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, November 10, 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 1 1. Approval of the 2026 Audit and Finance Committee Meeting Schedule
2. Approval of Minutes from the September 8, 2025 Audit and Finance Committee Meeting
3. Chair Report (Discussion)
4. Staff Report (Discussion)
5. Receive and Recommend that the Board of Directors Approve the Audited Financial Statements for Fiscal Year 2024-2025 (Action)
6. Quarter One Fiscal Year 2026 Financial Report (Quarter Ending September 30, 2025) (Discussion)
7. Committee Members' Reports (Discussion)
press *6 if you phoned into the meeting, to indicate that you would like to provide comment.
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:
2 https://www.peninsulacleanenergy.com.
JOINING INSTRUCTIONS
3 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. 4 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 #. 5 DATE: November 7, 2025
MEETING DATE: November 10, 2025
VOTE REQUIRED: Majority Vote
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nelly Wogberg, Clerk of the Board
SUBJECT: Approval of the 2026 Audit and Finance Committee Meeting Schedule Item No. 1
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Approval of the 2026 Audit and Finance Committee Meeting Schedule.
ATTACHMENTS:
2026 AFC Meeting Schedule.pdf
6 2026 Audit and Finance Committee Meeting Schedule
Location: Video/Teleconference/PCEA Lobby/Check Agenda
Meeting Date: Time: Location:
February 9, 2026 8:30 am Video/Teleconference/PCEA Lobby/Check Agenda May 11, 2026 8:30 am Video/Teleconference/PCEA Lobby/Check Agenda June 8, 2026 8:30 am Video/Teleconference/PCEA Lobby/Check Agenda September 14, 2026 8:30 am Video/Teleconference/PCEA Lobby/Check Agenda November 9, 2026 8:30 am Video/Teleconference/PCEA Lobby/Check Agenda 7 DATE: October 10, 2025
MEETING DATE: November 10, 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 September 8, 2025 Audit and Finance Committee Meeting
Item No. 2
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Approval of Minutes from the September 8, 2025 Audit and Finance Committee Meeting.
ATTACHMENTS:
09-08-2025 A&FC Draft Minutes.pdf
8 Special Meeting of the Audit and Finance Committee of the Peninsula Clean Energy Authority (PCEA)
Minutes
Monday, September 8, 2025
8:30 a.m.
Zoom Video Conference and Teleconference
CALL TO ORDER
Meeting was called to order at 8:35 a.m. in virtual teleconference, in the Peninsula Clean Energy Authority lobby, and in Los Banos City Hall Conference Room B.
ROLL CALL
Participating:
Tom McCune, Belmont
Donna Colson, Burlingame, Chair
Carlos Romero, East Palo Alto
Michale Amabile, Los Banos, participating from Los Banos Elmer Martinez Saballos, Redwood City, arrived at 8:40 a.m.
Absent:
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 Chair Colson to set the Agenda and approve Agenda Item Number 1.
1. Approval of the Minutes for the June 9, 2025 Audit and Finance Committee Meeting MOTION PASSED: 4-0 (Absent: Redwood City)
JURISDICTION BOARD MEMBER YES NO ABSTAIN ABSENT
Belmont Director McCune X
Burlingame Director Colson X
East Palo Alto Director Romero X
Los Banos Director Amabile X
Redwood City Elmer Martinez-Saballos X
Totals 4 1
9 REGULAR AGENDA
2. Chair Report
None.
3. Staff Report
Nick Bijur, Chief Financial Officer, provided an update to the Committee on an upcoming second prepay transaction, revised S&P outlook to “Positive,” progress on the annual audit, issuance of a $1.3M Letter of Credit to PG&E under updated CPUC financial security rules (replacing a $147K escrow and subject to semiannual recalculation), and the launch of the Enterprise Risk Management program.
4. Discussion of Future Prepay Transaction and Planning Nick Bijur, Chief Financial Officer, provided an overview of a future prepay transaction for discussion.
Public Comment: None
5. Q4 Fiscal Year 2025 Financial Report (Quarter Ending June 30, 2025) (Discussion) Nick Bijur, Chief Financial Officer, gave a presentation with the results of the fourth quarter financial report.
Public Comment: None
6. Committee Members’ Reports
Director McCune noted planned outages from PG&E in Belmont.
ADJOURNMENT
Meeting was adjourned at 9:36 a.m.
10 DATE: October 31, 2025
MEETING DATE: November 10, 2025
VOTE REQUIRED: Majority Vote
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nicholas Bijur, Chief Financial Officer
SUBJECT: Receive and Recommend that the Board of Directors Approve the Audited Financial Statements for Fiscal Year 2024-2025 (Action) Item No. 5
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Receive and Recommend Approval of the Audited Financial Statements for Fiscal Year 2024- 2025.
BACKGROUND
The financial statements for Fiscal Year 2024-2025 have been prepared by Peninsula Clean Energy's (PCE) finance team, with support from Maher Accountancy, and audited by Sorren CPAs, P.C., a licensed independent auditing firm. Note that PCE's prior independent auditing firm, Pisenti & Brinker, was recently acquired by Sorren; there has been no change to the team of professionals working with PCE. The audit work began in July 2025 and the financial statements are ready for the Audit and Finance Committee’s review. Upon recommendation of approval of these statements by the Audit and Finance Committee, the statements will be presented to the Board of Directors for their final approval.
Pisenti & Brinker, and now Sorren, has provided auditing services to PCE since 2017. In order to abide by California rules that require a change in audit partner at least every seven year, Kellin Gilbert assumed the role of engagement partner for PCE last year. Kellin will provide an overview of the audit process and results during the meeting.
ATTACHMENTS:
PCE - Letter to Those Charged with Govenance 6.30.2025.pdf Peninsula Clean Energy Authority 6.30.2025 Financial Statements.pdf Sorren Presentation - Peninsula Clean Energy A&F 11.10.2025.pdf 11 CPAs, PC
Report to the
Board of
Directors
Peninsula Clean Energy Authority
For the year ended June 30, 2025
12 Ph: (707) 542-3343 sorren.com
3562 Round Barn Cir, #200, Santa Rosa, CA 95403
To the Board of Directors
Peninsula Clean Energy Authority
2075 Woodside Road
Redwood City, CA 94061
We are pleased to present this report related to our audit of the financial statements of Peninsula Clean Energy Authority (“PCE”) as of and for the year ended June 30, 2025. Our report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for PCE’s financial reporting process.
This report is intended solely for the information and use of the Audit and Finance Committee, Board of Directors and management of PCE and is not intended to be and should not be used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to Peninsula Clean Energy Authority.
Santa Rosa, California
October 30, 2025
cc: Nick Bijur, Chief Financial Officer
13 TABLE OF CONTENTS
Required Communications 1
Significant Accounting Estimates 3
Appendices
Appendix A—Significant Written Communications Between Management and Our Firm
• Representation Letter 4
14 1
REQUIRED COMMUNICATIONS
The following required communications summarize our responsibilities regarding the financial statement audit as well as observations from our audit that are significant and relevant to your responsibility to oversee the financial reporting process.
Our Responsibilities
We described our responsibilities under auditing standards generally accepted in the United States of America have been described to you in our engagement letter dated September 29, 2025. Our audit of the financial statements does not relieve management or you of your responsibilities, which are also described in that letter.
Planned Scope and Timing
We previously issued a separate communication dated August 26, 2025 regarding the planned scope and timing of our audit and identified significant risks.
Accounting Policies and Practices
Preferability of Accounting Policies and Practices
Under accounting principles generally accepted in the United States of America, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice.
Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by PCE. PCE did not change any existing significant accounting policies. As disclosed in Note 12, PCE adopted GASB 102-104 which did not have a significant effect on the financial statements.
Significant Accounting Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant or Unusual Transactions
We did not identify any significant unusual transactions.
Management’s Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates.
Audit Adjustments and Uncorrected Misstatements
Management chose to pass on one adjustment related to GASB 96 which management concluded wasn't material. We are not aware of any other passed adjustments that were not trivial. 15 2
Observations About the Audit Process
Disagreements With Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit or significant disclosures to be included in the financial statements.
Consultations With Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.
Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.
Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.
Shared Responsibilities for Independence
Auditor independence is a joint responsibility and is managed most effectively when management, audit committees, and audit firms work together in considering compliance with applicable independence rules.
