Agenda packet — Desert Community Energy Board of Directors, March 23, 2026

DESERT COMMUNITY ENERGY

SPECIAL MEETING AGENDA
Monday, March 23, 2026
3:00 p.m.

Palm Springs City Hall
Large Conference Room
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
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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 ADA ACCESSIBLE.

ACTION MAY RESULT ON ANY ITEMS ON THIS AGENDA.

1. CALL TO ORDER – Chair Jeffrey Bernstein, City of Palm Springs Roll Call P4
Pledge of Allegiance
Agenda Modifications
Conflict of Interest Disclosure

2. 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.

3. BOARD MEMBER / EXECUTIVE DIRECTOR COMMENTS

4. DISCUSSION / ACTION
A. Fiscal Year 2025-26 Budget Amendment & Fiscal Year 2026-27 Projection– P5 Claude Kilgore
Recommendation: Approve the mid-year budget amendment for Fiscal Year 2025-26 B. Additional Authorizations for Pre-Pay Bond Financing – Lisa McNeilly and Claude Kilgore P10 Recommendation: Authorize the Executive Director to take additional steps to establish pre-payment bond financing including:

1.) Execute, in partnership with Redwood Coast Energy Authority (RCEA), an agreement with Goldman Sachs to fulfill the roles of Counterparty Supplier and Intermediary Bank;

5. INFORMATION
A) Attendance Record P55
B) Conflict of Interest Guidance P56
C) Summary of January 2026 Rate Adjustment P71
D) Community Advisory Committee Update P73
E) 2025 GO 156 Annual Supplier Diversity Report P74
F) Unaudited Year-to-Year Financial Report as of September 30, 2025 P92 G) Unaudited Year-to-Year Financial Report as of December 31, 2025 P95 H) DCE’s Quarterly Investment Report through September 30, 2025 P98 I) DCE’s Quarterly Investment Report through December 31, 2025 P99 J) Update on Calpine Community Energy’s Community Benefits Grant P100

6. 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.

7. ANNOUNCEMENTS
The next DCE Board meeting will be held April 20, 2026, at 3:00 p.m. at the Large Conference Room at Palm Springs City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

8. 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
ITEM 4A
Desert Community Energy Board
March 23, 2026

STAFF REPORT
Subject: Fiscal Year 2025-26 Budget Amendment & Fiscal Year 2026-27 Projection Contact: Claude T. Kilgore, Director of Finance ([email protected]) Recommendation: Approve the mid-year budget amendment for Fiscal Year 2025-26 Background: In June 2025, the Board approved DCE’s Fiscal Year 2025-26 (FY26) Budget. DCE operates on a fiscal year that starts on July 1 and runs through June 30 each year. When DCE’s Fiscal Year 2025-26 budget was initially developed in the spring of 2025, the best-known information available at the time was used for DCE’s revenues and expenses, using a mix of publicly filed as well as internally projected information. The annual budget is a guiding document, which allows for flexibility and adjustments to accommodate current business needs and updated projections. Budget reports are presented to the Board on an ongoing basis to provide ongoing oversight of public funds, relate current events and upcoming activities, and request adjustments based on new information.

On November 20, 2025, DCE staff provided the Board with an update on various factors affecting DCE’s budget and an overview of the estimated impacts to the FY26 budget, both positive and negative. Most significantly, SCE’s 2026 Energy Resource Recovery Account (ERRA) update in October 2025 included drastic increases to the Power Charge Indifference Adjustment (PCIA, or exit fee)and changes to the market price benchmark (MPB), directly affecting DCE’s revenue.

With this item, DCE staff seek to amend the FY26 budget. This is a similar budgeting approach to what the Board approved last year. This budget amendment uses actual energy cost and revenue data for the first eight months of the fiscal year (July 2025 through February 2026) and updated projections for the remaining four months (March through June 2026). Non-energy costs have been updated for the first seven or eight months depending on the line item and the original budget amounts have been used for the remaining months. Given the nature of projections, these figures are subject to change and may even be brought back to the Board for further revision at a future date.

The following items explain key differences between original and amended budget figures:

A) Net DCE Total Retail Revenue (line 7) – Retail revenue is projected to decrease from original budget amounts by 16.22%, or $10.7 million. Several factors contribute to this decline. Most significantly is the increase in PCIA (or exit fee) charged by SCE to all Community Choice Aggregator (CCA) customers, including those served by DCE. The fee recovers SCE’s above-market costs for power resources contracted before the departure of the CCA customers and can vary widely from year to year because of the complexity of the inputs that determine the fee.

The PCIA for DCE is positive when the market value of SCE’s power resources and all its products is lower than the original costs of the underlying energy contract; a positive PCIA reduces DCE’s retail revenue. The market value of SCE’s power resources is determined via three MPB, which are calculated per recent energy market prices, recent historical values of Renewable Portfolio Standard (RPS) transactions, and recent historical values of Resource Adequacy (RA) transactions. The PCIA can be negative when the opposite is true, and a negative PCIA increases DCE’s retail revenue. In recent years, the PCIA has been negative, which benefited DCE’s financial results. However, this trend has now shifted to a less favorable position.

In June 2025, the California Public Utilities Commission (CPUC) released Decision 25-06-048 that adopted changes to the calculation of the RA benchmarks. Aiming to reduce the rate volatility caused by the PCIA, this Decision reduced the RA MPBs from three to one and required multiple years of data to be utilized in the RA MPB calculation. This calculation methodology adjustment was implemented as of the Final 2025 and Forecast 2026 RA MPBs. The impact of this change was significantly lower Final 2025 and Forecast 2026 RA MPBs, which raised the PCIA for DCE customers by approximately 300%, flipping it from positive to negative. This switch will reduce DCE revenues, since DCE generation rates will be reduced by the PCIA rate increase. This change reduced DCE's remaining projected revenues for FY 2025-26 and its projected revenues for FY 2026-27.

Across California, many other CCAs are experiencing similar difficulties due to changes in PCIA.

Some are raising rates, while others face expenses that surpass their revenues and are turning to reserves to cover the gap. DCE staff has exercised prudent management of the situation, and the budget amendment demonstrates a commitment maintaining current rates. Concurrently, DCE is projected to maintain robust fixed charge coverage ratios, which will be discussed in greater detail later.

Another major factor contributing to the decline in projected revenue was lower-than-expected load results for the first eight months of the fiscal year. Electricity use in DCE territory can be difficult to predict, especially for the hot summer months. The total load can be very dependent on weather, but predictions about the pace of electrification, economic activity, and other factors also impact forecasts. The relative percentage of Carbon Free customers can also impact forecasted revenues. Actual use fluctuates from year to year, with June and September being the most difficult to predict. Recently, retail revenues have been noticeably below forecast, although the trend reversed for September, October, and January but not enough to compensate for the months where load came in below forecast. DCE staff continues monitoring this trend and are working to understand all the factors behind the discrepancies. The load projections to be used in the FY 2026-27 budget will be finalized in April 2026. If a declining load trend were to continue for the remainder of FY 2025-26, retail revenue projections could decrease up to $3 million.

The proposed budget amendment assumes that DCE’s current rates will be sustained through June 30, 2026. With this budget amendment, DCE staff does not recommend any rate increase or decrease to the current generation rates; however, adjustments may be necessary under the Rate Stabilization Schedule throughout the remainder of the fiscal year. This is especially true if SCE changes its rates and adjustments are required for Desert Saver to preserve its discount relative to SCE.

B) Wholesale Power Supply (line 14) – The budget amendment shows a significant decrease in power costs from the originally budgeted figures, representing a 11.55% or $6.8 million drop.

This is welcome news after extreme highs realized in recent years. Resource Adequacy (RA or capacity) and the renewable energy markets have experienced declining price trends throughout 2025 and into 2026. Since January 2025, market prices for RA and renewable energy have decreased by nearly 15% on average. These downward trends are expected to contribute to lower Final 2026 MPBs for both Renewable Portfolio Standard RA values, which are scheduled to be released in October 2026. As a result, certain DCE RA and renewable contract costs are expected to decline in 2026. While changes in the MPBs and the market value of power resources increase the PCIA and reduce revenue, these have the inverse effect on costs. The lower RA MPB will have a beneficial impact on DCE’s power costs, since some of DCE’s RA purchases are priced based on the RA MPB. Similarly, some of DCE’s Renewable Energy Credit (REC) purchases are priced based on the RPS MPB, so a similar reduction in the RPS MPB also benefits DCE’s power costs. Finally, DCE’s power procurement strategy balances risk reduction with market price trends. During the past calendar year, DCE has been able to execute periodic sales of surplus RECs and surplus RA at prices higher than the current MPBs. Given the lagged nature of the MPB, future prices are currently lower than the MPB, limiting opportunities for additional net revenue generating sales. DCE staff and its consultants continue to attempt power procurement optimization by marketing surplus attributes when possible.

Another recent CPUC Decision (D 25-09-007) eliminates the need to procure short-term “bridge” contracts to cover delays in meeting certain MTR requirements. DCE staff anticipate additional MTR requirements in the future beyond what has already been procured, but the extent of the budget impacts is not known at this time.

C) Other Updates – Smaller adjustments to the budget include reducing the expected expense for uncollectable accounts (line 6) by about $400,000 as customer payments on aging accounts have been more successful than originally budgeted. Total DCE internal operations charges (line 38), saw a decrease of about $660,000 as actual costs for things like staff time and benefits contracted through the Coachella Valley Association of Governments (CVAG) for the first half of the fiscal year came in under budget and customer program matches expenses have been budgeted out to the following fiscal year as details and timing are still being finalized with DCE counterparts.

The proposed budget amendment also is consistent with the recommendations made by S&P Global Ratings Inc. (S&P) to DCE when it issued its report providing DCE with an investment-grade credit rating opinion of BBB. DCE should provide rate-setting flexibility to ensure revenue requirements are met, which is measured in the form of fixed charge coverage ratios (FCC). At the same time, S&P indicated that DCE must remain competitive and ensure a low and stable customer opt-out rate.

Therefore, DCE must balance these priorities to ensure fiscal responsibility by meeting its revenue requirement yet prevent rate shock and losing customers.

DCE calculates its FCC as net revenue plus 50% of fixed power purchase agreement (PPA) expenses divided by 50% of fixed PPA expenses. The budget amendment demonstrates a FCC of 1.78. When S&P initially delivered its report, it indicated preference for DCE to maintain its FCC above 2.0 for the coming years. DCE successfully achieved this metric in fiscal year 2024-25, with DCE ending the year on June 30, 2025 with a FCC of 2.49. While the current projected FCC for FY26 of 1.78 is less than 2.0, ratios above 1.6 are still considered extremely strong. In addition, DCE staff will be tracking the final Energy Resource Recovery Account (ERRA) forecast and RA and RPS MPBS, which also will impact DCE’s final FCC results. While it was not possible to make an update to the budget based on these figures, looking at fiscal year 2025, they came in lower than budgeted and positively impacted DCE’s bottom line. DCE and its consultants including The Energy Authority (TEA) are closely tracking the recent geopolitical developments and the resulting volatility in oil and natural gas markets. The TEA team is actively assessing potential impacts to delivered cost of energy for our clients, including DCE, and remain committed to DCE’s disciplined, ratable hedging approach to help manage exposure through periods of market uncertainty.

Fiscal Year 2026-27 Projection
The budget amendment also includes an early projection of the Fiscal Year 2026-27 (FY27) budget.

This preview is preliminary and numbers will be finalized in the coming months prior to the Board’s consideration of adoption in June. Key factors influencing the FY27 budget include:

A) PCIA – The 2027 PCIA assumptions included in the budget preview are per the most recent available run through of the California Community Choice Association (CalCCA) forecasting model. DCE staff expects to learn more about the 2027 PCIA after SCE releases the 2027 Spring ERRA, which is expected around May 15, 2026. However, staff anticipates that the PCIA will probably increase from current assumptions, leading to lower revenue forecasts for FY27 than currently previewed.

B) Energy prices –Forward energy prices for the latter half of calendar year 2026 into 2027 are at an increase in comparison to FY 2025-26 energy prices driving an increase in projected wholesale energy costs for FY27.

C) RA prices – Forward Resource Adequacy (RA) market prices are displaying a slight increasing trend into calendar 2027, primarily in the summer months. However, DCE’s FY 2026-27 RA costs are projected to be much lower than the prior fiscal year. This is because summer 2025 RA procurement prices were significantly greater than current forecasted summer RA procurement prices.

D) REC prices – Forward Renewable Energy Credit (REC) prices are also displaying a slight increasing trend into calendar year 2027 primarily due to expectations of greater procurement activity resulting from 2027 being the final year in Renewable Portfolio Standard (RPS) Compliance Period 5.

E) Other factors:
a. DCE will update its FY27 load forecast in April, likely lowering projected revenue. b. DCE’s 2027 RA obligation will be finalized this year, which could have an impact on DCE’s RA procurement costs.
c. The May ERRA forecast is expected to be released on May 15, 2026 and will provide the first look at SCE’s 2027 rates which impact Desert Saver and competitiveness of Carbon Free.
d. The 2026 Final RA MPB, the 2026 Final RPS MPB, the 2027 Forecast RA MPB, and the 2027 Forecast RPS MPB (to be released in October 2026) are anticipated to positively impact certain contractual RPS and RA costs.

Staff recommends the Board approve the mid-year budget amendment for Fiscal Year 2025-26.

Fiscal Analysis: The costs of the mid-year budget amendment are incorporated into the amendment itself. If approved, DCE’s Fiscal Year 2025-26 net position is expected to increase by approximately $2.9 million dollars based on the factors described above, a decrease from what was originally budgeted by about $1.2 million.

Attachment: Proposed Fiscal Year 2025-26 Amended Budget and Fiscal Year 2026-27 Projection FY2025–26 Budget
Original
FY2025–26 Budget
Amended
Dollar Change Percentage
Change
Projected FY2026–27
1 Load Particulars
2 DCE Retail Load (MWh, net of opt-outs + losses) 383,128 362,998 (20,130) $ (5.25%) 382,468 3 Losses (MWh) 26,053 23,731 (2,322) $ (8.91%) 25,004
4 Revenue Particulars
5 Gross Revenue 68,597,382 $ 57,469,590 $ (11,127,792) $ (16.22%) 55,641,512 $ 6 Less Uncollectable Accounts (2,469,506) $ (2,068,905) $ 400,601 $ 16.22% (2,003,094) $ 7 Net DCE Total Retail Revenue 66,127,877 $ 55,400,685 $ (10,727,192) $ (16.22%) 53,638,418 $ 8 Average Monthly Revenue ($/MWh) 172.60 $ 152.62 $ (20) $ (11.58%) 140.24 $ 9 Other Revenue 986,606 $ 2,850,027 $ 1,863,421 $ 188.87% 754,646 $ 10 Other Operating Revenue 145,990 $ 1,932,195 $ 1,786,205 $ 1223.51% 20,380 $ 11 Investment Income 840,616 $ 917,832 $ 77,216 $ 9.19% 734,266 $ 12 Total Revenues 67,114,483 $ 58,250,712 $ (8,863,771) $ (13.21%) 54,393,064 $ 13 Total DCE Power Cost (w/o DCE Direct)
14 Wholesale Power Supply (Physical Components) 59,050,459 $ 52,232,107 $ (6,818,352) $ (11.55%) 42,501,668 $ 15 TEA Services 963,228 $ 895,012 $ (68,216) $ (7.08%) 921,862 $ 18 Calpine Data Management 561,450 $ 558,637 $ (2,813) $ (0.50%) 575,396 $ 19 SCE Billing Services 72,000 $ 59,342 $ (12,658) $ (17.58%) 61,122 $ 20 Total Wholesale Cost, Accrual (FiMo) 60,647,137 $ 53,745,098 $ (6,902,039) $ (11.38%) 44,060,049 $ 21 Average Wholesale Cost $/MWh 158.29 $ 148.06 $ (10) $ (6.47%) 115.20 $ $ -
22 River City Bank Credit Facility
23 Stand By Letter of Credit Fee $ 53,925 $ - $ (53,925) (100.00%) $ - 24 RLOC Renewal Processing Fees - $ 2,705 $ 2,705 $ 100.00% 2,786 $ 25 Net RCB Credit Accrual 53,925 $ 2,705 $ (51,220) $ (94.98%) 2,786 $ 26 Estimated Operating Expenses
27 DCE Staff Costs from CVAG 923,980 $ 709,732 $ (214,248) $ (23.19%) 731,024 $ 28 Total Salaries 651,072 $ 500,105 $ (150,967) $ (23.19%) 515,108 $ 29 Total Benefits 272,908 $ 209,627 $ (63,281) $ (23.19%) 215,916 $ 30 Contracts / Contract Labor (not incl. elsewhere) 355,440 $ 321,763 $ (33,677) $ (9.47%) 331,416 $ 31 Legal Services 104,200 $ 91,212 $ (12,988) $ (12.46%) 93,949 $ 32 Professional Services1 $ 127,411 48,340 $ 79,071 $ 163.57% 131,233 $ 33 Consultants2 $ 103,140 202,900 $ (99,760) $ (49.17%) 106,234 $ 34 CVAG General & Adminsitrative Support 281,773 $ 321,367 $ 39,594 $ 14.05% 331,008 $ 35 Retail Business Support Activities 33,800 $ 22,221 $ (11,579) $ (34.26%) 22,888 $ 36 DCE Programs 510,000 $ 60,000 $ (450,000) $ (88.24%) 501,800 $ 37 Office Supplies and Other Expenses 181,348 $ 182,067 $ 719 $ 0.40% 187,529 $ 38 Total DCE Internal Operations Charges 2,286,341 $ 1,617,150 $ (669,191) $ (29.27%) 2,105,664 $ 39 Total Non Power Opr Exp (DCE + All Services) 3,883,019 $ 3,130,141 $ (752,878) $ (19.39%) 3,664,045 $ 40 Expected Accrual Results
41 Revenues 67,114,483 $ 58,250,712 $ (8,863,771) $ (13.21%) 54,393,064 $ 42 Power and Operations Costs 62,933,478 $ 55,362,248 $ (7,571,230) $ (12.03%) 46,165,713 $ 43 Non-Operating Costs 53,925 $ 2,705 $ (51,220) $ (94.98%) 2,786 $ 44 Net Margin Avail After Expenses - Accrual 4,127,079 $ 2,885,759 $ (1,241,320) $ (30.08%) 8,224,564 $ 45 Annual Cumulative Accrual Revenues 386,277,768 $ 380,843,223 $ (5,434,545) $ (1.41%) 435,236,287 $ 46 Annual Cumulative Accrual Power/Ops/NonOps Cost$ 338,051,105 343,879,269 $ (5,828,164) $ (1.69%) 384,219,605 $ 47 Cumulative Net Position - Accrual 42,398,499 $ 42,792,118 $ 393,619 $ 0.93% 51,016,682 $ This budget supercedes the relevant figures in the orginally adopted fiscal year 2025-26 budget approved by the DCE Board of Directors in June 2025.

