AGENDA
City of Carlsbad | City of Del Mar | City of Escondido | City of Oceanside | City of San Marcos | City of Solana Beach | City of Vista Board of Directors Special Meeting Agenda
May 30, 2024, 2:15 p.m.
City of Oceanside, Council Chamber
300 North Coast Hwy, Oceanside CA 92054
Members of the public can observe the livestream of the meeting via Zoom by clicking:
https://us06web.zoom.us/j/81376410530
or telephonically by dialing:
(253) 215-8782
Meeting ID: 813 7641 0530
Members of the public can provide public comment in writing or orally in person as follows:
Written Comments: If you are unable to participate in person and you wish to make a comment, you may submit written comments prior to and during the meeting via email to:
[email protected]. All written comments will be posted online and become part of the meeting record. To ensure announcement of receipt of your written comments during the meeting, please submit all written comments by 12:00 p.m. prior to the commencement of the meeting. Public comments received in writing will not be read aloud at the meeting.
Oral Comments: Members of the public can address the Board on items on the agenda at the time the item is being addressed or during Public Comments for topics that are not listed on the agenda.
Speakers are limited to three (3) minutes each. In conformance with the Brown Act, no Board action can occur on items presented during Public Comment.
If you desire to speak during Public Comment, please fill out a speaker card and submit it to the Board Secretary. When you are called to speak, please come forward to the podium and state your name.
To address the Board regarding an item on the agenda, please fill out a speaker card and submit it to the Board Secretary before the Board Chair announces the item.
CALL TO ORDER
ROLL CALL
FLAG SALUTE
BOARD COMMENTS & ANNOUNCEMENTS
PUBLIC COMMENT
APPROVAL OF MINUTES
Minutes of the Regular Meeting held April 25, 2024
AGENDA
2 Clean Energy Alliance Board Meeting Agenda
May 30, 2024
Presentations
Consent Calendar
Item 1: Clean Energy Alliance Treasurer’s Report for March 2024 RECOMMENDATION:
Receive and file the Clean Energy Alliance Treasurer’s Report for March 2024.
Item 2: Consideration of Resolution No. 2024-005 Setting Time and Place for Clean Energy Alliance Board Meetings July 2024 – June 2025
RECOMMENDATION
Adopt Resolution No. 2024-005 Setting Time and Place for Clean Energy Alliance Board Meetings July 2024 – June 2025.
Item 3: Consideration of Amendment No. 2 to Task Order No. 1 under the Professional Services Agreement (PSA) with The Energy Authority
RECOMMENDATION:
Adopt Resolution 2024-006 approving the amendment with The Energy Authority.
Item 4: Ratification of SDG&E Modified Cost Allocation Method Resource Adequacy Allocation RECOMMENDATION:
Adopt Resolution No. 2024-007 ratifying the agreement with SDG&E Reports
Item 5: Clean Energy Alliance Chief Executive Officer Operational Report New Business
Item 6: Regulatory Update
RECOMMENDATION:
Receive the Regulatory update from Keyes and Fox.
Item 7: Fiscal Year 2024-25 Budget Discussion
RECOMMENDATION:
Discuss the Fiscal Year 2024-25 Budget.
BOARD MEMBER REQUESTS FOR FUTURE AGENDA ITEMS
AGENDA
3 Clean Energy Alliance Board Meeting Agenda
May 30, 2024
NEXT MEETING: Regular Board Meeting June 27, 2024, City of Oceanside, 300 North Coast Highway, Oceanside, CA 92054
If you are an individual with a disability and need a reasonable modification or accommodation pursuant to the Americans with Disabilities Act (“ADA”), please contact [email protected] prior to the meeting for assistance.
Clean Energy Alliance Board of Directors Regular Meeting Minutes April 25, 2024, 2:00 p.m.
City of Oceanside, Council Chamber
300North Coast Hwy,Oceanside CA 92054
CALL TO ORDER: Chair Druker called to order the Regular Meeting of the Clean Energy Alliance at 2:02 p.m.
ROLL CALL: Board Members: Garcia, Becker, Musgrove, Chair Druker.
Vice Chair Melendez arrived at 2:20 p.m.
Alternate Board Member: Joyce arrived at 2:05
Board Member Bhat-Patel – Absent.
FLAG SALUTE: Board Member Garcia led the flag salute.
BOARD COMMENTS & ANNOUNCEMENTS: Board Member Becker announced that she attended the CalCCA Conference in San Jose on April 16-17, 2024.
Chair Druker announced that CEO Greg Wade will be participating remotely.
PUBLIC COMMENT: None.
APPROVAL OF MINUTES:
Minutes of the Regular Meeting held March 28, 2024
Motion by Board Member Musgrove, seconded by Board Member Becker, to approve the minutes as presented. Motion carried, 5/0/2 (Melendez, Bhat-Patel – Absent) Presentations
Consent Calendar
Item 1: Clean Energy Alliance Treasurer’s Report for February 2024 RECOMMENDATION:
Receive and file the Clean Energy Alliance Treasurer’s Report for February 2024.
Item 2: Consideration of a Professional Services Agreement (PSA) with Pacific Energy Advisors RECOMMENDATION:
Adopt Resolution 2024-003 approving a PSA with Pacific Energy Advisors.
Item 3: Consideration of a Professional Services Agreement (PSA) with NewGen RECOMMENDATION:
Adopt Resolution 2024-004 approving a PSA with NewGen.
Motion by Board Member Becker, seconded by Board Member Musgrove, to approve the Consent Calendar. Motion carried, 5/0/2 (Bhat-Patel, Melendez – Absent).
Reports
Item 4: Clean Energy Alliance Chief Executive Officer Operational Report CEO Greg Wade presented the report, provided an update on recent outreach efforts in response to the launch in the City of Oceanside and the City of Vista.
CEA Board received report.
New Business
Item 5: Regulatory Update
RECOMMENDATION:
Receive the Regulatory Update from Keyes & Fox.
Keyes and Fox partner Jacob Schlesinger provided the update.
CEA Board received report.
Item 6: Financial Review Year to Date & Forecasting through June 2024 RECOMMENDATION:
Receive an information report on Financial Review & Forecasting through June 2024.
Interim Chief Financial Officer Andy Stern presented the report.
Discussion ensued amongst the Board Members.
CEA Board received report.
NEXT MEETING: Regular Board Meeting May 30, 2024, City of Oceanside, 300 North Coast Highway, Oceanside, CA 92054
ADJOURN: Chair Druker adjourned the meeting at 3:06 p.m. _______________________________________
Kaylin McCauley
Board Secretary/Administrative Assistant
Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Andy Stern, Interim Chief Financial Officer/Treasurer ITEM 1: Clean Energy Alliance Treasurer’s Report
RECOMMENDATION:
Receive and File Clean Energy Alliance (CEA) Interim Treasurer’s Report for March 2024.
BACKGROUND AND DISCUSSION:
This report provides the Board with the following financial information through March 31, 2024:
• Statement of Financial Position (Unaudited and preliminary) – Reports assets, liabilities, and financial position of the CEA as of March 31, 2024.
• Statement of Revenues, Expenses and Changes in Net Position (Unaudited and preliminary) for the twelve months ended March 31, 2024.
• Budget to Actuals Comparison Schedule (Unaudited and preliminary) – Reports actual revenues and expenditures compared to the annual amended budget as of March 31, 2024. • List of Payments Issued – Reports payments issued for March 2024.
As of March 31, 2024, liabilities represent invoices and estimated accruals for energy and services received but not yet paid. The noncurrent liabilities relate to debt with JPMorgan as well as amounts due to the member cities of Carlsbad, Del Mar and Solana Beach. CEA is currently making interest only payments on the debt from JPMorgan. The amounts due to the member agency were for start-up costs and services provided to CEA for the period December 2019 to June 2020. These invoices are scheduled to be paid three years from the time CEA is operational.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
May 30, 2024
CEA Treasurer’s Report
ASSETS
Current assets
Cash and cash equivalents $ 7,235,596
Accounts receivable, net of allowance 12,628,843
Accrued revenue 6,795,567
Prepaid expenses 2,665,742
Deposits 770,000
Total current assets 30,095,748
Noncurrent assets
Restricted cash 187,000
Deposits 55,376
Total noncurrent assets 242,376
Total assets 30,338,124
LIABILITIES
Current liabilities
Accrued cost of electricity 21,644,312
Accounts payable 562,068
Other accrued liabilities 441,482
Interest payable 130,404
Due to member agencies 504,017
Total current liabilities 23,282,283
Noncurrent liabilities
Security deposits - energy suppliers 496,150
Debt - Revolving line of credit 9,950,000
Total noncurrent liabilities 10,446,150
Total liabilities 33,728,433
NET POSITION
Unrestricted (deficit) $ (3,390,309)
These financial statements do not contain note disclosures, have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.
CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
As of March 31, 2024
May 30, 2024
CEA Treasurer’s Report
OPERATING REVENUES
Electricity sales, net $ 142,666,265
OPERATING EXPENSES
Cost of electricity 134,804,312
Contract services 3,378,563
Staff compensation 352,803
Other operating expenses 293,952
Total operating expenses 138,829,630
Operating income (loss) 3,836,635
NONOPERATING REVENUES (EXPENSES)
Interest income 201,077
Interest expense (975,737)
Nonoperating revenues (expenses), net (774,660)
CHANGE IN NET POSITION 3,061,975
Net position at beginning of year (6,452,284)
Net position at end of period $ (3,390,309)
These financial statements do not contain note disclosures, have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.
CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
Nine Months ended March 31, 2024
May 30, 2024
CEA Treasurer’s Report
BUDGET TO ACTUALS COMPARISON SCHEDULE
At its June 2023, board meeting, the CEA Board approved the Fiscal Year (FY) 2023/24 budget approving $213,361,000 in total operating and nonoperating expenses. For the year-to-date, $141,684,000 has been expended. Revenues from electricity sales for the year-to-date reached $144,545,000. The overall change in available fund balance (ignoring loan proceeds) for the year-to-date was an increase of $3,062,000.
The Budget to Actuals Comparison Schedules as of March 31, 2024, is shown on the next page.
May 30, 2024
CEA Treasurer’s Report
ANNUAL
BUDGET
YEAR-TO-DATE
ACTUAL
ANNUAL
BUDGET
VARIANCE
Operating Revenues
Energy Sales $ 230,915,000 144,545,283 $ 86,369,717
Operating Expenses
Power Supply 200,000,000 134,804,312 65,195,688
Data Manager / Call Center 2,500,000 1,514,756 985,244
Staffing/Consultants 3,000,000 629,636 2,370,364
Legal Services 467,500 286,912 180,588
Professional Services 1,448,885 1,044,149 404,736
Audit Services 10,000 23,421 (13,421)
Software & Licenses 15,000 36,619 (21,619)
Membership Dues 292,040 217,959 74,081
G&A (includes Bad Debt expense) 4,927,780 2,150,884 2,776,896 Total Operating Expenses 212,661,205 140,708,648 71,952,557 Operating Income (Loss) 18,253,795 3,836,635 14,417,160 Financing
Interest Income 50,000 201,077 (151,077)
Interest Expense (750,000) (975,737) 225,737
Net Interest Income (Expense) (700,000) (774,660) 74,660 $ 17,553,795 $ 3,061,975 $ 14,491,820
CLEAN ENERGY ALLIANCE
BUDGETARY COMPARISON SCHEDULE
Nine Months ended March 31, 2024
Change in Net Position
These financial statements do not contain note disclosures, have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.
May 30, 2024
CEA Treasurer’s Report
LIST OF PAYMENTS ISSUED
The report on the following page provides the detail of payments issued by CEA for the month. All payments were within approved budget.
May 30, 2024
CEA Treasurer’s Report
Date Type Vendor Description Amount
03/01/2024 ACH/CHECK BUSINESS OFFICE OUTFITTERS INC. Office Equipment 737.01 03/01/2024 Wire JPMorgan 01-Feb-2024 29-Feb-2024 29 35,402.38 03/01/2024 ACH/CHECK MCCAULEY, KAYLIN February 2023 - Expense Reimbursement 53.59 03/01/2024 ACH/CHECK Neyenesch Printers Printing Services 1,847.33 03/01/2024 ACH/CHECK SDG&E Services rendered under Schedule CCA-Info data 1,008.00 03/01/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 553.11 03/01/2024 ACH/CHECK Vista Chamber of Commerce Vista Magazine Advertising Spring 2024 400.00 03/01/2024 ACH/CHECK WADE, GREG February 2023 - Expense Reimbursement 585.21 03/01/2024 ACH/CHECK WADE, GREG February 2023 - Expense Reimbursement 155.16 03/04/2024 Wire SAAVI ENERGY SOLUTIONS, LLC. Firm Resourre Adequacy - (June 2024) 105,000.00 03/04/2024 Wire THE ENERGY AUTHORITY February 2024 - CAISO Weekly Settlement 74,020.50 03/04/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 3,468.00 03/05/2024 ACH/CHECK Evolution Affairs, LLC January 2024 - Professional Service 2,817.50 03/05/2024 ACH/CHECK River City Bank CC January 2024 - CC charges 6,922.79 03/06/2024 ACH/CHECK OCEANSIDE CHAMBER OF Best of Oceanside Magazine - QTR #1 through QTR#3 2,580.00 03/06/2024 ACH/CHECK The Bayshore Consulting Group, February 2024 - CEO transition, Operations Consulting 18,720.92 03/06/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 3,832.40 03/07/2024 ACH/CHECK CALPINE ENERGY SOLUTIONS January 2024 Services 175,765.00 03/07/2024 ACH/CHECK EMPOWER (401a) Employee Retirement - 03/05/2024 15,230.18 03/07/2024 ACH/CHECK EMPOWER (457b) Employee Retirement Contribution - 03/05/2024 5,380.47 03/07/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 3,497.40 03/08/2024 ACH/CHECK BRENTECH INCORPORATED Equipment Purchase 33.40 03/08/2024 ACH/CHECK Evolution Affairs, LLC February 2024 - Professional Service 4,042.50 03/08/2024 ACH/CHECK MCCAULEY, KAYLIN Expense Reimbursement 24.36 03/08/2024 ACH/CHECK Neyenesch Printers Printing Services 825.91 03/08/2024 ACH/CHECK SPECIAL DISTRICT RISK MGMT Coverage Month: February - April 2024 30,947.93 03/08/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 3,632.28 03/08/2024 ACH/CHECK WADE, GREG February 2023 - Expense Reimbursement 312.46 03/08/2024 ACH/CHECK WADE, GREG February 2023 - Expense Reimbursement 102.52 03/08/2024 ACH/CHECK WADE, GREG February 2023 - Expense Reimbursement 36.99 03/08/2024 ACH/CHECK WADE, GREG February 2023 - Expense Reimbursement 15.07 03/11/2024 Wire THE ENERGY AUTHORITY February 2024 - CAISO Weekly Settlement 43,870.39 03/14/2024 ACH/CHECK BRENTECH INCORPORATED UPS Delivery 24.10 03/14/2024 ACH/CHECK BURKE, WILLIAMS & SORENSEN, FEES FOR PROFESSIONAL SERVICES January, 2024 3,755.36 03/14/2024 ACH/CHECK Maher Accountancy March 2024 Services 9,500.00 03/14/2024 ACH/CHECK Neyenesch Printers Printing Services 857.76 03/14/2024 ACH/CHECK Tripepi, Smith & Associates, Inc. February 2024 - Communications and Marketing 13,498.19 03/15/2024 ACH/CHECK Hall Energy Law PC January 2024 - Energy Procurement Counsel Services 650.00 03/16/2024 State Compensation Insurance Monthly - Worker’s Comp 452.75 03/18/2024 Wire Orange County Power Authority February 2024 - System Flex -RA SWAP 7,000.00 03/18/2024 ACH/CHECK PECKHAM, DANIEL Travel to & from Vista Farmers Market event 9.57 03/18/2024 Wire THE ENERGY AUTHORITY February 2024 - CAISO Weekly Settlement 18,050.59 03/19/2024 ACH/CHECK BRENTECH INCORPORATED Equipment Purchase 49.57 03/19/2024 ACH/CHECK BURKE, WILLIAMS & SORENSEN, FEES FOR PROFESSIONAL SERVICES February 2024 7,082.80 03/19/2024 ACH/CHECK BUSINESS OFFICE OUTFITTERS INC. Office Equipment 587.24 03/19/2024 ACH/CHECK MCCAULEY, KAYLIN March 2023 - Expense Reimbursement 31.39 03/19/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 882.18 03/20/2024 Wire EDF TRADING NORTH AMERICA February 2024 - Capacity Purchase 706,500.00 03/20/2024 ACH/CHECK EMPOWER (401a) Employee Retirement - 03/20/2024 6,386.92 03/20/2024 ACH/CHECK EMPOWER (457b) Employee Retirement Contribution - 03/20/2024 4,117.32 03/20/2024 Wire SDG&E Feb 2024 REC Sales - LT Bundled & Unbundled 1,637,014.16 03/20/2024 Wire SDG&E Feb-24 Resource Adequacy Sales 113,729.87 03/20/2024 Wire SEMPRA February 2024 - Capacity Purchases 1,139,000.00 03/21/2024 ACH/CHECK Neyenesch Printers Printing Services 20,187.68 03/21/2024 ACH/CHECK Neyenesch Printers Printing Services 276.01 03/22/2024 ACH/CHECK MCCAULEY, KAYLIN March 2023 - Expense Reimbursement 162.35 03/22/2024 ACH/CHECK MCCAULEY, KAYLIN March 2023 - Expense Reimbursement 10.81 03/22/2024 ACH/CHECK MCCAULEY, KAYLIN March 2023 - Expense Reimbursement 40.55 03/22/2024 ACH/CHECK MCCAULEY, KAYLIN March 2023 - Expense Reimbursement 27.12 Clean Energy Alliance
PAYMENTS ISSUED DURING MARCH 2024
May 30, 2024
CEA Treasurer’s Report
03/25/2024 Wire Powerex Transactions for the Period of March 2024 98,562.50 03/25/2024 Wire Resi Station LLC Proxy Demand Response CEA Feb2024 1,530.00 03/25/2024 ACH/CHECK STERN, ANDREW For the period from 2/22/24-3/21/24 7,500.00 03/25/2024 Wire THE ENERGY AUTHORITY March 2024 - CAISO Weekly Settlement 164,911.26 03/26/2024 ACH/CHECK USPS First-Class Mail and First-Class Package Service 339.28 03/27/2024 Wire LEAPFROG POWER, INC. March 2024 RA (Quantity in kW) 6,897.00 03/28/2024 ACH/CHECK AVANTI EXECUTIVE SUITES April 2024 -Rent 2,399.16 03/28/2024 ACH/CHECK Granicus, LLC Mar 2024 - 2025 - DisclosureDocs Subscription & 497.94 03/28/2024 ACH/CHECK Keyes & Fox LLP February 2024 - Professional Services 14,177.25 03/28/2024 ACH/CHECK Neyenesch Printers Printing Services 819.57 03/28/2024 ACH/CHECK NORTH COUNTY DAILY STAR Advertising 675.00 03/28/2024 ACH/CHECK Pacific Energy Advisors, Inc February 2024 - Technical Consulting Advisors 34,925.14 03/28/2024 ACH/CHECK PECKHAM, DANIEL Flight for CalCCA conference 237.00 03/28/2024 ACH/CHECK THE ENERGY AUTHORITY February 2024 - Resource Management Monthly Fees 11,700.00 03/28/2024 ACH/CHECK Tripepi, Smith & Associates, Inc. February 2024 - Communications and Marketing 10,460.75 03/28/2024 ACH/CHECK Z|NEMS NEM Cash Out 21,231.50
Total for Operating Account 4,608,568.40
03/25/2024 lockbox Constellation Generation January 2024 - Power Purchase 353,803.62 03/25/2024 lockbox MORGAN STANLEY CAPITAL Febuary 2024 - Power Purchase 1,309,321.78 03/25/2024 lockbox NRG (Formerly DIRECT ENERGY) January 2024 - Energy Purchases 2,450,637.48 03/25/2024 lockbox Shell Oil North America January 2024 - Energy Purchases 4,344,177.24 03/25/2024 lockbox Tecolote Wind LLC February 2024 - Resource Adequacy 62,687.50 Total for Lockbox Account 8,520,627.62
Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Greg Wade, Chief Executive Officer
ITEM 2: Consider Resolution No. 2024-005 Setting Time and Place for Clean Energy Alliance Board Meetings July 2024 – June 2025
RECOMMENDATION:
Adopt Resolution No. 2024-005 setting the time and place for Clean Energy Alliance Board Meetings for July 2024 - June 2025.
