Agenda packet — Desert Community Energy Board of Directors, June 16, 2025

DESERT COMMUNITY ENERGY

MEETING AGENDA
Monday, June 16, 2025
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:
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Webinar ID: 861 8428 7306
Password: 053716

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. Members of the public joining the meeting by Zoom can provide comment by using the “raise hand” feature or hitting *9 on the phone keypad.

As a convenience to the public, DCE provides a call-in and internet-based option for members of the public to virtually observe and provide public comments at its meetings. Please note that, in the event of a technical issue disrupting the call-in or internet-based options, the meeting will continue unless otherwise required by law.

THIS MEETING IS HANDICAPPED ACCESSIBLE.

ACTION MAY RESULT ON ANY ITEMS ON THIS AGENDA.

1. CALL TO ORDER

2. ROLL CALL
A. Member Roster P4

3. AGENDA MODIFICATIONS (IF ANY)

4. PUBLIC COMMENTS ON AGENDA ITEMS
This is the first of two opportunities to address the Board. 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 the minutes of the May 19, 2025, Board meeting P5 B. Authorize the Executive Director to execute an agreement with MRW & Associates, P8 LLC for a not-to-exceed amount of $51,890 through June 2027, authorizing work on the 2025 Integrated Resource Plan as required by the California Public Utilities Commission
C. Adopt Resolution 2025-03, approving the 2024 Power Source Disclosure Annual P58 Report, and authorizing the Executive Director to complete all actions necessary for submittal to the California Energy Commission, including attesting to its veracity D. Approve updates to Policy No. 18-13 related to Budget and Accounting Policies P71

6.1 ITEMS HELD OVER FROM CONSENT CALENDAR

7. DISCUSSION / ACTION
A. DCE Fiscal Year 2025-26 Budget – Claude Kilgore P76
Recommendation: Adopt Resolution 2025-04 approving Desert Community Energy’s Fiscal Year 2025-26 Budget
B. DCE Mid-Term Reliability Procurement: Resource Adequacy + TB4 with Athos P98 Storage, LLC – Lisa McNeilly
Recommendation: Adopt Resolution No. 2025-05, approving a 15-year Resource Adequacy + TB4 Agreement (RA+TB4) with Athos Storage, LLC, for its Riverside County Battery Energy Storage System (BESS) project near Desert Center and authorizing the Executive Director and/or Legal Counsel to make minor modifications before execution of the agreement
C. Presentation: Summer power supply outlook – Jaclyn Harr, The Energy Authority

8. INFORMATION
A) Attendance Record P103

B) Summary of June 2025 Rate Adjustment P104
C) Coachella Valley Association of Governments’ Meeting Calendar for Fiscal Year P106 2025-26

9. PUBLIC COMMENTS ON NON-AGENDA ITEMS
This is the second of two opportunities to address the Board. 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 next DCE Board meeting will be held July 21, 2025, 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
City of Palm Springs Chair
Jeffrey Bernstein
Councilmember
DCE Staff
Tom Kirk, Executive Director
Claude Kilgore, Director of Finance
Lisa McNeilly, Director of Energy & Sustainability
Savannah Gil, Program Specialist
Janice Reitman, Accounting Manager
ITEM 6A
Desert Community Energy Board
Meeting Minutes
May 19, 2025

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

2. ROLL CALL

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

Members Present Member Jurisdiction
Councilmember Jeffrey Bernstein, Chair City of Palm Springs Finance Director Veronica Chavez, Vice Chair City of Palm Desert

3. AGENDA MODIFICATIONS (IF ANY)
None

4. PUBLIC COMMENTS ON AGENDA ITEMS
None

5. BOARD MEMBER/EXECUTIVE DIRECTOR COMMENTS
Director of Energy & Sustainability Lisa McNeilly shared an update on the Desert Saver Rates, confirming that the rates remain unchanged from the last DCE Board meeting report.

6. CONSENT CALENDAR
Prior to the vote, Vice Chair Chavez asked a question to staff regarding item 6B inquiring if DCE had a cyber security policy in place. Director McNeilly clarified that Coachella Valley Association of Governments (CVAG), which staffs DCE, has cyber security measures in place and staff is frequently trained on it.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY COUNCILMEMBER BERNSTEIN TO APPROVE THE FOLLOWING CONSENT CALENDAR:

A. Approve the minutes of the March 17, 2025, Board meeting B. Receive and file the Triennial Data Privacy Audit Report for 2022-2024 The audio file for this meeting can be found at: http://www.desertcommunityenergy.org Desert Community Energy Board of Directors
Meeting Minutes – March 17, 2025
C. Approve continued participation as an operational member of the California Community Choice Association (CalCCA) for an annual membership rate of $111,870
THE MOTION CARRIED WITH 2 AYES.

Chair Bernstein Aye
Vice Chair Veronica Chavez Aye

6.1 ITEMS HELD OVER FROM CONSENT CALENDAR
None

7. DISCUSSION / ACTION
A. Contractual Services for Customer Service Support
Director McNeilly presented the staff report. Brief member discussion ensued, with Director McNeilly clarifying how the services were procured.

Chair Bernstein requested an informational item be provided on a future agenda regarding the rebate process mentioned in this item.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY

COUNCILMEMBER BERNSTEIN AUTHORIZE THE EXECUTIVE DIRECTOR TO

EXECUTE A RESTATED AGREEMENT WITH CALPINE COMMUNITY ENERGY

TO PROVIDE DATA MANAGEMENT AND CUSTOMER CALL CENTER
SERVICES THROUGH APRIL 2028, WITH AN OPTIONAL THREE-YEAR EXTENSION, AT A COST OF ABOUT $590,000 ANNUALLY
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
B. Revolving Line of Credit Renewal with River City Bank Finance Director Claude Kilgore presented the staff report.

Member discussion ensued with Mr. Kilgore answering questions from the Board and clarifying how the revolving line of credit operates and relates to the credit rating.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR BERNSTEIN TO ADOPT RESOLUTION 2025-02, APPROVING THE FOURTH

AMENDMENT TO CREDIT AGREEMENT WITH RIVER CITY BANK FOR AN INCREASED TOTAL NOT TO EXCEED $20,000,000 AND AUTHORIZING THE

EXECUTIVE DIRECTOR AND/OR LEGAL COUNSEL TO NEGOITATE AND

TAKE THE NECESSARY STEPS TO FINALIZE AND EXECUTE THE CREDIT

AGREEMENT AMENDMENT AND RELATED DOCUMENTS
Desert Community Energy Board of Directors
Meeting Minutes – March 17, 2025
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
C. Fiscal Year 2025-26 Budget Preview
Mr. Kilgore presented the staff report.

Brief member discussion ensued with Mr. Kilgore answering questions from the Board regarding whether the consideration of tariffs or contingencies were being used for the budget.

No action was taken as this was an informational item only.

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

A) Attendance Record
B) 2024 Annual Supplier Diversity Report
C) Conflict of Interest Guidance
D) Unaudited Year-to-Year Financial Report as of March 31, 2025 E) DCE’s Quarterly Investment Report through March 31, 2025

9. PUBLIC COMMENT ON NON-AGENDA ITEMS

Donald Ziegler, resident of Palm Desert, addressed the Board regarding his concerns about the reliability of electricity in the Coachella Valley during hot summers and urged the Board to look into a new model that replaces the existing delivery model.

10. ANNOUNCEMENTS
The next DCE Board meeting will be held June 16, 2025, 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
There being no further business, Chair Bernstein adjourned the meeting at 3:42 p.m.

Respectfully submitted,
Elysia Regalado
Management Analyst
ITEM 6B

STAFF REPORT
Subject: Contract with MRW & Associates for DCE’s 2025 Integrated Resource Plan Contact: Savannah Gil, Program Specialist ([email protected]) and Allen McMillen, Contracts Manager ([email protected])
Recommendation: Authorize the Executive Director to execute an agreement with MRW & Associates, LLC for a not-to-exceed amount of $51,890 through June 2027, authorizing work on the 2025 Integrated Resource Plan as required by the California Public Utilities Commission
Background: The Integrated Resource Plan (IRP) is a requirement for all load-serving entities (LSEs), including DCE and other community choice aggregation agencies (CCAs). The overall purpose of the IRP process is to ensure that California’s electricity sector meets its greenhouse gas (GHG) reduction goals while maintaining reliability at the lowest possible costs. A key focus of the IRP is to ensure that DCE is providing sufficient energy to meet its load and to quantify its GHG emissions reduction objectives. The IRP process and coordination of this statewide planning effort have gained increased significance as energy resources have been strained during recent heatwaves.

The IRP is required to be submitted every two years, with bi-annual compliance filings in June and December of every year based on the latest updates from the CPUC. For the 2024-2026 IRP cycle, on February 15, 2024, the CPUC adopted Decision (D.) 23-02-047 on the 2023 Preferred System Plan and Transmission Planning Process Portfolios (Decision). Pursuant to the Decision, LSEs subject to the CPUC’s IRP purview are not required to file individual IRPs any earlier than November 1, 2025. The final 2025 Inputs & Assumptions document is expected to be released in mid-2025.

In 2022, DCE contracted with MRW & Associates, LLC (MRW) to prepare and file its 2022 IRP and associated compliance filings. MRW demonstrated efficiency in managing their workload concerning DCE’s compliance filings. DCE amended the 2022 IRP service agreement for an extension of three years to include the 2024 IRP and associated compliance filings, with MRW remaining below the established not-to-exceed amount of $65,000.

In April 2025, DCE staff solicited quotes from qualified contractors for the current CPUC 2024- 2026 IRP cycle (2025-2027 transmission planning process). DCE received three quotes by the May 9, 2025, deadline: a quote from Ascend Analytics in the amount of $312,195; a quote from MRW & Associates, Inc. in the amount of $51,890; and a quote from First Principles Advisory in the amount of $80,400. DCE staff reviewed the quotes and selected MRW based on its experience and cost-effectiveness. The firm not only has existing knowledge of DCE but also experience in preparing IRPs for DCE, as well as the expertise and proven experience necessary to prepare the IRP with complex modeling.

Desert Community Energy Board
June 16, 2025
Staff is now recommending that the Board authorize the Executive Director to finalize a contract with MRW. This recommended action would also allow the Executive Director and/or Legal Counsel to make clarifying changes prior to execution.

The IRP is due to the CPUC no later than November 1, 2025. The IRP will be presented to the Board prior to the deadline for review, input, and approval. The 2025 IRP to be prepared through the proposed contract will address how DCE will meet the statewide targets by managing its portfolio of energy and capacity resources.

Fiscal Analysis: DCE staff is recommending a contract with MRW for a not to exceed amount of $51,890 through June 30, 2027.

DCE staff time allocated for working with MRW in preparing the IRP is included in the approved budget. Input from TEA on the IRP to ensure consistency between its procurement on DCE’s behalf and DCE’s IRP obligations is also covered under TEA’s existing contract and budget allocations.

Attachment:

1. Agreement with MRW
1 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan

DESERT COMMUNITY ENERGY

PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”) is made and entered into on June 16, 2025, by and between DESERT COMMUNITY ENERGY, a California joint powers authority (“DCE”) and MRW & ASSOCIATES, LLC, a California limited liability company (“Consultant”). DCE and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”

RECITALS
A. Consultant desires to perform and assume responsibility for the provision of certain professional services required by DCE in relation to its 2025 Integrated Resource Plan (“IRP”) as required by the California Public Utilities Commission on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing technical services for DCE’s community choice energy program related to the IRP, is licensed in the State of California, and is familiar with the plans of DCE.

B. DCE desires to engage Consultant to render such professional services for the implementation of DCE’s community choice energy program in relation to the IRP (“Project”) as set forth in this Agreement.

AGREEMENT

1. Scope of Services and Term.

1.1 General Scope of Services. Consultant promises and agrees to furnish to DCE all labor and services and incidental and customary work necessary to fully and adequately supply DCE the services necessary for the Project (“Services”). The Services are more particularly described in Exhibit A attached hereto, and which are stated in the proposal to DCE. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto, and all applicable local, state and federal laws, rules and regulations.

1.2 Term. The term of this Agreement shall be from July 1, 2025 to June 30, 2027, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines.

2. Responsibilities of Consultant.

2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision. DCE retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of DCE and shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all 2 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.

2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services, which is stated in the proposal to DCE and set forth in Exhibit B attached hereto. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant’s conformance with the Schedule, DCE shall respond to Consultant’s submittals in a timely manner. Upon request of DCE, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of DCE.

2.4 Substitution of Key Personnel. Consultant has represented to DCE that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of DCE. In the event that DCE and Consultant cannot agree as to the substitution of key personnel, DCE shall be entitled to terminate this Agreement for cause.

As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to DCE, or who are determined by DCE to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of DCE. The key personnel for performance of this Agreement are as follows:

Staff Member Title Project Role
Mary Neal Senior Project Manager Project Lead

2.5 DCE’s Representative. DCE hereby designates the Executive Officer, or designee, to act as its representative for the performance of this Agreement (“DCE’s Representative”).

DCE’s Representative shall have the authority to act on behalf of DCE for all purposes under this Agreement. Consultant shall not accept direction or orders from any person other than DCE’s Representative, or designee.

2.6 Consultant’s Representative. Consultant hereby designates Mary Neal, or her designee, to act as its Representative for the performance of this Agreement (“Consultant’s Representative”). Consultant’s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant’s Representative shall supervise and direct the Services, using his or her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan

2.7 Coordination of Services. Consultant agrees to work closely with DCE staff in the performance of Services and shall be available to DCE’s staff, consultants and other staff at all reasonable times.

2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California.

Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from DCE, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subcontractors who is determined by DCE to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to DCE, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project.

2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to DCE, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold DCE, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

2.10 Insurance.

2.10.1 Time for Compliance. Consultant shall not commence the Services under this Agreement until it has provided evidence satisfactory to DCE that it has secured all insurance required under this section, in a form and with insurance companies acceptable to DCE. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to DCE that the subcontractor has secured all insurance required under this section.

2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subcontractors. Consultant 4 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001 or exact equivalent); (2) Automobile Liability: Insurance Services Office Business Auto Coverage (form CA 0001, code 1 (any auto) or exact equivalent); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance. (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $1,000,000 per occurrence, $2,000,000 for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability Coverage of at least $1,000,000 per accident for bodily injury or disease.

2.10.3 Professional Liability. Consultant shall procure and maintain, and require its subcontractors to procure and maintain, for a period of five (5) years following completion of the Services, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than $1,000,000 per claim and in the aggregate. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend.

2.10.4 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by DCE to add the following provisions to the insurance policies:
(A) General Liability.
(i) Commercial General Liability Insurance must include coverage for (1) Bodily Injury and Property Damage; (2) Personal Injury/Advertising Injury; (3) Premises/Operations Liability; (4) Products/Completed Operations Liability; (5) Aggregate Limits that Apply per Project; (6) Explosion, Collapse and Underground (UCX) exclusion deleted; (7) Contractual Liability with respect to this Agreement; (8) Broad Form Property Damage; and (9) Independent Consultants Coverage.
5 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
(ii) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; or (3) contain any other exclusion contrary to the Agreement. (iii) The policy shall give DCE, its directors, officials, officers, employees, and agents insured status using ISO endorsement forms 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.
(iv) The additional insured coverage under the policy shall be “primary and non-contributory” and will not seek contribution from DCE’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13, or endorsements providing the exact same coverage.
(B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) DCE, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects DCE, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by DCE, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way.
(C) Workers’ Compensation and Employers Liability Coverage. (i) Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and Consultant will comply with such provisions before commencing work under this Agreement.
(ii) The insurer shall agree to waive all rights of subrogation against DCE, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. (D) All Coverages. Defense costs shall be payable in addition to the limits set forth hereunder. Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits set forth herein shall be available to DCE, its directors, officials, officers, employees and agents as additional insureds under said policies. Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any Insurance policy or proceeds available to the named insured; whichever is greater. 6 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
(i) The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of DCE (if agreed to in a written contract or agreement) before DCE’s own insurance or self-insurance shall be called upon to protect it as a named insured. The umbrella/excess policy shall be provided on a “following form” basis with coverage at least as broad as provided on the underlying policy(ies). (ii) Consultant shall provide DCE at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to DCE at least ten (10) days prior to the effective date of cancellation or expiration.
(iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement.

Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
(iv) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by DCE, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(v) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, DCE has the right but not the duty to obtain the insurance it deems necessary and any premium paid by DCE will be promptly reimbursed by Consultant or DCE will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, DCE may cancel this Agreement. DCE may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project.
(vi) Neither DCE nor any of its directors, officials, officers, employees or agents shall be personally responsible for any liability arising under or by virtue of this Agreement.

2.10.5 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance 7 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
shall not contain any special limitations on the scope of protection afforded to DCE, its directors, officials, officers, employees, agents and volunteers.

2.10.6 Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by DCE. Consultant shall guarantee that, at the option of DCE, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects DCE, its directors, officials, officers, employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

2.10.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, licensed to do business in California, and satisfactory to DCE.

2.10.8 Verification of Coverage. Consultant shall furnish DCE with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to DCE. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf and shall be on forms provided by DCE if requested. All certificates and endorsements must be received and approved by DCE before work commences. DCE reserves the right to require complete, certified copies of all required insurance policies, at any time.

