Supplemental Packet — MCE Executive Committee, March 2, 2026 (part 2 of 2)

Data Manager: $5,434,000 (3.0% increase from FY 2025/26 Approved Budget) MCE’s data manager provides a wide range of billing services, including billing management for MCE’s customers, technical support for billing issues, and customer enrollment services.

The charges are based on a fixed fee per customer account. The proposed increase for next fiscal year would align the budget with the actual costs incurred this year, which have trended slightly upward following the enrollment of the city of Hercules in April 2025.

Technical and Scheduling Consultants: $1,588,000 (13.4% increase from FY 2025/26 Approved Budget)
These consultants schedule energy resources into the California Independent System Operator (CAISO) and assist MCE in managing risk more effectively. They also collaborate with staff to create advanced load management strategies and forecast costs related to market and regulatory changes. As battery scheduling and hourly matching of load and supply increase complexity of scheduling, there are increasing demands in this space.

Technical services are primarily based on a fixed charge per MWh of electricity usage (load).

Scheduling services are based on contracted amounts. Staff is proposing a 13.4% increase to cover the costs of changing the scheduling services provider. This transition would involve a period of vendor overlap late in the fiscal year, along with one-time transition and setup costs.

Service Fees – PG&E: $3,200,000 (16.9% increase from FY 2025/26 Approved Budget) PG&E service fees consist of a fixed charge per customer account. The fees cover PG&E’s costs for processing customer data and coordinating billing for MCE accounts. All community choice aggregators (CCAs) in PG&E’s territory must pay this fee. Fees have increased by 7 cents per account, from 35 cents to 42 cents4
. The proposed increase reflects the first full
year of these higher costs.

Legal and Policy Services: $1,427,000 (7% decrease from FY 2025/26 Approved Budget) This line encompasses external legal and policy services that assist MCE in areas such as contract review for energy suppliers, non-energy vendors, regulatory proceedings, employment matters, and other agency functions. The decrease in costs reflects a downward adjustment to align with actual spending trends. Additionally, MCE continues to leverage its 4 The California Public Utilities Commission (CPUC) approved the increase on January 1st, 2025. The increase subsequently took effect on January 1st, 2026.
membership with the California Community Choice Association (CalCCA) to participate in joint regulatory proceedings, thus reducing the budget for external policy services.

Communication Services: $1,876,000 (15.6% decrease from FY 2025/26 Approved Budget) Communication costs cover a wide range of marketing and community engagement activities including advertising, printing, mailing customer notices, community events and sponsorships. The decrease reflects downward adjustments in large vendor contracts, particularly for marketing, in response to the tight budgetary environment. Similarly, staff has reduced the budget for sponsorship and industry membership, which should result in a smaller footprint at local events and other community-driven initiatives. This year over year decrease is intended to be a temporary reduction.

Other Professional Services: $4,779,000 (0.5% increase from FY 2025/26 Approved Budget) Other professional services cover external contractors that support MCE across a range of key business functions. This includes external services such as accounting, auditing, benefits administration, and information technology (IT). This category also includes costs associated with the development and maintenance of MCE’s customer relationship management (CRM) software and data analytics infrastructure. The CRM platform organizes and connects the various customer data sets available to MCE and serves as the single source of truth for all customer-facing teams. MCE’s data warehouse hosts comprehensive customer data, including hourly interval usage. The data analytics platform leverages the warehouse’s data to support critical analyses such as customer segmentation, rate setting, and forecasting.

Insights from these analyses help guide strategic decision making for MCE’s various customer programs and rate setting process.

Staff kept this line flat. However, the line is seeing a small uptick to account for the planned governance assessment requested by your Board.

General and Administrative: $5,492,000 (10.6% increase from FY 2025/26 Approved Budget)
This category includes items such as load forecasting tools, software licenses for agency-wide tools, insurance, recruitment for open positions, membership dues for the California Community Choice Association (CalCCA) and other office expenses.

The proposed budget reflects expected annual increases to the CalCCA membership dues, increased prices for data analytics tools, higher recruitment expenses for the technical positions to be filled, and increased premiums for building and cyber insurance.

Occupancy: $417,000 (7.9% decrease from FY 2025/26 Approved Budget) This category includes lease payments for the MCE’s Concord office. Maintenance costs for both the Concord and San Rafael office locations are also included. The proposed budget reflects a decrease due to the shift to a smaller office in Concord which comes with a lower monthly lease payment. Additionally, in response to the budgetary environment, staff is planning no major maintenance projects in the coming fiscal year.

Contingency: $1,500,000 (No change from FY 2025/26 Approved Budget) The proposed budget represents a buffer to cover unexpected costs in the previous operating expenses line items. No change is being proposed at this time.

Non-Operating Revenues and Expenses
Grant Income: $5,018,000 million (53.1% increase from FY 2025/26 Approved Budget) MCE receives grants from government and non-profit organizations to support certain activities connected to MCE’s mission. Grant income varies year to year as grants can be “one time” or can be provided to MCE under multiple year agreements. Some grants were completed in the current fiscal year, and others are starting or continuing in FY 2026/27.

