Central Coast Community Energy (3CE) Policy Board
September 17, 2026

Policy Board of Directors
Meeting Agenda
September 17, 2026
9:00 AM
Embassy Suites by Hilton
1441 Canyon Del Rey Blvd
Room Laguna D
Seaside, CA 93955
WRITTEN COMMENTS SUBMITTED AT THE MEETING: If you have anything that you wish to be distributed to the Board, please provide 15 copies to a member of 3CE staff or the Board Clerk, who will distribute the information to the Board members and staff.

CONSENT AND NON-AGENDA PUBLIC COMMENT: The public may comment on the consent agenda and matters not listed on the agenda but within the Board's jurisdiction at the opening of the meeting. The Board may not take action at this meeting on any item not listed on the agenda other than to refer the matter to staff or set it for a future meeting. The public may comment on a specific item listed on this agenda when the Board considers that item. Speakers are limited to 3 minutes each.

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https://3cenergy.org/meetings-agendas/
ACCESSIBILITY: Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Board Clerk at 831-901-3362 or [email protected] Requests should be made as soon as possible but at least 72 hours prior to the scheduled meeting.

DISCLOSURE OF CAMPAIGN CONTRIBUTIONS: Pursuant to Government Code section 84308, members of the Board are disqualified and not able to participate in any agenda item involving contracts (other than competitively bid, labor, or personal employment contracts), franchises, discretionary land use permits and other entitlements if the Board member received more than $500 (adjusted yearly) in campaign contributions from the applicant or contractor, an agent of the applicant or contractor, or any financially interested participant who actively supports or opposes the decision on the agenda item in the preceding twelve (12) months.

Members of the Board who have received, and applicants, contractors or their agents who have made, campaign contributions totaling more than $500 (adjusted annually) to a Board member during the proceeding or for 12 months after a final decision is rendered in that proceeding, are required to disclose that fact for the official record of the subject proceeding. Disclosures must include the amount of the campaign contribution and identify the recipient Board member and may be made either in writing to the Board Clerk prior to the subject hearing or by verbal disclosure at the time of the hearing.

Welcome & Roll Call
Corrections or Additions
The Clerk will announce agenda corrections or proposed additions of emergency, urgency, or continued items, which will be acted on by the Board as provided in Section 54954.2 of the California Government Code.

Public Comment on Matters Not Listed on the Agenda
The public may provide comments on any item within the Board's jurisdiction but not on the Agenda. The Board may not take action at this meeting on any item not listed on the Agenda other than to refer the matter to staff or set if for a future meeting. Speakers are limited to 3 minutes each.

1. Update on 3CE’s FY 2025-26 Energy Programs

2. Regulatory and Legislative Quarterly Update

3. Financial Report for the period of October 1, 2025, through June 30, 2026

4. Investment Performance Report for the period of October 1, 2025, through June 30, 2026

5. Annual review and approval of the administrative and conforming amendments to the Investment Policy (FP 11) and renewal of delegation of investment authority to the Treasurer

6. Appoint Robert Shaw as Secretary to the Policy Board of Directors and Operations Board of Directors

7. Appoint Juan Lopez as 3CE Treasurer

8. Approve the FY 2026-27 Community Advisory Council Workplan and Adopt Resolution No. PB-2026-07 Establishing a Regular Meeting Schedule for the CAC

REGULAR

9. CEO Report
a. Power Charge Indifference Adjustment Reform
b. Fourth Annual 3CPrime Certified Report To Be Released c. Aratina Solar+ Storage Operational
d. 3CE's EV Launchpad Technical Assistance Program Planned October 1st

10. Adopt Resolution No. PB-2026-06 Authorizing the CEO to Execute a Clean Energy Purchase Contract with California Community Choice Financing Authority
and ancillary documents and agreements to effectuate 3CE’s second prepay financing transaction in an amount not to exceed $1.7 billion.

11. Adopt Resolution No. PB-2026-05 approving the Fiscal Year 2026-27 Recommended Budget

12. Consider and Appoint Candidates for Policy Board Chair and Vice Chair Adjournment
Staff Report Item 1
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: Update on 3CE’s FY 2025-26 Energy Programs
DATE: September 17, 2026
RECOMMENDATION:

This report recommends that the Policy Board receive an update on 3CE’s FY 2025-26 Energy Programs.

BACKGROUND:
3CE’s Energy Programs support 3CE’s mission by serving the Central Coast community with incentives to engage in electrification initiatives, strengthen the local economy, and reduce greenhouse gas emissions. The agency’s energy programs portfolio has undergone several iterations to improve community-wide accessibility and strengthen participation for priority communities. Currently, 3CE offers 10 programs and two pilots to support residential, commercial, and public agency electrification efforts in the transportation, building, and agricultural sectors.

DISCUSSION/ANALYSIS:

As part of 3CE’s commitment to customers, 3CE staff continually evaluate Energy Programs’ performance by tracking several key indicators and using this analysis to improve the impact of 3CE’s Energy Programs.

The table below highlights the agency’s programs’ fiscal year impact through August 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 6,300 mt CO2e
Load Shifted Over 10 MWh daily
Heat Pump Water Heater & HVAC Units 1,189 units
Induction Cooktops 32 units
All-Electric New Construction 204 units
E-Buses 17 E-buses
Electric Vehicles 1,176 EVs
EV Chargers 1,068 EV Chargers
Ag Equipment 16 rebates
Total Incentives Distributed $16.6 million
Table 1: Energy Programs Impact in FY 2025-26 (through August 2026) 3CE’s Energy Programs Portfolio Analysis Update (Attachment 1) provides a detailed look at individual Energy Programs in FY 2025-26. The update shares a variety of program performance metrics, including customer participation, all-electric purchases and installations, reduced greenhouse gas emissions, and performance on equity (e.g., incentives and support for income-qualified customers). The update also describes strategic initiatives currently underway to enhance 3CE’s Energy Programs portfolio through pilots and new program offerings.

Below are several ongoing strategic initiatives across Energy Programs’ focus areas.

Transportation Electrification
Electrify Your Ride (EYR): 3CE is actively developing 3CE’s EV Launchpad Technical Assistance Program, which is planned to launch October 1st. On August 19th, 3CE hosted a webinar for Member Agencies introducing the upcoming program. The webinar outlined enhanced support available to help agencies plan and implement transportation-electrification projects. Additional webinars are scheduled for September 9 th and 10th for special districts, commercial customers, and multifamily property owners to highlight technical assistance available through the program.

Building Electrification
Electrify Your Home: 3CE is exploring partnership opportunities with the state-administered GoGreen Financing program to help make electrification options more affordable for customers. Staff are inviting contractors who have successfully completed projects through EYH to be added to a Contractor Resource List, which will include

1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program.

the contractor’s name, website, languages they offer services in, counties they serve, and if they offer low-interest GoGreen Financing. Additional collaboration opportunities are being actively explored.

Agricultural Electrification
Ag Electrification Program: 3CE is actively developing an enhanced Ag Electrification Program with the Community Advisory Council (CAC). In June, staff presented stakeholder feedback gathered in the spring to the CAC and recommended improved program elements based on customer input. Recommended new offerings include additional rebates, technical assistance, and equipment demonstration events. Staff are working through program design details for the new offerings in anticipation of an October 1, 2026, launch date.

Energy Optimization
Virtual Power Plant (VPP): On August 17th and 20th, 3CE staff hosted two feedback sessions to inform development of 3CE’s upcoming Virtual Power Plant Program. The sessions engaged contractors and interested customers to gather input ahead of the program’s anticipated launch in October 2026. The program will begin with piloting battery enrollment and offer customers with qualifying residential battery systems pay-for-performance incentives to shift load and support grid reliability.

The fourth quarter of 3CE’s fiscal year has continued to show increased energy program participation.

Staff is forecasting full utilization of the Energy Programs budget for the second consecutive year and is proactively communicating to customers when programs reach 75% of their allocated budget, inclusive of spend anticipated by the application queue. Communication tactics include posting on 3CE’s website, notifying contractors/stakeholders, and removing the application link when the program reaches its budget limit. Staff have also been working to integrate customer communication capabilities into the agency’s Customer Relationship Management (CRM) system. With rebate status inquiries representing a significant portion of customer support interactions, the improvements will allow for automated application status update emails designed to help meet the needs of customers efficiently and effectively.

FISCAL IMPACT
There is no fiscal impact associated with this report and update.

CONCLUSION:
3CE’s Energy Programs support California’s Central Coast communities by providing funding and services to accelerate regional electrification, reduce greenhouse gas emissions, and benefit customers and local economies.

ATTACHMENT(S):

1. 3CE Energy Programs Analysis Update

3CE’s Energy Programs Update
This report provides updates on Central Coast Community Energy’s (3CE) Energy Programs and Pilots. 3CE continually tracks energy programs’ growing participation and impact in reducing greenhouse gas emissions and supporting the local economies in which 3CE customers live and work.

The table below highlights the agency’s programs’ impact through August 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 6,300 mt CO2e
Load Shifted Over 10 MWh daily
Heat Pump Water Heater & HVAC Units 1,189 units
Induction Cooktops 32 units
All-Electric New Construction 204 units
E-Buses 17 E-buses
Electric Vehicles 1,176 EVs
EV Chargers 1,068 EV Chargers
Ag Equipment 16 rebates
Total Incentives Distributed2 $16.6 million
3CE’s energy programs’ impact continues to increase, serving 3CE’s mission to support all customers in their transition to renewable resources, to drive GHG emissions reductions, and to promote local economic growth across the Central Coast. 1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program. 2 Does not include applications actively being processed; Includes additional incentive dollars in excess of budget approved by Policy Board for 3CE’s Residential Battery Rebate Program

Transportation Electrification

1.Electrify Your Ride
Over 4,990 mtCO2e avoided thus far
Equal to 1,164 gas cars off the road for one year
Program Purpose & Overview
Electrify Your Ride (EYR) is 3CE’s flagship transportation program, intended to reduce GHG emissions and increase EV adoption by providing residential and commercial customers with rebates for EV purchases and EV charger installations. Program funds are available first come, first served. Enhanced incentives are available for CARE/FERA customers, or income-qualified participants. Technical assistance is available for multifamily and commercial customers planning EV charging projects.
$4.5mil distributed in FY 2025-26
Program Design Updates
January 1, 2026: To maximize programs’ accessibility for all customers and to continue program administration through the end of the fiscal year, 3CE adjusted rebates. 3CE also introduced a new rebate type for bidirectional chargers to help customers power their homes and shift energy use to less expensive times of the day by drawing power from their electric vehicle’s battery.

July 2026: The program was paused on July 6th in response to 100% budget distributed or applied for. 3CE followed procedures to evaluate budget and reopened the program to new applications. 3CE incentives enabled over $57.8M in
purchases and installations
3240 EVs, EV Chargers and Electrical
Upgrades supported this fiscal year
Figure 1.1: Rebates approved by incentive type
2086 applications approved with 23% of incentives
going to income-qualified customers
Figure 1.2: Incentive distribution to income-qualified customers EYR supported installations for over 250
local contractors across all five counties

Transportation Electrification
76% of buses to a Title 1 school or
disadvantaged community (DAC)
Figure 2.1: % buses for DAC/Title 1 School, by county

2.Electric Bus (E-bus) Program
Over 400 mtCO2e
Program Purpose & Overview
3CE’s Electric Bus program enables public sector electrification by incentivizing all-electric buses throughout the 3CE service area. The program reduces GHG emissions and harmful pollutants from public transportation serving students, farmworkers, and community members. Program funds are available first come, first served, and can be assigned to a manufacturer. All funded E-buses must be domiciled and charged at 3CE-enrolled sites.
$1.6mil distributed out of $1.4mil budget
Program Design Updates:

January 1st, 2026: To maximize programs’ accessibility to all customers and to continue program administration through the end of the fiscal year, rebates have been adjusted to support two tiers of e-bus types.

August 31st, 2026: 100% of E-Bus Program rebates have been distributed for FY 2025-26. Staff have processing all remaining approved applications, and the program is closed to new applications for the remainder of the fiscal year. Completed applications will be placed on a waiting list until funding becomes available in FY 2026-27.
9 1
7 0
2 4
6 8
10 Transit bus Shuttle
Van/Type A
School Bus -
Type C/D
4 school districts & 3 transit agencies
supported across five counties
17 all electric buses supported

$29M in all-electric
purchases enabled through
3CE’s E-Bus program
Figure 2.2: Rebates approved by e-bus type

Transportation Electrification

3. Plan, Charge, and Electrify Your Fleet
16 Member Agencies committed to zero-emission fleet planning and implementation
Program Purpose & Overview
3CE’s Fleet Electrification programs reduce GHG emissions from medium and heavy-duty fleets by providing Member Agencies with incentives and technical assistance for zero-emission fleet planning and implementation at 3CE-enrolled sites. Program funds are available first come, first served.

Incentive Offerings:
- PLAN: Plan Your Fleet (PYF) provides no-cost technical assistance including fleet replacement planning, project design and engineering, EV charging recommendations, and funding plans.
- CHARGE: Charge Your Fleet (CYF) provides rebates for Level 2 EV Chargers and Level 3 DC Fast Chargers purchase and installation.
- ELECTRIFY: Electrify Your Fleet (EYF) provides rebates for electric vehicle purchase or lease, covering light, medium, and heavy-duty vehicles, plus electric motorcycles. $254k distributed out of $2.1mil budget
Program Design Updates
Oct. 1st, 2025: To streamline access and expand funding opportunities, 3CE has combined fiscal-year rebate caps for the Electrify Your Fleet and Charge Your Fleet programs. Member Agencies are eligible for up to $300k in total funding for the purchase or installation of electric vehicles, EV supply equipment, and associated infrastructure.

May 27, 2026: 3CE’s Operations Board approved a contract with Optony for comprehensive electric vehicle planning and EV charger development technical assistance for nonresidential customers, planned to launch in October 2026.

Over $2.1M
in all-electric purchases and
installations supported
Figure 3.1: rebates distributed by incentive type 8 cities and counties
Developing Fleet
Replacement
Plans
10 cities and
counties
Developing charging
infrastructure plans
and/or site designs
Cities and Counties engaged in zero-emission fleet
planning and implementation include…

Transportation Electrification

3.EV Charger Asset Pilot
Nine Level 2 and two DC Fast Chargers planned across three pilot sites Program Purpose & Overview
3CE’s EV Charger Asset Pilot addresses the need for additional Electric Vehicle Supply Equipment (EVSE) and infrastructure across the 3CE service area through the deployment of a phased EV Charger asset ownership program. The pilot examines charger asset ownership as a potential step in advancing equitable transportation electrification solutions across 3CE’s service area. The pilot encompasses Level 2 and Level 3 DC Fast Charger design, construction, and operation across three categories: community resilience hubs, corridor charging, and EVSE at Member Agency sites.
$423k spent out of $700k budget
Pilot Updates
Workplace Charging at 3CE’s San Luis Obispo Office: fully operational and active as of September 2025.

Workplace Charging at 3CE’s Soquel Office: fully operational and active as of November 2025.

Public Charging in Santa Maria: On October 21, the Santa Maria City Council approved the Site Lease License Agreement for 3CE’s Public EV Charger Asset Pilot. The project officially kicked off on December 10 and is progressing through construction and implementation activities.

Located near the Santa Maria Public Library, the site includes Level 2 and DC Fast Charging infrastructure to expand public charging access within the region. Construction coordination, utility engagement, and permitting activities are ongoing, with completion anticipated by Q2 FY 2026–27.

Future Pilot Sites: 3CE staff are exploring additional pilot locations for EV charging in consideration of designing and implementing an EV Charging Master Plan. Additional sites will further inform 3CE’s examination of agency-managed infrastructure to expand access to EV charging throughout the Central Coast.
10 ports across
6 Level 2 chargers
98%
total charger
uptime

14.5 t GHG
emissions avoided
Equivalent to planting
375 trees
50% increase
in staff EV
adoption

Building Electrification

4.Electrify Your Home Program
Over 816 mt CO2e avoided, equal to over
110 homes’ energy use for one year
Program Purpose & Overview
3CE's Electrify Your Home Program (EYH) promotes residential building decarbonization by replacing fossil-fuel powered water heating, space heating and cooking equipment with high-efficiency electric and heat pump appliances for single family and multifamily properties.

Applications are open to contractors and homeowners with program funds available on a first come, first served basis.
$1.8mil distributed out of $2.5mil budget
Program Design Updates
October 1, 2025: The program’s next iteration relaunched in-house, and includes design enhancements developed in collaboration with the Community Advisory Council. These included expanded contractor eligibility, new eligible appliances, and a customer-focused application.

Moreover, bringing program administration in-house will leverage 3CE staff expertise to improve customer experience and streamline program operations
Figure 5.2: Income-qualified participants by county
62% of rebates distributed to income-qualified customers 1411 rebates in fiscal year 2025-26
Figure 5.1: Rebates approved by incentive type
EYH supported over 67 unique, local installers across five counties to complete over $7.5M in all-electric and heat pump installations

Building Electrification

5.New Construction Electrification Program
205 new, all-electric housing units built across 3CE’s service area Program Purpose & Overview
3CE’s New Construction Electrification Program (NCEP) reduces GHG emissions by incentivizing the development of all-electric housing in 3CE’s service area. NCEP provides housing developers incentives to build all-electric housing projects including water heating, space heating, and cooking appliances. Enhanced incentives are available for affordable housing projects and single-family disaster rebuilds. Program funds are available first come, first served. $586k distributed out of $1.2mil budget
13 2 1
NCEP supported 7 local contractors to build all-electric housing across 3CE’s service area 189
All-electric Affordable
Housing Units
Accessory Dwelling
Units
Market Rate Housing Disaster Rebuild

Building Electrification

6.Reach Codes Program
Codes adopted by 3CE’s cities & counties are
anticipated to impact 310 permits per year
Program Purpose & Overview
3CE’s Reach Code program reduces GHG emissions from the built environment by providing technical assistance to 3CE Member Agency jurisdictions to adopt and codify “Reach Codes” that promote building electrification and EV infrastructure. Technical assistance includes customized code language development, staff presentations, board advocacy, and code enforcement tool creation. Implemented reach codes update local building codes and ordinances for new residential and commercial construction, and major remodel projects, and align with the 2022 California statewide building code update.
$55k distributed out of $100k budget
Program Design Updates
3CE is closely monitoring impacts from recent legislative decisions and exploring available support pathways. Cost effectiveness studies for new reach code opportunities were released in June 2026.

CODE TYPE & IMPACT
Single Family Existing Buildings- Flexpath:

Flexible menu of energy efficiency,
electrification, and electric readiness measures
for major renovations
Single Family Existing Buildings- Air
Conditioning to Heat Pump:

Property owners follow energy efficiency
measures or install heat pump technology at
time of replacement
New Construction- Energy Performance:

Property owners follow energy efficiency
measures during construction
Cities and Counties engaged in reach code
planning and implementation include…
5 Reach Codes in process,
adopted or codified across 3
cities
Figure 7.2: Types of Reach Codes pursued
Figure 7.1: # of codes by city

Ag Electrification

7.Agricultural (Ag) Electrification Program
Over 94 mtCO2 avoided thus far
Program Purpose & Overview
3CE’s Agricultural (Ag) Electrification program avoids GHG emissions associated with fossil fuel-powered agricultural equipment by incentivizing the purchase of all-electric equipment alternatives. The program provides rebates to 3CE customers in and/or supporting the agricultural industry for all-electric equipment purchases to support business operations. Enhanced incentives are available for small businesses and businesses that experienced loss/damage of equipment due to declared natural disasters. Customers are eligible for up to two rebates per fiscal year, and program funds are available first-come, first-served.
$321k distributed out of $800k budget
Program Design Updates
As part of its review of the Agricultural Electrification Program, 3CE staff hosted 13 focus groups & presentation in Winter of 2025 and Spring of 2026. Agricultural stakeholders from across the service area shared feedback on barriers to electrification and identified opportunities for additional support, including enhanced rebates, technical assistance, and demonstration days.

With input from the Community Advisory County, final program elements are being determined before the October 1st, 2026, launch date.
94%
of rebates to small businesses
3CE incentives enabled over $1.37M across 16 all-electric purchases including… Participation across 5 Counties
Figure 8.1: % of projects funded, by county

Energy Optimization

8. Residential Battery Rebate Program
Over 10 MWh of load shifted daily
during peak hours across 3CE service area
Program Purpose & Overview
3CE’s Residential Battery Rebate Program achieves load shifting during peak hours through rebates for the purchase and installation of residential, behind-the-meter battery systems. The program helps solar and non-solar customers manage energy consumption, respond to price signals, and reduce demand during net peak hours. Program funds are available first-come, first-served.

Customers enrolled in NEM 2.0 who elect to transition to NBT early, CARE/FERA-enrolled customers, and customers designated as medical baseline are eligible for enhanced incentives.

Batteries must be programmed to discharge 50% of capacity daily between 4 p.m. and 9 p.m. $5.5mil distributed out of $7.2mil total budget
Program Design Updates
April 20, 2026: The Policy Board voted to close the program to new applications and allocate $3.7 million to pay applicants who had received their Permission to Operate (PTO) letter and applied to the program prior to March 18. 3CE is currently developing a Virtual Power Plant (VPP) for interested customers, anticipated to launch in October 2026.

Figure 9.1: daily load shift during peak hours
772 applications across all five counties
17% of applications from CARE/FERA or
Medical Baseline enrolled customers
229 customers signed up for VPP Mailing
List for new program
Over 65 local
contractors actively
installing battery systems
for 3CE customers
90 2354
10111
0 2000
4000
6000
8000
10000
12000
kWh of load shifted daily (4
2024- Oct 2025- Oct 2026- Aug
-9PM)
Month

Energy Optimization

9.Hourly Flex Pricing Pilot 1 & 2
Over 17,300 MWh annual load enrolled
Program Purpose & Overview
3CE’s Hourly Flex Pricing (HFP) Pilot offers customer savings and operational benefits to agricultural, residential, and commercial 3CE customers through real-time, dynamic price signals.

In partnership with PG&E, both Pilot 1 (agricultural) and Pilot 2 (commercial and residential) offer a variety of Automation Service Providers (ASPs) to help enrolled customers optimize load in response to hourly price signals. Expanded Pilot 1, implemented in partnership with Yield Energy Services, also includes system reliability benefits for agricultural customers through incentivized equipment automation. HFP Pilots 1 and 2 are currently in their second year of implementation. 74% of annual load enrolled from
commercial meters
Figure 10.1: load enrolled by customer type
86 meters across all three customer
classes
Figure 10.2: pilot participation by customer type

Staff Report Item 2
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Director of Regulatory Affairs & Compliance Das Williams, Director of Policy and Legislative Affairs SUBJECT: Regulatory and Legislative Quarterly Update
DATE: September 17, 2026
RECOMMENDATION:

This memorandum provides the Policy Board with a second quarter Regulatory & Legislative Update.

DISCUSSION:

The Regulatory and Legislative Quarterly Updates prepare a summary of key proceedings and policy matters impacting 3CE’s customers, business operations, and climate goals.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. Quarterly Regulatory and Legislative Update

1 Quarterly Regulatory & Legislative Update
September 17, 2026

2 Table of Contents
REGULATORY UPDATE......................................................................................................................................................................... 3 Resource Adequacy (RA)................................................................................................................................................................. 3 Disconnections..................................................................................................................................................................................... 3 New Power Charge Indifference Adjustment (PCIA) Rulemaking................................................................................. 4 Renewables Portfolio Standard (RPS) ...................................................................................................................................... 5 PG&E Rule 30 Application for Transmission Service .......................................................................................................... 6 Improvements to the Climate Credit.......................................................................................................................................... 7 Integrated Energy Policy Report (IEPR)................................................................................................................................... 7 California Advanced Electric Rate Design ................................................................................................................................ 8 OIR to Improve Implementation and Expand Participation Under the Load Management Standards .......... 9 PG&E Billing Modernization Initiative....................................................................................................................................... 9 Energy Resources Recovery Account (ERRA) Forecast ...................................................................................................10 3CE LEGISLATIVE REPORT – Summer 2026 .............................................................................................................................11 Federal:.................................................................................................................................................................................................11 State: ......................................................................................................................................................................................................11 Local:......................................................................................................................................................................................................12

3 REGULATORY UPDATE
Resource Adequacy (RA) - R.25-10-003
Issue
The Resource Adequacy (RA) program is the California Public Utilities Commission’s (CPUC) main grid reliability planning program. All load serving entities (LSEs) under the CPUC’s jurisdiction, including CCAs, must demonstrate purchase of a specified amount of eligible RA generation capacity each month and year to comply with RA program requirements. The current proceeding will address the 2027- 2029 RA compliance years and consider further refinements to the slice-of-day (SOD) framework. Under the new framework, 3CE’s RA obligations shifted from meeting a single monthly peak to now demonstrating sufficient capacity across 24 individual hourly slices. Advocacy in the RA proceeding remains a top priority for 3CE, ensuring the grid maintains reliability without increasing costs for customers.

Status
On August 13, 3CE attended the CPUC Energy Division’s 2027 RA Workshop to review policy and implementation changes, receive guidance on RA showing templates, and provide feedback on the load forecast and allocation process. During the workshop, CCAs raised issues regarding LSE RA showing templates and the new counting methodology implemented by a recent Track 1 decision. The modification was intended to accommodate Long-Duration Energy Storage (LDES), however, the updates to the LSE showing templates caused LDES resources shown at full capacity to fail the CPUC’s test for counting resources toward RA. The Energy Division acknowledged the template error and stated that LSEs showing a LDES resource in 2027 would not be deemed out of compliance due to this issue.

On August 14, with support from 3CE, CalCCA filed its draft Loss of Load Expectation (LOLE) study and PRM proposal, for consideration in Track 2 of the proceeding. LOLE studies provide a test to determine the amount of resources needed to achieve reliability targets and to set the Planning Reserve Margin (PRM), which is an additional procurement obligation placed on top of LSEs’ RA requirement. CalCCA’s LOLE study demonstrates an alternative modeling approach for achieving grid reliability targets in the most cost-effective manner. 3CE is working with CalCCA to develop additional proposals to improve the RA program, which will be submitted later this fall.

Next Steps
With a Track 2 Proposed Decision not expected until June 2027, 3CE will continue focusing on LOLE studies, PRM adjustments, and broader proposals to improve the RA program. In addition to actively participating in the CPUC proceeding, 3CE will file important year ahead RA showings to both the CPUC and CAISO on October 30, demonstrating its compliance in procuring its RA obligations for 2027.

Disconnections– R. 18-07-005
Issue
The CPUC opened the Disconnections proceeding in 2018 pursuant SB 598 to address rising disconnection rates across California’s electric and gas investor-owned utilities (IOUs) by adopting policies and rules that reduce disconnections and improve reconnection processes and outcomes for disconnected customers. Phase 1 of the proceeding adopted rules to reduce residential customer disconnections and implemented pilot programs that help eligible low-income customers pay down utility bill debt. The Arrearage Management Plan (AMP) and the Percentage of Income Payment Plans, available to eligible 3CE residential customers, were originally set to run until October 2026 and February 2027, respectively. Phase 2, which began in July 2022, seeks to consider additional solutions for reducing disconnection rates, implement SB 1142, which mandates utilities restore

4 service to disconnected customers who agree to enroll in a payment plan, and considers disconnection protections for customers under extreme weather conditions. Because CCAs rely on IOU billing and collection systems, these rules directly govern how arrearages, payment plans, and disconnection protections are administered for 3CE’s residential and small business customers.

