Executive Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, May 16, 2024
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.
Clean Power Alliance
Executive Conference Room
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:
Ventura County Government Center
Point Mugu Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
Camarillo City Hall
Office of the Mayor
601 Carmen Drive
Camarillo, CA 93010
Sierra Madre City Hall
Council Chambers
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024
Los Angeles County Hall of Administration
Sybil Brand Conference Room, Room 372
500 West Temple Street
Los Angeles, CA 90012
Renaissance Esmeralda Hotel
44-400 Indian Wells Lane
Indian Wells, CA 92210
Hawthorne City Hall
Administrative Office
4455 W. 126th Street
Hawthorne, CA 90250
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
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
CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: 2
CONSENT AGENDA
2. Approve Minutes from April 18, 2024, Executive Committee Meeting
REGULAR AGENDA
3. Review Draft Agenda for the June 6, 2024, Board of Directors Meeting
4. Receive Presentation on FY 2024-25 Draft Budget
5. Oral Update from the CEO on CPA Operations
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT REGULAR MEETING ON JUNE 20, 2024*
*This meeting may be cancelled due to the CPA Board of Directors retreat on June 21, 2024.
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 2
To: Executive Committee
Subject: Approve Minutes from the April 18, 2024 Executive Committee Meeting
Date: May 16, 2024
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3
Executive Committee Item 2
MINUTES
Executive Committee of the
Clean Power Alliance of Southern California
Special Meeting
Thursday, April 18, 2024
1:00 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
Executive Conference Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
KC Kimpton Marlowe Hotel
25 Edwin H. Land Blvd.
Cambridge, MA 02141
Sheraton Grand Sacramento Hotel
1230 J Street
Sacramento, CA 95814
Signia by Hilton San Jose
Empire Conference Room
170 South Market St.
San Jose, CA 95113
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Los Angeles County Hall of Administration
Sybil Brand Conference Room, Room 372
500 West Temple Street
Los Angeles, CA 90012
Ojai City Hall
Conference Room
401 S Ventura St.
Ojai, CA 93023
Roll Call
Agoura Hills Deborah Klein Lopez Chair Remote
Beverly Hills Julian Gold Committee Member Remote
Camarillo Susan Santangelo Committee Member Remote
Carson Cedric Hicks Committee Member Remote
Hawthorne Alex Monteiro Committee Member Remote
Los Angeles County Lindsey Horvath Vice Chair Remote
Ojai Betsy Stix Committee Member Remote
Sierra Madre Robert Parkhurst Committee Member Remote
Ventura County Vianey Lopez Vice Chair Remote
*All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
Agenda Page 4
Executive Committee Item 2
CONSENT AGENDA
1. Approve Minutes from March 21, 2024, Executive Committee Meeting Motion: Committee Member Gold, Beverly Hills
Second: Committee Member Hicks, Carson
Vote: The consent agenda was approved by a roll call vote
REGULAR AGENDA
2. Oral Update from the CEO on CPA Operations
Ted Bardacke, CEO, provided an update on the Board retreat.
3. Review Draft Agenda for the May 2, 2024, Board of Directors Meeting Mr. Bardacke discussed the draft agenda. The consent agenda includes appointments to the Community Advisory Committee, a contract amendment with Arlington, and two contract items. The regular agenda includes the election of new Executive Committee at-large positions, discussion of a rates approach, approval of power purchase agreements and review of budget priorities.
4. (a) Receive Presentation on FY 2024-25 Rates and (b) Recommend a Rate Setting Approach to the Board at its May 2, 2024 Meeting
Karen Schmidt, Director of Rates and Strategy, provided a presentation on the item. The four components to the recommendation are product pricing differentials, total bill comparison levels for residential and small business rates, updating subset rates, and the rate approach for the new member communities.
Considerations for the FY 2045-25 rates include competitiveness with SCE, CPA’s reserve goals, and the price spread between CPA’s three retail rate products:
Lean, Clean, 100% Green. The new product content targets are based on Scenario 3, which are the most achievable. Ms. Schmidt presented a timeline of the process.
