Agenda packet — Desert Community Energy Board of Directors, June 24, 2026

DESERT COMMUNITY ENERGY

MEETING AGENDA
Wednesday, June 24, 2026
11:00 a.m.

Palm Springs City Hall
Large Conference Room
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
This is a special meeting. Members of the public may use the following link for listening access and ability to address the Desert Community Energy Board when called upon:
https://us02web.zoom.us/j/82099146709?pwd=duz7EDH2plm2bacxCiBGlAlnWRKscp.1 Dial In: +1 669 900 9128 US
Webinar ID: 820 9914 6709
Password: 959258

IF YOU ARE UNABLE TO CONNECT VIA DIAL IN OPTION,
PLEASE CALL 760-346-1127.

Members of the public are encouraged to submit comment in connection with the Desert Community Energy meeting by email to: [email protected] by 5:00 p.m. on the day prior to the Board meeting. Members of the public joining the meeting by Zoom can provide comment by using the “raise hand” feature or hitting *9 on the phone keypad.

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

THIS MEETING IS ADA ACCESSIBLE.

ACTION MAY RESULT ON ANY ITEMS ON THIS AGENDA.

1. CALL TO ORDER – Chair Jeffrey Bernstein, City of Palm Springs Roll Call P5
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. CONSENT CALENDAR
A. Approve the minutes of the September 15, 2025 meeting P6 B. Approve the minutes of the November 20, 2025 special meeting P9 C. Approve the minutes of the March 23, 2026 special meeting P13 D. Authorize the Executive Director to execute a termination agreement with Desert P16 Sands Energy Storage II, LLC, ending the 2023 Energy Storage Agreement E. Adopt Resolution 2026-02, approving the 2025 Power Source Disclosure Annual P21 Report and affirming the Executive Director’s authority to complete all actions necessary for submittal to the California Energy Commission, including attesting to its veracity
F. Adopt Resolution No. 2026-03, authorizing the Executive Director to prepare and P26 approve DCE’s 2026 Integrated Resource Plan and complete all actions necessary for submittal to the California Public Utilities Commission G. Authorize the classification of all fiscal year 2025-26 revenue above a 2.0x fixed charge P30 coverage ratio to the Stabilization Special Reserves Fund, in accordance with Governmental Accounting Standards Board Statement No. 62, with the final deferred revenue amount to be determined based on final fiscal year-end operating results

5. DISCUSSION / ACTION
A. DCE Fiscal Year 2026-27 Budget – Claude Kilgore P32
Recommendation: Adopt Resolution 2026-04, approving DCE’s Fiscal Year 2026-27 Budget and approve a 4 percent generation rate decrease for Carbon Free customers effective July 1, 2026 and a second generation rate decrease for Carbon Free customers effective January 1, 2027, currently budgeted at 6.7 percent, pending operating results during the fiscal year B. Final Authorizations for Pre-Pay Bond Financing – Lisa McNeilly and Claude Kilgore P36 Recommendation: Authorize the additional steps to establish pre-payment bond financing including:

1.) Authorize the Executive Director to take the necessary steps to finalize and execute Limited Assignment Agreements (LAAs) among DCE, J. Aron & Company (a subsidiary of Goldman Sachs), and four sellers identified in existing Power Purchase Agreements (Coachella Wind Holdings, San Gorgonio II Westwinds/Altwind, San Gorgonio II Westwinds/East Wind, and San Gorgonio Westwinds II);

2.) Authorize the Executive Director to take the necessary steps to finalize and execute the proposed Edison Electric Institute Master Agreement and Confirmation with Clean Energy Alliance, along with a corresponding LAA;

3.) Adopt Resolution No. 2026-05 authorizing the execution and delivery of a Clean Energy Purchase Contract and certain other documents in connection with the issuance of California Community Choice Financing Authority Clean Energy Project Revenue Bonds; and certain other actions required to ensure the reduction in the cost of renewable energy therewith; and

4.) Authorize the Executive Director to take any further steps necessary to fully execute the pre-pay transaction

6. INFORMATION
A) Attendance Record P62
B) Assignment Agreement for Resi Station Contract P63
C) Community Advisory Committee Update P64
D) Unaudited Year-to-Year Financial Report as of March 31, 2026 P66 E) DCE’s Quarterly Investment Report through March 31, 2026 P69 F) Governmental Accounting Standards Board’s (GASB) Video Series P70 G) Coachella Valley Association of Governments’ annual meeting calendar P71 H) Calpine Community Energy’s Community Benefits Grant Program P72

7. 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.

8. ANNOUNCEMENTS
The next DCE Board meeting will be held September 21, 2026, at 3:00 p.m. at the Large Conference Room at Palm Springs City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

The next meeting of the Coachella Valley Association of Governments’ General Assembly will be held on Monday, June 29, 2026, at 6 p.m. at Fantasy Springs Resort’s Special Events Center, 84-245 Indio Springs Parkway, Indio, 92203.

9. 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
Meeting Minutes
September 15, 2025

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

2. ROLL CALL

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

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

3. AGENDA MODIFICATIONS (IF ANY)
None

4. PUBLIC COMMENTS ON AGENDA ITEMS
None

5. BOARD MEMBER/EXECUTIVE DIRECTOR COMMENTS
Director of Energy & Sustainability Lisa McNeilly highlighted the update on the General Rate Case, which is included as an informational agenda item (Item 8B). Chair Bernstein thanked Director of Finance Claude Kilgore and the team for their work on this effort.

6. CONSENT CALENDAR

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

A. Approve the minutes of the June 16, 2025, Board meeting THE MOTION CARRIED WITH 2 AYES.

Chair Bernstein Aye
Vice Chair Veronica Chavez Aye
The audio file for this meeting can be found at: http://www.desertcommunityenergy.org Desert Community Energy Board of Directors
Meeting Minutes – September 15, 2025

6.1 ITEMS HELD OVER FROM CONSENT CALENDAR
None

7. DISCUSSION / ACTION
A. Presentation: Calpine Community Energy’s Community Benefits Grant Program Ms. McNeilly introduced the item and the new program that was authorized when the Board approved a new contract with Calpine. Caleb Ingerson, Client Services Specialist with Calpine, joined the meeting via Zoom to give an overview of the program and timeline for rollout.

Member discussion ensued. Both Ms. McNeilly and Mr. Ingerson addressed questions from the Board and noted that there would be coordination with City staff during the program’s rollout.

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

B. DCE Mid-Term Reliability Procurement: Resource Adequacy + TB8 with Balsam Project LLC
Ms. McNeilly presented the staff report and details of the agreement. Member discussion ensued, with staff addressing questions about Resource Adequacy and other procurement contracts.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR BERNSTEIN TO ADOPT RESOLUTION NO. 2025-06, APPROVING A 15-YEAR RESOURCE ADEQUACY + TB8 AGREEMENT (RA+TB8) WITH BALSAM

PROJECT LLC (BALSAM) FOR ITS SAN BERNARDINO COUNTY BATTERY

ENERGY STORAGE SYSTEM (BESS) PROJECT AND AUTHORIZING THE

EXECUTIVE DIRECTOR AND/OR LEGAL COUNSEL TO MAKE MINOR

MODIFICATIONS BEFORE EXECUTION OF THE AGREEMENT
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
C. Establishing a New Energy Efficiency Program for DCE Customers Management Analyst Eman Nazir provided the staff report and details of the two-pronged program plan.

Member discussion ensued, with the Board inquiring about the distribution of kits, outreach coordination and opportunities to expand in the future.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR

BERNSTEIN TO APPROVE THE PROPOSED ENERGY EFFICIENCY PROGRAM Desert Community Energy Board of Directors
Meeting Minutes – September 15, 2025

PLAN FOR DCE CUSTOMERS AND AUTHORIZE THE EXECUTIVE DIRECTOR TO TAKE THE NECESSARY STEPS TO FINALIZE AND SUBMIT AN ELECT-TO-ADMINISTER TIER 3 ADVICE LETTER TO THE CALIFORNIA PUBLIC UTILITIES

COMMISSION IN SUPPORT OF THE APPROVED PROGRAM PLAN
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye

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

A) Attendance Record
B) Update on General Rate Case

C) Unaudited Year-to-Year Financial Report as of June 30, 2025 D) DCE’s Quarterly Investment Report through June 30, 2025

9. PUBLIC COMMENT ON NON-AGENDA ITEMS

None

10. ANNOUNCEMENTS
The next DCE Board meeting will be held October 20, 2025, at 3:00 p.m. at the Large Conference Room at Palm Springs City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

11. ADJOURNMENT
There being no further business, Chair Bernstein adjourned the meeting at 3:42 p.m.

Respectfully submitted,
Erica Felci
Deputy Executive Director
ITEM 4B
Desert Community Energy Board
Special Meeting Minutes
November 20, 2025

1. CALL TO ORDER
The meeting of the DCE Board was called to order by Chair Jeffrey Bernstein at 3 p.m. at Palm Springs Police Department, Training Center- Classroom C, 200 S. Civic Drive, Palm Springs, CA 92262.

2. ROLL CALL

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

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

3. AGENDA MODIFICATIONS (IF ANY)
None

4. PUBLIC COMMENTS ON AGENDA ITEMS
None

5. BOARD MEMBER/EXECUTIVE DIRECTOR COMMENTS
Director of Energy & Sustainability Lisa McNeilly updated the Board on the advice letter submitted to the California Public Utilities Commission requesting funding to establish an energy efficiency program for customers, noting that it was filed last week, and staff does not expect a response until the second quarter of 2026.

6. CONSENT CALENDAR
Item 6B was pulled from the consent calendar.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR BERNSTEIN TO APPROVE ITEM 6A ON THE CONSENT CALENDAR:

A. Approve Adopt DCE Policy No. 25-01 for minor updates to DCE’s Wholesale Energy Procurement Risk Management Policy
THE MOTION CARRIED WITH 2 AYES.

The audio file for this meeting can be found at: http://www.desertcommunityenergy.org Desert Community Energy Board of Directors
Special Meeting Minutes – November 20, 2025
Chair Bernstein Aye
Vice Chair Veronica Chavez Aye

6.1 ITEMS HELD OVER FROM CONSENT CALENDAR
Item 6B was pulled for comment by Chair Bernstein requesting for rate updates from staff before proceeding with a vote.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR BERNSTEIN TO APPROVE ITEM 6B ON THE CONSENT CALENDAR:

B. Adopt DCE Resolution 2025-07 approving revised Rate Stabilization Schedule’s Exhibit A Rate Adjustment Guidelines effective November 17, 2025 THE MOTION CARRIED WITH 2 AYES.

Chair Bernstein Aye
Vice Chair Veronica Chavez Aye

7. DISCUSSION / ACTION
A. DCE’s Audited Financial Statements for Fiscal Year 2024-25 and Related Reports Director of Finance Claude Kilgore presented the staff report and introduced Joyce Amankwah, Systems Manager with DavisFarr, who provided the Board with an update on the unmodified audit opinion received by DCE.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR

BERNSTEIN TO RECEIVE AND FILE THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025, REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING, AND THE AUDITOR’S COMMUNICATION

WITH THOSE CHARGED WITH GOVERNANCE
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
B. Phase II of the ACCESS Indian Canyon Renewable Energy Assessment Services Management Analyst Alvaro Valcarcel Jervis presented the staff report.

Brief member discussion ensued with Mr. Jervis answering questions from the Board regarding procurement process and finalists.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR

BERNSTEIN TO AUTHORIZE THE EXECUTIVE DIRECTOR TO EXECUTE A

CONTRACT WITH CIERCO INC IN PARTNERSHIP WITH HOT PURPLE ENERGY (C&H) FOR AN AMOUNT NOT TO EXCEED $87,520 THROUGH APRIL Desert Community Energy Board of Directors
Special Meeting Minutes – November 20, 2025
2026 TO COMPLETE PHASE II OF THE RENEWABLE ENERGY ASSESSMENT

OF THE ADDRESSING CLIMATE CHANGE, EMERGENCIES AND SAND

STORMS (ACCESS) ALONG INDIAN CANYON PROJECT
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
C. Pre-Pay Bond Financing Overview and Selection of Advisory Initial Services Director Kilgore presented the staff report and an overview of pre-pay bond financing.

Member discussion ensued with Mr. Kilgore and Municipal Capital Market Groups’ Managing Director Tyler Noble, who joined the meeting via Zoom, answering questions from the Board regarding collateral amounts and industry’s best practices.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR

BERNSTEIN TO AUTHORIZE THE EXECUTIVE DIRECTOR TO TAKE THE

NECESSARY STEPS TO ESTABLISH PRE-PAYMENT BOND FINANCING INCLUDING 1.) EXECUTING, IN PARTNERSHIP WITH REDWOOD COAST

ENERGY AUTHORITY (RCEA), AGREEMENTS WITH MUNICIPAL CAPITAL MARKET GROUPS, INC. MANAGING DIRECTORS JOHN NORMAN AND TYLER

NOBLE TO PROVIDE PREPAYMENT ADVISORY AND RELATED SERVICES FOR A TOTAL, SHARED COST NOT TO EXCEED $350,000 AND 2.) SELECT

AND NEGOTIATE AGREEMENTS WITH PROJECT PARTICIPANT LEGAL COUNSEL AT A TOTAL, SHARED COST NOT TO EXCEED $300,000 AND 3)

WORK WITH RCEA TO APPORTION COSTS OF THE PRE-PAY EQUITABLY THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
D. Update on Factors Impacting DCE’s Fiscal Year 2025-26 Budget Ms. McNeilly introduced the staff report and turned the presentation to The Energy Authority’s Jacqueline Hart and Chris Weber, who joined the meeting via Zoom, to provide an update on key factors impacting the budget.

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

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

A) Attendance Record
B) 2024 Power Content Label

C) Update on Establishing DCE’s Energy Efficiency Program Desert Community Energy Board of Directors
Special Meeting Minutes – November 20, 2025
D) Summary of October and November 2025 Rate Adjustments

9. PUBLIC COMMENT ON NON-AGENDA ITEMS

None

10. ANNOUNCEMENTS
The next DCE Board meeting is scheduled for January 12, 2026, at 3:00 p.m. at the Large Conference Room at Palm Springs City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, 92262.

11. ADJOURNMENT
There being no further business, Chair Bernstein adjourned the meeting at 4:11 p.m.

Respectfully submitted,
Ely Regalado
Deputy Clerk
ITEM 4C
Desert Community Energy Board
Special Meeting Minutes
March 23, 2026

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

Members Present Member Jurisdiction
Councilmember Jeffrey Bernstein, Chair City of Palm Springs Finance Director Veronica Chavez, Vice Chair City of Palm Desert There were no agenda modifications. The Board and audience members recited the Pledge of Allegiance.

2. PUBLIC COMMENTS ON AGENDA ITEMS
None

3. BOARD MEMBER/EXECUTIVE DIRECTOR COMMENTS
Director of Energy & Sustainability Lisa McNeilly noted that there would not be an April meeting but staff anticipated a meeting in May.

Chair Bernstein requested that future agendas are released on the Wednesdays prior to the meeting in order to allow for more than the required 72-hour notice.

4. DISCUSSION / ACTION
A. Fiscal Year 2025-26 Budget Amendment & Fiscal Year 2026-27 Projection Director of Finance Claude Kilgore presented the staff report, detailing the factors impacting this year’s budget as well as next year’s budget forecast.