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. 23-Mar-26
Desert Community Energy
Fiscal Year 2025-26 Amended Budget & Fiscal Year 2026-27 Outlook ITEM 4B

STAFF REPORT
Subject: Additional Authorizations for Pre-Pay Bond Financing Contact: Lisa McNeilly, Director of Energy & Sustainability ([email protected]) and Claude T. Kilgore, Director of Finance ([email protected]) Recommendation: Authorize the Executive Director to take additional steps to establish pre-payment bond financing including:

1.) Execute, in partnership with Redwood Coast Energy Authority (RCEA), an agreement with Goldman Sachs to fulfill the roles of Counterparty Supplier and Intermediary Bank;

2.) Adopt Resolution No. 2026-01, authorizing DCE to join the California Community Choice Financing Authority (CCCFA), as the bond issuer, at a cost of $50,000 for the membership entry fee and up to $20,000 to cover a transaction fee for issuance of the bonds; and
3) Select and negotiate an agreement with a Tax and Bond counsel at a total, shared cost not to exceed $350,000
Background: In November 2025, the Board authorized the Executive Director to take the necessary steps to establish a pre-payment bond financing transaction (pre-pay), in partnership with Redwood Coast Energy Authority (RCEA), as part of the broader efforts to address DCE costs and long-term financial stability. Renewable energy pre-payment bonds are a way to reduce the cost of renewable energy and provide savings to customers under existing U.S. Treasury Regulations available to public entities like Community Choice Aggregators (CCAs), including DCE. Such bonds have been in use for years by municipal utilities to contract for natural gas or electricity at discounted prices, and used by CCAs since 2021 to achieve substantial savings for customers. In general, the costs of long-term renewable energy contracts (like Power Purchase Agreements or PPAs) are pre-paid for a supply of electricity from a taxable entity, and the CCA uses tax-exempt municipal bonds to fund that prepayment.

As part of the November authorization, the Board authorized an agreement with John Norman and Tyler Noble from Municipal Capital Markets Group, Inc. (MCM) for a total, shared cost not to exceed $350,000. Such a fiduciary was needed to assist with bond pricing, research and analytics, disclosure documents, negotiating commodity and interest rate swaps, and guaranteed investment contracts. In January 2026, Mr. Norman and Mr. Noble notified staff that they were joining MG Advisory Group (MG), and an agreement between DCE, RCEA, and MG was executed later that month, under the same terms as previously negotiated with MCM. the Executive Director was also authorized to execute a contract for specialized legal services. As authorized by the Board, staff worked with RCEA and are now working to finalize an agreement with Chapman and Cutler LLP (Chapman) for these specialized legal services. Chapman had been procured by San Diego Community Power (SDCP) for similar services in August 2024 and, because DCE’s Procurement Policy & Procedures allows the use of cooperative purchasing (“piggybacking”), staff at DCE and RCEA worked to secure the services under the same terms secured by SDCP two years ago. An agreement is being finalized and the total, shared cost of the agreement as Desert Community Energy Board
March 23, 2026
previously authorized by the Board will not exceed $300,000 and will be contingent on completing the pre-pay.

With these steps well under way, staff is now recommending additional authorization for the related to completing a pre-pay transaction. This includes recommending the Board provide additional authorizations to the Executive Director to engage with a pre-pay Counterparty Supplier; adopting a resolution to become a member of the California Community Choice Financing Authority (CCCFA); and engaging a Tax and Bond Counsel. Additional steps to advance the pre-pay transaction would come back to the Board for additional approvals at a future meeting.

The first recommended action would establish an agreement with Goldman Sachs. On February 9, 2026, DCE and RCEA released a Request for Proposals (RFP) for Prepay Counterparty for an Energy Prepayment Transaction. A quantitative addendum was released on February 17 with assumptions for a sample transaction cash flow result. Four proposals were received by the deadline and evaluated by the selection panel, which included an equal number of members from DCE and RCEA. Staff interviewed two applicants – Goldman Sachs and Morgan Stanley – and contacted references to better understand the services offered and the proposed fee structures.

Goldman Sachs offers a more diverse recipient pool, the lowest fees, and the larger back-office team to provide support after the pre-pay closing. Staff is now recommending the Board’s approval. The fee structure for pre-pay counterparties is complex, and the agreement with Goldman Sachs includes an Underwriting Fee of $4.50 per $1,000 of par amount and an Energy Supply Fee of $1.10 per MWh. Additional fees are dependent in part on selection of the Funding Recipient (FR), and total savings from the pre-pay transaction will be net of all Counterparty fees and contingent upon completion of the pre-pay. The total costs will be better understood once the CCAs are further along in the process and will be shared with the Board before final approval of the pre-pay transaction. These costs will be covered by bond proceeds.

The second recommended action involves membership CCCFA, a California joint powers authority founded by five CCAs, serves as a low-cost conduit to issue pre-pay bonds. Based on research by staff, it is currently the only viable option for pre-pay issuance for DCE. CCCFA has issued all prepay bonds to date for California CCAs. The bonds issued are off-balance sheet and non-recourse to the prepay participant (in this case, DCE), while also remaining ratings neutral to positive. There is no obligation to pay for debt issued, only to pay for power delivered. In this structure, CCCFA issues tax-exempt bonds and uses the bond proceeds to secure a 30-year energy supply from the Pre-paid Supplier. The Pre-paid Supplier then lends these proceeds to an intermediary bank at a taxable rate. The Pre-paid Supplier pays energy sellers the full contract price, while CCCFA charges the CCA a discounted rate. The difference is typically about eight to 10 percent or more depending on market conditions, resulting in a discount for the CCA. Banks accept this discount since they gain underwriting fees and other benefits from the deal.

CCCFA requires that a CCA join CCCFA as an Associate Member for CCCFA to issue Pre-payment Bonds for the CCA. To join CCCFA, the DCE Board must adopt a resolution approving the execution and delivery of the CCCFA Joint Powers Agreement. DCE will also need to pay an initial membership fee of $50,000, and agree to pay the CCA’s equal share of annual costs to CCCFA to cover certain general and administrative expenses of CCCFA not otherwise covered by other fees. Following receipt of the signed resolution, CCCFA will include on the agenda for the next available CCCFA Board meeting the approval of the CCA’s membership and the execution of the applicable amendment of the CCCFA Joint Powers Agreement. In addition to the resolution and agreement language, staff is providing additional information on the CCCFA procedures as an attachment to this staff report.

The third recommended action allows DCE and RCEA to engage Tax and Bond Counsel. The role of Bond Counsel is unique to municipal finance and is the entity that prepares documents like the Trust Indenture that governs the terms of the pre-payment bonds, the cash flows, and the security for the payment of the pre-payment bonds. At closing, Bond Counsel delivers an opinion that the investors rely on that the pre-payment bonds are validly issued and secured. The Bond Counsel also usually serves as Tax Counsel, providing an opinion that the interest on the Prepayment bonds is tax-exempt. Counsel can be engaged by CCCFA at the request of the CCA, but DCE staff is recommending that the Board authorize selecting a Tax and Bond Counsel at a total, shared cost not to exceed $350,000, in order to expedite the process for completing the pre-payment transaction. These costs will also be contingent on closing and paid out of the bond proceeds.

In summary, staff is recommending the Executive Director be authorized to engage with a pre-pay counterparty, become a member of CCCFA and engage a Tax and Bond Counsel. A future staff report will outline the remaining steps in the pre-payment bond financing process, including necessary decisions about the deal size, cash flow savings and other components of the final bond package, and the on-going work to apportion costs of the pre-pay equitably with RCEA.

Fiscal Analysis: The cost of the recommended agreement for the Tax and Bond Counsel is for a shared, not-to-exceed amount of $350,000. This cost, along with the fees for the Counterparty Supplier will be split between DCE and RCEA at an equitable rate as to be determined by transaction volume of each respective CCA or similar method. The cost of CCCFA membership includes the $50,000 membership entry fee, up to a $20,000 transaction fee, and a share of annual costs to CCCFA to cover certain general and administrative expenses not covered by other fees. These costs are contingent on the transactions closing and payable out of the deal proceeds.

Prepayment financing is a long-term financing strategy that allows tax-exempt entities such as CCAs to achieve substantial savings on power procurement by capitalizing on the spread between tax-exempt and taxable interest rates. DCE staff’s primary objective in recommending a prepayment financing structure is to secure meaningful reductions in energy procurement costs.

Based on preliminary analysis, the transaction is projected to generate approximately $800,000 to $1 million in annual savings, though actual results will depend on the energy contracts included in the transaction and prevailing market conditions. The targeted annual savings will serve as a critical factor during negotiations with the counterparty. DCE staff expect to provide a more refined estimate at a subsequent board meeting as discussions advance.

Any discount in energy costs achieved through the prepayment structure will flow directly into DCE’s financial position. Fees for service providers are contingent on a successful close and will be paid from bond proceeds, resulting in no out-of-pocket costs for DCE, except as otherwise noted. If the transaction does not proceed, DCE’s only direct expenses would be the CCCFA membership and general administrative fees (approximately $75,000) and rating agency fees (estimated at $250,000 to be split with RCEA). Once the deal closes, DCE may have to issue, through bond proceeds, cash as a member of CCCFA to cover operational costs. In one recent year there was no cash call, in another there was a cash call of about $30,000 to each member.

CCCFA currently has a working group of founding members evaluating how to most equitably share the burden of these cash calls on a pro-rata basis but for now they are per member. As an associate member of CCCFA, DCE would not be able to participate materially in these conversations or have a deciding vote. CCCFA’s fiscal year 2026 budget estimates a cash call of about $33,000 to members.

Staff would add that the debt obligation is non-recourse to DCE. This means DCE only pays for energy when it is delivered. DCE has no liability for bond repayment or other debt obligations in the event of a default by the Prepaid Supplier or the bank. In addition, rating agencies do not treat prepayment transactions as debt or fixed costs for DCE.

Attachments:

1. Resolution 2026-01

2. CCCFA Joint Powers Agreement

3. CCFA’s Summary of Policies and Procedures for the Issuance of Renewable Energy Prepayment Bonds
RESOLUTION NO. 2026-01

A RESOLUTION OF THE BOARD OF DIRECTORS OF DESERT COMMUNITY ENERGY

TO APPROVE AND AUTHORIZE THE EXECUTION OF A JOINT POWERS AGREEMENT

PROVIDING DESERT COMMUNITY ENERGY ASSOCIATE MEMBERSHIP TO

THE CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY TO

ISSUE MUNICIPAL BONDS FOR ENERGY PREPAY TRANSACTIONS
WHEREAS, the pursuit of an energy prepayment on a tax advantaged basis enables a meaningful power procurement cost savings opportunity in which Desert Community Energy (DCE) can utilize its tax-exempt status to access the municipal bond market to prepay existing energy supply contracts at a discounted rate;
WHEREAS, long-term power pre-pay transactions utilize the municipal bond market and therefore DCE requires a bond issuing entity to participate;
WHEREAS, the California Community Choice Financing Authority (CCCFA) is a joint exercise of powers agency established under California Government Code section 6500 et seq. (the JPA Law) and a Joint Powers Agreement (the CCCFA Joint Powers Agreement) among various California Community Choice Aggregators (CCAs) for the purpose of undertaking the financing and refinancing of energy prepayments that can be financed with tax advantaged bonds on behalf of one or more of its members by, among other things, issuing or incurring bonds and entering into related contracts;

WHEREAS, DCE is a community choice aggregator, as such term is defined in Section 331.1 of the Public Utilities Code of the State of California, that is a public agency, as such term is defined in the JPA Law, which has implemented a CCA program pursuant to Section 366.2 of the Public Utilities Code, and possesses the power to purchase and sell electric energy and enter into related contracts for such purposes and, therefore, DCE is eligible to become a member of CCCFA under the CCCFA Joint Powers Agreement;
WHEREAS, for CCCFA to finance or refinance energy prepayments and issue bonds on behalf of DCE, DCE must become an associate member of CCCFA;
WHEREAS, DCE has determined that CCCFA is the best-fit least-cost option for a bond issuing entity to enable DCE to participate in one or more energy prepayment transactions and therefore DCE desires to become an associate member of CCCFA;

WHEREAS, to become an associate member of CCCFA, the Board of Directors of DCE must file an executed counterpart of the CCCFA Joint Powers Agreement with CCCFA, together with a copy of the resolution of the Board of DCE approving the CCCFA Joint Powers Agreement and the execution and delivery hereof, and requesting to be added as an Associate Member of CCCFA and DCE must further agree in writing to pay CCCFA a share of organization, planning and other costs and charges as determined by the Board of CCCFA to be appropriate, if any; WHEREAS, on March 11, 2022, the CCCFA Board established a new membership entry fee of $50,000 for a new associate member’s portion of organization, planning, and other costs, in addition to each member’s equal share of general and administrative costs as determined by the CCCFA Board;
WHEREAS, on December 16, 2022, the CCCFA Board established a transaction fee of $20,000 to cover the Prepayment Project costs as defined in Section 1.11 of the CCCFA Joint Powers Agreement; and
WHEREAS, under the JPA Law and the CCCFA Joint Powers Agreement, CCCFA is a public entity separate and apart from the parties to the CCCFA Joint Powers Agreement, and the debts, liabilities, and obligations of the CCCFA will not constitute debts, liabilities, or obligations of the DCE.

NOW, THEREFORE, BE IT RESOLVED that the Board of DCE hereby finds, declares, and resolves as follows:

1. The above recitals are true and correct.

2. The CCCFA Joint Powers Agreement on file with the Clerk of the DCE is hereby approved.

The Executive Director is authorized and directed, on behalf of the DCE, to execute the CCCFA Joint Powers Agreement, and request that DCE become an associate member of CCCFA.

3. DCE hereby agrees to pay CCCFA for its share of organization, planning and other costs and charges as determined by the Board of CCCFA to be appropriate.

4. The officers, employees, and agents of DCE are hereby authorized and directed, jointly and severally, to execute and deliver any and all documents, agreements and instruments and to do any and all things which they may deem necessary or advisable to carry out, give effect to and comply with the terms and intent of the CCCFA Joint Powers Agreement and this Resolution.

5. This Resolution shall take effect immediately upon its adoption.

The following Resolution was duly passed by the Board of DCE at a meeting held on March 23, 2026, by the following vote:

Ayes:

Noes:

Absent:
______________________________
Jeffrey Bernstein
DCE Chair of the Board
Attest:
_______________________
Tom Kirk
DCE Secretary
DocuSign Envelope lD: B09244FF-51 73-466E-8888-E55834438D0E

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY

JOINT POWERS AGREEMENT
This Joint Powers Agreement (this "Agreement") is made by and among those public agencies who are signatories to this Agreement, and those public agencies which may hereafter become signatories to this Agreement (all such parties, except those which have withdrawn as provided herein, are referred to herein as the "Members" and those parties initially executing this Agreement are referred to as the "Founding Members"), creating a separate joint powers agency, which is named "California Community Choici Financing Authority" ("CCCFA").