Some grant activities require a ramp-up time that can be hard to predict, and this can cause year-to-year budget variation. The following grants or portions thereof are included in the $5,018,000 grant income line item in the proposed budget. • $3,951,000 - for the Disadvantaged Communities Green Tariff (DAC-GT) 5 program to
provide income-qualified, residential customers in disadvantaged communities with 100% renewable energy and a 20% bill discount. The amount is replenished annually.

Funded by the California Public Utilities Commission.
• $520,000 - for energy efficiency and electrification upgrades in single family homes in the Iron Triangle Neighborhood of Richmond under the Richmond Rising Grant Transformative Climate Communities from the Strategic Growth Council. • $435,000 - to support a participatory budgeting process in priority communities to guide the grant investment into EV charging stations and shared mobility options (Charged by Public Power). Funded by the U.S. Department of Energy. • $76,000 - for EV charging installations in disadvantaged Contra Costa communities in partnership with the Contra Costa Transportation Authority. Funded by the California Energy Commission.
• $35,000 - to support the Home Energy Savings program. Funded by Chevron Inc. 5 The DAC-GT program reimburses MCE for bill credits it provides to customers. Because bill credits reduce what the customer owes, they reduce incoming sales revenue. As such, a matching expense for this grant would not show up in the grant expense section when reviewing budget reports with actuals. However, for budgeting purposes, grant income matches grant expenses as MCE can only recognize income when there’s a matching expense. Grants are not additional income for the agency.

Investment Income: $13,707,000 (8.6% decrease from FY 2025/26 Approved Budget) Investment income captures interest and income from MCE’s fixed income portfolio. This line is decreasing against last year’s budget due to lower interest rates. Potential liquidation of investments throughout the fiscal year for working capital is also likely, in response to the revenue shortfall driven by the rate reduction. Staff is conservatively assuming an average annual yield of 2.5% on all of MCE’s holdings. MCE currently has about 43% of its cumulative position in a fixed income portfolio managed by Chandler Asset Management, about 41% in liquid money market funds, about 14% in CDARs issued by River City Bank, and about 3% in collateral at the California ISO. Staff continues to manage MCE’s investment resources by adhering to the Board approved Investment Policy.

Banking Fees and Financing Costs: $250,000 (11.1% increase from FY 2025/26 Approved Budget)
This line captures banking fees associated with MCE’s credit facility with Royal Bank of Canada (RBC). Note that the credit facility with RCB is due for renewal in early May.

Furthermore, the increase accounts for additional banking costs associated with meeting the CPUC’s Financial Security Requirement (FSR)6
. The final posting amount is still being
determined, and actual costs could vary resulting in revisions to this estimate.

Grant Expenses: $5,018,000 million (53.1% increase from FY 2025/26 Approved Budget) Grant expenses match grant income, as revenue is recognized only when corresponding expenses are incurred. As a result, these transactions net to zero and do not contribute additional income to MCE’s bottom line.

Capital Expenditures
Staff is once again recommending $10,250,000 to implement a Remedial Action Scheme (RAS) that would help alleviate some of the curtailment and congestion of certain power supply projects which could result in savings of up to $20 million per year once implemented. Due to slow negotiations outside of our control, this potential investment has taken longer than expected. Lastly, $147,000 is proposed to implement building improvements and retrofits, such as improvements to ADA accessibility and computer server upgrades at the San Rafael office.

Please note that per accounting guidelines, investments in long-term assets reduces cash on hand but does not directly impact the change in net position (bottom line) when the purchase takes place.

Instead, the cost of the asset is spread over its useful life through depreciation. 6 The California Public Utilities Commission (CPUC) Financial Security Requirement (FSR) is a mandatory security posting for Community Choice Aggregators (CCAs) and Electric Service Providers (ESPs), ensuring funds are available to cover costs if customers are involuntarily returned to the incumbent utility service.

Program Development Fund
Total Revenue and Other Sources: $8,208,000 (198% increase from FY 2025/26 Approved Budget)
Total revenue includes a proposed transfer of $8 million from the Operating Fund which would cover the projected program spend and would eliminate the forecasted deficit of $1.15 million in the current fiscal year. The deficit is a result of increased spending on the EV Instant Rebate Program due to a spike in EV sales prior to the Federal Tax Credits expiring and several projects in the EV Charging Program closing out earlier than expected.

Approximately $2.3 million of the transfer is attributable to 50% of the deep green premium.

Additionally, $131,000 in grants from the Marin Community Foundation for electric vehicle (EV) charging at affordable housing are also included.

Transportation Electrification Programs: $5,984,000 (13% increase from FY 2025/26 Approved Budget)
Transportation electrification programs include:
o Rebates for newly purchased and leased EVs for income-qualified residents. o Rebates for charging ports installed at workplaces and multifamily properties. o Outreach and education partnerships to increase access to electric transportation EV Instant Rebate Program
The EV Instant Rebate Program provides point of sale rebates for owned or leased, new or used electric vehicles for income-qualified customers. A majority (85%) of participating customers surveyed indicated they would not have purchased an EV without MCE’s rebate.

