Audit & Finance Committee Meeting
November 7, 2022
Peninsula Clean Energy
Agenda
• Call to Order / Roll Call
• Public Comment (for items not on the Agenda)
• Action to set the Agenda and Approve Consent Items
• Regular Agenda
o Inflation Reduction Act of 2022 Presentation
o Q1 Budget Variance Reporting
Chair Report
Staff Report
Inflation Reduction Act of 2022
Peninsula Clean Energy
Meeting Objectives
• Provide a high-level overview of Inflation Reduction Act of 2022 o What is it
o How much in funding? What are the areas of impact? Time period covered? o What areas are of potential interest to CCA’s; and of interest to PCE individually? o Specific and immediate PCE examples to leverage IRA sources to o Increasing current funding streams
o Longer term impacts examples … to increase investments in … o Power procurement projects – how to explore?
o Programs – which programs?
o In discussion - what is of interest for PCE staff to explore further? 6 Peninsula Clean Energy
• $773 billion ($433 in new investments)
federal bill funding climate/energy
provisions, lowering prescription prices,
and paying down national debt.
• Three priority funding buckets for CCAs:
o Increasing renewable generation ($40 billion)
o Enhancing building decarb ($9.8 billion)
o Supporting environmental justice ($33 billion)
7 Inflation Reduction Act of 2022 (IRA)
Peninsula Clean Energy 8
Program Name Description Total $
Production Tax
Credit (PTC -
SEC. 13101)
Extends tech-specific PTC through 2024. Revives PTC for solar.
Creates tech-neutral PTC from 2025 to phaseout in 2032. 1.5 cents/kwh (prevailing wage) + 10% for domestic manufacturing, energy community, or low-income (up to 20%). Direct
pay/transferability.
$30 billion
(estimated)
Investment Tax
Credits (ITC –
SEC. 13102)
Extends tech-specific ITC through 2024 at full amount. Extends to storage, biogas, microgrid controller. Creates tech-neutral PTC from 2025 to phaseout in 2032. 30% credit (prevailing wage) + 10% for domestic manufacturing, energy community, or low-income (up to 20%). Direct pay/transferability.
$10 billion
(estimated)
Renewable Generation Tax Credits
Peninsula Clean Energy 9
Program Name Description Total $
High-Efficiency
Electric Home Rebate
Program (HEERA)
(SEC. 50122)
Up to $14,000 in rebates to switch over to electric appliances—up to 50% of costs for moderate-income households and 100% for low-income households. Includes: $8,000 for a heat pump, which serves as an air conditioner in the summer and heater in the winter; $1,750 for a high-efficiency, all-electric heat pump water heater; $840 for an electric induction cooktop; $840 for a high-efficiency all-electric heat pump clothes dryer; Up to $9,100 for enabling improvements to the electric panel, wiring, and home insulation; Up to 50% of project for moderate income, up to 100% for low-income. $4.5 billion
Nonbusiness Energy
Property Credit (SEC.
13301)
Energy efficiency and electrification tax credits for qualified energy efficiency improvements including up to $2k for heat pumps
Building Decarbonization
Peninsula Clean Energy
1 0
Program Name Description Total $
Home Energy
Performance-Based,
Whole Home Rebates
(SEC. 50121)
Award grants to State energy offices to develop/implement a HOMES rebate program for homeowners and aggregators for whole-house energy savings retrofits. • For single-family home retrofits that achieve modeled energy savings of 20-35% = lesser of $2k or 50% project cost; >35% energy savings = $4k or 50% project. • For multi-family home retrofits achieve modeled energy savings of 20-35% = $2k per dwelling (max $200k); >35% energy savings = $4k per dwelling (max $400k). • For low-income single/multifamily housing, rebate rate doubles up to 80% project cost. $4.3 billion
Improving Energy
Efficiency or Water
Efficiency or Climate
Resilience of
Affordable Housing
(SEC. 30002)
New grant and loan program funding improvements for energy or water efficiency, indoor air quality, or sustainability, implement the use of low-emission technologies, materials, or processes, including zero-emission electricity generation, energy storage, org building electrification, or address climate resilience.