BACKGROUND AND DISCUSSION:
Pursuant to Section 4.8 of the Clean Energy Alliance (CEA) Joint Powers Agreement, the CEA Board shall establish the date, hour, and place of each regular meeting annually by resolution.
The proposed schedule sets meetings on the last Thursday of the month at 2 p.m. with the location at City of Oceanside City Council Chambers, 300 North Coast Hwy, Oceanside CA 92054.
Staff recommends the following exception to the meeting date:
November Meeting – Schedule November 21, 2024 (3rd Thursday) December Meeting – Cancelled
Adopting the Board meeting calendar by resolution meets the Brown Act requirements (Government Code §54954) and provides the CEA Board the opportunity to notify the public of its scheduled regular meetings. Special meetings may be called as needed by providing 24-hour notice before the time of the special meeting. The meeting schedule will be posted to the CEA website.
FISCAL IMPACT:
There is no fiscal impact associated with this item.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Resolution 2024-005, Setting Time and Place for Clean Energy Alliance Board Meetings July 2024 – June 2025
Attachment A
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-005
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CLEAN ENERGY ALLIANCE
SETTING TIME AND PLACE FOR CLEAN ENERGY ALLIANCE BOARD MEETINGS JULY 2024 – JUNE 2025
WHEREAS, the Clean Energy Alliance (CEA) is a joint powers agency, formed in November 2019, whose members include the cities of Carlsbad, Del Mar, Escondido, Oceanside, San Marcos, Solana Beach and Vista; and
WHEREAS, the CEA Board of Directors has determined it will establish its regular meetings annually by resolution; and
WHEREAS, the Ralph M. Brown Act (Government Code §54954) provides for the establishment of an annual regular meeting calendar procedure; and WHEREAS, special meetings of the Board of Directors will be called as necessary and following the requirements of the Brown Act (Government Code §54954).
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows:
Section 1. The Board of Directors of the Clean Energy Alliance hereby establishes the following dates, times, and location, for regular Board meetings during fiscal year 2024/25:
Location: City of Oceanside, City Council Chambers
300 North Coast Hwy
Oceanside, CA 92054
July 25, 2024 2 p.m.
August 29, 2024 2 p.m.
September 26, 2024 2 p.m.
October 31, 2024 2 p.m.
November 21, 2024 2 p.m.
January 30, 2025 2 p.m.
February 27, 2025 2 p.m.
March 28, 2025 2 p.m.
April 24, 2025 2 p.m.
May 29, 2025 2 p.m.
June 27, 2025 2 p.m.
CEA Resolution No. 2024-005
Time and Place for CEA
Board Meetings 2024-2025
2 Section 2. That the fiscal year 2024-25 meeting calendar will be posted to the Clean Energy Alliance website.
The foregoing Resolution was passed and adopted this 30th day of May, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Board Chair
ATTEST:
____________________________
Kaylin McCauley, Board Secretary
Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 3: Consider Adoption of Resolution No. 2024-00X Approving Amendment No. 2 to Task Order No. 1 under the Professional Services Agreement with The Energy Authority.
RECOMMENDATION:
Adopt Resolution No. 2024-00X approving Amendment No. 2 to Task Order No. 1 under the Professional Service Agreement for Scheduling Coordinator Services with The Energy Authority, for a fixed monthly fee not to exceed $18,000, with an annual escalator and one-time set up fee of $39,000, and authorize the Chief Executive Officer to execute all documents, subject to General Counsel approval.
BACKGROUND AND DISCUSSION:
The Clean Energy Alliance (CEA) Board of Directors approved a professional services agreement (PSA) with The Energy Authority (TEA) at its September 17, 2020 regular board meeting, pursuant to award through a Request for Qualifications process.
At its regular board meeting of October 26, 2023 the CEA Board approved the Wholesale Market Access Tariff (WMAT) Terms and Conditions and related forms of agreement. Pursuant to the WMAT Agreement, a unique SCID is established for customers served under the WMAT program, which results in a separate scheduling duties to manage the load for the customer in the California Independent Service Operator (CAISO) system. The costs of those scheduling coordinator services are included when developing the WMAT rate for the customer.
The proposed Amendment No. 2 to Task Oder No. 1 of the TEA agreement adds these services for the Channelside account, which will be enrolled with CEA under the WMAT program in January 2025. As part of serving the Channelside account, CEA is working with the San Diego County Water Authority to develop a Power Purchase Agreement (PPA) for procurement of energy generated at the Rancho Peñasquitos Hydroelectric Generating Facility as an energy source for the Channelside account. The proposed TEA amendment includes the scheduling services projected to be needed for the Rancho Peñasquitos facility.
FISCAL IMPACT:
Costs for the services provided under this amendment will be fully reimbursed by Channelside through the WMAT rate.
May 30, 2024
TEA Agreement
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS
A. Resolution No. 2024-006, approving Amendment No. 2 of Task Order No. 1 of the Professional Services Agreement with The Energy Authority
B. The Energy Authority Professional Services Agreement Amendment No. 2 of Task Order No. 1 Attachment A
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-006
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY ALLIANCE APPROVING AMENDMENT NO. 2 OF TASK ORDER NO. 1 TO THE ENERGY
AUTHORITY PROFESSIONAL SERVICES AGREEMENT FOR SCHEDULING
COORDINATOR SERVICES
WHEREAS, Clean Energy Alliance (CEA) is a Joint Powers Authority, formed in November 2019, whose members cities include Carlsbad, Del Mar, Escondido, Oceanside, San Marcos, Solana Beach and Vista; and
WHEREAS, CEA meets its service needs through a combination of in-house staff and consultants; and
WHEREAS, The Energy Authority (TEA) was selected to provide Scheduling Coordinator Services services through a Request for Qualifications process; and WHEREAS, a professional services agreement with TEA for Scheduling Coordinator Services was approved by the CEA Board of Directors at its regular board meeting September 17, 2020; and
WHEREAS, additional services are desired to be added to that agreement.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows:
Section 1. The Board of Directors of Clean Energy Alliance hereby approves Amendment No. 2 to Task Order No. 1 of the Professional Services Agreement with The Energy Authority for Scheduling Coordinator Services.
Section 2. This Resolution shall take effect immediately upon approval.
CEA Resolution No. 2024-006
The Energy Authority
Amendment
2 The foregoing Resolution was passed and adopted this 30th day of May, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Board Chair
ATTEST:
____________________________
Kaylin McCauley, Board Secretary
Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
Amendment No. 2 to Task Order 1
(SDCWA Support Services)
This Amendment No. 2 (this “Amendment”), effective as of ___________, 2024 (the “Amendment Effective Date”), is made part of the Task Order 1 between The Energy Authority, Inc. (“TEA”) and Clean Energy Alliance (“CEA”) dated January 21, 2021, as amended June 18, 2021 (collectively with all prior amendments, the “Task Order 1”) and is subject to all terms and conditions of the Task Order 1 except as otherwise provided herein. TEA and CEA are sometimes referred to herein individually as a “Party,” or collectively as the “Parties.” Capitalized terms used in this Amendment and not defined herein shall have the meanings assigned to such terms in the Task Order 1.
