Agenda packet — MCE Finance Committee, August 27, 2026

MCE Finance Committee Meeting
Thursday, August 27, 2026
10:00 a.m.

Lamorinda Music
81 Lafayette Circle
Lafayette, CA 94549
(Lafayette)
Larkspur City Hall
400 Magnolia Ave
Larkspur, CA 94939
(Larkspur)
Napa County Administration Building
1195 Third Street, Suite. 310
Napa, CA 94558
(Napa County)
MCE Concord Office
2300 Clayton Road, Suite 1500, Wind Room
Concord, CA 94520
Liz Alessio, County of Napa (Committee Chair)
John McCormick, City of Lafayette (Committee Vice Chair) Stephanie Andre, City of Larkspur
Charles Palmares, City of Vallejo
Sally Wilkinson, City of Belvedere
Public comments may be made in person or remotely via the details below.

Remote Public Meeting Participation
Video Conference:
https://us02web.zoom.us/j/83911081030?pwd=nJ6IsCQuBVcnnsuayq5sFLAtljICvk.1 Phone: Dial (669) 900-9128, Meeting ID: 839 1108 1030, Passcode: 167504 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.

The Finance 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. Roll Call
Agenda Page 2 of 2

2. Public Open Time for Items Not on the Agenda (Discussion)

3. Consent Calendar (Discussion/Action)
C.1. 7.29.26 Meeting Minutes

4. Report from Chief Executive Officer (Discussion)

5. Fiscal Year End 2026: Budget Results, Power Supply Variance, and Ratification of Certain Line Item Variances (Discussion/Action)

6. Financial Audit Fiscal Year End 2026 (Discussion)

7. Committee & Staff Announcements (Discussion)

8. Adjourn
The next regularly scheduled Finance Committee meeting will be September 24, 2026, at 10:00 a.m.

DRAFT

MCE SPECIAL FINANCE COMMITTEE MEETING MINUTES
Wednesday, July 29, 2026
10:00 A.M.

Present: Liz Alessio, Napa County, Chair
John McCormick, City of Lafayette
Charles Palmares, City of Vallejo, joined at 10:07 a.m.

Sally Wilkinson, City of Belvedere

Absent: Stephanie Andre, City of Larkspur
Staff
& Others: Jesica Brooks, Executive Assistant and Lead Board Clerk Vicken Kasarjian, Acting CEO and COO
Tanya Lomas, Board Clerk
Linda Lye, Senior Legal Counsel
Catalina Murphy, General Counsel
Carlos Oblites, Chandler Asset Management
Efren Oxlaj, Manager of Finance
Justine Parmelee, VP of Internal Operations
Maíra Strauss, Chief Financial Officer
Jamie Tuckey, Chief Customer Officer

1. Roll Call
(Video 0:00:00)
Chair Alessio called the regular Finance Committee meeting to order at 10:00 a.m. with quorum established by roll call.

2. Public Open Time for Items Not on the Agenda (Discussion) (Video 0:00:54)
There were no comments.

3. Consent Calendar (Discussion/Action)
(Video 0:01:10)
C.1 Approval of 6.25.26 Meeting Minutes
Chair Alessio opened the public comment period and there were no comments.

Action: It was M/S/C (McCormick/Wilkinson) to Approve Consent Calendar Item C.1. Motion carried by unanimous roll call vote. (Absent: Andre and Palmares).

DRAFT

4. Report from Chief Operating Officer (Discussion)
(Video 0:02:04)
Vicken Kasarjian, Acting CEO and Chief Operating Officer, introduced this item and addressed questions from committee members.

Chair Alessio opened the public comment period and there were no comments.

5. Review Draft of Management Analysis and Discussion with Draft Financial Statements Fiscal Year Ended (FYE) 2026 (Discussion)
(Video 0:06:01)
Maíra Strauss, Chief Financial Officer, and Efren Oxlaj, Manager of Finance, presented this item and addressed questions from Committee members.

Chair Alessio opened the public comment period and there was a comment from member of the public, Dan Segedin.

Action: No action required.

6. Overview of Policy 013: MCE’s Reserve Policy (Discussion) (Video 0:38:13)
Maíra Strauss, Chief Financial Officer, presented this item and addressed questions from Committee members.

Chair Alessio opened the public comment period and there was a comment from member of the public, Dan Segedin.

Action: No action required.

7. Proposed Amendment of Policy 014: MCE’s Investment Policy (Discussion/Action)
(Video 1:04:44)
Maíra Strauss, Chief Financial Officer introduced Carlos Oblites, Chandler Asset Management, who presented this item and addressed questions from Committee members.

Chair Alessio opened the public comment period and there were no comments.

DRAFT
Action: It was M/S/C (Wilkinson/McCormick) to recommend to the Board of Directors approval of the Amendment of the Policy 014: MCE’s Investment Policy. Motion carried by unanimous roll call vote. (Absent:

Andre).

8. Committee & Staff Matters (Discussion)
(Video 1:37:29)
There were no comments.

9. Adjournment
(Video 1:37:37)
Chair Alessio adjourned the meeting at 11:38 a.m. to the next scheduled Finance Committee Meeting on August 27, 2026.
___________________________________________
Liz Alessio, Chair
Attest:
___________________________________________
Justine Parmelee, Secretary
August 27, 2026
TO: MCE Finance Committee
FROM: Maíra Strauss, Chief Financial Officer
Kaladhar R. Bollampali, Director of Power Systems and Analytics Efren Oxlaj, Manager of Finance
RE: Fiscal Year End 2026: Budget Results, Power Supply Variance, and Ratification of Certain Line Item Variances (Agenda Item #05) ATTACHMENT: A. Presentation on Fiscal Year End 2026: Budget Results, Power Supply Variance, and Ratification of Certain Line Item Variances B. FYE 2026 Operating Fund Budget Comparison
C. FYE 2026 Operating Fund Budget Comparison – Contingency Applied D. FYE 2026 Program Development Fund Budget Comparison
E. FYE 2026 Resiliency Virtual Power Plant Fund Budget Comparison F. FYE 2026 Energy Efficiency Program Fund Budget Comparison G. Resolution 2026-07 Ratifying Certain Line Item Variances Between Actual and Budgeted Amounts in MCE’s Fiscal Year End 2026 Budget Dear Finance Committee Members:

Summary:

This report analyzes MCE's actual results relative to the Board approved Budgets for the fiscal year ended (FYE) March 31, 2026, and requests ratification of certain line item variances between actual and budgeted amounts for FYE 2026 via Resolution 2026-07. On a budget basis, MCE closed the year with a change net position of $1.5 million1
, compared to a budgeted $16.6 million,
representing a variance of about $15 million or 91%. The fiscal year was shaped by softer than expected demand due to mild summer weather in 2025 which suppressed load. Consequently, energy revenue finished 6.1% below budget. Meanwhile, MCE’s cost of energy fell further, ending $113.0 million or 14.8% below budget on lower market prices, reduced volumes, and favorable CAISO market settlements. Part of that favorability was a matter of timing. A short-term renewable index+ contract, one of the final transactions used to close MCE's calendar year 2025 renewable position, delivered earlier than expected thus moving costs out of FYE 2026. The Renewable Portfolio Planning & Results section below discusses that transaction, its estimated financial impact across FYE 2025 and FYE 2026, and the procurement changes staff have since adopted. 1 The change in net position shown here is a consolidated, budget-basis figure covering all of MCE's funds. It approximates the financial statements but does not tie exactly, as the statements include GASB accounting adjustments that the budget does not.

Furthermore, non-operating revenue exceeded projections on strong investment income, while operating expenses finished 6.8% below budget, and program spending reflected underspending on most customer programs partially offset by stronger than anticipated demand for MCE's EV incentives. As detailed herein, although MCE’s total expenses and capital outlay fell well below budgeted amounts, some expenses have exceeded budgeted amounts listed within the line items of an applicable approved budget (MCE has four approved budgets and collectively they represent the MCE Budget). Staff requests the Finance Committee recommend to the Board of Directors for approval, Resolution 2026-07 Ratifying Certain Line Item Variances Between Actual and Budgeted Amounts in MCE’s Fiscal Year End 2026 Budget.

A high-level summary of the MCE Budget is shown below.

Table 1. Summary of MCE’s Budget Results
Overview of MCE Fund Budgets
MCE’s fiscal year runs from April 1 through March 31 of the following calendar year. For FYE 2026, your Board approved four budgets: the Operating Fund Budget, the Energy Efficiency Budget, the Program Development Fund Budget, and the Resiliency Virtual Power Plant (VPP) Fund Budget.

The Operating Fund Budget captures activities related to MCE's core functions including sales of electricity, cost of energy, operating expenses, non-operating revenues and expenses, and capital outlay. The Energy Efficiency Fund Budget is entirely funded by the California Public Utilities Commission for energy efficiency programs. The Program Development Fund is funded by 50% of the Deep Green premium and grants, and any additional transfers from the Operating Fund, subject to your Board’s approval. This fund supports program incentives for electrification, electric vehicle (EV) adoption and EV charging stations. The Resiliency Virtual Power Plant Fund focuses on scaling MCE’s efforts with virtual power plants and energy storage. This fund may include grants and Board approved transfers from the Operating Fund.

FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Energy Revenue, Net 764,392,000$ 813,689,000$ (49,297,000)$ -6.1% ORF Withdrawal/Transfer (80,000,000) 13,000,000 (93,000,000) -715.4% Cost of Energy (652,516,000) (765,542,000) 113,026,000 -14.8% Operating Expenses (46,825,000) (50,249,000) 3,424,000 -6.8% Non-Operating Revenues 26,593,000 18,278,000 8,315,000 45.5% Non-Operating Expenses (1,019,000) (3,503,000) 2,484,000 -70.9% Program Expenses (20,935,000) (30,474,000) 9,539,000 -31.3% Program Income 11,807,000 21,393,000 (9,586,000) -44.8% Change in Net Position 1,497,000 16,592,000 (15,095,000) -91.0% Capital Outlay (5,684,000) (15,999,000) 10,315,000 -64.5% Total Expenses & Capital
Outlay
(726,979,000) (865,767,000) 138,788,000 -16.0%
Energy Revenue
Table 2: Energy Revenue Results
Gross energy revenue came in at $780.1 million (6.1% below budget) due to lower sales volume.

The cool summer temperatures in 2025 experienced across MCE's service area suppressed air conditioning related demand that the forecast had anticipated. As a result, sales volume came in

7.8% below forecast. A slightly higher average retail rate ($147.3 actual versus $144.7 budgeted, up

1.8%) partially offset the impact of the softer demand.

The following items reduced energy revenue:
• Uncollectible amounts totaled about $10 million, or 20.2% better than projections. Customer delinquencies were projected at 1.5% of sales, but actual results were closer to 1.3% suggesting stronger payment behavior from customers.
• The MCE Cares Relief Program cost $5.8 million, approximately 15.9% above budget.

Spending exceeded projections due to the timing of program expenditures and delays in reducing participation as the program approached its funding limit. Program expenditures continued beyond the available budget as previously committed bill credits were honored and enrollment adjustments could not be fully implemented until customers progressed through their normal billing cycles. Management has since implemented enhanced budget monitoring, forecasting, reconciliation, and escalation procedures to strengthen oversight of future customer assistance programs.
• The Bi-Directional Vehicle Charging Tariff had no activity against a budget of $79,500.

After these items, net energy revenue was $764.4 million, or $49.3 million (6.1%) below budget, closely tracking the shortfall in gross revenue.

Revenue was further reduced by the Board approved $80.0 million transfer to the Operating Reserve Fund (ORF), representing a positive swing of $93.0 million for the fund since MCE had originally budgeted a $13.0 million withdrawal. The transfer strengthens MCE’s ability to provide rate stabilization capacity to help manage future energy market volatility and other financial risks. The transfer is also expected to replenish the ORF balance following the planned withdrawal in the current fiscal year.

FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Energy Revenue 780,138,000$ 831,238,000$ (51,100,000)$ -6.1% Uncollectible Accounts (9,951,000) (12,469,000) 2,518,000 -20.2% MCE Cares Relief Program (5,795,000) (5,000,000) (795,000) 15.9% Bi-Directional Vehicle Charging - (79,500) 79,500 -100.0% Energy Revenue, Net 764,392,000 813,689,500 (49,297,500) -6.1% Transfer/Withdrawal to ORF (80,000,000) 13,000,000 (93,000,000) -715.4% Total Energy Revenue 684,392,000 826,689,500 (142,297,500) -17% Sales (MWh) 5,296,000 5,744,000 (448,000) -7.8%
Average Retail Rate 147.3$ 144.7$ 2.6$ 1.8%
Cost of Energy: $652,516,000 (14.8% below the Approved Budget) The cost of energy represents the expenditures MCE incurs to procure the electricity it delivers to customers. It is the largest expense for the agency. It consists of payments to suppliers under long and short-term contracts for renewable, large hydroelectric, and other carbon-free electricity.

Payments to reserve enough capacity (i.e. resource adequacy) to keep the grid reliable per state requirements, are also captured in this category. Other costs in this category include payments to hedge contract counterparties. Because MCE's renewable and clean energy contracts do not fully cover customer demand in every hour, the agency also enters into hedge contracts that lock in fixed prices for a portion of the system power it purchases through the California Independent System Operator (CAISO) market. Hedge contracts stabilize costs against price volatility. Finally, the cost of energy also captures the net cost of load, generation credits, and other charges settled through MCE's participation in the CAISO market. The cost of energy fluctuates from year to year with market conditions, including renewable energy prices, resource adequacy costs, CAISO market prices, hydroelectric availability, renewable generation output, congestion, contract terms, and the timing of procurement.

Table 3: Cost of Energy Results by the “Super Six” Categories 2 Cost of energy totaled $652.5 million (14.8% below budget) driven largely by mild weather, softer customer demand, and favorable market prices which sharply lowered the agency's net CAISO costs. A shift of expenses to the previous fiscal year due to early deliveries from a short-term contract further reduced the cost of energy. The following drivers explain the results shown in Table 3. • Hedge Contracts – total costs were higher than projections by about $9.9 million or 3.7% due to additional hedge contracts executed after the budget was set. However, the added volumes also lowered Net CAISO costs since hedge contracts are settled against CAISO system power costs. MCE pays a fixed price for hedge contracts and receives the floating CAISO price which offsets budgeted open positions for system power under Net CAISO Costs.
• Resource Adequacy – total costs were lower than projections by about $15.3 million or 10.5% due to surplus RA sales, portfolio optimizations, and a post-budget contract termination. • Renewable – Short Term – Costs came in about $63.4 million, or 48.4%, below projections, representing the second largest variance in the portfolio and driven primarily by non-recurring factors. Most significantly, a supplier accelerated renewable deliveries into the prior 2 Total shown in the table differs by about $1,000 from the total on the budget report due to rounding to the nearest one thousand of the individual categories shown. This rounding may impact subsequent tables shown.

FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Hedge Contracts $ 274,960,000 $ 265,050,000 $ 9,910,000 3.7% Resource Adequacy 130,444,000 145,713,000 (15,269,000) -10.5% Renewable - Short Term 67,675,000 131,035,000 (63,360,000) -48.4% Renewable - Long Term 131,837,000 122,588,000 9,249,000 7.5% Net CAISO Costs 19,234,000 85,084,000 (65,850,000) -77.4% Carbon Free - Large Hydro/ACS 28,367,000 16,072,000 12,295,000 76.5% Total 652,517,000 765,542,000 (113,025,000) -14.8%
fiscal year. This reduced FYE 2026 contract costs by approximately $36.4 million relative to budget, as a significant portion of the contract deliveries had already been recognized in FYE 2025. The costs were also lower because the approved budget overstated planned costs by about $10.3 million. In addition, MCE had a smaller open position for renewable energy than planned due to the softer demand which reduced the volumes MCE needed to cover. Finally, MCE terminated a short-term contract after the budget was set. • Renewable – Long Term – costs came in about $9.2 million above projections. Costs are based on forecasted production by projects, but actual production can differ based on delivered energy, curtailment, and deemed delivered energy. As a result of MCE’s three energy prepayments, about $13.8 million in savings was recognized during the fiscal year, reducing the costs for renewable energy from long term contracts by a like amount. • Net CAISO Costs – Costs came in about $65.9 million or 77.4% below projections, the single largest favorable variance in the portfolio. Due to milder weather and consequently softer demand from customers, MCE purchased less energy in the CAISO market. Lower than forecasted spot-market prices reduced the cost of the energy MCE did purchase. As noted above, because MCE executed additional hedge contracts after the budget was set, a portion of costs effectively shifted out of the net CAISO line and into the hedge contracts line 3 .
• Carbon Free – Large Hydro/ACS - costs were above forecast by about $12.3 million or 76.5% and reflects higher than expected deliveries associated with import RA purchases, which come with bundled carbon free energy. Import RA is necessary for compliance requirements.

In total, cost of energy came in at about $113.0 million below budget, largely offsetting the drop in energy revenue and significantly contributing to the results for the fiscal year.

