Executive Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, August 16, 2023
1:30 p.m.
Visit CPA’s YouTube Channel to view a Live Stream of the Meeting www.youtube.com/@CPApublicmeetings
*There may be a streaming delay of up to 90 seconds. This is a view-only live stream.
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Members of the public may also participate in this meeting remotely at the following locations:
Agoura Hills City Hall
Planning Conference Room
30001 Ladyface Court
Agoura Hills, CA 91301
Ojai City Hall
Conference Room
401 S Ventura St.
Ojai, CA 93023
Beverly Hills City Hall
Council Office, 4th Floor
455 N. Rexford Drive
Beverly Hills, 90210
Park James Hotel
1400 El Camino Real
Menlo Park, CA 94025
Camarillo City Hall
Administrative Conference Room
601 Carmen Drive
Camarillo, CA 93010
Ventura County Government Center
Point Mugu Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
Los Angeles County Hall of Administration
Sybil Brand Conference Room, Room 372
500 West Temple Street
Los Angeles, CA 90012
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
PUBLIC COMMENT: Members of the public may submit their comments by one of the following options:
• Email Public Comment: Members of the public are encouraged to submit written comments on any agenda item to [email protected] up to four hours before the meeting. Written public comments will be announced at the meeting and become part of the meeting record. Public comments received in writing will not be read aloud at the meeting. • Provide Public Comment During the Meeting: The General Public Comment item is reserved for persons wishing to address the Committee on any Clean Power Alliance-related matters not on today’s agenda. Public comments on matters on today’s Consent Agenda and Regular Agenda shall be heard at the time the matter is called. Comments on items on the Consent Agenda are Agenda Page 1
consolidated into one public comment period. Members of the public who wish to address the Committee at CPA’s Office are requested to complete a comment card and provide it to staff. If you are attending from a remote location, please identify yourself to a CPA representative when your item is called. Each speaker is limited to two (2) minutes (in whole-minute increments) per agenda item with a cumulative total of five 5 minutes to be allocated between the General Public Comment, the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
NAVIGATING OUR AGENDA PACKETS
The meeting agenda packets are bookmarked PDFs, which display a list of agenda items to the left of the page and allow you to click to view specific items within the packet. If viewing in your browser, click the "document outline" button in the upper left corner of the screen. If the PDF is downloaded, the bookmark panel (ribbon icon) appears on the left side of the screen.
ACCESSIBILITY: Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least two (2) working days before the meeting at [email protected] or (213) 713- 5995. Notification in advance of the meeting, while not required, will enable us to make reasonable arrangements to ensure accessibility to this meeting and the materials related to it.
CALL TO ORDER AND ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from June 21, 2023, Executive Committee Meeting
REGULAR AGENDA
2. Oral Update from the CEO on CPA Operations
3. Review Draft Agenda for the September 7, 2023, Board of Directors Meeting
4. Receive Presentation on Retention Incentive Program and Provide Feedback
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT REGULAR MEETING ON SEPTEMBER 20, 2023
Public Records: Public records that relate to any item on the open session agenda for a Committee Meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all, or a majority of, the members of the Committee. Public records are available for inspection at CPA’s Office at 801 S. Grand Ave., Suite 400, Los Angeles, CA 90017, or online at www.cleanpoweralliance.org/agendas.
Agenda Page 2
Staff Report – Agenda Item 1
To: Executive Committee
Subject: Approve Minutes from June 21, 2023 Executive Committee Meeting
Date: August 16, 2023
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3
Executive Committee Item 1
MINUTES
Executive Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, June 21, 2023
1:30 p.m.
Meeting videos are available on CPA's YouTube Channel.
http://www.youtube.com/@CPApublicmeetings
Committee Members participated in this meeting from the following locations:
Agoura Hills City Hall
Planning Conference Room
30001 Ladyface Court
Agoura Hills, CA 91301
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Beverly Hills City Hall
Council Office, 4th Floor
455 N. Rexford Drive
Beverly Hills, 90210
Camarillo City Hall
Administrative Conference Room
601 Carmen Drive
Camarillo, CA 93010
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
Ojai City Hall
Conference Room
401 S Ventura St.
Ojai, Ca 93023
Sierra Madre City Hall
Council Chambers
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024
Ventura County Government Center
Point Mugu Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
Los Angeles County Hall of Administration
Sybil Brand Conference Room, Room 372
500 West Temple Street
Los Angeles, CA 90012
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
CALL TO ORDER & ROLL CALL
Chair Gold called the meeting to order at 1:30 p.m. and Gabriela Monzon, Clerk of the Board, conducted roll call.