Recitals
WHEREAS, the Parties have previously entered into the Task Order 1; WHEREAS, CEA has requested TEA to perform scheduling coordinator and congestion revenue rights support for CEA’s new large load customer, Poseidon Resources (Channelside) LP (“Channelside”). Pursuant to that certain Water Purchase Agreement dated December 20, 2012 (“WPA”) between Channelside and San Diego County Water Authority (“SDCWA”), SDCWA has the sole authority and discretion to make decisions with respect to the Carlsbad Desalination Plant’s electricity supplier (the “Channelside Account”) until the expiration of that WPA on December 20, 2045, at which time the Channelside Desalination Plant transfers to SDCWA. The services CEA has requested TEA to perform will include but not be limited to scheduling Channelside’s load, Congestion Revenue Rights (“CRRs”) associated with Channelside’s load, scheduling the Rancho Peñasquitos Pressure Control & Hydroelectric Facility pursuant to a Power Purchase Agreement between CEA and SDCWA (the “Rancho Peñasquitos Project”) and scheduling the SDCWA WAPA Allocation Resource (the “WAPA Allocation”); WHEREAS, under this Amendment, TEA has agreed to provide services that will support certain transactions between TEA and CEA, as mutually agreed upon by the Parties; and
WHEREAS, the Parties wish to amend the Task Order 1 to add services related to SDCWA, the Channelside Account, the Rancho Peñasquitos Project, and the WAPA Allocation as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
Attachment B
Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
Terms and Conditions
1. Task Order 1 Incorporated.
Except as modified by this Amendment, the terms and conditions of the Task Order 1 are incorporated fully by this reference as of the Amendment Effective Date, and this Amendment is made part of the Task Order 1.
2. Amendments.
Pursuant to this Amendment, certain terms and conditions of the Task Order 1 are hereby modified and amended as follows:
A. Section 1.4 is hereby added to Task Order 1 as follows:
“Section 1.4 Channelside and SDCWA Scheduling Coordinator and Congestion Revenue Rights Support (“Support Services”)
CEA has requested and TEA agrees to provide segregated scheduling and CRR Services for CEA’s customers, Channelside and SDCWA, including the scheduling of the Channelside Account the Rancho Penasquitos Project, and the WAPA Allocation. The Scope of Work includes TEA coordinating with the SDCWA as needed, in collaboration with CEA, to effect the Services.
Section 1.4.1 CAISO Power Purchases
Subject to the RMA between the Parties, TEA shall provide Scheduling Coordinator (as defined by CAISO) (“SC”) Services on behalf of CEA as related to Channelside, the Rancho Peñasquitos Project, and the WAPA Allocation with TEA acting as principal in the CAISO Transactions with CAISO. “CAISO Transactions” means the purchase and sale of electricity products, including energy, CRR awards, ancillary services, and related attributes.
Section 1.4.2 Program Administration and Compliance.
1.4.2.1 Regulatory and CAISO Compliance.
TEA will follow CAISO market trends, issues and rules
changes, and provide a summary related to Channelside and SDCWA to CEA of any issues or rules that TEA believes may impact CEA’s operations, including procurement decisions.
TEA will perform a cross audit of supplier resource
adequacy (“RA”) plans on a monthly basis. As SC, TEA will collect all RA Supply Plans from the market and will settle any disputes in Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
the RA showings with the supplier, CAISO and/or California Public Utilities Commission (“CPUC”), as needed. As the SC, TEA will also perform the same cross audit function for the annual RA plan.
As needed, TEA will also make data available to CEA from its system(s) of record that is useful for preparing portfolio compliance reports such as Power Content Label Reporting and Renewables Portfolio Standard (“RPS”) Compliance Reporting.
1.4.2.2 Accounting Services.
During the term of this Task Order 1, TEA will support CEA by providing requested Channelside, SDCWA and CEA data and information in the possession of TEA necessary related to Operational Services for Channelside and SDCWA financial accounting, settlement, CEA audits, or to support ongoing Channelside, SDCWA and CEA operations.
1.4.2.3 Wholesale Power Procurement Operations.
TEA will be the SC in the CAISO market and will provide the following activities while performing its duties and responsibilities as SC on CEA’s behalf related to Channelside and SDCWA:
● Maintain credit facilities with CAISO. Subject to the requirements of Section 2 contained herein, TEA will maintain credit with the CAISO sufficient to make payments to, and receive payments from, the CAISO.
● Provide daily forecast of CEA hourly loads. Each business day, TEA will generate an hourly forecast of loads for
Channelside and SDCWA for the next ten (10) days.
● Submit demand bids to Day Ahead (“DA”) market. TEA will submit Demand Bids to the CAISO Day Ahead Market to meet CEA’s forecasted load requirements as related to Channelside and SDCWA. TEA will monitor and compare Demand Bid
information resident in the CAISO portal with submitted information and use commercially reasonable efforts to validate Day Ahead market data submissions.
● Submit supply bids to DA market (both economic and self-schedule). To the extent that CEA directly enters into agreements with power suppliers or generators (“CEA
Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
Counterparties”) related to Channelside and SDCWA load to acquire the output of a specific generating resource, TEA will provide the scheduling and settlement activities required to schedule CEA’s supply agreements with CAISO. For any
supply agreements linked to a specific generation source on behalf of Channelside or SDCWA, CEA will require CEA
Counterparties to provide TEA with a forecast of expected hourly generation levels, and related information, that TEA will use in submitting DA supply offers to CAISO.
● Register and maintain Commercial Model and Resource
Adequacy (“RA”). TEA shall assist CEA in identifying
Channelside, SDCWA and CEA’s information required to
register and maintain CEA’s assets, if any, in the CAISO commercial model. TEA shall assist CEA in identifying
Channelside’s, SDCWA’s and CEA’s information required to comply with CAISO’s resource adequacy requirements in
accordance with Section 40 of the Tariff and as related to Channelside and SDCWA.
● Settlement validation and allocation of costs. TEA shall use reasonable efforts to validate CAISO invoices related to Channelside and SDCWA. Should TEA and CEA elect to
dispute a CAISO invoice amount related to Channelside or SDCWA, TEA will file an initial dispute with CAISO pursuant to the CAISO tariff. Once a dispute determination has been made by CAISO, further appeals or action from TEA on CEA’s behalf would be provided as requested and paid for by CEA on a time and materials basis using the billing rates provided in Section 8 herein.
● CRR bid strategy development and implementation. Unless otherwise directed by CEA, TEA will manage the annual CRR nomination and allocation process for CEA on behalf of
Channelside and SDCWA. Annually, TEA will provide CEA
with an estimate of the dollar value of the potential CRRs based upon historic and forecasted Locational Marginal Prices for the source and sink pricing nodes associated with the applicable source and load pricing nodes, and TEA will consult with CEA to select the CRRs to nominate. Selection of any CRRs to nominate will be at CEA’s sole discretion. TEA will nominate any CRRs selected by CEA and TEA will notify CEA of the CRRs awarded to TEA for CEA’s account. TEA will review the settlement statements and invoices associated with the CRRs for accuracy.
Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
● Perform Additional Tasks. In addition to the above, TEA will provide the following:
○ Import schedule, as required, including preparing e-tags. ○ Coordination of Channelside and SDCWA unit outages
with generation operators and CAISO.
○ Coordination of Inter-Scheduling Coordinator trades
(“IST”) related to Channelside and SDCWA system
power and ancillary services transactions.”
B. Section 2 (Credit Support and Credit Solution) of Task Order 1 is hereby modified to extend the “Interim Period” through March 31, 2025. The following is hereby added to the end of Section 2:
“Unless otherwise agreed to by the Parties in writing, TEA will extend the provision of the CRR Solution to enable CRR procurement for the Channelside and SDCWA load on behalf of CEA through the Interim Period.”
The remainder of Section 2 remains in full force and effect.
C. Section 4.1.6 is hereby added to Task Order 1 as follows:
“4.1.6 Compensation for Channelside and SDCWA Support Services For the Channelside and SDCWA Support Services described in Section
1.4:
1. CEA shall pay TEA a one-time setup fee of $39,000 no later than December 31, 2024, which includes $25,200 for the Channelside and SDCWA load, $6,900 for the Rancho Peñasquitos Project, and $6,900 for the WAPA Allocation; and
2. CEA shall pay TEA a recurring, fixed monthly fee of $18,000, which includes $12,300 for the Channelside and SDCWA load, $3,200 for the Rancho Peñasquitos Project, and $2,500 for the WAPA Allocation (“SDCWA Support Services Monthly Fee”) to commence January 1, 2025. For each subsequent year, beginning January 1, 2026, the SDCWA Support Services Monthly Fee shall be escalated up to the greater of three percent (3%) or CPI-U, San Diego Area.”
3. General.
A. Headings. Headings or captions contained in this Amendment are solely for the convenience of the Parties and shall not affect the construction or interpretation of any of the provisions of this Amendment.
B. Amendment. Except as otherwise modified under this Amendment, the terms and conditions of the Task Order 1 remain in full force and effect. This Amendment Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
may be amended by an instrument in writing signed by an authorized representative of each Party.
C. Counterparts and Electronic Signatures. This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which shall constitute one agreement. Electronic signatures of authorized representatives of the Parties to this Amendment, in PDF or other mutually acceptable digital formats (e.g., DocuSign or Adobe Sign), shall be deemed originals for all purposes and shall have the same force and effect as manually executed original signatures.
