Clean Power Alliance Finance Committee
May 28, 2025

Finance Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, May 28, 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
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
Claremont City Hall
Council Office
207 Harvard Avenue
Claremont, CA 91711

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 April 23, 2025, Finance Committee Meeting

2. Receive and File April 2025 Risk Management Team Report

3. Receive and File April 2025 Investment Report

4. Receive and File FY 2024/2025 Q3 Financial Report

REGULAR AGENDA

5. Report from the Chief Financial Officer

6. Approve the Selection of Baker Tilly as the Auditor for CPA’s Fiscal Year 2024/2025 Financial Statements, and Authorize CPA Staff to Enter Contract Negotiations for Financial Audit Services with Baker Tilly

7. Recommend Approval of the Proposed Fiscal Year 2025/2026 Budget to the Board of Directors at its June 5, 2025, Meeting

COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON JUNE 25, 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. Page 2
Staff Report – Agenda Item 1
To: Finance Committee
Subject: Approve Minutes from the April 23, 2025, Finance Committee Meeting
Date: May 28, 2025

RECOMMENDATION
Approve.

ATTACHMENT

1. Minutes

MINUTES
Finance Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, April 23, 2025, 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
Administrative Conference Room
601 Carmen Drive
Camarillo, CA 93010
Clean Power Alliance Office
Executive Conference Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91302
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

CALL TO ORDER & ROLL CALL
Chair Santangelo called the meeting to order at 11:00 a.m. and Annie Mendoza, Deputy 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 Absent
Claremont Corey Calaycay Committee Member Remote
Rolling Hills
Estates
Steve Zuckerman Committee Member Remote
Santa Monica Pam O’Connor Committee Member Present
Thousand Oaks David Newman Committee Member Absent
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 February 26, 2025, Finance Committee Meeting

2. Receive and File March 2025 Risk Management Team Reports

3. Receive and File March 2025 Investment Reports

4. Receive and File February 2025 Financial Dashboard
Motion: Committee Member Zuckerman, Rolling Hills Estates Second: Committee Member Albrecht, Calabasas
Vote: The consent agenda was approved by a roll call vote, with an abstention from Committee Member O’Connor on Item No. 1

REGULAR AGENDA

5. Report from the Chief Financial Officer
David McNeil, Chief Financial Officer, reported that CPA’s finances were tracking to meet the budgeted contribution for the fiscal year's net position. Mr. McNeil also reported that the auditor selection process is moving forward; bids will be ready for staff review soon.

Committee Member Zuckerman inquired about the reduction in cash equivalents, and staff responded that it was the result of CPA paying invoices that vendors had been slow to provide.

6. Receive Presentation on the JP Morgan (JPM) Credit Agreement and Provide the Board of Directors with the Following Recommendation:

A. Reduce the Size of the JPM Credit Facility from $160 Million to $120 Million B. Delegate Authority to Staff to Further Reduce the Size of the JPM Credit Facility to an Amount that does not go Below $80 Million Kate Freeman, Strategic Finance Manager, presented the recommended action, noting that reducing the facility by $40 million would reduce the monthly non-utilization fee by $11,000, or a total of $110,000 by the end of the JPM Credit Agreement term.

Staff clarified for Committee Member Zuckerman that the credit facility expires on March 31, 2026, and does not automatically renew. Committee Member Albrecht suggested an MOU or some type of written agreement with JPMorgan related to their willingness to increase the facility size in the future if necessary.

Motion: Committee Member Calaycay, Claremont
Second: Committee Member Zuckerman, Rolling Hills Estates Vote: Item 6 was approved by a roll call vote.

7. Receive Presentation on FY 2025/26 Budget Priorities and Operating Expense Highlights
Mr. McNeil presented CPA’s organizational priorities and draft operating expenses.

Committee Member Zuckerman suggested how line-item increases can be described more precisely in staff’s presentation, and asked that the communications budget, which has grown, be shown as a percentage of the total budget in the next financial presentation. Staff acknowledged these suggestions.

In response to Committee Member Albrecht’s inquiry about staffing projections, Finance Committee Item 1

staff stated that hiring will likely be in junior or support positions, emphasizing cross-training and leadership development throughout the organization.

COMMITTEE MEMBER COMMENTS
None.

ADJOURN
Chair Santangelo adjourned the meeting at 11:40 a.m.

Finance Committee Item 1

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 April 2025 Risk Management Team Report Date: May 28, 2025
April 2025 RMT REPORT
Key Actions
• Reviewed the counterparty credit exposure summary
• Reviewed January 2025 day-ahead load forecast performance • Reviewed the April 2025 load forecast and assumptions • Reviewed March 2025 market performance
• Reviewed energy positions and approved 2025-2029 hedge proposal for monthly RFO
• Reviewed positions for Resource Adequacy (RA), RPS and Carbon-Free energy products (CF)
• Reviewed the 2025-2027 slice of day RA position
• Reviewed 2025 RA Purchase and Sale strategy
• Reviewed Energy Risk Management Policy (ERMP) compliance for RA, REC, CF, and Energy
• Reviewed long-term energy contract amendments and terminations • Reviewed April 2025 CRR Allocations
• Reviewed 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.

Beginning 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) +1 and
beyond to allow for a planning margin to
accommodate volumetric uncertainty associated
with electric consumption and generation. This
will align PY+1 and beyond with the existing
approach to maximum hedge ratio limits in the
current calendar year and PY. Adoption of higher
hedge ratio limits in PY+1 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 as part of the 2025 Integrated Resources
Planning (IRP) process.

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 April 2025 Investment Report
Date: May 28, 2025

RECOMMENDATION
Receive and file.

ATTACHMENT

1. April 2025 Investment Report

Clean Power Alliance Investment Report
April 2025
(in USD unless otherwise noted)
Local Agency
Investment
Fund (LAIF)
Certificates of Deposit
(CDs)
California Asset
Management Program
(CAMP)
US Bank Custodial
Account
US Treasury Securities Total
Beginning Balance 17,174 70,000,000 266,795,630 41,347,127 69,571,079 447,731,011 Deposits & Purchases 189 10,000,000 894,047 706,154 39,166,453 50,766,843 Maturities & Withdrawals 0 10,000,000 30,000,000 39,786,890 0 79,786,890 Ending Balance 17,364 70,000,000 237,689,677 2,266,392 108,737,532 418,710,964 Interest Earned* 60 259,453 894,047 6,154 297,536 1,457,251 Yield** 4.28% 4.30% 4.45% 4.22% 3.69% 4.20%
Weighted Average Term to Maturity (Months) 7.0 7.6 2.0 1.0 56.0 16.9 **Yield for LAIF & CAMP is reported on a monthly average basis; yield for CDs is determined based on a weighted average annual basis; yield for US Treasuries is equivalent to the coupon rate divided by month-end bond price; total yield is the weighted average yield for the whole portfolio Transaction Type Maturity Deposit
Depository River City Bank River City Bank
Par Amount 10,000,000 10,000,000
Rate 5.24% 4.08%
Placement Date 4/25/2024 4/24/2025
Maturity Date 4/24/2025 4/23/2026
Term (weeks) 52 52
Interest Earnings (Total) 536,420 415,250
Transaction Type Deposit
Depository US Bank National Trust
Par Amount 40,000,000
Coupon Rate 3.500%
Placement Date 4/10/2025
Maturity Date 4/30/2030
Term (months) 60
Estimated Interest Earnings (Total) 7,913,110
* 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. Interest earned on UST is based on the yield of each UST and is paid out at maturity (for terms <6mo) or biannually (for terms >6mo) Summary of Transactions (CDs)
Summary of Transactions (US Treasury Securities)

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: May 28, 2025

RECOMMENDATION
Receive and file.

ATTACHMENTS

1. FY 24/25 Q3 Financial Report

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 and other (grant related) revenues less allowance for doubtful accounts Cost of energy: Includes all direct power costs incurred to serve CPA’s load Operating expenses: Includes general, administrative, consulting, payroll, and other costs required to fund operations Operating Income: Represents the difference between revenues and cost of energy and operating expenses 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 90 days or less Year to date (YTD): Represents the fiscal period beginning July 1, 2024 YTD
March
2025
Financial Dashboard
Note: Numbers may not sum up due to rounding.

Active Accounts
1,042,117
Participation Rate

92.8%
YTD Sales Volume
8,329 GWh
Mar Volume
841 GWh
Agr/Oth
2% Com-Lg
23%
Com-Sm
30%
Res
45%
Mar Fiscal Year-to-Date
in $000,000's Actual Budget Variance % Actual Budget Variance % Energy Revenues 93.4 116.2 -22.8 -20% 1,165.6 1,223.0 -57.3 -5% Cost of Energy 80.1 88.5 -8.4 -9% 1,067.6 1,161.0 -93.4 -8% Net Energy Revenue 13.3 27.7 -14.5 -52% 98.1 62.0 36.1 58% Operating Expenses 4.5 5.8 -1.2 -21% 36.0 49.6 -13.6 -27% Operating Income 8.7 22.0 -13.2 -60% 62.0 12.4 49.7 402% Non-Operating Income 1.8 0.6 1.1 173% 15.9 7.0 8.9 127% Change in Net Position 10.5 22.6 -12.1 -54% 77.9 19.4 58.6 303% In March 2025 CPA’s net position increased by $10.5 million, -$12.1 million or 54% less than the budgeted increase in net position of $22.6 million for the month. March 2025 results were negatively impacted by CPA’s interim rate reduction which was approved by the Board in February 2025 and took effect in March 2025.

For the year-to-date, CPA’s net position increased by $77.9 million, $58.6 million or 303% higher than the budget increase of $19.4 million. YTD revenues were $1.16 billion, -$57.3 million or 5% less than budgeted revenues primarily due to CPA’s rate reduction taking effect on March 1st. YTD energy cost was $1.07 billion, -$93.4 million or 8% less than budget primarily due to the non-utilization of contingencies and lower than budgeted renewable energy and capacity costs. Absent contingencies, energy costs were -$28 million or 2.6% less than budgeted. Operating expenses were $36 million for the year to date, -$13.6 million or 27% less than budgeted primarily due to lower than budgeted spending on customer programs, communications, and administrative expenses. Non-operating income, primarily made up of interest income, was $15.9 million, $8.9 million or 127% higher than budgeted.

As of March 31st , 2025, CPA had unrestricted cash, cash equivalents, and investments of $417.1 million, and $154.4 million available in its bank line of credit representing 174 Days Liquidity on Hand. CPA is financially sound and in compliance with its bank and other credit covenants.

