Agenda packet — Desert Community Energy Board of Directors, June 27, 2023

DESERT COMMUNITY ENERGY

BOARD MEETING AGENDA
Tuesday, June 27, 2023
3:00 p.m.

Palm Springs City Hall
Large Conference Room
3200 E. Tahquitz Canyon Way
Palm Springs CA 92262
Members of the public may use the following link for listening access and ability to address the Desert Community Energy Board when called upon:
https://us02web.zoom.us/j/84082778083?pwd=ZFc2dHl5L1QxczRmZ2VMS2UrZmlYQT09 Dial In: +1 669 900 9128 US
Webinar ID: 840 8277 8083
Password: 667521

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 Board 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 – Chair Lisa Middleton, Councilmember, City of Palm Springs

2. ROLL CALL
A. Member Roster P4

3. AGENDA MODIFICATIONS (IF ANY)

4. 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.

5. BOARD MEMBER / EXECUTIVE DIRECTOR COMMENTS

6. CONSENT CALENDAR
A. Approve Minutes from the May 12, 2023 Board Meeting P5 B. Adopt Resolution 2023-02, approving the 2022 Power Source Disclosure (PSD) P8 Annual Report and associated 2022 Power Content Labels for Desert Saver and Carbon Free products, and attest to their veracity
C. Adopt DCE Policy No. 23-01 for Net Energy Metering Service, which replaces P25 Policy No. 2021-01 and includes language for the Solar Billing Program for DCE customers with onsite solar and battery storage systems D. Authorize the updating of the signature cards and signatories for DCE investments P35 and banking
E. Adopt DCE Policy No. 23-02, the restated Delinquent Accounts, Collections, P36 and Bad Debt Policy
F. Approve a clarifying amendment to DCE Policy No. 18-10 Financial Reserve Policy P41 G. Authorize the Executive Director to issue a notice of termination of the amended P44 Renewable Power Purchase Agreement with Deer Creek Solar I

7. DISCUSSION / ACTION
A. DCE Fiscal Year 2023/24 Budget– Claude Kilgore P45
Recommendation: Adopt Resolution 2023-03 approving Desert Community Energy’s Fiscal Year 2023/24 Budget
B. Presentation: Historical & Forecasted Energy Prices In a Volatile Market – Jaclyn Harr, The Energy Authority

8. INFORMATION
A) Attendance Record P60
B) Unaudited Year-to-Year Financial Report as of April 30, 2023 P61 C) Renewable and Mid-Term Reliability 2023 Request for Proposals P64 D) Southern California Edison General Rate Case P65
E) July 2023 Rate Adjustment Summary P67
F) DCE’s 2023 Summer Readiness Outreach Strategy P69

9. 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.

10. ANNOUNCEMENTS
The July meeting is being cancelled. The next DCE meeting will be held August 21 at 3:00 p.m. at the Large Conference Room at Palm Springs City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

11. ADJOURNMENT

DESERT COMMUNITY ENERGY

BOARD MEMBER ROSTER
Voting Members Seat on Committee Representative
City of Palm Desert Vice Chair
Veronica Chavez
Finance Director
Alternate: Mayor Kathleen Kelly
City of Palm Springs Chair
Lisa Middleton
Councilmember
Alternate: Mayor Pro Tem Jeffrey Bernstein
DCE Staff
Tom Kirk, Executive Director
David Freedman, Program Manager
Emily Langenbahn, Program Specialist
Janice Reitman, Accounting Manager
ITEM 6A
Desert Community Energy Board
Meeting Minutes
May 12, 2023

1. CALL TO ORDER
The meeting of the DCE Board was called to order by Chair Middleton at 3:00 p.m. at Palm Springs City Hall’s Large Conference Room, at 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

2. ROLL CALL

Roll call was taken, and it was determined that a quorum was present.

Members Present Member Jurisdiction
Councilmember Lisa Middleton City of Palm Springs
Finance Director Veronica Chavez City of Palm Desert

3. AGENDA MODIFICATIONS (IF ANY)
None

4. PUBLIC COMMENTS ON AGENDA ITEMS
None

5. BOARD MEMBER / DIRECTOR COMMENTS

DCE Program Manager David Freedman gave updates on two procurement matters, including a request for proposals and the market offer bid that Southern California Edison did not select.

6. CONSENT CALENDAR

IT WAS MOVED BY FINANCE DIRECTOR CHAVEZ AND SECONDED BY CHAIR MIDDLETON TO:

A. Approve Minutes from the April 5, 2023 Board Meeting B. Adopt DCE’s General Order 156 Supplier Diversity Goals to meet California Public Utilities Commission requirements and diversify procurement efforts
THE MOTION CARRIED WITH 2 AYES.

The audio file for this meeting can be found at: http://www.desertcommunityenergy.org Desert Community Energy Board of Directors
Meeting Minutes – May 12, 2023
Councilmember Middleton Aye
Finance Director Chavez Aye
.

7. DISCUSSION / ACTION
A. DCE Financial Outlook
Jaclyn Harr, Client Services Manager with The Energy Authority, presented an in-depth presentation regarding DCE’s financial outlook via Zoom videoconference.

Member discussion ensued, including Mrs. Harr answering questions regarding energy hedging to prepare for the summer months.

This item was an informational item with no action taken.

B. Rate Stabilization Schedule Amendment
DCE Energy Consultant Don Dame reviewed the rate stabilization schedule and the minor proposed changes to it based on the trends of the market and predicted needs for DCE.

Member discussion ensued.

IT WAS MOVED BY FINANCE DIRECTOR CHAVEZ AND SECONDED BY CHAIR MIDDLETON TO ADOPT DCE RESOLUTION 2023-01, APPROVING THE AMENDED RATE STABILIZATION SCHEDULE EFFECTIVE JUNE 1, 2023
THE MOTION CARRIED WITH 2 AYES.

Councilmember Middleton Aye
Finance Director Chavez Aye
C. DCE Fiscal Year 2023/24 Budget Preview
Finance Director Claude Kilgore gave a preview of the 2023/2024 DCE budget, which will be presented to the Board in June.

This item was an informational item with no action taken.

8. INFORMATION
The following items were included in the agenda packet for members’ information :

A. Attendance Record
B. Unaudited Year-to-Year Financial Report as of February 28, 2023 C. SCE Green Rate Update
Desert Community Energy Board of Directors
Meeting Minutes – May 12, 2023

9. PUBLIC COMMENT ON NON-AGENDA ITEMS

None.

10. ANNOUNCEMENTS
The next DCE meeting will be held June 27, 2023 at 3:00 p.m. at the Large Conference Room at Palm Springs City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

11. CLOSED SESSION
The Board adjourned to closed session at 3:55 p.m.

Conference with Legal Counsel – Existing Litigation
Initiation of litigation pursuant to Government Code Section 54956.9(d)(1) Name: CPUC Resource Adequacy Proceeding
The closed session concluded at 4:30 p.m. DCE Program Manager David Freedman reported that the board has unanimously voted to direct DCE staff and counsel to appeal the citation issued by the California Public Utilities Commission (CPUC) on April 17, 2023 in the amount of $374,674.20 for certain resource adequacy deficiencies related to DCE’s 2023 year-ahead filing.

12. ADJOURNMENT
Chair Middleton adjourned the meeting at 4:31 p.m.

Respectfully submitted,
Elysia Regalado, Management Analyst
ITEM 6B

STAFF REPORT
Subject: 2022 Power Source Disclosure Report and Associated Power Content Labels Contact: David Freedman, Program Manager ([email protected]) Emily Langenbahn, Program Specialist ([email protected]) Recommendation: Adopt Resolution 2023-02, approving the 2022 Power Source Disclosure (PSD) Annual Report and associated 2022 Power Content Labels for Desert Saver and Carbon Free products, and attest to their veracity Background: All retail sellers of electricity, including Community Choice Aggregation (CCA) energy providers such as DCE, are required by SB 1305, codified in Section 398.1 of the California Public Utilities Code, to disclose “accurate, reliable, and simple-to-understand information on the sources of energy” that are delivered to their customers each year. DCE started service to customers in Palm Springs in spring 2020, which was the first year DCE was required to provide this information on energy sources. Participation in the Power Source Disclosure (PSD) Program includes submitting an Annual PSD Report and associated Power Content Label (PCL) to the California Energy Commission (CEC).

The 2022 Power Source Disclosure reports for DCE’s Desert Saver and Carbon Free products (attached) were submitted to the CEC on June 1, 2023 and resubmitted in response to CEC comments on June 16, 2023. The reports include specific power purchases, resales, and self-consumption of energy by fuel type for each electricity product offered to DCE customers.

Information from DCE’s 2022 Power Source Disclosure Annual Report is included in Schedule 3 of the attached PSD Reports for DCE’s Carbon Free and Desert Saver products. The PCLs, shown below, will be posted on both the CEC website and the DCE website per CEC requirements.

The CEC provides auditing and verification regulations governing the PSD Program. Retail sellers were initially required to have the PSD Annual Reports for each electricity product audited by an accredited CPA or third-party verifier. However, these regulations were modified in May 2020 to allow a public agency to have the Board attest to the veracity and approve the Annual PSD Report and PCL for each product at a public meeting.

Staff recommends that the Board adopt Resolution 2023-02 approving DCE’s 2022 PSD Annual Reports and associated Power Content Labels for the Desert Saver and Carbon Free products.

The Resolution also confirms that the Board attests to the veracity of the data in the Annual Reports. Adoption of the resolution enables DCE to comply with the CEC regulation implementing SB 1305 (California Code of Regulations, Title 20, Article 5, Sections 1390 to 1394).

Summary of Power Content Labels and Annual Report
As shown in the Schedule 3 Power Content Label, DCE provided Desert Saver customers with an energy supply consisting of 62.1% large hydropower facilities, and 37.9% of unspecified power resources – electricity that has been purchased through open market transactions and is not traceable to a specific generation source. DCE provided 100% carbon free energy to Carbon Free customers, including 26.3% renewable energy eligible under the state’s Renewable Portfolio Standard purchased from solar sources (9.2%), wind sources (14.5%), and small hydropower (2.7%). The remaining carbon free energy was purchased from large hydropower sources (73.7%).

The DCE 2022 PSD Annual Reports for Desert Saver and Carbon Free were prepared with assistance from The Energy Authority (TEA). TEA performed a detailed review of all power purchases completed for the 2022 calendar year. This review included an inventory of all renewable energy transfers within DCE’s Western Renewable Energy Generation Information System (WREGIS) accounts and pertinent transaction records. Based on staff’s review of available data, the information presented in the PSD Annual Reports and the Power Content Label was determined to be accurate.
2022 POWER SOURCE DISCLOSURE ANNUAL
REPORT
SCHEDULE 3: POWER CONTENT LABEL DATA
For the Year Ending December 31, 2022

DESERT COMMUNITY ENERGY

DESERT SAVER
Adjusted Net
Procured (MWh)
Percent of Total
Retail Sales
Renewable Procurements - 0.0%
Biomass & Biowaste - 0.0%
Geothermal - 0.0%
Eligible Hydroelectric - 0.0%
Solar - 0.0%
Wind - 0.0%
Coal - 0.0%
Large Hydroelectric

55,420 62.1%
Natural gas - 0.0%
Nuclear - 0.0%
Other - 0.0%
Unspecified Power

33,755 37.9%
Total

89,175 100.0%
Total Retail Sales (MWh)
89,175
GHG Emissions Intensity (converted to lbs
CO2e/MWh) 357
Percentage of Retail Sales Covered by Retired
Unbundled RECs 0.0%
2022 POWER SOURCE DISCLOSURE ANNUAL
REPORT
SCHEDULE 3: POWER CONTENT LABEL DATA
For the Year Ending December 31, 2022

DESERT COMMUNITY ENERGY

CARBON FREE
Adjusted Net
Procured (MWh)
Percent of Total
Retail Sales
Renewable Procurements 81,363 26.3%
Biomass & Biowaste - 0.0%
Geothermal - 0.0%
Eligible Hydroelectric 8,194 2.7%
Solar 28,374 9.2%
Wind 44,795 14.5%
Coal - 0.0%
Large Hydroelectric 227,448 73.7%
Natural gas - 0.0%
Nuclear - 0.0%
Other - 0.0%
Unspecified Power - 0.0%
Total 308,811 100.0%
Total Retail Sales (MWh)
308,811
GHG Emissions Intensity (converted to lbs CO2e/MWh) -
Percentage of Retail Sales Covered by Retired
Unbundled RECs 0.0%
Fiscal Analysis: Adoption of Resolution 2023-02 does not result in any financial impact on DCE.

Attachments:

1. Resolution 2023-02 approving 2022 Power Source Disclosure Annual Reports and associated Power Content Labels

2. 2022 Power Source Disclosure Annual Report for DCE’s Desert Saver product

3. 2022 Power Source Disclosure Annual Report for DCE’s Carbon Free product RESOLUTION NO. 2023-02

A RESOLUTION OF THE BOARD OF DIRECTORS OF

DESERT COMMUNITY ENERGY
APPROVING AND ATTESTING TO THE VERACITY OF THE 2022

POWER SOURCE DISCLOSURE ANNUAL REPORT

AND ASSOCIATED POWER CONTENT LABEL FOR THE

DESERT SAVER PRODUCT AND CARBON FREE PRODUCT
A. 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.

B. Senate Bill 1305 was adopted in 1997, establishing an Electricity Generation Source Disclosure Program, (“Power Source Disclosure Program”), which requires retail suppliers of electricity to disclose to their customers each year the sources of electricity delivered to customers in the previous year, and to annually submit a Power Source Disclosure Report to the California Energy Commission.

C. Desert Community Energy is a retail supplier of electricity as defined by the Power Source Disclosure Program (Ca. Code of Regs., Title 20, Section 1391(r)).

D. The Power Source Disclosure Regulation was updated effective May 4, 2020, allowing the board of directors of a public agency providing electric services to approve, at a public meeting, the submission to the California Energy Commission of an attestation of the veracity of each product’s 2022 Power Source Disclosure Annual Report and 2022 Power Content Label.

E. DCE staff and consultants performed a detailed review of all power purchases completed for the 2022 calendar year, including an inventory of all renewable energy transfers within DCE’s WREGIS account, and transaction records.

F. Pursuant to the current California Energy Commission regulations, California Code of Regulations Section 1394.2, the Board is required to attest to the veracity of the 2022 Power Content Labels.