Status
On July 20, CalCCA filed comments in support of a CPUC Proposed Decision (PD) extending the AMP sunset date to February 1, 2027. The payment plan provided assistance to customers struggling to pay down their arrearages. 3CE supported CalCCA’s filing, as extending the pilot to February of 2027 aligns its sunset date with the culmination of the PIPP program, providing a simple solution with little administrative burden. The extension provides the CPUC time to evaluate making the pilots permanent while avoiding customer disruption and confusion of a temporary lapse of the program.

Next Steps
3CE will continue tracking proposals related to potential changes to the disconnection caps, upcoming program sunsets, and possible “circuit breaker” safeguards to prevent rapid increases in shutoffs. The Commission is expected to release a Proposed Decision on phase 2 issues by the end of this year, which will conclude the proceeding.

New Power Charge Indifference Adjustment (PCIA) Rulemaking – R.25-02-005 Issue
On February 20, 2025 the CPUC opened a new proceeding to update policies and procedures related to the IOUs’ Energy Resource Recovery Accounts (ERRA) and the Power Charge Indifference Adjustment (PCIA). The PCIA is a fee that all customers, bundled or unbundled, pay to ensure the IOUs remain indifferent to the loss of customers for legacy procurement done prior to customers having the choice to choose their energy provider.

The rulemaking will address near- and long-term changes impacting the PCIA, a ratemaking element designed to ensure customer indifference to retail load departure. The CPUC calculates the PCIA using market price benchmarks (MPBs) to establish the market value of the IOUs’ PCIA-eligible portfolio. However, in recent ERRA proceedings, the IOUs have proposed new policies related to the calculation of MPBs, citing concerns with the accuracy and volatility of the current methodology.

Status
On August 13, the CPUC issued a Proposed Decision (PD) rejecting CalCCA’s proposal to resolve how certain Renewable Energy Credits (RECs) are valued in PCIA calculations. Track 2 focused on determining the appropriate valuation in the PCIA of Renewable Energy Certificates (RECs) generated and banked by the IOUs prior to January 2019, when those RECs are used for bundled service customer compliance. CalCCA’s proposal maintained its position that Pre-2019 Banked RECs be valued at the Renewables Portfolio Standard (RPS) Market Price Benchmark (MPB). The CPUC’s valuation was disappointing as this matter will determine if departed CCA customers receive their fair share of benefits from these RECs which they originally helped purchase. A Track 3 scoping memo was issued on August 18, further separating the remaining issues in the proceeding. Track 3A will consider refinements to existing PCIA structures, including the Market Price Benchmark (MPB) which is used to determine the value of the IOUs energy portfolios. Track 3B will consider broader structural indifference frameworks.

Next Steps
Track 3A and 3B will likely require parties to submit PCIA reform proposals in the first half of 2027. In the meantime, 3CE will continue to work with CalCCA on the development of proposals that ensure indifference for CCA customers and sunset the PCIA. These include suggestions on how GHG-Free, RPS, RA and other attributes

5 should be allocated, recommend changes to the vintaging of PCIA resources and advocate for structural changes to ensure indifference and reduce, restructure, or remove the continuing obligations of unbundled customer to pay the PCIA.

Integrated Resource Planning (IRP) – R.20-05-003; R.25-06-019 Issue
Integrated Resource Planning (IRP) is the CPUC’s greenhouse gas (GHG) reduction planning program. LSEs must submit IRPs every two years demonstrating that planned future procurement will produce GHG emissions below an assigned benchmark while contributing to a resource fleet that meets sector-wide GHG targets and maintaining grid reliability. Previous IRP cycles have produced three procurement mandates, which apply to 3CE and other CCAs. On April 18, 2024, the CPUC issued an Amended Scoping Memo stating its intent to address additional issues in the IRP proceeding, including implementation of Assembly Bill (AB) 1373 which allows the Commission to request that the Department of Water Resources (DWR) serve as a central procurement entity (CPE) for certain long-lead time (LLT) resources, as well as development of a fourth long term procurement framework entitled the Reliable and Clean Power Procurement Program (RCPPP) that would replace the CPUC’s current ad hoc mandate structure.

Status
On June 23, 2026, the CPUC issued a ruling advancing a proposed alternative framework for the Reliable and Clean Power Procurement Program (RCPPP). The initial goal of the new procurement program was to establish long-term contracting requirements that streamline LSE procurement of reliability and renewable resources that align with the existing IRP process. However, the alternative RCPPP proposal puts forth a prescriptive framework that would reduce load serving entities procurement autonomy. However, the alternative RCPPP proposal puts forth a prescriptive framework that would reduce load serving entities procurement autonomy, proposing a mandate that would require new procurement in the near term and rely further on centrally procured energy.

This proposal comes a year after the CPUC proposed two other different options for implementing the RCPPP.

Initial comments on this additional proposal were due August 14; 44 parties submitted comment. Developers and environmental groups largely supported the new framework; Load-Serving Entities largely opposed it.

Additionally, 3CE filed its 2026 Individual IRP on August 10.

Next Steps
3CE has been working with CalCCA to submit reply comments due on September 2, recommending alternatives and modifications to the CPUC’s proposal that would streamline procurement and provide more flexibility.

CalCCA comments focus on the flaws in the new proposal, including that there is no guarantee of newly available resources and that it does not meet criteria for cost effectiveness. CalCCA urges the CPUC to choose a framework that allows new and existing resources to meet the new mandate and to avoid reliance on centrally procured energy. A proposed decision in the RCPPP aspect of the proceeding is expected in the November-December 2026 time frame.

Renewables Portfolio Standard (RPS) – R.24-01-017
Issue
The CPUC’s Renewables Portfolio Standard (RPS) proceeding monitors compliance by retail sellers, including CCAs, within California’s RPS program which requires that 60% of all electricity retail sales be served by renewable resources by 2030 and at least 65% of the procurement a retail seller counts toward the RPS requirements be from long-term contracts. The CPUC initiated a new rulemaking to continue implementation of the RPS program, including reviewing RPS procurement plans, providing tools for RPS analysis and reporting, assessing RPS compliance, and integrating new legislative mandates into the RPS program.

6 Status
On June 12, 3CE submitted its Draft 2026 RPS Procurement Plan to the CPUC. The plan provides information on 3CE’s current renewable portfolio information, upcoming solicitation plans for renewable energy, and long-term planning for renewable energy procurement. The plan also includes an assessment compliance, a review of risk for RPS eligible projects, and plans for sales of renewable energy. While 3CE is required to submit these annual plans, the CPUC has limited oversight of CCA procurement activities. The CPUC’s role is to review the plans of CCAs to ensure that they comply with the CPUC’s RPS Plan requirements. The plan follows guidance issued by an Assigned Commissioner’s Ruling (ACR) from March, which included a detailed list of criteria for LSEs to address in their plans.

Next Steps
Once the CPUC reviews 3CE’s draft plan, the Commission will issue a Decision accepting or conditionally accepting the RPS Procurement Plan. 3CE will have 30 days after the Decision is issued to modify the plan to address any CPUC identified deficiencies and submit its final plan. The 2027 ACR will be developed based on experience from this current cycle and may introduce new requirements.

PG&E Rule 30 Application for Transmission Service – A.24-11-007 Issue
On November 21, 2024, PG&E submitted an Application to the CPUC requesting approval of a new rule for non-residential customers requesting interconnection at transmission-level voltages, citing a recent increase in customers such as data centers requesting transmission-level interconnections. Current PG&E rules are focused on distribution-level interconnections. Under the proposed rule, the transmission-level customer would pay interconnection costs in advance until their forecasted load materializes, at which point the costs would be collected through rates. Due to the industry-wide implications, CalCCA has taken up this case that 3CE had initially spearheaded.

Status
On May 22, CalCCA submitted a reply brief in PG&E’s Electric Rule 30 Application at the California Public Utilities Commission (CPUC), in support of a joint motion for the adoption of a partial settlement agreement between PG&E, CalCCA, Cal Advocates, and the Sierra Club. The settlement secures critical information sharing and coordination for service agreements between PG&E and CCAs. PG&E’s Rule 30 proposes a new tariff for customers requesting interconnection from PG&E at transmission level voltages between 50 kilovolts (kV) and 230 kV. The settlement represents major progress for CCAs by securing strict 20 day timelines for PG&E to share new interconnection data and requires PG&E to notify customers on their CCA’s role as the default generation provider.

On September 9, CalCCA, with support from 3CE, filed comments in response to an ALJ ruling seeking comments on a recent show cause order issued by the Federal Energy Regulatory Commission (FERC) to the California Independent System Operator (CAISO) and transmission owners. The order directs CAISO and transmission owners to justify their current tariffs or propose changes to accommodate large load customers. The comments requested that the CPUC adopt the Partial Settlement proposed by CalCCA, PG&E, Cal Advocates, and Sierra Club, and the data sharing provisions included therein to improve the ability to forecast large loads consistent with the goals of the FERC Order.

Next Steps
3CE will continue to engage in the proceeding through CalCCA and will monitor for any new rulemakings related to large loads.

7 Improvements to the Climate Credit – R.25-07-013
Issue
The California Cap-and-Trade program, which was renamed Cap-and-Invest under AB-1207, requires power plants, fuel providers, and large industrial facilities that emit greenhouse gases (GHGs) to retire allowances to cover their emissions. The sale of these allowances is used to benefit ratepayers by funding the California Climate Credit. A twice-per-year lump-sum bill credit delivered in April and October, automatically provided to all bundled and unbundled residential electric customers. On July 28, 2025, the CPUC initiated a rulemaking to consider ways to improve the effectiveness of the Climate Credit in support of customer affordability. The preliminary scope of the rulemaking includes potential modifications to customer eligibility criteria, distribution timing, and setting guidelines around customer outreach related to the Climate Credit. The outcomes of the rulemaking will shape how 3CE residential customers see this relief on their bills and how much financial assistance they receive.

Status
Following a Phase 1A decision, residential customers automatically received their 2026 credit allocations in August and September rather than the typical low usage months of the spring and fall. For 3CE customers receiving distribution from PG&E, the total credit provides $72.36 across the consecutive summer months while those living in SCE service territory will receive $72.00 over the same period. In March, 3CE began notifying customers of the upcoming changes and provided call center staff with instructions on answering employee questions to avoid any confusion made by these changes. On June 29, the Assigned Commissioner issued a ruling (ACR) to begin Phase 1B of the proceeding. The ruling outlined the Commission’s priorities and conceptual approaches for further reforming the residential climate credit.

On August 11, 3CE attended a proceeding workshop at the CPUC in San Francisco to discuss methods for improving the residential climate credit. Parties proposed alternative distribution methods to better address affordability, including allocating more credits to high-usage customers or customers in specific areas. 3CE cautioned against complex approaches that could reduce credit amounts through increased administrative costs and supported reserving additional credits for income-qualified customers.

Next Steps
Parties, including CalCCA, are working through Phase 1B proposals filed on September 14, recommending alternative Climate Credit distribution methodologies. 3CE has been supporting the proposal development which retains the existing credit methodology, that all customers continue to receive a share of the credit, while recommending additional funds to income-qualified customers if the CPUC determines greater affordability measures are needed. A Proposed Decision (PD) on Phase 1B, setting long term modifications to the Climate Credit is expected by the end of this year.

Integrated Energy Policy Report (IEPR) – 26-IEPR-01
Issue
The Integrated Energy Policy Report (IEPR) is the California Energy Commission’s (CEC) biennial assessment of the state’s energy system, with an update in even numbered years, which includes a 15 year energy demand forecast. The IEPR forecast is a key input in the electric system planning and is used by the CPUC to establish procurement requirements for LSEs. The CEC develops the report through a collaborative process involving party workshops, demand analysis working groups, and stakeholder input. Load Serving Entities, including 3CE, are required to submit projected demand data during each reporting cycle. Because the IEPR determines 3CE’s Resource Adequacy obligations, accurate forecasting is critical to ensure the projected load matches system needs but doesn’t lead to costly over procurement.

8 Status
On August 20, 3CE attended a CEC Commissioner Workshop to review data inputs and assumptions that will be used in energy demand forecasting and modeling for the 2026 IEPR process. The updated forecast will include scenarios that estimate the potential impacts of the state’s decarbonization strategies and other sources of load growth, such as increases in data center load across the state. Discussions centered around updates to the forecast model to better account for data center growth and other large loads seeking interconnection to the grid. While the CEC develops its data center forecast using information from utilities, including project status and requested capacity, CCA involvement in these areas of the forecast has been limited. As situations regarding data centers and other large loads are rapidly evolving, CCA input will only serve to increase the accuracy of forecasting, as well as inform transmission and procurement needs. CalCCA, with support from 3CE, filed workshop comments on September 15 advocating for increased coordination with CCAs on large load issues and encouraging the CEC to engage with all CCAs to gather information that can be used to identify and forecast new loads.

Next Steps
The agency will attend additional workshops and demand analysis working groups leading up to the release of the draft report and final forecast presentations in December. With the forecast’s adoption expected in early 2027, 3CE expects to work closely with its member agencies to determine the extent to which data center projects and other large loads will be coming online in the service territory, while continuing to monitor the CEC’s modeling inputs and assumptions and evaluate the proposed demand forecasts.

California Advanced Electric Rate Design –R.26-04-009
Issue
On April 9, the CPUC opened a new rulemaking, R.26-04-009, to establish advanced electric rate design policies to update residential and non-residential rate structures and their underlying cost inputs so that rates more accurately reflect the cost of providing service, send price signals that support efficient use of grid infrastructure, and allocate costs fairly across all customers. The CPUC’s primary focus is on amending policies around the delivery portion of customers' bills to improve reliability and affordability, while ensuring costs to manage the grid are allocated fairly. The OIR responds to increasing affordability pressures driven by wildfire related costs and rapid load growth, while also advancing prior efforts to remove fixed costs out of volumetric rates. This proceeding will look to both develop new rates and policies for emerging issues around large loads like data centers and Commercial and Industrial customers, while also addressing electric rate design issues remaining from previous rulemakings to reform rates for residential customers. The CPUC Investor-owned utilities are the primary respondents in the Rulemaking, but CCA participation is imperative to ensure any modifications to delivery costs are equitable for CCA customers.

Status
A Prehearing Conference was held on June 18 to address the scope and schedule of the proceeding. CalCCA presented on behalf of the CCAs, asking that any new rate designs, fixed charges, or program structures established during the proceeding does not disadvantage CCA customers relative to bundled utility customers.

CalCCA also used the opportunity to recommend additional scoped items including the establishment of statewide information sharing requirements between IOUs and CCAs regarding large load interconnection requests. Administrative Law Judge Perez-Green signaled the Commission would take time to consider party comments and respond with a scoping memo, expected by September.

Next Steps
Following the issuance of the scoping memo, the proceeding will feature workshops followed by comment opportunities and stakeholder reports extending through late 2026, with an initial Phase or Track 1 Proposed Decision (PD) expected sometime next year.

9 OIR to Improve Implementation and Expand Participation Under the Load Management Standards –26-OIR-001
Issue
The California Energy Commission’s (CEC) updated Load Management Standards (LMS) require IOUs, municipal utilities, and CCAs with load greater than 700 GWh/year to upload time-dependent rates to the CEC’s Market Informed Demand Automation Server (MIDAS) platform, develop and maintain an LMS Compliance Plan, and jointly develop a single statewide standard tool (SST) for authorized rate data access by third parties that is compatible with each of those entities' systems. 3CE has maintained compliance with the regulations since the Policy Board approved the agency’s original plan in March of 2024 and began offering its agricultural, commercial and residential customers voluntary participation in PG&E’s Hourly Flex Pricing (HFP) Pilots 1 and 2.

The pilots offer customers dynamic rates where prices change hourly based on market and grid conditions.

Participants can then adjust their energy use to times when electricity is cheaper while reducing strain on the grid. However, data access remains a major barrier to 3CE offering its own hourly or sub-hourly marginal cost-based rate. CCAs would require the capability to combine generation rates with the IOU’s transmission and distribution components. While 3CE currently fulfills its LMS requirements through participation in PG&E’s dynamic rate pilots, issues around CCA autonomy and compliance with LMS regulations remain. With the pilots scheduled to sunset in December of 2027, 3CE is working on a solution to provide long-term options for customers to continue save money through load flexibility programs and rates, while providing benefits to the grid.

Status
A key LMS requirement for 3CE is the publication and maintenance of the agency’s time-dependent rates to the CEC’s Market Informed Demand Automation Server (MIDAS) database. While some 3CE customers already utilize Automated Service Providers (ASPs) to shift energy use away from peak periods, the LMS mandates that CCAs provide customer access to CEC’s preferred MIDAS database for this process. For 3CE and other CCAs, rate uploads to MIDAS have become increasingly resource-intensive, with the process taking over ten business days to complete. More recently, the CEC launched MIDAS 2.0 on June 22, which materially increases file size and the complexity of data uploads. To address the MIDAS issues, 3CE and a group of joint CCAs met with CEC staff from the Load Flexibility and Demand Response team on August 13 to highlight the ongoing challenges with the database and offer solutions to improve the reliability of the upload process. The CEC staff offered support with upload challenges and agreed to establish a CCA notification process for future MIDAS changes.

Next Steps
Earlier this year, the CEC announced it would open a new docket to improve the implementation and expand participation under the Load Management Standards, expected to begin in 2027. Once the new rulemaking opens, 3CE will continue to advocate for amendments that address the many barriers to CCA customer participation in dynamic rates.

PG&E Billing Modernization Initiative – A.24-10-014
Issue
On October 23, 2024, Pacific Gas and Electric Company (PG&E) filed Application (A.24-10-014) with the California Public Utilities Commission (CPUC) for its Billing Modernization Initiative (BMI), requesting approval to recover $761.3 million in forecasted and recorded costs spanning 2023 through 2030 to replace its aging customer billing architecture. 3CE and a coalition of other CCAs have been participating in the Application process to ensure CCA customers receive the same enhancements on their bills as bundled customers.

Status
On July 9, the joint CCAs reached a settlement agreement with PG&E and submitted it as a motion for approval

10 by the CPUC. The settlement advances significant improvements to CCA billing operations, including enhanced data quality, faster access to sub-hourly billing interval data, dedicated technical support, and a collaborative bill redesign process to improve clarity and customer communications. It also provides greater certainty by delaying any PG&E request to increase CCA Service Fees until BMI is complete and establishing the end-state BMI system as the timeline for displaying the PCIA as a separate line item on customer bills.

Next Steps
3CE anticipates that the Commission will vote to approve this settlement within the next few months.

Energy Resources Recovery Account (ERRA) Forecast – A.26-05-007; A.26-05-006 Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across Power Charge Indifference Adjustment (PCIA) vintages.

CCAs participate through CalCCA to ensure: (1) accuracy of forecast account balances, rates, and cost calculations; (2) proper attribution of PCIA vintage; (3) proposer attribution between bundled and unbundled customers; (4) appropriateness of IOU proposals within the context of an ERRA forecast proceeding.

Status
PG&E 2027 ERRA Forecast – A.26-05-007
Following PG&E’s May 15 filing of its 2027 ERRA Forecast Application, CalCCA filed a protest on June 17, on behalf of the 12 CCAs in PG&E’s service territory, including 3CE. PG&E’s Application includes surprising forecasts, including increasing bundled system average rates by 5.7% and omitting nearly $300 million in generation costs currently under consideration in the general rate case (GRC). Following the CPUC’s issuance of a scoping memo, CalCCA filed testimony on August 27 to address PG&E’s implementation of the interim Slice of Day Resource Adequacy (RA) calculation methodology. Unlike the other IOUs, PG&E proposes to calculate retained RA using an hourly RA position for each month’s worst day. The CalCCA testimony asserts that the CPUC should avoid adopting different methods for each IOU forecast, and that SCE’s interim method is preferable until a permanent solution can be implemented.

SCE 2027 ERRA Forecast – A.26-05-006
SCE filed its 2027 ERRA Forecast Application on May 15, 2026. SCE’s Application projecting a 5% increase in bundled rates. Similar factors impact the PCIA as the PG&E case. CalCCA submitted testimony on August 14, addressing SCE’s 2027 retained RA forecast, which is 3,000 MW higher than 2026. The error was due to SCE’s banked REC calculation, which requires a correction in the amount credited to the ERRA.

Next Steps
The IOUs request that the CPUC approve these forecasted 2027 energy procurement revenue requirements to become effective rates on January 1, 2027. Proposed Decisions providing resolution for these applications are expected by November. 3CE will work with CalCCA to ensure accuracy of forecast account balances and rates, cost calculations in workpapers, and calculation of the PCIA.

11 3CE LEGISLATIVE REPORT – Summer 2026
Federal:

CCEA Urges Congress to Weigh in on Administration's Proposal on Federal Grants On July 23, 3CE's trade association, the Community Choice Energy Alliance, wrote to congressional appropriations leaders asking them to use their oversight authority on a proposed federal rule that would reshape how grants are awarded. The rule would let the White House and its political appointees decide which applications win funding and pull back money from projects already underway if the administration decides they no longer match its priorities, which CCEA warns would force CCAs and their local partners to delay, scale back, or cancel the kinds of projects federal grants have supported, including programs that lower customer bills, keep the lights on during outages, and build local clean energy jobs. The proposal would apply to any local government or public agency that has federal funding or plans to seek it.

FERC Puts Grid Operators on the Clock for Large Load Rules On June 18, rather than complete the rulemaking in which CCEA filed comments on 3CE's behalf, FERC directed all six regional grid operators, including CAISO, to justify their existing rules for connecting data centers and other large customers or propose new ones. CCEA's comments urged FERC to leave primary authority over local grid decisions with states and localities and identified CCAs as well-positioned partners for serving these customers. CAISO responded in July that California differs from the eastern grids, with sufficient generation online or under contract to meet expected growth and the binding constraint being transmission construction and interconnection timelines. CAISO has since proposed defining a large customer as any single site drawing 50 megawatts or more, with an option to connect sooner in exchange for accepting curtailment while grid upgrades are built.

State:

Assembly Bill 1761 (PCIA Transparency) Heads to the Governor’s Desk On August 25, Assembly Bill 1761 passed out of the California State Senate with 39 yes votes and 1 absence. It is currently on the Governor's desk awaiting a signature. The bill took minor amendments in the Senate Appropriations Committee further clarifying that market-sensitive data is intended to remain confidential. At this time the only organizations in declared opposition are PG&E, SCE, and SDG&E. The bill would require public disclosure of data provided by an investor-owned utility or the California Public Utilities Commission that is used in the formulation of the Power Charge Indifference Adjustment or other cost recovery mechanisms. This transparency is essential for 3CE to assess the fairness of regulatory charges imposed on our customers and to identify contracts so costly they warrant non-renewal. If your Member Agency has not already sent a letter to the Governor requesting a signature on AB 1761, please contact Director of Government & Community Relations Das Williams for information on how to do so.

12 Senate Bill 1138 (Resource Adequacy transactability) held in Committee; will not advance this session.

SB 1138 did not advance prior to the August 12 Appropriations Committee deadline. This bill would have allowed CCAs and other load-serving entities to trade Resource Adequacy on an hourly basis, consistent with the requirement to demonstrate sufficient capacity for every hour of the day. This added flexibility would reduce costs by approximately $170 million annually through avoided over procurement. The CPUC estimated that the bill would cost $8 million annually to administer, which would have come out of ratepayer funds. 3CE participated in CalCCA Legislative Committee Planning meeting on September 12 to discuss possible next steps for RA transactability legislation.

Diablo Canyon Extension legislation doesn’t materialize; PG&E commits to restart community-benefit funding Heading into the final month of session, 3CE was prepared to review rumored legislation regarding the extension of Diablo Canyon Power Plant operations from 2030 to 2045, with attention on the financial allocation of energy and attributes to load serving entities (LSEs). On August 7, Governor Newsom made a public statement that the issue of extension should be taken up by the next Governor during the next legislative session. No bill language ever made it into print. Subsequently, on August 17, Senator John Laird announced that PG&E had agreed to re-start community benefit funding totaling $8.3 million annually to San Luis Obispo County local governments for the years 2026 and 2027. 3CE will continue to monitor the issue of DCPP extension in the next legislative session.

Local:

Public Meetings
During the reporting period, 3CE continued to engage with member agencies and local jurisdictions through public meetings, workshops, presentations, and policy discussions across the Central Coast.

In Santa Barbara County, 3CE delivered a Member Agency Presentation to the County on July 7 and participated in hearings on the County’s Utility Scale Solar Ordinance on July 14, with continued engagement at the September 1 meeting.

In San Benito County, 3CE remained actively engaged in the development of a local battery energy storage ordinance. On June 9, 3CE provided public comment to the Board of Supervisors in support of an ordinance that prioritizes strong safety standards while maintaining a viable local permitting pathway and preserving local decision-making authority. 3CE continued this advocacy before the San Benito County Planning Commission on August 19.
3CE also participated in several local planning and energy-related discussions throughout San Luis Obispo and Monterey counties. Staff attended the City of San Luis Obispo’s Climate Action Plan Public Workshop on June 22 and the County of San Luis Obispo’s Diablo Canyon 2045 Informational Session on July 30. 3CE also participated in the City of Morro Bay Planning Commission meeting on August 18 in support of a standards-based energy storage ordinance. On September 10, 3CE presented to the City of Marina Planning Commission on 3CE’s energy programs.

13 These engagements provide opportunities for 3CE to support member agencies, contribute its energy expertise to local policy discussions, and maintain an active presence in planning and energy issues affecting communities throughout the service area.

Sponsorships
During the reporting period, 3CE continued to support community, environmental, civic, and business organizations throughout the Central Coast through event sponsorships.

In June, 3CE sponsored the Girls Inc. Luncheon honoring Santa Barbara County CEO Mona Miyasato on June 4, the CommUnify Champions Dinner on June 5, the Environmental Defense Center’s Green & Blue event on June 7, ILDC’s A Toast to Justice on June 24, and the San Luis Obispo Chamber of Commerce’s Insight Studio: The Future of Clean Energy Technology on June 26. 3CE also supported EcoSLO’s SLOstice event on June 27 and SBCAN at 25 on June 28.

In August, 3CE continued its community engagement through sponsorship of Old Spanish Days Fiesta on August 5 and the California Ocean Summit on August 22. In September, 3CE sponsored Fiestas Patrias de Watsonville’s Mexican Independence Day celebration on September 13.

These sponsorships strengthen 3CE’s relationships with community partners, support organizations serving the Central Coast, and provide opportunities to engage with local leaders, businesses, and residents across the region.

Presentations
During the reporting period, 3CE participated in regional forums and industry discussions to share its expertise and perspectives on clean energy, emerging technologies, and the evolving energy workforce.

On June 26, 3CE presented at the San Luis Obispo Chamber of Commerce’s Insight Studio: The Future of Clean Energy Technology, contributing to a discussion on the technologies and innovations shaping the region’s clean energy future. On September 9, 3CE presented at the SoCalREN Regional Workforce Alliance Meeting, engaging with regional partners on workforce development and opportunities associated with the clean energy transition.

These presentations provide opportunities for 3CE to share its expertise, strengthen regional partnerships, and contribute to conversations about the Central Coast’s clean energy and workforce future.

Events Attended
During the reporting period, 3CE staff participated in a wide range of community, business, government, and industry events throughout the Central Coast to strengthen relationships with regional partners, stay engaged on local priorities, and represent 3CE in important regional conversations.

