Agenda — Pioneer Community Energy Board of Directors, October 19, 2023

Pioneer Community Energy
Board of Directors
October 19, 2023
3:00 PM Call to Order
Pioneer Community Energy Board Room
2510 Warren Drive, Suite B, Rocklin, CA 95677
Remote Location
Placer County Board of Supervisors - Roseville District Office 2200 Douglas Blvd., Bldg. A, Suite 260, Roseville, CA 95661 This regular meeting will convene in person at the address printed above, be accessible on the Zoom platform at the following link:
https://us06web.zoom.us/j/89967227073;
and live streamed for viewing on the Pioneer website:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.

Members of the public may participate in person or by remote audio/visual access. Those who participate remotely and wish to comment should be prepared to use the Zoom platform via computer or telephone. Public comment will be opened for each agenda item in sequence.

How to Participate Using Zoom
You can join the meeting using the following link:
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Public Comment via Computer or Smartphone
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1. Dial 1 (669) 900-6833

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Board of Directors
Chair: Alice Dowdin Calvillo
Vice Chair: John Hidahl
City of Auburn
Alice Dowdin Calvillo
Rachel Radell-Harris, Alternate
City of Colfax
Sean Lomen
Kim Douglass, Alternate
County of El Dorado
John Hidahl
Lori Parlin, Alternate
City of Grass Valley
Tom Ivy
Jan Arbuckle, Alternate
City of Lincoln
Holly Andreatta
Dan Karleskint, Alternate
Town of Loomis
Amanda Cortez
Danny Cartwright, Alternate
Nevada City
Gary Petersen
vacant, Alternate
County of Placer
Jim Holmes
Suzanne Jones
Bonnie Gore, Alternate
City of Placerville
David Yarbrough
John Clerici, Alternate
City of Rocklin
Greg Janda
David Bass, Alternate
I. GENERAL ADMINISTRATIVE FUNCTION – PART 1
A. CALL TO ORDER

1. Roll Call
B. AGENDA REVIEW
C. PRESENTATIONS BY THE PUBLIC ON MATTERS NOT ON THE AGENDA WITHIN THE

JURISDICTION OF THE BOARD
Persons may address the Board on items not on this agenda. Please limit comments to 3 minutes per person. According to State Law (the Brown Act), items must first be noticed on the agenda before any discussion or action. The Board is prohibited from discussing issues not on the agenda brought to them at this time.

II. CONSENT AGENDA
1) APPROVAL OF THE CONSENT AGENDA
All items on the Consent Agenda have been recommended for approval by the Executive Director. All Consent items will be approved by a single vote. Anyone may ask to address Consent items prior to the Board acting, and the item may be moved for discussion. a) ADMINISTRATION
Approve minutes of the September 28, 2023 special meeting. (ECKERT) b) FINANCE & ADMINISTRATION
Receive Fiscal Year 2023-24 Draft Financial Reports through August 2023. (KOEHN) III. REGULAR AGENDA
2) PROGRAMS
Partnership with Participate.Energy (DISCUSSION-STASSI-VANACORE) Recommendation: Discuss and provide direction to staff about introducing Participate.Energy to Pioneer Community Energy’s customers with the goal of offering microgrid solutions. 3) FINANCE & ADMINISTRATION
Adopt Resolution Approving Amendments to the Energy Risk Management Policy (ACTION-KOEHN)
Recommendation: Adopt Resolution approving amendments to Pioneer Community Energy’s Energy Risk Management Policy.

CONSENT AGENDA
GENERAL ADMINISTRATIVE FUNCTION – PART 1

REGULAR AGENDA
4) LEGISLATIVE & REGULATORY
End of Legislative Session Update (DISCUSSION-KANG)
Recommendation: Receive an update on the end of session legislative activities including the following bills that Pioneer Community Energy (Pioneer) had a position on: AB 538 (Holden), AB 557 (Hart), AB 625 (Aguiar-Curry), AB 643 (Berman), AB 704 (Patterson), AB 998 (Connolly), AB 1373 (Garcia), SB 83 (Weiner), SB 410 (Becker), SB 488 (Alvarado-Gil), SB 529 (Gonzalez), and SB 537 (Becker).
5) ADMINISTRATION
Authorize the Preparation of the Second Amended and Restated Joint Exercise of Powers Agreement For Pioneer Community Energy (ACTION-ECKERT)
Recommendation: Authorize the preparation of an Amendment to the Joint Exercise of Powers Agreement making non-substantive administrative updates to the document and eliminate the requirement that each Member Agency adopt resolutions approving new members to the JPA as described.
6) ADMINISTRATION
Update on Expansion into Unincorporated Nevada County (DISCUSSION-ECKERT) Recommendation: Receive an update of Pioneer Community Energy’s expansion efforts into Unincorporated Nevada County.

IV. GENERAL ADMINISTRATIVE FUNCTION – PART 2
A. BOARD MEMBER COMMUNICATIONS
B. EXECUTIVE DIRECTOR COMMUNICATIONS
C. ITEMS FOR INFORMATION

1. Glossary of Terms
D. ADJOURNMENT
Pioneer Community Energy is committed to ensuring that persons with disabilities are provided the resources to participate fully in its public meetings. If you are hearing impaired, we have listening devices available. If you require additional disability-related modifications or accommodations, including auxiliary aids or services, please contact the Clerk of the Board. If requested, the agenda shall be provided in appropriate alternative formats to persons with disabilities. All requests must be in writing and must be received by the Clerk five business days prior to the scheduled meeting for which you are requesting accommodation.

Requests received after such time will be accommodated only if time permits.

Upcoming Meeting of the Board:

November 16, 2023 at 3:00 PM
Pioneer Community Energy
Board Room
2510 Warren Drive, Suite B
Rocklin, CA 95677
GENERAL ADMINISTRATIVE FUNCTION – PART 2
Affidavit of Posting
I, Teresa Willock, Board Secretary, declare under penalty of perjury that the foregoing agenda for the October 19, 2023 regular meeting of the Pioneer Community Energy Governing Board was posted and available for public review on October 13, 2023 at the offices of Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, CA 95677; at remote location: Placer County Board of Supervisors-Roseville District Office, 2200 Douglas Blvd., Bldg. A, Suite 260, Roseville, CA 95661; and, was available for viewing on the Pioneer website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/ All public materials related to an item on this agenda submitted to the Governing Board after distribution of the agenda packet are also made available for public inspection on Pioneer’s website at:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/ Any document provided at the meeting by staff or by the public will be provided by the Board Clerk upon request by phone at (916) 758-8946, or by email at: [email protected].

PIONEER COMMUNITY ENERGY

GOVERNING BOARD

SPECIAL MEETING
September 28, 2023
Minutes
Entry No. 1
Heard General Administration Functions, Part I.

Notice of Cancellation
At the July 20, 2023 meeting, the September 21, 2023 meeting was cancelled and rescheduled to September 28, 2023, by Board consensus. A Cancellation Notice was posted on September 1, 2023.

Call to Order
Pioneer Community Energy Governing Board met in open session at 3:00 PM on July 20, 2023. The Members convened in person and the meeting was accessible to the public at Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, California, 95677; at Nevada City - City Hall, Wetherall Conference Room, 317 Broad Street, Nevada City, California 95959; was accessible for viewer participation on the Zoom platform at the following link: https://us06web.zoom.us/j/89967227073; and, was live streamed for viewing on the Pioneer website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.

Roll Call
Chair Dowdin Calvillo presided over the meeting.

Director Holmes informed staff that he would excuse himself no later than 4:30 PM due to a scheduling conflict.

Agenda Review
Reviewed and made no revision to the meeting agenda for September 28, 2023.

Public Comment
There were no comments from members of the public on items not listed on this agenda.

Director Ivy arrived prior to the Consent Agenda.

Entry No. 2
Acted on the Consent Agenda as follows:

Approved minutes of the July 20, 2023 regular meeting.

P A Agency Primary Member or Alternate Member
x City of Auburn x Chair
Alice Dowdin Calvillo
Rachel Radell-Harris
x County of El Dorado x Vice Chair
John Hidahl
Lori Parlin
x City of Colfax Sean Lomen x Kim Douglass
x City of Grass Valley x Tom Ivy Jan Arbuckle
x City of Lincoln Holly Andreatta Dan Karleskint
x Town of Loomis x Amanda Cortez Danny Cartwright
x Nevada City x Gary Petersen vacant
x County of Placer x Jim Holmes Bonnie Gore
x County of Placer x Suzanne Jones
x City of Placerville David Yarbrough John Clerici
x City of Rocklin x Greg Janda David Bass
Received Fiscal Year 2023-24 Draft Financial Reports through July 2023.

Adopted Resolution 2023-22 approving the Salary Range and Job Description for the Manager, Quantitative Analysis and Modeling position.

Adopted Resolution 2023-23 establishing a Special Program Fund (Budget) for Program purposes. (1) Adopted Resolution 2023-24 approving an attestation regarding the veracity of information reflected in Pioneer’s 2022 Power Source Disclosure Report for Pioneer Standard (“Base Service”) and the associated Power Content Label. (2) Adopted Resolution 2023-25 approving an attestation regarding the veracity of information reflected in Pioneer’s 2022 Power Source Disclosure Report for Green100 and the associated Power Content Label. (3) Approved the Pioneer Power Content Label for distribution per Public Utilities Code Sections 398.4 and 398.5.

MOTION: Holmes/Hidahl. Vote: 9:0:2.

ROLL CALL: Cortez, Douglass, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Petersen.

No/Abstain: None.

Absent: Andreatta, Yarbrough.

Entry No. 3
Impact Assessment Study Results for the Expansion into Unincorporated Nevada County Received results of the Impact Assessment Study related to the expansion of Pioneer Community Energy service territory into Unincorporated Nevada County.

Executive Director Eckert introduced Sam Kang, Pioneer Community Energy Chief Operating Officer.

Heard a presentation from Pacific Energy Advisors which provided the following conclusions to the study:
1) Projected fiscal impacts are negative due to the currently high prices for renewable energy and resource adequacy.
2) Absent a sharp decrease in market prices, by more than 30%, or Pioneer rate adjustments, expansion would yield negative operating margins.
3) Wholesale power markets are volatile, and it is possible that market conditions could change before 2025 to make expansion fiscally beneficial.

Discussion of this item was held to hear the next item presentation regarding the Board’s direction on moving forward with expansion efforts into unincorporated Nevada County.

Entry No. 4
Adopt Resolution Authorizing the Preparation of an Amendment to the Implementation Plan and Statement of Intent and to the Joint Exercise of Powers Agreement Allowing Expansion into Unincorporated Nevada County
Received presentation from Executive Director Eckert and discussed the Decision Point to:

A. Maintain Course with two conditions to continue:
1) Nevada County agrees to a rate-adder if needed to cover cost of service (incremental power cost) 2) Late 2025 start date to avoid summer procurement
PROS: continued momentum; JPA protected.

CONS: if abruptly ended, hard to start up again.

B. End the Process by voting “No” to the Resolution ending the process and we try again next year.

PROS: clean; ends process; pause deadline for filing Implementation Plan would be the same as waiting until next year.

CONS: qualitative; will need to start the process over again.

Minutes
September 28, 2023

Page 2 ends

Further discussion regarding the process timeline if moving forward confirmed that the Addendum to Pioneer’s Implementation Plan would be remitted to the California Public Utilities Commission in December 2023 with an expected approval within 90 days (March 2024).

This coincides with the Sales Forecast for purchasing Resource Adequacy release in April 2024. Pioneer will need to decide at that time. After May 2024, it is binding, and Pioneer would be committed to procure at that forecasted rate.

Executive Director Eckert explained that we will have a better picture at the end of 2023 when PG&E releases their rates forecast, consider the market fluctuations, and then the hard offramp would be in spring 2024.

Executive Director Eckert committed to return to the Board in Spring 2024 to see actual costs and the adder rate. This will be the final ‘offramp’ if the Board declines moving forward.

General Counsel reminded the Board that the item before them today is to authorize staff to move forward with preparations to update the Implementation Plan Addendum, but not to file it; also, for General Counsel to work on documents for amending the JPA in each of the member agencies but not approving expansion until the November 16, 2023 Board meeting.

Next steps would include each of the member jurisdictions approving by resolution prior to the Board vote scheduled for November 16, 2023.

Adopted Resolution 23-26 as discussed including later effective date of April 2024 and two conditions: (1) Nevada County agrees to a rate-adder if needed to cover cost of service (incremental power cost); and (2) Late 2025 start date to avoid summer procurement.

Adopted Resolution 23-26 authorizing staff to prepare Addendum No. 3 to Pioneer Community Energy’s Implementation Plan and Statement of Intent and Amendment No. 6 to the Joint Exercise of Powers Agreement to allow the addition of Unincorporated Nevada County as discussed.

MOTION: Holmes/Petersen. Vote: 9:0:2.

ROLL CALL: Cortez, Douglass, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Petersen.

No/Abstain: None.

Absent: Andreatta, Yarbrough.