2.10.9 Subcontractor Insurance Requirements. Consultant shall not allow any subcontractors to commence work on any subcontract until they have provided evidence satisfactory to DCE that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors shall be endorsed to name DCE as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, DCE may approve different scopes or minimum limits of insurance for particular subcontractors.

2.10.10 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life-saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.

3. Fees and Payments.

3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit C, 8 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
attached hereto. The total compensation shall not exceed $51,890 without written approval of DCE’s Board of Directors. Extra Work may be authorized, as described below, and, if authorized, said Extra Work will be compensated at the rates and manner set forth in this Agreement.

3.2 Payment of Compensation. Consultant shall submit to DCE a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. DCE shall, within 45 days of receiving such statement, review the statement and pay all approved charges thereon.

3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by DCE.

3.4 Extra Work. At any time during the term of this Agreement, DCE may request that Consultant perform Extra Work. As used herein, “Extra Work” means any work which is determined by DCE to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from DCE’s Representative.

4. Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of DCE during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

5. General Provisions.

5.1 Termination of Agreement.

5.1.1 Grounds for Termination. DCE may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to DCE, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.

5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, DCE may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such documents and other information within fifteen (15) days of the request.
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5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, DCE may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective Parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: MRW & Associates, LLC
1736 Franklin Street, Suite 700
Oakland, CA 94612
Attention: Mary Neal
DCE: Desert Community Energy
74-199 El Paseo Drive, Suite 100
Palm Desert, CA 92260
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

5.3 Ownership of Materials and Confidentiality.

5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for DCE to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (“Documents & Data”). Consultant shall require all subcontractors to agree in writing that DCE is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data.

Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by DCE. DCE shall not be limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at DCE’s sole risk.

5.3.2 Intellectual Property. In addition, DCE shall have and retain all right, title and interest (including copyright, patent, trade secret and other proprietary rights) in all plans, specifications, studies, drawings, estimates, materials, data, computer programs or software and source code, enhancements, documents, and any and all works of authorship fixed in any tangible medium or expression, including but not limited to, physical drawings or other data magnetically or otherwise recorded on computer media (“Intellectual Property”) prepared or developed by or 10 Desert Community Energy
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Project: 2025 Integrated Resource Plan
on behalf of Consultant under this Agreement as well as any other such Intellectual Property prepared or developed by or on behalf of Consultant under this Agreement.

DCE shall have and retain all right, title and interest in Intellectual Property developed or modified under this Agreement whether or not paid for wholly or in part by DCE, whether or not developed in conjunction with Consultant, and whether or not developed by Consultant. Consultant will execute separate written assignments of any and all rights to the above referenced Intellectual Property upon request of DCE.

Consultant shall also be responsible to obtain in writing separate written assignments from any subcontractors or agents of Consultant of any and all right to the above referenced Intellectual Property. Should Consultant, either during or following termination of this Agreement, desire to use any of the above-referenced Intellectual Property, it shall first obtain the written approval of DCE.

All materials and documents which were developed or prepared by the Consultant for general use prior to the execution of this Agreement and which are not the copyright of any other party or publicly available and any other computer applications, shall continue to be the property of the Consultant. However, unless otherwise identified and stated prior to execution of this Agreement, Consultant represents and warrants that it has the right to grant the exclusive and perpetual license for all such Intellectual Property as provided herein.

DCE further is granted by Consultant a non-exclusive and perpetual license to copy, use, modify or sub-license any and all Intellectual Property otherwise owned by Consultant which is the basis or foundation for any derivative, collective, insurrectional, or supplemental work created under this Agreement.

5.3.3 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of DCE, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use DCE’s name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of DCE.

5.3.4 Infringement Indemnification. Consultant shall defend, indemnify and hold DCE, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by DCE of the Documents & Data, including any method, process, product, or concept specified or depicted.
11 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan

5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

5.5 Attorney’s Fees. If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney’s fees and all other costs of such action.

5.6 Indemnification. To the fullest extent permitted by law, Consultant shall defend (with counsel of DCE’s choosing), indemnify and hold DCE, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant shall defend, at Consultant’s own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against DCE, its directors, officials, officers, employees, agents or volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against DCE or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. Consultant shall reimburse DCE and its directors, officials, officers, consultants, employees, agents and/or volunteers, for any and all legal expenses and costs, including reasonable attorneys’ fees, incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, DCE, its officials, officers, employees, agents, or volunteers. This section shall survive any expiration or termination of this Agreement.

5.7 Entire Agreement. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties.

5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County, California.

5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

5.10 DCE’s Right to Employ Other Consultants. DCE reserves right to employ other consultants in connection with this Project.

5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.
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5.12 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of DCE. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days.

All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to DCE include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

5.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, DCE shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of DCE, during the term of his or her service with DCE, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

5.19 Equal Opportunity Employment and Subcontracting. Consultant represents that it is an equal opportunity employer and it shall not discriminate on the basis of race, gender, gender 13 Desert Community Energy
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Project: 2025 Integrated Resource Plan
expression, gender identity, religion, national origin, ethnicity, sexual orientation, age, or disability in the solicitation, selection, hiring, or treatment of applicants, employees, subcontractors, vendors, or suppliers. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Further, Consultant shall provide equal opportunity for subcontractors to participate in subcontracting opportunities.

5.20 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Workers’ Compensation, or to undertake self- insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

5.21 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

5.22 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

5.23 This Agreement shall be executed with the use of electronic or digital signatures in order to be in effect.

5.24 Subcontracting. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of DCE.

Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
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Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan
IN WITNESS WHEREOF, the Parties have made and executed this Agreement as of the date first written above.

DESERT COMMUNITY ENERGY
By : _________________________________
Tom Kirk, Executive Director

CONSULTANT
By : _________________________________
Mark Fulmer, Principal
APPROVED AS TO FORM:
_________________________________
Ryan Baron, General Counsel
Exhibit A
15 Desert Community Energy
Contract No. DCE-25-005
Project: 2025 Integrated Resource Plan

EXHIBIT A

SCOPE OF SERVICES
See following pages.

Proposal for Integrated Resource Plan Services
7 C. Project Organization
A project organization chart is provided below. As in the past, Ms. Neal expects to communicate directly with DCE and The Energy Authority (TEA) personnel to gather the requisite data to complete this project.

3. Work Plan
MRW will approach the work similar to the previous IRP cycle, which resulted in a CPUC-approved IRP plan. That approach is consistent with the scope of work discussed in the RFQ. Each task and deliverable from the RFQ is discussed briefly below. In all cases, Ms. Neal will be responsible for the quality control of all deliverables, as well as adherence to the budget and schedule. As discussed above, Mr. Kern’s primary role is expected to be in performing Excel modeling, including the requisite IRP Excel templates.

Ms. Neal and Mr. Kern will work collaboratively to independently verify the accuracy of the work product. Throughout the project, MRW key staff will hold conference calls with designated DCE and TEA staff about the project to ensure the work is completed in a timely manner. MRW will also submit monthly progress reports with invoices as directed in the RFQ. MRW will also work with DCE and TEA on the interim deliverable schedule to ensure that TEA and DCE have adequate time to review the work ahead of all CPUC filing deadlines.

MRW has prepared a preliminary project schedule shown on the following page. The final schedule will depend on the CPUC issuing IRP templates and instructions in a timely manner. Guidance was due May 1, 2025 but as of the writing of this document has not been received. MRW will work with TEA and DCE staff to finalize the schedule at the project kick-off meeting.

DCE Staff
TEA Staff
Ms. Neal
Project Manager
Mr. Kern
Technical Analyst
Proposal for Integrated Resource Plan Services
9 Task 1: Resource Plan Development
A central goal of the IRP is to determine which resources and resource types will be included in DCE’s conforming IRP portfolios. MRW will begin with DCE’s existing resource portfolio of executed contracts and assess the portfolio for gaps relative to relevant resource planning standards and goals, including the following from the RFQ:
• Goals set by the IRP Proceeding, including cost minimization and support for disadvantaged communities. (The approved preferred system plan serves as a relevant benchmark for these goals; MRW will also work with the latest CalEnviroScreen tool to identify disadvantaged communities.)
• Compliance with all CPUC requirements, including limits on greenhouse gas (GHG) emissions. • Compliance with past CPUC midterm reliability (MTR) procurement orders. • Meeting DCE planning goals as approved by its Board, including resources local to DCE’s service territory in Riverside County.
• Contribution to resource adequacy and renewable portfolio standard requirements. • Tailoring to customer product preferences (i.e., enrollment in Desert Saver versus Carbon Free products).

One specific challenge in this IRP cycle will be determining the resources to meet MTR requirements in the wake of the cancellation of DCE’s Deer Creek Solar contract. Currently, DCE is pursuing bridge contracts to meet certain MTR tranches and may use its Desert Sands project to replace some of the canceled capacity. DCE has also engaged with compliance swaps with University of California, an ESP, to help meet its Diablo Canyon Replacement tranche. Procurement remains ongoing, and MRW will work to collect the necessary data on recent procurement activities that will inform decision-making on MTR compliance. After all relevant data is gathered, MRW will develop a matrix of resource options to fill the gaps in all requirements and discuss them with DCE and TEA staff. In the past IRP, DCE assumed procurement of a solar plus storage resource, similar to Deer Creek. With no procurement of replacement solar plus storage resources as yet, DCE may wish to consider a different mix of resources to meet clean energy requirements than used in past IRPs.

Another uncertainty is the ongoing development of the Reliable and Clean Power Procurement Program (RCPPP). Staff released its long-awaited RCPPP proposal on April 29, 2025, and it is currently being reviewed by stakeholders. It is not yet known how or if the RCPPP proposal will impact IRP planning requirements, but MRW is very familiar with the Staff proposal. Ms. Neal will be commenting on the proposal on behalf of AReM. Thus, MRW is well-positioned to assist DCE with all RCPPP planning compliance.

Together, consensus will be reached on an appropriate conforming portfolio at the level of specificity necessary to fill out all the required templates from the CPUC.

Proposal for Integrated Resource Plan Services
10 Relevant Deliverables for Task 1

1. Kick-off Meeting: MRW will meet with TEA and DCE and communicate all data needs and refine the scope and schedule of the project.

2. Data Review and Matrix of Resource Options: MRW to review all relevant load and resource data and present resource options to meet all IRP requirements.

3. Monitoring IRP Proceedings: MRW will attend all relevant meetings with CPUC IRP Staff to understand all the IRP requirements. This will be an ongoing task throughout the project. To the extent MRW is performing IRP work for multiple load-serving entities (LSEs), MRW will split the time billed for this task among multiple clients.

Task 2: Data Templates
Once the conforming portfolio is known, MRW will fill in all the relevant data in all IRP templates. In the past this included two templates: 1) the Clean System Power calculator and 2) the Resource Data Template. MRW’s understanding is the templates will be similar for the next IRP cycle but will attend all meetings with CPUC Staff to understand all template changes and requirements. One special challenge will be version control, as the CPUC Staff tends to issue multiple versions of these templates to correct errors and may issue corrections close to the filing deadline. MRW staff will coordinate with DCE on any schedule changes and contingency plans necessary to accommodate last-minute updates.

Task 3: Narrative Document
As in the past, MRW will take a lead role in drafting the IRP narrative document using the approved narrative template from the CPUC. To the extent possible, MRW will work on the narrative in parallel with Task 1: Resource Plan Development. However, much of the document involves descriptions of the conforming portfolio and thus will be completed after Task 1. Developing the narrative will also require coordination with DCE and TEA on recent procurement activities, procurement plans, and updates to customer program offerings.

Once all templates are completed and receive Board approval, MRW will work with DCE staff to prepare the final filing before the CPUC.

Relevant Deliverables for Tasks 2 & 3

1. Draft of IRP for Review: MRW will prepare an initial draft of the IRP for review by TEA and DCE in advance of the Board review deadline.

2. Working IRP for Planning: This will serve as a “working IRP” to guide DCE procurement. It will incorporate feedback from DCE and TEA on the Draft IRP.

3. Draft IRP for CPUC Submission: This will be the formal IRP approved by the DCE Board and submitted to the CPUC for approval.

4. Monitoring IRP Proceedings: MRW will attend all relevant meetings with CPUC IRP Staff to understand all the IRP requirements and any template revisions. This will be an ongoing task throughout the project. To the extent MRW is performing IRP work for multiple LSEs, MRW will split the time billed for this task among multiple clients.

Proposal for Integrated Resource Plan Services
11 Task 4: Plan Compliance Support
After the IRP is filed, the CPUC staff may issue data requests for further information or request updates to the templates to correct any data entry errors. Later, when the preferred system plan is approved, the CPUC will also issue a decision as to whether the IRP is compliant with all requirements. MRW will provide necessary support to DCE to complete necessary data requests and bring the IRP to compliance, if required.

Relevant Deliverables for Task 4

1. TBD by the CPUC
Task 5: As Needed Support
MRW will also make key Staff available on an as-needed basis. This may include support in answering DCE Board questions, presenting IRP materials to the Board, and assisting with procurement compliance filings. Currently, MRW supports DCE with IRP procurement filings due each December and June, including updating the resource data template for any procurement changes.

Relevant Deliverables for Task 5

1. TBD as needed

4. Proposed Fees
MRW provides the following table showing a quote for hours and billing rates by all personnel. The quote is informed by MRW’s past work for DCE preparing IRPs and assumes work will be similar for this engagement.

EXHIBIT B

PRELIMINARY PROJECT SCHEDULE
See following page.

Proposal for Integrated Resource Plan Services
8 PRELIMINARY PROJECT SCHEDULE
July August Sep October November
Task 1 7 14 21 28 4 11 18 25 1 8 15 22 29 6 13 20 27 3Task 1: Resource Plan DevelopmentKick-Off MeetingData Review and Resource MatrixTask 2 & 3: Data Templates & Narrative DocumentAdditional Biweekly MeetingsMonitoring of IRP Proceedings at the CPUCDraft of IRP for ReviewWorking IRP for PlanningDraft IRP for CPUC SubmissionDCE Board Approves IRPCPUC IRP SubmissionTask 4: Plan Compliance Support As NeededTask 5: As Needed Support Ongoing, as needed Exhibit C
17 Desert Community Energy
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Project: 2025 Integrated Resource Plan

EXHIBIT C
FEES
See following pages.

Relevant Deliverables for Task 4

Relevant Deliverables for Task 5

1. TBD as needed

Mary
Neal
Ben
Kern
$350 $170
Task Hours Hours Budget
Task 1: Resource Plan Development 25 11 $10,620
Kick-Off Meeting 1 1 $520
Additional Biweekly Meetings 2 2 $1,040
Data Review and Resource Matrix 20 8 $8,360
Monitoring of IRP Proceedings at the
CPUC 2 0 $700
Task 2: Data Templates 24 24 $12,480
Additional Biweekly Meetings 4 4 $2,080
Monitoring of IRP Proceedings at the
CPUC 2 0 $700
Draft of IRP for Review 10 12 $5,540
Working IRP for Planning 4 4 $2,080
Draft IRP for CPUC Submission 4 4 $2,080
Proposal for Integrated Resource Plan Services
12 Mary
Neal
Ben
Kern
$350 $170
Task Hours Hours Budget
Task 3: Narrative Document 56 8 $20,960
Draft of IRP for Review 40 4 $14,680
Working IRP for Planning 8 2 $3,140
Draft IRP for CPUC Submission 8 2 $3,140
Task 4: Plan Compliance Support 8 4 $3,480
Task 5: As Needed Support 10 5 $4,350
TOTAL ALL TASKS 123 52 $51,890

5. Conclusion
MRW thanks Desert Community Energy for this exciting opportunity. If you have any further questions, please contact us at the email or phone numbers below. For any questions about the technical proposal or the approach to the work, please contact Ms. Neal. For any questions about executing the services agreement, please contact Mr. Fulmer.

Sincerely,
Mark Fulmer
Principal
MRW & Associates, LLC
510-834-1999, ext. 240
[email protected]
Mary Neal
Senior Project Manager
MRW & Associates, LLC
510-834-1999, ext. 225
[email protected]
May 9, 2025
Lisa McNeilly
Director of Energy and Sustainability
Desert Community Energy
74-199 El Paseo Suite 100
Palm Desert, CA 92260
Subject: Response to Request for Quotes for Integrated Resource Plan Services Dear Ms. McNeilly:

MRW & Associates LLC (MRW) is excited by the opportunity to continue its support of Desert Community Energy’s (DCE’s) Integrated Resource Plan (IRP) filings. MRW staff have enjoyed working with DCE in the past three IRP cycles and are well positioned to continue this relationship.

A full summary of MRW’s qualifications, approach to the work, and proposed fees can be found in the attached Proposal. The Proposal is informed by the work MRW performed in past IRP cycles in which the California Public Utilities Commission approved DCE’s IRPs. The RFQ Addendum was received and signed as instructed.

For any questions about the technical proposal or the approach to the work, please contact Mary Neal. For any questions about executing the services agreement, please contact Mark Fulmer.

Our contact information is provided below.

Sincerely,
Mark Fulmer, Principal
1736 Franklin St. Floor 7
Oakland, CA 94612
510-834-1999, ext. 240
[email protected]
Mary Neal
Senior Project Manager
Mary Neal, Senior Project Manager
1736 Franklin St. Floor 7
Oakland, CA 94612
510-834-1999, ext. 225
[email protected]
1736 FRANKLIN ST.