G. The Board desires to attest to the veracity of the 2022 Power Source Disclosure Annual Reports for the Desert Saver product and the Carbon Free product and to the 2022 Power Content Labels so that all the required statements and attestations required by Section 1394.2 are contained in one resolution.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF DESERT COMMUNITY ENERGY, AS FOLLOWS:

1. Approves the submission and attests to the veracity of the attached 2022 Power Source Disclosure Annual Reports and 2022 Power Content Labels for Desert Community Energy.

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on June 27, 2023.

ATTEST:
________________________ ________________________
Lisa Middleton, Chair Tom Kirk, Secretary
Desert Community Energy Desert Community Energy
AYES: NAYS: ABSENT: ABSTAIN: _____
Version: April 2023
If you have questions, contact Power Source Disclosure (PSD) staff at [email protected] or (916) 805-7439.

NOTE: Information submitted in this report is not automatically held confidential. If your company wishes the information submitted to be considered confidential an authorized representative must submit an application for confidential designation (CEC-13), which can be found on the California Energy Commissions's website at https://www.energy.ca.gov/about/divisions-and-offices/chief-counsels-office.

WEBSITE URL FOR

PCL POSTING
https://desertcommunityenergy.org/about/key-documents/
Submit the Annual Report and signed Attestation in PDF format with the Excel version of the Annual Report to [email protected]. Remember to complete the Retail Supplier Name, Electricity Portfolio Name, and contact information above, and submit separate reports and attestations for each additional portfolio if multiple were offered in the previous year.

CITY, STATE, ZIP Palm Desert, CA 92260
PHONE (760) 346-1127
EMAIL [email protected]
NAME David Freedman
TITLE Program Manager - Enery & Sustainability
MAILING ADDRESS 74-199 El Paseo, Suite 100

CONTACT INFORMATION
2022 POWER SOURCE DISCLOSURE ANNUAL REPORT
For the Year Ending December 31, 2022

RETAIL SUPPLIER NAME
Desert Community Energy

ELECTRICITY PORTFOLIO NAME
Desert Saver
Retail suppliers are required to use the posted template and are not allowed to make edits to this format. Please complete all requested information.

GENERAL INSTRUCTIONS
Version: April 2023
Schedule 1: Procurements and Retail Sales
Schedule 2: Retired Unbundled RECs
Schedule 3: Annual Power Content Label Data
GHG Emissions Factors
Specified Purchases: A Specified Purchase refers to a transaction in which electricity is traceable to specific generating facilities by any auditable contract trail or equivalent, such as a tradable commodity system, that provides commercial verification that the electricity claimed has been sold once and only once to retail consumers. Do not enter data in the grey fields. For specified purchases, include enter following information for each line item:

Facility Name - Provide the name used to identify the facility.

Fuel Type - Provide the resource type (solar, natural gas, etc.) that this facility uses to generate electricity.

Location - Provide the state or province in which the facility is located.

Identification Numbers - Provide all applicable identification numbers from the Western Renewable Energy Generation Information System (WREGIS), the Energy Information Agency (EIA), and the California Renewables Portfolio Standard (RPS).

Gross Megawatt Hours Procured - Provide the quantity of electricity procured in MWh from the generating facility.

Megawatt Hours Resold - Provide the quantity of electricity resold at wholesale.

Unspecified Power: Unspecified Power refers to electricity that is not traceable to specific generation sources by any auditable contract trail or equivalent, or to power purchases from a transaction that expressly transferred energy only and not the RECs associated from a facility. Do not enter procurements of unspecified power. The schedule will calculate unspecified power procurements automatically.

Complete this schedule by entering information about unbundled REC retirements in the previous calendar year.

Unbundled RECs will be automatically displayed on Schedule 3 as a percentage of retail sales.

Retail suppliers of electricity must complete this schedule by entering information about all power procurements and generation that served the identified electricity portfolio covered in this filing in the prior year. The schedule is divided into sections: directly delivered renewables, firmed-and-shaped imports, specified non-renewables, and procurements from ACSs. Insert additional rows as needed to report all procurements or generation serving the subject product. Provide the annual retail sales for the subject product in the appropriate space. At the bottom of Schedule 1, provide the retail suppliers’ other electricity end-uses that are not retail sales, such as transmission and distribution losses. Retail suppliers shall submit a purchase agreement or ownership arrangement documentation substantiating that any eligible firmed-and-shaped product for which it is claiming an exclusion was executed prior to January 1, 2019. Any retail supplier that offered multiple electricity portfolios in the prior year must submit separate Annual Reports for each portfolio offered.

Schedule 2 - Retired Unbundled Renewable Energy Credits (RECs) Schedule 3 - Annual Power Content Label Data
Asset-Controlling Supplier (ACS) Procurement Calculator PSD Attestation

INSTRUCTIONS
Schedule 1 - Procurements and Retail Sales

INTRODUCTION
Retail suppliers are required to submit separate Annual Reports for each electricity portfolio offered to California retail consumers in the previous calendar year. Enter the Retail Supplier Name and Electricity Portfolio Name at the top of Schedule 1, Schedule 2, Schedule 3, and the Attestation.

A complete Annual Report includes the following tabs:

PSD Intro
Instructions
Version: April 2023
ACS Resource Mix Calculator
GHG Emissions Factors
Attestation
Retail suppliers may report specified purchases from ACS system power if the ACS provided its fuel mix of its specified system mix to the Energy Commission. Use the calculator to determine the resource-specific procurement quantities, and transfer them to Schedule 1.

This template provides the attestation that must be submitted with the Annual Report to the Energy Commission, stating that the information contained in the applicable schedules is correct and that the power has been sold once and only once to retail consumers. This attestation must be included in the package that is transmitted to the Energy Commission. Please provide the complete Annual Report in Excel format and the complete Annual Report with signed attestation in PDF format as well.

This tab will be displayed for informational purposes only; it will not be used by reporting entities, since the emissions factors below auto-populate in the relevant fields on Schedules 1 & 3.

This schedule is provided as an automated worksheet that uses the information from Schedule 1 to calculate the power content and GHG emissions intensity for each electricity portfolio. The percentages calculated on this worksheet should be used for your Power Content Label.

Version: April 2023
89,175
55,420
33,755
-
-
-
55,420
14,447

0.1620

DIRECTLY DELIVERED RENEWABLES
Facility Name Fuel Type
State or
Province WREGIS ID RPS ID N/A EIA ID
Gross MWh
Procured
MWh
Resold
Net MWh
Procured
Adjusted Net MWh
Procured
GHG Emissions
Factor (in MT
CO2e/MWh)
GHG Emissions (in
MT CO2e) N/A
- - #N/A
- - #N/A
- - #N/A
- - #N/A
- - #N/A
- - #N/A
- - #N/A
- - - #N/A
- - - #N/A
- - - #N/A
- - - #N/A
- - - #N/A
- - - #N/A
- - #N/A

FIRMED-AND-SHAPED IMPORTS
Facility Name Fuel Type
State or
Province WREGIS ID RPS ID
EIA ID of
REC
Source
EIA ID of
Substitute
Power
Gross MWh
Procured MWh Resold
Net MWh
Procured
Adjusted Net MWh
Procured
GHG Emissions
Factor (in MT
CO2e/MWh)
GHG Emissions
(in MT CO2e)
Eligible for
Grandfathered
Emissions?
- - #N/A
- - #N/A
- - #N/A
- - #N/A
- - #N/A

SPECIFIED NON-RENEWABLE PROCUREMENTS
Facility Name Fuel Type
State or
Province N/A N/A N/A EIA ID
Gross MWh
Procured MWh Resold
Net MWh
Procured
Adjusted Net MWh
Procured
GHG Emissions
Factor (in MT
CO2e/MWh)
GHG Emissions
(in MT CO2e) N/A
Mid-C Hydro - Priest Rapids & Wanapum Dams (Grant County PUD) Large Hydro WA 0 0 0 3887 29,402 - 29,402 29,402 - - Mid-C Hydro - Rocky Reach (Chelan County PUD) Large Hydro WA 0 0 0 3883 1,384 - 1,384 1,384 - - Mid-C Hydro - Rock Island (Chelan County PUD) Large Hydro WA 0 0 0 6200 2,580 - 2,580 2,580 - - G.M. Shrum Hydroelectric Generation Facility (CAN) Large Hydro BC, Canada 0 0 0 P206 13,533 - 13,533 13,533 - - Mica Hydroelectric Generation Facility (CAN) Large Hydro BC, Canada 0 0 0 P210 5,846 - 5,846 5,846 - - Revelstoke Hydroelectric Generation Facility (CAN) Large Hydro BC, Canada 0 0 0 P212 115 - 115 115 - - Lake Chelan Hydro Large Hydro WA 0 0 0 6424 52 - 52 52 - - Big Creek Hydro 3 Large Hydro CA 0 0 0 319 2,508 - 2,508 2,508 - - - - - #N/A
- - #N/A

Insert additional rows as needed. All fields in white should be filled out. Fields in grey auto-populate as needed and should not be filled out. For EIA IDs for unspecified power or specified system mixes from asset-controlling suppliers, enter "Unspecified Power", "BPA", or "Tacoma Power" as applicable. For specified procurements of ACS power, use the ACS Procurement Calculator to calculate the resource breakdown comprising the ACS system mix. Procurements of unspecified power must not be entered as line items below; unspecified power will be calculated automatically in cell N9. Unbundled RECs must not be entered on Schedule 1; these products must be entered on Schedule 2. At the bottom portion of the schedule, provide the other electricity end-uses that are not retail sales including, but not limited to transmission and distribution losses or municipal street lighting. Amounts should be in megawatt-hours.

Version: April 2023
-

RETIRED UNBUNDLED RECS
Facility Name Fuel Type
State or
Province RPS ID Total Retired (in MWh)
Total Retired Unbundled RECs
2022 POWER SOURCE DISCLOSURE ANNUAL REPORT
SCHEDULE 2: RETIRED UNBUNDLED RECS
For the Year Ending December 31, 2022

DESERT COMMUNITY ENERGY

DESERT SAVER
INSTRUCTIONS: Enter information about retired unbundled RECs associated with this electricity portfolio. Insert additional rows as needed. All fields in white should be filled out. Fields in grey auto-populate as needed and should not be filled out.

Version: April 2023
Adjusted Net
Procured (MWh)
Percent of Total
Retail Sales
Renewable Procurements - 0.0%
Biomass & Biowaste - 0.0%
Geothermal - 0.0%
Eligible Hydroelectric - 0.0%
Solar - 0.0%
Wind - 0.0%
Coal - 0.0%
Large Hydroelectric 55,420 62.1%
Natural gas - 0.0%
Nuclear - 0.0%
Other - 0.0%
Unspecified Power 33,755 37.9%
Total 89,175 100.0%
89,175
357

0.0%
Total Retail Sales (MWh)
GHG Emissions Intensity (converted to lbs CO2e/MWh)
Percentage of Retail Sales Covered by Retired Unbundled RECs
2022 POWER SOURCE DISCLOSURE ANNUAL
REPORT SCHEDULE 3: POWER CONTENT LABEL DATA
For the Year Ending December 31, 2022

DESERT COMMUNITY ENERGY

DESERT SAVER
Instructions: No data input is needed on this schedule. Retail suppliers should use these auto-populated calculations to fill out their Power Content Labels.

Version: April 2023
If you have questions, contact Power Source Disclosure (PSD) staff at [email protected] or (916) 805-7439.

WEBSITE URL FOR
PCL POSTING https://desertcommunityenergy.org/about/key-documents/ Submit the Annual Report and signed Attestation in PDF format with the Excel version of the Annual Report to [email protected]. Remember to complete the Retail Supplier Name, Electricity Portfolio Name, and contact information above, and submit separate reports and attestations for each additional portfolio if multiple were offered in the previous year.

CITY, STATE, ZIP Palm Desert, CA 92260
PHONE (760) 346-1127
EMAIL [email protected]
NAME David Freedman
TITLE Program Manager - Energy & Sustainability
MAILING ADDRESS 74-199 El Paseo, Suite 100

CONTACT INFORMATION
2022 POWER SOURCE DISCLOSURE ANNUAL REPORT
For the Year Ending December 31, 2022

RETAIL SUPPLIER NAME
Desert Community Energy

ELECTRICITY PORTFOLIO NAME
Carbon Free
Retail suppliers are required to use the posted template and are not allowed to make edits to this format. Please complete all requested information.

Facility Name - Provide the name used to identify the facility.

Fuel Type - Provide the resource type (solar, natural gas, etc.) that this facility uses to generate electricity.

Location - Provide the state or province in which the facility is located.

Gross Megawatt Hours Procured - Provide the quantity of electricity procured in MWh from the generating facility.

Megawatt Hours Resold - Provide the quantity of electricity resold at wholesale.

Complete this schedule by entering information about unbundled REC retirements in the previous calendar year.

Schedule 2 - Retired Unbundled Renewable Energy Credits (RECs) Schedule 3 - Annual Power Content Label Data
Asset-Controlling Supplier (ACS) Procurement Calculator PSD Attestation

INSTRUCTIONS
Schedule 1 - Procurements and Retail Sales

A complete Annual Report includes the following tabs:

This tab will be displayed for informational purposes only; it will not be used by reporting entities, since the emissions factors below auto-populate in the relevant fields on Schedules 1 & 3.

