2075 Woodside Road | Redwood City, CA 94061
(650) 260-0005 | peninsulacleanenergy.com
Regular Meeting of the Audit and Finance Committee of the Peninsula Clean Energy Authority (PCEA)
AGENDA
Monday, June 9, 2025
8:30 am
PLEASE NOTE: This meeting will be held in a hybrid format with both in-person and Zoom participation options for members of the public;
Board members shall appear in person.
In-Person Meeting Location:
PCEA Lobby, 2075 Woodside Road, Redwood City, CA 94061
Los Banos City Hall, Conference Room B, 520 J Street, Los Banos, CA 93635 Zoom, Virtual Meeting Link:https://pencleanenergy.zoom.us/j/89514559357 Meeting ID: 895-1455-9357 Passcode: 2075 Phone: +1 (669) 444-9171
INTRODUCTION
This meeting of the Peninsula Clean Energy Audit and Finance Committee will be held at the Peninsula Clean Energy Lobby: 2075 Woodside Road, Redwood City, CA 94061, and Los Banos City Hall, Conference Room B, 520 J Street, Los Banos, CA 93635 and by teleconference pursuant to California Assembly Bill 2449 and the Ralph M. Brown Act, CA Gov’t Code. Section 54950, et seq. Members of the Committee are expected to attend the meeting in person and should reach out to our General Counsel for Peninsula Clean Energy, Jennifer Stalzer, with questions or accommodation information ([email protected]). For information regarding how to participate in the meeting remotely, please refer to the instructions at the end of the agenda. In addition, a video broadcast of the meeting can be viewed at https://www.peninsulacleanenergy.com/meetings-events following the meeting.
Public Participation
The PCEA Audit and Finance Committee meeting may be accessed through Zoom online at https://pencleanenergy.zoom.us/j/89514559357. The meeting ID is: 895-1455-9357 and the passcode is:
2075. The meeting may also be accessed via telephone by dialing +1(669) 444-9171. Enter the webinar ID: 895-1455-9357, then press #. (Find your local number:
https://pencleanenergy.zoom.us/u/kTlH1Ocod). Peninsula Clean Energy uses best efforts to ensure audio and visual clarity and connectivity. However, it cannot guarantee the connection quality.
Members of the public can also attend this meeting physically at the Peninsula Clean Energy Lobby at 2075 Woodside Road, Redwood City, CA 94061, and Los Banos City Hall, Conference Room B, 520 J Street, Los Banos, CA 93635
Written public comments may be emailed to PCEA Board Clerk, Nelly Wogberg ([email protected]) and such written comments should indicate the specific agenda item on which the member of the public is commenting.
Spoken public comments will be accepted during the meeting in the Board Room(s) or remotely through Zoom at the option of the speaker. Please use the “Raise Your Hand” function in the Zoom platform, or press *6 if you phoned into the meeting, to indicate that you would like to provide comment. 1 1. Approval of Minutes from the May 12, 2025 Audit and Finance Committee Meeting
2. Chair Report
3. Staff Report
4. Appointment of Audit and Finance Committee Chair (Action)
5. Recommend to the Board of Directors Approval of the Fiscal Year 2025-2026 Budget (Action)
6. Discussion of Rate Stabilization Fund (Discussion)
7. Discussion of Days Cash on Hand Target (Discussion)
8. Committee Members' Reports (Discussion)
Please note that Peninsula Clean Energy Audit and Finance Committee meetings are a limited public forum, and all public comment must relate to something that is within the subject matter jurisdiction of the Committee. If comments do not relate to the subject matter jurisdiction of the Committee, we will stop the comment and move on to the next speaker. General Counsel will assist in identifying comments that are not related to the subject matter jurisdiction of the Committee.
ADA Requests
Individuals who require special assistance or a disability related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting, should contact Nelly Wogberg, Board Clerk, by 10:00 a.m. on the day before the meeting at ([email protected]). Notification in advance of the meeting will enable PCEA to make reasonable arrangements to ensure accessibility to this meeting, the materials related to it, and your ability to comment.
Closed Captioning is available for all PCEA Board meetings. While watching the video broadcast in Zoom, please enable captioning.
