FY26/27 and FY27/28 Budget Priorities and
Operating Expense Highlights
April 16, 2026
FY26/27 & FY27/28 Budget Process
2 January – April 2026 (Staff) – Goal Setting, Departmental Budgeting, Rate Design Planning, Energy Cost Projections & Consolidated Budget Planning
January 28, 2026 (Finance Committee) - 2-year Budget Cycle Proposal March 19, 2026 (Executive Committee) - 2-year Budget Cycle Proposal April 2, 2026 (Board) – 2-year Budget Cycle Proposal
April 16, 2026 (Executive Committee) – Budget Priorities April 22, 2026 (Finance Committee) – Budget Priorities and Draft FY26/27 & FY2027-28 OpEx budgets May 14, 2026 (Board) – Budget Priorities
May 21, 2026 (Community Advisory Committee) – Draft Budgets, Budget Priorities, and 2-year Budget Cycle Proposal May 21, 2026 (Executive Committee) – Draft FY26/27 & FY2027-28 Budgets and Draft Budget Policy May 27, 2026 (Finance Committee) – Proposed FY26/27 & FY2027-28 Budgets and Draft Budget Policy June 4, 2026 (Board) – Proposed FY26/27 & FY2027-28 Budgets and Proposed Budget Policy Clean Energy Portfolio Delivery and
Competitiveness
1. Maintain reserves at or near maximum
target and position CPA for long-term
competitiveness
2. Meet renewable procurement and GHG
emissions targets and implement long-term
rate product strategy
Customer Benefits and Impact
3. Deliver bill savings, environmental, and
resiliency benefits via customer and
member agency programs
4. Increase customer engagement while
maintaining customer participation rates
3 Current Organizational Priorities
Organizational Effectiveness
5. Develop the next generation of tools and
systems to support effective, data-driven
decision making, process improvements,
and risk mitigation
6. Support an engaged, effective Board
7. Invest in and support development of high-performing and diverse staff Industry Leadership
8. Comply with or surpass all regulatory and
legal obligations
9. Provide regional and statewide leadership
that addresses reliability, resiliency, and
affordability
4 CPA manages ~$1 billion of annual energy costs representing 92% of total costs. In addition, CPA contracts for and operationalizes long-term renewable and storage projects involving billions of dollars of financial commitments
While energy prices are falling, competitiveness pressures are ever-present, requiring CPA to be nimble, continuously innovating, and well-staffed Awareness of CPA among our customers has grown to 90% and CPA now tops SCE when customers are asked to name a “clean energy company.” Nevertheless, almost half of customers do not know what we do.
Electricity affordability tops reliability and environmental performance as key concerns CPA can help mitigate rising electricity bills by:
Delivering customer programs that save customers money and reduce peak load Continuing to invest internally in systems and people that manage risk Continuing to invest in education and outreach to support customer engagement and awareness with a focus on “participation” (i.e. programs, retention, behavior change) Seeking out innovative business and policy measures that can affordably and resiliently fulfill CPA’s decarbonization mission
Operating Expense Context
FY26/27 & FY27/28 Operating Expenses Overview
5 Operating expenses represent 8% of CPA’s total costs. Operating expense adjustments have limited impact on customer rates in the short term, though this budget supports work that helps keep customer rates competitive and stable over time.
Overall OpEx projected to increase ~11%-13% in both FY26/27 (~$8M-$10M) and FY27/28 (~$10M-$12M). Over the past four years, OpEx growth has averaged 25% and ~$11M in nominal terms.
Proposing to separate out Software & Data expenses into separate line item from General & Administrative expenses to recognize increasing technology investments.