Renewable Portfolio Planning & Results
The shift of renewable costs into the prior fiscal year traces back to a single short-term contract. That contract was one of the final transactions used to close MCE's calendar year 2025 renewable position, and the supplier delivered the contracted quantities much earlier than anticipated.

Although executed to secure MCE’s renewable targets, evolving 2025 energy demand later revealed the contract was unnecessary to fulfill the Board's renewable mandates.

The following section describes how the calendar year 2025 renewable position developed, the estimated financial impact of the additional procurement, and the changes staff have implemented in response.

Renewable procurement occurs in advance of actual customer load and resource generation.

Because both are uncertain and Board approved renewable targets are firm annual targets, planning margins have historically been used to reduce the risk of falling short. 3 The favorable Net CAISO variance and the unfavorable hedge variance are inversely related and partly offsetting.

The state Renewable Portfolio Standard (RPS) program provides flexibility across a multi-year compliance period, including the ability to apply excess procurement toward future compliance. In contrast, MCE’s renewable targets are higher than state requirements, and its standard practice is to plan and procure renewable energy to meet annual targets within the year to which they apply. This creates a greater need to manage uncertainty within each year.

For 2025 calendar year, staff procured about 75% of forecast renewable need in advance. Actual load subsequently came in below forecast, while renewable supply declined by a smaller amount, resulting in a long renewable position. Once the long position became clearer following summer 2025, staff pursued opportunities to sell expected excess renewable supplies. The amount and value that could be sold were affected by market timing, liquidity, and prevailing prices.

Table 4: 2025 Renewable Position
2025 Renewable
Position
Renewable
Percentage
Notes Estimated Financial
Impact ($)
Board Target
(Target)
64% Weighted: 100% Deep
Green & 60% Light Green
Target + Loss
Adjustment
68% Target + 6% loss factor for
reporting (effective 2025)
Planned Target 75% Target + 6% (loss factor) +
10% (planning margin)
Actual Renewable Share
of Actual Retail-Sales
77% Actual Renewable Position
Actual Position above
Board Target
+13% 64%  77% $73 million
With perfect hindsight and knowledge of actual load and renewable supply, one of the final procurement transactions used to close the 2025 position would not have been necessary. That transaction contributed to the resulting long position and represents an estimated $72.8 million total financial impact. The impact was spread between two fiscal years: about $54.6 million in FYE 2025 and $18.2 million in FYE 20264
. The transaction largely contributed to the budget overrun observed in FYE 2025 as the supplier delivered the renewable energy quantities much earlier than anticipated.

The $72.8 million figure represents a perfect hindsight assessment based on actual conditions subsequently realized, rather than information that was fully known when the procurement decision was made. Staff have included this analysis to support your Board’s oversight role and to document the procurement process changes already adopted, consistent with the agency's broader focus on strengthening financial and governance practices.

4 On a budget basis, the FYE 2026 Approved Budget assumed about $6 million per month for this contract from April through December 2025 (about $54.6 million). Because the supplier delivered early, only $18.2 million was recognized in FYE 2026, leaving the $36.4 million favorable budget variance noted earlier ($54.6 million budgeted minus $18.2 million actual).

Improvements Implemented for FYE 2027
Staff has already implemented the following changes based on 2025 review:
• Removed the historical 10% planning margin: The 6% loss adjustment incorporated into the portfolio planning provides additional coverage relative to the retail sales, reducing the need for a separate planning margin.
• Strengthened position monitoring: Positions are reviewed on a more frequent basis using updated forecasts, best available metered data and market information to identify emerging risks and opportunities and assess buy, sell, or hold decisions.

Potential Future Policy Considerations
• Flexible annual renewable targets rather than firm annual targets, enabling a more price-responsive and value-driven procurement strategy. • Allowing excess renewable supply to count toward future Board targets, like the flexibility available under the state RPS compliance framework.
• Reassessing voluntary renewable target levels, including the option of greater alignment with state requirements.
• Flexibility to meet the loss-adjusted target using either renewable energy or other carbon-free resources. Current policy guidance is not clearly defined.

Operating Expenses: $46,825,000 (6.8% below the Approved Budget) Operating expenses capture the overhead essential to running MCE, ranging from personnel to occupancy costs. This category also includes a contingency budget that can be drawn upon to offset any overages in any of the operating expense line items. For FYE 2026, total operating expenses came in at $46.8 million or 6.8% under budget, consistent with results in prior years. Except for personnel, data manager fees, and communication services, all lines were below budget. To remain within the Board approved budgets, MCE utilized $296,000 in contingency funds to offset the above budget variance for personnel, data manager, and communication services.

Personnel: $25,484,000 (0.3% above the Approved Budget before applying contingency) Personnel costs include full-time equivalent (FTE) MCE staff salaries and wages, employee benefits, retirement contributions, payroll taxes, and other employee-related expenses.

Personnel costs can fluctuate based on staffing levels, vacancies, hiring timelines, and grant reimbursements that offset staffing costs.

Table 5: Personnel Expenses breakdown
Personnel costs totaled $25.5 million, or 0.3% above budget. While personnel expenses were $1.0 million below budget, grant reimbursements were $1.1 million below budget. This more than offset the payroll savings and resulted in personnel costs ending $79,000 above budget.

FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Expenses $ 28,500,000 $ 29,517,000 $ (1,016,000) (3.4)% Grant Reimbursements (3,016,000) (4,112,000) 1,095,000 (26.6)% Total 25,484,000 25,405,000 79,000 0.3%
The shortfall in grant reimbursements was primarily driven by lower than budgeted realized reimbursements associated with CPUC Energy Efficiency programs. Reimbursements were lower largely because labor costs charged to grant-funded activities came in below budget.

Additionally, one grant-funded position included in the budget was not filled, resulting in both lower personnel expenses and lower corresponding grant reimbursements. Staffing changes during the year reduced the amount of labor charged to certain grant-funded projects, further decreasing grant reimbursements.

A portion of the grant reimbursements variance was also attributed to challenges with consistently tracking grant-related staff time. As of July 2026, MCE has fully transitioned grant timekeeping and reimbursement tracking to Euna Grants, following recommendations from MCE’s external grant compliance consultant, Award Advisors. The updated process improves the accuracy of labor allocations, reimbursement claims, and grant compliance while centralizing all grant timekeeping into a single system. The system also provides greater visibility into estimated versus actual grant-funded staff hours, improving budget monitoring, staffing allocation, and reimbursement tracking.

Gross personnel expenses came in below budget largely because several positions budgeted to be filled during FYE 2026 remained vacant longer than anticipated or were eliminated during the year.

At the end of the fiscal year, personnel expenses reflected nine fewer FTE positions than assumed in the budget. The remaining FTE positions have already been filled or are expected to be filled during the current fiscal year.

Overall, savings generated by staffing vacancies were more than offset by lower than expected grant reimbursements, resulting in personnel costs ending modestly above budget.

Data Manager: $5,428,000 (2.9% above the Approved Budget before applying contingency) 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. Costs came in above budget for two reasons: First, total enrolled accounts were 5% higher than forecast, increasing the data manager’s infrastructure and operational resources required to support the City of Hercules enrollment, and second, MCE requested additional billing and aging-balance reports that were not contemplated in the original budget.

FYE 2026 Actual FYE 2026 Budget Variance Variance %
FTE Staff 108 117 (9) (7.7)%
Technical and Scheduling Consultants: $1,246,000 (11.0% below the 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. Costs came in below budget as staff worked with a more cost-effective vendor for forward price curves and congestion analysis.

Service Fees – PG&E: $2,603,000 (4.9% below the 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. The budget built in a rate increase for PG&E's per-account billing fee that the CPUC has not yet approved. Because the higher rate never took effect, actual costs came in below budget.

Legal and Policy Services: $1,125,000 (26.7% below the 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. Results were below budget for a few reasons:
• Staff relied more on internal expertise for PPA reviews and engaged a more cost-effective vendor, thereby lowering the costs incurred for external counsel services. • Staff budgeted for outside counsel services related to municipal finance that ultimately did not materialize.
• Staff also budgeted for outside counsel services to support MCE’s Energy Efficiency Business Plan Application. Leveraging the last application, growing internal expertise, and creating efficiencies, Staff were able to decrease anticipated external spend. • Lastly, MCE continues to leverage its membership with the California Community Choice Association (CalCCA) to participate in joint regulatory proceedings, thus reducing the budget for external policy services.

Communication Services: $2,288,000 (2.9% above the Approved Budget before applying contingency)
The majority of the variance reflects a customer noticing software tool that had been budgeted within General & Administrative but was subsequently determined to be a communications cost, given the customer noticing function it serves. Absent the software tool cost classification, this line would be within the Approved Budget.

Other Profession Services: $4,205,000 (11.5% below the 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, grant writing, 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 following drivers led to results coming in below budget:
• Spending on grant writing consultants was lower than planned as changes in federal funding priorities reduced the number of viable grant opportunities. In response, MCE adopted a more targeted approach, supporting municipal-led applications as a sub applicant rather than serving as the primary applicant. This strategy reduced both staff effort and the need for outside consulting assistance.
• Consulting expenses associated with asset ownership and congestion revenue rights optimization initiatives were lower than budgeted, as the anticipated work did not move forward during the year. In addition, consulting costs related to the Remedial Action Scheme project were below budget due to delays in negotiations outside of MCE's control.
• Spending on staff training and coaching services was below budget, as certain nonessential training programs were deferred and demand for employee coaching services was lower than anticipated.

General and Administrative: $4,196,000 (15.5% below the 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, including registration and traveling costs. The following drivers led to results coming in below budget:
• Costs tied to one of MCE’s storage optimization software were significantly under budget due to a vendor invoicing delay. The vendor did not bill MCE for most of the year; staff are working to secure the outstanding invoices, and a portion of the cost is expected to shift into the current fiscal year.
• Costs tied to marketing tools were lower than budgeted due in part to the reclassification of the customer noticing software noted under Communication Services.
• The cost for Microsoft 365 licenses was deferred for about eight months. Following the onboarding of MCE's new IT Systems Manager, staff determined that a budgeted step-up in Microsoft 365 licensing could be deferred until the Microsoft migration formally began in December 2025, as the higher licensing tier was not required until staff transitioned to Outlook mailboxes.
• Participation in conferences and associated travel was lower than budgeted. Staff attended fewer events than the budget anticipated, reducing registration, airfare, lodging, and related travel expenses for the year.

Occupancy: $250,000 (44.8% below the 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. Spending finished below budget because certain maintenance work was needed less than anticipated, several larger projects were pushed to next fiscal year, and the timing of MCE's move provided a few additional months of complimentary rent.

Contingency: $296,000 (80.3% below the Approved Budget) MCE maintains a budgeted contingency that can be drawn upon to absorb overages in individual operating expense line items. For FYE 2026, approximately $296,000 of the $1.5 million budgeted contingency was applied to cover the spending above budget described for Personnel, Communication Services, and Data Manager.

Grant Income: $4,962,000 (51.4% above the Approved Budget) Results were above budget primarily due to the amount of funding received from the CPUC for MCE's Disadvantaged Communities Green Tariff (DAC-GT) 5 . Grant receipts are disbursed by the
CPUC based on MCE's Annual Budget Advice Letter filing rather than MCE's internal budget figure.

The filing applicable to FYE 2026 was overstated, as it double counted a portion of the DAC-GT program, including an embedded energy cost escalator. As a result, the CPUC paid more than the underlying program warranted. The overage represents a timing and reconciliation difference rather than a permanent increase in program funding. The inflated portion is expected to be adjusted through a true-up in future Annual Budget Advice Letter filings.

Other Income: $635,000 (Not budgeted)
Other income reflects damages paid to MCE by counterparties when a project fails to perform in accordance with its contract. MCE does not budget for these payments, as its forecasts assume that projects will perform as contracted and the magnitude of any potential damages is difficult to estimate in advance. As a result, amounts recorded in this category represent favorable variances to the budget.

Interest Income: $20,996,000 (40.0% above the Approved Budget) Interest income reflects what MCE earns on its cash deposits, CDARS, and fixed income investments.

Staff continue to invest MCE’s reserves according to the agency’s investment policy, focusing on safety, liquidity and return on investments. Earnings came in well above plan for three reinforcing reasons. First, lower energy costs left MCE holding more cash than expected, which earned additional interest. Second, although market rates eventually fell, they stayed higher than budgeted, lifting yields on both cash and investments relative to projections. Third, market rates declined over the course of the year, which raised the value of MCE's fixed income holdings. Each increase in the portfolio's value was recorded as an investment gain per accounting guidelines.

Banking Fees and Financing Costs: $270,000 (20.0% above the Approved Budget) 5 The program provides income-qualified residential customers in disadvantaged communities with 100% renewable energy and a 20% discount on their electricity bills. The associated bill credits reduce MCE's revenue from electricity sales, and the grant income received from the CPUC offsets that reduction.

Costs exceeded budget due to a significant increase in MCE's Financial Security Requirement (FSR), a posting that California Community Choice Aggregators (CCAs) are statutorily required to maintain to cover hypothetical customer re-entry costs to the incumbent utility. A combination of lower PG&E generation rates and higher PCIA charges coupled with changes to the FSR calculation methodology further increased the posting amount for CCAs. As a result, MCE's minimum FSR rose substantially from its historical level, increasing the banking fees associated with maintaining the posting. The size and timing of the FSR are determined by PG&E through a confidential formula driven process.

Changes are communicated to MCE 60 days before each posting date, placing this increase outside of MCE's control.

Capital Outlay and Interfund Transfers: $8,076,000 (56.1% below the Approved Budget) Capital outlay totaled approximately $5.7 million, consisting of $5.4 million for the purchase of MCE's office, $282 thousand for related office improvements. MCE also transferred the $2.4 million Board approved amount to the Program Development Fund. The budget variance reflects the Remedial Action Scheme transmission upgrade, which was not undertaken during the year due to negotiation delays outside of MCE's control.

The following sections transition away from the Operating Fund to the Program Development Fund, the Resiliency Virtual Power Plant Fund and the Efficiency Fund budget results. These funds often support long-term project development (EV charger installation, battery storage or large energy-efficiency retrofits) that spans multiple fiscal years. It can be difficult to project the exact expenditure in any given year for those programs as they can vary based on customers’ project timelines.

Regardless, for externally funded grants, if the total expenditures are under the grant budget and represent eligible grant activities, MCE is reimbursed for those costs.

Program Development Fund
Total Revenue and Other Sources: $2,522,000 (8.4% below the Approved Budget) As approved by your Board, MCE transferred $2.4 million to the Program Development Fund.

The Approved Budget also included contributions of $260,000 from a Marin Community Foundation Grant to support EV Charging at Affordable Multifamily Properties and $100,000 in Community Benefits Funds. The variance is due to lower activity recognized against the Marin Community Foundation Grant due to EV Project timelines being delayed into the subsequent fiscal year. This fund carried a balance of $3.7 million at the start of the fiscal year.

Total Expenditures and Other Uses: $8,032,000 (23.3% above the Approved Budget) Total expenditures came in above budget for the following reasons:
• Spending under MCE's transportation electrification programs totaled $7.0 million, ending the year 32.3% (approximately $1.7 million) above budget. As the federal EV tax credit approached its expiration at the end of September 2025, customers rushed to purchase electric vehicles before the credit was eliminated. This surge in EV purchases drove a sharp increase in demand for MCE's EV incentives, leading to higher than anticipated incentive payments and a need for additional program funding, which staff brought to your Board. To help address the shortfall, staff requested and received Board approval to increase the contract with Energy Solutions, the vendor that facilitates the incentive payouts, by approximately $600,000. This increase partially covered the $1.7 million overage6 . Lastly, greater than
forecasted EV charging project completions during the fiscal year further added to incentive payments under transportation electrification efforts. • Spending under MCE’s Heat Pump Water Heater Incentives program and Community Housing Grants was above budget due to higher than anticipated demand for the associated incentives. Since both programs supplement MCE's other program offerings, the extra spending allowed those related programs to keep going. • Overages in the programs described above were partially offset by lower than planned spending under MCE’s Emergency Water Heater Loaner.

The elevated spending on MCE's transportation electrification programs resulted in a year end deficit of approximately $1.8 million. The Approved Budget for the current fiscal year includes an $8.1 million transfer that eliminates this deficit in addition to funding the planned spending.

Resiliency Virtual Power Plant (VPP) Fund
Total Revenue and Other Sources: $294,000 (80.0% below the Approved Budget) The Approved Budget included additional contributions of $200,000 in Federal Grants to support Energy Storage, $72,000 in funding from the Marin Community Foundation to support resiliency at critical facilities and a $1.2 million grant from the California Energy Commission (CEC) to scale MCE’s virtual power plant (VPP) program. Work associated with this grant was significantly delayed as the transition away from a pilot version of the program took longer than expected. The anticipated program adaptations were not immediately possible to implement due to a potential conflict with prevailing wage concerns. Separately, three VPP summer solicitations took longer than expected to approve and launch.