CALL TO ORDER / ROLL CALL / APPROVE TELECONFERENCE PARTICIPATION UNDER AB 2449
This item is reserved to approve teleconference participation request for this meeting by Director pursuant to Brown Act revisions of AB 2449 due to an emergency circumstance to be briefly described.
PUBLIC COMMENT
This item is reserved for persons wishing to address the Committee on any PCEA-related matters that are not otherwise on this meeting agenda. Public comments on matters listed on the agenda shall be heard at the time the matter is called. Members of the public who wish to address the Committee are customarily limited to two minutes per speaker. The Committee Chair may increase or decrease the time allotted to each speaker.
ACTION TO SET AGENDA AND TO APPROVE CONSENT AGENDA ITEMS
REGULAR AGENDA
ADJOURNMENT
Public records that relate to any item on the open session agenda are available for public inspection. The records are available at the Peninsula Clean Energy offices or on PCEA Website at:
https://www.peninsulacleanenergy.com.
JOINING INSTRUCTIONS
2 Instructions for Joining a Zoom Meeting via Computer or Phone Best Practices:
Please mute your microphone when you are not speaking to minimize audio feedback If possible, utilize headphones or ear buds to minimize audio feedback If participating via videoconference, audio quality is often better if you use the dial-in option (option 2 below) rather than your computer audio
Options for Joining
Videoconference with Computer Audio - see Option 1 below Videoconference with Phone Call Audio - see Option 2 below Calling in via Telephone/Landline - see Option 3 below
Videoconference Options:
Prior to the meeting, we recommend that you install the Zoom Meetings application on your computer by clicking here https://zoom.us/download.
If you want full capabilities for videoconferencing (audio, video, screensharing) you must download the Zoom application.
Option 1 Videoconference with Computer Audio:
From your computer, click on the following link that is also included in the meeting calendar invitation: https://pencleanenergy.zoom.us/j/89514559357 The Zoom application will open on its own or you will be instructed to open Zoom.
After the application opens, the pop-up screen below will appear asking you to choose ONE of the audio conference options. Click on the Computer Audio option at the top of the pop-up screen.
Click the blue, "Join with Computer Audio" button.
In order to enable video, click on "Start Video" in the bottom left-hand corner of the screen. This menu bar is also where you can mute/unmute your audio.
Option 2 Videoconference with Phone Call Audio
From your computer, click on the following link that is also included in the Meeting Calendar Invitation: https://pencleanenergy.zoom.us/j/89514559357 The Zoom Application will open on its own or you will be instructed to Open Zoom. 3 After the application opens, the pop-up screen below will appear asking you to choose ONE of the audio conference options. Click on the Phone Call option at the top of the pop-up screen.
Please dial +1 (669) 444-9171.
You will be instructed to enter the meeting ID: 895-1455-9357 followed by #.
You will be instructed to enter in your participant ID. Your participant ID is unique to you and is what connects your phone number to your Zoom account.
After a few seconds, your phone audio should be connected to the Zoom application on your computer.
In order to enable video, click on "Start Video" in the bottom left-hand corner of the screen. This menu bar is also where you can mute/unmute your audio.
Audio Only Options:
Please note that if you call in/use the audio only option, you will not be able to see the speakers or any presentation materials in real time.
Option 3: Calling in via Telephone/Landline:
Please dial +1 (669) 444-9171.
You will be instructed to enter the meeting ID: 895-1455-9357 followed by #.
You will be instructed to enter your Participant ID followed by #. If you do not have a participant ID or do not know it, you can press # to stay on the line.
You will be instructed to enter the meeting passcode 2075 followed by #. 4 DATE: May 9, 2025
MEETING DATE: June 9, 2025
VOTE REQUIRED: Majority Vote
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nelly Wogberg, Board Clerk
SUBJECT: Approval of Minutes from the May 12, 2025 Audit and Finance Committee Meeting
Item No. 1
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Approval of Minutes from the May 12, 2025 Audit and Finance Committee Meeting ATTACHMENTS:
05-12-2025 AFC Draft Minutes.pdf
5 Regular Meeting of the Audit and Finance Committee of the Peninsula Clean Energy Authority (PCEA)
Minutes
Monday, May 12, 2025
8:30 a.m.
