Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, February 26, 2025
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:
Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91302
Camarillo City Hall
Administrative Conference Room
601 Carmen Drive
Camarillo, CA 93010
Carson City Hall
City Manager’s Conference Room
701 East Carson Street
Carson, CA 90745
Claremont City Hall
Council Office
207 Harvard Avenue
Claremont, CA 91711
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
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, 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 & ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from the December 3, 2024, Finance Committee Meeting
2. Receive and File January 2025 Risk Management Team Report
3. Receive and File October 2024 Investment Report
4. Receive and File Quarterly Financial Report
REGULAR AGENDA
5. Report from the Chief Financial Officer
6. Receive Presentation on FY 2024-25 Auditor Selection and Provide Staff with Direction
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON MARCH 26, 2025
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.
Staff Report – Agenda Item 1
To: Finance Committee
Subject: Approve Minutes from December 3, 2024, Finance Committee Meeting
Date: February 26, 2025
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Finance Committee Item 1
MINUTES
Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, December 3, 2024, 10:00 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 Member Calaycay called the meeting to order at 10:03 a.m. Ted Bardacke, Chief Executive Officer, conducted roll call.
Roll Call
Camarillo Susan Santangelo Committee Chair Absent
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.
GENERAL PUBLIC COMMENT
There was no public comment.
Finance Committee Item 1
CONSENT AGENDA
1. Approve Minutes from the October 30, 2024, Finance Committee Meeting
2. Receive and File October 2024 Risk Management Team Report
3. Receive and File October 2024 Investment Report
4. Receive and File September 2024 Financial Dashboard
5. Receive and File FY 2024/2025 Q1 Financial Report
Motion: Committee Member Newman, Thousand Oaks
Second: Committee Member Zuckerman, Rolling Hills Estates Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
6. Report from the Chief Financial Officer
David McNeil, Chief Financial Officer, provided an oral update on CPA’s first-quarter financial results. He highlighted that CPA had a successful summer, coming in ahead of budget primarily due to the non-utilization of contingencies. As part of the ongoing implementation of the Board-approved investment policy, Mr. McNiel reported that in October, CPA acquired $50 million in five-year Treasury securities. He also noted the completion of the fourth pre-pay transaction in November and mentioned that Mr.
Bardacke and Ms. Freeman are currently working on the fifth pre-pay transaction.
7. Bad Debt Reserve and Accounts Receivable Update
Mr. McNeil presented an update on bad debt and accounts receivable. He noted that past-due amounts for active commercial accounts have stabilized, while past-due amounts for active residential accounts remain high. He believes that the bad debt reserve has been conservatively estimated. Additionally, the unreserved portion of accounts receivable that are 90 days or more delinquent does not threaten the organization's financial health.
In response to Committee Member Zuckerman’s question about the “unapplied” on the charts, Mr. McNeil expressed that it is cash that has been received from a customer or that SCE received from a customer and has not been applied to an accounts receivable balance. Mr. McNeil also noted that if applied, it would reduce the receivable account balance, and if there were no accounts receivable, it would be returned to the customer.
Mr. McNeil explained that numerous unapplied problems arose when SCE changed its billing and collection software.
Committee Member Albrecht expressed concern regarding collections and suggested that CPA staff contact other utility providers to discuss their collections process. Mr. McNeil acknowledged Committee Member Albrecht’s feedback and added that there would be an Annual Utilities Meter to Cash Conference and participation could be considered.
COMMITTEE MEMBER COMMENTS
Committee Member Zuckerman asked about SCE rates, and Mr. Bardacke explained that a presentation was given to the Board, and that the summary would be in November’s Board meeting packet.
ADJOURN
Committee Member Calaycay, substituting for Committee Chair Santangelo, adjourned the meeting at 10:41 a.m.
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 January 2025 Risk Management Team Report Date: February 26, 2025
January 2025 RMT REPORT
Key Actions
• Reviewed the counterparty credit exposure summary
• Reviewed November 2024 day-ahead load forecast performance • Reviewed January 2025 market performance
• Reviewed energy positions and approved 2025-2028 hedge proposal for monthly RFO
• Reviewed positions for Resource Adequacy (RA), RPS and Carbon-Free energy products (CF)
• Reviewed SCE Projected PCL Content for 2025 and 2026
• Reviewed Sales Strategy for Vintage 2024 and 2025 PCC1 Length • 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 February 2025 CRR Allocations
• Reviewed and approved the Negative REC Price Strategy Finance Committee Item 2
Policy Compliance
Policy Deviation Required Action
Beginning in June 2024, the
renewable energy hedge ratio
exceeded the maximum hedge ratio
limit for 2027 due to the addition of
new renewable energy supply from a
PPA. Due to a calculation error, the
exceedance was not identified until
November 2024.
In November 2024, the renewable
energy hedge ratio exceeded the
maximum hedge ratio limit for 2028-
2030 due to a reduction in the
renewable energy product targets
that are used for long-term power
planning and position management.
None.
The deviations for 2027-2030 will resolve
themselves as CPA nears these years and the
maximum hedge ratio limits increase.
In the July 2025 annual ERMP update process,
CPA will consider increasing the maximum
hedge ratio limit for the Prompt Calendar Year
(PY) +2 and beyond to allow for a planning
margin to accommodate volumetric uncertainty
associated with electric consumption and
generation. This will align PY+2 and beyond with
the existing approach to maximum hedge ratio
limits in the current calendar year, PY and PY+1.
Adoption of higher hedge ratio limits in PY+2 and
beyond by the Board in July 2025 would cure the
2027-2030 renewable energy hedge ratio
deviations. CPA will also consider long-term
renewable energy product targets are part of the
2025 Integrated Resources Plan (IRP).
Beginning 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.