For Sorren CPAs P.C. (the Firm) to fulfill its professional responsibility to maintain and monitor independence, management, the Board of Directors, and the Firm each play an important role.
Our Responsibilities
• We are required to maintain both independence of mind and in appearance when providing audit and other attestation services. It is our responsibility to ensure that the general requirements for performing nonattest services are adhered to and included in all letters of engagement. • We are required to maintain a system of quality management over compliance with independence rules and firm policies.
PCE’s Responsibilities
• Timely inform the Firm, before the effective date of transactions or other business changes, of the following:
− New affiliates, directors, or officers.
• Understand and conclude on the permissibility, prior to PCE’s, officers, directors, or persons in a decision-making capacity, engaging in business relationships with the Firm. • Not entering into relationships resulting in close family members of the Firm covered persons, temporarily or permanently acting as an officer, director, or person in an accounting or financial reporting oversight role at the Company.
Significant Written Communications Between Management and Our Firm Copies of significant written communications between our firm and the management of PCE, including the representation letter provided to us by management, are attached as Appendix A 16 3
SIGNIFICANT ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates.
The following summarizes the significant accounting estimates reflected in PCE’s June 30, 2025 financial statements.
Significant Accounting Estimates
Accrued Revenue
Accounting policy/
Management’s estimation
process
Management’s estimate of accrued revenue includes historical trends and anticipated energy usage.
Basis for our conclusion on
the reasonableness of the
estimate
We tested management’s estimate analytically and determined management’s estimate to be reasonable in relation to the financial statements taken as a whole.
Cost of Electricity
Accounting policy/
Management’s estimation
process
Management’s estimate of accrued cost of electricity includes historical trends and anticipated energy usage.
Basis for our conclusion on
the reasonableness of the
estimate
We tested management’s estimate through subsequent
disbursements and analytical procedures and determined
management’s estimate to be reasonable in relation to the financial statements taken as a whole.
Allowance for Uncollectible Accounts
Accounting policy/
Management’s estimation
process
Management’s estimate of the allowance for uncollectible accounts includes historical collection trends and anticipated future collections.
Basis for our conclusion on
the reasonableness of the
estimate
We evaluated the key factors and assumptions used to develop the estimate in determining that the allowance is reasonable in relation to the financial statements taken as a whole.
17 APPENDIX A
Significant Written Communications Between Management and Our Firm
18 October 30, 2025
Sorren CPAs, P.C.
3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
This representation letter is provided in connection with your audit of the basic financial statements of Peninsula Clean Energy Authority (PCE) as of and for the years ended June 30, 2025 and 2024 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S.
GAAP).
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 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.
We confirm, to the best of our knowledge and belief, that as of October 30, 2025:
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated September 29, 2025 for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP.
2. 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.
3. We acknowledge our responsibility for the design, implementation and maintenance of controls to prevent and detect fraud.
4. The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of U.S. GAAP, and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.
5. Related-party transactions have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S.
GAAP.
6. The financial statements properly classify all funds and activities in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as amended.
7. All events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed.
8. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
9. Management has followed applicable laws and regulations in adopting, approving and amending budgets.
19 Sorren CPAs P.C.
October 30, 2025
10. Risk disclosures associated with deposit and investment securities and derivative transactions are presented in accordance with GASB requirements.
11. Provisions for uncollectible receivables have been properly identified and recorded.
12. Capital assets, including infrastructure, intangible assets, and right of use assets are properly capitalized, reported and, if applicable, depreciated.
13. The government properly separated information in debt disclosures related to direct borrowings and direct placements of debt from other debt and disclosed any unused lines of credit, collateral pledged to secure debt, terms in the debt agreements related to significant default or termination events with finance-related consequences and significant subjective acceleration clauses in accordance with GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements.
14. Components of net position (net investment in capital assets, restricted, and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved.
15. Leases have been properly identified, recorded, and disclosed in accordance with GASB Statement No. 87, Leases.
16. Subscription-based technology information arrangements (SBITAs) have been properly identified, recorded, and disclosed in accordance with GASB Statement No. 96, Subscription-Based Information Technology Arrangements.
17. There are no concentrations or constraints requiring disclosure in accordance with GASB Statement No. 102, Certain Risk Disclosures.
18. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bond holders, that is not disclosed in the financial statements.
19. We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance. In connection therewith, we specifically represent that we are responsible for determining that we are not subject to the requirements of the Single Audit Act because we have not received, expended or otherwise been the beneficiary of the required amount of federal awards during the period of this audit.
20. We have no knowledge of any uncorrected misstatements in the financial statements.
Information Provided
21. 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 basic financial statements such as records, 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 PCE from whom you determined it necessary to obtain audit evidence.
20 Sorren CPAs P.C.
October 30, 2025
d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared.
22. All transactions have been recorded in the accounting records and are reflected in the basic financial statements.
23. We have disclosed to you the results of our assessment of risk that the basic financial statements may be materially misstated as a result of fraud.
24. We have no knowledge of allegations of fraud or suspected fraud affecting PCE’s basic financial statements involving:
a. Management.
b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the basic financial statements.
25. We have no knowledge of any allegations of fraud or suspected fraud affecting PCE’s basic financial statements received in communications from employees, former employees, analysts, regulators, or others.
26. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations.
27. We are not aware of any pending or threatened litigation, claims or assessments; unasserted claims or assessments that are probable of assertion and must be disclosed in accordance with Accounting Standards Codification (ASC) Topic 450, Contingencies; violations or possible violations of laws and regulations; or other matters, including gain or loss contingencies, whose effects should be considered when preparing the financial statements.
28. We have disclosed to you the identity of all of PCE’s related parties and all the related-party relationships and transactions of which we are aware.
29. We are aware of no significant deficiencies in internal control over financial reporting, including significant deficiencies or material weaknesses, in the design or operation of internal controls that could adversely affect PCE’s ability to record, process, summarize and report financial data.
30. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
Supplementary Information
31. With respect to the Management’s Discussion and Analysis presented as required by GAAP and the Governmental Accounting Standards Board to supplement the basic financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary information.
b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.
21 Sorren CPAs P.C.
October 30, 2025
Nicholas Bijur, Chief Financial Officer
Peninsula Clean Energy Authority
Mike Maher, Accountant
Michael Maher 22
FINANCIAL STATEMENTS
FISCAL YEARS ENDED JUNE 30, 2025 AND 2024
WITH REPORT OF
INDEPENDENT AUDITORS
23 TABLE OF CONTENTS
Independent Auditor’s Report …………………………………………………........... 1 Management’s Discussion and Analysis ……………………………………………... 4 Basic Financial Statements:
Statements of Net Position …………………………………………………… 9
Statements of Revenues, Expenses and Changes in Net Position ….................. 10 Statements of Cash Flows …………………………………………………….. 11
Notes to the Basic Financial Statements ……………………………………… 13 24 Ph: (707) 542-3343 sorren.com
3562 Round Barn Cir, #200, Santa Rosa, CA 95403
Independent Auditor's Report
To the Board of Directors
Peninsula Clean Energy Authority
Opinion
We have audited the accompanying financial statements of Peninsula Clean Energy Authority (PCE), which comprise the statements of net position as of June 30, 2025 and 2024, the related statements of revenue, expenses and changes in net position, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of PCE as of June 30, 2025 and 2024, and the results of its operations 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of PCE 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 PCE’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued, including any currently known information that may raise substantial doubt shortly thereafter. 25 Independent Auditor's Report (continued)
Auditor's 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 auditor’s 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.
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 PCE’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 PCE’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.
26 Independent Auditor’s Report (continued)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and analysis 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.
Santa Rosa, California
October 30, 2025
27 PENINSULA CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED JUNE 30, 2025 AND 2024
4 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 Peninsula Clean Energy Authority’s (PCE) 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 PCE’s finances.
If you have questions about this report or require further information, please contact PCE at [email protected].
Overview of the Financial Statements
PCE’s financial report contains basic financial statements, which include:
o The Statements of Net Position include all of PCE’s assets, liabilities, 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 PCE’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.