Extensive member discussion ensued, with Mr. Kilgore addressing questions about the Power Charge Indifference Adjustment (PCIA, or exit fee), staffing and overhead costs, and resource adequacy. Mr. Kilgore noted that additional data would be available in May that would allow staff to better refine the budget for Fiscal Year 2026-27.

The audio file for this meeting can be found at: http://www.desertcommunityenergy.org Desert Community Energy Board of Directors
Special Meeting Minutes – March 23, 2025

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR

BERNSTEIN TO APPROVE THE MID-YEAR BUDGET AMENDMENT FOR
FISCAL YEAR 2025-26
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
B. Additional Authorizations for Pre-Pay Bond Financing Ms. McNeilly introduced the item and provided an overview of the pre-pay bond financing before handing the presentation to Mr. Kilgore to discuss additional details and next steps.

Member discussion ensued, with questions fielded by staff and Tyler Noble, Managing Director of MG Advisory Corp. who joined the meeting by Zoom.

IT WAS MOVED BY VICE CHAIR CHAVEZ AND SECONDED BY CHAIR

BERNSTEIN TO 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
THE MOTION CARRIED WITH 2 AYES.

Chair Jeffrey Bernstein Aye
Vice Chair Veronica Chavez Aye
C. DCE’s 2026 Integrated Resource Plan
Management Analyst Alvaro Valcarcel Jervis presented the staff report.

Member discussion ensued, including some questions about how data centers and electrification could factor into future planning. There was no action was taken on this informational item.

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

A) Attendance Record
Desert Community Energy Board of Directors
Special Meeting Minutes – March 23, 2025
B) Conflict of Interest Guidance
C) Summary of January 2026 Rate Adjustment
D) Community Advisory Committee Update
E) 2025 GO 156 Annual Supplier Diversity Report
F) Unaudited Year-to-Year Financial Report as of September 30, 2025 G) Unaudited Year-to-Year Financial Report as of December 31, 2025 H) DCE’s Quarterly Investment Report through September 30, 2025 I) DCE’s Quarterly Investment Report through December 31, 2025 J) Update on Calpine Community Energy’s Community Benefits Grant At the request of Vice Chair Chavez, Mr. Kilgore provided additional details on the investment reports (Items 5H-I). Chair Bernstein also sought some clarity about the timing of the community benefits grant as it pertains to Palm Springs’ programming (Item J).

6. PUBLIC COMMENT ON NON-AGENDA ITEMS

Donald Ziegler of Palm Desert asked some budgetary questions and also suggested there be regional collaboration with other agencies’ plans when it comes to preparing for energy reliability.

7. ANNOUNCEMENTS
It was noted that the April meeting was being canceled. The next DCE Board meeting will be held May 18, 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
There being no further business, Chair Bernstein adjourned the meeting at 3:57 p.m.

Respectfully submitted,
Erica Felci
Deputy Executive Director
ITEM 4D

STAFF REPORT
Subject: Termination Agreement for Desert Sands Energy Storage Project Contact: Lisa McNeilly, Director of Energy & Sustainability ([email protected]) Recommendation: Authorize the Executive Director to execute a termination agreement with Desert Sands Energy Storage II, LLC, ending the 2023 Energy Storage Agreement Background: In September 2023, the Board approved an Energy Storage Agreement (ESA) with Desert Sands Energy Storage II, LLC, a subsidiary of NextEra Energy Resources (NextEra), to satisfy DCE’s long-duration storage and additional Mid-term Reliability (MTR) procurement orders under California Public Utilities Commission (CPUC) Decisions 21-06-035 and 23-02-040. Desert Sands is a proposed 25 MW / 200 MW hour lithium-ion battery storage facility, which is part of a larger, 700 MW energy complex located largely within Palm Springs’ city limits. As a long-duration storage system, DCE’s portion of the facility would be capable of outputting 25 MW of capacity at eight hours of continuous discharge and would have also helped satisfy compliance requirements under the CPUC’s Resource Adequacy rules.

At the time of the execution of the agreement, the Desert Sands project was still securing permits and transmission interconnection. For Desert Sands to count towards MTR compliance it must achieve Full Capacity Deliverability Status (FCDS), which is a designation from the California Independent System Operator that assures a project can provide resource adequacy. The project was originally expected to complete its interconnection agreements with Southern California Edison (SCE) by October 2024 and had an expected Commercial Operation Date (COD) of April 1, 2027. However, in April 2025, NextEra informed DCE that the project had been delayed due to network upgrades, and the commercial operation date (COD) had been pushed to 2035 as a result.

Since the CPUC Decisions 21-06-035 and 23-02-040 require long-duration storage projects to be online no later than June 1, 2028, DCE needed to identify an alternate project in order to avoid costly penalties. In September 2025, the Board approved a 15-year Resource Adequacy + TB8 Agreement (RA+TB8) with Balsam Project LLC (Balsam) for its San Bernardino County Battery Energy Storage System project. In addition to fulfilling DCE’s procurement obligations, the RA+TB8 Balsam project will be more cost effective, with a smaller volume sized to better meet DCE’s needs.

With no further compliance need for the Desert Sands project, staff recommends execution of a termination agreement for that contract. The authorization would also allow the Executive Director and/or Legal Counsel to make clarifying changes prior to execution. Except for DCE’s obligation to return the Development Security, neither DCE nor Desert Sands will have any liability to the other Party, except that the confidentiality obligations will remain in full force and effect for two (2) years following the termination of the Agreement, and all indemnity and audit rights will remain in full force and effect for one (1) year following the termination.

Desert Community Energy Board
June 24, 2026
Fiscal Analysis: There is no cost to either party for terminating the agreement for the Desert Sands Energy Storage Project. As part of that termination, DCE will be required to return to the Development Security, which is currently held as a Letter of Credit. Given the terms of the contract, Desert Sands Energy Storage II, LLC, is not required to pay any commercial operation delay damages.

DCE was able to secure an alternate, more cost-effective, project to fulfill its regulatory requirements.

Attachment: DCE-Desert Sands II ESA – Termination Agreement

TERMINATION AGREEMENT REGARDING ENERGY STORAGE AGREEMENT This Termination Agreement Regarding Energy Storage Agreement (the “Termination Agreement”) is dated as of June 15, 2026 (the “Termination Agreement Effective Date”), by and between Desert Community Energy, a California joint powers authority (“Buyer”), and Desert Sands Energy Storage II, LLC, a Delaware limited liability company (“Seller”), and is entered into by the Parties with respect to the ESA (as defined below). Seller and Buyer are each a “Party” and together the “Parties”.

RECITALS
A. Buyer and Seller entered into that certain Energy Storage Agreement, dated as of September 27, 2023 (as may previously have been further amended, amended and restated, supplemented, or was otherwise modified from time to time, the “ESA”).

B. For reasons including CAISO deliverability delays, the Parties desire to terminate the ESA as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definitions. Capitalized terms used and not defined in this Termination Agreement have the respective meanings assigned to them in the ESA.

2. Termination of the ESA.

The ESA is hereby terminated as of the Termination Agreement Effective Date. Within ten (10) Business Days of the Termination Agreement Effective Date, Buyer shall return to Seller the Development Security in the amount of One-Million Five Hundred Thousand dollars ($1,500,000). Except for the Buyer obligation to return the Development Security referenced in the immediately preceding sentence, neither Party shall have any liability to the other Party, save and except for those obligations specified in the final sentence of Section 2.1(b) of the ESA.

3. Miscellaneous.
(a) This Termination Agreement is governed by, and construed in accordance with, the laws of the State of California, without regard to the conflict of laws provisions of such State. (b) Each Party represents to the other Party that the execution, delivery and performance of this Termination Agreement have been duly authorized, and this Termination Agreement has been duly executed and delivered by the signatory so authorized, and the obligations contained herein constitute the valid and binding obligations of such Party. (c) This Termination Agreement shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns.

Docusign Envelope ID: 1E7EB4A6-A10A-8EB6-82BC-A00027C2B3D8 (d) This Termination Agreement may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement. Delivery of an executed counterpart of this Termination Agreement electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Termination Agreement. (e) This Termination Agreement constitutes the sole and entire agreement between the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, including without limitation that this Termination Agreement supersedes the ESA, with respect to such subject matter.
(f) Each Party shall pay its own costs and expenses in connection with this Termination Agreement (including the fees and expenses of its advisors, accounts and legal counsel). [Signature Page Follows]
Docusign Envelope ID: 1E7EB4A6-A10A-8EB6-82BC-A00027C2B3D8 IN WITNESS WHEREOF, the Parties have caused this Termination Agreement to be duly executed as of the Termination Agreement Effective Date.

DESERT SANDS ENERGY STORAGE II,
LLC, a Delaware limited liability company
By:

Name: Anthony Pedroni
Title: Vice President
DESERT COMMUNITY ENERGY, a
California joint powers authority
By:

Name: Tom Kirk
Title: Executive Director
Docusign Envelope ID: 1E7EB4A6-A10A-8EB6-82BC-A00027C2B3D8 ITEM 4E

STAFF REPORT
Subject: 2025 Power Source Disclosure Annual Report and 2025 Preliminary Power Content Label
Contact: Savannah Gil, Program Specialist ([email protected]) Recommendation: Adopt Resolution 2026-02, approving the 2025 Power Source Disclosure Annual Report and affirming the Executive Director’s authority to complete all actions necessary for submittal to the California Energy Commission, including attesting to its veracity
Background: All retail sellers of electricity, including Community Choice Aggregators such as DCE, are required by Senate Bill 1305, codified in Section 398.1 of the California Public Utilities Code, to disclose “accurate, reliable, and simple-to-understand information on the sources of energy” that are delivered to their customers each year. As part of this process, the DCE Board typically adopts resolutions to approve the Power Source Disclosure (PSD) Annual Report and Power Content Label (PCL) in June and September, respectively, of each year. The PSD report discloses where an entity's electricity was sourced for the given year, while the PCL is a customer-facing table summarizing the PSD, showing the electricity mix by percentage.

This year, load-serving entities (LSEs) throughout California were instructed to submit the 2025 PSD Annual Report by June 1, 2026. DCE staff submitted the PSD report to the California Energy Commission (CEC) on May 28, 2026. CEC staff has notified DCE that it would not generate the 2025 PCLs for all CCAs until mid-September. Because of this, DCE has included its preliminary 2025 PCL for informational purposes only. Staff will return to the Board for approval of the 2025 PCL once the CEC releases more information.

Information from DCE’s 2025 PSD Annual Report and 2025 PCL is summarized below. Once approved by the Board, staff will post the final PSD report and PCL to the DCE website in accordance with CEC requirements. DCE will then send the PCL to all active customers by the due date, via mail or email, depending on the customer's preference.

Summary of 2025 PSD Annual Reports and Preliminary 2025 PCL DCE provided 100% carbon-free energy to Carbon Free customers, including 69% renewable energy eligible under the state’s Renewables Portfolio Standard (RPS) purchased from solar facilities (21%), wind facilities (48%), and small hydropower facilities (1%). The remaining carbon-free energy was purchased from large hydropower facilities (27%) and nuclear facilities (5%), which are not considered renewable under the RPS. DCE is estimated to have provided Desert Saver customers with 80% carbon-free energy, with an energy supply consisting of 37% Desert Community Energy Board
June 24, 2026
renewable energy eligible under the RPS purchased from geothermal facilities (3%), solar facilities (12%), and wind facilities (22%). The remaining energy was purchased from nuclear facilities (43%). Unspecified power makes up 20% of Desert Saver energy and is electricity not traceable to a specific facility such a through an open market transaction. While this category can include renewable energy, it is treated as fossil fuel for the purposes of the PSD.

The percentages by power source for both Carbon Free and Desert are also shown in the above preliminary 2025 PCL and include information on greenhouse gas emissions intensity (lbs CO2e/MWh). For context, the term CO₂ equivalent (CO₂e) is a standard unit for measuring carbon footprints, quantifying the impact of different greenhouse gases in terms of the amount of CO₂ that would produce the same amount of warming. Because this preliminary 2025 PCL is intended solely for informational purposes, there exists a possibility that the CEC may determine a different Greenhouse Gas (GHG) intensity for DCE’s energy products when it publishes the official 2025 PCL.

The attached DCE 2025 PSD Annual Report and the preliminary PCL for Carbon Free and Desert Saver have been prepared with assistance from The Energy Authority (TEA). TEA conducted a detailed review of all power purchases made during the 2025 calendar year. This review included an inventory of all 2025 RECs within DCE’s Western Renewable Energy Generation Information System (WREGIS) account. Based on staff and TEA’s review of such available data, the information presented in the PSD Annual Report and preliminary PCL is determined to be accurate. Adoption of the resolution enables DCE to comply with the CEC Power Source Disclosure Regulations implementing SB 1305 (California Code of Regulations, Title 20, Sections 1391 to 1394).

Fiscal Analysis: There is no cost to DCE for adoption of Resolution 2026-02.

Attachments:

1. Resolution 2026-02 approving the 2025 Power Source Disclosure Annual Report Emissions, Power Sources, Unbundled RECs Carbon Free Desert Saver CA Utility Average Total Loss-Adjusted
Load
Retail Sales and Loss-Adjusted Load 263,070 85,094 TBD 365,214 GHG Emissions Intensity (lbs CO2e/MWh) 0 190 TBD 88
■ Renewables and Zero-Carbon Resources 100% 80% TBD 91% ■ Fossil Fuels 0% 20% TBD 9%
Biomass & Biogas 0% 0% TBD 0%
Geothermal 0% 3% TBD 1%
Eligible Hydroelectric 1% 0% TBD 0%
Solar 21% 12% TBD 18%
Wind 48% 22% TBD 40%
RPS Eligible Renewables - Subtotal 69% 37% TBD 58%
Large Hydroelectric 27% 0% TBD 19%
Nuclear 5% 43% TBD 13%
Emerging Technologies 0% 0% TBD 0%
Other 0% 0% TBD 0%
Natural Gas 0% 0% TBD 0%
Coal & Petroleum 0% 0% TBD 0%
Unspecified Power - Total 0% 20% TBD 9%
Retail Sales Covered by Retired Unbundled
RECs 0% 0% TBD -
*NOTE: The figures above are preliminary.

Staff will calculate the GHG emissions factor and fuel mix breakdown (percentage derived from renewables and zero-carbon resources or fossil fuels) of unspecified power after data from all reporting entities is submitted.
2025 PCL Data*

2. 2025 Power Source Disclosure Annual Report for DCE’s Carbon Free and Desert Saver products: https://desertcommunityenergy.org/wp-content/uploads/2026/06/DCE-2025-PSD-Annual-Report-FINAL.pdf RESOLUTION NO. 2026-02

A RESOLUTION OF THE BOARD OF DIRECTORS OF
DESERT COMMUNITY ENERGY APPROVING THE 2025 POWER SOURCE DISCLOSURE ANNUAL REPORT AND AFFIRMING THE EXECUTIVE DIRECTOR’S AUTHORITY TO

COMPLETE ALL ACTIONS NECESSARY TO APPROVE AND ATTEST TO THE VERACITY OF THE FINAL 2025 POWER SOURCE DISCLOSURE ANNUAL REPORT

FOR THE DESERT SAVER AND CARBON FREE PRODUCTS
WHEREAS, Desert Community Energy (DCE) is a joint powers authority established on October 30, 2017, for the purpose of implementing community choice aggregation programs under Public Utilities Code Section 366.2.

