Agenda packet — MCE Board of Directors, February 11, 2026

MCE Board of Directors Meeting
Special Meeting & Public Workshop
Wednesday, February 11, 2026
10:00 a.m.

MCE, 2300 Clayton Road, Suite 1500, Concord, CA 94520
Public comments may be made in person or remotely via the details below.

Remote Public Meeting Participation
Video Conference: https://t.ly/mIv5w
Phone: Dial (669) 900-9128, Meeting ID: 890 0487 7785, Passcode: 525690 Materials related to this agenda are available for physical inspection at MCE’s offices in San Rafael at 1125 Tamalpais Avenue, San Rafael, CA 94901 and in Concord at 2300 Clayton Road, Suite 1500, Concord, CA 94520.

DISABLED ACCOMMODATION: If you are a person with a disability who requires an accommodation or an alternative format, please contact MCE at (888) 632-3674 or [email protected] at least 72 hours before the meeting start time to ensure arrangements are made.

Agenda Page 1 of 1

1. Roll Call/Quorum

2. Workshop 1 Recap (Discussion)

3. MCE’s Energy Portfolio Considerations (Discussion)

4. Proposed Fiscal Year 2026/27 MCE Rate Reduction Proposals (Discussion/Action)

5. Proposed Fiscal Year 2026/27 MCE Budget Elements (Discussion)

6. Adjourn
The Board of Directors may discuss any or all of the items listed on the agenda irrespective of how the items are described.

Budget Workshop 1 Recap
1 Strategic Plan for Energy Services
Integrated Resource Planning
Customer Rates, Billing, and Cost Context
2026 Agency
Priorities
• Reduce greenhouse gas emissions • Foster equity • Lower customer costs (strengthen energy affordability)
• Use funds wisely (amplify our impact by using our
funds wisely)
• Strengthen governance practices and support
shared understanding
• Achieve operational excellence and foster an
engaging employee experience
• Tell our story to inspire action (inspire others to
take action)
2 Options for Reducing Program Investments
3 Option Savings Estimates Program Impact
1 Close or scale back EV Instant
Rebate Program
$3,594,500 Up to 876 income-qualified customers
do not receive a rebate for the purchase
of an EV.
2 Close the EV Charging Program
to new applicants
$800,000 Projects with existing reservations will
still need to close out. Larger budget
implications in the coming FYs if we stop
taking in new project reservations.
3 Eliminate Electrification
Incentives
$942,000 685 electrification measures not installed
in customer homes. Will also impact
MCE’s ability to spend down CPUC EE
funds.

Total Potential Savings (all options): Up to $5,336,500 Why Customers Choose MCE
4 Cleaner energy, local control, and community benefits — with competitive, stable rates. • Cleaner energy: MCE provides significantly more renewable electricity than PG&E (69% vs. 23%, per the California Energy Commission 2024 Power Content Label). • Community-first, not-for-profit: Revenues are reinvested locally in bill discounts, customer rebates, clean energy projects, and workforce development, not shareholder profit.
• Stable rates: Historically stable rates, with income-qualified discounts, bill assistance, and customer programs.
• Local control & accountability: Governed by locally elected officials with transparent public meetings and Board oversight.

MCE's Energy Portfolio Considerations
February 11, 2026
Budget Workshop #2
MCE's Energy Procurement to meet Compliance
2 Integrated Resource Planning (IRP) : MCE is mandated by the California Public Utilities Commission (CPUC) to procure over 720 MW of new qualifying capacity by 2032 to meet reliability and emission reduction goals of the state.

Renewable Portfolio Standard (RPS): State Mandated program that requires Load Serving Entities (LSEs) to serve 60% of their retail sales using renewable resources by 2030.

Resource Adequacy (RA): A CPUC program that requires LSEs to secure a certain amount of capacity to maintain grid reliability.

MCE's Energy Procurement Considerations
3 ADJUST RENEWABLE AND

GHG-FREE CONTENT OF

MCE'S LIGHT GREEN

PORTFOLIO

EVALUATE USE OF

BANKED CREDITS FROM

PRIOR YEARS TO MEET
RPS
EVALUATE USE OF PCC2

OR UNBUNDLED

RENEWABLE ENERGY

CREDITS
Policy Considerations
4 California Energy Commission's Power Content Label (PCL) Reporting:

Starting in 2028, for reporting year 2027, PCL emissions will be reported based on hourly accounting.

CPUC's RA Program: Starting in 2025, the CPUC requires LSEs to procure RA on an hourly basis every month.

SB 100 goal to be carbon neutral by 2045: MCE, through the IRP process, will be required to meet the state emissions targets and reliability of the grid.

Guiding Principles for Choosing a Path Forward
5 2026 Agency Priorities
• Reduce greenhouse gas emissions
• Foster equity
• Lower customer costs (strengthen energy affordability) • Use funds wisely (amplify our impact by using our funds wisely) • Strengthen governance practices and support shared understanding • Achieve operational excellence and foster an engaging employee experience • Tell our story to inspire action (inspire others to take action) Emission Calculations for Short-Term contracts for Renewable and GHG-Free Energy
6 MCE’s Reported
2024 PCL
Emissions
(Light Green)
1 lbs CO2e/MWh
Modified 2024 PCL
without Short-Term
GHG- Free or
Renewable PPAs*
606 lbs CO2e/MWh
Effect of Short-Term PPAs for Renewable
Energy and GHG-Free Energy
*Assuming all short-term PPAs are replaced with
unspecified power
• Current CEC regulations do not distinguish emissions
based on length of contract. Emissions are based on
resource type only (solar, wind, natural gas, etc.).
• Starting in 2028, CEC regulations will require hourly emissions accounting. MCE’s current understanding is
that there will continue to be no difference in emissions accounting based on length of contract.
• Some of MCE's customers rely on MCE's products to
meet their local climate action goals and/or meet
regulatory requirements, therefore, we rely on the state provided guidelines to estimate renewable/GHG-content of our portfolio. 7 Effect of Short-Term PPAs for Renewable
Energy and GHG-Free Energy
*Assuming all short-term PPAs are replaced with
unspecified power
• MCE’s decision to purchase PCC1 bundled renewable
energy rather than PCC3 (unbundled) reflects MCE’s
commitment to making impactful purchases.
• Renewable project investors rely on revenues from both short- and long-term contracts as part of their financial stack; without these revenues, projects may not have
been financed and built.
• MCE’s current long-term contract portfolio is solar-heavy. Short-term PPAs for other renewables or GHG-free energy with different generation profiles may help reduce emissions and better follow MCE load shape.

