Special Meeting
MCE Technical Committee Meeting
Friday, February 13, 2026
10:00 a.m.
1125 Tamalpais Avenue, Mark Leno Room, San Rafael, CA 94901 2300 Clayton Road, Suite 1500, Wind Room, 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/QzAmo
Phone: Dial (669) 900-9128, Meeting ID: 828 5103 7385, Passcode: 142534 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) 632-3672 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. Board Announcements (Discussion)
3. MCE Rate Reduction Proposals (Discussion/Action)
4. Committee & Staff Matters (Discussion)
5. Adjourn
The Technical Committee may discuss and/or take action on any or all of the items listed on the agenda irrespective of how the items are described.
1 February 13, 2026
TO: MCE Technical Committee
FROM: Maíra Strauss, Chief Financial Officer and Treasurer Kaladhar R. Bollampalli, Director of Power Systems & Analytics Jonnie Kipyator, Principal Manager, Power Analytics
RE: MCE Rate Reduction Proposals (Agenda Item #03)
ATTACHMENT: Presentation FY 2026/27 MCE Rate Reduction Proposals
Dear Technical Committee Members:
Summary:
MCE is conducting its annual rate-setting assessment for FY 2026/27. Rates are assessed using six criteria: revenue sufficiency, rate competitiveness, rate stability, customer understanding, equity among customers, and efficiency and conservation.
Power supply costs in the market have dropped in recent months, creating a declining trend in cost of service. This trend is creating headroom in MCE’s generation rates that could allow for a reduction for customers, while still meeting MCE’s revenue requirements in the next fiscal year.
PG&E implemented new generation rates effective January 1, 2026, which are lower than MCE’s current generation rates. At the same time, the Power Charge Indifference Adjustment (PCIA) charged by PG&E to MCE customers (“unbundled customers”) has increased dramatically due to a large PCIA true-up recovering 2025 PG&E under-collections, while bundled customers (customers who take generation service from PG&E) are receiving PCIA credits. This gap stems from a 2025 CPUC decision that retroactively recalculated market price benchmarks, creating an alleged PG&E revenue shortfall that is now being recovered primarily from unbundled customers in 2026.
To better align with MCE’s declining cost of service and to deepen opportunities for customer savings, staff evaluated multiple rate options, reserve-supported rate relief tools, and potential cost-savings from reduction in clean procurement targets.
Staff evaluated five Generation Rate Reduction options for FY 2026/27. Please note:
• Rate comparisons are based on Residential E-TOU-C plan and MCE’s 2017 PCIA vintage. • Residential rates are used for comparison and illustration purposes only; similar rate reductions apply across all customer groups, including commercial, industrial, and other non-residential 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.
Table 1. Summary of FY 2026/27 Generation Rate Reduction Options.
MCE’s current residential generation rate is 14.62¢/kWh.
Option Generation
Rate
Reduction
Under-Recovery of
Cost
How the Gap Is
Addressed
Residential
Bill Impact
(w/o PCIA)
Residential
Bill Impact
(w/ PCIA)
1 1.73¢/kWh
(12%)
$0M N/A $1 above
bundled
customers
$22 above
bundled
customers
2 2.05¢/kWh
(14%)
$17M Partial ORF (Rate
Stabilization Fund)
$0 $21 above
bundled
customers
3 3¢/kWh
(21%)
$67M Almost full ORF $4 below
bundled
customers
$17 above
bundled
customers
4 3.51¢/kWh
(24%)
$94M Full ORF + Reserve-backed funding$7 below
bundled
customers
$14 above
bundled
customers
5 4¢/kWh
(27%)
$119M Full ORF + All
available reserve-backed funding +
Clean energy
procurement
reduction
$9 below
bundled
customers
$12 above
bundled
customers
All options would allow MCE to maintain compliance with MCE’s reserve and liquidity policies. The resulting revenue reduction or under-recovery of costs would be addressed through a combination of the Operating Reserve Fund (ORF, also referred to as the “Rate Stabilization Fund”), and other reserve-backed funding, and potentially a reduction in clean energy procurement.