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

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

WHEREAS, the Power Source Disclosure Regulation was updated effective May 4, 2020, allowing the board of directors of a public agency providing electric services to approve, at a public meeting, the submission to the California Energy Commission of an attestation of the veracity of each product’s 2025 Power Source Disclosure Annual Report.

WHEREAS, DCE staff and consultants performed a detailed review of all power purchases completed for the 2025 calendar year, including an inventory of all received renewable energy certificates (RECs) within DCE’s account at the Western Renewable Energy Generation Information System (WREGIS) and transaction records.

WHEREAS, pursuant to the current CEC regulations, California Code of Regulations Title 20, Section 1394.2(a)(2), the Board is required to attest to the veracity of the 2025 Power Content Labels.

WHEREAS, the Board desires to attest to the veracity of the 2025 Power Source Disclosure Annual Reports for the Desert Saver product and the Carbon Free product so that all the required statements and attestations required by Section 1394.2(a)(2), are contained in one resolution.

WHEREAS, The Board further desires to affirm the Executive Director’s authority to complete all actions necessary for submittal to the CEC, including attesting to the veracity of the final 2025 Power Source Disclosure Annual Report for the Desert Saver product and the Carbon Free product.

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

1. Approval of 2025 Power Source Disclosure Annual Report. The Board approves and attests to the veracity of the attached 2025 Power Source Disclosure Annual Reports for Desert Community Energy.

2. Delegation to Executive Director. The Board hereby authorizes the DCE Executive Director to approve the submission and attest to the veracity of the 2025 Power Source Disclosure Annual Report for Desert Community Energy by signing the attestation forms set out in the 2025 Power Source Disclosure Annual Report.

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

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on June 24, 2026.

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

ITEM 4F

STAFF REPORT
Subject: DCE’s 2026 Integrated Resource Plan
Contact: Alvaro Valcarcel Jervis, Management Analyst ([email protected]) Recommendation: Adopt Resolution No. 2026-03, authorizing the Executive Director to prepare and approve DCE’s 2026 Integrated Resource Plan and complete all actions necessary for submittal to the California Public Utilities Commission Background: The California Public Utilities Commission (CPUC) requires all load-serving entities, including community choice aggregators such as DCE, to prepare and file Integrated Resource Plans (IRPs). The IRP process is intended to ensure that load-serving entities maintain a reliable and cost-effective electricity supply while supporting California’s greenhouse gas reduction goals and the State’s target of supplying 100 percent of retail electricity sales from renewable and zero-carbon resources by 2045. 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.

As previewed to the Board at its March 2026 meeting, 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.

As part of the IRP process, each LSE is assigned a retail sales forecast to use for resource planning. DCE staff and its consultants are using 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 update the agency’s previously approved 2022 IRP and reflects significant changes in state policy, planning assumptions, and procurement requirements. Staff is currently working with its consultant to finalize the document ahead of the CPUC’s August 10, 2026 deadline. Because of the DCE Board’s meeting schedule, which has DCE going dark during the summer months, staff is recommending adoption of Resolution 2026-03 in order authorize the Executive Director to finalize the plan and submit it on time.

The 2026 IRP will include updated load forecasts, greenhouse gas emissions benchmarks, and planning assumptions provided by CPUC staff, as well as newly issued guidance regarding the treatment of resources allocated to load-serving entities under Assembly Bill 1373. 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.

Desert Community Energy Board
June 24, 2026
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.

IRPs are developed by evaluating multiple scenarios to identify a feasible and cost-effective portfolio of resources that meets forecasted customer demand, complies with greenhouse gas emissions limits, supports system reliability and meets Board’s goals. The CPUC uses a statewide optimization model known as RESOLVE to identify the least-cost mix of resources needed to meet California’s policy objectives. DCE’s IRP uses these statewide assumptions as a reference and develops a preferred conforming portfolio that reflects DCE’s specific load characteristics, existing contracts, and procurement strategy.

DCE’s preferred portfolio is intended to support the Board’s goal of delivering 100% renewable energy for its Carbon Free product, including transmission losses, by 2030. The portfolio also seeks to align the Desert Saver product with the State’s target of 60% Renewable Portfolio Standard (RPS) retail sales by 2030, while small hydro resources complement the remaining energy needs. Collectively, these planning assumptions position DCE toward achieving a carbon-free energy portfolio by 2030, subject to market conditions, resource availability, regulatory requirements, and rate considerations. The preferred portfolio is also consistent with DCE Board policies prioritizing carbon-free and renewable energy resources, including solar, wind, geothermal, and existing hydroelectric generation, while excluding biomass and biogas due to emissions concerns. The portfolio also prioritizes local and in-state procurement opportunities and relies primarily on high-quality Portfolio Content Category 1 (PCC1) renewable energy credits, supplemented by legacy voluntary allocation resources where applicable.

The 2026 IRP will demonstrate that DCE is positioned to meet applicable state planning requirements through a combination of existing renewable energy and storage contracts, including recently executed agreements for geothermal generation and battery energy storage, projected voluntary allocations and centrally procured resources, and additional procurement as needed. The IRP will also outline DCE’s long-term strategy to maintain competitive rates while continuing to provide its Carbon Free and Desert Saver products with increasing levels of renewable energy.

Upon submittal to the CPUC, the final filing will be posted to DCE’s website.

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), and Best Best & Krieger LLP.

Attachment: Resolution 2026-03
RESOLUTION NO. 2026-03

A RESOLUTION OF THE BOARD OF DIRECTORS OF

DESERT COMMUNITY ENERGY
AUTHORIZING DESERT COMMUNITY ENERGY’S
2026 INTEGRATED RESOURCE PLAN
WHEREAS, Desert Community Energy (“DCE”) is a joint powers authority established on October 30, 2017, for the purpose of implementing a community choice aggregation program under Public Utilities Code Section 366.2.0.

WHEREAS, the Board has established a set of strategic goals to guide DCE energy procurement to promote renewable energy, carbon-free energy, and greenhouse gas emissions reduction.

WHEREAS, DCE has ongoing commitments to fulfill regulatory requirements related to energy procurement, including submittal of an Integrated Resource Plan (“IRP”) to the California Public Utilities Commission (“Commission”) pursuant to SB 350 as implemented through Commission Rulemaking Proceeding R.20-05-003 (“IRP Proceeding”).

WHEREAS, the IRP Proceeding is a central element of the Commission’s planning process through which the electric procurement policies and programs of Load Serving Entities (“LSE”) are examined to ensure that California has a safe, reliable, and cost-effective electricity supply.

WHEREAS, DCE’s 2026 IRP has been prepared to address how DCE will meet these strategic goals and regulatory requirements by managing a portfolio of energy and capacity resources.

WHEREAS, the IRP serves to document DCE’s current procurement status and outlines resource planning objectives and future procurement plans.

WHEREAS, projecting the resources that an LSE may procure over the planning horizon covered by the IRP is an inexact matter and subject to change. Future projections of resources identified in DCE’s IRP represent a current good-faith projection of such procurement activities over the IRP planning horizon, in consideration of currently applicable mandates and adopted policies of DCE’s Board of Directors.

WHEREAS, the resources identified in future iterations of DCE’s IRP may change due to new information, changed circumstances, and additional power sources that DCE may acquire in the future.

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

1. Authorizes the Executive Director to approve and submit the Desert Community Energy 2026 IRP.

ADOPTED AND APPROVED by the Board of Directors of Desert Community Energy on this 24th day of June 2026.

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:
________________________ ________________________
Jeffrey Bernstein, Chair Tom Kirk, Secretary
Desert Community Energy Desert Community Energy
ITEM 4G

STAFF REPORT
Subject: Fiscal Year 2025-26 Deferred Revenue Classification Contact: Claude T. Kilgore, Director of Finance ([email protected]) Recommendation: Authorize the classification of all fiscal year 2025-26 revenue above a

2.0x fixed charge coverage ratio to the Stabilization Special Reserves Fund, in accordance with Governmental Accounting Standards Board Statement No. 62, with the final deferred revenue amount to be determined based on final fiscal year-end operating results Background: DCE operates in a rate-regulated environment in which revenues are established based on pre-established revenue requirements to maintain prudent financial stability. Under Governmental Accounting Standards Board Statement Number 62 (GASB 62), entities like DCE can defer revenues in strong financial years to be recognized in future periods. One accepted application is rate stabilization, where revenues earned above a defined financial threshold are deferred and recorded for recognition in a future year. The purpose of this treatment is to better align revenue recognition with the period in which the related costs, rate pressures, or financial needs arise, rather than recognizing all excess margin immediately in the year earned. For a Community Choice Aggregation (CCA) program like DCE, this can be particularly valuable given exposure to changing power supply costs, resource adequacy requirements, renewable procurement obligations, and utility true ups such as Southern California Edison’s Power Charge Indifference Adjustment (PCIA) which can reduce DCE’s revenue.

DCE staff recommend classifying all DCE excess revenue above a fixed charge coverage ratio of 2.0x for fiscal year 2025-26 to the Stabilization Special Reserves Fund. Based on current estimates, the amount available for classification is approximately $1.75 million; however, the final amount will depend on audited operating results and may change as key assumptions are finalized, including Southern California Edison’s (SCE) final Energy Resource Recovery Account (ERRA) forecast expected in December 2026.

In practical terms, transferring excess revenues above the 2.0x fixed charge coverage threshold to the Stabilization Special Reserves Fund would create a mechanism to recognize that revenue in a future year if needed to stabilize rates, absorb market or regulatory cost volatility, or support financial resilience. Public power and CCA peers have adopted this approach for similar reasons.

Ava Community Energy has described its GASB 62 Rate Stabilization Fund as a vehicle to defer surplus revenues for future use in stabilizing budgeted financial results, protecting customers from volatility, and supporting liquidity and credit quality. Orange County Power Authority has likewise reported use of revenue deferrals and a rate stabilization reserve framework to support affordability and financial stability.

DCE staff recommends the Board authorize the classification. DCE’s proposed approach is consistent with rate-stabilization practices permitted under GASB Statement No. 62 and aligns Desert Community Energy Board
June 24, 2026
with other CCAs which have used similar GASB 62 mechanisms to defer surplus revenues into stabilization or rate-stabilization funds for future recognition.

Fiscal Analysis: Based on current estimates, approximately $1.75 million of fiscal year 2025-26 revenue could be classified to the Stabilization Special Reserves Fund for future recognition rather than being recognized as current-year operating revenue. This classification would not reduce cash or overall fund balance but would defer recognition of the designated amount to a future period in accordance with GASB 62.

The final amount will be determined through year-end close and audit procedures and may change based on final operating results, including the impact of Southern California Edison’s final ERRA forecast expected in December.

ITEM 5A

STAFF REPORT
Subject: DCE Fiscal Year 2026-27 Budget
Contact: Claude T. Kilgore, Director of Finance ([email protected]); and Jiajing Cheng, Accountant ([email protected])
Recommendation: Adopt Resolution 2026-04, approving DCE’s Fiscal Year 2026-27 Budget and approve a 4 percent generation rate decrease for Carbon Free customers effective July 1, 2026 and a second generation rate decrease for Carbon Free customers effective January 1, 2027, currently budgeted at 6.7 percent, pending operating results during the fiscal year Background: The Fiscal Year 2026-27 Budget is presented for the Board’s review and approval. The proposed budget reflects three key priorities: two projected reductions in generation rates, the launch of consumer benefit programs, and continued growth in financial reserves to support the Board’s objectives. Each year by the end of June, DCE staff prepares a detailed budget for Board review and approval for the upcoming fiscal year. The proposed Fiscal Year 2026-27 Budget covers July 1, 2026, through June 30, 2027, and marks DCE’s seventh full year of providing electric service to customers in the City of Palm Springs. A preliminary budget overview was presented the Board at the March 25 meeting during the consideration of an amendment to the Fiscal year 2025-26 Budget. Since then, some figures have been updated based on new information, with overall results remaining favorable.

At the June 2025 Board meeting, staff will present additional detail on the key assumptions, data, and projections underlying the budget and request Board approval as required under the DCE Joint Powers Agreement.

The proposed budget targets an FCC ratio of approximately 2.0x, based on Net Revenue of $5 million plus 50 percent of power purchase agreement (PPA) expenses of $5 million, divided by 50 percent of PPA expenses of $5 million. Using rounded figures, (5 + 5) / 5 equals 2.0x. If DCE achieves an FCC of about 2.0x or higher in fiscal year 2026-27, it will mark the third fiscal year since S&P Global Rating’s analysis and issuance of an investment grade credit rating and the fourth consecutive fiscal year in which DCE has met or exceeded that level, overall. As DCE builds a stronger track record of FCC performance, it may gain greater flexibility to balance this objective with other priorities.

Setting DCE’s revenue requirement to achieve this 2.0x FCC in the 2026-27 budget aligns with S&P’s recommendations and seeks to reduce DCE’s vulnerability to adverse economic conditions while establishing a consistent record of FCC and liquidity. By achieving this revenue requirement, DCE Carbon Free generation rates are anticipated to decrease as of July 1, 2026 by 4 percent and are projected to again decrease in January 2027 by another 6.7 percent. For a DCE residential Carbon Free customer, the total bill is projected to be an average of $13 per month lower on January 1, 2027 than it would have been based on current rates. For a Carbon Free commercial customer, the projected decrease is an average of $50 per month. Because DCE bills include Southern California Edison (SCE) delivery charges, these dollar comparisons are more complex than the percentage of the generation rate decreases alone and depend in part on how SCE’s charges are projected to change. In this Desert Community Energy Board
June 24, 2026
instance, SCE is increasing its delivery charges starting in January 2027 which partially offset the positive impact of DCE generation rate decreases on the total bill for residential Carbon Free customers.

Over recent fiscal years, DCE has steadily strengthened reserves and maintained a strong liquidity position. This trend is expected to continue in 2026-27, when DCE anticipates reaching its target maximum basic reserve of 75 percent (270 days) of budgeted operating expenses, or approximately $32.5 million. Reaching this target will allow DCE to make greater use of the Board-approved special reserve categories, including customer and programmatic reserves, fixed charge coverage, procurement, and stabilization reserves. This marks an important milestone in DCE’s financial stability and long-term resilience.

DCE’s accrued cash reserves are expected to increase by approximately $4.9 million, reaching about $40.6 million as of June 30, 2027, compared with an estimated $35.7 million as of June 30, 2026. At the same time, the target maximum basic reserve is projected to decline from $41.5 million in fiscal year 2025-26 to $32.5 million in fiscal year 2026-27, primarily because DCE’s operating costs are expected to decrease by a similar amount year over year. This distinction is important. If operating costs rise again to levels similar to those in fiscal year 2025-26, DCE may need to reevaluate its reserve categories. Likewise, if reserves are used too quickly, they may need to be rebuilt, which could ultimately affect ratepayers. For example, if reserve targets were still based on 2025-26 operating costs, projected cash reserves as of June 30, 2027 would remain slightly below the target maximum basic reserve.