Roll Call
Agoura Hills Deborah Klein Lopez Committee Member Remote Beverly Hills Julian Gold Chair Remote
Camarillo Susan Santangelo Committee Member Remote
Agenda Page 4
Executive Committee Item 1
Carson Cedric Hicks Committee Member Remote
Hawthorne Alex Monteiro Committee Member Absent
Los Angeles County Lindsey Horvath Vice Chair Remote
Ojai Betsy Stix Committee Member Absent
Sierra Madre Robert Parkhurst Committee Member Remote
South Pasadena Diana Mahmud Immediate Past Chair Remote Ventura County Vianey Lopez Vice Chair Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from May 17, 2023, Executive Committee Meeting Motion: Committee Member Hicks, Carson
Second: Committee Member Mahmud, South Pasadena
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
3. Oral Update from the CEO on CPA Operations
Ted Bardacke, CEO, reported that CPA will achieve full compliance with all month-ahead Resource Adequacy (RA) obligations. The California Public Utilities Commission (CPUC) announced a proposal to disallow Community Choice Aggregators (CCA) that fail to meet month-ahead RA obligations from filing expansion plans for two years. Subsequently, the Administrative Law Judge expanded this prohibition to year-ahead RA obligations. Staff filed comments opposing the suggested penalty. In response to Chair Gold’s question about the response of other CCAs, Mr. Bardacke confirmed that CPA filed joint comments with Peninsula Clean Energy.
4. Review Draft Agenda for the July 6, 2023, Board of Directors Meeting Mr. Bardacke discussed several items on the Board consent agenda, including proposed amendments to the Energy Risk Management Policy (ERMP), bill positions that would impact the California Environmental Quality Act (CEQA) process, the new Net Energy Metering (NEM) tariff, and a contract for communications and marketing.
Committee Member Mahmud suggested forming a subcommittee comprised of Executive Committee members or Committee Chairs, which could allow the Board to provide input while providing flexibility. Committee Member Hicks expressed concerns about transparency and suggested that multi-year contracts should be presented to the Board for review; sought clarification on authority thresholds. Mr.
Agenda Page 5
Executive Committee Item 1
Bardacke explained that the limit for non-energy contracts is set at $125,000, and all such contracts are reported to the Board monthly. Mr. Bardacke noted that these ERMP adjustments would enable CPA to be nimble in a market with resource shortages. Committee Member Horvath asked about the amendment to the communications and marketing contract. Mr. Bardacke clarified that the duration of the contract, scope, and rate remain unchanged, but the workload has increased.
Mr. Bardacke discussed the Board’s regular agenda items, which included long-term Power Purchase Agreements (PPAs) approaching termination, funding for phase two of workforce development, and an update on Local Programs.
5. Receive Presentation on Local Programs Mid-Cycle Refresh and Provide Feedback
Joanne O’Neill, Director, Customer Programs, provided a presentation on the mid-cycle refresh of the Local Programs. In 2020, the Board adopted the Local Programs for a Clean Energy Future plan, focusing on three pillars: resilience and grid management, building and transportation electrification, and local procurement. Staff will develop separate “action plans” to expand and enhance approaches under each program pillar. Ms. O’Neill provided an overview of the action plan, discussed new programs and improvements to existing ones within the three Local Program pillars and a “cross cutting program,” and shared the next steps for the Local Programs refresh.
Committee Members Mahmud and Parkhurst asked questions about the resilience & grid management programs, Reach Codes, and the customer energy advisor. Ms. O’Neill explained that the Power Response program focuses on demand response, while the rate-based approach places customers on significantly low rates throughout the year with a higher rate during peak events.
Additionally, Ms. O’Neill indicated that there is interest in the Reach Code program, but no member agencies are currently enrolled. The customer energy advisor role would target residential and small commercial customers, utilizing various communication methods to address diverse needs. Committee Member Mahmud inquired about the need for contract amendments for existing solar customers; Ms.
