ATTENTION: DCE VOTING MEMBERS WILL RECEIVE A UNIQUE PANELIST LINK BY EMAIL. PLEASE USE THIS LINK TO PARTICIPATE IN THIS MEETING.
DESERT COMMUNITY ENERGY
BOARD MEETING AGENDA
Monday, January 10, 2022
*Please note the start time of 3:00 p.m.*
Pursuant to Assembly Bill 361 and the findings made by the DCE Board, this meeting will only be conducted via video/teleconferencing.
INSTRUCTIONS FOR PUBLIC PARTICIPATION
Online:
https://us02web.zoom.us/j/87850326449?pwd=NmkrNTE5dWd6SjduSDJvRlRIR0Zodz09 Passcode: 475380
One tap mobile:
US: +16699009128,,87850326449#
By Phone:
Dial In #: +1 669 900 9128
Webinar ID: 878 5032 6449
Passcode: 475380
This will provide listening access and ability to address the DCE Board when called upon.
IF YOU ARE UNABLE TO CONNECT VIA DIAL IN OPTION, PLEASE CALL 760-346-1127 Members of the public are encouraged to submit comment in connection with the Desert Community Energy meeting by email to: [email protected] by 5:00 p.m. on the day prior to the committee meeting. Comments intended to be read aloud into the record should be no more than 300 characters in length.
THIS MEETING IS HANDICAPPED ACCESSIBLE.
ACTION MAY RESULT ON ANY ITEMS ON THIS AGENDA.
1. CALL TO ORDER
2. ROLL CALL
A. Member Roster 4
3. PUBLIC COMMENTS ON AGENDA ITEMS
Any person wishing to address the Desert Community Energy Board on items appearing on this agenda may do so at this time. Please limit comments to 3 minutes. At the discretion of the chair, additional public comment time and/or opportunities during the meeting may be granted.
4. BOARD MEMBER / DIRECTOR COMMENTS
5. CONSENT CALENDAR
A. Approve Minutes from Board Meeting of November 29, 2021 5 B. Affirm that findings still exist, pursuant to Assembly Bill 361, and 8 authorize continuation of remote teleconference/virtual meetings of Desert Community Energy
C. Appoint Don Barrett of Palm Springs to fill a vacancy on the Community 9 Advisory Committee to complete the term ending in August 2023
6. DISCUSSION / ACTION
A. Line of Credit with River City Bank – Katie Barrows 11 Recommendation: Adopt Resolution 2022-01, approving a Credit Facility with River City Bank in an amount not to exceed $8,000,000, and authorizing the Executive Director, in consultation with Legal Counsel, to negotiate and take such action necessary and appropriate to finalize and execute the Credit Facility documents for a revolving line of credit consistent with the term sheet dated December 13, 2022, and related lockbox agreements, including any exhibits, schedules, certificates, and ancillary documents necessary to close the Credit Facility and obtain access to funding to address working capital requirements B. Statewide Residential Emergency Load Reduction Program – David Freedman 19 Recommendation: Authorize the Executive Director to take any necessary steps to coordinate DCE’s participation in the Emergency Load Reduction Program
7. INFORMATION
A. Attendance Record 21
B. Unaudited Financial Report for July 1, 2021 to October 31, 2021 22 C. Update on California’s Arrearage Payment Program 26
8. PUBLIC COMMENTS ON NON-AGENDA ITEMS
Any person wishing to address the Board on items not appearing on this agenda may do so at this time. Please limit comments to 2 minutes. At the discretion of the chair, additional public comment time and/or opportunities during the meeting may be granted.
9. ANNOUNCEMENTS
The next DCE meeting will be held February 14, 2022 at 2:30 p.m. via Zoom webinar.
10. ADJOURNMENT
Item 2A
Voting Members Representative
City of Palm Desert Mayor Pro Tem Sabby Jonathan, Vice Chair Alternate: Councilmember Kathleen Kelly
City of Palm Springs Councilmember Geoff Kors, Chair
Alternate: Mayor Lisa Middleton
Janice Reitman, Accounting Manager
Desert Community Energy Board
Member Roster
DCE Staff
Tom Kirk, Executive Director
Katie Barrows, Director
ITEM 5A
Desert Community Energy Board
Meeting Minutes
November 29, 2021
2:30 pm
Held via Zoom videoconference
1. CALL TO ORDER
The meeting of the DCE Board was called to order by Chair Geoff Kors, City of Palm Springs, at 2:30 p.m. via Zoom videoconferencing, pursuant to Assembly Bill 361.
2. ROLL CALL
Roll call was taken, and it was determined that a quorum was present.
Members Present Agency
Councilmember Geoff Kors, Chair City of Palm Springs
Councilmember Sabby Jonathan, Vice Chair City of Palm Desert DCE Staff & Consultants
Tom Kirk
Katie Barrows
Erica Felci
Claude Kilgore
Emmanuel Martinez
Jennifer Nelson
Beverly Newton
Peter Satin
Josh Zipperman
Brian Rix
Jeff Fuller
Burke Rix Communications
Burke Rix Communications
The Energy Authority
Jaclyn Harr
Chris Weber
Don Dame
Others Present
Casey Dailey
David Freedman
Kim Floyd
Patrick Tallarico
Erin Rode
The Energy Authority
The Energy Authority
DCE Consultant
WRCOG
Community Advisory Committee
Community Advisory Committee
City of Palm Springs
The Desert Sun
3. PUBLIC COMMENTS ON AGENDA ITEMS
None
The audio file for this meeting can be found at: http://www.desertcommunityenergy.org Desert Community Energy Board of Directors
Meeting Minutes – November 29, 2021
4. BOARD MEMBER / DIRECTOR COMMENTS
None
5. CONSENT CALENDAR
Councilmember Jonathan pulled item 5C for discussion.