Based on expectations established by S&P Global Ratings LLC that DCE demonstrate a track record of fixed charge coverage ratios above 2.0x to maintain or improve its investment-grade credit rating, DCE would then have approximately $6.3 million of remaining cash available for other special reserve categories in 2026-27. Of that amount, the budget proposes transferring $2.5 million to the Fixed Charge Coverage Special Reserve. This amount reflects the difference between the currently projected fixed charge coverage ratio of slightly above 2.0x and a 1.6x floor. Once placed in this reserve, the funds could be reassigned in a future year to other reserve categories, such as customer and programmatic reserves, if appropriate. After the proposed $2.5 million transfer to the Fixed Charge Coverage Special Reserve, DCE would have approximately $3.8 million remaining to allocate among other special reserve categories. The budget proposes assigning 75 percent of that amount, or about $2.9 million, to customer and programmatic reserves, with the remaining 25 percent, or about $900,000, allocated to the procurement special reserve.

The proposed budget also includes a $500,000 match for customer programs offered by the City of Palm Springs and/or programs developed and offered by DCE itself. This could include supporting the City of Palm Springs’ proposed reach code ordinances with incentives for customers who carry out qualifying energy efficiency upgrades, furthering the City’s efforts to reduce its greenhouse gas emissions. Although the customer program match has been budgeted, the program’s details are still being finalized and will be presented to the Board for approval once available.

The annual budget provides the framework for the upcoming fiscal year. Quarterly budget-to-actual reports are presented to the DCE Board of Directors to support oversight of public funds, monitor year-to-date performance, and report significant developments and changes in anticipated activities. Mid-year budget amendments are often necessary to better align the budget to actual operational results.

This year, and consistent with efforts to support paperless operations in the Finance Department, DCE has moved its budget book online, with a PDF version available for download. The online format can be designed to meet the Government Finance Officers Association (GFOA)’s criteria for clarity, organization, and visual appeal. A web-based budget book also saves time, reduces errors, improves transparency and accessibility, and supports award readiness.

Staff recommends approval of Resolution 2026-04 and adoption of the budget.

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

Attachments:

1. DCE's Fiscal Year 2026-27 Proposed Budget

2. Resolution No. 2026-04
RESOLUTION NO. 2026-04

A RESOLUTION OF THE BOARD OF DIRECTORS OF

DESERT COMMUNITY ENERGY
APPROVING FISCAL YEAR 2026-27 ANNUAL BUDGET

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

A. Desert Community Energy ("DCE") is a joint powers authority established on October 30, 2017 for the purpose of implementing community choice aggregation programs under Public Utilities Code Section 366.2;
B. Under Section 5.3.1 of the DCE Joint Powers Agreement the Board of Directors is to approve an annual budget by June 30th of each year for the next following fiscal year; C. This budget pertains to Fiscal Year July 1, 2026, through June 30, 2027; D. The DCE Fiscal Year 2026-27 Budget was presented to the Board of Directors at a duly noticed public meeting for its consideration, approval and adoption.

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

Section 1. Approval of Fiscal Year 2026-27 Annual Budget. The Board of Directors hereby approves the DCE Fiscal Year 2026-27 Budget.

PASSED AND ADOPTED at a meeting of the Board of Directors of Desert Community Energy held on this 24th day of June, 2026.

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

ITEM 5B

STAFF REPORT
Subject: Final 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 additional steps to establish pre-payment bond financing including:

4.) Authorize the Executive Director to take any further steps necessary to fully execute the pre-pay transaction
Background: 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 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. In this structure, tax-exempt bonds are issued and the bond proceeds are used to secure a 30-year energy supply from a 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 the bond issuer 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. This discount results primarily from the difference between the taxable interest rate at which the proceeds are loaned by the Pre-paid Supplier to the bank and the tax-exempt interest rate on the bonds.

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.

Desert Community Energy Board
June 24, 2026
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. At its March 2026 meeting, the Board further authorized the Executive Director to take additional steps. As a result of these two meetings, DCE and RCEA have executed the following agreements, whose costs will be covered by bond proceeds and shared proportionally among the parties based on contribution to deal volume:
• Municipal Advisory Services: Tyler Noble and Seema Mohanty from MG Advisory Group have been hired to assist with bond pricing, research and analytics, disclosure documents, and negotiating commodity and interest rate swaps, for a total, shared cost not to exceed $350,000 contingent on completing the pre-pay
• Project Participant Legal Counsel: Chapman and Cutler LLP (Chapman) has been hired to advise DCE and RCEA on applicable agreements and filings for a total, shared, not-to-exceed cost of $300,000 contingent on completing the pre-pay • Underwriter/Counterparty Supplier: Goldman Sachs & Co, LLC has been hired on to facilitate the tax-exempt municipal financing and secure the long-term energy supply in partnership with their J. Aron commodities division for an Underwriting Fee of $4.50 per $1,000 of par amount, an Energy Supply Fee of $1.10 per MWh, and additional fees dependent in part on selection of the Funding Recipient (FR), contingent upon completing the pre-pay
• California Community Choice Financing Authority (CCCFA): CCCFA has been brought on to issue the pre-pay bonds; DCE joined as an Associate Member for an initial membership fee of $50,000, a transaction fee of up to $20,000, and a share of annual costs moving forward
• Tax and Bond Counsel: Orrick, Herrington & Sutcliffe LLP (Orrick), through an agreement with CCCFA, has been brought on to prepare the Trust Indenture and ensure compliance with all relevant tax laws and regulations, for a total shared cost not to exceed $350,000, contingent on completing the pre-pay
With these steps complete, staff is now recommending additional authorizations needed to complete the pre-pay transaction. These authorizations fall into two categories. The first includes authorizing the Executive Director to execute contracts that allow assignment of long-term energy contracts into the pre-pay, constituting the basis for the cost savings (PPA Assignment Category).

These will include Limited Assignment Agreements and others that trade existing Voluntary Allocation and Market Offer (VAMO) volumes with a third-party CCA and create a new long-term confirmation. The second category is the set of documents required to support and execute the pre-pay, including the formal resolution authorizing issuance of the CCCFA Clean Energy Project Revenue Bonds (Pre-pay Execution Category).

PPA Assignment Category of Documents
In December 2020 and December 2024, the DCE Board approved long-term Power Purchase Agreements (PPAs) for four projects owned by Terra-Gen, LLC: Coachella Wind Holdings, San Gorgonio II Westwinds/Altwind, San Gorgonio II Westwinds/East Wind, and San Gorgonio Westwinds II. The generation capacity for the projects total 44.4 megawatts. In order for DCE to include these contracts in the pre-pay, DCE needs to assign specific energy delivery rights under these contracts to the pre-paid Supplier. The assigned energy is then delivered by the pre-paid Supplier to CCCFA and then by CCCFA to DCE at a discounted price. Staff are currently discussing the terms of these contracts with Terra-Gen and Goldman Sachs/J. Aron. The recommended action would authorize the Executive Director to finalize and execute the contracts.

Additionally, In July 2022, the DCE Board approved a Voluntary Allocation Agreement with Southern California Edison and elected a 100% allocation of the long-term load share resources offered. In any given year, DCE’s allocation is based on DCE’s most recent annual load and the generation output of each SCE resource in the agreement, making the volume vary by year. The volume also decreases over time as the underlying resource contracts reach the end of their term.

In order for DCE to include these contracts in the pre-pay, DCE needs to sign contracts that trade VAMO volumes and also create a new long-term, standardized Edison Electric Institute (EEI) confirmation structure. DCE staff are currently discussing the terms of a EEI Master Agreement and Confirmation with Clean Energy Alliance (CEA) to trade renewable energy acquired by each entity pursuant to its VAMO agreements with SCE and San Diego Gas & Electric (SDG&E). The recommended action would authorize the Executive Director to finalize and execute the agreements. For a period of nine years, DCE will sell the below volumes of renewable energy to CEA, and in return CEA will sell an equivalent amount of renewable energy to DCE, who will then assign those volumes into the pre-pay. DCE is also discussing the terms of an LAA with CEA and Goldman Sachs/J. Aron similar to above, and the recommended action would authorize the Executive Director to finalize and execute the needed agreement.

Contract Quantity
(MWh):

REC Vintage 2026: 21,000 MWh
REC Vintage 2027: 70,000 MWh
REC Vintage 2028: 70,000 MWh
REC Vintage 2029: 70,000 MWh
REC Vintage 2030: 70,000 MWh
REC Vintage 2031: 70,000 MWh
REC Vintage 2032: 70,000 MWh
REC Vintage 2033: 60,000 MWh
REC Vintage 2034: 60,000 MWh
Pre-pay Execution Category of Documents
This category of authorizations will allow DCE to move forward with its first pre-payment bond transaction. Staff is recommending adoption of Resolution No. 2026-05 authorizing the execution and delivery of a Clean Energy Purchase Contract and certain other documents in connection with the issuance of California Community Choice Financing Authority (CCCFA) Clean Energy Project Revenue Bonds. In short, the resolution sets the parameters Goldman Sachs will follow in completing the pre-pay, including minimum future savings and the initial reset period, which is the length of time before the financing terms can first be re-priced or reset. The prepayment structure includes periodic reset (or re-pricing) provisions that allow the financing terms to be updated based on market conditions. These resets are intended to preserve the long-term economic benefits of the transaction, although future savings may vary from those realized during the initial financing period. Resolution 2026-05 also directs CCCFA to make payments to service providers for issuance-related costs from prepayment bond proceeds.

The proposed resolution will also authorize staff to finalize and execute the following transaction documents (attached with this staff report) in support of the pre-pay:
• Clean Energy Purchase Contract: This is the primary agreement between DCE and CCCFA that provides for the sale of energy by CCCFA to DCE at a specified discount for an initial reset period, sets a minimum savings threshold for future reset periods, and other terms of the pre-pay structure
• PPA Custodial Agreement: This is an agreement between DCE, J. Aron, CCCFA, and the selected Custodian to receive and disburse payments from the Sellers (e.g., from Terra-Gen and CEA) • Form of Limited Assignment Agreement: This is a template for the agreement among DCE, J. Aron, and the Sellers assigning contracts into the pre-pay transaction • Letter Agreement for LAAs: Attached is a template for defining the commercial and administrative terms between J. Aron and DCE related to future assignment of PPAs, including operational procedures, notice requirements, and reporting expectations • Operational Services Agreement: This is an agreement among DCE, RCEA, and CCCFA that authorizes DCE and RCEA to administer specific operational matters related to the pre-pay
• Memorandum of Understanding: This is a second agreement between DCE and CCCFA indemnifying CCCFA from certain rating agency and green bond certification costs in the event that the pre-pay is not successfully completed
• Appendix A to the Preliminary Official Statement: This is an appendix to the offering documents used to market the bonds to investors, which includes information about DCE’s history, service territory, operations, and financial information Given the complexity of the pre-payment transaction structure, there are additional agreements and documents that CCCFA will execute but do not include DCE as a party.

Adoption of Resolution 2026-05 will also authorize CCCFA to make payments to service providers not listed above.

Finally, the adoption of the Resolution will authorize DCE to seek approval of the pre-pay transaction by the CCCFA Board. DCE is currently scheduled to be on the CCCFA agenda at its June 25, 2026, meeting. Staff will continue to work with advisors and service providers to finalize all documents and other required action by the end of June. The final timing of the pre-pay transaction will depend on market conditions and DCE staff will keep the Board informed of progress.

Fiscal Analysis: 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 could potentially benefit DCE ratepayers by over $1 million annually, though actual results will depend on prevailing market conditions.

By adopting the Power Supply Contract and other documents in connection with the issuance of CCCFA’s Clean Energy Project Revenue Bonds, the Board is confirming the following parameters:

1. The debt obligation of the Bonds, issued by CCCFA, 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.

2. The aggregate principal amount of the Bonds shall not exceed $900,000,000.

3. The total cost of issuance including all underwriting, legal and consultant fees for the Project will not exceed 1.00% of the amount of the proceeds of the Bonds issued by CCCFA.

4. The Monthly Discount Percentage plus the Annual Refund for the initial Reset Period as provided for in the Clean Energy Purchase Contract shall be at least 8.00% of the fixed cash flows or equivalent $ per MWh. There are no direct fiscal impacts of the Limited Assignment Agreements or the EEI Master Agreement and Confirmation with Clean Energy Alliance.

Any discount in energy costs achieved through the prepayment structure will flow directly into DCE’s financial position, as is discussed further in the proposed Fiscal Year 2026-27 Budget, which is the subject of a separate agenda item. Most service provider fees 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.

Adoption of Resolution 2026-05 will also authorize CCCFA to make payments to service providers not listed above. Total compensation for these and all other bond issuance services will be paid from bond proceeds and will not exceed 1.00% of bond proceeds. With the exception of the bond rating and green bond rating services, all expenses will be contingent on a successful bond issuance. Any transaction costs that are on-going will be paid from transaction cash flows in accordance with the financing documents. DCE would be responsible only for expenses, if any, that exceed the approved or budgeted amounts under the financing documents. The additional service providers are summarized below:
• Bond rating services (approximately $325,000)
• Independent Second Party Opinion supporting Green Bond designation (approximately $25,000)
• On-going Trustee and Custodian (in excess of approximately $17,000 per year) • On-going Rating Agency Surveillance (in excess of $15,000 per year) • Accounting, printing, and miscellaneous services (in excess of approximately $28,000 per year)
Attachments:

1. Resolution 2026-05

2. Clean Energy Purchase Contract

3. PPA Custodial Agreement

4. Form of Limited Assignment Agreement (LAA)

5. Letter Agreement for LAAs

6. Operational Services Agreement

7. Memorandum of Understanding

8. Appendix A to the Preliminary Official Statement
RESOLUTION NO. 2026 -05

RESOLUTION OF THE DESERT COMMUNITY ENERGY BOARD

OF DIRECTORS AUTHORIZING THE EXECUTION AND

DELIVERY OF A CLEAN ENERGY PURCHASE CONTRACT AND

CERTAIN OTHER DOCUMENTS IN CONNECTION WITH THE

ISSUANCE OF CALIFORNIA COMMUNITY CHOICE FINANCING

AUTHORITY (CCCFA) CLEAN ENERGY PROJECT REVENUE
BONDS; AND CERTAIN OTHER ACTIONS REQUIRED TO

ENSURE THE REDUCTION IN THE COST OF RENEWABLE

ENERGY THEREWITH

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

WHEREAS, Desert Community Energy (“Desert Community Energy” or “DCE”) was formed on December 15, 2015, under the provisions of the Joint Exercise Powers Act of the State of California, Government Code section 6500 et seq. (the “JPA Law”); WHEREAS, Desert Community Energy is duly organized, validly existing, and in good standing under and by virtue of the laws of the State of California, is duly authorized to transact business, having obtained all necessary filings, governmental licenses and approvals in the State of California, and has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage;
WHEREAS, Desert Community Energy is a community choice aggregator (as defined in Section 331.1 of the Public Utilities Code of the State of California (the “Public Utilities Code”), and is a public agency (as defined in the JPA Law) that 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;
WHEREAS, Desert Community Energy, acting pursuant to the JPA Law, may enter into a joint exercise of powers agreement with one or more other public agencies pursuant to which such contracting parties may jointly exercise any power common to them and, pursuant to Government Code Section 6588, to exercise certain additional powers;
WHEREAS, pursuant to the provisions of the JPA Law, Desert Community Energy joined certain other California community choice aggregators by entering into the joint powers agreement (the “Joint Powers Agreement”) pursuant to which the CCCFA (the “Issuer”) was organized for the purpose, among other things, of entering into contracts and issuing bonds to assist community choice aggregators, including Desert Community Energy, in financing the acquisition of supplies of clean energy; 2 RESO NO. 2026 -05
WHEREAS, the Issuer is authorized by its Joint Powers Agreement to acquire supplies of clean energy and to issue revenue bonds to finance the cost of acquisition of such supplies, and is vested with all powers necessary to accomplish the purposes for which it was created;
WHEREAS, Desert Community Energy has determined that it is desirable to acquire a long-term supply of clean energy from the Issuer pursuant to a clean energy prepayment transaction (the “Prepayment Transaction”);
WHEREAS, Desert Community Energy has determined to authorize pursuant to this Resolution the undertaking of the Prepayment Transaction with the Electricity Supplier (defined below);
WHEREAS, in connection with the foregoing, Desert Community Energy is requesting the Issuer to agree to purchase on a prepaid basis certain quantities of clean energy from a Delaware limited liability company, the sole equity member of which is J.