O’Neill clarified that existing solar customers typically operate under NEM 2.0 and would not experience any tariff changes with the addition of storage. Chair Gold asked if staff had considered implementing storage independently, and Ms. O’Neill indicated that it would hold no monetary value for CPA.
Vice Chair Horvath suggested that providing a description of programs, their impact, and popularity would benefit new Board members. Vice Chair Horvath suggested adding incentives for electric heat pumps for individual property owners, and for transitions to all-electric appliances for residential buildings. Ms. O’Neill explained that the program aims to assist customers in navigating the process and accessing existing incentives required to adopt these energy-efficient measures.
Committee Member Parkhurst added that incentivizing electric heat pumps holds innovative potential. Ms. O’Neill noted that the customer energy advisor is designed to help customers access the state funds allocated for this category. In response to Committee Member Mahmud’s question, Ms. O’Neill clarified that SCE’s programs primarily focus on energy efficiency while CPA’s programs are Agenda Page 6
Executive Committee Item 1
often more cross-cutting. Committee Member Parkhurst shared that the Power Ready program allowed the City of Sierra Madre to receive a new roof and solar panels for its public safety building. In response to Chair Gold’s questions about staffing and program distribution, Ms. O’Neill clarified that for the first three years, each member agency has one budgeted menu option, and additional funding can be authorized by the Board if the programs prove successful. With regard to staffing, Ms. O’Neill explained that one new employee would be hired, and other experienced technical consultants would assist with program execution.
COMMITTEE MEMBER COMMENTS
Committee Member Mahmud thanked staff for the five-year anniversary celebration.
ADJOURN
Chair Gold adjourned the meeting at 2:51 p.m.
Agenda Page 7
Staff Report – Agenda Item 2
To: Executive Committee
From: Ted Bardacke, Chief Executive Officer
Subject: Oral Update from the CEO on CPA Operations
Date: August 16, 2023
The CEO will provide an oral report on CPA operations including:
• Upcoming Customer Communications
o Annual Joint Rate Comparison (September) - Attached
o Annual Power Content Label (October)
o Preferred Energy Option (e.g. Default) Changes in Alhambra, LA County and Paramount
• Executive Committee Meeting Start Time and September 20 Executive Committee Meeting
ATTACHMENT
1. Annual Joint Rate Comparison (September)
Agenda Page 8
Your power choices.
Choose the energy source and
rate plan that’s right for you.
Each year Clean Power Alliance and Southern
California Edison provide you the opportunity to
compare your rate choices and the sources of
your energy and select the option that best suits
you and your family.
For more information: call Clean Power Alliance
at 888-585-3788 or visit cleanpoweralliance.org,
or call Southern California Edison at
800-974-2356 or visit sce.com/cca.
Agenda Page 9
SCE
Base Rate
CPA
Lean Power
CPA
Clean Power
CPA
100% Green Power
Generation Rate ($/kWh)
SCE Delivery Rate ($/kWh)
Surcharges ($/kWh)
Total Costs ($/kWh)
Average Monthly Bill ($)
If you need assistance to find out your current rate or if you have further questions, please contact Clean Power Alliance at cleanpoweralliance.org or (888) 585-3788 and SCE at sce.com/cca or (800) 974-2356.
Understanding your energy choices.
2022 Electric Power
Generation Mix1 SCE
Base Rate
CPA
Lean Power
CPA
Clean Power
CPA 100%
Green Power
Specific Purchases Percent of Total Retail Sales (kWh)
Renewable
Biomass & biowaste
Geothermal
Eligible hydroelectric
Solar
Wind
Coal
Large hydroelectric
Natural gas
Nuclear
Other
Unspecified Power 2
Total
You can make a comparison between Clean Power Alliance and SCE rates and see the energy mix of each to decide which service and rate works for you. The charts below illustrate the estimated electricity costs for a representative residential customer with an average monthly energy use of 569 kilowatt hours (kWh). This comparison is based on Clean Power Alliance rates approved by its Board of Directors at a duly-noticed public meeting and effective as of July 1, 2023. SCE rate options are based on rates effective June 1, 2023. Both Clean Power Alliance and SCE’s rates are subject to change.