MCE’s Reported
2024 PCL
Emissions
(Light Green)
1 lbs CO2e/MWh
Modified 2024 PCL
without Short-Term
GHG- Free or
Renewable PPAs*
606 lbs CO2e/MWh
Emission Calculations for Short-Term contracts for Renewable and GHG-Free Energy
Power Content Scenarios
8 1. Status Quo: As currently planned without changing any parameters or internal MCE clean goals

2. 60/95 Target: Locking renewable targets at 60% and keeping Carbon Free (CF) at 95%.

3. 60/70 Target: 60% Lock option paired with lowering CF targets to 70%

4. RPS Compliance/95: Lowering MCE renewable targets to RPS Compliance targets (49% in 2026, 52% in 2027 and 55% in 2028). Maintain CF targets at 95%

5. RPS Compliance/85: RPS Compliance paired with lowering CF% to 85%

6. RPS Compliance/70: RPS Compliance paired with lowering CF% to 70%

7. RPS Banking/70 : Banking excess 2025 RECS for use in 2026 and 2027 paired with CF at 70%. This effectively lowers 2026 and 2027 targets to 45%
The above target adjustments would apply for 2026, 2027 and 2028 Calendar years and would not affect Deep Green.

These options may require selling energy from MCE contracted resources where necessary.

Key considerations
• Targets are set based on the compliance periods ending in 2027 and 2030 respectively.
• MCE needs to average 52% for compliance period (CP) 5 (2025 – 2027) and 60% for CP6 (2028 – 2030)
• Banking allows use of excess RPS in one year to be used in following years within the same CP
• Power Content Label will reflect annual results and
customer messaging and expectations would need to be
adjusted.

MCE clean energy goals
9 2025 2026 2027 2028 2029 2030
State RPS targets 47% 49% 52% 55% 57% 60%

MCE RPS
Goals(Adjusted) 60% 60% 65% 70% 75% 80%
State Carbon Free
target 100% Carbon Free by 2045
MCE Carbon Free
goals 95% 95% 95% 95% 95% 95%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Before Banking
0%
10%
20%
30%
40%
50%
60%
After Banking
Financial summary of scenarios
10 FY 2026/27 FY 2027/28
Renewable
Content CF % Cost of Energy Delta Cost of Energy Delta

1. Status Quo 60-65% 95% $643 $0 $636 $0

2. 60/95 Target 60% 95% $642 $0 $634 $2

3. 60/70 target 60% 70% $630 $13 $618 $18

4. RPS Compliance/95 49-52% 95% $640 $3 $632 $4

5. RPS Compliance/85 49-52% 85% $634 $9 $625 $11

6. RPS Compliance/70 49-52% 70% $627 $16 $617 $19

7. RPS Banking/70 45% 70% $626 $17 $615 $21
Hourly accounting scenarios
11 100
70 120
70 30
50 Hour 1 Hour 2 Hour 3 Hour 4
MCE Energy portfolio System Power
30 GHG
0 emissions
20 avoided GHG 50 GHG
Needed
supply
Excess
Load 0 emissions
Sample Supply portfolio
12 *Actual profile could vary based on actual generation, load and CAISO system portfolio 0 100
200
300
400
500
600
700
800
900
MWh
Hour
Sample hourly profile
Nuclear Hydro Short term PCC1 Generation Load
2027 Supply portfolio
13 0
200
400
600
800
1000
June
0 200
400
600
800
1000
September
0 100
200
300
400
500
600
700
800
900
November
0 100
200
300
400
500
600
700
800
900
February
*Actual profile could vary based on actual generation, load and CAISO system portfolio 2027 average hourly emissions profile
14 0
20 40
60 80
100
120
140
0 0.05

0.1 0.15

0.2 0.25

0.3 mTCO2e
Mtco2e/MWh
Emissions rate (mTCO2e/MWh) estimates
MCE Emission CAISO Emissions(mTCO2/MWh) MCE Emission rate(mTCO2/MWh) *Actual profile could vary based on actual generation, load and CAISO system portfolio. * Hourly emissions are derived from 2024 CAISO emissions MCE’s 2024 Power Content Label
15 Emissions summary (Pounds CO2e/MWh)
16 2026 * 2027
Renewable Content Annual CF % Emissions Emissions

1. Status Quo 60-65% 95% 20 93 - 132

2. 60/95 Target 60% 95% 20 93 - 132

3. 60/70 target 60% 70% 327 160 - 207

4. RPS Compliance/95 49-52% 95% 20 112 - 189

5. RPS Compliance/85 49-52% 85% 186.9 145 - 193

6. RPS Compliance/70 49-52% 70% 327 200 - 205

7. RPS Banking/70 45% 70% 327 200 - 205
*Based on hourly accounting estimates
Recommendation
17 *Based on hourly accounting estimates
Option 1: Select one scenario below
Option 2: Select a range of renewable and carbon free equivalent percentages below. For example, a range with scenario 5 as the floor and scenario 1 as the ceiling would provide maximum flexibility. 2026 * 2027
Scenario Renewable Content Annual CF % Emissions Emissions