Aron & Company LLC, a New York limited liability company (the “Electricity Supplier”) on a prepaid basis and to sell such clean energy to DCE, as described herein (the “Project”); WHEREAS, Desert Community Energy is requesting that the Issuer finance the costs of the Project with the proceeds of its clean energy project revenue bonds, with a Series designation determined by the Issuer based on the timing and sequence of issuance (the “Bonds”);
WHEREAS, Desert Community Energy has determined to authorize the representatives of Desert Community Energy to take all necessary action to accomplish the purchase of clean energy from the Issuer and to assist the Issuer in the issuance, sale and delivery of the Bonds; and
WHEREAS, there have been submitted to this meeting for approval forms of the following agreements to which Desert Community Energy is a party (collectively, the “DCE Documents”):

1. Clean Energy Purchase Contract between Desert Community Energy and the Issuer;

2. Custodial Agreement by and among Desert Community Energy, the Issuer, J. Aron & Company LLC, a New York limited liability company (“J. Aron”), and a custodial bank to be named therein;

3. A Form of Limited Assignment Agreement, by and among Desert Community Energy, the counterparty to the power purchase agreement described therein, and J. Aron;

4. Letter Agreement by and among Desert Community Energy, the counterparty to the power purchase agreement described therein and J.

Aron regarding matters relating to the Limited Assignment Agreements;

5. Clean Energy Project Operational Services Agreement relating to the Project, by and among Desert Community Energy, Redwood Coast Energy Authority, and the Issuer; and
3 RESO NO. 2026 -05

6. Memorandum of Understanding between Desert Community Energy and the Issuer relating to certain fees.

WHEREAS, there have also been submitted to this meeting forms of the following additional documents relating to the Project:

1. Appendix A to the Preliminary Official Statement to be used in connection with the offering and sale of the Bonds (together with the DCE Documents, the “Project Documents”);

NOW, THEREFORE, IT IS HEREBY DETERMINED, AFFIRMED, AND

ORDERED BY THE BOARD OF DIRECTORS OF THE DESERT COMMUNITY ENERGY as follows:

Section 1. AUTHORIZED REPRESENTATIVES. The following named individuals are the authorized representatives of Desert Community Energy with the respective titles specified below (collectively referred to as “Authorized Representatives” and individually referred to as an “Authorized Representative”):

NAMES TITLES
Jeffrey Bernstein Chair of the Board
Veronica Chavez Vice-Chair of the Board
Tom Kirk Executive Director,
Coachella Valley
Association of
Governments
Lisa McNeilly Director of Energy &
Sustainability, Coachella
Valley Association of
Governments
Claude Kilgore Director of Finance,
Coachella Valley
Association of
Governments
Section 2. DCE Documents. The proposed forms of the DCE Documents, attached hereto as Exhibit A, are hereby approved. The forms of Limited Assignment Agreement may be used, in a substantially similar form, for assignments of the initial or any additional DCE power purchase agreements, as needed to maintain the transactions approved hereby, and any such Limited Assignment Agreements shall be included in the DCE Documents and are hereby approved. Subject to the parameters set forth in Section 5 of this Resolution, any Authorized Representative is hereby authorized and directed, for and on behalf of Desert Community Energy, to execute and deliver the DCE Documents in substantially similar form, with such changes and insertions therein as the Authorized Representatives executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 3. Appendix A to the Preliminary Official Statement. Appendix A to the Preliminary Official Statement in the form attached hereto as Exhibit B is hereby 4 RESO NO. 2026 -05
approved. Any Authorized Representative is hereby authorized and directed, for and on behalf of Desert Community Energy, to execute and deliver a certificate as to the information regarding Desert Community Energy contained in such Appendix A, with such changes and insertions therein as the Authorized Representative approving the same may deem necessary or appropriate. Desert Community Energy hereby authorizes the inclusion of such Appendix A in the Preliminary Official Statement and the final Official Statement, in each case with such changes as may be approved as aforesaid.

Section 4. Actions Authorized. The Authorized Representatives, each acting alone, are hereby authorized and directed, for and in the name and on behalf of Desert Community Energy, to execute and deliver any and all documents, including, without limitation, any tax certificate relating to its expected use of the energy to be purchased by it from the Project, any continuing disclosure certificate or similar agreement required for the offering or sale of the Bonds, and any and all closing certificates to be executed in connection with the issuance of the Bonds and to take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which Desert Community Energy has approved in this Resolution, for the issuance, sale and delivery of the Bonds, and to consummate by Desert Community Energy the transactions contemplated by Desert Community Energy for the Project, the DCE Documents approved hereby and the other Project Documents presented to the Board herewith, including any subsequent amendments, waivers or consents entered into or given under or in accordance with such documents.

Section 5. Transaction Parameters. The approvals provided for herein shall be subject to the following parameters:
(a) the Bonds will not be obligations of Desert Community Energy, but will be limited obligations of the Issuer payable solely from the revenues and other amounts pledged thereto, including amounts payable by Desert Community Energy under the Clean Energy Purchase Contract;
(b) the aggregate principal amount of the related Series of Bonds shall not exceed $900,000,000;
(c) the Monthly Discount Percentage plus the Annual Refund for the initial Reset Period as provided for in the Clean Energy Purchase Contract shall be at least 8.00% of the fixed cash flows or equivalent $ per MWh; and (d) CCCFA’s total cost of issuance including all underwriting, legal and consultant fees for the Project will not exceed 1.00% of the amount of the proceeds of the Bonds issued by CCCFA with respect to such Project.

Section 6. Execution and delivery of the DCE Documents by an Authorized Representative shall be conclusive evidence that the parameters set forth in Section 5 have been met, and all actions heretofore taken by the Authorized Representatives with respect to the issuance of the Bonds are hereby ratified, confirmed, and approved.

Section 7. If Section 5 and Section 6 listed herein have been met, an Authorized Representative may direct CCCFA to make payments to vendors that provided 5 RESO NO. 2026 -05
professional services to DCE to complete the DCE Documents and ultimately the issuance of the Bonds with respect to the Project. These professional services include legal counsel, bond counsel, tax counsel, municipal financial advisor, swap advisor, trustee and trustee counsel, underwriter of the bonds, underwriter’s counsel, and any other vendor required to complete the issuance of the Bonds. Payment to these vendors is considered a cost of issuance and will be paid by CCCFA out of the proceeds of the sale of the Bonds.

IT IS HEREBY FURTHER DETERMINED AND ORDERED that the Authorized Representatives are duly elected, appointed, or employed by or for Desert Community Energy, as the case may be. This Resolution now stands of record on the books of Desert Community Energy, is in full force and effect, and has not been modified or revoked in any manner whatsoever.

IT IS HEREBY FURTHER DETERMINED AND ORDERED that any and all acts authorized pursuant to this Resolution and performed prior to the passage of this Resolution are hereby ratified and approved.

IT IS HEREBY FURTHER DETERMINED AND ORDERED that this Resolution shall take effect upon its passage, shall be continuing and shall remain in full force and effect unless and until expressly revoked by further resolution of the Board of Directors.

ADOPTED AND APPROVED this 24th day of June 2026.
____________________________
Jeffrey Bernstein
Chair of the Board
ATTEST:
_________________________
Tom Kirk
Secretary
6 RESO NO. 2026 -___

EXHIBIT A
DCE Documents
(see attached)
7 RESO NO. 2026 -___

EXHIBIT B
Form of Appendix A to POS
(see attached)
RCEA-DCE Prepay 2026 - DCE Appendix A to POS, v.8
10003975
DRAFT 6.4.26

APPENDIX A

DESERT COMMUNITY ENERGY
Introduction
Desert Community Energy (“DCE”) is a joint powers authority organized and existing pursuant to the Joint Exercise of Powers Act (constituting Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code, as amended or supplemented from time to time) (the “Joint Powers Act”), as a “community choice aggregator” (“CCA”) as defined in Section 331.1 of the Public Utilities Code of the State of California, as amended (the “Public Utilities Code”). For a general description of CCAs in California, see the section “COMMUNITY CHOICE AGGREGATORS” in this Official Statement.

Formation, History, and Purpose of DCE
General. DCE was formed as a CCA in California pursuant to a “joint powers agreement” effective October 30, 2017, by three initial member cities participating in DCE: Cathedral City, Palm Desert, and Palm Springs. DCE is located entirely within the geographic boundaries of Riverside County, California, which receives electric services from Southern California Edison (“SCE”) and other providers (e.g., Imperial Irrigation District). DCE was created in order to provide overall rates that are lower or competitive with those offered by SCE for similar power supplies, to supply an energy portfolio that prioritizes the reduction of greenhouse gas emissions and the use of local renewable resources, including existing facilities to the maximum extent technically and economically feasible, and to establish local control for customers in its member cities.

Pursuant to its Community Choice Aggregation Implementation Plan and Statement of Intent, DCE’s prospective benefits to local consumers include the ability to: reduce energy costs, improve the local and regional economy, stabilize electric rates, increase local electric generation reliability, influence which technologies are used to meet local electricity needs (including a potential increased use of renewable energy), and ensure effective planning and development of sufficient resources and energy infrastructure to serve its member cities’ residents and businesses.

Pursuant to an Implementation and Management Services Agreement first approved in 2017 and extended for a further five years in 2022, DCE has contracted with the Coachella Valley Association of Governments (“CVAG”) to provide administrative and staffing services. CVAG is a California joint powers authority serving as the regional planning authority coordinating government services within the Coachella Valley, with members including ten cities, the County of Riverside; and four Indian Tribes. Staff support includes oversight of consultants and contracts, coordination of CCA implementation, budget preparation, oversight of the annual audit, and management of DCE’s treasury function.

Commencement of Service and Expansion. While DCE formed in 2017, it successfully initiated retail service as a CCA on April 1, 2020, for only one of its member agencies, the City of Palm Springs.

At that time, DCE provided electric generation service to approximately 5,317 municipal and commercial accounts and 30,074 residential customer accounts located within the City of Palm Springs, and in May 2020 enrolled approximately 150 additional municipal and commercial accounts and 3,778 additional residential customer accounts. By June 2023, DCE served approximately 4,500 non-residential accounts and 28,800 residential customer accounts, which constituted an eligible customer participation rate of 84%.

DCE ended the 2024 calendar year serving 28,073 residential and 4,008 commercial customers, and ended the 2025 calendar year serving over 31,959 residential and commercial customers. 2 DCE’s current customer enrollment stands at 28,072 residential and 3,949 commercial customers, constituting a participation rate of 84% of Palm Springs’s eligible electric customers, with its forecast total retail load consumption for the Fiscal Year 2025-2026 is projected to be 381,875 MWh.

The City of Cathedral City withdrew from the DCE effective July 1, 2021, without having initiated retail service.

Service Area
Communities Served by DCE. DCE’s membership currently consists of two jurisdictions located in the County of Riverside, California: its participating cities are Palm Desert and Palm Springs(“Members” or “Member Cities”). Currently only Palm Springs receives DCE retail services. The next possible launch date for the City of Palm Desert is 2028.

Service Area Map. DCE is responsible for the acquisition of electric power for customers in its service area, shown in the following map:

Governance and Management
Board of Directors. DCE is governed by a board of directors (the “Board of Directors” or “Board”), with board members consisting of representatives of each Member City. There are currently two directors serving on the Board of Directors, each representing one of DCE’s two Member Cities.

DCE’s Board of Directors has the rights and powers to conduct all business and carry out all functions of DCE, which include: making and entering into contracts; employing agents and employees, 3 including but not limited to an Executive Officer; acquiring property by eminent domain, or otherwise; leasing any property; suing and being sued in its own name; incurring debts, liability, and obligations; forming subsidiary or independent corporations or entities if necessary to carry out energy supply and energy conservation programs; issuing revenue bonds and other forms of indebtedness; and making and entering into service agreements relating to the provision of CCA services.

The Board of Directors is advised by a Community Advisory Committee (“CAC”), consisting of representatives appointed by the Board of Directors from the communities of its Member Cities for a two-year consecutive term. The CAC’s role is to advise the Board of Directors on programs and ongoing operations, and provide a forum for community discussion.

Management. Biographical information for key officers, directors, and managers is set forth below.

DCE’s management staff are sourced from CVAG pursuant to its staffing and administrative services relationship with DCE.

Tom Kirk, Executive Director. Tom Kirk is the Executive Director of the Coachella Valley Association of Governments (CVAG). Before joining CVAG in June 2009, Mr. Kirk served in both the private and public sectors, served as Executive Director of the Salton Sea Authority, and a city councilman in La Quinta. Mr. Kirk has extensive experience working for real estate development companies and planning/engineering consultants. Mr. Kirk earned a bachelor's degree, with honors, in Geography from the University of California, Los Angeles and a Master's degree in Urban and Regional Planning from the University of California at Berkeley where he graduated at the top of his class. Mr. Kirk was also a fellow of the University of California Transportation Center, a graduate of the Coro Foundation Public Affairs program, and the Harvard Kennedy School.

Claude Kilgore, Director of Finance. Claude Kilgore is the Director of Finance at CVAG and has served in that role for DCE since 2020 as part of CVAG’s staffing and administrative services to DCE.

He oversees all financial aspects of DCE, which includes its customer billing activities, dunning processes in collaboration with SCE, treasury management, and the integrity of DCE’s internal controls and financial records. He has guided DCE to achieve its investment-grade credit rating and was asked to provide witness testimony to the California Public Utilities Commission in SCE’s 2025 general rate case on behalf of other CCAs.

Mr. Kilgore is a Certified Public Accountant (CPA) with over fifteen years of accounting leadership experience. His career began at Ernst & Young, where he provided audit services over the financial statements of several large registrants of the Securities and Exchange Commission under the Public Company Accounting Oversight Board. In this role, he assisted with Sarbanes-Oxley audits, performing thorough assessments of companies’ internal controls over financial reporting, among other duties. Mr.

Kilgore comes from a family with deep roots in the electricity industry. His grandmother has served on the Board of Directors of Nueces Electric Cooperative for forty years, continuing a family tradition of retail electric Board service that spans more than seventy years. He holds a Bachelor of Business Administration (BBA) degree in Accounting from Texas A&M University’s Mays Business School as well as a Masters of Science in Finance.