Ms. Schmidt presented a competitiveness comparison between CPA and SCE total bills and how rate changes would impact financial reserves, with Low, Medium, and High Reserve projections. The competitiveness comparisons are related to financial metrics such as contributions to net position, reserve percentage, and Days Liquidity on Hand. CPA’s customer total bills are expected to increase due to SCE’s increasing delivery rates. Subset rates comprise less than 1% of CPA large commercial and agricultural customers and staff recommends rate-setting based on the current cost of service. Staff also recommends that new member communities’ total bill comparisons and reserve targets be set at the same level as all other communities. New CPA members starting service in October 2025 will start at SCE’s 2024 vintage PCIA rates. Ms.
Schmidt also reviewed proposed rate pilots for FY 2024-25, including EV charging incentives for customers and a discounted rate option to retain large commercial and industrial customers.
Committee Member Parkhurst asked about the impact of the CPUC’s fixed charges decision on rates and possible increases for subset customers. Mr.
Bardacke explained that it will impact the delivery side of customer bills so there is no impact to either CPA rate setting or bill comparisons. Committee Member Hicks Agenda Page 5
Executive Committee Item 2
asked about reserve targets; Mr. Bardacke noted the target is 40%, adding that CPA would be above 30% in both the High and Medium reserve levels. Only the Low reserve scenario would present a risk to meeting reserve targets. Committee Member Hicks expressed support for the Medium Reserve option to prevent sharp increases in energy costs for residents. Chair Klein Lopez expressed support for the Medium Reserve scenario as a way to offer customers a lower rate product option than SCE. Committee Member Parkhurst stated his support for the High Reserve scenario as it would create a larger reserve cushion, especially at a time when procuring energy is challenging. Vice Chair Horvath stated support for the Medium Reserve scenario because it strikes a balance between building reserves, being competitive, and considers all member communities as CPA develops its rates.
Staff discussed CPA’s financial stability in the event it faces significant volatility in the energy market. David McNeil, Chief Financial Officer, noted that staff will be working on modeling to develop a contingency amount for budget purposes, taking into consideration the unprecedented adverse market events happening in the California energy industry and the large range of uncertainty in the marketplace.
Matt Langer, Chief Operating Officer, added that every year, except in 2021, CPA was able to offer one product with a discounted rate, and opined that the Medium Reserve scenario will likely maintain the ability to offer a lower cost option.
Committee Member Gold stated support for the High Reserve option, noting that the reserve balance is currently 40% lower than projected. He commented that lowering CPA’s rates when SCE is increasing its transmission rates would mean subsidizing SCE’s increases, and CPA’s rates should not be tied to SCE’s.
Committee Member Gold noted that keeping subset rates based on cost of service under the High Reserve scenario would make a significant difference in building reserves. Committee Member Monteiro expressed support for the High Reserve option, pointing out the $1 and $2 difference between the Medium and High customer bills. Committee Members Santangelo, Stix, and Vice Chair Lopez also agreed that the High Reserve would make a small difference for ratepayers but would make a significant impact in CPA reserves.
In response to Vice Chair Horvath’s inquiry about marketing the High reserve scenario, staff responded that the Lean product would be marketed as a parity rate. Even as CPA works to separate itself from SCE, customers always want to know how CPA’s rates compare to SCE’s. It’s helpful to be able to offer a money-saving option when a customer is considering opting out, especially as rates increase. Vice Chair Horvath stated that the discussion at the full Board will determine the focus of the organization, whether to offer options that appeal to diverse communities or more narrowly focused on clean energy and higher reserves. Vice Chair Horvath opined that the Medium Reserve option makes sense financially and maintains diversity in rates for customers. Committee member Monteiro inquired whether CPA could adopt the Medium Reserve for a six-month period, then switch to the High Reserve option if needed. Mr. Bardacke noted that while it can be done, CPA prefers to do one rate setting a year. Committee Member Hicks added that it’s important to provide clean energy at an affordable rate, and specifically, Carson residents were sold on CPA because their bills would not substantially increase. Committee Member Parkhurst asked about the Lean product content comparisons to SCE. Mr. Bardacke explained that the Lean product will not have renewables in 2025 and GHG levels may be at parity with Agenda Page 6
Executive Committee Item 2
SCE. Committee Member Parkhurst noted that the Lean and Clean products are carbon-free even if they don’t include renewables and stated that customers will pay slightly more but receive a product that is 30% or more renewables. Chair Klein Lopez expressed support for the Medium Reserve option because CPA is not in a delicate financial situation and reserves are building in a positive trend.