The combination of imposed tariffs and end of the Federal EV Tax Credits have resulted in a sharp drop nationally in EV adoption in October and November (reports of 30-40% nationwide), following a large spike from July-September. MCE's EV Instant Rebates program has seen similar trends; however, it is important to mention that even with the drop off, sales in October and November were still higher than those months last year.

To accommodate the spike in EV sales and to avoid closing the program mid-summer, MCE added $1M to the EV Instant Rebate Program budget, utilizing funds that were otherwise underspent in the operating budget. Due to overwhelming demand, the program paused in late-November as all funds were exhausted.

The proposed budget would allow for 876 vehicle rebates in FY 2026/27 compared to 1,200 in FY 2025/26
EV Charging Program
The EV Charging Program provides funding for workplace or multifamily EV chargers.

The proposed budget for the EV rebate program represents a 33% increase over FY 2025/26. The budget increase reflects the close out of a significant number of projects in the current pipeline, an increase in the rebate level for L1 Charging and a higher level of customer project support.

Heat Pump Water Heater Incentives: $682,000 (26% increase from FY 2025/26 Approved Budget)
These incentives help increase adoption of heat pump water heaters (HPWH). HPWHs can be two to three times more energy efficient than conventional gas water heaters leading to savings on utility bills and reduced carbon emissions.

While the overall Electrification Incentives budget is unchanged year over year, the allocation across sub-programs is shifting. The Emergency Water Heater Loaner program is closing, and the funding previously allocated to it is proposed to be reallocated to the enhanced electrification incentives within the Energy Efficiency programs, hence the 26% increase.

Community Housing Support: $260,000 (No change from FY 2026/27 Approved Budget) Community Housing Support provides funding for ancillary expenses (such as wiring, panel upgrades or basic repairs) that are barriers to installing, operating, and/or maintaining all electric equipment. These grants are provided to sites that support community housing, including homeless shelters, farmworker housing, and homes or units occupied by low-income households. There is no change in the year over year proposed budget for these grants.

The transfer from the Operating Fund combined with the expected program spending outlined above would yield an ending fund balance of $0.

Board Options to Reduce Program Development Fund Transfer Staff recommends approval of the proposed Program Development Fund transfer to support the portfolio of customer programs included in the FY 2026/27 budget. These programs advance MCE’s mission to reduce greenhouse gas emissions and support customers.

However, should the Board wish to reduce the transfer amount, the following options are provided for consideration. These options are structured to generate savings while avoiding impacts to active grant agreements or existing customer commitments. • Option 1: Approve the Proposed Budget
o Proposed Transfer: $8,208,000
• Option 2: Reduce Funding for EV Instant Rebate Program o Savings: $1,797,000
o Revised Proposed Transfer: $6,280,000
o Program Impact: Approximately 438 fewer income-qualified customers would receive EV rebates in FY 2026/27.
• Option 3: Eliminate Funding for EV Instant Rebate Program o Savings: $3,595,000
o Revised Proposed Transfer: $4,483,000
o Program Impact: Up to 876 income-qualified customers would not receive rebates in FY 2026/27. Survey data indicates approximately 85% of participants would not have purchased an EV without MCE’s rebate.
• Option 4: Close EV Charging Program to New Applicants o Savings: $800,000
o Revised Proposed Transfer: $7,277,000
o Program Impact: No new charging projects would be accepted in FY 2026/27.

Existing reservations would be honored and would require multi-year close-out funding.
• Option 5: Eliminate Electrification Incentives (Heat Pump Water Heater Incentives and Community Housing Grants)
o Savings: $942,000
o Revised Proposed Transfer: $7,135,000
o Program Impact: Approximately 685 electrification measures would not be installed. This option may also impact MCE’s ability to fully expend CPUC energy efficiency funding.

Resiliency Virtual Power Plant (VPP) Fund
Your Board approved the creation of the Resiliency VPP Fund in 2019 in response to power outages which significantly impact the safety, health, and welfare of MCE’s customers, especially our vulnerable populations. Since then, the fund has expanded its scope to help scale MCE’s virtual power plants efforts.

Like the Program Development Fund, this fund is financed by a transfer from the Operating Fund.

Your Board has approved and transferred $9 million from the Operating Fund since its inception.

Portions of a $750,000 grant from the Marin Community Foundation have also been added to this fund over the last four years.

Total Revenue and Other Sources: $1,570,000 (7% increase from FY 2025/26 Approved Budget)
No transfer from the Operating Fund budget is needed at this time, however, the fund includes the following grants. Grant income is offset by an equivalent amount in expenses. • $1,200,000 - for integrating MCE’s existing Customer Programs into the virtual power plant (VPP) across MCE’s service area. Funded by the California Energy Commission (CEC).
• $270,000 - for Resiliency at critical facilities in Marin. Funded by the Marin Community Foundation.
• $100,000 - for solar paired with storage at critical facilities. Funded by a Federal Earmark.