2025 2024
ASSETS
Current assets
Cash and cash equivalents $ 357,176,103 $ 305,912,729
Investments 60,000,000 60,000,000
Accounts receivable, net of allowance 130,906,215 140,130,159 Accrued revenue 60,112,392 72,238,512
Other receivables 39,776,694 2,959,678
Interest receivable 1,482,434 837,515
Prepaid expenses 2,325,121 2,257,326
Deposits 4,847,135 6,845,392
Restricted cash - 1,200,000
Total current assets 656,626,094 592,381,312
Noncurrent assets
Capital assets, net of depreciation and amortization 1,932,668 2,556,086 Deposits 88,875 88,875
Investments 69,571,079 -
Total noncurrent assets 71,592,622 2,644,961
Total assets $ 728,218,716 $ 595,026,274

LIABILITIES
Current liabilities
Accounts payable $ 3,247,424 $ 6,992,789
Accrued cost of electricity 158,097,273 215,151,488
Other accrued liabilities 4,929,168 3,349,131
User taxes and energy surcharges due to other governments 12,038,609 10,982,146 Security deposits from energy suppliers 180,000 1,363,500 Unearned program funds 4,380,605 4,222,565
Lease liability, current 445,428 420,871
Total current liabilities 183,318,507 242,482,490
Noncurrent liabilities
Security deposits from energy suppliers 2,366,852 2,526,015 Lease liability, noncurrent 1,494,042 1,939,470
Other Accrued Liability-N/C 462,631 129,072
Total noncurrent liabilities 4,323,526 4,865,389
Total liabilities $ 187,642,033 $ 247,347,879

DEFERRED INFLOWS OF RESOURCES
Fiscal Stabilization Fund 135,000,000 -

NET POSITION
Investment in capital assets $ 7,434 $ 195,745
Restricted for collateral - 1,200,000
Unrestricted 405,569,249 346,282,649
Total net position $ 405,576,683 $ 347,678,394

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA

STATEMENT OF NET POSITION
AS OF MARCH 31, 2025 AND 2024

2025 2024

OPERATING REVENUES
Electricity sales, net $ 1,163,291,689 $ 1,144,216,826
Other revenue 2,356,998 1,221,548
Total operating revenues 1,165,648,687 1,145,438,374

OPERATING EXPENSES
Cost of electricity 1,067,570,793 995,012,916
Contract services 17,215,860 14,892,267
Staff compensation 16,457,525 13,281,643
General and administration 2,370,093 1,976,300
Total operating expenses 1,103,614,271 1,025,163,125
Operating income (loss) 62,034,417 120,275,249

NONOPERATING REVENUES (EXPENSES)
Interest income 16,361,478 6,355,262
Interest and related expenses (435,360) (454,155)
Interest expense - lease (38,084) (45,483)
Total nonoperating revenues (expenses) 15,888,035 5,855,625 CHANGE IN NET POSITION 77,922,451 126,130,874
Net position at beginning of period 327,654,232 221,547,520 Net position at end of period $ 405,576,683 $ 347,678,394

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION
FOR NINE MONTHS ENDED MARCH 31, 2025 AND 2024

2025 2024

RECONCILIATION OF OPERATING INCOME TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Net operating income (loss) $ 62,034,416 $ 120,275,249
Adjustments to reconcile operating income to net
cash provided (used) by operating activities
Depreciation expense 121,275 173,503
Amortization expense 346,148 287,181
Revenue adjusted for allowance for uncollectible accounts 18,917,107 25,507,342 (Increase) decrease in:

Accounts receivable (6,655,616) (42,378,447)
Other receivables (28,273,752) (2,364,476)
Accrued revenue 35,105,473 14,991,152
Prepaid expenses 88,967,796 43,895,523
Deposits (2,515,716) 9,105,914
Increase (decrease) in:

Accounts payable 201,523 (16,172)
Energy market settlements payable (4,526,401) 855,635
Accrued cost of electricity (84,246,276) 54,309,969
Other accrued liabilities 1,215,358 999,295
User taxes due to other governments 1,287,737 2,411,289 Supplier security deposits (4,561,500) 544,955
Unearned program funds 325,932 (129,919)
Net cash provided (used) by operating activities 77,743,502 228,467,992

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Interest and related expense payments (424,180) (478,698) Net cash provided (used) by non-capital
financing activities (424,180) (478,698)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments to acquire capital assets (10,183) (270,054)
Payments on lease (principal and interest) (354,682) (344,351) Net cash provided (used) by capital and related financing activities (364,864) (614,405)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchased of investments (69,571,079) (60,000,000)
Interest income received 16,283,304 5,750,961
Net cash provided (used) by investing activities (53,287,775) (54,249,039) Net change in cash and cash equivalents 23,666,682 173,125,850 Cash and cash equivalents at beginning of period 333,509,421 133,986,879 Cash and cash equivalents at end of period $ 357,176,103 $ 307,112,729 Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) $ 357,176,103 $ 305,912,729 Restricted cash - 1,200,000
Cash and cash equivalents $ 357,176,103 $ 307,112,729

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA

STATEMENT OF CASH FLOWS
FOR NINE MONTHS ENDED MARCH 31, 2025 AND 2024

2024/25 YTD
Budget
2024/25 YTD
Actual
2024/25 YTD
Budget Variance
(Under) Over
2024/25 YTD
Actual / Budget
% 2024/25 Budget
2024/25
Remaining
Budget
2024/25
Remaining
Budget %
Operating revenues
Revenue - electricity, net $ 1,220,855,800 $ 1,163,291,689 $ (57,564,111) 95% 1,582,354,000 $ $ 419,062,311 26% Other revenues 2,132,260 2,356,998 224,738 111% 2,939,000 582,002 20% Total operating revenues 1,222,988,060 1,165,648,687 (57,339,373) 95% 1,585,293,000 419,644,313 26% Energy costs
Energy procurement 1,160,989,725 1,067,570,793 (93,418,932) 92% 1,393,295,000 325,724,207 23% Total energy costs 1,160,989,725 1,067,570,793 (93,418,932) 92% 1,393,295,000 325,724,207 23% Operating revenues less energy costs 61,998,335 98,077,895 36,079,560 158% 191,998,000 93,920,105 49% Operating Expenditures
Staffing 17,803,600 16,457,525 (1,346,075) 92% 24,076,000 7,618,475 32% Technical services 1,525,950 1,155,596 (370,354) 76% 1,936,000 780,404 40% Legal services 935,730 576,480 (359,250) 62% 1,089,000 512,520 47% Other professional services 1,708,267 906,398 (801,869) 53% 2,257,000 1,350,602 60% Communications and outreach 2,986,495 1,469,231 (1,517,264) 49% 3,982,000 2,512,769 63% Mailers 631,490 364,580 (266,910) 58% 842,000 477,420 57% Billing data manager 9,043,400 8,447,331 (596,069) 93% 12,041,000 3,593,669 30% SCE services 1,686,800 1,590,372 (96,428) 94% 2,250,000 659,628 29% Customer programs 9,424,510 2,705,873 (6,718,637) 29% 13,208,000 10,502,127 80% General and administrations 3,895,270 2,370,093 (1,525,177) 61% 5,828,000 3,457,907 59% Total operating expenditures 49,641,512 36,043,479 (13,598,033) 73% 67,509,000 31,465,521 47% Operating income 12,356,823 62,034,416 49,677,593 502% 124,489,000 62,454,584 50% Non-operating revenues (expenditures)
Interest income 7,484,700 16,361,478 8,876,778 219% 9,503,000 (6,858,478) Finance and interest expense (485,200) (473,444) 11,756 98% (645,000) (171,556) 27% Total non-operating revenues (expenditures) 6,999,500 15,888,035 8,888,535 227% 8,858,000 (7,030,035) -79% Change in net position 19,356,323 77,922,451 58,566,128 403% 133,347,000 55,424,549 42% Other uses
Capital outlay 243,490 10,183 (233,307) 4% 325,000 314,817 97% Depreciation and Amortization (602,300) (467,423) 134,877 78% (794,000) (326,577) 41% Total other uses (358,810) (457,240) (98,430) 127% (469,000) (11,760) 3% Change in fund balance $ 19,715,133 $ 78,379,691 $ 58,664,558 $ 133,816,000 $ 55,436,309 41%

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA

BUDGETARY COMPARISON SCHEDULE
FOR NINE MONTHS ENDED MARCH 31, 2025

Select Financial Indicators
Note Mar-24 Jun-24 Sep-24 Dec-24 Mar-25
1 Working Capital 349,898,822 465,151,413 418,035,485 446,226,243 473,307,586 2 Current Ratio 2.4 2.7 2.1 2.5 3.6
3 Days Sales Outstanding 34 35 35 29 31
4 Equity 347,678,394 462,654,232 415,336,975 512,135,737 540,576,683 5 Equity to Assets % 58% 62% 52% 62% 74%
6 Adjusted Unrestricted Cash 362,023,214 386,401,069 461,254,387 500,716,640 414,629,251 7 Investments - - 70,000,000 - 69,571,079
8 Available Line of Credit 159,853,000 159,853,000 154,353,000 154,353,000 154,353,000 9 Total Liquidity 521,876,214 546,254,069 615,607,387 725,069,640 638,553,330 10 Days Liquidity on Hand (TTM) 155 158 167 200 174
11 Gross Margin (quarterly) 24% -6% -8% 29% 12%
12 Net Margin (quarterly) 22% -9% -9% 28% 9%
Percentage Change from Prior Quarter
Working Capital 26% 33% -10% 7% 6%
Current Ratio 3% 11% -22% 16% 46%
Days Sales Outstanding 4% 4% -1% -15% 5%
Equity 26% 33% -10% 23% 6%
Equity to Assets % 2% 7% -17% 19% 20%
Adjusted Unrestricted Cash 54% 7% 19% 9% -17%
Investments - - - - -1%
Available Line of Credit 0% 0% -3% 0% 0%
Total Liquidity 32% 5% 13% 18% -12%
Days Liquidity on Hand (TTM) 32% 2% 5% 20% -13%
Note Description Note Description
1 Current Assets less Current Liabilities 7 Fair market value of CPA's non-current investment assets 2 Current Assets divided by Current Liabilities 8 Total Line of Credit less Borrowing and Letters of Credit 3 Accounts receivable divided by Sales divided by 365 9 Sum of Available Cash and Line of Credit 4 Net Position plus Fiscal Stabilization Fund 10 Total Liquidity divided by trailing 12 month expenses divided by 365 5 Equity (Net Position + FSF) divided by Total Assets 11 Operating revenue less energy cost divided by operating revenue 6 Unrestricted cash and cash equivalents less supplier deposits 12 Change in net position divided by operating revenue -
100
200
300
400
500
600
700
800
Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Millions ($)
Fiscal Quarter
Financial Indicators
Working Capital Equity Total Liquidity

Staff Report – Agenda Item 5
To: Finance Committee
From: David McNeil, Chief Financial Officer
Subject: Report from the Chief Financial Officer
Date: May 28, 2025
The CFO will provide an oral update on CPA’s financial operations.

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: Fiscal Year 2024/25 Auditor Recommendation
Date: May 28, 2025

RECOMMENDATION
Approve the selection of Baker Tilly as the auditor for CPA’s FY 2024/25 financial statements and authorize CPA staff to enter contract negotiations for financial audit services with Baker Tilly.

BACKGROUND
At the February 28, 2025, Finance Committee meeting, staff presented key considerations for selecting audit services. These considerations are:
• Electric Industry Experience and Expertise
• Reputation and Independence
• Resources and Effectiveness
• Communication and Ongoing Support
• Cost of the Audit
Staff identified three categories of audit firms: “Big Four” international auditing firms, mid-tier firms with a utility specialty, and local accounting firms. The Finance Committee recommended that staff solicit proposals from any auditor, including the Big Four and local accounting firms.

Finance Committee Item 6
On April 1, 2025, staff released a competitive solicitation for audit services in which it requested proposals from thirteen accounting firms. These included the current auditor, the “Big Four”, and twelve accounting firms from the County of Los Angeles Preferred Auditor List. Four firms submitted proposals:
• Baker Tilly
• Kosmatka, Donnelly & Co
• Macias Gin & O’Connell
• Vasquez & Company
Following review and evaluation of the proposals, staff recommends selecting Baker Tilly for the following reasons:
• Baker Tilly has a nationwide practice auditing electric utilities and has deep electric utility industry expertise and knowledge. Baker Tilly will become the 6th largest auditor in the country following its announced merger with Moss Adams. • Baker Tilly has experience auditing California CCAs and CCA related entities. In addition to six years of experience auditing CPA, Baker Tilly audits Marin Clean Energy, Redwood Coast Energy Authority, and the California Community Choice Financing Authority.
• Baker Tilly has extensive knowledge of California energy markets and has experience with municipal electric utilities. It provides audit services for Northern California Power Agency, Balancing Authority of Northern California, Sacramento Municipal Utilities District (SMUD), Trinity Public Utilities District, MSR Public Power, Imperial Irrigation District, and Modesto Irrigation District. • Baker Tilly offered the lowest cost option.

Other information concerning Baker Tilly:
• Aaron Worthman is the proposed audit partner for the CPA engagement. Mr.

Worthman is the leader of Baker Tilly’s energy and utility practice and specializes in serving governmental and utility entities.

Finance Committee Item 6
• In its previous engagement with Baker Tilly, CPA has experienced low audit staff turnover, high partner and management availability for discussion, clear audit processes and communications, and on-time delivery of audit results. • Baker Tilly has agreed to comply with CPA’s requested audit schedule for the FY 2024/25 audit and to execute a contract that provides CPA with an option to renew for one or more additional years beyond the FY 2024/25 audit. CPA would only exercise contract renewal options with Baker Tilly if the Finance Committee selects them in the future to perform audits for FY 2025/26 and beyond.