IT WAS MOVED BY COUNCILMEMBER JONATHAN AND SECONDED BY
COUNCILMEMBER KORS TO:
A. Approve Minutes from Board Meeting of October 18, 2021 B. Affirm the findings still exist, pursuant to Assembly Bill 361, and authorize continuation of remote teleconference/virtual meetings of Desert Community Energy
D. Approve Amendment No. 3 to the DCE Joint Powers Agreement THE MOTION CARRIED WITH 2 AYES.
Councilmember Jonathan Aye
Councilmember Kors Aye
5.1 ITEMS REMOVED FROM CONSENT CALENDAR
C. Approve Amendment #2 to the Services Contract with Burke Rix Communications to provide ongoing outreach and website support for an additional amount not to exceed $94,000 and authorize the Chair and/or the Executive Director to execute any and all necessary agreements to fulfill the related marketing and outreach tasks In response to Councilmember Jonathan’s request, Katie Barrows said more information demonstrating the highlights and benefits of DCE, including highlights from public outreach efforts, would be made available within the next few weeks.
IT WAS MOVED BY COUNCILMEMBER JONATHAN AND SECONDED BY
COUNCILMEMBER KORS TO APPROVE AMENDMENT #2 TO THE SERVICES
CONTRACT WITH BURKE RIX COMMUNICATIONS TO PROVIDE ONGOING
OUTREACH AND WEBSITE SUPPORT FOR AN ADDITIONAL AMOUNT NOT TO EXCEED $94,000 AND AUTHORIZE THE CHAIR AND/OR THE EXECUTIVE
DIRECTOR TO EXECUTE ANY AND ALL NECESSARY AGREEMENTS TO FULFILL THE RELATED MARKETING AND OUTREACH TASKS.
THE MOTION CARRIED WITH 2 AYES.
Councilmember Jonathan Aye
Councilmember Kors Aye
6. DISCUSSION / ACTION
A. Launch of the Inland Empire Regional Energy Network – Tom Kirk Desert Community Energy Board of Directors
Meeting Minutes – November 29, 2021
Tom Kirk, gave an update on the progress of the Inland Empire Regional Energy Network (I-REN), including the California Public Utilities Commission’s approval of the business plan. Mr. Kirk also announced that David Freedman would be a CVAG employee starting in January 2022.
Casey Dailey from Western Riverside Council of Governments (WRCOG) provided a presentation on the background of I-REN, what the coalition is working to accomplish, how it is funded and the next steps in the implementation plan. Mr. Kirk and Mr. Dailey answered member questions, including the governing structure and coordination with DCE.
This was an information item and no action was taken.
B. DCE’s Financial Outlook and Carbon Free Premium Update – Jaclyn Harr, The Energy
Jaclyn Harr of The Energy Authority provided an update on the 2022 financial outlook, energy market and other conditions that may impact DCE’s rates and budget. Brief member discussion ensued with Councilmember Jonathan requesting a monthly break down of anticipated revenue for 2022.
This was an information item and no vote was taken.
7. INFORMATION
The following items were put in the agenda packet for members’ information :
A. Attendance Record
B. Unaudited Financial Report for July 1, 2021 to August 31, 2021
8. PUBLIC COMMENT ON NON-AGENDA ITEMS
None
9. ANNOUNCEMENTS
The next DCE meeting will be held January 10, 2022 at 2:30 p.m. via Zoom webinar.
10. ADJOURNMENT
The meeting was adjourned at 3:18 p.m.
Respectfully submitted,
Jennifer Nelson
Executive Assistant/Clerk
ITEM 5B
a
STAFF REPORT
Subject: Remote Teleconference/Virtual Meetings Pursuant to Assembly Bill 361 Contact: Jennifer Nelson, Executive Assistant/Clerk ([email protected]) Recommendation: Affirm that findings still exist, pursuant to Assembly Bill 361, and authorize continuation of remote teleconference/virtual meetings of Desert Community Energy
Background: All meetings of the Desert Community Energy Board and its Community Advisory Committee are subject to the Ralph M. Brown Act (Gov. Code §§ 54950 et seq.), and must be open and public so that any member of the public may attend and participate in the meetings.
Starting in March 2020, Governor Newsom issued a series of executive orders aimed at preventing the spread of COVID-19, as it was determined that social distancing was an important factor addressing the pandemic. Among these were Executive Orders N-25-20, N-29-20 and N-35-20 (collectively, the “Brown Act Orders”) that waived the teleconferencing requirements of the Brown Act to allow legislative bodies to meet virtually.