CEC VPP Flex Grant Match: $1,000,000 (No change from FY 2026/27 Approved Budget) The $1.2 million VPP grant from the CEC requires a $1 million commitment from MCE. This amount would fulfill the requirement and cover the costs of certain consultants and software licenses for the virtual power plant being developed.

MCE Sync: $927,000 (2.6% decrease from the FY 2026/27 Approved Budget) MCE Sync helps customers shift their EV charging from peak hours and encourages charging during solar daytime hours through MCE’s proprietary app. This program is partially supported by a grant from the California Energy Commission that was awarded to our implementer, EV.Energy, allowing MCE’s contributions to remain flat despite enrollment goals increasing.

Energy Storage Program: $137,000 (55.2% decrease from FY 2026/27 Approved Budget) MCE’s Energy Storage Program facilitates the adoption of customer-owned energy storage systems paired with on-site solar. MCE offers significant financial support including rebates, monthly bill credits, and performance-based payments to reduce upfront and out-of-pocket costs. This program has been closed to new applicants since FY 2024/25 and the costs associated with it will decrease overtime as the remaining projects in the pipeline close out.

Federal Earmark Match Expense: $100,000 (50.0% decrease from FY 2026/27 Approved Budget)
The Federal Earmark for Energy Storage requires MCE to provide matching funds, and this allocation would fulfill the match requirement for the fiscal year. Although there was funding in the FY 2025/26 budget for this program, it was based on forecasts for a program that had not yet launched. Due to contracting delays, no money was spent. The program has now launched successfully and is working on participation agreements with awardees. This is the budget that we anticipate spending this coming year.

Virtual Power Plant: $30,000 (82.5% decrease from FY 2026/27 Approved Budget) The VPP is beginning to transition away from a pilot to deployment across the larger service area through a combination of the CEC VPP Flex grant and MCE’s match commitment. This line captures additional VPP expenses not tied to the grant. The recommended budget would provide incentives for non-battery electric panel upgrades and would cover ad-hoc costs for storing VPP devices.

Change in Net Position
The change in net position is the bottom line and reflects all revenues minus all expenses.

Based on the proposed budgets presented, MCE’s consolidated change in net position, inclusive of program spending, would total $1.3 million, a 92% decrease from the current fiscal year.

Reserves and Liquidity
MCE’s reserve target is to have 60% of expected cost of energy and operating expenses. Reserves are accounted for as the Net Position in MCE’s financial statements. Based on the projections presented, MCE would end the fiscal year with a reserves level of $485 million, above the goal by 18 percentage points.

FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
Energy Revenue, Net $ 813,689,500 $ 621,291,000 $ (192,398,500) (23.6%) ORF Withdrawal 13,000,000 62,000,000 49,000,000 376.9%
Cost of Energy (765,542,000) (631,944,000) 133,598,000 (17.5%) Operating Expenses (50,249,000) (54,365,000) (4,116,000) 8.2% Non-Operating Revenues, Net 14,775,000 13,457,000 (1,318,000) (8.9%) Program Expenses (9,181,000) (9,120,000) 61,000 (0.7%)
Consolidated Change in Net Position 16,492,500 1,319,000 (15,173,500) (92.0%) $497
$437 $412
$417
$484 $485 84%
111% 118%
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 Millions $
Target vs Projected
Reserves Goal
Reserve Target $ Actual Reserves $ Reserves Actual (% of Target) MCE’s liquidity target is to have 240 days of liquidity on hand. From a liquidity7 perspective, MCE would have sufficient cash to run the operations despite the revenue shortfall caused by the rate reduction, temporary rate credit, and allocation to the MCE Cares Credit program. Reserves were intentionally built to provide financial stability during periods of volatility and timing related impacts.

Based on the projections presented, MCE would end the fiscal year with 257 days of liquidity on hand, above the goal by 17 days. However, complying with the CPUC’s FSR could reduce liquidity by the amount MCE must allocate to meet the requirement.

Recommendations:

Recommend to the Board of Directors approval of the proposed Fiscal Year 2026/27 budgets, including the proposed $8,208,000 Program Development Fund transfer to support customer programs (option 1), or an alternative customer program funding option (Options 2-5) as outlined in this report.
7 Days cash on hand is based on unrestricted cash and investments x 365/ (operating expenses + cost of energy, each for the current fiscal year). Projections are based on the forecasted net position. $545
$478 $451 $494
$554 $483
218
278
257
0 75
150
225
300
$0
$150
$300
$450
$600
FY 2024/25 Audited Results FY 2025/26 Projection FY 2026/27 Proposed Days
Millions $
Target vs Projected
Liquidity Goal
Liquidity Target $ Total Projected Liquidity $ Projected Days Liquidity on Hand Fiscal Year
2026/27
Proposed Budget
MCE Executive Committee
March 2, 2026
Context for FY 2026/27 Budget Setting
2 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 FY 2026/27 Proposed Budget Overview
• The budget for FY 2026/27 is shaped by:
• The 2.05-cent rate reduction
• A 0.62-cent rate credit running April–December 2026
• A $10 million allocation to the MCE Cares Credit program • The revenue shortfall is addressed by transferring $62 million from the Operating Reserve Fund • Cost of energy is decreasing significantly while operating expenses have been optimized to their lowest level possible
• Reserve and Liquidity goals are expected to be met
• The change in net position is projected at $1.3 million, a 92% decrease YoY 3 FY 2025/26 Projected Budget
• Forecast for the current FY shows a change in net position of $67 million • Energy revenue is down but energy costs have dropped even more sharply • Recall: $36.4mm in energy costs was shifted to the previous FY due to earlier than anticipated deliveries
• Other costs are trending below budget
• Creates an opportunity to add funds to the Operating Reserve Fund 4 FY 2025/26
Approved
FY 2025/26
Projected Variance $ Variance %
Energy Revenue, Net $ 813,689,500 $ 768,655,000 $ (45,035,000) (5.5%) ORF Withdrawal 13,000,000 - (13,000,000) (100.0%)
Cost of Energy (765,542,000) (674,355,000) 91,187,000 (11.9%) Operating Expenses (50,249,000) (46,838,000) 3,411,000 (6.8%) Non-Operating Revenues, Net 14,775,000 27,977,000 13,202,000 89.4% Program Expenses (9,181,000) (8,360,000) 821,000 (8.9%) Consolidated Change in Net Position 16,492,500 67,079,000 50,586,000 306.7% Energy Revenue and ORF Withdrawal
5 $814
$621
$13
$62
$827
$683
$300
$500
$700
$900
FY 2025/26 Approved FY 2026/27 Proposed
Millions
Energy Revenue
Energy Revenue, net ORF Withdrawal
Figures are shown net of uncollectibles and
MCE Cares credit program
FY 2026/27 includes $10 million for MCE
Cares credit
FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
Energy Revenue, net $813,689,500 $621,291,000 $(192,398,500) (23.6%) ORF Withdrawal 13,000,000 62,000,000 49,000,000 376.9%
Total 826,689,500 683,291,000 (143,398,500) (17.3%)
Load forecast
incorporates the mild
summer weather
observed in the last two
years
$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
6 YoY decreases driven by lower forward
prices for renewable energy, resource
adequacy, and hedge contracts
Cost of Energy
FY 2025/26
Approved
FY 2026/27
Proposed
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%)
Operating Expenses
7 FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
TOTAL OPERATING EXPENSES 50,249,000 54,365,000 4,116,000 8.2% • Captures overhead expenses MCE incurs to run the operations • Some expenses are beyond MCE’s control (tied to number of customer accounts or load) • Staff thoroughly reviewed each budget line and optimized resources to reduce costs Operating Expenses - Increases
8 Data Management:
• Increased billing activity after
City of Hercules enrollment
Technical & Scheduling Consultants:
• Potential changes to the
services MCE relies on
• Temporary vendor overlap +
one-time transition costs
PG&E Service Fees:
• Per-account charge rising
from $0.35 to $0.42
• FY 2026/27 reflects first full
year at new rate
General & Administrative:
• Higher software and data
platform costs driven by the
growth of AI
• Increased membership dues
for CalCCA
FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %

OPERATING EXPENSES
Personnel 25,405,000 28,652,000 3,247,000 12.8%
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 4,779,000 25,000 0.5% 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 54,365,000 4,116,000 8.2% Impact of 5
Proposed
New Positions
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
Power Resources:

Data Analyst
Power Resources Manager
Finance:

Manager of Finance
Senior Strategic Finance Analyst
Legal:

Grants Manager
10 Department Headcount
2 6
5 8
9 11
10 12
16 16
18 2
2 1
0 2 4 6 8 10 12 14 16 18 20
Strategic Iniatives
Human Resources
Finance
Internal Operations
Customer Operations
Technology and Analytics
Power Resources
Executives / Leadership Team
Customer Programs
Legal/Policy
Public Affairs
Department Full-Time Headcount with Proposed New Hires
FT Headcount Proposed New Hires
11 CCA Average Fully Loaded Personnel Cost Comparison
CCA Fiscal Year Personnel Cost Headcount Average Fully Loaded Personnel Cost CPA 25/26 $27,950,00 96 $291,146
AVA 25/26 $29,639,000 105 $282,276
SVCE 25/26 $18,870,000 67 $281,642
MCE Proposed
26/27
$32,713,694 (pre-grant offset)
$28, 652,458 (post grant offset)
118 $277,235 (pre-grant offset)
$248,817 (post grant offset)
MCE 25/26 $29,600,000 (pre-grant offset)
$25,400,000 (post grant offset)
113 $261,947 (pre-grant offset)
$224,779 (post grant offset)
PCE 25/26 $16,391,740 67 $244,653
3CE 25/26 $14,260,774 59 $241,708
SDCP 25/26 $21,115,541 94 $244,633
SCP 25/26 $12,781,000 60 $213,017
MCE’s personnel costs are shown both pre- and post-grant. Comparative CCA personnel costs are based on adopted FY 25/26 budgets and reflect post-grant amounts, where applicable grant offsets exist. 12 Personnel – before grant reimbursements
13 FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
Salaries $ 18,800,000 $ 21,686,000 $ 2,887,000 15.4%
Benefits 10,717,000 11,027,000 310,000 2.9%
Total Personnel Costs 29,517,000 32,714,000 3,196,000 10.8% • Costs include medical, dental, vision benefits; employer taxes; ancillary benefits; retirement and retention; other (workers comp, PTO, etc.)
• For full-time, part-time, and temporary staff
Key factors contributing to year-over-year increase:
• Full-year impact of the 13 new positions added in FY 2025/26 • Most of which were hired mid-year and did not incur a full 12 months of cost in the current fiscal year • Full-year impact of COLA and merit adjustments (1-5%) made in January 2026 • Addition of 5 new full-time roles to meet operational needs Personnel – after Grant Reimbursement
14 FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
Total Staffing Costs $ 29,517,000 $ 32,714,000 $ 3,197,000 10.8% Expected Grant Reimbursement (4,112,000) (4,061,000) 50,000 (1.2%) Personnel 25,405,000 28,652,000 3,247,000 12.8%
Information regarding grant reimbursements
• Anticipated modest reduction in grant reimbursements relative to the FY 2025/26 budget • Number in the budget is the cost after grant reimbursements Non-Operating Revenues, Net and Capital Outlay
15 FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
Non-Operating Revenues, Net $ 14,775,000 $ 13,457,000 $ (1,318,000) -8.9% Total Capital Expenditures,
Interfund Transfers & Other 18,391,000 18,474,000 83,000 0.5% Non-Operating Revenues
• Non-operating revenues come from interest and investment earnings on MCE’s cash and fixed-income portfolio • Presented net of banking fees, which are subject to change pending updates on the amount MCE must post to meet the CPUC’s Financial Security Requirement
Total Capital expenditures, Interfund Transfers and Other • $10.25mm for the RAS project
• $8mm transfer to the Program Development Fund
Program Development Fund
16 FY 2025/26
Approved
FY 2026/27
Proposed 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 - -
Resiliency Virtual Power Plant (VPP) Fund
17 FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %

REVENUE AND OTHER SOURCES
CEC VPP Flex Grant $1,200,000 $1,200,000 $ 0 0.0%
Federal Earmark Funding 200,000 100,000 (100,000) (50.0%) Marin Community Foundation Grant 72,000 270,000 198,000 275.0% TOTAL REVENUE AND OTHER SOURCES 1,472,000 1,570,000 98,000 7%

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 30,000 (141,000) (82.5%)
TOTAL EXPENDITURES 4,401,000 3,764,000 (637,000) (14.5%) Net Increase (Decrease) in Fund Balance (3,721,000) (2,194,000) - - Fund Balance at Beginning of Period 4,361,000 2,792,000 - - Fund Balance at End of Period 640,000 598,000 - -
Energy Efficiency Fund
18 FY 2025/26
Approved
FY 2026/27
Proposed 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%)

EXPENDITURES
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
Customer Program Funding Options
19 Option Budget Impact Program Impact
Close or scale back EV Instant
Rebate Program
Savings of up to $3,594,500 Up to 876 income-qualified customers will not receive a rebate for the purchase
of an EV. 85% of participants have
indicated via survey that they wouldn’t
have purchased an EV without MCE’s
rebate.

Close the EV Charging Program
to new applicants
Savings of around $800,000 Projects with existing reservations will still need to close out. Larger budget
impacts in the coming FYs if we stop
taking in new project reservations.

Eliminate Electrification
Incentives (Heat Pump Water
Heater Incentives & Community
Housing Support)
Savings of $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 Program Impacts and Expenditures
20 Program FY 2026/27
Proposed
MCE Cumulative
Expenditures
Program Impacts (inception to date)
EV Instant
Rebate Program
$3,594,500 $9,264,000
(Mar. 2023-Dec. 2025)
• 2,381 low-income customers purchased or
leased an EV with an MCE rebate
• GHG emissions reductions: 7,286 MT CO2e
EV Charging
Program
$2,289,137 $7,884,000
(Mar. 2019-Dec. 2025)
• 1,400 new charging ports at 142 locations
• GHG emissions reductions not tracked
Electrification
Incentives
$942,000 $1,177,000
(Apr. 2021-Dec. 2025)
• 700 electrification and electrification
readiness measures (heat pump HVAC,
water heater, heat pump dryers, induction
cooktops) installations completed
• GHG emissions reductions: 623 MT CO2e
Program Budgets
21 Program FY 2026/27 Proposed
EV Instant Rebate Program $3,595,000
EV Charging Program $2,289,000
EV Education and Outreach $100,000
Energy Storage Program $137,000
MCE Sync $927,000
Heat Pump Water Heater Incentives $682,000
Community Housing Support $260,000
Virtual Power Plant $210,000
Matching Funds:

DOE Storage Grant Match Funds $100,000
VPP Flex Match Funds $1,000,000
Change in Net Position
22 FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
Energy Revenue, Net $ 813,689,500 $ 621,291,000 $ (192,398,500) (23.6%) ORF Withdrawal 13,000,000 62,000,000 49,000,000 376.9%
Cost of Energy (765,542,000) (631,944,000) 133,598,000 (17.5%) Operating Expenses (50,249,000) (54,365,000) (4,116,000) 8.2% Non-Operating Revenues, Net 14,775,000 13,457,000 (1,318,000) (8.9%) Program Expenses (9,181,000) (9,120,000) 61,000 (0.7%)
Consolidated Change in Net Position 16,492,500 1,319,000 (15,173,500) (92.0%) The consolidated change in net position is projected to total $1.3 million, a 92% decrease year-over-year Progress towards
Reserves and
Liquidity Goals
Reserves
24 $497
$437 $412
$417
$484 $485
84%
111% 118%
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 Millions $
Target vs Projected
Reserves Goal
Reserve Target $ Actual Reserves $ Reserves Actual (% of Target) • Reserves target is met and surpassed
• Numbers are inclusive of cost of energy reductions and withdrawals from the ORF CCA Industry Days Liquidity on Hand
25 670
594
434
352 337 321
242 218
165 150
25 Average, 319
-
100
200
300
400
500
600
700
800
Sonoma
Clean
Power
Silicon
Valley Clean
Energy
Peninsula
Clean
Energy
Pioneer
Community
Energy
AVA Valley Clean
Energy
Clean
Power SF
MCE Clean
Power
Alliance
San Diego
Community
Power
Clean
Energy
Alliance
Days
Days Liquidity on Hand
As of FY 2025/26 End
Metrics for peer CCAs based on ending net position and amounts in their rate stabilization fund, when applicable.

Liquidity
26 $545
$478 $451
$494
$554 $483
218
278
257
0 75
150
225
300
$0
$150
$300
$450
$600
FY 2024/25 Audited Results FY 2025/26 Projection FY 2026/27 Proposed Days
Millions $
Target vs Projected
Liquidity Goal
Liquidity Target $ Total Projected Liquidity $ Projected Days Liquidity on Hand • Liquidity target is met and surpassed.
• Actual results may be lower due to the CPUC’s Financial Security Requirement (FSR) which will require MCE to post security. Amounts are still being determined.

Recommendation
Provide guidance on proposed transfer from Operating Fund to the Program Development Fund for customer programs.
27 Options Savings FY 2026/27
Proposed Transfer
1 Fully fund proposed Program Development
Fund
NA $8,077,000
2 Reduce funding for EV Instant Rebate Program $1,797,000 $6,280,000 3 Eliminate funding for EV Instant Rebate Program $3,595,000 $4,483,000 4 Close the EV Charging Program to new
applicants
$800,000 $7,277,000
5 Eliminate Electrification Incentives, Heat Pump
Water Heater Incentives & Community Housing
Support
$942,000 $7,135,000
Recommendation
28 Recommend to the Board of Directors approval of the proposed Fiscal Year 2026/27 budgets, including the proposed $8,208,000 Program Development Fund transfer to support customer programs (option 1), or an alternative customer program funding option (Options 2-5) as outlined in the staff report.

Thank you!
mceCleanEnergy.org
[email protected]
FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %

ENERGY REVENUE
Operating Revenues $ 831,238,000 $ 638,933,000 $ (192,305,000) (23.1%) Uncollectible Accounts (12,469,000) (7,642,000) 4,827,000 (38.7%) Cost Relief Program (5,000,000) (10,000,000) (5,000,000) 100.0% Bi-Directional Vehicle Charging Tariff (79,500) - 79,500 (100.0%) Energy Revenue, net 813,689,500 621,291,000 (192,398,500) (23.6%) Transfer from Operating Reserve Fund 13,000,000 62,000,000 49,000,000 376.9% Total Energy Revenue 826,689,500 683,291,000 (143,398,500) (17.3%)

ENERGY EXPENSES
Cost of Energy 765,542,000 631,944,000 (133,598,000) (17.5%) Net Electricity Revenue 61,148,000 51,347,000 (9,801,000) (16.0%)

NONOPERATING REVENUES
Grant Income 3,278,000 5,018,000 1,740,000 53.1%
Other Income - - - -
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% CHANGE IN NET POSITION* 25,674,000 10,439,000 (15,235,000) (59.3%) Budgeted Net Position Beginning of Period 416,863,052 484,271,558 67,408,506 16.2% Change in Net Position 25,674,000 10,439,000 (15,235,000) (59.3%) BUDGETED NET POSITION END OF PERIOD 442,537,052 494,710,558 52,173,506 11.8%