Consequently, MCE received less grant income but also incurred less expenses. Costs are expected to be rebalanced once the solicitations are completed and the project team can begin paying for equipment and integration costs. This fund carried a balance of $3.9 million at the start of the fiscal year.

Total Expenditures and Other Uses: $1,520,000 (65.5% below the Approved Budget) Total expenditures came in below the budget for the following reasons:
• As described above, work for the CEC VPP Flex Grant program was significantly lower than projected leading to less costs incurred.
• MCE's Energy Storage program came in under budget as project activities did not reach scheduled milestones, largely due to delays in PG&E's permission-to-operate 6 Although the Board approved roughly $600,000 in additional spending, the Program Development Fund budget was not amended to reflect this.
(PTO) approval process. As a result, project work and related expenditures shifted to later periods than planned.
• MCE Sync finished under budget as fewer incentives were claimed than forecasted and certain implementation activities, such as Application Programming Interface (API) integration work, were not fully completed as planned. MCE Sync incentives in FYE 2026 included the standard smart charging incentives and a new pilot program, ChargeWise, which offers dynamic rates for EV Charging that are aligned with wholesale electricity prices. Customers who opt into this pilot can take advantage of very low daytime pricing to earn EV charging credits.
• PeakFLEX expenditures were well below the budget as there was lower than expected enrollment in the program. In addition, the mild summer season limited participation days and associated performance payments.
• Federal Earmark for MCE’s energy storage initiatives:
 Grant funding: No project expenditures were incurred against the federal budget line item in FYE 2026 because activities remained on hold pending U.S.

Department of Energy (DOE) authorization. DOE is currently conducting the National Environmental Policy Act review, which was expected to take approximately 1–3 months following submission on April 30, 2026. The DOE has recently informed MCE that due to internal capacity constraints the review process may take until early November 2026.
 MCE Match Funding: Although the federally earmarked energy storage initiatives were delayed, MCE incurred modest costs for staff time on the grant as part of its cost sharing obligations. Expenditures were nonetheless below budget.
• Marin Community Foundation Resiliency at Critical Facilities: This line item incurred higher than anticipated expenditures during this reporting period due to project milestones, including Permission to Operate approval, being achieved sooner than originally projected.
• No costs were incurred for the San Rafael Office Resiliency Buildout project during the fiscal year because the project did not advance as originally anticipated. • Richmond VPP Pilot: The pilot ended and the team started the transition to MCE’s VPP Flex program, resulting in less expenses than projected.

The fund balance at the end of the fiscal year for this fund was about $2.7 million.

Energy Efficiency Fund $11,383,000 (41.8% below the Approved Budget) The energy efficiency (EE) fund supports the installation of energy efficient measures and retrofits for residential, commercial, industrial, and multifamily properties. The Energy Efficiency Fund programs are fully funded by the CPUC which follows a calendar year reporting cycle. Energy Efficiency Programs are required by the CPUC to budget funds in the year a project is reserved, even though most projects do not start and finish within the same year. The primary driver of the budget to actual variance is timing. Several EE programs show both revenue and expenses below budget, which may reflect differences between when program activity was originally budgeted to occur and when costs are actually incurred, submitted, reimbursed, or recognized. In those cases, lower spending does not necessarily indicate a reduction in planned activity, but rather that costs are expected to occur later than originally budgeted.

The Low-Income Families and Tenants Program is fully funded by the CPUC. While the program overspent its projected FY budget due to projects completing earlier than expected, it did not exceed its total awarded CPUC budget.

Progress towards reserve goals and liquidity
At the close of FYE 2026, MCE's net position increased by $1.4 million7 , bringing the year-end total
to $418.3 million. Net position represents the agency's reserves. Under Board-approved Policy 13 (Reserve Policy), MCE aims to maintain reserves equivalent to 60% of energy and operating expenses. Based on the actual expenses incurred, that target equated to about $433 million; MCE's actual reserves of $418.3 million represented about 97% of the goal. The target is a moving figure that shifts with actual energy costs and operating expenses. For example, in the prior fiscal year MCE fell short of the goal at 84%, reflecting a smaller change in net position alongside higher energy and operating costs. Measured by cash and cash equivalents plus investments, the ending liquidity position was $495 million, equivalent to 250 days or 10 days above the Policy goal of 240 days.

Resolution 2026-07
The proposed Resolution provides the opportunity for the Board to close out FYE 2026 and ratify past expenditures and reconcile MCE’s expenditures that exceeded specific line items in the budgets, but did not exceed the MCE Budget as a whole. Discussion of overages of line items are 7 As reported in the Statement of Revenues, Expenses, and Changes in Net Position. $418
495
433
474
$0
$100
$200
$300
$400
$500
Reserves Liquidity
Millions $
Progress to Reserves and Liquidity
FYE 2026 Actual FYE 2026 Goal
listed earlier in this report. Table 6 below provides the specific line item expenditures for the Board to approve through the proposed resolution.

Table 6: Expenditures Exceeding Approved Budget Line items for FYE 2026 Staff recommends the Finance Committee recommend to the Board of Directors for approval, Resolution 2026-07 Ratifying Certain Line Item Variances Between Actual and Budgeted Amounts in MCE’s Fiscal Year End 2026 Budget. This action will close out FYE 2026.

Fiscal Impact:

None.

Recommendation:

Receive information regarding the Fiscal Year End 2026: Budget Results, Power Supply Variance and Recommend to the Board of Directors for approval, Resolution 2026-07 Ratifying Certain Line Item Variances Between Actual and Budgeted Amounts in MCE’s Fiscal Year End 2026 Budget.

FYE 2026 Actual FYE 2026 Budget Variance $ Variance % Fund Cost Relief Program
(CARES)
5,795,000 5,000,000 795,000 15.9% Operating
Banking Fees and Financing
Costs
270,000 225,000 45,000 20.0% Operating
San Rafael Office Building
Purchase
5,401,000 5,400,000 1,000 0.0% Operating
MCE Resiliency at Critical
Facilities
275,000 72,000 203,000 281.9% Resiliency VPP
Public Purpose Low Income
Families and Tenants Pilot
Program
1,323,000 800,000 523,000 65.4% Energy Efficiency
Transportation
Electrification Programs
7,024,000 5,310,000 1,714,000 32.3% Program Development Heat Pump Water Heater
Incentives
620,000 540,000 80,000 14.8% Program Development
Community Housing Grants 349,000 260,000 89,000 34.2% Program Development Fiscal Year End 2026: Budget Results, Power Supply Variance, and Ratification of Certain Line Item Variances
MCE Finance Committee
August 27th, 2026
FYE 2026 Budget Review
2 FYE 2026 Actual FYE 2026 Budget Variance $ Variance % Energy Revenue, Net $ 764,392,000 $ 813,689,000 $ (49,297,000) -6.1% ORF Withdrawal/Transfer (80,000,000) 13,000,000 (93,000,000) -715.4% Cost of Energy (652,516,000) (765,542,000) 113,026,000 -14.8% Operating Expenses (46,825,000) (50,249,000) 3,424,000 -6.8% Non-Operating Revenues 26,593,000 18,278,000 8,315,000 45.5% Non-Operating Expenses (1,019,000) (3,503,000) 2,484,000 -70.9% Program Expenses (20,935,000) (30,474,000) 9,539,000 -31.3% Program Income 11,807,000 21,393,000 (9,586,000) -44.8% Change in Net Position 1,497,000 16,592,000 (15,095,000) -91.0% Capital Outlay (5,684,000) (15,999,000) 10,315,000 -64.5% Total Expenses & Capital Outlay (726,979,000) (865,767,000) 138,788,000 -16.0% Cost of Energy
3 $265
$146 $131 $123
$85
$16
$275
$130
$68
$132
$19 $28

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%
$0
$100
$200
$300
Hedge Contracts Resource Adequacy Renewable - Short
Term
Renewable - Long
Term
Net CAISO Costs Carbon Free - Large
Hydro/ACS
Millions
Cost of Energy Breakdown
FYE 2026 Budget FYE 2026 Actual
About $13.8 million in savings from
prepays was recognized during the
fiscal year
FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Hedge Contracts $ 274,960,000 $ 265,050,000 $ 9,910,000 3.7% Resource Adequacy 130,444,000 145,713,000 (15,269,000) -10.5% Renewable - Short Term 67,675,000 131,035,000 (63,360,000) -48.4% Renewable - Long Term 131,837,000 122,588,000 9,249,000 7.5% Net CAISO Costs 19,234,000 85,084,000 (65,850,000) -77.4% Carbon Free - Large Hydro/ACS 28,367,000 16,072,000 12,295,000 76.5% Total 652,517,000 765,542,000 (113,025,000) -14.8%
2025 Renewable Position
4 64%
68%
75%
77%
40%
50%
60%
70%
80%
Board Target
(Retail Sales Basis)
Target
+ Loss Adjustment (+6%)
Planned Target
(+10% Margin)
Actual Renewable
Position
(as % of Actual Retail
Sales)
+13%
2025 Key Results:
• Lower load vs. expected  long position
• Some excess sold (Value impacted by market
conditions)
• Perfect-hindsight: 13% excess I $73M
impact
FY 2026/27 Improvements:
• Removed 10% planning margin
• Enhanced position monitoring
Future Policy Considerations:
• Flexible annual targets  price-responsive
procurement strategy
• Bank excess for future years
• Reassess renewable target levels relative to
state requirements
Note:
• 64% weighted renewable content, based on 100% Deep Green and 60% Light Green participation • ~6% loss adjustment reflects CEC portfolio-level reporting (retail sales  grid) and provides additional coverage to the retail-sales-based Board target
• All percentages and dollar amounts are rounded
Operating Expenses
5 FYE 2026 Actual FYE 2026 Budget Variance $ Variance % Personnel $ 25,484,000 $ 25,405,000 $ 79,000 0.3%
Data Manager 5,428,000 5,276,000 152,000 2.9%
Technical and Scheduling Consultants 1,246,000 1,400,000 (154,000)-11.0% Service Fees - PG&E 2,603,000 2,738,000 (135,000)
-4.9%
Legal and Policy Services 1,125,000 1,534,000 (409,000) -26.7%
Communication Services 2,288,000 2,223,000 65,000 2.9%
Other Professional Services 4,205,000 4,754,000 (549,000) -11.5%
General and Administrative 4,196,000 4,966,000 (770,000) -15.5%
Occupancy 250,000 453,000 (203,000)-44.8%
Contingency - 1,500,000 (1,500,000)
-100.0%
Total 46,825,000 50,249,000 (3,424,000) -6.8%
Personnel, Data Manager, and Communication Services are shown before Contingency. Applying contingency caps each line at its budgeted amount and shifts the combined overage, about roughly $296,000, to the Contingency line.

MCE Funded Program Budgets
6 Program FYE 2026 Actual FYE 2026 Budget Variance $ Variance % Fund Transportation Electrification $ 7,025,000 $ 5,310,000 $ 1,714,000 32.3% Program Development MCE Sync 658,000 952,000 (294,000) -30.9% Resiliency VPP Heat Pump Water Heater Incentives 620,000 540,000 80,000 14.8% Program Development Community Housing Grants 349,000 260,000 89,000 34.2% Program Development Energy Storage Program 52,000 306,000 (254,000) -83.0% Resiliency VPP PeakFLEX 17,000 100,000 (83,000) -83.0% Resiliency VPP
Richmond VPP Pilot 12,000 171,000 (159,000) -93.0% Resiliency VPP Emergency Water Heater Loaner 9,000 142,000 (133,000) -93.7% Program Development San Rafael Office Resiliency Buildout - 200,000 (200,000) -100.0% Resiliency VPP Matching Funds:

CEC VPP Flex Match 281,000 1,000,000 (719,000) -71.9% Resiliency VPP Federal Earmark Match Expense 86,000 200,000 (114,000) -57.0% Resiliency VPP Total 9,108,000 9,181,000 (73,000) -0.8%
Recommendation
Recommend to the Board of Directors for approval, Resolution 2026-07 Ratifying Certain Line Item Variances Between Actual and Budgeted Amounts in MCE’s Fiscal Year End 2026 Budget.

Thank you!
mceCleanEnergy.org
[email protected]
FYE 2026 Actual FYE 2026 Budget Variance $ Variance %

ENERGY REVENUE
OPERATING REVENUES $ 780,138,000 $ 831,237,000 $ (51,099,000) -6.1% Transfer from Operating Reserve Fund (80,000,000) 13,000,000 - - Cost Relief Program (5,795,000) (5,000,000) (795,000) 15.9% Bi-Directional Vehicle Charging Tariff - (80,000) 80,000 -100.0% Uncollectible Accounts (9,951,000) (12,469,000) 2,518,000 -20.2% REVENUE - ELECTRICITY NET 684,392,000 826,689,000 (142,297,000) -17.2%

ENERGY EXPENSES
Cost of Energy 652,516,000 765,542,000 (113,026,000) -14.8% NET ENERGY REVENUE 31,876,000 61,147,000 (29,271,000) -48%

OPERATING EXPENSES
Personnel 25,484,000 25,405,000 79,000 0.3%
Data Manager 5,428,000 5,276,000 152,000 2.9%
Technical and Scheduling Consultants 1,246,000 1,400,000 (154,000) -11.0% Service Fees - PG&E 2,603,000 2,738,000 (135,000) -4.9% Legal and Policy Services 1,125,000 1,534,000 (409,000) -26.7% Communication Services 2,288,000 2,223,000 65,000 2.9%
Other Professional Services 4,205,000 4,754,000 (549,000) -11.5% General and Administrative 4,196,000 4,966,000 (770,000) -15.5% Occupancy 250,000 453,000 (203,000) -44.8%
Contingency - 1,500,000 (1,500,000) -100.0%
TOTAL OPERATING EXPENSES 46,825,000 50,249,000 (3,424,000) -6.8% OPERATING INCOME (14,949,000) 10,898,000 (25,847,000) -237.2%

NONOPERATING REVENUES
Grant Income 4,962,000 3,278,000 1,684,000 51.4%
Other Income 635,000 - 635,000 -
Interest Income 20,996,000 15,000,000 5,996,000 40.0%
TOTAL NONOPERATING REVENUES 26,593,000 18,278,000 8,315,000 45.5%

NONOPERATING EXPENSES -
Banking Fees and Financing Costs 270,000 225,000 45,000 20.0% Grant Expenses 749,000 3,278,000 (2,529,000) -77.2%
TOTAL NONOPERATING EXPENSES 1,019,000 3,503,000 (2,484,000) -70.9% CHANGE IN NET POSITION 10,625,000 25,673,000 (15,048,000) -58.6% Budgeted Net Position Beginning of Period 416,863,000 416,863,000 - - Change in Net Position 10,625,000 25,673,000 (15,048,000) -58.6% BUDGETED NET POSITION END OF PERIOD 427,488,000 442,536,000 (15,048,000) -3.4%

CAPITAL EXPENDITURES, INTERFUND TRANSFERS & OTHER
Software Transmission Upgrade - 10,250,000 (10,250,000) -100.0% San Rafael Office Building Purchase 5,401,000 5,400,000 1,000 0.0% Office Improvements and Retrofits 282,000 349,000 (67,000) -19.2% Transfer to Program Development Fund 2,392,000 2,392,000 - -

ENERGY EXPENSES
Cost of Energy 652,516,000 765,542,000 (113,026,000) -14.8% NET ENERGY REVENUE 31,876,000 61,147,000 (29,271,000) -48%

OPERATING EXPENSES
Personnel 25,405,000 25,405,000 - 0.0%
Data Manager 5,276,000 5,276,000 - 0.0%
Technical and Scheduling Consultants 1,246,000 1,400,000 (154,000) -11.0% Service Fees - PG&E 2,603,000 2,738,000 (135,000) -4.9% Legal and Policy Services 1,125,000 1,534,000 (409,000) -26.7% Communication Services 2,223,000 2,223,000 - 0.0%
Other Professional Services 4,205,000 4,754,000 (549,000) -11.5% General and Administrative 4,196,000 4,966,000 (770,000) -15.5% Occupancy 250,000 453,000 (203,000) -44.8%
Contingency 296,000 1,500,000 (1,204,000) -80.3%
TOTAL OPERATING EXPENSES 46,825,000 50,249,000 (3,424,000) -6.8% OPERATING INCOME (14,949,000) 10,898,000 (25,847,000) -237.2%

NONOPERATING REVENUES -
Grant Income 4,962,000 3,278,000 1,684,000 51.4%
Other Income 635,000 - 635,000 -
Interest Income 20,996,000 15,000,000 5,996,000 40.0%
TOTAL NONOPERATING REVENUES 26,593,000 18,278,000 8,315,000 45.5%