Entry No. 5
Adopt a Resolution Approving and Authorizing the Executive Director to Execute an Agreement with NextEra Analytics, Inc. for Battery Optimization Services for an Amount Not to Exceed $300,000 Annually Only if Profitable

Adopted Resolution 23-27 authorizing the Executive Director to sign a three-year contract (automatic 1 year renewal thereafter) for battery optimization services with NextEra Analytics, Inc. (NEA) not to exceed $300,000 per year. Service fees are based on a shared-profit model on a graduated scale starting at zero, but not to exceed $300,000 per year. The three-year term will commence on the date in which the battery resource starts commercial operation in the California Independent System Operator (CAISO) market.

MOTION: Hidahl/Janda. Vote: 9:0:2.

ROLL CALL: Cortez, Douglass, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Petersen.

No/Abstain: None.

Absent: Andreatta, Yarbrough.

Director Holmes excused himself from the meeting following the vote on this item.

Minutes
September 28, 2023

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Entry No. 6
Adopt a Resolution Approving and Authorizing the Executive Director to enter into a contract with Greenlite Lighting Corp. USA to execute LED Lighting Program Staff informed the Board that the contract negotiations are still in progress for the termination clauses; and, that terms for scope of work, timeline, and the not-to-exceed amount of $262,400.

Staff recommended the Board approve the contract in form; then, if there is a material change, staff will bring the contract back to the Board in October.

Adopted resolution as discussed and amended to approve and authorize the Executive Director to finalize negotiations and execute an agreement with Greenlite Lighting Corp USA for Program services, pursuant to the terms described in the staff report and presentation associated with this item, for program services beginning on October 1, 2023, for an amount not-to-exceed $262,400, subject to approval by General Counsel.

Adopted Resolution 23-28 approving and authorizing the Executive Director to enter into a contract with Greenlite Lighting Corp. USA to execute an LED lighting program for an amount not to exceed $262,400.

MOTION: Cortez/Jones. Vote: 8:0:3.

ROLL CALL: Cortez, Douglass, Dowdin Calvillo, Hidahl, Ivy, Janda, Jones, Petersen.

No/Abstain: None.

Absent: Andreatta, Holmes, Yarbrough.

Entry No. 7
Draft Fiscal Year 2022-23 Year-End Financial Reports
Received draft Fiscal Year 2022-23 year-end Financial Reports through June 30, 2023.

Entry No. 8
Heard General Administration Functions, Part II.

Board Member Communications
Committee Chair Janda reported that the Audit & Finance Committee met on September 6, 2023. The Committee approved minutes from the December 8, 2022 and May 22, 2023 meetings; and received an overview of the Financial Audit Kick-Off from independent auditor, Pisenti & Brinker. The next Committee meeting has been scheduled for December 6, 2023.

Executive Director Eckert reported that the Expansion ad hoc Committee met on September 13, 2023.

The Committee heard presentation and discussed the Impact Assessment Study related to Nevada County joining Pioneer Community Energy. By consensus, the Committee agreed to recommend the Board of Directors approve moving forward with submitting an Implementation Plan Amendment in December 2023 with an expected start date of late 2025. The Committee supports a rate-adder to cover Nevada County’s Cost of Service, but does not endorse impact to current ratepayers to subsidize potential new members.

Committee Chair Hidahl reported that on September 14, 2023, he attended the Energy Procurement Review ad hoc Committee along with Alice Dowdin Calvillo and Amanda Cortez. Pioneer staff and support including Commercial Counsel, General Counsel, and Technical Consultants were also in attendance. The Committee reviewed, discussed, asked questions, and approved the Executive Director’s execution of a long-term capacity contract with Terra-Gen Power Holdings II, LLC that will help Pioneer meet its 2026- 2041 resource adequacy requirements. The Committee also received information on a NextEra Energy analytics product for maximizing opportunities in battery storage.

Minutes
September 28, 2023

Page 4 ends

Executive Director Communications
Executive Director Eckert informed the Board of the following items:

LOOMIS EGGPLANT FESTIVAL
Pioneer is excited to participate in the Loomis Eggplant Festival on October 7th once again. The community event promotes local businesses, organizations, and the citizens of Loomis. The event takes place at the historic Loomis Train Depot and Blue Anchor Park from 10am – 4pm. In addition to sharing information about Pioneer and answering customer questions, Pioneer is partnering with 4ever Yours Rescue, a non-profit dog rescue, to help find animals their forever home. State Senator Roger Nielo is expected to visit the booth.

FIVE-YEAR ANNIVERSARY EVENT
Pioneer Community Energy will host an event celebrating its 5-Year anniversary on Wednesday, November 1, from 5:00-7:00 p.m. at the Blue Goose in Loomis. The early evening reception will include food, beverages, and a scripted program that highlights the success of the past five years and pays tribute to those who made our success possible. “Save the Date” information was distributed in August, and a formal printed invitation will be mailed this week. The guest list includes current and former Board members, elected leaders, business partners, supporters, and expansion prospects.

Executive Director Eckert also informed the Board that the Participate.Energy program will be presented at the October 19, 2023 Board meeting.

Informational Items
Received the Glossary of Terms.

Adjournment
The meeting adjourned at 5:04 PM
ATTEST:

Minutes approved as presented by a majority vote of
the Governing Board on October 19, 2023.

Teresa Willock, Board Secretary
Minutes
September 28, 2023

Page 5 ends

Page 1 of 1 ends

Staff Report – Item 1b
To: The Governing Board
From: Eric Acedo, Sr. Financial Analyst
Item 1b: Receive Fiscal Year 2023-24 Draft Financial Reports Through August 2023 Date: 10/19/2023

RECOMMENDATION
Receive Fiscal Year 2023-24 Draft Financial Reports through August 2023.

BACKGROUND
The Year-To-Date (YTD) financial reports are produced by Maher Accountancy for Board member and management review. Although these reports are unaudited, they provide the most up-to-date financial data for Pioneer Community Energy. The mPOWER program accepted its last application August 2021 and mPOWER activity is now limited to the administering the outstanding mPOWER Bonds. Financials for the mPOWER program will be included in the audited year end reports. For August 2023, the financial reporting package includes the following reports for the CCA Fund only:
• Statement of Net Position (Balance Sheet) – Accounting of Assets, Liabilities and Net Position as of the reporting period end date for the CCA program. • Statement of Revenues, Expenses, and Changes in Net Position (P&L) – Accounting of all revenues, expenses, and changes in net position on a YTD basis through the reporting period end date for the CCA program.
• Budgetary Comparison Schedule (Budget to Actuals) – Comparison of budget to actuals on a YTD basis through the reporting period end date for the CCA program.

STRATEGIC PLAN
Strategic Priority 5: Financial Stability & Strategic Growth

FISCAL IMPACT
The YTD change in net position through two months of the fiscal year is $7.6 million.

ATTACHMENTS

1. Financial Reports through August 31, 2023
1 ACCOUNTANTS’ COMPILATION REPORT
Management
Pioneer Community Energy
Management is responsible for the accompanying financial statements of the CCA Program of Pioneer Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of August 31, 2023, and the related statement of revenues, expenses, and changes in net position for the period 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 disclosures and the statement of cash flows required by accounting principles generally accepted in the United States of America in these interim financial statements. Pioneer Community Energy’s annual audited financial statements include the note disclosures and statement of cash flows omitted from these interim statements. If the omitted disclosures and the statement of cash flows were included in these financial statements, they might influence the user’s conclusions about Pioneer Community Energy’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 the Pioneer Community Energy because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
October 5, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com MAHER

ACCOUNTANCY
CCA Fund
ASSETS
Current assets
Cash and cash equivalents 19,827,398 $
Investments 48,862,985
Accounts receivable, net of allowance 26,491,269
Accrued revenue 11,667,719
Other receivables 1,003,078
Interest receivable 183,000
Prepaid expenses 62,284
Deposits 6,961,111
Total current assets 115,058,844
Noncurrent assets
Lease asset, net of amortization 1,430,906
Total noncurrent assets 1,430,906
Total assets 116,489,750

LIABILITIES
Current liabilities
Accrued cost of electricity 26,550,206
Accounts payable 531,879
Other accrued liabilities 314,294
Interest payable 23,706
Deposits 693,756
Note payable 659,374
Lease liability 76,779
Total current liabilities 28,849,994
Noncurrent liabilities
Note payable 6,491,062
Lease liability 1,553,029
Total noncurrent liabilities 8,044,091
Total liabilities 36,894,085

NET POSITION
Net investment (deficit) in capital assets (198,902)
Unrestricted net position 79,794,567
Total net position 79,595,665 $

PIONEER COMMUNITY ENERGY

STATEMENT OF NET POSITION
As of August 31, 2023

CCA FUND
See accountants' compilation report. 2
CCA Fund

OPERATING REVENUES
Electricity sales, net 47,311,080 $
Total operating revenues 47,311,080

OPERATING EXPENSES
Cost of electricity 38,327,340
Contract services 917,680
Staff compensation 554,848
Other operating expenses 169,290
Total operating expenses 39,969,158
Operating income (loss) 7,341,922

NONOPERATING REVENUES (EXPENSES)
Interest and investment returns 326,450
Interest and financing expense (58,114)
Nonoperating revenues (expenses), net 268,336
CHANGE IN NET POSITION 7,610,258
Net position at beginning of period 71,985,407
Net position at end of period 79,595,665 $

PIONEER COMMUNITY ENERGY
Two Months Ended August 31, 2023

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CCA FUND
See accountants' compilation report. 3
Participation Rates – August 2023
Participation Rate by TOT June 2023 July 2023 August 2023 AUBURN INC 85.66% 85.60% 85.51%
COLFAX INC 88.25% 88.58% 88.26%
LINCOLN INC 82.99% 82.90% 82.76%
LOOMIS INC 88.38% 88.28% 88.13%
PLACERVILLE INC 87.64% 87.52% 86.97%
ROCKLIN INC 90.86% 90.92% 90.85%
UNINC EL DORADO CO 81.40% 81.38% 80.90%
UNINC PLACER CO 85.08% 85.14% 85.08%
Grand Total 84.53% 84.54% 84.28%
4 Plf)NEER

COMMUNITY ENERGY
5 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Pioneer Community Energy
Management is responsible for the accompanying special purpose statement for the budgetary comparison schedule CCA Program of Pioneer Community Energy, a California Joint Powers Authority, for the period ended August 31, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. 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 statement 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, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of Pioneer Community Energy.

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.

Pioneer Community Energy’s annual audited financial statements 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 Pioneer Community Energy’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 Pioneer Community Energy because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
October 5, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com MAHER

ACCOUNTANCY
2023/24 YTD
Amended
Budget
2023/24 YTD
Actual
2023/24 YTD
Variance
(Under) Over
2023/24
YTD
Actual/
Budget %
2023/24
Amended
Budget
2023/24
Amended
Budget
Remaining

ENERGY REVENUES
Energy Sales $ 54,664,969 $ 47,953,237 $ (6,711,732) 88% 225,938,000 $ $ 177,984,763 Green100 Sales 6,558 5,282 81% (1,276) 30,000 24,718
Congestion Revenue Rights 1,083,268 1,093,070 (9,802) 99% 5,000,000 3,916,732 Less Uncollectible Accounts (738,066) (647,440) 90,626 88% (3,050,568) (2,403,128) Total Operating Revenues 48,394,347 55,026,532 (6,632,185) 227,917,432 179,523,085

ENERGY EXPENSES
Power Supply 39,410,608 42,029,000 (2,618,392) 94% 183,919,000 144,508,392 OPERATING MARGIN 12,997,532 8,983,739 (4,013,793) 43,998,432 35,014,693

OPERATING EXPENSES
Administration
Compensation 125,615 145,085 (19,470) 87% 870,507 744,892 Contract services 95,621 13,784 (81,837) 14% 381,325 367,541 Operating expenses 187,156 115,414 (71,742) 62% 791,126 675,712 Total Administration expenses 427,862 254,813 (173,048) 60% 2,042,958 1,788,145 Finance
Compensation 133,108 138,311 (5,203) 96% 829,866 696,758 Contract services 83,936 34,991 (48,946) 42% 591,618 556,627 Operating expenses 46,517 42,813 (3,704) 92% 256,103 213,290 Total Finance expenses 268,765 210,912 (57,852) 78% 1,677,587 1,466,675 Power Procurement
Compensation 82,660 149,873 (67,213) 55% 899,237 816,577 Contract services 292,919 258,698 (34,221) 88% 1,880,341 1,621,643 Operating expenses 7,167 1,217 (5,949) 17% 43,000 41,783 Total Power Procurement expenses 342,576 449,959 (107,383) 76% 2,822,578 2,480,002 Customer Care
Compensation 81,110 120,929 (39,820) 67% 725,576 644,466 Contract services 486,895 437,097 (49,798) 90% 2,921,370 2,484,273 Operating expenses 3,042 - (3,042) 0% 18,250 18,250
Total Customer Care expenses 518,207 610,866 (92,659) 85% 3,665,196 3,146,989 Marketing & Communications
Compensation 4,911 32,320 (27,410) 15% 193,922 189,011
Contract services 63,417 108,229 44,812 171% 380,500 272,271 Operating expenses 170,577 50,877 (119,700) 30% 1,087,460 1,036,583 Total Marketing expenses 266,314 164,017 (102,297) 62% 1,661,882 1,497,865 Legislative & Regulatory
Compensation 91,232 96,289 (5,056) 95% 577,732 486,500
Contract services 55,394 28,856 (26,538) 52% 317,275 288,419 Operating expenses 1,050 248 (802) 24% 6,300 6,052
Total Legislative expenses 120,336 152,732 (32,396) 79% 901,307 780,971 Programs
Compensation 33,980 26,714 7,266 127% 160,283 126,303
Contract services 18,667 - (18,667) 0% 112,000 112,000
Operating expenses 287,953 - (287,953) 0% 1,727,717 1,727,717 Total Programs expenses 333,333 33,980 (299,353) 10% 2,000,000 1,966,020 Total Operating Expenses 2,509,830 1,644,841 (864,989) 66% 14,771,508 13,126,667