28 PENINSULA CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED JUNE 30, 2025 AND 2024
5 Financial Summary
PCE’s Net Position
2025 2024 2023
Current assets $ 296,837,851 $ 271,029,376 $ 230,229,924 Noncurrent assets:
Capital assets, net 13,884,602 7,192,785 3,245,102
Other noncurrent assets 218,321,725 196,984,028 115,190,369 Total noncurrent assets 232,206,327 204,176,813 118,435,471 Total assets 529,044,178 475,206,189 348,665,395
Current liabilities 40,178,389 55,478,759 37,979,864
Noncurrent liabilities 2,571,232 2,527,330 3,059,539
Total liabilities 42,749,621 58,006,089 41,039,403
Deferred inflows of resources 128,000,000 68,000,000 -
Net position
Net Investment in capital assets 12,420,556 5,455,117 399,493 Unrestricted 345,874,001 343,744,983 307,226,499
Total net position $ 358,294,557 $ 349,200,100 $ 307,625,992 As of June 30, 2025, PCE’s total net position was approximately $358,000,000, an increase of $9,000,000 or 3% as compared to June 30, 2024. See the discussion in the following section for the changes in the various components.
PCE’s Changes in Net Position
2025 2024 2023
Operating revenues $ 391,935,615 $ 388,612,693 $ 428,218,199 Nonoperating revenues 26,275,124 14,844,423 2,953,610
Total revenues 418,210,739 403,457,116 431,171,809
Operating expenses 409,064,698 361,835,489 291,154,063
Nonoperating expenses and losses 51,584 47,519 62,488
Total expenses 409,116,282 361,883,008 291,216,551
Change in net position 9,094,457 $ $ 41,574,108 $ 139,955,258 The increase in electricity sales in 2025 were offset by the $60,000,000 voluntary deferral into the Rate Stabilization Fund. The cost of electricity, a component of operating expenses, increased from fiscal year (FY) 2024 to FY 2025 due to increases in renewable energy and resource adequacy (RA) market costs. See the following section for a detailed discussion. 29 PENINSULA CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED JUNE 30, 2025 AND 2024
6 Detailed Analysis
Current assets increased from $271,029,000 at the end of FY 2024 to $296,838,000 at the end of FY 2025, an increase of approximately $25,809,000 (9.6%). The increase was the result of normal operating results and investment earnings. At June 30, 2025, current assets consisted mainly of cash and investments of $228,077,000, accounts receivable of $30,563,000, and accrued revenue of $23,609,000. Included in cash and investments is $128,000,000 held in the Rate Stabilization Fund, which PCE uses to defer revenue to future years to allow PCE to mitigate potential future volatility in energy procurement costs and maintain stable and competitive customer rates. By comparison, the Rate Stabilization Fund balance at June 30, 2024 was $68,000,000. Also included in current assets are loans related to PCE’s On-Bill-Financing program. Under this program retail customers finance qualifying home electrification projects and make repayments with their monthly utility bills. PCE recognizes a current and noncurrent balance on its Statement of Net Position in accordance with the terms of the loans.
Noncurrent assets totaled $232,206,000 at June 30, 2025, up from $204,177,000 in FY 2024, reflecting investments of $211,007,000 (versus $192,300,000 in FY 2024) and capital assets of $13,885,000 (versus $7,193,000 in FY 2024). Growth in capital assets is attributable to investments in rooftop solar and battery storage assets.
Current liabilities decreased from $55,479,000 at June 30, 2024 to $40,178,000 at June 30, 2025, a reduction of $15,301,000 (27.6%). The primary driver was lower accrued cost of electricity, which totaled $33,039,000 at the end of FY 2025, compared to $43,669,000 at the end of FY 2024. These balances fluctuate annually based on the timing of energy purchases and payments, as well as wholesale market conditions.
Noncurrent liabilities remained relatively stable, totaling $2,571,000 in FY 2025 compared to $2,527,000 in FY 2024. These liabilities primarily represent supplier security deposits and the long-term portion of the lease liability for PCE’s office premises.
Total net position increased from $349,200,000 in FY 2024 to $358,295,000 in FY 2025, an increase of $9,095,000 (3%). Of the net position at the end of FY 2025, $12,421,000 represents PCE’s investment in capital assets, while the remaining $345,874,000 is unrestricted and available to support future operating activity, programs and rate stabilization efforts.
Operating revenues were $391,936,000 in FY 2025, up slightly from $388,613,000 in FY 2024 (0.9% increase), though down from $428,218,000 in FY 2023 (8.5% decrease). The modest year-over-year increase for 2025 reflects (a) a decrease of $7,260,000 in retail electricity sales, (b) a reduction of $8,000,000 offset for the deferred amount transferred to the Rate Stabilization Fund and (c) an increase of $4,185,000 in revenue from liquidated damages revenue received primarily as compensation for supplier contract delays.
30 PENINSULA CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED JUNE 30, 2025 AND 2024
7 Detailed Analysis (continued)
Grant revenue totaled $2,961,000 in FY 2025 compared to $3,271,000 in FY 2024. Investment income increased significantly to $22,621,000 in FY 2025, compared to $14,844,000 in FY 2024 and $2,164,000 in FY 2023, due to both higher interest rates and growth in invested balances.
Total operating expenses rose from $361,835,000 in FY 2024 to $409,065,000 in FY 2025, an increase of $47,230,000 (13%), following a larger increase of $70,681,000 (24%) from FY 2023 to FY 2024. The primary driver continues to be the cost of electricity, which was $365,972,000 in FY 2025 compared to $325,171,000 in FY 2024 and $265,208,000 in FY 2023. Rising costs in the RA market played a major role in driving this increase. Staff compensation also grew to $14,611,000 in FY 2025 (up from $9,842,000 in FY 2024 and $8,002,000 in FY 2023), reflecting continued program expansion and workforce growth.
Significant Capital Asset and Long-Term Financing Activity Capital assets include office equipment, furniture, leasehold improvements, and rooftop solar and battery storage systems. During FY 2025, capital asset acquisitions totaled $7,634,000, primarily for the continued deployment of solar and battery storage on public buildings in partnership with San Mateo County cities. Depreciation and amortization expense was $653,000 in FY 2025. 31 PENINSULA CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED JUNE 30, 2025 AND 2024
8 Currently Known Facts, Decisions, or Conditions
PCE expects to experience steady load growth over the next 10 years due to organic load growth, addition of new customers, increase in building electrification, and higher electric vehicle (EV) adoption rates. At the same time, rising costs for procurement of renewable energy and storage projects, RA, and environmental attributes will increase the cost of energy. Despite these challenges, PCE remains committed to its goal of delivering 100% renewable energy by 2030 while maximizing renewable energy matching against load on a time-coincident basis. Currently, 55% of PCE's energy mix is sourced from renewable resources, and PCE is focused on balancing sustainability, affordability, and reliability as demand continues to grow.
PCE has a portfolio of energy programs supporting electrification of buildings and transportation, load shaping, and fostering local solar and storage. In PCE 2026-26, PCE is investing over $30 million in programs including technical assistance for solar and EV charging installations, finance support for electrification and solar systems, and financial incentives for EVs, EV charging, and electric appliances. Adoption of clean energy technologies is in a period of accelerating adoption contributing to customer load growth. In addition, local and regional agencies continue to adopt policies accelerating the transition to clean electric buildings and transportation systems.
In the past, PCE’s rates were linked to Pacific Gas and Electric’s (PG&E), consistently offering a 5% discount compared to PG&E’s generation rates. However, PCE recently decoupled from PG&E, allowing greater flexibility in setting PCE’s rates. PCE’s current rates are designed to cover the full cost of energy delivery, including RA, operating expenses, and funding for customer programs. Additionally, this change enables PCE to better meet its financial goals, such as maintaining reserves and liquidity.