TOTAL CAPITAL EXPENDITURES, INTERFUND TRANSFERS &
OTHER 8,076,000 18,391,000 (10,315,000) -56.1%
BUDGETED NET INCREASE IN OPERATING FUND BALANCE 2,549,000 7,282,000 (4,733,000) -65.0% MCE Operating Fund With Contingency Applied
Approved Budget Comparison FYE 2026
From April 1, 2025 through March 31, 2026
FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Revenue And Other Sources
Transfer from Operating Fund and Deep Green Premium $ 2,392,000 $ 2,392,000 $ - 0.0% Marin Community Foundation Grant 30,000 260,000 (230,000) -88.5% Community Benefits Funds 100,000 100,000 - 0.0%
Total Revenue and Other Sources 2,522,000 2,752,000 (230,000) -8.4% Expenditures And Committed Funds 0
Transportation Electrification Programs 7,024,000 5,310,000 1,714,000 32.3% Heat Pump Water Heater Incentives 620,000 540,000 80,000 14.8% Emergency Water Heater Loaner Fund 9,000 142,000 (133,000) -93.7% Marin Community Foundation EV Charging at Affordable Housing 30,000 260,000 (230,000) -88.5% Community Housing Grants 349,000 260,000 89,000 34.2%
Total Expenditures And Other Uses 8,032,000 6,512,000 1,520,000 23.3% Net Increase (Decrease) in Fund Balance (5,510,000) (3,760,000) - 0.0% Fund Balance at Beginning of Period 3,738,000 3,760,000 - - Fund Balance at End of Period (1,772,000) - - -
MCE
Program Development Fund
Approved Budget Comparison FYE 2026
From April 1, 2025 through March 31, 2026
FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Revenue And Other Sources
CEC VPP Flex Grant 19,000$ 1,200,000$ (1,181,000)$ -98.4% Federal Earmark Funding - 200,000 (200,000) -100.0%
Marin Community Foundation Grant 275,000 72,000 203,000 281.9% Total Revenue and Other Sources 294,000 1,472,000 (1,178,000) -80.0% Expenditures And Other Uses
CEC VPP Flex Grant Expenses 139,000 1,200,000 (1,061,000) -88.4% Energy Storage Program 52,000 306,000 (254,000) -83.0%
CEC VPP Flex Grant Match 281,000 1,000,000 (719,000) -71.9% MCE Sync 658,000 952,000 (294,000) -30.9%
PeakFLEX 17,000 100,000 (83,000) -83.0%
Federal Earmark- Energy Storage - 200,000 (200,000) -100.0% MCE Resiliency at Critical Facilities 275,000 72,000 203,000 281.9% Federal Earmark Match Expense 86,000 200,000 (114,000) -57.0% San Rafael Office Resiliency Buildout - 200,000 (200,000) -100.0% Richmond VPP Pilot 12,000 171,000 (159,000) -93.0%
Total Expenditures And Other Uses 1,520,000 4,401,000 (2,881,000) -65.5% Net Increase (Decrease) in Fund Balance (1,226,000) (2,929,000) - - Fund Balance at Beginning of Period 3,879,000 3,086,000 - - Fund Balance at End of Period 2,652,000 157,000 - -
MCE
Resiliency Virtual Power Plant Fund
Approved Budget Comparison FYE 2026
From April 1, 2025 through March 31, 2026
FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Revenue And Other Sources
Public Purpose Energy Efficiency Program $ 10,060,000 $ 18,761,000 $ (8,701,000) -46.4% Public Purpose Low Income Families and Tenants
Pilot Program 1,323,000 800,000 523,000 65.4%
Total Revenue And Other Sources 11,383,000 19,561,000 (8,178,000) -41.8% Expenditures And Other Uses -
Public Purpose Energy Efficiency Program 10,060,000 18,761,000 (8,701,000) -46.4% Public Purpose Low Income Families and Tenants
Pilot Program 1,323,000 800,000 523,000 65.4%
Total Expenditures And Other Uses 11,383,000 19,561,000 (8,178,000) -41.8% Balance - - - -
MCE
Energy Efficiency Fund
Approved Budget Comparison FYE 2026
From April 1, 2025 through March 31, 2026
RESOLUTION 2026-07

A RESOLUTION OF THE BOARD OF DIRECTORS OF MARIN CLEAN ENERGY

RATIFYING CERTAIN LINE ITEM VARIANCES BETWEEN ACTUAL AND BUDGETED AMOUNTS IN MCE’S FISCAL YEAR END 2026 BUDGET
WHEREAS, Marin Clean Energy (MCE) is a joint powers authority established on December 19, 2008, and organized under the Joint Exercise of Powers Act (Government Code Section 6500 et seq.); and
WHEREAS, MCE members include the following communities: the County of Marin, the County of Contra Costa, the County of Napa, the County of Solano, the City of American Canyon, the City of Belvedere, the City of Benicia, the City of Calistoga, the City of Concord, the Town of Corte Madera, the Town of Danville, the City of El Cerrito, the Town of Fairfax, the City of Fairfield, the City of Hercules, the City of Lafayette, the City of Larkspur, the City of Martinez, the City of Mill Valley, the Town of Moraga, the City of Napa, the City of Novato, the City of Oakley, the City of Pinole, the City of Pittsburg, the City of Pleasant Hill, the City of San Ramon, the City of Richmond, the Town of Ross, the Town of San Anselmo, the City of San Pablo, the City of San Rafael, the City of Sausalito, the City of St. Helena, the Town of Tiburon, the City of Vallejo, the City of Walnut Creek, and the Town of Yountville; and
WHEREAS, in Fiscal Year End 2026 (FYE 2026), MCE’s total actual expenses and capital outlay were $138,788,000 lower than total budgeted amounts, as set forth in the high level summary of the MCE Budget shown below:

WHEREAS, although FYE 2026 total expenditures were well within total budgeted amounts, actual expenses for certain line items exceeded budgeted amounts; and WHEREAS, in order to formally close FYE 2026, MCE desires to ratify these variances between actual and budgeted amounts in these line items and reconcile MCE’s expenditures with the FYE 2026 MCE Budget.

FYE 2026 Actual FYE 2026 Budget Variance $ Variance %
Energy Revenue, Net 764,392,000$ 813,689,000$ (49,297,000)$ -6.1% ORF Withdrawal/Transfer (80,000,000) 13,000,000 (93,000,000) -715.4% Cost of Energy (652,516,000) (765,542,000) 113,026,000 -14.8% Operating Expenses (46,825,000) (50,249,000) 3,424,000 -6.8% Non-Operating Revenues 26,593,000 18,278,000 8,315,000 45.5% Non-Operating Expenses (1,019,000) (3,503,000) 2,484,000 -70.9% Program Expenses (20,935,000) (30,474,000) 9,539,000 -31.3% Program Income 11,807,000 21,393,000 (9,586,000) -44.8% Change in Net Position 1,497,000 16,592,000 (15,095,000) -91.0% Capital Outlay (5,684,000) (15,999,000) 10,315,000 -181.5% -
Total Expenses & Capital
Outlay
(726,979,000) (865,767,000) 138,788,000 -19.1%
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of MCE does hereby resolve, determine, and order as follows:

The Fiscal Year End 2026 expenditures shown below in Table 1 are hereby ratified and authorized by the Board.

Table 1: Expenditures Exceeding Approved Budget Line items for FYE 2026 PASSED AND ADOPTED at a regular meeting of the MCE Board of Directors on this 17th day of September 2026, by the following vote:

AYES NOES ABSTAIN ABSENT
County of Marin
County of Contra Costa
County of Napa
County of Solano
City of American Canyon
City of Belvedere
City of Benicia
City of Calistoga
City of Concord
Town of Corte Madera
Town of Danville
City of El Cerrito
Town of Fairfax
City of Fairfield
City of Hercules
City of Lafayette
City of Larkspur
FYE 2026 Actual FYE 2026 Budget Variance $ Variance % Fund Cost Relief Program (CARES) 5,795,000 5,000,000 795,000 15.9% Operating Banking Fees and Financing
Costs
270,000 225,000 45,000 20.0% Operating
San Rafael Office Building
Purchase
5,401,000 5,400,000 1,000 0.0% Operating
MCE Resiliency at Critical
Facilities
275,000 72,000 203,000 281.9% Resiliency VPP
Public Purpose Low Income
Families and Tenants Pilot
Program
1,323,000 800,000 523,000 65.4% Energy Efficiency
Transportation Electrification
Programs
7,024,000 5,310,000 1,714,000 32.3% Program Development Heat Pump Water Heater
Incentives
620,000 540,000 80,000 14.8% Program Development
Community Housing Grants 349,000 260,000 89,000 34.2% Program Development City of Martinez
City of Mill Valley
Town of Moraga
City of Napa
City of Novato
City of Oakley
City of Pinole
City of Pittsburg
City of Pleasant Hill
City of San Ramon
City of Richmond
Town of Ross
Town of San Anselmo
City of San Pablo
City of San Rafael
City of Sausalito
City of St. Helena
Town of Tiburon
City of Vallejo
City of Walnut Creek
Town of Yountville
______________________________________

CHAIR, MCE
Attest:
___________________________________________

SECRETARY, MCE
August 27, 2026
TO: MCE Finance Committee
FROM: Maíra Strauss, Chief Financial Officer and Treasurer Efren Oxlaj, Manager of Finance
RE: Financial Audit Fiscal Year Ended 2026 (Agenda Item #06) ATTACHMENTS: A. Baker Tilly Presentation on 2026 Financial Statement Audit Auditor’s Report to Governing Body
B. Reporting and Insights from the Fiscal Year 2026 Audit: Marin Clean Energy
C. Final Audited Financial Statements Fiscal Year 2026
Dear Finance Committee Members:

Summary:

MCE's fiscal year runs from April 1 through March 31. Following completion of the annual audit process, staff are presenting the final audited financial statements for Fiscal Year Ended (FYE) 2026.

At its July 29, 2026 meeting, the Finance Committee reviewed a draft Management's Discussion and Analysis (MD&A) and draft financial statements and provided feedback, which was incorporated into the final MD&A. The financial statements have since been finalized following completion of audit procedures by Baker Tilly and MCE's accounting firm, Maher Accountancy.

Overview:

The audited financial statements include the Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position, Statement of Cash Flows, and accompanying notes. As reflected in the audited financial statements, MCE ended FYE 2026 with total net position of approximately $418.3 million and an Operating Reserve Fund balance of $150.0 million. Operating revenues totaled approximately $701.4 million, operating expenses totaled $721.3 million, and nonoperating revenues totaled $21.4 million, resulting in an increase in net position of approximately $1.4 million for the fiscal year.

Representatives from Baker Tilly, MCE's independent external auditor, will present the results of the audit, including the auditor's opinion on the financial statements and required auditor communications.

Fiscal Impacts:

None.

Recommendation:

Discussion only.

Marin Clean Energy
2026 Financial Statement Audit
Auditor’s Report to Governing Body
August 27, 2026
01 / Audit Results
02 / Required Communication to Governing Body
03 / Impact of Future Standards
04 / Discussion
Agenda
Credible audit leadership, proven utility experience
Aaron Worthman, CPA
Principal
28 years of experience
Ryan Theiler, CPA
Senior Audit Manager
10 years of experience
Marin Clean Energy / August 27, 2026 – Page 3
A dedicated Baker Tilly team with relevant experience across community choice aggregation, public power, energy markets, and regional utility organizations.

Relevant client experience

COMMUNITY CHOICE &

AUTHORITIES
• Clean Power Alliance of Southern
California
• Redwood Coast Energy Authority
• California Community Choice Financing
Authority

ENERGY MARKETS & OPERATIONS
• California Independent System Operator
• Electric Reliability Council of Texas
• The Energy Authority
• Balancing Authority of Northern California

PUBLIC POWER & MUNICIPAL

UTILITIES
• Sacramento Municipal Utility District
• Modesto Irrigation District
• Imperial Irrigation District
• Seattle City Light
• Gainesville Regional Utilities

REGIONAL, GENERATION &

JOINT ACTION ENTITIES
• MSR Public Power Agency
• MSR Energy Authority
• Transmission Agency of Northern
California
• Energy Northwest
• Lower Colorado River Authority
• Grand River Dam Authority
Engagement leadership
4 As your independent auditor, our responsibilities include:
– Planning and performing the audit to obtain reasonable assurance about whether the basic financial statements are free from material misstatement. Reasonable assurance is a high level of assurance. – Assessing the risks of material misstatement of the basic financial statements, whether due to fraud or error. Included in that assessment is a consideration of MCE’s internal control over financial reporting. – Performing appropriate procedures based upon our risk assessment. – Evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management.
– Forming and expressing an opinion based on our audit about whether the basic financial statements prepared by management, with the oversight of the Board of Directors:
– Are free from material misstatement
– Present fairly, in all material respects, and in accordance with accounting principles generally accepted in the United States of America
– Our audit of the basic financial statements does not relieve management or the Board of Directors of their responsibilities.

Our responsibilities
Marin Clean Energy / August 27, 2026 – Page 4
5 • Audit focus
• Based on our understanding of MCE and the environment in which you operate, we focused our audit on the following key areas:
– Key transaction cycles
– Areas with significant estimates
– Implementation of new accounting standards including GASB 101 – Compensated Absences • Our areas of audit focus were informed by, among other things, our assessment of materiality.

Materiality in the context of our audit was determined based on specific qualitative and quantitative factors combined with our expectations about MCE's current year results.

Planned scope and timing
Marin Clean Energy / August 27, 2026 – Page 5
6 Key areas of focus and significant findings
• Other key areas of emphasis
• We also focused on other areas that did not meet the definition of a significant risk but were determined to require specific awareness and a unique audit response.

Other key areas of emphasis
Cash and investments Revenues and receivables General disbursements Payroll Net position calculations Financial reporting and required disclosures
Marin Clean Energy / August 27, 2026 – Page 6
7 Audit approach and results
Audit performed in accordance with Generally Accepted Auditing Standards
Audit objective – reasonable assurance that financial statements are free from material misstatement
Financial statements of MCE received an Unmodified Opinion There were no material weaknesses or significant deficiencies in controls Marin Clean Energy / August 27, 2026 – Page 7
8 Auditor communication to those charged
with governance
No other audit findings or
concerns
Baker Tilly agrees with MCE’s
accounting policies and disclosures
Auditor
responsibility &
independence
Board
responsibility
There was no
adjustment to the
financial statements
Accounting
policies and
estimates
Marin Clean Energy / August 27, 2026 – Page 8
Other
Recommendations
9 Future accounting standards update
GASB
Statement
Number
Description
Potentially
Impacts
You
Effective Date
103 Financial Reporting Model Improvements 3/31/2027
104 Disclosure of certain capital assets 3/31/2027
105 Subsequent events 3/31/2028
Marin Clean Energy / August 27, 2026 – Page 9
10 Discussion
Marin Clean Energy / August 27, 2026 – Page 10
11 Contributors
Aaron Worthman, CPA
Principal
[email protected]
+1 512 975 7281
Ryan Theiler, CPA
Senior Manager
[email protected]
+1 608 240 2571
Marin Clean Energy / August 27, 2026 – Page 11

Reporting and insights
from the fiscal year 2026
audit:

Marin Clean Energy
March 31, 2026

THIS COMMUNICATION IS INTENDED SOLELY FOR THE INFORMATION AND USE OF THOSE CHARGED WITH GOVERNANCE, AND, IF APPROPRIATE, MANAGEMENT, AND IS NOT INTENDED TO BE AND SHOULD NOT BE USED BY ANYONE OTHER THAN THESE SPECIFIED PARTIES.

BAKER TILLY ADVISORY GROUP, LP AND BAKER TILLY US, LLP, TRADING AS BAKER TILLY, ARE MEMBERS OF THE GLOBAL NETWORK OF BAKER TILLY INTERNATIONAL LTD., THE MEMBERS OF WHICH ARE SEPARATE AND INDEPENDENT LEGAL ENTITIES. BAKER TILLY US, LLP IS A LICENSED CPA FIRM THAT PROVIDES ASSURANCE SERVICES TO ITS CLIENTS. BAKER TILLY ADVISORY GROUP, LP AND ITS SUBSIDIARY ENTITIES PROVIDE TAX AND CONSULTING SERVICES TO THEIR CLIENTS AND ARE NOT LICENSED CPA FIRMS. NONATTEST SERVICES ARE PROVIDED BY BAKER TILLY ADVISORY GROUP, LP.

Executive summary
August 20, 2026
To the Board of Directors
Marin Clean Energy
1125 Tamalpais Avenue
San Rafael, CA 94901
We have completed our audit of the financial statements of Marin Clean Energy (MCE) for the year ended March 31, 2026, and have issued our report thereon dated August 20, 2026. This letter presents communications required by our professional standards.

Your audit should provide you with confidence in your financial statements. The audit was performed based on information obtained from meetings with management, data from your systems, knowledge of your operating environment and our risk assessment procedures. We strive to provide you clear, concise communication throughout the audit process and of the final results of our audit.

Additionally, we have included information on key risk areas MCE should be aware of in your strategic planning. We are available to discuss these risks as they relate to your organization's financial stability and future planning.