In June, staff attended the Santa Barbara County Climate Collaborative Clean Energy Working Group meeting, the South County Chamber of Commerce Government Rise & Shine Breakfast, the San Luis Obispo Chamber of Commerce Legislative Committee, and the Monterey Peninsula Chamber of Commerce Special Districts Panel.

Staff also attended the Monterey County Business Council Supervisor Speaker Series with Supervisor Wendy

14 Root-Askew, as well as a California Rodeo and Monterey Regional Airport Chamber Mixer hosted by the Monterey Peninsula and Salinas Valley Chambers of Commerce.

July engagement included a tour of Diablo Canyon Power Plant with Leadership South County, the Environmental Defense Center’s TGIF event, the Imjin Parkway Widening Project Ribbon Cutting, and the Monterey County Business Council Supervisor Speaker Series with Supervisor Glenn Church. Staff also attended Good Morning SLO and the Santa Cruz Area Chamber of Commerce Women in Business Luncheon featuring Joby Aviation.

In August, 3CE attended the Central Coast Labor Council Annual Breakfast, Mona Miyasato’s Retirement Celebration, and a tour of GridStor’s Goleta Energy Storage Facility with Supervisor Roy Lee, Supervisor Laura Capps, Councilmember Eric Friedman, SBCC Trustee Kyle Richards, and labor and environmental organizations.

Staff also participated in the Monterey County Business Council Supervisor Speaker Series with Supervisor Chris Lopez and the Solvang State of the City.

September activities included the Monterey County Hospitality Association’s Women in Leadership event, the San Benito Business Council Luncheon featuring Speaker Robert Rivas, the REACH Regional Roundtable and tour of Vandenberg Space Force Base, and the Monterey Bay Economic Partnership’s AI & The Future of Our Region event. Staff also participated in CalCCA’s Legislative Committee Fall Planning Meeting on September 11.

Participation in these events helps 3CE maintain strong relationships with local governments, business and labor organizations, community partners, and energy stakeholders while staying informed about the economic, policy, infrastructure, and community issues shaping the Central Coast.

Staff Report Item 3
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Gina Urmatan, Senior Accountant
SUBJECT: Financial Report for the period of October 1, 2025, through June 30, 2026 DATE: September 17, 2026
RECOMMENDATION:

Receive a financial report for the period October 1, 2025, through June 30, 2026.

BACKGROUND:

Consistent with 3CE’s commitment to affordability and prudent cost management, financial performance through the first three quarters of the fiscal year was favorable, with revenues slightly exceeding budget and expenditures remaining below plan, primarily due to lower energy costs. As a result, the 3CE’s cash and investment position grew, and its net position increased compared to the start of the fiscal year, while overall liabilities declined. Additional details on revenues, expenditure, receivables, collateral, and liquidity are followed below.

DISCUSSION/ANALYSIS:

For the period ending June 30, 2026, 3CE reported operating revenues of $419.2 million and operating expenses of $346.3 million, resulting in operating income of $73.0 million. Net non-operating revenue totaled $7.7 million, primarily driven by interest and investment returns, resulting in a total increase in net position of $80.7 million.

Year-to-date electricity sales revenue was $11.2 million above budget, primarily because rate revenue came in above budget across multiple customer classes and load was slightly favorable by almost 1%.

Non-operating revenue, consisting primarily of investment returns from assets held in operating and investment accounts together with interest earned on collateral and deposit balances, exceeded budget by $0.9 million due to higher-than-anticipated liquidity. In total, year-to-date revenues and other sources were $12.2 million above budget, representing a favorable variance of 3%. This favorable

variance is expected to compress at year-end, as rates were adjusted downward on February 15, 2026, and the fourth quarter includes 3CE's highest-priced summer months.

Year-to-date operating expenditures, excluding capital outlay, were $74.5 million below budget, representing a favorable variance of 18%. This variance was primarily attributable to lower-than-anticipated energy costs, which were $70.0 million under budget. The favorable energy cost variance reflects a combination of factors, including strong portfolio management, lower market prices, the timing of invoices for items such as Renewable Energy Credits (RECs) and annual net energy metering true-ups, and higher-than-planned revenue from congestion revenue rights. A portion of this variance is attributable to timing and is expected to reverse in the fourth quarter as 3CE fulfills its remaining energy-related obligations, including resource adequacy (RA) and REC purchases, and as costs increase during the higher-priced summer months.

Non-energy operating costs were $4.4 million below budget, consisting of $1.2 million in salaries and benefits, primarily due to staff vacancies and the timing of new hires, and $3.2 million in services and supplies, primarily due to lower-than-planned costs for contracted services. Capital outlay was $0.3 million below budget due to pending work on electric vehicle charging and tenant improvement capital projects. Non-energy operating costs are expected to increase in the fourth quarter as contracted services materialize and energy programs and capital projects continue to progress. Year-to-date total expenditures, including capital outlay, were $74.7 million lower than budget, representing a favorable variance of 18%.

Net position as of June 30, 2026, totaled $343.4 million, representing an increase of $80.7 million from the prior fiscal year-end balance of $262.7 million. This increase was primarily driven by higher cash and investment balances, along with a $39.1 million decrease in accrued cost of electricity. Cash, cash equivalents, restricted cash, and investments totaled $308.8 million, an increase of approximately $85.8 million from the start of the fiscal year. The favorable change in liquidity was primarily attributable to cash generated from operating revenues. Overall, 3CE’s year-to-date financial statements reflect a strong financial position, with increased liquidity, reduced liabilities, and continued growth in net position compared to the prior fiscal year-end.
3CE's counterparty collateral position consists of three components. First, 3CE maintains $2.4 million in interest-bearing Letter of Credit accounts with SCE and PG&E, reported as restricted cash, satisfying its regulatory-mandated Provider of Last Resort (POLR) Financial Security Requirement (FSR). Second, 3CE has posted $12.0 million in deposits with energy counterparties, reported as current and non-current assets; these balances declined by $13.5 million during the period. Third, and in the other direction, 3CE holds $13.1 million in security deposits posted by its own energy suppliers, reported as a liability, as

protection against nonperformance by those suppliers; these balances increased by $1.6 million during the period.

Accounts receivable, net of allowance for doubtful accounts, totaled $41.8 million as of June 30, 2026.

Approximately 78.7% of this balance was current or aged 30 days or less, consistent with normal billing cycles. Approximately $5.9 million, or 14.1% of total receivables, was aged over 91 days. This balance is presented net of an allowance for doubtful accounts, which reserves for anticipated losses, including amounts in the over-91-day category.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

CONCLUSION:

Staff will continue to monitor accounts receivable aging, energy cost trends, and liquidity throughout the remaining months of the fiscal year and will bring any material changes to the Board's attention in future reports. These are unaudited, compiled interim financial statements. Year-end results remain subject to 3CE’s annual independent audit.

ATTACHMENT(S):

1. June 30, 2026 Financial Report

Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 8
Investment Summary 9
Accounts Receivable Aging Summary 10
Table of Contents

FINANCIAL REPORT
Fiscal Year to Date
As of June 30, 2026

1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying financial statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of June 30, 2026, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the nine months then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
July 31, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

ASSETS
Current assets
Cash and cash equivalents - unrestricted 197,970,717$
Cash - restricted 2,380,711
Accounts receivable, net of allowance 41,819,250
Accrued revenue 31,635,215
Other receivables 2,813,041
Investments 88,522,211
Prepaid expenses 497,433
Deposits 11,983,360
Loan receivable 197,952
Total current assets 377,819,890
Noncurrent assets
Investments 19,931,050
Deposits 53,629
Loan receivable 937,826
Capital assets, net of depreciation and amortization 6,979,178 Total noncurrent assets 27,901,683
Total assets 405,721,573

LIABILITIES
Current liabilities
Accrued cost of electricity 41,589,461
Accounts payable 1,442,433
Other accrued liabilities 3,571,385
User taxes and energy surcharges due to other governments 1,835,003 Security deposits - energy suppliers 1,116,000
Lease liability 265,780
Total current liabilities 49,820,062
Noncurrent liabilities
Security deposits - energy suppliers 11,950,650
Lease liability 579,833
Total noncurrent liabilities 12,530,483
Total liabilities 62,350,545

NET POSITION
Net investment in capital assets 6,133,565
Restricted for security collateral 2,380,711
Unrestricted 334,856,752
Total net position 343,371,028$
As of June 30, 2026

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY

OPERATING REVENUES
Electricity sales, net 419,016,521$
Other income 202,249
Total operating revenues 419,218,770

OPERATING EXPENSES
Cost of electricity 311,593,908
Contract services 10,213,640
Staff compensation 9,433,513
Program incentives 12,491,714
Other operating expenses 2,030,251
Depreciation and amortization 492,490
Total operating expenses 346,255,516
Operating income (loss) 72,963,254

NONOPERATING REVENUES (EXPENSES)
Investment income 7,742,523
Interest expense (28,154)
Nonoperating revenues (expenses) 7,714,369
CHANGE IN NET POSITION 80,677,623
Net position at beginning of period 262,693,405
Net position at end of period 343,371,028$
Nine Months Ended June 30, 2026

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CENTRAL COAST COMMUNITY ENERGY

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 455,789,335$
Receipts from wholesale sales and other operating revenue 10,383,895 Receipts of deposits and collateral 65,977,869
Payments to suppliers for electricity (359,460,109)
Payments for other goods and services (12,816,699)
Payments of deposits and collateral (50,921,676)
Payments for program incentives (13,018,069)
Payments for staff compensation (9,144,575)
Payments of taxes and energy surcharges to other governments (7,810,285) Net cash provided by operating activities 78,979,686

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease (311,131)
Purchases of capital assets (683,882)
Net cash provided (used) by capital and related financing activities (995,013)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 5,447,209
Proceeds from sales and maturities of investments 124,915,000 Loan principal received 194,301
Investment purchases (125,344,394)
Net cash provided (used) by investing activities 5,212,116 Net change in cash and cash equivalents 83,196,789
Cash and cash equivalents at beginning of year 117,154,639 Cash and cash equivalents at end of period 200,351,428$ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 197,970,717$
Cash - restricted 2,380,711
Cash and cash equivalents 200,351,428$
Change in fair value of investments 2,458,219$
Change in interest income receivable (162,905)$
Nine Months Ended June 30, 2026

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

NONCASH INVESTING ACTIVITIES

Operating income (loss) 72,963,254$
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 492,490
(Increase) decrease in:

Accounts receivable, net of allowance 20,643,342
Accrued revenue 8,709,096
Other receivables 1,141,707
Prepaid expenses (43,153)
Deposits 13,478,867
Increase (decrease) in:

Accrued cost of electricity (39,148,503)
Accounts payable (1,849,974)
Other accrued liabilities 1,405,142
User taxes and energy surcharges due to other governments (389,908) Security deposits - energy suppliers 1,577,326
Net cash provided by operating activities 78,979,686$

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Nine Months Ended June 30, 2026

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

1 ACCOUNTANTS’ COMPILATION REPORT

Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose budgetary comparison schedule of Central Coast Community Energy (a California Joint Powers Authority) for the one and nine months ended June 30, 2026, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
July 31, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

Actual Budget Amount % Actual Budget Amount % Budget
Annual Budget
Less Actual
YTD

REVENUES AND OTHER SOURCES
Electricity sales, net $ 49,212,630 $ 49,620,404 $ (407,774) -1% $ 419,016,521 $ 407,837,802 $ 11,178,719 3% $ 578,022,716 $ 159,006,195 Interest and investment returns 926,994 758,333 168,661 22% 7,742,523 6,824,997 917,526 13% 9,100,000 1,357,477 Other income 82,174 6,250 75,924 1215% 202,249 56,250 145,999 260% 75,000 (127,249) Total revenues and other sources 50,221,798 50,384,987 (163,189) 0% 426,961,293 414,719,049 12,242,244 3% 587,197,716 160,236,423 EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 32,525,538 38,470,769 5,945,231 15% 312,264,002 382,302,551 70,038,549 18% 534,776,256 222,512,254 Salaries and benefits 885,612 1,209,261 323,649 27% 9,433,513 10,627,724 1,194,211 11% 14,260,774 4,827,261 Services and supplies 2,317,725 2,978,371 660,646 22% 24,376,642 27,608,525 3,231,883 12% 38,160,686 13,784,044 Capital outlay 68,231 100,000 31,769 32% 641,827 900,000 258,173 29% 1,200,000 558,173 Total current expenditures 35,797,106 42,758,401 6,961,295 16% 346,715,984 421,438,800 74,722,816 18% 588,397,716 241,681,732 Surplus (deficit) 14,424,692$ 7,626,586$ 6,798,106$ 80,245,309$ (6,719,751)$ 86,965,060$ (1,200,000)$ (81,445,309)$ Favorable variances represent revenues exceeding budget or expenditures below budget.

Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Nine Months Ended June 30, 2026
Current Month
Variance
Favorable
(unfavorable)
Year-To-Date
Variance
Favorable
(unfavorable)

CCA Program surplus/(deficit)
per budgetary comparison schedule: 80,245,309$
Adjustments needed to reconcile to the changes in net position in the Statement of Revenues, Expenses and Changes in Net Position:

Add back GASB 87 lease amortization not in operating budget 282,977 Subtract depreciation expense (492,490)
Add back capital asset acquisitions 641,827
Change in Net Position 80,677,623$

REVENUES, EXPENSES AND CHANGES IN NET POSITION

CENTRAL COAST COMMUNITY ENERGY

BUDGET RECONCILIATION TO STATEMENT OF
Nine Months Ended June 30, 2026

Budget Item
YTD Variance -
Favorable
(Unfavorable) Comment
Electric Sales Revenue, net 2.7% Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.

Cost of Energy 18.3% Variances in this category are typically due to (1) timing difference between projected and actual REC deliveries, (2) variance from actual to anticipated market prices, and (3) variance from actual to expected volume used by customers. Cost of energy includes scheduling coordinator fees for budget purposes only.

Salaries and Benefits 11.2% Staffing expenses are under budget due to the timing of new hires.

Services and Supplies 11.7% This category includes accounting, IT, technical and other consultants.

Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2025 through June 30, 2026

Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance 19,264,829$ 13,641,384$ 2,122,419$ 894,359$ 5,896,259$ 41,819,250$

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of June 30, 2026

Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank / Chase / West Coast Community Bank - Money Market and other Interest Earning AccountsFunds Invested - Average Balance 96,624,568$ 99,293,298$ 108,525,583$ 110,254,298$ 124,052,493$ 141,426,764$ 149,167,365$ 159,931,211$ 168,560,612$ Gains/Losses/Interest 3,607,818$ 331,876$ 320,565$ 354,632$ 351,482$ 354,822$ 444,421$ 451,349$ 497,284$ 501,386$ Average APY 4.12% 3.87% 3.92% 3.83% 3.43% 3.77% 3.63% 3.73% 3.57%INVESTMENTSSchwab/FidelityFunds Invested - Average Balance 131,114,341$ 131,499,666$ 131,948,441$ 132,208,888$ 132,677,578$ 133,044,877$ 133,414,246$ 133,771,576$ 134,102,592$ Gains/Losses/Interest 3,404,726$ 574,669.46 289,175.13 406,774.61 300,989.12 472,598.40 370,254.94 419,232.98 187,335.53 383,695.87 Average APY 5.26% 2.64% 3.70% 2.73% 4.27% 3.34% 3.77% 1.68% 3.43%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2025 through September 30, 2026

Staff Report Item 4
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Thomas White, Accountant
SUBJECT: Investment Performance Report for the period of October 1, 2025, through June 30, 2026
DATE: September 17, 2026
RECOMMENDATION:

Receive the quarterly investment performance report for the period of October 1, 2025, through June 30, 2026.

BACKGROUND:

As of June 30, 2026, Central Coast Community Energy held $309.0 million across its operating and investment accounts. The agency's investment strategy remains conservative and compliant with the 3CE Investment Policy and the California Government Code, prioritizing liquidity, capital preservation, and a passive investment approach. 3CE self-manages all its investments; the agency does not currently retain an outside party with discretionary investment authority. Charles Schwab and Fidelity Investments serve solely as custodial brokerage platforms executing transactions directed by 3CE staff.

DISCUSSION/ANALYSIS:
3CE held investment holdings as of June 30, 2026, that aligned with the Investment Policy and a strategy of maintaining sufficient cash to meet operating costs, including counterparty collateral calls. The strategy consists of holding three different classes of funds: cash to meet ongoing operating costs, liquidity reserves to meet collateral calls, capital acquisition, and unforeseen costs, and short-term investments to meet reserves, including the strategic reserve and energy rate stabilization funds. As of June 30, 2026, 3CE held $309.0 million in operating and investment accounts. The table below lists the cash and investment balances by account type.

Cash and Investment Mix Holdings by Institution
Account Type Institution Balance Investment Mix
Operating
River City Bank $125,829,948
cash (sweep) - $119.2M
money market - $0.2M
cash (operating) - $4.0M
letters of credit - $2.4M
JP Morgan Chase $14,102,262 cash (held for collateral)
West Coast Community Bank $34,986,536 money market
Investment
Schwab $66,313,999
Treasuries - $51.0M
cash (sweep) - $5.0M
money market - $10.3M
Fidelity $67,788,594 Treasuries (incl. accrued interest) - $67.7M money market - $0.1M
Total $309,021,340
Cash and Investment Mix Holdings by Type
Type Market Value % of Portfolio Permitted by CA Gov Code §53601 Cash and cash equivalents $142,348,447 46.1% 100.0%
Money Market Funds $48,030,979 15.5% 20.0%
U.S. Treasuries $118,641,914 38.4% 100.0%
Total $309,021,340 100.0%
Investment Policy Compliance Certification
Pursuant to Government Code Section 53646(b)(2), the following certifies the portfolio's compliance with 3CE's Investment Policy and the California Government Code as of June 30, 2026:

Requirement
Policy / Code
Reference
3CE Status as of 6/30/26 Compliant?
Money market fund concentration ≤
20% of portfolio
Gov. Code §53601(l);
Investment Policy 15.5% of portfolio Yes
Maximum maturity ≤ 5 years absent
prior Board approval Gov. Code §53601 Longest maturity 6/30/2028 (~2.0 years) Yes Prohibited instruments (inverse floaters,
range notes, IO strips) not held Gov. Code §53601.6 None held Yes Investments limited to permitted
issuers/instrument types Gov. Code §53601
100% direct U.S. Treasury
obligations; remainder in FDIC-eligible bank deposits and government money market funds
Yes
Annual delegation of investment
authority to Treasurer current Gov. Code §53607 9/18/2025 Yes 3CE Investment Policy
considered/reviewed by legislative body
within last year
Gov. Code §53646(a) 9/18/2025 Yes

Six-Month Expenditure Sufficiency Statement
Pursuant to Government Code Section 53646(b)(3): as of June 30, 2026, 3CE held $306.6 million in unrestricted cash and investments (total portfolio of $309.0 million, less $2.4 million pledged as collateral to counterparties, the SCE and PG&E letter-of-credit security accounts). The JP Morgan Chase account is a cash equivalent used for collateral purposes, but is not restricted.

On a static basis (assuming no further revenue collections), this represents approximately 6.3 months of FY budgeted operating expenditure of $588.4 million (annualized, less depreciation). 3CE continuously collects operating revenue throughout the year, averaging approximately $46.2 million per month, which substantially exceeds this static coverage measure. 3CE has sufficient resources, together with ongoing operating receipts, to meet its expenditure requirements for the next six months.

Portfolio Characteristics
All fixed-income holdings at Schwab and Fidelity are direct obligations of the U.S. Treasury, consistent with 3CE's prudent, capital-preservation-focused investment strategy. As of June 30, 2026, 3CE managed $134.1 million in investments across its Schwab and Fidelity brokerage accounts. The combined $118.4 million Treasury portfolio had a weighted average maturity of approximately 204 days (0.56 years), with yields ranging from approximately 3.4% to 4.2%. Treasuries maturing within one year represented approximately 83% of holdings; the remainder mature between September 2027 and June 2028.

Quarterly Trend
Quarter Ended Total Cash & Investments
Cash & Equiv.
%
Money Market Funds
%
U.S. Treasuries %
12/31/2025 $243.5M 37.0% 14.7% 48.3%
3/31/2026 $282.5M 42.6% 14.7% 42.7%
6/30/2026 $309.0M 46.1% 15.5% 38.4%
FISCAL IMPACT:

There is no fiscal impact to receiving this report.

CONCLUSION:
3CE continues to proactively diversify its financial institutional partnerships, self-manage its investment portfolio, and strengthen the transparency of its quarterly reporting to the Audit and Finance Committee, Operations Board, and Policy Board. The agency strategically deploys cash and short-term U.S. Treasury investments to capture favorable yields while maintaining sufficient liquidity to meet operating expenses and collateral requirements, consistent with the 3CE Investment Policy and California Government Code.

ATTACHMENT(S):

1. Attachment A: Investment Securities Detail Schedule

ATTACHMENT A: INVESTMENT SECURITIES DETAIL SCHEDULE
Pursuant to Government Code Section 53646(b)(1), the following schedule lists the type, issuer, maturity, par amount, and market value of all securities and cash positions held as of the dates indicated.

A-1. Fixed-Income Securities (all U.S. Treasury obligations, as of 6/30/2026) Custodian CUSIP Type Coupon Maturity Par ($)
Market Value
($)
Yield
Schwab 912797UR6 T-Bill Zero 07/28/26 5,000,000 4,986,444 3.7% Schwab 912797TQ0 T-Bill Zero 07/30/26 10,000,000 9,971,120 3.5% Schwab 912797UT2 T-Bill Zero 08/11/26 4,500,000 4,481,422 3.7% Schwab 912797TY3 T-Bill Zero 08/27/26 4,348,000 4,322,597 3.6% Schwab 91282CLH2 T-Note 3.750% 08/31/26 2,500,000 2,499,707 3.9% Schwab 912797UG0 T-Bill Zero 09/17/26 500,000 496,035 3.7% Schwab 912797UH8 T-Bill Zero 09/24/26 5,000,000 4,956,615 3.8% Schwab 912797VL8 T-Bill Zero 10/13/26 5,000,000 4,946,194 3.8% Schwab 912797UK1 T-Bill Zero 10/15/26 4,500,000 4,450,909 3.7% Schwab 912797SK4 T-Bill Zero 10/29/26 5,000,000 4,937,333 3.7% Schwab 912797VH7 T-Bill Zero 12/17/26 5,000,000 4,910,688 3.8% Fidelity 912797TN7 T-Bill Zero 07/16/26 5,000,000 4,992,500 3.4% Fidelity 91282CLB5 T-Note 4.375% 07/31/26 5,000,000 5,002,600 3.8% Fidelity 912797TY3 T-Bill Zero 08/27/26 5,652,000 5,619,162 3.7% Fidelity 912797UG0 T-Bill Zero 09/17/26 6,200,000 6,151,020 3.7% Fidelity 912797SU2 T-Bill Zero 11/27/26 1,300,000 1,279,720 3.8% Fidelity 912797TM9 T-Bill Zero 01/21/27 10,000,000 9,790,600 3.8% Fidelity 912797UD7 T-Bill Zero 03/18/27 5,000,000 4,864,000 3.9% Fidelity 912797UE5 T-Bill Zero 04/15/27 5,000,000 4,848,850 3.9% Fidelity 91282CMY4 T-Note 3.750% 04/30/27 5,000,000 4,986,700 4.1% Fidelity 91282CPB1 T-Note 3.500% 09/30/27 5,000,000 4,960,750 4.1% Fidelity 91282CQH7 T-Note 3.875% 03/31/28 5,000,000 4,975,400 4.2% Fidelity 91282CQY0 T-Note 4.125% 06/30/28 10,000,000 9,994,900 4.2% Total $118,425,266
Note: Schwab does not calculate a yield to maturity for this CUSIP because it holds multiple tax lots; the figure shown is calculated using the same approximate-yield formula as footnote 2. Fidelity's statement does not report a per-position yield to maturity. The figure shown is calculated using the standard approximate-bond-yield formula: YTM ≈ [Coupon + (Par−Price)/Years to Maturity] / [(Par+Price)/2], based on each security's own par, market value, maturity date, and coupon rate — an estimate, not a custodian-reported figure.

A-2. Cash, Bank Deposits & Money Market Funds
Institution Account Type Balance ($) As of
River City Bank ICS Investment Bank sweep / ICS cash $119,223,259 6/30/26 River City Bank Money Market Public fund money market $225,977 6/30/26 River City Bank Operating Operating cash $4,000,000 6/30/26 River City Bank SCE LOC Security Collateral (restricted) $308,486 6/30/26 River City Bank PG&E LOC Security Collateral (restricted) $2,072,225 6/30/26 JP Morgan Chase Operating Collateral $14,102,262 6/30/26 West Coast Community Bank Money Market Money market $34,986,536 6/30/26 Schwab Cash + Bank Sweep Cash sweep $5,022,925 6/30/26
Schwab SNSXX Schwab US Treasury
Money Market Money market fund $10,332,010 6/30/26
Fidelity SPAXX Fidelity Government
Money Market Money market fund $322,392 6/30/26
Total $190,596,074

Staff Report Item 5
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Thomas White, Accountant
SUBJECT: Annual review and approval of the administrative and conforming amendments to the Investment Policy (FP 11) and renewal of delegation of investment authority to the Treasurer
DATE: September 17, 2026
RECOMMENDATION:

This memorandum recommends that the Policy Board:
a. Consider and approve the administrative and conforming amendments to the 3CE Investment Policy (FP-11), pursuant to California Government Code section 53646(a); and b. Renew the delegation of investment authority to the Treasurer for a one-year period pursuant to California Government Code section 53607.

BACKGROUND:

Pursuant to California Government Code section 6505 and section 3.3.3(h) of 3CE’s Joint Exercise of Powers Agreement, the Policy Board appoints the agency’s Treasurer. The Board will consider the selection under a separate board action in this scheduled meeting agenda.

Government Code section 53607 permits the Policy Board to delegate its investment authority to the Treasurer for a one-year period, subject to annual renewal and to ongoing reporting and oversight.

Government Code section 53646(a) provides for the Treasurer to annually render the agency’s statement of investment policy (“Investment Policy”) to the legislative body for consideration at a public meeting, and requires that any change to the policy likewise be considered at a public meeting.

The agency’s fiscal year runs from October 1 through September 30. The delegation is accordingly renewed on a fiscal-year basis, with Board consideration occurring at the last regular Policy Board meeting preceding the start of each fiscal year.

The Investment Policy was last amended before the agency transition from Monterey Bay Community Power to Central Coast Community Energy, and the policy text has not been updated since then. Staff has completed a comprehensive review of the Investment Policy against the current provisions of Government Code sections 53600 et seq., the California Debt and Investment Advisory Commission’s Local Agency Investment Guidelines, and the investment policies of peer Community Choice Aggregators.

DISCUSSION/ANALYSIS:

Annual Review of the Investment Policy and Recommended Updates The Policy Board is asked to consider the Investment Policy annually. Staff has reviewed the policy against current statutory requirements. The amendments presented for adoption fall into two categories: administrative and conforming to changes to existing statutory requirements.