WITNESSETH
WHEREAS, each Member is a "community choice aggregator," as that term is defined in Section 331 .l of the Public Utilities Code of the State of Califomia (the "Public Utilities Code"), having duly adopted, established and implemented a community choice aggregation program pursuant to Section 366.2 of the Public Utilities Code, with the authority to group retail electricity customers to solicit bids, broker, and contract for electricity and energy services for those customers, and to enter into agreements for services to facilitate the sale and purchase of electricity and other related services, and to study, promote, develop, conduct, operate and manage energy-related programs; and
WHEREAS, each Member is a "public agency," as that term is defined in Section 6500 of the Government Code of the State of California (the "Government Code"); and WHEREAS, Chapter 5 of Division 7 of Title I of the Government Code, being Section 6500 and following (the "Act"), authorizes a joint exercise by two or more public agencies of any power which is common to each of them and the creation of an entity that is separate from the parties to the joint exercise of powers agreement; and
WHEREAS, it is to the mutual benefit of the Members and in the public interest that an agency by the name of the California Community Choice Financing Authority be created, by which the Members jointly exercise for their common benefit and for the purposes specified herein certain powers that they have in comrnon or are otherwise provided for by applicable law, including but not limited to (i) the acquisition and operation ofpower supplies, resource adequacy and renewable attributes, and (ii) the provision ofother energy services or programs which may be of benefit to one or more Members; and WHEREAS, the Act conveys upon joint exercise of powers authorities certain additional powers, including but not limited to the power to issue revenue bonds and incur other evidences of indebtedness for such purposes as are specified in the Act; and
WHEREAS, CCCFA's purpose is to assist Members by undertaking the financing or refinancing of energy prepayments that can be financed with tax advantaged bonds on behalf of one or more of the Members by, among other things, issuing or incurring Bonds (as such term is defined herein) and entering into related contracts with Members.

NOW, THEREFORE, the Members, for and in consideration of the mutual promises and agreements herein contained, do hereby agree as follows:

DocuSign Envelope lD: B09244FF-51 73-4668-8888-E55834438D0E Article I. DEFINITIONS
In addition to the other terms defined herein, the following terms, whether in the singular or in the plural, when used herein and initially capitalized, shall have the meanings specified throughout this Agreement.

Section 1.01 6'Act" means Chapter 5 of Division 7 of Title I of the Government Code (Section 6500 et seq.), as supplemented and amended from time to time, including without limitation the Marks-Roos Local Bond Pooling Act of 1985.

Section 1.02 "Agreement" means this Joint Powers Agreement, as it may be supplemented and amended from time to time in accordance with the terms hereof.

Section 1.03 "Associate Member" means any Public CCA Agency that is a signatory to this Agreement and that has met the requirements of Section 3.02 below to become an Associate Member. The term "Associate Member" shall, however, exclude any Associate Member which shall have withdrawn or been excluded from CCCFA pursuant to Section 3.04 below.

Section 1.04 "Board" means the Board of Directors of CCCFA as established by this Agreement.

Section 1.05 "Bonds" means bonds, notes, commercial paper, installment purchase, lease purchase and similar agreements and certificates of participation therein, and any other evidences of indebtedness.

Section 1.06 "CCCFA" means the California Community Choice Financing Authority, the Joint Powers Authority established by this Agreement.

Section 1.07 "Director" means each Director duly appointed and serving on the Board as provided in Article IV of this Agreement.

Section 1.08 "Founding Member" means each of the Public CCA Agencies initially executing this Agreement, and any Public CCA Agency that becomes a Founding Member pursuant to Section 3.01 below.

The term "Founding Member" shall, however, exclude any Founding Member which shall have withdrawn or been excluded from CCCFA pursuant to Section 3.04 below. The initial Founding Members are Central Coast Community Energy, East Bay Community Energy, Marin Clean Energy, and Silicon Valley Clean Energy.

Section 1.09 "Government Code" means the Government Code of the State of California.

Section 1.11 "Prepayment Project" means, in connection with the financing or refinancing of energy prepayments that can be financed with tax advantaged bonds and other obligations: (i) the purchase and sale of electric energy and associated capacity and environmental attributes, (ii) the design. acquisition. maintenance, or operation of any Public Capital Improvement (as defined in the Act) or other facility or improvement, or the leasing thereof, (iii) the provision of working capital, and (iv) any other project, program, public capital improvement or purpose authorized by the Act or other law to be undertaken, financed, or refinanced by CCCFA, subject to CCCFA's approval of an application from one or more Members for support of such project, program, public capital improvement or authorized purpose and in connection with the financing or refinancing of energy prepayments that can be financed with tax advantaged bonds and other obligations.

Section 1.12 "Prepayment Project Contract" means a contract among any Members and CCCFA in connection with the undertaking, financing or refinancing of a Prepayment Project by such Members and CCCFA in accordance with the terms of this Agreement.
2 Section 1.10 "Member" means a Founding Member or an Associate Member.

DocuSign Envelope lD: B09244FF-5173-466E-8888-E55834438D0E Section 1.13 "Public CCA Agency" means any community choice aggregator, as such term is defined in Section 331.1 of the Public Utilities Code, that is a public agency! as such term is defined in the Act, which has implemented a CCA program pursuant to Section 366.2 of the Public Utilities Code.

Section 1.14 "Public Utilities Code" means the Public Utilities Code of the State of California.

Article II. FORMATION OF AUTHORITY
Section 2.01 Creation of CCCFA. Pursuant to the Act, there is hereby created a public entity, to be known as the "California Community Choice Financing Authority." which shall be a public entity separate and apart from its Members. The debts, liabilities and obligations of CCCFA shall not constitute debt, liabilities or obligations of any Member.

Section 2.02 Purpose. This Agreement is made, and CCCFA is being established. pursuant to the Act to provide for the joint exercise of powers common to the parties hereto to assist the Members in financing or refinancing energy prepayments that can be financed with tax advantaged bonds and other obligations on behalf of one or more of the Members, including by undertaking, financing or refinancing Prepayment Projects on behalf of one or more of the Members and/or CCCFA, all as further described in Section 2.03 hereof. CCCFA will fulfill the purposes of this Agreement by, among other things, undertaking the sale and issuance or incurrence of Bonds to finance or refinance Prepayment Projects on behalf of one or more of the Members and/or CCCFA in accordance with the Act. CCCFA is not being formed for the purposes of providing municipal services within the meaning of Section 6503.6 or Section 6503.8 of the Act.

Section 2.03 Powers. CCCFA, in its own name, shall have any and all power to undertake Prepayment Projects on behalf of one or more of the Members and/or CCCFA, and to finance or refinance such Prepayment Projects through the sale and issuance or incurring of Bonds for the purposes set forth in Section 2.02 hereof.

CCCFA is empowered to exercise any and all common powers of the Members, and any other powers provided to it by any applicable laws, beneficial for the issuance or incurrence from time to time of such Bonds pursuant to Article VII hereof. Without limiting the generality of the foregoing, CCCFA, in its own name, shall have the power:
(a) to acquire, purchase, finance, operate, maintain, utilize and/or dispose of one or more Prepayment Projects and any facilities, programs or other authorized costs relating thereto; (b) to make and enter contracts (including without limitation interest rate, commodity, basis and similar hedging contracts intended to hedge payment, rate, cost or similar exposure); (c) to employ agents and employees;
(d) to acquire, manage, maintain or operate any building, works or improvements; (e) to acquire, hold, lease or dispose ofproperty;
(0 to incur debts (including without limitation through the issuance or incurrence of Bonds), liabilities or obligations (which shall not constitute debts, liabilities, or obligations of any of the Members); (g) to sue and be sued in its own name;
(h) to receive gifts, contributions and donations of real or personal property, funds, services and other forms of assistance from any source;
(D to receive, collect, invest and disburse moneys;
CI) to apply for, accept, and receive all licenses, permits, grants, loans or other aids from any federal, state, or local public agency;
(k) to make and enter into service agreements relating to the provision of services necessary to plan, implement. operate and adm inister energy-rel ated programs; (D to defend, hold harmless, and indemnify, to the fullest extent permitted by law, each Member from any liability, claims, suits, or other actions;
J
DocuSign Envelope lD: B09244FF-51 73-466E-8888-E55834438D0E (m) to exercise any other power and take any other action permitted by law to accomplish the purposes of this Agreement.

Such powers shall be exercised by CCCFA subject only to such restrictions upon the manner of exercising such power as are imposed upon Silicon Valley Clean Energy in the exercise of similar powers, as provided in Section 6509 of the Act, and, should Silicon Valley Clean Energy withdraw orbe excluded from this Agreement pursuant to Section 3.04 hereof, the manner of exercising any power shall be subject only to the restrictions upon the manner of exercising such powers as are imposed upon Marin Clean Energy in the exercise of similar powers; provided, however, that nothing herein shall limit the powers of CCCFA under Article 4 of the Act.

Any Bonds issued or incurred by CCCFA shall not constitute general obligations of CCCFA, but shall be payable solely from the moneys pledged to the payment of principal of or interest on such Bonds under the terms of the resolution, indenture, trust agreement or other instrument pursuant to which the Bonds are issued or incurred, as further described in Article VII hereof. Such Bonds shall not constitute debts, liabilities or obligations of the Members.

Any of the Prepayment Projects acquired, financed or refinanced by CCCFA shall be operated by a Member or CCCFA for and on behalf of CCCFA, either directly or pursuant to contract or agreement with a third party designated by the applicable Member or Members and approved by CCCFA. None of the Members or CCCFA shall have liability for the breach, negligence or willful misconduct of any such third party.

Article III. MEMBERSHIP
Section 3.01 Founding Members. A Public CCA Agency will be qualified to join as a Founding Member only if it possesses the power to purchase and sell electric energy and enter into related contracts for such purposes. Public CCA Agencies may be added as parties to this Agreement and become Founding Members, and existing Associate Members may be elevated to Founding Members, upon: (1) the filing by such Public CCA Agency with the Board of an executed counterpart of this Agreement, together with a copy of the resolution of the governing body of such Public CCA Agency approving this Agreement and the execution and delivery hereof, and requesting to be added as a Founding Member of CCCFA; (2) the approval at a regular or special meeting of the Board by at least two-thirds (2/3) of the entire Board, and the adoption of a resolution of the Board approving the addition of such Public CCA Agency as a Founding Member; and (3) the deposit with, or the written agreement to pay to, CCCFA a share of organization, planning and other costs and charges as determined by the Board to be appropriate, if any. Upon satisfaction of such conditions, the Board shall file such executed counterpart of this Agreement as an amendment hereto. effective upon such filing. Upon completion of the foregoing, the Public CCA Agency shall become a Founding Member for all purposes of this Agreement.

Section 3.02 Associate Members. A Public CCA Agency will be qualified to join as an Associate Member only if it possesses the power to purchase and sell electric energy and enter into related contracts for such purposes. Public CCA Agencies may be added as Associate Members of CCCFA upon: (l) the filing by such Public CCA Agency with the Board of an executed counterpart of this Agreement, together with a copy of the resolution of the governing body of such Public CCA Agency approving this Agreement and the execution and delivery hereof, and requesting to be added as an Associate Member of CCCFA; (2) the approval at a regular or special meeting of the Board by a majority vote of the Directors in attendance, provided a quorum is established and maintained, and the adoption of a resolution of the Board approving the addition of such Public CCA Agency as an Associate Member; and (3) the deposit with, or the written agreement to pay to, CCCFA a share of organization, planning and other costs and charges as determined by the Board to be appropriate, if any. Upon satisfaction of such conditions, the Board shall file such executed counterpart of this Agreement as an amendment hereto, effective upon such filing. Upon completion of the foregoing, the Public CCA Agency shall become an Associate Member for all purposes of this Agreement. 4 DocuSign Envelope lD: B092,A4FF-5173-466E-8888-ES5834438D0E Section 3.03 Cost Allocations.
(a) Unless otherwise determined by a two{hirds (2/3) vote of the entire Board, each Member shall pay an equal share of one Member one share for general and administrative costs as determined by the Board associated with all operations of CCCFA. General and administrative costs do not include any costs that relate solely to any specific Prepayment Project Contract. (b) The costs of each Prepayment Project shall be allocated solely to the Member or Members undertaking or participating in such Prepayment Project or on whose behalf CCCFA undertakes such Prepayment Project, which allocation shall be described in a Prepayment Project Contract relating to such Prepayment Project.

Section 3.04 Withdrawal or Exclusion of Member.
(a) Any Member may withdraw from CCCFA upon the following conditions:

The Member shall have filed with the Board Secretary a certified copy of a resolution of its governing body expressing its desire to so withdraw. If a Founding Member files a resolution to withdraw with the Board Secretary, that Founding Member no longer has any voting rights on the Board;
Members undertaking or participating in Prepayment Projects or on whose behalf CCCFA undertakes a Prepayment Project shall remain subject to the cost allocation, participation and withdrawal terms and conditions, as applicable, set forth in the applicable Prepayment Project Contract; and
Prior to the Board accepting the Member's filing of such resolution, any Member so terminating shall be obligated to pay its share of general and administrative costs then due. However, this obligation shall take into account any refunds due to the Member and shall not extend to debts, liabilities and obligations of CCCFA. The debts, liabilities and obligations of CCPFA shall not constitute debt, liabilities or obligations of any Member.

No such withdrawal shall, or shall be permitted if it would, result in (a) CCCFA having fewer than three Founding Members; or (b) the dissolution of CCCFA so long as any Bonds remain outstanding under any resolution, indenture, trust agreement or other instrument pursuant to which such Bonds are issued or incurred.

Upon compliance with the conditions specified in Section 3.04(a), the Board shall accept the withdrawing Member's resolution and the withdrawing Member shall no longer be considered a Member for any reason or purpose under this Agreement and its rights and obligations under this Agreement shallterminate. The withdrawal of a Member shall not affect any obligations of such Member under any Prepayment Project Contract or other program agreement. (c) Any Member which has (i) defaulted under this Agreement, a Prepayment Project Contract, or other program agreement, (ii) if such Member is a Founding Member, failed to appoint a Director to serve on the Board in accordance with Section 4.02 below, or (iii) failed to pay any required share of costs in accordance with Sections 3.01,3.02, and 3.03 above, may have its rights under this Agreement terminated and may be excluded from participation in CCCFA by the vote (taken at a regular or special meeting of the Board) of at least two-thirds (213) of the entire Board (including the Director representing the defaulting Member, if such Member is a Founding Member). Prior to any vote to terminate participation of any Member, written (i)
(ii)
(iiD
(iv)
(b)
5 DocuSign Envelope lD: B09244FF-5173-466E-8888-E55834438D0E notice of the proposed termination and the reason(s) for such termination shall be delivered to the Member whose termination is proposed at least 60 days prior to the Board meeting at which such matter shall first be discussed as an agenda item. The written notice of the proposed termination shall specif, the particular provisions of this Agreement or a Prepayment Project Contract or other program agreement which the Member has allegedly defaulted on, or whether the proposed termination is based on failure to appoint a Director (if such Member is a Founding Member) or pay any required share of costs. The Member subject to possible termination shall have the opportunity to cure the violation prior to the meeting at which termination will be considered. At the meeting where termination of the Member is considered, the Member shall be given the opportunity to respond to any reasons and allegations that may be cited as a basis for termination prior to a termination vote. Any excluded Member shall continue to be liable for its obligations under any Prepayment Project Contract or other program agreement and for any unpaid contribution, payment, or advance approved by the Board prior to such Member's exclusion. No such termination shall, or shall be permitted if it would, result in (a) CCCFA having fewer than three Founding Members; or (b) the dissolution of CCCFA so long as any Bonds remain outstanding under any resolution, indenture, trust agreement or other instrument pursuant to which such Bonds are issued or incurred.
(d) The withdrawal or termination of a Member shall not affect the provisions or obligations set forth in Article VIII or Section I 1.04 below.

Section 3.05 Contributions and Advances. Contributions or advances of public funds and of personnel, equipment or property may be made to CCCFA by any Member for any of the purposes of this Agreement.

Payment of public funds may be made to defray the cost of such purpose. Any such advance shall be made subject to repayment, and shall be repaid in the manner agreed upon by such Member and CCCFA at the time of making such advance. It is mutually understood and agreed that no Member is under any obligation to make advances or contributions to CCCFA to provide for the costs and expenses of administration of CCCFA, even though any Member, in its sole discretion. may do so. Any Founding Member may allow the use of personnel, equipment or property in lieu of other contributions or advances to CCCFA.

Article IV. POWERS OF BOARD & MANAGEMENT OF CCCFA
Section 4.01 Board. CCCFA shall be administered by a Board which shall consist of one Director representing each Founding Member. Such Board shall be the governing body of this CCCFA, and, as such, shall be vested with the powers set forth in this Agreement, and shall execute and administer this Agreement in accordance with the purposes and functions provided herein. The Board shall have the authority to provide for the general management and oversight of the affairs, property and business of CCCFA.

Section 4.02 Appointment and Vacancies. Each Director shall be the Chief Executive Officer, General Manager, Executive Director, or designee of the Chief Executive Officer, General Manager, or Executive Director, of each Founding Member and shall be appointed by and serve at the pleasure of the Founding Member that the Director represents, and may be removed as Director by such Founding Member at any time.

If at any time a vacancy occurs on the Board, a replacement shall be appointed by the Founding Member to fitl the position of the previous Director in accordance with the provisions of this Article IV within 60 days of the date that such position becomes vacant or the Founding Member shall be subject to the exclusion procedures in Section 3.04(c) above. Each Director may appoint an alternate to serve in their absence.