NON-OPERATING REVENUES (EXPENSES)
Investment gains (losses) - 326,450 326,450 750,000 423,550 Term Loan Debt Service (158,333) (101,196) 64% 57,137 (950,000) (848,804) Additional Term Loan Principal - - - (2,100,000) (2,100,000) Line/Letter of Credit Fees (87,500) 87,500 - 0% (350,000) (350,000) Financial Security Requirement - - - (360,000) (360,000) Nonoperating revenues (expenses), net (245,833) 225,254 471,087 (3,010,000) (3,235,254) Total Expenses (Energy, Operating, Non-Operating) 44,784,664 40,830,196 (3,954,468) 201,700,508 160,870,312 Contribution to/(from) Reserves $ 10,241,869 $ 7,564,151 $ (2,677,717) $ 26,216,924 $ 18,652,773

BUDGETARY COMPARISON SCHEDULE
Two Months Ended August 31, 2023

PIONEER COMMUNITY ENERGY

CCA FUND

Page 1 of 1 ends

Staff Report – Item 2
To: The Governing Board
From: Paige Garcia, Programs Manager
Item 2: Partnership with Participate.Energy
Date: 10/19/2023

ACTION REQUESTED
Discuss and provide direction to staff about introducing Participate.energy to Pioneer Community Energy’s (“Pioneer”) customers with the goal of offering microgrid solutions to any customer interested in the program.

RECOMMENDATION
There is no recommendation in the report.

BACKGROUND
At the May 25, 2023, Governing Board Meeting, the Board reviewed the Proposed Fiscal Year 2023-24 Operating Budget and provided directions to focus on Programs that serve the residential sector.

At the June 15, 2023, Governing Board Meeting, the Board adopted the Fiscal Year 2023-24 Operating Budget that included $2 million of Programs funding.

ANALYSIS & DISCUSSION
The genesis of Pioneer’s interest is there are a number of solar vendors in our territory that are providing long-term solar agreements to customers with little or no money down. This opportunity could allow Pioneer to provide a similar offering that maintains long-term relationships with our customers. Staff had prior knowledge of Participate Energy through Participate Energy’s efforts with other Community Choice Aggregators and received a presentation of their services to staff in early August.

Participate.energy provides distributed microgrid programs to CCAs across California. They partner with CCAs and Tesla to provide behind-the-meter solar-plus-storage to homeowners at no upfront cost to the customer.

Participate.energy pays Tesla for the costs of the system plus installation and Participate Energy owns the system. Pioneer enters a 25-year PPA with Participate.energy to buy the energy created by the sola-plus-storage systems and charges the customer through the PG&E bill. The customer does not pay any costs upfront and receives the benefit of having solar and storage for their home with the ease of monthly payments to Pioneer through their existing bill.

If the Board provides direction to pursue then next steps would involve a presentation by Participant Energy to the Community Advisory Committee and subsequently a contract to the Board at a later date.

STRATEGIC PLAN
The recommendation supports the Local Engagement and Quality in Service priorities.

FISCAL IMPACT
Since this is still in the development phase, the fiscal impact is not known at this time.

ATTACHMENTS
There are no attachments to the report.

Page 1 of 2 ends

Staff Report – Item 3
To: The Governing Board
From: Brad Koehn, Director of Finance and Administration Item 3: Adopt Resolution Approving Amendments to the Energy Risk Management Policy Date: 10/19/2023

RECOMMENDATION
Adopt Resolution Approving Amendments to Pioneer Community Energy’s (“Pioneer”) Energy Risk Management Policy (“Policy”).

RISK OVERSIGHT COMMITTEE RECOMMENDATION
The Risk Oversight Committee reviewed the amended policy at the September 2023 meeting and approved the policy in form and recommended Board approval.

BACKGROUND
In September 2019, the Board approved the Policy that governs the framework by which the Board, staff and consultants conduct power procurement and related business activities. The Policy established a Risk Oversight Committee and is supplemented by the Energy Risk Management Guidelines (“Guidelines”), which sets the minimum and maximum procurement amounts Pioneer will undertake for various energy products. The Policy and associated Guidelines are based on industry best practices that will require the Policy to evolve as Pioneer develops further operational experience and/or new market and regulatory conditions unfold.

During its normal course of business, Pioneer manages risks associated with its participation in the energy markets. A key component of effectively managing procurement and portfolio risks is being able to identify, measure, and manage market and credit risks. The Policy provides the framework around which Pioneer manages various market and credit risks.

The policy requires a biennial review with amendments to the policy requiring Board approval. The Board adopted amendments to the policy in October 2021.

ANALYSIS & DISCUSSION
Pursuant to the Policy’s requirement for a biennial Board review, Pioneer staff performed a review of the Policy and updated the Policy for clarity. The following is a summary of proposed changes compared to the current policy:

Section 1 – Policy Overview
The member agencies have been updated for the expanded service territory.

Section 2 – Strategy/Goals and Risk Exposures
Clarifying language was added for the goal to maintain competitive rates and the impact of the Power Cost Indifference Adjustment on competitiveness.

Section 3 – Business Practices
Minor edits for clarification purposes.

Plf)NEER

COMMUNITY ENEAGV
Agenda Item: 3 Agenda Date: 10/19/2023

Page 2 of 2 ends

Section 4 – Organization Structure and Responsibilities Defining and selection clarification was added for the non-voting member of the Risk Oversight Committee.

Language was added in section 4.4 Energy Procurement Review Committee (EPRC) to be in alignment with Section 5 Delegation of Authority, that the EPRC reviews and approves energy contracts greater than 5 years and authorize the Executive Director to execute those contracts.

Section 5 – Delegation of Authority
Minor clarification edits only.

Section 6 – Credit Policy
Minor clarification edits only.

Section 7 – Position Tracking and Management Reporting
No edits or changes.

Section 8 – Policy Revision Process
Minor edits.

STRATEGIC PLAN
The recommendation supports the following strategic plan priorities:

1. Quality in Service – The recommendation supports competitive rates.

2. Operational Excellence – The recommendation follows industry best practices.

3. Financial Stability & Strategic Growth – The recommendation supports financial stability by mitigating commodity price volatility.

FISCAL IMPACT
The recommendation does not have a fiscal impact, but the policy supports mitigation of risk in Pioneer’s largest operating expense that directly impacts the budget and the ability to offer stable and competitive rates.

ATTACHMENTS

1. Resolution Approving the updated Energy Risk Management Policy

2. Energy Risk Management Policy (2021 Policy redlined with changes) Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held October 19, 2023 by the following vote on roll call:

Ayes:

Noes:

Absent:

Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, the Board of Pioneer Community Energy approved an Energy Risk Management Policy October 2021; and
WHEREAS, the Policy requires a biennial Board review; and WHEREAS, the Policy identifies significant risks such as Customer Opt-Out Risk, Market risk, Regulatory risk, Volumetric risk, Model risk, Operational risk, Counterparty Credit risk and Liquidity risk; and
WHEREAS, the Policy identifies procurement strategies, and a framework of controls and oversight; and
Whereas, the Policy identifies measures, monitoring and reports to manage risk; WHEREAS, the Risk Oversight Committee reviewed the Policy and recommended Board approval;
BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby approves the Energy Risk Management Policy.

This Resolution shall take effect immediately upon its adoption.

Exhibit A: Energy Risk Management Policy
In the matter of: Resolution Approving the
Amended Energy Risk Management Policy

ENERGY RISK

MANAGEMENT
POLICY
Revised: October 19, 2023
Table of Contents

PIG)NEER

COMMUNITY ENERGY
2 Contents
Table of Contents.............................................................................................................................. 1 Section 1: POLICY OVERVIEW.................................................................................................................. 4

1.1 Background and Purpose .................................................................................................................................. 4

1.2 Scope................................................................................................................................................................. 4

1.3 Energy Risk Management Objective ................................................................................................................. 5

1.4 Policy Administration........................................................................................................................................ 5 Section 2: STRATEGY/GOALS AND RISK EXPOSURES................................................................ 6

2.1 Strategy/Policy Goals........................................................................................................................................ 6 a) Current Board-approved Procurement Strategy.............................................................................................. 6 b) Long-term Business Viability Goals .................................................................................................................. 6

2.2 Risk Exposures................................................................................................................................................... 7

2.2.1 Customer Opt-Out Risk .................................................................................................................................. 7

2.2.2 Market Risk .................................................................................................................................................... 7

2.2.3 Regulatory Risk............................................................................................................................................... 8

2.2.4 Volumetric Risk .............................................................................................................................................. 8

2.2.5 Model Risk...................................................................................................................................................... 9

2.2.6 Operational Risk............................................................................................................................................. 9

2.2.7 Counterparty Credit Risk................................................................................................................................ 9

2.2.8 Liquidity Risk ................................................................................................................................................ 10

2.3 Risk Measurement Methodology.................................................................................................................... 10 Section 3: BUSINESS PRACTICES......................................................................................................... 11

3.1 General Conduct ............................................................................................................................................ 11

3.2 Trading for Personal Accounts........................................................................................................................ 11

3.3 Adherence to Statutory Requirements........................................................................................................... 11

3.4 Transaction Type, Regions and Markets......................................................................................................... 12

3.5 Counterparty Suitability .................................................................................................................................. 13

3.6 System of Record ............................................................................................................................................ 13

3.7 Transaction Valuation ..................................................................................................................................... 13

3.8 Stress Testing .................................................................................................................................................. 13

3.9 Trading Practices............................................................................................................................................. 13 3 3.10 Policy Compliance ......................................................................................................................................... 14 Section 4: ORG. STRUCTURE AND RESPONSIBILITIES ........................................................... 15

4.1 Risk Management Organizational Structure................................................................................................... 15

4.2 Governing Board ............................................................................................................................................. 15

4.3 Risk Oversight Committee (“ROC”)................................................................................................................. 15

4.4 Energy Procurement Review Committee (“EPRC”)......................................................................................... 16

4.5 Segregation of Duties...................................................................................................................................... 16

4.5.1 Front Office .................................................................................................................................................. 16

4.5.2 Middle Office................................................................................................................................................ 17

4.5.3 Back Office ................................................................................................................................................... 17 Section 5: DELEGATION OF AUTHORITY.......................................................................................... 19

5.1 Hedging Tolerances......................................................................................................................................... 19

5.1.1 Energy Procurement Tolerances.................................................................................................................. 19

5.1.2 Renewable Portfolio Standard..................................................................................................................... 20

5.1.3 Resource Adequacy...................................................................................................................................... 20

5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits...................................................................... 20 Section 6: CREDIT POLICY........................................................................................................................ 21

6.1 Counterparty Credit Risk................................................................................................................................. 21

6.2 Counterparty Concentration........................................................................................................................... 21

6.3 Credit Review Exceptions................................................................................................................................ 22

6.4 Credit Exposure and Monitoring..................................................................................................................... 22 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING .................................. 23 Section 8: POLICY REVISION PROCESS............................................................................................ 24

8.1 Acknowledgement of Policy............................................................................................................................ 24

8.2 Policy Interpretations...................................................................................................................................... 24 Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS AND MARKETS ............. 25 Appendix B: NEW TRANSACTION APPROVAL FORM.................................................................. 26 Appendix C: DEFINITIONS........................................................................................................................ 27 4 Section 1: POLICY OVERVIEW

1.1 Background and Purpose
Pioneer Community Energy (“Pioneer”) is a public joint powers agency located within the geographic boundaries of El Dorado, Nevada, and Placer Counties.

Member agencies of Pioneer include the Unincorporated Counties of Placer and El Dorado, as well as the Cities of Auburn, Colfax, Grass Valley, Lincoln, Nevada City, Placerville, and Rocklin and the Town of Loomis.

Mission Statement: Pioneer is a locally owned provider of electricity – powering the communities we serve with competitive rates, reliable service, and a choice in energy options.

Pioneer will give its members an opportunity to procure electricity supplies and implement local programs that meet the goals of the local communities. Electricity procured to serve customers will continue to be delivered through Pacific Gas & Electrics’ (“PG&E”) transmission and distribution system.

Providing retail electric generation service to customers enrolled in the CCA program exposes Pioneer to risks such as customer opt-out risk, market risk, regulatory risk, volumetric risk, model risk, operational risk, counterparty credit risk and reputation risk.

