Board of Directors Meeting
June 27, 2024
Item 3: CEO Report
2 Item 3: CEO Report
3 •CEA Outreach Efforts
•Presence at Community Events
•Enrollment Statistics
•Solar Plus Update
Completed Community Events
4 Upcoming Community Events
5 Oceanside & Vista Enrollment
Stats
6 CEA Enrollment Stats
7 Solar Plus Update
8 • 11 Enrolled Contracts (as of 6/20/24)
• Carlsbad – 4
• San Marcos – 3
• Escondido – 3
• Oceanside - 1
Solar Plus Update
9 • Program Expansion Opportunities
• Increased Marketing
• Expansion of contractors to assist with outreach
• Will expand eligibility to tile roofs and other roof
types
• Tesla providing additional consultation/sales
resources
Questions/Discussion
10 Rate Public Hearing, FY2024-2025 Draft Budget
And
5-Year Outlook through June 2029
Board Recommended Actions
• Hold Public Hearing for Rate Change
• Select Rate Change Option
• Adopt Resolution Approving New Rate Schedule Based on Option selected
• Adopt Resolution Approving FY 2024/2025 Budget based on Rate Change Option Selected
12 Rate Change Overview
Background
• May 30, 2024 Staff Presented Financial Forecast Reflecting Rate Change is Needed
• Board Considered 3 Rate Change Options
• Option 1: 10% Effective 7/1/2024 & 10% Effective 7/1/2025 • Results in annualized total bill increase of 6.0%
• Option 2: 20% Effective 11/1/2024
• Results in annualized total bill increase of 5.7%
• Option 3: 30% Winter Rate Change & 15% Summer Rate Change Effective 11/1/2024 • Results in annualized total bill increase of 5.4%
14 Background
• Board Directed Staff Schedule Rate Public Hearing
• Option 3 was preferred option
• Least impact to customers and smoothing of bills between summer and winter seasons
• Directed an additional option be presented
• Further reduces customers impact and improves seasonal bill fluctuations • 40% Winter Change/10% Summer Change achieves this request 15 Rate-Setting Priorities
• JPMorgan covenant compliance
• Result in revenues sufficient to recover costs and fund reserves • Meet Debt Service Coverage Ratio & Days Liquidity on Hand • Address cash flow needs
• Provide funds to meet Climate Action Goals
• Increasing Renewable Energy to achieve 100% Renewable by 2035 • Rate Stability
• Meet Board-set financial reserve policy (5% of revenues) • Financial stability and credit rating
• Rate competitive to SDG&E
16 Annualized Total Bill Impact
Includes SDG&E Charges
Winter Rates: November – May (7 months)
Summer Rates: June – October (5 months)
Average Total
Winter Bill
Average Total
Summer Bill
Average Year-Long
Monthly Bill
Annualized
Percent
Change
Current Monthly
Rates $170.00 $200.00 $182.50
Option 3 $177.50 $213.00 $192.29 5.4%
Option 4 $180.00 $209.00 $192.08 5.2%
Annualized Total Bill Impact
Includes SDG&E Electric Delivery & Gas Charges
Average Total
SDG&E Winter Bill
Average Total
SDG&E Summer
Bill
Annualized Average
SDG&E Bill % Change
Current Rates $249.00 $233.00 $241.00
Option 3 $256.50 $246.00 $251.25 4.3%
Option 4 $259.00 $242.00 $250.50 3.9%
Winter Rates: November – May (7 months)
Summer Rates: June – October (5 months)
Annualized Total Bill Comparison to SDG&E
Current Rates
Variance between communities due to difference PCIA Vintages
7.5%
6.0%
10.0%
6.4%
6.9%
5.5%
9.6%
5.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Solana Beach Carlsbad/Del Mar Escondido & San Marcos Oceanside & Vista Option 3 Option 4
NOTE: Comparison based on current SDG&E Rates. SDG&E rates will be changing in January 2025, which will affect this comparison
Budget Overview
Background
• May 30, 2024 Board Received Draft Budget Update
• Budget Priorities:
• Financial Stability
• Revenues Sufficient to Cover Costs and Reserve Contribution • Meet Regulatory Compliance Requirements
• Meet JPMorgan Line of Credit Covenants
• Achievement of Member Agency Climate Action Plan Goals 21 Key Assumptions
• Power Supply Costs Based on Actual Executed Contracts and May 2024 Forward Price Curves
• Reasonable Power Supply Cost Contingency to Address Price Volatility
• Consulting Services Based on Current Approved Contracts • Full Fiscal Year of Staff Costs with Modest Increase for Future Needs
• Initial Program Funding of $600,000 - Programs not yet identified
22 23
Proposed FY 2024/2025 Budget
Comparison of 2 Rate Change Options
Reserve Requirement Analysis
• Board Policy to Contribute 5% of Revenue to Reserves
24 Option A
Proposed Budget
FY 2024/2025
Option B
Proposed Budget
FY 2024/2025
Change in Net Position $24,005,228 $33,307,350
Required Reserve Contribution $17,578,659 $18,041,977
Remaining Net Position $6,426,569 $15,265,373
Reserve Requirement Met? Yes Yes
5 Year Outlook – Change in Net Position
Comparison of 2 Rate Change Options
25 Proposed
Budget Outlook Outlook Outlook Outlook
11/1/24 and 6/1/25 FY2024-2025 FY2025-2026 FY2026-2027 FY2027-2028 FY2028-2029 Option A/3: 30/15 $24,005,228 $41,642,394 ($1,396,481) $32,764,071 $64,630,681 Option B/4: 40/10 $33,307,350 $43,195,358 $164,169 $34,368,841 $66,280,550