FLOOR 7

OAKLAND, CALIFORNIA
94612
TEL 510.834.1999
FAX 510.834.0918 [email protected]
MRW & Associates, LLC
Proposal for Integrated Resource Plan Services
Submitted to
Desert Community Energy
MRW & Associates, LLC
1736 Franklin Street, Suite 700
Oakland, CA 94612
Tel: (510) 834-1999
Contact: Mark Fulmer
510-834-1999, ext. 240
[email protected]

Mary Neal
510-834-1999, ext. 225
[email protected]
May 9, 2025
Proposal for Integrated Resource Plan Services
MRW & Associates, LLC
Proposal for Integrated Resource Plan Services
3 1. Table of Contents

1. Qualifications, Related Experience and References........................................................... 4 A. Introduction to MRW & Associates, LLC....................................................................................4 B. Related Experience .........................................................................................................................4 C. References........................................................................................................................................5

2. Proposed Staffing and Project Organization ...................................................................... 6 A. Key Personnel..................................................................................................................................6 B. Key Personnel Bios .........................................................................................................................6 C. Project Organization.......................................................................................................................7

3. Work Plan .............................................................................................................................. 7

4. Proposed Fees....................................................................................................................... 11

5. Conclusion............................................................................................................................ 12 Appendix A: Recent and Relevant Projects ............................................................................. 13 Appendix B: Resumes................................................................................................................. 14 Appendix C: Changes to Professional Services Agreement.................................................... 21 Appendix D: Signed Addendum................................................................................................ 22 Proposal for Integrated Resource Plan Services
4 MRW & Associates (MRW) offers this proposal in response to Desert Community Energy’s (DCE’s) request for quotes (RFQ) for a consultant to support Integrated Resource Plan (IRP) services. MRW has supported DCE’s past three IRP filings and is well positioned to continue this relationship.

1. Qualifications, Related Experience and References
A. Introduction to MRW & Associates, LLC
Established in Oakland, California, in 1986, MRW & Associates, LLC has built a solid reputation for delivering local insights on power and fuel markets in the western United States and successful intervention in legislative and regulatory proceedings on clients’ behalf. The company maintains a strong focus on California markets and regulatory structures. MRW’s team of professionals includes specialists in renewable energy, power market modeling, financial analysis, regulatory processes, utility rate design, legislative analysis, commodity procurement, energy use analysis, contract negotiations, transmission planning and pricing, and strategic planning. MRW, a group of two partners supported by three employees, is a limited liability corporation with a central office in Oakland, California, and one partner operating remotely from Portland, Oregon.

MRW & Associates, LLC, just celebrated its 39th anniversary and is in sound financial health. MRW has never declared bankruptcy, has no pending litigation, has no planned office closures nor intent to merge with another firm. Overall, there are no circumstances that would impede our ability to complete the project.

B. Related Experience
MRW has decades of experience in resource planning. This includes supporting IRP development in California as well as reviewing utility IRPs in other states. Personnel have also worked in regulatory proceedings evaluating applications for construction of new generation resources as well as resource acquisitions. They have also assisted with pro forma financial modeling of new renewable resources supplying onsite power for large consumers.

Regulatory support in California Public Utilities Commission (CPUC) proceedings is a core competency of MRW. MRW actively monitors most CPUC dockets related to energy policy and electric rates. It actively comments on resource planning matters on behalf of the Alliance for Retail Energy Markets (AReM), a group of major electric service providers (ESPs), in the IRP and resource adequacy (RA) dockets. MRW personnel have also supplied testimony in front of the CPUC in numerous rate proceedings on behalf of consumer advocates, trade groups, and community choice aggregators (CCAs).

Ms. Mary Neal, Senior Project Manager at MRW, as discussed in more detail in Section 3 below, has supported DCE’s past three IRP filings, and MRW proposes she continue as Project Manager for this engagement. She has extensive knowledge of IRP requirements in California, supporting multiple IRP filings by CCAs and ESPs in each of the past three IRP cycles. She works directly with CCA and ESP clients to understand and address each aspect of the CPUC’s IRP requirements in order to develop compliant IRP filings on their behalf. This includes developing a clear understanding of greenhouse gas emissions, local criteria pollutants, disadvantaged communities, and RA requirements, among other considerations. She also frequently supplies comments in the IRP and RA proceedings on behalf of AReM. Prior to her role at MRW, she performed resource planning work in multiple states and Canadian provinces. A list of Ms. Neal’s testimony before the CPUC and in other jurisdictions is supplied with her resumé in Appendix B.

Proposal for Integrated Resource Plan Services
5 C. References
Monica Padilla
Chief Executive Officer
Silicon Valley Clean Energy
333 W. El Camino Real #330
Sunnyvale, CA 94087
(844) 474-7823
[email protected]
Ms. Neal assisted Silicon Valley Clean Energy (SVCE) with preparing IRP filings in the past two IRP cycles. In the most recent cycle, she provided support with the following tasks:
• Completing the resource data template.
• Quality control reviews of conforming resource portfolios. • Reliability calculations, including cost allocation mechanism (CAM) resource allocations.

Her role in the 2020 IRP cycle was more extensive, including a lead role in completing the narrative document, and technical expertise in developing conforming portfolios.

Greg Bass
Calpine Energy Solutions
Director, Western Regulatory and Legislative Affairs
401 West A Street
Suite 500
San Diego, CA 92101
(619) 684-8199
[email protected]
MRW worked with Calpine Energy Solutions, an ESP, with all three of its IRP filings before the CPUC.

Our analytical support has varied over the years, but has included the following:
• Technical support to ensure portfolios meet the assigned greenhouse gas emissions target, procurement requirements, and reliability requirements. • Analyzing how conforming portfolios compare to the reference system plan or preferred system plan.
• Filling in all required data for the resource data template and clean system power calculator. • Drafting sections of the IRP narrative document.
• Ensuring the filing met all IRP requirements.

Proposal for Integrated Resource Plan Services
6 2. Proposed Staffing and Project Organization
A. Key Personnel
As with past engagements with DCE, Ms. Mary Neal, Senior Project Manager at MRW, will serve as Project Manager. She will be responsible for completing the majority of the work for this assignment, ensuring quality control, and meeting all relevant deadlines. She is located in Oakland, California and is currently assigned as the lead for AReM on IRP and RA-related filings before the CPUC. Her assignment with AReM is expected to continue for the length of the engagement with DCE, but she will have the necessary availability to support the DCE engagement, including providing the estimated hours of work provided in the Fee Proposal. She has been with MRW since 2018.

Ms. Neal will be assisted by Benjamin Kern, Technical Analyst at MRW. As a Technical Analyst, Mr.

Kern plays a supporting role in numerous projects at MRW, providing necessary analytical support. With skills in Excel modeling, Mr. Kern can support DCE in filling in the Excel-based IRP templates, overseen by Ms. Neal. Though Mr. Kern is expected to be working on multiple projects during the course of MRW’s engagement with DCE, he will have the necessary availability to support the DCE engagement, including providing the estimated hours of work provided in the Fee Proposal. Also located in Oakland, California, Mr. Kern has been with MRW since 2022.

Although not expected to provide technical support to the project, work will be overseen by Mark Fulmer, Principal and President of MRW. Any questions regarding contracting with MRW should be directed to his attention.

Brief bios for key staff are provided below and resumés are provided in Appendix B. Key personnel will be available to the extent proposed for the duration of the Project, and no person shall be removed or replaced without the prior written consent of DCE.

B. Key Personnel Bios
Mary Neal is a Senior Project Manager at MRW & Associates, LLC with over fifteen years of experience in energy consulting. She advises electric and natural gas industry clients on a wide array of regulatory, policy, and capital planning issues. She has extensive resource planning experience, including preparing IRPs on behalf of CCAs and ESPs in California. She prepares utility cost allocation, revenue requirement, and rate design models and testifies in regulatory proceedings across the U.S. and Canada. She also has extensive experience modeling wholesale power markets for price forecasting and asset valuation. Prior to her consulting role, Ms. Neal was a combustion engineer for Solar Turbines, Inc.

Ms. Neal holds a B.S. in Mechanical Engineering from UC Davis and a M.A. in Energy and Environmental Analysis from Boston University.

Benjamin Kern is a Technical Analyst at MRW. Mr. Kern supports MRW in rate forecasting, data analysis, and regulatory analysis. Mr. Kern holds a bachelor’s degree in economics and data analytics from the University of California, Berkeley.

DCE Staff
TEA Staff
Ms. Neal
Project Manager
Mr. Kern
Technical Analyst
Proposal for Integrated Resource Plan Services
8 PRELIMINARY PROJECT SCHEDULE
July August Sep October November
Task 1 7 14 21 28 4 11 18 25 1 8 15 22 29 6 13 20 27 3Task 4: Plan Compliance SupportCPUC IRP SubmissionDCE Board Approves IRPDraft IRP for CPUC SubmissionWorking IRP for PlanningDraft of IRP for ReviewMonitoring of IRP Proceedings at the CPUCAdditional Biweekly MeetingsTask 2 & 3: Data Templates & Narrative DocumentData Review and Resource MatrixKick-Off MeetingTask 1: Resource Plan Development As Needed
Task 5: As Needed Support Ongoing, as needed
Proposal for Integrated Resource Plan Services
9 Task 1: Resource Plan Development
A central goal of the IRP is to determine which resources and resource types will be included in DCE’s conforming IRP portfolios. MRW will begin with DCE’s existing resource portfolio of executed contracts and assess the portfolio for gaps relative to relevant resource planning standards and goals, including the following from the RFQ:
• Goals set by the IRP Proceeding, including cost minimization and support for disadvantaged communities. (The approved preferred system plan serves as a relevant benchmark for these goals; MRW will also work with the latest CalEnviroScreen tool to identify disadvantaged communities.)
• Compliance with all CPUC requirements, including limits on greenhouse gas (GHG) emissions. • Compliance with past CPUC midterm reliability (MTR) procurement orders. • Meeting DCE planning goals as approved by its Board, including resources local to DCE’s service territory in Riverside County.
• Contribution to resource adequacy and renewable portfolio standard requirements. • Tailoring to customer product preferences (i.e., enrollment in Desert Saver versus Carbon Free products).

Together, consensus will be reached on an appropriate conforming portfolio at the level of specificity necessary to fill out all the required templates from the CPUC.

Proposal for Integrated Resource Plan Services
10 Relevant Deliverables for Task 1

1. Kick-off Meeting: MRW will meet with TEA and DCE and communicate all data needs and refine the scope and schedule of the project.

2. Data Review and Matrix of Resource Options: MRW to review all relevant load and resource data and present resource options to meet all IRP requirements.

Once all templates are completed and receive Board approval, MRW will work with DCE staff to prepare the final filing before the CPUC.

Relevant Deliverables for Tasks 2 & 3

1. Draft of IRP for Review: MRW will prepare an initial draft of the IRP for review by TEA and DCE in advance of the Board review deadline.

2. Working IRP for Planning: This will serve as a “working IRP” to guide DCE procurement. It will incorporate feedback from DCE and TEA on the Draft IRP.

3. Draft IRP for CPUC Submission: This will be the formal IRP approved by the DCE Board and submitted to the CPUC for approval.

Relevant Deliverables for Task 4

Relevant Deliverables for Task 5

1. TBD as needed

Sincerely,
Mark Fulmer
Principal
MRW & Associates, LLC
510-834-1999, ext. 240
[email protected]
Mary Neal
Senior Project Manager
MRW & Associates, LLC
510-834-1999, ext. 225
[email protected]
Proposal for Integrated Resource Plan Services
13 Appendix A: Recent and Relevant Projects
The best example of a recent project deliverable is DCE’s 2022 IRP. Ms. Neal played a lead role in drafting this document, which has now been approved by the CPUC. It is available from DCE’s website at the link below.
https://desertcommunityenergy.org/wp-content/uploads/2022/11/DCE_v1-DCEs-IRP-Narrative-Public-Version.pdf Proposal for Integrated Resource Plan Services
14 Appendix B: Resumes
Proposal for Integrated Resource Plan Services
15 MARY NEAL
PROFESSIONAL Senior Project Manager
EXPERIENCE MRW & Associates, LLC
(2018)
Conduct technical analysis of electric and gas utility rate cases and other regulatory filings and serve as expert witness in regulatory proceedings. Perform integrated resource planning on behalf of Community Choice Aggregators and Electric Service Providers in California. Construct and critique models for utility cost allocation, rate design, retail rate forecasts, and benefits of distributed generation facilities. Evaluate energy procurement options and provide analytical and strategic support for business decisions and litigation on electric and gas issues.

Senior Consultant
Daymark Energy Advisors, Inc.
(2009-2017)
Advised electric and gas industry clients on resource planning, utility rates, and market design issues. Testified before multiple state and Canadian provincial regulatory agencies on issues related to electric market modeling, fuel cost forecasting, cost allocation, rate design, and electric utility capital planning.

Prepared and critiqued numerous electric and gas utility allocated cost of service, revenue requirement and rate design models. Led modeling team for Daymark Energy Advisors’ AURORAxmp Northeast electric market model.

Engineer
Solar Turbines, Inc.
(2005-2008)
Designed dry low-emission combustion systems for Mars SoLoNOx gas turbines.

Led development of fuel injectors for landfill gas and aftermarket retrofit applications.

EDUCATION M.A., Energy and Environmental Analysis, Boston University, 2010 B.S. Mechanical Engineering, University of California, Davis, 2005 Proposal for Integrated Resource Plan Services
16 Prepared Testimony

1. Nova Scotia Utility and Review Board Matter No. 04600 Direct Testimony of Mary Neal on Behalf of the Nova Scotia Small Business Advocate Concerning Nova Scotia Power’s 2012 Annual Capital Expenditure Plan. January 13, 2012.

2. Public Service Commission of Wisconsin Docket No. 3270-UR-118 Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board of Wisconsin Concerning Madison Gas & Electric’s Application for Authority to Change Electric and Natural Gas Rates.

August 27, 2012.

3. Public Service Commission of Wisconsin Docket No. 6690-UR-123 Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board of Wisconsin Concerning Wisconsin Public Service Corporation’s Application to Adjust Electric and Natural Gas Rates.

August 13, 2014.

4. Nova Scotia Utility and Review Board Matter No. 06514 Direct Testimony of Mary Neal on Behalf of the Nova Scotia Small Business Advocate Concerning Nova Scotia Power’s 2015 Annual Capital Expenditure Plan. January 16, 2015.

5. Public Service Commission of Wisconsin Docket No. 05-CE-145/05-CE-147 Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board of Wisconsin Concerning the Joint Application of Wisconsin Electric Power Company, Madison Gas and Electric Company, and WPPI Energy for a Certificate of Authority to Upgrade Various Power Block Equipment at Elm Road Generating Station Units to Facilitate the Use of Sub-Bituminous or Powder River Basin Coals as a Fuel Source/Construct a Site Bulk Material Handling Project at Oak Creek and Elm Road Generating Station. February 24, 2015.

6. Public Service Commission of Wisconsin Docket No. 6690-UR-124 Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board of Wisconsin Concerning Wisconsin Public Service Corporation’s Application to Adjust Electric and Natural Gas Rates.

September 2, 2015.

7. Nova Scotia Utility and Review Board Matter No. 07176 Direct Testimony of Mary Neal on Behalf of the Nova Scotia Small Business Advocate Concerning Nova Scotia Power’s 2016 Annual Capital Expenditure Plan. February 17, 2016.

8. New York Public Service Commission Case No. 16-E-0060 Direct Testimony of the Electric Rate Panel on Behalf of the New York Utility Intervention Unit Concerning the Rates, Charges, Rules and Regulations of Consolidated Edison Company of New York, Inc. for Electric Service (with Lee Smith and Danielle Panko). May 27, 2016.

9. Vermont Public Service Board
Testimony of Mary Neal on Behalf of Swanton Village Electric Concerning Swanton Village Electric’s Proposed Electric Vehicle Charging Station Pilot Program (with assistance from Vermont Public Power Supply Authority). June 2016.

10. CPUC Application 18-07-024
Testimony on Behalf of The City of Long Beach, Energy Resources Department. April 12, 2019.

Proposal for Integrated Resource Plan Services
17 11. Public Service Commission of Wisconsin Docket No. 5-CE-146 Direct Testimony of Mary Neal on Behalf of Citizens Utility Board. April 26, 2019.

12. Public Service Commission of Wisconsin Docket No. 5-CE-146 Supplemental Direct Testimony of Mary Neal on Behalf of Citizens Utility Board. May 3, 2019.

13. Public Service Commission of Wisconsin Docket No. 5-CE-146 Rebuttal Testimony of Mary Neal on Behalf of Citizens Utility Board. May 28, 2019.

14. Public Service Commission of Wisconsin Docket No. 5-CE-146 Surrebuttal Testimony of Mary Neal on Behalf of Citizens Utility Board. May 28, 2019.

15. Public Service Commission of Wisconsin Docket No. 6690-UR-126 Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board, Clean Wisconsin & Wisconsin Industrial Energy Group. August 23, 2019.

16. Public Service Commission of Wisconsin Docket No. 6690-UR-126 Supplemental Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board, Clean Wisconsin & Wisconsin Industrial Energy Group. August 28, 2019.