32 BASIC FINANCIAL STATEMENTS
33 PENINSULA CLEAN ENERGY AUTHORITY
STATEMENTS OF NET POSITION
JUNE 30, 2025 AND 2024
9 The accompanying notes are an integral part of these financial statements.
ASSETS 2025 2024
Current assets
Cash and cash equivalents $ 216,555,767 $ 179,932,959
Accounts receivable, net of allowance 30,562,761 32,381,329 Accrued revenue 23,609,119 25,740,350
Investments 11,520,856 16,828,861
Other receivables 9,141,461 6,315,467
Prepaid expenses 3,077,647 4,611,128
Deposits and other assets 2,370,240 5,219,282
Total current assets 296,837,851 271,029,376
Noncurrent assets
Investments 211,007,402 192,300,331
Loans receivable 7,122,104 4,493,035
Deposits and other assets 192,219 190,662
Capital assets, net of depreciation and amortization 13,884,602 7,192,785 Total noncurrent assets 232,206,327 204,176,813
Total assets 529,044,178 475,206,189
LIABILITIES
Current liabilities
Accrued cost of electricity 33,038,673 43,668,621
Accounts payable 3,155,099 2,950,037
Other accrued liabilities 1,567,473 899,037
Deferred revenue 1,087,084 4,372,157
User taxes and energy surcharges due to other governments 643,960 1,166,699 Deposits - energy suppliers 120,000 1,889,999
Lease liability 566,100 532,209
Total current liabilities 40,178,389 55,478,759
Noncurrent liabilities
Deposits - energy suppliers 2,409,451 1,799,451
Lease liability 161,781 727,879
Total noncurrent liabilities 2,571,232 2,527,330
Total liabilities 42,749,621 58,006,089
DEFERRED INFLOWS OF RESOURCES
Rate Stabilization Fund 128,000,000 68,000,000
NET POSITION
Net investment in capital assets 12,420,556 5,455,117
Unrestricted 345,874,001 343,744,983
Total net position $ 358,294,557 $ 349,200,100
34 PENINSULA CLEAN ENERGY AUTHORITY
STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
YEARS ENDED JUNE 30, 2025 AND 2024
10 The accompanying notes are an integral part of these financial statements. 2025 2024
OPERATING REVENUES
Electricity sales, net $ 437,922,956 $ 445,183,763
Rate stabilization fund transfer (60,000,000) (68,000,000) Liquidated damages revenue 10,740,686 6,555,711
Grant revenue 2,961,165 3,270,369
Other income 310,808 1,602,850
Total operating revenues 391,935,615 388,612,693
OPERATING EXPENSES
Cost of electricity 365,971,833 325,171,050
Contract services 12,382,693 12,534,557
Staff compensation 14,610,948 9,841,887
Program incentives 12,579,039 11,273,657
Other operating expenses 2,867,532 2,436,014
Depreciation and amortization 652,653 578,324
Total operating expenses 409,064,698 361,835,489
Operating income (loss) (17,129,083) 26,777,204
NONCAPITAL SUBSIDIES
Income from solar energy investment credit 3,654,609 -
Operating income (loss) and noncapital subsidies (13,474,474) 26,777,204
OTHER NONOPERATING REVENUES
(EXPENSES AND LOSSES)
Investment income 22,620,515 14,844,423
Loss on disposal of assets (20,022) -
Finance costs (31,562) (47,519)
Total other nonoperating revenues (expenses and losses) 22,568,931 14,796,904 CHANGE IN NET POSITION 9,094,457 41,574,108
Net position at beginning of year 349,200,100 307,625,992 Net position at end of year $ 358,294,557 $ 349,200,100
35 PENINSULA CLEAN ENERGY AUTHORITY
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2025 AND 2024
11 The accompanying notes are an integral part of these financial statements. 2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 446,771,516 $ 457,426,586
Receipts from grantors 1,503,049 3,270,369
Receipts of deposits and collateral 9,977,148 14,735,000 Receipts of liquidated damages 10,740,686 6,555,711
Receipts from wholesale sales and other operating activities 39,870,144 17,141,880 Payments to suppliers for electricity (416,380,959) (321,205,879) Payments for other goods and services (27,873,852) (30,617,940) Payments of deposits and collateral (8,959,245) (2,238,725) Payments of staff compensation (14,107,483) (9,643,002) Payments of taxes and surcharges to other governments (6,650,008) (6,346,905) Net cash provided by operating activities 34,890,996 129,077,095
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Receipt of solar energy investment credit 325,365 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets (7,105,906) (5,113,486)
Payments of lease liability (563,770) (547,354)
Net cash used by capital and related financing activities (7,669,676) (5,660,840)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments 64,778,115 57,048,636 Investment income received 16,351,114 9,947,512
Purchase of investments (72,053,106) (140,704,733)
Net cash provided (used) by investing activities 9,076,123 (73,708,585) Net change in cash and cash equivalents 36,622,808 49,707,670 Cash and cash equivalents at beginning of year 179,932,959 130,225,289 Cash and cash equivalents at end of year $ 216,555,767 $ 179,932,959
NONCASH INVESTING ACTIVITIES
Change in fair value of investments $ 6,269,401 $ 4,896,911
NONCASH CAPITAL FINANCING ACTIVITIES
Capital acquisitions included in accounts payable
and other liabilities $ 736,165 $ 477,580
36 PENINSULA CLEAN ENERGY AUTHORITY
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED JUNE 30, 2025 AND 2024
12 The accompanying notes are an integral part of these financial statements.
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
2025 2024
Operating income (loss) $ (17,129,083) $ 26,777,204
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 652,653 578,324
Loss on disposal of assets 20,022 -
(Increase) decrease in:
Accounts receivable, net of allowance 1,818,568 4,843,470 Accrued revenue 2,131,231 (3,515,790)
Other receivables (2,204,127) (1,418,862)
Prepaid expenses 1,533,481 3,955,081
Deposits and other assets 3,051,098 11,783,042
Increase (decrease) in:
Accrued cost of electricity (10,629,948) 18,022,051
Accounts payable (53,523) 1,311,342
Other accrued liabilities 668,436 154,836
Deferred revenue (3,285,073) (471,906)
User taxes and energy
surcharges due to other governments (522,739) (73,597)
Deposits - energy suppliers (1,160,000) (868,100)
Rate Stabilization Fund 60,000,000 68,000,000
Net cash provided by operating activities $ 34,890,996 $ 129,077,095 37 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
13 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Peninsula Clean Energy Authority (PCE) is a joint powers authority created on February 29, 2016.
As of June 30, 2025, parties to its Joint Powers Agreement consist of the following local governments:
County Cities and Towns
San Mateo Atherton Menlo Park
Belmont Millbrae
Brisbane Pacifica
Burlingame Portola Valley
Colma Redwood City
Daly City San Bruno
East Palo Alto San Carlos
Foster City San Mateo
Half Moon Bay South San Francisco
Hillsborough Woodside
Los Banos
PCE is separate from and derives no financial support from its members. PCE is governed by a Board of Directors (Board) whose membership is composed of elected officials representing the member governments.
A core function of PCE is to provide electric service that includes renewable sources, and it operates as a Community Choice Aggregation Program subject to California Public Utilities Code Section 366.2.
PCE began its energy delivery operations in October 2016. Electricity is acquired from electricity suppliers and delivered through existing physical infrastructure and equipment managed by Pacific Gas and Electric Company.
38 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
14 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
BASIS OF ACCOUNTING
PCE’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.
PCE’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 two categories – net investment in capital assets and unrestricted.
When both restricted and unrestricted resources are available for use, it is PCE’s policy to use restricted resources first, and then unrestricted resources as they are needed.
CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, PCE 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.
ACCRUED REVENUE
Accrued revenue reflects the estimated value of electricity delivered to customers during the reporting period for which invoices had not been issued by the end of the fiscal year.
39 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INVESTMENTS
Investments are stated at fair value based on prices listed on a national exchange for debt securities. Certificates of deposits are stated at cost. PCE 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.
PCE’s Investment Policy permits the following types of investments:
U.S. Treasury obligations Repurchase agreements
Obligations of the State of California Local Agency Investment Fund Bonds of any of the other 49 states San Mateo County Pool Commercial paper Local Government Investment Pools
Negotiable certificates of deposits Bankers' acceptances Demand deposits Medium-term notes
Passbook savings accounts Asset-backed securities
Money market funds Supranationals
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 PCE 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.
LOANS RECEIVABLE
PCE provides an On-Bill-Financing program to its retail customers. Under this program customers finance qualifying home electrification projects and make repayments when they pay their monthly utility bills. PCE recognizes a current and noncurrent balance in the Statement of Net Position in accordance with the terms of the loans.
40 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
16 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
LEASE ASSET AND LEASE LIABILITY
PCE recognizes an asset and liability when it enters into certain leasing arrangements. The leased asset is amortized over the term of the lease. The lease liability is the present value of payments expected to be paid to the lessor during the lease term. PCE’s leased asset and liability relate to its office premises.