This Energy Risk Management Policy (“Policy”) establishes Pioneer’s Energy Risk Management Program (“Program”) including risk management functions and procedures to manage the risks associated with power procurement activities.

The ultimate purpose of this Policy is to help Pioneer manage its risks by specifying management responsibilities, organizational structures, risk management standards, and operating controls and limits necessary to properly identify and manage Pioneer’s exposure to risk.

1.2 Scope
Unless otherwise explicitly stated in this Policy, or other policies approved by the Board, this Policy applies to all power procurement and related business activities that may impact the risk profile of Pioneer. This Policy documents the framework by which management and staff will:
• Identify and quantify risk
• Develop and execute procurement strategies
• Create a framework of controls and oversight
• Monitor, measure, and report on the effectiveness of the Program 5 1.3 Energy Risk Management Objective
The objective of the Energy Risk Management Policy is to provide a framework for conducting procurement activities that will manage risks to support Pioneer meeting the goals listed in Section 2.1.

Pursuant to this Policy, Pioneer will identify and measure the magnitude of the risks to which it is exposed and contribute to the potential for not meeting identified goals.

1.4 Policy Administration
This Policy document shall be reviewed and approved by Pioneer’s Governing Board (“Board”) biennially.
6 Section 2: STRATEGY/GOALS AND RISK EXPOSURES

2.1 Strategy/Policy Goals
a) Current Board-approved Procurement Strategy
The current Board approved Energy Procurement Strategy is to meet the State’s minimum renewable energy targets while procuring the remaining energy needs with less expensive power whether system power or other power sources to maintain competitive rates.
b) Long-term Business Viability Goals
To help ensure Pioneer’s long-term viability, this Program outlines the following business goals. Pioneer will establish metrics for modeling and measuring risk exposures for tracking performance relative to these goals. • Pioneer will target to maintain competitive retail rates compared to PG&E after adjusting for the Power Charge Indifference Adjustment (PCIA) and Franchise Fee.
• Pioneer will fund financial reserves with the following objectives:
o Establish long-term business sustainability
o Build collateral for power procurement activities
o Establish an investment grade credit rating
o Develop a source of funds for investment in generation and other local programs
o Stabilize rates and dampen year-to-year variability in procurement costs 0%
20%
40%
60%
80%
100%
120%
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
CA Renewable Por�olio Standards
Por�olio Composi�on Requirements
■ CA RPS Min % ■ Non-Specified Power %
7 The goals outlined above are incorporated into the financial models that are used in modeling and measuring risk exposures. It is important to note that the goals listed above are not intended to be a comprehensive list of goals for Pioneer.

2.2 Risk Exposures
The Program faces a range of risks during ongoing operations:
a) Customer Opt-Out risk
b) Market risk
c) Regulatory risk
d) Volumetric risk
e) Model risk
f) Operational risk
g) Counterparty credit risk
h) Liquidity risk

2.2.1 Customer Opt-Out Risk
Customer opt-out risk is the primary risk the CCA faces. Customer opt-out risk includes any condition or event that creates the potential for significant reductions in the CCA’s customer base, thereby increasing the potential for the CCA to not meet its Policy goals. A CCA faces other risks, but the ultimate concern is often how these other risks will affect customer opt-outs. This Policy addresses this paramount risk and secondary risk types listed below. These risks are not all inclusive but are identified as the risk factors driving the success of the CCA.

The most relevant measures of the success of this Policy include:
• Retail rate competitiveness with PG&E
• Financial reserve level

2.2.2 Market Risk
For this Policy, risk exposure is assessed on all the transactions (energy, environmental attributes, capacity, etc.) executed by Pioneer, as well as the risk exposure of open positions and the impacts of these uncertainties on the CCA’s load obligations. The following are components of Pioneer’s energy risk that will be monitored, assessed, and managed.

Market risk is the uncertainty of Pioneer’s financial performance due to variable commodity market prices (market price risk) and uncertain price relationships (basis risk). Variability in market prices creates uncertainty in Pioneer’s procurement costs and can materially impact Pioneer’s financial position. Market risk is managed by:
8 • Regular measurement
• An active hedging program
• Execution of approved procurement and Congestion Revenue Right strategies • The limit structure set forth in this Policy

2.2.3 Regulatory Risk
CCAs remain a comparatively new legal entity in the state of California and are subject to an evolving legal and regulatory landscape. Additionally, Pioneer is in direct competition with PG&E, which face the risk of stranded investments in generating assets and power purchase agreements procured in the past to serve now departing CCA loads. That stranded investment risk is passed on to Pioneer’s customers through the PCIA which impacts Pioneer’s competitiveness. The competitive and regulatory landscape results in retail rate competitiveness risks that are unique to CCAs. Regulatory risk is managed by:
• Monitoring and analyzing legislative and regulatory proceedings impacting CCAs • Monitoring and reporting of actual and projected financial results including stressed financial results assuming a range of market and retail rate scenarios (both Pioneer and PG&E)
• Structuring procurement strategies with the objective function of maintaining a favorable retail rate savings relative to PG&E
• Actively participating in and representing CCA customer interests during regulatory and legislative proceedings

2.2.4 Volumetric Risk
Volumetric risk is the uncertainty of Pioneer’s financial performance due to variability in the quantity of retail load served by Pioneer. Load variability can be the result of customer opt-outs, temperature deviation from normal, unforeseen adoption of behind the meter generation by Pioneer customers, as well as local, state, and national economic conditions. Volumetric risk is managed by:
• Quantifying the variability of PG&E generation and PCIA rates • Quantifying variability in procurement costs
• Monitoring and adjusting for non-regulatory factors driving volumetric uncertainty (e.g. weather)
• Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating Pioneer’s actual load data into forecasts as such data becomes available
• Adopting a formal procurement strategy
• Implement a key accounts program and maintain strong relationships with local communities
9 • Monitoring trends in customer onsite generation, economic shifts, electric vehicle adoption, and other factors that affect electric consumption

2.2.5 Model Risk
Model risk is the uncertainty of Pioneer’s financial performance due to potentially inaccurate or incomplete characterization of a transaction or power supply portfolio elements due to fundamental deficiencies in models and/or information systems.

Model risk is managed by:
• Developing industry standard financial risk assessment models • Reviewing model outputs as part of risk control framework • Conducting ongoing Pioneer staff education and participation in CCA industry forums
• Updating and improving models as additional information and expertise are acquired

2.2.6 Operational Risk
Operational risk is the uncertainty of Pioneer’s financial performance due to weaknesses in the quality, scope, content, or execution of human resources, technical resources, and/or operating procedures within Pioneer. Operational risk can also be exacerbated by fraudulent actions by employees or third parties or inadequate or ineffective controls. Operational risk is managed by:
• Ensuring adequate controls set forth in this Policy
• Conducting routine oversight of procurement activity
• Perform timely and effective reporting by management
• Training staff to reinforcing a culture of compliance to ERM policies • Conducting Ongoing and timely internal and external audits • Separate internal operations between Front, Middle and Back Office responsibilities as set forth herein
• Provide training to Board members to enhance oversight

2.2.7 Counterparty Credit Risk
Counterparty credit risk is the potential that a Counterparty will fail to perform or meet its obligations in accordance with terms agreed under contract. Pioneer’s exposure to counterparty credit risk is controlled by the limit controls set forth in the Credit Policy described in Section 6.
10 2.2.8 Liquidity Risk
Pioneer manages liquidity risk through adherence to its loan and power purchase agreement credit covenants, limiting commitments to provide cash security consistent with its Credit Guidelines, ensuring it has adequate loan facilities, prudent cash and investment management, and adherence to its Reserve Policy.

Pioneer monitors its liquidity (defined as unrestricted cash, investments, and unused bank lines of credit) no less than weekly. Pioneer utilizes scenario and sensitivity analyses while preparing budget, rate, and pro forma analyses to identify potential financial outcomes and ensure sufficient liquidity under adverse conditions.

2.3 Risk Measurement Methodology
A vital element in Pioneer’s Energy Risk Management Policy is the regular identification, measurement, and communication of risk. Pioneer will routinely evaluate industry accepted benchmarks of quantified risk measurements to determine the applicability of such benchmark to Pioneer operations and performance. To effectively communicate risk, all risk management activities must be monitored frequently using risk measurement methodologies that quantify the risks associated with Pioneer’s energy procurement and performance relative to goals.

Risk measurement is the comparison of Pioneer’s projected retail rates to those of PG&E under expected and stressed scenarios. The rate comparison will be adjusted for actual and projected PCIA and Franchise Fee charges. Risk measurement methodologies shall be re-evaluated on a periodic basis to ensure Pioneer adjusts its methods to reflect the evolving regulatory and competitive landscape. The implementation of these methods shall be overseen and ratified by the Risk Oversight Committee (“ROC”).
11 Section 3: BUSINESS PRACTICES

3.1 General Conduct
It is the policy of Pioneer that all personnel, including the Board, management, and agents, adhere to standards of integrity, ethics, conflicts of interest, compliance with statutory law and regulations and other applicable Pioneer standards of personal conduct while employed by or affiliated with Pioneer.

3.2 Trading for Personal Accounts
All Pioneer Directors, management, employees and agents participating in any transaction or activity within the coverage of this Policy are obligated to give notice in writing to Pioneer of any interest such person has in any counterparty that seeks to do business with Pioneer, and to identify any real or potential conflict of interest such person has or may have regarding any contract or transaction with Pioneer.

Conflicts of Interest shall be identified and defined as set forth in the Pioneer Conflict of Interest Code, as amended from time to time by the Board, which incorporates the Political Reform Act requirements for all employees advising Pioneer.

If there is any doubt as to whether a prohibited condition exists, then it is the employee’s responsibility to discuss the possible prohibited condition with her/his manager or supervisor.

3.3 Adherence to Statutory Requirements
Compliance is required with rules promulgated by the state of California, California Public Utilities Commission, California Energy Commission, Federal Energy Regulatory Commission (FERC), Commodity Futures Trading Commission (CFTC), and other regulatory agencies.

Congress, FERC, and CFTC have enacted laws, regulations and rules that prohibit, among other things, any action or course of conduct that actually or potentially operates as a fraud or deceit upon any person in connection with the purchase or sale of electric energy or transmission services. These laws also prohibit any person or entity from making any untrue statement of fact or omitting to state a material fact where the omission would make a statement misleading. Violation of these laws can lead to both civil and criminal actions against the individual involved, as well as 12 Pioneer. This Policy is intended to comply with these laws, regulations, and rules and to avoid improper conduct on the part of anyone employed by Pioneer. These procedures may be modified from time to time by legal requirements, auditor recommendations, ROC requests and other considerations.

In the event of an investigation or inquiry by a regulatory agency, Pioneer may provide legal counsel to employees. However, Pioneer, with the consent of the Board, will not appoint legal counsel to an employee if Pioneer determines that the employee was not acting in good faith within the scope of employment.

3.4 Transaction Type, Regions, and Markets
Authorized transaction types, regions and markets are listed in Appendix A to this Policy. These transaction types, regions and markets are and shall continue to be focused on supporting Pioneer’s financial policies, including approved procurement strategies. New or non-standard transaction types may provide Pioneer with additional flexibility and opportunity but may also introduce new risks. Therefore, transaction types, regions and markets not included in Appendix A, or transactions within already approved transaction types that are substantially different from any prior transaction executed by Pioneer, must be approved by the ROC prior to execution using the process defined below.

When seeking approval for a new or non-standard transaction type, region, and/or market, a New Transaction Approval Form, as shown in Appendix B, should be drafted describing all significant elements of the proposed transaction. The proposal write-up should, at a minimum, include:
• A description of the benefit to Pioneer, including the purpose, function and expected cost impact (i.e., decrease costs, manage volatility, control variances, etc.);
• Identification of the in-house or external expertise that will manage and support the new or non- standard transaction type;
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues;
• How the exposures to the risks above will be managed; • Proposed valuation methodology (including pricing model, where appropriate); • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new transaction type; • Proposed accounting methodology.

It is the responsibility of Pioneer’s Executive Director to ensure that relevant departments have reviewed the proposed transaction and that material issues are resolved prior to submittal to the ROC for approval. If approved, Appendix A to the Policy will be updated to reflect the new transaction type. 13 3.5 Counterparty Suitability
Pioneer’s counterparty credit limits and approval processes will govern counterparty suitability for all transactions executed by Pioneer, consistent with the credit policies described in Section 6. Credit limits should be approved prior to execution of contracts.

3.6 System of Record
Pioneer will maintain a set of records for all transactions executed in association with Pioneer procurement activities. The records will be maintained in US dollars and transactions will be separately recorded and categorized by type of transaction.

This system of record shall be auditable.

3.7 Transaction Valuation
Transaction valuation and reporting of positions shall be based on objective, market-observed prices. Open positions should be valued (mark-to-market), based on consistent valuation methods and data sources. Whenever possible, mark-to-market valuations should be based on independent, publicly available market information and data sources.

3.8 Stress Testing
Stress testing shall also be used to examine the performance of the Pioneer portfolio under adverse conditions. Stress testing is used to understand the potential variability in Pioneer’s projected procurement costs, and resulting retail rate impacts and competitive positioning, associated with low probability events.