Version: April 2023
308,811
308,811
----
308,811
0 0.0000

DIRECTLY DELIVERED RENEWABLES
Facility Name Fuel Type
State or
Province WREGIS ID RPS ID N/A EIA ID
Gross MWh
Procured
MWh
Resold
Net MWh
Procured
Adjusted Net MWh
Procured
GHG Emissions
Factor (in MT
CO2e/MWh)
GHG Emissions (in
MT CO2e) N/A
CED Lost Hills Solar, LLC - Frontier Solar Solar CA W7139 62516A - 60039 28374 - 28,374 - 28,374 - Coachella Hills Wind CA W11291 65072A - 64323 31,363 - 31,363 - 31,363 - EDF Renewable Wind Farm V, Inc. - LaBrisa Wind Project Wind CA W732 64042A - 54453 13,432 - 13,432 - 13,432 -El Dorado - Montgomery Creek Hydro Eligible hydro CA W589 60154A - 55009 1,836 - 1,836 - 1,836 - Snow Mtn Hydro (Burney) - Burney Creek Eligible hydro CA W673 60177A - 10706 1,935 - 1,935 - 1,935 -Snow Mtn. Hydro - Lost Creek 1 Eligible hydro CA W670 60179A - 10708 3,041 - 3,041 - 3,041 -Snow Mtn. Hydro - Lost Creek 2 Eligible hydro CA W671 60180A - 10709 1,382 - 1,382 - 1,382 - - - #N/A -
- - #N/A -
- - #N/A -
- - #N/A -
- - #N/A -
- - #N/A -
- #N/A -

SPECIFIED NON-RENEWABLE PROCUREMENTS
Facility Name Fuel Type
State or
Province N/A N/A N/A EIA ID
Gross MWh
Procured MWh Resold
Net MWh
Procured
Adjusted Net MWh
Procured
GHG Emissions
Factor (in MT
CO2e/MWh)
GHG Emissions
(in MT CO2e) N/A
Mid-C Hydro - Priest Rapids & Wanapum Dams (Grant County PUD Large Hydro WA 0 0 0 3887 120,669 - 120,669 - 120,669 - Mid-C Hydro - Rocky Reach (Chelan County PUD) Large Hydro WA 0 0 0 3883 5,681 - 5,681 - 5,681 - Mid-C Hydro - Rock Island (Chelan County PUD) Large Hydro WA 0 0 0 6200 10,590 - 10,590 - 10,590 - G.M. Shrum Hydroelectric Generation Facility (CAN) Large Hydro BC, Canada 0 0 0 P206 55,540 - 55,540 - 55,540 - Mica Hydroelectric Generation Facility (CAN) Large Hydro BC, Canada 0 0 0 P210 23,991 - 23,991 - 23,991 - Revelstoke Hydroelectric Generation Facility (CAN) Large Hydro BC, Canada 0 0 0 P212 473 - 473 - 473 - Lake Chelan Hydro Large Hydro WA 0 0 0 6424 215 - 215 - 215 -Big Creek Hydro 3 Large Hydro CA 0 0 0 319 10,289 - 10,289 - 10,289 - - - #N/A -
- #N/A -

PROCUREMENTS FROM ASSET-CONTROLLING SUPPLIERS
Facility Name Fuel Type N/A N/A N/A N/A EIA ID
Gross MWh
Procured MWh Resold
Net MWh
Procured
Adjusted Net MWh
Procured
GHG Emissions
Factor (in MT
CO2e/MWh)
GHG Emissions
(in MT CO2e) N/A
#N/A - #N/A - #N/A -
#N/A -
END USES OTHER THAN RETAIL SALES MWh
Retail Sales (MWh)
Net Specified Procurement (MWh)
Unspecified Power (MWh)
Procurement to be adjusted
2022 POWER SOURCE DISCLOSURE ANNUAL REPORT
SCHEDULE 1: PROCUREMENTS AND RETAIL SALES
For the Year Ending December 31, 2022
Desert Community Energy
Carbon Free
GHG Emissions Intensity (in MT CO2e/MWh)
Net Specified Natural Gas
Net Specified Coal & Other Fossil Fuels
Net Specified Nuclear, Large Hydro, Renewables, and ACS Power GHG Emissions (excludes grandfathered emissions)
Instructions: Enter information about power procurements underlying this electricity portfolio for which your company is filing the Annual Report. Insert additional rows as needed. All fields in white should be filled out. Fields in grey auto-populate as needed and should not be filled out. For EIA IDs for unspecified power or specified system mixes from asset-controlling suppliers, enter "Unspecified Power", "BPA", or "Tacoma Power" as applicable. For specified procurements of ACS power, use the ACS Procurement Calculator to calculate the resource breakdown comprising the ACS system mix. Procurements of unspecified power must not be entered as line items below; unspecified power will be calculated automatically in cell N9. Unbundled RECs must not be entered on Schedule 1; these products must be entered on Schedule 2. At the bottom portion of the schedule, provide the other electricity end-uses that are not retail sales including, but not limited to transmission and distribution losses or municipal street lighting. Amounts should be in megawatt-hours.

Version: April 2023
-

DESERT COMMUNITY ENERGY

CARBON FREE
INSTRUCTIONS: Enter information about retired unbundled RECs associated with this electricity portfolio. Insert additional rows as needed. All fields in white should be filled out. Fields in grey auto-populate as needed and should not be filled out.

Version: April 2023
Adjusted Net
Procured (MWh)
Percent of Total
Retail Sales
Renewable Procurements 81,363 26.3%
Biomass & Biowaste - 0.0%
Geothermal - 0.0%
Eligible Hydroelectric 8,194 2.7%
Solar 28,374 9.2%
Wind 44,795 14.5%
Coal - 0.0%
Large Hydroelectric 227,448 73.7%
Natural gas - 0.0%
Nuclear - 0.0%
Other - 0.0%
Unspecified Power - 0.0%
Total 308,811 100.0%
308,811
-

DESERT COMMUNITY ENERGY

CARBON FREE
Instructions: No data input is needed on this schedule. Retail suppliers should use these auto-populated calculations to fill out their Power Content Labels.

Item 6C

STAFF REPORT
Subject: Updated Policy for Net Energy Metering Service Contact: David Freedman, Program Manager ([email protected]) Emily Langenbahn, Program Specialist ([email protected]) Recommendation: Adopt DCE Policy No. 23-01 for Net Energy Metering Service, which replaces Policy No. 2021-01 and includes language for the Solar Billing Program for DCE customers with onsite solar and battery storage systems Background: As previously reported to the DCE Board, the California Public Utilities Commission (CPUC) in December 2022 approved a decision revising the Net Energy Metering (NEM) programs for solar customers. Through these NEM programs, customers receive bill credits for excess generation that is exported to the grid, offsetting energy costs. Effective April 15, 2023, all three investor-owned electric utilities (IOUs) – Southern California Edison (SCE), Pacific Gas & Electric, and San Diego Gas & Electric – began implementing this decision, which was referred to as NEM 3.0 because it is the third iteration of the NEM program. For customers in SCE’s service territory, this updated program is known as the Solar Billing Plan. DCE’s Solar Billing Program is the equivalent for DCE customers to SCE’s Solar Billing Plan.

The most significant change in SCE’s Solar Billing Plan is the reduction in compensation for solar customers exporting excess energy to SCE’s grid. These customers will now pay more for energy taken from the grid than energy fed into the grid. This reduction is approximately a 75 percent decrease in export value from the previous NEM 2.0 program, increasing the payback period for residential solar-only customers from three to five years under NEM 2.0 to nine years under the Solar Billing Plan.

Another significant change is increased incentives for customers who also install battery storage systems. The incentive amount including any funding reserved to encourage low-income customers to install solar and battery storage is currently being considered in the state’s 2023-24 budget discussions. For customers living in a designated area for Tribal Land, fire hazard zones, or disadvantaged communities, there may be additional rebates or benefits available.

NEM 3.0 impacts new solar customers. There is generally no impact from the implementation of the Solar Billing Plan on existing customers who enrolled under NEM 1.0 or NEM 2.0. These customers (and any new owners of their systems) will move to new billing rates under the Solar Billing Plan (or any successor tariff) 20 years after their original interconnection date. Existing NEM customers who increase their system size by 10 percent or 1kW, whichever is more, will move then to the Solar Billing Plan. However, existing NEM customers can add battery storage at any time without affecting their NEM status.

DCE launched service in the City of Palm Springs in April 2020 for residential and non-residential customers. By May 2020, DCE expanded its eligible customer base to NEM customers applying the Net Surplus Compensation Rate adopted since DCE’s inception. In March 2021, DCE approved and adopted Policy No. 2021-01 for Net Energy Metering to inform the public of the detailed mechanics of DCE’s NEM program. With the transition to SCE’s Solar Billing Plan for solar customers beginning April 15, 2023, DCE staff is recommending an updated policy to include information about the new program from SCE and DCE’s parallel Solar Billing Program. Staff have also updated DCE’s website to reflect SCE’s most current Solar Billing Plan and DCE’s parallel Solar Billing Program. Both clean and redlined versions are attached to this report.

Although SCE’s Solar Billing Plan is now in effect, the CPUC has provided guidance to the IOUs in updating their billing system to reflect the changes to the previous NEM policies. SCE is expected to take between 12 and 24 months to properly update its billing system. In the meantime, customers enrolled in the Solar Billing Plan will be billed under NEM 2.0 rates until SCE can adjust accordingly. Staff will report back to the Board on future developments as SCE’s Solar Billing Plan implementation continues and propose additional amendments to DCE’s policies as needed.

Fiscal Analysis: There are no costs associated with updating the policy. As the program evolves with SCE’s billing updates, staff will evaluate potential effects on DCE’s revenues and expenses, which will be reflected in DCE’s Board-approved budgets.

Attachments:

DCE Policy No. 23-01
DCE Policy No. 23-01, redline showing amendments to DCE Policy No. 2021-01 Subject: DCE’s Net Energy Metering (NEM) Program and Solar Billing Program are available to those DCE customers who are respectively eligible under Southern California Edison (SCE)’s NEM 1.0, 2.0, or Solar Billing Plan programs. These SCE Rate Schedules are available at: https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates and may be amended or replaced by SCE from time to time. DCE’s NEM and Solar Billing Program Policy may be amended or clarified from time to time.

Net Energy Metering and Solar Billing Program Policy
Effective April 15, 2023, DCE customers who want to participate in SCE’s Solar Billing Plan after enrolling with DCE must provide SCE with a completed SCE interconnection application and comply with all other SCE requirements before being eligible for the DCE Solar Billing Program, DCE’s equivalent to SCE’s Solar Billing Plan.

Eligible DCE customers who meet the requirements for the SCE Solar Billing Plan will be automatically enrolled in the DCE Solar Billing Program either at the time of initially enrolling with DCE or at the time SCE accepts them into SCE’s Solar Billing Plan.

DCE customers eligible under NEM with SCE who have a home or business with a solar installation operating or applied for before April 15, 2023, are automatically enrolled in DCE’s NEM Program.

RATES: All rates for the DCE NEM or Solar Billing Programs will be in accordance with the customer’s applicable DCE rate schedule. Nothing in this policy will supersede any SCE authorized charges.

CHARGES & BILLING: The following section applies to both NEM and Solar Billing Program customers. This section will be revised for Solar Billing Program customers as SCE updates and implements its Solar Billing Plan. DCE’s charges for energy (kWh) will be calculated at the DCE rate schedule and billed on the net metered usage, as described below.
a) For a NEM customer with Non-Time of Use (TOU) Rates:

If the customer is a “Net Consumer,” having overall positive usage during a specific monthly billing cycle, the customer will be billed in accordance with the customer’s DCE Rate Schedule.

If the customer is a “Net Generator,” having overall negative usage during a specific monthly billing cycle, any net energy production shall be valued at the applicable POLICY # 23-01
Net Energy Metering and Solar Billing
Programs
rate as set forth in the customer’s DCE Rate Schedule. The calculated value of any net energy production shall be credited to the customer according to the DCE Rate Schedule and applied as described in Sections (c) and (d). b) For a NEM or Solar Billing Program customer with TOU Rates:

If the customer is a Net Consumer during any discrete TOU period reflected within a specific monthly billing cycle, the net kWh consumed during such TOU period shall be billed in accordance with applicable TOU period-specific rates or charges as specified in the customer’s rate schedule.

If the customer is a Net Generator during any discrete TOU period reflected within a specific monthly billing cycle, any net energy production shall be valued at the applicable TOU period specific rates or charges as specified in the customer’s DCE Rate Schedule. The calculated value of such net energy production shall be credited to the customer according to the DCE rate schedule and applied as described in Sections (c) and (d).
c) Monthly Settlement of DCE Charges/Credits:

Each customer will receive a statement as part of its monthly SCE bill indicating any accrued charges for electric energy usage during the current monthly billing cycle. When a customer’s net energy production results in an accrued credit balance in excess of currently applicable charges, the value of any net energy production during the monthly billing cycle (in excess of currently applicable charges) shall be valued at the DCE Rate Schedule and noted on the customer’s bill, including the quantity of any surplus production (measured in kWh), and carried over as a bill credit for use in a subsequent billing cycle(s).

A customer who has accrued credits during previous billing cycles will see such credits applied against currently applicable charges, reducing otherwise applicable charges by an equivalent amount to such credits. Any remaining credits reflected on the customer’s billing statement shall be carried forward to subsequent billing cycle(s) until either the excess the credit is used to satisfy current charges, the customer no longer receives service from DCE or an annual account true-up is performed.
d) DCE Annual True-Up & Cash-Out Processes:
i. DCE Annual True-Up
a. Generation Credit Refund: During the monthly billing cycle in May of each year, DCE will perform a true-up of the most recent twelve (12) month billing cycle, or the period from the customer’s commencement of participation in the DCE NEM or Solar Billing Programs up to the following May (the “Relevant Period”). At the time of the Annual True-Up, if the customer has accumulated any generation credits in excess of any currently outstanding charges, those generation credits will be refunded to the customer up to the total DCE charges paid by the customer on the same account during the Relevant Period, consistent with DCE’s Annual Cash-Out practice in (ii).
b. Net Surplus Compensation: Net Surplus Energy is defined as any generation that exceeds total customer energy usage during the Relevant Period, as measured in kWh. DCE will also determine whether each customer has produced Net Surplus Energy over the course of the Relevant Period. If a customer has produced Net Surplus Energy, then DCE shall credit such customer an amount not to exceed $10,000 that is equal to the current Net Surplus Compensation rate per kWh, as defined in DCE Net Surplus Compensation Rate Schedule, multiplied by the quantity of Net Surplus Energy produced by the customer during the Relevant Period, consistent with DCE’s Annual Cash-Out practice in (ii) below. The amount of excess generation kWh will be paid out at DCE’s Net Surplus Compensation aligned with the current SCE rate. ii. DCE Annual Cash-Out
During the monthly billing cycle in May of each year, any current customer who has a combined NEM or Solar Billing Program generation credit and Net Surplus Compensation value of $100 or more, as determined during the Annual True-Up process, that exceeds any outstanding charges, will be sent a payment by check via U.S. Mail to the customer’s mailing address on file at the time of mailing for the credit balance on their account, as determined through DCE’s Annual True-Up process (i). Customers receiving direct payment will have an equivalent amount removed from their account balance at the time of check issuance. In the event customers do not have a combined generation credit and Net Surplus Compensation value exceeding $100, such credit balance will be carried forward to offset future DCE charges. All NEM and Solar Billing Program accounts will be reset to zero kilowatt hours annually as of the customer’s May monthly billing cycle and the only NEM or Solar Billing Program credits that will be carried forward on the customer’s account will be the combined NEM or Solar Billing Program generation credit and Net Surplus Compensation credit balances less than $100.
iii. DCE Cash-Out for Terminations
Customers who close their electric account through SCE, opt-out of DCE and return to bundled service, or move outside of the DCE service area prior to the monthly billing cycle in May of each year, shall be trued up according to DCE’s Annual True-Up Process. If applicable, the customer shall receive a refund payment by check via U.S. mail to the customer’s mailing address on file at the time of mailing for any NEM or Solar Billing Program generation credits on their account that exceeds outstanding charges at the time of true-up, up to the amount paid by the customer during the Relevant Period.