Section 4.03 Notices. The Board shall comply with the applicable provisions of Sections 6503.5, 6503.6 and 5305 1 of the Government Code requiring the filing of notices and a statement with the Secretary of State and the State Controller.
6 DocuSign Envelope lD: B092A4FF-5173-466E-8888-E55834438D0E Section 4.04 Committees. The Board may create committees to provide advice to the Board or conduct the business of CCCFA subject to delegation of authority from the Board as permitted in the bylaws and any applicable laws.

Section 4.05 Director Compensation. Compensation for work performed by Directors, including alternates, on behalf of CCCFA shall be borne by the Founding Member that appointed the Director. The Board, however, may adopt by resolution a policy relating to the reimbursement of expenses incurred by Directors.

Section 4.06 Board Officers. At its first meeting in every second calendar year, the Board shall elect or re-elect a Chair and a Vice-Chair, each of whom shall be selected from among the Directors and shall also appoint or re-appoint a Secretary, and a Treasurer/Controller, each of whom may, but need not, be selected from among the Directors.
(a) Chair and Vice-Chair. The duties of the Chair shall be to preside over the Board meetings, sign all ordinances, resolutions, contracts and correspondence adopted or authorized by the Board, and to help ensure tlre Board's directives and resolutions are carried out. In the absence or inability of the Chair to act, the Vice Chair shall act as Chair. (b) Treasurer/Controller. The Board shall appoint a qualified person to act as the Treasurer/Controller, who does not need to be a Director. Where a certified public accountant has been designated as Treasurer/Controller of CCCFA, the auditor of one of the Founding Members or of a county in which one of the Founding Members is located shall be designated as auditor of CCCFA. Subject to the provisions of any resolution, indenture, trust agreement or other instrument providing for a trustee or other fiscal agent in connection with any Bonds, and, except as may otherwise be specified by resolution of CCCFA, the Treasurer/Controller shall be the depository of CCCFA to have custody of all the money of CCCFA, from whatever source, and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Government Code. The Treasurer/Controller is hereby designated as the public officer or person who has charge of, handles, or has access to any property of CCCFA, and such officer shall file an official bond in an amount determined from time to time by the Board as required by Section 6505.1 of the Government Code. The Treasurer/Controller shall cause an independent audit to be made by a certified public accountant, or public accountants, in compliance with Section 6505 of the Government Code. The Treasurer/Controller shall also create or caused to be created a report in writing on the first day of each fiscal quarter to CCCFA and each Founding Member, which report shall describe the amount of money held by the Treasurer/Controller, the amount of receipts since the last such report. and the amount paid out since the first such report.
(c) Secretary. The Secretary shall be responsible for keepingthe minutes of allmeetings of the Board and all other official records of CCCFA, and responding to public records requests of the JPA.

Section 4.07 Management of CCCFA. The Board may appoint a part-time or full-time General Manager, and may appoint one or more part-time or full-time Assistant General Managers, to serve at the pleasure of the Board. If a Ceneral Manager has been appointed, the General Manager shall be responsible for the dayto-day operation and management of CCCFA. If no General Manager shall have been appointed, the Treasurer/Controller shall be responsible for the day-to-day operation and management of CCCFA. The General Manager, if any, and the Treasurer/Controller may each enter into and execute contracts in accordance with the policies established and direction provided by the Board, and shall file an official bond in the amount determined from time to time by the Board.
7 DocuSign Envelope lD: B092,44FF-51 73-466E-888B-E55834438D0E Section 4.08 Other Officers and Employees. The Board shall have the power to appoint such other officers, deputies, legal counsel (which may be the legal counsel to one or more of the Members) and staff as it may deem necessary who shall have such powers, duties and responsibilities as are determined by the Board, and to retain independent accountants, legal counsel, engineers and other consultants. The Founding Members may contract with CCCFA to provide staff to perform services for CCCFA, but such employees shall at all times, and for all purposes including benefits and compensation, remain employees of the Founding Member only.

Section 4.09 Budget. The budget shall be approved by the Board. The Board may revise the budget from time-to-time as may be reasonably necessary to address contingencies and expected expenses. All subsequent budgets of CCCFA shall be approved by the Board in accordance with rules as may be adopted by the Board from time to time. All expenditures must be made in accordance with the adopted budget.

Section 4.10 Fiscal Year. Unless changed by resolution of the Board, the fiscal year of CCCFA shall be the period from January I of each year to and including the following December 3 1.

Article V. MEETINGS OF THE BOARD
Section 5.01 Regular Meetings. The Board shall hold at least one regular meeting per year, but the Board may provide for the holding of regular meetings at more frequent intervals. The date, hour and place of each regular meeting shall be fixed by resolution of the Board. Regular meetings may be adjoumed to another meeting time.

Section 5.02 Special Meetings. Special and emergency meetings ofthe Board may be called in accordance with the provisions of Government Code Sections 54956 and 54956.5, as amended.

Section 5.03 Brown Act Compliance. All meetings of the Board shall be conducted in accordance with the provisions of the Ralph M. Brown Act (Government Code Section 54950 et seq.), and as augmented by rules of the Board not inconsistent therewith. Directors may participate in meetings telephonically or by other electronic means, with full voting rights, to the extent permitted by law.

Section 5.04 Minutes. The Secretary shall cause to be kept minutes of the meetings of the Board, both regular and special, and shall cause a copy of the minutes to be forwarded promptly to each Director.

Section 5.05 Quorum. A quorum of the Board shall consist of a majority of the Directors, except that less than a quorum may adjourn from time to time in accordance with law.

Section 5.06 Voting. Each Founding Member shall have one vote, which may be cast on any matter before the Board by each Director or alternate. Except to the extent otherwise specified in this Agreement, or by law, a vote of the majority of the Directors in attendance shall be required and sufficient to constitute action, provided a quorum is established and maintained.
(a) Special Voting Requirements as specified in this Agreement:

Action of the Board on the matters set forth in Section 3.01 related to addition of Founding Members shall require the affirmative vote of at least two-thirds (213) of the Entire Board.

Action of the Board on the matters set forth in Section 3.04(c) related to involuntary termination of a Member shall require the affirmative vote of at least two-thirds (2/3) of the entire Board.
(i)
(iD
8 DocuSign Envelope lD: B092A4FF-5173-466E-888B-E55834438D0E Action of the Board on the matters set forth in Section 9.0 I related to termination of this Agreement shall require the affirmative vote of at least two-thirds (2/3) of the entire Board approved by resolution of each Founding Member's governing body.

Action of the Board to amend any other provision of this Agreement shall be subject to the voting requirements set forth in Section I 1.03 below.

Section 5.07 Rules and Regulations. CCCFA may adopt, from time to time, by resolution of the Board such bylaws, policies or rules and regulations for the conduct of its meetings and affairs zN may be required.

Article VI. PREPAYMENT PROJECTS
Section 6.01 Prepayment Projects. The Board has the power, upon majority vote of the Directors in attendance, provided a quorum is established and maintained, to approve the application of any Member for the undertaking, financing, or refinancing of any Prepayment Projects within the purpose and power of CCCFA and to adopt guidelines for their implementation.

Section 6.02 Prepayment Project Contract. The costs and other expenses of each Prepayment Project, including without limitation applicable administrative costs of CCCFA with respect to the Prepayment Project, shall be allocated solely to the Member or Members undertaking or participating in such Prepayment Project or on whose behalf CCCFA undertakes such Prepayment Project, which allocation shall be described in a Prepayment Project Contract relating to such Prepayment Project, which will be separate and distinct from this Agreement.

Article VII. BONDS AND OTHER INDEBTEDNESS
ln addition to the other powers conferred on CCCFA by this Agreement, CCCFA shall have the power to issue, incur, sell and deliver Bonds in accordance with the provisions of the Act and other applicable laws for the purpose of acquiring, undertaking, financing, or refinancing one or more Prepayment Projects. The terms and conditions of the issuance or incurrence of any such bonds or indebtedness shall be set forth in a resolution, indenture trust agreement, or other instrument pursuant to which the Bonds are issued or incurred, as required by law and as approved by the Board. CCCFA's debts, liabilities and obligations with respect to Bonds issued or incurred under this Agreement and contracts or obligations entered into to carry out the purposes for which Bonds are issued or incurred, shall not constitute a debt, liability or obligation of any of the Members.

Article VIII. LIMITATION ON LIABILITY OF MEMBERS
Section 8.01 Pursuant to Section 6508.1 of the Government Code, no debt, liability or obligation of CCCFA shall be a debt, liability or obligation of any Member. Nothing contained in this Article Vlll shall in any way diminish the liability of any Member with respect to any Prepayment Project Contract such Member enters into pursuant to this Agreement.

Section 8.02 Notwithstanding anything to the contrary in this Agreement or otherwise, CCCFA shall not have the power to and shall not enter into any retirement contract with any public retirement system (as defined in Section 6508.1 of the Government Code) for any reason. The provision in this paragraph is intended to (iiD
(iv)
9 DocuSign Envelope lD: B092A4FF-5173-466E-8888-E55834438D0E benefit Members and to be a confirming, irrevocable obligation of CCCFA which may be enforced by Members individually or collectively.

ArticleIX. TERM;TERMINATION;LIQUIDATION;DISTRIBUTION
Section 9.01 Term and Termination. This Agreement shall become effective when at least three Founding Members execute this Agreement. This Agreement shall continue in full force and effect until terminated as provided in this Article; provided, however, this Agreement cannot be terminated while either (a) any Bonds of CCCFA remain outstanding under the terms of the resolution, indenture, trust agreement or other instrument pursuant to which such Bonds are issued or incurred, or (b) CCCFA is the owner, lessor or lessee of any real or personal property financed from the proceeds of any Bonds. This Agreement may be terminated by a two-thirds (2/3) vote of the entire Board that is approved by resolution of each Founding Member's governing body; provided, however, that this Agreement and CCCFA shall continue to exist after termination for the purpose of disposing of all claims, distribution of assets and all other functions necessary to conclude the obligations and affairs of CCCFA. In any event, CCCFA shall cause all records regarding its formation, existence, the Prepayment Projects, any Bonds issued or incurred by it and proceedings pertaining to its termination to be retained for at least six years (or as otherwise required by law) following termination of CCCFA or final payment of any Bonds issued or incurred by CCCFA, whichever is later.

Section 9.02 Liquidation; Distribution. Upon termination of this Agreement, the Board shall liquidate the business and assets and the property of CCCFA as expeditiously as possible, and distribute any net proceeds, after the conclusions of all debts and obligations of CCCFA, to any Members in proportion to the contributions made or in such manner as otherwise provided by law. The Board is vested with all powers of CCCFA for the purpose of concluding and dissolving the business affairs of CCCFA. Notwithstanding the foregoing, no dissolution of CCCFA shall be permitted while either (a) any Bonds of CCCFA remain outstanding, or (b) CCCFA is the owner, lessor or lessee of any real or personal property financed from the proceeds ofany Bonds.

ARTICLE X. ACCOUNTSANDREPORTS
Section 10.01 Establishment and Administration of Funds. CCCFA is responsible for the strict accountability of all funds and reports of allreceipts and disbursements. It will comply with every provision of law relating to the establishment and administration of funds, including without limitation Section 6505 of the Government Code. CCCFA shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of any resolution, indenture or other instrument of CCCFA securing its bonds or other indebtedness, except insofar as such powers, duties and responsibilities are assigned to a trustee appointed pursuant to such resolution, indenture or other instrument. The books and records of CCCFA shall be open to inspection at all reasonable times to each Member and its representatives.

Section 10.02 Annual Audits and Audit Reports. The Treasurer/Controller shall cause an annual independent audit of the accounts and records of CCCFA to be made by a certified public accountant or public accountant in accordance with all applicable laws. lf permitted by applicable law and authorized by the Board, the audit(s) may be conducted at the longer interval authorized by applicable law. A report of the financial audit will be filed as a public record with each Member not later than 270 days after the close of the fiscal year or fiscal years under examination. CCCFA will pay the cost of the financial audit and charge the cost against the Members in the same manner as other administrative costs.

ARTICLE XI. GENERAL PROVISIONS
l0
Section 11.01 Conflict of Interest Policy. CCCFA, unless otherwise exempt, shall adopt a conflict of interest policy as required under applicable laws of the State of California. Counsel to CCCFA for financing DocuSign Envelope lD: B092A4FF-51 73-466E-8888-E55834438D0E matters, including bond counsel, shall not be considered a consultant or other designated position for purposes of the conflict of interest policy.

Section 11.02 Successors and Assigns. This Agreement shallbe binding upon and shall inure to the benefit of the successors of the parties. Except to the extent expressly provided herein, neither a Member nor CCCFA may assign any right or obligation under this Agreement without the consent of all other Members.

Section 11.03 Amendments. Subject to any requirements of law, a two-thirds (213) vote of the entire Board will be required to amend Articles II, III, VIII, and IX of this Agreement, and an amendment of Section 8.02 and Section I 1.03 of this Agreement shall require an affirmative vote of the entire Board. Once an amendment of Articles II, III, VIII, or IX is adopted by the Board, the amendment must be approved by two-thirds of the Founding Members pursuant to each Founding Member's applicable approval process, and an amendment of Section 8.02 and Section 11.03 of this Agreement shallrequire an affirmative vote of all Founding Members pursuant to each Founding Member's applicable approval process. All other provisions of this Agreement may be amended at any time or from time to time by an amendment approved by at least two-thirds (2/3) vote of the entire Board. Written notice shall be provided to all Members of proposed amendments to this Agreement, including the effective date of such amendments, at least thirty (30) days prior to the date upon which the Board votes on such amendments. Each Member hereby agrees to take any actions necessary on its part to approve any amendment adopted pursuant to this Section 11.03, and if any Member fails to perform any such actions, such Member shall be deemed to have submitted a resolution of withdrawal pursuant to the provisions of Section 3.04 hereof.

Notwithstanding the foregoing, this Agreement shall not terminate while any Bonds of CCCFA remain outstanding under the terms of the resolution, indenture, trust agreement or other instrument pursuant to which such Bonds are issued or incurred.

Section 11.04 Indemnification and Insurance. To the fullest extent permitted by law, CCCFA shall defend, indemnify, and hold harmless the Members and each Director, alternate, officer, employee and agent from any and all claims losses damages, costs, injuries and liabilities of every kind arising directly or indirectly from the conduct, activities, operations, acts, and omissions of CCCFA under this Agreement to the extent not otherwise provided under a Prepayment Project Contract. CCCFA shall acquire such insurance coverage as the Board deems is necessary and appropriate to protect the interests of CCCFA and the Members.

Section 11.05 Waiver of Personal Liability. No member, director, commissioner, officer, agent or employee of CCCFA or the Members, respectively, past, present or future, shall be individually or personally liable for the observance or performance of any terms, conditions or provisions hereof or for any claims, losses, damages, costs, injury and liability of any kind, nature or description arising from the actions of CCCFA or the actions undertaken pursuant to this Agreement; provided, however, that nothing herein shall relieve any such person from the performance of any official duty provided hereby or by applicable provision of law.

Section 11.06 Limitation of Rights. All of the covenants, agreements, terms and conditions in this Agreement to be observed or performed by or on behalf of CCCFA or the Members shall be for the sole and exclusive benefit of CCCFA and the Members, whether so expressed or not, and nothing contained herein, express or implied, is intended to or shall give any other person other than CCCFA and the Members any legal or equitable right, remedy or claim hereunder.

Section 11.07 Notices. The Board shall designate its principal office as the location at which it will receive notices, correspondence, and other communications, and shall designate one of its Directors or staff as an officer for the purpose of receiving service of process on behalf of CCCFA. Any notice given pursuant to this Agreement shall be in writing and shall be dated and signed by the Member giving such notice. Notice to each Member under this Agreement is sufficient if mailed to the Member, and separately to the Director appointed by such Founding Member, to their respective addresses on file with CCCFA. l1
DocuSign Envelope lD: B092A4FF-51 73-466E-8888-E55834438D0E Section 1I.08 Severability. Should any portion, term, condition, or provision of this Agreement be determined by a court of competent jurisdiction to be illegal or in conflict with any law of the State of California, or be otherwise rendered unenforceable or ineffectual, the remaining portions, terms, conditions, and provisions shall not be affected thereby.

Section 11.09 Section Headings. The section headings herein are for convenience only and are not to be construed as modifying or governing the language in the section to which they refer.

Section 11.10 Choice of Law. This Agreement will be governed and construed in accordance with the laws of the State of California.

Section 11.11 Counterparts. This Agreement may be executed in any number of counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all Members had signed the same instrument.