Administrative corrections
These have no effect on investment authority or practice and include:

1. Updating references from “MBCP” to “3CE” and from “Board of Directors” to “Policy Board” throughout;

2. Correcting two internal cross-references in the municipal securities provisions that point to the wrong subdivisions, and a citation omitting a subdivision range;

3. Correcting two typographical errors and updating the Local Agency Investment Fund per-agency maximum in the glossary; and

4. Adding definitions for seven terms already used in the Investment Policy but not previously defined.

Conforming changes to existing statutory requirements
These restate obligations that already apply to 3CE as a matter of state law, so that the Investment Policy accurately reflects the governing statutes. They include the trustee and prudent investor standard under section 53600.3; the one-year delegation term and monthly transaction report under section 53607; the annual rendering requirement under section 53646(a) and the report contents described in section 53646(b); depository requirements under sections 53630 et seq., 53635.2, 53638, 53649, and 53652; the increase in the maximum maturity for commercial paper from 270 to 397 days under 2025 legislation amending section 53601(h), together with the issuer limit in that subdivision; the prohibition on zero-interest accrual securities under section 53601.6; and the statutory measurement of an investment’s term and the limit on forward settlement dates.

No new investment authority is granted, and no existing restrictions are modified. The list of authorized investments is unchanged. The maximum maturity for 3CE investments remains two years, and the existing percentage limits, including the 20% limit on commercial paper, are unchanged. Staff has separately identified several substantive policy revision opportunities raised by the review, including portfolio diversification and issuer concentration limits, custody and settlement practices, the treatment

of funds held under the agency’s prepaid energy transactions, and whether the two-year maximum maturity remains appropriate given the 3CE’s current balance sheet. These matters involve policy judgment rather than statutory compliance and are not addressed in the amendments presented here.

After staff finishes reviewing these revision opportunities, it will bring them to the Audit and Finance Committee for review and return to the Policy Board with any recommended amendments.

Renewal of Delegation of Investment Authority
3CE requests that the Policy Board renew the delegation of investment authority to the Treasurer for FY 2026-27, the one-year period commencing October 1, 2026 and ending September 30, 2027, as prescribed by California Government Code section 53607. The current delegation, approved by the Board on September 18, 2025, remains in effect through September 30, 2026, so renewal at this meeting maintains delegation without interruption. The delegation runs to the office of Treasurer rather than to any individual and remains in effect through the term, regardless of changes in the individual holding the office.

Since the Board’s original delegation, the Treasurer has invested agency funds in accordance with the Investment Policy. Renewal of the delegation maintains continuity of investment management and allows 3CE to continue generating investment income. The Treasurer provides an investment performance report quarterly to the Audit and Finance Committee, the Operations Board, and the Policy Board, consistent with Government Code section 53646(b).

Delegation does not relieve the Policy Board of ultimate responsibility for and oversight of agency funds.

It authorizes the Treasurer to execute day-to-day investment transactions within the parameters of the Investment Policy and California Government Code, subject to the Board’s continuing review.

FISCAL IMPACT:

There is no direct fiscal impact associated with the annual policy review, the proposed amendments, or the delegation renewal.

CONCLUSION:

Consideration of the Investment Policy and renewal of the delegation of investment authority satisfy the annual obligations under Government Code sections 53646(a) and 53607 and the Investment Policy, and ensure continuity in managing agency funds.

ATTACHMENTS:

1. 3CE Investment Policy (FP-11) – Redline showing proposed amendments

2. 3CE Investment Policy (FP-11) – Clean copy as proposed to be amended

1 FP11
Category: FINANCE

INVESTMENT POLICY
I. PURPOSE
This statement contains guidelines for the prudent investment of MBCP3CE's cash balances in accordance with California Government Code sections 53600, et. seq. The overarching goal of MBCP3CE’sthe Investment Policy is to protect MBCP3CE's pooled cash while producing a reasonable rate of return on investments.producing a reasonable rate of return on investments. This Policy is rendered annually to the Policy Board for consideration at a public meeting pursuant to Government Code section 53646(a), and any amendment to it is likewise considered at a public meeting.

II. STANDARD OF CARE
The standard of prudence to be used by investment officials will be the “prudent investor” standard, which states that,Pursuant to California Government Code section 53600.3, all persons authorized to make investment decisions on behalf of 3CE are trustees and therefore fiduciaries subject to the prudent investor standard, which states that, “when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” III.SCOPE
This Investment Policy applies to all funds and investment activities of MBCP3CE. This Policy does not apply to the investment of bond proceeds, which would be governed by any applicable bond documents.

IV.OBJECTIVES
The primary objectives, in priority order, of the investment activities of MBCP3CE are:

1. Safety of Principal – Preservation of principal is the foremost objective of MBCP3CE.

2. Liquidity – MBCP3CE’s portfolio will remain sufficiently liquid to enable MBCP3CE to meet its cash flow requirements. It is important that the portfolio contain investments which provide the ability of being easily sold at any time with minimal risk of loss of principal or interest.

Formatted: Left: 0.75", Right: 0.75", Top: 1", Bottom: 1"

2 3. Return on Investment – MBCP3CE’sThe investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and cash flow needs.

Delegation of Authority
Pursuant to California Government Code Section 53607, the Treasurer (and his/her designee, if necessary) is authorized to invest and reinvest money of MBCP3CE, to sell or exchange securities so purchased, and to deposit such securities for safekeeping in accordance with and subject to this investment policy.in accordance with and subject to this investment policy. The delegation of investment authority under Section 53607 is effective for a period of one year and must be renewed annually by the Policy Board, subject to review.

MBCP3CE may engage the support services of outside investment advisors in regard to its investment program, so long as these services are likely to produce a net financial advantage or necessary financial protection of MBCP3CE’s financial resources. Outside investment advisors must be approved by the Chief Executive Officer, the Treasurer and the Board of Directors. MBCP3CE will be responsible for managing the investment advisors.

Conflict of Interest
The authorized employees involved in the investment process will refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.

Pursuant to MBCP3CE’s Conflict of Interest Code, the authorized employees will disclose any financial interests and investment holdings that could affect the performance of MBCP3CE’sthe portfolio or the individual’s judgement or decisions regarding MBCP3CE’sthe portfolio.

Authorized Financial Dealers and Institutions
The purchase by MBCP3CE of any investment other than those purchased directly from the issuer, will be purchased either from an institution licensed by the State as a broker-dealer, as defined in Section 25004 of the Corporations Code, which is a member of the Financial Industry Regulatory Authority (FINRA), or a member of a federally regulated securities exchange, a national or state chartered bank, a federal or state association (as defined by Section 5102 of the Financial Code), or a brokerage firm designated as a Primary Government Dealer by the Federal Reserve Bank.

3 The Treasurer is responsible for the evaluation of all institutions that wish to do business with MBCP3CE, to determine if whether they are adequately capitalized, staffed by qualified investment professionals, and agree to abide by the conditions set forth in MBCP3CE’sthe Investment Policy and any other guidelines that may be provided. This will be done annually by having the financial institutions:

1. Provide written notification that they have read, and will abide by, theMBCP3CE’s Investment Policy.

2. Submit their most recent audited Financial Statements within 120 days of the institution’s fiscal year end.

If MBCP3CE has an investment advisor, the investment advisor may use its own list of authorized broker/dealers to conduct transactions on behalf of MBCP3CE.

Purchase and sale of securities will be made on the basis of best execution.

Authorized Investments
Acceptable investments authorized for purchase or behalffor purchase on behalf of MBCP3CE are:

1. Deposits at Bank(s) – Funds may be invested in non-interest-bearing depository accounts to meet MBCP3CE’s operating and collateral needs. Funds not needed for these purposes will be invested in interest-bearing depository or investment accounts such as Public Fund Money Market and Insured Cash Sweep accounts, or Certificates of Deposit.

Banks eligible to receive deposits will be federally or state chartered and will confirm to California Government Code 53635.2.will conform to California Government Code section 53635.2, which requires that a depository have received an overall rating of not less than “satisfactory” in its most recent evaluation by the appropriate federal financial supervisory agency of its record of meeting the credit needs of California’s communities. 3CE will execute a depository contract with each institution that accepts its funds, as required by Government Code section 53649.

Deposits in excess of the applicable federal deposit insurance limit must be collateralized in accordance with Government Code section 53652, at 110% of the deposit amount for most classes of collateral and 150% where the collateral is classified as mortgages. The amount on deposit at any one institution may not exceed that institution’s total shareholders’ equity, as required by Government Code section 53638.

4 A money market deposit account or other interest-bearing depository account is a deposit governed by Government Code sections 53630 et seq. and is not subject to the percentage limits applicable to securities authorized under Government Code section 53601. An Insured Cash Sweep or similar arrangement in which deposits are placed with other institutions through a private sector placement service is governed by Government Code section 53601.8 and is subject to the percentage limit stated in that section.

2. U.S. Treasury obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest.

3. Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

4. Obligations of the State of California or any local agency within the state, including bonds payable solely out of revenues from a revenue producing property owned, controlled or operated by the state or any local agency, or by a department, board, agency or authority of the state or any local agency that is rated in a rating category of “A” or its equivalent or better by a nationally recognized statistical-rating organization (NRSRO). Purchases of the obligations

5. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state, or by a department, board, agency, or authority of any of these states that is rated in a rating category of “A” or its equivalent or better by an NRSRO. Purchases of the obligations described in this subdivision and in subdivision 3 (obligations of thein subdivision 4 (obligations of the

6. Commercial Paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by an NRSRO. The entity that issues the commercial paper must meet all of the following conditions in either paragraph a or paragraph b:
a. The entity meets the following criteria: (i) is organized and operating in the United States as a general corporation, (ii) has total assets in excess of five hundred million dollars ($500,000,000), and (iii) has debt other than commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher by an NRSRO.

5 b. The entity meets the following criteria: (i) is organized within the United States as a special purpose corporation, trust, or limited liability company, (ii) has program-wide credit enhancements including, but not limited to, over collateralization, letters of credit, or surety bond, and (iii) has commercial paper that is rated “A-1” or higher, or the equivalent, by an NRSRO.

Eligible commercial paper will have a maximum maturity of 270 days or fewer.a maximum maturity of 397 days or fewer, consistent with Government Code section 53601(h) as amended effective January 1, 2026. No more than 20% of MBCP3CE’s portfolio may be invested in commercial paper. MBCP3CE may purchase no more than 10% of the outstanding commercial paper of any single issuer. No more than 5% of the outstanding commercial paper investments can be invested in the Energy industry/sector.can be invested in the Energy industry/sector. As required by Government Code section 53601(h), 3CE may purchase no more than 10% of the outstanding commercial paper of any single issuer.

7. Repurchase Agreements. Overnight Repurchase Agreements shall be used solely as short-term investments not to exceed 3 days.

8. Local Agency Investment Fund (State Pool) - An investment pool managed by the State Treasurer.

MBCP3CE can invest up to the maximum amount permitted by the State Treasurer.

9. County Investment Fund (County Pool) - Shares of beneficial interest issued by a joint powers authority (Local Government Investment Pools or “Pool”) organized pursuant to California Government Code Section 6509.7 that invests in the securities and obligations authorized in subdivisions to (q) of California Government Code Section 53601, inclusive.authorized in subdivisions (a) to (q), inclusive, of California Government Code Section 53601. Each share will represent an equal proportional interest in the underlying pool of securities owned by the Joint Powers Authority. The Pool will be rated in a rating category “AAA” or its equivalent by a NRSRO. To be eligible under this section, the shares will maintain a stable net asset value (NAV) and the joint powers authority issuing the shares will have retained an investment adviser that meets all of the following criteria:
a. The adviser is registered or exempt from registration with the Securities and Exchange Commission.
b. The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q) California Government Code Section 53601, inclusive.

6 c. The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

Pursuant to Government Code section 53601.6, 3CE will not invest in any security that could result in a zero-interest accrual if held to maturity, including inverse floaters, range notes, and mortgage-derived interest-only strips. Under a provision sunsetting January 1, 2031, securities issued or backed by the United States government that could result in a zero- or negative-interest accrual if held to maturity are permitted during a period of negative market interest rates.

Restriction on Investment Policies and MBCP3CE Constraints Section 53600 et. seq. of the State of California Government Code outlines the collateral requirements for certain types of investments and also limits the percentage of total investments which can be placed in certain classifications. Investments must meet the time schedules as indicated by the cash flow projections of MBCP3CE. Investments will be purchased with the intent to hold until maturity, however this will not preclude the sale of securities prior to maturity in order to reposition the portfolio’s duration, credit quality, or enhance the rate of return.

Where the Investment Policy specifies a percentage limitation for a particular category of investment, that percentage applies only at the date of purchase, consistent with Government Code section 53601.

A subsequent change in market value or in the size of the portfolio does not constitute a violation of this Policy. No security may be purchased with a forward settlement date exceeding 45 days from the time of investment.

Maturity Limit
State law requires that the maturity of any given instrument should not exceed five years unless specifically approved by the MBCP Board of Directors3CE Policy Board at least three months before the investment is made. Maximum Maturity for MBCP’s investments shall be limited to 2 years.Maximum maturity for 3CE’s investments shall be limited to 2 years, measured from the settlement date to final maturity.

Internal Control
The Treasurer is responsible for establishing and maintaining an internal control structure designed to provide reasonable assurance that the assets of MBCP3CE are protected from loss, theft or misuse. The MBCP3CE Treasurer or his/her designee shall arrange for an annual audit by an external CPA firm in compliance with the requirements of state law and generally accepted accounting principles as pronounced by the GASB (Governmental Accounting Standards Board). As part of the audit, investment

7 transactions will be tested. The annual audit will be an integral part, but not the sole part of management’s program of monitoring internal controls.

Performance Standards
MBCP3CE’s portfolio shall be structured to achieve a market-average rate of return through various economic cycles, commensurate with the investment risk constraints and the cash flow needs.

Investment performance will be calculated on a gross basis before fees and expenses and tracked monthly for internal use and monitoring.

Reporting Requirements
The Treasurer will provide a year-to-date investment summary to the Board of Directors on a monthly basisto the Policy Board on a monthly basis. The summary will show the type of investment, the average balance of funds invested, and average annual percentage yield.and average annual percentage yield. So long as investment authority is delegated to the Treasurer under Government Code section 53607, the monthly report will also account for each purchase, sale, exchange, and maturity of securities during that month, as required by that section.

Within 90 days of the end of each fiscal year, the Treasurer will render an annual report to the Policy Board, the Operations Board, the Audit and Finance Committee, and the Chief Executive Officer containing the information described in Government Code section 53646(b), including: a listing of individual securities by investment type, issuer, credit rating, CUSIP number, maturity date, par value, and amount invested; the percentage of the portfolio represented by each investment category; the current market value of all securities as of the report date and the source of that valuation; a statement that the portfolio is in compliance with this Policy and with Government Code section 53646, or an explanation of any non-compliance; and a statement of 3CE’s ability to meet its expenditure requirements for the next six months, together with an explanation if sufficient funds will not be available. The report will also state the weighted average maturity of the portfolioportfolio's weighted average maturity.

For funds held in the Local Agency Investment Fund, a county investment pool, or federally insured deposit accounts, the most recent account statement from those entities may be substituted for the security-level detail otherwise required above.

Policy Review
This Investment Policy will be reviewed at least annually to ensure its consistency with:

8 1. 1. The California Government Code sections that regulate the investment and reporting of funds.

1. 2. The overall objectives of preservation of principal, sufficient liquidity, and a market return.

9 Glossary
Broker-Dealer is a person or a firm who can act as a broker or a dealer depending on the transaction. A broker brings buyers and sellers together for a commission. They do not take a position. A dealer acts as a principal in all transactions, buying and selling for his own account.

Collateral refers to securities, evidence of deposits, or other property that a borrower pledges to secure repayment of a loan. It also refers to securities pledged by a bank to secure deposits. In California, repurchase agreements, reverse repurchase agreements, and public deposits must be collateralized.

Commercial Paper is a short term, unsecured, promissory note issued by a corporation to raise working capital.

CUSIP is the unique nine-character identifier assigned to a security by the Committee on Uniform Securities Identification Procedures, used to identify individual holdings in investment reports.

Duration is a measure of the sensitivity of the price of a security or a portfolio of securities to a change in interest rates, typically stated in years.

Federal Agency Obligations are issued by U.S. Government Agencies or Government Sponsored Enterprises (GSE). Although they were created or sponsored by the U.S. Government, most Agencies and GSEs are not guaranteed by the United States Government. Examples of these securities are notes, bonds, bills and discount notes issued by Fannie Mae (FNMA), Freddie Mac (FHLMC), the Federal Home Loan Bank system (FHLB), and Federal Farm Credit Bank (FFCB). The Agency market is a very large and liquid market, with billions traded every day.

Issuer means any corporation, governmental unit, or financial institution that borrows money through the sale of securities.

Liquidity refers to the ease and speed with which an asset can be converted into cash without loss of value. In the money market, a security is said to be liquid if the difference between the bid and asked prices is narrow and reasonably sized trades can be done at those quotes.

Local Agency Investment Fund (LAIF) is a special fund in the State Treasury that local agencies may use to deposit funds for investment. There is no minimum investment period and the minimum transaction

10 is $5,000, in multiples of $1,000 above that, with a maximum of $65 million for any California public agencywith a maximum of $75 million for any California public agency. It offers high liquidity because deposits can be converted to cash in twenty-four hours and no interest is lost. All interest is distributed to those agencies participating on a proportionate share determined by the amounts deposited and the length of time they are deposited. Interest is paid quarterly via direct deposit to the agency’s LAIF account. The State keeps an amount for reasonable costs of making the investments, not to exceed one-quarter of one per cent of the earnings.

Local Government Investment Pools (LGIP) are investment tools similar to money market funds that allow public entities to invest funds.

Market Value is the price at which a security is trading and could presumably be purchased or sold.

Maturity is the date upon which the principal or stated value of an investment becomes due and payable.

Money Market Deposit Account is an interest-bearing deposit account at a bank or other depository institution. It is a deposit governed by Government Code sections 53630 et seq. and is not a security under Government Code section 53601, so the percentage limits applicable to money market mutual funds do not apply to it.

Money Market Fund is a type of investment comprising a variety of short-term securities with high quality and high liquidity. The fund provides interest to shareholders. Eligible money market funds must strive to maintain a stable net asset value (NAV) of $1 per share.

Net Asset Value (NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value. Money Market funds that MBCP3CE is authorized to invest in are required to maintain an NAV of $1.00 at all times.

Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency registered with the U.S. Securities and Exchange Commission. Ratings from an NRSRO are used throughout this Policy to establish minimum credit quality. The three most widely used are Moody’s, S&P, and Fitch.

Par Value is the stated face value of a bill, note, or bond, and the amount the issuer repays at maturity.

11 Placement Service Deposit is a deposit made with a selected depository institution that uses a private sector entity to distribute the funds across a network of other institutions in amounts small enough that the full balance remains federally insured. Insured Cash Sweep (ICS) and the Certificate of Deposit Account Registry Service (CDARS) are the services most commonly used for this purpose.

Principal describes the original cost of a security. It represents the amount of capital or money that the investor pays for the investment.

Repurchase Agreements are short-term investment transactions. Banks buy temporarily idle funds from a customer by selling him U.S. Government or other securities with a contractual agreement to repurchase the same securities on a future date at an agreed upon interest rate. Repurchase Agreements are typically for one to ten days in maturity. The customer receives interest from the bank.

The interest rate reflects both the prevailing demand for Federal Funds and the maturity of the Repo.

Repurchase Agreements must be collateralized.

U.S. Treasury Issues are direct obligations of the United States Government. They are highly liquid and are considered the safest investment security. U.S. Treasury issues include:

1. Treasury Bills which are non-interest-bearing discount securities issued by the U.S. Treasury to finance the national debt. Bills are currently issued in one, three, six, and twelve-month maturities.

2. Treasury Notes that have original maturities of one to ten years.

3. Treasury Bonds that have original maturities of greater than 10 years.

Weighted Average Maturity is the average time to maturity of the securities in the portfolio, weighted by the amount invested in each. It is a summary measure of how exposed the portfolio is to changes in interest rates.

1 FP11
Category: FINANCE

INVESTMENT POLICY
I. PURPOSE
This statement contains guidelines for the prudent investment of 3CE's cash balances in accordance with California Government Code sections 53600, et. seq. The overarching goal of the Investment Policy is to protect 3CE's pooled cash while producing a reasonable rate of return on investments. This Policy is rendered annually to the Policy Board for consideration at a public meeting pursuant to Government Code section 53646(a), and any amendment to it is likewise considered at a public meeting.

II. STANDARD OF CARE
Pursuant to California Government Code section 53600.3, all persons authorized to make investment decisions on behalf of 3CE are trustees and therefore fiduciaries subject to the prudent investor standard, which states that, “when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” III. SCOPE
This Investment Policy applies to all funds and investment activities of 3CE. This Policy does not apply to the investment of bond proceeds, which would be governed by any applicable bond documents.

IV.OBJECTIVES
The primary objectives, in priority order, of the investment activities are:

1. Safety of Principal – Preservation of principal is the foremost objective of 3CE.

2. Liquidity – 3CE’s portfolio will remain sufficiently liquid to enable 3CE to meet its cash flow requirements. It is important that the portfolio contain investments which provide the ability of being easily sold at any time with minimal risk of loss of principal or interest.

2 3. Return on Investment – The investment portfolio will be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and cash flow needs.

Delegation of Authority
Pursuant to California Government Code Section 53607, the Treasurer (and his/her designee, if necessary) is authorized to invest and reinvest money of 3CE, to sell or exchange securities so purchased, and to deposit such securities for safekeeping in accordance with and subject to this investment policy. The delegation of investment authority under Section 53607 is effective for a period of one year and must be renewed annually by the Policy Board, subject to review. 3CE may engage the support services of outside investment advisors in regard to its investment program, so long as these services are likely to produce a net financial advantage or necessary financial protection of 3CE’s financial resources. Outside investment advisors must be approved by the Chief Executive Officer, the Treasurer and the Board of Directors. 3CE will be responsible for managing the investment advisors.

Conflict of Interest
The authorized employees involved in the investment process will refrain from personal business activities that could conflict with proper execution of the investment program, or impair their ability to make impartial decisions.

Pursuant to 3CE’s Conflict of Interest Code, the authorized employees will disclose any financial interests and investment holdings that could affect the performance of the portfolio or the individual’s judgment or decisions regarding the portfolio.

Authorized Financial Dealers and Institutions
The purchase by 3CE of any investment other than those purchased directly from the issuer, will be purchased either from an institution licensed by the State as a broker-dealer, as defined in Section 25004 of the Corporations Code, which is a member of the Financial Industry Regulatory Authority (FINRA), or a member of a federally regulated securities exchange, a national or state chartered bank, a federal or state association (as defined by Section 5102 of the Financial Code), or a brokerage firm designated as a Primary Government Dealer by the Federal Reserve Bank.

3 The Treasurer is responsible for the evaluation of all institutions that wish to do business with 3CE, to determine whether they are adequately capitalized, staffed by qualified investment professionals, and agree to abide by the conditions set forth in the Investment Policy and any other guidelines that may be provided. This will be done annually by having the financial institutions:

1. Provide written notification that they have read and will abide by the Investment Policy.

2. Submit their most recent audited Financial Statements within 120 days of the institution’s fiscal year end.

If 3CE has an investment advisor, the investment advisor may use its own list of authorized broker/dealers to conduct transactions on behalf of 3CE.

Purchase and sale of securities will be made on the basis of best execution.

Authorized Investments
Acceptable investments authorized for purchase on behalf of 3CE are:

1. Deposits at Bank(s) – Funds may be invested in non-interest-bearing depository accounts to meet operating and collateral needs. Funds not needed for these purposes will be invested in interest-bearing depository or investment accounts such as Public Fund Money Market and Insured Cash Sweep accounts, or Certificates of Deposit.

Banks eligible to receive deposits will be federally or state chartered and will conform to California Government Code section 53635.2, which requires that a depository have received an overall rating of not less than “satisfactory” in its most recent evaluation by the appropriate federal financial supervisory agency of its record of meeting the credit needs of California’s communities. 3CE will execute a depository contract with each institution that accepts its funds, as required by Government Code section 53649.

Deposits in excess of the applicable federal deposit insurance limit must be collateralized in accordance with Government Code section 53652, at 110% of the deposit amount for most classes of collateral and 150% where the collateral is classified as mortgages. The amount on deposit at any one institution may not exceed that institution’s total shareholders’ equity, as required by Government Code section 53638.

4 A money market deposit account or other interest-bearing depository account is a deposit governed by Government Code sections 53630 et seq. and is not subject to the percentage limits applicable to securities authorized under Government Code section 53601. An Insured Cash Sweep or similar arrangement in which deposits are placed with other institutions through a private sector placement service is governed by Government Code section 53601.8 and is subject to the percentage limit stated in that section.

2. U.S. Treasury obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest.

3. Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

4. Obligations of the State of California or any local agency within the state, including bonds payable solely out of revenues from a revenue producing property owned, controlled or operated by the state or any local agency, or by a department, board, agency or authority of the state or any local agency that is rated in a rating category of “A” or its equivalent or better by a nationally recognized statistical-rating organization (NRSRO). Purchases of the obligations described in this subdivision and in subdivision 5 (registered treasury notes or bonds of any of the other 49 states in addition to California) collectively may not exceed 20% of 3CE’s portfolio.

5. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state, or by a department, board, agency, or authority of any of these states that is rated in a rating category of “A” or its equivalent or better by an NRSRO. Purchases of the obligations described in this subdivision and in subdivision 4 (obligations of the State of California or any local agency within the state) collectively may not exceed 20% of 3CE’s portfolio.

6. Commercial Paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by an NRSRO. The entity that issues the commercial paper must meet all of the following conditions in either paragraph a or paragraph b:
a. The entity meets the following criteria: (i) is organized and operating in the United States as a general corporation, (ii) has total assets in excess of five hundred million dollars

5 ($500,000,000), and (iii) has debt other than commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher by an NRSRO. b. The entity meets the following criteria: (i) is organized within the United States as a special purpose corporation, trust, or limited liability company, (ii) has program-wide credit enhancements including, but not limited to, over collateralization, letters of credit, or surety bond, and (iii) has commercial paper that is rated “A-1” or higher, or the equivalent, by an NRSRO.

Eligible commercial paper will have a maximum maturity of 397 days or fewer, consistent with Government Code section 53601(h) as amended effective January 1, 2026. No more than 20% of 3CE’s portfolio may be invested in commercial paper. 3CE may purchase no more than 10% of the outstanding commercial paper of any single issuer. No more than 5% of the outstanding commercial paper investments can be invested in the Energy industry/sector. As required by Government Code section 53601(h), 3CE may purchase no more than 10% of the outstanding commercial paper of any single issuer.

7. Repurchase Agreements. Overnight Repurchase Agreements shall be used solely as short-term investments not to exceed 3 days.

8. Local Agency Investment Fund (State Pool) - An investment pool managed by the State Treasurer. 3CE can invest up to the maximum amount permitted by the State Treasurer.

9. County Investment Fund (County Pool) - Shares of beneficial interest issued by a joint powers authority (Local Government Investment Pools or “Pool”) organized pursuant to California Government Code Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (q), inclusive, of California Government Code Section 53601. Each share will represent an equal proportional interest in the underlying pool of securities owned by the Joint Powers Authority. The Pool will be rated in a rating category “AAA” or its equivalent by a NRSRO. To be eligible under this section, the shares will maintain a stable net asset value (NAV) and the joint powers authority issuing the shares will have retained an investment adviser that meets all of the following criteria:
a. The adviser is registered or exempt from registration with the Securities and Exchange Commission.
b. The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q) California Government Code Section 53601, inclusive.