17. Public Service Commission of Wisconsin Docket No. 6690-UR-126 Surrebuttal Testimony of Mary Neal on Behalf of the Citizens Utility Board, Clean Wisconsin & Wisconsin Industrial Energy Group. October 4, 2019.

18. CPUC Application 19-03-002
Direct Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Authority to Update Marginal Costs, Cost Allocation, and Electric Rate Design. April 6, 2020.

19. CPUC Application 19-03-002
Rebuttal Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Authority to Update Marginal Costs, Cost Allocation, and Electric Rate Design. May 4, 2020.

20. CPUC Application 19-10-012
Testimony of Substitute Witness Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application to Extend and Modify the Power Your Drive Pilot Approved by Decision 16-01-045. May 18, 2020.

21. CPUC Application 19-10-012
Rebuttal Testimony of Substitute Witness Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application to Extend and Modify the Power Your Drive Pilot Approved by Decision 16-01-045. June 19, 2020.

22. CPUC Application 19-09-014
Direct Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Phase 2 Opening Testimony. August 21, 2020.

23. CPUC Application 19-11-019
Proposal for Integrated Resource Plan Services
18 Direct Testimony of Mary Neal on Behalf of the Western Manufactured Housing Communities Association in Pacific Gas & Electric’s 2020 Electric Cost Allocation and Rate Design Proceeding. November 20, 2020.

24. CPUC Application 20-10-012
Direct Testimony of Mary Neal on Behalf of the Western Manufactured Housing Communities Association in Phase 2 of Southern California Edison’s 2021 General Rate Case Application. July 26, 2021.

25. CPUC Application 21-08-010
Direct Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Approval of its 2022 Electric Sales Forecast. October 1, 2021.

26. CPUC Application 21-08-010
Rebuttal Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Approval of its 2022 Electric Sales Forecast. October 8, 2021.

27. CPUC Application 21-12-006
Direct Testimony of Mary Neal on Behalf of The Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Approval of Real Time Pricing Pilot Rate. December 30, 2022.

28. CPUC Application 21-12-006
Rebuttal Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Approval of Real Time Pricing Pilot Rate. January 30, 2023.

29. CPUC Application 22-09-015
Testimony of Mary Neal on Behalf of Long Beach Utilities. June 12, 2023.

30. CPUC Application 22-09-015
Rebuttal Testimony of Mary Neal on Behalf of the Western Manufactured Housing Communities Association in Southern California Gas Company (U 904 G) and San Diego Gas & Electric Company (U 902 G) Gas Cost Allocation Proceeding. July 28, 2023.

31. Public Service Commission of Wisconsin Docket No. 4220-CE-185 Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board and Clean Wisconsin.

November 29, 2023.

32. Public Service Commission of Wisconsin Docket No. 4220-CE-185 Rebuttal Direct Testimony of Mary Neal on Behalf of the Citizens Utility Board and Clean Wisconsin. December 21, 2023.

33. CPUC Application 23-01-008
Direct Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Authority to Update Marginal Costs, Cost Allocation, and Electric Rate Design. January 8, 2024.

Proposal for Integrated Resource Plan Services
19 34. Public Service Commission of Wisconsin Docket No. 4220-CE-185 Surrebuttal Testimony of Mary Neal on Behalf of Citizens Utility Board and Clean Wisconsin January 16, 2024.

35. CPUC Application 23-01-008
Rebuttal Direct Testimony of Mary Neal on Behalf of the Utility Consumers’ Action Network Concerning San Diego Gas & Electric Company’s Application for Authority to Update Marginal Costs, Cost Allocation, and Electric Rate Design. February 7, 2024.

36. CPUC Application 24-03-019
Testimony of Mary Neal on Behalf of the Western Manufactured Housing Communities Association in Phase 2 of Southern California Edison’s 2025 General Rate Case Application.

January 8, 2025.

Proposal for Integrated Resource Plan Services
20 BENJAMIN KERN
Professional Technical Analyst
Experience MRW & Associates, LLC
(2022-Present)
Perform research and technical analysis to track and forecast electric and gas utility rates and to develop project cost-benefit analyses. Prepare and review documents in support of regulatory proceedings. Construct statistical/economic models for complex energy projects.

Undergraduate Research Assistant
Lynde Research Mentoring Program, Berkeley
(2021 - 2022)
Created a dataset in Excel showing the district-level implementation of a 2020 Nationwide Firecracker Ban in India by researching state gazettes for information on state compliance of the ban. Created geospatial maps and time-series graphs to show trends in major pollutants levels around the date of the Firecracker Ban.

Used regression discontinuity analysis and other linear regression techniques to analyze the causal impact of the ban on pollution levels. Presented findings to a panel of graduate students and economics professors.

Research and Communications Intern
Global Footprint Network
(2021)
Extracted Sustainability-related insights from the Global Footprint Database, visualized the data in Jupyter Notebooks, and communicated findings to various stakeholders. Wrote articles and blog posts on the company website using insights from MRIO-based Footprint Data stored in the Global Footprint Database. Supported a variety of sustainability-related projects related to 100 Days of Possibility Campaign and Earth Overshoot Day. Used MRIO Footprint Data to analyze levels of carbon emissions in the industrial agriculture sector in South American Countries as part of a personal project.

EDUCATION B.S Economics, University of California, Berkeley, 2022 Proposal for Integrated Resource Plan Services
21 Appendix C: Changes to Professional Services Agreement MRW has no objections or requested changes to the Agreement attached to the RFQ.

Proposal for Integrated Resource Plan Services
22 Appendix D: Signed Addendum

ITEM 6C

STAFF REPORT
Subject: 2024 Annual Power Source Disclosure Report and 2024 Preliminary Power Content Label
Contact: Savannah Gil, Program Specialist ([email protected]) Recommendation: Adopt Resolution 2025-03, approving the 2024 Power Source Disclosure Annual Report, and authorizing the Executive Director to complete all actions necessary for submittal to the California Energy Commission, including attesting to its veracity
Background: All retail sellers of electricity, including Community Choice Aggregators such as DCE, are required by Senate Bill 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. As part of this process, the DCE Board typically adopts a resolution to approve the Power Source Disclosure (PSD) Annual Reports and Power Content Label (PCL) in June or September of each year.

This year, load-serving entities (LSEs) throughout California were instructed to submit the 2024 PSD Annual Report by June 2, 2025. DCE staff submitted the PSD report to the California Energy Commission (CEC) on June 2, 2025. On June 3, 2025, CEC staff notified DCE that it would generate the 2024 PCLs for all CCAs by mid-September. Because of this, DCE has included its preliminary 2024 PCL for informational purposes only. Staff will return to the Board to approve the 2024 PCL once the CEC releases more information.

Information from DCE’s 2024 PSD Annual Report and 2024 PCL is summarized below. Once approved by the Board, staff will post the final PSD report and PCL to the DCE website in accordance with CEC requirements. DCE will then send the PCL to all active customers via mail or email, depending on the customer's preference, by the due date.

Summary of 2024 PSD Annual Reports and Preliminary 2024 PCL DCE provided 100% carbon-free energy to Carbon Free customers, including 57% renewable energy eligible under the state’s Renewables Portfolio Standard (RPS) purchased from solar facilities (19%), wind facilities (38%), and small hydropower facilities (0.65%). The remaining carbon-free energy was purchased from large hydropower facilities (12%) and nuclear facilities (30%), which are not considered renewable under the RPS.

DCE is estimated to have provided Desert Saver customers with an energy supply consisting of 17% renewable energy eligible under the RPS purchased from geothermal facilities (1.8%), solar Desert Community Energy Board
June 16, 2025
facilities (9.4%), wind facilities (5.4%), and small hydropower facilities (0.13%). The remaining energy was purchased from large hydropower facilities (0.27%) and nuclear facilities (83%).

DCE staff would note that this is the first time in which its Carbon Free and Desert Saver products have both achieved a zero-to-low intensity of greenhouse gas emissions (GHG) measured in pounds of CO2e emitted per megawatt-hour. For context, the term CO₂ equivalent (CO₂e) is a standard unit for measuring carbon footprints, quantifying the impact of different greenhouse gases in terms of the amount of CO₂ that would create the same amount of warming. Because this preliminary 2024 PCL is intended solely for informational purposes, there exists a possibility that the CEC may determine a different Greenhouse Gas (GHG) intensity for DCE’s energy products when it publishes the official 2024 PCL.

Carbon Free Desert Saver CA Utility Average
Greenhouse Gas Emissions Intensity
(lbs of CO2e emitted per megawatt hour)
0 3 TBD
Electricity Sources
■ Renewables and Zero-Carbon Resources
■ Fossil Fuels and Unspecified Power
RPS Eligible Renewables 57% 17% TBD
Biomass & Biogas 0.0% 0.0% TBD
Geothermal 0.0% 1.8% TBD
Eligible Hydroelectric 0.65% 0.13% TBD
Solar 19% 9.4% TBD
Wind 38% 5.4% TBD
Large Hydroelectric 12% 0.27% TBD
Nuclear 30% 83% TBD
Emerging Technologies 0% 0% TBD
Other 0% 0% TBD
Natural Gas 0% 0% TBD
Coal & Petroleum 0% 0% TBD
Unspecified Power (primarily fossil fuels) 0% 0% TBD
Total 100% 100% 100%
Retail sales covered by retired unbundled RECs 0% 4%
https://desertcommunityenergy.org/about/key-documents/Want to learn more? Visit https://www.energy.ca.gov/pcl
PRELIMINARY 2024 POWER CONTENT LABEL
Desert Community Energy
■ This label does not reflect compliance with the Renewables Portfolio Standard (RPS), which measures the use of tracking instruments called Renewable Energy Credits (RECs) over the course of multi-year compliance periods.

RECs that are purchased separately from the renewable energy ("Unbundled RECs") can be used for RPS compliance, but they do not factor into the power mixes or GHG emissions intensities above. ■ GHG intensity figures exclude biogenic CO2 and emissions from geothermal sources and grandfathered imports of firmed-and-shaped energy. For detailed information about all GHG emissions from California's retail electricity suppliers, visit the CEC link below.
■ Unspecified power is electricity purchased from a genericized pool on the open market.

The attached DCE 2024 PSD Annual Report and the preliminary PCL for Carbon Free and Desert Saver have been prepared with assistance from The Energy Authority (TEA). TEA conducted a detailed review of all power purchases made during the 2024 calendar year. This review included an inventory of all 2024 RECs within DCE’s Western Renewable Energy Generation Information System (WREGIS) account. Based on staff and TEA’s review of such available data, the information presented in the PSD Annual Report and preliminary PCL is determined to be accurate.

Adoption of the resolution enables DCE to comply with the CEC Power Source Disclosure Regulations implementing SB 1305 (California Code of Regulations, Title 20, Sections 1391 to 1394).

Fiscal Analysis: Adoption of Resolution 2025-03 does not result in any financial impact on DCE.

Attachments:

1. Resolution 2025-03 approving the 2024 Power Source Disclosure Annual Report

2. 2024 Power Source Disclosure Annual Report for DCE’s Carbon Free and Desert Saver products
RESOLUTION NO. 2025-03

A RESOLUTION OF THE BOARD OF DIRECTORS OF
DESERT COMMUNITY ENERGY APPROVING THE 2024 POWER SOURCE DISCLOSURE

ANNUAL REPORTS AND AUTHORIZING THE EXECUTIVE DIRECTOR TO COMPLETE ALL

ACTIONS NECESSARY TO APPROVE AND ATTEST TO THE VERACITY OF THE FINAL 2024 POWER SOURCE DISCLOSURE ANNUAL REPORT

FOR THE DESERT SAVER AND CARBON FREE PRODUCTS
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 (CEC).

C. Desert Community Energy is a retail supplier of electricity as defined by the Power Source Disclosure Program (California Code of Regulations, 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 2024 Power Source Disclosure Annual Report.

E. DCE staff and consultants performed a detailed review of all power purchases completed for the 2024 calendar year, including an inventory of all received renewable energy certificates (RECs) within DCE’s account at the Western Renewable Energy Generation Information System (WREGIS) and transaction records.

F. Pursuant to the current CEC regulations, California Code of Regulations Title 20, Section 1394.2(a)(2), the Board is required to attest to the veracity of the 2024 Power Content Labels.

G. The Board desires to attest to the veracity of the 2024 Power Source Disclosure Annual Reports for the Desert Saver product and the Carbon Free product so that all the required statements and attestations required by Section 1394.2(a)(2), are contained in one resolution.

H. The Board further desires to authorize the Executive Director to complete all actions necessary for submittal to the CEC, including attesting to the veracity of the final 2024 Power Source Disclosure Annual Report for the Desert Saver product and the Carbon Free product.

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

Section 1. Approval of 2024 Power Source Disclosure Annual Report. The Board approves and attests to the veracity of the attached 2024 Power Source Disclosure Annual Reports for Desert Community Energy.

Section 2. Delegation to Executive Director. The Board hereby authorizes the DCE Executive Director to approve the submission and attest to the veracity of the 2024 Power Source Disclosure Annual Report for Desert Community Energy by signing the attestation forms set out in the 2024 Power Source Disclosure Annual Report.

Section 3. Resolution Effective Date. This resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on June 16, 2025.

ATTEST:
________________________ ________________________
Jeffrey Bernstein, Chair Tom Kirk, Secretary
Desert Community Energy Desert Community Energy
AYES: NAYS: ABSENT: ABSTAIN: _

ITEM 6D

STAFF REPORT
Subject: Updates to Policy No. 18-13 Budget and Accounting Policies Contact: Claude T. Kilgore, Director of Finance ([email protected]) Recommendation: Approve updates to Policy No. 18-13 related to Budget and Accounting Policies
Background: Around the time of DCE’s formation in 2018, the Budget and Accounting Policy was created as a guiding document covering the annual budget and audit processes. The policy has not been updated since the original version. Vice Chair Chavez recently alerted staff that the policy may need to be updated to better align with current practices and make certain clarifications.

One of the updates involved better aligning the budget presentation timing with operational practicality.

Each year, certain key information necessary for developing critical aspects of the budget (for example, SCE’s Power Charge Indifference Adjustment (PCIA), which affects DCE’s revenue) is not released by SCE until May 15, 2025. This timing makes it challenging to present a draft budget earlier in the year which was in the original policy. Additionally, budget forecasts now include projections for future years, ensuring that the Board consistently reviews budget-to-actual information during the year. Furthermore, load forecasts and other data, such as staffing costs from CVAG, are finalized during April.

Other revisions aimed to clarify potentially confusing aspects of the original policy, such as when an emergency expense related to day-ahead or energy purchases may need to be made outside of previously budgeted amounts. The updated language provides clarity on these situations and instructs attempts to reach the Board Chair while ensuring that business operations can continue in extreme circumstances.

Minor clarifications were also made to properly reference accounting reports and items issued by the external auditors which had incorrect or outdated references.

Staff has reviewed the policy and is now recommending updates to Policy No. 18-13.

Fiscal Analysis: Updating the policy has no fiscal impact beyond staff time and resources.

Attachments:

1. Redline document with updates

2. Policy No. 18-13 Amended Budget and Accounting Policies Desert Community Energy Board
June 16, 2025
1 Subject: Guidelines for Agency Budgeting and Accounting Controls Budget Policies:

1. The DCE Executive Director shall prepare and submit to the DCE Board of Directors a draft proposed Budget for the next following fiscal which shall be approved by the Board at a public meeting occurring not later than during the month immediately preceding the start of the respective fiscal year.year two months prior to the end of the then current fiscal year. DCE’s Budget shall be in alignment with established DCE goals and shall reflect all DCE activities, including operating and capital programs, revenues and expenditures.

DCE’s budget shall be approved by the Board at a public meeting occurring not later than during the month immediately preceding the start of the respective fiscal year.

2. DCE’s budget process, accounting practices and finances shall be kept separate from CVAG’s budget process, accounting practices and finances.

3. DCE’s annual budget shall be balanced. A balanced budget exists when total projected revenues are greater than or equal to total projected expenditures. Total revenues shall include all revenues from retail and wholesale sales of electricity, return on investments and withdrawals from reserve funds. Total expenditures shall include all operating expenses, capital programs, and contribution to reserve funds. Any increase in expenditures and or decrease in revenues that would cause the budget to become imbalanced and would require a budget revision is subject to Board approval. Any year-end surplus will be used to maintain or augment reserve levels with the balance available for programs and capital projects, debt reduction and/or one-time-only expendituresin accordance with Policy No. 18-10 Amended Financial Reserve Policy.

4. Once operational, long-term debt or bond financing shall not be used to support program operating expenses. Total annual debt service expense shall not exceed 10% of operating revenue unless otherwise approved by the Board. The percentage of debt service shall be reviewed annually.

5. Staff and relevant service providers will annually, as part of DCE’s budget process, prepare a five-year financial forecast of revenues and expenditures for all operating funds, programs and capital projects. The forecast shall be used as a planning tool in developing the following year’s budget.

6. The DCE Executive Director shall submit revenue and expenditure projections to the Board of Directors on a quarterly basis unless there are material changes in those POLICY No. #18-13 - Amended
Budget and Accounting Policies
2 projections, in which case the Board of Directors will be informed at the next Regular or Special Meeting of the Board.