Background:
MCE reviews potential rate adjustments each year in alignment with its fiscal year (April 1–March 31).
Although this review is conducted annually, rate changes are implemented only when needed.
Aligning the review with the fiscal year helps maintain consistency between the agency’s budget and its revenue requirements. Off-cycle adjustments may be made when necessary to ensure full cost recovery.
MCE’s rate design is guided by the following objectives:
• Revenue sufficiency: rates should recover all expenses, debt service and other expenditure requirements, and build prudent reserves, i.e., the “revenue requirement”. • Rate competitiveness: rates should allow MCE to successfully compete in the marketplace to retain and attract customers.
• Rate stability: rate changes should be minimized to reduce customer bill impacts. • Customer understanding: rates should be simple, transparent, and easily understood by customers.
• Equity among customers: rate differences among customers should be justified by differences in usage characteristics and/or cost of service. • Efficiency and conservation: rates should encourage conservation and efficient use of electricity (e.g., off-peak vehicle charging or time-of-use load shifting).
These objectives can be in tension with one another. Revenue sufficiency cannot be compromised, but the Board has discretion in balancing the remaining objectives.
MCE maintains strong financial stability through:
• Reserves equal to 60% of annual energy and operating expenses. • Liquidity of 240 days cash on hand.
FY 2025/26 projections show MCE exceeding both targets, with reserves expected at 109% and liquidity at 274 days.
The PG&E PCIA charges remain volatile. CCA customers face higher PCIA charges, while bundled PG&E customers receive credits. According to industry forecasts, PCIA costs are expected to converge across vintages beginning in 2027 and beyond.
Rate-Setting Process
The FY 2026/27 rate analysis incorporates updated load forecasts, customer participation assumptions, and projected procurement costs. Projected revenue at current rates is compared to the revenue requirement to determine whether adjustments are needed. Rates are then designed to recover each customer class’s allocated costs while balancing competitiveness and stability.
Rate Relief Tools
The following table summarizes the tools available to support rate competitiveness in FY 2026/27.
All amounts are estimates and subject to change as forecasts are updated.
Table 2. Potential Resources to Support Rate Competitiveness (FY 2026/27).
Tool Amount Description
Rate Reduction
Headroom
$89M Ability to reduce rates to align projected FY 2026/27 revenues with cost levels without creating a deficit
Operating Reserve
Fund
$70M Funds available currently for targeted rate relief Reserve-Backed
Funding
$24 to 36M Up to $36M available from reserves for rate relief with no impact on MCE’s reserve or liquidity targets
Reduced Clean Energy
Procurement
$0 to 17M Potential savings from lowering Renewable Portfolio Standards (RPS)/Carbon-Free (CF) procurement targets
Total Potential Rate
Relief
$183 to 212M Sum of all available tools for FY 2026/27
Clean Procurement Reduction Measures
California’s Renewables Portfolio Standard (RPS) requires:
• 60% renewable energy by 2030.
• 100% zero-carbon electricity by 2045.
Compliance is tracked through Renewable Energy Credits (RECs), which certify that one megawatt-hour of electricity was generated from a renewable resource, and these certificates are issued and managed in the Western Renewable Energy Generation Information System (WREGIS).
Compliance is enforced by the CPUC and the California Energy Commission (CEC), and annual procurement obligations are set within multi-year compliance periods (Compliance Period CP5:
2025–2027; CP6: 2028–2030).
MCE’s Current Clean Energy Goals
MCE’s Light Green service provides:
• 60% renewable energy (minimum achieved since 2017).
• 95% GHG-free energy (achieved since 2022).
