Regular Board Meeting
May 26, 2022
Item 8: CEO & Regulatory Report
5/26/22 2
Item 8: CEO Report
• CEA Expansion
• Escondido & San Marcos – April 2023 Launch
• Timeline:
• Implementation Plan Amendment Certified by CPUC – RECEIVED! • April 2022 – Include energy usage in CEA Year Ahead Resource Adequacy(RA) Filing with CPUC – First Procurement Related Action - FILED • May 2022 – Energy Hedge Procurement Begins
• July 2022 – RA requirements received from CPUC – Procurement Obligations • August 2022 – CAC Input into marketing and outreach strategy • October 2022 – Contracts for RA finalized; submittal to CPUC • October 2022 – Marketing & Outreach Begins
• February 2023 – Required Noticing begins
• April 2023 – Service Enrollments
5/26/22 3
Item 8: CEO Report
• CEA Expansion
• Oceanside, Vista, San Clemente – 2024 service
• Timeline:
• April 2022 – Results to cities
• May 2022
• May 3 - Vista Council Workshop
• May 26 – CEA Board Update
• June 2022 - Cities consider resolution to join CEA and Ordinance establishing CCA • June 18 – Oceanside City Council
• June 26 – Vista City Council
• TBD – San Clemente
• July 2022 – CEA approve cities joining; direct preparation of Implementation Plan Amendment • August 2022 – New Board Members Oath of Office
• October 2022 – Draft Implementation Plan Amendment to CEA Board for approval • December 2022 – File Implementation Plan Amendment with CPUC 5/26/22 4
Item 8: CEO Report
• General Counsel Request for Qualifications
• Board Subcommittee: Vice Chair Druker; Board Member Acosta • April 18, 2022 – RFQ Issued
• May 16, 2022 – Proposals Due
• 4 Proposals Received
• May 31, 2022 – Subcommittee Interviews
• June 30, 2022 – Board Interviews/Selection
5/26/22 5
Questions/Discussion
5/26/22 6
Item 3: CEA Board Ad-Hoc
Subcommittee – General Counsel
Selection
5/26/22 7
Item 9: Proposed FY 2022/23 Budget
• Recommendation:
• Review Proposed FY 2022/23 Budget and Schedule Adoption for June 30, 2022 Meeting.
5/26/22 8
Item 9: Proposed FY 2022/23 Budget
• FY 2021/22 Year End Estimates
• Expenditure savings
• Power Supply Costs - $1.0M
• Legal Services - $88,500
• Professional Services - $91,200
5/26/22 9
Midyear
Adjusted Budget Year End Estimate Variance
Projected Revenue $63,282,755 $63,297,755 $15,000
Projected
Expenditures
$61,055,025 $59,792,791 ($1,262,234)
Net Results $2,227,730 $3,504,964 $1,277,234
Item 9: Proposed FY 2022/23 Budget
• FY 22/23 Proposed Budget Assumptions
• Revenues based on current adopted rates
• Power supply costs based on actual executed contracts and May forward price curve
• Consulting Services based on approved contracts
• Priorities & Goals
• Financial Stability
• Regulatory Compliance
• Successful Expansion in Escondido and San Marcos
5/26/22 10
Item 9: Proposed FY 2022/23 Budget
• Proposed FY22/23 Budget in Balance
• Increase in revenue due to April 2023 Escondido & San Marcos Expansion
• Increase in expenditure due to energy purchases to servie Escondido & San Marcos & proposed positions
5/26/22 11
FY 21/22 Year
End Estimate
FY 22/23
Proposed
Budget
Variance
Projected Revenue $63,297,755 $80,791,405 $17,493,650
Projected
Expenditures
$59,792,791 $78,383,015 $18,590,224
Net Results $3,504,964 $2,408,390 ($1,096,574)
Item 9: Proposed FY 2022/23 Budget
• Proposed Positions – Transition from Interim to Permanent • Chief Financial Officer/Treasurer