3.9 Trading Practices
It is the expressed intent of this Policy to prohibit the acquisition of risk beyond that encountered in the efficient optimization of Pioneer’s generation portfolio and execution of procurement strategies. As such, speculative transactions are prohibited. During developing operating plans and conducting procurement activities, Pioneer recognizes that expertise must be employed by staff, and it is not the intent of this Policy to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs and risks within the constraints of this Policy. If any questions arise as to whether a transaction constitutes speculation, the ROC shall review the transaction(s) to determine whether the transaction would constitute speculation and document its findings.
14 3.10 Policy Compliance
Pioneer’s Director of Finance and Administration will provide a quarterly report monitoring compliance with the limits established by this Policy. 15 Section 4: ORG. STRUCTURE AND RESPONSIBILITIES

4.1 Risk Management Organizational Structure
Pioneer’s Energy Risk Management Policy ensures proper segregation of responsibility for policy approval, valuation and reporting, and trading.

4.2 Governing Board
Pioneer’s Board has the responsibility to review and approve this Policy. With approval, the Board assumes responsibility for understanding the risks Pioneer is exposed to due to CCA Program activity and how the policies outlined in this document help Pioneer manage the associated risks. The Board is also responsible to:
• Determine Pioneer’s strategic direction
• Understand the procurement strategy employed
• Approve risk exposures beyond the Executive Director’s authority

4.3 Risk Oversight Committee (“ROC”)
The ROC shall include the following voting members: Executive Director, Director of Finance and Administration, and General Counsel or their designees in case of their absence. The Technical Procurement Advisor (which may be an outside consultant or as otherwise selected by the Executive Director) shall be a non-voting member of the ROC. The Executive Director shall act as the chair of the ROC.

The ROC shall meet quarterly or as otherwise called to order by the Executive Director. The Executive Director shall make reports and seek approval for any substantive changes to this Policy from the Board.

The ROC shall from time to time adopt and bring current risk management guidelines defining in detail the internal controls, strategies, and processes for managing market risks incurred through or attendant upon wholesale trading, retail marketing, long-term contracting, CRR trading and load and generation scheduling.

The ROC maintains the authority and responsibility to:
• Approve and ensure that all procurement strategies are consistent with this Policy;
• Determine if changes in procurement strategies are warranted; 16 • Approve new transaction types, regions, markets and delivery points; • Understand financial and risk models;
• Understand counterparty credit review models and methods for setting and monitoring credit limits;
• Receive and review reports as described in this Policy; • Meet to review actual and projected financial results and potential risks; • Escalate to the Board with any risks beyond the Executive Director’s authority; • Review summaries of limit violations;
• Review the effectiveness of Pioneer's energy risk measurement methods; • Maintain this Policy; and
• Monitor regulatory and legislative activities.

4.4 Energy Procurement Review Committee (“EPRC”)
The EPRC is authorized to review and approve energy contracts greater than five (5) years in length (from contract execution date) and authorize the Executive Directo to execute the EPRC-approved energy contracts. Long-term power (greater than five years) purchase agreements (“PPAs”) are periodically necessary to fulfill regulatory requirements (e.g., Renewables Portfolio Standard), and for portfolio optimization.

4.5 Segregation of Duties
Pioneer shall maintain a segregation of duties, also referred to as "separation of function", to the extent practicable to help manage and control the risks outlined in this Policy. Individuals responsible for legally binding the CCA to a transaction will not perform confirmation, clearing or settlement functions. Pioneer staff roles and responsibilities are divided into front-middle-back-office activities, as described below. In executing these functions, Pioneer may rely on third-party to assist in performing various functions to preserve the intent of the separation of functions.

4.5.1 Front Office
The Front Office is the responsibility of the Chief Operating Officer.

The Front Office has overall responsibility for:
a) Managing all commodity transactions;
b) Analysis of fundamentals affecting Pioneer’s net position; and c) Transacting within the limits of this Policy, and associated policies, to balance loads and resources, and maximize the value of Pioneer’s assets through the exercise of approved optimization strategies.

Other duties associated with these responsibilities include:
17 a) Develop and analyze hedging products and procurement strategies and bring recommendations to the ROC, utilizing the net forward power positions prepared by Middle Office
b) Prepare each month a monthly operating plan for the prompt months that gives direction to the day-ahead and real-time trading and scheduling staff regarding the bidding and scheduling of Pioneer's resource portfolio in the California Independent System Operator (“CAISO”) market c) Develop, price, and negotiate purchase and/or sale transactions for energy Resource Adequacy, renewable, green-house gas free energy d) Keep accurate records of all transactions

4.5.2 Middle Office
The Middle Office is the responsibility of the Director of Finance and Administration.

The Middle Office provides independent market and credit risk oversight.

The Middle Office has primary responsibility for trading controls, including forward trading. Primary responsibilities include:
a) Calculating and maintaining the short-term load forecasts and disseminating to Front and Back Office
b) Estimating and publishing forward monthly power price curves for a minimum of the balance of the current year through the next calendar year c) Ensuring that Pioneer adheres to all risk policies and procedures in letter and intent.
d) Calculating and maintaining the net forward power positions of Pioneer. e) Assisting Back Office in calculating Counterparty Credit Exposure.

4.5.3 Back Office
The Back Office is the responsibility of the Director of Finance and Administration.

The Back Office provides support with a wide range of administrative activities necessary to execute and settle transactions and to support the risk control efforts (e.g., transaction entry and/or checking, data collection, billing, etc.) consistent with this Policy.

The Back Office has primary responsibility for ensuring agreement with counterparties regarding the terms of all trades, including forward trading. Primary responsibilities include:
a) Handling confirmation of all transactions (physical and financial) and reconciling differences with the trading counterparties b) Reviewing transaction confirmations for adherence to approved limits c) Calculating a monthly Counterparty Credit Exposure report d) Ensuring all trades have been entered into the appropriate system of record 18 e) Carrying out month-end checkout of all physical and financial transactions each month
f) Implementing and enforcing credit policies and limits 19 Section 5: DELEGATION OF AUTHORITY
With the approval of the Policy, the Pioneer Board is explicitly delegating approval of transactions to the Executive Director and EPRC as outlined in the following table:

Authority Contract or PPA
Term Limit
Energy Procurement Review Committee Over 60 months
Executive Director Up to 60 months
Additionally, to adapt to changing market conditions and to facilitate the daily operations of Pioneer, the Board is delegating authority to the Executive Director to execute administrative amendments to duly approved transactions where such amendment does not exceed the Executive Director’s delegated authority as set forth above (for clarity, amendments exceeding Term limits shall require EPRC approval) and further reduces Pioneer’s risk in furtherance of this Policy. Such administrative amendments must be reported at the next available ROC meeting.

All procurement executed under the delegation above must align with the Pioneer’s underlying risk exposure (locational, volume and temporal) that is being hedged consistent with the approved Procurement Strategy.

The point of delivery for all products must be at a location on the CAISO transmission grid.

5.1 Hedging Tolerances
The Front Office is responsible for managing portfolio risks within the limits of this Policy. To reduce market price risk and increase retail rate certainty Front Office will execute transactions based on the following hedge targets.

5.1.1 Energy Procurement Tolerances
Period Minimum
Coverage*
Fiscal Year % of Forecasted Load
Year 1 (Current Year) 90%
Year 2 70%
Year 3 50%
Year 4 30%
Year 5 10%
*Prior to start of Current Year
20 5.1.2 Renewable Portfolio Standard
With respect to purchases to meet the Renewable Portfolio Standard (RPS), Pioneer must comply with regulatory requirements and is guided by the Board for purchases above those requirements. Pioneer purchases should be staggered to accommodate regulatory uncertainty and changes in load and supply price risks, as well as diversified with respect to technologies.

5.1.3 Resource Adequacy
Pioneer must comply with the regulatory requirements for procurement of capacity products for Resource Adequacy ("RA"). Pioneer must comply for local resource adequacy for one to three years by October 31st of each year. Additionally, Pioneer must demonstrate, on a month-ahead basis, full compliance with its monthly RA obligations. Pioneer endeavors to purchase RA products over time to meet its obligations and to diversify its purchases between suppliers and market conditions.

5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits The Middle Office is responsible for monitoring, and reporting compliance with, all limits within this Policy. If a limit or control is violated, the Middle Office will send notification to the Executive Director, Chief Operating Officer, and the ROC. The ROC will discuss the cause and potential remediation of the exceedance to determine next steps for curing the exceedance.
21 Section 6: CREDIT POLICY
All Counterparties shall be evaluated for creditworthiness by the Middle Office prior to execution of any transaction and no less than annually thereafter. Additionally, Counterparties shall be reviewed if a change has occurred, or perceived to have occurred, in market conditions or in a company’s management or financial condition. This evaluation, including any recommended increase or decrease to a credit limit, shall be documented, and inclusive of all information supporting such evaluation in a credit file for the counterparty. A credit limit for a Counterparty will not be recommended or approved without first confirming the Counterparty’s senior unsecured or corporate credit rating from one of the nationally recognized rating agencies and/or performing a credit review or analysis of the Counterparty’s or guarantor’s financial statements. The credit analysis shall include, at a minimum, current audited financial statements or other supplementary data that indicates financial strength commensurate with an investment grade rating. Trade and banking references, and any other pertinent information, may also be used in the review process.

Once a counterparty is determined to be creditworthy, a credit limit will be proposed. Although a counterparty may qualify for a certain maximum credit limit, anticipated transaction volumes and other business factors may prompt Pioneer to select a lower limit that is considered more appropriate.

6.1 Counterparty Credit Risk
Pioneer evaluates and monitors the financial strength of service and energy providers consistent with Pioneer’s Credit Guidelines.

6.2 Counterparty Concentration
In addition to maintaining credit exposure limits, Pioneer staff shall strive to diversify transactions among counterparties. Pioneer staff shall document the business reasons (e.g., differences in offer price, lack of qualified suppliers, etc.) for awarding additional contracts to counterparties with high concentrations of Credit Exposure.
22 6.3 Credit Review Exceptions
Counterparties not subject to the above credit review criteria include those associated with day-ahead and current day purchases or market index-based contracts where risks associated with market movements are minimal.

6.4 Credit Exposure and Monitoring
The Back Office will monitor the current credit exposure for each Counterparty with whom Pioneer transacts and include such information in the quarterly Risk Management Report. This report will be made available, reviewed, and communicated to the ROC pursuant to the reporting requirements outlined in Section 7.
23 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING Minimum reporting requirements are shown below. The reports outlined below will be made available to ROC members:
• Quarterly Financial Model Forecast
Latest projected financial performance, marked to current market prices, and shown relative to financial goals.
• Quarterly Net Position Report
Prepare a forward net position report, not less frequently than quarterly, and report the results to the ROC.
• Quarterly Report to the Board
Update on activities and projected financial performance to be presented least quarterly at Pioneer Board meetings.
• Quarterly Counterparty Credit Exposure
Updates on the notional and mark-to-market exposure to each Pioneer counterparty individually by deal and in aggregate by counterparty.

Counterparty credit exposure reporting includes contingent collateral posting risks arising from changes in market prices and other factors. • Counterparty Credit Exposure
This report will show credit exposures for transactions executed by Pioneer. • Risk Analysis
This will include a stress test of financial forecast relative to financial goals. 24 Section 8: POLICY REVISION PROCESS
Pioneer’s Energy Risk Management Policy will evolve over time as market and business factors change. At least on an annual basis, the ROC will review this Policy and associated procedures to determine if they should be amended, supplemented, or updated to account for changing business and/or regulatory requirements. If an amendment is warranted, the Policy amendment will be submitted to the Pioneer Board for approval.

8.1 Acknowledgement of Policy
Any Pioneer employee participating in any activity or transaction within the scope of this Policy shall sign on an annual basis or upon any revision, a statement approved by the ROC that such employee:
• Has read Pioneer’s Energy Risk Management Policy
• Understands the terms and agreements of said Policy
• Will comply with said Policy
• Understands that any violation of said Policy shall be subject to employee discipline up to and including termination of employment.

8.2 Policy Interpretations
Questions about the interpretation of any matters of this Policy should be referred to the Executive Director. All legal matters stemming from this Policy will be referred to General Counsel.
25 Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS, AND

MARKETS
All transaction types listed below must be executed within the limits set forth in this Policy or Credit Risk Guidelines.