On June 11, 2021, the Governor issued Executive Order N-08-21 to begin winding down some of the prior measures that were adopted to respond to COVID-19. Notably, this order rescinds the Brown Act Orders, effective September 30, 2021. On September 16, 2021, Governor Newsom signed Assembly Bill 361 (AB 361), which effective October 1, 2021, allows legislative bodies to meet virtually provided the legislative body makes specific findings.
Specific Findings Required under AB 361:
The DCE Board has previously made the following findings pursuant to AB 361:
1. A statewide state of emergency is currently in place;
2. State or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19; and
3. Meeting in person would present imminent risks to the health or safety of attendees.
With this item, staff is recommending the DCE Board confirm these findings still exist and continue virtual meetings, pursuant to AB 361.
Fiscal Analysis: There are no additional costs to DCE for hosting virtual meetings.
Desert Community Energy Board
January 10, 2022
ITEM 5C
Desert Community Energy Board
January 10, 2022
STAFF REPORT
Subject: Community Advisory Committee Appointment
Contact: Katie Barrows, Director ([email protected])
Recommendation: Appoint Don Barrett of Palm Springs to fill a vacancy on the Community Advisory Committee to complete the term ending in August 2023 Background: In March 2019, the DCE Board established a Community Advisory Committee (CAC) in order to provide a structured opportunity for community members to participate in DCE, as well as help ensure that efforts to educate and inform member communities about Community Choice Energy are broad and inclusive. The CAC meets at various times throughout the year to discuss a variety of topics and issues. In addition, the CAC has a Palm Springs Working Group.
Although advisory in nature, the CAC has been an actively engaged group of doers working to educate and promote DCE in their communities.
The first members of the CAC were appointed by the DCE Board at the June 17, 2019 Board meeting. At the August 2021 meeting, the DCE Board reappointed the eight existing members of the CAC from Palm Springs and Palm Desert, extending their terms for another two years. The DCE Board has also established the CAC’s Palm Springs Working Group and, in February 2020, identified that future members could be appointed at the recommendation of the DCE representative from the City of Palm Springs or by the recommendation of the Palm Springs City Council members.
Palm Springs resident David Freedman, who currently serves as chair of the CAC, will be stepping down from the CAC and its Palm Springs Working Group as he joined the Coachella Valley Association of Governments (CVAG) staff in December 2021 as DCE Program Manager. Mr.
Freedman has been a dedicated and effective chair of the CAC and its Palm Springs Working Group, and the DCE team appreciates his service. Mr. Freedman sought input from Palm Springs Council members. In his capacity as CAC Chair, he recommended to Mayor Lisa Middleton, who represents District 5 where Mr. Freedman lives, that Don Barrett be a new member of the CAC.
Mayor Middleton, who also serves as the City’s alternate member to the DCE Board, supported the recommendation.
Mr. Barrett submitted his application for a position on the Community Advisory Committee. He has been a member of the Palm Springs Sustainability Commission since July 2021. He was formerly a member of the Academic Senate and member/chair of the Faculty Union at CSU San Marcos (1998-2012). He is currently vice chair of ONE-PS and has served as co-chair/chair of their Governance Committee and interim chair of their Code Enforcement and Public Works committee. Mr. Barrett has expressed enthusiasm for joining the CAC to represent Palm Springs.
He has been active with mobile home park resident associations and is an advocate for the needs of renters, mobile home residents, and similar often-excluded groups. His familiarity with the needs of mobile home park communities will be an asset to the CAC and DCE.
There remains another vacancy on the CAC for a representative from Palm Springs. A representative from each city council district is not a requirement. With the appointment of Mr.
Barrett, there will be representatives from Council Districts 1, 2, 3 and 5 and a vacancy from District 4. DCE staff will continue outreach to encourage applications for this vacant position, with hopes of filling it in early 2022. The DCE website also has an ongoing invitation for applying to the CAC and staff will coordinate with the outreach team to include this opportunity in future social media efforts.
DCE staff is recommending that the Board approve the appointment of Mr. Barrett to fill one of the vacant seats on the CAC.
Fiscal Analysis: The CAC is a volunteer group, and staff support for the CAC is covered under existing resources.
ITEM 6A
STAFF REPORT
Subject: Line of Credit with River City Bank
Contact: Katie Barrows, Director ([email protected])
Recommendation: Adopt Resolution 2022-01, approving a Credit Facility with River City Bank in an amount not to exceed $8,000,000, and authorizing the Executive Director, in consultation with Legal Counsel, to negotiate and take such action necessary and appropriate to finalize and execute the Credit Facility documents for a revolving line of credit consistent with the term sheet dated December 13, 2022, and related lockbox agreements, including any exhibits, schedules, certificates, and ancillary documents necessary to close the Credit Facility and obtain access to funding to address working capital requirements
Background: At the March 19, 2018 meeting, the DCE Board of Directors authorized the Executive Director to negotiate and execute a Credit and Banking Agreement with a vendor to provide banking services for DCE operations. After a competitive bid process, DCE entered into a banking services agreement with River City Bank (RCB) as its depositary institution in April 2018. RCB established DCE’s lockbox account, a secured account which receives daily revenue remittances from Southern California Edison to DCE. DCE’s accounts also provide for monthly payment to the power suppliers under contract, including The Energy Authority. DCE has also established operating, savings, and investments accounts with RCB.