Flat/Minimal Increases: Technical Services, Other Services, Billing Services, G&A Down: Legal, SCE Service Fees
Up: Customer Programs (YR 2), Communications and Marketing (YR1), Mailers (YR1), Software (Y1 and Y2)
Historical: Potential staffing growth in FY26/27 (~13%) and FY27/28 (~ 14%) is slightly lower than last year (16%). Growth in new positions mostly aligned with rising spend areas Technology
Budget Priorities
FY26/27 & FY27/28 Technology Investments
7 Data & Software budget is projected to increase by ~$1M in FY26/27 and ~$2M in FY27/28
Data & Systems roadmap guides technology improvements through 2028 Projected investments include technology to:
• Build out CPA’s database infrastructure and reporting capabilities • Upgrade/implement new accounting, payroll, financial reporting, and budgeting software to increase productivity
• Optimize energy expense management with new software solutions in energy modeling, energy contract settlements, and storage optimization Customer Programs
Budget Priorities
Expanding Investments
in Existing Programs
Energized Communities
Program now has 20 member agencies
participating through its Pathways offering and
another 10 through Innovation Fund.
In FY26/27 CPA plan to launch a third round of
the Innovation Fund that focuses specifically on
community resilience projects.
2-year budget also reflects CPA’s intention to
continue its Pathway offerings, including
opening a second round of funding in FY27/28.
Power Ready
CPA will implement a second round of the
Power Ready program, creating another 5-10
resilience projects at critical municipal
facilities.
Budget reflects soft costs to develop and
own these assets (construction costs not
likely until FY28/29)
9 Proposed increase in Customer Programs
budget of $3.0M over the next two years to
fund continued expansion of successful
programs, including Energized Communities
and Power Ready.
Budget for some programs is reduced
relative to FY25/26 to better align program
budget and timing of spend (Instant AC
Savings, EV SmartCharge, and Power
Response) and to account for program
sunsetting (Reach Codes and CALeVIP).
Launching New Programs Focused on
Multifamily and Commercial Customers
Investment of $2.2M in new programs launching over the next two fiscal years.
1. Apartment Building Cooling ($915K) is complementary to tenant-focused Instant AC Savings; will assist small apartment property owners to install high-efficiency cooling equipment
2. Partnership Programs with Regional Energy Networks ($451K) to increase incentives available for comprehensive upgrades and electrification of cooling systems
3. Multifamily EV Charging Program ($450K) will provide technical assistance and incentives to install low-powered EV charging outlets and level 2 chargers
4. New Commercial Program ($350K) Potential new program offering(s) to expand services to our commercial customers; anticipated to be developed and launched in FY27/28 10 Communications and
Marketing Budget
Priorities
Communications and Mailers Budgets
Mailers budget is expected to increase by ~ $500K in FY26/27 and ~ $100K in FY27/28 due to increased mailers related to Customer Programs marketing. Physical mailers continue to show high levels of effectiveness, particularly among low-income and other “hard-to-reach” customers.
Communications budget is expected to increase by ~$3.0M in FY26/27 and ~$0.8M in FY27/28.
73% of FY26/27’s estimated growth and 60% of FY27/28’s estimated growth are due to increased marketing support for Customer Programs.
Budget increase further reflects expected higher marketing costs due to the upcoming congested media market (e.g. 2026 elections, 2027 Super Bowl, 2028 Olympics).
In addition to this growth, there are three proposed investments in community events and PR enhancements for which Staff is seeking Board guidance:
1) Mobile Education Unit
2) Expanded Public and Media Relations/Visibility
3) Scope for CPA’s 10th Anniversary Celebration
12 Communications Budget Options/Mobile Unit
A mobile education unit would provide high visibility access to CPA in our communities, continue to build brand awareness and recognition, and further grow engagement with our customers. Projected costs exceeded budget in FY25/26 so the project was paused.
Decision Point: Is a Mobile Education Unit still a Board priority? Deliverables: Year-round community events such as farmer’s markets, Earth month events, and experiential events, targeting up to 50 events per year.
Desired Outcome: Customers who feel informed to participate in CPA programs and are better connected to CPA as their local electricity provider.
Cost: ~$2.4M over two fiscal years, inclusive of one new staff position 13 Examples of mobile units
Communications Budget Options/Enhanced PR
Clean Power Alliance continues to craft and distribute content about who we are, what we do, and the benefits CPA brings to the region. Investing in Public and Media Relations editorial content and outreach will heighten our visibility and reach by engaging a PR agency to develop additional content such as case studies of projects in our communities, and editorials.
Decision point: Should CPA invest in an enhanced Public and Media Relations strategy? Deliverables: Written and video case studies on CPA’s local community projects to leverage for advertising, written editorials, support for media pitching, increased print, digital and radio advertising, and more video content.
