MINUTES
REGULAR MEETING of the Board of Directors of the
Clean Power Alliance of Southern California
Wednesday, May 11, 2022, 2:00 p.m.
The Board of Directors conducted this meeting in-person and remotely, pursuant to the Proclamation of the State of Emergency by Governor Newsom on March 4, 2020, AB 361, and enacting CPA Resolutions, and as a response to mitigating the spread of COVID-19
CALL TO ORDER & ROLL CALL
Chair Diana Mahmud called the meeting to order at 2:00 p.m. and Gabriela Monzon, Clerk of the Board, conducted roll call.
Roll Call
1 Agoura Hills Deborah Klein Lopez Alternate Remote
2 Alhambra Jeff Maloney Director Remote
3 Arcadia Absent
4 Beverly Hills Julian Gold Director Remote
5 Calabasas Michael McConville Alternate Remote
6 Camarillo Susan Santangelo Director Remote
7 Carson Cedric L. Hicks, Sr. Alternate Remote
8 Claremont Corey Calaycay Director Remote
9 Culver City Daniel Lee
Yasmine-Imani McMorrin
Director
Alternate Remote
10 Downey Director Absent
11 Hawaiian Gardens Ramie L. Torres Alternate Remote
12 Hawthorne Alex Monteiro Director Remote
13 Los Angeles County Sheila Kuehl Vice Chair Remote
14 Malibu Steve Uhring Alternate Remote
15 Manhattan Beach Hildy Stern Director Remote
16 Moorpark Janice Parvin Alternate Remote
17 Ojai Betsy Stix Director Remote
18 Oxnard Absent
19 Paramount Adriana Figueroa Alternate Remote
20 Redondo Beach Christian Horvath Director Remote
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21 Rolling Hills Estates Steve Zuckerman Director Remote 22 Santa Monica Gleam Davis Director Remote
23 Sierra Madre Robert Parkhurst Director Remote
24 Simi Valley Ruth Luevanos
Samantha Argabrite
Director
Alternate Remote
25 South Pasadena Diana Mahmud Chair Remote
26 Temple City Absent
27 Thousand Oaks Kevin McNamee Director Remote
28 City of Ventura Joe Yahner Alternate Remote
29 Ventura County Linda Parks Vice Chair Remote
30 West Hollywood Rachel Dimond Alternate Remote
31 Westlake Village Ned Davis Director Remote
32 Whittier Vicki Smith Alternate Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
No general public comment was made.
CONSENT AGENDA
1. Adopt Resolution 22-05-028 Finding the Continuing Need to Meet by Teleconference Pursuant to Government Code Section 54953 (e)
2. Approve Minutes from April 7, 2022, Board of Directors Meeting
3. Approve Amendment No. 3 to the Professional Services Agreement with NewGen Strategies and Solutions with a Not-to-Exceed Amount of $118,360 to Provide Support Related to SCE’s Energy Resource Recovery Account (ERRA) Proceedings
4. Approve Amended and Restated Professional Services Agreement with Municipal Capital Markets Group, Inc. (MCM) with a Not-to-Exceed Amount of $487,500 to be Paid from Bond Proceeds for Municipal Advisory Services
5. Approve Legal Services Agreement with Chapman and Cutler, LLP with a Not-to-Exceed Amount of $300,000 to be Paid from Bond Proceeds, Unless a Transaction is Not Completed, in which case a Not-to-Exceed Amount of $25,000
6. Receive and File Community Advisory Committee Monthly Report Jane Johnson provided a public comment on Item 4 of the consent agenda.
Motion: Director Parkhurst, Sierra Madre
Second: Vice Chair Kuehl, Los Angeles County
Vote: The consent agenda was approved by a roll call vote, with an abstention from Alternate Director Adriana Figueroa on Item 2.
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REGULAR AGENDA
7. Election of Board Chair for a Two-Year Term from July 1, 2022, to June 30, 2024; and announcement of Committee Chair Appointments
The Board unanimously elected Julian Gold, City of Beverly Hills, as Board Chair for the term July 1, 2022, to June 30, 2024.