If you have questions at any point, please connect with us:
• Aaron Worthman, Principal: [email protected] or +1 (512) 975 7281 • Ryan Theiler, Senior Manager: [email protected] or +1 (608) 240 2571 Sincerely,
Baker Tilly US, LLP
Aaron Worthman, CPA
Principal
© 2026 Baker Tilly US, LLP Page | 3
Responsibilities
Our responsibilities
As your independent auditor, our responsibilities include:
• Planning and performing the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Reasonable assurance is a high level of assurance.
• Assessing the risks of material misstatement of the financial statements, whether due to fraud or error. Included in that assessment is a consideration of MCE’s internal control over financial reporting.
• Performing appropriate procedures based upon our risk assessment. • Evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management.
• Forming and expressing an opinion based on our audit about whether the financial statements prepared by management, with the oversight of the Board of Directors:
• Are free from material misstatement
• Present fairly, in all material respects and in accordance with accounting principles generally accepted in the United States of America
• Our audit does not relieve management or the Board of Directors of their responsibilities.

We are also required to communicate significant matters related to our audit that are relevant to the responsibilities of the Board of Directors, including:
• Internal control matters
• Qualitative aspects of MCE’s accounting practice including policies, accounting estimates and financial statement disclosures
• Significant unusual transactions
• Significant difficulties encountered
• Disagreements with management
• Circumstances that affect the form and content of the auditors' report • Audit consultations outside the engagement team
• Corrected and uncorrected misstatements
• Other audit findings or issues
© 2026 Baker Tilly US, LLP Page | 4
Audit status
Significant changes to the audit plan
There were no significant changes made to either our planned audit strategy or to the significant risks and other areas of emphasis identified during the performance of our risk assessment procedures. © 2026 Baker Tilly US, LLP Page | 5
Audit approach and results
Planned scope and timing
Audit focus
Based on our understanding of MCE and environment in which you operate, we focused our audit on the following key areas:
• Key transaction cycles
• Areas with significant estimates
• Implementation of new accounting standards
Our areas of audit focus were informed by, among other things, our assessment of materiality. Materiality in the context of our audit was determined based on specific qualitative and quantitative factors combined with our expectations about MCE’s current year results.

Key areas of focus and significant findings
Significant risks of material misstatement
A significant risk is an identified and assessed risk of material misstatement that, in the auditors’ professional judgment, requires special audit consideration. Within our audit, we focused on the following areas below.

Significant risk areas Testing approach Conclusion
Management override of
controls
Incorporate unpredictability into
audit procedures, emphasize
professional skepticism and
utilize audit team with industry
expertise
Procedures identified provided
sufficient evidence for our audit
opinion
Improper revenue recognition
due to fraud
Confirmation or validation of
certain revenues supplemented
with detailed predictive analytics
based on non-financial data and
substantive testing of related
receivables
Procedures identified provided
sufficient evidence for our audit
opinion
Other areas of emphasis
We also focused on other areas that did not meet the definition of a significant risk, but were determined to require specific awareness and a unique audit response.

Other areas of emphasis
Cash and investments Revenues and receivables General disbursements Payroll Net position calculations Financial reporting and required disclosures
Power management and
related expenses
© 2026 Baker Tilly US, LLP Page | 6
Internal control matters
We considered MCE’s internal control over financial reporting as a basis for designing our audit procedures for the purpose of expressing an opinion on the financial statements. We are not expressing an opinion on the effectiveness of MCE’s internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis.

A material weakness is a deficiency or combination of deficiencies in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses.

Required communications
Qualitative aspect of accounting practices
• Accounting policies: Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we have advised management about the appropriateness of accounting policies and their application. The significant accounting policies used by MCE are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing accounting policies was not changed during fiscal year 2026.

We noted no transactions entered into by MCE during the year for which accounting policies are controversial or for which there is a lack of authoritative guidance or consensus or diversity in practice.
• Accounting estimates: Accounting estimates, including fair value estimates, are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements, the degree of subjectivity involved in their development and because of the possibility that future events affecting them may differ significantly from those expected. The following estimates are of most significance to the financial statements:

Estimate
Management's process to
determine
Baker Tilly's conclusions
regarding reasonableness
Allowance for doubtful
accounts
Evaluation of historical
revenues and loss levels with
the analysis on collectability of
individual amounts
Reasonable in relation to the
financial statements as a whole
Unbilled revenue Evaluation of the T+12 data
that is submitted to CAISO
Reasonable in relation to the
financial statements as a whole
© 2026 Baker Tilly US, LLP Page | 7
There have been no significant changes made by management to either the processes used to develop the particularly sensitive accounting estimates, or to the significant assumptions used to develop the estimates noted above.
• Financial statement disclosures: The disclosures in the financial statements are neutral, consistent and clear.

Significant unusual transactions
There have been no significant transactions that are outside the normal course of business for MCE or that otherwise appear to be unusual due to their timing, size or nature.

Significant difficulties encountered during the audit
We encountered no significant difficulties in dealing with management and completing our audit.

Disagreements with management
Professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit.

Audit report
There have been no departures from the auditors' standard report.

Audit consultations outside the engagement team
We encountered no difficult or contentious matters for which we consulted outside of the engagement team.

Uncorrected misstatements and corrected misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.

There were no misstatements identified.

Other audit findings or issues
We encountered no other audit findings or issues that require communication at this time.

We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as MCE’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Management's consultations with other accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing or accounting matters.
© 2026 Baker Tilly US, LLP Page | 8
Written communications between management and Baker Tilly The attachments include copies of other material written communications, including a copy of the management representation letter.

Compliance with laws and regulations
We did not identify any non-compliance with laws and regulations during our audit.

Fraud
We did not identify any known or suspected fraud during our audit.

Going concern
Pursuant to professional standards, we are required to communicate to you, when applicable, certain matters relating to our evaluation of MCE’s ability to continue as a going concern for a reasonable period of time but no less than 12 months from the date of the financial statements, including the effects on the financial statements and the adequacy of the related disclosures, and the effects on the auditors’ report.

No such matters or conditions have come to our attention during our engagement.

Independence
We are not aware of any relationships between Baker Tilly and MCE that, in our professional judgment, may reasonably be thought to bear on our independence.

Related parties
We did not have any significant findings or issues arise during the audit in connection with MCE’s related parties.

Other matter
We applied certain limited procedures to the required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

© 2026 Baker Tilly US, LLP Page | 9
Audit committee resources
Our business is to know every aspect of yours and to maintain a constant lookout for what's next. We invite you to learn about some of the trending challenges and opportunities for public sector organizations like yours and how Baker Tilly can help.

To explore more trending topics and regulatory updates, visit our resource page at https://www.bakertilly.com/insights/audit-committee-resource-page.

Capital project oversight
Public sector capital projects face increasing pressure from cost escalation, supply chain disruption, regulatory complexity and heightened scrutiny around transparency and accountability. Strong planning, governance and controls are critical across the full project life cycle, from feasibility and funding strategy through execution and closeout.

Independent oversight helps chart a clear course from planning to delivery. Our teams work alongside leadership to strengthen governance, establish financial and contractual controls, align funding with project goals and monitor performance throughout execution, helping projects stay on schedule, within budget and aligned with community priorities.

Succession planning
An aging workforce, rising retirement rates and competition for specialized talent make succession planning a fiscal and operational a priority for public sector organizations.

By identifying critical roles, assessing workforce risk, building internal talent pipelines and integrating succession planning with broader workforce strategies, Baker Tilly helps organizations preserve institutional knowledge and maintain continuity, today and into the future.

Economic development
Successful economic development depends on disciplined planning, sound financial analysis and coordinated execution. Public sector leaders must balance incentives, infrastructure investment, funding opportunities and stakeholder priorities while maintaining fiscal responsibility.

Baker Tilly’s supports local governments with strategic and financial planning, incentive structuring and negotiation, tax increment financing administration, project financing, grant strategy, and economic and fiscal impact analysis. This integrated approach helps leaders move from vision to action, strengthening communities and advancing sustainable, long-term growth.
© 2026 Baker Tilly US, LLP Page | 10
Management representation letter

August 20, 2026
Baker Tilly US, LLP
4807 Innovation Lane
P.O. Box 7398
Madison WI 53711

Dear Baker Tilly US, LLP:

We are providing this letter in connection with your audits of the financial statements of Marin Clean Energy (MCE) as of March 31, 2026 and 2025 and for the years then ended for the purpose of expressing an opinion as to whether the financial statements present fairly, in all material respects, the financial position of MCE and the respective changes in financial position and cash flows in conformity with accounting principles generally accepted in the United States of America (U.S.

GAAP). We confirm that we are responsible for the fair presentation of the previously mentioned financial statements in conformity with U.S. GAAP. We are also responsible for adopting sound accounting policies, establishing and maintaining internal control over financial reporting and preventing and detecting fraud.

Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors.

We confirm, to the best of our knowledge and belief, the following representations made to you during your audits.

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated February 14, 2024, including our responsibility for the preparation and fair presentation of the financial statements in accordance with U.S. GAAP.

2. The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all financial information of MCE required by U.S. GAAP to be included in the financial reporting entity.

3. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

4. We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.

5. Significant assumptions we used in making accounting estimates, including those measured at fair value, if any, are reasonable in accordance with U.S. GAAP.

6. All events subsequent to the date of the financial statements and for which U.S. GAAP require adjustment or disclosure have been adjusted or disclosed. No other events, including instances of noncompliance, have occurred subsequent to the financial statement date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements.

7. All material transactions have been recorded in the accounting records and are reflected in the financial statements.

8. The effects of all known actual or threatened litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.

9. Guarantees, whether written or oral, under which MCE is contingently liable, if any, have been properly recorded or disclosed.

Information Provided

10. We have provided you with:

a. Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as financial records and related data, documentation and other matters.

b. Additional information that you have requested from us for the purpose of the audit.

c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.

d. Minutes of the meetings of the Board of Directors or summaries of actions of recent meetings for which minutes have not yet been prepared.

11. We have disclosed to you results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.

12. We have no knowledge of any fraud or suspected fraud that affects the entity and involves:

a. Management,

b. Employees who have significant roles in internal control, or

c. Others where the fraud could have a material effect on the financial statements.

13. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, former employees, regulators or others.

14. Except as otherwise disclosed by counsel, we have no knowledge of known instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts or grant agreements or abuse, whose effects should be considered when preparing financial statements.

15. We have disclosed to you the names of our related parties and all the related party relationships and transactions, including side agreements, of which we are aware.

Other

16. There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in, financial reporting practices.

17. We have not identified any noticed investigations of MCE by a regulatory agency or legal proceedings that have been initiated with respect to the periods under audit.

18. MCE has no plans or intentions that may materially affect the carrying value or classification of assets, deferred outflows of resources, liabilities, deferred inflows of resources or net position.

19. We are responsible for compliance with federal, state and local laws, regulations and provisions of contracts and grant agreements applicable to us, including tax or debt limits, debt contracts and IRS arbitrage regulations; and we have identified and disclosed to you all known federal, state and local laws, regulations and provisions of contracts and grant agreements that we believe have a direct and material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, including legal and contractual provisions for reporting specific activities in separate funds.

20. For the periods under audit, there are no known:

a. Material violations or possible violations of budget ordinances, federal, state and local laws or regulations (including those pertaining to adopting, approving and amending budgets), provisions of contracts and grant agreements, tax or debt limits and any related debt covenants whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency or for reporting on noncompliance, except those already disclosed in the financial statement, if any.

b. Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by U.S. GAAP.

c. Rates being charged to customers other than the rates as authorized by the applicable authoritative body.

21. For the periods under audit, we are not aware of any violations or instances of noncompliance with the provisions of the Ralph M. Brown Act (California Government Code Sections 54950 et seq., including matters related to open meetings, agenda posting requirements, closed sessions, or public notice requirements, that would have a material effect on the financial statements or related disclosures.

22. MCE has satisfactory title to all owned assets and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.

23. Except as otherwise disclosed by counsel, MCE has complied with all aspects of contractual agreements that would have a material effect on the financial statement in the event of noncompliance.

24. The financial statements include all component units as well as joint ventures with an equity interest and properly disclose all other joint ventures and other related organizations, if any.

Component units have been properly presented as either blended or discrete.

25. Components of net position (net investment in capital assets; restricted; and unrestricted) are properly classified and, if applicable, approved.

26. MCE has no derivative financial instruments such as contracts that could be assigned to someone else or net settled, interest rate swaps, collars or caps.

27. Provisions for uncollectible receivables, if any, have been properly identified and recorded.

28. Deposits and investments are properly classified, valued and disclosed (including risk disclosures, collateralization agreements, valuation methods and key inputs, as applicable).

29. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if applicable, depreciated/amortized. Any known impairments have been recorded and disclosed.

30. The auditing standards define an annual report as “a document or combination of documents, typically prepared on an annual basis by management or those charged with governance in accordance with law, regulation or custom, the purpose of which is to provide owners (or similar stakeholders) with information on the entity’s operations and the entity’s financial results and financial position as set out in the financial statements.” Among other items, an annual report contains, accompanies or incorporates by reference the financial statements and the auditor’s report thereon. We do not prepare an annual report.

31. The operations and rate setting process meet the condition for application of accounting for regulated operations as outlined in GASB Statement No. 62. All regulatory items included in the financial statements have been approved and are being accounted for in accordance with specific action taken by the regulatory body and as such the expectation of future recovery or refund is reasonable.

32. We have appropriately disclosed MCE's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available and have determined that net position was properly recognized under the policy.

33. We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI.

34. We have previously implemented GASB Statement No. 87, Leases, and believe that all required disclosures and accounting considerations have been identified and properly classified in the financial statements in compliance with the Standard.

35. We have identified any leases or other contracts that are required to be reported as leases and are in agreement with the key assumptions used in the measurement of any lease related assets, liabilities or deferred inflows of resources.

36. We have assessed the impact of GASB Statement No. 96, Subscription-Based Information Technology Arraignments and determined the impact of the statements to be immaterial.

37. We have implemented GASB Statement No. 101, Compensated Absences and believe that all required disclosures and accounting considerations have been identified and properly classified in the financial statements in compliance with the Standard.

38. We have evaluated our ongoing operations and determined there are no concentrations or constraints meeting the requirements for disclosure under GASB Statement No. 102.

39. As a member of California Community Choice Financing Authority (CCCFA), MCE does not have an obligation for CCCFA's outstanding debt.

40. We are responsible for the estimation methods and assumptions used in measuring assets and liabilities reported or disclosed at fair value, including information obtained from brokers, pricing services or third parties. Our valuation methodologies have been consistently applied from period to period. The fair value measurements reported or disclosed represent our best estimate of fair value as the measurement date in accordance with the requirements of GASB Statement No. 72—Fair Value Measurement. In addition, our disclosures related to fair value measurements are consistent with the objectives outlined in GASB Statement No. 72. We have evaluated the fair value information provided to us by brokers, pricing services or other parties that has been used in the financial statements and believe this information to be reliable and consistent with the requirements.

Sincerely,

Signed: _____________________________
Maira Strauss, Chief Financial Officer

Signed: _____________________________
Vicken Kasarjian, Acting Chief Executive Officer, and Chief Operating Officer Maira Strauss (Aug 20, 2026 12:24:54 PDT)
Maira Strauss
Vicken Kasarjian (Aug 20, 2026 14:42:23 PDT)
© 2026 Baker Tilly US, LLP Page | 16
Client service team
Aaron Worthman, CPA
Principal
4807 Innovate Lane
Madison, WI 53718
United States
T +1 (512) 975 7281 | Madison
[email protected]

Ryan Theiler, CPA
Senior Manager
4807 Innovate Lane
Madison, WI 53718
United States
T +1 (608) 240 2571 | Madison
[email protected]

© 2026 Baker Tilly US, LLP Page | 17
Accounting changes relevant to Marin
Clean Energy
Future accounting standards update
GASB
statement
number Description
Potentially
impacts
you Effective date
103 Financial reporting model improvements 3/31/2027
104 Disclosure of certain capital assets 3/31/2027
105 Subsequent events 3/31/2028
Further information on upcoming GASB pronouncements.

Changes to the financial reporting model
GASB Statement 103, Financial Reporting Model Improvements, builds on Statement 34 by providing key targeted improvements to the financial reporting model. Its requirements are designed to:
• Enhance the effectiveness of governmental financial reports in providing information essential for decision making and assessing a government's accountability, and • Address certain application issues.

The targeted improvements contained in Statement 103 establish or modify existing accounting and financial reporting requirements related to:
• Management's discussion and analysis: While the overall requirements do not substantially change management's discussion and analysis, the modifications are meant to improve the analysis included in this section and provide details about the items that should be discussed as currently known facts, decisions, or conditions expected to have a significant financial effect in the subsequent period.
• Unusual or infrequent items (previously known as extraordinary and special items): The new statement simplifies GASB literature by eliminating the separate presentation of extraordinary and special items. Under the requirement of Statement 103, applicable items will either be identified as unusual or infrequent, or both.
• Presentation of the proprietary fund statement of revenues, expenses and changes in fund net position: The changes are designed to improve consistency around the classification of items in these statements by better defining what should be included in operating revenues and expenses and nonoperating revenues and expenses including, for example, the addition of subsidies received or provided as a new category of nonoperating revenues and expenses. • Major component unit information, and budgetary comparison information: Statement 103 is designed to improve the consistency of the reporting of major component unit information and budgetary comparison information by specifying required placement of that information.