CAPITAL ASSETS AND DEPRECIATION
PCE’s policy is to capitalize furniture and equipment valued over $5,000 that is 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 twenty years for solar and battery storage.
DEFERRED REVENUE
Deferred revenue consists of payments received in advance from customers for which revenue has not been earned and is shown as a current liability in the Statement of Net Position.
DEPOSITS – ENERGY SUPPLIERS
Various energy contracts entered into by PCE require the supplier to provide PCE 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 time the deposits will be held.
41 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
RATE STABILIZATION FUND
In May 2024, PCE created a Rate Stabilization Fund (RSF) that is reported in accordance with GASB Statement No. 62. The purpose of the RSF is to allow PCE to defer revenue in years when financial results are strong for use in future years when financial results may decline. Withdrawals of revenues from the RSF can be made in a fiscal year when change in net position is projected to be negative or if necessary to satisfy any covenants and contractual obligations. 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. Transfers to this Fund were $60,000,000 and $68,000,000 in fiscal years 2025 and 2024, 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 a lease obligation that is attributable to the acquisition, construction, or improvement of those assets.
Unrestricted: This component of net position consists of net position that does not meet the definition of “investment in capital assets” or “restricted.”
OPERATING AND NONOPERATING REVENUES
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.
Investment income and grants that are not earned from the delivery of program activities are considered “nonoperating revenues”.
REVENUE RECOGNITION
PCE 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. 42 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
OPERATING AND NONOPERATING EXPENSES
Operating expenses include the costs of electricity, services, administrative expenses, and depreciation of capital assets. Nonoperating expenses are expenses related to financing and loss on asset disposals.
COST OF ELECTRICITY
During the normal course of business, PCE purchases electrical power from numerous suppliers.
Electricity costs include the cost of energy and capacity arising from bilateral contracts with energy suppliers as well as generation credits, and load and other charges arising from PCE’s participation in the California Independent System Operator’s 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.
To comply with the State of California’s Renewable Portfolio Standards (RPS) and self-imposed benchmarks, PCE acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (Certificates) recognized by the Western Renewable Energy Generation Information System. PCE obtains Certificates with the intent to retire them and does not sell or build surpluses of Certificates with a profit motive.
PCE purchases capacity commitments from qualifying generators to comply with the California Public Utilities Commission’s Resource Adequacy (RA) Program. The goals of the RA Program are to provide sufficient resources to the California Independent System Operator to ensure the safe and reliable operation of the electrical 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
PCE pays employees semi-monthly and fully satisfies its obligation for health benefits and contributions to its defined contribution retirement plan. PCE does not provide post-employment healthcare or other fringe benefits and, accordingly, no related liability is recorded in these financial statements.
PCE 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.
43 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
19 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME TAXES
PCE 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.
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 in the prior year’s financial statements have been reclassified for comparative purposes to conform to the presentation of the current year’s financial statements. These reclassifications did not result in any change in previously reported net position or change in net position.
2. CASH AND CASH EQUIVALENTS
PCE maintains its cash in both interest-bearing and non-interest-bearing deposit accounts in several banks. PCE’s deposits are subject to California Government Code Section 16521, which requires banks to provide collateral of 110% of account balances in excess of the $250,000 insurance coverage by Federal Deposit Insurance Corporation. Accordingly, the amount of risk is not disclosed for bank deposits. The risk disclosures in Note 4 address the risks related to certain short-term investments with original maturities of less than three months that are classified as cash and cash equivalents in the statements of net position and statements of cashflow. PCE monitors its risk exposure on an ongoing basis.
3. ACCOUNTS RECEIVABLE
Accounts receivable were as follows as of June 30:
2025 2024
Accounts receivable from customers 37,591,761 $ $ 37,763,313 Allowance for uncollectible accounts (7,029,000) (5,381,984) Net accounts receivable $ 30,562,761 $ 32,381,329
The majority of account collections occur within the first few months following the issuance of customer invoices. PCE estimates that a portion of the billed accounts will not be collected. PCE 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, PCE continues to have success in collecting older accounts.
44 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
20 4. INVESTMENTS
During the years ended June 30, 2025 and 2024, PCE held investments with original maturities of three months or more. As of June 30, the fair value of investments was as follows:
2025 2024 Level
Current Investments:
U.S. Treasury securities $ 9,866,789 $ 8,015,940 1
U.S. agency obligations 592,613 - 2
Corporate bonds - U.S. 931,097 7,154,986 2
Municipal bonds 722,970 1,065,322 2
Total current investments 11,520,856 $ $ 16,828,861
2025 2024 Level
Noncurrent Investments:
U.S. Treasury securities 106,057,258 $ $ 132,450,396 1
U.S. agency obligations 31,698,244 612,325 2
Corporate bonds - U.S. 66,650,942 56,311,594 2
Corporate bonds - foreign 4,762,116 2 -
Municipal bonds 1,838,842 2,926,016 2
Total noncurrent investments 211,007,402 $ $ 192,300,331
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.
In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. PCE’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.
45 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
21 4. INVESTMENTS (continued)
CREDIT RISK
Credit risk is the risk 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 considered to have no credit risk. As of June 30, 2025 and 2024, PCE’s investments were rated as follows:
2025 2024
U.S. Treasury securities NR and Aaa NR and Aaa
U.S. agency obligations NR and Aaa NR and Aaa
Corporate bonds-U.S. NR & A to Aaa NR & Baa to Aaa
Corporate bonds-foreign A to Aaa -
Municipal Bonds Aa NR & Aa to Aaa
Moody's Investors Service
PCE’s investment policy addresses this risk by limiting investments to those allowed by Section 53601 of the California Government Code.
CUSTODIAL CREDIT RISK
Cash and cash equivalents
Custodial credit risk is the risk that in the event of a financial institution failure, PCE’s deposits may not be returned to PCE. PCE’s deposits are fully insured or collateralized.
As of June 30, 2025 and 2024, none of PCE’s bank balances are known to be exposed to credit risk.
Investments
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, PCE 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 PCE’s investments are exposed to credit risk.
PCE’s investment policy addresses custodial credit risk. All investments owned by PCE shall be held in safekeeping by a third-party custodian, acting as an agent for PCE under the terms of a custody agreement.
46 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
22 4. INVESTMENTS (continued)
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. It 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. PCE 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 June 30, 2025:
Investment Type Fair Value
Less Than 1
Year 1-5 Years
More than 5
years
U.S. Treasury securities 115,924,047 $ $ 9,866,789 $ 106,057,258 $ - U.S. agency obligations 31,698,244 31,698,244 - -
Corporate bonds-U.S. 67,582,039 931,097 66,650,942 -
Corporate bonds-foreign 4,762,116 4,762,116 - -
Municipal bonds 2,561,812 722,970 1,838,842 -
$ 222,528,258 $ 11,520,856 $ 211,007,402 $ -
Investment Maturities
Following is a summary of investment maturities as of June 30, 2024:
Investment Maturities
Investment Type Fair Value
Less Than 1
Year 1-5 Years
More than 5
years
U.S. Treasury securities $ 140,466,336 $ 8,015,940 $ 131,174,241 $ 1,276,155 U.S. agency obligations 1,204,938 592,613 612,325 -
Corporate bonds-U.S. 59,795,065 7,154,986 52,640,079 -
Corporate bonds-foreign 3,671,515 3,671,515 - -
Municipal bonds 3,991,338 1,065,322 2,926,016 -
$ 209,129,192 $ 16,828,861 $ 191,024,176 $ 1,276,155
CONCENTRATION OF CREDIT RISK
Concentration of credit risk is the risk of loss to the magnitude of PCE’s investment in a single issuer. PCE manages the concentration of credit risk by diversifying its portfolio so that reliance on any one issuer will not place an undue burden on PCE.