• $837.5M to HUD through 2028 for direct loans, modifying loans, and for grants. • $60M for HUD to implement this section including reporting, research, and evaluation. • $60M for HUD to administer contracts.
• $42.5M for eligible property energy and water benchmarking. $1 billion ($4
billion in
loans)
Building Decarbonization
Peninsula Clean Energy
1 1
Program Name Description Total $
Greenhouse Gas
Reduction Fund (Green
Bank - SEC. 60103)
Provides funding for grants to state, local, regional, and Tribal programs that provide financial support to low and zero carbon technologies (like rooftop solar, and pollution-reducing technologies) and can act as seed capital for regional, local, state, or Tribal green banks that provide financial support for low or zero emission projects. • $11.97 billion through 2024 to make grants for entities that provide financial or technical support to establish green banks.
• $15 billion through 2024 to make grants for entities to provide financial and technical support and support the deployment of clean energy technologies in low-income and disadvantaged communities.
$27 billion
Environmental and Climate
Justice Block Grants (SEC.
60201)
Investments for community-led projects covering a range of eligible activities, from pollution monitoring and prevention, to mitigating health risks from climate events like heat and wildfires, to climate resilience and adaptation, to reducing indoor air pollution; to increasing community engagement in public processes like rulemakings. The fund includes $200 million to provide technical assistance to communities. $3 billion
Neighborhood Access and
Equity Grant Program
(SEC. 60501)
$3 billion ($1.1 billion for disadvantaged communities) for grants to improve transportation access and mitigate negative safety or environmental impacts in underserved communities. • Grants may be used for improvements to reduce air pollution and GHG emissions, manage stormwater run-off, address urban heat islands, and to monitor air quality, transportation related GHG emissions and pollution, and gaps in tree canopy coverage. $3 billion
Environmental Justice
Peninsula Clean Energy
1 2
Program Name Description Total $
Climate Pollution
Reduction Grants
(SEC. 60114)
Competitive awards to states, municipalities, tribes or air pollution agencies that support the establishment and implementation of plans to to reduce climate pollution. This program could support states and other subnational actors in the implementation of clean electricity policies; programs driving adoption of zero-emission vehicles and buildings; deployment of EV charging infrastructure; incentives for smart-growth, housing and transit-oriented development; climate-smart agriculture and lands conservation, and more. $5 billion
Clean Vehicle Tax
Credits (SEC.
13401)
Tax credits/point-of-sale rebates of up to $7,500 for new vehicles and $4,500 for used vehicles (depending on domestic battery and critical minerals). Commercial clean vehicle tax credits of $7,500 for light-duty and $40,000 for heavy-duty. No unit-per manufacturer cap starting after Dec 31, 2022. Tax credit terminates by 2033. Includes both electric plug-in vehicles and fuel cell motor vehicles. Taxpayer can elect to transfer credits to eligible dealer that sold vehicle, meaning taxpayer gets credit equal to tax credit from dealer at point of sale.