Section 11.12 Dispute Resolution. The Members shall make reasonable efforts to informally settle all disputes arising out of, or in connection with, this Agreement. Should such informal efforts to settle a dispute fail, the dispute shall be mediated in accordance with policies and procedures established by the Board. In the event such mediation fails to settle a dispute, the parties may pursue any remedies provided by law. fSignature Page FollowsJ
l2
DocuSign Envelope lD: B092,44FF-5173-466E-8888-E55834438D0E IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By:

Name: Dawn wei sz
Title: CEo
CCA Name: MCE
Date. lune 25, 202L
t-#*-ry*,
By; fi-'tilaa"*u^*
Name
Title: CEO
ci ri sh Bal achandran
CCA Name: Si I i con Va1 l ey Cl ean Energy
Date: lune 25, ZOZL
/-DocuSigned
by:

Itao 1;1p='-:- By uohEAoaarrracrrE
Name: rui ck chaset
Title: cEo
CCAName: East BaY CommunitY Energy
Date: :une 25, 202L
By: ffis*i'y
Tom Habashi Name
Title: CEO
CCAName: central coast community energy
Date: lune 25, 202L
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

D by Donald Eckert
Bv 12:27:33 PDT
Name: Donald Eckert
Title: ExecutiveDirector
CCA Name: Pioneer Community Energy
Date: SoPtember 02, 2022
Docusign Envelope lD: 5F985826-DCFE-481 F-BA1 4-E2F0996E,1 AgC IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By:

Name:

Title:
ted gardacke
chief Executive officer
CCA Name: Clean Power Alliance of Southern cal'ifornia
Dut",9/6/2022
,ir?/
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By: do \
Loc Mvtcvel\\ Name:

Title Dicector Energy
CCA Name: QAvky of 5 ac Tose
Date: OI\*/(2024
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By: __________________________________
Name: Shawn Marshall__________________
Title: Chief Executive Officer______________
CCA: Name: Peninsula Clean Energy________
Date: 8/23/24___________________________
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By:____________________________________
Name:__________________________________
Title:___________________________________
CCA Name:______________________________
Date:____________________________________
San Diego Community Power
October 16, 2024
Chief Finanical Officer
Dr. Eric W. Washington
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By:____________________________________
Name:__________________________________
Title:___________________________________
CCA Name:______________________________
Date:____________________________________
Geof Syphers
Chief Executive Officer
Sonoma Clean Power Authority
October 17, 2024
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By:____________________________________
Name:__________________________________
Title:___________________________________
CCA Name:______________________________
Date:____________________________________
Mitch Sears
Executive Officer
Valley Clean Energy Alliance
October 16, 2024
IN WITNESS WHEREOF, each Member hereto has caused this Agreement to be executed as an original counterpart by its duly authorized representative on the date indicated below.

By:____________________________________
Name:__________________________________
Title:___________________________________
CCA Name:______________________________
Date:____________________________________
Orange County Power Authority
Chief Executive Officer
Docusign Envelope ID: B0D4166C-4E16-4BD4-A731-3055C77B0039 1/28/2026
Joseph M. Mosca

ITEM 4C

STAFF REPORT
Subject: DCE’s 2026 Integrated Resource Plan
Contact: Alvaro Valcarcel Jervis, Management Analyst ([email protected]) Recommendation: Information
Background: The Integrated Resource Plan (IRP) is a statutory requirement of the California Public Utilities Commission (CPUC) for all load-serving entities (LSEs), including DCE and other Community Choice Aggregators (CCAs). The purpose of the IRP process is to ensure that California’s electricity system meets its greenhouse gas (GHG) reduction targets while maintaining reliability at the lowest possible cost. The IRP is a central component of the State’s long-term clean energy strategy, aligning procurement and resource planning with California’s climate and reliability objectives. IRPs are generally submitted every two years and include a narrative describing the LSE’s procurement strategy as well as quantitative portfolio data submitted through CPUC-required templates.

The IRP serves to demonstrate that DCE has sufficient energy and capacity resources to serve its forecasted load and it also quantifies how its portfolio supports statewide GHG reduction goals.

The importance of the IRP process and having coordinated resource planning has increased in recent years given the extreme heat events, electrification of buildings and transportation, and the increased demand from large loads, including data centers.

The last IRP was approved by the Board at its October 2022 meeting and was subsequently filed with the CPUC on November 1, 2022. The CPUC delayed, through a series of actions, any IRP filing for 2024. The original due date for the 2026 IRP filing was November 1, 2025; however, the deadline was postponed due to delays in the Commission’s IRP proceeding, first to June 1, 2026, and most recently to August 10, 2026.

As part of the IRP process, each LSE is assigned a retail sales forecast to use for resource planning. DCE staff and its consultants will use this forecast for the assessment of existing and planned resources and evaluate how its portfolio complies with CPUC-assigned emissions and reliability benchmarks. Through this process, LSEs show that their procurement and planning strategies are aligned with California’s climate goals, system reliability needs, and cost-effectiveness objectives.

DCE’s 2026 IRP will quantify the amount of carbon-free and renewable energy power supply needed to meet California’s GHG reduction targets as well as the Board’s long-term procurement objectives. The 2026 IRP will be the first to include a strategy for meeting the 2045 requirement for 100 percent of California's retail electricity sales to be served by renewable and other zero-carbon resources. DCE’s 2026 IRP will also address how it will procure new resources to support reliability as part of the Mid Term Reliability (MTR) procurement requirements for LSEs.

The 2026 IRP will model portfolios that follow these principles and Board policies:

Desert Community Energy Board
March 23, 2026
• For procurement that qualifies as Renewables Portfolio Standard (RPS), DCE’s preferred resource types for its Carbon Free product are solar, wind, small hydro, and geothermal with carbon-free technology. Biomass/biogas resources are excluded over concern about carbon emissions.
• DCE only procures non-RPS-qualifying carbon-free energy from existing large hydro generation, or nuclear, not new large hydro.
• DCE prefers to source its green energy from local generation, with preference in the following order: Palm Springs, Riverside County, Southern California, all of California and then in Western Electricity Coordinating Council (WECC) but outside California. • DCE only uses portfolio content category one (PCC1) renewable energy credits (RECs) or PCC0 RECs from the voluntary allocation market offer process to satisfy RPS requirements. PCC1 is the highest-quality category of RECs, it represents bundled energy and RECs, with renewable electricity physically delivered into California. PCC0 are RECs typically obtained through the Voluntary Allocation Market Offer process (VAMO) or similar regulatory allocations.
• DCE will continue to exceed the State’s clean energy targets. As part of the ongoing modelling process for the IRP, DCE staff will evaluate a scenario in which the Carbon Free product is composed of 100% renewable energy, and Desert Saver is composed 100% carbon-free energy beginning in 2030, 15 years ahead of the State’s mandate. Additional scenarios will be evaluated to ensure DCE continues to advance its environmental goals, while maintaining rate affordability and cost-effective procurement for customers.

Ultimately, only one will be selected as DCE’s preferred portfolio for use in CPUC IRP modelling.

DCE procurement efforts will continue to emphasize local projects that will bring local jobs and economic benefits to the community. In addition, the IRP will describe how DCE will procure Resource Adequacy to meet all regulatory requirements for load-serving entities and contribute its fair share to California’s grid reliability. The IRP will also provide a public and transparent framework for communicating DCE’s resource planning policies, objectives, and long-term strategy to stakeholders. Consistent with CPUC requirements, the IRP will also be available on DCE’s website.

Staff will seek the Board’s approval of the 2026 IRP before the August 10, 2026 deadline.

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

In June 2025, the DCE Board authorized the Executive Director to execute an agreement with MRW & Associates, LLC to prepare DCE’s IRP. The costs of preparing the IRP are covered under this contract, which was authorized for a not-to exceed amount of $51,980. Additional resources were provided under existing staff time and the existing contract with The Energy Authority (TEA).

ITEM 5A DESERT COMMUNITY ENERGY BOARD
FY 2025-26 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 5B

STAFF REPORT
Subject: Conflict of Interest Guidance
Contact: Elysia Regalado, Deputy Clerk, ([email protected]) Recommendation: Information
Background: DCE contracts with the Coachella Valley Association of Governments (CVAG) to provide staffing and administrative duties. Over the years, elected officials serving on CVAG committees and its sister agencies have periodically requested clarification regarding the rules and regulations governing conflicts of interest during voting. This staff report provides a refresher on key requirements to support informed, transparent, and ethical decision-making.

A full guidance memorandum from Best Best & Krieger is included as an attachment. Key highlights are summarized below:
• Real Property Conflicts: Ownership of property within 500 feet of a subject parcel creates a presumed conflict of interest. Property located more than 500 feet away may still present a conflict depending on the circumstances.
• Financial Contributions: Campaign contributions of $500 or more made within 12 months before or after a proceeding by an individual or entity involved in the matter constitute a conflict, subject to limited exceptions. Board members must disclose such contributions and abstain from participating in related decisions.
• Personal Financial Interests: Board members must recuse themselves if they hold any financial interest that could be affected by the decision, including real property ownership, business investments, personal income, or spousal income. • Dual Roles and Service on Other Boards: Serving in multiple public roles does not automatically require recusal. However, recusal is required when the matter involves real estate negotiations or potential litigation discussed in closed session. Board members are encouraged to be transparent about dual roles to avoid any appearance of bias. • Disclosure and Recusal Procedures: Commissioners must publicly disclose the basis for a conflict of interest and fully recuse themselves, which includes leaving the room during deliberations and refraining from any participation in the item.

Staff also wishes to inform the Board of upcoming changes to the Ralph M. Brown Act that will take effect in 2026. While most of these changes are not expected to apply directly to DCE because it is a joint powers authority, staff will continue to coordinate with legal counsel to ensure the Commission remains compliant with any provisions that do apply. For reference, the Brown Act is available for review at the following link: Ralph M. Brown Act
Fiscal Analysis: There is no cost to DCE for this informational update Attachment: Best Best & Krieger 2024 Key Insights Into Open Government & Ethics- Avoiding Financial Conflicts- Should I Participate in this Decision? Desert Community Energy Board
March 23, 2026

ITEM 5C

STAFF REPORT
Subject: Summary of January 2026 Rate Adjustment
Contact: Lisa McNeilly, Director of Energy & 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 first 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, the Power Charge Indifference Adjustment (PCIA, or exit fee), State of California regulatory mandates, and to follow DCE Board-approved rate guidelines as outlined in RSS Exhibit A.

The Board’s currently approved RSS Exhibit A Rate Adjustment Guidelines include: 1) designing Desert Saver rates within a 0.0-1.0% average total bill discount versus SCE’s comparable bundled 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. Effective January 1, 2026, SCE implemented rate changes based on revisions to generation rates, costs related to Diablo Canyon power plant, delivery charges, and other general rate case cost categories. The net result was a small decrease to overall average SCE rates. As a result, DCE implemented corresponding adjustments to its Desert Saver rates to maintain compliance with current Board rate guidelines, with de minimus budget impacts.

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 January 2026 rate adjustments associated with SCE’s January 2026 rate changes.

January 2026 Rate Adjustment Summary:

Effective January 1, 2026, SCE implemented rate changes associated with various components of its rate design. Average SCE residential customer bills decreased about 2.9 percent. Depending upon any particular residential customer’s monthly electricity consumption level however, such customer may experience a small average bill increase or decrease. 1 Working within DCE Board-approved financial policies and procedures, the provisions of DCE’s RSS, and the concurrence of DCE’s Risk Management Team (RMT), DCE implemented adjustments to its Desert Saver rates to maintain an average 0.0 – 1.0 % discount versus SCE’s bundle base product 1 For a more complete description of SCE’s January 2026 related rate changes, interested customers should review details provided on SCE’s website: https://www.sce.com/save-money/rates-financing/sce-rate-advisory .

Desert Community Energy Board
March 23, 2026
average monthly bills for all Desert Saver customers. No material adjustments were applied to DCE’s generation rates for Carbon Free customers. Adjustments to DCE’s Desert Saver rates became effective on January 1, 2026, or as soon thereafter as practicable.

January 2026 DCE Rate Adjustment Details:
• Effective Date: January 1, 2026 (or as soon thereafter as practicable, upon implementation of DCE's revised rate factors).
• RMT discussion and concurrence during meetings on December 18, 2025 and January 15, 2026.
• Desert Saver average total bill discount compared to SCE’s bundled base power product average total bill designed to range within 0 – 1% for all Desert Saver customers. • No material change to DCE’s average Carbon Free generation rates. • Rate forecast period utilized: January 1, 2026 – December 31, 2026. • Calculations and estimates are based on known and forecast costs and revenues throughout the rate forecast period.
• Any individual customer’s average bill may vary depending on enrolled rate schedule and monthly electricity usage.

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

SCE residential customer retail rates were revised during January 2026 to reflect changes to various components of overall cost of service. Effective January 1, 2026, DCE correspondingly implemented minor adjustments to DCE Desert Saver generation rates to maintain 0.0 – 0.1 percent average monthly bill discount for all Desert Saver customers. As detailed in the DCE/SCE January 1, 2026 Joint rate Comparison (JRC)2
: 1) SCE’s non-CARE3 bundled average residential monthly bill is $196.17 and DCE’s Desert Saver average residential monthly bill is $195.53, approximately a 0.33% discount versus SCE; and 2) SCE’s CARE customer bundled average residential monthly bill is $121.14 and DCE’s Desert Saver CARE customer average residential monthly bill is $120.50, approximately a 0.53% discount versus SCE. No material changes were made to DCE’s Carbon Free generation rates.

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.

Staff continues to work with the California Community Choice Association (CalCCA) and other Community Choice Aggregators (CCAs) to collectively address cost-effectiveness and regulatory actions impacting CCAs. Additionally, DCE will continue to highlight DCE’s retail product choices as part of community engagement efforts.
2 As tabulated in the DCE/SCE January 2026 JRC adjusted to average monthly energy consumption of 541 kilowatthours. The full JRC is available on DCE’s website at: https://desertcommunityenergy.org/wp-content/uploads/2026/02/SCE-and-DCE-JRC-effective-1.1.26.pdf . 3 “CARE” indicates the CPUC’s California Alternative Rate for Energy program which provides discounted electric service to qualified lower income customers.

ITEM 5D
Desert Community Energy Board
March 23, 2026

STAFF REPORT
Subject: Community Advisory Committee Update
Contact: Lisa McNeilly, Director of Energy & Sustainability ([email protected]) and Savannah Gil, Program Specialist III ([email protected])
Recommendation: Information
Background: In March 2019, the DCE Board established a Community Advisory Committee (CAC) to provide a structured opportunity for community members to participate in DCE and to help ensure that efforts to educate and inform member communities about Community Choice Energy are broad and inclusive. The CAC meets at various times throughout the year to discuss a variety of topics and issues, and staff provides the Board with a written recap of those meetings.

The CAC last met on January 15, 2026, at the Palm Springs office of Burke Rix Communications, which is contracted by DCE to handle public engagement. A quorum was reached, and CAC members voted to appoint a new Chair and Vice Chair for the rest of the term ending June 30, 2026. They elected Noel Loughrin of Palm Springs as Chair and Donald Barrett of Palm Springs as Vice Chair. DCE staff presented a new small-business energy-efficiency customer program to help commercial customers upgrade to more efficient appliances for energy savings. CAC members asked questions and provided feedback to DCE staff on the best ways to reach out to small businesses and find reputable, licensed contractors. This input will be incorporated into the program implementation plan, and future meetings will be used to get additional CAC input.

The next CAC meeting is expected to be held in April. CAC meetings are open to the public and the agendas are posted on DCE’s website in advance to encourage participation. The DCE website also has an ongoing invitation to apply to the CAC, and staff have ensured with the outreach team that this opportunity is periodically shared on its social media channels.

Fiscal Analysis: There is no cost DCE for this informational update. The CAC is a volunteer group, and staff support for the CAC is covered under existing resources.

ITEM 5E

STAFF REPORT
Subject: 2025 GO 156 Annual Supplier Diversity Report
Contact: Savannah Gil, Program Specialist III ([email protected]) Recommendation: Information
Background: Community Choice Aggregators (CCAs) like DCE are required to submit an Annual Supplier Diversity Report to the California Public Utilities Commission (CPUC) that details a plan for increasing procurement from small, local, and diverse business enterprises and details procurement efforts related to Women, Minority, Disabled Veteran, or Lesbian Gay Bisexual Transgender Business Enterprises (WMDVLGBTBEs). The CPUC oversees the voluntary Supplier Diversity Program under General Order 156 (GO 156), which promotes efforts to increase the number of utility contract dollars spent on underserved or marginalized groups.

DCE submitted its 2025 Annual Supplier Diversity Report to the CPUC on February 26, 2026. The report highlights DCE’s commitment to promoting equal access to economic opportunities for WMDVLGBTBEs and increasing procurement from certified, local, small, and diverse businesses.

The report also outlines DCE’s goals for 2026. Although DCE primarily purchases power contracts, DCE staff are committed to finding ways to source other goods and services, including subcontracting, in order to promote inclusivity. To support the local community, DCE aims to prioritize local procurement, benefiting both the residents and local businesses.

The CPUC's Supplier Diversity Program is a valuable initiative that includes a Supplier Clearinghouse that maintains a Certified Suppliers List. This list provides utilities and covered entities, such as CCAs, with access to a centralized database of certified suppliers, helping them meet their procurement goals. By participating in this program, local companies can be identified as eligible, certified suppliers, opening multiple opportunities for networking and visibility through marketing activities, events, and bid announcements advertised by the Clearinghouse.

The CPUC develops and distributes the annual Supplier Diversity Report template to CCAs and utility companies. Some of the report sections and tables do not apply to DCE specifically and are therefore either marked as not applicable or intentionally left blank. An example of this is shown in the table in Section 9.1.2 of the report. Other tables, such as those in Section 9.1.9, are automatically populated with zeros because DCE is only responsible for filling in any applicable data.