• Board Secretary
• Proposed New Positions
• Accounts Services/Program Manager
• Procurement Manager
• Regulatory Analyst
5/26/22 12
Item 9: Proposed FY 2022/23 Budget
5/26/22 13
CEA Board of
Directors
Chief Executive
Officer
Account Services
& Program
Manager
Procurement
Manager
Regulatory
Analyst
General Counsel CFO/Treasurer
Board Secretary
Board Clerk
5/26/22 14
FY 21/22
Midyear
Adjusted
Budget
FY 21/22 Year
End Estimate
(5/2022 Pro
Forma
FY 22/23 Proposed
Budget - Summary
REVENUE
Energy Sales Revenue $ 57,282,755 $ 57,282,755 $ 80,786,405 Interest Income $ 15,000 $ 5,000
Funds provided by Financing $ 6,000,000 $ 6,000,000
TOTAL REVENUE $ 63,282,755 $ 63,297,755 $ 80,791,405
EXPENDITURES
Power Supply $ 58,222,525 $ 57,150,291 $ 74,134,855
Data Management/Call Center $ 840,000 $ 840,000 $ 1,151,180 Staffing/Consultants $ 235,700 $ 200,000 $ 985,280
Legal Services $ 375,000 $ 286,500 $ 390,000
Professional Services $ 888,600 $ 797,400 $ 963,600
Audit Services $ 41,000 $ 26,000 $ 15,000
Software & Licenses $ 9,100 $ 11,600 $ 15,100
Memberships & Dues $ 121,000 $ 120,500 $ 121,000
Printing $ 27,000 $ 25,000 $ 55,000
Postage $ 21,100 $ 26,000 $ 50,000
Advertising $ 15,000 $ 1,500 $ 15,000
Insurance $ 32,000 $ 6,000 $ 35,000
Bank Fees $ 2,000 $ 2,000 $ 2,000
Debt Service $ 225,000 $ 300,000 $ 450,000
TOTAL PROJECTED BUDGET $ 61,055,025 $ 59,792,791 $ 78,383,015 Net Results of Operations $ 2,227,730 $ 3,504,964 $ 2,408,390 Beginning Fund Balance (2,707,414) (2,707,414) 797,550
Ending Fund Balance $ (479,684) $ 797,550 $ 3,205,940
• Proposed Budget results in
4% Reserve
• Policy sets minimum reserve
at 5%
• Staff to continue refining
budget to achieve 5%
Reserve
• Next Step
• Staff to continue refining budget to achieve 5% reserve contribution • June 30, 2022 Regular Board Meeting – Budget Adoption 5/26/22 15
Item 9: Proposed FY 2022/23 Budget
Questions/Discussion
5/26/22 16
Item 10: Assessment Report –
Oceanside, San Clemente, Vista
5/26/22 17
Item 10: Assessment Report
• Recommendation:
• Receive Update and Assessment Report related to the cities of Oceanside, San Clemente and Vista Joining CEA.
5/26/22 18
Item 10: Assessment Report
• New Member Policy:
• Analysis of proposed member usage data results in a positive financial result using CEA’s pro forma model;
• Addition of new member does not create an undue risk or financial burden to CEA
• Does not create an undue risk to the achievement of the goals of CEA, including the achievement of the Climate Action Plan goals of the current Members.
5/26/22 19
Item 10: Assessment Report
• Analysis
• Usage data for calendar year 2021 input into CEA’s current pro forma model
• April 2024 Enrollment
• Current CEA adopted rates used
• 90% Participation Rate
• CEA’s current cost of power supply
5/26/22 20
Item 10: Assessment Report
5/26/22 21
FYE 2024 FYE 2025 FYE 2026
Revenue $20.51 $110.34 $110.89
Power Supply Costs -$18.48 -$104.43 -$102.29
Staffing -$0.35 -$0.35 -$0.35
Billing and Other Costs -$0.83 -$2.76 -$2.77
Net Operating Margin $0.85 $2.79 $5.48
5% Reserve Contribution $1.03 $5.52 $5.54
Reserve Shortfall/Excess -$0.18 -$2.72 -$0.06
Reserve by year:
2024 – 4%
2025 – 2.5%
2026 – 4.9%
Rates would need to be increased 2.5% to achieve a minimum 5% reserve contribution in each year.