CPA will be under a lot of scrutiny with new customers and it’s meaningful to have a rate option lower than SCE.
Motion: Committee Member Monteiro, Hawthorne
Second: Committee Member Hicks, Carson
Vote: The staff recommendations in Item 4 were approved by roll call vote, with 5 votes for the High Reserve option and 4 votes for the Medium Reserve option.
After the vote, staff introduced the idea of making adjustments to the Medium Reserve rate option, and after discussion, the Committee reached unanimous consensus to put forward to the Board a recommendation for the Medium Reserve option offering Lean at 1% less, Clean at 0% or parity, and 100% Green at 5% more. Mr. Bardacke noted that staff would need to run new calculations related to this proposal with regard to the reserve target.
5. Receive Presentation on FY 2024-25 Budget Priorities Ted Bardacke, CEO, presented the budget process and FY 2024/25 operational priorities that include achieving financial targets, meeting renewable procurement and GHG emissions targets, helping individual customers reduce their bills, investing in communications and marketing to reach customers, and attracting and retaining high-quality CPA staff. Operating expenses are projected to increase about 20%, driven mostly by increased spending on customer programs, communications, and staffing. Managing CPA’s $1.4 billion of annual energy costs requires investment in software and systems licensing and implementation, as well as highly trained staff. Mr. Bardacke presented information about two new customer programs: Managed Electric Vehicle Charging and Efficient Cooling for CARE Customers. Mr. Bardacke also reviewed the Marketing and Communications and staffing budgets. Overall, CPA has been successful with employee retention.
Vice Chair Horvath praised the staff retention program and expressed excitement for the two new incentive programs related to efficient cooling and for EV charging.
Regarding communications, she encouraged staff to pursue earned media and continue outreach about CPA’s successes. Chair Klein Lopez recognized that CPA is in a strong position and staff has done a good job retaining employees and minimizing the volatility in the industry. She remarked that the budget presentation demonstrates CPA is expanding its programs and outreach, which is vital to its mission.
COMMITTEE MEMBER COMMENTS
There were no committee member comments.
ADJOURN
Chair Klein Lopez adjourned the meeting at 2:52 p.m.
Agenda Page 7
Staff Report – Agenda Item 3
To: Executive Committee
From: Ted Bardacke, Chief Executive Officer
Subject: Review Draft Agenda for the June 6, 2024 Board of Directors Meeting
Date: May 16, 2024
Staff will provide an overview of the proposed agenda items for the June 6, 2024 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 June Board meeting.
Quarterly Board Reports
Standard quarterly board reports (Financial Results, Risk Management, Communications & Marketing) will be provided. A new quarterly report on Power Ready status will also be added.
Banker-Dealer and Broker-Dealer Accounts Proposal
Beginning in early 2024, staff evaluated banker-dealer and broker-dealer service offerings that would enable CPA to invest directly in US Treasury securities and other low-risk instruments consistent with its Investment Policy, such as Federal Agency Securities, which are bonds issued by federal agencies and government sponsored entities (GSEs).