7. Any expenditure expense in excess of the authorized total DCE Budget shall require prior approval by the Board of Directors, typically through a budget amendment. The Executive Director may, if he/she deems such excess budget expenditure expense to be of urgent importance in order to sustain operations related to day-ahead or other necessary energy purchases a timely business necessity, authorize such expenditure expense via concurrence with the DCE Board Chair, when such concurrence can be attained in a timely manner. The excess expense amount and justification shall beand reported the amount and justification for such expenditure to the Board no later than the next regularly scheduled Board meeting. The Executive Director shall establish procedures to ensure that proper controls are implemented for all DCE expenseditures.

Accounting Policies:

1. DCE will establish accounting practices that conform to Generally Accepted Accounting Principles (GAAP) for governmental entities as established by the Governmental Accounting Standards Board (GASB).

2. An independent firm of Certified Public Accountant (CPAs or Auditor) shall perform an annual financial audit meeting at least the and minimum requirements for a complete set of financial statements in accordance with GAAP. The CPAs’ Independent Auditor’s Report (Opinion) on those financial statements an official comprehensive annual financial report (CAFR) shall be issued no later than 6 months following fiscal year-end.

3. A management letterThe Auditor’s Communication with Those Charged with Governance (SAS 114 Letter), the by-product of an annual audit, shall be presented to the DCE Board by the independent certified public accounting firmAuditor no later than 60 days from issuancerelease of DCE’s complete set of financial statements and the accompanying CPAs’ Opinionthe Authority’s CAFR. The Board shall have final approval overreceive and file the audit each year.

4. DCE’s unaudited financial Accounting Sstatements, including a Balance SheetStatement of Net Position and, a Statement of Revenues, Expenses, and Changes in Net Position Profit and Loss Statement and a Supplementary Schedule of Capital Projects shall be submitted to the DCE Board of Directors at least quarterly, or more frequently if conditions warrant or as directed by the Board.

Amended June 2025
1 Subject: Guidelines for Agency Budgeting and Accounting Controls Budget Policies:

1. The DCE Executive Director shall prepare and submit to the DCE Board of Directors a draft proposed Budget for the next following fiscal which shall be approved by the Board at a public meeting occurring not later than during the month immediately preceding the start of the respective fiscal year. DCE’s Budget shall be in alignment with established DCE goals and shall reflect all DCE activities, including operating and capital programs, revenues and expenditures.

2. DCE’s budget process, accounting practices and finances shall be kept separate from CVAG’s budget process, accounting practices and finances.

3. DCE’s annual budget shall be balanced. A balanced budget exists when total projected revenues are greater than or equal to total projected expenditures. Total revenues shall include all revenues from retail and wholesale sales of electricity, return on investments and withdrawals from reserve funds. Total expenditures shall include all operating expenses, capital programs, and contribution to reserve funds. Any increase in expenditures and or decrease in revenues that would cause the budget to become imbalanced and would require a budget revision is subject to Board approval. Any year-end surplus will be used to maintain or augment reserve levels in accordance with Policy No. 18-10 Amended Financial Reserve Policy.

6. The DCE Executive Director shall submit revenue and expenditure projections to the Board of Directors on a quarterly basis unless there are material changes in those projections, in which case the Board of Directors will be informed at the next Regular or Special Meeting of the Board.

POLICY No. 18-13 - Amended
Budget and Accounting Policies
2 7. Any expense in excess of the authorized total DCE Budget shall require prior approval by the Board of Directors, typically through a budget amendment. The Executive Director may, if he/she deems such excess budget expense to be of urgent importance in order to sustain operations related to day-ahead or other necessary energy purchases, authorize such expense via concurrence with the DCE Board Chair, when such concurrence can be attained in a timely manner. The excess expense amount and justification shall be reported to the Board no later than the next regularly scheduled Board meeting. The Executive Director shall establish procedures to ensure that proper controls are implemented for all DCE expenses.

Accounting Policies:

2. An independent firm of Certified Public Accountant (CPAs or Auditor) shall perform an annual financial audit meeting at least the minimum requirements for a complete set of financial statements in accordance with GAAP. The CPAs’ Independent Auditor’s Report (Opinion) on those financial statements shall be issued no later than 6 months following fiscal year-end.

3. The Auditor’s Communication with Those Charged with Governance (SAS 114 Letter), the by-product of an annual audit, shall be presented to the DCE Board by the independent Auditor no later than 60 days from release of DCE’s complete set of financial statements and the accompanying CPAs’ Opinion. The Board shall receive and file the audit each year.

4. DCE’s unaudited financial statements, including a Statement of Net Position and a Statement of Revenues, Expenses, and Changes in Net Position shall be submitted to the DCE Board of Directors at least quarterly, or more frequently if conditions warrant or as directed by the Board.

Amended June 2025
ITEM 7A

STAFF REPORT
Subject: DCE Fiscal Year 2025-26 Budget
Contact: Claude T. Kilgore, Director of Finance ([email protected]); and Jiajing Cheng, Accountant ([email protected])
Recommendation: Adopt Resolution 2025-04 approving Desert Community Energy’s Fiscal Year 2025-26 Budget
Background: By the end of June each year, DCE staff prepares a detailed budget for the next following fiscal year for Board's review and approval. DCE's Fiscal Year 2025-26 Budget, covering the period from July 1, 2025 through June 30, 2026, represents DCE’s sixth full year of operations for its electricity customers in the City of Palm Springs. A high-level preview of the 2025-26 budget was presented at the May 2025 meeting of the DCE Board, including an overview of major budget assumptions. The discussion will continue at the June 2025 Board meeting, where DCE staff will provide more comprehensive details on the key assumptions, facts, and figures used to develop the budget, and request the Board to consider budget approval as required by the DCE Joint Powers Agreement.

The annual budget serves as a guiding document for the upcoming fiscal year. Quarterly budget-to-actual reports are presented to the DCE Board of Directors to ensure ongoing oversight of public funds, track year-to-date activity, and communicate current events and changes in expected activities.

Several important fiscal policy changes are represented in the 2025-26 budget and were propelled by S&P Global Ratings (S&P)’s recent issuance of an investment-grade credit rating to DCE. S&P’s credit report outlined several improvements to some of DCE’s standing practices and policies, which were presented to the DCE Board of Directors in previous meetings. A major item from S&P included rate-setting to ensure DCE meets its annual revenue requirements, which is measured in the form of DCE’s Fixed Charge Coverage (FCC) ratio. DCE followed S&P’s methodology for calculating DCE’s FCC ratio and to subsequently arrive at DCE’s 2025-26 revenue requirement. This is calculated by taking net revenue plus 50% of fixed power purchase agreement (PPA) expenses, divided by 50% of PPA expenses. S&P expects DCE to maintain a FCC above 2.0x in the coming years. The proposed budget aims for a ratio of approximately 2.1x. The 2.1x target should provide ample opportunity to surpass the

2.0x expectations set by S&P, while also allowing for some flexibility in case revenues do not come in as anticipated or expenses track up from original budgeted amounts.

By ensuring DCE meets its FCC obligations, the Board safeguards the financial stability necessary to maintain local control, provides customers with a reliable energy portfolio, and shields them from unpredictable energy market fluctuations. This approach not only supports more predictable energy bills but also ensures customers benefit from long-term agreements that stabilize costs and enhance energy reliability, making it a choice that directly serves their best interests.

Desert Community Energy Board
June 16, 2025
DCE’s total revenue is projected at nearly $67.1 million. DCE wholesale power supply costs are projected at about $59 million while total non-power operating costs are roughly $3.9 million.

Consequently power, operating, and non-operating costs are about $63 million. If one subtracts that amount from the total DCE revenue of $67.1 million, it leaves an increase of approximately $4.1 million – a net position that is expected to be accumulated for reserves. The budgeted expenses include a number of contractual services, and, at the request of Vice Chair Chavez, this report includes a listing of the non-energy contracts.

The proposed budget also anticipates a $500,000 match for customer programs offered by the City of Palm Springs and/or programs developed and offered by DCE itself. This match, which would come back to the Board for approval, could include supporting the City of Palm Springs’ proposed reach code ordinances with incentives for customers who carry out qualifying energy efficiency upgrades, further helping the City of Palm Springs reduce its greenhouse gas emissions.

In December 2024, the Board approved and amended DCE’s financial reserves policy which created special reserve categories in addition to accumulation of basic reserves. The special reserves include four reserves: customer programs, procurement, market stabilization, and FCC. Special reserves are treated independently from the basic reserve and are not aggregated. The 2025–26 budget projections indicate that DCE is on track to meet the minimum financial reserve levels equal to 50 percent (180 days) of total power and operating costs targeted by its amended financial reserve policy, with an estimated cash reserve balance of approximately $31.5 million by fiscal year-end. This accomplishment will enhance DCE’s financial health and stability and signify a critical milestone in DCE’s financial journey. Given the timing of minimum basic reserve accumulation occurring near the end of the fiscal year, DCE staff are not yet recommending the creation of any Special Reserves in 2025-26 but will be working with the Board of Directors to develop target reserve amounts in the future.

Staff is recommending the Board approve Resolution 2025-04 and adopt the budget. Staff will continue to monitor factors such as power supply costs, retail sales receipts, climate impacts, regulatory mandates, and other elements throughout the fiscal year. As actual revenues and expenses occur, any necessary budget adjustments will be presented to the Board accordingly.

Fiscal Analysis: The projected revenues and expenses for DCE are outlined in the budget itself.

Attachments:

1. Resolution No. 2025-04

2. DCE’s Fiscal Year 2025-26 Budget

3. Summary of Non-Energy Contracted
Services
RESOLUTION NO. 2025-04

A RESOLUTION OF THE BOARD OF DIRECTORS OF

DESERT COMMUNITY ENERGY
APPROVING FISCAL YEAR 2025-26 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;
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, 2025, through June 30, 2026; D. The DCE Fiscal Year 2025-26 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 2025-26 Annual Budget. The Board of Directors hereby approves the DCE Fiscal Year 2025-26 Budget.

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on this 16th day of June, 2025.

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

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From the Executive Director

TO THE HONORABLE MEMBERS OF DESERT COMMUNITY ENERGY
The City of Palm Springs and the City of Palm Desert
JUNE 16, 2025
VER ITS FIVE YEARS OF OPERATIONS, Desert Community Energy has worked tirelessly to achieve the goals we set when first supplying electricity to Palm Springs as a community choice aggregator (CCA) in 2020. First and foremost, we have worked to exceed the State’s targets for reducing greenhouse gas (GHG) emissions. We have done so while also prioritizing consumer choice and price stability, accessing local clean energy sources, and offering an affordable alternative to Southern California Edison (SCE).

Our progress toward improving the environment and supporting the community of Palm Springs can be measured directly. Because DCE serves 84% of Palm Springs’ electric customers, we have helped the City reduce its GHG emissions by an average of 78,000 metric tons per year. Enrollment in DCE’s Carbon Free energy product remains the default for its customers and triggers the majority of this reduction, which is the equivalent of eliminating 430 railcars’ worth of coal burned annually.

DCE also works locally to provide economic benefits and reinvest in our communities. Our electricity procurement prioritizes alternative fuel energy that is generated in Palm Springs, and in December 2024, we added a fourth long-term Power Purchase Agreement. With the new San Gorgonio Westwind–Phoenix project, DCE now purchases a total of 44.2 megawatts (MW) of carbon-free electricity generated by wind, creating 100+ clean energy jobs (including construction and permanent). We also increased DCE’s pro-rata share of the Cape Generating Station 1 project with Fervo Energy from 3 MW to 4 MW of geothermal energy and are working to identify solar, wind, or battery opportunities in connection with CVAG’s Addressing Climate Change, Emergencies and Sand Storms (ACCESS) project along Indian Canyon Drive.

DCE’s work is gaining momentum, as seen by our progress toward financial goals. In 2024, DCE achieved a ‘BBB’ issuer credit rating with a stable outlook from S&P Global Ratings (S&P). This investment-grade rating provides a strong public statement about our improved financial stability and will give DCE the opportunity to expand its investments and continue to reduce the cost of providing electricity. As of March 2025, S&P rated SCE Corporate at BBB with a negative outlook, which is lower than the rating assigned to DCE. Additionally, only a few other CCAs have received investment-grade credit ratings.

We continue to have a positive impact on the community. DCE maintains the Desert Saver option for customers, which offers the lowest-cost electricity option for Palm Springs residents. We have restarted the Community Advisory Committee for the 2024–26 calendar year membership term, O
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and its members will advise the Board on matters such as outreach, education, and programs aimed at addressing energy affordability.

I am pleased to share the fiscal year 2025–26 budget for your review and approval. The budget builds on our efforts over the past five years and provides a strong foundation for future success.

It reflects the recently updated Rate Stabilization Schedule, which ensures that Carbon Free rates are based on revenue requirements, meet fixed charge coverage ratios, and respond to the changing regulatory framework. The budget also indicates DCE’s sustained achievement of robust financial reserves. When adjusted for $8,000,000 committed from bank revolving credit, DCE consistently maintains a minimum of 180 days of cash on hand. This is a significant indicator of financial stability, illustrating that DCE possesses sufficient liquidity to cover at least 50 percent of one year’s operating expenses at any given time. In the new budget year, DCE anticipates this liquidity to continue growing from its own cash reserves, as well as from increased credit commitments from its banking partner.

Moving forward, DCE will continue to investigate cost-effective renewable energy and battery energy storage resources to meet DCE’s climate action goals and help ensure future rate stability.

As opportunities arise that meet both climate action and economic goals, DCE will maintain an emphasis on carbon-free energy projects and work to augment financial reserves. We aim to research and launch residential and commercial customer programs in the near future, including ones in support of the City of Palm Springs’ anticipated new building codes.

I want to close by thanking DCE’s staff for all their hard work in providing clean energy to our customers and achieving our financial targets. New staff are stepping into their roles with the same enthusiasm as their predecessors for a more sustainable Coachella Valley.

As we look ahead, I am excited to work with you to provide positive outcomes for the communities we serve.

Tom Kirk
Executive Director
Desert Community Energy
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About Desert Community Energy
ESERT 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 the environmental and economic goals of member agencies, 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 2028.

DCE is governed by a Board of Directors (the Board), consisting of one director appointed by each member 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 promote the financial health of the agency, including an Energy Risk Management Policy and a 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.
• Maintain an investment-grade credit rating.
• Develop a source of funds for investment in 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 the 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 budget preparation, oversight of the annual audit, and management of various DCE funds.

Of the CVAG employees providing support for the CCA program, each only spends part of their time on the CCA program. DCE reimburses CVAG for all staff time incurred, as well as non-employee costs, such as supplies, legal services, consultant services, and equipment, that are incurred while performing the services.

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 has marked the period since DCE’s 2020 launch and is expected to continue.

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, also known as the Community Choice Aggregation Law. DCE D
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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.

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

DCE works to provide overall rates that are lower or competitive with those offered by SCE for similar power supplies, to supply an energy portfolio that prioritizes reducing greenhouse gas emissions and utilizing local renewable resources, and to establish local control. The benefits to consumers include the ability to reduce energy costs and stabilize rates, improve the local and regional economy, and increase local electric generation reliability.

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Budget Overview
HE DCE FISCAL YEAR 2025–26 BUDGET, covering the period from July 1, 2025, through June 30, 2026, pertains to DCE’s sixth full year of operations for its electricity customers in the City of Palm Springs. The annual budget serves as a guiding document for the upcoming fiscal year. Quarterly budget-to-actual reports are presented to the DCE Board of Directors to ensure ongoing oversight of public funds, track year-to-date activity, and communicate current events and changes in expected activities. Due to the nature of projections and the various inputs and assumptions used to derive these budgeted figures, they are prone to change and may be reviewed by the Board for further revision at a future date during the fiscal year. This method enables modifications that align with present business needs and revised forecasts while meeting the minimum financial criteria established by the Board.

Several important fiscal policy changes are represented in the 2025–26 budget. In the summer of 2024, DCE engaged S&P Global Ratings (S&P) to discuss DCE’s business operations, financial viability, and seeking an Issuer Credit Rating. S&P ultimately issued a report providing DCE with an investment-grade credit rating opinion of ‘BBB.’ Overall, it indicates that DCE has an adequate capacity to meet its financial commitments; however, it is more susceptible to adverse economic conditions compared to higher-rated entities. This investment-grade credit rating was welcome news, as it reflects DCE’s improved financial metrics, enhanced liquidity, and stable customer base over the last five years. Not all Community Choice Aggregators (CCAs) have attained investment-grade credit ratings, and several of them are more established entities than DCE. With its investment-grade credit rating, DCE can establish a stronger credit profile and negotiate more effectively with counterparties.

In its report, S&P also suggested improvements to some of DCE’s standing practices and policies, which were presented to the DCE Board of Directors throughout 2024–25. These included greater budgetary control, an updated financial reserves policy, as well as an enhanced Rate Stabilization Schedule (RSS). The DCE Board approved an update to DCE’s financial reserve policy, which introduced new special reserve categories, including customer programs, procurement, market stabilization, and a fixed charge coverage special reserve. Further discussion and a preview of targeted financial reserves can be found in the section titled “Projected Cumulative Reserves.” The updated RSS, approved by the Board at its March 2025 meeting, separated DCE’s Carbon Free product rate and revenue requirements from a rate premium on SCE’s bundled base product. The amended RSS provides that DCE’s Carbon Free rates, together with any RSS adjustment, are to be based on DCE’s Carbon Free full revenue requirements, as identified through budgetary processes, including Board-approved financial reserve accumulation, meeting fixed charge ratios, and responding to power market and regulatory changes. Setting electric rates to meet revenue requirements involves prudent utility business practices, maintaining an investment-grade credit rating, and meeting the expectations of power supply counterparties. The RSS maintains the establishment of Desert Saver rates at a discount to SCE’s bundled base average bill, which affords budget-conscious customers a cost-effective rate choice.