Item 10: Assessment Report
5/26/22 22
Bill Comparison – Current Rates
City of Oceanside
Residential: DR
SDG&E
31%
Renewable
CEA
50%
Renewable
Clean Impact
CEA
Clean Impact
Plus
75% Carbon
Free
CEA
Green
Impact
100%
Renewable
Generation $ 49.86 $ 36.70 $ 36.70 $ 36.70
Clean Impact Plus/Green Impact
Premium $ - $ - $ 0.32 $ 2.43
SDG&E PCIA+FFS - 2022 Vintage $ - $ 9.73 $ 9.73 $ 9.73
Generation Related Costs $ 49.86 $ 46.43 $ 46.75 $ 48.86 SDG&E Delivery $ 73.08 $ 73.08 $ 73.08 $ 73.08
Total Average Monthly Bill $ 122.94 $ 119.51 $ 119.83 $ 121.94 $ Savings to SDG&E $ (3.44) $ (3.11) $ (1.00)
% Savings to SDG&E -2.79% -2.53% -0.81%
Average 324 kWh Usage
City of Oceanside
Residential: DR
SDG&E
31%
Renewable
CEA
50%
Renewable
Clean Impact
CEA
Clean Impact
Plus
75% Carbon
Free
CEA
Green
Impact
100%
Renewable
Generation $ 49.86 $ 35.80 $ 35.80 $ 35.80
Clean Impact Plus/Green Impact
Premium $ - $ - $ 0.32 $ 2.43
SDG&E PCIA+FFS - 2022 Vintage $ - $ 9.73 $ 9.73 $ 9.73
Generation Related Costs $ 49.86 $ 45.53 $ 45.85 $ 47.96 SDG&E Delivery $ 73.08 $ 73.08 $ 73.08 $ 73.08
Total Average Monthly Bill $ 122.94 $ 118.61 $ 118.93 $ 121.04 $ Savings to SDG&E $ (4.33) $ (4.01) $ (1.90)
% Savings to SDG&E -3.52% -3.26% -1.55%
Average 324 kWh Usage
Bill Comparison – 2.5% Rate Increase
Item 10: Assessment Report
5/26/22 23
Bill Comparison – Current Rates Bill Comparison – 2.5% Rate Increase City of San Clemente
Residential: DR
SDG&E
31%
Renewable
CEA
50%
Renewable
Clean Impact
CEA
Clean Impact
Plus
75% Carbon
Free
CEA
Green
Impact
100%
Renewable
Generation $ 60.94 $ 43.75 $ 43.75 $ 43.75
Clean Impact Plus/Green Impact
Premium $ - $ - $ 0.40 $ 2.97
SDG&E PCIA+FFS - 2022 Vintage $ - $ 11.90 $ 11.90 $ 11.90 Generation Related Costs $ 60.94 $ 55.65 $ 56.05 $ 58.62 SDG&E Delivery $ 89.32 $ 89.32 $ 89.32 $ 89.32
Total Average Monthly Bill $ 150.27 $ 144.97 $ 145.37 $ 147.94 $ Savings to SDG&E $ (5.29) $ (4.89) $ (2.32)
% Savings to SDG&E -3.52% -3.26% -1.55%
Average 396 kWh Usage
City of San Clemente
Residential: DR
SDG&E
31%
Renewable
CEA
50%
Renewable
Clean Impact
CEA
Clean Impact
Plus
75% Carbon
Free
CEA
Green
Impact
100%
Renewable
Generation $ 60.94 $ 44.85 $ 44.85 $ 44.85
Clean Impact Plus/Green Impact
Premium $ - $ - $ 0.40 $ 2.97
SDG&E PCIA+FFS - 2022 Vintage $ - $ 11.90 $ 11.90 $ 11.90 Generation Related Costs $ 60.94 $ 56.74 $ 57.14 $ 59.71 SDG&E Delivery $ 89.32 $ 89.32 $ 89.32 $ 89.32
Total Average Monthly Bill $ 150.27 $ 146.07 $ 146.47 $ 149.04 $ Savings to SDG&E $ (4.20) $ (3.80) $ (1.23)
