Audit & Finance
Committee
Meeting
February 10, 2025
The meeting will begin shortly.
Thank you!
Chair Report
Staff Report
Staff Report
• RFP launched for Accounting support, responses due February 24 • Discussion regarding possible banking RFP
• PCE rate change/reduction effective today (February 10) • First Risk Operating Committee (ROC) meeting, approved ROC Procedures • Prepay cost savings effective February (~$500k/month) • 2024 investment returns (see next page)
2024 Investment Returns
5.41%
4.06% 3.85%
3.69%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
CAMP Chandler PFM
Market Value ($M)
(as of 12/31/24)
$168.1 $106.3 $110.9
Annual Cash Return ($M) $7.9 $4.1 $4.1
Yield at Cost 4.65% 3.67% 3.86%
Maturity 42 days 3.09 yrs 2.45 yrs
Rating AAA AA+ AA
Note: Interest rate on JPMorgan cash balance is currently 3.1%. (benchmark)
PFM Asset Management
Update on Portfolio, Strategy, and Market Conditions
A Division of U.S. Bancorp Asset Management, Inc. pfmam.com Update on Portfolio, Strategy,
and Market Conditions
December 31, 2024
Monique Spyke, Managing Director
Justin Resuello, Institutional Sales & Relationship Manager ▸ U.S. economic soft landing remains on track
▹ Inflation and labor markets are in line with Fed expectations despite slower recent progress ▹ Strong economic growth prospects remain intact, aided by a resilient consumer ▹ Changes to fiscal policy may impact growth and inflation trajectory ▸ Fed easing cycle moves forward as expected, but looks to slow in 2025 ▹ The Fed cut the federal funds target rate by an additional 50 basis points (bps) during the fourth quarter to 4.25% - 4.50%
▹ The Fed’s December “dot plot” implies another 50 bps of cuts in 2025, less than the 100 bps of cuts previously projected in September
▹ Fed Chair Powell noted the slower pace of cuts reflect “stickier” inflation heading into 2025 ▸ Treasury yields responded to expected monetary and fiscal policy ▹ Yields on maturities between 2 years and 10 years rose 60-83 bps during the 4 th quarter
▹ The yield curve disinversion continued and was flatter at the front end and positively sloped beyond 1-year
▹ Yield spreads remained near historically tight levels across most sectors aided by robust demand and strength in the economy
Current Market Themes
1 Source: Details on market themes and economic indicators provided throughout the body of the presentation. Bloomberg Finance L.P., as of December 31, 2024.
U.S. TreasuryYield Curve
2 Source: Bloomberg Finance L.P. as of 12/31/2024.
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Yield
Maturity
12/31/2024 12/31/2023 12/31/24 12/31/23 Change
YoY
3-month 4.31% 5.33% -1.02%
6-month 4.27% 5.25% -0.98%
1-year 4.14% 4.76% -0.62%
2-year 4.24% 4.25% -0.01%
3-year 4.27% 4.01% 0.26%
5-year 4.38% 3.85% 0.53%
TreasuryYields
3 Source: Bloomberg Finance L.P., as of 12/31/2024.
4.24% 4.57%
Portfolio Performance
4 1. The lesser of 10 years or since inception is shown. Since inception returns for periods one year or less are not shown. Performance inception date is June 30, 2020.
2. Interest earned calculated as the endingaccrued interest less beginning accrued interest, plus net interest activity.
3. Returns for periods one year or less are presented on a periodic basis. Returns for periods greaterthanone year are presented on an annualized basis. 4Thtfli’bhk ithICE BfA 15 YUSGt/CAAAA IdSBlbFiil LP
PortfolioSnapshot
5 1. Yield and duration calculations exclude cash and cash equivalents. Sector allocation includes market values and accrued interest. The portfolio’s benchmark is the ICEBofA1-5 Year U.S. Government/Corp A-AAA Index. Source: Bloomberg Financial LP.An average of each security’s credit rating was assigned a numeric value and adjusted for its relative weighting in the portfolio.
Sector Allocation Review
6 Market values, excluding accrued interest. Only includes fixed-income securities held within the separately managed account(s) and LGIPs managed byPFMAM. Detail maynot add to total due to rounding.
