Board of Directors Meeting
May 29, 2025
Item 5: CEO Report
2 Oceanside & Vista Enrollment
3 • Enrollment of remaining Net Energy Metering
(NEM) customers has concluded
• Enrolled approximately 1,800 NEM customers per
month over the past 12 months
• Statistics as of May 13, 2025:
CEA Enrollment Stats
4 Solar Plus Update
5 • 15 Active / 4 Complete Contracts (as of 05/14/25)*
• Carlsbad 3 Active, 1 Complete
• Escondido 6 Active, 0 Complete
• Oceanside 1 Active, 1 Complete
• San Marcos 0 Active, 1 Complete
• Solana Beach 1 Active, 0 Complete
• Vista 4 Active, 1 Complete
*Channel Partners have 5 active customers in process.
Completed Community Events
6 Upcoming Community Events
Item 6: Battery Bonus & Battery
Bonus Connect
7 Battery Bonus Program
• Numerous Customers have Solar and no Battery
• Batteries provide:
• Backup Power
• TOU Optimization
• Increased Use of Renewable Energy from Solar System
• Supports Grid Reliability
8 Battery Bonus Program
• Participate.Energy (PE) selected to administer CEA’s Battery Bonus Program
• The Battery Bonus Program provides battery retrofits for CEA customers with existing Solar Systems and no battery • Program will be integrated with the current Solar Plus Program administered by PE
• Like Solar Plus, this Program has no upfront cost or credit check
9 Battery Bonus Proposed Rates
• Customers fee ranges from: $50 - $115 per battery per month • Rates based on several factors:
10 Installation Complexity Installer Costs Customer Preference • Main service panel
upgrade
• Relocating critical
loads
• Fire or local code
compliance
• Union labor /
prevailing wages
• Larger installation
crews
• Sales and marketing
costs
• Equipment selection
• Additional batteries
to extend back-up
capabilities
• Preferred installation
location
• Trenching vs external
conduit
Battery Bonus Connect Program
• Haven Energy Services, Inc. selected to administer CEA’s Battery Bonus Connect Program
• Program benefits income qualified customers including CARE/FERA customers
• Program funded by the Self Generation Incentive Program (SGIP) • Haven’s Professional Services Agreement (PSA) provides battery retrofits at no cost to CEA Customers
• PSA executed to initiate SGIP application process; no cost or rate impact to CEA
11 Recommendation:
• Adopt Resolution No. 2025-022 which would:
• Approve the Battery Bonus Program rates, and;
• Approve the PSA with PE for Battery Bonus Program &
Authorize CEO to execute all necessary documents
• Ratify the PSA with Haven Energy Services, Inc. for the Battery Bonus Connect Program
12 Questions/Discussion
13 Item 7: Regulatory Update
14 15
Overview
● Rulemaking 25-05-005: Proposed Decision Changing the Power Charge Indifference Adjustment (PCIA) methodology
● Application 23-06-001: Proposed Decision in the 2022 Energy Resource Recovery Account (ERRA) Compliance Proceeding
● Rulemaking 23-10-011: Proposed Decision in the Resource Adequacy (RA) Rulemaking
● Application 25-05-012: 2026 ERRA Forecast Case
16 Setting PCIA Rates
FORECAST
COST OF
UTILITY
PORTFOLIO
FORECAST
VALUE OF
UTILITY
PORTFOLIO
INDIFFERENCE
AMOUNT
(PCIA)
FORECAST
RPS ADDER
($/GWH) *
GWh
FORECAST
VALUE OF
UTILITY
PORTFOLIO
ENERGY
INDEX
($/GWH) *
GWh
FORECAST
RA ADDER
($/kW-mo) *
kW-mo
Proposed Decision in R.25-02-005
The Proposed Decision seeks to:
● Solve a perceived lack of transaction volumes in the data used to determine the Resource Adequacy (RA) Market Price Benchmark. ● Remove non-market-relevant transactions:
○ Affiliate transactions
○ Swap transactions
○ Sleeve transactions
17 Proposed Decision in R.25-02-005
It modifies the MPB itself and the data set used to calculate the RA MPB:
● It collapses what were three different RA MPBs (Local, System and Flex) into one MPB for all RA transactions
● It uses three (for the forecasted MPB) and four (for the final MPB) years of data to calculate the RA MPB
● It eliminates affiliate and swap transactions from the data set ● It reduces sleeve transactions to just one transaction within the data set PCIA rates will increase compared to the status quo if the Proposed Decision is adopted.
18 Proposed Decision in R.25-02-005
The changes will be applied to both the Final 2025 RA MPB (for the true-up) and the Forecast 2026 RA MPB (for forecasted rates).