Zoom Video Conference and Teleconference
CALL TO ORDER
Meeting was called to order at 8:41 a.m. in virtual teleconference, in the Peninsula Clean Energy Authority lobby, and is Los Banos City Hall Conference Room B.
ROLL CALL
Participating:
Tom McCune, Belmont, participating remotely under AB 2449 “just cause” exemption Donna Colson, Burlingame, Chair
Carlos Romero, East Palo Alto
Michael Amabile, Los Banos, participating from Los Banos Elmer Martinez Saballos, Redwood City
Absent: None
A quorum was established.
PUBLIC COMMENT
None
ACTION TO SET AGENDA AND TO APPROVE CONSENT AGENDA ITEMS Public Comment: None
MOTION: Director McCune moved, seconded by Director Amabile to set the Agenda and approve Agenda Item Number 1.
1. Approval of Minutes from the February 10, 2025 Audit and Finance Committee Meeting MOTION PASSED: 5-0
JURISDICTION BOARD MEMBER YES NO ABSTAIN ABSENT
Belmont Director McCune X
Burlingame Director Colson X
East Palo Alto Director Romero X
Los Banos Director Ragsdale X
Redwood City Director Llanez X
Totals 5
6 REGULAR AGENDA
2. Chair Report
None
3. Staff Report
None
4. Q3 Fiscal Year 2025 Financial Report (Quarter Ending March 31, 2025) (Discussion) Nick Bijur, Chief Financial Officer, gave a presentation with the Third Quarter Fiscal Year 2025 Financial Report.
Public Comment: None
5. Review Fiscal Year 2025-2026 Draft Budget (Discussion) Nick Bijur, Chief Financial Officer, gave a presentation on the Fiscal Year 2025-2026 Draft Budget.
Public Comment: None
6. Recommend to the Board of Directors Approval of a Two-Year Contract with Maher Accountancy (Action)
Hailey Wu, Manager of Financial Planning & Analysis, gave a brief presentation of the RFP process and the proposed two-year contract with Maher Accountancy.
Public Comment: None
MOTION: Director McCune moved, seconded by Director Amabile to recommend to the Board of Directors approval of a two-year contract with Maher Accountancy (Maher) commencing on July 1, 2025 in an amount not to exceed $690,000.
MOTION PASSED: 5-0
JURISDICTION BOARD MEMBER YES NO ABSTAIN ABSENT
Belmont Director McCune X
Burlingame Director Colson X
East Palo Alto Director Romero X
Los Banos Director Ragsdale X
Redwood City Director Llanez X
Totals 5
7 7. Residential Solar Program and Credit Enhancement Options (Discussion) Rafael Reyes, Director of Energy Programs, gave a presentation on the Residential Solar Program and credit enhancement.
Public Comment: None
8. Committee Members’ Reports
None
ADJOURNMENT
Meeting was adjourned at 10:10 a.m.
8 DATE: June 2, 2025
MEETING DATE: June 9, 2025
VOTE REQUIRED: Majority Vote
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nicholas Bijur, Chief Financial Officer
SUBJECT: Recommend to the Board of Directors Approval of the Fiscal Year 2025-2026 Budget (Action)
Item No. 5
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Recommend approval by the Board of Directors of the Fiscal Year 2025-2026 budget (July 1, 2025 through June 30, 2026).
BACKGROUND
On May 12, 2025, staff presented a draft fiscal year 2025-2026 budget to the Audit and Finance Committee to solicit comments and input. The Audit and Finance Committee was supportive of the draft budget and did not have any suggested changes. Since the Audit and Finance Committee meeting on May 12, 2025, the CPUC issued a Proposed Decision on the PCIA Order Instituting Rulemaking (OIR) which, if adopted, will significantly increase the PCIA in 2026. Budgeted costs have not changed materially; however, the forecasted net position of ~$1 million is approximately $24 million less than was presented at the May Audit and Finance Committee meeting, largely due to lower forecasted customer rates and revenues starting in February 2026 to account for an anticipated increase in the PCIA.