The 2025 Report identifies that DCE currently has a contract with one local, diverse business enterprise that is certified through the CPUC Supplier Clearinghouse as an LGBT business enterprise. The 2025 Report also highlights DCE’s efforts to recruit individuals from diverse backgrounds to serve on its Community Advisory Committee, particularly those who represent underserved areas of the community. DCE staff is exploring ways to help eligible local businesses obtain certification and be listed on the State's Supplier Clearinghouse database. Additionally, Supplier Diversity Program informational flyers were distributed at three community events by DCE’s outreach consultant, Burke Rix Communications.

Desert Community Energy Board
March 23, 2026
The 2025 Annual Report also features DCE’s planned activities for 2026, which include:
• Increasing the visibility of DCE by conducting a thorough review of its education material and website and making necessary updates, with an aim of engaging more with residents and promoting emerging customer programs;
• Helping local, diverse suppliers get certified by being more proactive in sharing certification opportunities, such as sharing DCE’s information at the Coachella Valley annual procurement vendor fair and promoting the annual CCA Supplier Diversity Workshop hosted by Marin Clean Energy;
• Enhancing training and knowledge efforts on Supplier Diversity with current and new DCE staff members by creating dedicated training materials, including presentations and fact sheets.
• Utilizing a new Enterprise Resource Planning (ERP) system to track DCE’s financials and to help streamline future reporting needs.

DCE staff will continue working toward achieving its supplier diversity goals for 2026 and will provide the Board with updates accordingly.

Fiscal Analysis: There is no additional cost to DCE for this information item. The cost of performing supplier diversity activities is covered in the DCE budget.

Attachment: 2025 GO 156 Supplier Diversity Report
2025

SUPPLIER

DIVERSITY
REPORT
Presented to the California Public Utilities Commission March 1, 2026
Desert Community Energy
Achievements
Greenhouse gas emissions reduced by
60,954 metric tons
64 MW of battery storage in
development
131,277 MWh of local wind energy
generated

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28,122 customers receiving carbon-free energy
39,837 customers
served in 2025
2024-2025
Key Highlights and Metrics
Desert Community Energy

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Table of Contents
2025 Supplier Diversity Report

9.1.1 (pg. 5)
Program Activities
Hiring Practices
Workforce and Board
Diversity

9.1.5 (pg. 12)
Summary of Prime
Contractors Utilization of
Subcontractors

9.1.2 (pg. 8)
Summary of Purchases
Non-power purchases
Suppliers with Majority
Workforce in California

9.1.6 (pg. 12)
List of Supplier Diversity
Complaints

9.1.3 (pg. 11)
Supplier Diversity Program
Expenses

9.1.9 (pg. 12)
Activities and Progress in
Power Procurement

10.2 (pg. 15)
Program Activities planned
for 2026
DCE/IREN Table at Community Event
Desert Community Energy (DCE) is a
local government, not-for-profit Joint
Powers Authority established in 2017 to
provide member agencies with a
Community Choice Aggregation (CCA)
program. The current members are cities
of Palm Springs and Palm Desert. DCE
began serving the City of Palm Springs in
April 2020 and, as of December 2025,
serves approximately 32,684 residential,
commercial, industrial, and agricultural
accounts.

DCE’s goals are to:

1. Reduce greenhouse gas emissions
relating to electricity use;

2. Provide electric generation at
competitive, stable rates;

3. Offer programs to reduce energy
consumption;

4. Stimulate the local economy by
developing local jobs in renewable
energy; and,

5. Promote long-term energy security,
and reliability for customers through
local control of electric generation
resources.

The California Public Utilities
Commission (CPUC) General Order 156
(GO 156) emphasizes preferential
purchasing for diverse business
enterprises. In compliance with
Proposition 209, CCAs, as local
government entities, do not explicitly
give preferential treatment to bidders
based on race, sex, color, ethnicity, or
national origin. Proposition 209 limits
CCAs as public agencies from engaging
in
in several of the activities associated with
supplier diversity under GO 156. However,
DCE acknowledges thatadditional efforts
are needed to support small, local, and
diverse businesses.

Consistent with the requirements of Senate
Bill 255, this report describes DCE’s
continued efforts to plan for and implement
practices to increase procurement from
small, local, and diverse businesses. It also
reports to the Commission on its
procurement from these sources.

DCE is committed to expanding equal
access to economic opportunities for
minority business enterprises (MBE),
women-business enterprises (WBE), Lesbian,
Gay, Bisexual, and Transgender business
enterprises (LGBTBE), persons with disability
business enterprises (PDBE), and disabled
veteran business enterprises (DVBE). DCE is
also committed to involving local and small
businesses in our procurement efforts
whenever possible. Nonetheless, most of
DCE’s expenditures are focused on power
contracts.

The Coachella Valley is a small region, which
presents challenges for local and small
businesses seeking to act as prime
contractors in grid-scale energy projects, as
securing project capital requires proof of
financial stability. However, there are
opportunities for these businesses to serve
as subcontractors or consultants on such
projects. One of DCE's goals is to ensure
profits are retained within our communities,
supporting local businesses and residents.

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Introduction
Desert Community Energy
In 2025, DCE engaged in the following
activities oriented toward increasing
supplier diversity:

Reviewed information provided by
CPUC staff regarding updated
compliance with GO 156.

Conducted outreach to diverse
businesses at three community
events and provided information on
supplier diversity and the Supplier
Clearinghouse.

Continued educating consultants on
GO 156 and providing supplier
diversity informational flyers at
outreach events.

Created a user profile for the new
Supplier Clearinghouse website, and
posted one Request-for-Proposal for
mailing and printing services on the
website.

Continued working with other CCAs
as members of CalCCA to learn best
practices in maximizing supplier
diversity in our communities, given
the constraints of Proposition 209.

DCE did not receive any requests for
technical assistance from any eligible
vendors in 2025. In 2026, DCE will
continue to dedicate resources to
working with our existing and future
suppliers on opportunities to expand
institutional diversity and inclusion. The
Coachella Valley is a diverse region with
many business owners who meet the GO
156 parameters but may not be aware of
the Clearinghouse or realize their
eligibility for certification.

Hiring Practices
DCE staffing is provided by the Coachella
Valley Association of Governments (CVAG)
through a management services agreement
approved by the DCE Board. Thus, DCE does
not directly employ staff. However, CVAG is
an equal opportunity employer, and
recruiting and hiring practices are
established to strive for diversity, consistent
with the requirements of Proposition 209.

Recruitment outreach opportunities to
access a diverse pool of potential job
applicants are utilized.

Community Advisory Committee
In March 2019, the DCE Board established a
Community Advisory Committee (CAC) to
create a structured opportunity for
community members to engage with DCE
and to help ensure that efforts to educate
and inform member communities about
DCE’s initiatives and programs are broad
and inclusive. The CAC remained active until
2022, after which its activities stalled
because of membership challenges. As a
result, DCE sought ways to reconnect with
its members and compile a list of
candidates for 2024.

DCE convened its first CAC meeting for the
2024-2026 membership term on December
9, 2024, featuring eight appointed members.

As of January 2026, the CAC has six active
members. The CAC convened again on
January 15, 2026, to provide feedback on a
new customer program for small
businesses.

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9.1.1 Supplier Diversity Program Activities
Desert Community Energy
Since its launch in April 2020, DCE has released multiple requests for offers (RFOs) and requests for proposals (RFPs), resulting in various agreements such as renewable energy agreements, energy storage agreements (ESAs), and power purchase agreements (PPAs) for procuring power and electric capacity.

As part of its forecasting and procurement processes, DCE considers the overall diversity and reliability of its renewable portfolio. DCE also reviews the respective risks associated with short and long-term purchases as part of its forecasting and procurement processes. These efforts will lead to a more diverse resource mix, address grid integration issues, and provide value to the local community.

Beyond the state’s minimum renewable procurement requirements, the DCE Board has established additional green and renewable energy goals. Specifically, the DCE Board has directed that DCE acquire a portfolio consisting of 100 percent carbon-free generation for its Carbon Free product. All new DCE customers in the City of Palm Springs are automatically enrolled in this Carbon Free product as the default. The vast majority of DCE’s customers have chosen to remain with this premium product rather than opting down to the Desert Saver product, which provides cost savings while still meeting Renewables Portfolio Standard (RPS) compliance requirements.

DCE also continues efforts to include small, local, and diverse businesses in non-energy procurement opportunities. To this end, DCE’s Board adopted an amended procurement policy at its meeting on June 17, 2024. This policy includes a section on supplier diversity, in line with the CPUC’s Supplier Diversity Program. Since promoting local job creation is one of the core benefits of DCE, the procurement policy also includes a local preference that is substantially based on the Local Business Preference Program in both Palm Desert and Palm Springs.

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Strategic Initiatives
Desert Community Energy
Palm Springs Wind Turbines
Current DCE Board Members
City of Palm Springs:

Councilmember
Jeffrey Bernstein
City of Palm Desert:

Finance Director
Veronica Chavez
Public information on DCE’s Board members can also be found at:
https://desertcommunityenergy.org/about/board-agendas/

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Workforce and Board Diversity
Desert Community Energy
In August 2025, DCE submitted its annual RPS Workforce Development data report to the CPUC, highlighting the diversity of its staff. The report indicated that DCE has five full-time employees, four of whom are women, and three are minorities.

The DCE Board is made of two members, one from the City of Palm Springs and the City of Palm Desert. Both Board members were women in 2024. In 2025, the diversity of the Board changed.

DCE’s Supplier Diversity Program
weblink: https://desertcommunityenergy.org/about-go156-supplier-diversity/ Phone: (855) 357-9240
Email: [email protected]
Responses Received from the
following vendors:

Supplier
Percentage of CA
workforce
Best, Best, &
Krieger

0.74 Donald B Dame
Consulting

1.00 DCE commits to purchasing from small,
local, diverse businesses within our region
to the extent possible. This section
summarizes the 2025 results of DCE’s
procurement in the requested categories.

It should be noted that the majority of
DCE’s procurement is through wholesale
power contracts. As a result, opportunities
to directly engage with local and small
businesses are more limited. Many of the
electric generation resources are
developed, owned, and operated by large
corporations with sufficient capital to
manage these projects. Still, DCE has been
successful in procuring wind energy from
projects within the local community from
the local developer, Terra-Gen.

Despite the difficulties in finding diverse
procurement opportunities for power
purchases, DCE engages with one
registered diverse supplier for its services
and products. Its current marketing and
outreach provider is a Lesbian, Gay,
Bisexual, Transgender Business Enterprise
(LGBTBE) that has been working with DCE
since 2023.

Moving into 2025 and beyond, DCE aims to
raise the proportion of its diverse vendors.

DCE has reviewed its current contracts
and created a procurement schedule for
the products and services that are soon
due for a new procurement cycle.

The table for 9.1.2 is on the next page.

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9.1.2 Summary of Purchases
Desert Community Energy
Description of Suppliers with Majority
Workforce in California
In 2025, DCE received non-power services
and products from ten vendors. DCE sent
out a survey to its vendors to inquire
about their workforce diversity and
location distribution in November 2025.

Only two of its vendors responded by the
deadline. From the vendors that
responded, the average percentage of the
workforce in California is 87%.

At Best, Best, & Krieger, the workforce is

61.6% female and 38.4% male. Among
them, 40.7% identify as a minority (non-white) race or ethnicity. Donald B. Dame Consulting is operated by a single
individual who identifies as a white male.

9.1.2 Table for 2025 Supplier Diversity Procurement Results by Product and Service Categories (non-power purchases)
Direct
Spend $
Sub
Spend $ %
Product
Spend $
Service
Spend $
Total $ %
Minority
Male
African American -- -- -- -- --
Asian Pacific American -- -- -- -- --
Hispanic American -- -- -- -- --
Native American -- -- -- -- --
Minority
Female
African American -- -- -- -- --
Asian Pacific American -- -- -- -- --
Hispanic American -- -- -- -- --
Native American -- -- -- -- --
Total Minority Business Enterprise -- -- -- -- --
Women Business Enterprise -- -- -- -- --
LGBT Business Enterprise 30,940.66 0 1.4 6,035.66 24,905 30,940.66 1.4 Disabled Veteran Business Enterprise -- -- -- -- --
Persons with Disabilities Enterprise -- -- -- -- --
8(a) Businesses* -- -- -- -- --
Total Supplier Diversity Spend 30,940.66 0 1.4 6,035.66 24,905 30,940.66 1.4 Desert Community Energy Page 9

9.1.2 Table for 2025 Supplier Diversity Procurement Results by Product and Service Categories (non-power purchases) continued
Total $
Total Supplier Diversity Spend 30,940.66
Net Procurement** 2,226,308.23
Net Product Procurement 17,649.06
Net Service Procurement 2,208,659.17
Total # of Diverse Suppliers that Received Direct Spend 1 NOTE:
* 8(a) - Businesses owned and controlled by persons found to be disadvantaged by the U.S.

Small Business
Administration pursuant to Section 8(a) of the Small Business Act, as amended (15 U.S.C. 637 (a)) or the U.S. Secretary of Commerce, pursuant to Section 5 of Executive Order 11625 (GO 156 Section 1.3.13).
** Net Procurement incudes purchase orders, non-purchase orders, and credit card dollars. 1 Direct - Means Direct Procurement: when a CCA directly procures from a supplier. 2 Sub - Means Subcontractor Procurement: when a prime contractor, in contract with a CCA, procures from a subcontractor to fulfil its contractual obligation(s). % - Percentage of Net Procurement.

Desert Community Energy Page 10
Arbor Day Community Park Event
Expense Category 2025
Wages $0
Other Employee Expenses $0
Program Expenses $3,897.48
Reporting Expenses $0
Consultant Expenses $27,353.45
Total $31,250.93

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9.1.3 Diverse Supplier Program Expenses
DCE has spent $31,250.93 to implement a supplier diversity program in accordance with GO 156. The chart above includes expenses related to marketing and outreach for events, salaries for staff engaged in supplier diversity programs, as well as costs associated with training personnel on supplier diversity initiatives and reporting.

In 2025, there were no designated trainings for GO 156, leaving nothing to report.

However, in 2026, DCE intends to partner with MCE for their annual workshop to encourage participation from local businesses in the Coachella Valley.

In accordance with the California Public Utilities Code and the policy objectives of the California Public Utilities Commission (CPUC) as outlined in CPUC General Order 156, DCE encourages businesses to become certified by the CPUC as diverse business enterprises in all of its RFPs.

Desert Community Energy
In 2025, DCE worked with primary contractors to fully utilize diverse suppliers when possible. Efforts included encouraging contractors to subcontract with diverse suppliers in product procurement, if applicable. No prime contractors utilized diverse supplier subcontractors in 2025.

DCE continues to work with primary contractors to identify ways to enhance supplier diversity, including subcontracting, and encourage them to have all tiers of subcontractors that are eligible to participate in the certification process.

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9.1.5 Summary of Prime Contractors Utilization
of Diverse Supplier Subcontractors
Desert Community Energy
As previously mentioned, DCE has issued several RFOs and RFPs, resulting in various agreements, including renewable energy agreements, ESAs, and PPAs, to purchase power and electric capacity over four years. For example, DCE’s Phoenix project, one of the three Terra-Gen wind projects in Palm Springs for which DCE has an active PPA, demonstrates how DCE can fulfill its goal of reinvesting revenues locally to support the community by creating jobs and encouraging the development of additional local renewable energy sources.

In 2025, DCE signed two contracts with California-based battery storage projects, which will provide a combined 64 MW of carbon-free energy to its residents. DCE is also looking into the feasibility of building wind, solar, or battery storage near a CVAG bridge project, the Addressing Climate Change, Emergencies and Sand Storms (ACCESS) project along Indian Canyon Drive in Palm Springs, with the help of a local engineering company and solar/battery installer.

In summary, during the reporting year 2025, DCE did not procure with any CPUC Supplier Diversity Program-certified entities that provide energy storage systems, vegetation management, or renewable and non-renewable energy, nor did DCE own any power plants or PPAs that would necessitate procuring fuel for generation in 2025.

The table for 9.1.9 is on the next page.

9.1.6 Supplier Diversity Complaints Received
DCE is happy to report it did not receive any formal complaints this reporting cycle.