Chair-Elect Gold announced the following Committee Chair appointments:
• Legislative & Regulatory Committee: Director Lindsey Horvath, West Hollywood
• Finance Committee: Director Susan Santangelo, Camarillo • Energy Planning & Resources Committee: Director Robert Parkhurst, Sierra Madre
Open Nomination Period for Executive Committee At-Large Positions Chair Mahmud opened the nomination period for two Los Angeles County At-Large positions and one Ventura County At-Large position on the Executive Committee.
Director Zuckerman, Rolling Hills Estates, nominated Director Lopez, Agoura Hills.
Director Horvath, Redondo Beach, nominated Director Monteiro, Hawthorne.
Vice Chair Parks, Ventura County, nominated Director Stix, Ojai.
Director Santangelo, Camarillo, nominated Director Luevanos, Simi Valley.
Chair Mahmud encouraged Board members to run for a position on the Executive Committee. Directors may nominate themselves and make nominations until May 20, 2022.
8. Approve Fiscal Year 2022/2023 Rate Setting Approach
Matt Langer, Chief Operating Officer, provided a recap of the FY 2022/23 rates process and outlined the considerations for FY 22/23 rates, highlighting that CPA is presented with a rare opportunity to accelerate its progress toward financial goals. Mr. Langer provided an overview of the investment-grade (IG) credit rating, including the process for receiving a credit rating and some of the benefits of having one. Building liquidity is critical the key metric is Days Liquidity on Hand (DLOH). CPA is currently in the “adequate” range with 67 DLOH, but CPA would need to be in the middle of the “strong” range of 90-150 DLOH if it can receive an IG rating in the next year. Staff prepared three options for CPA rates for FY 2022/23 that target DLOH within the “strong” range. Staff prepared three rate options, including a low, moderate, and high-risk option. All options assume product differentials are based on a cost of service (COS) approach and are similar to last year; subset rates reflect current COS; the CARE rate freeze ends on June 30, 2022.
The lowest-risk option projects a $178 million contribution to the net position with 109 DLOH; the moderate-risk option contributes $236 million to the net position with 131 DLOH; and the high revenue option contributes $265 to the net position with 142 DLOH. Mr. Langer discussed rate comparison ranges with SCE and identified four scenarios (A, B, C, and D) of timelines to end the CARE rate freeze and their respective reductions to net position and DLOH. Mr. Langer indicated that the moderate-risk and low-risk options provide an opportunity to dedicate up Clean Power Alliance Board of Directors Page 4 of 5
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to $10 million in additional one-time program spending. How funds are spent would be the focus of a mid-point customer programs review later in 2022. The Executive Committee expressed a desire to accelerate progress towards CPA’s financial goals and protect customer interests through the summer and unanimously recommends option 3A, the lowest risk scenario with a CARE rate freeze to end in October. The Community Advisory Committee supported an approach that ensures fiscal stability and expressed desire for strong customer communication and a continued push for the 100% Green default rate. Mr. Langer concluded with a summary of staff’s request to approve a rate approach and next steps.
Director Hicks inquired about the COS approach; Mr. Langer noted that last year’s COS study influenced product differentials (Lean power is 1% lower than Clean power and 100% Green is 3% more than Clean power, reflecting the current COS).
CPA can balance a competitive position, while acquiring higher contributions to reserves at a cost-of-service approach. Director Hicks voiced his concern for how the recommended approach may negatively impact fixed income customers recovering from COVID-19. Director Gold acknowledged Director Hicks’ concerns and added that option 3A puts CPA in the best financial position to support the coming summer months. Vice Chair Kuehl expressed preference for option 3A and observed that customers in the Lean product will be paying less when compared to SCE; opined that waiting until October to end the CARE rate freeze will benefit customers and the focus on investing in reserves is the best course of action in this scenario. Director Parkhurst added that the Ukraine conflicts and supply chain issues have affected projects and pricing and commented that option 3A gives CPA a strong position to achieve the IG credit rating that would allow for more contracts at a better discount in the future. In response to Director Hicks’ question concerning the $80 million line of credit and the 120 DLOH, Mr. Langer stated that that capacity concerns and potential blackouts and price impacts in energy markets could lower the projected DLOH figure. Additionally, the lowest risk option would put CPA at a 138 DLOH by the end of the next fiscal year. Director Hicks expressed a preference for option 2A, due to its minimal impact on customer bills.