Sustainable Investment Objectives &
Criteria
1. Source: https://www.peninsulacleanenergy.com/strategy/
2. Source: PCE’s Investment Policy Addendum, effective August 1, 2020. ESG metrics are based on Sustainalytics’s data and methodology. Pre-trade screening is for credit/corporate investments only. ESG stands for environmental, social, & governance. 7 ▹ Medium or lower ESG Risk Rating
▪ Exceptionfor high-risk
issuers that are top
performers (rated in the top
25% of Subindustry)
▹ Environmental risk exposure limit
▹ Industry exclusions:
▪ Energy Services
▪ Oil & Gas Producers
▪ Refiners & Pipelines
Sustainable Investment Criteria2
Sustainable Investment
Objectives&Priorities
▹ Align investment approachwith
PCE’s core missionand
objectives
▹ ConsiderESG risks in the
investment process
▹ Limit environmental risk exposure
▹ Eliminate direct fossil fuel
exposure
PCE strives to reduce greenhouse gas emissions by expanding access to sustainable and affordable energy solutions1
ESG Risk Composition Overview
As of December 31, 2024
Data Source: Sustainalytics. Data as of June 30, 2022 and June 30, 2021, as indicated. Please see important disclosures at the end of this presentation.
Interpreting the ESG Risk Rating
TheESG Risk Rating measures economic value atrisk based on ESG factors.
A company’s ESG Risk Rating is comprised of a quantitative score and a risk category. The score indicates unmanagedESG risk. Risk categories are absolute and comparable across industries.
Lower scores represent less unmanaged risk;ratings are scored on a scale of 1-100.
Negligible
0-9.9
Low
10-19.9
Medium High
30-39.9
Severe
20-29.9 40-100
Allocation by ESG Risk Rating
Low
24%
Medium
9%
Not
Rated
67%
Portfolio Average
ESG Risk Rating
18.4 0%
20%
80%
60%
40%
0 10
40 30
20 Automobiles
Banks
Chemicals
Diversified Financials
Food ProductsFood Retailers
Healthcare
Machinery
Pharmaceuticals
Retailing
Semiconductors
Software
& Services
Technology Hardware
Portfolio Weight (%)
ESG Risk Rating
Industry Exposure and Weighted
Average Risk Score
8 The fourth quarter of 2024 was characterized by an increase in yields and volatility as investors digested the potential impact of the new administration’s policy proposals. Areas of focus include taxes, tariffs, immigration, and deregulation, which the market generally expects could result in more growth, larger budget deficits and higher inflation.
The Fed cut the overnight rate by 25 basis points (bps) (0.25%) at both its November and December meetings to bring the new target range to 4.25% - 4.50%.
The Fed’s updated “dot plot” implied only 50 bps of rate cuts in 2025, down from previous projections indicating a full percentage point of rate cuts in 2025. This revision, plus some pointed commentary from Fed officials, has resulted in the market generally expecting the Fed to pause rate cuts for some time.
U.S. inflation readings remained ‘sticky’ during the quarter and did not show progress in moving towards the Fed’s 2% target.
U.S. real gross domestic product (GDP) growth continued its upward trajectory in Q3, with final estimates showing growth of 3.1%.
What We Are Watching…
9 QUESTIONS?
Disiscclolasimurers
The viewsexpressed within this material constitute the perspectiveandjudgmentofU.S. Bancorp Asset Management, Inc. at the time of distribution andare subject to change.Any forecast, projection, or prediction of the market, the economy, economic trends, and equity orfixed-incomemarketsare based upon current opinion as of the date of issue andare also subject to change.Opinions anddata presented are not necessarily indicativeof future events or expected performance. Informationcontained herein is based on data obtained from recognizedstatistical services, issuerreports or communications, or other sources, believed to be reliable. No representation ismade as to its accuracy or completeness.
PFM Asset Management serves clients in the public sector and is a divisionofU.S. Bancorp Asset Management, Inc., which is thelegal entity providinginvestment advisory services. U.S.Bancorp Asset Management, Inc. is a registeredinvestment adviser,a direct subsidiary ofU.S.Bank N.A. and an indirect subsidiaryof U.S. Bancorp. U.S.Bank N.A. is notresponsible for and does not guarantee the products, services, or performanceofU.S. Bancorp Asset Management, Inc.
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
This report contains information developed by Sustainalytics. Such information and data are proprietary of Sustainalytics and/or its third-party suppliers (Third Party Data) and are providedfor informational purposes only. The use of the data does not constitute an endorsement of any product or project, nor investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. The use of their data is subject to their conditions.For more information visit http://www.sustainalytics.com/legal-disclaimer.