[Signatures appear on following page]
Amendment No. 2 to the Task Order 1
between TEA and Clean Energy Alliance
Proprietary & Confidential
IN WITNESS WHEREOF, this Amendment is executed by an authorized representative of each Party.
The Energy Authority, Inc.
By: ______________________________
Name: Joanie C. Teofilo
Title: President and CEO
Clean Energy Alliance
By: ______________________________
Name: Gregory Wade
Title: CEO
Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 4: Consider Adoption of Resolution No. 2024-007 Ratifying Execution of the First Amendment to the Edison Electric Institute (EEI) Transaction Confirmation Agreement Between San Diego Gas & Electric Company (SDG&E) and Clean Energy Alliance (CEA) for the Allocation and Purchase of Resource Adequacy (RA) Pursuant to the California Public Utilities Commission (CPUC) Decision D.23-12-014
RECOMMENDATION:
Adopt Resolution No. 2024-007 Ratifying approval and execution by the Chief Executive Officer (CEO) of the First Amendment to the Edison Electric Institute (EEI) Transaction Confirmation Agreement Between San Diego Gas & Electric Company (SDG&E) and Clean Energy Alliance (CEA) for the Allocation and Purchase of Resource Adequacy (RA) Pursuant to the California Public Utilities Commission (CPUC) Decision D.23-12-014.
BACKGROUND AND DISCUSSION:
On December 21, 2021, Clean Energy Alliance (CEA) executed an EEI Master Power Purchase and Sale Agreement (Master Agreement) with San Diego Gas & Electric Company (SDG&E) establishing the general terms and conditions under which future energy transactions would be carried out.
Subsequently, and as governed by the Master Agreement, an EEI Transaction Confirmation for Resource Adequacy (RA) Capacity Product was executed between CEA and SDG&E on September 28, 2022, providing for the purchase and/or sale of Local and Flexible RA between the parties.
In California Public Utilities Commission (Commission) Decision (D.) 22-05-015, certain load-serving entities, including CEA, were offered a one-time provision for the purchase of RA capacity at a point in time determined by the Commission to address any uncertainty and inequity created between the adoption of a prior Commission Decision (D.19-11-016) and D.22-05-015. Thereafter, D.23-12-014 clarified that the point in time to determine CEA and other buyer’s share for the sale and purchase of eligible RA capacity should be based on the final 2023 RA year-ahead forecast for load served by each load-serving entity, which was finalized in August 2022.
Given CEA’s RA needs, CEA has been working SDG&E to procure available RA subject to D.23-12-014.
Shortly after the CEA’s April Board Meeting, SDG&E made CEA aware of revised and additional allocations of RA to be made available in response to D.23-12-014 and indicated that immediate May 30, 2024
EEI Amendment – SDG&E
execution of a First Amendment to our EEI Transaction Confirmation dated September 28, 2022, was needed. As such, on May 7, 2024, CEA executed the First Amendment for the purchase of additional RA capacity from SDG&E. The CEA Board’s approval of Resolution of 2024-007 will ratify the actions taken by the CEO in execution of this First Amendment.
FISCAL IMPACT:
Costs for CEA’s allocation of RA made available pursuant to this First Amendment to the EEI Transaction Confirmation dated September 28, 2022, have been accounted for in the Draft Fiscal Year 2024-2025 CEA Budget.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Resolution No. 2024-007, approving the First Amendment to the EEI Transaction Confirmation governed by the EEI Master Power Purchase & Sale Agreement, dated as of December 21, 2021 B. First Amendment to the EEI Transaction Confirmation – Executed Copy Attachment A
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-007
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY ALLIANCE
RATIFYING APPROVAL AND EXECUTION BY THE CHIEF EXECUTIVE OFFICER
OF THE FIRST AMENDMENT TO THE EDISON ELECTRIC INSTITUTE (EEI)
TRANSACTION CONFIRMATION AGREEMENT BETWEEN SAN DIEGO GAS &
ELECTRIC COMPANY (SDG&E) AND CLEAN ENERGY ALLIANCE (CEA) WHEREAS, Clean Energy Alliance (CEA) is a Joint Powers Authority, formed in November 2019, whose members cities include Carlsbad, Del Mar, Escondido, Oceanside, San Marcos, Solana Beach and Vista; and
WHEREAS, San Diego Gas & Electric Company (SDG&E) and CEA are Parties to that certain EEI Transaction Confirmation between SDG&E and CEA, dated as of September 28, 2022, which is governed by the EEI Master Power Purchase & Sale Agreement, dated as of December 21, 2021, along with any amendments and annexes executed between the Parties thereto (the “Master Agreement”, and together with the Confirmation, the “Agreement”), under which, among other things, SDG&E will sell to CEA, and CEA will purchase from SDG&E, the Product as described therein; and
WHEREAS, the California Public Utilities Commission (“CPUC”) Decision (“D.”) 22-05-015 offered CEA, among others, a one-time provision for the purchase of resource adequacy capacity at a point in time determined by the Commission to address any uncertainty and inequity created between the adoption of CPUC D.19-11-016 and D.22-05-015; and WHEREAS, in D.23-12-014 the CPUC clarified that the point in time to determine CEA’s allocation share for the sale and purchase of eligible resource adequacy capacity should be based on the final 2023 resource adequacy year-ahead forecast for load served by each load-serving entity, which was finalized in August 2022; and
WHEREAS, because CEA elects to purchase additional capacity in response to the clarification in D.23-12-014, SDG&E and CEA now desire to amend the Agreement under the terms and conditions set forth in this First Amendment.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows:
Section 1. The Board of Directors of Clean Energy Alliance hereby Ratifies Approval and Execution by the Chief Executive Officer of the First Amendment to the Edison Electric Institute (EEI) Transaction Confirmation Agreement Between San Diego Gas & Electric Company (SDG&E) and Clean Energy Alliance (CEA) for the Allocation and Purchase of Resource Adequacy (RA) Pursuant to the California Public Utilities Commission (CPUC) Decision D.23-12-014.
Section 2. This Resolution shall take effect immediately upon approval.
CEA No. Resolution 2024-007
SDG&E EEI Transaction Confirmation
First Amendment
2 The foregoing Resolution was passed and adopted this 30th day of May, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Board Chair
ATTEST:
____________________________
Kaylin McCauley, Board Secretary
SDG&E DRAFT VERSION
1 FIRST AMENDMENT
To the
EEI TRANSACTION CONFIRMATION
This First Amendment to the EEI Transaction Confirmation (“First Amendment”) is made and entered into by San Diego Gas & Electric Company (“SDG&E” or “Seller”), a California corporation, and Clean Energy Alliance (“CEA” or “Buyer”), a California joint powers authority, effective as of May 7, 2024 (the “First Amendment Effective Date”). Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms not otherwise defined in this First Amendment are used with the meanings ascribed to them in the Agreement (as defined below).
RECITALS
WHEREAS, Seller and Buyer are Parties to that certain EEI Transaction Confirmation between SDG&E and CEA, dated as of September 28, 2022, which is governed by the EEI Master Power Purchase & Sale Agreement, dated as of December 21, 2021, along with any amendments and annexes executed between the Parties thereto (the “Master Agreement”, and together with the Confirmation, the “Agreement”), under which, among other things, Seller will sell to Buyer, and Buyer will purchase from Seller, the Product as described therein.
WHEREAS, the California Public Utilities Commission (“CPUC”) Decision (“D.”) 22- 05-015 offered Buyer, among others, a one-time provision for the purchase of resource adequacy capacity at a point in time determined by the Commission to address any uncertainty and inequity created between the adoption of D.19-11-016 and D.22-05-015.
WHEREAS, in D.23-12-014 the CPUC clarified that the point in time to determine Buyer’s allocation share for the sale and purchase of eligible resource adequacy capacity should be based on the final 2023 resource adequacy year-ahead forecast for load served by each load-serving entity, which was finalized in August 2022.
WHEREAS, because Buyer elects to purchase additional capacity in response to the clarification in D.23-12-014, Seller and Buyer now desire to amend the Agreement under the terms and conditions set forth in this First Amendment.
AGREEMENT
In consideration of the promises, mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration as set forth herein, the Parties agree as follows:
I. Effectiveness.
The effectiveness of this First Amendment is conditioned upon Seller having obtained final and non-appealable CPUC Amendment Approval no later than August 31, 2024. Prior to this deadline, should the CPUC issue an order approving this First Amendment with conditions or modifications that materially alter the commercial aspects of this First Amendment, the Parties agree to use good faith efforts to renegotiate this First Amendment DocuSign Envelope ID: E20C8332-A26F-497A-AEEB-13BF1D0C4A45 DocuSign Envelope ID: 75B8D254-4084-4E31-A1AB-C25C03696E25 Attachment B
2 and file the amended First Amendment with the CPUC seeking approval thereof. If, no later than the earlier of (i) sixty (60) days after such order or (ii) the deadline date above, no agreement is reached, either Party may terminate this First Amendment upon delivery of Notice to the other Party. For purpose of this First Amendment, “CPUC Amendment Approval” shall mean a final, non-appealable order approving this First Amendment in its entirety issued by the CPUC.