1. Status Quo 60-65% 95% 20 93 - 132

2. 60/95 Target 60% 95% 20 93 - 132

3. 60/70 target 60% 70% 327 160 - 207

4. RPS Compliance/95 49-52% 95% 20 112 - 189

5. RPS Compliance/85 49-52% 85% 186.9 145 - 193
Thank you!
mceCleanEnergy.org
[email protected]
Proposed Fiscal Year
2026/27 MCE Rate
Reduction Proposals
Budget Workshop #2
February 11, 2026
Meet the Presenter
2 Maíra Strauss
Chief Financial Officer and Treasurer
Maíra leads all of MCE’s financial operations and strategies which include FP&A, Strategic Finance, Accounting and Risk Management.

Maíra brings over 15 years of experience in financial
management and strategic planning to her role. Prior to joining MCE, she consulted on strategic business practices for various international foundations and startups and
worked in the energy industry in Brazil. Maíra holds a
bachelor’s degree in business administration from SFSU and a post-baccalaureate certificate in business strategies from ESPM- RJ in Rio de Janeiro, Brazil.

Meet the Presenter
3 Kaladhar R. Bollampalli (Kal)
Director, Power Systems & Analytics
Kal joined MCE in June 2025 and leads the organization’s rates design, portfolio planning and analytics, and CAISO market operations.

Before joining MCE, Kal spent 16 years at Southern California Edison (SCE), where he managed energy portfolios valued at up to $2 billion and advanced market strategy, clean energy procurement, and portfolio optimization - efforts that delivered more than $150 million in customer savings over his tenure.

Prior to his work at SCE, Kal spent over 6 years as a software engineer, successfully implementing technology solutions in the energy and supply chain management sectors.

Kal holds a Bachelor of Engineering in Electronics and
Communications Engineering from OUCE and an MBA from
UCLA.

MCE Rate-Setting Principles
4 MCE Rate-Setting
Principles
Revenue
Sufficiency
Stability
Compete
Efficiency
Equity
Clarity
Recover all costs and maintain
required reserves
Minimize large or
frequent rate changes
Support MCE’s ability to
retain and attract
customers
Encourage conservation and smart
energy use (e.g., off-peak charging)
Rate differences should
reflect cost-of-service
differences
Simple, transparent, and
easy for customers to
understand
MCE’s Reserve & Liquidity Policy
5 • Maintain MCE's Reserves = 60% of
annual energy + operating
expenses
• Liquidity goal of 240 days cash on
hand (unrestricted cash &
investments / annual expenses)
• Ensure financial stability, rate stability
and strong credit rating
• FY 2025/26 Projection is based on current estimates and will be refined with updated financials
218
274
240
84%
109%
0%
25%
50%
75%
100%
125%
0 100
200
300
2024/25
Results
2025/26
Projection
Days of Cash on Hand
Reserves (% of Target)
Projected Days Liquidity on Hand Target Days Liquidity on Hand Reserves Actual (% of Target)
Historical Generation Rate + PCIA Comparison
6 • Rate comparisons use Residential E1/E-TOU-C plans and MCE’s 2017 PCIA vintage • PG&E generation and PCIA rates are set on a calendar year; MCE generation rates on a fiscal year (Apr–Mar) MCE’s Generation Rates + PCIA have generally been a lower-cost and stable option, with steady customer participation over time
77%
70%
79% 83% 82% 86% 86% 86% 87% 87% 87% 86% 87%

11.42 14.81 17.21

15.10 12.60

12.44 15.76

15.80 0%
25%
50%
75%
100%
125%
-

5.00 10.00

15.00 20.00

25.00 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Participation Rate (%)
¢/kWh
Generation Rate + PCIA Comparison
Participation Rate (%) PG&E (¢/kWh) MCE (¢/kWh)
Customer Participation & Cost Sensitivity
7 Despite periods of higher rates, customer participation remains strong • Since June 2025, MCE generation + PCIA has been higher than PG&E • Participation at an all-time high: 87.3% (Dec 2025)
• Record customers: 603,478 accounts (Dec 2025)
• Opt-outs remain historically low
• Customers who opt out must decide to stay with MCE for 6 months or take PG&E’s inflated transitional bundled service rate (often 2-3x standard rate) Key takeaway:

Customers appear to value long-term stability, sustainability, and program benefits; not just short-term price differences
Affordability remains a core priority, also supported by several bill discount and customer programs for financially vulnerable customers
PG&E Switching Limits: Transitional Bundled Service (TBS) 8 • Customers opting out of CCA have 2 choices:
• Give 6 month’s notice and stay with CCA service for that period, or • Return to PG&E immediately
• Opting out of MCE without 6-month notice triggers PG&E’s Transitional Bundled Service (TBS) for 6 months
• Under TBS, Transitional Bundled Commodity Cost (TBCC) rates apply • TBCC is highly volatile and costly, often 2–3× standard rates, fluctuating weekly with CAISO market prices (~ 14 – 30¢/kWh in recent years)
• Original PCIA vintage applies during the TBS period
• After 6 months, customers move to bundled generation + PCIA, followed by a 6-month PG&E lock-in
FY 2026/27 MCE Rates Strategy
Balance Cost with Competitiveness and Long-Term Customer Retention 9 Reflect True Cost
• Align with reserve policy
• True cost = rate floor
• Supports long-term financial
stability
Competitiveness & Retention
Retention is influenced by more than price
• Cleaner, greener power; programs
• Historically stable & often lower rates
• Long-term value proposition (future years
may be lower)
Strategic implication: MCE must balance cost recovery with maintaining a compelling customer value proposition across price, sustainability, stability, programs and long-term certainty FY 2026/27 Rate Relief Tools
10 • All figures are estimates and subject to change as forecasts are updated Tool Amount Description
Rate Reduction Headroom $89M
Align FY 2026/27 revenues with costs without
creating a deficit
Operating Reserve Fund
(ORF) $70M Funds available currently for targeted rate relief Reserve-Backed Funding
(Reserves) $24 to 36M
Reserves available without affecting reserve/liquidity
targets
Reduced Clean Energy
Procurement $0 to 17M
Potential savings from lowering RPS/CF
procurement targets
Total Potential Rate Relief $183 to 212M Sum of all available tools for FY 2026/27 Potential Resources to Support Rate Competitiveness (FY 2026/27) FY 2026/27 Proposed Gen Rate Reduction Options
11 Option Gen Rate
Reduction
Under-Recovery How Addressed Bill Impact
(w/o PCIA)
Bill Impact
(w/ PCIA)
1 1.73¢/kWh
(12%)
$0M N/A $1 above bundled
customers
$22 above
bundled
customers
2 2.05¢
(14%)
$17M Partial ORF $0 $21 above
3 3¢
(21%)
$67M Almost full ORF $4 below $17 above
4 3.51¢
(24%)
$94M Full ORF + Reserve-backed
funding $7 below $14 above
5 4¢
(27%)
$119M
Full ORF + Reserve-backed
funding + Lower clean
energy procurement
$9 below $12 above
• Rate comparisons use Residential E-TOU-C plan and MCE’s 2017 PCIA vintage, based on a weighted average rate of customer usage across seasons (summer/winter) and time-of-use (on-peak/off-peak) periods. • Residential rates are shown for illustration; similar reductions apply across all customer classes • Proposed rate reductions are approximate; actual impacts vary by rate class and time-of-use period. • Monthly bill impacts assume 438 kWh of typical residential usage. • All figures are estimates and subject to change.

Reduced Clean Energy Procurement Scenarios
12 FY 2026/27 FY 2027/28
Scenario
#
RPS/Carbon-Free (CF)
%
RPS CF
Cost of
Energy
($M)
Cost
Reduction
($M)
Cost of
Energy
($M)
Cost
Reduction
($M)
1 Status-Quo 60-65% 95% $643 $0 $636 $0
2 60/95 60% 95% $642 $0 $634 $2
3 60/70 60% 70% $630 $13 $618 $18
4 RPS Compliance/95 49-52% 95% $640 $3 $632 $4
5 RPS Compliance/85 49-52% 85% $634 $9 $625 $11
6 RPS Compliance/70 49-52% 70% $627 $16 $617 $19
7 RPS Banking/70 45% 70% $626 $17 $615 $21
• State RPS goals (’25/’26/’27): 47% / 49% / 52%; MCE RPS goals (’25/’26/’27): 60% / 60% / 65%; MCE’s CF goal 95% • MCE calculates CF percentage based on the CEC Power Content Label (PCL) reported emissions factor (lbs CO₂e/MWh). Resource Adequacy is not reflected in the PCL and is not attributed to MCE’s retail energy portfolio for emissions reporting purposes. • RPS Compliance options do not include REC banking
• REC banking allows excess RPS in one year to be used in later years within the same Compliance Period (CP); CP5 is from 2025-2027 • All figures are estimates and subject to change

17.29 12.57

14.62 14.62

12.89 12.57 11.62 11.11 10.62
-

5.00 10.00

15.00 20.00

MCE PG&E PG&E MCE
Current
Option 1 Option 2 Option 3 Option 4 Option 5
2025 2026
¢/kWh
PG&E Gen rate
MCE Gen rate
FY 2026/27 Proposed Generation Rate Options
13 • All rate comparisons use Residential E1/E-TOU-C plans and MCE’s 2017 PCIA vintage; Operating Reserve Fund (ORF); Clean Energy (CE) • All figures are estimates and subject to change
• Proposed rate reductions are approximate; actual impacts vary by rate class and time-of-use period

1.73¢ 2.05¢ 3¢ 3.51¢ 4¢
Option 1 2 3 4 5
Deficit $0M $17M $67M $94M $119M
Source ORF + Reserves +Lower CE

17.29 12.57 14.62 14.62 12.89 12.57 11.62 11.11 10.62

1.18 (2.20) (1.01)

3.66 3.66 3.66 3.66 3.66 3.66

15.80 15.10

11.56 18.28

16.55 16.23 15.28 14.77 14.28
(5.00)
-

5.00 10.00

15.00 20.00

25.00 MCE PG&E PG&E MCE
Current
Option 1 Option 2 Option 3 Option 4 Option 5
2025 2026
¢/kWh
PG&E Gen rate MCE Gen rate
PG&E's PCIA Gen + PCIA
FY 2026/27 Proposed Generation Rate Options +
PCIA
14 • All rate comparisons use Residential E1/E-TOU-C plans and MCE’s 2017 PCIA vintage; Operating Reserve Fund (ORF); Clean Energy (CE) • All figures are estimates and subject to change
• Proposed rate reductions are approximate; actual impacts vary by rate class and time-of-use period