6 c. The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

Pursuant to Government Code section 53601.6, 3CE will not invest in any security that could result in a zero-interest accrual if held to maturity, including inverse floaters, range notes, and mortgage-derived interest-only strips. Under a provision sunsetting January 1, 2031, securities issued or backed by the United States government that could result in a zero- or negative-interest accrual if held to maturity are permitted during a period of negative market interest rates.

Restriction on Investment Policies and 3CE Constraints
Section 53600 et. seq. of the State of California Government Code outlines the collateral requirements for certain types of investments and also limits the percentage of total investments which can be placed in certain classifications. Investments must meet the time schedules as indicated by the cash flow projections of 3CE. Investments will be purchased with the intent to hold until maturity, however this will not preclude the sale of securities prior to maturity in order to reposition the portfolio’s duration, credit quality, or enhance the rate of return.

Where the Investment Policy specifies a percentage limitation for a particular category of investment, that percentage applies only at the date of purchase, consistent with Government Code section 53601.

A subsequent change in market value or in the size of the portfolio does not constitute a violation of this Policy. No security may be purchased with a forward settlement date exceeding 45 days from the time of investment.

Maturity Limit
State law requires that the maturity of any given instrument should not exceed five years unless specifically approved by the 3CE Policy Board at least three months before the investment is made.

Maximum maturity for 3CE’s investments shall be limited to 2 years, measured from the settlement date to final maturity.

Internal Control
The Treasurer is responsible for establishing and maintaining an internal control structure designed to provide reasonable assurance that the assets of 3CE are protected from loss, theft or misuse. The 3CE Treasurer or his/her designee shall arrange for an annual audit by an external CPA firm in compliance with the requirements of state law and generally accepted accounting principles as pronounced by the GASB (Governmental Accounting Standards Board). As part of the audit, investment transactions will

7 be tested. The annual audit will be an integral part, but not the sole part of management’s program of monitoring internal controls.

Performance Standards
3CE’s portfolio shall be structured to achieve a market-average rate of return through various economic cycles, commensurate with the investment risk constraints and the cash flow needs.

Investment performance will be calculated on a gross basis before fees and expenses and tracked monthly for internal use and monitoring.

Reporting Requirements
The Treasurer will provide a year-to-date investment summary to the Policy Board on a monthly basis.

The summary will show the type of investment, the average balance of funds invested, and average annual percentage yield. So long as investment authority is delegated to the Treasurer under Government Code section 53607, the monthly report will also account for each purchase, sale, exchange, and maturity of securities during that month, as required by that section.

Within 90 days of the end of each fiscal year, the Treasurer will render an annual report to the Policy Board, the Operations Board, the Audit and Finance Committee, and the Chief Executive Officer containing the information described in Government Code section 53646(b), including: a listing of individual securities by investment type, issuer, credit rating, CUSIP number, maturity date, par value, and amount invested; the percentage of the portfolio represented by each investment category; the current market value of all securities as of the report date and the source of that valuation; a statement that the portfolio is in compliance with this Policy and with Government Code section 53646, or an explanation of any non-compliance; and a statement of 3CE’s ability to meet its expenditure requirements for the next six months, together with an explanation if sufficient funds will not be available. The report will also state the portfolio's weighted average maturity.

For funds held in the Local Agency Investment Fund, a county investment pool, or federally insured deposit accounts, the most recent account statement from those entities may be substituted for the security-level detail otherwise required above.

Policy Review
This Investment Policy will be reviewed at least annually to ensure its consistency with:

1. The California Government Code sections that regulate the investment and reporting of public funds.

8 2. The overall objectives of preservation of principal, sufficient liquidity, and a market return.

3. Following the review, the Treasurer will render this Policy to the Policy Board for consideration at a public meeting pursuant to Government Code section 53646(a). The Policy Board will consider any amendment to this Policy at a public meeting.

9 Glossary
Broker-Dealer is a person or a firm who can act as a broker or a dealer depending on the transaction. A broker brings buyers and sellers together for a commission. They do not take a position. A dealer acts as a principal in all transactions, buying and selling for his own account.

Collateral refers to securities, evidence of deposits, or other property that a borrower pledges to secure repayment of a loan. It also refers to securities pledged by a bank to secure deposits. In California, repurchase agreements, reverse repurchase agreements, and public deposits must be collateralized.

Commercial Paper is a short term, unsecured, promissory note issued by a corporation to raise working capital.

CUSIP is the unique nine-character identifier assigned to a security by the Committee on Uniform Securities Identification Procedures, used to identify individual holdings in investment reports.

Duration is a measure of the sensitivity of the price of a security or a portfolio of securities to a change in interest rates, typically stated in years.

Federal Agency Obligations are issued by U.S. Government Agencies or Government Sponsored Enterprises (GSE). Although they were created or sponsored by the U.S. Government, most Agencies and GSEs are not guaranteed by the United States Government. Examples of these securities are notes, bonds, bills and discount notes issued by Fannie Mae (FNMA), Freddie Mac (FHLMC), the Federal Home Loan Bank system (FHLB), and Federal Farm Credit Bank (FFCB). The Agency market is a very large and liquid market, with billions traded every day.

Issuer means any corporation, governmental unit, or financial institution that borrows money through the sale of securities.

Liquidity refers to the ease and speed with which an asset can be converted into cash without loss of value. In the money market, a security is said to be liquid if the difference between the bid and asked prices is narrow and reasonably sized trades can be done at those quotes.

Local Agency Investment Fund (LAIF) is a special fund in the State Treasury that local agencies may use to deposit funds for investment. There is no minimum investment period and the minimum transaction

10 is $5,000, in multiples of $1,000 above that, with a maximum of $75 million for any California public agency. It offers high liquidity because deposits can be converted to cash in twenty-four hours and no interest is lost. All interest is distributed to those agencies participating on a proportionate share determined by the amounts deposited and the length of time they are deposited. Interest is paid quarterly via direct deposit to the agency’s LAIF account. The State keeps an amount for reasonable costs of making the investments, not to exceed one-quarter of one per cent of the earnings.

Local Government Investment Pools (LGIP) are investment tools similar to money market funds that allow public entities to invest funds.

Market Value is the price at which a security is trading and could presumably be purchased or sold.

Maturity is the date upon which the principal or stated value of an investment becomes due and payable.

Money Market Deposit Account is an interest-bearing deposit account at a bank or other depository institution. It is a deposit governed by Government Code sections 53630 et seq. and is not a security under Government Code section 53601, so the percentage limits applicable to money market mutual funds do not apply to it.

Money Market Fund is a type of investment comprising a variety of short-term securities with high quality and high liquidity. The fund provides interest to shareholders. Eligible money market funds must strive to maintain a stable net asset value (NAV) of $1 per share.

Net Asset Value (NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value. Money Market funds that 3CE is authorized to invest in are required to maintain an NAV of $1.00 at all times.

Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency registered with the U.S. Securities and Exchange Commission. Ratings from an NRSRO are used throughout this Policy to establish minimum credit quality. The three most widely used are Moody’s, S&P, and Fitch.

Par Value is the stated face value of a bill, note, or bond, and the amount the issuer repays at maturity.

11 Placement Service Deposit is a deposit made with a selected depository institution that uses a private sector entity to distribute the funds across a network of other institutions in amounts small enough that the full balance remains federally insured. Insured Cash Sweep (ICS) and the Certificate of Deposit Account Registry Service (CDARS) are the services most commonly used for this purpose.

Principal describes the original cost of a security. It represents the amount of capital or money that the investor pays for the investment.

Repurchase Agreements are short-term investment transactions. Banks buy temporarily idle funds from a customer by selling him U.S. Government or other securities with a contractual agreement to repurchase the same securities on a future date at an agreed upon interest rate. Repurchase Agreements are typically for one to ten days in maturity. The customer receives interest from the bank.

The interest rate reflects both the prevailing demand for Federal Funds and the maturity of the Repo.

Repurchase Agreements must be collateralized.

U.S. Treasury Issues are direct obligations of the United States Government. They are highly liquid and are considered the safest investment security. U.S. Treasury issues include:

1. Treasury Bills which are non-interest-bearing discount securities issued by the U.S. Treasury to finance the national debt. Bills are currently issued in one, three, six, and twelve-month maturities.

2. Treasury Notes that have original maturities of one to ten years.

3. Treasury Bonds that have original maturities of greater than 10 years.

Weighted Average Maturity is the average time to maturity of the securities in the portfolio, weighted by the amount invested in each. It is a summary measure of how exposed the portfolio is to changes in interest rates.

Staff Report Item 6
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, CEO
SUBJECT: Appoint Robert Shaw as Secretary to the Policy Board of Directors and Operations Board of Directors
DATE: September 17, 2026
RECOMMENDATION:

Appoint Robert Shaw as Secretary to the Policy Board of Directors and Operations Board of Directors BACKGROUND / DISCUSSION:

The 3CE JPA requires at Section 3.9.3 that each Board “appoint a Secretary . . . who shall be responsible for keeping the minutes of all meetings of each Board and all other official records of the Authority.” The JPA further provides that if “the secretary appointed is an employee of the Authority, that employee may serve as Secretary to both Boards (Policy and Operations).”
Article VI, Section 6 of the 3CE Operating Rules and Regulations reinforces the above cited provisions of the JPA Agreement and clarifies that “Secretary” is synonymous with “Board Clerk.” Gail Borkowski joined 3CE as a contract employee and servs as the Board Clerk/Executive Assistant. 3CE intends to recruit for a permanent Board Clerk position. To ensure continuity, staff recommend appointing CEO Robert Shaw as Secretary to the Policy and Operations Boards and delegate responsibilities, as appropriate, to agency staff. Initially responsibilities will be delegated to Ms. Borkowski who has decades of public service experience, most notably serving for 9 years as the Clerk of the Board for Monterey County.

FISCAL IMPACT:

None

Staff Report Item 7
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Appoint Juan P. Lopez as 3CE Treasurer
DATE: September 17, 2026
RECOMMENDATION:

This recommends that the Policy Board appoint Juan P. Lopez, Director of Finance, to serve as Treasurer for Central Coast Community Energy.

BACKGROUND:
3CE’s Policy Board is responsible for selecting a Treasurer to organize, manage, and oversee the depository, custody, treasury, and financial matters of 3CE pursuant to CA Government Code Section 6505 and section 3.3.3(h) of 3CE’s JPA. Section 3.9.4 of the JPA further provides that the Policy Board shall select a qualified person to act as Treasurer, that the Treasurer need not be a member of the Board and that the Treasurer shall comply with the requirements of treasurers of incorporated municipalities.

Article VI, Section 5 of 3CE’s Operating Rules and Regulations assigns the Treasurer the duties and responsibilities specified in Government Code Section 6505.5 and provides that there is no term limit for the office.

The Policy Board last exercised this authority on June 21, 2023, appointing Dewayne Woods, then serving as Interim Chief Financial Officer, as Treasurer. Mr. Woods now serves as 3CE's Chief Power Officer, a role centered on power supply procurement and portfolio management rather than the agency’s depository, custody, accounting, and financial reporting functions. Assigning the Treasurer's statutory duties to the Director of Finance aligns the office with the position that performs those functions day-to-day
DISCUSSION/ANALYSIS:

Government Code Section 6505.5 designates the Treasurer as depositary and custodian of all money of the agency and requires the Treasurer to receive and receipt for all money, hold those funds in the

agency’s name subject to strict accountability, disburse funds only as authorized, and verify and report on all money held at least quarterly. Government Code Section 6505.6 expressly permits a joint powers authority to appoint one of its own officers or employees to serve as Treasurer in place of the officers otherwise designated in Section 6505.5, provided the appointee is qualified, and the agency continues to obtain the independent annual audit required by Section 6505. Mr. Lopez’s selection is authorized under that section.

The Treasurer establishes and maintains the funds and accounts required by good accounting practice or by the Policy Board (Operating Rules and Regulations, Article XII, Section 3); provides the Policy Board a complete written report of all financial activities within 120 days after the close of each fiscal year (Operating Rules and Regulations, Article XII, Section 4); and invests money not required for the agency’s immediate necessities, as directed by the Policy Board and as permitted by Government Code Section 53601 (Article XV). The Policy Board's direction under Article XV is expressed through 3CE’s Investment Policy, which establishes the permitted instrument types, credit quality standards, maturity and concentration limits, liquidity requirements, and reporting cadence within which the Treasurer exercises investment authority.

JPA Section 3.9.4 and Article VI, Section 5 of the Operating Rules provide that the Treasurer reports directly to the Policy Board. Selecting the Director of Finance preserves that direct line of accountability to the Board and places the Treasurer’s statutory custody and reporting duties with the staff position that already performs the agency’s treasury, investment, banking, and financial reporting functions.

Mr. Lopez has served as 3CE's Director of Finance since September 2023. He has been a central contributor to the agency’s treasury operations, investment and debt management, annual budget, financial close, and external audit, as well as developing the financial policies and internal controls that safeguard 3CE’s assets and ensure accurate financial reporting. He has helped prepare each of 3CE's last three annual budgets and supported 3CE's prepaid energy transactions through the California Community Choice Financing Authority, including the structuring, diligence, and ongoing administration of those financings. He holds a Master of Public Administration from the University of Southern California, with a concentration in public policy, and a Bachelor of Arts in Political Science from the University of California, Santa Cruz.

FISCAL IMPACT:

There is no fiscal impact associated with this appointment.

CONCLUSION:

The Board’s appointment of Mr. Lopez as Treasurer allows the Director of Finance to carry out the requisite duties of the Treasurer on behalf of 3CE.

Staff Report Item 8
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: Approve the FY 2026-27 Community Advisory Council Workplan and Adopt Resolution No. PB-2026-07 Establishing a Regular Meeting Schedule for the CAC DATE: September 17, 2026
RECOMMENDATION:

This recommends that the Policy Board of Directors approve the FY 2026-27 Community Advisory Council Workplan and adopt Resolution No. PB-2026-07 establishing a regular meeting schedule for the CAC.

BACKGROUND:

FY 2026-27 is the fifth year in which 3CE, in coordination with the Community Advisory Council (CAC) chair, submits an annual workplan directing the work of the CAC to its Policy Board for consideration and approval. The workplan helps align the CAC with Board priorities and focuses the CAC’s role in supporting 3CE’s energy programs. Previous CAC workplans included informational study sessions on important topics that aligned with agency priorities for electrification and energy optimization.

In FY 2024-25, the CAC workplan concerned an evaluation of the Electrify Your Home (EYH) Program, which promotes replacement of fossil-fuel powered water heating and space heating equipment with high-efficiency, all-electric heat pump alternatives. The CAC workplan included four community workshops and four CAC meetings. The workplan resulted in an enhanced Electrify Your Home version

2.0 to address community needs for accessible information, reduced barriers to program participation, and expanded rebate offerings.

In FY 2025-26, the CAC workplan focused on review of 3CE’s Agricultural Electrification Program, which offers rebates for customers replacing fossil fuel agricultural equipment with electric alternatives, including tractors, irrigation pumps, and farm tools. The workplan included over nine focus group workshops and four CAC meetings. The result of the workplan will be an enhanced agricultural program offering to

address infrastructure constraints, technology readiness, and reduce upfront costs. New elements will include an enhanced rebate program, technical assistance, and equipment demonstration events.

Through prior workplans focused on specific program offerings and customer segments, 3CE has collaborated with the CAC to incorporate their guidance and community input into the agency’s program design. At its August 5
th meeting, the CAC discussed and unanimously supported seeking Policy Board approval of the 3CE CAC FY 2026-27 Workplan, which will focus on completing a holistic review of the Energy Programs portfolio and creating an Energy Programs Strategic Plan. The plan is expected to include a five-year strategy with short-term, medium-term, and long-term operational plans that establish strategic guidance for 3CE and scale the impact of 3CE’s energy programs portfolio.

The Brown Act requires 3CE’s board to provide a regular time and place for its meetings by resolution, ordinance, or other formal action. The proposed resolution sets the CAC’s 2026-27 regular meeting schedule to facilitate the proposed workplan.

DISCUSSION/ANALYSIS:

The proposed FY 2026-27 CAC Workplan focuses on developing a comprehensive Energy Programs Strategic Plan to guide program implementation through FY 2030-31. The strategic planning process will inform 3CE’s future energy programs portfolio with cost-effective and community-focused programs that reduce greenhouse gas emissions, strengthen the local economy, and support a reliable grid. The workplan will incorporate successes from the original five-year programs roadmap developed in 2019 that led to the establishment of 3CE’s energy programs portfolio.

Key goals include working with the community and 3CE stakeholders to identify strategic priorities and ensure its programs portfolio meets customers’ current and anticipated needs, to develop actionable recommendations based on a comprehensive situational analysis, to evaluate programmatic focus areas and gaps, to identify opportunities for improvement, and to produce a draft Energy Programs Strategic Plan for 3CE Boards’ consideration and adoption.

Building on the success of the Electrify Your Home and Agricultural Electrification study sessions, the proposed FY 2026-27 Workplan includes community workshops and surveys in Fall 2026 designed to gather direct customer feedback on program focus areas, gaps, and priorities. Additionally, in Spring 2027, under the workplan, feedback will be sought from community organizations, local government, and other stakeholders on 3CE’s energy programs focus areas and goals.

The proposed FY 2026-27 CAC Workplan schedule is as follows:

1. August 2026: Discuss CAC roles and responsibilities, align with 3CE’s mission, vision and values, and review 3CE’s energy programs portfolio categories

2. October 2026: Present findings from staff-led internal and external analysis of current programs portfolio and service area landscape to inform Strengths, Weakness, Opportunities, and Threats (SWOT) analysis

3. November 2026 – January 2027: Community focus group meetings held in the northern and southern portions of 3CE service area to gather perspectives on program focus areas, gaps, and priorities to further inform SWOT analysis

4. February 2027: Present findings from SWOT analysis, discuss feedback from community workshops, prioritize strategic focus areas, and develop draft Energy Programs goals and objectives that align with mission and vision

5. March 2027 – May 2027: Review draft focus areas, goals, and objectives with CAC, 3CE’s Executive Committee, and community stakeholders to ensure broad input and alignment

6. June 2027: Refine focus areas, goals, and objectives, develop draft 1-year, 3-year, and 5-year action plans, and establish key performance indicators to measure success

7. August 2027: Review complete draft of Energy Programs strategic plan, discuss process for biennial review and updating, provide feedback on FY 2027-28 CAC workplan.

As part of this process, the CAC will provide feedback on staff’s recommendations and analysis and actively engage with 3CE’s communities and stakeholders to inform a comprehensive Energy Programs Strategic Plan. While the workplan is underway, 3CE will continue to administer and improve current programs and pilots to align their design with priorities identified in the strategic planning process.

FISCAL IMPACT:

The financial impact of the proposed CAC Workplan is anticipated not to exceed $15,000 and is included as part of the proposed FY 2026-27 budget submitted to the 3CE Policy Board for consideration at its September meeting. The costs are tied to venues and expenses associated with the public community focus group meetings and are anticipated to bring commensurate community education and engagement benefits.

CONCLUSION:

The Policy Board’s adoption of the proposed FY 2026-27 CAC Workplan and adoption of a meeting schedule to support the workplan will facilitate public input and provide an opportunity for CAC members to lend their individual expertise and community knowledge to the strategic design of 3CE’s energy programs portfolio for the advancement of electrification, local economic development, and emission reductions on the central coast.

ATTACHMENT(S):

1. FY 2026-27 CAC Workplan

2. Draft Resolution No. PB 2026-07

FY 2026-27 CAC Workplan
Energy Programs – 2026 – 2030 Strategic Plan Development Purpose
Central Coast Community Energy (3CE) provides reliable, affordable, clean electricity and electrification programs to reduce greenhouse gas emissions and strengthen our local community. 3CE is governed by separate Policy and Operations Boards (the "Boards"). 3CE's professional staff ("staff") carries out the policy direction of the governing boards.

The Community Advisory Council (CAC) is comprised of public15 members who serve in an advisory capacity to the Boards and staff.

Role of 3CE's CAC
Provide feedback, as requested
by 3CE staff and Boards, on
staff proposals and
recommendations
Actively engage with 3CE's
communities to assist 3CE
operational and policy goals,
engagement, and community
education regarding 3CE's
programs and initiatives
Support the Boards and staff
with outreach in furtherance of
3CE's operational and policy
goals
The CAC workplan specifies CAC work items as requested by the Boards or staff.

In addition to informational/work study sessions that facilitate the CAC's support of 3CE's goals, other matters may be presented including:
• Energy Programs Annual Portfolio Evaluation
• Energy Programs Strategic Plan Development Progress
• Communications & Outreach Strategies in support of Energy Programs • Other matters identified by the Boards or 3CE's staff FY 2026-27 Study Sessions
TOPIC: ENERGY PROGRAMS STRATEGIC PLAN DEVELOPMENT
I. Overview
The 3CE CAC FY 2026-27 Workplan focuses on developing a comprehensive Energy Programs Strategic Plan to be implemented through FY 2030-31. Working collaboratively with 3CE staff, external community stakeholders, and the Executive Committee, the CAC will guide a structured strategic planning process to set the long-term direction for 3CE’s energy programs portfolio.

This workplan follows a structured, multi-phase approach rooted in sound strategic planning practice. The process will begin by reaffirming 3CE’s mission, vision, and values, and progress through situational analysis, goal-setting, action planning, and final Board adoption over the course of the fiscal year. 3CE’s Energy Programs are guided by a clear vision: empowering all 3CE customers to participate in the Central Coast community’s transition to clean and renewable energy. The strategic planning process will ensure this vision is translated into a portfolio of cost-effective and community-focused programs that reduce greenhouse gas emissions, strengthen the local economy, and help to enable a reliable grid. The portfolio will focus on programs and initiatives across the four program categories of Transportation Electrification, Building Electrification, Agricultural Electrification, and Energy Optimization.

The CAC will hold four formal CAC meetings, supplemented by community workshops, surveys, and stakeholder review sessions across the fiscal year. Between formal meetings, staff will conduct internal analysis, facilitate community outreach, and develop planning documents to facilitate the CAC’s guidance.

II. Goals
• Center 3CE’s mission as the foundational objective for strategic plan development • Conduct a comprehensive situational analysis, including a Strengths, Weaknesses, Opportunities, and Threats (SWOT) assessment and external community engagement, to identify strategic priorities • Engage with the broader 3CE community to gather stakeholder input on focus areas, program gaps, and opportunities for improvement
• Develop clear, Specific, Measurable, Achievable, Relevant, and Time-bound (SMART)-based goals, objectives, and an action plan with defined short-term (1-year), mid-term (3-year), and long-term (5-year) milestones
• Provide feedback to 3CE staff on the creation of a draft Energy Programs Strategic Plan for 3CE Boards’ consideration and adoption
III. Expected Outcomes
Through the strategic planning process outlined in this workplan, CAC members and 3CE staff will collaboratively:
• Produce a comprehensive Energy Programs Strategic Plan grounded in community input and aligned with 3CE’s mission, JPA objectives, and California’s climate goals • Establish clear, SMART goals and objectives for 3CE’s four Energy Programs portfolio categories, with defined short-, mid-, and long-term actions, along with a recommended Energy Programs Portfolio • Ensure equitable program design by seeking hard-to-reach and priority population perspectives throughout the planning process and reflecting those perspectives in recommended actions • Develop a framework for ongoing evaluation, including KPIs and a biennial review cycle to keep the Strategic Plan current and effective
• Strengthen community trust and engagement by modeling a transparent, participatory planning and review process
IV. Timeline
In preparation for the FY 2026-27 CAC workplan, 3CE staff will review the draft Energy Programs Policy, compile existing program performance data, and prepare orientation materials to set the stage for CAC deliberations. The strategic planning process will begin in August 2026, and continue through the 2026-27 fiscal year, with five key milestones:

AUGUST 2026 — Community Advisory Council Regular Meeting | Reaffirm 3CE’s Mission/Vision/Values Alignment with Energy Programs Guiding Question: How do 3CE’s mission, vision, and values guide Energy Programs? • Introduce the FY 2026-27 CAC Workplan: scope, purpose, and strategic planning process overview
• Present and discuss 3CE’s mission, vision, and values, as they relate/align with 2019 Energy Programs Policy.
• Review 3CE’s four Energy Programs portfolio categories: Transportation Electrification, Building Electrification, Agricultural Electrification, and Energy Optimization • Discuss the role of the CAC in the strategic planning process and expectations for the upcoming year
• Identify initial themes, priorities, and questions to explore in the situational analysis phase CAC Action Items: 3CE Staff Action Items:

• Review 3CE’s mission, vision, and values
statements and 2019 Energy Programs
Policy
• Identify any gaps or refinements needed in
the current program category framework
• Surface key community concerns or
opportunities to explore in the situational
analysis
• Present 3CE’s Energy Programs Policy
and facilitate values alignment discussion
• Distribute background materials on current
energy programs portfolio performance,
and planned initiatives
• Prepare workplan orientation materials and
logistics for upcoming community
engagement activities
OCTOBER 2026 — Community Advisory Council Regular Meeting | Situation Analysis
Guiding Question: What do current learnings and external conditions tell us about strategic opportunities and challenges for 3CE’s Energy Programs? • Present findings from staff-led analysis of 3CE’s current Energy Programs portfolio performance and capacity
• Review external landscape: regulatory environment, market trends, community demographics, and peer agency benchmarking
• Identify key themes and preliminary strategic implications to inform the SWOT analysis and community outreach phase
CAC Action Items:
• Review situation analysis materials and
provide initial feedback
• Identify priority or additional factors to
investigate during the community outreach
period
• Advise on key topics for outreach and on
community segments to engage through
November–December workshops and
surveys
3CE Staff Action Items:
• Present analysis findings including program
performance data, resource inventory, and
operational strengths and gaps
• Present external scan of regulatory,
market, and community context relevant to
Energy Programs
• Finalize community outreach plan and
materials for November–December SWOT
workshops and surveys
NOVEMBER 2026 – JANUARY 2027 |
Development of SWOT analysis; community workshops and surveys on Energy Programs focus areas Staff will develop an internal SWOT analysis examining 3CE’s current Energy Programs portfolio strengths, weaknesses, opportunities, and threats. Concurrently, staff and CAC members will support community outreach including workshops and surveys designed to gather customer and stakeholder perspectives on program focus areas, gaps, and priorities. Findings will be compiled and presented at the February CAC meeting.

FEBRUARY 2027 — Community Advisory Council Regular Meeting | Focus Areas, Goals, and Objectives
Guiding Question: What are the key findings of our situational analysis, and what strategic focus areas should guide our Energy Programs?
• Present findings from internal SWOT analysis of 3CE’s Energy Programs portfolio • Review results of community workshops and surveys conducted in November and December

• Identify and prioritize strategic focus areas based on situational analysis (e.g., hard-to-reach customer access, GHG reduction potential, cost-effectiveness gaps) • Develop draft Energy Programs goals and objectives aligned with SMART criteria and the mission/vision guiding principles established in August • Guest speaker: community or industry perspective on energy program needs and opportunities (optional)
CAC Action Items:
• Review and validate SWOT findings;
identify additional factors to consider
• Prioritize strategic focus areas and provide
feedback on draft goals and objectives
• Discuss equity and hard-to-reach customer
access considerations for program planning
3CE Staff Action Items:
• Present SWOT analysis and community
input summary to CAC
• Facilitate discussion on strategic focus
areas and priorities
• Draft initial Energy Programs goals and
objectives for CAC review and refinement
MARCH – MAY 2027 |
Review of draft goals and objectives with CAC, Executive Committee, and key stakeholders Staff will circulate draft Energy Programs focus areas, goals, and objectives for review by the CAC, 3CE’s Executive Committee, and identified community stakeholders. Feedback will be compiled and incorporated prior to the June CAC meeting. This iterative review period ensures broad input and stakeholder alignment before development of strategic action plan begins.