Although PFM Asset Management’s information providers, includingwithout limitation, Sustainalytics,Inc. and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality,accurate and/or completenessof any data herein. None of the ESG Parties make any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissionsin connect with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibilityof such damages.
There is a risk that the issuers selected to support client sustainableobjectives may not perform as expected in addressing sustainabilityconsiderationsor such performance may change over time, which could cause a client account to temporarily hold securities that are not in alignmentwith the account’s sustainable objectives. Further, there is a risk that information used to evaluate ESG criteria may not be readily available,complete or accurate, which could negatively impact an account’s ability to apply its sustainable objectives. In managing client's sustainability objectives,PFM Asset Management may rely on analysisand ratings provided by third parties in determiningwhether an issuer meets an account’s sustainabilityobjectives.A client’s perception may differ from PFM Asset Management’s or a third party’s on how to judge an issuer’s adherence to client's guidelines.
11 ESG Disclosures
Disclaimer
The viewsexpressed within this material constitute the perspectiveandjudgment ofU.S. Bancorp Asset Management, Inc. at the time of distribution andare subject to change.Any forecast, projection, or prediction of the market, the economy, economic trends, and equity orfixed-incomemarketsare based upon current opinion as of the date of issue andare also subject to change.Opinions anddata presented are not necessarily indicativeof future events or expected performance. Informationcontained herein is based on data obtained from recognizedstatistical services, issuerreports or communications, or other sources, believed to be reliable. No representation ismade as to its accuracy or completeness.
PFM Asset Management serves clients in the public sector and is a divisionofU.S. Bancorp Asset Management, Inc.,which is thelegal entity providinginvestment advisory services.U.S.Bancorp Asset Management, Inc. is a registeredinvestment adviser, a direct subsidiary ofU.S.Bank N.A. and an indirect subsidiaryof U.S. Bancorp. U.S.Bank N.A. is notresponsible for and does not guarantee the products, services, or performanceofU.S. Bancorp Asset Management, Inc.
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
For Institutional Investor orInvestmentProfessional Use Only – This material is not for inspectionby, distributionto, or quotation to the general public.
12 Q2 FY24-25 Financial Review
Customer Load
YTD load 2.4% below budget
• Mild weather in August and September
• Reduced Small Commercial load relative to
historical
• Q2 load 1.4% below budget
200,000
225,000
250,000
275,000
300,000
325,000
350,000
July August September Oct Nov Dec
Total Load (MWh)
Actuals Budget FY23-24 Actual
(in MWh) Actual Budget Variance Var (%)
Residential 711,132 725,658 (14,525) -2.0%
Commercial & Industrial 1,047,566 1,075,491 (27,925) -2.6% Total 1,758,698 1,801,149 (42,451) -2.4%
FY24-25 YTD Base Load
(in millions)
FY25 Q2
Actual
FY25 Q2
Budget
FY24 Q2