In April 2021, DCE executed a credit agreement with RCB for a line of credit of up to $2 million to address short-term working capital requirements. This line of credit was not intended to provide long-term financing and had a term date of December 31, 2021. As of December 31, 2021, DCE has fully repaid the balance on this line of credit.
DCE is still a relatively new CCA and now requires additional working capital to manage fluctuations in cash flow requirements until such time as it can accumulate sufficient reserves.
Cash flow fluctuations are not uncommon for Community Choice Aggregation (CCA) agencies like DCE, which are largely as a result of timing differences between when a CCA collects revenue and must pay for energy, resource adequacy compliance, and other operating expenses. These fluctuations are typically managed through the establishment of operating reserves that accumulate over time. Because DCE launched service in April 2020, it has not had sufficient time to accumulate such reserves.
As described at the November 2021 meeting, staff engaged PFM Financial Advisors, LLC (PFM) to provide financial advisory services and assist with the process of obtaining proposals for a proposed credit facility to help DCE address short-term working capital requirements. DCE received two competitive proposals: One from MUFG Union Bank N.A. and another from RCB.
Following receipt of an initial term sheet proposal, DCE entered into discussions with representatives of both banks focused on cost, experience and the ability to meet DCE’s desired Desert Community Energy Board
January 10, 2022
terms. Final term sheets were submitted for DCE staff’s review and consideration in late December 2021.
Based on this review, DCE staff, in conjunction with its consultant team and PFM, determined that the RCB offer was best suited to DCE’s current needs. As outlined in the term sheet, the Credit Facility with RCB would be for up to $8 million for three years. At the end of three years, DCE would have the option to convert any remaining principal to a term loan. The RCB term sheet also states that DCE would be required to obtain an unconditional guaranty from the City of Palm Springs for the DCE line of credit. City of Palm Springs representatives have indicated a willingness to do so. DCE staff is currently working with city staff to complete the necessary documents for the guaranty. A resolution from Palm Springs City Council for approval of the guaranty will be required and may be considered as soon as this month. The RCB Credit Agreement will also have covenants requiring DCE to continue to maintain all of its deposit accounts with RCB and to not incur any additional indebtedness without the prior consent of RCB.
DCE staff is recommending that the Board of Directors adopt Resolution 2022-01 to delegate authority to the DCE Executive Director, in consultation with General Counsel, to negotiate, finalize and execute a Credit Facility agreement with RCB, consistent with the terms and conditions set forth in the December 13, 2021 term sheet, together with such changes as may be deemed necessary or appropriate upon advice from the General Counsel and DCE’s advisors.
This delegation is requested due to the time sensitive nature of negotiations and the need to put a Credit Facility in place to manage cash flow in early 2022. Contract negotiations are anticipated to take two to four weeks.
Fiscal Analysis: Under the terms offered by RCB, a line of credit of up to $8 million for three years would be available to help DCE address short-term working capital requirements. The line of credit will be secured by a guaranty from the City of Palm Springs. The interest on the line of credit will be floating at the three-month US Treasury (“UST”) bill yield plus 1.75 percent. The three-month UST bill yield was 0.06 percent at close of trading hours on December 10, 2021, indicating an all-in rate of 1.81 percent. The Credit Facility debt service payments and fees will be incorporated into the Fiscal Year 2022/2023 budget.
Attachments:
1. Resolution 2022-01
2. Credit Facility Term Sheet from River City Bank
RESOLUTION NUMBER 2022-01
A RESOLUTION OF THE BOARD OF DIRECTORS
OF DESERT COMMUNITY ENERGY
APPROVING A CREDIT FACILITY AND
AUTHORIZING EXECUTIVE DIRECTOR TO APPROVE RELATED AGREEMENTS WHEREAS, Desert Community Energy (DCE) is a joint powers authority established on October 30, 2017 for the purpose of implementing community choice aggregation programs under Public Utilities Code Section 366.2.0; and
WHEREAS, DCE needs working capital to address short term fluctuations in cash flow and working capital requirements as a result of its operations; and WHEREAS, DCE received credit proposals that would provide financing and credit support for DCE operation and power procurement (“Credit Facility”), as well as working capital requirements; and WHEREAS, DCE staff has proposed entering into a Credit Facility consistent with a term sheet negotiated with River City Bank (“RCB”) to provide a Commercial Revolving Line of Credit in the amount of up to $8,000,000 (“Credit Facility Term Sheet”), and has briefed the Board of Directors on the lender’s terms and conditions; and
WHEREAS, the Credit Facility Term Sheet provides for certain financial covenants and conditions that DCE staff, its legal counsel and its technical consultants consider customary and acceptable for the purposes of the Credit Facility, and WHEREAS, the Credit Facility Term Sheet provides that the line of credit with RCB will be secured by an unconditional guaranty of all obligations of DCE as borrower from the City of Palm Springs; and
WHEREAS, the Credit Facility Term Sheet further provides that DCE shall maintain and collect rates and charges for energy sufficient enough to collect revenues to cover all power supplies costs, operating expenses, and debt service each fiscal year; and WHEREAS, DCE staff and legal counsel intend to negotiate a Credit Agreement and related security agreements that are consistent with the terms of the Credit Facility Term Sheet; and WHEREAS, it is important from a timing perspective that the Credit Facility and terms set forth in the Credit Facility Term Sheet be approved by the Board and that authority be given to the Executive Director, with the advice of staff and legal counsel, to enter into the definitive Credit Agreement and other documentation in order for DCE to fulfill its working capital obligations.