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
40.0%
0.0%
0.0%
0.0%
60.0%
100.0%
40.1%
8.1%
12.0%
0.9%
3.3%
15.9%
0.0%
20.4%
0.0%
0.0%
0.0%
39.4%
100.0%
100.0%
0.0%
0.0%
0.0%
62.3%
37.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
$0.16503 $0.15093 $0.15429 $0.16776
$0.19097 $0.19097 $0.19097 $0.19097
$0.00000 -$0.00306 -$0.00306 -$0.00306
$0.35600 $0.33884 $0.34220 $0.35567
$202.56 $192.80 $194.71 $202.38
33.2%
0.1%
5.7%
0.5%
17.0%
9.8%
0.0%
3.4%
24.7%
8.3%
0.1%
30.3%
100.0%
2023 Schedule
Domestic
Comparison
1. Based on SCE and CPA 2022 data provided through the California Energy Commission’s Power Source Disclosure program.
2. Unspecified sources of power mean electricity from transactions that are not traceable to specific generation sources.
Generation Rate reflects the cost of producing or purchasing electricity to power your residence. This rate will vary depending on your service provider and rate plan.
SCE Delivery Rate is a charge assessed by SCE to deliver electricity to your residence. This rate depends on usage.
Surcharges represent the Cost Responsibility Surcharge (CRS) and Franchise Fee (FF) that are applicable to Community Choice Aggregation (CCA) customers and SCE customers that elect a Green Rate. The CRS is a surcharge to recover costs associated with power purchases made on behalf of customers, prior to a customer’s switch to a CCA or SCE Green Rate. The FF recovers taxes owed to a city in exchange for allowing SCE to utilize electrical distribution lines throughout the property of the city. SCE acts as the collection agency for the FF surcharge which is levied by cities and counties for all customers.
Agenda Page 10
Staff Report – Agenda Item 3
To: Executive Committee
From: Ted Bardacke, Chief Executive Officer
Subject: Review Draft Agenda for September 7, 2023 Board of Directors Meeting
Date: August 16, 2023
Staff will provide an overview of the proposed agenda items for the September 7, 2023 Board of Directors meeting for review and feedback from the Executive Committee. The draft Board agenda is attached to this staff report. Information on the main items for Board consideration is provided below.
CONSENT AGENDA
The following items are recommended for inclusion on the Consent Agenda of the September Board meeting.
Annual Electricity Usage by Jurisdiction
Per CPA’s Joint Powers Agreement, in the case of a voting shares (weighted) vote by the CPA Board of Directors, voting shares are based on the percentage of retail load served, by jurisdiction, in the previous year. Staff will request that the Board receive and file the percentage load by jurisdiction for fiscal year 2022/23. Load for the three cities that will begin service during this fiscal year will be projected based on historic load data provided by Southern California Edison and adjusted for expected opt-out levels.
Wireless Technology Rates (WTR)
Starting November 2023 CPA will begin enrolling approximately 350 customer accounts across our service territory on a WTR rate schedule. CCAs in SCE territory had not previously been able to serve these accounts because of SCE billing system issues which have now been resolved. Staff will request that the Board approve CPA rates for the WTR Agenda Page 11
Executive Committee Item 3
schedule in alignment with the standard FY 2023/24 rate setting approach adopted by the Board in May.
Task Order for Customer Programs Support Services
CPA’s Director of Customer Programs will be out on parental leave beginning in the fall through March 2024 at a time when the Customer Programs team is ramping up several new programs, including the Local Government Program, and making improvements to existing programs. A competitive Task Order solicitation for temporary staff augmentation to support key operational and program strategy functions for customer programs is in process. Should negotiations with the selected vendor be successful, the proposed Task Order will be presented to the Board for consideration with a Not-to-Exceed amount of approximately $175,000.
REGULAR AGENDA
The following items are recommended for inclusion on the Regular Agenda of the September Board meeting.
In December 2022, CPA launched its 2022 Power Share RFO targeting procurement of renewable energy projects that will fulfill its supply allocations for the Power Share program, including DAC-Green Tariff and Community Solar (CSGT) programs. During its July 26th meeting, the Energy Planning & Resources Committee approved a shortlist of six rooftop projects in Los Angeles County all with a single developer. The City of Carson is the Community Sponsor for the two Community Solar projects, allocating the city 25% of the project output and the resulting 20% bill savings as well as responsibilities for assisting with customer sign-up and other outreach efforts.