If determined to have produced Net Surplus Energy, the customer shall also receive a check via U.S. Mail to the customer’s mailing address on file at the time of mailing for Net Surplus Compensation, up to a maximum of $10,000. Payments will be released 30 days after final billing to allow for any revised usage and/or adjustments from SCE. Checks will expire 90 calendar days after issuance. If checks expire or are returned to DCE, customers may request the reissuance of a check and DCE will make a reasonable effort to reissue the check within 30 days of a customer’s request.
e) SCE NEM and Solar Billing Programs
Customers are subject to applicable terms and conditions and billing procedures of SCE for SCE charges as described in SCE NEM or Solar Billing Plan Rate Schedules (except for generation-related charges, which are described in DCE’s rate schedules). Customers should be aware that while DCE settles balances for generation monthly, SCE will continue to calculate charges for delivery, transmission and other services annually for those customers with an annual billing option, and DCE NEM and Solar Billing Program credits cannot be applied to any SCE charges. Customers are encouraged to review SCE NEM and Solar Billing Plan Rate Schedules at https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates. f) Return to SCE Bundled Service:

DCE customers participating in the DCE NEM and Solar Billing Programs may opt out and return to SCE’s bundled service, subject to any applicable restrictions imposed by SCE. If a DCE customer opts out more than 60 days after their initial enrollment date, DCE will perform a true-up of their account, as specified in section (d)(iii), at the time of return to SCE bundled service. For details concerning opting out of DCE service, please contact DCE Customer Service.

POLICY #2021-01
Subject: DCE’s Net Energy
Metering Service
Subject: Net Energy Metering (NEM) Program (DCE NEMand Solar Billing Program) is are available to those DCE customers who are respectively eligible under Southern California Edison’sEdison (SCE) Net Energy Metering program.’s NEM 1.0, 2.0, or Solar Billing Plan programs. These SCE NEM Rate Schedules are available at:
https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates and may be amended or replaced by SCE from time to time. DCE’s NEM and Solar Billing Program Policy may be amended or clarified from time to time.

Net Energy Metering and Solar Billing Program Policy
Effective April 15, 2023, DCE customers who want to participate in NEMSCE’s Solar Billing Plan after enrolling with DCE must provide SCE with a completed SCE NEM Applicationinterconnection application and comply with all other SCE requirements before being eligible for the DCE NEM Program.Solar Billing Program, DCE’s equivalent to SCE’s Solar Billing Plan.

Eligible DCE customers who meet the requirements for the SCE NEM Program Solar Billing Plan will be automatically enrolled in the DCE NEMSolar Billing Program either at the time of initially enrolling with DCE or at the time SCE accepts them into SCE’s NEM ProgramSolar Billing Plan.

DCE customers eligible under NEM with SCE who have a home or business with a solar installation operating or applied for before April 15, 2023, are automatically enrolled in DCE’s NEM Program.

RATES: All rates for the DCE NEM Programor Solar Billing Programs will be in accordance with the customer’s applicable DCE rate schedule. Nothing in this policy will supersede any SCE authorized charges.

CHARGES & BILLING:

CHARGES & BILLING: The following section applies to both NEM and Solar Billing Program customers. This section will be revised for Solar Billing Program customers as SCE updates and implements its Solar Billing Plan. DCE’s charges for energy (kWh) will be calculated at the DCE rate schedule and billed on the net metered usage, as described below. a) For a NEM customer with Non-Time of Use (TOU) Rates:

If the customer is a “Net Consumer,” having overall positive usage during a specific monthly billing cycle, the customer will be billed in accordance with the customer’s DCE POLICY # 23-01
Net Energy Metering and Solar Billing
Programs
Rate Schedule.

If the customer is a “Net Generator,” having overall negative usage during a specific monthly billing cycle, any net energy production shall be valued at the applicable rate as set forth in the customer’s DCE Rate Schedule. The calculated value of any net energy production shall be credited to the customer according to the DCE Rate Schedule and applied as described in Sections (c) and (d).
b) For a NEM or Solar Billing Program customer with TOU Rates:

The calculated value of such net energy production shall be credited to the customer according to the DCE rate schedule and applied as described in Sections (c) and (d). c) Monthly Settlement of DCE Charges/Credits:

Each customer will receive a statement as part of its monthly SCE bill indicating any accrued charges for electric energy usage during the current monthly billing cycle. When a customer’s net energy production results in an accrued credit balance in excess of currently applicable charges, the value of any net energy production during the monthly billing cycle (in excess of currently applicable charges) shall be valued at the DCE Rate Schedule and noted on the customer’s bill, including the quantity of any surplus NEM production (measured in kWh), and carried over as a bill credit for use in a subsequent billing cycle(s).

DCE will perform the first Annual True-Up in May 2021. Commencing in May 2021, DCE will perform the Annual True Up for the 12-month period between May to April for all current NEM customers.
b. Net Surplus Compensation: Net Surplus Energy is defined as any generation that exceeds total customer energy usage during the Relevant Period, as measured in kWh. DCE will also determine whether each customer has produced Net Surplus Energy over the course of the Relevant Period. If a customer has produced Net Surplus Energy, then DCE shall credit such customer an amount not to exceed $10,000 that is equal to the current Net Surplus Compensation rate per kWh, as defined in DCE Net Surplus Compensation Rate Schedule, multiplied by the quantity of Net Surplus Energy produced by the customer during the Relevant Period, consistent with DCE’s Annual Cash-Out practice in (ii) below. The amount of excess generation kWh will be paid out at DCE’s Net Surplus Compensation aligned with the current SCE rate. ii. DCE Annual Cash-Out
During the monthly billing cycle in May of each year, any current customer who has a combined NEM or Solar Billing Program generation credit and Net Surplus Compensation value of $100 or more, as determined during the Annual True-Up process, that exceeds any outstanding charges, will be sent a payment by check via U.S. Mail to the customer’s mailing address on file at the time of mailing for the credit balance on their account, as determined through DCE’s Annual True-Up process (i). Customers receiving direct payment will have an equivalent amount removed from their NEM account balance at the time of check issuance. In the event that customers do not have a combined NEM generation credit and Net Surplus Compensation value exceeding $100, such credit balance will be carried forward to offset future DCE charges. All NEM and Solar Billing Program accounts will be reset to zero kilowatt hours annually as of the customer’s May monthly billing cycle and the only NEM or Solar Billing Program credits that will be carried forward on the customer’s account will be the combined NEM or Solar Billing Program generation credit and Net Surplus Compensation credit balances less than $100.
iii. DCE Cash-Out for Terminations
Customers who close their electric account through SCE, opt-out of DCE and return to bundled service, or move outside of the DCE service area prior to the monthly billing cycle in May of each year, shall be trued up according to DCE’s Annual True-Up Process. If applicable, the customer shall receive a refund payment by check via U.S. mail to the customer’s mailing address on file at the time of mailing for any NEM or Solar Billing Program generation creditcredits on their account that exceeds outstanding charges at the time of true-up, up to the amount paid by the customer during the Relevant Period. If determined to have produced Net Surplus Energy, the customer shall also receive a check via U.S.

Mail to the customer’s mailing address on file at the time of mailing for Net Surplus Compensation, up to a maximum of $10,000. Payments will be released 30 days after final billing to allow for any revised usage and/or adjustments from SCE. Checks will expire 90 calendar days after issuance. If checks expire or are returned to DCE, customers may request the reissuance of a check and DCE will make a reasonable effort to reissue the check within 30 days of a customer’s request.
e) SCE NEM Programand Solar Billing Programs
Customers are subject to applicable terms and conditions and billing procedures of SCE for SCE charges as described in SCE NEM or Solar Billing Plan Rate Schedules (except for generation-related charges, which are described in DCE’s rate schedules).

Customers should be aware that while DCE settles balances for generation monthly, SCE will continue to calculate charges for delivery, transmission and other services annually for those customers with an annual billing option, and DCE NEM and Solar Billing Program credits cannot be applied to any SCE charges. Customersare encouraged to review SCE NEM Rate Schedules at
https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates. Customers are encouraged to review SCE NEM and Solar Billing Plan Rate Schedules at https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates. f) Return to SCE Bundled Service:

DCE customers participating in the DCE NEM Programand Solar Billing Programs may opt out and return to SCE’s bundled service, subject to any applicable restrictions imposed by SCE. If a DCE customer opts out more than 60 days after their initial enrollment date, DCE will perform a true-up of their account, as specified in section (d)(iii), at the time of return to SCE bundled service. For details concerning opting out of DCE service, please contact DCE Customer Service.

ITEM 6D
a

STAFF REPORT
Subject: Authorization to Update Signature Cards
Contact: Claude T. Kilgore, Director of Finance/ Administration ([email protected]) Recommendation: Authorize the updating of the signature cards and signatories for DCE investments and banking
Background: On occasion, usually due to a change in the Chair and/or employee turnover, DCE seeks authorization through Coachella Valley Association of Governments’ employees (as authorized in its JPA and contracted by DCE for staffing) to update the appropriate signatories and signature cards for DCE investments and banking. This request supersedes any prior Board action related to the matter.

CVAG is in the process of hiring a new Director of Energy & Sustainability who will serve as a signatory once hired. All transactions require dual approval with transactions over $1,000,000 requiring three approvers.

With the Board’s approval of the staff recommendation, the signature cards will be updated as follows and previously authorized staff will be removed:
1) Bank Signature Cards to the following CVAG employees and DCE Chair:

Name Title Type
Lisa Middleton DCE Chair Existing
Tom Kirk Executive Director Existing
Claude T. Kilgore Director of Finance Existing
Erica Felci Chief Operating Officer ADD
New Director - Pending Hire Director of Energy &
Sustainability
ADD
Fiscal Analysis: There is no cost to DCE for this action.

ITEM 6E

STAFF REPORT
Subject: Delinquent Accounts, Collections, and Bad Debt Policy Contact: Janice Reitman, Accounting Manager ([email protected]) Claude Kilgore, Finance Director ([email protected])
Recommendation: Adopt DCE Policy No. 23-02, the restated Delinquent Accounts, Collections, and Bad Debt Policy
Background: The purpose of the Delinquent Accounts, Collections, and Bad Debt Policy (Policy) is to define DCE’s process for methodically communicating with customers to ensure the collection of its accounts receivable (the term for this process is “dunning”) while also ensuring that its financial statements allow for a bad debt reserve in DCE’s financial statements. These accounting estimates for bad debt are derived using specialized knowledge and judgement, derived from current and past operating experience as well as relevant industry benchmarks. In addition, this accounting estimate is typically reviewed with a high level of scrutiny and in great detail by DCE’s external auditors each year.

Given that these customers are jointly shared between DCE and Southern California Edison (SCE) and directly billed by SCE, DCE is reliant on SCE’s dunning process until the joint customer is disconnected from service by SCE and the customer returned to DCE as further described below.

The DCE Board first adopted its policy for Delinquent Accounts, Collections, and Bad Debt in 2018. The Board amended it in 2021 to reference 3% of revenues for bad debt allowance. In recent years, major factors have come into play which has prompted DCE staff to recommend the Board replace the previous policies with the attached, restated Policy.

First, SCE has been in a critical multi-year billing system implementation moving away from their legacy platform and moving to a more functional program which is now provided by software giant, SAP. This process has provided many challenges between SCE and DCE related to the final reconciliation of transferred account balances and has made it difficult for DCE staff and its back-office data management vendor, Calpine, to assess the full status of delinquent accounts and implement a robust Policy.

Second, Southern California Edison’s new SAP Dunning (Collections) Path, imaged below, was implemented after DCE’s current Policy was adopted. It takes approximately 55 days to complete to a status of disconnection for residential customers and 45 days for commercial customers.

During this time, there are many customer invoices and touchpoints provided by SCE as imaged below. In the future, DCE also hopes to build out a pre-collection notification as allowed in the Policy.

One exception to disconnection on SCE’s SAP Dunning (Collections) Path is when local temperatures are forecasted to exceed 100 degrees. SCE’s Customer Service indicated that there is a high likelihood of the customer remedying the delinquent account within days of the disconnection and a weekly report is available of the accounts that are disconnected and then reconnected.

Finally, the COVID-19 pandemic and the associated, state-imposed moratorium on service disconnections resulted in considerable increases in customer delinquencies from March 2020 through December 2022 – which happens to align with DCE’s operational launch in April 2020.

The financial impact to DCE is approximately $2,186,000 in inactive account balances as of the end of May 2023. The moratorium has been rescinded and SCE has begun collections on delinquent accounts. DCE is recommending to update the Policy to better align with industry best practices as well as begin the collections process on DCE returned accounts utilizing an external collections agent.

The current Policy establishes reserving 3% of revenue for DCE’s bad debt reserve which has the advantage of simplicity yet does not factor fluctuations in the aging of delinquent accounts.

While a bad debt reserve as a percentage of revenue is an allowable and appropriate estimate and used by many CCAs, DCE’s auditors have informed staff that, for utility clients, a percentage of accounts receivable typically demonstrates a better estimate for the bad debt reserve. This is because a bad debt reserve based on accounts receivable buckets as opposed to revenue automatically adjusts as DCE’s accounts receivable aging worsens or improves.

DCE staff met with staff at Clean Power Alliance (CPA) —the largest Community Choice Aggregator in SCE’s service territory, serving customers in Los Angeles and Ventura Counties – to review its bad debt policy. CPA evaluates their customer account receivable balances for each aging bucket (30, 60, 90, 90+ days) and use a bad debt reserve percentage allocation for each aging bucket to calculate the reserve. This bad debt reserve percentage for the aging buckets was based on the SCE’s aging methodology which applies a percentage reserve to each aging bucket.

Since a percentage of sales or accounts receivable are both allowable under US Generally Accepted Accounting Principles (US GAAP) and the bad debt reserve is typically an area of higher audit risk (due to its estimate nature) facing more scrutiny than other financial areas during DCE’s annual audit, DCE’s updated Policy allows for both methods. While consistency in accounting methods from period to period is an important accounting concept, DCE staff believe the above factors make it the right time to transition the bad debt reserve policy to a percentage of accounts receivable.