WHEREAS, the DCE Board of Directors desires to delegate authority to the Executive Director and General Counsel to negotiate, finalize and execute a Credit Facility agreement with RCB in satisfaction of DCE’s credit needs, consistent with the terms and conditions set forth in the Credit Facility Term Sheet, and pending approval of a guaranty from the City of Palm Springs, together with such changes as may be deemed necessary or appropriate upon advice from General Counsel and DCE’s financial advisors.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of DCE as follows:
1. The Board of Directors has reviewed the Credit Facility Term Sheet and the recommendations of DCE staff and legal counsel and has determined that the recitals herein are true and correct.
2. The Credit Facility as proposed by River City Bank, consistent with the terms and conditions therein, is hereby approved, together with such changes and additions as the Executive Officer and General Counsel may deem necessary, appropriate or advisable, for the performance of DCE’s obligations thereunder and the consummation of the transactions contemplated thereby be, and are hereby, approved.
3. The Board of Directors approves of the security for the line of credit and other covenants of DCE as set forth in the Credit Facility Term Sheet.
4. The Board of Directors hereby authorizes the Executive Director, or his designee, with the advice of legal counsel, to negotiate and execute a Credit Facility agreement with RCB in an amount not to exceed $8 million, and consistent with the terms and conditions set forth in the Credit Facility Term Sheet, definitive documentation of the Credit Facility, and final approval of the guaranty from the City of Palm Springs and prepare and finalize for execution all documents ancillary thereto.
5. This Resolution shall be effective immediately upon approval by the Board of Directors.
PASSED AND ADOPTED by the Board of Directors of Desert Community Energy on this 10th day of January 2022.
AYES:
NOES:
ABSTAIN:
ABSENT:
__________________________________
Geoff Kors
Chair, Desert Community Energy
Attest:
___________________________
Tom Kirk
Secretary, Desert Community Energy
Approved as to form:
___________________________
Glen Price
Legal Counsel, Desert Community Energy
ITEM 6B
Desert Community Energy Board
January 10, 2022
STAFF REPORT
Subject: Statewide Residential Emergency Load Reduction Program Contact: David Freedman, Program Manager ([email protected]) Recommendation: Authorize the Executive Director to take any necessary steps to coordinate DCE’s participation in the Emergency Load Reduction Program Background: On December 6, 2021, the California Public Utilities Commission issued Decision 21-12-015, which directs Southern California Edison (SCE) and the other Investor-Owned Utilities (IOUs) to take actions to prepare for potential extreme weather in the summers of 2022 and 2023.
The CPUC’s decision adopts several supply-side and demand-side requirements and programs to ensure there is adequate electric power in the event of extreme weather during times of greatest need, most notably a new Residential Emergency Load Reduction Program (ELRP) pilot project that is designed to extend to residential customers the opportunity to be compensated for their contribution to system reliability and load reduction during times of grid stress. The ELRP would allow residential customers to receive compensation for reductions in energy use during system emergencies, with special outreach to low-income customers and customers in areas identified as disadvantaged communities. The IOUs will use a day-ahead CAISO-issued Flex Alert or Grid Alert declarations as the triggers for dispatching residential ELRP customers. To provide more predictability for stakeholders regarding the conditions and parameters under which CAISO will issue a Flex Alert notice, CPUC staff will work with CAISO to develop an objective set of criteria that triggers Flex Alerts.
The CPUC’s decision requires SCE and other IOUs to automatically enroll customers in the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) programs, as it will provide them an additional way to reduce their utility bills. This auto-enrollment was recommended by the California Environmental Justice Alliance, whose members include Leadership Counsel for Justice & Accountability (which has a focus on the eastern Coachella Valley) and the Sierra Club. The IOUs will provide notifications to alert and engage customers about the program being triggered using methods such as email, phone call, text message, bill insert or mailer. Customers may also opt out of residential ELRP at any time.
CCAs such as DCE may elect not to participate in the ELRP, in which case their customers are ineligible to enroll. In late December 2021, DCE received notice from SCE regarding the need to make its election to not participate by January 31 by notifying SCE in writing. DCE staff is recommending participation in the program as the pilot ELRP is a good opportunity for eligible customers to reduce their energy use during peak hours of the summer. Those CCAs that are opting out in the state have indicated they are doing so to start their own ELRP programs, which is not something DCE staff is anticipating here. Additionally, should the Board opt out of the program, it would be eliminating this as an option for any DCE customers, including those CARE and FERA customers who would otherwise be automatically enrolled.
While staff is recommending participation in the program, it should be noted that participants in the OhmConnect smart thermostat program are ineligible to participate in the ELRP. This is a free program that both DCE and CVAG are promoting through mid-March, mainly through social media and other outreach channels. However, any OhmConnect enrollees would be disenrolled from that program if they chose to enroll in the ELRP, either automatically or via an opt-in. The ELRP is designed to reduce grid strain in the next two summers and will apply automatically when CAISO issues a flex alert, while the OhmConnect program is more year-round and provides its enrollees with the ability to control connected devices through their smartphones when a load reduction event is announced.