11.56 Option 1 2 3 4 5
Higher 4.99¢ 4.67¢ 3.72¢ 3.21¢ 2.72¢
Bill Comparison: MCE and PG&E
15 • Rate comparisons use E-TOU-C plan and MCE’s 2017 PCIA vintage, based on a weighted average rate of customer usage across seasons (summer/winter) and time-of-use (on-peak/off-peak) periods • Average bills in recent years under TBCC range from ~$180–$250 per month; about 16% to 50% higher than PG&E’s standard bundled rates
PG&E
Residential: E-TOU C 2026 2025 Current Option 1 Option 2 Option 3 Option 4 Option 5 Generation Rate ($/kWh) $0.1257 $0.1462 $0.1462 $0.1289 $0.1257 $0.1162 $0.1111 $0.1062 PG&E Delivery Rate ($/kWh) 0.236 0.280 0.236 0.236 0.236 0.236 0.236 0.236 PG&E PCIA/FF ($/kWh) (0.010) 0.012 0.037 0.037 0.037 0.037 0.037 0.037 Total Electricity Cost ($/kWh) 0.352 0.438 0.419 0.402 0.398 0.389 0.384 0.379 Average Monthly Bill ($) $154 $192 $183 $176 $174 $170 $168 $166 Difference (MCE - PG&E) $38 $29 $22 $20 $16 $14 $12
% Higher than PG&E 25% 19% 14% 13% 11% 9% 8%
MCE Light Green
Rate Comparison: MCE and PG&E
16 12.57

23.60 (1.01)

7.08 11.47

0.84 6.90

11.47 0.82

12.57 23.60

3.66 MCE PG&E
Generation
T&D
FY 2026/27
Option 2
2012
PCIA
2026
2012
-

5.00 10.00

15.00 20.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 ¢/kWh
(Generation + PCIA) Rate Comparison
PG&E (¢/kWh) MCE (¢/kWh)
Option 1 Option 2
Option 3 Option 4
Option 5 PG&E Projected
Generation Rate + PCIA Projections
17 • Comparisons use Residential E1/E-TOU-C plans and MCE’s 2017 PCIA vintage • Future PG&E generation rates are assumed to remain at 2026 levels, while PCIA values for 2027 and beyond rely on industry (NewGen Strategies & Solutions) projections
Projections 2027+: PCIA convergence
across all vintages
Cost-based rates keep MCE’s
Generation + PCIA below
PG&E’s forecast:
• Options 1–2: Generation
Rate remains stable and
sustainable with no
increases
• Options 3–5: Use
reserves in the near term,
then raise the Generation
Rate later to at least the
Option 1–2 level, with
future increases offset by
declining PCIA beginning
in 2027
Projections
MCE Reserve & Liquidity Outlook
18 • Outlook is based on current estimates and will be refined with updated financials • The revenue projections are based on a stable customer participation rate 218
274 290 281 255 240 242
240
84%
109%
116% 116% 116%
110% 110%
0%
25%
50%
75%
100%
125%
0 100
200
300
400
2024/25
Results
2025/26
Projection
Option 1 Option 2 Option 3 Option 4 Option 5
Days of Cash on Hand
Reserves (% of Target)
Projected Days Liquidity on Hand Target Days Liquidity on Hand Reserves Actual (% of Target) Recommendation
19 Select a preferred generation rate reduction option to support FY 2026/27 budget planning Option Gen Rate
Reduction Impacts
1 1.73¢/kWh
(12%)
Full cost recovery and sustainable into FY 2027/28;
No use of reserves
2 2.05¢
(14%)
Sustained rates likely into FY 2027/28;
Some use of reserves
3 3¢
(21%)
Rate increase likely needed for FY 2027/28;
Heavy use of reserves
4 3.51¢
(24%)
Maintains liquidity targets;
Utilizes all available reserves
5 4¢
(27%)
Requires reduced clean energy targets &
associated changes to customer messaging
mceCleanEnergy.org
[email protected]
Thank you!
Proposed Fiscal
Year 2026/27
MCE Budget
Elements
Budget Workshop #2
February 11, 2026
Meet the Presenter
2 Maíra Strauss
Chief Financial Officer and Treasurer
Maíra leads all of MCE’s financial operations and strategies, which include FP&A, Strategic Finance, Accounting and Risk Management.

Meet the Presenter
3 Efren Oxlaj
Manager of Finance
Efren has been with MCE since 2019. He is responsible for financial planning, modeling, reporting and general
financial operations. He played a key role in the issuance of more than $2.5 billion in prepay bonds and currently
represents MCE on the California Community Choice
Financing Authority Working Group.

Efren holds a BS in Economics from Santa Clara University and is currently enrolled in its MS in Finance & Analytics program.

Context for FY 2026/27 Budget Setting
4 Looking Ahead (2027+)
• PCIA values expected to converge, eliminating the temporary distortion • MCE’s cost-of-service-based rates are projected to be below PG&E’s Based on Residential E-TOU-C and
MCE’s 2017 PCIA vintage
Future PG&E generation rates are
assumed to remain at 2026 levels,
while PCIA values for 2027 and
beyond rely on industry projections