% Savings to SDG&E -2.80% -2.53% -0.82%
Average 396 kWh Usage
Item 10: Assessment Report
5/26/22 24
Bill Comparison – Current Rates Bill Comparison – 2.5% Rate Increase City of Vista
Residential: DR
SDG&E
31%
Renewable
CEA
50%
Renewable
Clean Impact
CEA
Clean Impact
Plus
75% Carbon
Free
CEA
Green
Impact
100%
Renewable
Generation $ 52.63 $ 37.79 $ 37.79 $ 37.79
Clean Impact Plus/Green Impact
Premium $ - $ - $ 0.34 $ 2.57
SDG&E PCIA+FFS - 2022 Vintage $ - $ 10.26 $ 10.26 $ 10.26 Generation Related Costs $ 52.63 $ 48.05 $ 48.39 $ 50.62 SDG&E Delivery $ 77.14 $ 77.14 $ 77.14 $ 77.14
Total Average Monthly Bill $ 129.77 $ 125.19 $ 125.53 $ 127.76 $ Savings to SDG&E $ (4.58) $ (4.24) $ (2.02)
% Savings to SDG&E -3.53% -3.27% -1.55%
Average 342 kWh Usage
City of Vista
Residential: DR
SDG&E
31%
Renewable
CEA
50%
Renewable
Clean Impact
CEA
Clean Impact
Plus
75% Carbon
Free
CEA
Green
Impact
100%
Renewable
Generation $ 52.63 $ 38.73 $ 38.73 $ 38.73
Clean Impact Plus/Green Impact
Premium $ - $ - $ 0.34 $ 2.57
SDG&E PCIA+FFS - 2022 Vintage $ - $ 10.26 $ 10.26 $ 10.26 Generation Related Costs $ 52.63 $ 48.99 $ 49.34 $ 51.56 SDG&E Delivery $ 77.14 $ 77.14 $ 77.14 $ 77.14
Total Average Monthly Bill $ 129.77 $ 126.13 $ 126.48 $ 128.70 $ Savings to SDG&E $ (3.64) $ (3.29) $ (1.07)
% Savings to SDG&E -2.80% -2.54% -0.83%
Average 342 kWh Usage
Item 10: Assessment Report
• Procurement Considerations
• Resource Adequacy
• Requires working closely with SDG&E to acquire excess RA related to the departures of the new members from SDG&E to CEA
• Risk of non-compliance to CEA if unable to reach agreement with SDG&E • Long-Term Renewable Energy
• Long-Term Renewable Energy contracts required for existing generating facilities immediately upon service establishment
• Cooperation with SDG&E to acquire excess long-term renewable energy supply related to the departures of the new members
• Risk to non-compliance to CEA if unable to reach agreement with SDG&E 5/26/22 25
Item 10: Assessment Report
• Next Steps
5/26/22 26
ACTIVITY TIMING
Assessment Report Results to CEA Board May 26, 2022
Cities - Resolution to Join CEA and 1st Reading of
Ordinance to Establish a CCA
June 2022
Cities - 2nd Reading of Ordinance June/July 2022
CEA - Resolution approving Cities joining CEA/Direct
preparation of Implementation Plan Amendment –
Review Updated Financial Impact
July 2022
Draft Implementation Plan Amendment to CEA Board
Review Updated Financial Impact
October 2022
File Implementation Plan Amendment with CPUC December 2022 Questions/Discussion
5/26/22 27