Staff will coordinate with OhmConnect about potential conflicts with their program and the ELRP in order to provide clear messaging to customers about their options to save money. Staff will note on the DCE website that customers have two programs available to choose from to help them reduce their electricity bills. Staff will work with OhmConnect and SCE (which also promotes OhmConnect) to clarify the differences for customers. Staff will also coordinate with other CCAs that have used OhmConnect to ensure clear messages are used in outreach.
Staff recommends that DCE participate in the program so that eligible customers can benefit from the energy reduction opportunities and compensation proposed in the ELRP. Participation in the program provides yet another option for customers to save money during the desert’s tough summer months.
Fiscal Analysis: The ELRP is provided by SCE. Any outreach costs for the program would be addressed through DCE’s existing outreach efforts and staff time.
ITEM 7A DESERT COMMUNITY ENERGY BOARD
FY2021-2022 ATTENDANCE RECORD
FEB MAR APR MAY JUNE
City of Palm Desert *
City of Palm Springs *
Absent
No Meeting *
Voting Members JUL* AUG SEP OCT NOV DEC JAN
* July was a special meeting. The regular July meeting was cancelled.
DESERT COMMUNITY ENERGY
UNAUDITED FINANCIAL STATEMENTS
STATEMENT OF NET POSITIONS
AS OF OCTOBER 31, 2021
ASSETS
Unrestricted Funds
Operating Account 0.00 1,092,340.28 1,092,340.28
Money Market Account 66,347.52 0.00 66,347.52
ICS Account 1,317,525.26 (798,564.88) 518,960.38
Lockbox Account 2,830,359.71 (2,812,511.84) 17,847.87
Total Unrestricted Funds 4,214,232.49 (2,518,736.44) 1,695,496.05 Restricted Funds
Restricted Cash (PPA Collateral) 0.00 1,680,000.00 1,680,000.00 SCE FSR Letter of Credit Collateral 147,000.00 0.00 147,000.00 Debt Service Reserve Account 0.00 200,000.00 200,000.00 Total Restricted Funds 147,000.00 1,880,000.00 2,027,000.00 Total Cash 4,361,232.49 (638,736.44) 3,722,496.05
Accounts Receivable
Southern California Edison 0.00 7,295,221.83 7,295,221.83 Southern California Edison (Escrow Account) (1) 0.00 2,041,395.62 2,041,395.62 Coachella Hills 0.00 68,586.52 68,586.52
Total Accounts Receivable 0.00 9,405,203.97 9,405,203.97 Accrued Revenue 0.00 2,404,839.38 2,404,839.38
Allowance for Doubtful Accounts (2) 0.00 (1,130,582.65) (1,130,582.65) TOTAL ASSETS 4,361,232.49 10,040,724.26 14,401,956.75
LIABILITIES
Accounts Payable
Ace Printing 486.62 486.62 973.23
Arthur J Gallaghuer Insurance & co 51.63 51.63 103.25
Best, Best & Kreiger LLP 4,208.75 12,626.25 16,835.00
Burke Rix 0.00 4,731.25 4,731.25
Calpine Energy Solutions 0.00 98,121.20 98,121.20
Donald D. Dame 569.19 1,707.56 2,276.75
River City Bank 2,903.69 0.00 2,903.69
Southern California Edison 0.00 29,000.00 29,000.00
The Energy Authority 0.00 6,049,480.40 6,049,480.40
Vesper Energy 0.00 72,751.90 72,751.90
Net Energy Metering payables 0.00 5,277.68 5,277.68
Total Accounts Payable 8,219.87 6,274,234.48 6,282,454.35 Accrued Accounts Payable
The Energy Authority 0.00 13,267.56 13,267.56
Total Accounts Payable 0.00 13,267.56 13,267.56
Due to Other Governments
Coachella Valley Association of Governments 142,790.67 428,372.01 571,162.68 Utility Users Tax- Palm Springs 0.00 1,170,330.70 1,170,330.70 Electric Energy Surcharge (CDTFA) 0.00 17,592.82 17,592.82 Total Due to Other Governments 142,790.67 1,616,295.53 1,759,086.20 Loans Payable (short term)
River City Bank 0.00 875,000.00 875,000.00
Total Loans Payable (short term) 0.00 875,000.00 875,000.00 PPA Collateral
Terra-Gen 0.00 1,680,000.00 1,680,000.00
Total PPA Collateral 0.00 1,680,000.00 1,680,000.00
TOTAL LIABILITIES 151,010.54 10,458,797.57 10,609,808.11
NET POSITION
Restricted Net Position 147,000.00 200,000.00 347,000.00 Unrestricted Net Postion 4,063,221.95 (618,073.31) 3,445,148.64 TOTAL LIABILITIES AND NET POSITION 4,361,232.49 10,040,724.26 14,401,956.75 - - -
GENERAL PALM SPRINGS TOTAL
(1) Net Energy Metering customers' usage is monitored on a montlhy basis, recorded in an escrow account and trued-up at the end of each customer's relevant period (May 2022). - If the NEM customer generated more electricty than used, DCE will pay the NET balance at the end of May 2022 at DCE's approved Net Surplus Compensation Rate; if the NEM customer used more electricity than generated, DCE will bill the net annual balance at the customer's metered rate. (2) Accrued an offset of $609,655 for the California Arrearage Payment Program (CAPP) allocation for COVID-19 bill relief.