Staff is in the process of negotiating with the selected developer; should these negotiations be successful, up to six of these contracts will be presented to the Board for consideration.
Power Share Power Purchase Agreement(s)
Agenda Page 12
Executive Committee Item 3
Retention Incentive Program
This item will be subject to a separate presentation to the Executive Committee.
ATTACHMENT
1. Draft September 7, 2023, Board of Directors Agenda
Agenda Page 13
REGULAR MEETING of the Board of Directors of the
Clean Power Alliance of Southern California
Thursday, September 7, 2023
2:00 p.m.
CALL TO ORDER AND PLEDGE OF ALLEGIANCE
ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from July 6, 2023, Board of Directors Meeting
2. Approve Task Order for Customer Programs Support Services
3. Approve Wireless Technology Rates for FY 2023/2024
4. Receive and File CY Q2 Risk Management Team Report
5. Receive and File CY Q2 Quarterly Communications Report
6. Receive and File Annual Electricity Usage by Jurisdiction
7. Receive and File Bill Positions Monthly Report
8. Receive and File Community Advisory Committee Monthly Report
REGULAR AGENDA
9. Power Share Power Purchase Agreement(s)
10. Approve Policy No. X - Retention Incentive Program
MANAGEMENT REPORT
COMMITTEE CHAIR UPDATES
BOARD MEMBER COMMENTS
REPORT FROM THE CHAIR
ADJOURN – NEXT MEETING ON OCTOBER 5, 2023
Agenda Page 14
Staff Report – Agenda Item 4
To: Executive Committee
From: Dr. Monique Edwards-Greer, Chief Administrative Officer Approved by: Ted Bardacke, Chief Executive Officer
Subject: Retention Incentive Program
Date: August 16, 2023
RECOMMENDATION
Receive presentation and provide feedback.
ATTACHMENTS
1. DRAFT Policy – Retention Incentive Program
2. Presentation on Retention Incentive Program
Agenda Page 15
DRAFT
Clean Power Alliance Retention Incentive Program
I. Purpose
Clean Power Alliance (CPA) operates in a unique and specialized labor market and competes for talent across many sectors, including the private sector, other CCAs, and both public and private utilities. Many middle and senior management level employees are highly specialized and have broad responsibility for multiple functions within CPA operations. To retain management-level (and equivalent) employees and to promote high performance, CPA has implemented a retention incentive program to incentivize employees to remain employed with CPA.
II. Overview
The CPA retention incentive program supports staff retention and high performance by:
• Budgeting for and setting aside each fiscal year an additional cash payment comprised of fixed and contingent amounts (the “Retention Incentive”) that eligible employees could earn at the end of a Waiting Period in addition to their regular salary. • Providing the Retention Incentive as a cash payment, less applicable withholdings and taxes, to “Eligible Employees” who remain employed with CPA at the end of a multi-year “Waiting Period”, thus triggering an “Earn Out Date”.
• Making a portion of the Retention Incentive a “Contingent Amount” payable upon certain “Organizational Performance Metrics” being met during a “Performance Period”.
III. Definitions
A. Contingent Amount – A percentage of the Retention Incentive that is dependent on achieving specific Organizational Performance Metrics during the Performance Period.
B. Earn Out Date – The last day of the Waiting Period, when eligible employees are paid their Retention Incentive.
C. Eligible Employees – Full-time executive, management track-level, and Professional/Technical Level 51 employees who remain employed by Clean Power Alliance on the Earn Out Date and are not subject to written disciplinary action or on a performance improvement plan at any point during the Waiting Period.
D. Fixed Amount – The amount of the Retention Incentive that is earned and not dependent on achievement of Organizational Performance Metrics.
E. Organizational Performance Metrics – Metrics used to calculate the Contingent Amount of the Retention Incentive.
F. Pay Out Date – The pay date that aligns with the Earn Out Date.
G. Performance Period – The time within the Waiting Period in which the Organizational Performance Metrics are measured.
H. Retention Incentive – A cash payment budgeted for and set aside that eligible employees could earn in addition to their regular salary at a later date. Applicable withholdings and taxes will be deducted from the cash payment made on the Earn Out Date.