© 2026 Baker Tilly US, LLP Page | 18
Revisions to disclosures for certain capital assets
Governments are required to provide information on capital assets in the footnotes to the financial statements as outlined in GASB Statement No. 34. Recent standards have impacted the accounting and reporting for capital assets and as a result GASB issued Statement No. 104, Disclosure of Certain Capital Assets to provide enhanced disclosures for certain capital assets, including (a) Lease assets reported under Statement No. 87, intangible right-to-use assets reported under Statement No. 94 and subscription assets reported under Statement No. 96 should all be disclosed separately, and by major class of underlying asset. In addition, if there are any other intangible assets reported, they should also be disclosed separately. (b) Capital assets that are held for sale should have the ending balance with separate disclosure for historical cost and related accumulated depreciation as well as any outstanding debt for which the asset is pledged as collateral disclosed by major class of asset. Assets held for sale are defined as those for which the government has decided to pursue the sale, and it is probable that the sale will be finalized within one year of the financial statement date.

While these changes are focused on footnote disclosures, it is important to plan ahead to ensure the required information is available for implementation.

Updated guidance for the financial reporting of subsequent events GASB Statement No. 105, Subsequent Events, which supersedes GASB Statement No. 56, is intended to enhance consistency in the application of requirements for subsequent events.

The Statement defines subsequent events as transactions or other events that occur after year end but before the date the financial statements are available to be issued. The date the financial statements are available to be issued is the date at which (a) the financial statements are complete in a form and format that complies with generally accepted accounting principles (GAAP) and (b) approvals necessary for issuance have been obtained, or typically the opinion date. The definition of subsequent events in this Statement modifies the subsequent events time frame throughout the GASB literature.

The Statement also clarifies:
• The different types of subsequent events (recognized and nonrecognized events) • When note disclosures are required
• The information that should be included in those note disclosures

© 2026 Baker Tilly US, LLP Page | 19
Two-way audit communications
As part of our audit of your financial statements, we are providing communications to you throughout the audit process. Auditing requirements provide for two-way communication and are important in assisting the auditor and you with more information relevant to the audit.

As this past audit is concluded, we use what we have learned to begin the planning process for next year's audit. It is important that you understand the following points about the scope and timing of our next audit:
a. We address the significant risks of material misstatement, whether due to fraud or error, through our detailed audit procedures.
b. We will obtain an understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing and extent of further audit procedures. We will obtain a sufficient understanding by performing risk assessment procedures to evaluate the design of controls relevant to an audit of financial statements and to determine whether they have been implemented. We will use such knowledge to:
• Identify types of potential misstatements
• Consider factors that affect the risks of material misstatement • Design tests of controls, when applicable and substantive procedures c. We will not express an opinion on the effectiveness of internal control over financial reporting or compliance with laws, regulations and provisions of contracts or grant programs. d. The concept of materiality recognizes that some matters, either individually or in the aggregate, are important for fair presentation of financial statements in conformity with generally accepted accounting principles while other matters are not important. In performing the audit, we are concerned with matters that, either individually or in the aggregate, could be material to the financial statements. Our responsibility is to plan and perform the audit to obtain reasonable assurance that material misstatements, whether caused by errors or fraud, are detected.

Our audit will be performed in accordance with auditing standards generally accepted in the United States of America.

We are very interested in your views regarding certain matters. Those matters are listed here:
a. We typically will communicate with your top level of management unless you tell us otherwise. b. We understand that the governing board has the responsibility to oversee the strategic direction of your organization, as well as the overall accountability of the entity. Management has the responsibility for achieving the objectives of the entity. c. We need to know your views about your organization's objectives and strategies, and the related business risks that may result in material misstatements. d. We anticipate that the MCE will receive an unmodified opinion on its financial statements. e. Which matters do you consider warrant particular attention during the audit, and are there any areas where you request additional procedures to be undertaken? f. Have you had any significant communications with regulators or grantor agencies? g. Are there other matters that you believe are relevant to the audit of the financial statements?

© 2026 Baker Tilly US, LLP Page | 20
Also, is there anything that we need to know about the attitudes, awareness and actions of the governing body concerning:
a. The entity's internal control and its importance in the entity, including how those charged with governance oversee the effectiveness of internal control? b. The detection or the possibility of fraud?
We also need to know if you have taken action in response to developments in financial reporting, laws, accounting standards, governance practices or other related matters, or in response to previous communications with us.

With regard to the timing of our audit, here is some general information. If necessary, we may do preliminary financial audit work during the months of January-March, and sometimes early in April. Our final financial fieldwork is scheduled during the spring to best coincide with your readiness and report deadlines. After fieldwork, we wrap up our financial audit procedures at our office and may issue drafts of our report for your review. Final copies of our report and other communications are issued after approval by your staff. This is typically 6-12 weeks after final fieldwork but may vary depending on a number of factors.

Keep in mind that while this communication may assist us with planning the scope and timing of the audit, it does not change the auditor's sole responsibility to determine the overall audit strategy and the audit plan, including the nature, timing and extent of procedures necessary to obtain sufficient appropriate audit evidence.

We realize that you may have questions on what this all means or wish to provide other feedback. We welcome the opportunity to hear from you.

Financial Statements
mceCleanEnergy.org
Years ended March 31, 2026 & 2025
with Report of Independent Auditors

MARIN CLEAN ENERGY
YEARS ENDED MARCH 31, 2026 AND 2025

TABLE OF CONTENTS
Independent Auditor’s Report ………………………………………………….......... 1 Management’s Discussion and Analysis (unaudited) ………………………………... 3 Basic Financial Statements:

Statements of Net Position …………………………………………………… 10
Statements of Revenues, Expenses and Changes in Net Position …................ 11 Statements of Cash Flows ……………………………………………………. 12
Notes to the Basic Financial Statements ……………………………………… 14 Independent Auditors' Report
To the Board of Directors of
Marin Clean Energy
Opinion
We have audited the accompanying financial statements of Marin Clean Energy (MCE), as of and for the years ended March 31, 2026 and 2025, and the related notes to the financial statements, which collectively comprise the MCE's basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of MCE as of March 31, 2026 and 2025, and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the MCE and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the MCE's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
1 Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms.

In performing an audit in accordance with GAAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the MCE's internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the MCE's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Madison, Wisconsin
August 20, 2026
2 MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
3 The purpose of management’s discussion and analysis (MD&A) is to help stakeholders and other readers understand what the financial statements and notes in this report say about Marin Clean Energy’s (MCE) financial health and why it has changed since last year. It contains information drawn from other parts of the report, accompanied by explanations informed by the finance staff’s knowledge of MCE’s finances. MCE’s fiscal year runs from April 1 through March 31.

If you have questions about this report or require further information, please contact MCE at [email protected].

Overview of the Financial Statements
MCE’s financial report contains basic financial statements:
o The Statements of Net Position include all of MCE’s assets, liabilities, deferred inflows of resources, and net position and provide information about the nature and amounts of resources and obligations at a specific point in time.
o The Statements of Revenues, Expenses, and Changes in Net Position report all of MCE’s revenue and expenses for the years shown.
o The Statements of Cash Flows report the cash provided and used by operating activities, as well as other sources and uses, such as capital and investing activities. o The notes to the Basic Financial Statements provide additional details and information related to the basic financial statements.

MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
(Continued)
4 Financial Summary
MCE’s Net Position
2026 2025 2024
Current assets 479,004,853$ 512,168,716$ 426,376,427$
Noncurrent assets
Capital assets, net 6,189,785 555,816 863,432
Other noncurrent assets 174,819,822 166,328,849 164,792,317 Total noncurrent assets 181,009,607 166,884,665 165,655,749 Total assets 660,014,460 679,053,381 592,032,176
Current liabilities 91,705,235 192,190,329 118,346,661
Deferred inflows of resources 150,000,000 70,000,000 70,000,000 Net position:

Net investment in capital assets 6,189,785 555,816 326,788 Restricted 17,581,784 15,000,000 15,000,000
Unrestricted 394,537,656 401,307,236 388,358,727
Total net position 418,309,225$ 416,863,052$ 403,685,515$ As of March 31, 2026, MCE’s total net position was approximately $418 million, an increase of $1.446 million compared to March 31, 2025. See the discussion in the following section for the changes in the various components.

MCE’s Changes in Net Position
2026 2025 2024
Operating revenues 701,422,195$ 816,224,799$ 767,779,391$ Nonoperating revenues 21,369,348 25,354,208 15,420,160
Total income 722,791,543 841,579,007 783,199,551
Operating expenses 721,345,370 828,392,314 623,657,258
Nonoperating expenses - 9,156 28,624
Total expenses 721,345,370 828,401,470 623,685,882
Change in net position 1,446,173$ 13,177,537$ 159,513,669$ For the year ended March 31, 2026, MCE’s change in net position was an increase of approximately $1 million, a decrease of $12 million from the prior year. See the discussion in the following section for the changes in the various components.

MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
(Continued)
5 Detailed Analysis
MCE continued to maintain a strong financial position during fiscal year 2026 while advancing its long-term objectives of rate stability, customer affordability, and prudent risk management. During the year, MCE increased its Operating Reserve Fund from $70 million to $150 million, remained debt-free, maintained investment-grade credit ratings, and strengthened its liquidity position.

Although operating results were affected by the deferral of a portion of current-year revenues into reserves and by changes in energy market conditions, these actions reflect MCE's ongoing commitment to financial resilience and its ability to support customers through future market volatility. The following discussion highlights the key factors affecting MCE's financial performance and financial position during fiscal year 2026.

MCE’s Operating Reserve Fund increased from $70,000,000 at the end of fiscal year 2025 to $150,000,000 at the end of fiscal year 2026. The Operating Reserve Fund allows MCE to defer revenues in years of strong financial performance for potential recognition in future periods when financial results may decline. The fiscal year 2026 deferral reduced the increase in net position but provides additional rate stabilization capacity to help MCE manage future energy market volatility and other financial risks.

Operating revenues decreased by $115,000,00 in fiscal year 2026 compared with fiscal year 2025.

The decrease was primarily attributable to the $80,000,000 contribution to the Operating Reserve Fund, which is reported as a reduction of operating revenues. Retail electricity sales also declined by $36,000,000, reflecting slightly lower year over year electricity consumption. Mild weather during the summer of 2025 contributed to lower air-conditioning demand and, consequently, lower electricity load. MCE also receives revenue from sources other than retail customer sales, including grant revenue and liquidated damages resulting from electricity suppliers' noncompliance with contract provisions. Grant revenue increased modestly during the year, partially offsetting the decline in retail electricity sales.

Operating expenses decreased by $107,000,000 in fiscal year 2026 compared with fiscal year 2025.

The decrease was primarily attributable to a $116,000,000 reduction in the cost of electricity. Several factors contributed to the lower cost of electricity. Renewable energy deliveries under a short-term contract occurred earlier than anticipated, shifting a significant portion of the related costs to fiscal year 2025. The contract allowed the seller discretion over the timing of deliveries within the applicable calendar year, and energy delivered under the contract was priced during a period of elevated renewable energy prices. As a result, fiscal year 2025 included a greater concentration of these higher-cost deliveries than fiscal year 2026.

MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
(Continued)
6 Detailed Analysis (Continued)
Fiscal year 2026 costs also benefitted from lower electricity demand due to unusually cool weather, which contributed to lower California Independent System Operator (CAISO) market and settlement costs. Costs associated with renewable energy, resource adequacy, and contracts used to manage exposure to market price volatility were also lower than in the prior year. These decreases were partially offset by higher costs for certain carbon-free energy resources. Overall, the year over year decrease reflects the timing and pricing of contracted energy deliveries, lower customer demand, and more favorable energy market conditions during fiscal year 2026.

The table below summarizes the year-over-year change in MCE’s main cost of energy categories. 2026 2025 2024
$ change from
2026 to 2025
% change from
2026 to 2025
Energy contracts 522,072,000$ 626,255,000$ 468,797,000$ (104,183,000)$ -17% Resource adequacy 130,444,000 142,264,000 102,607,000 (11,820,000) -8% Total 652,516,000$ 768,519,000$ 571,404,000$ (116,003,000)$ -15% Energy contracts include PCC1 renewable energy agreements, non-renewable energy agreements, carbon free energy agreements, large hydro or asset-controlling supplier deals, and CAISO settlement costs.

Energy costs fluctuate based on retail load, market prices, renewable energy and resource adequacy requirements, contract terms, hydroelectric and renewable generation, CAISO settlements, congestion, and the timing and mix of procurement. The decrease in the cost of electricity was partially offset by increases in contract services, staff compensation, and other operating expenses necessary to support MCE’s operations, regulatory requirements, customer programs, and expanded service area.

Current assets decreased from $512,000,000 at the end of fiscal year 2025 to $479,000,000 at the end of fiscal year 2026. The decrease primarily reflects a shift in the maturity composition of MCE’s investment portfolio, including a $60,000,000 decrease in investments classified as current, partially offset by a $53,000,000 increase in unrestricted cash and cash equivalents. Current assets at the end of fiscal year 2026 were primarily comprised of cash and investments of $354,000,000, accounts receivable of $68,000,000, and accrued revenue of $29,000,000.

Capital assets are reported net of depreciation and amortization. Each year, the change is mostly due to capital asset acquisitions, less depreciation and amortization expenses. Capital assets include leasehold improvements, furniture and equipment, and real estate related to MCE’s office premises.

Capital assets, net of accumulated depreciation and amortization, increased from $600,000 at the end of fiscal 2025 to $6,000,000 at the end of fiscal year 2026. The increase primarily resulted from MCE’s acquisition of land and an office building during fiscal year 2026.

MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
(Continued)
7 Currently Known Facts, Decisions, or Conditions (continued) Other noncurrent assets include investments of $175,000,000 and $166,000,000 at the end of fiscal years 2026 and 2025, respectively. MCE manages its investment portfolio in accordance with its adopted investment policy, with consideration given to safety, liquidity, maturity, diversification, and anticipated cash-flow requirements.

Current liabilities decreased from $192,000,000 at the end of fiscal year 2025 to $92,000,000 at the end of fiscal year 2026. The largest component of current liabilities is the cost of electricity delivered to customers that was not yet paid by MCE at the end of the fiscal year. Accrued cost of electricity was approximately $59,000,000 and $158,000,000 at the end of fiscal years 2026 and 2025, respectively. The fiscal 2025 balance was comparatively high because it included substantial uninvoiced deliveries under a renewable energy contract executed during a period of elevated renewable energy prices. The fiscal 2026 balance included a lower amount of delivered energy for which invoices had not yet been received at year-end. Accordingly, the decrease primarily reflects differences in the amount and cost of delivered, but uninvoiced energy included in the accrual at each fiscal year-end. Accrued cost of electricity may fluctuate from year to year based on the timing and volume of energy deliveries, supplier invoicing and settlement activity, contractual payment terms, and the prices applicable to the products delivered.

Significant Capital Asset and Long-Term Financing Activity MCE does not own assets used for electric generation or distribution. Included in capital assets are office equipment, such as computers, furniture, leasehold improvements and real estate. In July 2025, MCE purchased an office building and land for $5,400,000.

MCE does not have any outstanding financing debt. MCE has a revolving credit agreement with Royal Bank of Canada with a credit line of $60 million that was effective until May 2026 and subsequently amended as described in Currently Known Facts, Decisions, or Conditions.

MCE signs renewable energy agreements, procures electricity and electrical capacity and signs other power purchase agreements to comply with state law and elevated voluntary targets for renewable and greenhouse gas-free products as described in its Integrated Resource Plan. California law established a Renewable Portfolio Standard (RPS) that requires load-serving entities (“LSEs”), such as MCE, to gradually increase the amount of renewable energy they procure for their customers.

MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
(Continued)
8 Currently Known Facts, Decisions, or Conditions (continued) As of March 31, 2026, MCE had executed RPS contracts of ten years or more in duration that are projected to meet MCE’s Senate Bill 350 long-term contracting requirements. Additionally, MCE is planning to continue its long-term RPS procurement as opportunities arise. Expected obligations under power purchase agreements totaled approximately $6.0 billion as of March 31, 2026 and $5.9 billion as of March 31, 2025. Actual future costs under these agreements may vary based on the timing and volume of energy deliveries, contract performance, and curtailment. MCE manages these risks by aligning procurement with forecast customer demand, diversifying its portfolio by technology, project location, contract term, delivery profile, and supplier. MCE also maintains counterparty credit, collateral, liquidity, and energy-risk-management practices.

Effective April 1, 2026, MCE implemented a 14% reduction in customer generation rates. MCE also implemented a temporary bill credit of $0.0062 per kilowatt-hour through December 2026 and approved an additional $10.0 million for the MCE Cares Credit program, which provides bill assistance to qualifying residential and small-business customers. These rate actions were adopted in consideration of declining forecasted energy costs, MCE’s revenue requirements, rate competitiveness, and increases in the Power Charge Indifference Adjustment, or PCIA, charged by PG&E to MCE customers. The rate reduction, temporary bill credit, and expanded customer assistance are expected to reduce fiscal year 2027 operating revenues compared with the amounts that would have been generated under the prior rates schedule. To partially offset this reduction, MCE’s Board approved the recognition of $62.0 million of previously deferred Operating Reserve Fund revenue during fiscal year 2027. Actual operating results may vary based on customer electricity usage, weather, market conditions, and future rate actions.