Lisa McNeilly, Director of Energy & Sustainability. Lisa McNeilly is the Director of Energy & Sustainability for CVAG and manages all operations for DCE as part of CVAG’s staffing and administrative services to DCE. She provides direction and oversight for all regional energy and sustainability programs to promote energy efficiency, green energy, air quality, water conservation, and help transition to a clean economy.
4 Prior to joining CVAG and DCE, Ms. McNeilly served in roles as the Director of Sustainability for the City of Scottsdale, the City of Baltimore, and UC Berkeley, as well as a Special Assistant to the Chair of the White House Climate Change Task Force and as an Energy Technology Program Specialist for the U.S. Department of Energy. Ms. McNeilly holds a Master’s degree in public policy from Princeton University and an undergraduate degree in Mathematics from Davidson College.

Customers
General. DCE currently provides energy to more than 32,362 residential, commercial, and industrial accounts in Palm Springs, serving approximately 84% of the residents and businesses in its service area. The current mix of DCE’s customer base is approximately 55% residential and 45% commercial/industrial by the percentage of load served and 58% residential and 41% commercial/industrial by the percentage of revenue.

DCE offers two different energy service choices, called Carbon Free and Desert Saver. • Carbon Free. This energy service offers carbon-free energy sources for DCE customers, at a higher rate than its Desert Saver plan. In 2024, customers receiving Carbon Free service were provided with 100% carbon-free energy, sourced from a mix of renewable wind, solar, and hydroelectric, as well as carbon-free large hydroelectric and nuclear sources. This service has continued to offer 100% carbon-free energy in 2025. • Desert Saver. This is DCE’s most affordable plan, which provides a significant portion of its energy sources from carbon-free providers. In 2024, customers receiving Desert Saver service were provided with 98% carbon-free energy, with 17% from renewable energy sourced from a mix of wind, geothermal, and solar. In 2025, Desert Saver rates provided 80% carbon-free energy.

In addition, DCE offers its customers access to the following optional energy programs:
• Solar/Net Billing Tariff: A program replacing DCE’s prior Net Energy Metering program, whereby DCE customers who produce solar energy will have their contributions to the energy grid credited to their accounts on an annual basis each May. • Carbon Free Business Recognition Program. This program provides marketing and publicity support to individuals and businesses who use DCE’s Carbon Free service. • Rate Discounts & Assistance. DCE supports a number of programs offering discounts, payment plans, emergency support, or help with late payments, including: California Alternate Rates for Energy (CARE); Family Electric Rate Assistance (FERA); Medical Baseline Allowance; Arrearage Management Program (AMP); Low Income Energy Assistance Program (LIHEAP); Energy Assistance Fund (EAF); Help2Others; SoCal Gas Payment Arrangement & Assistance Programs; and Energy Savings Assistance Program (ESA).

Customer Enrollment. Currently, the Carbon Free plan serves as DCE’s default plan, in which its customers are automatically assigned upon enrollment. Customers may opt down from the default plan by selecting the Desert Saver plan, or they may opt out of DCE service entirely and instead receive generation 5 service from SCE. Overall, approximately 70% of DCE customers are served on Carbon Free, while the remaining approximately 30% are served on the Desert Saver plan.

New Customers. DCE is the default generation service provider for residents and businesses in the City of Palm Springs.

Customer Election to Opt-out of DCE Service. Customers can opt-out of DCE service and return to service from their traditional electric service provider, SCE, either initially upon the transition to DCE or at any time after DCE becomes the generation service provider. There is no fee associated with opting out of the DCE, and opt-outs become effective typically by the next meter read. DCE offers different opt-out options, including immediate opt-out or an opt-out after a minimum of six months, with the latter choice designed to assist customers to be placed back into SCE’s regular bundled rates and avoid SCE’s Transitional Bundled Service rates.

Cumulative Opt-Out Rate and Customer Retention. Since program inception, cumulative opt-outs represent approximately 19% of the eligible customer base for the fiscal year of 2024-2025.

Service Rates
General. As described in its Rate Setting Policy, rates for DCE energy service are determined by its Board of Directors on at least an annual basis and in accordance with its fiscal year budget process after one or more public hearings. DCE rates are not regulated by the CPUC.

Determination of Rates for Energy. The rates DCE charges for the Desert Saver energy services are intended to provide a discount against the SCE base rate of up to 1%, while the Carbon Free energy plan is typically 15-20% more than the SCE base rate.

Current and Historical Rate Information. A DCE customer’s total cost of electric service is determined by DCE’s charges for generation services and includes SCE charges for transmission, distribution, and other non-by-passable charges. In addition to DCE’s charges for generation services, customers’ rates include amounts for transmission and distribution of electricity established by SCE, as well as a “power charge indifference adjustment” (“PCIA”) and other non-by-passable load charges imposed by the CPUC in order to compensate investor-owned utilities for investments in power generation and long-term power purchase contracts associated with the loss of customers to CCAs, which in each case are passed through on a customer’s bill in the amounts established or imposed. Other charges include the DWR Bond Charge, a pre-existent charge issued by the Department of Water Resources (“DWR”) to cover the cost of buying power during the energy crisis, and a Utility User Tax (“UUT”) for residents of Palm Springs.

RESIDENTIAL
D D

DOMESTIC SCE DCE
(Deser t Sa ver )
DCE
(CARE/FERA)
DCE
(100% Ca r bon Fr ee)
Generation Rate $0.11761 $0.09379 N/A $0.17486
SCE Delivery Rate $0.24499 $0.23908 N/A $0.23908
Surcharges $0.00000 $0.02855 N/A $0.02855
Total Costs $0.36260 $0.36142 N/A $0.44249
Average Monthly Bill ($) $288.27 $287.33 N/A $351.78
Monthly Usage: 795 kWh
SCE rates are current as of January 1, 2026. DCE rates are current as of January 1, 2026.

This rate com parison represents sim ilar com parisons for D SDP, D SDP O, DE, DE SDP, DE SDP O, DM, DMS 1, DMS 2, DMS 3 6 California Renewable Portfolio Standards and Other Regulations General. Community choice aggregators such as DCE are “load-serving entities” (“LSEs”) and as such are required to comply with California’s Renewable Portfolio Standard, Resource Adequacy requirements, and Power Source Disclosure requirements described below.

Renewable Portfolio Standard. California’s Renewable Portfolio Standard (“RPS”) requires LSEs to supply their retail sales with minimum quantities of eligible renewable energy. Senate Bill 100 directs all LSEs to procure 60% of their portfolios from RPS-eligible resources by 2030 and 100% of their retail sales from zero-carbon resources (or eligible renewable resources) by 2045. Based on DCE’s approved service offerings for 2025, 96% of retail sales are from zero-carbon resources comprised of RPS-eligible resources, such as solar, wind, geothermal, and small hydroelectricity with over 61% of total energy served being renewable energy. DCE intends to meet Board-directed goals (including procuring 100% of the Carbon Free load from RPS-eligible resources by 2030) and orders by the CPUC under the Mid-term Reliability Procurement decision (D.21-06-035) and the Supplemental Mid-Term Reliability Procurement Order (D.23-02-040). DCE is on target to meet the Board approved renewable energy goals for 2025 and has already executed two long-term power purchase agreements meeting its share of the CPUC directed procurement orders.

Resource Adequacy. Resource Adequacy (“RA”), a California program jointly administered by the CPUC, the California Energy Commission (“CEC”) and the California Independent System Operator (“CAISO”), directs LSEs to secure forward capacity and offer it into the CAISO’s Day-Ahead and Real-Time markets to ensure that there will be enough supply in the right locations and with sufficient ramping capability to meet load. The RA program is comprised of three products: System RA; Local RA; and Flexible RA, although rules and categories are subject to modification by state agencies. Local RA obligations have been assigned to a Central Procurement Entity as of 2023. DCE has a strong track record of meeting its RA obligations and expects to meet its future RA obligations in compliance with its policies.

Integrated Resource Planning. Integrated Resource Planning (“IRP”) requires LSEs to develop a plan to serve the forecasted customer load in alignment with their own vision and values and in accordance with regulatory requirements. In October 2015, California codified this LSE responsibility with the passage of SB 350, which requires the CPUC to establish and oversee an IRP process to assist with meeting the state’s aggressive greenhouse-gas (“GHG”) targets (i.e., 40% below 1990 levels by 2030). The IRP process, which is used in many states across the U.S., generally produces 10-to-20-year plans that map out both the supply-side and demand-side resources required for meeting customer load. Given the complexity

COMMERCIAL AND INDUSTRIAL
TOU-EV-7-E SCE DCE
(Deser t Sa ver )
DCE
(CARE/FERA)
DCE
(100% Ca r bon Fr ee)
Generation Rate $0.11264 $0.09314 N/A $0.17115
SCE Delivery Rate $0.19111 $0.18520 N/A $0.18520
Surcharges $0.00000 $0.02234 N/A $0.02234
Total Costs $0.30375 $0.30069 N/A $0.37869
Average Monthly Bill ($) $324.41 $321.13 N/A $404.44
Monthly Usage: 1,068 kWh
SCE rates are current as of January 1, 2026. DCE rates are current as of January 1, 2026.

TOU-EV-8 SCE DCE
(Deser t Sa ver )
DCE
(CARE/FERA)
DCE
(100% Ca r bon Fr ee)
Generation Rate $0.10114 $0.07931 N/A $0.14641
SCE Delivery Rate $0.21006 $0.20415 N/A $0.20415
Surcharges $0.00000 $0.02296 N/A $0.02296
Total Costs $0.31120 $0.30642 N/A $0.37353
Average Monthly Bill ($) $3,847.37 $3,788.29 N/A $4,617.89 Monthly Usage: 12,363 kWh
SCE rates are current as of January 1, 2026. DCE rates are current as of January 1, 2026. 7 of the grid and the time required to plan and build generating facilities, IRP plans are critical for ensuring safe, reliable, and clean power in a cost-effective manner. In addition to addressing the long-term planning horizon typical of an IRP process, the IRP process has been used in recent years to direct procurement of new capacity to meet near- and mid-term reliability and clean energy needs per CPUC Decision (“D.”) 19- 11-016, D. 21-06-035 and D. 23-02-040. Pursuant to the procurement orders in these CPUC Decisions, LSEs are required to procure “Incremental System Capacity,” which is RA capacity from non-emitting, storage, and/or renewable resources that are in addition to the resources identified on a baseline list of existing, on-line and operating resources. DCE is working toward full compliance with these requirements and maintains policies and procedures to ensure continuing compliance therewith.

Power Source Disclosure. California law requires LSEs to disclose the types of power resources used to supply retail sales. This mandate, known as the Power Source Disclosure Program (“PSDP”), is a consumer information program managed by the CEC on an annual basis. A key output of the PSDP is the Power Content Label (“PCL”). The PCL is an LSE-specific document that shows the breakdown of power resource types for each of the LSE’s energy products used to serve retail load, as well as a breakdown of resource types for the overall California grid. The PCL is distributed to DCE customers each year in compliance with the foregoing and is available on its website.

Energy Demand
Long-term Load Forecast: DCE partners with The Energy Authority (“TEA”) to create its long-term load forecasts. TEA is a non-profit wholesale energy services company that is owned by seven public power utilities and provides services to another 60 community-owned LSEs through the United States.

TEA publishes information concerning its load forecasting methodology on its website, which includes the use of probabilistic modeling, analytical tools, and other forms of analysis. DCE’s 2026 long-term load forecast is projecting a slight decline in annual total energy through 2030. This is driven by incremental energy efficiency improvements, a stagnation in near-term electric vehicle adoption, and a conservative projection of customer counts over time. Factors such as accelerated electrification, large load additions, or higher than expected economic growth could result in higher realized load than current projections.

DCE’s load forecast as prepared in April 2026 is as follows:

DCE Load Forecast (MWh)
Fiscal Year Load Forecast
2025-2026 381,875
2026-2027 362,206
2027-2028 361,186
2028-2029 358,037
2029-2030 357,099
Sources of Energy
General. DCE prioritizes securing sufficient, low-cost, clean sources of electricity that achieve DCE’s priorities, while ensuring reliability and meeting regulatory mandates. During the normal course of business, DCE purchases electrical power from numerous suppliers. Electricity costs include the cost of energy and capacity arising from bilateral contracts with energy suppliers as well as wholesale sales and generation credits, and load and other charges arising from DCE’s participation in the CAISO’s centralized market. DCE purchases capacity commitments from qualifying generators to comply with the RA Program.

DCE is in compliance with external mandates and self-imposed benchmarks. 8 Energy Purchases. In 2025, DCE procured approximately 366,814 MWh of electricity for its customers. DCE anticipates that roughly 86% of its total 2026 retail sales will be sourced from carbon-free resources including renewables such as wind, solar, and small hydroelectric.

Energy Load and Supply Risk Management. DCE manages load forecasting and supply risk management by contracting with TEA, a qualified data management and scheduling coordinator, which provides the systems and data necessary to forecast and schedule load using good utility practice. Load variability is also considered in establishing appropriate planning margins for renewable and other carbon-free energy sources.

Volumetric risk reflects the potential uncertainty in the quantity of different power supply products (e.g., renewable energy, carbon-free energy and capacity) required to meet the needs of DCE customers.

This uncertainty can lead to adverse financial outcomes, as well as create potential for DCE to fail to meet reliability or renewable energy compliance requirements established by the State of California and/or DCE’s own policies. Customer load is subject to fluctuation due to customer opt-outs or departures, temperature deviation from normal, unforeseen changes in the growth of behind-the-meter generation by DCE customers, unanticipated energy efficiency gains, new or improved technologies, as well as local, state and national economic conditions. DCE monitors its positions on a regular basis to reduce exposure to CAISO day-ahead market prices.

DCE manages energy delivery risks by ensuring that contracts include appropriate contractual penalties for non-delivery, acquiring energy from a geographically and technologically diverse portfolio of generating assets (with a range of generation profiles that are generally complementary to the manner in which DCE’s customers use electric power). Due to known production variability and supply uncertainty related to renewable and other carbon-free energy products, DCE includes planning margins in its procurement of such products to ensure that related targets/mandates are achieved.

Procurement. DCE’s procurement strategies, as described in its Procurement Policy & Procedures, updated June 17, 2024, focus on diversity among technologies, production profiles, project sizes and locations, counterparties, length of contract, and timing of market purchases. For any purchase of goods or services in excess of $100,000, DCE requires a competitive process whereby DCE issues requests for proposals (“RFPs”) and other methods of solicitation. Smaller contracts may follow an informal bidding procedure, but contracts over $10,000 and up to $100,000 should typically include at least three quotes/proposals; contracts under $10,000 in value do not require such processes.

Energy Storage
DCE currently has 64 MW of wholesale storage under contract with CODs in 2027 and 2028.

From the re-release of its 2024 RFP on January 28, 2025, DCE initiated negotiations with SB Energy for the Athos Storage Project, a 43 MW lithium-ion battery storage facility located within Riverside County limits. The storage project has a guaranteed COD of February 1, 2027, and will provide capacity and TB4 attributes. The project received board approval on June 16, 2025.

Furthermore, in September 2025, the DCE Board approved a Resource Adequacy +TB8 agreement (RA+TB8) with Balsam Project, LLC for its San Bernardino County Battery Storage System (BESS) project. DCE has contracted 21MW/168MWh of the total capacity of the project.

Information Technology, Data Analytics and Cyber Security 9 Information technology is a critical DCE asset that is managed to ensure that it remains complete, accurate, confidential, and available only for authorized business activities. Proper management of data and information is required to support regulatory compliance, minimize legal liability, reduce the risk of criminal activity, and sustain stakeholder and customer satisfaction.