II. Amendments.
The Agreement is amended as follows:
a. The second sentence of Section 3.4 of the Agreement is be deleted in its entirety and the following inserted:
“’Buyer’s Allocation mCAM Quantity’ means (i) 4.25% of Seller’s RA Total for the period commencing on the Delivery Start Date through the end of December 31, 2024, and (ii) 10.59% of Seller’s RA Total commencing at the beginning of January 1, 2025, through the end of the Delivery Term.” b. Appendix A is deleted in its entirety and the new Appendix A attached to this First Amendment is inserted.
III. Miscellaneous.
a. Each Party expressly reserves all of its respective rights and remedies under the Agreement.
b. Except as expressly set forth in this First Amendment, the Agreement remains unchanged and in full force and effect.
c. The terms and provisions hereof shall be binding on, inure to the benefit of, and be enforceable by, the successors and assigns of the Parties, whether so expressed or not.
d. If any provision of this First Amendment is held invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions hereof will not in any way be affected or impaired thereby.
e. This First Amendment may be executed in one or more counterparts, each of which will be deemed to be an original of this First Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this First Amendment and of signature pages by facsimile transmission or by other electronic means shall constitute effective execution and delivery of this First Amendment as to the Parties and may be used in lieu of the original First Amendment for all purposes. Signatures of the Parties transmitted by facsimile or by other electronic means shall be deemed to be their original signatures for all purposes.
f. Each Party represents and warrants that the execution, delivery and performance of this First Amendment are within its powers, have been duly authorized by all necessary action, and do not violate any of the terms and conditions in its governing DocuSign Envelope ID: E20C8332-A26F-497A-AEEB-13BF1D0C4A45 DocuSign Envelope ID: 75B8D254-4084-4E31-A1AB-C25C03696E25 3 documents, any contracts to which it is a party, or any law, rule, regulation, order or the like applicable to it, and that the person who signs below on behalf of that Party has authority to execute this First Amendment on behalf of such Party and to bind such Party to this First Amendment.
g. This First Amendment sets forth the entire agreement of the Parties with respect to the subject matter herein, supersedes all previous understandings, written or oral, with respect thereto, and may not be amended, modified, abrogated or superseded by a subsequent agreement unless such subsequent agreement is in the form of a written instrument executed by each Party.
[Remainder of page intentionally left blank]
DocuSign Envelope ID: E20C8332-A26F-497A-AEEB-13BF1D0C4A45 DocuSign Envelope ID: 75B8D254-4084-4E31-A1AB-C25C03696E25 4 IN WITNESS WHEREOF the Parties hereto have caused this First Amendment to be duly executed as of the effective date of this First Amendment.
CLEAN ENERGY ALLIANCE,
a California joint powers authority
By:
Name: Gregory Wade
Title: Chief Executive Officer
SAN DIEGO GAS & ELECTRIC
COMPANY, a California corporation
By:
Name: Adam D. Pierce
Title: Vice President – Energy
Procurement & Rates
By:
Name: Dave Druker
Title: Board Chair
APPROVED as to legal form __________
DocuSign Envelope ID: E20C8332-A26F-497A-AEEB-13BF1D0C4A45 DocuSign Envelope ID: 75B8D254-4084-4E31-A1AB-C25C03696E25 Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 5: Clean Energy Alliance Chief Executive Officer Operational and Administrative Report RECOMMENDATION:
Receive and File Chief Executive Officer Operational and Administrative Report.
BACKGROUND AND DISCUSSION:
This report provides an update to the Clean Energy Alliance (CEA) Board regarding operational and administrative activity.
OPERATIONAL UPDATE
Oceanside & Vista May 2024 Enrollment
As previously reported, the City Councils of Oceanside and Vista have selected Clean Impact Plus, 75% Carbon Free, as the default power supply in which customers will be automatically enrolled. In addition, the City of Vista City Council approved enrolling all municipal accounts in CEA’s Green Impact, 100% renewable power supply, in support of meeting its Climate Action Plan goals.
Enrollment mailers were sent out to Oceanside and Vista customers beginning in early February in preparation for the automatic enrollments in April 2024. The February mailers were the first of four mailers to be sent out. The schedule of mailers were and are as follows:
February 2024: 60-Day pre-enrollment mailer - Complete
March 2024: 30-Day pre-enrollment mailer – Complete
March 2024: Letter to NEM customers being enrolled in April 2024 May 2024: 30-Day post-enrollment welcome letter
June 2024: 60-Day post-enrollment mailer
With the February, March and May mailings, CEA continues to receive calls and opt out requests from Oceanside and Vista residents and businesses.
May 30, 2024
CEO Admin Report
The statistics as of May 8, 2024, are as follows:
City
# of Eligible
Customers
# of Opt-Downs to
50%
Renewable
# of Opt-Ups
to 100%
Renewable
# of Opt-OutsParticipation
Rate
Oceanside 63,944 89 32 2,147 96.7%
Vista 34,707 28 249 806 97.7%
TOTAL 98,651 117 281 2,953 97.0%
CEA staff and Oceanside and Vista staff have continued to meet regularly to prepare and carry out our marketing and communications strategy for ongoing enrollment. This includes identifying community events to participate in, key community groups to reach out to, and key customers to contact. The goal of the marketing and communications strategy is to meet with affected residents and businesses to answer questions they may have about CEA, address concerns related to their enrollment and to minimize opt-outs.
To provide opportunities for the communities to meet with CEA staff and have their questions answered, staff has and is planning to attend several in person community events.
CEA in the Community
CEA has been busy with many of the scheduled outreach efforts. Recent events that CEA participated in:
DATE DESCRIPTION
April 26, 2024 Dr. Bronner’s Staff Earth Day Extravaganza April 27, 2024 Carlsbad Chamber Green Business Expo
May 1, 2024 City of Vista, Staff Lunch & Learn
May 2, 2024 Vista Business Breakfast
May 2, 2024 MainStreet Oceanside, Farmers Market
May 2, 2024 San Diego County Farm Bureau Graze at the Fields May 10, 2024 Vista Councilmember O’Donnell Town Hall
May 11, 2024 Vista Farmers Market
May 14, 2024 Hunter Industries Employee Resource Fair
May 15, 2024 California Green Business Network Conference May 16, 2024 California Efficiency & Demand Management Council Spring Symposium May 18, 2024 Ocean Hills Country Club, Senior Expo
May 19, 2024 Escondido Street Festival
May 21, 2024 El Camino Rotary Club
May 23, 2024 North County African American Women's Association (NCAAWA) May 26, 2024 Vista Strawberry Festival
Upcoming events that CEA will be participating in:
May 30, 2024
CEO Admin Report
DATE DESCRIPTION
July 11, 2024 San Diego County Farm Bureau, Board Meeting July 17, 2024 Escondido City Council Presentation
August 1, 2024 Oceanside Chamber of Commerce, Emerging Issues Forum CEA staff is also currently coordinating with the cities of Oceanside and Vista to schedule a community outreach event specifically for Spanish-speaking customers and business owners.
Call Center Activity and Participation Statistics
The following chart reflects customer activity through April 30, 2024.
Call volumes to CEA’s Call Center decreased 46% from March to April 2024, which is to be expected following the April launch in Oceanside and Vista as no enrollment notices are sent in April and most customers have, for the most part, opted in or out. The most common call topics for all customers (commercial and residential) were related to General Information and Net Energy Metering with Opt Out Inquiries dropping down the list.
The total number of calls received, response times and call duration through May 8, 2024, are in the following table:
941
655
692
618
660
844
609
530
403
311
465
804
1213
666
0 200
400
600
800
1000
1200
1400
Total Calls Calls Connected to Agents
May 30, 2024
CEO Admin Report
Monthly Summary – CEA May 8, 2024
Stats by Month 8-May Apr Mar Feb Total
Total Calls 217 666 1213 804 18,693
Total Calls Connected to Agents 198 647 1145 774 18,290 Average Seconds to Answer 0:01:22 0:00:35 0:00:48 0:00:35 Average Call Duration 0:10:17 0:10:37 0:11:22 0:10:56
The following chart reflects enrollments in CEA’s power supply products through May 8, 2024:
POWER SUPPLY PRODUCT APRIL
2024
MAY
2024
Net
Change
Clean Impact – 50% Renewable 537 544 +7
Clean Impact Plus - 75% Carbon Free 151,828 246,558 +94,730 Green Impact – 100% Renewable 674 850 +176
TOTAL ACCOUNTS 153,039 247,952 94,913
The increase in total accounts is related to the enrollment of customers during the launch in Oceanside and Vista.
Long Term Power Purchase Agreement Update
On September 22, 2022, the CEA Board of Directors approved a 15-Year Power Purchase Agreement (PPA) with Cape Generating Stations 1, LLC, a subsidiary of Fervo Energy, for geothermal renewable energy located in Beaver County, Utah. This PPA was the result of a joint solicitation with Desert Community Energy and California Choice Energy Authority. The project meets the procurement requirements as established by the CPUC Midterm Reliability Procurement requirement and deliveries were expected to be received beginning June 1, 2026.
Pursuant to Section 2.3 of the PPA, Fervo is required to provide quarterly progress reports to CEA regarding the anticipated schedule for development of the geothermal facility and expected deliveries.
The Cape Modern Geothermal Station is a major development that includes project work conducted by Cape Generating Station 1, LLC as well as other Fervo subsidiaries. Work has progressed as anticipated and no major hurdles have been encountered since execution of the PPA. In their quarterly report, Fervo indicated progress in Engineering, Permitting, Construction and Interconnection all of which indicates a timely completion of the project and an expected Commercial Operation Date of June 1, 2026.