$12
billion
Assistance for
Latest and Zero
Building Energy
Code Adoption
(SEC. 50131)
Grants to assist States, and units of local government to adopt building codes for:
Residential buildings that meets or exceeds the 2021 International Energy Conservation Code, or achieves equivalent or greater energy savings; Commercial buildings that meets or exceeds the ANSI/ASHRAE/IES standard; for residential and commercial buildings that meets or exceeds the zero energy provisions
$1 billion
State-based Home
Energy Efficiency
Contractor Training
Grants (SEC. 50123)
Funding through DOE to provide state energy offices with grants for the training of contractors on energy efficiency and electrification upgrades, including those in the above residential energy efficiency rebates and tax credits
$200
million
Other
Peninsula Clean Energy
Priority Direct Opportunities
Renewable
Energy Tax
Credits (ITC)
Renewable Energy
Generation
Projects (IFTM)
Solar + Storage
on Public
Buildings (BTM)
Capture tax credits
with Direct Pay
High-Efficiency
Rebates
Appliance
Incentives
Potential to
administer and layer
with PCE incentives
Performance-Based,
Whole Home Rebates
AND
Green Bank Finance
Low-Income
Home Upgrade
Potential to
administer rebates
and layer with PCE
incentives. Use low
cost capital to finance
balance of costs
Climate Pollution
Reduction Grants
Climate Action Plans
Partner with CCAG
and member
jurisdictions
13 IRA
Peninsula Clean Energy
Additional Opportunities & Timing
Additional Opportunities
• Encouraging customers to use tax credits
• Workforce and reach codes
• Wholesale generation ownership
(partial list)
Timing
• Tax credits become available in 2023
• Rebates become available later, depending upon state agencies distribution capabilities
14 FY 2022-23
Q1 Financial Report
July 1, 2022 through September 30, 2022
Peninsula Clean Energy
FY 2022-23 Q1 Actual vs. Budget Load Performance
16 Actual vs. Budget
• The actual total load is
1.11% lower than
budgeted load
(in kWh) Actual Budget Variance
Variance as
% Budget
Commercial 548,703,494 534,698,597 14,004,896 2.62%
Street light and Agr. 10,631,229 11,172,460 (541,231) -4.84% Residential 365,881,145 389,719,708 (23,838,563) -6.12% Total 925,215,868 935,590,766 (10,374,898) -1.11%
Peninsula Clean Energy
Revenue – Monthly Trend
17 Revenue (Last 13 months)
Actual Budget Var Fav/(Unf)
Sep-21 $19.3 $20.7 ($1.4)
Oct-21 $14.6 $20.1 ($5.5)
Nov-21 $14.5 $15.3 ($0.8)
Dec-21 $16.0 $17.1 ($1.1)
Jan-22 $15.1 $17.6 ($2.5)
Feb-22 $14.1 $16.0 ($1.9)
Mar-22 $14.7 $16.8 ($2.1)
Apr-22 $26.1 $15.5 $10.7
May-22 $29.5 $19.6 $9.9
Jun-22 $36.3 $23.3 $13.0
Jul-22 $35.0 $39.2 ($4.2)
Aug-22 $37.0 $41.1 ($4.1)
Sep-22 $41.4 $39.7 $1.7
September-22
Month Revenue Comparison vs Budget
Peninsula Clean Energy
Cost of Energy – Monthly Trend
Cost of Energy (Last 13 months)
Actual Budget Var Fav/(Unf)
Sep-21 $17.5 $19.3 $1.8
Oct-21 $17.4 $18.0 $0.6
Nov-21 $15.0 $16.7 $1.7
Dec-21 $18.8 $19.3 $0.5
Jan-22 $20.3 $18.8 ($1.5)
Feb-22 $17.6 $17.2 ($0.4)
Mar-22 $18.4 $16.9 ($1.5)
Apr-22 $19.5 $16.5 ($2.9)
May-22 $19.8 $17.6 ($2.2)
Jun-22 $23.6 $18.2 ($5.4)
Jul-22 $23.1 $23.7 $0.6