DCE staff recommend transitioning to the percentage of accounts receivable methodology as possible based on the above factors and, it may take DCE extended time to move to this methodology. DCE staff will keep the Board apprised of relevant updates. DCE’s current external audit firm, Davis Farr LLP, are supportive of this recommendation to move the bad debt reserve to a percentage of Accounts Receivable. The proposed Policy also relates to staff’s recommendation to make a clarifying amendment to DCE’s Financial Reserve Policy, which is outlined in a separate staff report.

Fiscal Analysis: By implementing collections as outlined in the restated Policy, DCE will see increased cash flow allowing it to continue to build financial reserves towards Board targeted levels
Attachment: DCE Policy No. 23-02
Subject: Delinquent Accounts, Collections and Bad Debt Policy Purpose:

This policy establishes rules governing late payment and pre-collection notifications to customers, and the process by which a third-party collection agent will collect past due Desert Community Energy (DCE) charges on DCE’s behalf.

Delinquent Accounts:

All customers must pay all outstanding DCE charges for the period in which the customer received service from DCE.

Southern California Edison (SCE) as part of its established dunning (collections) path for joint SCE and DCE customer performs pre-collection notifications through its billing system.

Where feasible, DCE may send customers a late payment notice if the account has a DCE balance that is 90 days or more past due and the customer is not on a payment arrangement with SCE. The notice may be sent to a customer’s last known mailing address or, if a customer consented to receive electronic notices or bills, at a customer’s last known email address. Late payment notices should indicate that an outstanding balance is overdue and that failure to pay DCE charges to SCE or to enter into a payment arrangement with SCE may result in being referred to a collection agent designated by DCE.

Collections:

Except as provided elsewhere in this policy, any customer account with an outstanding DCE charge that is not subject to collection by SCE may be referred for collections to a collection agency designated by DCE.

Customers enrolled in the California Alternate Rates for Energy (CARE), Family Electric Rate Assistance (FERA), or Medical Baseline programs at the time SCE returns a receivable to DCE are not subject to the collections criteria in Section C.1. if the balance is $500 or less.

Any customer account that meets the collections criteria specified in above may receive a pre-collection notice informing the customer that charges owed to DCE are outstanding and that the customer’s account is collectible through a collection agent designated by DCE.

DCE may engage one or more collection agents to collect past due funds from DCE customers on DCE’s behalf (Collection Agent). The Collection Agent retained by DCE shall be licensed and accredited to help ensure compliance with all laws or regulations relating to consumer privacy and protection, credit, collections, and similar laws or regulations.

Bad Debt Reserve:

DCE shall establish a bad debt reserve based on either a percentage of revenue or accounts receivable and in line with US Generally Accepted Accounting Principles (US GAAP). The bad POLICY No. 23-02
Delinquent Account, Collections
and Bad Debt Policy
debt reserve shall be monitored by DCE staff and may vary over time based on current economic factors as well as specialized knowledge and judgement derived from current and past collections experience as well as relevant industry benchmarks. On an annual basis, DCE’s bad debt reserve metrics will undergo an external financial statement audit and updates will be provided to the DCE Board accordingly.

Executive Director Authority:

The Executive Director or the Executive Director’s designee may, in their discretion, cancel, recall an account from the Collection Agent, or otherwise deviate from Policy for reasons including but not limited to cases of unforeseeable events, exigent circumstances, operational need or customer hardship.

ITEM 6F
a

STAFF REPORT
Subject: Update to DCE Policy No. 18-10 Financial Reserve Policy Contact: Claude T. Kilgore, Director of Finance/ Administration ([email protected]) Recommendation: Approve a clarifying amendment to DCE Policy No. 18-10 Financial Reserve Policy
Background: Due to recommended updates to DCE’s restated Delinquent Accounts, Collections and Bad Debt Policy No. 23-01, the Financial Reserve Policy also needs minor non-substantive changes to remove outdated references to the former Delinquent Accounts, Collections and Bad Debt Policy No. 18-10.

Fiscal Analysis: There is no cost to DCE for this action.

Attachments: DCE Policy No. 18-10 Financial Reserve Policy as amended 1 Subject: Guidelines for DCE reserve fund accumulation and utilization with respect to actual and projected operating surpluses subject to annual review and adjustment by the Board of Directors.

Reserve Policy:

Establishing operating reserves that build over time is a critical component of enterprise risk management, prudent fiscal management, contingency planning and implementation and funding of long-term program goals.

This reserve policy is intended to align with requirements set forth by DCE’s procurement agent, The Energy Authority, and is subject to annual review and adjustment coincident with DCE’s fiscal year budget approval process. Such reserve balances are established as an unrestricted fund sourced generally from excess revenues over expenditures, unrestricted one-time revenue occurrences, and other available funds as may be deemed appropriate and proper by the DCE Board to augment DCE reserve accumulation. Such reserve balances may include the currently designated threshold of 0.300% of total revenues to be set aside for bad debt (see related policy) subject to approval by the Board. This policy may be reviewed and modified at the Board’s discretion from time to time in consultation, as applicable, with DCE’s Executive Director, service providers, procurement agents, and banking/financial advisors.

Reserve Target Levels:

This policy establishes an initial operating reserve accumulation target equal to 30% (120 days operating capital) to 40% (150 days operating capital) of the most current Board approved DCE operating budget, including power supply, within the first 3 years of operations. The target reserve accumulation will increase to 50% (180 days operating capital) of the most current Board approved DCE operating budget by the end of DCE’s 6th year of operation.

Contributions to achieve these targets are subject to actual revenue and cash flow streams, prevailing conditions of business necessity, then existing financial obligations, and other relevant factors as may be determined by the Board. The targeted maximum reserve balance is 75% (270 days operating capital) of the most current Board approved DCE operating budget.

Use of Reserves:

Use of reserves shall be recommended by DCE’s Executive Director and is subject to approval by the Board of Directors. Any recommendation for use of reserves shall include a proposal for the replenishment of such reserves within two fiscal years, or other time period as approved by the Board. Primary reserve fund uses include but are not limited to:

POLICY No. 18-10 - Amended
Financial Reserve Policy
2 1) Meeting mandated regulatory and or operating depository requirements when other sources of funds are not available;
2) Credit support for power purchase arrangements;
3) Meeting financial obligations during periods of business necessity; 4) Rate stabilization to mitigate power price shocks, market volatility or regulatory changes; 5) Temporary operating financial resources in the event of an economic downturn or other emergency situations preceding expense reductions, rate adjustments, and/or other corrective actions;
6) Covering temporary operating shortfalls instead of incurring new debt; 7) Local power programs/projects requiring credit backing or short-term infusion of capital; 8) Other uses as deemed necessary and prudent by the DCE Board.

If reserve funds exceed target levels, the Board of Directors may use excess funds for capital improvements, financing programs, paying down existing debt, rate reductions and/or other strategic purposes.

Reporting
Reserve levels will be monitored during each fiscal year and reported no less frequently than quarterly in financial reports provided to the Board.

ITEM 6G

STAFF REPORT
Subject: Termination of Deer Creek Solar + Storage Project Contact: David Freedman, Program Manager ([email protected]) Recommendation: Authorize the Executive Director to issue a notice of termination of the amended Renewable Power Purchase Agreement with Deer Creek Solar I Background: On February 6, 2023, the DCE Board approved an amendment to the 20-year renewable power purchase agreement (PPA) with Deer Creek Solar I, LLC (Deer Creek) for the Deer Creek Solar + Storage Project in Tulare County, California, which was signed in April 2021.

The amendment extended the Guaranteed Construction Start Date and Commercial Operation Date (COD) that were originally set out in the PPA. The amendment allows DCE, in its sole discretion, to terminate the PPA upon 30 days written notice to Deer Creek and collect an amount equal to the entire development security posted by Deer Creek if the project does not start construction as of the revised Guaranteed Construction Start Date for any reason.

On June 15, 2023, Deer Creek formally notified DCE that construction on the project is not anticipated to begin and will not achieve the revised Guaranteed Construction Start Date set forth in the amendment. Deer Creek further advised that it is not in a position to proceed with the project without: (i) a significant further delay in the COD; and (ii) another substantial increase in the amounts payable for energy and battery storage pursuant to the PPA.

Following discussion with DCE’s procurement advisors, The Energy Authority (TEA), and legal counsel, DCE staff recommends that DCE terminate the amended PPA and immediately draw on the development security as the remedy set forth in the amendment. As further detailed in the Board’s agenda packet under Item 8C, staff is working with TEA to procure additional long-term energy resources for DCE.

Fiscal Analysis: Termination of the amended PPA will entitle DCE to payment of an amount equal to the development security. TEA will continue to seek opportunities to find replacement energy products at the most efficient cost.

ITEM 7A

STAFF REPORT
Subject: DCE Fiscal Year 2023/24 Budget
Contact: Claude T. Kilgore, Director of Finance/Administration ([email protected]) Recommendation: Adopt Resolution 2023-03 approving Desert Community Energy’s Fiscal Year 2023/24 Budget
Background: By the end of June of each year, DCE staff prepares a detailed fiscal year budget for the Board’s review and approval. DCE's Fiscal Year 2023/24 Budget, covering the period from July 1, 2023 through June 30, 2024, pertains to DCE’s fourth full year of operation for its electricity customers in the City of Palm Springs. The budget process was previewed at the DCE Board’s May 2023 meeting. The June 2023 Board meeting provides an opportunity for further budget questions and comments, and for the Board to consider budget approval as prescribed by the DCE Joint Powers Agreement.

The draft budget includes the current expected business outcome for Fiscal Year 2022/23 using ten months of actuals through April 2023, and estimates for May and June 2023. Future business uncertainties remain, however, including longer-term residual economic impacts from the COVID-19 pandemic, western United States’ generally favorable hydro conditions, impacts from climate change, load variability, power market price volatility and integration/performance of power purchase agreements. In addition to these factors, Southern California Edison’s (SCE) retail rates and the Power Charge Indifference Adjustment (PCIA, or exit fee) were adjusted effective January 1, 2023, March 1, 2023, and June 1, 2023 and staff would note that further rate revisions and regulatory actions will likely occur. In response to these recent SCE changes, DCE adjusted its retail rates effective January 1, 2023 and a subsequent adjustment becomes effective July 1, 2023. These DCE rate adjustment were developed and implemented pursuant to DCE’s Rate Stabilization Schedule (RSS) and conform to Board policies and guidelines.

It is important to note the proposed budget is a planning document and staff will continue to coordinate with The Energy Authority (TEA) to update power supply costs, retail sales receipts, climate impacts, regulatory mandates and other factors throughout the year as actual revenues/expenses occur and keep the Board informed of any materials changes.

The budget information relating to TEA financial modeling (FiMo) inputs utilize the June 7, 2023 FiMo.

DCE staff met with TEA at its June 15, 2023 Risk Management Team meeting and the Risk Management Team concurred that the FiMo presented is materially in line with that used in the budget.

Fiscal Analysis: The costs and revenues for DCE are outlined in budget itself. The proposed budget incorporates multiple assumptions regarding CCA program participation, retail loads, wholesale supply cost, and residual economic impacts from the COVID-19 pandemic. Recent and prospective regulatory actions include the potential imposition of a substantial increase to DCE’s and other Community Choice Aggregators’ Financial Security Requirement (“FSR”), which increase could be in the $5 million range.

DCE staff is currently assessing the most prudent manner to provide these additional depository funds and the DCE budget may be impacted accordingly. DCE also has cost exposure related to potential Resource Adequacy (RA) regulatory actions, which could result in material cost increases during Fiscal Year 2023/24 and beyond. Additionally, SCE will likely submit additional rate changes over the period covered by this budget. DCE staff will actively monitor and report to the Board events which may materially alter expected budget results and as warranted, bring back to the Board any proposed budget revisions deemed prudent and necessary to maintain DCE Board policies and objectives.

Attachments:

1. Resolution No. 2023-03 approving DCE’s Fiscal Year 2023/24 budget

2. DCE’s Fiscal Year 2023/24 budget
RESOLUTION NO. 2023-03

A RESOLUTION OF THE BOARD OF DIRECTORS OF

DESERT COMMUNITY ENERGY
APPROVING FISCAL YEAR 2023/24 ANNUAL BUDGET

THE BOARD OF DIRECTORS OF DESERT COMMUNITY ENERGY DOES HEREBY FIND, RESOLVE, AND ORDER AS FOLLOWS:

A. 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;
B. Under Section 5.3.1 of the DCE Joint Powers Agreement the Board of Directors is to approve an annual budget by June 30th of each year for the next following fiscal year; C. This budget pertains to Fiscal Year July 1, 2023, through June 30, 2024; D. The DCE Fiscal Year 2023/24 Budget was presented to the Board of Directors at a duly noticed public meeting for its consideration, approval and adoption.

NOW THEREFORE BE IT RESOLVED BY THE BOARD OF DIRECTORS OF DESERT COMMUNITY ENERGY, AS FOLLOWS:

Section 1. Approval of Fiscal Year 2023/24 Annual Budget. The Board of Directors hereby approves the DCE Fiscal Year 2023/24 Budget.

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on this June 27, 2023.

ATTEST:
___________________________________ _____________________________________ Lisa Middleton, Chair Tom Kirk, Secretary
Desert Community Energy Desert Community Energy
AYES: NAYS: ABSENT: ABSTAIN:

Draft
Contents
From the Executive Director 1
About Desert Community Energy 2
Budget Overview 3
Budget Assumptions 3
Prior Year Budget to Actuals and New Proposed Budget 4
High-Level Budget Overview 5
Budget Summary Detail 6
Projected Cumulative Reserves 7
Fiscal Analysis 7
Proposed Budget 8
Internal Budget Costs 9
1 From the Executive Director
To the honorable members of Desert Community Energy: City of Palm Springs and City of Palm Desert June 27, 2023
When I’m asked about Desert Community Energy and its impact on the community, one of the first words that comes to mind is “choice.” DCE gives those who pay for electricity in Palm Springs, for the very first time, a choice in who procures their electricity and a choice in what type of electricity they want powering their home or business. I think about the choices that were made by your colleagues at the Coachella Valley Association of Governments to explore these options and to bring such a bold, forward-thinking program to the Coachella Valley. And the choice by your Board predecessors to launch service in the City of Palm Springs in 2020, even amid a worldwide pandemic that was changing every aspect of daily life.