DESERT COMMUNITY ENERGY
UNAUDITED FINANCIAL STATEMENTS
REVENUES, EXPENSES, AND CHANGES IN NET POSITIONS
FOR THE PERIOD FROM JULY 1, 2021 TO OCTOBER 31, 2021
REVENUES
Electricity Sales (1) 0.00 21,831,022.69 21,831,022.69
Other Revenue 0.00 426,964.78 426,964.78
Investment Income 1,478.90 0.00 1,478.90
TOTAL REVENUES 1,478.90 22,257,987.47 22,259,466.37
EXPENSES
Cost of Electricity
Electricity Purchase 0.00 15,413,695.21 15,413,695.21
Resource Adequacy 0.00 3,693,596.25 3,693,596.25
Renewable Energy Credit Settlement 0.00 1,561,189.35 1,561,189.35 Market Charges 0.00 2,259,665.26 2,259,665.26
Total Cost of Electricity 0.00 22,928,146.07 22,928,146.07 Accounting / Bank Services 155.65 155.65 311.29
Legal Services 4,208.75 12,626.25 16,835.00
Professional Services
AJ Gallagher & Co Insurance 175.00 175.00 350.00
Brown & Riding Insurance 58.13 58.13 116.25
Davis Farr LLP 487.50 1,462.50 1,950.00
SOCAL Edison 0.00 14,000.00 14,000.00
Total Professional Services 720.63 15,695.63 16,416.25
Insurance
Total Insurance 3,896.63 3,896.63 7,793.25
Consultants
Calpine Energy Solutions 49,233.51 147,700.54 196,934.05 Don Dame 0.00 8,606.50 8,606.50
The Energy Authority 0.00 488,376.52 488,376.52
Total Consultants 49,233.51 644,683.56 693,917.07
Outreach
Burke Rix Communications 0.00 11,989.25 11,989.25
Total Outreach 0.00 11,989.25 11,989.25
Postage
Ace Printing 1,071.81 1,071.81 2,143.61
Total Printing 1,071.81 1,071.81 2,143.61
Printing
Ace Printing 2,613.00 2,613.00 5,226.00
Total Printing 2,613.00 2,613.00 5,226.00
Social Programs 0.00 20,615.00 20,615.00
Registrations/Memberships
Western Renewable Energy Generation Information System (WREGIS 0.00 125.00 125.00 CA Community Choice Association 10,398.13 31,194.38 41,592.50 Total Registration/Memberships 10,398.13 31,319.38 41,717.50 Bad Debt (2) 0.00 45,275.69 45,275.69
Interest Expense 0.00 62,798.73 62,798.73
TOTAL EXPENSES 72,298.09 23,780,886.62 23,853,184.71
Excess of Revenues over Expenses (70,819.19) (1,522,899.15) (1,593,718.34) Net Position - Beginning of the Period 4,281,041.14 1,104,825.84 5,385,866.98 Net Position - End of the Perid 4,210,221.95 (418,073.31) 3,792,148.64 (2) Accrued an offset of $609,655 for the California Arrearage Payment Program (CAPP) allocation for COVID-19 bill relief.
GENERAL PALM SPRINGS TOTAL
(1) Electricity sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed
DESERT COMMUNITY ENERGY
UNAUDITED FINANCIAL STATEMENTS
STATEMENT OF NET POSITIONS
AS OF OCTOBER 31, 2021
ASSETS
Unrestricted Funds
Operating Account 1,092,340.28
Money Market Account 66,347.52
ICS Account 518,960.38
Lockbox Account 17,847.87
Total Unrestricted Funds 1,695,496.05
Restricted Funds
Restricted Cash (PPA Collateral) 1,680,000.00
SCE FSR Letter of Credit Collateral 147,000.00
Debt Service Reserve Account 200,000.00
Total Restricted Funds 2,027,000.00
Total Cash 3,722,496.05
Accounts Receivable
Southern California Edison 7,295,221.83
Southern California Edison (Escrow Account) (1)
2,041,395.62
Coachella Hills Wind 68,586.52
Total Accounts Receivable 9,405,203.97
Accrued Revenue 2,404,839.38
Allowance for Doubtful Accounts (2)
(1,130,582.65)
TOTAL ASSETS 14,401,956.75
LIABILITIES
Accounts Payable
Ace Printing 973.23
Arthur J Gallaghuer Insurance & co 103.25
Best, Best & Krieger LLP 16,835.00
Burke Rix 4,731.25
Calpine Energy Solutions 98,121.20
Donald D. Dame 2,276.75
River City Bank 2,903.69
Southern California Edison 29,000.00
The Energy Authority 6,049,480.40
Vesper Energy 72,751.90
Net Energy Metering payables 5,277.68
Total Accounts Payable 6,282,454.35
Accrued Accounts Payable
The Energy Authority 13,267.56
Total Accounts Payable 13,267.56
Due to Other Governments
Coachella Valley Association of Governments 571,162.68
Utility Users Tax- Palm Springs 1,170,330.70
Electric Energy Surcharge (CDTFA) 17,592.82
Total Due to Other Governments 1,759,086.20
Loans Payable (short term)
River City Bank 875,000.00
Total Loans Payable (short term) 875,000.00
PPA Collateral
Terra-Gen 1,680,000.00
Total PPA Collateral 1,680,000.00
TOTAL LIABILITIES 10,609,808.11
NET POSITION
Restricted Net Position 347,000.00
Unrestricted Net Position 3,445,148.64
TOTAL NET POSITION 3,792,148.64
TOTAL LIABILITIES AND NET POSITION 14,401,956.75
(1) Net Energy Metering customers' usage is monitored on a montlhy basis, recorded in an escrow account and trued-up at the end of each customer's relevant period (May 2022).