1 1 MCE uses the CEC Power Content Label reported emissions factor (lbs of CO2e emitted per megawatt-hour) to calculate its carbon-free percentage equivalent. GHG intensity figures exclude biogenic CO2 and emissions from geothermal sources and grandfathered imports of firmed-and-shaped energy. For detailed MCE’s customer messaging for the Light Green product would need to be adjusted if the renewable and GHG-free content is reduced. MCE’s anticipated progress to increase renewable content to 85% by 2031 is shown in Table 3 below.
Table 3. State and MCE Light Green Targets. Summary of California State and MCE RPS and Carbon-Free (CF) Targets. 2025 2026 2027 2028 2029 2030
State RPS targets 47% 49% 52% 55% 57% 60%
MCE RPS Goals 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%
Deep Green remains unaffected by any cost-saving adjustments.
Procurement Options Evaluated
Table 4. Cost Summary. Summary of the procurement options and the associated net changes to the cost of energy relative to current estimates. Scenario #1 represents no change to current targets.
Scenario #2 would delay increasing RPS content from 60% to 65% by one year. Scenarios #3-7 represent a departure from MCE’s Board policy towards an incrementally cleaner portfolio over time and would require changes to customer messaging, product descriptions, and materials. Reductions would likely create customer and community partner concern and confusion, and affect trust in MCE’s clean energy commitments.
FY 2026/27 FY 2027/28
Scenario
#
RPS/CF
%
Renewable
Content
Cost of Energy
(M)
Savings
(M)
Cost of Energy
(M)
Savings
(M)
1 60-65/95 60% $643 $0 $636 $0
2 60/95 60% $642 $0 $634 $2
3 60/70 60% $630 $13 $618 $18
4 RPS
Compliance/95
49-52%
(RPS
Compliance)
$640 $3 $632 $4
information about all GHG emissions from California's retail electricity suppliers, visit the CEC webpage.
Resource Adequacy (RA) is not reflected in the CEC Power Content Label, which reports only delivered retail energy and does not account for individual load serving entity RA contracts. RA is procured to meet CAISO reliability requirements and is not attributed to MCE’s retail energy portfolio for emissions reporting purposes. 5 RPS
Compliance/85
49-52%
(RPS
Compliance)
$634 $9 $625 $11
6 RPS
Compliance/70
49-52%
(RPS
Compliance)
$627 $16 $617 $19
7 RPS Banking/70
45%
(RPS
Banking)
$626 $17 $615 $21
RPS Compliance: Meet the state RPS requirements without banking any RECs.
RPS Banking: Bank excess 2025 RECs for use in 2026 and 2027 under CP5, which lowers the effective RPS to 45% for those years.
These measures could provide up to $17 million in cost savings in FY 2026/27 and $21 million in FY 2027/28.
FY 2026/27 Proposed Rate Options
MCE’s current residential E-TOU C generation rate is 14.62¢/kWh. This represents a weighted average rate that accounts for customer usage patterns as well as seasonal (summer/winter) and time-of-use (on-peak/off-peak) pricing.
Option 1: Generation Rate Reduction of 1.73¢/kWh (12%) — Full Cost Recovery • Achieves break-even and fully recovers projected costs. • Generation Rate: MCE 12.89¢/kWh vs. Bundled 12.57¢/kWh (0.32¢/kWh higher). • Gen + PCIA: MCE 16.55¢/kWh vs. Bundled 11.56¢/kWh (4.99¢/kWh higher). • Monthly Residential Bill Impact:
• Without PCIA: $1 below bundled.
• With PCIA: $22 above bundled.
Option 2: Generation Rate Reduction of 2.05¢/kWh (14%)
• Results in a $17M under-recovery of projected costs.
• Under-recovery addressed through the operating reserve fund. • Generation Rate: MCE 12.57¢/kWh vs. Bundled 12.57¢/kWh (at parity). • Gen + PCIA: MCE 16.23¢/kWh vs. Bundled 11.56¢/kWh (4.67¢/kWh higher). • Monthly Residential Bill Impact:
• Without PCIA: Equal to bundled.
