Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, September 25, 2024
11:00 a.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 at the following locations:
Camarillo City Hall
Administrative Conference Room
601 Carmen Drive
Camarillo, CA 93010
Claremont City Hall
Council Office
207 Harvard Avenue
Claremont, CA 91711
Thousand Oaks City Hall
City Manager’s Office, Council Office #1
2100 Thousand Oaks Blvd.
Thousand Oaks, CA 91362
Rolling Hills Estates City Hall
Conference Room
4045 Palos Verdes Drive North
Rolling Hills Estates, CA 90274
Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91302
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 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, Agenda Page 1
the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
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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 & ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from the June 26, 2024, Finance Committee Meeting
2. Receive and File August 2024 Risk Management Team Report
3. Receive and File August 2024 Investment Report
4. Receive and File July 2024 Financial Dashboard
REGULAR AGENDA
5. Report from the Chief Financial Officer
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON OCTOBER 30, 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 1
To: Finance Committee
Subject: Approve Minutes from June 26, 2024 Finance Committee Meeting Date: September 25, 2024
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3
Finance Committee Item 1
MINUTES
Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, June 26, 2024, 11:00 a.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:
Camarillo City Hall
Mayor’s Office
601 Carmen Drive
Camarillo, CA 93010
Clean Power Alliance
Executive Conference Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Claremont City Hall
Conference Room
207 Harvard Avenue
Claremont, CA 91711
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Rolling Hills Estates City Hall
Conference Room
4045 Palos Verdes Drive North
Rolling Hills Estates, CA 90274
Thousand Oaks City Hall
City Manager’s Office, Council Office #1
2100 Thousand Oaks Blvd.
Thousand Oaks, CA 91362
CALL TO ORDER & ROLL CALL
Committee Chair Santangelo called the meeting to order at 11:01 a.m. and Gabby Monzon, Clerk of the Board, conducted roll call.
Roll Call
Camarillo Susan Santangelo Committee Chair Remote
Calabasas Ed Albrecht Committee Member Remote
Carson Reata Kulcsar Committee Member Remote
Claremont Corey Calaycay Committee Member Remote
Rolling Hills Estates Steve Zuckerman Committee Member Remote Santa Monica Pam O’Connor Committee Member Absent
Thousand Oaks David Newman Committee Member Remote
All votes are unanimous unless otherwise stated.
Agenda Page 4
Finance Committee Item 1
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from the May 29, 2024, Finance Committee Meeting
2. Receive and File May 2024 Risk Management Team Report
3. Receive and File May 2024 Investment Report
4. Receive and File April 2024 Financial Dashboard
Motion: Committee Member Newman, Thousand Oaks
Second: Committee Member Albrecht, Calabasas
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
5. Report from the Chief Financial Officer
David McNeil, Chief Financial Officer, reported that CPA closed the month of April with a significant contribution to the net position at $34 million with a strong cash position.
6. A. Recommend that the Board of Directors Approve up to Three Prepayment Transactions with either Goldman Sachs (GS), Morgan Stanley (MS), or Royal Bank of Canada (RBC) as CPA’s Underwriter & Prepaid Supplier, provided that Staff will be Authorized to Complete No More Than Three Transactions in Total; B. Recommend that the Board of Directors Approve the Delegation of Authority to Staff to Select Funding Recipient(s) for Prepayment Transactions Completed with GS and/or MS; If RBC is selected as CPA’s Underwriter & Prepaid Supplier, RBC will also Serve as the Funding Recipient for any Prepayment Transactions Completed with RBC
Kate Freeman, Strategic Finance Manager, presented the proposed Clean Energy Prepayment Transactions; in order to preserve flexibility, having a suite of three options will ensure that CPA receives the best available pricing and deal terms. Current market conditions are positive, and staff views the risks as acceptable. Ms. Freeman provided details about the prepay transactions noting that bonds will be limited obligations of CCCFA, not obligations of CPA.
In response to Committee Member questions about market conditions and the issuance of bonds, Ms. Freeman explained that market conditions are favorable; the achieved savings levels for initial prepays issued in the past 6 months have been between 10-15% for the participating CCA. Ms. Freeman also elaborated on the $4.5 million estimate in prepay transactions, noting that it is a conservative estimate that takes into consideration several factors, including the number of long-term PPAs CPA will execute over the next two years, thereby providing certainty to prepaid suppliers. Mr. McNeil clarified that prepay transactions do include termination provisions for CPA, including not meeting minimum savings. Staff also discussed non-energy unassigned obligations, for example CAISO fees and scheduling coordinator costs that are not included in the prepay transaction.