JUNE 2027 — Community Advisory Council Regular Meeting | Develop Action Plan and Allocate Resources (1 year, 3 year, and 5 year) Guiding Question: How should 3CE translate its strategic goals into a concrete, resourced action plan for Energy Programs?
• Review refined Energy Programs focus areas, goals, and objectives following stakeholder input • Develop draft action plan to achieve each strategic objective • Establish timeframes: short-term (1-year), mid-term (3-year), and long-term (5-year) actions • Discuss resource allocation, including budget, staffing, and program investment priorities • Identify key performance indicators (KPIs) to track progress and measure success CAC Action Items:
• Review and provide input on the draft
action plan and proposed resource
allocation
• Advise on prioritization of actions across
program categories and timeframes
• Recommend KPIs and evaluation criteria to
ensure accountability and community
benefit
• Review staff proposed updates to Energy
Programs Policy
3CE Staff Action Items:
• Present draft action plan for CAC
feedback
• Facilitate prioritization discussion across
short-, mid-, and long-term timeframes
• Finalize action plan draft for inclusion in
the Strategic Plan document
• Receive feedback on proposed updates to
Energy Programs Policy

AUGUST 2027 — Community Advisory Council Regular Meeting | Review/Approve Plan (CAC and Board)
Guiding Question: Is the Energy Programs Strategic Plan ready to be recommended to the 3CE Board for adoption?
• Review complete draft Energy Programs Strategic Plan, including situational analysis, goals, objectives, and action plan with recommended Energy Programs Portfolio • Discuss process for biennial review and update of goals and objectives • Seek CAC recommendation to accompany a presentation of the Strategic Plan to the Board • Discuss next steps including plan implementation
• Reflect on lessons learned from the FY 2026-27 workplan process to inform future CAC workplans
CAC Action Items:
• Review full Strategic Plan document and
provide final feedback
• Provide CAC recommendation for Plan
presentation to the 3CE Board
• Advise on public communications strategy
3CE Staff Action Items:
• Present final draft Energy Programs
Strategic Plan to CAC for review and
recommendation
• Finalize FY 2027-28 CAC workplan
recommendation
V. Council Member Responsibilities
• Feedback to 3CE staff:
◦ CAC will review and provide advisory input on each phase of the strategic planning process, including alignment with agency mission, situational analysis findings, draft goals and objectives, and the action plan
• Community engagement and outreach:
◦ CAC members will assist in promoting and supporting community workshops and surveys during the November–December engagement period, leveraging their networks to ensure diverse stakeholder participation
• Stakeholder review:
◦ During the March–April review period, CAC members will assist in soliciting feedback from community organizations, local government, and other relevant entities on draft focus areas and goals • Board support:
◦ The CAC will formally consider the completed Energy Programs Strategic Plan at its August 2027 meeting, providing a community-grounded recommendation to the 3CE Policy Board FY 2026-27 CAC Workplan — Energy Programs Strategic Plan Development | Central Coast Community Energy (3CE)

RESOLUTION NO. PB-2026-07

A RESOLUTION OF THE POLICY BOARD OF DIRECTORS OF CENTRAL COAST

COMMUNITY ENERGY ESTABLISHING A REGULAR MEETING SCHEDULE FOR THE COMMUNITY ADVISORY COMMITTEE; AND SUPERSEDING ALL

PREVIOUSLY ADOPTED RESOLUTIONS TO THE EXTENT OF ANY INCONSISTENT

MEETING SCHEDULE, LOCATION AND TIMES
WHEREAS, Central Coast Community Energy is a Joint Powers Authority established and operated pursuant to California Government Code section 6500 et seq. to study, promote, develop, conduct, operate, and manage energy programs in the California Central Coast region of Santa Cruz, Monterey, San Benito, Santa Barbara, and San Luis Obispo Counties; and
WHEREAS, pursuant to the Ralph M. Brown Act, Government Code Section 54950 et seq. the Policy Board of Directors of the Authority ("Board") may fix, by resolution, the date upon which, and the hour and place at which, regular meetings are to be held; and WHEREAS, on February 15, 2023, the Board voted to suspend the Community Advisory Committee’s Bylaws, including its meeting schedule, and to create an annual workplan to direct the work of the CAC members; and
WHEREAS, the meeting schedule below is designed to support the FY 2026-27 Community Advisory Committee Workplan, which was unanimously supported by the Community Advisory Committee on August 5, 2026; and
WHEREAS, the Authority desires to establish a regular meeting schedule by resolution and to supersede any prior resolutions related to the foregoing by this resolution; and NOW, THEREFORE, the POLICY Board of Directors of the Central Coast Community Energy does hereby resolve as follows:

1. The regular meetings of the Community Advisory Committee will be held according to the following table:

DATE TIME LOCATION WORKPLAN ITEM
October 7, 2026
1 st Wednesday
4:00 p.m. Monterey
headquarters
and noticed
remote
locations
Present findings from staff-led
internal and external analysis of
current programs portfolio and
service area landscape to inform
Strengths, Weakness,
Opportunities, and Threats
(SWOT) analysis

February 3, 2027
1 st Wednesday
4:00 p.m. Monterey
headquarters
and noticed
remote
locations
Present findings from SWOT
analysis, discuss feedback from
community workshops, prioritize
strategic focus areas, and develop
draft Energy Programs goals and
objectives that align with mission
and vision
June 2, 2027
1 st Wednesday
4:00 p.m. Monterey
headquarters
and noticed
remote
locations
Refine focus areas, goals, and
objectives, develop draft 1-year, 3-
year, and 5-year action plans, and
establish key performance
indicators to measure success
August 4, 2027
1 st Wednesday
4:00 p.m. Monterey
headquarters
and noticed
remote
locations
Review complete draft of Energy
Programs strategic plan, discuss
process for biennial review and
updating, provide feedback on FY
2027-28 CAC workplan.

The Community Advisory Committee meetings will be held at Central Coast Community Energy’s Monterey headquarters.

1. If necessary, special Community Advisory Committee meetings will be convened and duly noticed consistent with Brown Act requirements.

2. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED by the Policy Board of the Central Coast Community Energy this 17th Day of September by the following vote:

AYES:

NOES:

ABSENT:

Attest:
_____________________________
__________________________________
Board Clerk, Gail Borkowski Chair, Fred Keeley

Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: September 17, 2026

POWER CHARGE INDIFFERENCE ADJUSTMENT REFORM
On August 13, 2026, the CPUC issued a disappointing Proposed Decision (PD) that would value Pre-2019 Banked RECs at zero when used to satisfy bundled customer compliance obligations, rejecting the CCA proposal to value them at the RPS market price benchmark. This zero-dollar valuation will be integrated into the 2027 PCIA and continue to cause upward pressure on this regulatory fee. In comments filed by CalCCA on September 2, the CCAs requested the Commission reject the PD and issue an Alternate PD. The comments argue that the PD fails to fulfill the Commission’s continuing obligation to reduce the cost responsibility of later departing customers by the value of benefits that remain with bundled customers, fails to address how the proposed zero valuation satisfies the statutory indifference requirements, and incorrectly applies timeliness and laches doctrines. 3CE has supported CalCCA’s positions in the proceeding and during the development of CalCCA’s response. The investor-owned utilities and Public Advocates Office supported the PD. Reply comments were due September 8. The earliest this PD may be heard at a Commission voting meeting is September 17.

PCIA reform will continue into 2027. In the newly set Track 3, 3CE is supporting CalCCA in the development of proposals for structural reform of the indifference framework, including options to reduce the size of the PCIA portfolio. The Scoping Ruling divides Track 3 into two tracks.

Track
3A, addressing refinements to existing PCIA structures, including the Renewable Portfolio Standard, Energy Price Index, GHG-Free market price benchmarks and re-vintaging policy; and Track 3B, addressing broader structural changes that could ultimately replace the PCIA. Track 3A is underway, with parties engaged in a 60-day process to identify the utility data needed for proposal development. The Track 3B schedule is expected in the fourth quarter of 2026, with party proposals likely due in the first half of 2027.

FOURTH ANNUAL 3CPRIME CERTIFIED REPORT TO BE RELEASED
Next month, 3CE will distribute an annual report to large load customers subscribed to the agency’s 100% renewable electricity offering, 3Cprime. As verified by the Western Renewable Energy Generation Information System (WREGIS), 3CE customers in the commercial, industrial, agricultural, healthcare, technology, and public sectors sourced more than 126 million kilowatt hours of wind and solar renewable energy through the program last year. This procurement avoided nearly 600,000 metric tons of carbon dioxide emissions. The number of commercial customers enrolled in 3Cprime increased by 15% in 2025, demonstrating sustained demand for transparent, accountable renewable consumption pathways. With a fixed premium of $0.008 per kilowatt-hour, 3Cprime provides important value to customers meaningfully committed to sustainability. Unlike unbundled carbon credit purchases, 3Cprime integrates renewable attributes directly into customers’ electricity supply portfolios. The annual 3Cprime Certified Report supplies important reporting data and is packaged with branding and marketing assets to help customers share their contributions to growing renewable energy on the Central Coast.

ARATINA SOLAR + STORAGE OPERATIONAL
3CE successfully commissioned the Avantus Aratina project, a 120 MW solar and 75 MW battery energy storage facility in Kern County. Aratina is expected to provide approximately 7% of 3CE's energy needs, adding a significant source of clean, reliable, and competitively priced energy. Its storage capability supports grid reliability and helps maximize the value of renewable generation.
3CE’s EV LAUNCHPAD TECHNICAL ASSISTANCE PROGRAM PLANNED OCTOBER 1ST 3CE is actively developing 3CE’s EV Launchpad Technical Assistance Program, which is planned to launch on October 1
st
, 2026. The program will offer 3CE’s nonresidential customers with fleet electrification planning and charging infrastructure assistance to help advance projects from concept through construction. The program will transition and expand on services offered through 3CE's Plan Your Fleet and Electrify Your Ride Concierge Service programs, and create a comprehensive offering tailored to meet the diverse needs of different customer types. Planned program enhancements include expanded support for public charging sites, customized assistance for public agencies, enhanced support for commercial customers, and tailored planning assistance for multifamily customers.

On August 19th, 3CE hosted a webinar for Member Agencies introducing the upcoming program. The webinar outlined enhanced support available to help agencies plan and implement transportation-electrification projects. Additional webinars were held on September 9th and 10th for special districts, commercial customers, and multifamily property owners to highlight technical assistance available through the program.

ATTACHMENT(S):

1. ST Energy Product Transactions

3CE Short-Term Power Supply Transactions — CEO Delegation Report Per 3CE's Energy Risk Management Policy (ERMP §9, Delegation of Financial Authority), the Chief Executive Officer is authorized to approve and execute certain wholesale power supply transactions outside CAISO market activity, subject to the limits set forth in that policy. The short-term transactions below were executed within this delegated authority and are reported in aggregate by product type and direction, consistent with 3CE's reporting practice.

Summary of Short-Term Transactions Executed April 1 - August 31, 2026 Product
Type Buy/Sell
# of
Transactions
Notional per
Transaction
Delivery/Term
Window
IST Buy 2
Each under
$15,000,000 Cal 2027 - Cal 2028
RA Sell 5 Each under $250,000 May 2026 - Sep 2026
RA Buy 5 Each under $1,000,000 Aug 2026 - Sep 2026
IAR Sell 2 Each under $50,000 Aug 2026 - Sep 2026

Staff Report Item 10
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Adopt Resolution No. PB-2026-06 authorizing the CEO to execute a Clean Energy Purchase Contract with California Community Choice Financing Authority and ancillary documents and agreements to effectuate 3CE’s second prepay financing transaction in an amount not to exceed $1.7 billion DATE: September 17, 2026
RECOMMENDATION:

It is recommended that the Policy Board adopt Resolution No. PB-2026-06 authorizing the Chief Executive Officer to execute a Clean Energy Purchase Contract with the California Community Choice Financing Authority, together with the ancillary documents and agreements needed to effectuate 3CE’s second prepay financing transaction, in an aggregate principal amount not to exceed $1.7 billion.

BACKGROUND:

A power purchase agreement (PPA) prepay is a transaction structure in which a PPA holder receives a discount to the contracted PPA price by facilitating a prepayment of the PPA’s renewable energy. A conduit financing authority undertakes the prepay transaction: the California Community Choice Financing Authority (CCCFA), a Joint Powers Authority formed in 2021 for this sole purpose, of which 3CE is a founding member. Historically, CCA prepays issued by CCCFA have produced savings that ranged from 8% to 17% (12% average) relative to the contracted price. 3CE completed its first energy prepayment transaction in October 2023, when the CCCFA issued $647.8 million in Clean Energy Project Revenue Bonds on 3CE's behalf. That transaction ("Prepay #1") is delivering roughly $5 million per year in energy cost savings. As 3CE’s portfolio has grown since 2023, staff seeks to use this financing vehicle to continue delivering affordability for its customers.

On March 18, 2026, the Policy Board authorized the CEO to develop, structure, and execute a second prepayment in 2026 ("Prepay #2") with an estimated par amount between $800 million and $1.2 billion, subject to market conditions, minimum savings thresholds, and final Board approval of transaction documents. PFM Financial Advisors LLC (PFM) was engaged as municipal advisor and swap advisor and ran competitive solicitations for the remaining transaction roles.

Staff is currently sizing the transaction in a range of $1.3 billion to $1.5 billion, above the $800 million to $1.2 billion range the Policy Board authorized in March, because 3CE has since executed additional long-term power purchase agreements that are also candidates for assignment. The resolution before the Policy Board therefore sets the not-to-exceed amount at $1.7 billion. The reasons for that request, and what the par amount does and does not represent, are discussed under Authorized Amount below.

At current market indications and a sizing in the $1.3 billion to $1.5 billion range, the transaction would be expected to deliver roughly $7 million to $9 million per year in energy cost savings over a nine-year initial period, with the range reflecting a savings of 8% to 10% on the assigned contracts; staff is targeting 10%. Combined with Prepay #1, total savings from both prepayments would be roughly $12 million to $14 million per year.

Prepay #2 uses the same structure, the same conduit issuer, and substantially the same documents as Prepay #1, which has performed as expected since 2023. The Executive and Audit and Finance committees unanimously supported the Policy Board’s consideration and authorization of Prepay #2 at their regular meetings on August 19 and 26, 2026, respectively. The Operations Board considered this item at its meeting on September 16, 2026, and its recommendation will be reported to the Policy Board.

DISCUSSION/ANALYSIS:

Prepays have existed in the power and natural gas business for decades, with over $100 billion in total market value. Since the first prepayments for natural gas began in the early 1990s, the IRS has issued rules allowing tax-exempt prepayments, and Congress has enacted legislation specifically allowing these transactions (National Energy Policy Act of 2005; Section 1327).

Since its inception, CCCFA has issued over $31.4 billion in renewable energy prepay bonds, saving $200 million per year to date. 3CE’s financial advisor, PFM, has advised on most of those completed transactions.

How 3CE Customers Benefit
3CE buys most of its power under long-term power purchase agreements and pays as energy is delivered. A prepayment transaction does not change that. 3CE still pays monthly and only for energy delivered; it simply pays a lower price.

The savings come from the gap between tax-exempt and corporate borrowing costs. Federal tax rules adopted in 2005 allow a public power agency to capture that gap by paying for energy in advance.

CCCFA issues tax-exempt bonds and uses the proceeds to prepay for roughly 30 years of energy deliveries. Those proceeds are not simply handed to the supplier. They are lent to a highly rated bank, insurance company, or corporation, which gains access to inexpensive capital and repays it on a fixed monthly schedule. Those payments cover debt service on the bonds, and in exchange, 3CE receives its energy at a discount.
3CE brings existing power purchase agreements into the transaction through limited assignment agreements. The projects, the physical energy, and 3CE’s monthly payment obligation all stay the same.

The only change is that 3CE buys that same energy from CCCFA at a discount to the contract price.

Swaps and other financial arrangements sit alongside the structure so that its cash flows match fixed-rate debt service; 3CE is not a party to any of them.

How 3CE and Customers are Protected
Two features of the structure do most of the work of protecting 3CE:
 3CE pays only for energy actually delivered. The contract is "take-and-pay," not "take-or-pay." 3CE has no debt service obligation.
 The bonds are non-recourse. They are limited obligations of CCCFA, payable solely from transaction revenues. Under CCCFA's Joint Powers Agreement, no CCCFA debt is a member's debt, and each transaction's costs are allocated solely to the member participating in it. If the structure unwound tomorrow, 3CE's assigned PPAs would revert to 3CE, and the loss would be the forgone discount plus the staff time invested.

The remaining risks are economic rather than balance-sheet risks. If market conditions do not support the minimum discount at pricing, staff does not proceed, and the power purchase agreements remain as originally negotiated. At each future reset, if the discount floor cannot be met, the purchase contract allows 3CE to terminate and the contracts return to 3CE. 3CE is never obliged to accept a price that does not meet its savings criteria.

The two risks 3CE does carry have known limits, and both are set before anything is signed. First, an assigned project may deliver less than the prepaid quantity, so sizing is set conservatively against guaranteed or historical production, and over-deliveries in one prepayment can offset shortfalls in the other. Second, a material decline in load would reduce 3CE’s ability to take prepaid energy, so federal tax rules cap prepaid volume at 80 percent of expected load in any year. The only money genuinely at risk before closing is rating agency and green bond verification fees.

Authorized Amount
In March, the Policy Board authorized an estimated par amount between $800 million and $1.2 billion.

That range was built on the power purchase agreements 3CE had identified for assignment at the time.

Since then, 3CE has executed additional long-term power purchase agreements, and the pool of contracts now under consideration for assignment carries an estimated prepayment value of roughly $1.3 billion.

Staff now expects a transaction in the range of $1.3 billion to $1.5 billion, above the range authorized in March. The resolution sets the not-to-exceed amount at $1.7 billion, for two reasons. First, the contracts executed since March cannot be accommodated within $1.2 billion, and the savings attributable to them would otherwise be forgone or deferred to a future transaction. Second, final par is not known until pricing; it moves with interest rates, with the discount achieved, and with the final production assumptions for each assigned project. A ceiling set at the expected size leaves no room for that movement, and any movement above it would require a return to the Board after the pricing window has closed.

The resolution also contemplates financing the transaction with one or more series of bonds. A transaction of this size may be issued in more than one series, allowing different interest rate periods or pricing dates across the portfolio. That flexibility matters because each series requires a funding recipient willing to take the bond proceeds, and the pool of highly rated institutions able to absorb a commitment of this size on attractive terms is limited at any given moment. Issuing in more than one series lets staff and the underwriter match each series to the market conditions and counterparty appetite available at pricing. Whether to do so will be determined with the underwriter and the municipal advisor as pricing approaches. The not-to-exceed amount applies to all series in the aggregate, so issuing in multiple series does not increase the total authorized.

It is worth being precise about what the par amount represents in this structure, because it does not work the way a par amount works in a conventional financing. 3CE is not the borrower. The bonds are limited obligations of CCCFA payable solely from transaction revenues, and 3CE’s only payment obligation is for energy it actually receives. Par therefore measures how much energy is purchased in

advance, not the debt 3CE is taking on. A larger transaction means a larger share of 3CE’s portfolio is bought at a discount; it does not mean greater exposure.

The resolution provides that the bonds are not obligations of 3CE and that total costs of issuance may not exceed 1.25% of bond proceeds. Separately, and as contemplated in the March authorization, staff has set a minimum discount below which it will not execute the transaction. The $1.7 billion figure is a ceiling within which those tests must still be met, not a target. Staff would use the additional capacity only for contracts that clear them.

Progress to Date and Next Steps
Since the March authorization, the transaction has moved through competitive procurement and into final documentation. PFM solicited proposals for the remaining transaction roles in July. Following evaluation in early August, 3CE selected Goldman Sachs & Co. LLC as underwriter and supplier, Stradling Yocca Carlson & Rauth LLP as prepay counsel, and Nixon Peabody LLP as bond and tax counsel.

Through late August, staff identified the specific power purchase agreements to bring into the transaction and provided the underlying contracts and production history for review. 3CE used that information to develop the preliminary sizing described above. Counsel circulated first drafts of the transaction documents in late August; the working group completed its review in early September, and the team finalized and submitted revised documents ahead of this meeting. The documents attached to this report are those near-final drafts.

Part of the assignment work supports the existing transaction rather than the new one. A scheduled reduction in contracted capacity for an existing PPA will reduce the energy flowing through Prepay #1 beginning in 2027. Staff will direct a portion of the new assignments to Prepay #1 to replace that volume and preserve its roughly $5 million in annual savings, with the balance supporting Prepay #2.

The remaining steps are largely sequencing and are summarized below. Nothing in that schedule commits 3CE to proceed. Staff will not execute unless the transaction satisfies the parameters in the resolution and meets the minimum discount staff has set, which the Policy Board will review before pricing.

Timing Milestone Status
July Competitive solicitations issued for underwriter, supplier, and counsel Complete Early Aug. Proposals evaluated; transaction team selected Complete Late Aug. Power purchase agreements identified; preliminary sizing; first drafts of transaction documents
Complete
Sept. 1–5 Working group document review; revised documents completed and submitted to the Boards
Complete
Sept. 16–17 Operations Board support and Policy Board adoption of the resolution This item Mid–late
Sept.

Financing documents submitted to CCCFA; funding solicitation launched; submission to rating agencies
Upcoming
Sept. 24 CCCFA Board considers approval of the transaction Upcoming Late Sept. Preliminary Official Statement finalized; green bond verification Upcoming Early Oct. Disclosure documents mailed to investors Upcoming Oct. or later Pricing and closing, subject to market conditions and savings thresholds Upcoming

A prepayment is not a one-time financing event. Like the power purchase agreements behind it, it begins a supply relationship that runs for about 30 years, and unlike a power purchase agreement, it is refinanced (also referred to as a reset) every five to ten years. Most agencies that use the structure manage it as an ongoing program rather than a series of unrelated transactions. 3CE's current authorization covers only this transaction. As Prepay #2 closes and attention turns to the remaining unassigned contracts in the portfolio and future resets, a programmatic authorization is a structure the Boards may wish to consider. Staff can bring that concept forward for discussion after closing.

Key Transaction Documents
The nine agreements attached to this report are presented in near-final form, with all parties having settled the language on the major elements of the transaction. The market-dependent terms, most importantly the discount, are fixed at pricing. Staff has set a minimum discount below which it will not execute the transaction, and is targeting 10%. The Policy Board will review that threshold before pricing.

1. Clean Energy Purchase Contract – Between 3CE and CCCFA. 3CE’s agreement to buy roughly 30 years of prepaid energy. Sets the discount 3CE receives, confirms that 3CE pays only for energy actually delivered, establishes how the discount is reset in future periods, and governs how 3CE’s power purchase agreements enter and leave the structure.

2. Consolidated, Amended and Restated PPA Custodial Agreement – Between 3CE, J. Aron & Company LLC, CCCFA, and U.S. Bank Trust Company as custodian. Replaces the 2023 custodial agreement and administers both prepayments under a single agreement, so that each project seller continues to receive one consolidated monthly payment from one account.

3. Form of Limited Assignment Agreement – Between 3CE, the seller under the power purchase agreement being assigned, and J. Aron. Assigns the right to receive a specified portion of a project’s output for a defined period, together with the obligation to pay for what is delivered.

All other rights and obligations under the power purchase agreement remain with 3CE, and the assigned rights automatically revert to 3CE when the assignment or the underlying contract ends. The resolution approves this as a form, so it can be used for additional contracts without returning to the Boards.

4. Letter Agreement re: Limited Assignment Agreements – Between 3CE and J. Aron. Although each assignment agreement can be terminated at will on its face, this agreement bars either party from doing so except in a short list of defined circumstances, such as the underlying contract ending, 3CE electing to remarket, or a project persistently under-delivering.

5. Clean Energy Project Operational Services Agreement – Between 3CE and CCCFA. Governs the administrative and operational services CCCFA provides in connection with the transaction and the associated fee.

6. Trust Indenture – Between CCCFA and U.S. Bank Trust Company as trustee. Authorizes the Series 2026 Clean Energy Project Revenue Bonds, which may be issued in one or more series, and governs how transaction revenues are held and applied to debt service. This document makes the bonds limited obligations payable solely from transaction revenues. 3CE is not a party to it, and the bonds are not 3CE debt.

7. Master Power Supply Agreement – Between CCCFA and Aron Energy Prepay 65 LLC, the special-purpose entity formed to supply the transaction. Governs the supplier’s delivery obligations, the remarketing of any prepaid energy 3CE does not take, and the circumstances under which the transaction can be terminated.

8. Form of 3CE Appendix A – The description of 3CE included in the official statement used to sell the bonds, covering governance, service area, customers, rates, load, supply portfolio, and financial information. The resolution authorizes an officer certificate as to that information.

9. First Amendment to 2023 Clean Energy Purchase Contract – Between 3CE and CCCFA. Updates the Prepay #1 contract so that both transactions operate under the single consolidated custodial agreement and use the same monthly billing and true-up mechanics. Approving this item amends the existing 2023 transaction and authorizes the new one.

What Adoption of the Resolution Does
The resolution before the Board does five things:
 Approves the forms of the nine transaction documents listed above, together with the First Amendment to the 2023 Clean Energy Purchase Contract.
 Designates the Chief Executive Officer, Chief Operating Officer, and Director of Finance as Authorized Officers who may execute those documents, with changes made in consultation with prepay counsel, bond counsel, and the municipal advisor.  Approves the form of Limited Assignment Agreement for use on additional power purchase agreements as needed to maintain the transaction, so that adding a contract later does not require a further Board action.
 Approves the 3CE Appendix for inclusion in the Official Statement and authorizes an officer certificate as to that information.
 Sets the three parameters within which the transaction must be executed: the bonds are not obligations of 3CE; aggregate par across all series may not exceed $1.7 billion; and total costs of issuance may not exceed 1.25% of bond proceeds.

Adoption does not commit 3CE to proceed. If the market does not support the minimum discount at pricing, staff will not execute, and the power purchase agreements remain as originally negotiated.

FISCAL IMPACT:

Transaction costs, including financial advisory, underwriting, legal, and other issuance expenses, will be paid from bond proceeds at closing, and the resolution caps total issuance costs at 1.25% of bond proceeds. Adopting the resolution does not appropriate funds or create a debt obligation for 3CE. There is no anticipated impact on 3CE’s operating budget beyond staff time and the preliminary structuring

expenses incurred before issuance, principally rating agency and green bond verification fees. Final execution depends on achieving the minimum savings thresholds set by staff.

CONCLUSION:

The transaction is on schedule. Competitive procurement is complete, the transaction documents are in near-final form and attached to this report, and Prepay #2 remains on track for CCCFA Board approval on September 24 and pricing thereafter, subject to market conditions and achievement of the minimum discount staff has set.