Another key recommendation made by S&P was to provide rate-setting flexibility to ensure DCE meets its annual revenue requirements, which is measured in the form of DCE’s Fixed Charge Coverage (FCC) ratio. S&P calculates DCE’s FCC ratio as net revenue plus 50% of fixed power T
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purchase agreement (PPA) expenses divided by 50% of PPA expenses. S&P expects DCE to maintain an FCC above 2.0x in the coming years. The proposed budget aims for a ratio of approximately 2.1x, calculated by adding Net Revenue of $4.1 million with 50% of PPA Expenses of $3.7 million, then dividing by 50% of PPA Expenses, again $3.7 million. Taking rounding into account, (4.1+3.7)/3.7 equals 2.1. The 2.1x target should provide ample opportunity to surpass the 2.0x expectations set by S&P while also allowing for some flexibility in case revenues do not come in as anticipated or expenses track up from the original budgeted amounts.

Setting DCE’s revenue requirement to achieve this FCC in the 2025–26 budget aligns with S&P’s recommendations and seeks to reduce DCE’s vulnerability to adverse economic conditions while establishing a consistent record of FCC and liquidity. To achieve this revenue requirement, DCE Carbon Free generation rates are anticipated to increase slightly as of July 1, 2025. This follows two successive generation rate decreases by DCE in June and October 2024 and a rate increase in June 2025. The total bundled bill average dollar amount increase for a domestic Carbon Free customer is approximately $5.93, or 2.68 percent, and for a Carbon Free commercial account is approximately $9.75, or 3.01 percent. DCE staff will continue to monitor DCE’s liquidity and FCC ratios throughout the fiscal year, as well as SCE’s PCIA and market price benchmarks through regulatory filings.

Although the current revenue requirement is considered adequate for budgetary purposes, adjustments may be necessary based on changes in the previously mentioned factors. Any revisions to the revenue requirement will be communicated to and/or approved by the Board via quarterly budgetary reports or the RSS.

To highlight the significance of DCE meeting its FCC coverage ratios for 2025–26, S&P noted in its report that “We could lower the rating if FCC falls significantly short of projections due to restricted rate-setting flexibility that impedes adequate cost recovery or a substantial increase in the opt-out rate that significantly reduces revenue.” Conversely, S&P noted, “We could raise the rating if management establishes a healthy track record of FCC and liquidity while continuing to secure additional power contracts that reduce open positions and provide for predictable costs. In addition, a low and stable customer opt-out rate would also support an upgrade.” Maintaining and/or receiving an upgraded investment-grade credit rating is of paramount importance for not only DCE’s near-term financial activities but also for its ability to continue securing long-term power purchase agreements with fixed costs. These agreements play a crucial role in stabilizing the energy portfolio and shielding customers from the unpredictable fluctuations of volatile energy markets, thereby avoiding the sudden financial strain caused by rising electricity costs. By ensuring DCE meets its FCC obligations, the Board safeguards the financial stability necessary to maintain local control, provides customers with a reliable energy portfolio, and shields them from unpredictable energy market fluctuations. This approach not only supports more predictable energy bills but also ensures customers benefit from long-term agreements that stabilize costs and enhance energy reliability, making it a choice that directly serves their best interests.

The proposed budget also includes a $500 thousand match for customer programs offered by the City of Palm Springs and/or programs developed and offered by DCE itself. This could include supporting the City of Palm Springs’ proposed reach code ordinances with incentives for customers who carry out qualifying energy efficiency upgrades, further helping the City of Palm Springs reduce its greenhouse gas emissions. Although the customer program match has been budgeted, the program’s details are still being finalized and will be presented to the Board during the fiscal year.

The proposed budget is a planning document, and staff will monitor factors such as power supply costs, retail sales receipts, climate impacts, regulatory mandates, and other elements throughout DRAFT 06/06/2025 7
the year. As actual revenues and expenses occur, any necessary budget adjustments will be presented to the Board accordingly.

BUDGET ASSUMPTIONS
DCE’s major 2025–26 budget assumptions include:

1. Full accrual accounting practices are implemented in line with US Generally Accepted Accounting Principles (GAAP) for enterprise funds.

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

3. Projected loads, resources, and costs will utilize TEA’s May 21, 2025 financial model, inclusive of information filed by SCE in its May 15, 2025 application to the CPUC for its 2026 Energy Resource Recovery Account (ERRA).

4. DCE will develop its budget to ensure that the net margin after expenses exceeds 2.0x Fixed Charge Coverage ratio.

5. DCE will see an opt-down rate of about 16 percent, meaning those DCE customers are choosing Desert Saver over the 100% Carbon Free default product.

6. Board-approved rate-setting objectives are met as outlined in DCE’s Amended Rate Stabilization Schedule, which became effective April 1, 2025.
a. DCE’s Carbon Free rates are to be based on DCE’s Carbon Free full revenue requirements, including Board-approved financial reserve accumulation, meeting fixed charge ratios, and responding to power market and regulatory changes.
b. The residential Desert Saver customer bill, on average, is to maintain an average 0.0–1.0 percent discount versus Southern California Edison’s current non-CARE residential base product average total monthly bill.

7. DCE will provide specific funding for new customer programs in its service territory. This includes a matching contribution supporting the City of Palm Springs’ reach code ordinances, if adopted by the City Council. These would include incentives for homeowners who carry out qualifying energy efficiency upgrades, which would help the City of Palm Springs further reduce its greenhouse gas emissions.

8. Non-energy costs will be estimated with inflationary increases on a budget-line level to reflect budgetary conservatism.

9. Cost allocation and rate setting are based on cost recovery, fairness, and equity.

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

11. DCE continues ongoing collaboration with CalCCA, other CCAs, and public power groups.

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

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

14. DCE follows adopted Board policies and objectives. Full accrual accounting practices are implemented in accordance with US GAAP for enterprise-type funds, and the net position will differ from the cash on hand.

PRIOR YEAR BUDGET TO ACTUALS AND NEW PROPOSED BUDGET
Table 1 presents a comparison between the estimated actual results for the end of fiscal year 2024– 25 compared to DCE’s amended 2024–25 budget. The estimates are based on at least ten months of actual revenue and expenditures through April 2025. For May and June 2025, it includes financial modeling approximations for energy procurement costs and revenue projections as provided by The Energy Authority (TEA). These estimated amounts may differ slightly from year-end actual results.

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Table 1: DCE Prior Year Budget to Actuals and Fiscal Year 2025–26 Proposed Budget The 2024–25 projected actual Total Revenues are lower than the budgeted amounts by approximately 2.1 percent, or $1.4 million. This is primarily due to DCE’s actual retail loads being lower than the budgeted forecasts, particularly for March and April 2025, which were estimated at the time of the final budget amendment. Actual load results for May and June 2025 are still pending, and depending on weather patterns, these results may be higher or lower than currently projected.

Simultaneously, Other Revenues are expected to be approximately $1.5 million higher than budgeted due to factors such as increased interest income and the sale of certain energy portfolio positions during the year. Total Power, Operating, and Non-Operating Costs are anticipated to be below budget by roughly $900 thousand, which is welcome news as certain energy costs have shown downward trends in recent months, and non-power operating costs continue to come in under budget. This trend continues into the budget year 2025–26.

Budgeted Net Retail Sales in 2025–26 are expected to increase by approximately 4.2 percent compared to the estimated actuals for 2024–25. This reflects projected rate adjustments in line with revenue requirements, as well as projected increases in load, which are primarily based on the trend in customer counts over the past three years and the state’s push toward electrification and electric vehicles. Total Revenue in 2025–26 is projected to decline due to a reduction in planned sales of energy portfolio positions. Additionally, investment income has been budgeted more conservatively owing to uncertainties in the interest rate environment, with strong indicators suggesting that yields on investment products in which DCE invests will experience a downward trend in the coming year.

Projected 2025–26 Total Power, Operating, and Non-Operating Costs are expected to decrease by approximately 3.6 percent versus 2024–25 estimated actuals, reflecting a more stable power market augmented by DCE’s wholesale supply hedging activities.

Column1
24–25 Amended Budget24–25 Projected Actuals
24–25 Actuals as % of Budget25–26 Budget25–26 Budget v. 24–25 Actuals25–26 Budget as% of 24–25 Actuals Revenues
Net Retail Sales $ 66,414,515 $ 63,459,624 95.6% 66,127,877 $ $ 2,668,253 104.2% Other Revenues $ 3,515,874 $ 5,027,213 143.0% 986,606 $ $ (4,040,607) 19.6% Total Revenues $ 69,930,389 $ 68,486,836 97.9% 67,114,483 $ $ (1,372,354) 98.0% Power Supply Costs $62,992,626 $62,413,986 99.1% $59,050,459 $(3,363,527) 94.6% Wholesale Power Supply $ 62,992,626 $ 62,413,986 99.1% 59,050,459 $ $ (3,363,527) 94.6% Non Power Operating Costs
DCE Position Support $ 732,132 $ 659,416 90.1% 923,980 $ $ 264,564 140.1% Contract and Other Labor $ 333,075 $ 273,992 82.3% 355,440 $ $ 81,448 129.7% CVAG Related Facilities Support $ 156,145 $ 213,645 136.8% 281,773 $ $ 68,128 131.9% Wholesale Support Services $ 1,545,457 $ 1,534,023 99.3% 1,596,678 $ $ 62,655 104.1% Retail Business Support Activities $ 23,894 $ 17,594 73.6% 33,800 $ $ 16,206 192.1% Other Customer Programs $ 76,628 $ 10,628 13.9% 510,000 $ $ 499,372 4798.6% Other Operating Costs $ 259,545 $ 142,977 55.1% 181,348 $ $ 38,371 126.8% Total Non Power Operating Costs $ 3,126,877 $ 2,852,275 91.2% 3,883,019 $ $ 1,030,744 136.1% Non Operating Costs
RLOC/SBLC Fees $ 50,400 $ 50,400 100.0% 53,925 $ $ 3,525 107.0% Total Power/Op/NonOp Costs $ 66,169,903 $ 65,316,661 98.7% 62,987,403 $ $ (2,329,258) 96.4% Retail Load (MWh, net of losses) 389,993 376,330 96.5% 383,128 6,798 101.8% DRAFT 06/06/2025 9
With respect to the 2025–26 Non-Power Operating Costs, it is projected that these expenses will be approximately $1 million higher than the estimated actual costs for 2024–25. The DCE customer incentive program match with the City of Palm Springs is the largest driver for increased non-power operating costs. The increase is also partly attributed to conservative budgeting practices, as actual expenditures typically fall below their budgeted amounts.

Additionally, several factors are projected to elevate these costs in 2025–26. These include ongoing inflationary pressures on base costs, a rise in banking fees to free funds for greater return on investment, and higher consultant and staff costs required to operate new programs. Moreover, there will be increased legal costs to assist DCE in navigating statewide Resource Adequacy and Mid-Term Reliability, as well as other CPUC requirements, and ensuring fair representation of DCE customers in dealings with SCE. Additionally, membership dues are expected to increase as DCE continues to work with other CCAs on important industry representation and CPUC proceedings.

DCE is staffed by CVAG under an existing staffing agreement. Effective for 2025–26, budgeted salary increases, including those for promotions, averaged about 4 percent, along with a 2.9 percent Cost of Living Adjustment. Additionally, CVAG is implementing a new ERP system, which will enable DCE to fully integrate its contracting, accounts payable and receivable, chart of accounts, and financial reporting systems. This integration will result in streamlined processes and new efficiencies. The initial investment in the ERP system includes several one-time costs, such as consulting fees for ERP implementation and temporary support for staff overseeing the project.

DCE’s unique relationship with CVAG enables DCE to achieve cost savings compared to procuring such a system independently.

Since its inception, DCE has depended on several external consultants and will continue to rely on the expertise of TEA, Don Dame Consulting, Calpine, and other consultants. Furthermore, in line with the original organizational strategies, as more internal expertise is acquired, DCE staff will continue to assimilate a greater share of the direct work effort and reduce the use of consultants where possible and practical. 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, plans were in place for three active members. The original Implementation Plan, created around the formation of the JPA, demonstrated pro forma revenues, expenses, and cumulative reserves at levels that accounted for all three members; however, the City of Palm Springs remains the only population served by DCE. Therefore, these budgeted figures, compared to the pro forma in the Implementation Plan, remain below the targeted levels. This budget document presents the most relevant revenues, expenses, and related cumulative reserve accumulation for DCE.

DRAFT 06/06/2025 10

HIGH-LEVEL BUDGET OVERVIEW
Chart 1 provides a high-level budget overview for fiscal year 2025–26:

Chart 1: Fiscal Year 2025–26 Accrual Budget
The blue area represents total physical power supply costs of approximately $59 million, which comprise about 93 percent of DCE’s total operating costs. The red area represents DCE’s wholesale vendor services charges from TEA, Calpine, and SCE, attributable to CCA, totaling approximately $1.6 million. The yellow slice represents the budget portion of DCE’s non-power operating costs attributable to CCA operations (including CVAG services and facilities utilization), totaling approximately $2.3 million. Non-operating costs are projected to be less than $100 thousand. The green slice shows projected accrual net margins of $4.1 million projected available for reserves (see Chart 2 for further discussion of reserves).

BUDGET SUMMARY DETAIL
Table 2 shows the fiscal year 2025–26 budget summary:

Table 2: Fiscal Year 2025–26 Budget Summary Detail
Line MWh Load: 383,128
1 Revenues FY2025–26 Avg $/Month Avg $/MWh
2 Retail Sales, Net of Uncollectible Accounts $ 66,127,877 $ 5,510,656 $ 172.60 3 Other Revenue $ 986,606 $ 82,217 $ 2.58
4 Total DCE Revenue $ 67,114,483 $ 5,592,874 $ 175.18
5 Power Costs
6 DCE Wholesale Power Supply $ 59,050,459 $ 4,920,872 $ 154.13 7 DCE Operating Costs
8 DCE Position Support $ 923,980 $ 76,998 $ 2.41
9 Contract and Other Labor $ 355,440 $ 29,620 $ 0.93
10 CVAG Related Facilities Support $ 281,773 $ 23,481 $ 0.74 11 Wholesale Support Services (TEA, Calpine, SCE) $ 1,596,678 $ 133,057 $ 4.17 12 Retail Business Support Activities $ 33,800 $ 2,817 $ 0.09 13 Other Customer Programs $ 510,000 $ 42,500 $ 1.33
14 Other Operating Costs $ 181,348 $ 15,112 $ 0.47
15 Total Non Power Operating Costs $ 3,883,019 $ 323,585 $ 10.14 16 Non-Operating Costs
17 RLOC/SBLC Fees $ 53,925 $ 4,494 $ 0.14
18 Total Power/Op/NonOp Costs $ 62,987,403 $ 5,248,950 $ 164.40 19 Estimated FY Net Rev Available for Reserves $ 4,127,079 DRAFT 06/06/2025 11
Table 2, Line 4 shows Total DCE Revenue projected at nearly $67.1 million. DCE Wholesale Power Supply costs on line 6 are projected at about $59 million, while Total Non-Power Operating Costs on Line 15 are roughly $3.9 million. Line 18 shows 2025–26 Total Power, Operating, and Non-Operating Costs of $63 million. By taking the Total DCE Revenue of $67.1 million and subtracting the Total Power, Operating, and Non-Operating Costs of $63 million, Line 19 demonstrates an increase of approximately $4.1 million to DCE’s net position in 2025–26, which is expected to be accumulated for reserves.

It is important to note that the 2025–26 budget results are accrual-based, and actual revenues and available cash reserves fluctuate accordingly and differ from cash-on-hand. Actual revenue cash receipts can lag sales by as much as two months and are estimated to be in the $10 to $12 million range at the end of 2025–26.

PROJECTED CUMULATIVE RESERVES
Chart 2 shows DCE’s estimated accrued margins attained during the fiscal years 2024–25 and projected for 2025–26, 2026–27, 2028–29, and 2029–30. During DCE’s early operational history, it experienced negative margins due to increasing power supply costs and revenue lag. This issue was mitigated by utilizing credit arrangements with River City Bank, guaranteed by the City of Palm Springs. The current credit agreement is expected to be renewed and increased for working capital from $8 million to $20 million, effective before June 30, 2025, although it was not finalized at the time of budget preparation. The discussion of liquidity and reserves does not consider the additional $20 million anticipated to be available to DCE, but it does help improve DCE’s adjusted liquidity ratios as viewed by counterparties and credit agencies.

Chart 2: Residual Margin and Reserves
DRAFT 06/06/2025 12
Analyzing DCE’s current operating results and unadjusted cash position, it is evident that the situation has significantly improved over the past several fiscal years. DCE maintained a positive accrued margin beginning in 2022–23 and continued to augment that reserve throughout 2023–24, concluding the fiscal year with nearly $26 million in reserves. This positive trend continued into 2024–25, with projections indicating further accumulation and maintenance of positive cash reserves, estimated at over $28 million by June 30, 2025.