• With PCIA: $21 above bundled.
Option 3: Generation Rate Reduction of 3¢/kWh (21%)
• Results in a $67M under-recovery of projected costs.
• Under-recovery addressed through the Operating Reserve Fund (ORF or “Rate Stabilization Fund”).
• Generation Rate: MCE 11.62¢/kWh vs. Bundled 12.57¢/kWh (0.95¢/kWh lower). • Gen + PCIA: MCE 15.28¢/kWh vs. Bundled 11.56¢/kWh (3.72¢/kWh higher). • Monthly Residential Bill Impact:
• Without PCIA: $4 below bundled.
• With PCIA: $17 above bundled.
Option 4: Generation Rate Reduction of 3.51¢/kWh (24%) — Uses All Available Reserves Without Falling Below Liquidity Targets
• Results in a $97M under-recovery of projected costs.
• Under-recovery addressed through the ORF; this option fully exhausts ORF and reserve-backed funding while maintaining liquidity targets. • Generation Rate: MCE 11.11¢/kWh vs. Bundled 12.57¢/kWh (1.46¢/kWh lower). • Gen + PCIA: MCE 14.77¢/kWh vs. Bundled 11.56¢/kWh (3.21¢/kWh higher). • Monthly Residential Bill Impact:
• Without PCIA: $7 below bundled.
• With PCIA: $14 above bundled.
Option 5: Generation Rate Reduction of 4¢/kWh (27%)
• Results in a $119M under-recovery of projected costs. • Under-recovery addressed through ORF, reserve-backed funding, and reduced clean energy procurement.
• Generation Rate: MCE 10.62¢/kWh vs. Bundled 12.57¢/kWh (1.95¢/kWh lower). • Gen + PCIA: MCE 14.28¢/kWh vs. Bundled 11.56¢/kWh (2.72¢/kWh higher). • Monthly Residential Bill Impact:
• Without PCIA: $9 below bundled.
• With PCIA: $12 above bundled.
Reserve & Liquidity Outlook
• All options maintain compliance with MCE’s reserve and liquidity policies. • Option 4 represents the break-even point for reserve sufficiency. • Projections assume stable customer participation.
Sustainability of Proposed Generation Rate Options
When evaluating the FY 2026/27 rate options, it is important to distinguish between the size of the rate reduction and the resulting generation rate level. Sustainability is determined by the generation rate level in each option, not by how large the reduction is.
Based on current forecasts, projected FY 2027/28 costs are slightly below the generation rate associated with Option 2. This means:
• Options 1 and 2
Both options set generation rate levels that are at or above projected FY 2027/28 costs, allowing them to be sustained next year without the need for a rate increase. • Options 3, 4, and 5
These options reduce the generation rate to levels that fall below what is needed to recover projected FY 2027/28 costs.
o Each option relies heavily on the ORF in FY 2026/27, leaving insufficient reserves to continue supporting these lower generation rates.
o As a result, the generation rate levels in Options 3–5 cannot be sustained into FY 2027/28.
o Under any of these options, the generation rate would need to increase next year to a level at or slightly below the Option 2 generation rate to achieve cost recovery.
In summary, while deeper reductions (Options 3–5) produce lower generation rates in the near term, those generation rate levels are not financially sustainable beyond FY 2026/27. Options 1 and 2 provide the only generation rate levels that can be maintained without requiring an upward adjustment next fiscal year.
Fiscal Impact:
None at this time. Fiscal impacts to be determined by future board action.
Recommendation:
Consider recommending a preferred rate reduction option to the full Board to assist with FY 2026/27 budget planning and finalization.
Proposed Fiscal Year
2026/27 MCE Rate
Reduction Proposals
Special Technical Committee Meeting
February 13, 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 a CCA 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 rates, followed by a 12-month PG&E lock-in prohibiting them from returning to MCE 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
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