These choices, and the choices that you as Board members make in the months and years ahead, have almost immeasurable impacts on ensuring we have a sustainable future. You would be hard pressed to find a single choice that has made such a big difference in the Coachella Valley. DCE is now entering its fourth year of serving the City of Palm Springs. We’re serving nearly 85 percent of the City’s electric customers and data shows that it is helping the City achieve greenhouse gas emission reductions at a faster-than-expected pace. Think about this: In the first full year of operations alone, DCE's rollout had the same greenhouse gas reduction equivalent as replacing almost 23,000 gasoline-fueled cars in the city with bikes, all while giving customers a choice in their electricity service.

The budget itself, presented here for your review and approval, reflects the choices that the Board has made and lays the groundwork for achieving cost-conscious and customer-conscious milestones and objectives moving forward.

The budget also builds on what we’ve accomplished to date. By serving the City of Palm Springs residents and businesses with 100% Carbon Free electricity, we’ve been critical to Palm Springs exceeding the State of California’s ambitious 2020 goals to reduce GHG emissions and help fight climate change. In the last year alone, we demonstrated financial stability by paying off all short-term debts and the line of credit. And we’re looking ahead by approving a 15-year agreement for Cape Generating Station 1 LLC Geothermal Project as part of DCE’s Mid-term Reliability Procurement. At the same time, we know we can’t operate in a vacuum. DCE this year adopted its first legislative platform, and our presence on the statewide advocacy stage, including with the California Public Utilities Commission, continues to grow. We also are working to establish innovative new programs, including a customer recognition program for Palm Springs’ business community that we hope to launch this coming fiscal year.

Most importantly, we’re mindful of the customers’ bottom lines. DCE’s Desert Saver product remains the lowest-cost electricity option for Palm Springs. You will find that most of our social media and community outreach focuses on how to save money.

We’ve also partnered with OhmConnect to offer a smart plug and thermostat program to help residents be aware of their energy use and find ways to be more efficient.

It takes a hardworking and professional staff to achieve these milestones and the objectives that are outlined in the budget. I’m incredibly proud of their dedication to implementing programs that the Board adopts and prioritizes. Our commitment to excellence is also reflected in our commitment to transparency, including this year’s revamped budget to provide both the Board and the public with a more engaging and user-friendly document.

As we look ahead, I look forward to working with you to increase DCE’s impact on a more sustainable Coachella Valley.

Tom Kirk
Executive Director
Desert Community Energy
2 About Desert Community Energy
Desert Community Energy (DCE) is a California joint powers authority (JPA) formed to offer a Community Choice Aggregation (CCA) program in the desert region of Riverside County. DCE was established in October 2017 to meet member agencies’ environmental and economic goals including competitive electric rates, greenhouse gas reductions, local control, and local economic benefits. The original JPA was formed among the cities of Palm Springs, Cathedral City, and Palm Desert. However, the City of Cathedral City withdrew from DCE effective July 1, 2021. While DCE formed in 2017, it only began serving load on April 1, 2020, for one of its member agencies, the City of Palm Springs. The next possible launch date for the City of Palm Desert is 2025.

DCE is governed by a Board of Directors (Board), consisting of one director appointed by each of the members of the JPA.

Directors are elected officials or senior staff of the appointing member. Each JPA member may also appoint an alternate to serve in the absence of its Director. All Board meetings are conducted in accordance with the provisions of the Ralph M. Brown Act.

The Board has established policies that ensure the financial health of the agency including an Energy Risk Management Policy and Financial Reserve Policy. The Board follows a fiscally conservative course with a near-term emphasis on building financial reserves. DCE targets, during the initial years of operation, to fund financial reserves with the following objectives:
• Establish long-term business sustainability.
• Build collateral for power procurement activities.
• Establish an investment grade credit rating.
• Develop a source of funds for investment in generation and other local programs. • Stabilize rates and dampen year-to-year variability in procurement costs.

Pursuant to an Implementation and Management Services Agreement first approved in 2017 and extended for a further five years in 2022, DCE has contracted with Coachella Valley Association of Governments (CVAG) to provide administrative and staffing services. Staff support includes meeting coordination, support to the board, oversight of consultants, and coordination of CCA implementation. Additionally, CVAG staff provide administrative support and accounting services including preparation of the budget, oversight of the annual audit, and management of the various DCE funds. Of the CVAG employees providing support for the CCA program, each only spend part of their time on the CCA program. DCE reimburses CVAG for all staff time incurred as well as non-employee costs incurred by CVAG while performing the services, such as supplies, legal services, consultant services and equipment.

As noted above, DCE began serving load in April 2020 for one of its member agencies, the City of Palm Springs. Through DCE, customers within the service area can take advantage of opportunities granted by Assembly Bill 117, the Community Choice Aggregation Law. DCE implements sustainable energy initiatives that reduce energy demand, increase energy efficiency, and advance the use of clean, efficient, and renewable resources available in the region. DCE’s primary objectives in implementing programs are to provide overall rates that are lower or competitive with those offered by Southern California Edison (SCE) for similar power supplies, to supply an energy portfolio that prioritizes the reduction of greenhouse gas emissions and the use of local renewable resources, including existing facilities, to the maximum extent technically and economically feasible, and to establish local control. The prospective benefits to local consumers include the ability to reduce energy costs; improve the local and regional economy; stabilize electric rates; increase local electric generation reliability; influence which technologies are used to meet local electricity needs (including a planned increased use of renewable energy); and to ensure effective planning and development of sufficient resources and energy infrastructure to serve DCE residents and businesses.

The California Public Utilities Code provides the relevant legal authority for DCE to serve as a CCA and invests the California Public Utilities Commission (CPUC) with regulatory oversight of DCE. DCE’s Implementation Plan was certified by the CPUC in March 2018. DCE is also registered with SCE and works closely with SCE on CCA program implementation.

In addition to staffing provided by CVAG as discussed above, DCE is supported by a solid team of contractors with expertise in the energy industry and CCA operations. This team helps DCE navigate the volatile energy markets and increasingly complicated regulatory environment that have marked the period since DCE’s 2020 launch and are expected to continue. 3 Budget Overview
By the end of June of each year, DCE staff prepares a detailed forthcoming fiscal year budget for Board review and approval.

DCE's FY2023/24 budget, covering the period from July 1, 2023, through June 30, 2024, pertains to DCE's fourth full year of operation for its electricity customers in the City of Palm Springs. The budget process was previewed at the DCE Board's May 2023 meeting. The June 2023 Board meeting provides an opportunity for further budget questions and comments and for the Board to consider budget approval as prescribed by the DCE Joint Powers Agreement.

The proposed budget includes the current expected business outcome for FY2022/23 using ten months of actuals through April 2023 and estimates for May and June 2023. Future business uncertainties remain, however, including longer-term residual economic impacts from the COVID-19 pandemic, the Western United States' generally favorable hydro conditions, climate change impacts, load variability, power market price volatility, and integration/performance of power purchase agreements. In addition to these factors, Southern California Edison's (SCE) retail rates and the Power Charge Indifference Adjustment (PCIA, or exit fee) were adjusted effective January 1, 2023, March 1, 2023, and June 1, 2023, and further rate revisions and regulatory actions will likely occur. In response to these recent SCE changes, DCE adjusted its retail rates effective January 1, 2023, and a subsequent adjustment becomes effective July 1, 2023. These DCE rate adjustments were developed and implemented pursuant to DCE's Rate Stabilization Schedule (RSS) and conform to Board policies and guidelines.

It is important to note the proposed budget is a planning document, and staff will continue to coordinate with The Energy Authority (TEA) to update power supply costs, retail sales receipts, climate impacts, regulatory mandates, and other factors throughout the year as actual revenues/expenses occur.

Budget Assumptions
DCE’s FY2023/24 budget assumptions include:

1. Full accrual accounting practices are implemented in line with US GAAP for enterprise-type funds so costs/revenues often differ from cash on hand.

2. Palm Springs is the only city where DCE is actively serving CCA customers.

3. Projected loads, resources, revenues, and costs will utilize TEA's June 7, 2023, financial model output (FiMo), and derived revenues will include DCE's July 1, 2023, rate adjustment. DCE financial staff provide DCE internal cost forecasts.

4. An opt-out rate of about 16 percent (those customers remaining with SCE bundled service) and an opt-down rate of about 11 percent (those DCE customers that choose Desert Saver as opposed to the 100% Carbon Free default product).

5. Board-approved rate-setting objectives. The residential Desert Saver customer bill, on average, is to be about 0–1.0% less than SCE's bundled base customer bill and meets full California Renewables Portfolio Standard compliance. DCE's 100% Carbon Free residential product is priced, on average, not to exceed a 14% total bill premium when compared with SCE's bundled base product for customers enrolled in DCE's largest residential rate class, "Domestic."

6. Continued rate Carbon Free subsidy suspension to customers enrolled in low-income assistance programs; these customers, representing about 16% of DCE's total customer base, are enrolled in the Desert Saver product.

7. Rates are sufficient to recover wholesale supply costs, yield a positive net margin, build cash reserves, and meet applicable loan terms, conditions, and financial covenants.

8. TEA will continue to provide credit support functions to DCE during FY2023/24 with a goal to reevaluate this function throughout the upcoming fiscal year and moving into the FY2024/25 budget.

9. Non-energy FY2023/24 operating costs will be estimated with escalation between 3–15% on a budget-line level to reflect budgetary conservatism in an inflation-prone market. For FY2024/25 and FY2025/26 notional estimates, a 4.5% annual escalation rate was applied.

10. Cost allocation and rate setting is based on cost recovery, fairness, and equity.

11. DCE meets regulatory, legislative, and operating requirements.

12. DCE continues collaborating with CalCCA, other CCAs, and public power groups.

13. DCE maintains necessary and adequate internal staffing and continues the contract support relationship with the Coachella Valley Association of Governments (CVAG).

14. DCE will monitor and adjust forecast retail loads, revenues, and costs based on actual experience and revise expectations accordingly throughout the forthcoming year.

15. DCE follows adopted Board policies and objectives.
4 Prior Year Budget to Actuals and New Proposed Budget
The tables that follow summarize DCE’s expenses and revenues for the current fiscal year ending June 30, 2023, and provide DCE's budget projections for FY2023/22024. Additional forecast outcomes for FY2024/25 and FY2025/26 are also provided based on current market and business expectations.

Table 1 presents a comparison between the estimated actual results for the end of FY2022/23 compared to DCE’s originally adopted FY2022/23 budget. This comparison is based on 10 months of actual FY2022/23 cost data, plus a projection of the last two months as provided by TEA. For DCE/CVAG Staff and Operations Support, the data was provided by DCE staff and includes ten months of actual expenditures with estimated amounts for the remaining two months of the fiscal year. These estimated amounts may therefore differ somewhat from year-end actual results.

Customer loads were below forecast for the FY2022/23 budget period and DCE has been calibrating its model accordingly.

FY2022/23 revenues are below budget projections by 4.9%, primarily reflecting DCE's actual retail loads coming in about 8.4% below budget forecast. Even with the reduced loads, power supply costs were almost 2% above forecast costs.

Given DCE's improving financial reserves position, a nominal amount was budgeted for Interest Expense as compared to FY2022/23 which saw DCE utilize the River City Bank revolving credit facility for working capital needs. Projected FY2023/24 revenues are expected to increase approximately 16% versus FY2022/23 actuals reflecting rate adjustments necessary to track supply costs, SCE rate changes, and to build reserves in line with DCE's Financial Reserves Policy.

Projected FY2023/24 Total Power and Operating Costs are expected to increase approximately 5.8% versus FY2022/23, reflecting ongoing power market price pressure, the full impact of which is tempered by DCE's wholesale supply hedging activities.

With regard to year-over-year cost escalation, aggregated non-power supply operating costs are up about 19% for the coming budget year. This is a result of many factors including inflation and also an increased budgeted amount for DCE programs such as supporting lower-income customers on weatherization as well as increased consultant and staff costs for these programs.

DCE is staffed by CVAG under an existing staffing agreement, and beginning July 1, 2023, CVAG will implement a Classification and Total Compensation adjustment which affects some of the CVAG positions providing staffing for DCE. In addition, CVAG is acquiring a new Enterprise Resource Planning (ERP) system, which DCE will be able to benefit from and utilize as well.

Table 1: DCE Prior Year Budget to Actuals and FY2023/24 Proposed Budget 5 Because DCE operates in an increasingly complex market and regulatory environment, staff and consulting expertise are continuously required to manage business operations adequately. These extra efforts are primarily reflected in DCE/CVAG Staff and Operations Support and Contract and Other Labor depicted in Lines 10 and 11 of Table 2.

Since its inception, DCE has depended on several external consultants and will continue to rely on the expertise of TEA, Don Dame, Calpine, and other consultants. However, in line with original organization strategies, as more internal expertise is acquired, DCE staff will assimilate more of the work effort and reduce the use of consultants accordingly. Additional staff effort is required to address increasing operating and regulatory complexities engendered by climate change and the transition from carbon-based electricity production.

Thus, DCE's regulatory, customer service, business policy, and programming needs continue to grow, and responding to those needs, at least in part with internal staff, will provide organizational benefits. Ongoing synergies are also expected to be achieved via the utilization of CVAG's expertise and capabilities.

When DCE was established, there were plans for three active CCAs. This led prior budgets to reference cost allocations meant to accommodate the three active CCAs compared to DCE general operations. As the City of Palm Springs remains the only active CCA with no planned launch date for any other CCAs, no cost allocations are being utilized.

High-Level Budget Overview
The following pie chart provides a high-level budget overview for FY2023/24:

The blue area represents total physical power supply costs of approximately $47.8 million, which comprise about 94% of DCE’s total operating costs. The red area represents DCE’s wholesale vendor services charges from TEA, Calpine and SCE attributable to Palm Springs CCA. The yellow slice shows the budget portion of DCE’s internal charges attributable to Palm Springs' CCA operations (including CVAG services and facilities utilization) of approximately $1.5 million. The green slice shows projected accrual net margins which may be available for reserves (see Chart 2).

Chart 1: FY2023/24 Accrual Budget.
6 Budget Summary Detail
Table 2 shows the FY2023/24 budget summary:

Table 2, Lines 2–7 show revenues and costs associated with PS CCA, as taken from the TEA financial model (FiMo). Lines 10– 18 show projected DCE non-power supply operating costs and are developed using DCE financial input, staffing, and related projections. These costs include TEA and Calpine services, TEA credit fee, SCE billing charges, and programs that benefit DCE customers.