FISCAL IMPACT
The cost of audit services for the first year of service is $32,000. These costs are included in the proposed FY 2025/26 Budget.

ATTACHMENTS

1. Proposal for Audit Services – Baker Tilly

2. FY 2024/25 Auditor Selection Presentation

1 April 28, 2025
Clean Power Alliance
Proposal and quote for FY 2024-25 audit services

Contents
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. © 2025 Baker Tilly US, LLP.

Baker Tilly US, LLP and Baker Tilly Advisory Group, LP and its subsidiary entities provide professional services through an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable laws, regulations and professional standards. Baker Tilly US, LLP is a licensed independent CPA firm that provides attest services to clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and business advisory services to their clients. Baker Tilly Advisory Group, LP and its subsidiary entities are not licensed CPA firms.

Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are independent members of Baker Tilly International. Baker Tilly International Limited is an English company. Baker Tilly International provides no professional services to clients. Each member firm is a separate and independent legal entity, and each describes itself as such. Baker Tilly Advisory Group, LP and Baker Tilly US, LLP are not Baker Tilly International’s agent and do not have the authority to bind Baker Tilly International or act on Baker Tilly International’s behalf. None of Baker Tilly International, Baker Tilly Advisory Group, LP, Baker Tilly US, LLP nor any of the other member firms of Baker Tilly International has any liability for each other’s acts or omissions. The name Baker Tilly and its associated logo is used under license from Baker Tilly International Limited.

QUALIFICATIONS AND EXPERIENCE.......................................................................... 1 TASKS AND DELIVERABLES....................................................................................... 8 PROJECT TEAM ..........................................................................................................15 PRICING QUOTE..........................................................................................................17 LICENSING AND EXPERIENCE ..................................................................................19 MODIFICATIONS TO CPA’S CONTRACT ...................................................................21 APPENDIX A: RESUMES.............................................................................................22 APPENDIX B: CERTIFICATES OF INSURANCE.........................................................28

April 28, 2025
Hui Lisano, Senior Director, Finance and Accounting
Clean Power Alliance
801 S Grand Ave, Suite 400
Los Angele, CA 90017
Delivered electronically
Dear Hui:

Clean Power Alliance of Southern California (CPA) seeks qualified and experienced contractors to provide audit services. This proposal is the continuation of our relationship — our vision of how we can protect and enhance your organizational impact as we achieve your immediate goal of auditing CPA’s financial statements for Fiscal Year 2024-25 financial statements (for the year ending June 30, 2025).

We appreciate the significance of CPA’s role as one of California’s community choice aggregators (CCAs), having provided financial auditing services not only for CPA but also for Marin Clean Energy and Redwood Coast Energy Authority.

Below are the highlights of everything we’ll bring to CPA. If you have questions or need additional information, please let us know how we can help support your decision-making process.

Looking forward is what we do best
When you want to go far, go as a team. Adapted from a proverb we hold dear, this philosophy serves us well. In collaboration with you and through a deep understanding of the utilities industry, we’ll continue to explore and uncover new possibilities. CPA will continue to have access to the right mix of talent, technology and audit solutions crafted exclusively for your unique potential.

Our relationship with CPA is a commitment based on mutual respect and continuous growth. We imagine and reimagine the progress we can make together, finding new ways to add value through our audit solutions. You’ll continue to receive transformational thinking and deep collaboration for your organization as we progress together toward your objectives.

UTILITY SPECIALIZATION AND KNOWLEDGE
Nationwide, Baker Tilly provides audit, accounting and advisory services to more than 1,700 utility clients. CPA’s audit team will include professionals from our dedicated energy and utilities team – a nationally recognized group of specialists in your industry. Our energy and utilities professionals are committed to leading the industry as educators by serving as speakers at industry association meetings and authors of thought leadership. We understand and have the knowledge and resources to help navigate the challenges and opportunities faced by CPA.

LARGE FIRM RESOURCES WITH RESPONSIVE CLIENT SERVICE
Baker Tilly blends the resources and technical expertise of a top-10 advisory, tax and assurance firm with the personalized touch of smaller firms. Our commitment to your success goes beyond checkboxes/numbers; it’s about delivering a holistic client experience that results in new information and insights for CPA on your financial journey.

Baker Tilly US, LLP
4807 Innovate Ln
Madison, WI, 53718
T: +1 (608) 249 6633
F: +1 (608) 249 8532
bakertilly.com

Clean Power Alliance

EYES ON WHAT LIES AHEAD
Working toward what’s next means making sure we have a clear, realistic view of vulnerabilities, exposure areas and internal control deficiencies that could impact CPA now and in the future. We’ll bring our deep insights into issues affecting utilities, knowledge of relevant regulations, evidence to support claims and innovative ideas to protect your interests and address your unique needs.

CPA is a valued client of Baker Tilly. More than anything, as your audit provider, we’re passionate about continuing to work together to forge new paths for success. We look forward to discussing your questions and feedback.

Sincerely,
Aaron Worthman, CPA, Principal
+1 (512) 975 7281 | [email protected] Bethany Ryers, CPA, MAS, Principal +1 (608) 240 2382 | [email protected]

1 Qualifications and experience

7.1.1. Proposer’s qualifications and experience with the elements specified in Section 3 (Qualifications and Experience). Proposer must provide qualifications for all team members, including the principal, company official(s), and other personnel who Proposer anticipates will be assigned to work on behalf of CPA. This requirement includes, but is not limited to, Proposer’s anticipated subcontractors or teaming partners.

SECTION 3 QUALIFICATIONS AND EXPERIENCE

CPA REQUIREMENT HOW BAKER TILLY MEETS CPA REQUIREMENTS

3.1 Financial auditing services for California
government agencies; audit manager and
principal are properly licensed to practice in
California
Baker Tilly provides financial auditing services to
government agencies in California including:
• Balancing Authority of Northern California
• California Community Choice Financing Authority
• Imperial Irrigation District
• Marin Clean Energy
• Modesto Irrigation District
• MSR Public Power Agency
• Northern California Public Power Agency
• Redwood Coast Energy Authority
• Sacramento Municipal Utility District
• Transmission Agency of Northern California
• Trinity Public Utilities District
Baker Tilly is licensed to practice public accounting in various states across the U.S. State licensing
certifications are documented and can be provided
upon request. Your audit manager and principal are
properly licensed to practice public accounting.

3.2 Prior experience auditing CCAs, California
municipal electric and other municipal utilities
As noted above, Baker Tilly’s California governmental
clients include CCAs such as CPA, Marin Clean
Energy and Redwood Coast Energy Authority.

3.3 Minimum insurance requirements are met
Baker Tilly meets minimum insurance requirements.

We have provided sample Certificates of Insurance in
Appendix B.

2 QUALIFICATIONS AND EXPERIENCE
Guiding you with our resources, reputation and reach
Our ranking as the 10th-largest accounting firm means we’re actively leading and shaping the industry landscape. We have a seat at the table with regulators and utility associations, which translates to the opportunity to share our clients’ perspectives and bring valuable insights back to CPA.

What does our size mean for you? It’s about having a powerhouse team of passionate professionals unafraid to roll up their sleeves and provide hands-on support for CPA. It’s about team members brimming with thoughtful ideas, backed by the scale of a firm genuinely dedicated to your success.

When you choose Baker Tilly, you’re not just choosing a leading advisory, tax and assurance firm. You’re choosing a skilled navigator for the road ahead.

GIVING YOU THE TOOLS YOU NEED TO NAVIGATE THE FUTURE
Baker Tilly will successfully guide CPA through changing landscapes with skills, stability and strength as one of the oldest and largest advisory, tax and assurance firms in the United States.

Bringing greater value, relationships and resources to our clients:

Baker Tilly and Moss Adams are joining forces
On April 21, 2025, Baker Tilly and Moss Adams announced a planned combination to take effect in early June that will redefine advisory and accounting services for our clients. The merger, which will create the sixth-largest advisory CPA firm in the United States, will bring deeper industry specialization, broader geographic reach and expanded capabilities to Clean Power Alliance.

Our unified firm will operate under the Baker Tilly name, forming a leading firm positioned to help the middle-market navigate an increasingly complex environment. Our combination multiplies the value we can deliver through a shared people-first culture, client-centric service model and steadfast commitment to quality. A fixture on the West coast, Moss Adams will add a significant presence in Washington, California, Arizona, Colorado and New Mexico, as well as in Texas.

For CPA, your fee arrangements will remain unchanged, and we expect very little impact on the trusted relationships, leadership and day-to-day management of your engagement. We will continue to provide exceptional service to you, enhanced by more tools, more perspectives and more possibilities.

3 QUALIFICATIONS AND EXPERIENCE
Investing our resources in California
California's population is the largest in the United States and growing, with the fifth-largest economy in the world, boasting a diverse range of industries and businesses. We’re proud to be growing right alongside you. For Baker Tilly, expanding client relationships, a burgeoning local presence and an understanding of your state’s unique markets are escalating our growth in the Golden State.

Nationally recognized utility practice
CPA will receive audit services from our dedicated utilities team. This team is a nationally recognized group of more than 60 professionals specializing in your industry. Our goal will be to support CPA as you serve your communities and customers. Dedicated to meeting the diverse needs of electric, water, sewer and gas utility service providers, and diverse local government organizations, Baker Tilly currently works with more than 1,600 utility clients, including wholesale utility authorities and agencies, public power and investor-owned utilities, water, wastewater and reclaimed water utilities, river authorities, electric cooperatives, transit systems, renewable energy developers and joint action agencies.

80+ years of industry
experience
Serving clients
nationwide
1,600+ energy and
utilities clients
Energy and utilities: Experience that matters

4 QUALIFICATIONS AND EXPERIENCE
Baker Tilly’s depth of specialized expertise and knowledge of our utility industry team is recognized across the country. We provide accounting and advisory services to utilities throughout the United States and are sought out by leading organizations such as the American Public Power Association (APPA) and the American Water Works Association (AWWA) to speak on hot topics, teach courses and represent the industry. Our team members are adept at communicating with federal, state and other regulatory agencies and stay current with issues that affect the industry.

This focus on industry specialization means Baker Tilly’s utilities team brings a balance of technical skill, industry insight and common sense to our work with you. For more than 80 years, Baker Tilly has provided utilities with a range of accounting and advisory services needed to operate effectively in a complex regulatory environment. Our professionals apply this industry knowledge and offer useful recommendations and insights to help your business.

Our services cover a wide range of financial and compliance issues faced by the industry and include:
• Internal audit outsourcing and co-sourcing
• Business process evaluation and internal control review • Contract performance compliance reviews
• Financial audits and agreed-upon procedures engagements • Federal and state single audits
• Department of Energy grant management and reporting support • Construction project audits
• Renewable resources, project consulting and financing • Industry accounting and financial training
• Technical accounting research and guidance to address the unique requirements of utility industry accounting
With our level of industry experience and specialization, you can be assured of on-target advice and a quality audit that provides value.

In addition to performing audit services for other CCAs, we serve many joint action agencies and other clients with operations similar to CCAs, including the clients listed in the table below. We can provide contact information and further details on any of these engagements upon request.

JOINT ACTION AGENCIES AND SIMILAR ENTITIES AUDIT CONSULTING Central Municipal Power Agency/Services X
Delaware Municipal Electric Corporation X
Energy Northwest X
Illinois Municipal Electric Agency X
Lower Colorado River Authority X X
Massachusetts Municipal Wholesale Electric Company X
Michigan South Central Power Agency X
Missouri Basin Power Project X X

5 QUALIFICATIONS AND EXPERIENCE

JOINT ACTION AGENCIES AND SIMILAR ENTITIES AUDIT CONSULTING Missouri River Energy Services X X
M-S-R Public Power Agency X
Northern California Power Agency X
Oklahoma Municipal Power Authority X
Southern Illinois Power Cooperative X
The Energy Authority X
WPPI Energy X X
Wyoming Municipal Power Agency X
Energy and utility industry involvement
Baker Tilly’s energy and utilities team is actively engaged in state and national utility associations as authors, speakers, trainers and promoters of the utility industry. Our industry involvement keeps us at the forefront of changes and enables us to better assist you with implementing regulations or adopting new standards. Our participation in the following organizations means we have the expertise to help CPA meet the challenges you face in providing utility services to customers. • Institute of Internal Auditors (IIA)
• ISACA (previously Information Systems Audit and Control Association) • AICPA Technical Committees
• American Public Power Association
• American Water Works Association
• American Gas Association
• American Wind Energy Association (AWEA)
• California Municipal Utilities Association (CMUA)
• Association of Government Accountants
• GASB Technical Committees
• GASB Asset Retirement Obligation Task Force
• Government Finance Officers Association (GFOA)
• National Association of Manufacturers (NAM) – Joint Energy Committee • Nuclear Non-operating Owner’s Group (NNOG)
• Sustainability Accounting Standards Board – Electric industry working group member • Many state water, wastewater, electric and gas industry associations Thought leadership to keep you informed
We regularly provide thought leadership and direction for industry organizations and some of the largest public power utilities in the country, as outlined in detail below.