Actual
$Var vs
Budget
Fav/(Unf)
$Var vs
FY24 Q2
Fav/(Unf)
Electricity Sales 107.6 110.1 98.1 (2.5) 9.5
Non-Electricity Revenues 1.0 0.8 0.6 0.3 0.4
Green Electricity Premium 0.8 0.8 0.8 0.0 0.0
Total Revenues $109.4 $111.7 $99.5 ($2.3) $9.9
(in millions)
FY25 YTD
Actual
FY25 YTD
Budget
FY24 YTD
Actual
$Var vs
Budget
Fav/(Unf)
$Var vs
FY24 Q2
Fav/(Unf)
Electricity Sales 240.7 244.1 229.8 (3.3) 10.9
Non-Electricity Revenues 1.5 1.5 1.1 (0.0) 0.4
Green Electricity Premium 1.6 1.6 1.5 (0.0) 0.1
Total Revenues $243.8 $247.1 $232.4 ($3.4) $11.4
Revenues
Q2 and Year-To-Date revenues
$2.3 million, and $3.4 million
below budget, respectively • Primarily due to lower load than budgeted
Higher revenues vs. 2024 largely
due to $12 million bill credit in
2Q24 • 3% load growth
(in millions)
FY25 Q2
Actual
FY25 Q2
Budget
FY24 Q2
Actual
$Var vs
Budget
Fav/(Unf)
$Var vs
FY24 Q2
Fav/(Unf)
Energy 59.9 65.9 51.8 6.1 (8.1)
Capacity 25.1 21.8 16.5 (3.3) (8.6)
REC/GHG-Free (19.5) 4.3 2.0 23.8 21.5
Other (0.6) 1.8 (0.3) 2.5 0.4
Contingency 0.0 6.9 0.0 6.9 0.0
Total Cost of Energy $64.7 $100.7 $70.0 $36.0 $5.2
(in millions)
FY25 YTD
Actual
FY25 YTD
Budget
FY24 YTD
Actual
$Var vs
Budget
Fav/(Unf)
$Var vs
FY24 Q2
Fav/(Unf)
Energy 113.1 122.8 108.2 9.7 (4.9)
Capacity 88.8 88.9 50.0 0.1 (38.8)
REC/GHG-Free (9.4) 8.6 3.0 18.0 12.4
Other (5.4) (2.8) 1.5 2.6 6.9
Contingency 0.0 16.1 0.0 16.1 0.0
Total Cost of Energy $187.1 $233.6 $162.7 $46.4 ($24.4) Cost of Energy
Q2 cost of energy $36 million
below budget • REC sales • Optimization of CRRs • Resettlements • Timing of NEM costs • Lower load than budgeted • Offset in part by higher RA prices
• Contingency not
used/needed
YTD cost of energy $46 million
below budget
(in millions)
FY25 Q2
Actual
FY25 Q2
Budget
FY24 Q2
Actual
$Var vs
Budget
Fav/(Unf)
$Var vs
FY24 Q2
Fav/(Unf)
Revenues 109.5 111.7 99.5 (2.2) 9.9
Cost of Energy 64.8 100.7 70.0 35.9 5.2
Revenue Less Cost of Energy $44.7 $10.9 $29.5 $33.7 $15.1 Compensation 3.4 3.4 2.2 0.0 (1.2)
Data Mgr and PG&E Fees 1.2 1.2 1.2 0.0 (0.0)
Professional Fees 0.6 0.9 0.7 0.3 0.1
Marketing 0.4 0.9 0.3 0.5 (0.1)
Programs 5.7 6.8 3.3 1.1 (2.4)
Other G&A 0.9 1.2 0.9 0.3 (0.0)
Operating Expenses $12.2 $14.5 $8.6 $2.3 ($3.6)
Non-Operating Income 0.8 2.3 6.0 (1.5) (5.3)
Change in Net Position $33.3 ($1.2) $27.0 $34.5 $6.2
Q2 Change in Net Position (CINP)
Q2 CINP $33.3 million, which is
$34.5 million above budget
• Primarily due to lower
cost of energy
• Operating expense
categories relatively on
or under-budget
(in millions)
FY25 YTD
Actual
FY25 YTD
Budget
FY24 YTD
Actual
$Var vs
Budget
Fav/(Unf)
$Var vs
FY24 Q2
Fav/(Unf)
Revenues 243.8 247.1 232.5 (3.4) 11.3
Cost of Energy 187.1 233.6 163.3 46.4 (23.8)
Revenue Less Cost of Energy $56.7 $13.6 $69.2 $43.1 ($12.5) Compensation 6.7 6.7 4.4 0.0 (2.3)
Data Mgr and PG&E Fees 2.4 2.5 2.4 0.0 (0.0)
Professional Fees 1.3 1.8 1.6 0.5 0.3
Marketing 1.2 1.8 0.8 0.6 (0.4)
Programs 8.4 13.7 6.1 5.3 (2.3)
Other G&A 1.7 2.3 1.6 0.6 (0.1)
Operating Expenses $21.7 $28.8 $16.9 $7.1 ($4.8)
Non-Operating Income 10.5 4.6 7.9 6.0 2.6
Change in Net Position $45.5 ($10.7) $60.2 $56.2 ($14.7) YTD Change in Net Position (CINP)
YTD CINP $45.5 million, which is
$56.2 million above budget
• Lower cost of energy
• Lower Programs expenses