Risk Oversight Committee
Pursuant to CEA’s Energy Risk Management Policy, the Risk Oversight Committee met in a Special Meeting on May 16, 2024. The Committee reviewed CEA’s proposed Fiscal Year (FY) 2024/2025 Budget as well as current energy market prices, CEA load forecast and their impact to CEA’s 5-year budgetary outlook.
Recent procurement activity, current portfolio positions and future procurement targets, and portfolio May 30, 2024
CEO Admin Report
market to market and counterparty exposure was also discussed. The next regular meeting of the Committee is scheduled for June 6, 2024.
Contracts $50,000 - $100,000 entered into by Chief Executive Officer
VENDOR DESCRIPTION AMOUNT
None
FISCAL IMPACT:
There is no fiscal impact with this action.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
None.
Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 6: Receive Regulatory Update from Keyes & Fox
RECOMMENDATION:
Receive the Regulatory Update from Keyes & Fox.
BACKGROUND AND DISCUSSION:
Clean Energy Alliance contracts with Keyes and Fox for Regulatory Advocacy related activities. Each month Keyes and Fox provides an update to the CEA Board on key items of interest.
FISCAL IMPACT:
There is no fiscal impact from this action.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Keyes & Fox Regulatory Report
1 Clean Energy Alliance
Regulatory Monitoring Report
To: Clean Energy Alliance (CEA) Board of Directors
From:
Tim Lindl, Partner, Keyes & Fox LLP
Jacob Schlesinger, Partner, Keyes & Fox LLP
Jason Hoyle, Principal Analyst, EQ Research, LLC
Subject: Monthly Regulatory Memo
Date: May 20, 2024
Keyes & Fox LLP and EQ Research LLC are pleased to provide CEA’s Board of Directors with this informational memo describing recent developments in key California regulatory and compliance-related updates from the California Public Utilities Commission (CPUC). Additional information is available in CEA’s Digest of Regulatory Updates.
RPS (R.24-01-017)
• On May 9, the Assigned Commissioner issued a Scoping Memo and Ruling setting forth the initial issues and schedule for the RPS proceeding. Some specific issues within these categories that are scoped include: (1) Establishing a cost containment mechanism for utility RPS procurement, (2) Coordinating the RPS, IRP, and RA proceedings, (3) Potential increases in the RPS procurement percentage in later compliance periods, (4) Possible integration of greenhouse gas emissions (GHG) reduction goals and metrics into RPS procurement methods, and (5) Consideration of extending the BioMAT program end date. • A May 17 Ruling from the Assigned Commissioner and ALJ identified content requirements, filing deadlines, and the schedule of review for 2024 RPS Procurement Plans. Initial Draft RPS Plan filings are due July 12, comments on RPS plans are due August 12, reply comments are due August 26, and motions to update RPS Plans are also due August 26.
Resource Adequacy/Slice-of-Day Framework (R.23-10-011)
• On May 17, the ALJ issued a Proposed Decision (PD) on adopting local capacity requirements for 2025-2027, flexible capacity obligations for 2025, and slice-of-day and other Resource Adequacy (RA) program refinements. The matter may be heard as early as the June 20 Commission meeting. Comments on the PD are due June 6 and reply comments are due June 11.
• Under the PD, the Slice-of-Day (SOD) framework will be implemented, as planned, for the 2025 RA Compliance Year. The PD would also adopt a 17% planning reserve margin (PRM) for all months for the initial implementation rather than use an adjusted PRM for individual months. The Commission would not adopt a system-RA waiver process but would provide, on an interim basis, an extended cure period for delays in new resources coming online. The PD also provides expanded opportunities for RA imports and clarifies some resource counting rules under SOD.
Demand Flexibility (R.22-07-005)
• D.24-05-028, issued on May 15, approved the income-graduated fixed charges (IGFC) and other requirements of AB 205 (Stats. 2022, ch. 61.).
• IGFCs will be implemented in three income-based tiers by the large electric utilities via advice letter. SCE and SDG&E are directed to implement the IGFC starting in Q4 2025 and other utilities must implement the IGFC starting in Q1 2026. Although fixed charges are intended to result in slightly lower bills for customers whose usage is unchanged, the actual bill impacts are estimated to vary based on whether a customer is billed on CARE, FERA, or standard rates; the customer’s climate zone; and the extent to which customers are engaged in home or vehicle electrification activities, as described in Appendices A and B of the Decision.
Attachment A
2 Diablo Canyon Cost Recovery (A.24-03-018)
• PG&E submitted an Amended Application (April 8) for the recovery of its costs through electric rates for extended operations at the Diablo Canyon Power Plant (DCPP) for the period September 1, 2023 through December 31, 2025, and it hosted a stakeholder discussion (webinar slides) on April 24. A May 15 ALJ Ruling scheduled the prehearing conference for May 31 at 10 a.m. • PG&E estimates a total net 2025 revenue requirement of $418.4 million, of which SDG&E territory is allocated a revenue requirement of $35.5 million, or 8.5%, including franchise fees and uncollectibles. The revenue requirement and per-customer charges in SDG&E’s territory are estimated at about $0.87/month per average non-CARE customer and $0.57/month per average CARE customer. • These costs will be allocated to all retail electric customers in the state as a non-bypassable public purpose charge, and in exchange load-serving entities (LSEs) such as CCAs will be allocated resource adequacy and GHG-free benefits in the same proportion as their customers are allocated costs. However, PG&E customers were allocated an additional $79.8 million in costs as a PG&E-specific volumetric performance fee, and in response PG&E proposed to adjust the allocation of these benefits to reflect the additional PG&E-specific costs. If approved, this adjustment would reduce the allocation of benefits to customers in SCE and SDG&E territory in proportion to the additional costs allocated to PG&E customers.
SDG&E 2025 ERRA Forecast (A.24-05-010)
• SDG&E filed its 2025 ERRA Forecast Application on May 15 in which its requested revenue requirement is $469.4 million - a $284.9 million or 37.8% decrease from rates currently in effect. This revenue requirement forecast would reduce the system average bundled rate, including the impact of the Greenhouse Gas (GHG) revenue return, by 3.3¢/kWh, or a decrease of about 9.9%. The system average rate for CCA customers, including the GHG revenue return, is projected to decrease by 1.4¢/kWh or 7.7%. • SDG&E expects to serve its Fall Update on October 14, which will include any adjustments to its expected 2025 rates. Among potential adjustments in its Fall Update, SDG&E may include alternative scenarios for its treatment of the Resource Adequacy Market-Price Benchmark (RA MPB) similar to the alternative treatment proposed by PG&E.
• PG&E’s 2025 ERRA Forecast Application includes a proposal that in the event that any Commission-issued Forecast 2025 or Final 2024 RA MPB products exceeds the level of the 2024 Forecast System RA MPB of $15.23 per kilowatt-month (kW-month), the adoption of an alternative ratesetting scenario that would continue the use of the Forecast 2024 System RA MPB for any RA MPB exceeding $15.23/kW-month for 2025 ratesetting purposes. SDG&E indicated that it may also request an alternative ratesetting scenario similar to PG&E’s proposal that would allow SDG&E to continue the use of the 2024 system RA MPB for 2025 ratesetting purposes.
Staff Report
DATE: May 30, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Andy Stern, Chief Financial Officer
ITEM 7: Review Proposed Clean Energy Alliance Fiscal Year 2024/2025 Budget and Schedule Rate Public Hearing and Rate and Budget Adoption for June 27, 2024 RECOMMENDATION:
Review proposed Clean Energy Alliance (CEA) Fiscal Year (FY) 2024/2025 Budget, provide direction on any additions/changes and schedule Rate Public Hearing and Rate and Budget Adoption for June 27, 2024.
BACKGROUND AND DISCUSSION:
The proposed FY 2024/2025 Budget(detail below) reflects a full year of service for all member cities, including the recent expansion into Oceanside and Vista, a full year of staffing costs related to recent employee hires, projected power supply costs based on current forward price curves and existing contracts, on-going regulatory compliance requirements and professional and legal services required to support operations.
The following key assumptions were used to develop the proposed Budget:
• Revenue based on current adopted rates and projected usage • Inclusion of a recommended customer rate increase to be considered by the Board • Power supply costs based on actual executed contracts and May 2024 forward price curves • Reasonable power supply cost contingency based on historical volatility • Consulting services based on approved contracts
Fiscal Year 2023/2024 Year End Estimates
As part of developing the FY 2024/2025 proposed budget, staff has made projections for the current FY 2023/2024 ending net results. For several reasons discussed at the April 27th Board Meeting and below, the ending Change in Net Position is expected to be nearly $18.0 million below the budgeted level. The table below summarizes the expected year-end results:
May 30, 2024
Proposed FY 2024/2025 Budget
Revenues are expected to end the year 12.8% or $29.2 million below budget. Revenues are expected to be lower than the budget for the full year as a result of mild weather throughout the year and a load forecast provided by SDG&E for recent expansion territories which turned out to be much higher than the actual levels experienced.