6 QUALIFICATIONS AND EXPERIENCE
Articles: As industry leaders, we author articles that focus on emerging issues of interest to the utility industry, such as the impact and implementation of new accounting reporting standards. These publications reach a nationwide audience and address trending topics, including GASB pronouncements, benchmarks and key performance indicators, revenue decoupling mechanisms and long-range planning.

Utility industry training: We are instructors at a number of industry associations within the utility industry, including the AWWA, APPA, Edison Electric Institute and American Gas Association. Our team regularly presents workshops and seminars on financial and organizational issues in the utility industry. .

Webinars: We also share our knowledge through webinars, which we view as a way of educating the current and next generation of utility finance and accounting professionals as well as enabling utilities in their efforts to continue improving their service to customers and stakeholders. Recent webinars include “Enterprise risk management: ensuring business continuity resiliency in crisis and in recovery,” “Managing utility finances in uncertain times,” “Implementing new accounting standards: GASB 100 and GASB 101” and ”GASB 102 and GASB 103: overview of new accounting standards.”“
Industry textbooks and whitepapers: Baker Tilly authors textbooks and whitepapers as resource materials for the utility industry. These publications serve as guides based on our industry knowledge and insights and include common-sense applications of industry practices for utilities to follow. Past publications include “Advanced Utility Accounting” and “Work Order Accounting.”
Utility University: Annually, Baker Tilly subject matter specialists present a complimentary webinar series to explore hot topics affecting utilities. Attendees have the opportunity to sharpen their skills, share solutions and learn from industry and technical specialists while receiving vital information to maximize operations and performance. All the 2024 webinars are now available on the Utility University page.

Demonstrating that we've been down this path before
The experiences of our clients speak more about Baker Tilly’s capabilities than any proposal ever could.

That’s why we encourage you to talk with our clients. Here are a few individuals who welcome the opportunity to share their Baker Tilly experience.

Each will give you an authentic perspective as you consider your own needs.

MARIN CLEAN ENERGY
Name Maira Strauss Title Senior Finance Analyst
Phone +1 (415) 464 6667 Email [email protected] Services Annual financial audit
Date of work 2018 to present

7 QUALIFICATIONS AND EXPERIENCE

REDWOOD COAST ENERGY AUTHORITY
Name Lori Biondini Title Director of Business Planning and Finance Phone +1 (707) 269 1700 Email [email protected] Services Annual financial audit and bookkeeping assistance Date of work 2020 to present related to the 2018 and 2019 financial statement audits.

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
Name Garth Salisbury Title Treasurer/Controller
Phone +11 (415) 335 6115 Email [email protected]
Services Annual financial audit
Date of work 2022 to present
EXPERIENCE MATTERS. ESPECIALLY THE EXPERIENCE OUR CLIENTS RECEIVE Connect with our clients to learn more. Additional references are available by request.

8 Tasks and deliverables

7.1.2. Proposer’s explanation for how it plans to meet Task and Deliverables specified in Attachment A (which will be attached as the scope of work to the final agreement as Exhibit A).

Baker Tilly understands that CPA seeks a full range of financial audit services that include:

Task #1: Pre-audit activities
We understand CPA requires Baker Tilly to develop an engagement timeline and create a client service plan. Deliverables will include an engagement timeline and objectives (by July 15, 2025), a client service plan (by July 31, 2025) and an audit plan (by August 15, 2025).

Task #2: Analysis and reporting
Baker Tilly will execute the audit plan based on a mutually developed and approved audit timeline, communicating with key CPA personnel as the plan is executed and discussing and providing progress reports on open items with CPA management and staff to mitigate issues as they arise and ensure there are no surprises at the conclusion of the audits.

Deliverables will include an audit timeline and audit progress reports. Fieldwork is anticipated to occur between September 2, 2025 and September 26, 2025, with weekly audit progress reports providing during the audit.

Task #3: Audit response and presentation of audit results Baker Tilly will communicate the results of the completed audit in the form of a report to CPA management, the CPA Finance Committee and those charged with governance activities. We will meet with CPA management upon completion of the audit to solicit feedback on audit results.

Deliverables will include final audit reports, an audit closeout meeting with CPA staff, and a final presentation to the CPA Finance Committee. FY 2024-25 financial statements will be available on or before close of business on October 15, 2025 and the presentation to the Finance Committee will occur on October 22, 2025.

Task #4:Other audit services
We understand that it’s possible CPA may require single or other audits. If needed, Baker Tilly will provide audit plans and perform those audit services.

9 TASKS AND DELIVERABLES
Transforming the traditional audit into a proactive experience When your goal is a high-quality audit, there are many pathways you can take.

The Baker Tilly path stands alone, taking you above the ordinary. Avoiding the well-worn pitfalls of conventional thinking and transforming the nature of the auditor-client relationship into one of trust, collaboration and alliance. It’s a path designed to help CPA go beyond the simple audit. To adapt to and benefit from change. And to go there, we’ll serve as your consultative assurance ally, watching the landscape and proactively managing your risk.

OUR AUDIT PHILOSOPHY IS DESIGNED TO DO MORE FOR CPA
Beyond the audit, our collaborative approach adds value at every step.

Breaking new ground with Global Focus US
In a world where audit experiences can be all over the map, we saw a need for audit software that could provide a reliable route to excellence — both in client experience and the audit product itself. So, we created one: Global Focus US, our proprietary audit methodology. It incorporates industry-specific forms, templates, processes and content.

Global Focus US means CPA's financial statements are fairly stated, focus areas are aligned with your industry and effective internal controls are in place.

Global Focus US brings you fairness and accuracy. It pairs the required standards with our industry knowledge and auditing best practices and streamlines the delivery of your services – making them nimble, risk-focused and, above all, collaborative.

To go further, it embeds leading technology tools to strengthen communication and build connections between team members. It eliminates errors through data visualization. It gives you an audit path that’s accurate, efficient and delivers optimal results. And we’ll continue innovating. Our methodology adapts as standards change, requirements shift and technology transforms. With it, we’ll keep exploring new routes, new territories and new solutions.

Blending the right people with the right technology for your audit Technology on its own won’t solve everything. It must be used by auditors who understand the industry and your goals. Our auditors work with clients like CPA every day. They come to the table prepared with

10 TASKS AND DELIVERABLES
a deep understanding of your industry and your specific risks, needs and expectations. They arrive ready to move forward on day one. You won’t spend your valuable time training us on the day-to-day challenges and opportunities you know so well.

Here's a picture of how our experienced auditors and our proprietary technology, Global Focus US, will blend to bring CPA the highest level of service through our tailored approach:

BRINGING THE RIGHT PEOPLE AND TECHNOLOGY TO YOUR EFFICIENT AUDIT Global Focus US reduces unnecessary audit procedures, increases accuracy and enhances risk assessments and linkage throughout the audit.
• Tailored to the specific needs of your organization; you won’t be over- or under-audited • Fresh perspectives and a smooth transition
• Upfront planning and hands-on principal/manager involvement for more efficient fieldwork • Software and technology tools that automate processes, focusing time where it matters: sharing recommendations and interacting with you
• A dedicated assurance professional practice group (PPG) to quickly resolve disagreements or technical consultations

KNOWING WHERE YOUR TRUE RISKS LIE
We combat risks to your business, controls and processes, aligning integrated value-added analytics and predictive tests that bring CPA sound audit evidence and insights. • Focus on specific risk areas and test entries of greatest risk • Software and technology tools to quickly compile information and visualize risks • Risk-based focus on process and control review
• Effective testing of controls
• Custom analytics to optimize our work, tailor our procedures and focus our testing

FOCUSING ON YOUR INDUSTRY RISKS, CHALLENGES AND OPPORTUNITIES CPA benefits from tailored audit programs, processes and checklists addressing your specific industry issues and business risks.
• All applicable auditing standards and independence considerations in industry templates • Experience-based insights from serving similar organizations enable recommendations for process improvements and solutions
• Industry-specialized audit programs
• Industry-specified templates aligned to applicable standards, so we can quickly identify any relevant accounting standard changes
• Team member involvement in industry initiatives, including American Institute of Certified Public Accountants (AICPA) Center for Audit Quality working groups and taskforces by industry • Insight into trends, upcoming pronouncements and specific regulatory issues that impact CPA

11 TASKS AND DELIVERABLES

DRIVING VALUE FOR YOU THROUGH COST MANAGEMENT
Flexible work arrangements leverage your internal resources to manage your costs and streamline communication.
• An innovative approach that boosts efficiency by keeping steps, processes and timing flexible • Effective use of technology tools to save time
• Ample lead time to complete prepared-by-client (PBC) request lists • Experienced audit teams with an industry focus
• Tailored audit timeline based on your input and needs • Completion of interim fieldwork to alleviate time pressures at year-end • Seamless connectivity between our audit and tax platforms • Continuous team coordination with shared tools and routine check-ins, reducing disruption

COMMUNICATING IN REAL TIME
Open, active dialogue gives you timely intelligence as we build our file for your year-end compliance work.
• Open communication in all phases of the audit and responsiveness throughout the year, with a typical response time to your questions of no more than one business day • Technology that supports real-time communication, creating a seamless trail from planning through statement issuance
• Frequent status updates with your management and governance teams to avoid surprises • Industry trends and challenges shared in our thought leadership

Listening to CPA is how we begin your audit
From the initial discussion of your needs to the assessment of our finished work, CPA's needs will shape our path. This is how we build lasting relationships and an audit process that meets the highest professional standards yet remains tailored to your needs.

Our audit is rooted in a foundation of communication and is executed in four phases. An overview of our approach is below, with more information provided on the following pages.

12 TASKS AND DELIVERABLES

AN AUDIT APPROACH BASED ON YOU
Our high-touch audit service model gives CPA an accessible, reliable and tailored approach.

PHASE 1: LISTEN AND DEFINE AUDIT OBJECTIVES
Mission: Build a client service plan that matches our audit timeline to your relationship, organization needs and communication style
Steps
• Listen first; then, define your audit objectives and relationship expectations • Always improve; talk with CPA frequently and update your service plan every year

Results
• A solid, trust-based bond between CPA personnel and Baker Tilly • Planning, communication and execution that anticipates your needs and avoids surprises

13 TASKS AND DELIVERABLES
PHASE 2: DEVELOP A CUSTOMIZED AUDIT PLAN
Mission: Set the stage for a successful, tailored audit Steps
• Understand your business deeply
• Perform industry comparison*
• Identify risk areas
• Anticipate knowing what help we may need from your team • Develop a customized audit plan

Results
• Productive plans developed early on to handle potential audit issues • Personalized audit with a focus that aligns with risk level • Audit leveraging technology and data analytics

* All industries have their idiosyncrasies. To develop your customized audit plan, we’ll leverage insights and suggestions from similar client experiences, combined with analytics, walk-throughs and reviews of internal controls and our understanding of your operations. If we identify missing controls or segregation of duties issues, we will point them out immediately and adjust the plan as needed.

Examples may include transactions, stock compensation plan options or new business combinations.