1 Professional/Technical Level 5 is CPA’s highest category of non-management or individual contributor employees and with experience equivalent to or greater than management track-level employees.
Agenda Page 16
I. Waiting Period - A multi-year period that begins July 1, which includes the Performance Period and additional year(s) following the end of the Performance Period.
IV. Retention Incentive Description
At the beginning of each fiscal year, CPA sets aside funds equivalent to a percentage of each eligible employee’s salary as of June 30th (the end of the prior fiscal year) as a Retention Incentive. Eligible Employees that begin employment after July 1st (the start of then-current fiscal year) or are promoted to an eligible position will have their Retention Incentive prorated according to the number of full months of employment within the Performance Period. A portion of the Retention Incentive will be fixed (the Fixed Amount), and a portion will be based on achieving Organization Performance Metrics during the Performance Period (the “Contingent Amount”), as described below. Continuation of the retention incentive program year to year is dependent on budget approval by CPA’s Board of Directors.
Retention Incentives will be earned by Eligible Employees who remain employed with CPA on the Earn Out Date. Organizational Performance Metrics will be measured at the end of the Performance Period to determine the Contingent Amount that any employee may earn. For example, as depicted in the chart below, a Retention Incentive set aside on July 1, 2023, would be earned on June 30, 2025.
A. Organizational Performance Metrics
Earning the Contingent Amount depends on achieving certain Organizational Performance Metrics during the Performance Period. The Organizational Performance Metrics are:
1. Financial Performance: Achieving and/or maintaining an Investment Grade credit rating during the Performance Period.
2. Renewable Energy Procurement: Achievement of the target renewable energy procurement levels for each of CPA’s rate products in effect as of July 1 of the calendar year of the Performance Period.
3. Participation Rate: Achieving a customer Participation Rate in the last week of the Performance Period that is no less than 1% below the Participation Rate in the first week of the Performance Period.
Each of the Organizational Performance Metrics accounts for a portion of the Contingent Amount. For example, in the case where CPA sets aside a Retention Incentive of $20,000 for an Eligible Employee with a salary of $100,000 and each Organizational Performance Metric represents a Contingent Amount of 10%, the employee will earn a Fixed Amount of $14,000 if they remain employed as of the Earn Out Date and an additional $2,000 for each of the Agenda Page 17
Organizational Performance Metrics that are achieved during the Performance Period provided the conditions outlined in this Policy are met.
V. Fiscal Year 2023/24 Parameters
Retention Incentive: up to 20% of an eligible employee’s salary as of June 30, 2023, or their employment start date if hired after July 1, 2023 (prorated according to the number of full months of employment within the Performance Period).
Waiting Period: Two years from July 1, 2023
Earn Out Date: June 30, 2025,
Performance Period: July 1, 2023 to June 30, 2024
Contingent Amount: up to 30% of the Retention Incentive amount; 10% for each individual performance metric.
The Parameters established in this Section V will apply in future Fiscal Years unless altered by the Board of Directors.
VI. Termination of Employment
If an employee voluntarily terminates employment at any time during the Waiting Period or is involuntarily terminated for cause before the Earn Out Date, the Retention Incentive amount is not earned. No pro rata portion of the Retention Incentive (including the Contingent Amount) will be earned by the employee.
If an employee whose employment with CPA is subject to a contract with the Board (e.g., Chief Executive Officer and General Counsel) voluntarily terminates employment at any time during the Waiting Period, the Retention Incentive amount is not earned, and no pro rata portion of the Retention Incentive (including the Contingent Amount) will be earned by the employee. If the voluntary termination is due to the contract expiring during the Waiting Period and the contract is not extended by mutual agreement past the Earn Out Date, then the employee may earn any amount of the Incentive Retention calculated after the Performance Period. Such amount will be paid on the employee’s final paycheck in accordance with the Company’s then-current payroll practices. If an employee’s contract terminates and is not extended by mutual agreement within a Performance Period, the Retention Incentive will be earned in a prorated amount from July 1 to the contract end date. Such amount will be paid on the employee’s final paycheck in accordance with the Company’s then-current payroll practices.