Director Gold added that the DLOH includes the $80 million line of credit. Vice Chair Parks commented on the benefits of that Ventura County had experienced by building a strong reserve fund, including bond ratings and lower interest rates.
Director Lopez commented that the Executive Committee reached unanimous consensus with the lowest-risk option (option 3A) and expressed a personal preference for option 3A that will provide benefits in the future. Chair Mahmud expressed concern for the volatile energy markets and increasing inflation rates and echoed the preference for option 3A that would allow CPA to prepare for the uncertain future for energy prices. Director Zuckerman added that option 3A reflects a conservative approach that can help CPA avoid dramatic rate changes in the future.
Motion: Director Gold, Beverly Hills
Second: Director Santangelo, Camarillo
Vote: Item 8 was approved by a roll call vote with two noes from Directors Hicks and Smith.
9. Review Fiscal Year 2022/2023 Budget Priorities
Ted Bardacke, CEO, provided an overview of the FY 2022/23 budget process, reviewed internal operational priorities, and provided context to the operating Clean Power Alliance Board of Directors Page 5 of 5
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expenses representing about 5% of total costs. Mr. Bardacke reviewed notable budget area increases including staffing, customer programs including incentives and implementer costs, communication and outreach, and general and administrative costs.
Director Zuckerman suggested a peer group comparison chart with budget metrics to show salaries as a percentage of net energy revenue and net income in relation to Community Choice Aggregation (CCA) peers, and Chair Mahmud echoed the suggestion. Director Hicks suggested that staffing costs reflect both annualized costs and costs based on projected hiring dates. Mr. Bardacke noted that refinements will be made accordingly. Vice Chair Kuehl commented that a strong investment in staff can reduce turnover and improve retention.
MANAGEMENT REPORT
Mr. Bardacke provided an update on the launch of CPA’s electric vehicle charger incentive program in Los Angeles County, noting that 60% of funds are reserved for low income and disadvantaged communities; about $1.2 million is still available for this program in Ventura County. Mr. Bardacke indicated that CPA recently passed a data privacy audit and is ranked in the top five percent of utilities for data security and IT technology environment and controls. Mr. Bardacke announced a lunch reception will be held for Chair Mahmud on June 17 at CPA offices. Mr. Bardacke identified an upcoming regulatory proceeding that will likely increase CPA’s Financial Security Requirements by millions of dollars and staff will keep the Board apprised of the matter.
COMMITTEE CHAIR UPDATES
Director Gold, Finance Committee Chair, thanked the Board for their support as the newly elected Chair of the Board of Directors.
Director Parkhurst, Energy Planning & Resources Committee Chair, reported on challenges in electricity supply that will impact upcoming contracting activities.
BOARD MEMBER COMMENTS
Vice Chair Parks thanked Chair Mahmud for her leadership as Board Chair. Chair Mahmud expressed appreciation for the Board members and staff. Mr. Bardacke reported that Gary Gero, Alternate Board Member, Los Angeles County, has retired and will no longer be a Board member.
REPORT FROM THE CHAIR
Chair Mahmud shared her recent meeting with Dartmouth students who are interested in supporting the formation of a CCA in New Hampshire. Chair Mahmud added that CPA staff is attending city council meetings at certain adjacent cities potentially interested in joining CPA and encouraged Board members to reach out to Council Members who might be a good fit for the Board of Directors. Chair Mahmud announced the Water Education for Latino Leaders Southern California Water Conference on June 9 and 10 and encouraged Board members to attend.
ADJOURN
Chair Mahmud adjourned the meeting at 4:05 p.m.