Aug-22 $25.7 $26.9 $1.2
Sep-22 $36.1 $26.7 ($9.4)
September-22
Month COE Comparison vs Budget
18 Peninsula Clean Energy
FY 2022-23 Q1 Actual vs. Budget Financial Performance
19 Items Q1 Q1
Month 7-9 7-9
Calendar Year 2022 2022
Fiscal Year 2023 2023
Code Items Actual Budget Variance
Variance as %
Budget
OPERATING REVENUES
Mtpl Electricity Sales, net 112,628,344 119,270,294 (6,641,950) -5.57% Mtpl Green electricity premium 767,960 716,450 51,510 7.19% Total Operating Revenues 113,396,304 119,986,744 (6,590,440) -5.49%
OPERATING EXPENSES
Mtpl Cost of energy 84,875,611 77,274,735 (7,600,876) -9.84% Mtpl Staff compensation 1,798,114 2,145,805 347,692 16.20% 50200 Data Manager 882,662 900,000 17,339 1.93%
50500 Service Fees - PG&E 331,959 337,500 5,541 1.64%
Mtpl Consultants & Professional Services 272,785 432,735 159,950 36.96% Mtpl Legal 299,118 368,500 69,382 18.83%
Mtpl Communications and Noticing 347,308 678,677 331,369 48.83% Mtpl General and Administrative 538,284 595,500 57,216 9.61% 55100 Community Energy Programs 961,925 2,160,000 1,198,075 55.47% 80200 Depreciation 19,306 24,000 4,694 19.56%
Total Operating Expenses 90,327,070 84,661,817 (5,665,254) -6.69% Operating Income (Loss) 23,069,234 35,324,927 (12,255,694) -34.69% NON-OPERATING REVENUES (EXP.)
Total Nonoperating Income/(Expense) (2,126,486) 150,000 (2,276,486) -1517.66% CHANGE IN NET POSITION 20,942,747 35,474,927 (14,532,180) -40.96% Actual vs. Budget:
• Revenues are $6.6
million lower than budget
• Operating expenses are
$5.7 million higher than
budget
• Operating income is
$23.1 million, or $12.3
million lower than budget
• Change in net position is
$20.9 million
Peninsula Clean Energy
Cash and Investment Summary – Quarterly Trend
20 Jun-19 Jun-20 Jun-21 Jun-22 Sep-22
Investment Account - USBank (Combined PFM/FRB)
Asset Summary
Cash & Equivalents $ 4,507,825 $ 58,937,363 $ 2,785,233 $ 181,685 $ 2,561,110.10 Fixed Income $ 90,743,561 $ 105,343,286 $ 153,947,396 $ 125,313,000 $ 118,534,373.37 Accrued Income $ 546,170 $ 520,977 $ 421,015 $ 487,220.93 Ending Balance $ 95,251,385 $ 164,826,819 $ 157,253,606 $ 125,915,700 $ 121,582,704.40 Other Accounts (Unrestricted)
Unrestricted - M&T LockBox $ 758,192 $ - $ 3,814,590.41 Unrestricted - Wilmington LockBox $ 5,632,155 $ 5,030,087 $ 2,465,340 $ 8,133,146 $ 2,867,243.70 Operating Account - First Republic $ 3,299,345 $ 5,834,142 $ 4,340,702 $ 1,365,681 $ 13,332,832.42 Savings Account - First Republic $ 9,885,949 $ 2,484,545 $ 1,354,942 $ 74,032 $ 678,656.61 Other Accounts $ 573 $ - $ - $ 22,908 $ 2,800.40
Subtotal Unrestricted (non-Investment accounts) $ 18,818,022 $ 13,348,775 $ 8,919,176 $ 9,595,766 $ 20,696,123.54 Other Accounts (Restricted)
Restricted Cash - Wilmington LockBox $ 1,500,000 $ 1,000,000 $ 500,000 $ - $ - Restricted Cash - First Republic $ 11,665,799 $ 31,386,560 $ 3,949,194 $ - $ - Subtotal Restricted (non-Investment accounts) $ 13,165,799 $ 32,386,560 $ 4,449,194 $ - $ - Total Cash $ 127,235,206 $ 210,562,154 $ 170,621,976 $ 135,511,466 $ 142,278,827.94 Unrestricted Cash $ 114,069,407 $ 178,175,594 $ 166,172,782 $ 135,511,466 $ 142,278,827.94 Committee Members’ Reports