Agenda Page 8
Executive Committee Item 3
Staff will present a recommendation and Resolution to the Board for its consideration authorizing staff to a) open banker-dealer or broker-dealer accounts with each of US Bank, the Royal Bank of Canada, and Morgan Stanley for the purpose of purchasing US Treasury securities and b) open a custodial account at US Bank for the purposes of delivering and safekeeping all of CPA’s purchased securities. Staff expect that investment in these securities will meet CPA’s Investment Policy objectives (listed in order of importance) of safety, liquidity, and return on investment.
Arlington Contract Amendment
Staff is in the process of negotiating an amendment to its long-term Power Purchase Agreement with the Arlington Solar + Storage project to clarify certain contract provisions related to contract settlements. Should the negotiation be successful, the amendment may be presented to the Board for consideration.
Creative Services Contract(s)
During Fiscal Years 2021-22, 2022-23, and 2023-24 CPA contracted with Fraser Communications and Pastilla Inc for creative services and web development services as part of its Professional Services Agreements (PSAs) to support program marketing and growth of CPA’s brand awareness. Both contracts conclude in June at the end of the current fiscal cycle. In Fiscal Year 2024-25, CPA’s Communications and Marketing team is seeking creative and web development services to support the growth of CPA customer programs and bolster brand awareness. A Request for Proposals (RFP) for comprehensive creative services launched in April 2024 and responses are currently in review. Should negotiations with a selected vendor(s) be successful, we anticipate bringing one or more proposed contracts to the Board for consideration at the June Board meeting. The expected not-to-exceed amount is $1.3 million and is dependent on the Board-approved Fiscal Year 2024-25 budget being proposed at the same meeting.
Agenda Page 9
Executive Committee Item 3
REGULAR AGENDA
The following items are recommended for inclusion on the Regular Agenda of the June Board meeting.
FY 2024/25 Rates Approval
At the May 2, 2024 Board Meeting the Board adopted the following approach for FY 2024/25 rate setting:
a. Establish a reserve percentage target of 38-41% with total bill comparison targets for residential and small business customers of 100% Green Power rates at a 5% premium, Clean Power at a 0% discount, and Lean Power at a 1% discount to SCE rates as of June 1, 2024;
b. Update rates for large commercial, pumping and agriculture, and streetlighting rate classes to reflect CPA’s current cost of service (COS) and based on the selected reserve target;
c. Set total bill comparisons for customers in the cities of Hermosa Beach, Monrovia, and Santa Paula at the same total bill comparison targets as customers that began to receive service in 2018-2020 based on the selected reserve option.
This approach will offer protection against market volatility and put reserves at or near the midpoint of the Board’s reserve targets consistent with the Board-approved Reserve Policy, while maintaining a strong competitive position.
At the June meeting, staff will present detailed rates and resolutions to the Board for approval based on this approach.
FY 2024/25 Budget Approval
This item will be subject to a separate presentation to the Executive Committee.
Approval of Energy Advisor Contract
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 Agenda Page 10
Executive Committee Item 3
electrification, and local procurement. In 2023, an updated “action plan” to expand and enhance approaches under each program pillar was developed following feedback from the Board, the Community Advisory Committee, member agency staff, and other key stakeholders. This update included a new program concept, the Energy Advisor, that would help support residential and small business customers through the complexity of the electrification process.
The Energy Advisor would support CPA’s residential and small business customers by offering phone, email, and chat support for electrification projects. This will include virtual energy assessments, customized electrification plans, information on available rebates and incentives (including federal tax credits), and guidance on finding and selecting a contractor.
Staff is finalizing negotiations for a professional services agreement that will support the Energy Advisor program. Should the negotiations be successful the agreement will be presented for consideration at the June Board meeting, along with an overview of the program in general.
Approval of Power Purchase Agreement(s)
Staff is in the process of negotiating a long-term, bilateral, contract approved by the Energy Committee. Should the negotiation be successful, the PPA may be presented to the Board for consideration.
ATTACHMENT
1. Draft June 6, 2024 Board of Directors Agenda
Agenda Page 11
Executive Committee Item 3
Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, June 6, 2024
2:00 p.m.