As of June 30, 2025 and 2024, PCE’s investment portfolio was concentrated as follows:
Percentage of Portfolio
Issuer Investment Type 2025 2024
Federal Home Loan Mortgage
Corporation (Freddie Mac)
U.S. agency implicitly
guaranteed 13.7% 10.6%
47 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
23 5. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2025 was as follows:
Beginning
balance Increases Decreases
Ending
balance
Capital assets not being depreciated:
Construction in progress $ 5,322,353 $ 7,364,491 $ (7,633,800) $ 5,053,044 Capital assets being depreciated and amortized:
Furniture and equipment 430,534 (93,135) - 337,399
Leasehold improvements 268,414 (12,878) - 255,536
Solar and battery storage 606,000 7,633,800 - 8,239,800 Lease asset 3,079,488 - - 3,079,488
Total capital assets being depreciated and amortized 4,384,436 7,633,800 (106,013) 11,912,223 Less accumulated depreciation and amortization:
Furniture, equipment and leasehold improvements (543,128) (159,935) 85,992 (617,071) Lease asset (1,970,876) (492,718) - (2,463,594)
Total accumulated depreciation and amortization (2,514,004) (652,653) 85,992 (3,080,665) Total capital assets, net of depreciation and amortization 7,192,785 $ $ 14,345,638 $ (7,653,821) $ 13,884,602 Capital asset activity for the year ended June 30, 2024 was as follows:
Beginning
balance Increases Decreases
Ending
balance
Capital assets not being depreciated:
Construction in progress $ 1,433,434 $ 4,494,919 $ (606,000) $ 5,322,353 Capital assets being depreciated and amortized:
Furniture and equipment 444,402 (13,868) - 430,534
Leasehold improvements 236,873 31,541 - 268,414
Solar and battery storage 606,000 - - 606,000
Lease asset 3,079,488 - - 3,079,488
Total capital assets being depreciated and amortized 3,760,763 637,541 (13,868) 4,384,436 Less accumulated depreciation and amortization:
Furniture, equipment and leasehold improvements (470,939) (85,604) 13,415 (543,128) Lease asset (1,478,156) (492,720) - (1,970,876)
Total accumulated depreciation and amortization (1,949,095) (578,324) 13,415 (2,514,004) Total capital assets, net of depreciation and amortization 3,245,102 $ $ 4,554,136 $ (606,453) $ 7,192,785
48 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
24 6. LEASE
A lease asset is reported in accordance with Governmental Accounting Standards Board No. 87 (GASB 87).
On August 1, 2017, PCE entered into an 86-month non-cancelable lease for its office premises.
The rental agreement includes an option to renew the lease for two additional five-year terms. In September 2019, the lease was extended an additional two years to September 30, 2026. As part of the extension, PCE leased additional office space through the same termination date.
Rental payments under this lease were $593,000 and $573,000 for the years ended June 30, 2025 and 2024, respectively.
As of June 30, 2025, future minimum lease payments under this lease were projected as follows:
Principal Interest Total
Year ending June 30,
2026 $ 566,100 $ 14,586 $ 580,686
2027 161,781 877 162,658
Total $ 727,881 $ 15,463 $ 743,344
7. GRANTS
PCE participates in various grants from the California Public Utilities Commission (CPUC) and other sources.
The Disadvantaged Communities Green Tariff (DAC-GT) grant provides bill discounts for eligible customers. The FLEXmarket grant provides incentives for customers to install various energy saving equipment in their homes or businesses.
The following is a summary of grant revenue for the years ended June 30:
2025 2024
Operating grants:
DAC-GT 1,322,471 $ 1,182,963$
FLEXmarket 1,458,116 2,087,406
Other 180,578 -
$ 2,961,165 3,270,369$
49 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
25 8. DEFINED CONTRIBUTION RETIREMENT PLAN
PCE provides retirement benefits through the County of San Mateo 401(a) Retirement Plan (Plan). The Plan is a defined contribution retirement plan that is compliant with Internal Revenue Code 401(a) and was established to provide benefits at retirement to qualified employees admitted by the Plan. The Plan is administered by Empower. As of June 30, 2025, there were 65 plan participants. PCE is required to contribute 6% of covered payroll and up to an additional 4% of annual covered payroll to match employee contributions. PCE contributed $1,022,000 and $698,000 during the years ended June 30, 2025 and 2024, respectively. Plan provisions and contribution requirements are established and may be amended by the Board.
9. RISK MANAGEMENT
PCE 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, PCE purchased insurance policies from highly rated commercial carriers to mitigate risks that include those associated with earthquakes, theft, general liability, errors and omissions, and property damage. Settled claims have not exceeded coverage in the last two years. There were no significant reductions in coverage compared to the prior year. PCE has general liability coverage of $2,000,000 as well as a $10,000,000 umbrella policy. Deductibles on the various policies range from $0 to $25,000.
From time to time, PCE may be party to various pending claims and legal proceedings. PCE has no current litigation or claims pending that are expected to have a material adverse effect on PCE’s financial position or results of operations.
PCE 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, PCE enters into netting arrangements whenever possible and where appropriate obtains collateral and other performance assurances from counter parties.
50 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
26 10. PURCHASE COMMITMENTS
In the ordinary course of business PCE 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.
The following table details the obligations to purchase existing energy, renewable, and RA contracts as of June 30, 2025:
Year ending June 30,
2026 $ 310,900,000
2027 306,900,000
2028 290,100,000
2029 279,400,000
2030 263,600,000
2031-2048 2,235,800,000
Total $ 3,686,700,000
11. JOINT VENTURE
PCE 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.
CCCFA issued the following bonds, excluding original issue premium, which are to be used to finance energy purchases that will be delivered to PCE. No debt, liability, or obligation of CCCFA is a debt, liability, or obligation of PCE.
Deal Date issued Amount
2024C October 2024 959,825,000 $
51 PENINSULA CLEAN ENERGY AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2025 AND 2024
27 11. JOINT VENTURE (continued)
PCE will purchase energy from CCCFA in the same manner as it purchases energy from other suppliers. PCE purchased approximately $14,517,000 and $0 from CCCFA during fiscal years 2025 and 2024, respectively. The outstanding purchase commitments related to these financing facilities are included in Note 10. This amount represents executed energy contracts assigned to CCCFA at June 30, 2025. Additional contracts will be assigned throughout the full bond period.
The financial statements of CCCFA are available online at http://www.cccfa.org/key-documents.html
12. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
PCE implemented GASB Statement No. 102, Certain Risk Disclosures, which requires additional disclosures regarding concentrations and constraints that could impact PCE’s financial position or results of operations. Implementation of this statement did not have a material effect on the financial statements.
PCE also implemented GASB Statement No. 103, Financial Reporting Model Improvements, which establishes revised guidance for the presentation of financial statements by state and local governments. The adoption of this statement did not have a material effect on PCE’s financial statements.
In addition, PCE adopted GASB Statement No. 104, Disclosure of Certain Capital Assets.
Implementation of this statement did not have a material effect on the financial statements. 52 sorren.com
Peninsula Clean Energy Authority
Audit and Finance Committee
November 10, 2025
53 Introduction
Kellin Gilbert, CPA
Audit Partner
17 years in public accounting and performing audits of government entities Currently working with several CCA’s throughout California Aliandra Schaffer
Engagement Supervisor
6 years in public accounting and performing audits of governments (CCA’s) Alauna Rico
Audit Senior Associate
4 years in public accounting and performing audits of governments (CCA’s) 54 Transition to Sorren CPAs P.C.
As of May 2025, legacy Pisenti & Brinker combined practices with several other like-sized firms and rebranded as one unified firm “Sorren.” By combining resources with the strategic merger, we can make even greater investments in technology as well as our greatest assets, our people and clients.
Sorren is a new national top 50 firm and currently has twenty-three office locations and almost a thousand employees.
The Santa Rosa office will continue to be the lead office for Peninsula Clean Energy Authority. No changes to the current engagement team, costs or timing of the services we provide to PCE.
55 Results of Current Year Audit
The audit is complete. We reported the following:
• Unmodified opinion – Based on our audit, the financial statements are materially accurate.
• No significant deficiencies or material weakness in internal control noted. 56 Audit of the year ended June 30, 2025
Financial Statements
Relative Roles & Responsibilities
• Management is responsible for preparing the Financial Statements and establishing a system of internal control.
• Auditor is responsible for auditing the Financial Statements • Considering risks of material misstatement in the Financial Statements • Considering internal controls relevant to the Financial Statements • Performing tests of year-end balances based on risk assessment • Evaluating adequacy of disclosures
57 Risk Assessment for the year ended June
30, 2025
Our audit is a risk-based audit. Risk assessment procedures include:
• Gain understanding of the entity’s operating characteristics, practices, and procedures.