ATTACHMENTS:

1. Draft Resolution No. PB-2026-06

2. Clean Energy Purchase Contract

3. Consolidated, Amended, and Restated PPA Custodial Agreement

4. Form of Limited Assignment Agreement

5. Letter Agreement re Limited Assignment Agreements

6. Clean Energy Project Operational Services Agreement

7. Trust Indenture

8. Master Power Supply Agreement

9. Form of 3CE Appendix A

10. First Amendment to 2023 Clean Energy Purchase Contract

4908-7583-4058v4/201010-0002
RESOLUTION NO. PB-2026-XX

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY

BOARD OF DIRECTORS AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO

EXECUTE A CLEAN ENERGY PURCHASE CONTRACT WITH CALIFORNIA

COMMUNITY CHOICE FINANCING AUTHORITY AND ANCILLARY DOCUMENTS

AND AGREEMENTS TO EFFECTUATE THE PREPAY FINANCING TRANSACTION WHEREAS, Central Coast Community Energy (“3CE”) desires to enter into a prepaid electricity transaction (the “Project”) whereby one or more series of bonds (the “Bonds”) will be issued by California Community Choice Financing Authority (the “Issuer”), the proceeds of which will be used to prepay electricity deliveries; and
WHEREAS, 3CE by this Resolution grants the Authorized Officers (as defined herein) the authority to take all actions necessary or desirable to accomplish the purchase of clean energy from the Issuer and to assist the Issuer in the issuance, sale and delivery of the Bonds; and WHEREAS, there has been made available to the Policy Board of Directors of 3CE for approval proposed forms of the following agreements (collectively, the “Project Documents”):

1. Clean Energy Purchase Contract(s) between 3CE and the Issuer;

2. Consolidated, Amended and Restated PPA Custodial Agreement(s) by and among 3CE, J. Aron & Company LLC, a New York limited liability company (“J. Aron”), the Issuer, and U.S. Bank Trust Company, National Association, as custodian;

3. Limited Assignment Agreement by and among 3CE, the counterparty to the power purchase agreement described therein, and J. Aron;

4. Letter Agreement between 3CE and J. Aron regarding matters relating to Limited Assignment Agreements; and

5. Clean Energy Project Operational Services Agreement relating to the Project, by and between 3CE and the Issuer;

6. Trust Indenture(s) (the “Indenture”) between the Issuer and U.S. Bank Trust Company, National Association as trustee, providing for, among other things, the issuance of and security for the Bonds;

7. Master Power Supply Agreement(s) (the “Master Power Supply Agreement”) between the Issuer and from a specified Aron Energy Prepay LLC (“Prepay LLC”), providing for the delivery of the Prepaid Energy Supply to the Issuer; and

8. Certain information relating to 3CE that will be included as an appendix (“3CE Appendix”) to the Preliminary Official Statement (the “Preliminary Official Statement”), to be used in connection with the offering and sale of the Bonds;

WHEREAS, 3CE previously entered into that certain Clean Energy Purchase Contract, dated as of October 17, 2023 (the “2023 Clean Energy Purchase Contract”), by and between 3CE and the Issuer; and
WHEREAS, 3CE and the Issuer have determined to make certain amendments to the 2023 Clean Energy Purchase Contract pursuant to an Amendment to Clean Energy Purchase Contract (“First Amendment to 2023 Clean Energy Purchase Contract”) between 3CE and the Issuer.

WHEREAS, there has been made available to the Policy Board of Directors of 3CE for approval the proposed form of the First Amendment to 2023 Clean Energy Purchase Contract.

NOW THEREFORE, BE IT RESOLVED by the 3CE Policy Board of Directors, as follows:

SECTION 1. The proposed forms of the Project Documents, as made available to the Policy Board of Directors for this meeting, are hereby approved. The form of Limited Assignment Agreement may be used, in substantially the same form, for assignments of the initial or any additional 3CE power purchase agreements, as needed to maintain the transactions approved hereby, and any such Limited Assignment Agreements shall be included in the Project Documents hereby approved. Subject to the parameters set forth in Section 5 of this Resolution, any of the Chief Executive Officer, Chief Operating Officer, Director of Finance, or the designees of any of them (each, an “Authorized Officer”), are hereby authorized and directed, for and on behalf of 3CE, to execute and deliver the Project Documents in substantially said form, with such changes, additions, insertions, or corrections as the Authorized Officer executing the same may approve, in his or her discretion, in consultation with Stradling Yocca Carlson & Rauth LLP, as prepay counsel (“Prepay Counsel”), Nixon Peabody LLP, as bond counsel (“Bond Counsel”), and PFM Financial Advisors LLC (the “Municipal Advisor”) as being in the best interests of 3CE or necessary and advisable for the issuance of the Bonds in one or more series, such approval to be conclusively evidenced by the execution and delivery thereof. If it is determined to be in the best interest of 3CE to issue the Bonds in multiple series, then a separate set of the applicable Project Documents for each such series of Bonds may be delivered in connection with the issuance of each such series of Bonds, with appropriate insertions, deletions and modifications therein to reflect the terms and conditions applicable to such particular series of Bonds; provided that each such document shall be in substantially the forms of such applicable documents that have been made available to the Policy Board of Directors for this meeting with such changes as are authorized by this resolution.

SECTION 2. The proposed form of the 3CE Appendix, as made available to the Policy Board of Directors for this meeting, is hereby approved. Any Authorized Officer is hereby authorized and directed, for and on behalf of 3CE, to execute and deliver a certificate as to the information regarding 3CE contained in the Preliminary Official Statement, including in the 3CE Appendix of the Preliminary Official Statement, and in the final version of the Official Statement, including in the 3CE Appendix of the Official Statement, and in any supplement or amendment to either of the Preliminary Official Statement or the final Official Statement, in each case with such changes and insertions therein as the Authorized Officer approving the same may deem necessary or appropriate. Subject to approval by the Issuer, 3CE hereby authorizes the inclusion of the 3CE Appendix in connection with the distribution of the Preliminary Official Statement to persons who may be interested in the purchase of the Bonds, and authorizes the inclusion of the 3CE Appendix

in connection with the delivery of the Official Statement in final form to the purchasers of the Bonds, in each case with such changes as may be approved as aforesaid.

SECTION 3. The proposed form of First Amendment to 2023 Clean Energy Purchase Contract, as made available to the Policy Board of Directors for this meeting, is hereby approved.

The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of 3CE, to execute and deliver the First Amendment to 2023 Clean Energy Purchase Contract in substantially said form, with such changes, additions, insertions, or corrections as the Authorized Officer executing the same may approve, in his or her discretion, in consultation with Prepay Counsel and the Municipal Advisor.

SECTION 4. The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of 3CE, to execute and deliver any and all certificates, disclosures, and other documents, including, without limitation, any tax certificate relating to its expected use of the energy to be purchased by it from the Project, any agreement required for the offering or sale of the Bonds, and any and all closing certificates to be executed in connection with the issuance of the Bonds, and to take any and all actions which may be necessary or advisable, in the discretion of such Authorized Officer in consultation with Prepay Counsel, Bond Counsel and the Municipal Advisor, to effectuate the actions which 3CE has approved in this Resolution, for the issuance, sale and delivery of the Bonds, and to consummate by 3CE the transactions contemplated by the Project Documents and the First Amendment to 2023 Clean Energy Purchase Contract presented to the Board herewith, including any subsequent amendments, waivers or consents entered into or given under or in accordance with such documents.

SECTION 5. The approvals provided for herein shall be subject to the following parameters:
(a) the Bonds will not be obligations of 3CE, but will be limited obligations of the Issuer payable solely from the revenues and other amounts pledged therefor under the Indenture(s), including amounts payable by 3CE under the Clean Energy Purchase Contract(s); (b) the aggregate principal amount of the Bonds shall not exceed $1,500,000,000;
(c) the total cost of issuance, including all underwriting, legal and consultant fees, will not exceed 1.25% of the amount of the bond proceeds.

SECTION 6. Execution and delivery of the Project Documents by an Authorized Officer or Officers shall be conclusive evidence that the parameters set forth in Section 5 have been met, and all actions heretofore taken by the Authorized Officers with respect to the issuance of the Bonds are hereby ratified, confirmed and approved.

SECTION 7. This Resolution shall take effect immediately.

PASSED AND ADOPTED at a regular meeting of the Policy Board of Directors of Central Coast Community Energy on this 17
th day of September, 2026, held in Seaside, California, at a location freely accessible to the public, and at which a quorum was present and acting throughout, by the following roll-call vote:

AYES:

NOES:

ABSENT:
__________________________________
Chair, Fred Keeley
__________________________________
Board Clerk, Gail Borkowski

Sheppard Draft 1 September 2026

CLEAN ENERGY PURCHASE CONTRACT
between

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
and

CENTRAL COAST COMMUNITY ENERGY
Dated as of [____], 20[_]

-i-TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS ........................................................................................................2 Section 1.1 Defined Terms ................................................................................................2 Section 1.2 Definitions; Interpretation.............................................................................13 ARTICLE II. DELIVERY PERIOD; NATURE OF CLEAN ENERGY PROJECT; CONDITION PRECEDENT ........................................................................13 Section 2.1 Delivery Period .............................................................................................13 Section 2.2 Nature of Clean Energy Project ....................................................................13 Section 2.3 Condition Precedent......................................................................................14 Section 2.4 Pledge of this Agreement..............................................................................14 ARTICLE III. SALE AND PURCHASE; PRICING...............................................................14 Section 3.1 Sale and Purchase of Product........................................................................14 Section 3.2 Payments.......................................................................................................14 Section 3.3 Limited Obligation to Take Base Quantities ................................................15 Section 3.4 Annual Refund..............................................................................................15 Section 3.5 Reset Period Remarketing.............................Error! Bookmark not defined.

ARTICLE IV. FAILURE TO SCHEDULE PRODUCT .........................................................16 Section 4.1 Issuer’s Failure to Schedule Base Quantity (Not Due to Force Majeure)........................................................................................................16 Section 4.2 Project Participant’s Failure to Schedule or Take Base Quantities (Not Due to Force Majeure)..........................................................................17 Section 4.3 Failure to Deliver or Take Due to Force Majeure.........................................17 Section 4.4 Assigned Products.........................................................................................17 Section 4.5 Sole Remedies...............................................................................................18 ARTICLE V. DELIVERY POINTS; SCHEDULING .............................................................18 Section 5.1 Delivery Points..............................................................................................18 Section 5.2 Transmission and Scheduling .......................................................................18 Section 5.3 Title and Risk of Loss...................................................................................18 Section 5.4 PCC1 Product and.........................................................................................19

-ii-Section 5.5 Communications Protocol.............................................................................21 Section 5.6 Deliveries within CAISO or another Balancing Authority...........................22 Section 5.7 Assigned Products.........................................................................................22 ARTICLE VI. ASSIGNMENT OF POWER PURCHASE AGREEMENTS........................22 Section 6.1 Assignments Generally .................................................................................22 Section 6.2 Failure to Obtain ...........................................................................................23 Section 6.3 Adjustments to Base Quantities....................................................................24 Section 6.4 J. Aron Non-Payment to APC Party. ............................................................24 ARTICLE VII. USE OF PRODUCT .........................................................................................24 Section 7.1 Tax Exempt Status of the Bonds...................................................................24 Section 7.2 Priority Products ...........................................................................................24 Section 7.3 Assistance with Sales to Third Parties..........................................................24 Section 7.4 Qualifying Use ..............................................................................................25 Section 7.5 Remediation ..................................................................................................25 Section 7.6 Remediation; Ledger Entries; Redemption...................................................26 ARTICLE VIII. REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS ................................................................................................27 Section 8.1 Representations and Warranties of Issuer.....................................................27 Section 8.2 Warranty of Title...........................................................................................28 Section 8.3 Disclaimer of Warranties..............................................................................28 Section 8.4 Continuing Disclosure ..................................................................................28 ARTICLE IX. TAXES.................................................................................................................29 ARTICLE X. JURISDICTION; WAIVER OF JURY TRIAL ...............................................29 Section 10.1 Consent to Jurisdiction..................................................................................29 Section 10.2 Waiver of Jury Trial......................................................................................29 ARTICLE XI. FORCE MAJEURE...........................................................................................30 Section 11.1 Applicability of Force Majeure.....................................................................30 Section 11.2 Settlement of Labor Disputes........................................................................30

-iii-ARTICLE XII. GOVERNMENTAL RULES AND REGULATIONS...................................30 Section 12.1 Compliance with Laws .................................................................................30 Section 12.2 Contests.........................................................................................................30 Section 12.3 Defense of Agreement ..................................................................................31 ARTICLE XIII. ASSIGNMENT................................................................................................31 ARTICLE XIV. PAYMENTS.....................................................................................................31 Section 14.1 Monthly Statements......................................................................................31 Section 14.2 Payments.......................................................................................................33 Section 14.3 Payment of Disputed Amounts.....................................................................33 Section 14.4 Late Payment ................................................................................................33 Section 14.5 Audit; Adjustments.......................................................................................33 Section 14.6 Netting; No Set-Off.......................................................................................34 Section 14.7 Rate Covenant...............................................................................................34 ARTICLE XV. RESERVED.......................................................................................................35 ARTICLE XVI. NOTICES.........................................................................................................35 ARTICLE XVII. DEFAULT; REMEDIES; TERMINATION...............................................35 Section 17.1 Issuer Default................................................................................................35 Section 17.2 Project Participant Default............................................................................35 Section 17.4 Remedies Upon Default................................Error! Bookmark not defined.

Section 17.5 Termination of Master Power Supply Agreement...... Error! Bookmark not defined.

Section 17.6 Limitation on Damages.................................................................................38 ARTICLE XVIII. MISCELLANEOUS.....................................................................................38 Section 18.1 Indemnification Procedure............................................................................39 Section 18.2 Deliveries......................................................................................................39 Section 18.3 Entirety; Amendments..................................................................................39 Section 18.4 Governing Law .............................................................................................39 Section 18.5 Non-Waiver...................................................................................................40 Section 18.6 Severability ...................................................................................................40 Section 18.7 Exhibits.........................................................................................................40

-iv-Section 18.8 Winding Up Arrangements...........................................................................40 Section 18.9 Relationship of Parties..................................................................................40 Section 18.10 Immunity.......................................................................................................40 Section 18.11 Rates and Indices ..........................................................................................40 Section 18.12 Limitation of Liability...................................................................................41 Section 18.13 Counterparts..................................................................................................41 Section 18.14 Third Party Beneficiaries; Rights of Trustee ................................................41 Section 18.15 No Recourse to Members of Project Participant...........................................42 Section 18.16 Waiver of Defenses.......................................................................................42 Section 18.17 Rate Changes ................................................................................................42 [DRAFTING NOTE: TABLE OF CONTENTS TO BE UPDATED.]
Exhibit A-1 — Base Quantities; Base Delivery Point; Commodity Reference Prices Exhibit A-2 — Assigned Rights and Obligations
Exhibit B — Notices
Exhibit C — Remarketing Election Notice
Exhibit D — Federal Tax Certificate
Exhibit E — Project Participant’s Legal Opinion
Exhibit F — Assignment of Assignable Power Contracts
Exhibit G — Communications Protocol
Exhibit H — Pricing and Other Terms
Exhibit I — Closing Certificate

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CLEAN ENERGY PURCHASE CONTRACT
This Clean Energy Purchase Contract (this “Agreement”) is made and entered into as of [____], 2026 (the “Execution Date”), by and between California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended) (“Issuer”) and Central Coast Community Energy, a California joint powers authority (“Project Participant”).

W I T N E S S E T H:

WHEREAS, Issuer has planned and developed a project to acquire long-term supplies of Product from Aron Energy Prepay 65 LLC, a Delaware limited liability company (“Prepay LLC”) and a wholly-owned subsidiary of The Goldman Sachs Group, Inc., pursuant to a Master Power Supply Agreement, dated as of [____], 2026 (the “Master Power Supply Agreement”), to meet a portion of the Product supply requirements of Project Participant through a discounted clean energy purchase product (the “Clean Energy Project”); WHEREAS, Project Participant desires to enter into an agreement with Issuer for the purchase of Product acquired by the Issuer under the Clean Energy Project; WHEREAS, Issuer will finance its payment for Product under, and the other costs of, the Clean Energy Project by issuing Bonds;
WHEREAS, Project Participant is a joint powers authority and a community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members for the transmission, distribution, sale, and delivery of Product to retail electric consumers within its service area;
WHEREAS, Project Participant is agreeable to purchasing a portion of its Product requirements from Issuer under the terms and conditions set forth in this Agreement and Issuer is agreeable to selling to Project Participant such supplies of Product under the terms and conditions set forth in this Agreement;
WHEREAS, concurrently herewith, Project Participant has assigned to J. Aron (as defined below) certain Assigned Rights and Obligations (as defined below), including the right to receive Assigned Products (as defined below), which Assigned Products will be resold to Prepay LLC under the Electricity Sale and Service Agreement, then resold to Issuer under the Master Power Supply Agreement and then resold to Project Participant hereunder; and

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WHEREAS, as a condition precedent to the effectiveness of the Parties’ obligations under this Agreement, Issuer shall have entered into the Master Power Supply Agreement and shall have issued the Bonds.

NOW, THEREFORE, in consideration of the premises above and the mutual covenants and agreements herein set forth, Issuer and Project Participant (the “Parties” hereto; each is a “Party”) agree as follows:

ARTICLE I.

DEFINITIONS
Section 1.1 Defined Terms. The following terms, when used in this Agreement (including the preamble or recitals to this Agreement) and identified by the capitalization of the first letter thereof, have the respective meanings set forth below, unless the context otherwise requires:
“Administrative Fee” means the amount per MWh specified as such in Exhibit H. “Affiliate” means, with respect to either Party, any entity which is a direct or indirect parent or subsidiary of such Party or which directly or indirectly (i) owns or controls such Party, (ii) is owned or controlled by such Party, or (iii) is under common ownership or control with such Party. For purposes of this definition, “control” of an entity means the power, directly or indirectly, either to (a) vote 50% or more of the securities having ordinary voting power for the election of directors or Persons performing similar functions or (b) direct or cause the direction of the management and policies, whether by contract or otherwise. “Agreement” has the meaning specified in the preamble and shall include exhibits, recitals and attachments referenced herein and attached hereto. “Alternate Delivery Point” has the meaning specified in Section 5.1(a). “Annual Refund” means the annual refund, if any, to be provided to the Project Participant and calculated pursuant to the procedures specified in Section 3.4. “APC Contract Price” means (i) the fixed prices specified in Exhibit A-2 as of the date hereof with respect to the Assigned Prepay Quantities for the Initial Assignment Periods and (ii) the Day-Ahead Average Price with respect to the Assigned Prepay Quantities for any Assignment Period outside of the Initial Assignment Periods. “APC Party” has the meaning specified in Exhibit F.
“Applicable Project” has the meaning specified in Exhibit F. “Assignable Power Contract” has the meaning specified in Section 6.1.

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“Assigned Delivery Point” means, with respect to any Assigned Energy, the Assigned Delivery Point as set forth in the applicable Assignment Agreement for such Assigned Energy.
“Assigned Energy” means any Energy, including Energy associated with PCC1 Product and Long-Term PCC1 Product, to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Assigned PAYGO Product” means, for any Month with respect to an Assigned PPA, the amount, if any, by which the total quantity of Assigned Products delivered under such Assigned PPA in such Month exceeds the Assigned Prepay Quantity for such Assigned PPA for such Month.
“Assigned PPA” means any power purchase agreement that is assigned pursuant to an Assignment Agreement in accordance with the terms of this Agreement. “Assigned Prepay Quantity” has the meaning specified in Exhibit F. “Assigned Prepay Value” means, for any Month and each Assignment Agreement, the Assigned Prepay Quantity for such Month multiplied by the applicable APC Contract Price. “Assigned Products” means, as applicable, PCC1 Product, Long-Term PCC1 Product, Assigned Energy, Assigned RECs and any other Product included in an Assignment Agreement, subject to the limitations for such other Product set forth in Exhibit F. “Assigned Quantity” means, with respect to each Assigned PPA and each Month during the Assignment Period therefor, the quantity of Assigned Energy delivered pursuant to such Assigned PPA consistent with the terms of the applicable Assigned Rights and Obligations in connection with the Assigned Products during such Month. “Assigned RECs” means any RECs associated with PCC1 Product or Long-Term PCC1 Product to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Assigned Rights and Obligations” has the meaning specified in Section 6.1. “Assignment Agreement” means, for any Assigned Rights and Obligations, an agreement among Project Participant, J. Aron and the APC Party, approved by Issuer, in the form attached hereto as Annex I to Exhibit F (with such changes thereto as may be mutually agreed upon by Project Participant, J. Aron, the APC Party, and Issuer, each in its sole discretion). “Assignment Period” for any Assigned Rights and Obligations has the meaning specified in the applicable Assignment Agreement.
“Available Discount Percentage” has the meaning specified in the Re-Pricing Agreement. For the avoidance of doubt, the “Available Discount Percentage” under the Re-Pricing

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Agreement includes the Monthly Discount Percentage, as well as additional discounting expected to be made available through the Annual Refund.
“Balancing Authority” has the meaning specified in the CAISO Tariff. “Base Delivery Point” has the meaning specified in Section 5.1(a). “Base Product” means Firm (LD) Energy delivered to the Base Delivery Point. “Base Quantity” means, with respect to each Delivery Hour during the Delivery Period, the Base Unadjusted Quantity for such Delivery Hour less the Base Quantity Reduction for such Delivery Hour, each as set forth on Exhibit A-1, as Exhibit A-1 may be revised pursuant to Article VI.
“Base Quantity Reduction” means, with respect to each Delivery Hour during the Delivery Period, the “Base Quantity Reduction” of Base Product (in MWh) set forth for such Delivery Hour on Exhibit A-1, as Exhibit A-1 may be revised pursuant to Article VI. “Base Unadjusted Quantity” means, with respect to each Delivery Hour during the Delivery Period, the “Base Unadjusted Quantity” (in MWh) set forth for such Delivery Hour on Exhibit A-1.
“Billing Statement” has the meaning specified in Section 14.1(b). “Bond Closing Date” means the date on which Bonds are first issued pursuant to the Trust Indenture.
“Bonds” means the bonds issued pursuant to the Trust Indenture. “Business Day” means any day other than (i) a Saturday or Sunday, (ii) a Federal Reserve Bank Holiday, (iii) any other day on which commercial banks generally in either New York, New York or the State of California are authorized or required by Law to close, or (iv) any day excluded from “Business Day” as therein defined, pursuant to the Trust Indenture. “CAISO” means California Independent System Operator or its successor. “CAISO Tariff” means CAISO’s FERC-approved tariff, as modified, amended or supplemented from time to time.
“Calculation Agent” has the meaning specified in the Re-Pricing Agreement. “California Long-Term Contracting Requirements” means the long-term contracting requirement set forth in the Clean Energy and Pollution Reduction Act of 2015 (SB 350), California Public Utilities Code Section 399.13(b), and CPUC Decision 17-06-026 and CPUC Decision 18-05-026, as may be modified by subsequent decision of the California Public Utilities Commission or by other Law.

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“CEC” means California’s State Energy Resources Conservation and Development Commission, also known as the California Energy Commission, and any successor agency thereto. “Claiming Party” has the meaning specified in Section 11.1. “Claims” means all claims or actions, threatened or filed, that directly or indirectly relate to the indemnities provided herein, and the resulting losses, damages, expenses, attorneys’ fees, experts’ fees, and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Agreement. “Clean Energy Project” has the meaning specified in the recitals. “Code” means the Internal Revenue Code of 1986, as amended. “Commercially Reasonable” or “Commercially Reasonable Efforts” means, with respect to any decision, purchase, sale or other action required to be made, attempted or taken by a Party under this Agreement, such decision or efforts as a reasonably prudent Person would make or undertake, as the case may be, for the protection of its own interest under the conditions affecting such decision, purchase, sale or other action. For the avoidance of doubt, the reasonableness of any action taken by a Party under this Agreement shall be determined at the time of such action, taking into account the facts, circumstances and competitive environment surrounding such action including without limitation, the amount of notice of the need to take such action, the duration and type of the purchase or sale or other action, and the risk to the Party required to take such action.
“Commodity Reference Price” means either (i) the Day-Ahead Market Price, or (ii) the Real-Time Market Price, as applicable.
“Contract Price” means (i) with respect to the Base Product and any Delivery Hour, (A) the Day-Ahead Market Price for such Delivery Hour at the Base Delivery Point less (B) the product of the Fixed Price for Base Quantities multiplied by the Monthly Discount Percentage, (ii) with respect to Assigned Prepay Quantities during the Initial Assignment Periods, (A) the applicable APC Contract Price(s) multiplied by (B) the result of 100% less the Monthly Discount Percentage, (iii) with respect to Assigned Prepay Quantities outside of the Initial Assignment Periods, (A) the APC Contract Price less (B) the product of the Fixed Price for Assigned Prepay Quantities outside of the Initial Assignment Periods multiplied by the Monthly Discount Percentage, and (iv) with respect to Assigned PAYGO Product, the contract price then in effect under the applicable Assigned PPA for such Assigned PAYGO Product. “Day” means each period of 24 consecutive Hours commencing at the Hour ending at 01:00 (PPT) through the Hour ending at 24:00 (PPT).
“Day-Ahead Average Price” means, for any Assigned Prepay Quantities after the Initial Assignment Periods, the result of (i) (x) the sum of the Day-Ahead Market Prices for each Pricing Interval in a Month, divided by (y) the number of Pricing Intervals in such Month; plus (ii)

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$[____]/MWh. As used in this definition, “Pricing Interval” means the unit of time for which CAISO establishes a separate price.
“Day-Ahead Market Price” has the meaning specified on Exhibit A-1 for the Primary Delivery Point.
“Default Rate” means, as of any date of determination, the lesser of (a) the sum of (i) the rate of interest per annum quoted in The Wall Street Journal (Eastern Edition) under the “Money Rates” section as the “Prime Rate” for such date of determination, plus (ii) one percent per annum, or (b) if a lower maximum rate is imposed by applicable Law, such maximum lawful rate.
“Delivering Entity” has the meaning specified in the Master Power Supply Agreement.
“Delivery Hour” has the meaning specified in Exhibit A-1. “Delivery Period” has the meaning specified in Exhibit H. “Delivery Point” means the Base Delivery Point or an Assigned Delivery Point, as applicable.
“Disqualified Sale Proceeds” has the meaning specified in Section 7.6. “Disqualified Sale Units” has the meaning specified in Section 7.6. “Electricity Sale and Service Agreement” has the meaning specified in the Master Power Supply Agreement.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means three-phase, 60-cycle alternating current electric energy, expressed in megawatt hours.
“EPS” means California’s Emissions Performance Standards, as set forth in Sections 8340 and 8341 of the California Public Utilities Code, as implemented and amended from time to time, and any successor Law.
“EPS Compliant Energy” means Energy that Project Participant can contract for and purchase in compliance with EPS requirements that are applicable to Project Participant. “EPS Energy Period” means any Assignment Period or J. Aron EPS Energy Period. “Execution Date” has the meaning specified in the preamble.