CALL TO ORDER AND PLEDGE OF ALLEGIANCE
ROLL CALL
GENERAL PUBLIC COMMENT
CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Section 54956.9: 2
CONSENT AGENDA
2. Approve Minutes from April 4, 2024, Board of Directors Meeting
3. Adopt Resolution for Banker-Dealer and Broker-Dealer Accounts Proposal
4. Approve Arlington Contract Amendment
5. Approve Creative Services Contract
6. Receive and File Bill Positions May 2024 Monthly Report
7. Receive and File Monthly Community Advisory Committee Report
REGULAR AGENDA
Action Items
8. Adopt Resolution for FY 2024/25 Rates
9. Approve FY 2024/25 Budget
10. Approve Energy Advisor Contract
11. Approve Power Purchase Agreement
COMMITTEE CHAIR UPDATES
MANAGEMENT REPORT
BOARD MEMBER COMMENTS
REPORT FROM THE CHAIR
ADJOURN – NEXT MEETING ON JULY 11, 2024
Agenda Page 12
Staff Report – Agenda Item 4
To: Executive Committee
From: David McNeil, Chief Financial Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Draft FY2024/25 Budget
Date: May 16, 2024
RECOMMENDATION
Receive presentation from staff.
ATTACHMENTS
1. Presentation Draft FY2024/25 Budget
2. Draft FY2024/25 Budget
Agenda Page 13
Draft FY 2024/25 Budget
May 16, 2024
Agenda Page 14
Summary
2 Key FY 2024/25 Budget Takeaways
Budgeted revenues are projected to be nearly flat year over year and reflect the rate setting approach approved by the Board at its May board meeting, an allowance for bad debt, and the full year effect of default product changes in October 2023 and new community enrollments in March 2024
Budgeted cost of energy is up by 12% year over year reflecting increased costs of Resource Adequacy and Renewable Energy. Increases to operating expenses reflect CPA’s FY 2024/25 budget priorities presented at the April ExCom and May Board meetings The budgeted increase in the net position of $131 million is lower than the prior year but would bring CPA’s reserve percentage to 40% by June 30, 2025 consistent with CPA’s Reserve Policy
Agenda Page 15
FY 2024/25 Budget Process
January – April 2024 (Staff) – FY 2024/25 Goal Setting, Departmental Budgeting, Rate Design Planning, Energy Cost Projections & Consolidated Budget Planning (ongoing) April 18, 2024 (Executive Committee) – Budget Priorities April 24, 2024 (Finance Committee) – Budget Priorities & Draft FY 2024/25 Operating Expenses Budget May 2, 2024 (Board) – Budget Priorities
May 16, 2024 (Community Advisory Committee) – Budget Priorities and Draft FY 2024/25 Budget May 16, 2024 (Executive Committee) – Draft FY 2024/25 Budget May 22, 2024 (Finance Committee) – Draft FY 2024/25 Budget June 6, 2024 (Board) – Proposed FY 2024/25 Budget
Agenda Page 16
3 Net Energy Revenue
4 Budgeted revenues include the FY 2024/25 rate approach approved by the Board on May 2, 20241 which would result in a small rate and revenue decrease offset by increased revenue from new CPA member agency enrollments in March 2024 and default product changes in October 2023 Bad debt expense is budgeted at 1.9% of revenue or $30.6 million up from 1.77% of revenue included in the FY 2023/24 Budget
Energy costs (+12%) reflect higher Resource Adequacy and Renewable Energy costs arising from increasing market prices/constrained supply and a contingency equal to 6% of energy costs
1. 2024/25 Rate Approach: Lean -1%, Clean 0%, 100% Green +5% compared to Residential/Small Business SCE base rates
A B C D E
FY 2023/24 Budget FY 2024/25 Budget
Budget
Difference ($)
Budget
Difference (%)
1 Revenue - Electricity net 1,576,284,000 1,582,354,000 6,070,000 0.4% 2 Transfer from Fiscal Stabilization Fund - - - 0%
3 Other revenue 3,238,000 2,939,000 (299,000) -9%
4 TOTAL REVENUE 1,579,523,000 1,585,293,000 5,772,000 0.4% 5 TOTAL ENERGY COSTS 1,243,338,000 1,393,295,000 149,957,000 12% 6 NET ENERGY REVENUE 336,185,000 191,998,000 (144,185,000) -43% Draft
Agenda Page 17
FY 2024/25 Operating Income and Reserves
5 The 21% increase in operating expenses reflect investments in customer programs, marketing & communications, staffing, and G&A (notably software). Operating expenses other than the aforementioned items are budgeted to increase by 10.3% year- over-year
The budgeted increase in the net position would bring CPA’s reserve percentage to 40% by June 30, 2025 or the mid-point of the target range outlined in the Reserve Policy. Reserves are the sum of the Net Position and Fiscal Stabilization Fund (also known as balance sheet equity) and are not equivalent to or held as cash Days liquidity on hand (DLOH) would increase to approximately 150 days consistent with the Reserve Policy target.