Comments are due June 12; the Proposed Decision may be adopted as early as June 26.
19 Proposed Decision in A.23-06-001
● Key question in this case is “portfolio optimization,” i.e., SDG&E’s efforts to sell excess capacity:
○ Impacts both CEA’s ability to meet its RA requirements and CEA’s PCIA rates
○ Proposed Decision appears to suggest CCAs cannot review SDG&E’s efforts to sell its substantial amount of excess capacity ● Comments due today: The Proposed Decision commits significant legal and factual errors and must be revised.
20 Proposed Decision in R.23-10-011
● Key question in this rulemaking for CCAs is hourly “transactability,” i.e., the ability of CCAs to transact capacity on an hourly basis instead of a monthly basis.
● CalCCA’s proposal to allow hourly transactions would have saved Californians $180 million each year.
● The Proposed Decision denies the proposal to study it further. ● Comments are due June 11.
21 2026 ERRA Forecast Case Filed
● SDG&E filed its application to set PCIA rates for 2026 on May 15. ● The October Update in this case will utilize the new RA MPB. ● Next Steps:
○ June: Protest
○ August and September: Testimony and hearings
○ October Update (including changes from R.25-05-005)
○ November and December: Two Advice Letters
○ December 31: Final SDG&E rates, including PCIA
22 QUESTIONS?
Tim Lindl
[email protected]
(510) 314-8385
23 Item 8: FY 25/26 Budget and Adoption
24 FY2025-2026 Draft Budget
And
5-Year Outlook through June 2030
May 29, 2024
Financial Performance Projected through June 30, 2025
26 YTD Actuals through Forecast through Budget Variance 3/31/2025 6/30/2025 FY2024-2025 Fav/(Unf)
Total Operating Revenues $273,668,520 $352,035,391 $360,839,549 ($8,804,157) Total Cost of Energy 232,762,908 310,160,685 317,090,165 6,929,480 Other Expenses (excluding Energy) 6,850,183 9,293,860 9,381,926 88,066 Total Operating Expenses 239,613,091 319,454,546 326,472,091 7,017,546 Operating Income (Loss) 34,055,429 32,580,846 34,367,457 (1,786,612) Total Nonoperating Income/(Expense) (882,164) (1,081,752) (1,063,383) (18,369) CHANGE IN NET POSITION $33,173,265 $31,499,094 $33,304,074 ($1,804,981) Net Position at the beginning of period ($16,964,834) ($16,964,834) Net Position at the end of period $16,208,431 $14,534,259 Key Observations for Full Year (FY2025)
• Current forecast is to end the year with positive Change in Net Assets of $31.4 million
• $1.9 million below Budget
• Several likely positive upsides could improve the outcome to better than Budgeted level
• Current forecast is to end with positive $14.5 million of Net Position (after 3 successive negative years)
• Revenues in second half of the year lower than expected • Full year $8.8 million below Budget
• Significantly lower customer usage than expected during mid-day hours due to high rooftop solar installations
• Energy expenses
• $6.9 million below Budget
• But used approximately half of $14.4 million contingency • Sum of all other expenses very close to Budget
• Total Operational Expenses – close to budget and just 2.9% of total expenses 27 FY2025-2026 Budget Detail
Key Assumptions
• Rates
• Assuming no change in rates from current levels through the 5-year projection • Note: CalCCA rate projections show potential for significant SDG&E generation rate decreases
• No load growth
• Customers – number, mix and usage all flat
• Programs Budget
• FY2026 - $2.0 million
• FY2027 - $4.0 million
• FY2028 - $6.0 million
• FY2029 - $8.0 million
• FY2030 - $12.0 million
• Staffing and Administration
• Today – 6 positions
• At June 30, 2025 – 10 positions
• At June 30, 2026 – 16 positions
29 Key Assumptions – Energy Costs
• Energy and Energy Attribute Prices
• Forward energy price forecasts appear to be continuing recent declines • REC prices have declined from recent historical highs, but remain above historical norms
• Resource Adequacy prices expected to be significantly lower than recent historical highs
• Contingency
• Prior year’s budget included 5% contingency
• Concerns:
• Recent significant declines in forward price expectations leave significant room for upward surprises