Over the Counter Products
• CAISO Market Products
o Day-ahead and Real-time Energy
o Congestion Revenue Rights
o Convergence bids
o Inter Scheduling Coordinator Transactions
o Tagging into and out of CAISO
• Physical Power Products
o Power
o Physical Resource Adequacy Capacity
• Physical Transmission Products
o Physical WECC transmission
• Physical Environmental Products
o Renewable Energy Credits
o Specified Source Power
o Carbon Allowances and Obligations
26 Appendix B: NEW TRANSACTION APPROVAL FORM
New or Non-Standard Transaction
Approval Form
Prepared By:

Date:

New or Non-Standard Transaction Name:

Business Rationale and Risk Assessment:
• Product description – including the purpose, function, expected impact on net revenues (i.e. increase, manage volatility, control variances, etc.) and/or benefit to Pioneer
• Identification of the in-house or external expertise that will be relied upon to manage and support the new or non-standard transaction
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues
• How the exposures to the risks above will be managed by the limit structure • Proposed valuation methodology (including pricing model, where appropriate) • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new product
• Proposed accounting methodology
• Proposed Middle Office workflows/methodology, including systems • Brief description of the responsibilities of various departments within Pioneer who will have any manner of contact with the new or non-standard transaction Reviewed by:

Chief Operating Officer Date
General Counsel Date
Executive Director Date
27 Appendix C: DEFINITIONS
Back Office: That part of a trading organization which manages transaction accounting, confirmations, management reporting, contract administration and working capital management.

Bilateral Transaction: Any physical or financial transaction between two counterparties, neither of whom is an Exchange or market entity such as CAISO.

Cash Flow at Risk: A measure of the potential shortfall in cash flow from a specified level during a specified period of time at a specified confidence level.

CAISO: California Independent System Operator. CAISO operates a California bulk power transmission grid, administers the State’s wholesale electricity markets, and provides reliability planning and generation dispatch.

CCA: Community Choice Aggregator. CCAs allow local government agencies such as cities and/or counties to purchase and/or develop generation supplies on behalf of their residents, businesses, and municipal accounts.

CFTC: Commodity Futures Trading Commission. The CFTC is a U.S. federal agency that is responsible for regulating commodity futures and swap markets. It goals include the promotion of competitive and efficient futures markets and the protection of investors against manipulation, abusive trade practices and fraud.

Commodity: A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.

Confirmation Letter: A letter agreement between two counterparties that details the specific commercial terms (e.g., price, quantity and point of delivery) of a transaction.

Congestion Revenue Right: A point-to-point financial instrument in the Day-Ahead Energy Market that entitles the holder to receive compensation for or requires the 28 holder to pay certain congestion related transmission charges that arise when the transmission system is congested.

Counterparty Credit Risk: The risk of financial loss resulting from a counterparty to a transaction failing to fulfill its obligations.

Counterparty Credit Exposure: This measures the known exposures and is represented by the sum of both (a)Realized exposure and (b) Forward exposure, as those terms are defined below:

Realized exposure: payable or receivable amount owed between counterparties, is a measurement of cash flow for billed and unbilled transactions.

Forward exposure: measure of current unrealized exposure and includes the measure of a counterparty’s incentive to fulfill contractual obligations. Forward exposure measures the risk associated with having a payment default or the need to replace a transaction in the event of delivery default.

Day-ahead Market: The short-term forward market for efficiently allocating transmission capacity and facilitating purchases and sales of energy and scheduled bilateral transactions; conducted by CAISO prior to the operating day.

Delivery point: the point at which a commodity will be delivered and received.

FERC: Federal Energy Regulatory Commission. FERC is a federal agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas terminals, interstate natural gas pipelines, as well as licenses hydroelectric generation projects.

Front Office: That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities.

Hedging products: Hedging products means capacity, energy, renewable energy credits or other products related to a specific transaction.

Hedging Transaction: A transaction designed to reduce the financial exposure of a specific outstanding position or portfolio; “fully hedged” equates to complete elimination of the targeted risk and “partially hedged” implies a risk reduction of less than 100%.

IOU: An Investor-Owned Utility (IOU) is a business organization providing electrical and/or natural gas services to both retail and wholesale consumers and is managed as a private enterprise.

Middle Office: That part of a trading organization that measures and reports on 29 market risks, develops risk management policies, and monitors compliance with those policies, manages credit, and keeps management and the Board informed on risk management issues.

Speculation: Speculation is the act of trading an asset with the expectation of realizing financial gain resulting from a change in price in the asset being transacted.

ENERGY RISK

MANAGEMENT
POLICY
Approved: September 9, 2019
Revised: October 1921, 20213
Plt)NEER

COMMUNITY ENERGY
2 Table of Contents
Contents
Table of Contents .............................................................................................................................. 2 Section 1: POLICY OVERVIEW .................................................................................................................. 4

1.1 Background and Purpose .................................................................................................................................. 4

1.2 Scope ................................................................................................................................................................. 4

1.3 Energy Risk Management Objective ................................................................................................................. 5

1.4 Policy Administration ........................................................................................................................................ 5 Section 2: STRATEGY/GOALS AND RISK EXPOSURES ................................................................ 6

2.1 Strategy/Policy Goals ........................................................................................................................................ 6 a) Current Board-approved Procurement Strategy .............................................................................................. 6 b) Long-term Business Viability Goals .................................................................................................................. 6

2.2 Risk Exposures ................................................................................................................................................... 7

2.2.1 Customer Opt-Out Risk .................................................................................................................................. 7

2.2.2 Market Risk .................................................................................................................................................... 7

2.2.3 Regulatory Risk ............................................................................................................................................... 8

2.2.4 Volumetric Risk .............................................................................................................................................. 8

2.2.5 Model Risk ...................................................................................................................................................... 9

2.2.6 Operational Risk ............................................................................................................................................. 9

2.2.7 Counterparty Credit Risk ................................................................................................................................ 9

2.2.8 Liquidity Risk .............................................................................................................................................. 109

2.3 Risk Measurement Methodology .................................................................................................................... 10 Section 3: BUSINESS PRACTICES ......................................................................................................... 11

3.1 General Conduct ............................................................................................................................................ 11

3.2 Trading for Personal Accounts ........................................................................................................................ 11

3.3 Adherence to Statutory Requirements ........................................................................................................... 11

3.4 Transaction Type, Regions and Markets ......................................................................................................... 12

3.5 Counterparty Suitability .................................................................................................................................. 13

3.6 System of Record ............................................................................................................................................ 13

3.7 Transaction Valuation ..................................................................................................................................... 13

3.8 Stress Testing .................................................................................................................................................. 13 -
3 3.9 Trading Practices ............................................................................................................................................. 13

3.10 Policy Compliance ......................................................................................................................................... 14 Section 4: ORG. STRUCTURE AND RESPONSIBILITIES ........................................................... 15

4.1 Risk Management Organizational Structure ................................................................................................... 15

4.2 Governing Board ............................................................................................................................................. 15

4.3 Risk Oversight Committee (“ROC”) ................................................................................................................. 15

4.4 Energy Procurement Review Committee (“EPRC”) ......................................................................................... 16

4.5 Segregation of Duties ...................................................................................................................................... 16

4.5.1 Front Office .................................................................................................................................................. 16

4.5.2 Middle Office ................................................................................................................................................ 17

4.5.3 Back Office ................................................................................................................................................... 17 Section 5: DELEGATION OF AUTHORITY .......................................................................................... 19

5.1 Hedging Tolerances ......................................................................................................................................... 19

5.1.1 Energy Procurement Tolerances .............................................................................................................. 2019

5.1.2 Renewable Portfolio Standard ..................................................................................................................... 20

5.1.3 Resource Adequacy ...................................................................................................................................... 20

5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits ...................................................................... 20 Section 6: CREDIT POLICY ........................................................................................................................ 21

6.1 Counterparty Credit Risk ............................................................................................................................. 2221

6.2 Counterparty Concentration ....................................................................................................................... 2221

6.3 Credit Review Exceptions ................................................................................................................................ 22

6.4 Credit Exposure and Monitoring ..................................................................................................................... 22 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING .................................. 23 Section 8: POLICY REVISION PROCESS ............................................................................................ 24

8.1 Acknowledgement of Policy ............................................................................................................................ 24

8.2 Policy Interpretations ...................................................................................................................................... 24 Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS AND MARKETS ............. 25 Appendix B: NEW TRANSACTION APPROVAL FORM .................................................................. 26 Appendix C: DEFINITIONS........................................................................................................................ 27 4 Section 1: POLICY OVERVIEW

1.1 Background and Purpose
Pioneer Community Energy (“Pioneer”) is a public joint powers agency located within the geographic boundaries of El Dorado, Nevada, and Placer and El Dorado Counties. Member agencies of Pioneer include the Unincorporated Counties of Placer and El Dorado, as well as the Cities of Auburn, Colfax, Grass Valley, Lincoln, Nevada City, Placerville, and Rocklin and the Town of Loomis.

Mission Statement: Pioneer is a locally owned provider of electricity – powering the communities we serve with competitive rates, reliable service, and a choice in energy options.

1.3 Energy Risk Management Objective
The objective of the Energy Risk Management Policy is to provide a framework for conducting procurement activities that will manage risks to support Pioneer meeting the goals listed in Section 2.1.

Pursuant to this Policy, Pioneer will identify and measure the magnitude of the risks to which it is exposed and contribute to the potential for not meeting identified goals.

1.4 Policy Administration
This Policy document shall be reviewed and approved by Pioneer’s Governing Board (“Board”) biennially.
6 Section 2: STRATEGY/GOALS AND RISK EXPOSURES

2.1 Strategy/Policy Goals
a) Current Board-approved Procurement Strategy
The current Board approved Energy Procurement Strategy is to meet the State’s minimum renewable energy targets while procuring the remaining energy needs with less expensive power whether system power or other power sources to maintain competitive rates.
b) Long-term Business Viability Goals
To help ensure Pioneer’s long-term viability, this Program outlines the following business goals. Pioneer will establish metrics for modeling and measuring risk exposures for tracking performance relative to these goals. • Pioneer will target to maintain competitive retail rates withcompared to PG&E after adjusting for the Power Charge Indifference Adjustment (PCIA) and Franchise Fee. • Pioneer will fund financial reserves with the following objectives: o Establish long-term business sustainability o Build collateral for power procurement activities o Establish an investment grade credit rating o Develop a source of funds for investment in generation and other local programs o Stabilize rates and dampen year-to-year variability in procurement costs 120%
100%
80%
60%
40%
20%
0%
CA Renewable Portfolio Standards
Portfolio Composition Requirements

I I I I I I I I I I
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
CARPS Min% Non-Specified Power%
7 The goals outlined above are incorporated into the financial models that are used in modeling and measuring risk exposures. It is important to note that the goals listed above are not intended to be a comprehensive list of goals for Pioneer.

2.2 Risk Exposures
The Program faces a range of risks during ongoing operations:. a) Customer Opt-Out risk
b) Market risk
c) Regulatory risk
d) Volumetric risk
e) Model risk
f) Operational risk
g) Counterparty credit risk
h) Liquidity risk

The most relevant measures of the success of this Policy include:
• Retail rate competitiveness with PG&E
• Financial reserve level

Market risk is the uncertainty of Pioneer’s financial performance due to variable commodity market prices (market price risk) and uncertain price relationships (basis risk). Variability in market prices creates uncertainty in Pioneer’s procurement costs and can materially impact Pioneer’s financial position. Market risk is managed by:
-
8  Rregular measurement,
 Aan active hedging program,
 Eexecution of approved procurement and Congestion Revenue Right strategies and
 Tthe limit structure set forth in this Policy.

2.2.3 Regulatory Risk
CCAs remain a comparatively new legal entity in the state of California and are subject to an evolving legal and regulatory landscape. Additionally, Pioneer is in direct competition with PG&E, which face the risk of stranded investments in generating assets and power purchase agreements procured in the past to serve now departing CCA loads. TThat stranded investment risk is passed on to Pioneer’s customers through the PCIA which impacts Pioneer’s competitiveness. The competitive and regulatory landscape results in retail rate competitiveness risks that are unique to CCAs. RPioneer will manage regulatory risk is managed by:
• Monitoring and analyzing legislative and regulatory proceedings impacting CCAs;
• Monitoring and reporting of actual and projected financial results including stressed financial results assuming a range of market and retail rate scenarios (both Pioneer and PG&E);
• Structuring procurement strategies with the objective function of maintaining a favorable retail rate savings relative to PG&E;
• Actively participating in and representing CCA customer interests during regulatory and legislative proceedings.

2.2.4 Volumetric Risk
Volumetric risk is the uncertainty of Pioneer’s financial performance due to variability in the quantity of retail load served by Pioneer. Load variability can be the result of customer opt-outs, temperature deviation from normal, unforeseen adoption of behind the meter generation by Pioneer customers, as well as local, state, and national economic conditions. Volumetric risk is managed by:
• Quantifying the variability of PG&E generation and PCIA rates; • Quantifying variability in procurement costs;
• Monitoring and adjusting for non-regulatory factors driving volumetric uncertainty (e.g. weather);
• Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating Pioneer’s actual load data into forecasts as such data becomes available;
• Adopting a formal procurement strategy;
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9 • Implement a key accounts program and maintain strong relationships with local communities;
• Monitoring trends in customer onsite generation, economic shifts, electric vehicle adoption, and other factors that affect electric consumption.