FY2023/24 total power and operating costs of $51,206,753 are approximately 5.8% above FY2022/23 actuals, reflecting generally higher power market conditions, residual COVID-19 load shifts, climate impacts, and international energy market turmoil. Total FY2023/24 projected revenue of $71,457,376 reflects recent and scheduled rate adjustments necessary to recover costs, respond to SCE rate actions, and contribute to Board adopted reserve accumulation goals.

It is important to note the FY2023/24 budget results are accrual based, and actual revenues and available cash reserves fluctuate accordingly and differ from cash-on-hand. Actual revenue receipts can lag sales by as much as two months and are estimated to be in the $12 million range at the end of the current fiscal year. Line 21 in Table 2 shows an estimated FY2023/24 net amount available for reserves around $20 million; however, after adjusting for revenue lag amount, actual cash on hand at the end of FY2023/24 is estimated to be closer to $22–24 million, including end of FY2022/23 cash reserve balance.

Table 2: FY2023/24 Budget Summary Detail
7 Projected Cumulative Reserves
Chart 2 shows DCE's estimated accrued margins attained during the prior fiscal year and projected for FY2023/24, FY2024/25, and FY2025/26.

During DCE's early operational history, it experienced negative margins, primarily due to increasing power supply costs and revenue lag, which were tempered by utilizing credit arrangements with River City Bank as guaranteed by the City of Palm Springs, and invoicing support from TEA.

Commencing toward the end of FY2022/23 and continuing into FY2023/24, DCE is projected to begin accumulating positive cash reserves which may reach reserve policy target levels over the next twelve months, adding to DCE's financial health and stability and reaching an important benchmark for its journey to attain an investment quality credit rating.

DCE staff held conversations with TEA regarding the credit support function TEA currently provides on behalf of DCE. While DCE is projected to accumulate additional reserves by the end of FY2023/24, it is unlikely for DCE to be in a financial position to begin entering directly into credit agreements prior to FY2024/25, at the earliest; therefore, to maintain a conservative approach, DCE staff is assuming ongoing credit support from TEA during FY2023/24.

Fiscal Analysis
The costs and revenues for DCE are outlined in the above and attached budget tables. The proposed budget incorporates multiple assumptions regarding CCA program participation, retail loads, wholesale supply cost, and residual economic impacts from the COVID-19 pandemic.

Recent and prospective regulatory actions include the potential imposition of a substantial increase to DCE's (and other CCAs') Financial Security Requirement (FSR), which could be in the $5 million range. DCE staff is currently assessing the most prudent manner to provide these additional depository funds, and the DCE budget may be impacted accordingly. DCE also has cost exposure related to potential Resource Adequacy (RA) regulatory actions, which could increase material costs during FY2023/24 and beyond.

Additionally, SCE will likely submit additional rate changes over the period covered by this budget. DCE staff will actively monitor and report to the Board events which may materially alter expected budget results and, as warranted, bring back to the Board any proposed budget revisions deemed prudent and necessary to maintain DCE Board policies and objectives.

Chart 2: Residual Margin and Reserves
8 Proposed Budget
Table 3 includes DCE's internal costs and expenses, which are displayed in greater detail in Table 4. Also, note the budget is constructed using projected revenues and costs as accrued and that reserve accumulation and actual cash on hand may differ substantially given revenue receipts which can lag actual power sales by up to two months.

Table 3: FY2022/23 Total Budget and Projected Year-End Actuals; FY2023/24 Proposed Budget by Month; and Projected FY2024/25 and FY2025/26 Budget Totals.
9 Internal Budget Costs
Table 4: DCE Internal Budget Costs (FY2022/23 Total Budget and Projected Year-End Actuals; FY2023/24 Proposed Budget by Month; and Projected FY2024/25 and FY2025/26 Budget Totals).

10 ITEM 8A DESERT COMMUNITY ENERGY BOARD
FY2022-2023 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 Statement of Net Position Prev Year Comparison As of April 30, 2023
Apr 30, 23 Apr 30, 22 $ Change % Change
ASSETS
Current Assets
Checking/Savings
1100 · Unrestricted Funds
1105 · Operating Account -8099 $ 199,575 $ 390,557 $ (190,982) (49%) 1107 · ICS Account -0995 0 82 (82) (100%)
1109 · DDM Marketplace Sweep - 0991 1,917,380 633,773 1,283,607 203% 1115 · Lockbox -4446 991,571 2,151 989,420 45,998%
Total 1100 · Unrestricted Funds 3,108,526 1,026,563 2,081,963 203% 1199 · Restricted Funds
1110 · Money Market -5470 405,416 1,747,647 (1,342,231) (77%) 1120 · FSR Letter of Credit Collateral 147,000 147,000 0 0% Total 1199 · Restricted Funds 552,416 1,894,647 (1,342,231) (71%) Total Checking/Savings 3,660,942 2,921,210 739,732 25%
Accounts Receivable
1221 · Accounts Receivable 12,792,239 8,871,928 3,920,311 44% 1223 · Accrued Accounts Receivable 1,596,839 1,343,375 253,464 19% Total Accounts Receivable 14,389,078 10,215,303 4,173,775 41% Other Current Assets
1225 · Allowance for Doubtful Accounts (2,795,609) (1,495,129) (1,300,480) (87%) 1240 · Prepaid Expenses 1,473 0 1,473 100%
Total Other Current Assets (2,794,136) (1,495,129) (1,299,007) (87%) Total Current Assets 15,255,884 11,641,384 3,614,500 31% Other Assets
1170 · Deposits/Bonds 310,584 0 310,584 100%
Total Other Assets 310,584 0 310,584 100%
TOTAL ASSETS $ 15,566,468 $ 11,641,384 $ 3,925,084 34%

LIABILITIES & NET POSITION
Liabilities
Current Liabilities
Accounts Payable
2110 · Accounts Payable $ 2,053,874 $ 3,429,061 $ (1,375,187) (40%) 2112 · Accrued Accounts Payable 0 72,461 (72,461) (100%) 2120 · Due to Other Governments 170,718 458,312 (287,594) (63%) Total Accounts Payable 2,224,592 3,959,834 (1,735,242) (44%) Other Current Liabilities
2230 · Taxes payable
2231 · Utility Users Tax (UUT) 239,010 60,574 178,436 295% 2232 · Electric Energy Surcharge 8,213 9,240 (1,027) (11%) Total 2230 · Taxes payable 247,223 69,814 177,409 254%
2260 · Vendor Security Deposits
2262 · PPA Development Security 225,000 1,680,000 (1,455,000) (87%) 2263 · Contract Development Deposit 180,000 0 180,000 100% Total 2260 · Vendor Security Deposits 405,000 1,680,000 (1,275,000) (76%) Total Other Current Liabilities 652,223 1,749,814 (1,097,591) (63%) Total Current Liabilities 2,876,815 5,709,648 (2,832,833) (50%) Long Term Liabilities
2300 · Non-current Liability 0 4,242,848 (4,242,848) (100%) Total Long Term Liabilities 0 4,242,848 (4,242,848) (100%) Total Liabilities 2,876,815 9,952,496 (7,075,681) (71%) Net Position
31000 · Restricted Net Position 147,000 147,000 0 0%
32000 · Unrestricted Net Position 4,724,389 5,127,861 (403,472) (8%) Net Income 7,818,265 (3,585,973) 11,404,238 318%
Total Net Position 12,689,654 1,688,888 11,000,766 651% TOTAL LIABILITIES & NET POSITION $ 15,566,469 $ 11,641,384 $ 3,925,085 34%

Page 1 of 1 ends

Desert Community Energy
Unaudited Changes to Net Position Prev Year Comparison
July 2022 through April 2023
Jul '22 - Apr 23 Jul '21 - Apr 22 $ Change % Change
Revenue
5010 · Electricity Sales
5011 · Carbon Free $ 39,883,680 $ 28,885,975 $ 10,997,705 38% 5012 · Carbon Free- CARE / FERA (326) 1,716,687 (1,717,013) 1 (100%) 5013 · Desert Saver 8,502,613 3,379,279 5,123,334 152%
Total 5010 · Electricity Sales 48,385,967 33,981,941 14,404,026 42% 5100 · Other Revenue
5120 · Energy Market Settlements 1,065,812 972,390 93,422 10% 5125 · Resouce Adequacy 223 0 223 100%
5150 · Other Revenue 460,346 609,655 (149,309) (24%)
Total 5100 · Other Revenue 1,526,381 1,582,045 (55,664) (4%) 5900 · Investment Revenue 15,651 3,327 12,324 370%
Total Revenue $ 49,927,999 $ 35,567,313 $ 14,360,686 40% Expense
4100 · Cost of Electricity
4105 · Electricity Purchase 24,653,747 22,739,956 1,913,791 8% 4110 · Resource Adequacy Settlement 8,057,734 6,132,751 1,924,983 31% 4115 · Low Carbon Settlement 0 2,381,000 (2,381,000) 2 (100%) 4120 · Renewable Energy Cr. Settlement 134,106 1,171,191 (1,037,085) (89%) 4125 · Market Charges 5,429,903 3,380,780 2,049,123 61% Total 4100 · Cost of Electricity 38,275,490 35,805,678 2,469,812 7% 4200 · Accounting / Bank Services 24,723 31,638 (6,915) (22%) 4353 · Insurance 7,367 7,793 (426) (5%)
4423 · Office Supplies 1,200 0 1,200 100%
4425 · Legal Services 74,908 67,304 7,604 11%
4431 · Professional Services 130,786 66,797 63,989 96%
4432 · Consultants 1,925,859 1,868,353 57,506 3%
4433 · Outreach Services 43,722 38,834 4,888 13%
4435 · Technology Costs (IT) 3,523 1,886 1,637 87%
4440 · Postage 13,023 14,787 (1,764) (12%)
4441 · Printing 16,187 17,125 (938) (5%)
4450 · Sponsorships 1,603 0 1,603 100%
4452 · Marketing 8,355 0 8,355 100%
4455 · Customer Programs 0 21,899 (21,899) (100%)
4500 · Registrations/Memberships 84,621 84,620 1 0%
4610 · Interest Expense 46,655 107,093 (60,438) (56%)
4750 · Bad Debt Expense 1,451,714 1,019,477 432,237 42% Total Expense 42,109,736 39,153,284 2,956,452 8%
Excess of Revenue over Expenses $ 7,818,263 $ (3,585,971) $ 11,404,234 318% 1 2
CARE/FERA was discontinued and converted to Desert Saver.

Year-ahead purchases of low carbon energy have been less available in current year.

Page 1 of 1 ends

Desert Community Energy
Unaudited Changes to Net Position Budget vs. Actual
July 2022 through April 2023
Jul '22 - Apr 23
Actual
Jul '22 - Apr 23
Budget Actual v Budget $ % of Budget
Revenue
5010 · Electricity Sales
5011 · Carbon Free $ 39,883,680 $ 44,300,283 $ (4,416,603) 90% 5012 · Carbon Free- CARE / FERA (326) 0 (326) 100%
5013 · Desert Saver 8,502,613 5,882,394 2,620,219 145%
Total 5010 · Electricity Sales 48,385,967 50,182,677 (1,796,710) 96% 5100 · Other Revenue
5120 · Energy Market Settlements 1,065,812 0 1,065,812 100% 5125 · Resouce Adequacy 223 0 223 100%
5150 · Other Revenue 460,346 500,000 (39,654) 92%
Total 5100 · Other Revenue 1,526,381 500,000 1,026,381 305% 5900 · Investment Revenue 15,651 6,000 9,651 261%
Total Revenue $ 49,927,999 $ 50,688,677 $ (760,678) 98% Expense
4100 · Cost of Electricity
4105 · Electricity Purchase 24,653,747 23,881,488 772,259 103% 4110 · Resource Adequacy Settlement 8,057,734 6,405,973 1,651,761 126% 4115 · Low Carbon Settlement 0 2,111,365 (2,111,365) 0% 4120 · Renewable Energy Cr. Settlement 134,106 1,200,752 (1,066,646) 11% 4125 · Market Charges 5,429,903 4,071,558 1,358,345 133% Total 4100 · Cost of Electricity 38,275,490 37,671,136 604,354 102% 4200 · Accounting / Bank Services 24,723 34,011 (9,288) 73% 4353 · Insurance 7,367 8,378 (1,011) 88%
4423 · Office Supplies 1,200 0 1,200 100%
4425 · Legal Services 74,908 73,806 1,102 101%
4431 · Professional Services 130,786 70,788 59,998 185% 4432 · Consultants 1,925,859 2,020,022 (94,163) 95%
4433 · Outreach Services 43,722 38,101 5,621 115%
4435 · Technology Costs (IT) 3,523 1,668 1,855 211%
4440 · Postage 13,023 15,897 (2,874) 82%
4441 · Printing 16,187 18,410 (2,223) 88%
4450 · Sponsorships 1,603 0 1,603 100%
4452 · Marketing 8,355 0 8,355 100%
4455 · Customer Programs 0 23,542 (23,542) 0%
4500 · Registrations/Memberships 84,621 90,965 (6,344) 93% 4610 · Interest Expense 46,655 58,650 (11,995) 80%
4750 · Bad Debt Expense 1,451,714 1,505,480 (53,766) 96% Total Expense 42,109,736 41,630,854 478,882 101%
Excess fo Revenue over Expenses $ 7,818,263 $ 9,057,823 $ (1,239,560) 86%

Page 1 of 1 ends

ITEM 8C

STAFF REPORT
Subject: Renewable and Mid-Term Reliability 2023 Request for Proposals Contact: David Freedman, Program Manager ([email protected]) Emily Langenbahn, Program Specialist ([email protected]) Recommendation: Information
Background: As reported to the Board at the April 2023 meeting, DCE’s consultant The Energy Authority (TEA) released an RFP on March 6, 2023 to satisfy DCE’s long-duration storage (eight hours or more) and additional Mid-Term Reliability procurement orders under California Public Utilities Commission (CPUC) Decisions 21-06-035 from June 2021 and 23-02-040, approved on February 23, 2023.

Responses to the RFP were due on April 14, 2023. An evaluation committee made up of TEA and DCE staff, their technical consultants, legal counsel, as well as a member of DCE’s Community Advisory Committee (CAC) reviewed responses to the RFP in April and May. Each proposal was screened for completeness and scored on a weighted criteria basis. DCE staff and TEA identified a short list of proposed transactions and conducted interviews with three bidders for four projects, including project locations in Palm Springs and eastern Riverside County, and two additional locations in Nevada. There is one additional project on the short list to be interviewed, for rooftop solar plus battery storage at homes in Palm Springs.