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.
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 December 2024 Investment Report Date: February 26, 2025
RECOMMENDATION
Receive and file.
ATTACHMENT
1. December 2024 Investment Report
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 Quarterly Financial Report
Date: February 26, 2025
RECOMMENDATION
Receive and file.
ATTACHMENTS
1. Quarterly Financial Report
Staff Report – Agenda Item 5
To: Finance Committee
From: David McNeil, Chief Financial Officer
Subject: Report from the Chief Financial Officer
Date: February 26, 2025
The CFO will provide an oral update on CPA’s financial results for the first half of fiscal year 2024/25.
Staff Report – Agenda Item 6
To: Finance Committee
From: Hui Lisano, Sr. Director of Finance and Accounting Reviewed by: David McNeil, Chief Financial Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Receive FY24-25 Auditor Selection Presentation Date: February 26, 2025
RECOMMENDATION
Receive FY24-25 Auditor Selection presentation and provide staff with direction.
ATTACHMENTS
1. Presentation on FY 2024-25 Auditor Selection
FY 2024/25
Auditor Selection
Feb 26, 2025
Summary
Each year CPA engages an independent auditor to audit its financial statements following its June 30 fiscal year end.
Following a competitive solicitation process, the Finance Committee selected Baker Tilly to audit CPA’s financial statements beginning in FY 2018/19 and for each of the subsequent 5 years. The contract amount has not exceeded $50k each year.
Bethany Ryers, the audit partner/principal from Baker Tilly, has served as the lead auditor on CPA’s audits for the past six years.
Assembly Bill 1345 requires local governments to rotate the lead audit partner after six consecutive years. CPA is not a local government but recognizes this as a pertinent guideline.
Staff will present options for selecting audit services for FY 2024/25 and subsequent years, and request direction from the Finance Committee. 2 Background
CPA’s Joint Powers Agreement requires a financial audit of its annual financial statements by an independent auditor.
CPA’s Bylaws authorize the Finance Committee to:
Select an Independent Auditor who shall perform a financial audit of the accounts of the Alliance on an annual basis. The Independent Auditor shall be accredited in the State of California and provide independent, accurate, and timely assessments of the Alliance’s financial activities in compliance with generally accepted government auditing standards.
3 Select auditors that perform their audit in accordance with Generally Accepted Government Auditing Standards.
The audit procurement process should be structured so that the principal factor in selecting an independent auditor is the auditor’s ability to perform a quality audit.
Enter into agreements of at least five years to allow continuity, minimize the potential for disruptions in connection with the independent audit, and help with audit start-up costs.
Actively seek the participation of all qualified firms, including the current auditors, assuming that their past performance has proven satisfactory. Where audit firm rotation does not result from this process, governments may consider requesting that senior engagement staff, such as engagement partners and senior managers, be rotated to provide a fresh perspective.
4 Key Recommendations from the Government
Finance Officers Association (GFOA)
Key Considerations for Auditor Selection
Electric Industry Experience and Expertise: Auditors with experience with municipal electric utilities and California CCAs will have the expertise and knowledge about accounting issues impacting our business, regulatory requirements, and compliance needs.
Reputation and Independence: The auditor should be impartial, act with professional skepticism, and provide an unbiased opinion with a reputation of objectivity and integrity.
Resources and Effectiveness: The audit staff is qualified and experienced, and the audit team can work cooperatively and effectively with management while maintaining objectivity.
Communication and Ongoing Support: The auditor should establish an open channel for communication and provide guidance on regulatory changes, assistance with accounting and internal controls issues, and advice on emerging risks and opportunities throughout the year.
Cost of the Audit: A reasonable fee level should be considered.
Comparing Different Types of Audit Firms
Audit Firm Category
Industry
Experience and
Expertise
Reputation and
Independence
Resources and
Effectiveness
Communication
and Ongoing
Support
Cost of the Audit Other Pros/Cons
Big Four International
Accounting Firms
(Deloitte, KPMG, PwC,
E&Y)
Electric utility
experience but no
experience with
CCAs in CA
Prestigious
reputation
Extensive resources
serving major
multinational and
public-traded corps,
but standardized
procedures that may
not suit our industry
Limited access to
audit partners to
discuss issues or
receive guidance on
new regulations and
emerging risk
High (expect >
$250k)
Pro: offering quality
assurance (at a cost)
Con: high staff
turnover reduces
continuity and
efficiency
Mid-tier Firms with Utility
Specialty (Baker Tilly,
Moss Adams)
Electric utility and
CCAs experience.
(MA has no
experience with
CCAs)
Well-regarded
Adequate resources
for mid-size
companies and more
focused & tailored
service offerings
More access to audit
partners to discuss
issues or receive
guidance on new
regulations and
emerging risk
Moderate (expect
$50k - $100k)
Pro: offering quality
assurance; less staff
turnover
Local Accounting Firms
(Pisenti & Brinker)
P&B has lots of
experience with
CCAs but limited
electric utility
experience.
Less prominent
reputation
Fewer resources;
Tools may not be
state-of-art.
More person-to-person attention and
direct interaction
with the audit partner
Low (expect $50k or
less)
6 Audit Services Options
1. Solicit written quotes from three qualified audit firms (e.g., Baker Tilly, Moss Adams, Pisenti Brinker).
2. Solicit proposals from any auditors including Big Four and local accounting firms.
Staff would present a summary of qualified bids to the Finance Committee at its May meeting and ask the Committee to select an auditor. 7 Questions?