The PCIA is a state-authorized charge assessed and collected by PG&E from customers receiving generation service from community choice aggregators, including MCE. Changes in the PCIA do not directly affect MCE’s reported revenues or expenses; however, they affect customers’ total electricity bills and may influence MCE’s rate competitiveness, customer participation, and future rate-setting decisions. The 2026 increase in the PCIA was one of the factors considered by MCE when approving the generation-rate reduction, temporary bill credit, and expansion of customer bill assistance. MCE will continue to monitor regulatory proceedings and changes in PG&E charges when evaluating future rates and customer programs.

In May 2026, S&P Global Ratings affirmed MCE’s A issuer credit rating with a stable outlook. The rating assessment cited MCE’s liquidity, diversified renewable energy portfolio, broad customer base, customer retention, and absence of outstanding debt. Fitch Ratings also maintained MCE’s A-issuer default rating following its December 2025 review. MCE’s investment-grade ratings support its ability to negotiate energy supply agreements and access financing and liquidity facilities on favorable terms.

MARIN CLEAN ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED MARCH 31, 2026 AND 2025
(UNAUDITED)
(Continued)
9 Currently Known Facts, Decisions, or Conditions (continued) In July 2026, following a 45-day extension, MCE finalized an amendment to its revolving credit agreement with Royal Bank of Canada. The amendment extended the facility through May 2027 and increased the available commitment from $60 million to $80 million. As of the date of this report, MCE had no outstanding borrowings or standby letters of credit under the facility. The facility provides an additional source of liquidity for operating and energy procurement requirements.

MCE continues to evaluate a Remedial Action Scheme, or RAS, in coordination with CAISO and PG&E to reduce curtailment affecting a contracted solar project in California’s Central Valley. If implemented, the software-based solution may improve project deliverability and reduce curtailment-related energy costs. MCE budgeted approximately $10.2 million of capital outlay for the project in fiscal year 2027. The project’s timing, ownership structure, implementation costs, regulatory approvals, and ultimate financial effects remain subject to technical evaluation and negotiations.

BASIC FINANCIAL STATEMENTS

MARIN CLEAN ENERGY
10 The accompanying notes are an integral part of these financial statements

STATEMENTS OF NET POSITION
MARCH 31, 2026 AND 2025
2026 2025
Current assets
Cash and cash equivalents - unrestricted 242,125,512 $ 189,331,563$ Cash equivalents - restricted for grant purposes 16,270,080 22,294,426 Cash equivalents - restricted for security reserve 17,581,784 15,000,000 Accounts receivable, net of allowance 67,953,267 63,716,419 Accrued revenue 29,032,067 32,246,942
Other receivables 18,803,237 22,849,094
Prepaid expenses 1,071,840 2,372,584
Investments 78,048,161 138,291,067
Deposits 8,118,905 26,066,621
Total current assets 479,004,853 512,168,716
Noncurrent assets
Investments 174,622,647 166,170,227
Capital assets, net of depreciation and amortization 6,189,785 555,816 Deposits 197,175 158,622
Total noncurrent assets 181,009,607 166,884,665
Total assets 660,014,460 679,053,381
Current liabilities
Accrued cost of electricity 58,642,896 158,422,801
Accounts payable 4,433,294 3,980,165
Other accrued liabilities 10,160,357 5,353,759
User taxes and energy surcharges due to other governments 1,341,808 1,282,378 Security deposits - energy suppliers 856,800 856,800
Advances from grantors 16,270,080 22,294,426
Total current liabilities 91,705,235 192,190,329
Operating Reserve Fund 150,000,000 70,000,000
Net position
Net investment in capital assets 6,189,785 555,816
Restricted 17,581,784 15,000,000
Unrestricted 394,537,656 401,307,236
Total net position 418,309,225$ 416,863,052$

NET POSITION
ASSETS

LIABILITIES

DEFERRED INFLOWS OF RESOURCES

MARIN CLEAN ENERGY
11 The accompanying notes are an integral part of these financial statements

STATEMENTS OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION
YEARS ENDED MARCH 31, 2026 AND 2025
2026 2025

OPERATING REVENUES
Electricity sales, net 768,857,882$ 801,542,634 $
Rate stabilization (80,000,000) -
Grant revenue 11,829,585 14,393,254
Other revenue 734,728 288,911
Total operating revenues 701,422,195 816,224,799

OPERATING EXPENSES
Cost of electricity 652,516,462 768,519,084
Contract services 23,707,524 22,184,759
Staff compensation 28,475,316 24,719,274
Other operating expenses 16,417,632 12,336,595
Depreciation and amortization 228,436 632,602
Total operating expenses 721,345,370 828,392,314
Operating loss (19,923,175) (12,167,515)

NONOPERATING REVENUES (EXPENSES)
Investment income 21,369,348 25,354,208
Finance costs - (9,156)
Nonoperating revenues (expenses), net 21,369,348 25,345,052 CHANGE IN NET POSITION 1,446,173 13,177,537
Net position at beginning of year 416,863,052 403,685,515 Net position at end of year 418,309,225$ 416,863,052$

MARIN CLEAN ENERGY
12 The accompanying notes are an integral part of these financial statements

STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 2026 AND 2025
2026 2025

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 782,441,917$ 811,751,482$
Receipts from grantors 6,228,908 12,584,238
Receipts of security deposits 18,988,991 4,118,400
Receipts from wholesale sales and other operating activities 23,803,994 61,191 Payments to suppliers for electricity and collateral (769,518,931) (705,397,207) Payments for other goods and services (39,785,558) (35,595,730) Payments for deposits and collateral (449,563) (21,226,265) Payments for staff compensation (27,094,705) (22,614,450) Payments of taxes and surcharges to other governments (13,249,249) (12,818,095) Net cash provided (used) by operating activities (18,634,196) 30,863,564

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease liabilities - (545,801)
Payments to acquire capital assets (5,612,405) (324,986) Net cash used by capital and related
financing activities (5,612,405) (870,787)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 23,355,477 16,641,296
Proceeds from sales and maturities of investments 115,447,674 47,017,973 Purchase of investments (65,205,163) (78,375,562)
Net cash provided (used) by investing activities 73,597,988 (14,716,293) NET INCREASE IN CASH AND CASH EQUIVALENTS 49,351,387 15,276,484 Cash and cash equivalents at beginning of year 226,625,989 211,349,505 Cash and cash equivalents at end of year 275,977,376$ 226,625,989$ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 242,125,512 $ 189,331,563$ Cash equivalents - restricted for grant purposes 16,270,080 22,294,426 Cash equivalents - restricted for security reserve 17,581,784 15,000,000 Cash and cash equivalents 275,977,376$ 226,625,989$
NONCASH INVESTING ACTIVITIES:

Change in fair value of investments (667,708)$ 8,712,912$ Change in interest receivable (1,318,421)$ 81,606$

MARIN CLEAN ENERGY
13 The accompanying notes are an integral part of these financial statements

STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 2026 AND 2025
(Continued)
2026 2025
Operating loss (19,923,175)$ (12,167,515)$
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities
Depreciation and amortization expense 228,436 632,602
(Increase) decrease in:

Accounts receivable, net (4,236,848) (2,268,779)
Accrued revenue 3,214,875 (334,474)
Other receivables 2,727,436 (16,944,778)
Prepaid expenses 1,300,744 (1,400,381)
Deposits 18,539,430 (11,033,423)
Increase (decrease) in:

Accrued cost of electricity (99,779,905) 90,472,512
Accounts payable 453,129 (572,277)
Other accrued liabilities 4,806,598 2,640,346
User taxes and energy surcharges due to other governments 59,430 (5,994) Security deposits - energy suppliers - (126,600)
Operating Reserve Fund contribution 80,000,000 -
Advances from grantors (6,024,346) (18,027,675)
Net cash provided (used) by operating activities (18,634,196)$ 30,863,564$

RECONCILIATION OF OPERATING LOSS TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
14 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY
Marin Clean Energy (MCE) is a California joint powers authority created on December 19, 2008. As of March 31, 2026, the parties to its Joint Powers Agreement consist of the following local governments:

Contra Costa Marin Napa Solano
Concord Belvedere American Canyon Benicia
Danville Corte Madera Calistoga Fairfield
El Cerrito Fairfax Napa Vallejo
Hercules Larkspur St. Helena Unincorporated area
Lafayette Mill Valley Yountville
Martinez Novato Unincorporated area
Moraga Ross
Oakley San Anselmo
Pinole San Rafael
Pittsburg Sausalito
Pleasant Hill Tiburon
Richmond Unincorporated area
San Pablo
San Ramon
Walnut Creek
Unincorporated area
MCE is separate from and derives no financial support from its members. MCE is governed by a Board of Directors whose membership is composed of elected officials representing one or more of the parties.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) REPORTING ENTITY (Continued)
MCE’s mission is to confront the climate crisis by eliminating fossil fuel greenhouse gas emissions, producing renewable energy, and creating an equitable community. MCE provides electricity to retail customers as a Community Choice Aggregation Program (CCA) under the California Public Utilities Code Section 366.2.

Electricity is acquired from commercial suppliers and delivered through existing physical infrastructure and equipment managed by Pacific Gas and Electric Company. MCE administers energy efficiency programs that support the development, coordination, and implementation of energy efficiency projects in and around MCE’s service area. The funding for energy efficiency programs is provided by ratepayers and regulated by the California Public Utilities Commission.

BASIS OF ACCOUNTING
MCE’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements.

MCE’s operations are accounted for as a governmental enterprise fund and are reported using the economic resources measurement focus and the accrual basis of accounting – similar to business enterprises. Accordingly, revenues are recognized when they are earned, and expenses are recognized at the time liabilities are incurred. Enterprise fund-type operating statements present increases (revenues) and decreases (expenses) in total net position.

Reported net position is segregated into three categories – net investment in capital assets, restricted, and unrestricted.

When both restricted and unrestricted resources are available for use, it is MCE’s policy to use restricted resources first, then unrestricted resources as they are needed.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
16 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, MCE defines cash and cash equivalents to include cash on hand, demand deposits, and short-term investments with an original maturity of three months or less. The Statement of Net Position presents restricted cash balances separately. Restricted cash reported on the Statements of Net Position includes funding advanced from grantors and reserves required by MCE’s line of credit agreement.

INVESTMENTS
Investments are stated at fair value based on prices listed on a national exchange for debt securities except for certificates of deposit which are stated at cost. MCE intends to hold its securities to maturity. Investments with a maturity of less than one year are shown as current assets in the Statement of Net Position. Investments with a maturity of one year or more are shown as noncurrent assets in the Statement of Net Position.

MCE’s Investment Policy permits the following types of investments:

Local Agency Investment Fund (LAIF)
United States Treasury obligations
Federal agency securities
Commercial paper
Certificates of deposits
Money market funds
Municipal securities
Corporate bonds
Collateralized mortgage obligations
Supranationals

OTHER RECEIVABLES
At March 31, 2026 and 2025, the balance of other receivables totaled approximately $18,803,000 and $22,849,000, respectively. These amounts primarily consist of receivables related to the resale of excess energy purchased, anticipated refunds from suppliers due to overpayments, and accrued investment income. These receivables are expected to be collected within the next fiscal year and are considered fully collectible.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

PREPAID EXPENSES
Payments made to vendors that will benefit periods beyond the end of the current fiscal year are recorded as prepaid expenses.

DEPOSITS
Contracts to purchase energy may require MCE to provide the supplier with advanced payments or security deposits. Deposits are generally held for the term of the contract and are classified as current or noncurrent assets depending on the length of time the deposits will be outstanding.

LEASE ASSETS AND LEASE LIABILITIES
MCE recognizes an asset and liability when it enters into certain leasing arrangements. The cost of the leased asset is amortized over the term of the leases. The lease liability is the present value of payments expected to be paid to the lessor during the lease term. MCE’s leased asset and liability are related to its office lease that expired in March 2025.

CAPITAL ASSETS AND DEPRECIATION
MCE’s policy is to capitalize furniture and equipment costing over $5,000 that are expected to be in service for over one year. Depreciation is computed according to the straight-line method over estimated useful lives of three years for electronic equipment, seven years for furniture, ten years for leasehold improvements, and 30 years for buildings. MCE does not own any electric generation, transmission, or distribution assets.

SECURITY DEPOSITS FROM ENERGY SUPPLIERS
Various energy contracts require the supplier to provide MCE with a security deposit. These deposits are generally held for the term of the contract or until the completion of certain benchmarks. Deposits are classified as current or noncurrent, depending on the length of the time the deposits will be held.

ADVANCES FROM GRANTORS
MCE received grant funding from various grantors. The amount in this category represents funds received by MCE but not yet expended to carry out specific goals. See Note 7 for additional information related to grants administered by MCE.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

OPERATING RESERVE FUND
In March 2020, MCE created an Operating Reserve Fund (ORF) to allow MCE to defer revenue in years when financial results are strong for use in future years when financial results may decline. MCE’s ORF Policy allows a deferral of revenues into the ORF when the increase in net position is projected to exceed 5% of total revenues in a fiscal year. The ORF Policy has a targeted maximum balance of 10% of the total revenues in the current fiscal year. In accordance with GASB Statement No. 62, the amount deposited into the fund is shown as a reduction in operating revenues and reported on the statements of net position as a deferred inflow of resources. Although the ORF Policy establishes a targeted maximum balance of 10% of current-year revenues, the Board approved a one-time waiver of the policy in fiscal year 2026 to permit a balance beyond this limit. Transfers to this fund were $80,000,000 and $0 in fiscal years 2026 and 2025, respectively.

NET POSITION
Net position is presented in the following components:

Net Investment in capital assets: This component of net position consists of capital assets, net of accumulated depreciation and amortization, and reduced by outstanding borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted: This component of net position consists of restraints placed on net asset use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation.

Unrestricted: This component of net position consists of net position that does not meet the definitions of “net investment in capital assets” or “restricted.”

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
19 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

OPERATING AND NONOPERATING REVENUE
Operating revenues include energy sales to retail and wholesale customers, grant revenue earned from the delivery of program activities, and liquidated damages from suppliers that fail to meet delivery commitments. Operating revenues also include contributions to and distributions from the Operating Reserve Fund.

Investment income and grants that are not earned from the delivery of program activities are considered “nonoperating revenues.”

REVENUE RECOGNITION
MCE recognizes revenue according to the accrual basis. This includes invoices issued to customers during the reporting period and electricity estimated to have been delivered but not yet billed. Management estimates that a portion of the billed amounts will be uncollectible.

Accordingly, an allowance for uncollectible accounts has been recorded. Revenue is presented net of estimated uncollectible amounts.

OPERATING AND NONOPERATING EXPENSES
Operating expenses include the costs of electricity, services, administrative expenses, and amortization and depreciation of capital assets. Nonoperating expenses include expenses relating to financing.

COST OF ELECTRICITY
During the normal course of business MCE purchases electrical power from numerous suppliers. Electricity costs include the cost of electricity and generation capacity arising from bilateral contracts with energy suppliers and for generation credits, load and other charges arising from MCE’s participation in the California Independent System Operator’s (CAISO) centralized market. The cost of electricity and capacity is recognized as “Cost of Electricity” in the Statements of Revenues, Expenses and Changes in Net Position.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
20 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) COST OF ELECTRICITY (Continued)
To comply with the State of California’s Renewable Portfolio Standards (RPS) and self-imposed benchmarks, MCE acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (Certificates) recognized by the Western Renewable Energy Generation Information System. MCE obtains Certificates with the intent to retire them and does not sell or build surpluses of Certificates with a profit motive. An expense is recognized at the point that the cost of the Certificate is due and payable to the supplier. MCE purchases capacity commitments from qualifying generators to comply with the California Energy Commission’s Resource Adequacy Program.

MCE purchases capacity commitments from qualifying electricity generators to comply with the California Energy Commission’s Resource Adequacy Program. The goals of the Resource Adequacy Program are to provide sufficient resources to CAISO to ensure the safe and reliable operation of the electricity grid in real-time and to provide appropriate incentives for the siting and construction of new resources needed for reliability in the future.

STAFFING COSTS
MCE pays employees semi-monthly and fully satisfies its obligation for health benefits and contributions to its defined contribution retirement plan. MCE does not provide post-employment healthcare or other fringe benefits and accordingly, no related liability is recorded in these financial statements.

MCE provides compensated absences, including paid time off, which are accrued when earned and recorded as part of accrued liabilities. The liability includes leave that is attributable to services already rendered, accumulates, and is more likely than not to be used or paid. The liability is measured using the employee’s pay rate as of the financial statement date.