Responding to questions about committing to 30-year bonds despite only executing 10– 15-year PPAs, Ms. Freeman noted that CPA is able to replace expired PPAs with newly executed PPAs. Lastly, staff identified the Chief Executive Officer as the delegated authority that will select funding recipient(s) for prepayment transactions.
Motion: Committee Member Calaycay, Claremont
Second: Committee Member Zuckerman, Rolling Hills Estates Vote: Item 6 was approved by a roll call vote.
Agenda Page 5
Finance Committee Item 1
COMMITTEE MEMBER COMMENTS
In response to Committee Member Zuckerman’s question about past due accounts, Mr. McNeil noted there hasn’t been much change in balances and SCE’s collection efforts have been slow.
Staff will provide an update later in the year.
ADJOURN
Committee Chair Santangelo adjourned the meeting at 11:43 a.m.
Agenda Page 6
Staff Report – Agenda Item 2
To: Finance Committee
From: Lyon Hardgrave, Director, Energy Risk Management
Approved By: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: Receive and File August 2024 Risk Management Team Report Date: September 25, 2024
August 2024 RMT REPORT
Key Actions
• Reviewed the counterparty credit exposure summary
• Reviewed May 2024 day-ahead load forecast performance • Reviewed July 2024 market performance
• Reviewed energy positions and approved 2024-2028 hedge proposal for monthly RFO
• Reviewed positions for Resource Adequacy (RA), RPS and Carbon-Free energy products (CF)
• Reviewed 2024-2025 COD impacts on RA compliance
• Reviewed the 2025-2027 slice of day RA position
• Reviewed Energy Risk Management Policy (ERMP) compliance for RA, REC, CF, and Energy
• Reviewed long-term energy contract amendments and terminations • Reviewed August 2024 CRR Allocations
• Reviewed and approved the Negative REC Price Strategy Policy Compliance
Policy Deviation Required Action
In April 2024, the energy
hedge position for the third
quarter of 2027 (July to
September) exceeded the
maximum hedge limit for
that period.
None.
This policy deviation arises from CPA continuing to enter into long term contracts for renewable energy consistent with its objective to reduce exposure to the short-term renewable energy market.
Agenda Page 7
Finance Committee Item 2
This policy deviation also arises from the latest load
forecast which includes a reduction in demand in Q3 2027 which increased CPA's hedge percentage for this period.
This deviation is expected to be resolved by Q3 2025 as the electricity production period nears and the
corresponding policy hedge limit maximums increase
above the level of energy hedges under contract.
ATTACHMENT
None.
Agenda Page 8
Staff Report – Agenda Item 3
To: Finance Committee
From: David McNeil, Chief Financial Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Receive and File August 2024 Investment Report Date: September 25, 2024
RECOMMENDATION
Receive and file.
ATTACHMENT
1. August 2024 Report
Agenda Page 9
Clean Power Alliance Investment Report
August 2024
Statement
Local Agency Investment
Fund (LAIF)
Certificates of Deposit
(CDs)
California Asset Management
Program (CAMP)
Beginning Balance 16,778 80,000,000 216,543,738
Deposits - 10,000,000 67,000,000
Maturities & Withdrawals - 10,000,000 0
Ending Balance 16,778 80,000,000 284,636,283
Interest Earned* 64 365,210 1,092,546
Average Yield** 4.58% 5.14% 5.41%
Weighted Average Term to Maturity (Months) 7.0 3.7 2.0
* Interest earned on LAIF is based on daily compounding, account balances and monthly effective yield published by LAIF. Interest earned on CDs is based on the fixed interest rate of each CD and is paid out in full at maturity. **Average yield for LAIF & CAMP is reported on a monthly basis; average yield for CDs is determined based on a weighted average annual basis Transaction Type Deposit Maturity
Depository River City Bank River City Bank
Par Amount 10,000,000 10,000,000
Rate 4.44% 5.43%
Placement Date 8/29/2024 2/29/2024
Maturity Date 8/28/2025 8/29/2024
Term (weeks) 52 26
Interest Earnings (Total) 452,705 274,434
Summary of Transactions (CDs)
Agenda Page 10
Staff Report – Agenda Item 4
To: Finance Committee
From: David McNeil, Chief Financial Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Receive and File July 2024 Financial Dashboard Date: September 25, 2024
RECOMMENDATION
Receive and file.