PHASE 3: PERFORM AUDIT
Mission: Complete your audit with efficiency, open communication and added insight Steps
• Perform preliminary audit procedures, substantive tests of details and final audit procedures based on the approved audit timeline and the groundwork we achieved during phase 2. • Deliver interim audit procedures where possible to save time at year-end • Discuss progress and open items with CPA's process owners • Communicate issues to management

Results
• Focused testing based on unique risk areas
• Real-time communication
• Methodical project management
• No surprises
• Challenges resolved at the team level or through our professional practice group

14 TASKS AND DELIVERABLES
PHASE 4: CONCLUDE AUDIT, REPORT AND GET YOUR FEEDBACK
Mission: On-time delivery and CPA's satisfaction
Steps
• Meet deadlines on time or ahead of schedule
• Conclude the audit and issue final report
• Present audit findings and insights to your Finance Committee • Review client service plan
• Assess our performance

Results
• Final audit report, including a link to an audit committee landing page for your industry • Value-added deliverables and audit opinions
• Increased client satisfaction
• Comprehensive file building for your future

* Management, board members, audit committee members and internal process owners can use the landing page link to interact with internal thought leadership, review new accounting standards and address industry-specific accounting updates.

Shaping the future of auditing
To keep CPA far ahead of ever-changing industry standards, we stand firmly at the forefront of our profession. We think of the what-ifs, build efficient new routes to our goals and share them with the world. Right now, we’re using the power of automation, data analytics and technology to help the American Institute of Certified Public Accountants (AICPA) develop Dynamic Audit Solution (DAS), a new standard for the future of auditing.

Technology like artificial intelligence, automation and data analytics is already making waves in the auditing world. We’re right there on the frontier, seizing every opportunity and developing our own innovations to provide high-quality audits more effectively, more efficiently and with ever-greater value to you as our client.

The AICPA, CPA.com and participating firms from the AICPA Major Firms Group — which includes Baker Tilly — have set out to develop a transformational audit methodology to modernize and enhance the quality and value of audits. Baker Tilly is fully committed to these efforts and has invested in developing DAS, including contributing talent to the project. Several of our team members, including solution architects and developers, are directly involved in DAS.

Joining forces with technology's leaders
Among the committee working groups specializing in the advancement of data and technology within the profession, you’ll find Baker Tilly professionals taking an active role in the following organizations:
• Rutgers AICPA Data Analytics Research (RADAR)
• PCAOB Data and Technology Task Force
• Center for Audit Quality (CAQ) Data and Technology Working Group • Digital CPA.com

15 Project team

7.1.2.1. A list of the Proposer’s planned project team, who will be assigned to work on behalf of CPA, and an explanation for each project team member’s role and responsibility.

Aligning key engagement team members with CPA's goals
While other firms may not always assign their best and most experienced people to utility engagements, that is not the case at Baker Tilly. We believe in strong personal relationships, and this means a personal interest in CPA from some of our most experienced team members. You will work with our best and brightest utility professionals who will be dedicated to you and the industry you serve. This handpicked team offers a collaborative focus supported by the breadth and depth of our firm’s resources.

Engagement team members are introduced below, and complete resumes are available in Appendix A.

THE TEAM TO ACHIEVE CPA’S GOAL
Aaron Worthman, CPA — Principal
Engagement role: Engagement
principal Relevant experience
Aaron will assume the role of engagement
principal to meet principal rotation
requirements. He will guide the audit
processes and teams, bringing deep
experience and a solid history of success.

He will keep CPA’s audit running
according to plan.

Aaron is a leader on Baker Tilly’s energy
and utilities practice and specializes in
serving governmental and utility entities.

He has been with the firm since 1998.
• Sacramento Municipal Utility District,
CA
• Transmission Agency of Northern
California
• Balancing Authority of Northern
California
• Inland Empire Utilities Agency, CA
• Modesto Irrigation District, CA
• MSR Public Power Agency, CA
Bethany Ryers, CPA, MAS — Principal
Engagement role: Relationship
principal and pre-issuance reviewer. Relevant experience Bethany will move from being your
engagement principal to being CPA’s
relationship principal, continuing to offer
the guidance and expertise CPA has come
to expect. She will also serve as the pre-issuance reviewer for your audit.

Bethany specializes in providing auditing,
accounting and advisory services to
utilities. She also assists with financial and
capital forecasts, rate studies and impact
fees.
• Marin Clean Energy, CA
• Redwood Coast Energy Authority, CA
• California Community Choice
Financing Authority, CA
• Modesto Irrigation District, CA
• Trinity Public Utilities District, CA
• Northern California Public Power
Agency, CA
• Roseville Utilities, CA
• Energy Northwest, WA
• Grand River Dam Authority, OK
• Lansing Board of Water & Light, MI
• Gainesville Regional Utilities, FL
• Delaware Municipal Electric
Corporation, DE

16 PROJECT TEAM
THE TEAM TO ACHIEVE CPA’S GOAL
Ryan Theiler, CPA — Manager
Engagement role: Project manager Relevant experience
Ryan will continue coordinating project
management between CPA and Baker Tilly
to deliver a seamless, collaborative audit.

With an in-depth understanding of your
processes, Ryan will coordinate the day-to-day activities of our team members and be available to CPA’s staff throughout the year.
• Marin Clean Energy, CA
• Redwood Coast Energy Authority, CA
• California Community Choice
Financing Authority, CA
• Imperial Irrigation District, CA
• Modesto Irrigation District, CA
• Southern California Public Power
Authority, CA
• Gainesville Regional Utilities, FL
• Grand River Dam Authority, OK
• Massachusetts Municipal Wholesale
Electric Company, MA
• The Energy Authority, FL
INNOVATIVE THINKING, TANGIBLE RESULTS AND UNRELENTING DEDICATION TO CPA’S SUCCESS Your engagement team members are excited to work together to achieve CPA’s goals.

We will also assign additional senior or associate level staff as needed from our dedicated energy and utilities team, based on availability and the timing of your audit.

7.1.2.2. A list of subcontractors, if any, and their respective roles and responsibilities separated by task.

Baker Tilly is not proposing any subcontractors. Our energy and utilities team has the in-house expertise and capacity needed to complete your audit.

17 Pricing quote

7.1.2.3. Proposer must provide its pricing Quote, including the information required in Section 5, “Pricing,” above.

Proposer should describe any fixed fees or hourly billing rates, fees, or other compensation that Proposer may seek from CPA for services, inclusive of staff time, equipment, materials, travel, administrative/clerical, overhead and other out-of-pocket expenses, if applicable to this contract.

Sharing our transparent fee estimate
CPA's fee estimate is based on what we’ve learned is important to you. We’ll go beyond what’s expected to deliver a return on your investment. We have also provided not-to-exceed fees for additional years, if CPA exercises its right to extend the agreement.

SERVICES FOR CPA FEES
Financial audit – initial term
Fiscal Year 2024-2025 $32,000
Financial audit – renewal term
Fiscal Year 2025-2026 $33,000
Fiscal Year 2026-2027 $34,000
Fiscal Year 2027-2028 $35,000
Fiscal Year 2028-2029 $36,000
Fiscal Year 2029-2030 $37,000

OUR TRANSPARENT, FAIR FEE ESTIMATE
CPA can expect a competitive fee arrangement and continuous value.

No unnecessary charges
You won’t see add-on charges for routine calls, emails or quick consultations. They’re included in our fees because we’re here to earn your trust. If your need is out of scope, we’ll never perform additional work unless you give us the go-ahead. Our final billing will always be based on the value we deliver to you.

Key assumptions
We based our fee estimate on your needs. If any of the assumptions below change, we’ll share any new requirements, budgetary considerations and options.
• Adequate support, preparedness, cooperation and feedback from management • Fees based on current standards
• No major changes in scope or organizational structure, including mergers or expansions • Organized books and records
• Fieldwork to be performed remotely, as in prior years

18 PRICING QUOTE
Delivering services above the standard — at standard hourly rates When you need us, we step in to help, even outside the scope of our engagement. If the service you need is out of scope, we’ll let you know and get your approval. Whenever possible, we’ll give you an estimate in advance, outlining the time and expense we believe we’ll need to achieve your objectives.

Any fees will be based on our standard rates shown below. Before we send a final invoice, we confirm that you’ve received the value you deserve.

STANDARD HOURLY RATES

STAFF LEVEL HOURLY RATES
Principal $600
Director $400
Senior manager $300
Manager $250
Senior $200
Staff $180

DELIVERING BEYOND THE STANDARD
When CPA needs additional services, we're flexible and accessible, standing ready to serve your needs beyond the scope of our engagement.

7.1.2.4. If a teaming arrangement is being proposed, teaming partner or subcontractor costs should be broken out separately.

Baker Tilly is not proposing a teaming arrangement.

19 Licensing and experience

7.1.3.1. Are Proposer’s engagement manager and partner licensed to practice in California? Baker Tilly is licensed to practice public accounting in various states across the U.S. State licensing certifications are documented and can be provided upon request. All key CPAs assigned to CPA’s engagement are licensed to practice public accounting.

7.1.3.2. Does the Proposer’s lead audit partner have experience auditing municipal electric utilities operating in California? If so, please list them.

Aaron Worthman, your engagement principal, has experience auditing municipal electric utilities operating in California and throughout the United States. California municipal electric audit clients include:
• Sacramento Municipal Utility District, CA
• Transmission Agency of Northern California
• Balancing Authority of Northern California
• Modesto Irrigation District, CA
• MSR Public Power Agency, CA
• Inland Empire Utilities Agency, CA

7.1.3.3. Does the Proposer’s lead audit partner have experience auditing Community Choice Aggregators operating in California? If so, please list them.

Aaron Worthman has been involved as a technical advisor and pre-issuance reviewer to other Community Choice Aggregators’ audits, including CPA’s audit, as well as the audits for:
• Marin Clean Energy, CA
• Redwood Coast Energy Authority, CA

7.1.3.4. Does the Proposer’s lead audit partner have experience auditing electric utilities in the US? If so, please list them.

Aaron Worthman has experience auditing electric utilities in other parts of the US, including:
• CPS Energy, TX
• Lower Colorado River Authority, TX
• Seattle City Light, WA
• Colorado Springs Utilities, CO
• The Energy Authority, FL

20 LICENSING AND EXPERIENCE

7.1.3.5. Does the Proposer have conflicts of interest that may impede its ability to provide audit services? If so, please clarify.

Baker Tilly is not aware of any conflicts of interest that would impede our ability to provide audit services.

Putting your interests first by resolving conflicts of interest CPA’s interests will always come first. Our own financial interests take a back seat. It’s one of the ways we stay objective and protect the integrity of the work we do. We’ve established these procedures to avoid or resolve any potential conflicts of interest:

• The principal in charge (PIC) monitors all client projects for potential conflicts • Our principals or directors will notify the PIC if they perceive a conflict may exist or has the potential to exist.
• If the PIC believes a potential conflict could exist, they will notify the affected team member to resolve it, meeting with the affected team member to explore the potential conflict and its extent. • If we find a real or perceived conflict, the PIC will discuss it with their clients. If any client believes a conflict exists, that client can choose how to proceed:
• Have Baker Tilly disclose the situation in writing to all parties • Have Baker Tilly establish internal boundaries, with separate staff and information flow for each client • Have Baker Tilly resign the service area of one or more clients; we would work with the client(s) to find a suitable provider

21 Modifications to CPA’s contract

7.1.4. Any required changes to CPA’s Pro Forma Contract. See Attachment B.

Notwithstanding anything to the contrary in the RFP, this bid is contingent upon Baker Tilly and Clean Power Alliance engaging in good faith discussions to reach mutually agreeable terms in order for Baker Tilly to remain compliant with applicable professional standards and regulations, in line with the previously negotiated Contract dated June 21, 2022, prior to executing a final contract.

Appendix A: Resumes

23 APPENDIX A: RESUMES PRINCIPAL
Aaron W. Worthman, CPA
Aaron Worthman, principal and leader with Baker Tilly’s energy and utilities practice, has been with Baker Tilly since 1998.

Aaron specializes in serving governmental and utility entities. His experience includes performing financial audits and agreed-upon procedure reviews as well as preparing rate studies, cost of service studies, rate designs and financial forecasts.