DLOH is equal to the sum of cash, investments and available line of credit divided by average daily expenses
A B C D E
FY 2023/24 Budget FY 2024/25 Budget
Budget
Difference ($)
Budget
Difference (%)
TOTAL OPERATING EXPENSES 55,661,000 67,509,000 11,848,000 21% OPERATING INCOME 280,524,000 124,489,000 (156,035,000) -56% NON OPERATING REVENUE (EXPENSE) 2,751,000 8,858,000 6,107,000 222% CHANGE IN NET POSITION 283,275,000 133,347,000 (149,928,000) -53% NET POSITION BEGINNING OF PERIOD 221,547,520 504,822,520 283,275,000 128% NET POSITION END OF PERIOD 504,822,520 638,169,520 133,347,000 26%
FISCAL STABILIZATION FUND - - -
RESERVES END OF PERIOD (Net Position + FSF) 504,822,520 638,169,520 133,347,000 26% Agenda Page 18
Revenues are budgeted at $1.58 billion
• an increase of $6 million or .4% year over year
• includes an average rate decrease, increase in bad debt reserve and prior fiscal year new community enrollments and default product changes
Costs of energy are budgeted at $1.39 billion
• an increase of $149.9 million or 12% year over year
• due to ongoing supply constraints and elevated prices for resource adequacy and renewable energy Operating costs are budgeted at $67.5 million
• an increase of $11.8 million or 21% year over year
• reflects the operational priorities presented to the Board in May and are driven by investments in programs and communications, staffing and software and technology
The budgeted increase in the net position of $133.3 million is 53% lower than the prior year however CPA would still make significant progress towards meeting its Reserve Policy targets
CPA financial metrics continue to compare favorably with peer CCAs 6 Summary
Agenda Page 19
Questions?