• Recent tariff and supply chain issues have created potential volatility • Staff proposes a 10% contingency of Total Energy Costs for FY2025-2026 Budget and 5-year outlook. Adds $12-14 million annually over prior outlook and 5-year plan
30 FY2025-2026 Energy Expense Detail
31 No change in rates through June 2030 Forecast through Preliminary Budget Outlook Outlook Outlook Outlook 6/30/2025 FY2025-2026 FY2026-2027 FY2027-2028 FY2028-2029 FY2029-2030 Resource Adequacy 49,085,981 69,054,700 76,753,866 65,956,090 60,814,582 61,775,114 Energy Purchases 160,810,860 157,078,636 152,957,019 141,133,811 131,086,965 127,389,984 Energy Carbon Free 6,257,778 7,860,061 7,555,535 3,568,117 - - Congestion Revenue Rights (2,189,261) - - - - -
RECS Purchases PCC1 72,187,960 65,056,940 62,654,062 68,217,676 73,859,392 74,551,557 RECS Purchases PCC2 4,000 - - - - -
CAISO 17,655,314 3,164,522 3,286,944 3,258,369 3,309,388 3,361,309 CAISO Chg/Credit Other 305,652 - - - - -
Broker Fees 419,197 - - - - -
VAMO Adjustment - - - - - -
Contingency 3,449,326 28,716,809 28,506,775 26,739,017 25,325,644 25,177,665 Total Cost of Energy 307,986,807 330,931,667 331,714,201 308,873,081 294,395,972 292,255,630 NEM Expense 2,173,878 2,608,654 3,130,385 3,756,462 4,507,754 5,409,305 Total Cost of Energy 310,160,685 333,540,321 334,844,585 312,629,543 298,903,726 297,664,935 FY2025-2026 Other Expense Detail
32 Preliminary Budget – FY2025/2026
Biggest Increases over prior year Forecast:
• Consultants and Professional Services – increase of $0.8 million • Data Manager (Calpine) – increase of $0.4 million related to full year of expanded territory
• Staffing – increase of $1.2 million
• Full year of increased staff
• Programs – increase of $2.0 million
Total Operational Expenses –3.9% of total expenses (3.3% excluding Programs) No change in rates through June 2030 Forecast through Preliminary Budget Outlook Outlook Outlook Outlook 6/30/2025 FY2025-2026 FY2026-2027 FY2027-2028 FY2028-2029 FY2029-2030 Communications and Outreach 373,899 409,791 450,770 495,847 545,432 599,975 General and Administrative 966,058 1,080,635 1,155,496 1,233,545 1,204,816 1,038,840 Consultants & Professional Services 6,388,325 7,142,001 7,536,285 8,270,113 9,077,324 9,767,257 Staff compensation 1,565,578 2,817,342 3,868,026 5,421,443 6,875,701 8,720,051 Programs - 2,000,000 4,000,000 6,000,000 8,000,000 12,000,000 Other Expenses (excluding Energy) 9,293,860 13,449,769 17,010,576 21,420,949 25,703,274 32,126,123 5-Year Outlook
Rates Stable at Current Levels
33 Days Liquidity on Hand
Reserve Policy – annual target met every year, but don’t meet cumulative until end of FY2028 Investment Grade Credit Rating – Targeting mid-to-late 2027 based on expected DLOH levels Preliminary Budget Outlook Outlook Outlook Outlook
FY2025-2026 FY2026-2027 FY2027-2028 FY2028-2029 FY2029-2030 Total Operating Revenues $383,146,909 $388,089,267 $383,501,212 $383,507,082 $383,513,055 Total Cost of Energy 333,540,321 334,844,585 312,629,543 298,903,726 297,664,935 Other Expenses (excluding Energy) 13,363,246 16,646,758 20,674,112 25,379,524 31,715,530 Total Operating Expenses 346,903,567 351,491,343 333,303,655 324,283,250 329,380,465 Operating Income (Loss) 36,243,342 36,597,923 50,197,557 59,223,832 54,132,590 Total Nonoperating Income/(Expense) (380,692) (3,635) 444,240 1,481,379 2,703,573 CHANGE IN NET POSITION $35,862,650 $36,594,289 $50,641,797 $60,705,211 $56,836,163 Net Position at the beginning of period $14,468,108 $50,330,758 $86,925,047 $137,566,844 $198,272,055 Net Position at the end of period $50,330,758 $86,925,047 $137,566,844 $198,272,055 $255,108,218 Days Liquidity on Hand 75 110 170 207 269
FY2025-2026 Budget Timeline
• Board Meeting June 26, 2024 – Final Budget Approval
• With updated financial results through April 2025
34 FY2025-2026 Budget Staffing
• The Proposed Budget allows for 4 new positions in FY2025- 2026 in addition to the 2 previously authorized by the Board • Staff also recommends a separate Executive
Assistant/Office Management position and Clerk to the
Board position
• Staff recommends creating a Senior Procurement Manager position
• Amendments to CEA’s Position Control Listing will be
presented at the June 26th Board Meeting
35