DISCUSSION
Fiscal year 2025-2026 (July 1, 2025 through June 30, 2026) budget presentation and details will be provided for Audit and Finance Committee and Executive Committee review. The bottoms-up budgeting approach included individual discussions with the department heads to develop their portions of the budget. Staff also conducted a cross-departmental meeting to review Peninsula Clean Energy (PCE) priorities and cost reduction opportunities.
The budget being presented includes sufficient expenses to support PCE's mission to reduce greenhouse gas emissions by expanding access to sustainable and affordable energy solutions. Total budgeted costs of $394 million represents a 5% decrease from fiscal year 2024-2025 due largely to lower energy costs, offset in part by higher operating expenses.
Based on cost-of-service ratemaking, maintaining rates at a 10% discount to PG&E throughout the year should generate sufficient revenues to support PCE's costs. The forecast 9 assumes an approximate 35% rate decrease in February 2026 to coincide with anticipated PG&E and PCIA rate changes. Staff will return to the Board of Directors in January 2026 for approval of updated rates. Forecasted electricity sales are $65 million less than fiscal year 2024-2025 due to lower average customer rates throughout the year which are inclusive of a higher PCIA.
FISCAL IMPACT
Approving the fiscal year 2025-2026 budget will provide sufficient resources to cover PCE's operations and will allow PCE to maintain the current 10% net discount to PG&E, while supporting PCE's long-term financial viability.
ATTACHMENTS:
Summary Budget.pdf
10 Draft 5-Year Forecast
As of June 5, 2025
2025 2026 2027 2028 2029 2030
9 Mo. Act + Fcst Budget Forecast Forecast Forecast Forecast Operating Revenues 454,959,920 381,071,035 300,964,100 418,740,925 447,878,977 456,946,996 Rate Stabilization Fund (37,000,000) - 105,000,000 - - - Total Revenues 417,959,920 381,071,035 405,964,100 418,740,925 447,878,977 456,946,996 Cost of Energy 368,852,605 339,852,565 351,391,003 363,618,843 386,739,115 398,260,807 Revenue less Energy Costs 49,107,315 41,218,469 54,573,097 55,122,082 61,139,862 58,686,189 Programs 17,522,488 21,700,000 27,050,000 27,650,000 27,650,000 27,150,000 Staff Compensation 14,087,390 16,391,740 18,124,963 19,581,130 20,560,187 21,588,196 General & Administrative 14,006,921 16,505,734 16,791,207 17,621,363 18,000,430 18,478,670 Operating Expenses 45,616,799 54,597,474 61,966,170 64,852,493 66,210,617 67,216,866 Operating Income (Loss) 3,490,516 (13,379,004) (7,393,073) (9,730,411) (5,070,755) (8,530,676) Interest Income 20,330,881 14,520,194 11,893,036 10,081,443 9,926,360 9,731,002 Change in Net Position 23,821,397 1,141,190 4,499,964 351,032 4,855,604 1,200,325 11 DATE: June 2, 2025
MEETING DATE: June 9, 2025
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nicholas Bijur, Chief Financial Officer
SUBJECT: Discussion of Rate Stabilization Fund (Discussion) Item No. 6
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Discussion item only.
BACKGROUND
The Board of Directors (Board) approved the establishment of a Rate Stabilization Fund in May 2024. A Rate Stabilization Fund is an accounting tool available to government entities under Governmental Accounting Standards Board (GASB) 62 to mitigate rate changes and, more importantly, rate spikes. The primary purpose of GASB 62 is to recognize expenses and the revenues from rates designed to recover those costs in the same accounting period. This standard recognizes that Load Serving Entities, including CCAs, often have to consider rate stability, and thus recover costs over different periods than those costs would be recognized as expenses under Generally Accepted Accounting Principles.
PCE staff will consider deferral of revenues into the Rate Stabilization Fund in a fiscal year when the projected addition to Net Position is greater than 3% of revenues, and deposits can be made into the Rate Stabilization Fund until the fund balance equals 15% of revenues, which is the target threshold established by the Board in 2024. Staff will consider withdrawals of revenues from the Rate Stabilization Fund in a fiscal year where Change in Net Position is projected to be negative or as necessary to satisfy any covenants, contractual obligations, or to maintain investment grade credit ratings.