Model risk is managed by:
• Developing industry standard financial risk assessment models; • Reviewing model outputs as part of risk control framework; • Conducting ongoing Pioneer staff education and participation in CCA industry forums;
• Updating and improving models as additional information and expertise are acquired

2.2.6 Operational Risk
Operational risk is the uncertainty of Pioneer’s financial performance due to weaknesses in the quality, scope, content, or execution of human resources, technical resources, and/or operating procedures within Pioneer. Operational risk can also be exacerbated by fraudulent actions by employees or third parties or inadequate or ineffective controls. Operational risk is managed throughby:
• Ensuring adequate controls set forth in this Policy;
• Conducting routine oversight of procurement activity; • Perform timely and effective reporting by management; • Training staff to reinforcing a culture of compliance to ERM policies • Conducting Ongoing and timely internal and external audits • Separate internal operations between Front, Middle and Back Office responsibilities as set forth herein
• Provide training to Board members to enhance oversight

2.2.7 Counterparty Credit Risk
Counterparty credit risk is the potential that a Counterparty will fail to perform or meet its obligations in accordance with terms agreed to under contract. Pioneer’s exposure to counterparty credit risk is controlled by the limit controls set forth in the Credit Policy described in Section 6.
10 2.2.8 Liquidity Risk
Pioneer manages liquidity risk through adherence to its loan and power purchase agreement credit covenants, limiting commitments to provide cash security consistent with its Credit Guidelines, ensuring it has adequate loan facilities, prudent cash and investment management, and adherence to its Reserve Policy.

Risk measurement is the comparison of Pioneer’s projected retail rates to those of the PG&E under expected and stressed scenarios. The rate comparison will be adjusted for actual and projected PCIA and Franchise Fee charges. Risk measurement methodologies shall be re-evaluated on a periodic basis to ensure Pioneer adjusts its methods to reflect the evolving regulatory and competitive landscape. The implementation of these methods shall be overseen and ratified by the Risk Oversight Committee (“ROC”).
11 Section 3: BUSINESS PRACTICES

If there is any doubt as to whether a prohibited condition exists, then it is the employee’s responsibility to discuss the possible prohibited condition with her/his manager or supervisor.

In addition to statutory requirements, the goals of the Energy Risk Policy are to comply with Governing Board's approved policies and objectives including the Strategic Plan, the Integrated Resource Plan ("IRP"), the Procurement Plan and Cash Reserve Policy including retail rate stability and competitiveness and the accumulation of financial reserves.
12 Congress, FERC, and CFTC have enacted laws, regulations and rules that prohibit, among other things, any action or course of conduct that actually or potentially operates as a fraud or deceit upon any person in connection with the purchase or sale of electric energy or transmission services. These laws also prohibit any person or entity from making any untrue statement of fact or omitting to state a material fact where the omission would make a statement misleading. Violation of these laws can lead to both civil and criminal actions against the individual involved, as well as Pioneer. This Policy is intended to comply with these laws, regulations, and rules and to avoid improper conduct on the part of anyone employed by Pioneer. These procedures may be modified from time to time by legal requirements, auditor recommendations, ROC requests and other considerations.

When seeking approval for a new or non-standard transaction type, region, and/or market, a New Transaction Approval Form, as shown in Appendix B, should be drafted describing all significant elements of the proposed transaction. The proposal write-up should, at a minimum, include:
• A description of the benefit to Pioneer, including the purpose, function and expected cost impact (i.e.;i.e., decrease costs, manage volatility, control variances, etc.);
• Identification of the in-house or external expertise that will manage and support the new or non- standard transaction type;
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues;
• How the exposures to the risks above will be managed; • Proposed valuation methodology (including pricing model, where appropriate); • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new transaction type; 13 • Proposed accounting methodology.

3.5 Counterparty Suitability
Pioneer’s counterparty credit limits and approval processes will govern counterparty suitability for all transactions executed by Pioneer, consistent with the credit policies described in Section 6. Credit limits should be approved prior to execution of contracts.

This system of record shall be auditable.

3.7 Transaction Valuation
Transaction valuation and reporting of positions shall be based on objective, market-observed prices. Open positions should be valued (marked-to-market) daily, based on consistent valuation methods and data sources. Whenever possible, mark-to-market valuations should be based on independent, publicly available market information and data sources.

3.9 Trading Practices
It is the expressed intent of this Policy to prohibit the acquisition of risk beyond that encountered in the efficient optimization of Pioneer’s generation portfolio and execution of procurement strategies. As such, speculative transactions are prohibited. During developing operating plans and conducting procurement activities, Pioneer recognizes that expertise must be employed by staff, and it is not the intent of this Policy to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs and risks 14 within the constraints of this Policy. If any questions arise as to whether a transaction constitutes speculation, the ROC shall review the transaction(s) to determine whether the transaction would constitute speculation and document its findings.

3.10 Policy Compliance
Pioneer’s Director of Finance and Administration will provide a quarterly report monitoring compliance with the limits established by this Policy. 15 Section 4: ORG. STRUCTURE AND RESPONSIBILITIES

4.1 Risk Management Organizational Structure
Pioneer’s Energy Risk Management Policy ensures proper segregation of responsibility for policy approval, valuation and reporting, and trading.

The ROC shall specify the categories of transactions permitted and set risk limits for wholesale trading. The ROC shall receive and review information and reports regarding risk management, wholesale trading transactions, and the administration of supply contracts.
16 The ROC maintains the authority and responsibility to:
• Approve and ensure that all procurement strategies are consistent with this Policy;
• Determine if changes in procurement strategies are warranted; • Approve new transaction types, regions, markets and delivery points; • Understand financial and risk models;
• Understand counterparty credit review models and methods for setting and monitoring credit limits;
• Receive and review reports as described in this Policy; • Meet to review actual and projected financial results and potential risks; • Escalate to the Board with any risks beyond the Executive Director’s authority; • Review summaries of limit violations;
• Review the effectiveness of Pioneer's energy risk measurement methods; • Maintain this Policy; and
• Monitor regulatory and legislative activities.

4.4 Energy Procurement Review Committee (“EPRC”)
The EPRC is authorized to review and approve Executive Director is authorized to execute energy contracts greater than five (5) years in length (from contract execution date) and authorize the Executive Directo tro execute the EPRC-approved energy contracts subject to the review and approval by the EPRC. Long-term power (greater than five years) purchase agreements (“PPAs”) are periodically necessary to fulfill regulatory requirements (e.g., Renewables Portfolio Standard), and for portfolio optimization. The role of the EPRC is to review pending long-term PPAs.

4.5.1 Front Office
The Front Office is the responsibility of the Chief Operating Officer.

The Front Office has overall responsibility for:

I -
17 a) (1) Mmanaging all commodity transactions;,
b) (2) Athe analysis of fundamentals affecting Pioneer’s net position;, and c) (3) Ttransacting within the limits of this Policy, and associated policies, to balance loads and resources, and maximize the value of Pioneer’s assets through the exercise of approved optimization strategies.

Other duties associated with these responsibilities include:
a) Develop and analyze hedging products and procurement strategies and bring recommendations to the ROC, utilizing the net forward power positions prepared by Middle Office.
b) Prepare each month a monthly operating plan for the prompt months that gives direction to the day-ahead and real-time trading and scheduling staff regarding the bidding and scheduling of Pioneer's resource portfolio in the California Independent System Operator (“CAISO”) market. c) Develop, price, and negotiate purchase and/or sale transactions for energy, Resource Adequacy, renewable, green-house gas free energy d) Keep accurate records of all transactions

4.5.2 Middle Office
The Middle Office is the responsibility of the Director of Finance and Administration.

The Middle Office provides independent market and credit risk oversight.

The Middle Office has primary responsibility for trading controls, including forward trading. Primary responsibilities include:
a) Calculating and maintaining the short-term load forecasts and disseminating to Front and Back Office.
b) Estimating and publishing forward monthly power price curves for a minimum of the balance of the current year through the next calendar year. c) Ensuring that Pioneer adheres to all risk policies and procedures in letter and intent.
d) Calculating and maintaining the net forward power positions of Pioneer. e) Assisting Back Office in calculating Counterparty Credit Exposure.

4.5.3 Back Office
The Back Office is the responsibility of the Director of Finance and Administration.

The Back Office has primary responsibility for ensuring agreement with Formatted: Font: Verdana
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18 counterparties regarding the terms of all trades, including forward trading. Primary responsibilities include:
a) Handling confirmation of all transactions (physical and financial) and reconciling differences with the trading counterparties b) Reviewing transaction confirmations for adherence to approved limits c) Calculating a monthly Counterparty Credit Exposure report. d) Ensuring all trades have been entered into the appropriate system of record e) Carrying out month-end checkout of all physical and financial transactions each month
f) Implementing and enforcing credit policies and limits 19 Section 5: DELEGATION OF AUTHORITY
With the approval of the Policy, the Pioneer Board is explicitly delegating approval of transactions to the Executive Director and EPRC as outlined in the following table:

Authority
Contract or PPA
Term Limit
Energy Procurement Review Committee Over 60 months
Executive Director Up to 60 months
Additionally, to adapt to changing market conditions and to facilitate the daily operations of Pioneer, the Board is delegating authority to the Executive Director to execute administrative amendments to duly approved transactions where such amendment does not exceed the Executive Director’s delegated authority as set forth above (for clarity, amendments exceeding Term limits shall require EPRC approval) and further reduces Pioneer’s risk in furtherance of this Policy. Such administrative amendments must be reported at the next available ROC meeting.

The point of delivery for all products must be at a location on the CAISO transmission grid.

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20 5.1.1 Energy Procurement Tolerances
Period Minimum
Coverage*
Fiscal Year % of Forecasted Load
Year 1 (Current Year) 90%
Year 2 70%
Year 3 50%
Year 4 30%
Year 5 10%
*Prior to start of Current Year

5.1.2 Renewable Portfolio Standard
With respect to purchases to meet the Renewable Portfolio Standard (RPS), Pioneer must comply with regulatory requirements and is guided by the Board for purchases above those requirements. Pioneer purchases should be staggered to accommodate regulatory uncertainty and, changes in load and supply price risks, and that the RPS portfolio should bes well as diversified with respect to technologies.

Counterparties that do not qualify for an unsecured Credit Limit must post an acceptable form of credit support or Prepayment prior to the execution of any transaction, unless otherwise approved by the Executive Director. A Counterparty may choose to provide a guarantee from a third party, provided the third party satisfies the criteria for a Credit Limit as outlined herein. 22 6.1 Counterparty Credit Risk
Pioneer evaluates and monitors the financial strength of service and energy providers consistent with Pioneer’s Credit Guidelines.

6.3 Credit Review Exceptions
Counterparties not subject to the above credit review criteria include those associated with day-ahead and current day purchases or market index-based contracts where risks associated with market movements areis minimal.

6.4 Credit Exposure and Monitoring
The Back Office will monitor the current credit exposure for each Counterparty with whom Pioneer transacts and include such information in the quarterly Risk Management Report. This report will be made available, reviewed, and communicated to the ROC pursuant to the reporting requirements outlined in Section 7.
-
23 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING Minimum reporting requirements are shown below. The reports outlined below will be made available to ROC members:
• Quarterly Financial Model Forecast
Latest projected financial performance, marked to current market prices, and shown relative to financial goals.
• Quarterly Net Position Report
Prepare a forward net position report, not less frequently than quarterly, and report the results to the ROC.
• Quarterly Report to the Board
Update on activities and projected financial performance to be presented least quarterly at Pioneer Board meetings.
 Quarterly Counterparty Credit Exposure
Updates on the notional and mark-to-market exposure to each Pioneer counterparty individually by deal and in aggregate by counterparty.

Section 8: POLICY REVISION PROCESS
Pioneer’s Energy Risk Management Policy will evolve over time as market and business factors change. At least on an annual basis, the ROC will review this Policy and associated procedures to determine if they should be amended, supplemented, or updated to account for changing business and/or regulatory requirements. If an amendment is warranted, the Policy amendment will be submitted to the Pioneer Board for approval.

8.1 Acknowledgement of Policy
Any Pioneer employee participating in any activity or transaction within the scope of this Policy shall sign on an annual basis or upon any revision, a statement approved by the ROC that such employee has:
• Has rRead Pioneer’s Energy Risk Management Policy
• Understands the terms and agreements of said Policy
• Will comply with said Policy
• Understands that any violation of said Policy shall be subject to employee discipline up to and including termination of employment.

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25 Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS, AND

MARKETS
All transaction types listed below must be executed within the limits set forth in this Policy or Credit Risk Guidelines.

Over the Counter Products
 CAISO Market Products
o Day-ahead and Real-time Energy
o Congestion Revenue Rights
o Convergence bids
o Inter Scheduling Coordinator Transactions
o Tagging into and out of CAISO
 Physical Power Products
o Power
o Physical Resource Adequacy Capacity
 Physical Transmission Products
o Physical WECC transmission
 Physical Environmental Products
o Renewable Energy Credits
o Specified Source Power
o Carbon Allowances and Obligations
26 Appendix B: NEW TRANSACTION APPROVAL FORM
New or Non-Standard Transaction
Approval Form
Prepared By:

Date:

New or Non-Standard Transaction Name:

Business Rationale and Risk Assessment:
 Product description – including the purpose, function, expected impact on net revenues (i.e. increase, manage volatility, control variances, etc.) and/or benefit to Pioneer
 Identification of the in-house or external expertise that will be relied upon to manage and support the new or non-standard transaction
 Assessment of the transaction’s risks, including any material legal, tax or regulatory issues
 How the exposures to the risks above will be managed by the limit structure  Proposed valuation methodology (including pricing model, where appropriate)  Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new product
 Proposed accounting methodology
 Proposed Middle Office workflows/methodology, including systems  Brief description of the responsibilities of various departments within Pioneer who will have any manner of contact with the new or non-standard transaction 27 Reviewed by:

Chief Operating Officer Date
General Counsel Date
Executive Director Date
Appendix C: DEFINITIONS
Back Office: That part of a trading organization which manageshandles transaction accounting, confirmations, management reporting, contract administration and working capital management.