Desired Outcome: Elevate our role as a clean energy thought leader at the local, regional and national levels.
Cost: ~$500K/year
14 Communications Budget Options/10th Anniversary
Clean Power Alliance will mark its 10th anniversary in 2028. A festive 10th anniversary stakeholder event will bring together board directors, community advisors, member agency staff, CPA staff and other key stakeholders to celebrate. Expanding the 10th anniversary celebration to include a paid media presence in our communities could foster a sense of shared celebration among CPA customers.
Decision Point: Should CPA expand the 10th Anniversary Celebration to include paid media? Deliverables: Pole banners, bus shelters/wraps or other out of home content visible in the communities.
Desired Outcome: Bring additional awareness of CPA as Southern California’s established clean energy leader and trusted local electricity provider.
Cost: ~$500K in FY27/28
15 Bus wraps and pole banners bring CPA brand
visibility to our communities
Celebrating
milestones brings
people together
Staffing Budget
Priorities
Staffing - Context
17 FY 2025/26 budgeted headcount of 100. Current headcount = 93 (with 7 open positions) Turnover rates are picking up after a post-COVID dip:
Jan 2021 to March 2022 – Hired 35/Net gain of 14
April 2022 to March 2023 – Hired 20/Net gain of 14
April 2023 to March 2024 - Hired 18/Net gain of 15
April 2024 to March 2025 – Hired 14/Net gain of 11
April 2025 to March 2026- Hired 16/Net gain of 10
Initial FY26/27 budget reflects a 13%-15% increase in staffing costs relative to FY25/26. 53% of the increase is due to the full-year impact of current year’s new hires, next year’s COLA, and other retention efforts. The growth rate in the staffing budget continues to decelerate.
Budgeting 8-10 new positions in FY26/27 (similar to FY25/26). New positions address growth in communications and marketing, energy contracting, customer and community support, and cybersecurity. (see slide 19 for details)
2:1
1.2:1
1.6:1
Initial Staffing Budget Projection
18 Initial budget projections are for staffing costs to increase by 13%-15% in FY26/27, increasing from 2.0% of total revenue in FY25/26 to ~2.7% of revenue in FY26/27 (depending on rate approach selected by the Board).
A budgeted staffing growth of ~14% in FY27/28 allows for the addition of new staff positions as strategic needs evolve particularly surrounding technological upgrades and emerging initiatives.
Staffing Budget Growth Rates Over Time FY26/27 Staffing Budget Breakdown Current Staffing + Proposed FY 26/27 Positions
Department Current Positions Proposed New Positions Total Executive (including Board Office) 7 0 7
Legal 3 1 Support Power Supply 4
Coms & Marketing 14
(one grant funded, two open)
2 (+2) Support Programs and Admin
(Enhanced PR and Events) 16 (+2)
Customer Care 4 1 Support Customer Inquiries 5
Customer Programs 11
(one open)
1 Demand Management 12
Data & Systems 8
(one open)
1 Cybersecurity 9
Finance (including Accounting, FP&A, Load Forecasting, Risk Management, Strategic Initiatives, Treasury)
15 (one open)
0 15
Government Affairs 6 1 Enhanced Community/Policy Support 7 Operations (including Non-Energy Procurement, Strategic Accounts) 3 0 3 People & Culture/Admin 5 0 5
Power Supply 16
(two open)
1 Support CAISO/PPA settlements 17
Rates & Strategy 4 0 4
Regulatory Affairs 4 0 4
Total 100 8-10 108
Operating expenses projected to be ~8% of total costs in FY26/27 and FY27/28 Budgeted increases in operating costs are driven primarily by increases in software, programs and associated marketing, and staffing
Staffing cost growth continues to decelerate; new positions are focused around key growth areas; strong retention efforts remain in place
Staff seek input on the two-year budget priorities presented and initial guidance on three communication options:
1) Mobile Education Unit ($2.4M over 2 years)
2) Expanded Public and Media Relations/Visibility ($500K per year) 3) Expanded scope for CPA’s 10th Anniversary Celebration ($500K in FY27/28) 20 Summary
Questions?
22 Current Org Chart