Peninsula Clean Energy (PCE) deferred $68 million of revenues in fiscal year 2023-2024, representing 15% of revenues.
DISCUSSION
When the Rate Stabilization Fund was initially contemplated by staff and approved by the Board in 2024, the 15% of revenues fund limit was based on benchmarking data at the time and was determined to be sufficient to help support PCE rates in the near future. Given updated benchmarking data and an anticipated significant increase in the PCIA that will 12 negatively impact customer rates, staff recommends temporarily waiving the Rate Stabilization Fund limit and deferring additional revenues from fiscal year 2024-2025. The revenues will likely be recognized in fiscal year 2026-2027 to help stabilize rates and provide customers a discount to PG&E in a year that is forecasted to be financially challenging.
Staff forecasts an approximately $60 million addition to Net Position in the current fiscal year, which exceeds the original budget primarily due to lower energy costs. Deferring revenues in fiscal year 2024-2025 and increasing the Rate Stabilization Fund will directly support PCE's ability to set rates at a discount to PG&E in fiscal year 2026-2027 when PG&E generation rates are expected to decline and the PCIA to increase significantly. While the exact amount of revenues to be deferred will depend in part on fiscal year 2024-2025 final financial results, deferring $37 million of revenues would increase the Rate Stabilization Fund to $105 million, which represents ~23% of anticipated revenues.
FISCAL IMPACT
Deferring revenues into the Rate Stabilization Fund will have a commensurate negative effect on revenues in the current fiscal year while still generating a small addition to Net Position.
There is no impact on cash. Withdrawals from the Rate Stabilization Fund would have a commensurate positive effect on net revenues in that fiscal year, thus allowing continued rate discounts, and similarly no impact on cash.
13 DATE: June 2, 2025
MEETING DATE: June 9, 2025
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nicholas Bijur, Chief Financial Officer
SUBJECT: Discussion of Days Cash on Hand Target (Discussion) Item No. 7
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Discussion item only.
BACKGROUND
In December 2023, Peninsula Clean Energy (PCE) established an annual reserve target of 250 adjusted Days Cash on Hand (DCOH), above which the Board of Directors (Board) would consider a surplus fund allocation. DCOH is a commonly used metric in the industry and by the rating agencies that compares a company's cash position relative to historical expenses and essentially calculates how many days it would take to exhaust a company's cash assuming no revenues or inflow of funds.
Adjusted cash is defined by PCE as cash less Board-approved capital spending, as these are funds that have been committed for disbursement in the near-term (i.e., GovPV, Residential Solar and Storage, and On-Bill-Financing). In addition, staff recommends that DCOH should also be adjusted by the Rate Stabilization Fund, as these are similarly funds that have been earmarked to reduce customer rates and PCE revenues in the near-term. PCE did not have a Rate Stabilization Fund when the adjusted DCOH target was initially determined.
DISCUSSION
As part of the budget process, staff calculates adjusted DCOH to determine recommended PCE rates. Staff also considers forecasted DCOH given anticipated changes in revenues and costs, such as the cost of energy which is heavily impacted by the energy markets, and PG&E's rates and the PCIA which also impacts PCE's rates and revenues. If DCOH exceeds the 250 day target, either adjusted or forecasted, staff may recommend for the Board’s consideration further discounts in customer rates.
In the coming fiscal year, adjusted DCOH of 237 days, further adjusted for the Rate Stabilization Fund, and forecasted DCOH of 246 days supports staff's recommendation to maintain electric generation rates at a 10% discount to PG&E throughout the fiscal year, which assumes an approximate 35% decrease in PCE's rates in February 2026 to coincide with an 14 anticipated decrease in PG&E rates and sharp increase in the PCIA.
FISCAL IMPACT
Targeting 250 adjusted DCOH, further adjusted for the Rate Stabilization Fund, supports PCE's financial viability and helps ensure that PCE has sufficient resources to meet its goals and support its operations.
15