9.1.9 Supplier Diversity Activities and Progress
in Power Procurement

9.1.9 Table for
Supplier Diversity
Results in Power
(Energy)
Procurement
Direct
Power
Purchases
Direct Fuels for Generation Totals(1) % (2)
Power
Products
$
Diesel
$
Nuclear
$
Natural
Gas $
Direct(3)
and
Sub(4)
Totals $
Total(5)
$
Minority
Male
African American -- -- -- -- -- --
Asian Pacific American -- -- -- -- -- --
Hispanic American -- -- -- -- -- --
Native American -- -- -- -- -- --
Minority
Female
African American -- -- -- -- -- --
Asian Pacific American -- -- -- -- -- --
Hispanic American -- -- -- -- -- --
Native American -- -- -- -- -- --
Total Minority Business Enterprise -- -- -- -- -- --
Women Business Enterprise -- -- -- -- -- --
LGBT Business Enterprise -- -- -- -- -- --
Disabled Veteran Business Enterprise -- -- -- -- -- --
Persons with Disabilities Enterprise -- -- -- -- -- --
8(a) Businesses* -- -- -- -- -- --
Total Supplier Diversity $0 $0 $0 $0 $0 $0 0%
Desert Community Energy Page 13

9.1.9 Table for Supplier Diversity Results in Power (Energy) Procurement continued
Total $
Total Supplier Diversity $0
Net Power Procurement $46,842,889
Net Direct Power Purchases $46,842,889
Net Direct Fuels for Generation $0
Total # of Diverse Suppliers 0
NOTE:
(1) Excludes purchases from the California Independent System Operator (CAISO), utilities, federal entities, state entities, municipalities and cooperatives.
(2) % - Percentage of Net Procurement.
(3) Direct - Means Direct Procurement: when a CCA directly procures from a supplier. Includes Direct Power Purchases and Direct Fuels for Generation.
(4) Sub - Means Subcontractor Procurement: when a prime contractor, in contract with a CCA, procures from a subcontractor to fulfil its contractual obligation(s). (5) "Total" does not include pre-commercial development (COD) subcontracting values. * 8(a) - Businesses owned and controlled by persons found to be disadvantaged by the U.S. Small Business Administration pursuant to Section 8(a) of the Small Business Act, as amended (15 U.S.C. 637 (a)) or the U.S.

Secretary of Commerce, pursuant to Section 5 of Executive Order 11625 (GO 156 Section 1.3.13).

Desert Community Energy Page 14
Rendition of the ACCESS Bridge Project in Palm Springs
Planned External Program Activities

1. Increase the visibility of DCE
DCE plans to conduct a thorough review of its educational material and website to make necessary updates. It plans to increase its engagement with local residents within the City of Palm Springs by working with its Community Advisory Committee to promote its new small business customer program.

2. Help local, diverse suppliers get certified
DCE intends to be more proactive in sharing certification opportunities with local businesses. It plans to help promote the annual Supplier Diversity workshop at local community events and on its website, allowing local businesses to learn more about the certification process.

Planned Internal Program Activities

1. Enhance training and knowledge efforts on Supplier Diversity with current and new DCE Staff
DCE is a small agency with limited staff and utilizes consultants for most services. DCE will prioritize attending quarterly trainings provided by CPUC to CCAs, and plans to create a high-level overview Supplier Diversity Program training packet for new DCE Staff.

2. Utilize a new financial system to track DCE’s spend
DCE has implemented a new financial software system to monitor vendor invoices, revenue, and payments for fiscal year 2025/2026 and beyond. This system will be tailored to enhance tracking of Supplier Diversity spending for future reports.

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10.2 Supplier Diversity Program Activities
Planned for 2026
Desert Community Energy
Black History Month Community Fair
DCE will work with its current and future contractors to encourage the utilization of small, local, and diverse businesses to engage these business enterprises in all categories that provide subcontracting opportunities. Part of this outreach will include educating contractors on the importance and benefits of engaging the services of Clearinghouse-registered and eligible entities.

In March 2026, the DCE Board will receive the 2025 Supplier Diversity report with DCE’s planned goals for 2026. In the short term, DCE aims to train its team to become proficient in supplier diversity requirements and eventually become the go-to resource for local and county business entities. These objectives are reflected in the planned activities for 2026.

In the mid- and long-term, DCE aspires to expand its outreach to diverse local businesses, particularly those in underserved communities, and to increase opportunities to contract with diverse suppliers.

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Plans to Encourage Prime Contractors to
Subcontract Small, Local, and Diverse
Businesses
Desert Community Energy
Juneteenth Community Festival
Financial Row
Amount
(As of 9/30/2025)
Comparison Amount
(As of 9/30/2024) Variance % Variance
Assets
Current Assets
Bank
1011 - 1011 - DCE CAMP Account - 6235 $16,177,201 $13,986,610 $2,190,591 15.66% 1021 - 1021 - DCE LAIF Account 40-33-028 $6,594,511 $6,307,410 $287,101 4.55% 1050 - 1050 - DCE River City Bank Money Market -5470 $405,750 $405,748 $2 0.00% 1051 - 1051 - DCE River City Bank FSR LOC Collateral -1075 $147,000 $147,000 $0 0.00% 1052 - 1052 - DCE River City Bank Operating Account -8099 $199,172 $199,293 ($122) -0.06% 1053 - 1053 - DCE River City Bank ICS Account -0995 $4,235,499 [a] $0 $4,235,499 100.00% 1054 - 1054 - DCE River City Bank DDM Marketplace Sweep - 0991 $8,742 $2,106,054 ($2,097,313) -99.58% 1055 - 1055 - DCE River City Bank Lockbox -4446 $2,191,565 $3,030,038 ($838,473) -27.67% Total Bank $29,959,439 $26,182,153 $3,777,286 14.43%
Accounts Receivable
1200 - 1200 - Accounts Receivable $13,607,192 $16,537,065 ($2,929,873) -17.72% 1210 - 1210 - Due from other Governments $72,037 $0 $72,037 100.00% Total Accounts Receivable $13,679,229 $16,537,065 ($2,857,836) -17.28% Other Current Asset
1080 - 1080 - Fair Value Adjustment $12,725 $13,000 ($275) -2.12% 1250 - 1250 - Accrued Accounts Receivable $5,929,845 $4,583,719 $1,346,126 29.37% 1300 - 1300 - Allowance for Doubtful Accounts ($2,387,919) ($1,866,979) ($520,940) 27.90% 1400 - 1400 - Interest Receivable $72,037 $70,352 $1,686 2.40% 1600 - 1600 - Prepaid Expenses $566,374 [b] $6,033 $560,341 9287.84% 1650 - 1650 - Deposits Receivable $1,010,584 $710,584 $300,000 42.22% Total Other Current Asset $5,203,646 $3,516,709 $1,686,938 47.97% Total Current Assets $48,842,315 $46,235,927 $2,606,388 5.64% Total Assets $48,842,315 $46,235,927 $2,606,388 5.64%
Liabilities & Net Position
Current Liabilities
Accounts Payable
2111 - 2111 - Accounts Payable $9,046,927 $7,538,268 $1,508,659 20.01% 2120 - 2120 - Due To Other Government $646,427 $653,233 ($6,806) -1.04% Total Accounts Payable $9,693,354 $8,191,501 $1,501,853 18.33% Other Current Liability
2150 - 2150 - Accrued Accounts Payable $214,111 $3,311,607 ($3,097,496) -93.53% 2250 - 2250 - NEM Escrow Payable $49,156 $67,148 ($17,992) -26.79% 2300 - 2300 - Taxes Payable
2301 - 2301 - Utility Users Tax (UUT) $211,486 $212,875 ($1,390) -0.65% 2302 - 2302 - Electric Energy Surcharge (EES) $6,627 $6,329 $298 4.70% Total - 2300 - 2300 - Taxes Payable $218,112 $219,205 ($1,092) -0.50% Total Other Current Liability $481,380 $3,597,960 ($3,116,580) -86.62% Total Current Liabilities $10,174,734 $11,789,461 ($1,614,727) -13.70% Long Term Liabilities
2451 - 2451 - Development Deposit $405,000 $405,000 $0 0.00% Total Long Term Liabilities $405,000 $405,000 $0 0.00%
Net Position
3100 - 3100 - F/B-Unrestricted $39,895,312 $35,039,779 $4,855,532 13.86% 3200 - 3200 - F/B-Restricted $147,000 $147,000 $0 0.00% Net Income ($1,779,731) ($1,145,313) ($634,418) 55.39%
Total Net Position $38,262,580 $34,041,466 $4,221,114 12.40% Total Liabilities & Net Position $48,842,315 $46,235,927 $2,606,387 5.64% [a] New bank account opened in FY2025/26.
[b] The increase is primarily attributable to higher prepaid Resource Adequacy costs.

Desert Community Energy
Unaudited Statement of Net Position Prev Year Comparison As of September 30, 2025
Financial Row Amount Budget Amount Amount Over Budget % of Budget Ordinary Revenue/Expense
Revenue
4310 - 4310 - Carbon Free $20,441,067 $23,122,483 ($2,681,416) 88.40% 4350 - 4350 - Desert Saver $4,354,244 $6,004,550 ($1,650,306) 72.52% 4400 - 4400 - Energy Settlements $1,188,603 $93,840 $1,094,763 1,266.63% Total - Revenue $25,983,914 $29,220,873 ($3,236,959) 88.92% Expense
5100 - 5100 - Energy Procurement
5100 - 5100 - Energy Procurement $11,853,570 $11,494,750 $358,820 103.12% 5110 - 5110 - PCC1 REC Purchases $1,958,112 $2,083,378 ($125,266) 93.99% 5200 - 5200 - Resource Adequacy $11,178,623 $10,756,693 $421,931 103.92% 5400 - 5400 - CAISO Market Charges $582,414 $3,378,542 ($2,796,128) 17.24% 5500 - 5500 - Long Term PPA $973,393 $70,113 $903,279 1,388.31% Total - 5100 - 5100 - Energy Procurement $26,546,112 $27,783,476 ($1,237,365) 95.55% 6100 - 6100 - Advertising/Marketing/Sponsorships $0.00 $5,150.01 ($5,150.01) 0.00% 6175 - 6175 - Postage $5,519 $3,315 $2,204 166.47%
6200 - 6200 - Printing/Copying $4,065 $3,300 $765 123.18% 6250 - 6250 - Professional Services
6250 - 6250 - Professional Services $31,924 $53,528 ($21,604) 59.64% 6260 - 6260 - Audit/Accounting Services $9,500 $0 $9,500 100.00% Total - 6250 - 6250 - Professional Services $41,424 $53,528 ($12,104) 77.39% 6280 - 6280 - Legal Services $18,474 $26,050 ($7,576) 70.92% 6500 - 6500 - Direct Program/Project Costs
6550 - 6550 - Consultants $509,841 $733,333 ($223,492) 69.52% 6650 - 6650 - Outreach Services $3,674 $6,600 ($2,926) 55.66% Total - 6500 - 6500 - Direct Program/Project Costs $513,514 $739,933 ($226,418) 69.40% 7050 - 7050 - Account/Service Fees $3,084 $54,525 ($51,441) 5.66% 7175 - 7175 - Memberships $28,072 $28,072 $0 100.00%
7200 - 7200 - Office Supplies $0.00 $375.00 ($375.00) 0.00% 7225 - 7225 - Subscription Based Information Technology $980 $0 $980 100.00% 7275 - 7275 - Insurance $2,049 $2,138 ($89) 95.84%
7350 - 7350 - Bad Debt Expense $892,631 $1,048,573 ($155,942) 85.13% Total - Expense $1,509,813 $1,964,958 ($455,145) 76.84% Net Ordinary Revenue ($2,072,011) ($527,562) ($1,544,449) 392.75% Other Revenue and Expenses
Other Revenue
8001 - 8001 - Investment Income $287,371 $210,154 $77,217 136.74% 8005 - 8005 - Gain/(Loss) in Investments $4,908 $0 $4,908 100.00% Total - Other Revenue $292,279 $210,154 $82,125 139.08% Net Other Revenue $292,279 $210,154 $82,125 139.08%
Net Revenue ($1,779,731) ($317,408) ($1,462,323) 560.71% The Budget vs. Actual comparison is based on the original budget. An amended budget reflecting updates will be proposed at the March 23, 2026, Board meeting.

Desert Community Energy
Unaudited Changes to Net Position Budget vs. Actual
July 1, 2025 - September 30, 2025
Financial Row
Amount
(7/1/2025 - 9/30/2025)
Comparative Amount
(7/1/2024 - 9/30/2024) Variance % Variance
Ordinary Revenue/Expense
Revenue
4310 - 4310 - Carbon Free $20,441,067 $23,522,823 ($3,081,757) -13.10% 4350 - 4350 - Desert Saver $4,354,244 $6,108,512 ($1,754,268) -28.72% 4400 - 4400 - Energy Settlements $1,188,603 $238,574 $950,029 398.21% Total - Revenue $25,983,914 $29,869,910 ($3,885,996) -13.01% Expense
5100 - 5100 - Energy Procurement
5100 - 5100 - Energy Procurement $11,853,570 $13,266,125 ($1,412,555) -10.65% 5110 - 5110 - PCC1 REC Purchases $1,958,112 [a] $1,137,295 $820,817 72.17% 5200 - 5200 - Resource Adequacy $11,178,623 $9,407,375 $1,771,248 18.83% 5220 - 5220 - Carbon Free Energy $0 [b] $2,721,870 ($2,721,870) -100.00% 5400 - 5400 - CAISO Market Charges $582,414 [c] $1,709,478 ($1,127,064) -65.93% 5500 - 5500 - Long Term PPA $973,393 [d] $0 $973,393 100.00% Total - 5100 - 5100 - Energy Procurement $26,546,112 $28,242,142 ($1,696,030) -6.01% 5600 - 5600 - CPUC Penalty $0 $1,750,159 ($1,750,159) -100.00% 6100 - 6100 - Advertising/Marketing/Sponsorships $0 $3,503 ($3,503) -100.00% 6175 - 6175 - Postage $5,519 $4,247 $1,271 29.93%
6200 - 6200 - Printing/Copying $4,065 $2,864 $1,201 41.96% 6250 - 6250 - Professional Services
6250 - 6250 - Professional Services $31,924 $85,917 ($53,993) -62.84% 6260 - 6260 - Audit/Accounting Services $9,500 $0 $9,500 100.00% Total - 6250 - 6250 - Professional Services $41,424 $85,917 ($44,493) -51.79% 6280 - 6280 - Legal Services $18,474 $11,816 $6,659 56.36% 6500 - 6500 - Direct Program/Project Costs
6550 - 6550 - Consultants $509,841 $628,251 ($118,410) -18.85% 6650 - 6650 - Outreach Services $3,674 $2,514 $1,160 46.15% 6675 - 6675 - Customer Programs $0 $1,628 ($1,628) -100.00% Total - 6500 - 6500 - Direct Program/Project Costs $513,514 $632,393 ($118,878) -18.80% 7050 - 7050 - Account/Service Fees $3,084 $526 $2,559 486.78% 7075 - 7075 - IT Services $0 $1,564 ($1,564) -100.00%
7150 - 7150 - Training and Event Registration $0 $21,895 ($21,895) -100.00% 7175 - 7175 - Memberships $28,072 $0 $28,072 100.00%
7225 - 7225 - Subscription Based Information Technology $980 $0 $980 100.00% 7275 - 7275 - Insurance $2,049 $2,011 $38 1.86%
7350 - 7350 - Bad Debt Expense $892,631 $568,229 $324,402 57.09% Total - Expense $1,509,813 $1,334,964 $174,848 13.10%
Net Ordinary Revenue ($2,072,011) ($1,457,355) ($614,655) 42.18% Other Revenue and Expenses
Other Revenue
8001 - 8001 - Investment Income $287,371 $275,214 $12,157 4.42% 8005 - 8005 - Gain/(Loss) in Investments $4,908 $36,828 ($31,920) -86.67% Total - Other Revenue $292,279 $312,042 ($19,763) -6.33% Net Other Revenue $292,279 $312,042 ($19,763) -6.33%
Net Revenue ($1,779,731) [e] ($1,145,313) ($634,418) 55.39% [b] DCE revised its modeling of Carbon Free energy procurement for the Carbon Free rate program in 2025, which resulted in a reduction of necessary Carbon Free procurement to maintain the 100% requirement.
[c] DCE realized less charges from the organized energy market operator that administers the ISO market DCE participates in. [d] New account for FY2025/26; it was combined with Energy Procurement in prior years. [e] The net loss demonstrated in the first two quarter is partly due to the timing of energy purchases compared to when the costs were budgeted and will offset in a future quarter.
[a] The increase is mainly attributable to higher VAMO costs.