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“Federal Tax Certificate” means the executed Federal Tax Certificate delivered by Project Participant in the form attached as Exhibit D.
“FERC” means the Federal Energy Regulatory Commission or any successor thereto.
“Firm (LD)” means, with respect to a Party’s obligation to sell and deliver or purchase and receive, that such Party’s liability for the failure to meet such obligation shall only be excused to the extent that, and for the period during which, such performance is prevented by Force Majeure, and that in the absence of Force Majeure, the Party to which performance of such obligation is owed shall be entitled to receive from the Party which failed to deliver/receive an amount determined pursuant to Article IV.
“Fixed Price” means $[____]/MWh with respect to Base Quantities and $[____]/MWh with respect to Assigned Prepay Quantities outside of the Initial Assignment Periods, which are the fixed prices under the Buyer Swap (as defined in the Master Power Supply Agreement).
“Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under this Agreement, which event or circumstance was not anticipated as of the date this Agreement was executed, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided; provided that, for the avoidance of doubt, the declaration of “Force Majeure” by an APC Party under a PPA (as defined in an Assignment Agreement) shall constitute Force Majeure hereunder. Force Majeure shall include, provided the criteria in the first sentence are met, riot, insurrection, war, labor dispute, natural disaster, vandalism, terrorism and sabotage. Force Majeure shall not be based on (i) the loss of Project Participant’s markets; (ii) Project Participant’s inability economically to use or resell the Product purchased hereunder; (iii) the delay, loss or failure of Issuer’s supply; or (iv) Issuer’s ability to sell the Product at a higher price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (x) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the applicable Delivery Point and (y) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of the foregoing factors shall not be sufficient to conclusively or presumptively prove the existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. Force Majeure invoked by Prepay LLC under the Master Power Supply Agreement shall constitute Force Majeure in respect of Issuer hereunder to the extent the conditions set forth above have been satisfied with respect to Prepay LLC.

Notwithstanding the foregoing or anything to the contrary herein, to the extent that an Assignment Agreement is terminated early, such termination shall constitute Force Majeure with respect to Issuer hereunder until the earlier of (I) the commencement of an “Assignment Period” under a replacement Assignment Agreement, (II) the commencement of a J. Aron EPS Energy Period or (III) the end of the second Month following the Month in which such early termination occurs.

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“Government Agency” means the United States of America, any state thereof, any municipality, or any local jurisdiction, or any political subdivision of any of the foregoing, including, but not limited to, courts, administrative bodies, departments, commissions, boards, bureaus, agencies, or instrumentalities.
“Governmental Approval” means any authorization, consent, approval, license, ruling, permit, exemption, variance, order, judgment, registration, filing, giving of notice to, decree, declaration of or regulation by any Government Agency relating to the valid execution, delivery or performance of this Agreement or the consummation of any of the transactions contemplated hereby.
“Hour” means the 60-minute period commencing at 00:00 (PPT) on first Day of the Delivery Period and ending at 01:00 (PPT) on the first Day of the Delivery Period, and each 60-minute interval thereafter.
“Initial Assigned Rights and Obligations” means Assigned Rights and Obligations expected to be assigned by the Project Participant to J. Aron prior to the commencement of the Delivery Period, which as of the date hereof the Parties expect to be an Assigned PPA entered into following the Bond Closing Date by and between the Project Participant and [PPA Seller] with sufficient quantities to reduce the Base Quantities to zero for the Initial Reset Period. “Initial Assignment Periods” means the Assignment Periods for the Initial Assigned Rights and Obligations specified in Exhibit A-2 hereto as of the date hereof. “Initial Reset Period” has the meaning specified in Exhibit H. “Interest Rate Period” has the meaning specified in the Trust Indenture. “Issuer” has the meaning specified in the preamble.
“Issuer Default” has the meaning specified in Section 17.1. “ISTs” has the meaning specified in Section 5.1(a).
“J. Aron” means J. Aron & Company LLC, a New York limited liability company, and its permitted successors and assigns under an Assignment Agreement. “J. Aron EPS Energy Period” has the meaning specified in Section 6.1(c). [“J. Aron Fixed Payment” has the meaning specified in the PPA Custodial Agreement.]
“J. Aron Prepay Payment” has the meaning specified in the PPA Custodial Agreement.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).

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“Joint Powers Agreement” means that certain Joint Powers Agreement dated December 19, 2008, as amended from time to time, under which Project Participant is organized as a Joint Powers Authority in accordance with the Joint Powers Act. “Law” means any statute, law, rule or regulation or any written judicial or administrative decision, ruling or interpretation with respect thereto or thereof having the effect of the foregoing enacted, promulgated, or issued by a Government Agency whether in effect as of the Execution Date or at any time during the term of this Agreement. “Long-Term PCC1 Product” means bundled renewable energy and RECs meeting the requirements of Portfolio Content Category 1, and the California Long-Term Contracting Requirements, to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Master Power Supply Agreement” has the meaning specified in the recitals. “Minimum Discount Percentage” has the meaning specified in Exhibit H. “Month” means a period beginning on the first Day of a calendar month and ending immediately prior to the commencement of the first Day of the next calendar month. The term “Monthly” shall be construed accordingly.
“Monthly Discount Percentage” has the meaning specified in Exhibit H. “Municipal Utility” means any Person that (i) is a “governmental person” as defined in the implementing regulations under Section 141 of the Code and any successor provision, (ii) owns either or both a gas distribution utility or an electric distribution utility (or provides natural gas or electricity at wholesale to, or that is sold to entities that provide natural gas or electricity at wholesale to, governmental Persons that own such utilities), and (iii) agrees in writing to use the gas or electricity purchased by it (or cause such gas or electricity to be used) for a qualifying use as defined in U.S. Treas. Reg. § 1.148-1(e)(2)(iii). “MWh” means megawatt-hour.
“Non-Priority Products” means any Products that are not Priority Products. “Party” has the meaning specified in the preamble.
“PCC1 Product” means bundled renewable energy and RECs meeting the requirements of Portfolio Content Category 1 to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Person” means any individual, limited liability company, corporation, partnership, joint venture, trust, unincorporated organization, or Government Agency. “Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource

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consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law.
“Potential Remarketing Event” has the meaning specified in Section 3.5(b). “PPA Custodial Agreement” means that certain Consolidated, Amended and Restated PPA Custodial Agreement, dated as of [____], 2026, by and among Project Participant, Issuer, J. Aron and the PPA Custodian.
“PPA Custodian” means U.S. Bank Trust Company, National Association, a national banking association.
“PPT” means Pacific Prevailing Time.
“Prepay LLC” has the meaning stated in the recitals.
“Primary Delivery Point” has the meaning specified in Section 5.1(a). “Priority Products” means the Base Quantity and Assigned Products to be purchased by Project Participant under this Agreement, together with Products that (i) Project Participant is obligated to take under a long-term agreement, which Products either have been purchased by Project Participant or a joint action agency pursuant to a long-term prepaid power purchase agreement using the proceeds of bonds, notes, or other obligations, the interest on which is excluded from income for federal income tax purposes, or (ii) with respect to Energy, Energy that is generated using capacity that was constructed using the proceeds of bonds, notes, or other obligations, the interest on which is excluded from income for federal income tax purposes (provided that, for the avoidance of doubt, Priority Products shall not include Energy that is generated using capacity that was wholly or partially financed through the monetization of renewable tax credits other than to the extent such energy was generated with capacity financed with tax-exempt bonds, whether such monetization is accomplished through a tax equity investment or otherwise, or that is generated from federally owned and operated hydroelectric facilities, including through the United States Army Corps of Engineers and the United States Bureau of Reclamation, and marketed by the Bonneville Power Administration or the Western Area Power Administration).
“Product” means Energy and, to the extent included in an Assignment Agreement, associated RECs, capacity or other products related to the foregoing; provided that the inclusion of any Product in an Assignment Agreement is subject to the limitation set forth in Exhibit F. “Project Participant” has the meaning specified in the preamble. “Project Participant Default” has the meaning specified in Section 17.2. “Qualifying Use Requirements” means, with respect to any Product delivered under this Agreement, such Product is used (i) for a “qualifying use” as defined in U.S. Treas.

Reg. § 1.148-1(e)(2)(iii), (ii) in a manner that will not result in any “private business use” within

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the meaning of Section 141 of the Code, and (iii) in a manner that is consistent with the Federal Tax Certificate attached as Exhibit D.
“Re-Pricing Agreement” means the Re-Pricing Agreement, dated as of the Bond Closing Date (as defined in the Master Power Supply Agreement), by and between Prepay LLC and Issuer.
“Real-Time Market Price” has the meaning specified on Exhibit A-1 for each Delivery Point.
“Remarketing Election Deadline” means, for any Reset Period, the last date and time by which Project Participant may provide a Remarketing Election Notice, which shall be 4:00 p.m. PPT on the 10th day of the Month (or, if such day is not a Business Day, the next succeeding Business Day) prior to the first delivery Month of a Reset Period with respect to which a Potential Remarketing Event has occurred.
“Remarketing Election Notice” has the meaning specified in Section 3.5(b). “Remarketing Entity” has the meaning specified in the Master Power Supply Agreement.
“Renewable Energy Credit” or “REC” has the meaning specified for “Renewable Energy Credit” in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law. “Replacement Assigned Rights and Obligations” means any Assigned Rights and Obligations other than the Initial Assigned Rights and Obligations. “Replacement Price” means, with respect to any Shortfall Quantity of Base Quantities, the price at which Project Participant, acting in a Commercially Reasonable manner, purchases at the applicable Delivery Point Replacement Product for such Shortfall Quantity, plus (i) costs reasonably incurred by Project Participant in purchasing Replacement Product, and (ii) additional transmission charges, if any, reasonably incurred by Project Participant to the applicable Delivery Point, or at Project Participant’s option, the market price at the Delivery Point for such Product not delivered as determined by Project Participant in a Commercially Reasonable manner.

The Replacement Price for any Shortfall Quantity shall not include any administrative or other internal costs incurred by Project Participant and shall be limited to a price that is Commercially Reasonable with respect to the timing and manner of purchase. In no event shall the Replacement Price include any penalties, ratcheted demand or similar charges, nor shall Project Participant be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Issuer’s liability.
“Replacement Product” means any Energy purchased by Project Participant to replace any Shortfall Quantity at the Delivery Point where such Shortfall Quantity occurred; provided that such Energy is purchased for delivery in the Delivery Hour to which such Shortfall Quantity relates.

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“Reset Period” means each “Reset Period” under the Re-Pricing Agreement. “Reset Period Notice” has the meaning specified in Section 3.5(a). “RPS Law” means the California Renewable Energy Resources Act, including the California Renewables Portfolio Standard Program, Article 16 of Chapter 2.3, Division 1 of the California Public Utilities Code, as implemented and amended from time to time, and any successor Law.
“Schedule”, “Scheduled” or “Scheduling” means the actions of Issuer, Project Participant and/or their designated representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other the quantity and type of Product to be delivered during any given portion of the Delivery Period at a specified Delivery Point. “Shortfall Quantity” has the meaning specified in Section 4.1(a). “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Issuer or Project Participant to or from the Delivery Point. “Trust Indenture” means (i) the Trust Indenture to be entered into prior to the commencement of the Delivery Period between Issuer and the Trustee, as supplemented and amended from time to time in accordance with its terms, and (ii) any trust indenture entered into in connection with the commencement of any Interest Rate Period after the initial Interest Rate Period between Issuer and the Trustee containing substantially the same terms as the indenture described in clause (i) and which is intended to replace the indenture described in clause (i) as of the commencement of such Interest Rate Period.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association, and its successors as trustee under the Trust Indenture. “Utility Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of Project Participant’s community choice aggregation program, including, without limiting the generality of the foregoing, (1) all income, rents, rates, fees, charges, or other moneys derived by the Project Participant from the sale, furnishing and supplying of the electric capacity or energy or other services, facilities, and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Project Participant’s community choice aggregation, (2) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, or other moneys to the extent that the use of such earnings and income is limited to Project Participant’s community choice aggregation by or pursuant to law, (3) deferred revenues and moneys maintained in the Project Participant’s operating reserve fund and (4) such other income, charges, revenue or moneys maintained in reserves as the Project Participant may specify in a written order of the Project Participant filed with the Issuer, but excluding (A) in all cases customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the Project Participant; and (B) such other income, charges, revenue or moneys as the Project Participant may specify in a written order of the Project Participant filed with the Issuer, provided that such written

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order of the Project Participant confirms that, following the filing of such written order of the Project Participant, (i) the requirements of Section 14.7 shall be satisfied; and (ii) the income, charges, revenue or moneys specified in such written order of the Project Participant shall be accounted for separately from the “Utility Revenues” as defined herein. “Voided Remarketing Election Notice” has the meaning specified in Section 3.5(b). “Western EIM” has the meaning ascribed to “Energy Imbalance Market (EIM)” under the CAISO Tariff.
“WREGIS” means the Western Renewable Energy Generation Information System or its successor.

Section 1.2 Definitions; Interpretation. References to “Articles,” “Sections,” “Schedules” and “Exhibits” shall be to Articles, Sections, Schedules and Exhibits, as the case may be, of this Agreement unless otherwise specifically provided. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest scope of such general statement, term or matter.

Except where expressly provided otherwise, any reference herein to any agreement or document includes all amendments, supplements or restatements to and of such agreement or document as may occur from time to time in accordance with its terms and the terms hereof, and any reference to a party to any such agreement includes all successors and assigns of such party thereunder permitted by the terms hereof and thereof.

ARTICLE II.

DELIVERY PERIOD; NATURE OF CLEAN ENERGY PROJECT; CONDITION

PRECEDENT
Section 2.1 Delivery Period. Subject to Section 2.3, delivery of Product by Issuer to Project Participant shall commence at the beginning of the Delivery Period and, except for any Reset Period for which a Remarketing Election Notice is in effect as provided in Section 3.5(b), shall continue throughout the Delivery Period.

Section 2.2 Nature of Clean Energy Project. Project Participant acknowledges and agrees that Issuer will meet its obligations to provide Product to Project Participant under this Agreement exclusively through its purchase of Product the Delivering Entity pursuant to the Master Power Supply Agreement and that Issuer is financing its purchase of such supplies through the issuance of the Bonds.

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Section 2.3 Condition Precedent. Notwithstanding anything to the contrary herein, commencement of deliveries and the rights and obligations of Issuer and Project Participant hereunder are subject to the condition precedent that Issuer shall have entered into the Master Power Supply Agreement and shall have issued the Bonds.

Section 2.4 Pledge of this Agreement. Project Participant acknowledges and agrees that Issuer will pledge its right, title and interest under this Agreement and the revenues to be received under this Agreement to secure Issuer’s obligations under the Trust Indenture.

ARTICLE III.

SALE AND PURCHASE; PRICING
Section 3.1 Sale and Purchase of Product. Issuer shall sell and deliver or cause to be delivered to Project Participant, and Project Participant shall purchase and receive from Issuer, the applicable Product in the quantities and at the times and subject to the terms and conditions set forth in this Agreement. The quantities of Product to be sold and purchased and delivered and received pursuant to the terms and conditions set forth in this Agreement shall be equal to (a) the Base Quantity, if any, for each Delivery Hour and (b) the Assigned Quantity delivered to J. Aron in each Month of the Delivery Period pursuant to the Assignment Agreements.

Section 3.2 Payments.
(a) For each Month for which an EPS Energy Period is in effect at the start of such Month:
(i) Project Participant shall pay Issuer the Contract Price multiplied by the Assigned Prepay Quantities actually delivered for such Month, provided that Issuer shall owe a payment to Project Participant to the extent that the Contract Price for Assigned Prepay Quantities is negative; and
(ii) Pursuant to the terms of the PPA Custodial Agreement, Project Participant shall owe a separate [Project Participant Gross Payment] (as defined in the PPA Custodial Agreement) for each Assigned PPA consistent with the terms of the PPA Custodial Agreement, and, upon satisfying its obligations under the PPA Custodial Agreement in respect of such amount (after taking into consideration any [PPA Seller Payment Obligation] (as such term is defined in the PPA Custodial Agreement) credited to Project Participant in respect thereof), any portion of such amount attributable to Assigned PAYGO Product shall be deemed to be paid by Project Participant to the applicable APC Party on behalf of J. Aron and shall satisfy the obligations of the respective parties under each of the Electricity Sale and Service Agreement, the Master Power Supply

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Agreement, this Agreement and the applicable Assignment Agreement for such Assigned PAYGO Product.
(b) To the extent that Base Quantities are delivered hereunder in any Month, Project Participant shall pay Issuer the Contract Price multiplied by the Base Quantities actually delivered.
(c) The Contract Price for Assigned Energy is inclusive of any amounts due in respect of other Assigned Products.

Section 3.3 Limited Obligation to Take Base Quantities. Notwithstanding anything to the contrary in this Agreement, Project Participant shall not be required to purchase and receive any Base Quantities hereunder, and Issuer, with respect to any Base Quantities that otherwise would be delivered hereunder, shall cause Prepay LLC to remarket such Base Quantities pursuant to the provisions of Exhibit C to the Master Power Supply Agreement.

Section 3.4 Annual Refund. In addition to any Monthly Discount Percentage applied to Energy Scheduled hereunder, Issuer shall credit such Annual Refund to Project Participant as may be available for distribution by Issuer pursuant to [Section 5.12] of the Trust Indenture, subject to the provisions of this Section 3.4. Such Annual Refund, if any, shall be credited to the next amount due from Project Participant following the release of funds for such purpose to Issuer under the terms of the Trust Indenture. In determining the amount of such Annual Refund, if any, to be credited to Project Participant, Issuer may reserve such funds (i) as may be required under the terms of the Trust Indenture or (ii) with the prior written consent of Project Participant (a) to fund or maintain the Minimum Discount Percentage for any future Reset Period, (b) to fund or maintain any rate stabilization or working capital reserve, (c) to reserve or account for unfunded liabilities and expenses or (d) for other costs of the Clean Energy Project.

Section 3.5 Reset Period Remarketing.
(a) Reset Period Notice. For each Reset Period, Issuer shall provide to Project Participant, at least ten (10) days prior to the Remarketing Election Deadline, written notice (a “Reset Period Notice”) setting forth (i) the duration of such Reset Period, (ii) the estimated Available Discount Percentage for such Reset Period, and (iii) the applicable Remarketing Election Deadline. Issuer may thereafter update such notice at any time prior to the Remarketing Election Deadline and in any such update may extend the Remarketing Election Deadline in its sole discretion.
(b) Remarketing Election. If the Reset Period Notice (or any update thereto) for any Reset Period indicates that the estimated Available Discount Percentage specified in such notice is not at least equal to the Minimum Discount Percentage for such Reset Period, then: (i) a “Potential Remarketing Event” shall be deemed to exist, and (ii) Project Participant may, not later than the Remarketing Election Deadline, issue a written notice in the form attached hereto as Exhibit C (a “Remarketing Election Notice”) to Issuer, Prepay LLC and the Trustee electing for the Assignment Agreements to be terminated and all Base Quantities with respect to such Reset Period to be remarketed; provided, however, if the actual Available Discount Percentage, as finally

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determined under the Re-Pricing Agreement, is equal to or greater than the Minimum Discount Percentage, then Issuer shall elect by written notice (a “Voided Remarketing Election Notice”) to Project Participant to treat such Remarketing Election Notice as void, unless Prepay LLC has contracted to remarket the related Product for the applicable Reset Period. If Project Participant issues a valid Remarketing Election Notice (other than a Voided Remarketing Election Notice) in accordance with this Section 3.5(b) for any Reset Period, then Project Participant shall have no rights or obligations to receive any Product hereunder during such Reset Period or to receive any Annual Refund attributable to such Reset Period.
(c) Final Determination of Available Discount Percentage. The Parties acknowledge and agree that the final Available Discount Percentage for any Reset Period following the Initial Reset Period will be determined on the [Re-Pricing Date] (as defined in the Re-Pricing Agreement) for such Reset Period, and that such Available Discount Percentage may differ from the estimate or estimates of such Available Discount Percentage last provided to Project Participant prior to the Remarketing Election Deadline for such Reset Period; provided that the Available Discount Percentage for any Reset Period will not be less than the lower of (i) the last estimated Available Discount Percentage set forth in the Reset Period Notice for such Reset Period (or any update thereof) sent to Project Participant by Issuer and (ii) the Minimum Discount Percentage for Reset Period.
(d) Obligations Following a Remarketing Election. Notwithstanding the issuance of any Remarketing Election Notice for a Reset Period, Project Participant shall not make any new commitment to purchase Priority Products during such Reset Period to the extent any such commitment could reasonably be expected to cause, during any portion of the Delivery Period after such Reset Period, Project Participant’s aggregate obligations to purchase Priority Products (including its obligation to purchase Priority Products hereunder) to exceed Project Participant’s expected aggregate requirements for Products that will be used (i) for a “qualifying use” as defined in U.S. Treas. Reg. § 1.148-1(e)(2)(iii) and (ii) in a manner that will not result in any “private business use” within the meaning of Section 141 of the Code. Unless Project Participant issues a new Remarketing Election Notice (other than a Voided Remarketing Election Notice) for any subsequent Reset Period in accordance with this Section 3.5, Project Participant and J. Aron will cooperate in good faith and exercise Commercially Reasonable Efforts to locate EPS Compliant Energy for redelivery hereunder in any such Reset Period.

ARTICLE IV.

FAILURE TO SCHEDULE PRODUCT
Section 4.1 Issuer’s Failure to Schedule Base Quantity (Not Due to Force Majeure). (a) Shortfall Quantity. If, for any Delivery Hour during the Delivery Period, Issuer breaches its obligation to Schedule or deliver all or any portion of the Base Quantity, after giving effect to reductions for Assigned Energy at any Delivery Point pursuant to the terms of this Agreement, then the portion of the Base Quantity that Issuer failed to Schedule or deliver shall be a “Shortfall Quantity”.

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(b) Issuer Cover Damage Payments. To the extent Project Participant actually purchases Replacement Product with respect to any Shortfall Quantity, then Issuer shall pay to Project Participant the result determined by the following formula:

P = Q x (RP - CP + AF)
Where:

P = The amount payable by Issuer under this Section 4.1(b); Q = The quantity of Replacement Product purchased;
RP = The Replacement Price;
CP = The Contract Price that would have applied to such Product; and AF = The Administrative Fee.
(c) Project Participant Obligation to Mitigate. Project Participant shall exercise Commercially Reasonable Efforts to mitigate Issuer’s damages paid by Issuer hereunder.

Section 4.2 Project Participant’s Failure to Schedule or Take Base Quantities (Not Due to Force Majeure). If, for any Delivery Hour during the Delivery Period, Project Participant breaches its obligation to Schedule or take all or any portion of the Base Quantity at any Delivery Point pursuant to the terms of this Agreement, then Project Participant shall remain obligated to pay Issuer the Contract Price for such Base Quantity. Issuer shall credit to Project Participant’s account any net revenues Issuer may receive from Prepay LLC under the Master Power Supply Agreement in connection with the ultimate sale of any such Product by the Delivering Entity to Municipal Utilities or, if necessary, other Project Participants, up to the Contract Price.

Section 4.3 Failure to Deliver or Take Due to Force Majeure. If with respect to all or any portion of Base Quantities or Assigned Prepay Quantities:
(a) Project Participant fails to take or Issuer fails to deliver all or any portion of such quantities at any Delivery Point pursuant to the terms of this Agreement; and (b) such failure is due to Force Majeure claimed by either Party, then the Parties shall have no payment obligations with respect to such quantities hereunder.

Section 4.4 Assigned Products. Notwithstanding anything herein to the contrary, neither Project Participant nor Issuer shall have any liability or other obligation to one another for any failure to Schedule, take, or deliver Assigned Products.

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Section 4.5 Sole Remedies. Except with respect to the termination of this Agreement pursuant to Article XVII, the remedies set forth in this Article IV shall be each Party’s sole and exclusive remedies for any failure by the other Party to Schedule, deliver or take Product, as applicable, pursuant to this Agreement.

ARTICLE V.

DELIVERY POINTS; SCHEDULING
Section 5.1 Delivery Points.
(a) Base Delivery Points. All Base Product delivered under this Agreement shall be Scheduled for delivery and receipt at (i) the Delivery Point set forth in Exhibit A-1 (the “Primary Delivery Point”) or (ii) any other point (an “Alternate Delivery Point”) that has been mutually agreed by Issuer, Project Participant and Prepay LLC (the Primary Delivery Point or, to the extent specified, any Alternate Delivery Point being the “Base Delivery Point”). Delivery of Energy to Project Participant at the Primary Delivery Point shall be facilitated through submission of Inter-SC Trades, as defined in the CAISO Tariff (“ISTs”). Project Participant shall designate a scheduling coordinator in the CAISO market for this purpose as specified in Exhibit G. (b) Alternate Base Market Prices. The Day-Ahead Market Price and Real-Time Market Price for each Alternate Delivery Point, as applicable, shall be the price mutually agreed and identified by the Parties, or if no such price is identified for such Alternate Delivery Point, the Day-Ahead Market Price and Real-Time Market Price, as applicable, specified on Exhibit A-1 for the Primary Delivery Point from which quantities are being shifted to such Alternate Delivery Point.
(c) Assigned Energy Delivery Points. Assigned Energy delivered under this Agreement shall be Scheduled for delivery and receipt at the applicable Assigned Delivery Point specified in the applicable Assignment Agreement. All other Assigned Products shall be delivered consistent with the terms of the applicable Assignment Agreement.

Section 5.2 Transmission and Scheduling. Issuer shall Schedule or arrange for Scheduling services with CAISO in accordance with the CAISO Tariff, to deliver the Base Product to the Base Delivery Point. Project Participant shall Schedule or arrange for Scheduling services with CAISO in accordance with CAISO Tariff, to receive the Base Product at the Base Delivery Point. If Prepay LLC Schedules or arranges for Scheduling services, to deliver Base Product to the Base Delivery Point, then Issuer’s obligations under this Section shall be relieved pro tanto.

Scheduling of Assigned Energy shall be in accordance with the applicable Assignment Agreement.

Section 5.3 Title and Risk of Loss. Title to and risk of loss of the Product delivered under this Agreement shall pass from Issuer to Project Participant at the applicable Delivery Point.

The transfer of title and risk of loss for all Assigned Products shall be in accordance with the applicable Assignment Agreement; provided that all Assignment Agreements shall provide for the transfer of Renewable Energy Credits in accordance with WREGIS. Subject to Section 18.1, each Party shall indemnify, defend and hold harmless the other Party from and against any Claims made

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by a third party arising from or out of any event, circumstance, act or incident related to the Product delivered hereunder first occurring or existing during the period when control and title to Base Product or Assigned Products are vested in the indemnifying Party as provided in this Section; provided that, notwithstanding the foregoing, (a) Issuer shall have no obligations to indemnify, defend or hold harmless Project Participant for any such Claims relating to replacement costs, cover damages or similar liabilities that are payable to any Person because of Project Participant’s failure to deliver any Product to such Person and (b) no obligation to indemnify, defend or hold harmless shall supplant or control the provisions of this Agreement relating to Force Majeure.

Notwithstanding anything to the contrary herein, no Party shall have any obligations to indemnify, defend or hold harmless the other Party in respect of any Claims relating to any Assigned Products.

Section 5.4 PCC1 Product and Long-Term PCC1 Product. Notwithstanding any other provision of this Agreement to the contrary, to the extent that any Assigned Products are PCC1 Product or Long-Term PCC1 Product, the following provisions apply:
(a) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6, Non-Modifiable. (Source: D.07-11-025, Attachment A.) D.08-04-009].
(b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1, Non-modifiable. D.11-01-025].
(c) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC REC-2, Non-modifiable. D.11-01- 025]. With respect to Sections 5.4(a) through (c), “Seller” means “Issuer”, Buyer means “Project Participant”, and any other capitalized terms not otherwise defined therein shall have the meaning specified in the Assigned PPA.