due to program delays
(BE) and slower uptake
(EV)
• Higher interest income,
including $2.2 million of
unrealized gains
(in millions) Dec-23 Mar-24 Jun-24 Sep-24 Dec-24
Cash (First Republic / JP Morgan) $45.7 $15.5 $16.3 $13.4 $15.5 CAMP 90.2 141.8 163.8 166.0 168.1
PFM 106.7 107.0 107.9 111.6 110.9
Chandler (was FRB) 102.1 102.6 103.5 107.1 106.3
Schwab 0.2 0.0 0.0 0.0 0.0
Total Investments $299.3 $351.4 $375.2 $384.7 $385.2
Total Cash & Investments $345.0 $366.9 $391.6 $398.1 $400.7 Days Cash on Hand 415 397 395 365 367
Cash and Investment Summary – Quarterly Trend
Appendix
Detailed Financial Statement
Actual Budget Var Fav/(Unf) Actual Budget Var Fav/(Unf) Electricity Sales $107,566,476 $110,128,507 ($2,562,030) $240,737,818 $244,057,824 ($3,320,005) Non-Energy Revenues $1,043,278 $763,571 $279,707 $1,496,163 $1,527,143 ($30,980) Green Electricity Premium 788,954 767,675 21,279 1,562,875 1,563,906 (1,031) Revenue Less Cost of Energy 109,398,708 111,659,753 (2,261,045) 243,796,856 247,148,873 (3,352,016) Cost of Energy 64,746,128 100,709,942 35,963,814 187,116,616 233,560,203 46,443,587 Gross Profit 44,652,580 10,949,811 33,702,769 56,680,240 13,588,669 43,091,571 Compensation 3,374,485 3,419,671 45,186 6,692,409 6,713,124 20,715 Data Manager 887,587 900,000 12,413 1,776,984 1,800,000 23,016 Service Fees (PG&E) 332,231 333,600 1,369 663,819 667,200 3,381 Consultants & Professional Services 384,927 538,610 153,682 882,816 1,098,519 215,703 Legal 171,876 348,491 176,616 371,799 696,982 325,184
Communications & Noticing 401,217 896,400 495,183 1,172,869 1,785,345 612,476 General & Administrative 864,241 1,154,883 290,642 1,685,417 2,308,277 622,860 Community Energy Programs 5,733,117 6,842,500 1,109,383 8,378,933 13,685,000 5,306,067 Depreciation 19,902 18,724 (1,178) 42,837 37,447 (5,390) Operating Expenses 12,169,583 14,452,878 2,283,295 21,667,884 28,791,894 7,124,011 OPERATING INCOME 32,482,996 (3,503,067) 35,986,064 35,012,356 (15,203,225) 50,215,581 Non-Operating Income 771,449 2,275,795 (1,504,346) 10,526,910 4,551,589 5,975,321 CHANGE IN NET POSITION $33,254,445 ($1,227,273) $34,481,718 $45,539,266 ($10,651,636) $56,190,902 Quarter Ending December 2024 YTD FY 2024-2025
Revenues – Monthly Trend (13 months)
Actual Budget Var Fav/(Unf) Var Fav/(Unf) %
Dec-23 26.7 40.9 (14.2) -34.7%
Jan-24 39.3 41.9 (2.5) -6.0%
Feb-24 36.2 37.7 (1.5) -3.9%
Mar-24 35.9 34.4 1.4 4.2%
Apr-24 32.4 31.2 1.2 3.9%
May-24 34.9 33.7 1.2 3.7%
Jun-24 42.6 44.0 (1.4) -3.2%
Jul-24 47.2 44.5 2.7 6.2%
Aug-24 44.9 46.4 (1.5) -3.3%
Sep-24 42.3 44.6 (2.3) -5.2%
Oct-24 36.7 37.2 (0.4) -1.1%
Nov-24 35.2 35.2 (0.0) -0.1%
Dec-24 37.5 39.3 (1.8) -4.6%
Revenue Comparison vs. Budget (in millions)
Cost of Energy – Monthly Trend (13 months)
Actual Budget Var Fav/(Unf) Var Fav/(Unf) %
Dec-23 23.7 25.0 1.4 5.5%
Jan-24 32.6 32.1 (0.5) -1.7%
Feb-24 24.1 25.8 1.6 6.4%
Mar-24 25.2 22.5 (2.7) -12.0%
Apr-24 16.8 20.4 3.5 17.4%
May-24 27.6 22.5 (5.1) -22.5%
Jun-24 34.3 27.0 (7.3) -27.1%
Jul-24 34.3 39.2 4.9 12.4%
Aug-24 48.5 48.9 0.4 0.9%
Sep-24 39.5 44.7 5.2 11.6%
Oct-24 33.8 34.5 0.7 2.0%
Nov-24 26.3 31.2 4.9 15.8%
Dec-24 4.7 35.0 30.3 86.6%
Cost of Energy Comparison vs. Budget (in millions)
Committee Member Reports
Adjournment
Peninsula Clean Energy