ATTACHMENT
1. July 2024 Financial Dashboard
Agenda Page 11
CUSTOMERS
Summary of Financial Results
Definitions:
Accounts: Active Accounts represents customer accounts of active customers served by CPA per Calpine Invoice Participation Rate %: Participation Rate represents active accounts divided by eligible CPA accounts YTD Sales Volume: Year-to-date sales volume represents the amount of energy (in gigawatt hours) sold to retail customers Revenues: Retail energy sales less allowance for doubtful accounts Cost of energy: Cost of energy includes direct costs incurred to serve CPA’s load Operating expenses: Operating expenditures include general, administrative, consulting, payroll, and other costs required to fund operations Net operating income represents the difference between revenues and expenditures before interest income and expense, and capital expenditures
Non-Operating Income: interest income arising from deposits and investments net of borrowing costs and fees Investments: liquid and high-quality securities with maturities of 91 days or more Cash and Cash Equivalents: Includes bank deposits and high quality and liquid securities with maturities of less than 90 days Year to date (YTD): Represents the fiscal period beginning July 1, 2024 YTD
July
2024
Financial Dashboard
Note: Numbers may not sum up due to rounding.
Active Accounts
1,043,767
Participation Rate
93.1%
YTD Sales Volume
1,106 GWh
July Volume
1,106 GWh
Agr/Oth
2% Com-Lg
20%
Com-Sm
28%
Res
50%
July Year-to-Date
in $000,000's Actual Budget Variance % Actual Budget Variance % Energy Revenues 175.9 171.1 4.8 3% 175.9 171.1 4.8 3%
Cost of Energy 171.0 179.1 -8.1 -5% 171.0 179.1 -8.1 -5% Net Energy Revenue 4.9 -8.0 12.9 4.9 -8.0 12.9
Operating Expenses 3.5 5.0 -1.5 -30% 3.5 5.0 -1.5 -30%
Operating Income 1.4 -13.0 14.4 1.4 -13.0 14.4
Non-Operating Income 1.4 0.9 0.5 52% 1.4 0.9 0.5 52%
Change in Net Position 2.8 -12.0 14.9 2.8 -12.0 14.9
In July 2024 CPA increased its net position by $2.8 million, $14.9 million higher than the budgeted decrease in the net position of $12 million.
July 2024 revenues were $175.9 million, $4.8 million or 3% higher than FY 2024/25 budget due to higher than normal temperatures in July. July cost of energy was $171 million, $8.1 million or 5% lower than the FY 2024/25 budget primarily due to the non-utilization of contingencies. Operating costs were 30% below budget due to lower than budgeted spending on general and administrative expenses, customer programs and other services, and the non-utilization of contingencies.
As of July 31st, 2024, CPA had unrestricted cash, cash equivalents, and investments of $373 million, and $159.853 million available in its bank line of credit representing 149 Days Liquidity on Hand. CPA is financially sound and in compliance with its bank and other credit covenants.
Agenda Page 12
Staff Report – Agenda Item 5
To: Finance Committee
From: David McNeil, Chief Financial Officer
Subject: Report from the Chief Financial Officer
Date: September 25, 2024
The CFO will provide an oral update on CPA’s July 2024 financial performance, FY 2024/25 monthly budget projections, investment and treasury operations and prepay transactions.
ATTACHMENT
1. Summary of Clean Energy Prepayment Transactions
Agenda Page 13
September 25, 2024
Summary of Clean Energy
Prepayment Transactions
Agenda Page 14
2 Summary of CPA Prepay Transactions
CPA has completed three prepayment transactions to-date, securing $184M of energy cost savings over the 2023-2032 period:
Transaction
Closing Date
Bond Par
Amount ($M)
Initial Term
(years)
Initial Period
Savings ($M)
Annual Initial Period
Savings ($M)
Prepay 1
(CCCFA Series 2023C) 02/23/23 $999 7.6 $58.7 $7.7
Prepay 2
(CCCFA Series 2023D) 06/15/23 $958 5 $32.4 $6.0
Prepay 3
(CCCFA Series 2024B) 08/27/24 $1,524 8 $93.0 $11.6
Total $184.0 $25.3
CPA is authorized to complete up to two additional prepayment transactions of up to $1.5 billion each
CPA plans to select an Underwriter & Prepaid Supplier later this month and complete its fourth prepay transaction in October market conditions permitting Agenda Page 15