- If the NEM customer generated more electricty than used, DCE will pay the NET balance at the end of May 2022 at DCE's approved Net Surplus Compensation Rate; if the NEM customer used more electricity than generated, DCE will bill the net annual balance at the customer's metered rate.
(2) Accrued an offset of $609,655 for the California Arrearage Payment Program (CAPP) allocation for COVID-19 bill relief.
DESERT COMMUNITY ENERGY
UNAUDITED FINANCIAL STATEMENTS
OF REVENUES, EXPENSES, AND CHANGES
IN NET POSITION FOR THE PERIOD
JULY 1, 2021 TO OCTOBER 31, 2021
REVENUES
Electricity Sales (1)
21,831,022.69
Carbon Free 18,741,607.74
Carbon Free- CARE/FERA 1,871,412.99
Desert Saver 1,218,001.96
Other revenue 426,964.78
Investment Income 1,478.90
TOTAL REVENUES 22,259,466.37
EXPENSES
Cost of Electricity
Electricity Purchase 15,413,695.21
Resource Adequacy 3,693,596.25
Renewable Energy Credit Settlement 1,561,189.35
Market Charges 2,259,665.26
Total Cost of Electricity 22,928,146.07
Accounting / Bank Services 311.29
Legal Services 16,835.00
Professional Services 16,416.25
Insurance 7,793.25
Consultants 693,917.07
Outreach 11,989.25
Postage 2,143.61
Printing 5,226.00
Social Programs 20,615.00
Registrations/Memberships 41,717.50
Bad Debt (2)
45,275.69
Interest Expense 62,798.73
TOTAL EXPENSES 23,853,184.71
Excess of Revenues over Expenses (1,593,718.34)
Net Position - Beginning of the Period 5,385,866.98
Net Position - End of the Period 3,792,148.64
(1) Electricity sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.
(2) Accrued an offset of $609,655 for the California Arrearage Payment Program (CAPP) allocation for COVID-19 bill relief.
ITEM 7C
STAFF REPORT
Subject: Update on California’s Arrearage Payment Program Contact: Janice Reitman, Accounting Manager ([email protected]) Recommendation: Information
Background: At the August 2021 Board meeting, staff provided a summary of the California Arrearage Payment Program (CAPP). The State Budget Act of 2021 appropriated $1 billion from the federal American Rescue Plan Act of 2021 to support the establishment of the CAPP. The program is designed to provide financial assistance to active and inactive residential and commercial customer accounts that have delinquent balances incurred during the COVID-19 pandemic relief period, which spans from March 4, 2020 through June 15, 2021. Both CCA and Investor-Owned Utility (IOU) customers are eligible for this funding, in proportion to their respective shares of eligible past due amounts.
DCE has observed a significant increase on delinquency rates since the April 2020 launch of service in the City of Palm Springs, largely as an impact of the COVID-19 pandemic. This prompted the DCE Board to increase its bad debt allowance from 0.3% to 3.0%.
In October 2021, the California Department of Community Services and Development (CSD) – the agency responsible for managing the CAPP disbursements – issued a notice identifying CAPP utility arrearages and allocations. Because reported statewide energy utility arrearages of $1,994,976,176 far exceed the total CAPP allocation of $993.5 million, CSD estimates that CAPP allocations will offset approximately 49.8 percent of total statewide arrearages. Approximately 45 percent of the arrearages in the CCA category will be offset by the designated CAPP fund allocation. For DCE, the total amount for accounts in arrears was about $2.6 million at the end of November, and DCE has been allocated $609,655 in CAPP funds.
CAPP benefits will be credited to customer accounts on a rolling basis as energy utilities apply and are approved for CAPP funding. Southern California Edison (SCE) will receive the funds, and they must be distributed by January 31, 2022. The CAPP benefits are required to be applied to customer accounts within 60 days. DCE staff is coordinating with SCE and Calpine as they will manage the application of funds as defined by the CSD procedures. Once the benefits are applied to the customer accounts, the energy utilities shall not disconnect CAPP benefit recipients for 90 days after the benefit application.
Information about the CAPP benefits will be provided on DCE’s website and via other outreach channels.
Fiscal Analysis: DCE has been allocated $609,655 in CAPP funding. This will reduce DCE’s 60-days-plus accounts receivable balance, which was $2,633,502 million as of November 30, 2021. The aged balances are anticipated to slowly improve as individuals and businesses move through pandemic recovery.
Desert Community Energy Board
January 10, 2022