• Compare to our knowledge of similar entities, industry and professional guidance.
• Review procedures and controls surrounding significant transaction cycles and business processes.
58 Risk Assessment for the year ended June
30, 2025
Significant areas of focus for the audit:
• Revenue recognition
• Accounts receivable and accrued revenue
• Test a sample of customer billings
• Relate total cash received during the year to revenue • Review revenue recognition through year-end and method for determining (accrued revenue)
• Cash & Investments
• Confirmations sent to financial institutions
• Accrued Cost of Electricity
• Review subsequent bills from electricity providers and cash payments • Financial Statement Note Disclosures – Complete and without bias 59 Required Board Communications
• As discussed in Note 12, PCE adopted GASB 102 through 104 which did not have a material effect on the financial statements.
• We did not propose any adjustments to the financial statements. • We did not identify any significant or unusual transactions or applications of accounting principles where a lack of authoritative guidance exists.
• There have been no disagreements with management concerning the scope of our audit and we have not encountered any difficulties in dealing with management during the performance of our audit.
• We issued a letter to the board dated October 30th detailing these required communications. 60 Kellin Gilbert
Partner
[email protected]
(707) 577-1511
sorren.com
61 DATE: October 31, 2025
MEETING DATE: November 10, 2025
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Audit and Finance Committee FROM: Nicholas Bijur, Chief Financial Officer
SUBJECT: Quarter One Fiscal Year 2026 Financial Report (Quarter Ending September 30, 2025) (Discussion)
Item No. 6
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
RECOMMENDATION
Receive report and provide any feedback. This is a discussion item only.
BACKGROUND
Staff will review financial results for the quarter ending September 30, 2025.
ATTACHMENTS:
Q1 Financials.pdf
62 Fiscal Year Actual/Budget Amount Fiscal Year Actual/Budget Amount June 30, 2016 Audited ($1,044) June 30, 2016 Audited $3,833 June 30, 2017 Audited $21,711 June 30, 2017 Audited $18,882 June 30, 2018 Audited $85,365 June 30, 2018 Audited $64,689 June 30, 2019 Audited $140,139 June 30, 2019 Audited $114,069 June 30, 2020 Audited $189,072 June 30, 2020 Audited $177,629 June 30, 2021 Audited $180,717 June 30, 2021 Audited $165,652 June 30, 2022 Audited $167,671 June 30, 2022 Audited $135,090 June 30, 2023 Audited $307,626 June 30, 2023 Audited $254,074 June 30, 2024 Audited $349,200 June 30, 2024 Audited $389,062 June 30, 2025 Audited $358,295 June 30, 2025 Audited $439,084 September 30, 2025 Actual $407,892 September 30, 2025 Actual $479,064 September 30, 2025 Budget $409,869 September 30, 2025 Budget $473,761 Fiscal Year Actual/Budget Amount Fiscal Year Actual/Budget Amount FY2015-2016 Audited ($1,044) FY2015-2016 Audited $0
FY2016-2017 Audited $22,755 FY2016-2017 Audited $64,501 FY2017-2018 Audited $63,655 FY2017-2018 Audited $170,135 FY2018-2019 Audited $54,774 FY2018-2019 Audited $194,035 FY2019-2020 Audited $48,933 FY2019-2020 Audited $216,066 FY2020-2021 Audited ($8,355) FY2020-2021 Audited $213,834 FY2021-2022 Audited ($13,046) FY2021-2022 Audited $226,678 FY2022-2023 Audited $139,955 FY2022-2023 Audited $265,208 FY2023-2024 Audited $41,574 FY2023-2024 Audited $325,171 FY2024-2025 Audited $9,094 FY2024-2025 Audited $365,972 FY2025-2026 3mo. Act + 9mo. Fcst $2,000 FY2025-2026 3mo. Act + 9mo. Fcst $336,553 FY2025-2026 Budget $3,976 FY2025-2026 Budget $337,650
Fiscal Year Actual/Budget Amount Fiscal Year Actual/Budget Amount FY2015-2016 Audited $0 FY2015-2016 Audited $1,041
FY2016-2017 Audited $93,129 FY2016-2017 Audited $5,603
FY2017-2018 Audited $244,738 FY2017-2018 Audited $10,836 FY2018-2019 Audited $259,782 FY2018-2019 Audited $12,877 FY2019-2020 Audited $278,093 FY2019-2020 Audited $15,272 FY2020-2021 Audited $228,101 FY2020-2021 Audited $22,469 FY2021-2022 Audited $237,899 FY2021-2022 Audited $19,861 FY2022-2023 Audited $428,218 FY2022-2023 Audited $25,946 FY2023-2024 Audited $388,613 FY2023-2024 Audited $36,664 FY2024-2025 Audited $391,936 FY2024-2025 Audited $43,093 FY2025-2026 3mo. Act + 9mo. Fcst $374,290 FY2025-2026 3mo. Act + 9mo. Fcst $52,522 FY2025-2026 Budget $381,071 FY2025-2026 Budget $54,347
Peninsula Clean Energy
Performance at a Glance
Results for the Fiscal Quarter Ended
September 30, 2025
($000s)
Net Position Balance Unrestricted Cash/Investments Balance Revenues Total Other Operating Expenses
Change in Net Position Cost of Electricty
63 Peninsula Clean Energy
Performance at a Glance
Results for the Fiscal Quarter Ended
September 30, 2025
($000s)
FY 2026 Q1 Revenue FY 2026 Q1 Expense
Customer Accounts Energy Used
286,228 , 91%
28,707 , 9%
Customer Accounts
Residential Commercial/Industrial
315,477 , 38%
525,466 , 62%
FY 2026 Q1 Energy Usage (MWh)
Residential Commercial/Industrial
$124,807
$131,588
$0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000
Actual vs. Budget
Actual Revenues - FY 2026 Q1 Budget Revenues - FY 2026 Q1 $80,818
$83,740
$0 $50,000 $100,000
Actual vs. Budget
Actual Expenses - FY 2026 Q1 Budget Expenses - FY 2026 Q1 64 1
ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Peninsula Clean Energy Authority
Management is responsible for the accompanying financial statements of Peninsula Clean Energy Authority (PCE), a California Joint Powers Authority, which comprise the statement of net position as of September 30, 2025, and the statement of revenues, expenses, and changes in net position, and the statement of cash flows for the three months then ended, in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
PCE’s annual audited financial statements will include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to PCE because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
October 30, 2025
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 65 ASSETS
Current assets
Cash and cash equivalents 190,870,041$
Accounts receivable, net of allowance 39,192,429
Accrued revenue 24,452,114
Investments 13,805,914
Other receivables 11,567,516
Prepaid expenses 3,329,966
Deposits and other assets 2,703,163
Total current assets 285,921,143
Noncurrent assets
Investments 271,872,653
Loans receivable 7,606,434
Deposits and other assets 192,562
Capital assets, net of depreciation and amortization 14,469,947 Total noncurrent assets 294,141,596
Total assets 580,062,739
LIABILITIES
Current liabilities
Accrued cost of electricity 33,797,269
Accounts payable 3,141,986
Other accrued liabilities 1,686,836
Deferred revenue 1,415,250
User taxes and energy surcharges due to other governments 1,121,750 Lease liability 589,055
Total current liabilities 41,752,146
Noncurrent liabilities
Deposits - energy suppliers 2,418,451
Total noncurrent liabilities 2,418,451
Total liabilities 44,170,597
DEFERRED INFLOWS OF RESOURCES
Rate Stabilization Fund 128,000,000
NET POSITION
Net investment in capital assets 13,596,959
Unrestricted 394,295,183
Total net position $ 407,892,142
As of September 30, 2025
STATEMENT OF NET POSITION