If an involuntary termination not for cause (i.e., death, disability) occurs during the Waiting Period and not past the Earn Out Date, then the employee may earn any amount of the Incentive Retention calculated after the Performance Period. Such amount will be paid on the final paycheck made payable to the employee or their designated beneficiary in accordance with the Company’s then-current payroll practices. If involuntary termination not for cause (i.e., death, disability) occurs within a Performance Period, the Retention Incentive will be earned in a prorated amount from July 1 to the involuntary termination date. Such amount will be paid on the final paycheck made payable to the employee or their designated beneficiary in accordance with the Company’s then-current payroll practices.
Agenda Page 18
VII. Interest, Taxes, and Conditions
The Retention Incentive is only earned by Eligible Employees as set forth in this Policy on the Earn Out Date. As a result, Eligible Employees will not earn interest on the budgeted and set-aside Retention Incentives during the Waiting Period.
Retention Incentives are taxable income to the employee and will be added to the employee’s compensation in the calendar year corresponding to the Pay Out Date. Employees are encouraged to seek advice from a tax professional.
Retention Incentives are not portable to other employers or agencies.
The Retention Incentive program may be altered, limited, restricted, or terminated at any time with Board action to adjust to changing labor market conditions, internal staffing goals, overall compensation approaches, CPA’s fiscal health, or other considerations. Nothing in this program creates an expectation of employment or modifies the at-will nature of an Eligible Employee’s employment.
The Retention Incentive program is conditioned upon sufficient appropriation of funds by the Board. If the Board does not appropriate sufficient funds for this program, this Program may be terminated or reduced to reflect any reduction in funding.
VIII. Severability
If any section, subsection, sentence, or clause of this Policy is determined to be illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability shall not affect the legality, validity, or enforceability of this Policy as a whole or of any section, subsection, sentence, or clause herein that is not so determined.
Agenda Page 19
Item 4
CPA Employee Retention Incentive Program
Implementation
August 16, 2023
Agenda Page 20
Retention Incentive Program Background
CPA operates in a unique and specialized labor market and competes for talent across many sectors, including the private sector, other CCAs, and both public and private utilities Competition for Executive and Management level (and equivalent) positions with technical and market expertise is particularly acute – CPA turnover rates for these positions are disproportionately high A package of updates to salary grades, benefits, and the Employee Handbook was approved by the Board in December 2022; Staff was also directed to develop a retention incentive program Staff and its HR Consultant Mercer developed program options that were presented to the Executive Committee in May 2023
The Executive Committee recommended key program parameters that would impact the FY23/24 budget such as incentive levels (20% of base salary), eligibility (Executive and Management), and payout timing (2 years)
The Executive Committee also endorsed the concept of tying a portion of the Retention Incentive to the achievement of organizational performance metrics and provided feedback on other details Based on this direction, $1.1 million for Retention Incentives was included in the Board approved FY 23/24 budget
Implementation details are now drafted (attachment) and subject to any further refinement from the Executive Committee will be presented to the Board for consideration and approval in September Agenda Page 21
Retention Incentive Program Basics
Eligibility: Full-time Executive, Management track-level, and Professional/Technical Level 5 Budget and Pay Out: Amount is budgeted and set-aside each year but are not paid out until some years later (“Earn Out Date”)
Termination: If a staff member departs CPA voluntarily or involuntarily for cause before the Earn Out Date, they forfeit the incentive, and the amount remains with CPA. (Assuming some continued staff turnover, actual retention payouts would be less than budget) Fixed Amount and Contingent Amount: A percentage of the retention incentive is fixed and paid out if an employee remains employed with CPA on the Earn Out Date; a percentage of the retention incentive is contingent on meeting certain organizational performance metrics