In December 2024, the Board approved and amended DCE’s financial reserves policy, which created special reserve categories in addition to the accumulation of basic reserves. The special reserves include four reserves: customer programs, procurement, market stabilization, and fixed charge coverage. Special reserves are treated independently from the basic reserve and are not aggregated.

Minimum basic reserves are targeted at 50 percent (180 days) of total power and operating costs, with a maximum basic reserve balance of 75 percent (270 days). The 2025–26 budget projections indicate that DCE is on track to meet the minimum financial reserve levels targeted by its amended financial reserve policy, with an estimated cash reserve balance of approximately $31.5 million by the end of the fiscal year. This accomplishment will enhance DCE’s financial health and stability and signify a critical milestone in DCE’s financial journey.

Given the timing of minimum basic reserve accumulation near the end of the fiscal year, DCE staff are not yet recommending the creation of any Special Reserves in 2025–26. However, during 2025– 26, DCE staff intend to work with the Board of Directors to develop target reserve amounts for any Special Reserve, which shall be identified at its creation. The bands in Chart 2 are illustrative; special reserves may be created before DCE reaches its maximum basic reserve levels.

PROPOSED BUDGET
The proposed budget, along with the following tables, presents comparative data spanning multiple years. Each fiscal year starts on July 1 and ends on June 30. In addition to the 2024–25 year-end estimates, the budget presents the full 2025–26 budget year in total. Also presented are four additional years of projections covering 2026–27, 2027–28, 2028–29, and 2029–30. The projections for the subsequent fiscal years are provided solely for comparative purposes, offering an overview of potential future trends, and are based on current market and business expectations. Revenue requirements for these years are set to include coverage of additional costs to DCE above the minimum included in the FCC ratio calculations provided by S&P.

Future business uncertainties and unknown factors persist both within the current budget year and in the subsequent years. Some of these uncertainties include approval of Southern California Edison’s (SCE) rates and the Power Charge Indifference Adjustment (PCIA, or exit fee), procurement costs, block hedging activity versus day-ahead market participation, load variability, power market price volatility, scarcity of resource adequacy products at commercially reasonable prices, and integration/performance of power purchase agreements.

DRAFT 06/06/2025 13
Table 3: Fiscal Year 2024–25 Total Budget and Projected Year-End Actuals; 2025–26 Proposed Budget; and 2026–27, 2027–28, 2028–29, and 2029-30 Projections
FY2024–25
Amended Budget
FY2024–25
Projected Actuals
FY2025–26 Budget Projected
FY2026–27
Projected
FY2027–28
Projected
FY2028–29
Projected
FY2029–30
Load Particulars
DCE Retail Load (MWh, net of opt-outs + losses) 389,993 376,330 383,128 382,468 383,221 383,221 383,221 Losses (MWh) 26,520 25,590 26,053 26,008 26,059 26,059 26,059 Revenue Particulars
Gross Revenue $ 68,434,664 $ 65,829,485 $ 68,597,382 $ 64,433,257 $ 66,836,461 $ 67,069,649 $ 67,739,364 Less Uncollectable Accounts $ (2,020,149) $ (2,369,861) $ (2,469,506) $ (2,319,597) $ (2,406,113) $ (2,414,507) $ (2,438,617) Net DCE Total Retail Revenue $ 66,414,515 $ 63,459,624 $ 66,127,877 $ 62,113,660 $ 64,430,349 $ 64,655,142 $ 65,300,747 Average Monthly Revenue ($/MWh) $ 170.30 $ 168.63 $ 172.60 $ 162.40 $ 168.13 $ 168.72 $ 170.40 Other Revenue $ 3,515,874 $ 5,027,213 $ 986,606 $ 1,059,824 $ 1,206,980 $ 1,358,822 $ 1,514,779 Other Operating Revenue $ 2,615,874 $ 4,011,374 $ 145,990 $ 150,224 $ 154,580 $ 159,063 $ 163,676 Investment Income $ 900,000 $ 1,015,839 $ 840,616 $ 909,600 $ 1,052,400 $ 1,199,759 $ 1,351,103 Total Revenues $ 69,930,389 $ 68,486,836 $ 67,114,483 $ 63,173,484 $ 65,637,329 $ 66,013,964 $ 66,815,526 Total DCE Power Cost (w/o DCE Direct)
Wholesale Power Supply (Physical Components) $ 62,992,626 $ 62,413,986 $ 59,050,459 $ 51,300,655 $ 53,960,592 $ 53,863,045 $ 54,208,584 TEA Services $ 931,630 $ 924,069 $ 963,228 $ 991,162 $ 1,019,905 $ 1,049,483 $ 1,079,918 Calpine Data Management $ 542,819 $ 539,856 $ 561,450 $ 577,732 $ 594,486 $ 611,726 $ 629,466 SCE Billing Services $ 71,008 $ 70,098 $ 72,000 $ 74,088 $ 76,237 $ 78,447 $ 80,722 Total Wholesale Cost, Accrual (FiMo) $ 64,538,083 $ 63,948,009 $ 60,647,137 $ 52,943,637 $ 55,651,221 $ 55,602,701 $ 55,998,691 Average Wholesale Cost $/MWh $ 165.49 $ 169.93 $ 158.29 $ 138.43 $ 145.22 $ 145.09 $ 146.13 River City Bank Credit Facility
Stand By Letter of Credit Fee $ - $ - $ 53,925 $ 55,489 $ 57,098 $ 58,754 $ 60,458 RLOC Renewal Processing Fees $ 50,400 $ 50,400 $ - $ - $ 57,000 $ - $ - Net RCB Credit Accrual $ 50,400 $ 50,400 $ 53,925 $ 55,489 $ 114,098 $ 58,754 $ 60,458 Estimated Operating Expenses
DCE Staff Costs from CVAG $ 732,132 $ 659,416 $ 923,980 $ 950,775 $ 978,348 $ 1,006,720 $ 1,035,915 Total Salaries $ 510,854 $ 454,310 $ 651,072 $ 669,953 $ 689,382 $ 709,374 $ 729,946 Total Benefits $ 221,278 $ 205,105 $ 272,908 $ 280,822 $ 288,966 $ 297,346 $ 305,969 Contracts / Contract Labor (not incl. elsewhere) $ 333,075 $ 273,992 $ 355,440 $ 365,748 $ 376,355 $ 387,269 $ 398,500 Legal Services $ 92,117 $ 93,704 $ 104,200 $ 107,222 $ 110,331 $ 113,531 $ 116,823 Professional Services1 $ 110,438 $ 82,358 $ 48,340 $ 49,742 $ 51,184 $ 52,669 $ 54,196 Consultants2 $ 130,521 $ 97,930 $ 202,900 $ 208,784 $ 214,839 $ 221,069 $ 227,480 CVAG General & Adminsitrative Support $ 156,145 $ 213,645 $ 281,773 $ 289,944 $ 298,353 $ 307,005 $ 315,908 Retail Business Support Activities $ 23,894 $ 17,594 $ 33,800 $ 34,780 $ 35,789 $ 36,827 $ 37,895 DCE Programs $ 76,628 $ 10,628 $ 510,000 $ 524,790 $ 540,009 $ 555,669 $ 571,784 Office Supplies and Other Expenses $ 259,545 $ 142,977 $ 181,348 $ 186,607 $ 192,019 $ 197,587 $ 203,317 Total DCE Internal Operations Charges $ 1,581,420 $ 1,318,252 $ 2,286,341 $ 2,352,645 $ 2,420,872 $ 2,491,077 $ 2,563,318 Total Non Power Opr Exp (DCE + All Services) $ 3,126,877 $ 2,852,275 $ 3,883,019 $ 3,995,627 $ 4,111,500 $ 4,230,733 $ 4,353,425 Expected Accrual Results
Revenues $ 69,930,389 $ 68,486,836 $ 67,114,483 $ 63,173,484 $ 65,637,329 $ 66,013,964 $ 66,815,526 Power and Operations Costs $ 66,119,503 $ 65,266,261 $ 62,933,478 $ 55,296,282 $ 58,072,092 $ 58,093,778 $ 58,562,009 Non-Operating Costs $ 50,400 $ 50,400 $ 53,925 $ 55,489 $ 114,098 $ 58,754 $ 60,458 Net Margin Avail After Expenses - Accrual $ 3,760,486 $ 3,170,175 $ 4,127,079 $ 7,821,713 $ 7,451,138 $ 7,861,431 $ 8,193,059 Annual Cumulative Accrual Revenues $ 320,606,838 $ 319,163,286 $ 386,277,768 $ 449,451,252 $ 515,088,581 $ 581,102,545 $ 647,918,070 Annual Cumulative Accrual Power/Ops/NonOps Co $ 281,745,125 $ 280,891,866 $ 343,879,269 $ 399,231,039 $ 457,417,230 $ 515,569,762 $ 574,192,229 Cumulative Net Position - Accrual $ 38,861,713 $ 38,271,420 $ 42,398,499 $ 50,220,213 $ 57,671,351 $ 65,532,782 $ 73,725,842

1. Does not include the professional services expenses of SCE which are listed individually in Total DCE Power Cost (w/o DCE Direct) section.

2. Does not include the consultant expenses of TEA, Calpine and CVAG which are listed individually in Total DCE Power Cost (w/o DCE Direct) section.

DRAFT 06/06/2025 14
Table 4: 2025–26 Budget in Total and by Month.

FY2025–26 Budget Jul 2025 Aug 2025 Sep 2025 Oct 2025 Nov 2025 Dec 2025 Jan 2026 Feb 2026 Mar 2026 Apr 2026 May 2026 Jun 2026 Load Particulars
DCE Retail Load (MWh, net of opt-outs + losses) 383,128 52,909 51,418 39,612 30,629 22,549 24,179 23,949 21,196 22,394 23,995 29,401 40,897 Losses (MWh) 26,053 3,598 3,496 2,694 2,083 1,533 1,644 1,629 1,441 1,523 1,632 1,999 2,781 Revenue Particulars
Gross Revenue $ 68,597,382 $ 10,676,831 $ 10,405,672 $ 8,044,530 $ 5,056,110 $ 3,632,440 $ 3,924,647 $ 3,791,693 $ 3,315,075 $ 3,438,174 $ 3,661,054 $ 4,591,696 $ 8,059,459 Less Uncollectable Accounts $ (2,469,506) $ (384,366) $ (374,604) $ (289,603) $ (182,020) $ (130,768) $ (141,287) $ (136,501) $ (119,343) $ (123,774) $ (131,798) $ (165,301) $ (290,141) Net DCE Total Retail Revenue $ 66,127,877 $ 10,292,465 $ 10,031,067 $ 7,754,927 $ 4,874,090 $ 3,501,673 $ 3,783,360 $ 3,655,192 $ 3,195,733 $ 3,314,400 $ 3,529,256 $ 4,426,395 $ 7,769,319 Average Monthly Revenue ($/MWh) $ 172.60 $ 194.53 $ 195.09 $ 195.77 $ 159.13 $ 155.29 $ 156.47 $ 152.63 $ 150.77 $ 148.00 $ 147.09 $ 150.55 $ 189.97 Other Revenue $ 986,606 $ 70,051 $ 163,891 $ 70,051 $ 70,051 $ 79,201 $ 113,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 Investment Income $ 840,616 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 $ 70,051 Accrual Monthly Revenues $ 67,114,483 $ 10,362,516 $ 10,194,959 $ 7,824,979 $ 4,944,142 $ 3,580,874 $ 3,896,411 $ 3,725,243 $ 3,265,784 $ 3,384,451 $ 3,599,308 $ 4,496,446 $ 7,839,370 Total DCE Power Cost (w/o DCE Direct)
Wholesale Power Supply (Physical Components) $ 59,050,459 $ 9,509,404 $ 9,451,369 $ 8,822,704 $ 3,851,664 $ 2,683,303 $ 3,612,158 $ 3,248,373 $ 3,006,726 $ 3,131,001 $ 3,336,364 $ 3,625,479 $ 4,771,915 TEA Services $ 963,228 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 $ 80,269 Calpine Data Management $ 561,450 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 $ 46,788 SCE Billing Services $ 72,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 Total Wholesale Cost, Accrual (FiMo) $ 60,647,137 $ 9,642,460 $ 9,584,426 $ 8,955,760 $ 3,984,720 $ 2,816,359 $ 3,745,215 $ 3,381,429 $ 3,139,783 $ 3,264,057 $ 3,469,420 $ 3,758,536 $ 4,904,971 Average Wholesale Cost $/MWh $ 158.29 $ 182.25 $ 186.40 $ 226.09 $ 130.10 $ 124.90 $ 154.89 $ 141.20 $ 148.13 $ 145.75 $ 144.59 $ 127.84 $ 119.93 0 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - River City Bank Credit Facility FY2025–26 Budget Jul 2025 Aug 2025 Sep 2025 Oct 2025 Nov 2025 Dec 2025 Jan 2026 Feb 2026 Mar 2026 Apr 2026 May 2026 Jun 2026 Net RCB Credit Accrual $ 53,925 $ 53,925 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Estimated Operating Expenses
DCE Staff Costs from CVAG $ 923,980 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 $ 76,998 Total Salaries $ 651,072 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 $ 54,256 Total Benefits $ 272,908 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 $ 22,742 Contracts / Contract Labor (not incl. elsewhere) $ 355,440 $ 25,963 $ 53,550 $ 32,790 $ 29,050 $ 28,550 $ 28,613 $ 25,963 $ 25,463 $ 28,613 $ 25,963 $ 25,463 $ 25,463 Legal Services $ 104,200 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 $ 8,683 Professional Services1 $ 48,340 $ 38 $ 28,125 $ 7,365 $ 3,125 $ 3,125 $ 3,188 $ 38 $ 38 $ 3,188 $ 38 $ 38 $ 38 Consultants2 $ 202,900 $ 17,242 $ 16,742 $ 16,742 $ 17,242 $ 16,742 $ 16,742 $ 17,242 $ 16,742 $ 16,742 $ 17,242 $ 16,742 $ 16,742 CVAG General & Adminsitrative Support $ 281,773 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 $ 23,481 Retail Business Support Activities $ 33,800 $ 2,629 $ 2,629 $ 2,629 $ 2,629 $ 2,629 $ 4,879 $ 2,629 $ 2,629 $ 2,629 $ 2,629 $ 2,629 $ 2,629 DCE Programs $ 510,000 $ - $ - $ - $ - $ - $ 500,000 $ - $ - $ - $ - $ - $ 10,000 Office Supplies and Other Expenses $ 181,348 $ 32,602 $ 4,530 $ 4,530 $ 32,477 $ 4,530 $ 4,530 $ 32,477 $ 4,530 $ 4,530 $ 32,552 $ 4,530 $ 19,530 Total DCE Internal Operations Charges $ 2,286,341 $ 161,673 $ 161,189 $ 140,429 $ 164,636 $ 136,189 $ 638,501 $ 161,548 $ 133,101 $ 136,251 $ 161,623 $ 133,101 $ 158,101 Total Non Power Opr Exp (DCE + All Services) $ 3,883,019 $ 294,730 $ 294,245 $ 273,485 $ 297,692 $ 269,245 $ 771,558 $ 294,605 $ 266,158 $ 269,308 $ 294,680 $ 266,158 $ 291,158 Expected Accrual Results
Revenues $ 67,114,483 $ 10,362,516 $ 10,194,959 $ 7,824,979 $ 4,944,142 $ 3,580,874 $ 3,896,411 $ 3,725,243 $ 3,265,784 $ 3,384,451 $ 3,599,308 $ 4,496,446 $ 7,839,370 Power and Operations Costs $ 62,933,478 $ 9,804,133 $ 9,745,614 $ 9,096,189 $ 4,149,356 $ 2,952,548 $ 4,383,716 $ 3,542,977 $ 3,272,884 $ 3,400,308 $ 3,631,043 $ 3,891,637 $ 5,063,073 Non-Operating Costs $ 53,925 $ 53,925 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Net Margin Avail After Expenses - Accrual $ 4,127,079 $ 504,458 $ 449,345 $ (1,271,210) $ 794,786 $ 628,326 $ (487,304) $ 182,266 $ (7,100) $ (15,857) $ (31,736) $ 604,809 $ 2,776,298 Annual Cumulative Accrual Revenues $ 386,277,768 $ 329,525,802 $ 339,720,761 $ 347,545,739 $ 352,489,881 $ 356,070,755 $ 359,967,166 $ 363,692,409 $ 366,958,193 $ 370,342,644 $ 373,941,952 $ 378,438,398 $ 386,277,768 Annual Cumulative Accrual Power/Ops/NonOps Cos $ 343,879,269 $ 290,749,924 $ 300,495,538 $ 309,591,727 $ 313,741,083 $ 316,693,630 $ 321,077,346 $ 324,620,324 $ 327,893,207 $ 331,293,516 $ 334,924,559 $ 338,816,196 $ 343,879,269 Cumulative Net Position - Accrual $ 42,398,499 $ 38,775,878 $ 39,225,222 $ 37,954,012 $ 38,748,798 $ 39,377,125 $ 38,889,820 $ 39,072,086 $ 39,064,986 $ 39,049,129 $ 39,017,393 $ 39,622,202 $ 42,398,499

1. Does not include the professional services expenses of SCE which are listed individually in Total DCE Power Cost (w/o DCE Direct) section.