INCOME TAXES
MCE is a joint powers authority under the provision of the California Government Code and is not subject to federal or state income or franchise taxes.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
21 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

RECLASSIFICATIONS
Certain amounts reported in the prior year’s financial statements have been reclassified for comparative purposes to conform to the presentation of the current year financial statements.

These reclassifications did not result in any changes to previously reported net position or change in net position.

2. CASH AND CASH EQUIVALENTS
MCE maintains its cash in both interest-bearing and non-interest-bearing accounts. MCE’s deposits are subject to California Government Code Section 16521 which requires banks to provide 110% collateralization on public funds in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. Certain short-term investments with original maturities of less than three months are classified as cash and cash equivalents, which are not subject to the collateral requirement or FDIC coverage previously mentioned. Accordingly, the amount of risk is not disclosed. MCE monitors its risk on an ongoing basis.

3. ACCOUNTS RECEIVABLE
The balances of accounts receivable were as follows as of March 31:
2026 2025
Accounts receivable from customers 112,934,268$ 98,746,419$ Allowance for uncollectible accounts (44,981,001) (35,030,000) Net accounts receivable 67,953,267$ 63,716,419$
The majority of accounts receivable are collected within a few months after billing. MCE records and allowance for uncollectible accounts based on historical collection experience, customer aging, and other relevant factors. MCE continues collection efforts on accounts in excess of de minimis balances regardless of the age of the account. Although collection success generally decreases with the age of the receivable, MCE continues to be successful in collecting older accounts.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
22 4. INVESTMENTS
During the years ended March 31, 2026 and 2025, MCE held investments with original maturities of three months or more. As of March 31, the fair value of investments, except for certificates of deposit which are stated at cost, was as follows:
2026 2025 Level
Current Investments:

U.S. Treasury securities 16,481,262$ 11,423,887$ 1
U.S. agency obligations 5,517,068 1,509,316 2
Asset backed securities - 1,720,609 2
Collateralized mortgage obligations - 743,359 2
Mutual Funds 457(f) plan 1,046,879 - 2
Certificates of deposit 55,002,952 122,893,896 NA
Total current investments 78,048,161$ 138,291,067$
2026 2025 Level
Noncurrent Investments:

U.S. Treasury securities 59,903,669$ 52,915,296$ 1
U.S. agency obligations 6,555,936 13,082,124 2
Asset backed securities 17,685,499 19,432,656 2
Collateralized mortgage obligations 24,256,597 21,333,952 2 Corporate bonds 55,666,130 48,919,999 2
Municipal bonds 1,785,935 1,771,864 2
Supranational 8,768,881 8,714,336 2
Total noncurrent investments 174,622,647$ 166,170,227$

FAIR VALUE MEASUREMENT
GASB Statement No. 72, Fair Value Measurement and Application, sets forth the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs.

U.S. Treasury securities are classified as Level 1 inputs because they rely on unadjusted, quoted prices in active markets for identical assets.

Other investments, other than certificates of deposits, are classified as Level 2 inputs as they were valued using institutional bond quotes or valuations based on various market inputs.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
23 4. INVESTMENTS (Continued)

FAIR VALUE MEASUREMENT (CONTINUED
Certificates of deposits are based on nominal value which is materially consistent with fair value.

In instances where inputs used to measure fair value fall into more than one level in the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. MCE’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

CREDIT RISK
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Certain investments, such as obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government are not considered to have credit risk. As of March 31, 2026 and 2025, MCE’s investments were rated as follows:
2026 2025
Asset backed securities NR- to AAA NR- to AAA
Corporate bonds BBB+ to AA+ A- to AAA
Municipal bonds AA- AA
Supranational AAA AAA
Certificates of deposit NR NR
Standard & Poor's
MCE’s investment policy addresses this risk. MCE’s investment policy limits investments to those allowed by Section 53601 of the California Government Code that addresses the risk allowable for each investment.

CUSTODIAL CREDIT RISK
Cash and cash equivalents
Custodial credit risk is the risk that in the event of a financial institution failure, MCE’s deposits may not be returned to MCE. MCE’s deposits are subject to California Government Code Section 16521, which requires banks to collateralize public funds in excess of the FDIC limit of $250,000 by 110%.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
24 4. INVESTMENTS (Continued)

CUSTODIAL CREDIT RISK (CONTINUED)
As of March 31, 2026 and 2025, none of MCE’s bank balances are known to be individually exposed to credit risk.

CUSTODIAL CREDIT RISK – INVESTMENTS
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, MCE would not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. All of MCE’s investments are exposed to custodial credit risk.

MCE’s investment policy addresses this risk. All investments owned by MCE are to be held in safekeeping by a third-party custodian, acting as an agent for MCE under the terms of a custody agreement.

INTEREST RATE RISK
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Duration is a measure of the price sensitivity of a fixed income portfolio to changes in interest rates. Duration is calculated as the weighted average time to receive a bond’s coupon and principal payments. The longer the duration of a portfolio, the greater its price sensitivity to changes in interest rates. MCE manages its exposure to declines in fair values by limiting the weighted average maturity of its investments.

Following is a summary of investment maturities as of March 31, 2026:

Investment Type Fair Value Under 1 Year 1-5 Years
U.S. Treasury securities 76,384,931$ 16,481,262$ 59,903,669$ U.S. agency obligations 12,073,004 5,517,068 6,555,936
Asset backed securities 17,685,499 - 17,685,499
Collateralized mortgage obligations 24,256,597 - 24,256,597 Corporate bonds 55,666,130 - 55,666,130
Municipal bonds 1,785,935 - 1,785,935
Supranational 8,768,881 - 8,768,881
Mutual Funds 457f deposits 1,046,879 1,046,879 -
Certificates of deposit 55,002,952 55,002,952 -
252,670,808$ 78,048,161$ 174,622,647$
Investment Maturities

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
25 4. INVESTMENTS (Continued)
INTEREST RATE RISK (Continued)
Following is a summary of investment maturities as of March 31, 2025:

Investment Type Fair Value Under 1 Year 1-5 Years
U.S. Treasury securities 64,339,183$ 11,423,887$ 52,915,296$ U.S. agency obligations 14,591,440 1,509,316 13,082,124 Asset backed securities 21,153,265 1,720,609 19,432,656 Collateralized mortgage obligations 22,077,311 743,359 21,333,952 Corporate bonds 48,919,999 - 48,919,999
Municipal bonds 1,771,864 - 1,771,864
Supranational 8,714,336 - 8,714,336
Certificates of deposit 122,893,896 122,893,896 -
304,461,294$ 138,291,067$ 166,170,227$
Investment Maturities

CONCENTRATION OF CREDIT RISK
Concentration of credit risk is the risk of loss to the magnitude of MCE’s investment in a single issuer. MCE manages the concentration of credit risk by diversifying its portfolio so that reliance on any one issuer will not place an undue burden on MCE.

As of March 31, 2026 and 2025, MCE’s investment portfolio was concentrated as follows:

Issuer Investment Type 2026 2025
Federal Home Loan Mortgage
Corporation (Freddie Mac)
U.S. agency implicitly
guaranteed 9.6% 7.3%
Percentage of Portfolio

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
26 5. CAPITAL ASSETS
Capital asset activity for the year ended March 31, 2026, was as follows:

Beginning
balance Increases Decreases
Ending
balance
Capital assets not being depreciated:

Land $ - $ 2,025,000 $ - 2,025,000$
Capital assets being depreciated and amortized:

Furniture and equipment 783,928 80,239 (184,982) 679,185 Leasehold improvements 1,089,769 202,221 (1,072,028) 219,962 Software 307,245 180,000 - 487,245
Building - 3,591,751 - 3,591,751
Total capital assets being depreciated and amortized: 2,180,942 4,054,211 (1,257,010) 4,978,143 Less accumulated depreciation and amortization (1,625,126) (228,436) 1,040,204 (813,358) Total capital assets, net of depreciation and amortization 555,816$ 5,850,775$ (216,806)$ 6,189,785$ Capital asset activity for the year ended March 31 2025, was as follows:

Beginning
balance Increases Decreases
Ending
balance
Capital assets being depreciated and amortized:

Furniture and equipment 799,573$ -$ (15,645)$ 783,928$
Leasehold improvements 1,072,028 17,741 - 1,089,769
Software - 307,245 - 307,245
Intangible assets-buildings 2,878,560 - (2,878,560) -
Total capital assets being depreciated and amortized: 4,750,161 324,986 (2,894,205) 2,180,942 Less accumulated depreciation and amortization (3,886,729) (632,602) 2,894,205 (1,625,126) Total capital assets, net of depreciation and amortization 863,432$ (307,616)$ -$ 555,816$

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
27 6. DEBT

LINE OF CREDIT AND LETTERS OF CREDIT
MCE has a $60 million revolving credit agreement with Royal Bank of Canada (RBC) that matures in May 2026. The agreement enhances MCE’s overall liquidity for potential working capital needs, collateral requirements, and enhances MCE’s investment credit rating. The agreement requires MCE to hold $15 million in an operating reserve account. See the subsequent event note for further details.

MCE had no standby Letters of Credit or amounts outstanding under its lines of credit agreement as of March 31, 2026, and 2025. Any unused balance is subject to a 0.33% fee per annum.

7. GRANTS
MCE administers various grants from the California Public Utilities Commission (CPUC), California Energy Commission, and other sources. MCE’s primary source of grant funding is through its CPUC-funded Energy Efficiency (EE) programs. MCE administers several programs under this funding source. Grant revenues are recognized when corresponding eligible expenses are incurred.

The following is a summary of grant revenue for the years ended March 31:
2026 2025
Operating grants:

EE 11,009,121$ 10,160,223$
Other 820,464 4,233,031
11,829,585$ 14,393,254$

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
28 8. DEFINED CONTRIBUTION RETIREMENT PLAN
The Marin Clean Energy Plan (Plan) is a defined contribution retirement plan established by MCE to provide benefits at retirement to its employees. The Plan is administered by Nationwide Retirement Solutions. On March 31, 2026 and 2025, MCE had 108 and 102 plan participants, respectively. MCE is required to contribute 10% of covered payroll to the Plan and contributed approximately $2,035,000 and $1,679,000 during the years ended March 31, 2026 and 2025, respectively. The Plan includes vesting provisions intended to encourage employee retention. Plan provisions and contribution requirements are established and may be amended by the Board of Directors.

9. NONQUALIFIED DEFERRED COMPENSATION PLAN
Marin Clean Energy sponsors a nonqualified deferred compensation plan under Section 457(f) of the Internal Revenue Code for certain eligible employees. The plan is structured as a retention incentive to qualified personnel still employed and is not subject to the contribution limits applicable to qualified plans.

Under the terms of the plan, eligible employees may receive deferred compensation benefits upon meeting specified vesting conditions. The benefits are subject to a substantial risk of forfeiture until the vesting date, at which point the deferred amounts become taxable to the employee.

As of March 31, 2026 and 2025, the total liability recognized in the statement of net position for the 457(f) plan was $1,157,000 and $498,000, respectively.

10. RISK MANAGEMENT
MCE is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; and errors and omissions. During the year, MCE purchased insurance policies from commercial carriers to mitigate risks that include those associated with earthquakes, theft, general liability, errors and omissions, and property damage. There were no significant reductions in coverage compared to the prior year. There were no settled claims that exceeded coverage in any of the last three years.

From time to time, MCE may be a party to various pending claims and legal proceedings.

Although the outcome of such matters cannot be forecasted with certainty, it is the opinion of management and MCE’s legal counsel that the likelihood is remote that any such claims or proceedings will have a material adverse effect on MCE’s financial position or results of operations.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
29 10. RISK MANAGEMENT (Continued)
MCE maintains risk management policies, procedures and systems that help mitigate credit, liquidity, market, operating, regulatory and other risks that arise from participation in the California energy market. Credit guidelines include a preference for transacting with highly rated counterparties, evaluating counterparties’ financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. In addition, MCE enters into netting arrangements whenever possible and where appropriate obtains collateral and other performance assurances from counterparties. Further information about MCE’s energy risk management policy can be found online at MCE’s website.

11. PURCHASE COMMITMENTS

POWER AND ELECTRIC CAPACITY
In the ordinary course of business, MCE enters into various power purchase agreements to acquire renewable and other energy and electric capacity. The price and volume of purchased power may be fixed or variable. Variable pricing is generally based on the market price of either natural gas or electricity at the date of delivery. Variable volume is generally associated with contracts to purchase energy from as-available resources such as solar, wind and hydro-electric facilities.

MCE enters into power purchase agreements to comply with state law and voluntary targets for renewable and greenhouse gas (GHG) free products and to ensure stable and competitive electric rates for its customers.

The following table details the obligations to purchase existing energy, renewable, and RA contracts as of March 31, 2026:

Year ended March 31,
2027 520,000,000$
2028 460,000,000
2029 380,000,000
2030 370,000,000
2031 370,000,000
2032-51 3,900,000,000
Total 6,000,000,000$

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
30 12. LEASES

PROPERTY LEASE
On March 9, 2015, MCE entered into a ten-year non-cancelable lease for its San Rafael, California office premise. The rental agreement includes an option to renew the lease for five additional years. On December 12, 2017, MCE entered into a 68-month non-cancelable lease for its Concord, California office location. This lease was amended with a new expiration date of December 31, 2024. The leases have expired and there are no future minimum lease payments as of March 31,2025.

STORAGE CONTRACT ARRANGEMENTS
Related to providing electricity to its customers, MCE entered into energy storage agreements.

Through these agreements, MCE obtains the right to control certain aspects of the nature and manner and use of the underlying facilities. The monthly payments made by MCE are variable and based on the performance of the underlying assets including the plant’s available capacity, operating charging efficiency, and the seller’s responsiveness to MCE’s charging and discharge instructions. The variable payments under energy storage agreements are recognized as part of the cost of electricity on the Statement of Revenues, Expenses, and Changes in Net Position. Variable payments for the energy storage agreements totaled approximately $12,986,000 and $4,260,000 in fiscal years 2026 and 2025, respectively.

13. JOINT VENTURE

MCE participates in a joint powers agreement (JPA) through the California Community Choice Financing Authority (CCCFA). CCCFA was formed to assist its members by undertaking the financing or refinancing of energy prepayments through tax-advantaged bonds on behalf of one or more of the members by issuing or incurring bonds and entering into related contracts with its members. Any debt or liability incurred by CCCFA on behalf of a member to prepay for renewable energy is not a debt or liability of that member.

Furthermore, the assets of CCCFA in the form of prepaid energy or reserves held by the respective bond trustees for any prepayment transaction undertaken on behalf of a member do not constitute an asset or reserve of that member.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
31 13. JOINT VENTURE (Continued)
CCCFA issued the following bonds, excluding original issue premiums, which are to be used to finance energy purchases that will be delivered to MCE. No debt, liability, obligation of CCCFA is a debt, liability, or obligation of MCE.

Deal Date issued Amount Issued
Outstanding as of
March 31, 2026
Outstanding as of
March 31, 2025
2021A November 2021 602,655,000$ 596,830,000$ 598,715,000$ 2023G December 2023 1,038,285,000 1,038,285,000 1,038,285,000 2025B June 2025 1,062,605,000 1,062,605,000 -
2,703,545,000$ 2,697,720,000$ 1,637,000,000$
MCE purchases energy from CCCFA in the same manner as it purchases energy from other suppliers. MCE purchased approximately $99,800,000 and $69,680,000 from CCCFA during the fiscal years ended March 31, 2026 and 2025, respectively. The outstanding commitments to purchase from CCCFA are included in Note 11. This amount represents executed energy contracts assigned to CCCFA as of March 31, 2026. Additional contracts may be assigned while the bond is outstanding.

The financial statements of CCCFA are available online at http://www.cccfa.org/key-documents.html.

14. CONTINGENCY
MCE is involved in pending contract related litigation. The complaint seeks damages of approximately $35 million, including attorney fees. MCE, after consultation with legal counsel, believes it has meritorious and complete defenses to the claims asserted. However, no assurance can be given as to the ultimate outcome of the litigation. Accordingly, no liability has been recorded in the accompanying financial statements.

15. SUBSEQUENT EVENT

In July 2026, MCE extended their revolving credit agreement with Royal Bank of Canada.

The credit line is $80 million until May 2027.

MARIN CLEAN ENERGY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2026 AND 2025
32 16. RECENTLY ADOPTED AND FUTURE ACCOUNTING PRONOUNCEMENTS

MCE implemented GASB Statement No. 102, Certain Risk Disclosures, which requires additional disclosures regarding concentrations and constraints that could impact MCE’s financial position or results of operations. Implementation of this statement did not have a material effect on the financial statements.

GASB Statements No. 103, Financial Reporting Model Improvements and No .104, Disclosure of Certain Capital Assets are effective for fiscal years beginning after June 15, 2025. Management is evaluating the effect of implementation of this statement.

GASB Statements No. 105, Subsequent Events, is effective for fiscal years beginning after June 15, 2026. Management is evaluating the effect of implementation of this statement.

MCE Finance CommitteeAugust 27, 2026

MCE Finance Committee
August 27, 2026