Agenda Page 20
FY 2023/24 Budget FY 2024/25 Budget
Budget
Difference ($)
Budget
Difference (%)
Revenue ‐ Electricity net 1,576,284,000 1,582,354,000 6,070,000 0.4% Transfer from Fiscal Stabilization Fund ‐ ‐ ‐ 0% Other revenue 3,238,000 2,939,000 ‐ (299,000) 9% TOTAL REVENUE 1,579,523,000 1,585,293,000 5,772,000 0.4% TOTAL ENERGY COSTS 1,243,338,000 1,393,295,000 149,957,000 12% NET ENERGY REVENUE 336,185,000 191,998,000 ‐ (144,185,000) 43%
OPERATING EXPENSES
Staffing 20,072,000 24,076,000 4,004,000 20% Technical services 1,809,000 1,936,000 127,000 7% Legal services 1,054,000 1,089,000 35,000 3% Other services 1,975,000 2,257,000 282,000 14% Communications and marketing services 2,157,000 3,982,000 1,825,000 85% Customer notices and mailing services 1,023,000 842,000 (181,000) ‐18% Billing data management services 11,262,000 12,041,000 779,000 7% Service fees ‐ SCE 2,165,000 2,250,000 85,000 4% Customer programs 9,643,000 13,208,000 3,565,000 37% General and administration 4,501,000 5,828,000 1,327,000 29% TOTAL OPERATING EXPENSES 55,661,000 67,509,000 11,848,000 21% OPERATING INCOME 280,524,000 124,489,000 ‐ (156,035,000) 56% Finance and interest expense 1,563,000 645,000 ‐ (918,000) 59% TOTAL NON OPERATING EXPENSES 1,563,000 645,000 ‐ (918,000) 59% Interest Income 4,314,000 9,503,000 5,189,000 120% TOTAL NON OPERATING REVENUE 4,314,000 9,503,000 5,189,000 120% NON OPERATING REVENUE (EXPENSE) 2,751,000 8,858,000 6,107,000 222% CHANGE IN NET POSITION 283,275,000 133,347,000 ‐ (149,928,000) 53% NET POSITION BEGINNING OF PERIOD 221,547,520 504,822,520 283,275,000 128% NET POSITION END OF PERIOD 504,822,520 638,169,520 133,347,000 26% FISCAL STABILIZATION FUND ‐ ‐ ‐ RESERVES END OF PERIOD (Net Position + FSF) 504,822,520 638,169,520 133,347,000 26% Other Uses
Capital Outlay 225,000 325,000 100,000 44% Depreciation & Amortization (622,000) (794,000) (172,000) 28% CHANGE IN FUND BALANCE 283,672,000 133,816,000 ‐ (149,856,000) 53% Note: Funds may not sum precisely due to rounding
CLEAN POWER ALLIANCE of SOUTHERN CALIFORNIA
Fiscal Year 2024/2025 Budget
Draft
Agenda Page 21
Staff Report – Agenda Item 5
To: Executive Committee
From: Ted Bardacke, Chief Executive Officer
Subject: Oral Update from the Chief Executive Officer on CPA Operations Date: May 16, 2024
The CEO will provide an oral update on CPA operations including a draft of the upcoming June 21, 2024 Board Retreat Agenda.
ATTACHMENT
1. Draft Board Retreat Agenda
Agenda Page 22
DRAFT for Executive Committee Review
Clean Power Alliance 2024 Board Retreat
June 21, University Club, USC
9am – 2pm
9:00: Registration/Continental Breakfast/Opening Remarks/Agenda Review 9:15: Customer/Community Programs
• Objective: Educate Board Members on Current Suite of Programs • Format: Quick overview followed by Board members being able to go to different tables (in 10–15-minute chunks) staffed by Program Managers of CPA programs Break
10:15: CPA Expansion
• Objective: Get guidance from the Board about what considerations to prioritize when looking at future expansion of CPA service territory. Considerations include:
o Are there certain internal thresholds around power supply, financial targets, and rate competitiveness that should be met before further expansion takes place?
o Are there any changes to Governance/Board structure that should be examined when/if future expansion takes place?
o Should current expansion parameters (filling in geographic holes, adding key load centers, enhancing the diversity of membership) be altered when pursuing new cities such that CPA maintains geographic balance and mission alignment?
• Format: Five small groups teamed with staff expert(s) discuss thresholds/changes/alterations and then report out findings to plenary Break
11:15: Big Ideas, New Strategies, The Next Big Thing (BHAG) • Objective: Brainstorm about future CPA goals in the areas of energy supply, new business opportunities, marketing, transportation electrification, and experimental rate design
• Format: Introduction sharing themes/ideas that have emerged from staff discussions in these areas. Participants work individually to write down ideas and Agenda Page 23
DRAFT for Executive Committee Review
then discuss with theme groups. Theme groups picks 1-2 ideas to “pitch” to plenary. Participants show preferences with sticky dots Break
12:30: Lunch with Speaker(s)
1:30: Installation of 2024-2026 Executive Committee
Agenda Page 24