2. Does not include the consultant expenses of TEA, Calpine and CVAG which are listed individually in Total DCE Power Cost (w/o DCE Direct) section.

DRAFT 06/06/2025 15
Vendor Name FY26 Budgeted Amount Contract? Start Date End Date Ace Printing 27,400.08 As needed N/A N/A
Arthur J. Gallagher & Co. Insurance 9,000.00 Yes 7/2/2021 Recurring Best Best & Krieger LLP 100,060.08 Yes 9/26/2023 Recurring Burke Rix Communications 28,575.00 Yes 1/1/2024 12/31/2026 CalCCA 122,328.00 Membership 4/16/2018 Annual
Calpine Energy Solutions LLC 561,450.03 Yes 2/26/2018 4/30/2028 Coachella Valley Assoc. of Governments 1,205,753.00 Yes 10/30/2017 10/30/2027 Davis Farr LLP 12,350.00 Yes FY20-21 FY25-26
Donald D. Dame 18,000.00 Yes 4/1/2017 6/30/2027
BRB Law LLP 4,200.00 Yes 5/1/2025 11/15/2025
MRW & Associates, LLC 30,000.00 Yes 8/1/2022 6/30/2025
PersonifyPro 2,499.96 No N/A N/A
PFM Financial Advisors LLC 10,000.00 Yes Pending Pending River City Bank 58,575.00 Yes 2/11/2022 6/1/2028
SOCAL Edison 72,000.00 Yes 4/1/2020 Ongoing
Standard & Poor's Financial Srvc 15,000.00 Yes 5/14/2024 Ongoing The Energy Authority 963,228.00 Yes 1/18/2018 1/22/2027 WREGIS 2,125.00 Membership Inception Ongoing
As of June 2025

DESERT COMMUNITY ENERGY
Summary of Non-Energy Contracted Services
Fiscal Year 2025–2026 Proposed Budget
ITEM 7B

STAFF REPORT
Subject: DCE Mid-Term Reliability Procurement: Resource Adequacy + TB4 with Athos Storage, LLC
Contact: Lisa McNeilly, Director of Energy & Sustainability ([email protected]) Recommendation: Adopt Resolution No. 2025-05, approving a 15-year Resource Adequacy + TB4 Agreement (RA+TB4) with Athos Storage, LLC, for its Riverside County Battery Energy Storage System (BESS) project near Desert Center and authorizing the Executive Director and/or Legal Counsel to make minor modifications before execution of the agreement
Background: As previously reported to the Board, DCE’s consultant, The Energy Authority (TEA), released a Request-for-Proposals (RFP) on July 15, 2024, to satisfy DCE’s Mid-term Reliability (MTR) procurement orders under California Public Utilities Commission (CPUC) Decisions 21-06-035 from June 2021 and 23-02-040 from February 2023. In December 2024, the Board approved a long-term Power Purchase Agreement with San Gorgonio Westwind II, LLC for its north Palm Springs wind project.

This RFP was re-opened on January 24, 2025, for a second round of proposals. Responses to the second round of this RFP were due on February 7, 2025. In March 2025, the evaluation committee, made up of TEA and DCE staff, screened proposals for completeness and scored on a weighted criteria basis. DCE staff and TEA identified a short list of three proposed transactions and conducted interviews with the bidders. Project locations were eastern Riverside County near Desert Center, Orange County, and Imperial County.

With this item, staff is recommending a Resource Adequacy and TB4 Agreement (RA+TB4) with Athos Storage, LLC, a subsidiary of SB Energy (SBE). TB4 is a standard product that can be traded on the Intercontinental Exchange (ICE) commodity trading platform. RA+TB4 is similar to a traditional Energy Storage Agreement (ESA), but shifts the responsibility of optimizing the battery dispatch for maximum economic benefit from DCE to SBE as the key difference. The economics of the TB4 component are based on the price spread between the top four highest-priced hours of the day and the bottom four lowest-priced hours of the day, but SBE retains any price risk based on their operation of the battery. RA+TB4 contracts are becoming increasingly common with project developers shifting their preference away from traditional ESAs to RA+TB4 structures. SBE is a developer with substantial experience in financing, constructing, and operating solar and battery storage projects. SBE has a pipeline of more than 15,000 MW of solar energy projects and 12,000 MWh of storage projects, including several projects in California and Texas.

The Athos Storage project is a proposed lithium-ion battery storage facility, located within Riverside County limits. DCE will be contracting for 43 MW / 172 MW-hour of the capacity at the Athos Storage project to meet its MTR obligations for resource adequacy. The remaining capacity of the battery storage facility will be contracted to other off-takers. The project will be on a parcel zoned for energy-industrial uses and includes solar and related energy infrastructure. The Athos Desert Community Energy Board
June 16, 2025
Storage project will be constructed on SBE-owned land and will tie into the existing high voltage equipment constructed for SBE’s Athos Solar projects. The guaranteed commercial operation date (COD) for the Athos Storage project is February 1, 2027. The project has secured all necessary permits, including a Conditional Use Permit from the Bureau of Land Management, and has executed a transmission interconnection agreement. The project will interconnect to SCE’s 220 kV Red Bluff substation located near Desert Center’s community limits.

Staff would note that the project is a prime example of how DCE can achieve its goal of reinvesting revenues locally to support the community, create jobs and prompt the development of more renewable energy sources for the region. The entire project will be built using a project labor agreement. Athos Storage is estimated to create 100 construction jobs and four full-time jobs.

Approval of the RA+TB4 will help DCE meet its MTR obligations and reduce price volatility in DCE’s power portfolio, thereby providing for increased rate certainty.

As a standalone battery storage system, DCE’s portion of the facility is capable of outputting 43 MW of capacity at four hours of continuous discharge. The Athos Storage project will be DCE’s second storage resource. The project will completely satisfy DCE’s remaining compliance requirement. To count towards MTR compliance, the project needs to apply annually for Interim Deliverability Status (IDS), which is a designation from the California Independent System Operator (CAISO) that assures a project can provide resource adequacy throughout the duration of its IDS allocation. The project will not receive Full Capacity Deliverability Status (FCDS) from CAISO until required transmission upgrades are installed. The project will also help DCE satisfy its compliance requirements under the CPUC’s Resource Adequacy rules.

CPUC Decisions 21-06-035 and 23-02-040 set out annual procurement amounts for load-serving entities such as DCE, with a compliance tranche for long-duration storage projects required to be online no later than June 1, 2028. SBE and two other developers offered projects that were able to meet this deadline. Compared to the other eligible projects, the Athos Storage project closely aligned with DCE’s procurement needs for 2028, considering SBE’s experience in energy project development and operation, as well as the fact that the Athos Storage project is largely located within Riverside County limits.

Staff is recommending the Executive Director be authorized to execute the RA+TB4 contract, which was negotiated by TEA and DCE’s legal counsel with continuous input from DCE staff. The recommended action would also authorize the Executive Director and/or Legal Counsel to make clarifying changes prior to execution. The redacted RA+TB4 contract is available for Board review and approval at the link found at the end of this staff report.

Fiscal Analysis: Under the pricing terms in the RA+TB4 agreement, DCE will pay for the use of its portion of the Athos Storage project at a fixed-price rate per kW-month, with no escalation, for the full 15-year term of the RA+TB4 agreement. DCE is entitled to all product attributes from the facility, including energy, ancillary services, and resource adequacy. The RA+TB4 agreement reflects pricing that is cost-effective in the current market for new energy storage resources and is expected to reduce the overall costs for compliance with the CPUC MTR decisions referred to above. As the COD approaches, the energy storage costs will be included in DCE’s budget.

Attachments:

1. Resolution No. 2025-05

2. Project Site Map

3. Link to ESA: https://desertcommunityenergy.org/wp-content/uploads/2025/06/Athos_RA_TB4.pdf RESOLUTION NO. 2025-05

A RESOLUTION OF THE BOARD OF DIRECTORS OF DESERT COMMUNITY ENERGY APPROVING A 15-YEAR ENERGY STORAGE AGREEMENT WITH

ATHOS STORAGE, LLC
A. Desert Community Energy (“DCE”) is a joint powers authority established on October 30, 2017, for the purpose of implementing community choice aggregation (“CCA”) programs under Public Utilities Code Section 366.2.

B. DCE is required under California Public Utilities Commission (“CPUC”) Mid-Term Reliability procurement requirements, Decisions 21-06-035 and 23-02-040, to procure resources required to be online between 2023 and 2028 to meet electric system reliability needs. To meet the State of California greenhouse gas emissions reduction targets, the CPUC requires all resources procured in satisfaction of its Mid-Term Reliability decisions to be zero-emitting unless they otherwise qualify under renewables portfolio standard eligibility requirements.

C. DCE re-issued a Request for Proposals in February 2025 for projects in satisfaction of the CPUC’s Mid-Term Reliability requirements.

D. DCE has negotiated a 15-year Energy Storage Agreement with Athos Storage, LLC, to meet its Mid-Term Reliability obligations for resource adequacy by securing capacity rights of 43 megawatt / 172 megawatt-hour in a larger proposed lithium-ion battery storage facility with a guaranteed commercial operation date of February 1, 2027.

E. Under Section 2.5.1 of the DCE Joint Powers Agreement, the DCE Board of Directors has the power to make and enter into all contracts, including, but not limited to, service agreements relating to the provision of services necessary to plan, implement, operate and administer the CCA Program and other energy programs including the acquisition of electric power supply and the provision of retail and regulatory support services.

F. DCE staff recommends the approval of the 15-year Energy Storage Agreement with Athos Storage, and the Board has received information and had a discussion regarding the terms of the agreement.

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

Section 1. Approval of Energy Storage Agreement. The Board of Directors hereby approves the 15-year Energy Storage Agreement with Athos Storage, LLC.

Section 2. Delegation to Executive Director. The Board of Directors hereby authorizes the DCE Executive Director to negotiate, finalize, and execute the Energy Storage Agreement in substantially similar form with any minor modifications before execution of the agreement as approved by Legal Counsel.

Section 3. Resolution Effective Date. This resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on June 16, 2025.

ATTEST:
________________________ ________________________
Jeffrey Bernstein, Chair Tom Kirk, Secretary
Desert Community Energy Desert Community Energy
AYES: NAYS: ABSENT: ABSTAIN: _

ITEM 8A DESERT COMMUNITY ENERGY BOARD
FY2024-2025 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
ITEM 8B

STAFF REPORT
Subject: Summary of June 2025 Rate Adjustment
Contact: Lisa McNeilly, Director of Energy and Sustainability ([email protected]) and Don Dame, DCE Energy Consultant
Recommendation: Information
Background: On November 16, 2020, DCE adopted a Rate Stabilization Schedule (RSS). The RSS became effective on December 1, 2020, and was amended by the Board on May 12, 2023, with an effective date of June 1, 2023. A second amendment was approved on March 17, 2025, with an effective date of April 1, 2025. The RSS authorizes staff to adjust DCE retail rates in response to changes in Southern California Edison (SCE) rates and/or the Power Charge Indifference Adjustment (PCIA, or exit fee), State of California regulatory mandates, and to follow DCE Board-approved rate guidelines. The March 17, 2025, RSS amendment enables DCE staff to adjust DCE rates due to revenue and/or cost variances identified through DCE’s budgetary/revenue requirements processes.

The Board’s currently approved RSS Rate Adjustment Guidelines include: 1) designing Desert Saver residential rates within a 0-1% average total bill discount versus SCE’s comparable bundled non-California Alternative Rates for Energy (CARE) base product average total bill; and 2) designing DCE’s 100% Carbon Free residential rates such that DCE meets its annual revenue requirements as identified in DCE’s budget process, as such requirements may change during the budget year. Any single RSS rate adjustment may not exceed a plus or minus five (5.0) percent change to DCE’s average generation rates, without Board approval.

The RSS requires DCE staff to prepare a summary report describing RSS-related rate adjustments and to provide this information at the next scheduled Board meeting following implementation of such adjustments. This staff report provides a summary of DCE’s June 2025 rate adjustments.

June 2025 Rate Adjustment Summary:

Effective June 1, 2025, SCE implemented a system-wide average rate decrease of approximately

1.7% that included an average non-CARE residential customer rate decrease of approximately

2.1%. SCE’s average non-CARE bundled residential customer bill decreased by approximately $3.61 monthly, based on average monthly consumption of 541 kWh.1 For customers enrolled in CARE and Family Electric Rate Assistance (FERA) plans, SCE’s average bundled residential customer bill decreased by about $2.09 monthly inclusive of ongoing CARE/FERA average billing discounts of approximately 32.5% and 18%, respectively. As approved by the California Public 1 June 2025 SCE average monthly bill changes were derived from Table 4 of SCE Advice Letter 5555-E dated May 28, 2025, adjusting average monthly residential energy consumption from 500 to 541 kWh per month.

Desert Community Energy Board
June 16, 2025
Utilities Commission (CPUC), SCE’s revised rates reflect changes to multiple components of its consolidated revenue requirement.

Working within DCE Board-approved financial policies and procedures, the provisions of DCE’s RSS, updated DCE FY2024-2025 revenue requirements, and the concurrence of DCE’s Risk Management Team (RMT), DCE implemented a five percent (5.0%) upward adjustment to DCE’s Carbon Free generation rate effective June 1, 2025, or as soon thereafter as practicable. No changes to DCE’s Desert Saver generation rates were implemented, as the Desert Saver average customer bills remained within Board guidelines.

June 2025 DCE Rate Adjustment Details:
• Effective Date: June 1, 2025 (or as soon thereafter as practicable, upon implementation of DCE's revised rate factors).
• RMT review and concurrence: May 22, 2025.
• Desert Saver average total bill discount compared to SCE’s non-CARE bundled base power product average residential total bill is estimated to be within 0 – 1%. • DCE’s average Carbon Free generation rates increase by five (5.0) percent. • Rate forecast period utilized: July 1, 2024 – June 30, 2025. • Calculations and estimates are based on known and forecast costs and revenues throughout the rate forecast period.
• Any individual customer’s average bill impact may vary depending on the enrolled rate schedule and monthly electricity usage patterns.

Fiscal Analysis: DCE’s rate adjustments are designed to fully recover forecast power supply and operating costs, build financial reserves, address cash flow requirements, maintain a 2.0 Fixed Charge Coverage (FCC) ratio per Standard & Poor (S&P) guidelines, meet DCE’s revenue requirements, and exercise fiscal prudence.

SCE customer retail rates were revised effective June 1, 2025, and DCE coincidently adjusted DCE Carbon Free generation rates. The average monthly bill of SCE bundled non-CARE residential customers decreased about $3.61; DCE non-CARE Desert Saver residential customers average monthly bill also decreased by about $3.61, primarily due to SCE’s decrease in delivery rates. DCE Carbon Free residential customer average monthly bill increased by about $0.92, or about 0.4 percent, based on the combined SCE delivery rate and DCE generation rate changes.

Staff continues to work with the California Community Choice Association (CalCCA) and other Community Choice Aggregators (CCAs) to collectively address cost-effectiveness, legislative matters, and CPUC actions impacting CCAs. Additionally, DCE will continue to highlight DCE’s retail product choices as part of community engagement efforts. DCE’s Desert Saver product continues to be the least cost retail electric service in Palm Springs, and DCE’s Carbon Free product results in zero carbon emissions, augmenting electricity-related climate mitigation and helping the City of Palm Springs achieve its greenhouse gas reduction goals.

COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS SCHEDULE OF MEETINGS FISCAL YEAR 2025/2026

CVAG STANDING

COMMITTEES

DAY TIME JULY
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AUG
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SEPT OCT
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NOV DEC
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JAN FEB MAR
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APR MAY JUN
EXECUTIVE COMMITTEE Last Monday 4:30 p.m. - - 29 - H
Dec 1 - 26 23 - 27 H June 1 29
TRANSPORTATION COMMITTEE 1st Monday 10:00 a.m. - H
Aug 25 - 3 - 5 2 - 6 4 1

COACHELLA VALLEY
CONSERVATION COMMISSION 2nd Thursday 10:30 a.m. - - 11 - 13 - 8 12 - 9 14 11 DESERT COMMUNITY ENERGY 3rd Monday 3:00 p.m. 21 18 15 20 17 - H Jan 12
H
Feb 9 16 20 18 15

ENERGY AND SUSTAINABILITY

COMMITTEE
2nd Thursday 12:00 p.m. - - 11 - 13 - 8 12 - 9 14 11
PUBLIC SAFETY COMMITTEE 2nd Monday 9:00 a.m. - - 8 - 10 - 12 9 - - 11 8 HOMELESSNESS COMMITTEE 3rd
Wednesday 10:00 a.m. - - 17 - 19 - 21 18 - 15 20 17
GENERAL ASSEMBLY Last Monday
in June 6:00 p.m. - - - - - - - - - - - 29
H = Holiday * = Special Meeting AGENDAS CAN BE FOUND AT: www.cvag.org. UPDATED: June 3, 2025 PLEASE NOTE: When it becomes necessary to have a special meeting or to change the date of a meeting, committee members will be alerted and the change will be noted on the CVAG website calendar.

Desert Community Energy Board of DirectorsJune 16, 2025

Desert Community Energy Board of Directors
June 16, 2025