Specific experience
• Manages financial audits of numerous governmental and utility entities • Provides OMB Uniform Guidance compliance audits of federally funded programs
• Reviews and tests internal controls of the administration of grant programs
• Analyzes the financial impact of construction projects on utility customer rates, borrowing needs and operational results • Prepares electric, water, sewer and stormwater rate filings, cost of service studies and rate design
• Testifies as an expert witness before regulatory agencies and local governing bodies to support utility rate adjustments
• Prepares annual budgets and long range financial forecasts for municipal utilities
• Assists with the negotiation of retail utility service agreements related to large industrial developments and intergovernmental agreements Industry involvement
• American Institute of Certified Public Accountants (AICPA) • American Public Power Association (APPA)
• Texas Public Power Association
• Texas Society of Certified Public Accountants Austin Chapter • Wisconsin Institute of Certified Public Accountants (WICPA) Thought leadership
• Speaks on accounting and financial reporting topics at national and regional conferences as well as at Baker Tilly sponsored seminars • Teaches utility education courses for the APPA
• Authors nationally and regionally published articles on utility regulation and accounting issues
Baker Tilly US, LLP
901 MoPac Expressway S
Suite 100
Austin, TX 78746
United States
T: +1 (512) 975 7281
[email protected]
bakertilly.com
Education
Bachelor of Business
Administration
University of Wisconsin-Eau Claire

24 APPENDIX A: RESUMES PRINCIPAL
Aaron W. Worthman, CPA

Continuing professional education
• AICPA, national governmental and not-for-profit training session • Baker Tilly, Electric cost of service and rate design • Baker Tilly, Single audit training sessions
• Baker Tilly, Utility re-engineering audit update
• Baker Tilly, Utility training seminar
• WICPA, Governmental Financial Management Update
• Wisconsin Rural Water Association, the business of running your utility

25 APPENDIX A: RESUMES PRINCIPAL
Bethany Ryers, CPA, M.A.S.

Bethany Ryers is a principal with Baker Tilly’s energy and utilities practice, has been with the firm since 2006.

Bethany specializes in providing auditing, accounting and advisory services to utilities. She also assists with financial and capital forecasts, rate studies and impact fees.

Specific experience
• Performs financial audits of electric, water, stormwater and sewer utilities
• Conducts audits of fiduciary funds for single employer defined benefit pension plans, defined contribution plans and other postemployment benefit plans, including integration into employer government reporting as needed
• Executes financial risk assessments and internal control evaluations • Prepares financial forecasts, long-range plans and cash flow projections for municipal utilities
• Develops electric, water, sewer and stormwater rate filings, cost of service studies and rate design
• Analyzes the financial impact of construction projects on utility customer rates, borrowing needs and operational results • Compiles municipal utility financial statements and annual reports to regulatory agencies
• Delivers consulting services to public utilities, including financial capital forecasts
• Performs OMB Uniform Guidance compliance audits of federally funded programs
• Assists with implementation of accounting standards for municipal utilities, including derivatives and regulatory accounting • Provides various other accounting services
Industry involvement
• American Institute of Certified Public Accountants (AICPA) • American Public Power Association (APPA) – utility education courses instructor
• Wisconsin Institute of Certified Public Accountants
Baker Tilly US, LLP
4807 Innovate Lane
Madison, WI 53718
United States
T: +1 (608) 240 2382
[email protected]
bakertilly.com
Education
Master of Accounting Science
Northern Illinois University
Bachelor of Science in business
administration
Marquette University
(Milwaukee, Wisconsin)

26 APPENDIX A: RESUMES PRINCIPAL
Bethany Ryers, CPA, M.A.S.

Thought leadership
• Speaks on accounting and financial reporting topics at industry conferences • “Advanced public utility accounting,” APPA Spring, Fall and Winter Education institutes, 2016-Present • “Public utility accounting”, APPA webinar and Education Institutes, 2023-2024 • “The Role of the Audit Committee”, APPA Business and Financial Conference, 2021 • "Keeping up with governmental accounting standards," APPA webinar, 2020 • “Advanced public utility accounting guidebook,” APPA (contributing author), 2019 • "Governmental accounting standards and reporting update," WIAWWA Annual Meeting, 2019 • "Navigating the new lease accounting standard," Baker Tilly Utility University 2019 • "Trending complexities in public utility accounting," APPA Business and Financial Conference, 2019, 2021- 2023
• “Utility work order accounting guidebook,” APPA (contributing author), 2019 • "Welcome to the wonderful world of leases," APPA Business & Financial Conference, 2019 • "How to meet new GASB standards," APPA Business and Financial Conference, 2018 • “Meeting new GASB standards,” APPA webinar, 2018
• "Meeting new governmental accounting standards," Baker Tilly Utility University, 2018 • “Accounting standards and reporting update,” APPA webinar, 2017 and 2016 • "Current issues in public utility accounting," APPA Business and Financial Conference, 2016 • "Governmental accounting update," Baker Tilly Utility University, 2016 • “Regulatory accounting: theory and practical applications,” APPA webinar, 2016 • “Revenue bond requirements for utilities,” Baker Tilly webinar, 2013 • “Advanced utility accounting manual,” APPA (contributing author), 2012

27 APPENDIX A: RESUMES MANAGER
Ryan Theiler, CPA
Ryan Theiler, manager with Baker Tilly, has been with the firm since 2016.

Ryan specializes in serving audit clients within the energy and utilities team.

Specific experience
• Provides financial audits of electric, water, stormwater and sewer utilities
• Compiles financial statements for utility clients
• Prepares electric, water, sewer and stormwater rate filings, cost of service studies and rate design
• Compiles municipal utility financial statements and annual reports to regulatory agencies
• Provides various accounting services
Industry involvement
• American Institute of Certified Public Accountants
• American Public Power Association (APPA) – utility education courses instructor
Continuing professional education
• Certificate in Information Systems, University of Wisconsin-Eau Claire Thought leadership
• “Public utility accounting”, APPA webinar and Education Institutes, 2024-present
• “Value-added cash reserve and investment policies,” WIAWWA Annual Conference, 2021
Baker Tilly US, LLP
4807 Innovate Lane
Madison, WI 53718
United States
T: +1 (608) 240 2571
[email protected]
bakertilly.com
Education
Bachelor of Business
Administration in accounting
University of Wisconsin-Eau Claire

Appendix B: Certificates of
insurance

Carol Jacobs Holder Identifier : 7777777707070700077763616065553330772707547315556607443136663506311072751467156331120772405557067455207166015772234512075226331720763300750623313607633207304013352272130077727252025773110777777707000707007 6666666606060600062606466204446200602222624204220006220204062040002060220040622620020602200626226022006200004240262020062222040602400220622220426006020006220024042200402066646062240664440666666606000606006 Certificate No : 570110349768

CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY)
01/03/2025
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

PRODUCER
Aon Risk Services Northeast, Inc.

New York NY Office
One Liberty Plaza
165 Broadway, Suite 3201
New York NY 10006 USA
PHONE
(A/C. No. Ext):

E-MAIL
ADDRESS:

INSURER(S) AFFORDING COVERAGE NAIC #
(312) 381-1000
INSURED INSURER A: National Fire Ins. Co. of Hartford 20478 INSURER B: The Continental Insurance Company 35289
INSURER C: American Casualty Co. of Reading PA 20427
INSURER D: Transportation Insurance Co. 20494
INSURER E:

INSURER F:

FAX
(A/C. No.): (312) 381-7007

CONTACT
NAME:

Baker Tilly US, LLP
& Baker Tilly Advisory Group, LP
P.O. Box 7398
4807 Innovate Lane
Madison WI 53707-7398 USA
COVERAGES CERTIFICATE NUMBER: 570110349768 REVISION NUMBER:

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Limits shown are as requested

POLICY EXP
(MM/DD/YYYY) POLICY EFF (MM/DD/YYYY) SUBR

WVD INSR LTR ADDL TYPE OF INSURANCE INSD POLICY NUMBER LIMITS

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR

POLICY LOC

EACH OCCURRENCE

DAMAGE TO RENTED
PREMISES (Ea occurrence)
MED EXP (Any one person)

PERSONAL & ADV INJURY

GENERAL AGGREGATE

PRODUCTS - COMP/OP AGG
X
X
X
GEN'L AGGREGATE LIMIT APPLIES PER:
$1,000,000
$1,000,000
$5,000
$1,000,000
$2,000,000
$2,000,000
A 01/01/2025 01/01/2026
General Liability
C6016751638

PRO-JECT
OTHER:

AUTOMOBILE LIABILITY

ANY AUTO
OWNED

AUTOS ONLY

SCHEDULED
AUTOS

HIRED AUTOS
ONLY

NON-OWNED

AUTOS ONLY
BODILY INJURY ( Per person)
PROPERTY DAMAGE X X (Per accident)
BODILY INJURY (Per accident)
$1,000,000 A 01/01/2025 01/01/2026
Auto

COMBINED SINGLE LIMIT
(Ea accident)
BUA 6016751641

EXCESS LIAB

X OCCUR

CLAIMS-MADE AGGREGATE

EACH OCCURRENCE
DED
$2,000,000
$2,000,000
01/01/2025
Umbrella UMBRELLA LIAB B CUE6016723001 01/01/2026

RETENTION
X
E.L. DISEASE-EA EMPLOYEE
E.L. DISEASE-POLICY LIMIT
E.L. EACH ACCIDENT $1,000,000

X OTH-ER
C 01/01/2025 01/01/2026 PER STATUTE
C 01/01/2025 01/01/2026
D 01/01/2025 01/01/2026
$1,000,000
Y / N
(Mandatory in NH)

ANY PROPRIETOR / PARTNER / EXECUTIVE
OFFICER/MEMBER EXCLUDED? N N / A
Workers Compensation

WORKERS COMPENSATION AND

EMPLOYERS' LIABILITY
If yes, describe under
DESCRIPTION OF OPERATIONS below
$1,000,000
WC6016751624-AOS
WC6023746823-CA
WC6043413436-WI
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

CERTIFICATE HOLDER CANCELLATION
Evidence of Insurance AUTHORIZED REPRESENTATIVE
ACORD 25 (2016/03)
©1988-2015 ACORD CORPORATION. All rights reserved.

The ACORD name and logo are registered marks of ACORD

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE

EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

CERTIFICATE OF LIABILITY INSURANCE

DATE(MM/DD/YYYY)
10/01/2024
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

PRODUCER
Aon Risk Services Northeast, Inc.

One Liberty Plaza,
165 Broadway, Suite 3201
New York, N.Y. 10006
CONTACT NAME:

PHONE (A/C. No. Ext): 312-381-1000 FAX
(A/C. No) 312-381-7007
E-MAIL ADDRESS:

INSURER(S) AFFORDING COVERAGE NAIC #

INSURED
Baker Tilly US, LLP & Baker Tilly Advisory Group, LP
P.O. Box 7398
4807 Innovate Lane
Madison WI 53707-7398 USA
INSURER A: Columbia Casualty Company
INSURER B:

INSURER C:

INSURER D:

INSURER E:

INSURER F:

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

CERTIFICATE HOLDER CANCELLATION
Baker Tilly US, LLP & Baker Tilly Advisory Group, LP
P.O. Box 7398
4807 Innovate Lane
Madison WI 53707-7398 USA

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE
Aon Risk Services Northeast, Inc.
©1988-2015 ACORD CORPORATION. All rights reserved.

ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Limits shown are as requested INSR
LTR

TYPE OF INSURANCE ADDL
INSD
SUBR

WVD POLICY NUMBER

POLICY EFF
(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY) LIMITS

COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE

CLAIMS-MADE OCCUR DAMAGE TO RENTED PREMISES
(Ea occurrence)
MED EXP (Any one person)

PERSONAL & ADV INJURY
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE

POLICY PROJECT LOC PRODUCTS - COMP/OP AGG
OTHER:

AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT (Ea accident) BODILY INJURY (Per person)

ANY AUTO
BODILY INJURY (Per accident) OWNED AUTOS ONLY SCHEDULED AUTOS PROPERTY DAMAGE (Per accident) HIRED AUTOS ONLY NON-OWNED

AUTOS ONLY

UMBRELLA LIAB OCCUR

EACH OCCURRENCE

AGGREGATE EXCESS LIAB CLAIMS-MADE

DED RETENTION

WORKERS COMPENSATION AND EMPLOYERS' LIABILITY

ANY PROPRIETOR / PARTNER / EXECUTIVE
OFFICER/MEMBER EXCLUDED? Y / N
N / A

PER STATUTE OTHER
E.L. EACH ACCIDENT
(Mandatory in NH)
If yes, describe under DESCRIPTION OF
OPERATIONS below
E.L. DISEASE-EA EMPLOYEE
E.L. DISEASE-POLICY LIMIT
A Professional Liability Insurance ABF-188122608 01-Oct-24 01-Oct-25 Not less than US $2,000,000 per claim and in the annual aggregate.

DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

FY 2024/25
Auditor Selection
May 28, 2025

1 Recommendation
Approve the selection of Baker Tilly as the auditor for FY 2024/25 financial statements, and
Authorize CPA staff to enter into contract negotiations with Baker Tilly

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 Background Continued…
At the February 2025 Finance Committee meeting, staff presented the following key considerations for selecting audit services:
- Electric industry experience and expertise
- Reputation and independence
- Resources and effectiveness
- Communication and ongoing support
- Cost of the audit
Staff identified three categories of audit firms; “Big Four” international auditing firms, mid-tier firms with a utility specialty, and local accounting firms. The Finance Committee recommended that staff solicit proposals from any auditor, including the Big Four and local accounting firms.

Staff conducted a competitive solicitation in which it requested proposals from thirteen accounting firms. These included the current auditor, along with twelve accounting firms from the County of Los Angeles Preferred Auditor List.

Four accounting firms submitted a proposal. These were Baker Tilly, LLP; Kosmatka, Donnelly & Co, LLP; Macias Gin & O’Connell, LLP; Vasquez & Company, LLP.

4 Staff recommends selecting Baker Tilly for the
following reasons:

Baker Tilly has a nationwide practice auditing electric utilities and has deep electric utility industry expertise and knowledge. Baker Tilly will become the 6th largest auditor in the country following its announced merger with Moss Adams.

Baker Tilly has experience auditing California CCAs and CCA related entities. In addition to six years of experience auditing CPA, Baker Tilly audits Marin Clean Energy, Redwood Coast Energy Authority and the California Community Choice Financing Authority.

Baker Tilly has extensive knowledge of California energy markets and has experience with municipal electric utilities. It provides audit services for Northern California Power Agency, Balancing Authority of Northern California, Sacramento Municipal Utilities District (SMUD), Trinity Public Utilities District, MSR Public Power, Imperial Irrigation District, and Modesto Irrigation District.

Baker Tilly offered the lowest cost option.

5 Other comments concerning Baker Tilly
• Aaron Worthman is the proposed audit partner for the CPA engagement. Mr. Worthman is the leader of Baker Tilly’s energy and utility practice and specializes in serving governmental and utility entities.
• In its previous engagements with Baker Tilly, CPA experienced low audit staff turnover, high partner and management availability for discussion, clear audit processes and communications, and on-time delivery of audit results.
• Baker Tilly has agreed to comply with CPA’s requested audit schedule for the FY 2024/25 audit and to execute a contract that provides CPA with an option to renew for one or more additional years beyond the FY 2024/25 audit. CPA would only exercise contract renewal options with Baker Tilly if the Finance Committee selects them in the future to perform audits for FY 2025/26 and beyond.

6 Recommendation
Approve the selection of Baker Tilly as the auditor for FY 2024/25 financial statements, and
Authorize CPA staff to enter into contract negotiations with Baker Tilly

Questions?

Staff Report – Agenda Item 7
To: Finance Committee
From: Jennifer Stevenson, Financial Planning and Analysis Manager Reviewed by: David McNeil, Chief Financial Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Proposed Fiscal Year 2025/2026 Budget
Date: May 28, 2025

RECOMMENDATION
Recommend approval of the Proposed Fiscal Year (FY) 2025/26 Budget to the Board of Directors at its June 5, 2025 meeting.

BACKGROUND
Each year CPA develops an annual budget to govern the receipt of revenues, the incurrence of expenses, and capital expenditures made during the upcoming fiscal year.

The Proposed FY 2025/26 Budget is provided in Attachment 2.

The Proposed FY 2025/26 Budget incorporates the budget priorities presented to, and rate-setting approach approved by, the Board at its May 1, 2025, meeting. Staff will present the Proposed FY 2025/26 Budget to the Board for approval on June 5, 2025.

SUMMARY
The FY 2025/26 Proposed Budget reflects lower energy costs, a lower contribution to Reserves, and higher interest income, while providing room for higher operating expenses. These key elements were considered in the rate setting approach approved

Finance Committee Item 7
by the Board in May and enable CPA to reduce revenue through lower rates, while still covering costs and achieving the target Reserve balance and liquidity goals outlined in the Reserve Policy.

Other key takeaways:
• Lower energy costs are driven by lower energy market prices and lower-cost long-term power purchase and energy storage agreements replacing in many instances higher cost, short-term contracts.
• Higher operating expenses primarily reflect investments in staffing, customer programs, and marketing and communications.
• Higher interest income results from higher investable assets which are managed in accordance with CPA’s Board approved Investment Policy. • The projected increase in net position is expected to bring CPA’s Reserve percentage to 50% by June 30, 2026 with a days liquidity on hand level of 189 days, consistent with CPA’s Board approved Reserve Policy, and well prepared to respond to market, policy, regulatory, and competitiveness volatility in the future.

DISCUSSION
The Proposed Budget sets forth changes to the following budget line items:

Revenue – electricity net (-$262,613,000; 17% decrease): Budgeted electricity revenues are based on estimates of customer electricity usage and the cost of service to procure generation for customers. Budgeted revenues reflect a year-over-year increase in budgeted load of 0.1%; increases in load from new community enrollments and increased customer electrification is offset by decreases from customer solar additions and refinements in CPA’s load forecast modeling. Budgeted revenues include an allowance for bad debt equal to 2.0% of revenues or $26.9 million. Revenues are budgeted to be lower than the prior year’s budget as they reflect the full year impact of the March 1, 2025, rate decrease and the rate approach approved by the Board on May 1, 2025.

Finance Committee Item 7
Other revenue (+$1,575,000; 54% increase): Other revenue includes operating revenue from sources other than retail electricity sales. Other revenue includes funding from the California Public Utilities Commission (CPUC) to support the Power Share program and a projection for funding through the Southern California Equitable Building Decarbonization grant. Other Revenue partially offsets the increase in expenses budgeted this FY in the Customer Programs, Staffing, Mailers, and Communications budget line items.

Cost of energy (-$185,851,000; 13% decrease): Cost of energy includes expenses associated with the purchase of system energy, renewable energy, Resource Adequacy, and charges by the California Independent System Operator (CAISO) for load and services performed by the CAISO. CAISO charges for load are based on electricity consumed by CPA customers and related line losses and prices at the Default Load Aggregation Point (DLAP). Credits for energy generation scheduled into the CAISO market and revenues arising from Congestion Revenue Rights (CRRs) are netted from the cost of energy. CRRs are financial instruments created by the CAISO which enable load serving entities, such as CPA, to manage price differences between wholesale energy delivery locations and retail use points. CAISO credits for energy generation are based on wholesale energy deliveries and Locational Margin Prices (LMPs). The budgeted cost of energy is projected to decrease year-over-year due to decreases in renewable energy and Resource Adequacy market costs, as well as the impact of 328 MW of renewable energy and 420 MW of storage that began commercial operation under long term PPAs in FY 2024/25 and FY 2025/26 replacing, in many cases, higher cost, short term contracts. The cost of energy budget includes a contingency equal to 7.1% of projected cost of energy.

Staffing (+$3,770,000; 16% increase): Staffing costs include salaries and benefits payable in accordance with CPA’s Board-approved Employee Handbook, and salary grades and ranges approved by the Board on February 6, 2025. 57% of the increase is driven by the full-year impact of FY 2024/25 new hires, merit increases, a cost-of-living adjustment (COLA), and retention incentives. 43% of the increase is due to 7 new

Finance Committee Item 7
positions and 4 potential unallocated mid-year hires. CPA is continuing with its retention program incentive through FY 2025/26, based on the Board’s direction at its September 7, 2023, board meeting.

The FY 2025/26 budgeted staffing costs increase is composed of the following:
$594,000 of these staffing expenses are reimbursable via CPUC Power Share customer program funding, and Southern California Equitable Building Decarbonization grant funding administered by the County of Los Angeles.

Technical services (+$529,000; 27% increase): Technical services comprise professional services for scheduling coordination, short- and long-term energy contracting, risk and portfolio management, and support for customer programs where engineering or other technical expertise is required. Scheduling coordinators provide a variety of services including scheduling generating and storage assets and customer energy use into the CAISO markets, managing CRR purchases and sales, validating CAISO invoices, and providing risk management and energy contract management software. Increases are primarily driven by an expectation that Scheduling Coordinator costs will increase after the expiry of CPA’s current Scheduling Coordinator contract in late 2025.

Finance Committee Item 7
FY 2025/26 budgeted technical services expenses are composed of the following:

Legal services (+$453,000; 42% increase): Legal services support CPA’s contracting, including energy contracting for short- and long-term energy, resource adequacy, and non-energy contracting, including banking, finance, and local programs. Legal services also include support for specific regulatory proceedings (e.g., SCE’s ERRA Applications, SCE General Rate Case, and other compliance obligations), employment matters, governance, and general liability management. The budget increase is primarily due to the new Innovation Request for Offers process, the CPUC’s anticipated decision on the PCIA and related impact, and researching and addressing potential risk considerations associated with asset ownership. The majority of the budget in this section is provided by the firms listed in the following table:

Legal Service Major Providers
Energy Contracting Hall Energy Law
Clean Energy Counsel
Keyes & Fox
Perkins Coie
Regulatory Compliance and CPUC Proceeding
Advocacy
Braun Blaising & Wynne
Keyes & Fox
Braun, Blaising & Wynne
BRB Law LLP
Customer Programs Support Shute Mihaly & Weinberger
Banking and Finance Chapman
Employment Law and Compliance Jackson Lewis
General Liability and Governance Actium
Colantuono, Highsmith & Whatley
Coleman Frost
Polsinelli
Other services (+$545,000; 24% increase): Other services represent professional services not budgeted under Technical or Legal services and includes costs associated with energy compliance auditing, financial audits and audit support, rate setting, lobbying

Finance Committee Item 7
services, non-technical assistance for local programs, and staff support services including recruitment, payroll, and benefits administration, IT support, and labor compliance.

The proposed budget increase is due primarily to budgeting for consulting services to support the procurement of business management software focused on enhancing CPA’s financial systems, as well as consultants to support FY 2025/26’s regulatory applications.

FY 2025/26 budgeted other services expenses are composed of the following:

Communications and marketing services (+$2,097,000; 53% increase):

Communications and marketing related services include costs associated with customer outreach, marketing, branding, website management, translation, advertising, special events, and sponsorships. The increase in communications and marketing expenses reflects investments in activities and consultants to support customer acquisition for CPA’s customer programs through advertising, sponsorship, social media, and branding efforts.

Finance Committee Item 7
FY 2025/26 budgeted communications expenses and offsetting revenue (the latter recorded in the Other Revenue budget line item) are composed of the following:
65% of the communications and marketing budget is directed towards supporting Programs initiatives. The proposed increase in Special Events is to procure and deploy a Mobile Education Unit at community events throughout CPA’s service territory.

Customer notices and mailing services (583,000; 69% increase): This budget item supports communications with CPA’s customers, most of which are required by the CPUC. Costs include printing and postage and are increasing primarily due to new community enrollments in FY 2025/26 and an increase in Program related mailings.

FY 2025/26 budgeted customer notices and mailing services are composed of the following:

Billing data management services (+$238,000; 2% increase): Billing data manager costs are based on the number of customer meters served by CPA and monthly per-meter rates charged by CPA’s billing data manager, Calpine Energy Services. Increased costs reflect a 2.5% inflation escalator on per-meter charges included in the Calpine contract approved by the Board on April 1, 2021, and the impact of the three new community enrollments beginning October 2025.

Finance Committee Item 7
Service fees – SCE (+$154,000; 7% increase): Service fees are charged by SCE for a variety of customer billing and administrative services. The increase in service fees results from adding contingencies to cover unforeseen costs from SCE, as well as the increase in customer accounts due to three new community additions beginning in October 2025.