10.00 15.00

20.00 2026 2027 2028 2029
¢/kWh
Generation Rate + PCIA Comparison
Option 1 Option 2 Option 3 Option 4 Option 5 PG&E Projected Context for FY 2026/27 Budget Setting
Curre nt Situation (2026)
Bundled Gen + PCIA temporarily < MCE Gen Rate + PCIA
• Increase driven by PCIA reforms and improper retroactive ratemaking; CalCCA has filed an appeal
• This is an anomaly, not a true cost trend
MCE Position
• Lower current power costs  rate-reduction headroom
• Staff has developed rate-reduction options
5 Context for FY 2026/27 Budget Setting
• The budget for FY 2026/27 will be shaped by the rate reduction option your Board selects • Option 1 - reduce rates by 1.73¢/kWh or 12%
• Option 2 – reduce rates by 2.05¢/kWh or 14%
• Option 3 – reduce rates by 3¢/kWh or 21%
• Option 4 – reduce rates by 3.51¢/kWh or 24%
• Option 5 – reduce rates by 4¢/kWh or 27%
• Options 2 and 3 would create a deficit, which could be covered by withdrawing from the Operating Reserve Fund (ORF)
• Options 4 and 5 would create a deficit d e sp ite ORF withdrawals and reductions in the cost of energy
• The ORF has $70 million in deferred income
• Reserve and Liquidity goals are met across all options • Numbers presented are preliminary estimates and subject to change 6 Endurable (cost-based)
Rate increase likely for FY 2027/28
Operating Reserve Fund (Rate Stabilization Fund)
• De p osits: When change in net position exceeds 5% of revenues, or after reserve targets are met and obligations paid
• Withd rawals: To cover projected revenue shortfalls, legal or contractual obligations, or to maintain credit ratings
• Curre nt Limit: 10% of operating and non-operating revenues Consid e r a p olicy ame nd me nt for a p ossib le future d e p osit from curre nt FY 2025/26 7 $11 $15 $15
$30
$70
$70
$70 $70
$28
$14
$41
$160
$13
$60
$0
$70
$140
$210
FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 Projection
Millions
ORF Transfers
ORF Balance Change to Net Position
ORF is established
Energy Revenue
8 $814
$772
$683 $666
$616 $589
$564
(35.0%)
(30.0%)
(25.0%)
(20.0%)
(15.0%)
(10.0%)
(5.0%)

0.0%
$500
$600
$700
$800
FY 2025/26 Status Quo Option 1 Option 2 Option 3 Option 4 Option 5 Millions
FY 2026/27 Proposed Energy Revenue
Energy Revenue, net
• Load forecasts have been
adjusted downward to align
with the mild summer
weather observed over the
last two years
• Energy revenue would
decrease substantially
under each Option
• Transfers from the
Operating Reserve Fund
(ORF) would be needed for
Options 2-5
• Figures are shown net of
uncollectibles
FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %
Status Quo $ 813,689,500 $ 772,440,000 $ (41,249,500) (5.1%) Option 1 813,689,500 683,373,000 (130,316,500) (16.0%)
Option 2 813,689,500 666,297,000 (147,392,500) (18.1%)
Option 3 813,689,500 616,464,000 (197,225,500) (24.2%)
Option 4 813,689,500 588,927,000 (224,762,500) (27.6%)
Option 5 813,689,500 564,009,000 (249,680,500) (30.7%)
Energy Revenue and ORF Withdrawals
9 $827
$772
$683 $683 $683 $659 $634
(35.0%)
(30.0%)
(25.0%)
(20.0%)
(15.0%)
(10.0%)
(5.0%)

0.0%
$500
$600
$700
$800
FY 2025/26 Status Quo Option 1 Option 2 Option 3 Option 4 Option 5 Millions
FY 2026/27 Proposed Energy Revenue
Energy Revenue, net ORF Withdrawal
• Option 2 would require a
$17 million ORF withdrawal
• Option 3 would require a
$67 million ORF withdrawal
• Option 4 and 5 would
require a $70 million ORF
withdrawal
• This would bring the
ORF balance to $0
Ene rg y Re ve nue , ne t ORF Withd rawal Total Re ve nue FY 2025/26 $ 813,689,500 $ 13,000,000 $ 826,689,500
Status Quo 772,440,000 - 772,440,000
Option 1 683,373,000 - 683,373,000
Option 2 666,297,000 17,076,000 683,373,000
Option 3 616,464,000 66,909,000 683,373,000
Option 4 588,927,000 70,000,000 658,927,000
Option 5 564,009,000 70,000,000 634,009,000
$267
$123 $131 $146
$85
$14
$225
$159
$33
$106 $88
$21

35.6%

25.1%

5.3%

16.7%

13.9%

3.4% 0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%
$0
$100
$200
$300
Hedge Contracts Renewable - Long
Term PPAs
Renewable - Short
Term
Resource Adequacy Net CAISO Costs Carbon Free - Large
Hydro/ACS
Millions
Cost of Energy Breakdown
FY 2025/26 Approved Budget FY 2026/27 Proposed Budget % Of total Cost of Energy
10 YoY decreases driven by lower forward
prices for renewable energy, resource
adequacy, and hedge contracts
Cost of Ene rg y
FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d
Variance $ Variance %
Hedge Contracts $ 267,050,000 $ 225,028,000 $(42,022,000) (15.7%) Renewable - Long Term PPAs 122,588,000 158,798,000 36,210,000 29.5% Renewable - Short Term 131,035,000 33,235,000 (97,800,000) (74.6%) Resource Adequacy 145,713,000 105,565,000 (40,148,000) (27.6%) Net CAISO Costs 85,084,000 88,104,000 3,020,000 3.5%
Carbon Free - Large Hydro/ACS 14,072,000 21,214,000 7,142,000 50.8% Total 765,542,000 631,944,000 (133,598,000) (17.5%)
Cost of Energy
11 $766
$632 $632 $632 $632 $615
$500
$550
$600
$650
$700
$750
FY 2025/26 Option 1 Option 2 Option 3 Option 4 Option 5 Millions
FY 2026/27 Proposed Cost of Energy
• Options 1 through 4 would see no
change to projected energy costs
• Option 5 would require a reduction
of $17 million through a combination
of reducing renewables and carbon
free procurement targets
Cost of Ene rg y
FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %
Option 1 765,542,000 631,944,000 (133,598,000) (17.5%)
Option 2 765,542,000 631,944,000 (133,598,000) (17.5%)
Option 3 765,542,000 631,944,000 (133,598,000) (17.5%)
Option 4 765,542,000 631,944,000 (133,598,000) (17.5%)
Option 5 765,542,000 614,944,000 (150,598,000) (19.7%)
Figures shown are net of $11.2mm
in savings from prepays
Operating Expenses
12 FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %
TOTAL O PERATING EXPENSES 50,249,000 54,831,000 4,582,000 9.1% • Captures overhead expenses MCE incurs to run the operations • Some expenses are tied to number of customer accounts or load Operating Expenses - Increases
13 Data Management:
• Increased billing activity after City of
Hercules enrollment
Te chnical & Sche d uling Consultants:
• Transition to new scheduling services
provider
• Temporary vendor overlap + one-time
transition costs
PG&E Se rvice Fe e s:
• Per-account charge rising from $0.35
to $0.42
• FY 2026/27 reflects first full year at
new rate
Ge ne ral & Ad ministrative :
• Higher software and data platform
costs driven by the growth of AI
• Increased membership dues for
CalCCA
FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %

OPERATING EXPENSES
Personnel 25,405,000 29,143,000 3,738,000 14.7%
Data Manager 5,276,000 5,434,000 158,000 3.0%
Technical and Scheduling Consultants 1,400,000 1,588,000 188,000 13.4% Service Fees - PG&E 2,738,000 3,200,000 462,000 16.9%
Legal and Policy Services 1,534,000 1,427,000 (107,000) (7.0%) Communication Services 2,223,000 1,876,000 (347,000) (15.6%) Other Professional Services 4,754,000 4,754,000 0 0.0%
General and Administrative 4,966,000 5,492,000 526,000 10.6% Occupancy 453,000 417,000 (36,000) (7.9%)
Contingency 1,500,000 1,500,000 0 0.0%
TOTAL OPERATING EXPENSES 50,249,000 54,831,000 4,582,000 9.1% Personnel – before grant reimbursements
15 FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %
Salaries $ 18,800,000 $ 22,006,000 $ 3,206,000 17.1%
Benefits 10,717,000 11,193,000 476,000 4.4%
Total Pe rsonne l Costs 29,517,000 33,199,000 3,682,000 12.5% Ke y factors contrib uting to year-over-year increase :
• Full-year impact of the 13 new positions added in FY 2025/26 • Full-year impact of COLA and merit adjustments made in January 2026 • Addition of 5 new full-time roles to meet operational needs • Increase in benefit premiums
Personnel – after Grant Reimbursement
16 FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %
Total Staffing Costs $ 29,517,000 $ 33,199,000 $ 3,682,000 12.5% Expected Grant Reimbursement (4,112,000) (4,056,000) 56,000 (1.4%) Pe rsonne l 25,405,000 29,143,000 3,738,000 14.7%
Information re g ard ing g rant re imb urse me nts
• Anticipated modest reduction in grant reimbursements relative to the FY 2025/26 budget • Number in the budget is the cost after grant reimbursements Department Headcount
2 6
5 8
9 10
12 12
16 16
19 2
2 1
0 2 4 6 8 10 12 14 16 18 20
Strategic Iniatives
Human Resources
Finance
Internal Operations
Customer Operations
Power Resources
Technology and Analytics
Exectutives/ Leadership Team
Customer Programs
Legal/Policy
Public Affairs
Department Full-Time Headcount with Proposed New Hires
FT Headcount Proposed New Hires
Executives/Leadership
Impact of
Proposed New
Positions
5 new proposed
head counts across
Power Resources,
Finance, and Legal
01 05
02 04
03 Expansion of grants, procurement contract management, and power resource portfolios requires coordinated oversight Establishing dedicated capacity for strategic financial analysis, governance support, Finance Committee support, and long-range planning
New federal funding and increasing regulatory oversight driving more complex compliance and reporting
Ensuring MCE can absorb new federal earmarks while
maintaining operational excellence and accountability
Building internal expertise to support complex
compliance, financial analysis, and power resource work Growth in Scale and Complexity of MCE’s Operations
Growth of Strategic Finance Function
Evolving External, Federal, and Regulatory Requirements Positioning MCE for Sustainable and Compliant Growth
Strengthening In-House Technical and Subject Matter
Expertise
Non-operating Revenue and Expenses
19 • Non-operating revenues come from interest and investment earnings on MCE’s cash and fixed-income portfolio
• Budget assumes 2.5% annual yield on MCE’s holdings
FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %

NONOPERATING REVENUES
Grant Income 3,278,000 5,018,000 1,740,000 53.1%
Other Income 0 0 0 0
Investment Income 15,000,000 13,707,000 (1,293,000) (8.6%) TOTAL NONOPERATING REVENUES 18,278,000 18,725,000 447,000 2.4%

NONOPERATING EXPENSES
Banking Fees and Financing Costs 225,000 250,000 25,000 11.1% Grant Expenses 3,278,000 5,018,000 1,740,000 53.1%
TOTAL NONOPERATING EXPENSES 3,503,000 5,268,000 1,765,000 50.4% Program Development Fund
20 FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %

REVENUE AND OTHER SOURCES
Transfer from Operating Fund and Deep Green Premium $2,392,000 $8,077,000 $5,685,000 238% Marin Community Foundation Grant 260,000 131,000 (129,000) (50%) Community Benefits Funds 100,000 0 (100,000) (100%)
TOTAL REVENUE AND OTHER SOURCES 2,752,000 $8,208,000 $5,456,000 198%

EXPENDITURES
Transportation Electrification Programs 5,310,000 5,984,000 674,000 13% Heat Pump Water Heater Incentives 540,000 682,000 142,000 26% Emergency Water Heater Loaner Program 142,000 0 (142,000) (100%) MCF - EV Charging at Affordable Housing 260,000 131,000 (129,000) (50%) Community Housing Support 260,000 260,000 0 0
TOTAL EXPENDITURES 6,512,000 7,057,000 545,000 8%
Net Increase (Decrease) in Fund Balance 3,760,000 1,151,000 - - Fund Balance at Beginning of Period 3,760,000 (1,151,000) - - Fund Balance at End of Period 0 0 - -
FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %

REVENUE AND OTHER SOURCES
CEC VPP Flex Grant $1,200,000 $1,200,000 $ 0 0.0%
Federal Earkmark Funding 200,000 100,000 (100,000) (50.0%) Marin Community Foundation Grant 72,000 270,000 198,000 275.0% Transfer from Operating Fund 0 0 0 0.0%
TOTAL REVENUE AND OTHER SOURCES 878,000 1,570,000 692,000 79%

EXPENDITURES
CEC VPP Flex Grant Expenses 1,200,000 1,200,000 0 0.0%
Energy Storage Program 306,000 137,000 (169,000) (55.2%) CEC VPP Flex Grant Match 1,000,000 1,000,000 0 0.0%
MCE Sync 952,000 927,000 (25,000) (2.6%)
PeakFLEX 100,000 0 (100,000) (100.0%)
Federal Earmark - Energy Storage 200,000 100,000 (100,000) (50.0%) MCF - Resiliency at Critical Facilities 72,000 270,000 198,000 275.0% Federal Earmark Match Expense 200,000 100,000 (100,000) (50.0%) San Rafael Office Resiliency Buildout 200,000 0 (200,000) (100.0%) Virtual Power Plant 171,000 210,000 39,000 22.8%
TOTAL EXPENDITURES 3,201,000 3,944,000 743,000 23.2%
Net Increase (Decrease) in Fund Balance (3,721,000) (2,374,000) - - Fund Balance at Beginning of Period 4,361,000 2,792,000 - - Fund Balance at End of Period 640,000 418,000 - -
Resiliency Virtual Power Plant (VPP) Fund
21 Energy Efficiency Fund
22 FY 2025/26
Ap p rove d
FY 2026/27
Prop ose d Variance $ Variance %

REVENUE AND OTHER SOURCES
Public Purpose Energy Efficiency Program $ 18,761,000 $ 14,380,000 $ (4,381,000) (23.4%) Public Purpose Low Income Families and Tenants Pilot Program 800,000 0 (800,000) (100.0%) TOTAL REVENUE AND OTHER SOURCES 19,561,000 14,380,000 (5,181,000) (26.5%)

EXPENDITURE
Public Purpose Energy Efficiency Program 18,761,000 14,380,000 (4,381,000) (23.4%) Public Purpose Low Income Families and Tenants Pilot Program 800,000 0 (800,000) (100.0%) TOTAL EXPENDITURES 19,561,000 14,380,000 (5,181,000) (26.5%) BALANCE 0 0
Change in Net Position
23 The ag e ncy has sufficie nt cash to run the op e rations and no exte rnal fund ing source s would b e re q uire d , e ve n und e r op tions 4 and 5.

Status Quo Op tion 1 Op tion 2 Op tion 3 Op tion 4 Op tion 5 Energy Revenue, Net $ 772,440,000 $ 683,373,000 $ 666,297,000 $ 616,464,000 $ 588,927,000 $ 564,009,000 ORF Withdrawal 0 0 17,076,000 66,909,000 70,000,000 70,000,000 Cost of Energy (631,944,000) (631,944,000) (631,944,000) (631,944,000) (631,944,000) (614,944,000) Operating Expenses (54,831,000) (54,831,000) (54,831,000) (54,831,000) (54,831,000) (54,831,000) Non-Operating Revenues, Net 13,457,000 13,457,000 13,457,000 13,457,000 13,457,000 13,457,000 Program Expenses (9,300,000) (9,300,000) (9,300,000) (9,300,000) (9,300,000) (9,300,000) Consolid ate d Chang e in Ne t Position 89,822,000 755,000 755,000 755,000 (23,691,000) (31,609,000) Assumptions:

ORF Withdrawals 0 0 17,076,000 66,909,000 70,000,000 70,000,000 Cost of Energy Reduction 0 0 0 0 0 17,000,000
Progress towards
Reserves and
Liquidity Goals
Reserves
25 84%
109%
137%
116% 116% 116% 110% 111%
0%
20%
40%
60%
80%
100%
120%
140%
$0
$150
$300
$450
$600
FY 2024/25
Audited Results
FY 2025/26
Projection
FY 2026/27
Proposed -
Status Quo
FY 2026/27
Proposed -
Option 1
FY 2026/27
Proposed -
Option 2
FY 2026/27
Proposed -
Option 3
FY 2026/27
Proposed -
Option 4
FY 2026/27
Proposed -
Option 5
Millions $
Target vs Projected
Reserves Goal
Reserve Target $ Actual Reserves $ Reserves Actual (% of Target) • Reserves target is met across all options
• Numbers are inclusive of cost of energy reductions and withdrawals from the ORF Liquidity
26 218
274
338
291 281
255 240 242
0 75
150
225
300
$0
$150
$300
$450
$600
FY 2024/25
Audited Results
FY 2025/26
Projection
FY 2026/27
Proposed -
Status Quo
FY 2026/27
Proposed -
Option 1
FY 2026/27
Proposed -
Option 2
FY 2026/27
Proposed -
Option 3
FY 2026/27
Proposed -
Option 4
FY 2026/27
Proposed -
Option 5
Millions $
Days
Target vs Projected
Liquidity Goal
Liquidity Target $ Total Projected Liquidity $ Projected Days Liquidity on Hand • Liquidity target is met across all options
• Numbers are inclusive of cost of energy reductions and withdrawals from the ORF Thank you!
mceCleanEnergy.org
[email protected]

MCE Board of DirectorsFebruary 11, 2026

MCE Board of Directors
February 11, 2026