PENINSULA CLEAN ENERGY AUTHORITY
See accountants' compilation report. 2 66
OPERATING REVENUES
Electricity sales, net 124,228,534$
Liquidated damages revenue 27,086
Grant revenue 578,727
Total operating revenues 124,834,347
OPERATING EXPENSES
Cost of electricity 68,967,411
Contract services 3,208,024
Staff compensation 3,886,414
Program incentives 3,731,493
Other operating expenses 786,670
Depreciation and amortization 232,345
Total operating expenses 80,812,357
Operating income (loss) 44,021,990
NONOPERATING REVENUES (EXPENSES)
Investment income 5,580,880
Finance costs (5,285)
Nonoperating revenues (expenses), net 5,575,595
CHANGE IN NET POSITION 49,597,585
Net position at beginning of period 358,294,557
Net position at end of period $ 407,892,142
PENINSULA CLEAN ENERGY AUTHORITY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
Three Months Ended September 30, 2025
See accountants' compilation report. 3 67
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 115,812,954$
Receipts from grantors 678,727
Receipts of deposits and collateral 9,000
Receipts of liquidated damages 27,086
Receipts from wholesale sales and other operating activities 8,279,248 Payments to suppliers for electricity (78,396,700)
Payments for other goods and services (7,548,244)
Payments of deposits and collateral (427,375)
Payments of staff compensation (3,874,923)
Payments of taxes and surcharges to other governments (1,131,933) Net cash provided (used) by operating activities 33,427,840
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets (1,269,922)
Payments of lease liability (144,108)
Net cash provided (used) by capital and related financing activities (1,414,030)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments 13,673,362 Investment income received 4,334,978
Purchase of investments (75,707,876)
Net cash provided (used) by investing activities (57,699,536) Net change in cash and cash equivalents (25,685,726)
Cash and cash equivalents at beginning of period 216,555,767 Cash and cash equivalents at end of period $ 190,870,041
NONCASH INVESTING ACTIVITIES
Change in fair value of investments 1,141,687$
Change in interest receivable 104,215$
NONCASH CAPITAL FINANCING ACTIVITIES
Capital acquisitions included in accounts payable and other liabilities 283,933$ Three Months Ended September 30, 2025
STATEMENT OF CASH FLOWS
PENINSULA CLEAN ENERGY AUTHORITY
See accountants' compilation report. 4 68
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss) 44,021,990$
Adjustments to reconcile operating income to net
cash provided (used) by operating activities
Depreciation and amortization expense 232,345
(Increase) decrease in:
Accounts receivable, net of allowance (8,629,668)
Accrued revenue (842,995)
Other receivables (2,806,170)
Prepaid expenses (252,319)
Deposits and other assets (307,375)
Increase (decrease) in:
Accrued cost of electricity 758,594
Accounts payable 439,119
Other accrued liabilities 119,363
Deferred revenue 328,166
User taxes and energy
surcharges due to other governments 477,790
Deposits - energy suppliers (111,000)
Net cash provided (used) by operating activities 33,427,840$ Three Months Ended September 30, 2025
STATEMENT OF CASH FLOWS
PENINSULA CLEAN ENERGY AUTHORITY
(continued)
See accountants' compilation report. 5 69
Cash Receipts .00 30,000,000.00
Taxable Interest 537,655.89 1,014,595.22Realized Gain/Loss 47,683.90 106,584.19Change In Unrealized Gain/Loss - 66,467.42 402,022.65Change In Accrued Income - 115,741.43 146,817.48 PENINSULA CLEAN ENERGY - PFM Page 3 of 57
Period from September 1, 2025 to September 30, 2025
CURRENT PERIOD YEAR TO DATE
09/01/2025 TO 09/30/2025 07/01/2025 TO 09/30/2025
Beginning Market Value 146,001,205.72 114,734,317.12ReceiptsTotal Receipts .00 30,000,000.00Asset ActivityTotal Asset Activity 403,130.94 1,670,019.54Net Change In Market Value 403,130.94 31,670,019.54Ending Market Value 146,404,336.66 146,404,336.66
MARKET VALUE RECONCILIATION
70 1 1 1 1 1 1 1 1 1 1 1 11 1 111 11 1 1 1 11 1 1 1 1 1 1 111 111 1 1 11 11 1 11 1 1 1 1 1 11 1 1 1 1 111111 1 1 11 11 1 1 11 11 11 1 111 1 111 1 11 1 1 1 1 1 11 11 1 1111 11 1 111 11 11 111 1 11 1 1 1111 1 1 1 1 11111 1 1 1 11 1 11 1 11 1 1 1 11 1 1 1 1111 11 1 1 1 1 1 11111111111111111111 Cash Receipts .00 30,000,000.00Taxable Interest 537,655.89 1,014,595.22Realized Gain/Loss 47,683.90 106,584.19Change In Accrued Income - 115,741.43 146,817.48 PENINSULA CLEAN ENERGY - PFM Page 4 of 57
Period from September 1, 2025 to September 30, 2025
CURRENT PERIOD YEAR TO DATE
09/01/2025 TO 09/30/2025 07/01/2025 TO 09/30/2025
Beginning Cost 143,668,486.01 112,870,087.48ReceiptsTotal Receipts .00 30,000,000.00Asset ActivityTotal Asset Activity 469,598.36 1,267,996.89Ending Cost 144,138,084.37 144,138,084.37
COST RECONCILIATION
71 Cash And Equivalents 399,355.04 0.27
U.S. Government Issues 110,128,902.13 75.22Corporate Issues 33,172,267.85 22.66Foreign Issues 981,317.50 0.67Municipal Issues 728,057.15 0.50Accrued Income 994,436.99 0.68PENINSULA CLEAN ENERGY - PFM Page 5 of 57 Period from September 1, 2025 to September 30, 2025
09/30/2025 % OF
ASSETS MARKET VALUE MARKET
Total Assets 145,409,899.67 99.32Grand Total 146,404,336.66 100.00
ASSET SUMMARY
BONDS 99.05%
72 Cash Receipts .00 10,000,000.00
Taxable Interest 507,808.26 1,255,515.07Realized Gain/Loss 2,981.30 - 412.75Change In Unrealized Gain/Loss - 20,837.22 607,600.81Change In Accrued Income - 78,737.90 27,650.69 PENINSULA CLEAN ENERGY - CHANDLER Page 3 of 42
Period from September 1, 2025 to September 30, 2025
CURRENT PERIOD YEAR TO DATE
09/01/2025 TO 09/30/2025 07/01/2025 TO 09/30/2025
Beginning Market Value 141,597,574.23 130,118,434.85ReceiptsTotal Receipts .00 10,000,000.00Asset ActivityTotal Asset Activity 411,214.44 1,890,353.82Net Change In Market Value 411,214.44 11,890,353.82Ending Market Value 142,008,788.67 142,008,788.67
MARKET VALUE RECONCILIATION
73 1 1 1 1 1 1 1 1 1 1 1 11 1 111 11 1 1 1 1 1 1 1 1 1 1 1 111 111 111 1 1 11 11 1 11 1 1 1 1 1 11 11 1 111111 1 11 11 1 111 1 11 1 11 1 11 1 111 11 1 11 1 1 1 11 11 11 11 1 111 1 11111 111 1 11 111111 1 1 11 1 11 1 1 1 11 111 1 1 11 1 11 11 1 1 11 11111 1 11 11 1 1 11111 1 1 111 1 11111111111111111111 Cash Receipts .00 10,000,000.00Taxable Interest 507,808.26 1,255,515.07Realized Gain/Loss 2,981.30 - 412.75Change In Accrued Income - 78,737.90 27,650.69 PENINSULA CLEAN ENERGY - CHANDLER Page 4 of 42
Period from September 1, 2025 to September 30, 2025
CURRENT PERIOD YEAR TO DATE
09/01/2025 TO 09/30/2025 07/01/2025 TO 09/30/2025
Beginning Cost 139,845,263.44 128,994,562.09ReceiptsTotal Receipts .00 10,000,000.00Asset ActivityTotal Asset Activity 432,051.66 1,282,753.01Ending Cost 140,277,315.10 140,277,315.10
COST RECONCILIATION
74 Cash And Equivalents 405,608.25 0.29
U.S. Government Issues 86,560,618.14 60.95Corporate Issues 49,193,220.26 34.64Foreign Issues 3,790,582.50 2.67Municipal Issues 1,123,601.40 0.79Accrued Income 935,158.12 0.66PENINSULA CLEAN ENERGY - CHANDLER Page 5 of 42 Period from September 1, 2025 to September 30, 2025
09/30/2025 % OF
ASSETS MARKET VALUE MARKET
Total Assets 141,073,630.55 99.34Grand Total 142,008,788.67 100.00
ASSET SUMMARY
BONDS 99.05%
75 76
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