Flexibility: Retention incentives will be budgeted for every year. Program parameters can be altered with Board approval to adjust to labor market conditions, internal staffing goals, and compensation approaches, but the intention is that the parameters would remain relatively stable year over year
Agenda Page 22
FY 23/24 Parameters & Org Perf Metrics
Fiscal Year 2023/24 Parameters
• Retention Incentive: 20% of an eligible employee’s salary as of June 30, 2023, or their employment start date if hired after July 1, 2023 (prorated according to the number of full months of employment within the Performance Period)
• Waiting Period: Two years from July 1, 2023
• Earn Out Date: June 30, 2025
• Contingent Amount: 30% of the Retention Incentive total (10% for each individual performance metric) as measured during the Performance Period
• Performance Period: July 1, 2023 to June 30, 2024
Organizational Performance Metrics
• Financial Performance: Achieving and/or maintaining an Investment Grade credit rating during the Performance Period
• Renewable Energy Procurement: Achievement of the target renewable energy procurement levels for each of CPA’s rate products in effect as of July 1 of the calendar year of the Performance Period • Participation Rate: Achieving a Participation Rate in the last week of the Performance Period that is no less than 1% below the Participation Rate in the first week of the Performance Period Agenda Page 23
Incorporation of ExCom Feedback
1. Retention Incentive for poorly performing employees: To be eligible for the Retention Incentive, employees cannot be subject to written disciplinary action or on a performance improvement plan at any point during the multi-year Waiting Period
2. Employees with Board Contracts (CEO and GC) are eligible for the Retention Incentive as allowed by current contract language. By approving the policy, the Board will acknowledge that they are potentially raising the cash value of these employees’ compensation in two years. If the contract employee voluntarily terminates employment during the Waiting Period, they will not earn any portion of the Retention Incentive. If their employment is terminated due to their contract expiring and not extended by mutual agreement, the contract employee could earn full or prorated amounts of the Retention Incentive
3. Pay ratios: Non-management employees have the potential for salary growth through annual merit increases and promotion. CPA tracks the ratio between the organization's highest and lowest paid employees along with various industry ratios. For comparison:
• CPA's current ratio is 5.3:1
• Benefit corporations (B-Corps), mission-driven companies benchmark a maximum ratio of 7:1 • Publicly traded companies in the US have an average ratio of 144:1 • The retention incentive program would slightly increase CPA’s ratio to approximately 6:1 Agenda Page 24
Next Steps
Discuss any additional feedback from the Executive Committee Present the proposed Employee Retention Incentive program details to the Board in September for consideration and approval
Agenda Page 25
Appendix
Agenda Page 26
Typical Retention Incentive Payment Schedule
Agenda Page 27
Contract Employee Retention Incentive Payment
Schedule in Case of Separation or Contract Expiration
Notes
Employee Start Date Termination Date Termination Type FY 24/25 FY 25/26 FY 26/27 7/1/2023 or Earlier 12/31/2024 Voluntary or Involuntary for Cause $0 N/A N/A 7/1/2023 or Earlier 12/31/2024 Involuntary Not for Cause (Death/Disability, Contract Ended & Not Renewed) $20,000 + $10,000 N/A N/A 7/1/2023 or Earlier 6/30/2025 Voluntary or Involuntary for Cause $20,000 $0 N/A 7/1/2023 or Earlier 6/30/2025 Involuntary Not for Cause (Death/Disability, Contract Ended & Not Renewed) $20,000 $20,000 N/A 7/1/2023 or Earlier 12/31/2025 Voluntary or Involuntary for Cause $20,000 $0 $0 7/1/2023 or Earlier 12/31/2025 Involuntary Not for Cause (Death/Disability, Contract Ended & Not Renewed) $20,000 $20,000 + $10,000 N/A 7/1/2023 or Earlier 6/30/2026 Voluntary or Involuntary for Cause $20,000 $20,000 $0 7/1/2023 or Earlier 6/30/2026 Involuntary Not for Cause (Death/Disability, Contract Ended & Not Renewed) $20,000 $20,000 $20,000 7/1/2023 or Earlier 12/31/2026 Voluntary or Involuntary for Cause $20,000 $20,000 $0 7/1/2023 or Earlier 12/31/2026 Involuntary Not for Cause (Death/Disability, Contract Ended & Not Renewed) $20,000 $20,000 $20,000 1/1/2024 6/30/2025 Voluntary or Involuntary for Cause $10,000 N/A Prorated Due to Later Start or Promotion Date 1/1/2024 12/31/2025 Involuntary Not for Cause (Death/Disability, Contract Ended & Not Renewed) $10,000 $20,000 + $10,000 N/A Prorated Due to Later Start or Promotion Date Example: $100,000 salary, Annual Set Aside: $20,000 Retention Incentive Amount Paid Out Agenda Page 28