Customer Programs (+$1,217,000; 9% increase): Customer programs represent direct costs associated with providing energy programs to CPA customers and other related services. Direct costs include both incentives for participation and payments to third parties for program implementations. The FY 2025/26 customer programs budget supports the CPA Power Share program (expenses and above-market energy costs are reimbursable from CPUC), CPA’s EV charger rebate program which provides matching funds for electric vehicle charger incentives administered by the Center for Sustainable Energy/CALeVIP program, ongoing Power Response, Power Ready, Reach Code programs, Energized Communities, Sun Storage Rebate, Energy Advisor, Instant AC Savings program, Solar and Battery Access program, EV SmartCharge program, Hard to reach EV Technical Assistance, Low Income Efficient Cooling (Landlord) program, and a new Wildfire Recovery program.

Finance Committee Item 7
FY 2025/26 budgeted customer programs expenses are composed of the following:

The smaller increase in Customer Programs expenses as compared to previous years’ results from lower-than-expected administrative costs and improved expense timing projections for some existing programs, offset by greater investments in other programs.

Finance and interest expense (+$531,000; 82% increase): Finance and interest expenses represent fees, borrowing interest, and letter of credit costs associated with CPA’s loan facility. Finance and interest expenses include a contingency to allow for borrowing or posting of letters of credit.

Interest income (+$17,065,000; 180% increase): Interest income represents income earned on funds in Certificates of Deposits and savings accounts held by River City Bank, on US Treasury note investments, and on funds held in other investment accounts including the California Asset Management Program (CAMP) and the Local Agency Investment Fund (LAIF). CPA invests funds and earns interest income pursuant to its Investment Policy which prioritizes the safety and liquidity of investments and investment returns. The increase in interest income arises from a larger pool of funds available for investment.

Finance Committee Item 7
Capital outlay (+$13,000; 4% increase): Expenditures associated with capital outlay will support and accommodate equipment purchases and office improvements as they age and need to be replaced.

ATTACHMENTS

1. Proposed FY 2025/26 Budget Presentation

2. Proposed FY 2025/26 Budget

Proposed FY 2025/26 Budget
May 28, 2025

Recommendation:

Recommend approval of the Proposed Fiscal Year (FY) 2025/26 Budget to the Board of Directors

FY 2025/26 Budget Process
3  January – April 2025 (Staff) – FY 2025/26 Goal Setting, Departmental Budgeting, Rate Design Planning, Energy Cost Projections & Consolidated Budget Planning (ongoing)  April 17, 2025 (Executive Committee) – Budget Priorities  April 23, 2025 (Finance Committee) – Budget Priorities & Draft FY 2025/26 Budget  May 1, 2025 (Board) – Budget Priorities
 May 15, 2025 (Community Advisory Committee) – Draft FY 2025/26 Budget  May 15, 2025 (Executive Committee) – Draft FY 2025/26 Budget May 28, 2025 (Finance Committee) – Proposed FY 2025/26 Budget June 5, 2025 (Board) – Proposed FY 2025/26 Budget

FY 2025/26 Budget Overview
4 The FY 2025/26 Proposed Budget reflects:

Lower energy costs ($1.21 billion; year-over-year decrease of $186 million or 13%) Lower contribution to Reserves ($65.1 million; year-over-year decrease of $68.2 million or 51%) Higher interest income ($26.7 million; year-over-year increase of $17.1 million or 180%) Higher operating expenses ($77.1 million; year-over-year increase of $9.6 million or 14%) Lower revenues ($1.32 billion; year-over-year decrease of $263 million or 17%) These key elements were considered in the rate setting approach approved by the Board in May and enable CPA to reduce revenue and cover costs, while still achieving the target Reserve balance and liquidity goals outlined in the Reserve Policy.

Energy Costs
5 13% reduction in energy costs reflect:
328 MW of renewable energy and 420 MW of storage that began commercial operation under long term PPAs in FY 2024/25 and FY 2025/26 replacing, in many cases, higher cost, short term contracts
A decrease in market prices for resource adequacy and renewables A contingency equal to 7.1% of projected energy costs

Operating Expense Highlights
74% of the Operating Expense increase is due to budget priorities in:

Staffing: Year-over-year increase of 16%
o Increase reflects full year impacts of FY 2024/25 new hires, COLA, merit, retention incentives, 7 new positions, and 4 potential unallocated mid-year hires (see slide 15 for details). $594K is reimbursable by grant and program funding (included in Other Revenues) Communications: Year-over-year increase of 53%
o Increase supports customer program acquisition through website enhancements, market research and CBO-led outreach efforts, as well as branding efforts to improve CPA brand recognition and awareness, and a turnkey Mobile Education Unit. 65% of the total Marketing and Communications budget is intended to support Programs
Customer Programs: Year-over-year increase of 9%
o The smaller increase in Customer Programs expenses as compared to previous years’ results from lower than expected administrative costs and improved expense timing projections for some existing programs, offset by greater investments in other programs

6 Staffing cost increases are decelerating as
CPA matures and new hires provide primarily
professional / technical support
Communications & Marketing Budget year-over-year growth reflects support for CPA’s growing suite of customer programs - including associated tasks such as enhanced website interactivity, CBO outreach, and market research – and the deployment of a Mobile Education Unit
Customer Programs growth tracks to development of program offerings and improved expense timing projections
Operating Expense Year-over-Year Trends

7 Non-Operating Revenue and Reserves
8 Interest income is projected to increase by 180% year-over-year due to a larger pool of funds available for investment
CPA invests funds and earns interest income pursuant to its Investment Policy which prioritizes the safety and liquidity of investments and investment returns
The budgeted increase in the net position is anticipated to bring CPA’s reserve percentage to 50% by June 30, 2026, achieving the target balance as outlined in the Reserve Policy1 Days liquidity on hand (DLOH)2 would increase to 189 days consistent with the Reserve Policy 1 Reserves are the sum of the Net Position and Fiscal Stabilization Fund (also known as balance sheet equity) and are not equivalent to, nor held as, cash 2 DLOH is equal to the sum of cash, investments and available line of credit divided by average daily expenses

Total Revenue
9 Net electricity revenue’s 17% decrease reflects:

The Board approved FY 2025/26 rate approach3
The full year impact of the rate decrease that went into effect in March 2025 A year-over-year increase in budgeted load of 0.1%; increases in load from new community enrollments and increased customer electrification is offset by decreases from customer solar additions and refinements in CPA’s load forecast modeling
A bad debt expense budgeted at 2.0% of revenue or $26.9 million which is relatively flat to the 1.9% of revenue included in the FY 2024/25 Budget
3 FY 2025/26 Rate Approach approved by the Board May 1, 2025: Strengthened Reserve approach resulting in targets of Lean -2%, Clean 0%, 100% Green +6% compared to Residential/Small Business SCE base rates as of June 1, 2025. Targets are based on total bill comparisons on a representative 2018 PCIA vintage rate schedules, average customer usage, and load profiles for each specified rate class. Individual customer comparisons vary by specific rate schedule and customer usage.

The FY 2025/26 Proposed Budget reflects:

Lower energy costs ($1.21 billion; year-over-year decrease of $186 million or 13%) Lower contribution to Reserves ($65.1 million; year-over-year decrease of $68.2 million or 51%) Higher interest income ($26.7 million; year-over-year increase of $17.1 million or 180%) Higher operating expenses ($77.1 million; year-over-year increase of $9.6 million or 14%) Lower revenues ($1.32 billion; year-over-year decrease of $263 million or 17%) The budgeted increase in net position is anticipated to achieve CPA’s Reserve Policy target of 50% by June 30, 2026, with a days’ liquidity on hand level of 189 days CPA financial metrics continue to compare favorably with peer CCAs and are consistent with CPA’s “A-” credit rating
10 Summary

Recommendation:

Recommend approval of the Proposed FY 2025/26 Budget to the Board of Directors

Questions?

Select CCA Metrics and Comparisons
13 CPA’s metrics for total operating expenses and staffing costs compare favorably with industry averages

Reserve Policy Targets
CPA Reserve Policy
“CPA shall grow reserves to maintain a minimum reserve target equal to 30% of total operating budget expenditures, with a goal of increasing the reserve to a maximum reserve target of 50% of total operating budget expenditures. Reserves shall not exceed 60% of total operating budget expenditures. Reserves shall support the goal of securing 120 days liquidity on hand.”

14 Current Staff Headcount + Proposed Positions
(updated for Proposed Budget)
Department Current Positions Proposed New Positions Total Executive (including Board Office) 7 0 7
Legal 3 0 3
Coms & Marketing 11 2 13
Customer Care 4 0 4
Customer Programs 9 1 10
Data & Systems 7 1 8
Finance (including Accounting, FP&A, Load Forecasting, Risk Management, Strategic Initiatives, Treasury)
13 (two open)
2 15
Government Affairs 5 0 5
Operations (including Non-Energy Procurement, Strategic Accounts) 3 0 3 People & Culture/Admin 5
(one open)
0 5
Power Supply 16
(one open)
0 16
Rates & Strategy 3 1 4
Regulatory Affairs 4 0 4
Unallocated (mid-year hires based on need) - Up to 4 TBD Total 90 7-11 97-101

15 A B C D E F
FY 2024/25
Budget
FY 2025/26
Budget
Budget
Difference ($)
Budget
Difference (%)
% of
Revenue
Revenue - Electricity net 1,582,354,000 1,319,741,000 (262,613,000) -17% Transfer from Fiscal Stabilization Fund - - - 0%
Other revenue 2,939,000 4,514,000 1,575,000 54%
TOTAL REVENUE 1,585,293,000 1,324,255,000 (261,037,000) -16% TOTAL ENERGY COSTS 1,393,295,000 1,207,444,000 (185,851,000) -13% 91% NET ENERGY REVENUE 191,998,000 116,811,000 (75,186,000) -39%

OPERATING EXPENSES
Staffing 24,076,000 27,846,000 3,770,000 16% 2.1%
Technical services 1,936,000 2,465,000 529,000 27% 0.2% Legal services 1,089,000 1,542,000 453,000 42% 0.1%
Other services 2,257,000 2,802,000 545,000 24% 0.2%
Communications and marketing services 3,982,000 6,079,000 2,097,000 53% 0.5% Customer notices and mailing services 842,000 1,425,000 583,000 69% 0.1% Billing data management services 12,041,000 12,279,000 238,000 2% 0.9% Service fees - SCE 2,250,000 2,404,000 154,000 7% 0.2%
Customer programs 13,208,000 14,425,000 1,217,000 9% 1.1% General and administration 5,828,000 5,836,000 8,000 0% 0.4% TOTAL OPERATING EXPENSES 67,509,000 77,103,000 9,594,000 14% 6% OPERATING INCOME 124,489,000 39,708,000 (84,781,000) -68% Finance and interest expense 645,000 1,176,000 531,000 82% TOTAL NON OPERATING EXPENSES 645,000 1,176,000 531,000 82% Interest Income 9,503,000 26,568,000 17,065,000 180%
TOTAL NON OPERATING REVENUE 9,503,000 26,568,000 17,065,000 180% NON OPERATING REVENUE (EXPENSE) 8,858,000 25,392,000 16,534,000 187% CHANGE IN NET POSITION 133,347,000 65,100,000 (68,247,000) -51% 3% NET POSITION BEGINNING OF PERIOD 327,654,232 461,001,232 133,347,000 41% NET POSITION END OF PERIOD 461,001,232 526,101,232 65,100,000 14% FISCAL STABILIZATION FUND 135,000,000 135,000,000 - 0%
RESERVES END OF PERIOD (Net Position + FSF) 596,001,232 661,101,232 65,100,000 11% Other Uses
Capital Outlay 325,000 338,000 13,000 4%
Depreciation & Amortization (794,000) (617,000) 177,000 -22% CHANGE IN FUND BALANCE 133,816,000 65,379,000 (68,437,000) -51% Note: Funds may not sum precisely due to rounding
CLEAN POWER ALLIANCE of SOUTHERN CALIFORNIA
Fiscal Year 2025/2026 Budget

PROPOSED