Desert Community Energy
Unaudited Changes to Net Position Prev Year Comparison
July 1, 2025 - September 30, 2025
Financial Row
Amount
(As of 12/31/2025)
Comparison Amount
(As of 12/31/2024) Variance % Variance
Assets
Current Assets
Bank
1011 - 1011 - DCE CAMP Account - 6235 $18,062,636 $14,158,763 $3,903,873 27.57% 1021 - 1021 - DCE LAIF Account 40-33-028 $6,666,548 $6,377,761 $288,787 4.53% 1050 - 1050 - DCE River City Bank Money Market -5470 $406,551 $405,773 $779 0.19% 1051 - 1051 - DCE River City Bank FSR LOC Collateral -1075 $147,000 $147,000 $0 0.00% 1052 - 1052 - DCE River City Bank Operating Account -8099 $199,135 $199,405 ($270) -0.14% 1053 - 1053 - DCE River City Bank ICS Account -0995 $4,589,562 [a] $0 $4,589,562 100.00% 1054 - 1054 - DCE River City Bank DDM Marketplace Sweep - 0991 $0 [a] $3,379,147 ($3,379,147) -100.00% 1055 - 1055 - DCE River City Bank Lockbox -4446 $4,107,288 $3,715,957 $391,330 10.53% Total Bank $34,178,720 $28,383,806 $5,794,914 20.42%
Accounts Receivable
1200 - 1200 - Accounts Receivable $12,209,206 $14,549,473 ($2,340,267) -16.08% Total Accounts Receivable $12,209,206 $14,549,473 ($2,340,267) -16.08% Other Current Asset
1080 - 1080 - Fair Value Adjustment $14,543 ($2,411) $16,954 -703.22% 1250 - 1250 - Accrued Accounts Receivable $2,064,379 $1,980,391 $83,988 4.24% 1300 - 1300 - Allowance for Doubtful Accounts ($2,759,077) ($2,586,535) ($172,542) 6.67% 1400 - 1400 - Interest Receivable $70,490 $74,183 ($3,693) -4.98% 1600 - 1600 - Prepaid Expenses $628,101 [b] $4,022 $624,079 15,516.48% 1650 - 1650 - Deposits Receivable $1,010,584 $710,584 $300,000 42.22% Total Other Current Asset $1,029,020 $180,234 $848,786 470.94% Total Current Assets $47,416,946 $43,113,513 $4,303,433 9.98% Total Assets $47,416,946 $43,113,513 $4,303,433 9.98%
Liabilities & Net Position
Current Liabilities
Accounts Payable
2111 - 2111 - Accounts Payable $4,413,593 $3,620,093 $793,500 21.92% 2120 - 2120 - Due To Other Government $644,153 $378,753 $265,401 70.07% Total Accounts Payable $5,057,746 $3,998,845 $1,058,901 26.48% Other Current Liability
2150 - 2150 - Accrued Accounts Payable $1,821,197 $1,709,344 $111,853 6.54% 2250 - 2250 - NEM Escrow Payable $46,205 $58,854 ($12,648) -21.49% 2300 - 2300 - Taxes Payable
2301 - 2301 - Utility Users Tax (UUT) $96,233 $91,703 $4,530 4.94% 2302 - 2302 - Electric Energy Surcharge (EES) $3,303 $3,491 ($188) -5.39% Total - 2300 - 2300 - Taxes Payable $99,536 $95,194 $4,342 4.56% Total Other Current Liability $1,966,938 $1,863,391 $103,547 5.56% Total Current Liabilities $7,024,685 $5,862,237 $1,162,448 19.83% Long Term Liabilities
2451 - 2451 - Development Deposit $410,768 $405,000 $5,768 1.42% Total Long Term Liabilities $410,768 $405,000 $5,768 1.42% Net Position
3100 - 3100 - F/B-Unrestricted $39,895,310 $35,039,779 $4,855,531 13.86% 3200 - 3200 - F/B-Restricted $147,000 $147,000 $0 0.00% Net Income ($60,817) $1,659,497 ($1,720,314) -103.66%
Total Net Position $39,981,493 $36,846,276 $3,135,217 8.51% Total Liabilities & Net Position $47,416,946 $43,113,513 $4,303,433 9.98% [a] The DDM cash sweep account with River City Bank was closed in September 2025 and replaced with an ICS account. [b] The increase is primarily attributable to higher prepaid Resource Adequacy costs.

Desert Community Energy
Unaudited Statement of Net Position Prev Year Comparison As of December 31, 2025
Financial Row Amount Budget Amount Amount Over Budget % of Budget Ordinary Revenue/Expense
Revenue
4310 - 4310 - Carbon Free $28,794,032 $33,168,245 ($4,374,213) 86.81% 4350 - 4350 - Desert Saver $6,311,224 $8,571,986 ($2,260,762) 73.63% 4400 - 4400 - Energy Settlements $1,914,989 $145,990 $1,768,999 1,311.73% 4900 - 4900 - Other Revenue $3,655 $0 $3,655 100.00%
Total - Revenue $37,023,900 $41,886,221 ($4,862,321) 88.39% Expense
5100 - 5100 - Energy Procurement
5100 - 5100 - Energy Procurement $15,509,415 $15,154,221 $355,194 102.34% 5110 - 5110 - PCC1 REC Purchases $3,741,722 $4,312,746 ($571,025) 86.76% 5200 - 5200 - Resource Adequacy $12,769,151 $13,364,214 ($595,063) 95.55% 5220 - 5220 - Carbon Free Energy $550,000 $550,000 $0 100.00% 5400 - 5400 - CAISO Market Charges $1,208,605 $4,404,332 ($3,195,728) 27.44% 5500 - 5500 - Long Term PPA $1,333,307 $145,087 $1,188,220 918.97% Total - 5100 - 5100 - Energy Procurement $35,112,199 $37,930,601 ($2,818,401) 92.57% 6100 - 6100 - Advertising/Marketing/Sponsorships $0 $10,300 ($10,300) 0.00% 6175 - 6175 - Postage $8,582 $6,630 $1,952 129.44%
6200 - 6200 - Printing/Copying $6,847 $6,600 $247 103.74% 6250 - 6250 - Professional Services
6250 - 6250 - Professional Services $66,894 $80,965 ($14,071) 82.62% 6260 - 6260 - Audit/Accounting Services $12,350 $0 $12,350 100.00% Total - 6250 - 6250 - Professional Services $79,244 $80,965 ($1,721) 97.87% 6280 - 6280 - Legal Services $44,705 $52,100 ($7,395) 85.81% 6500 - 6500 - Direct Program/Project Costs
6550 - 6550 - Consultants $1,070,428 $1,466,666 ($396,238) 72.98% 6650 - 6650 - Outreach Services $8,591 $13,200 ($4,609) 65.09% 6675 - 6675 - Customer Programs $0 $500,000 ($500,000) 0.00% Total - 6500 - 6500 - Direct Program/Project Costs $1,079,019 $1,979,866 ($900,846) 54.50% 7050 - 7050 - Account/Service Fees $6,400 $57,375 ($50,975) 11.15% 7175 - 7175 - Memberships $56,019 $56,019 $0 100.00%
7200 - 7200 - Office Supplies $0 $750 ($750) 0.00%
7225 - 7225 - Subscription Based Information Technology $2,518 $0 $2,518 100.00% 7275 - 7275 - Insurance $4,096 $4,275 ($179) 95.81%
7350 - 7350 - Bad Debt Expense $1,263,789 $1,502,648 ($238,859) 84.10% Total - Expense $2,551,219 $3,757,528 ($1,206,309) 67.90% Net Ordinary Revenue ($639,519) $198,092 ($837,611) -322.84% Other Revenue and Expenses
Other Revenue
8001 - 8001 - Investment Income $571,976 $420,308 $151,668 136.08% 8005 - 8005 - Gain/(Loss) in Investments $6,726 $0 $6,726 100.00% Total - Other Revenue $578,702 $420,308 $158,394 137.69% Net Other Revenue $578,702 $420,308 $158,394 137.69%
Net Revenue ($60,817) $618,400 ($679,217) -9.83%
The Budget vs. Actual comparison is based on the original budget. An amended budget reflecting updates will be proposed at the March 23, 2026, Board meeting.

Desert Community Energy
Unaudited Changes to Net Position Budget vs. Actual
July 1, 2025 - December 31, 2025
Financial Row
Amount
(7/1/2025 - 12/31/2025)
Comparative Amount
(7/1/2024 - 12/31/2024) Variance % Variance
Ordinary Revenue/Expense
Revenue
4310 - 4310 - Carbon Free $28,794,032 $32,450,395 ($3,656,364) -11.27% 4350 - 4350 - Desert Saver $6,311,224 $8,386,465 ($2,075,241) -24.75% 4400 - 4400 - Energy Settlements $1,914,989 [a] $6,515,593 ($4,600,604) -70.61% 4900 - 4900 - Other Revenue $3,655 $14,884 ($11,229) -75.44% Total - Revenue $37,023,900 $47,367,337 ($10,343,437) -21.84% Expense
5100 - 5100 - Energy Procurement
5100 - 5100 - Energy Procurement $15,509,415 $17,317,148 ($1,807,733) -10.44% 5110 - 5110 - PCC1 REC Purchases $3,741,722 $2,961,672 $780,050 26.34% 5200 - 5200 - Resource Adequacy $12,769,151 $13,907,614 ($1,138,463) -8.19% 5220 - 5220 - Carbon Free Energy $550,000 [b] $4,916,358 ($4,366,358) -88.81% 5400 - 5400 - CAISO Market Charges $1,208,605 [c] $2,811,659 ($1,603,054) -57.01% 5500 - 5500 - Long Term PPA $1,333,307 [d] $0 $1,333,307 100.00% Total - 5100 - 5100 - Energy Procurement $35,112,199 $41,914,450 ($6,802,251) -16.23% 5600 - 5600 - CPUC Penalty $0 $1,750,159 ($1,750,159) -100.00% 6100 - 6100 - Advertising/Marketing/Sponsorships $0 $3,503 ($3,503) -100.00% 6175 - 6175 - Postage $8,582 $7,016 $1,566 22.33%
6200 - 6200 - Printing/Copying $6,847 $5,632 $1,215 21.58% 6250 - 6250 - Professional Services
6250 - 6250 - Professional Services $66,894 $125,699 ($58,805) -46.78% 6260 - 6260 - Audit/Accounting Services $12,350 $0 $12,350 100.00% Total - 6250 - 6250 - Professional Services $79,244 $125,699 ($46,455) -36.96% 6280 - 6280 - Legal Services $44,705 $32,117 $12,588 39.19% 6500 - 6500 - Direct Program/Project Costs
6550 - 6550 - Consultants $1,070,428 $1,190,049 ($119,621) -10.05% 6650 - 6650 - Outreach Services $8,591 $6,294 $2,298 36.50% 6675 - 6675 - Customer Programs $0 $1,628 ($1,628) -100.00% Total - 6500 - 6500 - Direct Program/Project Costs $1,079,019 $1,197,970 ($118,951) -9.93% 7050 - 7050 - Account/Service Fees $6,400 $2,779 $3,621 130.30% 7075 - 7075 - IT Services $0 $3,079 ($3,079) -100.00%
7150 - 7150 - Training and Event Registration $0 $43,790 ($43,790) -100.00% 7175 - 7175 - Memberships $56,019 $0 $56,019 100.00%
7225 - 7225 - Subscription Based Information Technology $2,518 $0 $2,518 100.00% 7275 - 7275 - Insurance $4,096 $4,022 $74 1.84%
7350 - 7350 - Bad Debt Expense $1,263,789 $1,197,224 $66,565 5.56% Total - Expense $2,551,219 $2,622,830 ($71,610) -2.73%
Net Ordinary Revenue ($639,519) $1,079,898 ($1,719,417) -159.22% Other Revenue and Expenses
Other Revenue
8001 - 8001 - Investment Income $571,976 $558,182 $13,794 2.47% 8005 - 8005 - Gain/(Loss) in Investments $6,726 $21,417 ($14,691) -68.59% Total - Other Revenue $578,702 $579,599 ($897) -0.15%
Other Expense
7400 - 7400 - Interest Expense $0 $0 $0 100.00%
Total - Other Expense $0 $0 $0 100.00%
Net Other Revenue $578,702 $579,599 ($897) -0.15%
Net Revenue ($60,817) [e] $1,659,497 ($1,720,314) -103.66% [d] New account for FY2025/26; it was combined with Energy Procurement in prior years. [c] DCE realized less charges from the organized energy market operator that administers the ISO market DCE participates in. [e] The net loss demonstrated in the first two quarter is partly due to the timing of energy purchases compared to when the costs were budgeted and will offset in a future quarter. [a] The decrease is mainly due to a one-time environmental energy sale of approximately $3.8 million in December 2024 that occurred in the prior year and did not recur in the current fiscal year.
[b] DCE revised its modeling of Carbon Free energy procurement for the Carbon Free rate program in 2025, which resulted in a reduction of necessary Carbon Free procurement to maintain the 100% requirement.

Desert Community Energy
Unaudited Changes to Net Position Prev Year Comparison
July 1, 2025 - December 31, 2025
Carrying % of Fair Market % of Annual
Description Amount Total Value Total %age Yield

CASH AND INVESTMENTS UNDER THE DIRECTION OF DCE
River City Bank - Operating $ 199,172 0.66% 199,172 $ 0.66% N/A River City Bank - DDM Marketplace Sweep $ 8,742 0.03% $ 8,742 0.03% 4.34% River City Bank - ICS $ 4,235,499 14.14% 4,235,499 $ 14.13% 4.33% River City Bank - Lockbox $ 2,191,565 7.32% 2,191,565 $ 7.31% N/A River City Bank - Money Market $ 405,750 1.35% 405,750 $ 1.35% 2.28% River City Bank - Stand-by FSR Letter of Credit $ 147,000 0.49% 147,000 $ 0.49% N/A Local Agency Investment Fund (LAIF) $ 6,594,511 22.01% 6,607,235 $ [a] 22.05% 4.34% CAMP $ 16,177,201 54.00% 16,177,201 $ 53.98% 4.27%
Overall Total $ 29,959,439 100.00% 29,972,164 $ 100.00% Note:

Duly submitted by:

Claude T. Kilgore
Director of Finance

DESERT COMMUNITY ENERGY

INVESTMENT REPORT
FOR SEPTEMBER 30, 2025
[a] Source of Market Values - LAIF, State of California Pooled Money Investment Account Market Valuation - September 2025. Paper Gain/(Loss) was 0.193%. Fair market value includes accrued interest.

Carrying % of Fair Market % of Annual
Description Amount Total Value Total %age Yield

CASH AND INVESTMENTS UNDER THE DIRECTION OF DCE
River City Bank - Operating $ 199,135 0.58% 199,135 $ 0.58% N/A River City Bank - ICS $ 4,589,562 13.43% 4,589,562 $ [a] 13.42% 4.19% River City Bank - Lockbox $ 4,107,288 12.02% 4,107,288 $ 12.01% N/A River City Bank - Money Market $ 406,551 1.19% 406,551 $ 1.19% 2.28% River City Bank - Stand-by FSR Letter of Credit $ 147,000 0.43% 147,000 $ 0.43% N/A Local Agency Investment Fund (LAIF) $ 6,666,548 19.50% 6,681,091 $ [b] 19.54% 4.20% CAMP $ 18,062,636 52.85% 18,062,636 $ 52.83% 3.90%
Overall Total $ 34,178,720 100.00% 34,193,263 $ 100.00% Note:

Duly submitted by:

Claude T. Kilgore
Director of Finance

DESERT COMMUNITY ENERGY

INVESTMENT REPORT
FOR DECEMBER 31, 2025
[b] Source of Market Values - LAIF, State of California Pooled Money Investment Account Market Valuation - December 2025. Paper Gain/(Loss) was 0.218%. Fair market value includes accrued interest.

DCE's investment portfolio demonstrates its ability to fully sustain its expenditure requirements for at least the next six months and beyond including all liquidity requirements for the foreseeable future. [a]The DDM cash sweep account with River City Bank was closed in September 2025 and replaced with an ICS account.

ITEM 5J

STAFF REPORT
Subject: Update on Calpine Community Energy’s Community Benefits Grant Program Contact: Lisa McNeilly, Director of Energy & Sustainability ([email protected]) Recommendation: Information
Background: Calpine Community Energy (Calpine) provides front-line customer services for DCE. The relationship dates back to February 2018, when the DCE Board authorized a contract with Calpine to provide data management and customer call center services through February 26, 2025. On May 19, 2025, the Board approved an agreement with Calpine Community Energy to provide data management and customer call center services through April 2028.

In addition to the continuation of existing services, the new contract establishes a community benefits grants program for the DCE service territory. For this program, Calpine rebates two percent of the annual data management service fees directly to local non-profit organizations that help advance clean energy, sustainability, and resiliency in support of DCE’s mission. At the September 2025 Board meeting, Calpine shared preliminary information about the anticipated rollout of the community benefits grant program and gathered the Board’s input on how to coordinate these efforts with the City of Palm Springs’ other community engagement efforts.

DCE staff have begun working with Calpine to further refine elements of the program, which is now anticipated to launch in May 2026. Eligible organizations must be IRS-designated 501(c)3 nonprofit(s) in the DCE service territory, with a local or regional focus, and applications should align with one or more focus areas (environmental and social justice communities research, education, and/or workforce development). Calpine will collaborate with DCE staff on the grant guidelines, on promotion of the program, and on the evaluation of applications, but has sole responsibility for awarding the funds. With approximately $11,000 in available funding for 2026, DCE expects to award one to three grants, which will have a one-year term. Applications will be relatively simple and include a short description of the proposed work and a high-level budget.

DCE staff will be creating a dedicated grant webpage and send an informational email to Palm Springs–based 501(c)(3) organizations using publicly available sources to compile the distribution list. The application period should be open for at least six weeks, with grant awardees notified in late summer or early fall. Staff will continue to provide updates to the Board as details are finalized and will notify the Board when the program launches.

Fiscal Analysis: There is no cost to DCE for this informational report. Calpine’s contract for data management and customer call center services costs about $590,000 annually. The new contract includes the two percent rebate for the proposed community benefits grants program, which was not a benefit included in the prior contract. The grant amount is projected to equate to $11,000 or more benefitting non-profit organizations in DCE’s service territory.

Desert Community Energy Board
March 23, 2026

Desert Community Energy Board of DirectorsMarch 23, 2026

Desert Community Energy Board of Directors
March 23, 2026