On the other hand, Total Expenses are also expected to end the year $12.5 million below budget partially mitigating the revenue shortfall. Energy expenses are expected to be $8.3 million below budget despite historically high prices for Resource Adequacy and Renewable Energy. The budgets included a significant contingency amount which has proved prudent given the surprisingly high prices for these energy categories.
Other expense categories were, in total, also below the budgeted level as the organization had a slower-than-expected ramp up in staffing.
Finally, non-operating costs, which are mostly financing, and interest costs related to use of the line of credit facility, is expected to end the fiscal year approximately $0.5 million above Budget as additional borrowing was needed to support the early purchases of energy related to the recent expansion and the delayed collection of revenues associated with that expansion.
Proposed Fiscal Year 2024/2025 Operating Budget
The FY 2024/2025 proposed budget is based on the following priorities and goals:
➢ Financial Stability
➢ Meeting Regulatory Compliance
A. Energy Expenses
The biggest expense category for CEA is in Energy procurement. Costs are expected to increase significantly in the upcoming fiscal year relative to the current year. While much of the increase is related to recent expansion to Oceanside and Vista, and the initiation of service to Channelside (the desalination plant) in January 2025, increasing costs for Resource Adequacy and Renewable Energy account for a significant amount of the additional costs that are expected to be incurred. Renewable energy expenses are necessary to meet CEA’s climate action goals. In addition, the Preliminary Budget includes an assumption of 5% Contingency ($14.4 million) of Energy expenses to ensure against unforeseen spikes in potentially volatile energy markets.
YTD Actuals through Forecast through Budget
Variance: Budget
to FY Forecast
3/31/2024 6/30/2024 FY2023-2024 Fav/(Unf)
Net Operating Revenues $142,666,265 $199,237,067 $228,415,000 ($29,177,933) Total Cost of Energy $134,804,312 $191,716,170 $200,000,000 $8,283,830 Other Expenses (excluding Energy) $4,025,314 $5,920,234 $10,161,205 $4,240,971 Total Operating Expenses 138,829,626 197,636,404 210,161,205 12,524,801 Total Non-operating Income/(Expense) (774,660) (1,177,736) (700,000) (477,736) CHANGE IN NET POSITION $3,061,978 $422,927 $17,553,795 ($17,130,868) May 30, 2024
Proposed FY 2024/2025 Budget
B. Other Operating Expenses
The Preliminary Budget also reflects an increase of approximately $3.5 million in the total of Other Operating Expenses. The biggest increases are in expenses related directly to the increase in customer accounts as a result of expanded territory. Expected expenses for Calpine and SDG&E administrative fees make up $1.2 million of the overall increase. Other significant increases include Staff Compensation related to a full year of staffing costs in the FY2024/2025 year and funding to begin implementing new programs and to enhance existing programs.
C. Revenues
The primary source of revenue comes from payment of customer electricity rates. CEA sets customer rates based on the following priorities:
➢ JPMorgan credit line covenant compliance
o Result in revenues sufficient to recover costs and fund reserves o Meet Debt Service Coverage Ratio & Days Liquidity on Hand ➢ Address cash flow needs
➢ Rate Stability
➢ Financial stability and credit rating
➢ Fund Board established operating reserve policy
➢ Sufficient funding to support increased renewable energy procurement to achieve climate goals and implement local programs
➢ Rate competitive to SDG&E
Based on current assumptions, it is anticipated that the Board will need to consider a rate increase to ensure that projected revenues are sufficient to cover costs, to comply with our reserve policy and to meet credit line covenants. Key to what is driving CEA’s need to increase rates is the current historic high prices for Resource Adequacy and Renewable Energy. Pursuant to CEA’s Joint Powers Authority (JPA) Agreement, CEA’s energy purchases must be from a minimum 50% renewable sources, increasing to achieve 100% renewable sources by 2035.
Staff evaluated a number of options for how and when to implement rate increases. These options included:
Forecast through Preliminary Budget
6/30/2024 FY2023-2024
Communications and Outreach $492,376 $595,583
General and Administrative $416,824 $499,017
Data Manager (Calpine) $2,204,756 $3,120,000
Service Fees - SDG&E $496,653 $741,600
Other Costs $1,576,131 $1,928,873
Consultants & Professional Services $4,277,540 $5,790,473 Staff Compensation $733,495 $1,917,059
Programs $0 $600,000
Other Operating Expenses (excluding Energy) $5,920,234 $9,402,131 May 30, 2024
Proposed FY 2024/2025 Budget
• Option 1: 10% Rate Change effective 7/1/2024 with another 10% rate change 7/1/2025 • Option 2: 20% Rate Change effective 11/1/2024
• Option 3: 30% Rate Change to winter rates effective 11/1/2024, and 15% rate change to summer rates effective 6/1/2025 with the shift to summer rates For rate TOUD-DR1, which is the rate most residential customers are served under, the current average residential customer’s electric summer bill is $200 per month and the current average winter electric bill is $170 per month. This is based on monthly energy use of 377 kWh in winter and 338 kWh in summer.
The impact of the three options on residential bills are summarized below:
Average Winter $ Change
% Total Bill Change
Average Summer $Change
% Total Bill Change
Option 1 $5.25
3.1%
$19.00
9.5%
Option 2 $5.00
3%
$18.00
9%
Option 3 $7.50
4.5%
$13.00
6.5%
The total bill change based on the two options above are reflected below:
Average Total
Winter Bill
Average Total
Summer Bill
Average Year-Long
Monthly Bill
Annualized
Percent
Change
Current Monthly
Rates $170 $200 $182.50
Option 1 $175.25 $219 $193.48 6.0%
Option 2 $175 $218 $192.92 5.7%
Option 3 $177.50 $213 $192.29 5.4%
To reduce the impact on customers during the upcoming summer months, staff recommends the Board consider a rate change that would not be effective until November 1, 2024. Doing so would result in the new rates being implemented in the month where electric bills are already going down by an average of $30 per month with the change from summer to winter rates. Customers would continue to see lower winter electric bills compared to the summer months with either of the two rate options above – Option 1 or Option 3 – that are implemented on November 1, 2024.
Option 3 results in the lower overall bill increase compared to the other two options over the course of the year and provides greater bill stability throughout the course of the year. Based on these factors, staff recommends that the Board adopt Option 3.
Staff will return with the revised rate schedules for adoption, based on the rate change option the Board directs, at a Public Hearing on June 27, 2024.
May 30, 2024
Proposed FY 2024/2025 Budget
Implementation of the rate increase structure shown above, Option 3 results in a net positive budgeted results of operations in the amount of approximately $24 million as shown in table below.
The following table provides the line-item detail of FY 2023/2024 Year End Estimates and FY 2024/2025 Preliminary Budget, including the impact of the Staff-recommended Option 3 rate change.
Clean Energy Alliance
FY 2023/2024 Year End Estimates and FY 2024/2025 Proposed Budget The proposed budget will be brought back to the Board for formal adoption at the June 27, 2024 regular Board meeting.
5-Year Outlook
Managing energy purchases and providing electricity generation for the customers in CEA’s territories requires a long-term view to ensure financial stability. To that end, a 5-year outlook has been prepared based on expected energy costs and assumption of the adoption of the Staff-recommended rate increase (Option 3).
The outlook includes an assumption for a rate change based on the options provided to the Board above.
Forecast through Preliminary Budget
6/30/2024 FY2024-2025
Total Operating Revenues $199,237,067 $351,573,172
Total Cost of Energy $191,716,170 $317,403,431
Communications and Outreach $492,376 $595,583
General and Administrative $416,824 $499,017
Consultants & Professional Services $4,277,540 $5,790,473 Staff Compensation $733,495 $1,917,059
Programs $0 $600,000
Other Operating Expenses (excluding Energy) $5,920,234 $9,402,131 Total Operating Expenses $197,636,404 $326,805,563
Operating Income (Loss) $1,600,663 $24,767,609
Total Nonoperating Income/(Expense) ($1,177,736) ($858,003) CHANGE IN NET POSITION $422,927 $23,909,606
May 30, 2024
Proposed FY 2024/2025 Budget
The adoption of a rate increase and the current projection of expenses over the following 5 years is forecast to generate reasonable positive net positions and should contribute to increasing financial stability. Such growth should position CEA to be better able to consider achieving an investment grade credit rating which would yield lower energy prices and better credit terms with energy suppliers.
FISCAL IMPACT:
With the adoption of a rate increase, revenuesfrom energy sales to customers would provide sufficient funds for the proposed expenditures and the required contribution to reserves.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
None.
Preliminary Budget Outlook Outlook Outlook Outlook
FY2024-2025 FY2025-2026 FY2026-2027 FY2027-2028 FY2028-2029 Total Operating Revenues $351,573,172 $404,711,328 $413,164,663 $419,756,210 $426,594,611 Total Cost of Energy $317,403,431 $351,223,210 $399,620,179 $368,237,937 $339,309,865 Other Operating Expenses (excluding Energy) $9,402,131 $12,203,744 $15,817,361 $19,825,809 $24,336,608 Total Operating Expenses $326,805,563 $363,426,954 $415,437,540 $388,063,746 $363,646,474 Operating Income (Loss) $24,767,609 $41,284,374 ($2,272,877) $31,692,464 $62,948,138 Total Nonoperating Income/(Expense) ($858,003) $28,860 $558,670 $725,077 $1,301,557 CHANGE IN NET POSITION $23,909,606 $41,313,234 ($1,714,207) $32,417,541 $64,249,695