DCE is dependent on information technology to conduct its business operations. All DCE staff are responsible for reporting to management any noncompliance of its policy. DCE makes information technology accessible only to authorized employees or authorized/designated vendors as needed, and such information may only be used for authorized agency purposes. To ensure protection of information technology and adherence to protocols, operational guidelines have been put in place for employees and designated vendors that adhere to principles including: restricting access to information technology; creating security systems with multiple layers of security; and adequate controls regarding assignment of sensitive duties.

Security is not an optional component of DCE’s operations. All DCE staff and designated vendors are required to protect sensitive data and customer information. All staff and designated vendors that use or have access to DCE information technology are personally responsible for exercising the proper control over information assets according to the operational guidelines provided to them.

To reinforce governance and accountability, DCE maintains and publicly posts policies related to information technology security, customer confidentiality, and social media protocols. These policies, combined with experienced internal staff and external expertise, support continuous improvement of DCE’s technology environment while reducing risk and enhancing operational efficiency.

Financial Information
Revenues from Energy Sales and Operating Expenses. Approximately 98% of DCE’s revenue is derived from electricity sales which includes sales to customers and can also include the sale of energy and capacity portfolio resources via bilateral contracts as well as energy market settlements through DCE’s participation in the CAISO centralized market and also includes other smaller revenues. In Fiscal Year 2024-2025, total revenues amounted to approximately $71.9 million, representing an increase of $1.7 million (2.5%) compared to Fiscal Year 2023-2024. This increase was principally attributable to elevated electricity usage among the customers served by DCE as load, leading to higher total energy sales alongside adjustments in applicable rates.

Approximately 96% of DCE’s expenses are the cost of electricity which include the cost of energy and capacity arising from contracts with bilateral energy/capacity suppliers as well as load and other charges for DCE’s participation in the CAISO in addition to block hedges and other settlement fees. For Fiscal Year 2024-2025, total expenses were approximately $67.0 million, representing an increase of $12.7 million or 23.5% from the previous fiscal year. The substantial increase in expenses was largely attributed to elevated costs for capacity products and renewable energy, both of which were required to ensure compliance with CPUC regulations, uphold the reliability of DCE’s energy supply, and achieve board-approved carbon-free objectives. Other expenses during Fiscal Year 2024-2025 remained relatively stable from the prior year and included payments to consultants and various professional service vendors like CVAG. DCE expects fiscal year 2025-2026 wholesale power expenses to decline to approximately $53.7 million, reflecting a meaningful easing in capacity and renewable energy costs from Fiscal Year 2024-2025 peak levels.

In Fiscal Year 2024-2025, DCE demonstrated another year of excellent financial health, achieving a Fixed Charge Coverage (FCC) ratio of 2.49x. This ratio is calculated using one-half of the PPA costs as 10 a proxy for debt service. As of December 31, 2025, DCE also reported 353 adjusted days of cash on hand, underscoring its strong liquidity position.

Results of Operations. The following is a summary of DCE’s results of operations for the fiscal years ending June 30 of 2024 and 2025:
11 Assets, Liabilities, Deferred Inflows or Resources and Net Position. The following table is a summary of DCE’s assets, liabilities, and net position for fiscal years ending June 30:

Other Sources of Revenue. While DCE derives revenue from investment and other miscellaneous income, this constitutes a very small portion of its annual revenue. Its Approved Budget for the Fiscal Year 2025-2026 projects such income to constitute less than 1% of its total projected net revenue.

Cash Flows. The following table is a summary of DCE’s cash flows for the fiscal years ending June 30:
12 Financial Reserves. DCE prudently manages its operations in a manner that supports its long-term financial independence and stability while providing sufficient financial capacity to meet short term obligations. Its Financial Reserve Policy outlines the appropriate types and target levels (minimum and maximum) of unrestricted/undesignated reserves.

That policy establishes an operating reserve accumulation minimum target equal to 50% (180 days operating capital) of the most current Board approved DCE total power and operating costs budget by the end of DCE’s 6th year of operation. Contributions to achieve these targets are subject to actual revenue and cash flow streams, prevailing conditions of business necessity, existing financial obligations, and other relevant factors as may be determined by the Board. The targeted maximum reserve balance is 75% (270 days operating capital) of the most current Board approved DCE operating budget. DCE has met or exceeded the targets established in its financial reserves policy. 13 Temporary reductions in reserves for cash flow management, aimed at balancing expected fluctuations in revenues and expenses, are normal cyclical occurrences within the fiscal year and do not constitute a use of reserves.

Under the policy, if Basic Reserves exceed and remain above the minimum target level, use of those reserves may be made subject to approval by the Board of Directors. Use of those reserves shall encompass strategic purposes such as funding capital projects or improvements, financing programs, paying down existing debt, rate setting enhancements, and/or other strategic uses as deemed necessary and prudent by the DCE Board. Use of Basic Reserves not subject to the minimum target level may encompass transfer to or creation of a separate Special Reserve designated for specific purposes. Any recommendation for use of Basic Reserves outside the creation of a Special Reserve shall include a cost-benefit analysis or a proposal for the replenishment of such funds within a time period as approved by the Board.

DCE is creating a number of special reserves, which are treated independently from the Basic Reserve and are not aggregated to maximize fiscal prudence in keeping with the foregoing policy, described below. Reserve levels will be monitored during each fiscal year and included as part of the annual budget process and reported no less frequently than quarterly in financial reports provided to the Board. • FCC Reserve. DCE has established a Fixed Charge Coverage (“FCC”) Reserve to ensure that rate-setting allows for flexibility in cost recovery. The major rating agencies place significant weight on DCE’s ability to meet fixed obligations on an ongoing basis and look extremely favorably at an annual FCC above 1.6x. If DCE’s FCC were to drop below certain levels, this may result in a less favorable credit rating which could then impact DCE’s operations. Upon Board approval, these funds may be transferred to other Special Reserves or to the Basic Reserve.
• Stabilization Reserve. DCE has also established a Stabilization Reserve to mitigate unexpected financial risks which may arise due to market volatility, regulatory changes, unforeseen geopolitical events, catastrophe, power price or rate shocks, and other types of adverse and unplannable events such as economic downturn to meet financial obligations during periods of business necessity.
• Procurement Reserve. DCE has established a Procurement Reserve to meet mandated regulatory and/or operating requirements for the procurement of energy products such as resource adequacy, carbon-free products, and renewables as well as for meeting mandated regulatory and/or operating depository requirements when other sources of funds are not available; and credit support for power purchase arrangements and other such type uses supportive of long-term energy procurement in line with DCE’s objectives and California’s strict Renewable Portfolio Standards.
• Customer and Programmatic Reserve. DCE has established a contingency reserve for customer programs and incentives as well as for other community projects such as local power programs/projects requiring credit backing or short-term infusion of capital.

Risk Management. On November 17, 2025, DCE’s Board adopted the Wholesale Energy Procurement Risk Management Policy (WEPRMP), updating and replacing the Energy Risk Management Policy adopted on May 21, 2018 (and revised on June 17, 2024). The WEPRMP applies to all power procurement and related business activities that may impact the risk profile of DCE. 14 The WEPRMP provides a structured, disciplined, and consistent approach to wholesale energy procurement risk management that facilitates risk-informed decision making in wholesale energy activities, which makes up 96% of DCE’s annual budget. The WEPRMP supports DCE in aligning its strategy, processes, people, and technology for the purpose of evaluating and managing energy procurement uncertainties inherent to the energy industry and power procurement. By strategically managing risk associated with power procurement activities, DCE can proactively reduce the chance of loss, identify and take advantage of procurement opportunities, create greater financial stability, and protect its resources to support its mission and create value for its members.

The ultimate purpose of the WEPRMP is to support DCE’s achievement of its goals by specifying management responsibilities, organizational structures, risk management standards, and the operating controls and limits necessary to appropriately identify, evaluate, and manage DCE’s exposure to wholesale energy procurement risk. DCE’s WEPRMP can be found on its website.

To ensure the successful operation of the CCA program, DCE has partnered with experienced consultants to provide energy-related services. Specific to power procurement, DCE has partnered with TEA, which executes the preponderance of front- (transacting), middle-(monitoring) and back-office (settlement) related activities on DCE’s behalf. In providing these services for DCE, TEA adheres to and is governed by the WEPRMP. In addition, TEA maintains its own risk management policies and procedures, following industry best practices of segregation of duties, which also govern activities executed on DCE’s behalf. Credit guidelines include a preference for transacting with investment-grade counterparties, evaluating counterparties’ financial condition and assigning credit limits as applicable.

These credit limits are established based on risk and return considerations under terms customarily available in the industry. In addition, DCE enters into netting arrangements whenever possible and, where appropriate, obtains collateral and other performance assurances from counterparties.

Credit Rating. DCE currently maintains an issuer credit rating of BBB with a stable outlook from S&P Global Ratings.

ITEM 6A 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 6B

STAFF REPORT
Subject: Assignment Agreement for Resi Station Contract Contact: Lisa McNeilly, Director of Energy & Sustainability ([email protected]) Recommendation: Information
Background: At its June 29, 2022, the Board authorized the Executive Director to execute a 10- year Western Systems Power Pool Resource Adequacy (RA) Confirmation with Resi Station, LLC for resource adequacy benefits from a demand response project. The RA contract fulfills part of the California Public Utility Commission’s (CPUC) June 2021 Mid-term Reliability procurement order to achieve California’s ambitious greenhouse gas (GHG) emissions reduction targets for 2030 and to help the state meet the ultimate goal of 100 percent carbon-free electricity resources by 2045. The RA product that Resi Station LLC (Resi Station), a subsidiary of OhmConnect, offers in the contract aggregates demand response by participating customers throughout California.

DCE’s pro rata share of the project is 4.5 megawatts (MW) of the 15MW peak volume over a 10- year period beginning January 1, 2023.

In November 2025, DCE staff were notified that a merger between OhmConnect and Google Nest involved operational changes that would make it difficult for Resi Station to continue to deliver their capacity obligation to DCE. After investigating possible replacement capacity, Resi Station ultimately offered to assign and transfer its obligations to Leapfrog Power, Inc. The Assignment, Assumption, and Novation Agreement has been reviewed by staff and will be signed by the Executive Director in accordance with the Assignment provisions of the original contract. All substantive terms of the original contract remain the same.

Fiscal Analysis: There is no additional cost to DCE for this information item. Under the pricing terms in the agreement, DCE will continue to pay for the system RA generated by the project at a fixed-price rate per MWh (megawatt hour) ranging from a low point for the months of November - March throughout the contract term to a high point for September 2023.

Desert Community Energy Board
June 24, 2026
ITEM 6C

STAFF REPORT
Subject: Community Advisory Committee Update
Contact: Eman Nazir, Management Analyst ([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 throughout the year to discuss a variety of topics and issues; DCE staff provides the Board with written updates following those meetings.

The CAC last met on April 13, 2026, at the Coachella Valley Association of Governments (CVAG) office in the City of Palm Desert. During the meeting, DCE staff provided updates on several ongoing initiatives, including DCE’s upcoming small-business energy-efficiency program and the anticipated roll out of Calpine Community Energy’s Community Benefits Grant Program.

DCE staff also introduced CAC members to the Residential Incentive Finder Tool. The tool officially launched in April 2026 as part of CVAG’s partnership in the Inland Regional Energy Network (I-REN), which is a collaboration with San Bernardino Council of Governments (SBCOG), and Western Riverside Council of Governments (WRCOG) to expand access to energy-efficiency programs, education, and funding opportunities throughout the Inland Empire. The Residential Incentive Finder Tool consolidates more than 160 federal, state, regional, and local incentive programs into a single searchable tool, allowing residents to quickly identify programs they may qualify for based on household and location information. Available programs include:
• Energy bill discounts and income-qualified assistance • Home energy improvements, including solar, insulation, and battery storage • Electrification upgrades, such as heat pump technologies • Clean transportation incentives, including electric vehicle programs The tool also highlights enhanced benefits available to income-qualified households and surfaces relevant local and regional programs. No personally identifiable information is required or stored, and users may email themselves their results for future reference. The platform is now available on the DCE website: I-REN Incentive Finder – Desert Community Energy.

At the April meeting, CAC members were able to beta test the incentive tool and provide feedback on how it works. CAC members provided feedback on outreach strategies, customer engagement opportunities, and potential barriers to participation for DCE’s upcoming small-business energy-efficiency program. CAC members also participated in a discussion regarding Calpine Community Energy’s Community Benefits Grant Program, including program eligibility, outreach opportunities, and ways to maximize awareness and participation across DCE member communities. Staff will continue incorporating CAC input into program development as Desert Community Energy Board
June 24, 2026
implementation progresses on these efforts.

CAC meetings are open to the public, and agendas are posted on the DCE website in advance to encourage participation and community engagement. Over the summer, DCE staff will also be reaching out to the community in an effort to fill vacancies on the CAC. An item will be brought to the Board in the fall to review the appointments.

Fiscal Analysis: There is no cost to DCE associated with this informational update. The CAC is a volunteer advisory body, and staff support for the committee is covered through existing resources.