The interview panel for DCE is currently evaluating responses to these interviews and will begin negotiations with the selected bidders. Although DCE issued the RFP, it reserved the right to engage other partners that it deems fitting in discussions about partnering as additional off-takers for a project of substantial size, and discussions with other Southern California Community Choice Aggregators are continuing. Depending on the speed of the negotiations with the bidders, staff expects to bring any contracts associated with the RFP to the DCE Board for approval by September 2023.

Fiscal Analysis: The costs associated with launching and administering the RFP are covered under the existing TEA contract and staff time. The procurement activities in the RFP will ensure that DCE is compliant with state requirements and meets the Board’s objectives for procurement of local renewable energy and storage resources. DCE staff is working closely with TEA and DCE’s legal counsel to determine which contracts from this RFP will best allow DCE to meet the state compliance requirements and Board objectives while balancing fiscal concerns. There is no cost to include a member from DCE’s Community Advisory Committee to evaluate potential environmental and community concerns for each project.

ITEM 8D
a

STAFF REPORT
Subject: Southern California Edison General Rate Case
Contact: Emily Langenbahn, Program Specialist ([email protected]) Recommendation: Information
Background: Pursuant to the California Public Utilities Commission’s (CPUC) procedure, each Investor-Owned Utility (IOU) must file a General Rate Case (GRC), which set rates that customers pay to fund day-to-day operations, including maintenance for equipment and electricity grid upgrades. Each IOU files a GRC application every three years, which typically includes rate increases, that is subject to review by the CPUC. SCE filed its most recent GRC for 2025 on May 12, 2023, which SCE requested an approximately 10% increase to its projected 2024 bundled residential customer rates. SCE has requested approval of this 10% increase by December 2, 2024, and it would be effective in 2025. All cities in SCE’s affected service territory will be notified of this increase. Public participation hearings are likely to occur in the latter half of this year.

SCE charges DCE customers for delivery and transmission of electricity, maintenance of the transmission and distribution grid, and customer service, while customers receive an electricity generation charge from DCE. SCE has stated that these rate increases are necessary to cover the rising costs of purchased power and ongoing grid maintenance and repair, which include growing climate risks and an acceleration in the rate of grid electrification such as electric vehicles, heat pumps, and other factors, among its customer groups. Infrastructure replacement also factors into SCE’s cost increase, and accounts for 29% of the projected roughly $40 billion in capital expenditure from 2023 through 2028. Inspections and maintenance work are expected to be 13% of the total, and other distribution projects are estimated to account for about 11% of all spending.

Additionally, SCE’s spending on wildfire mitigation has grown from about $700 million in 2019 to about $1.2 billion in both 2021 and 2022, driven by work on covered conductors. A covered conductor is a tool used to quickly mitigate the threat of wildfires that could be caused by debris blowing into power lines. Over the past three years, SCE has installed nearly 4,000 miles of covered conductors and is aiming to replace more than 7,200 miles of overhead lines, about three-fourths of the company’s total network, by late 2025.

In justifying the proposed increase, SCE also stated that these rate increases are necessary to fairly compensate its shareholders and attract capital to meet its obligations to serve its customers safely and reliably.

The CPUC reviews detailed cost data for areas of utility operations and approves a budget for the first year – called a test year – of the GRC cycle. For years two and three (or post-test years) the GRC decision recommends how to adjust the test year budget for inflation and other factors that may affect costs, such as additional capital projects between test years. The CPUC has regulatory mechanisms in place to adjust the costs approved in GRCs for unforeseen circumstances, such as wildfire risk in an IOU’s service territory. Included below is SCE’s estimated impact on customer rates from its 2025 GRC application:

The most significant change in average rates will be in the Residential and Lighting – Small and Medium Power categories. It is also worth noting that there also will be an approximately 10% impact on the residential customers enrolled in the California Alternate Rates for Energy (CARE) program, which provides financial assistance to lower-income customers. DCE staff will continue to monitor the effective changes and rate impacts for DCE customers and provide relevant updates to the DCE Board.

Fiscal Analysis: There is no cost to DCE for this informational update.

Item 8E

STAFF REPORT
Subject: July 2023 Rate Adjustment Summary
Contact: Don Dame, DCE Energy Consultant
Recommendation: Information
Background: On November 16, 2020, the Desert Community Energy (DCE) Board adopted a Rate Stabilization Schedule (RSS). The RSS authorizes staff to adjust DCE retail rates in response to changes in Southern California Edison (SCE) rates / Power Charge Indifference Adjustment (PCIA, or exit fee), to maintain DCE Board-approved rate guidelines.

The RSS became effective on December 1, 2020, and was amended by the Board on May 12, 2023, with a June 1, 2023 effective date. The Board’s currently approved rate policies include designing Desert Saver rates within a 0-1% average total bill discount versus SCE's comparable bundled base product average total bill and designing DCE’s 100% Carbon Free rates such that DCE’s primary residential rate class, “Domestic,” does not exceed a 14% average total bill premium versus SCE’s comparable bundled base product average total bill.

Effective June 1, 2023, SCE implemented a generation rate increase averaging approximately 6% and a delivery rate increase of approximately 5%, resulting in a combined average rate increase of about 5.1%. SCE’s average bundled residential customer bill is estimated to increase approximately $9.78 monthly, based on average monthly consumption of 569 kWh.1 SCE’s average bundled CARE/FERA residential customer bill is estimated to increase about $6.79 monthly inclusive of ongoing CARE/FERA average billing discounts of approximately 30%. The combined effects of increases in forecast fuel and purchased power costs contributed to SCE’s rate change.

Working within DCE Board-approved financial policies and procedures, the provisions of DCE’s RSS, and the concurrence of DCE’s Risk Management Team (RMT, which met on June 1, 2023), DCE has scheduled a corresponding DCE rate adjustment effective July 1, 2023. The DCE rate adjustment is required to meet rising power supply costs and build financial reserves, while adhering to Board approved rate guidelines.

The RSS requires DCE staff to prepare a summary report describing RSS-related rate adjustments and provide this information at the next scheduled Board meeting after such adjustments are implemented. This staff report provides that summary. 1 Estimated monthly bill increases were derived from SCE’s May 30, 2023, Advice Letter 5041-E, P. 13, Table 5, adjusting monthly average residential energy usage from 500 kWh to 569 kWh, the average consumption level utilized in SCE’s/DCE’s Joint Rate Comparison table for DCE’s service area, effective March 1, 2023.

July 2023 DCE Rate Adjustment Details:
• Effective Date: July 1, 2023
• RMT review and agreement: June 1, 2023.
• Desert Saver average total bill discount compared to SCE's bundled base power product average total bill estimated to be within 0 – 1%.
• 100% Carbon Free residential customer average total bill premium not to exceed approximately 14% compared to SCE's bundled base power product average total bill. • The rate forecast period utilized is July 1, 2023 – June 30, 2024. • Calculations and estimates are based on known and forecast costs and revenues throughout the rate forecast period.
• Any particular customer’s average bill impact may vary depending on enrolled rate schedule and monthly electricity usage.

Staff continues to work with the California Community Choice Association (CalCCA) and other California Community Choice Aggregators (CCAs) to collectively address costs, legislative matters and California Public Utilities Commission (CPUC) actions impacting CCAs. In addition, DCE staff will continue to highlight DCE’s retail product choices as part of ongoing community engagement efforts. DCE’s Desert Saver product continues to be the least cost choice for electricity service in Palm Springs, and DCE’s Carbon Free product results in zero carbon emissions, maximizing electricity related climate mitigation.

Fiscal Analysis: DCE's July 2023 rate adjustment is designed to fully recover forecast power supply and operating costs, build financial reserves, address cash flow requirements, and exercise fiscal prudence.

SCE customer retail rates increased June 1, 2023, and DCE customer retail rates will commensurately adjust on July 1, 2023. The average monthly bill of SCE bundled residential customers will increase about $4.69 per $100 usage; DCE Desert Saver residential customer bills will increase about $4.66 per $100 usage; and DCE Carbon Free residential customer bills will increase about $5.35 per $100 usage.

ITEM 8F

STAFF REPORT
Subject: DCE’s 2023 Summer Readiness Outreach Strategy
Contact: David Freedman, Program Manager ([email protected]) Recommendation: Information
Background: The Coachella Valley experienced an extremely hot summer in 2022, with multiple emergency flex alerts issued over Labor Day weekend, leading to renewed calls statewide about encouraging residential and business customers to do their part to reduce energy demands on the grid. Summer is once again upon us and the need to conserve energy during the hottest months of June through September is imperative for grid stability. The California Independent System Operator (CAISO), California Public Utilities Commission (CPUC), and California Energy Commission (CEC) are annually asking Community Choice Aggregation providers such as DCE to report on their existing efforts to address the increased need to reduce higher energy use that occurs in the summer and continue its summer readiness strategy.

DCE staff continues working with CalCCA and other CCAs to address summer readiness planning and messaging to customers. Flex Alerts, which are issued by the CAISO to encourage the public to voluntarily conserve electricity in times of combined high demand and low energy supply, generally are issued with only few days – or even hours - of notice. The CAISO recently presented information at a California Energy Commission workshop on Summer 2023 electricity reliability identifying that the grid remains vulnerable to high loads and availability of imports during widespread heat events, especially in late summer, and that the hours of most vulnerability are declining and continue to shift to hours after sunset. The CAISO also advised that strategic reserves have been mobilized through state efforts to safeguard against these extremes. To ensure public awareness, readiness, and participation, DCE staff is working with its outreach coordinator, Burke Rix Communications, to prepare its messaging in advance of forecasted heat waves and to ensure all Flex Alert messages are passed on to the public as soon as they are received. Given the immediacy and urgency of the CAISO Flex Alerts, DCE staff will rely heavily on social media to promote these messages.

DCE staff anticipates a summer outreach strategy similar to last year’s program to encourage customers to reduce energy use, especially during peak hours, with a heavy emphasis on reducing energy use during peak operating hours, which are typically between 4 p.m. to 9 p.m.

DCE’s public outreach educates and encourages customers to avoid peak hours by letting them know what times are best for using energy intensive appliances like washing machines and dishwashers, as well as best times to charge electric vehicles. DCE will continue to work with member agencies to encourage their residents and businesses to reduce consumption. The outreach team is broadcasting through various social media channels helpful tips and tricks on saving money and energy this summer. In addition, the attached Ways to Save Energy flyer will once again be distributed at public locations throughout Palm Springs. DCE will aim to expand its audience by working with other social media accounts and will be coordinating with the Cities of Palm Springs and Palm Desert during the summer.

DCE has updated its web page dedicated to saving money and energy. Customers can visit this site https://desertcommunityenergy.org/save-money-energy/ to learn about energy saving programs offered and cost saving tips to help them survive the heat and lower their electric bills.

Links to Flex Alert, SCE’s rotating outage page, Public Safety Power Shutoff (PSPS), and other resources are also on the website as part of the summer readiness outreach.

DCE has been working with OhmConnect since November 2021 on outreach to encourage residential customers to avoid peak hours to save energy and money. DCE continues to promote OhmConnect’s 2023 Spring/Summer outreach campaign to our customers via email, social media, and other outreach. Through the partnership with OhmConnect, customers are incentivized to switch out old thermostats with new ones and use smart plugs. The program lets customers know when they need to turn things off and rewards them with points when they meet OhmConnect hours. Customers who enroll in OhmConnect’s demand response program can receive prizes and rewards such as gift certificates and even cash. There is also a $50 incentive for joining.

Fiscal Analysis: DCE has an existing contract with Burke Rix for outreach efforts. The cost for the summer readiness outreach strategy was incorporated under the marketing and outreach costs in the Fiscal Year 2022/2023 Budget approved last year. DCE staff estimates that the costs associated with this outreach strategy will be between $3,000 to $5,000 for a summer social media campaign.

Attachment: Ways to Save Energy flyer
DesertCommunityEnergy.org
(855) 357-9240 (toll free)
Help your HVAC run more efficiently by changing your filters regularly every few months and getting the unit professionally serviced. 1 Perform a HVAC Tune-Up
A programmable thermostat optimizes your HVAC unit and makes your whole house more energy-efficient, equating up to 10% in savings. Pre-cool your home in the morning and set your thermostat to 78°F (or higher) later in the day. Get a smart thermostat to save even more!
2 78
Get a Programmable, or even better, a Smart Thermostat
Replace 5 of your home’s most frequently used lights with ENERGY STAR qualified LED bulbs to save up to $65 a year. Don’t over-light your rooms and install a dimmer.
3 Don’t Overheat your Home with Lighting
This one may be obvious, but the best way to save on lighting is to make sure you turn off all the lights when you leave a room! The same goes for electronic devices and setup the hibernation feature on your TV and computer to make it easy.
4 78 Turn Off Lights & Electronic Devices
Many appliances use energy even when turned off! Stop the energy drain by plugging devices into a power strip and turning it off when not in use. Smart Plugs are also a great way to save energy by programming them and monitoring use.
5 Stop the Drain
Studies show that refrigerators are second only to air conditioner units in the amount of energy they use per year.

Keep it Cool by Closing the Fridge Door 6
12 Ways to Save Energy
at Home
DesertCommunityEnergy.org
(855) 357-9240 (toll free)
Using a ceiling fan is equivalent to reducing the air temperature by as much as 4°F and enables you to keep comfortable where you are without overcooling the house.
7 Install Ceiling Fans in Rooms You Use Regularly
Look for air seepage around windows and exterior doors. Install weather-stripping where needed to improve comfort and intrusion of unwanted air from the outside that adds to energy costs!
8 Seal Gaps & Cracks
Choose window treatments that allow you to use natural light while reducing heat loss and gain. Plant trees to create shade and cool your home. 9 Block the Sun
Run your pool pump for a maximum of 8 hours at night or split it between mornings and night to conserve energy and save money.
10 Make an Energy Savings Splash
The City of Palm Springs offers a $100 rebate for home energy assessments done by a qualified professional. Details are available on the Office of Sustainability Energy Efficiency page:
https://www.palm-springsca.gov/services/sustainability-and-recycling/energy-efficiency 11 Perform a Home Energy Audit
Turn-off and unplug devices between 4-9pm when energy demand and rates are the highest. Run your dishwasher, washing machine, and dryer in the morning, early afternoon before 4:00 p.m. or after 9:00 p.m. 12 Power Down Between 4-9pm
12 Ways to Save Energy
at Home

Desert Community Energy Board of DirectorsJune 27, 2023

Desert Community Energy Board of Directors
June 27, 2023