CAPITAL EXPENDITURES, INTERFUND TRANSFERS & OTHER
Software Transmission Upgrade 10,250,000 10,250,000 - 0.0% San Rafael Office Building Purchase 5,400,000 - (5,400,000) (100.0%) Office Improvements and Retrofits 349,000 147,000 (202,000) (0.58) Transfer to Resiliency VPP Fund - - - -
Transfer to Program Development Fund 2,392,000 8,077,000 5,685,000 237.7% TOTAL CAPITAL EXPENDITURES, INTERFUND TRANSFERS & OTHER 18,391,000 18,474,000 83,000 0.5% BUDGETED NET INCREASE IN OPERATING FUND BALANCE 7,283,000 (8,035,000) (15,318,000) (210.3%) Change in Net Position 25,674,000 41,734,506 163%
Preliminary Breakdown
Costs shifted to previous FY 36,400,000
Prepay 7,265,810
43,665,810
MCE Operating Fund
Approved Budget Fiscal Year 2025/26
From April 1, 2026 through March 31, 2027
**Shows Change in Net Position before programs expenses. See staff report for Consolidated Change in 0Net Position inclusive of program expenses.

FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
$2,392,000 $8,077,000 $5,685,000 238%
260,000 131,000 (129,000) -50%
100,000 - (100,000) -100%
2,752,000 $8,208,000 $5,456,000 198%
5,310,000 5,984,000 674,000 13%
540,000 682,000 142,000 26%
142,000 - (142,000) -100%
260,000 131,000 (129,000) -50%
260,000 260,000 - -
6,512,000 7,057,000 545,000 8%
3,760,000 1,151,000 - -
3,760,000 (1,151,000) - -

REVENUE AND OTHER SOURCES
Transfer from Operating Fund and Deep Green Premium
Marin Community Foundation Grant
Community Benefits Funds

TOTAL REVENUE AND OTHER SOURCES

EXPENDITURES
Transportation Electrification Programs
Heat Pump Water Heater Incentives
Emergency Water Heater Loaner Program
MCF - EV Charging at Affordable Housing
Community Housing Support

TOTAL EXPENDITURES AND OTHER USES
Net Increase (Decrease) in Fund Balance
Fund Balance at Beginning of Period
Fund Balance at End of Period - - - -
MCE
Program Development Fund
Proposed Budget Fiscal Year 2026/27
From April 1, 2026 through March 31, 2027
C. Proposed FY 2026/27 Program Development Fund Budget
*Bel balance due to
FY 2025/26
Approved
FY 2026/27
Proposed Variance $ Variance %
$1,200,000 $1,200,000 $ - 0.0%
200,000 100,000 (100,000) (50.0%)
72,000 270,000 198,000 275.0%
- - - 0.0%
1,472,000 1,570,000 98,000 7%
1,200,000 1,200,000 - 0.0%
306,000 137,000 (169,000) (55.2%)
1,000,000 1,000,000 - 0.0%
952,000 927,000 (25,000) (2.6%)
100,000 - (100,000) (100.0%)
200,000 100,000 (100,000) (50.0%)

REVENUE AND OTHER SOURCES
CEC VPP Flex Grant
Federal Earmark Funding
Marin Community Foundation Grant
Transfer from Operating Fund

TOTAL REVENUE AND OTHER

SOURCES

EXPENDITURES AND OTHER USES
CEC VPP Flex Grant Expenses
Energy Storage Program
CEC VPP Flex Grant Match
MCE Sync
PeakFLEX
Federal Earmark - Energy Storage
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%) Home Area Network Device Pilot - - - 0.0%
San Rafael Office Resiliency Buildout 200,000 - (200,000) (100.0%) Virtual Power Plant 171,000 30,000 (141,000) (82.5%)

TOTAL EXPENDITURES AND OTHER
USES
4,401,000 3,764,000 (637,000) (14.5%)
Net Increase (Decrease) in Fund Balance (3,721,000) (2,194,000) - - Fund Balance at Beginning of Period 4,361,000 2,792,000 - - Fund Balance at End of Period 640,000 598,000 - -
*Beginning balance for FY 2026/27 budget differs from budget FY 2025/26 ending actual balance due to delays in actual fund spending.

D. Proposed FY 2026/27 Resilency VPP Fund Budget
MCE
Resiliency VPP Fund
Proposed Budget Fiscal Year 2026/27
From April 1, 2026 through March 31, 2027
HBN
FY 2025/26
Approved
FY 2026/27
Proposed 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 - (800,000) (100.0%) TOTAL REVENUE AND OTHER SOURCES 19,561,000 14,380,000 (5,181,000) (26.5%)

EXPENDITURES AND OTHER USES
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 - (800,000) (100.0%) TOTAL EXPENDITURES AND OTHER USES 19,561,000 14,380,000 (5,181,000) (26.5%)

BALANCE - -
For comparison purposes, the Proposed FY 2026/27 budget is shown along the current year's Approved Budget. Actuals through December 2025 plus projections through March 31, 2026 are shown in the Fiscal Year 2025/26 Projected Budget column.

E. Proposed FY 2026/27 Energy Efficency Fund Budget
MCE
Energy Efficiency Fund
Proposed Budget Fiscal Year 2026/27
From April 1, 2026 through March 31, 2027

MCE Executive CommitteeMarch 2, 2026

MCE Executive Committee
March 2, 2026