Financial Row Amount (As of 3/31/2026)
Comparison Amount
(As of 03/31/2025) Variance % Variance
Assets
Current Assets
Bank
1011 - 1011 - DCE CAMP Account - 6235 $12,229,767 $12,643,150 ($413,383) -3.27% 1021 - 1021 - DCE LAIF Account 40-33-028 $20,737,038 $6,451,944 $14,285,093 221.41% 1050 - 1050 - DCE River City Bank Money Market -5470 $405,775 $405,775 $0 0.00% 1051 - 1051 - DCE River City Bank FSR LOC Collateral -1075 $0 $147,000 ($147,000) -100.00% 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 $1,440,405 [a] $0 $1,440,405 100.00% 1054 - 1054 - DCE River City Bank DDM Marketplace Sweep - 0991 $0 [a] $6,017,196 ($6,017,196) -100.00% 1055 - 1055 - DCE River City Bank Lockbox -4446 $1,179,360 $1,631,232 ($451,872) -27.70% Total Bank $36,191,479 $27,495,702 $8,695,777 31.63%
Accounts Receivable
1200 - 1200 - Accounts Receivable $12,018,886 $15,056,465 ($3,037,579) -20.17% Total Accounts Receivable $12,018,886 $15,056,465 ($3,037,579) -20.17% Other Current Asset
1080 - 1080 - Fair Value Adjustment ($398) $5,479 ($5,876) -107.26% 1250 - 1250 - Accrued Accounts Receivable $2,001,959 $1,660,009 $341,950 20.60% 1300 - 1300 - Allowance for Doubtful Accounts ($3,096,214) ($3,206,731) $110,517 -3.45% 1400 - 1400 - Interest Receivable $69,074 $71,100 ($2,026) -2.85% 1600 - 1600 - Prepaid Expenses $465,649 [b] ($19,529) $485,178 -2,484.40% 1650 - 1650 - Deposits Receivable $1,010,584 $1,010,584 $0 0.00% Total Other Current Asset $450,655 ($479,088) $929,743 -194.07% Total Current Assets $48,661,020 $42,073,079 $6,587,941 15.66% Total Assets $48,661,020 $42,073,079 $6,587,941 15.66%
Liabilities & Net Position
Current Liabilities
Accounts Payable
2111 - 2111 - Accounts Payable $3,564,521 $4,666,917 ($1,102,396) -23.62% 2120 - 2120 - Due To Other Government $933,887 $386,256 $547,631 141.78% Total Accounts Payable $4,498,408 $5,053,173 ($554,765) -10.98% Other Current Liability
2150 - 2150 - Accrued Accounts Payable $1,767,927 $39,406 $1,728,521 4,386.45% 2250 - 2250 - NEM Escrow Payable $44,311 $58,052 ($13,741) -23.67% 2300 - 2300 - Taxes Payable
2301 - 2301 - Utility Users Tax (UUT) $94,054 $79,082 $14,972 18.93% 2302 - 2302 - Electric Energy Surcharge (EES) $4,097 $3,146 $951 30.24% Total - 2300 - 2300 - Taxes Payable $98,151 $82,227 $15,923 19.36% Total Other Current Liability $1,910,388 $179,685 $1,730,703 963.19% Total Current Liabilities $6,408,796 $5,232,858 $1,175,938 22.47% 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 $40,042,310 $35,039,779 $5,002,531 14.28% 3200 - 3200 - F/B-Restricted $0 $147,000 ($147,000) -100.00% Net Income $1,799,146 $1,248,441 $550,705 44.11%
Total Net Position $41,841,456 $36,435,221 $5,406,235 14.84% Total Liabilities & Net Position $48,661,020 $42,073,079 $6,587,941 15.66% [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 March 31, 2026
Financial Row Amount (7/1/2025 - 3/31/2026)
Comparative Amount
(7/1/2024 - 03/31/2025) Variance % Variance
Ordinary Revenue/Expense
Revenue
4310 - 4310 - Carbon Free $36,707,071 $40,284,896 ($3,656,364) -8.88% 4350 - 4350 - Desert Saver $7,763,100 $10,138,372 ($2,075,241) -23.43% 4400 - 4400 - Energy Settlements $2,324,760 [a] $6,553,707 ($4,228,948) -64.53% 4900 - 4900 - Other Revenue $3,655 $14,884 ($11,229) -75.44% Total - Revenue $46,798,585 $56,991,860 ($10,193,275) -17.89% Expense
5100 - 5100 - Energy Procurement
5100 - 5100 - Energy Procurement $17,758,652 $21,339,924 ($3,581,273) -16.78% 5105 - 5105 - PCC0 REC Purchases $0 $0 $0 0.00%
5110 - 5110 - PCC1 REC Purchases $4,970,902 $5,441,354 ($470,451) -8.65% 5200 - 5200 - Resource Adequacy $14,632,372 $15,443,154 ($810,782) -5.25% 5220 - 5220 - Carbon Free Energy $550,000 [b] $4,916,358 ($4,366,358) -88.81% 5400 - 5400 - CAISO Market Charges $2,368,340 $3,794,243 ($1,425,903) -37.58% 5500 - 5500 - Long Term PPA $1,920,816 [c] $0 $1,920,816 100.00% Total - 5100 - 5100 - Energy Procurement $42,201,081 $50,935,033 ($8,733,952) -17.15% 5600 - 5600 - CPUC Penalty $0 $1,750,159 ($1,750,159) -100.00% 6100 - 6100 - Advertising/Marketing/Sponsorships $600 $4,280 ($3,680) -85.98% 6175 - 6175 - Postage $10,341 $10,879 ($538) -4.95%
6200 - 6200 - Printing/Copying $9,379 $8,080 $1,299 16.07% 6250 - 6250 - Professional Services
6250 - 6250 - Professional Services $77,239 $146,286 ($69,047) -47.20% 6260 - 6260 - Audit/Accounting Services $12,350 $0 $12,350 100.00% Total - 6250 - 6250 - Professional Services $89,589 $146,286 ($56,697) -38.76% 6280 - 6280 - Legal Services $54,276 $61,202 ($6,926) -11.32% 6500 - 6500 - Direct Program/Project Costs
6550 - 6550 - Consultants $1,758,398 $1,753,831 $4,567 0.26% 6650 - 6650 - Outreach Services $15,728 $17,280 ($1,553) -8.98% 6675 - 6675 - Customer Programs $0 $1,628 ($1,628) -100.00% Total - 6500 - 6500 - Direct Program/Project Costs $1,774,125 $1,772,739 $1,386 0.08% 7050 - 7050 - Account/Service Fees $7,052 $6,226 $827 13.28% 7075 - 7075 - IT Services $0 $4,543 ($4,543) -100.00%
7150 - 7150 - Training and Event Registration $0 $65,685 ($65,685) -100.00% 7175 - 7175 - Memberships $83,966 $0 $83,966 100.00%
7225 - 7225 - Subscription Based Information Technology $3,598 $0 $3,598 100.00% 7275 - 7275 - Insurance $6,144 $6,033 $111 1.84%
7350 - 7350 - Bad Debt Expense $1,600,926 $1,817,420 ($216,494) -11.91% Total - Expense $3,639,997 $3,903,372 ($263,375) -6.75% Net Ordinary Revenue $957,507 $403,296 $554,211 137.42% Other Revenue and Expenses
Other Revenue
8001 - 8001 - Investment Income $849,854 $815,839 $34,015 4.17% 8005 - 8005 - Gain/(Loss) in Investments ($8,214) $29,307 ($37,521) -128.03% Total - Other Revenue $841,639 $845,146 ($3,506) -0.41% Other Expense
7400 - 7400 - Interest Expense $0 $0 $0 0.00%
Total - Other Expense $0 $0 $0 0.00%
Net Other Revenue $841,639 $845,146 ($3,506) -0.41%
Net Revenue $1,799,146 $1,248,441 $550,705 44.11%
[c] New account for FY2025/26; it was combined with Energy Procurement in prior years. [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 - March 31, 2026
Financial Row Amount Budget Amount Amount Over Budget % of Budget Ordinary Revenue/Expense
Revenue
4310 - 4310 - Carbon Free $36,707,071 $34,730,856 $1,976,215 105.69% 4350 - 4350 - Desert Saver $7,763,100 $8,740,605 ($977,505) 88.82% 4400 - 4400 - Energy Settlements $2,324,760 $1,847,220 $477,540 125.85% 4900 - 4900 - Other Revenue $3,655 $0 $3,655 100.00%
Total - Revenue $46,798,585 $45,318,681 $1,479,904 103.27% Expense
5100 - 5100 - Energy Procurement
5100 - 5100 - Energy Procurement $17,758,652 $17,762,652 ($4,000) 99.98% 5110 - 5110 - PCC1 REC Purchases $4,970,902 $5,393,644 ($422,741) 92.16% 5200 - 5200 - Resource Adequacy $14,632,372 $15,203,467 ($571,096) 96.24% 5220 - 5220 - Carbon Free Energy $550,000 $550,000 $0 0.00% 5400 - 5400 - CAISO Market Charges $2,368,340 $1,640,886 $727,454 144.33% 5500 - 5500 - Long Term PPA $1,920,816 $2,116,022 ($195,206) 90.77% Total - 5100 - 5100 - Energy Procurement $42,201,081 $42,666,671 ($465,589) 98.91% Expense
6100 - 6100 - Advertising/Marketing/Sponsorships $600 $3,833 ($3,233) 15.65% 6175 - 6175 - Postage $10,341 $10,641 ($300) 97.18%
6200 - 6200 - Printing/Copying $9,379 $9,992 ($613) 93.87% 6250 - 6250 - Professional Services
6250 - 6250 - Professional Services $77,239 $168,640 ($91,401) 45.80% 6260 - 6260 - Audit/Accounting Services $12,350 $0 $12,350 100.00% Total - 6250 - 6250 - Professional Services $89,589 $168,640 ($79,051) 53.12% 6280 - 6280 - Legal Services $54,276 $65,162 ($10,886) 83.29% 6500 - 6500 - Direct Program/Project Costs
6550 - 6550 - Consultants $1,758,398 $1,854,555 ($96,157) 94.82% 6650 - 6650 - Outreach Services $15,728 $15,645 $83 100.53% 6675 - 6675 - Customer Programs $0 $0 $0 0.00%
Total - 6500 - 6500 - Direct Program/Project Costs $1,774,125 $1,870,200 ($96,075) 94.86% 7050 - 7050 - Account/Service Fees $7,052 $7,000 $52 100.74% 7175 - 7175 - Memberships $83,966 $83,966 $0 0.00%
7200 - 7200 - Office Supplies $0 $250 ($250) -100.00%
7225 - 7225 - Subscription Based Information Technology $3,598 $3,720 ($123) 96.70% 7275 - 7275 - Insurance $6,144 $6,205 ($61) 99.02%
7350 - 7350 - Bad Debt Expense $1,600,926 $1,564,973 $35,954 102.30% Total - Expense $3,639,997 $3,794,584 ($154,587) 95.93% Net Ordinary Revenue $957,507 ($1,142,574) $2,100,080 -83.80% Other Revenue and Expenses
Other Revenue
8001 - 8001 - Investment Income $849,854 $761,284 $88,569 111.63% 8005 - 8005 - Gain/(Loss) in Investments ($8,214) $0 ($8,214) 100.00% Total - Other Revenue $841,639 $761,284 $80,355 110.56% Net Other Revenue $841,639 $761,284 $80,355 110.56%
Net Revenue $1,799,146 ($381,290) $2,180,436 -471.86%
Desert Community Energy
Unaudited Changes to Net Position Budget vs. Actual
July 1, 2025 - March 31, 2026
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 0.55% 199,135 $ 0.55% N/A River City Bank - ICS $ 1,440,405 3.98% 1,440,405 $ 3.98% 3.96% River City Bank - Lockbox $ 1,179,360 3.26% 1,179,360 $ 3.26% N/A River City Bank - Money Market $ 405,775 1.12% 405,775 $ 1.12% 2.28% Local Agency Investment Fund (LAIF) $ 20,737,038 57.30% 20,736,640 $ [a] 57.30% 3.83% CAMP $ 12,229,767 33.79% 12,229,767 $ 33.79% 3.80%
Overall Total $ 36,191,479 100.00% 36,191,082 $ 100.00% Note:

Duly submitted by:

Claude T. Kilgore
Director of Finance

DESERT COMMUNITY ENERGY

INVESTMENT REPORT
FOR MARCH 31, 2026
[a] Source of Market Values - LAIF, State of California Pooled Money Investment Account Market Valuation - March 2026. Paper Gain/(Loss) was (0.002)%. 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.

ITEM 6F

STAFF REPORT
Subject: Governmental Accounting Standards Board’s (GASB) Video Series Contact: Claude T. Kilgore, Director of Finance ([email protected]) Recommendation: Information
Background: Established in 1984, the Governmental Accounting Standards Board (GASB) is the independent, private-sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP).

The GASB standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs (AICPA). GASB develops and issues accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to taxpayers, public officials, investors, and others who use financial reports.

In April 2026, GASB announced it is offering a new video series to walk elected officials, citizens, accounting students, preparers, and other stakeholders through the highlights of the annual comprehensive financial report (ACFR), which presents the financial statements for a state or local government. The goal of the 16 videos is to explain how information within the ACFR may be used. The episodes average 5-to-10 minutes in length. The series includes a three-part introduction to government financial reporting and 13 segments on key areas of the ACFR.

Staff is providing a link to the videos for the Board members’ information: Video Series Walks Elected Officials through Governmental Financial Reports.

Fiscal Analysis: There is no cost to DCE. The video series is a free service offered by GASB.

Desert Community Energy Board
June 24, 2026

COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS SCHEDULE OF MEETINGS FISCAL YEAR 2026-27

STANDING COMMITTEES
& GOVERNING BODIES

DAY TIME JULY
(Dark)
AUG
(Dark)

SEPT OCT
(Dark)

NOV DEC
(Dark)

JAN FEB MAR
(Dark)

APR MAY JUN
EXECUTIVE COMMITTEE Last
Monday 4:00 p.m. - - 28 - 30 - 25 22 - 26 H
June 7 28
TRANSPORTATION COMMITTEE 1st Monday 10:00 a.m. - H
Aug 31 - 2 - 4 1 - 5 3 7

ENERGY AND SUSTAINABILITY

COMMITTEE
2nd
Thursday 12:00 p.m. - - 10 - 12 - 14 11 - 8 13 10
PUBLIC SAFETY COMMITTEE 2nd Monday 9:00 a.m. - - 14 - 9 - 11 8 - - 10 14 HOMELESSNESS COMMITTEE 3rd
Wednesday 10:00 a.m. - - 16 - 18
9:30
am
- 20 17 - 21 19 16
GENERAL ASSEMBLY Last Monday
in June
TO BE
ANNOUNCED - - - - - - - - - - - 28

OTHER AGENCIES

COACHELLA VALLEY

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

COACHELLA VALLEY POWER
AGENCY
Last
Monday 3:00 p.m. - - 28 - 30 - 25 22 - 26 H
June 7 -
H = Holiday * = Special Meeting AGENDAS CAN BE FOUND AT: www.cvag.org. UPDATED: June 1, 2026 PLEASE NOTE: When it becomes necessary to have a special meeting or to change the date of a meeting, committee members will be alerted and the change will be noted on the CVAG website calendar.

ITEM 6H

STAFF REPORT
Subject: Calpine Community Energy’s Community Benefits Grant Program Contact: Eman Nazir, Management Analyst ([email protected]) Recommendation: Information
Background: Calpine Community Energy (Calpine) provides front-line customer services for DCE, including data management and customer call center services. On May 19, 2025, the DCE Board approved an agreement with Calpine through April 2028, which also established a Community Benefits Grant Program for the DCE service territory. Under the program, Calpine rebates two percent of annual data management service fees to support nonprofit organizations advancing clean energy, sustainability, and resiliency efforts aligned with DCE’s mission.

At the September 2025 Board meeting, Calpine representatives presented preliminary information regarding the anticipated rollout of the program and received Board input on coordination with the City of Palm Springs’ broader community engagement efforts. Staff also provided an update at the March 2026 Board meeting regarding the anticipated launch of the program. Staff provided an update to DCE’s Community Advisory Committee in April2026 , where staff received additional input on program rollout.

Over the past several months, DCE staff have worked with Calpine to refine program elements and prepare for launch. Calpine collaborated with DCE staff on program guidelines, outreach, and application review, but retains sole responsibility for awarding grant funds. Applications are open to IRS-designated 501(c)(3) nonprofit organizations serving the DCE service territory and must align with one or more of the following focus areas: Energy & Sustainability, Environmental & Social Justice, Education, and Workforce Development.

The Community Benefits Grant Program officially launched on May 15, 2026. Approximately $11,000 is available for the 2026 funding cycle, with Calpine awarding up to three grant awards for projects with a one-year term. Applications include a short project description and high-level budget.

To support outreach efforts, DCE staff created a dedicated Programs & Assistance webpage featuring a grants page for the program. Staff also developed an outreach database of qualifying nonprofit organizations using information from the City of Palm Springs’ Finance Department and the Palm Springs Chamber of Commerce.

The application period is open through June 26, 2026. Awardees are expected to be notified in September 2026, with grant funds anticipated to be distributed in late 2026.

Staff will continue to provide updates to the Board as the program progresses =.

Desert Community Energy Board
June 24, 2026
Fiscal Analysis: There is no cost to DCE associated with this informational report. Calpine’s contract includes a two percent rebate to support the Community Benefits Grant Program, projected to provide approximately $11,000 annually to nonprofit organizations serving the DCE service territory.

Desert Community Energy Board of DirectorsJune 24, 2026

Desert Community Energy Board of Directors
June 24, 2026