Bilateral Transaction: Any physical or financial transaction between two counterparties, neither of whom is an Exchange or market entity such as CAISO.

Cash Flow at Risk: A measure of the potential shortfall in cash flow from a specified level during a specified period of time at a specified confidence level.

Clearing: Clearing is the process of reconciling purchases and sales of a commodity, as well as the direct transfer of funds from one financial institution to another. The process validates the availability of funds, records the transfer, and in the case of financial securities, ensures the delivery to the buyer. 28 Commodity: A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.

Confirmation Letter: A letter agreement between two counterparties that details the specific commercial terms (e.g., price, quantity and point of delivery) of a transaction.

Congestion Revenue Right: A point-to-point financial instrument in the Day-Ahead Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.

Counterparty Credit Risk: The risk of financial loss resulting from a counterparty to a transaction failing to fulfill its obligations.

Counterparty Credit Exposure: This measures the known exposures and is represented by the sum of both (a)Realized exposure and (b) Forward exposure, as those terms are defined below:

Realized exposure: payable or receivable amount owed between counterparties, is a measurement of cash flow for billed and unbilled transactions.

Delivery point: the point at which a commodity will be delivered and received.

Front Office: That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities.
29 Hedging products: Hedging products means capacity, energy, renewable energy credits or other products related to a specific transaction.

IOU: An Investor-Owned Utility (IOU) is a business organization providing electrical and/or natural gas services to both retail and wholesale consumers and is managedment as a private enterprise.

Middle Office: That part of a trading organization that measures and reports on market risks, develops risk management policies, and monitors compliance with those policies, manages credit, and keeps management and the Board informed on risk management issues.

Speculation: Speculation is the act of trading an asset with the expectation of realizing financial gain resulting from a change in price in the asset being transacted. -

Page 1 of 7 ends

Staff Report – Item 4
To: The Governing Board
From: Kirstin Kolpitcke, Legislative and Regulatory Manager Item 4: End of Legislative Session Update
Date: 10/19/2023

RECOMMENDATION
Receive an update on the end of session legislative activities including the following bills that Pioneer Community Energy (Pioneer) had a position on: AB 538 (Holden), AB 557 (Hart), AB 625 (Aguiar-Curry), AB 643 (Berman), AB 704 (Patterson), AB 998 (Connolly), AB 1373 (Garcia), SB 83 (Weiner), SB 410 (Becker), SB 488 (Alvarado-Gil), SB 529 (Gonzalez), and SB 537 (Becker).

BACKGROUND
The California State Legislature adjourned on September 14, 2023. The Governor has a deadline of October 14, 2023, to sign or veto any bills. This was the first year of a two-year session and numerous bills were introduced that had the potential to impact the energy market, generally, and Pioneer, specifically.

ANALYSIS & DISCUSSION
Pioneer developed the 2023 Pioneer Legislative Policy and Platform based on the legislative policy and objectives presented to the Board in April of 2023. All relevant bills were analyzed, summarized, and generally ranked as Support, Watch, or Oppose by staff.

Support: Pioneer will support in various ways that may include sponsorship, writing letters of support, lobbying other market participants to support, support through California Community Choice Association (CalCCA), requesting Member Agencies to offer their support, etc.

Watch: Pioneer will monitor and continue to watch, offer support, or oppose depending on the direction of the bill.

Oppose: Pioneer will oppose in various ways that may include writing letters of opposition, lobbying other market participants to oppose, oppose through CalCCA, requesting Member Agencies to oppose, etc.

The following is a summary table and further details on the bills of highest priority for Pioneer that were introduced by the Assembly and Senate this session. They have been designated a position of Support, Oppose and sometime denoting, Unless Amended.

Agenda Item: 4 Agenda Date: 10/19/2023

Page 2 of 7 ends

Summary Results Table of Priority Active Bills

Highest Priority Active Bills Further Detail
AB 538, Holden (D) – Public utilities: timely service: customer energization Impact to Pioneer: Yes
This bill would create a framework for the expansion of the California Independent System Operator (CAISO) to include additional transmission operators and utilities (also referred to as balancing authorities) from the Western states by modifying the process for appointment of governing board members.

Priority: High
Position: Support. Expanding the operating footprint of the CAISO with its neighbors in the west would enable better collaboration, transparency, and integration across the western electrical transmission grid system allowing California and Pioneer to achieve its goals for renewable energy and greenhouse gas reduction faster and with less cost to electric ratepayers.

Status: Two-year bill.

AB 557, Hart (D) – Open meetings: local agencies: teleconferences Impact to Pioneer: Yes
This bill would eliminate the sunset date on provisions of law allowing local agencies to use teleconferencing without complying with the Brown Act requirements during a proclaimed state of emergency.

Specifically, this bill would eliminate the January 1, 2024, sunset date on provisions of law authorizing a local agency’s legislative body to use teleconferencing for a public meeting without having to post agendas at each Bill Author Pioneer Position Status
AB 557 Hart Support Signed by Governor
SB 1373 Garcia No position Signed by Governor
SB 410 Becker Support Signed by Governor
AB 538 Holden Support Assembly Appropriations - Two-year bill SB 488 Alvarado-Gil Sponsor Failed passage in the Senate Energy, Utilities, and
Communications
AB 625 Aguiar-Curry Sponsor Held in Assembly
Appropriations
AB 643 Berman Support Held in Assembly
Appropriations
AB 704 Jim Patterson Support Held in Assembly
Appropriations
AB 998 Connolly Support Held in Senate Appropriations
SB 529 Gonzalez Support Held in Senate Appropriations
SB 83 Wiener Support Held in Senate Appropriations
SB 537 Becker Support Inactive File
Agenda Item: 4 Agenda Date: 10/19/2023

Page 3 of 7 ends

teleconference location accessible to the public and require at least a quorum of the legislative body to participate from within the local agency’s jurisdiction during a proclaimed state of emergency.

This bill would change the frequency with which a legislative body must make specified findings in order to continue to teleconference from every 30 days to every 45 days.

Priority: High
Position: Support. This bill is part of a package of bills intended to address the restrictions and need for flexibility in the post-COVID era with regards to the Brown Act.

Status: Signed by Governor.

AB 625, Aguiar-Curry (D) – Forest biomass: management: emissions: energy Impact to Pioneer: Yes
This bill would establish the Forest Biomass Waste Utilization Program to develop an implementation plan to meet the goals and recommendations of specified statewide forest management plans and to develop a workforce training program to complement workforce needs associated with the implementation plan. The bill would require the submission of an annual report to the Legislature, beginning January 1, 2025, on the progress made on implementing the implementation plan.

This bill would require the Natural Resources Agency to facilitate the inclusion of recommendations for forest biomass waste utilization in state climate adaptation plans.

This bill would require the CEC to prepare and submit a report that evaluates innovative bioenergy technologies that use forest biomass waste and include in the 2025 edition of the integrated policy report, an assessment of the potential for forest biomass waste energy to provide firm renewable power.

This bill would require the state air board, in a report that assesses statewide greenhouse gas emissions associated with wildfire and forest management activities, to include a methodology to quantify the greenhouse gas and short-lived climate pollutant emissions from wildfire, pile burning, and forest management activities.

Finally, this bill would require the CPUC to continue the BioMAT program until implementation of the provisions authorizing CCAs to participate in the program has been resolved and adequate time is given to CCAs to participate in the program.

Priority: High
Position: Sponsor/Support. Considering Pioneer’s desire to expand the use of biomass and extending the sunset date of the BioMAT Program, Pioneer staff will continue to support this bill and monitor as the session moves forward and take appropriate action as needed per our Legislative Policy and Platform.

Status: Held in Assembly Appropriations.

AB 643, Berman (D) – Electric Rule 21: interconnection: distributed renewable generation This bill would require the California Public Utilities Commission (CPUC) to commence consideration of adopting mechanisms for distributed renewable generation interconnections to enforce timelines, reduce administrative burden, and provide transparency and certainty to customers by March 31, 2024. This bill would require the CPUC to create process improvements to, and potential timelines for, Electric Rule 21 to address certain types of delays.

Priority: High
Agenda Item: 4 Agenda Date: 10/19/2023

Page 4 of 7 ends

Position: Support. Pioneer and other CCAs sent out a survey to its jurisdictions inquiring about interconnection delays. While the most significant delays were outside of Pioneer’s territory, they were within PG&E’s service territory. This is a much broader issue that Pioneer may want to participate in since this issue could affect our territory soon if it is not addressed.

Status: Held in Assembly Appropriations.

AB 704, Jim Patterson (R) – Energy: building standards: requirements Impact to Pioneer: Yes
This bill, until January 1, 2027, would require residential construction intended to repair, restore, or replace a residential building damaged or destroyed as a result of a disaster in an area in which a state of emergency has been proclaimed by the Governor to comply only with requirements regarding photovoltaic systems pursuant to the regulations, if any, that were in effect at the time the damaged or destroyed residential building was originally constructed.

This bill’s provisions would only apply if one or more of the specified conditions are met with respect to the building owner’s income, insurance coverage, or the location or square footage of the construction.

Priority: High
Position: Support. Pioneer’s service territory has unfortunately seen more than its fair share of wildfires. This bill could relieve local homeowners whose homes were either damaged or destroyed by wildfires from having to install solar on their homes. This bill would require the home to be repaired or replaced based upon the solar installation requirements at the time the home was built as opposed to when the home is being repaired or replaced.

Status: Held in Assembly Appropriations.

AB 998, Connolly (D) – Biomass energy facilities: State Energy Resources Conservation and Development Commission: report
Impact to Pioneer: Yes
This bill would require the CEC, on or before December 31, 2024, to issue a report on utility-scale biomass facilities still in operation as of January 1, 2024, to develop a plan to modernize and save biomass facilities.

This bill would require the report to include a strategy to upgrade biomass combustion facilities, where appropriate, that considers impacts on disadvantaged, rural forested, and agricultural communities, impacts on the ability to maintain existing capacity for managing forest or other excess biomass, the cost of upgrading facilities and financing opportunities, and job creation or job loss that may result from the strategy.

Priority: High
Position: Support. For CCAs, like Pioneer, that are interested in procuring biomass, this bill could be helpful in finding a path forward for the expansion of the biomass industry that includes modernizing facilities to newer technologies, such as gasification or carbon capture and sequestration.

Status: Held in Senate Appropriations
AB 1373, Garcia (D) – Energy
Impact to Pioneer: Yes
This bill would make significant policy changes to electricity market structure and regulations proposed by the Newsom Administration’s 2023 budget energy trailer bill, including the creation of a central procurement entity at the Department of Water Resources (DWR).

This bill would require capacity payments for load-serving entities and local publicly owned electric utilities that are deficient in their reliability obligations and DWR’s Strategic Reliability Reserve was used to meet their Agenda Item: 4 Agenda Date: 10/19/2023

Page 5 of 7 ends

reliability needs. This bill would also bestow upon the California Public Utilities Commission enforcement and subsequent penalty authority of load serving entities’ integrated resource plans.

Priority: High
Position: None. Pioneer’s position changed from an Oppose Unless Amended position to None because of amendments that CalCCA successfully got added to the bill which preserves the existing right of CCA’s to self-procure diverse resources that are not otherwise procured by the DWR in their central procurement capacity.

Status: Signed by Governor
SB 83, Wiener (D) – Public utilities: electrical distribution grid: interconnection Impact to Pioneer: Yes
This bill would require an electrical corporation to interconnect a development project within eight weeks of receiving a notification from a development project applicant that the development project is interconnection ready. This bill would also require the electrical corporation to compensate a development project applicant for failing to meet the 9-week time period.

Priority: High
Position: Support. Pioneer and other CCAs sent out a survey to its jurisdictions inquiring about interconnection delays. While the most significant delays were outside of Pioneer’s territory, they were within PG&E’s service territory. This is a much broader issue that Pioneer may want to participate in since this issue could affect our territory soon if it is not addressed.

Status: Held in Senate Appropriations
SB 410, Becker (D) – Powering Up Californians Act
Impact to Pioneer: Yes
This bill would create the Powering Up Californians Act. This bill would declare that in order to meet the state’s decarbonization goals, the state’s electrical distribution systems must be substantially upgraded, new customers must be promptly interconnected, and existing customers must have their service level promptly upgraded.

This bill would require the CEC to establish a working group, before March 1, 2024, to provide advice regarding the development of reasonable average and maximum target interconnection time periods, propose processes that would improve the ability of utilities to be informed well in advance of needed increases in distribution system capacity, and explore options to reduce interconnection time periods.

Status: Signed by Governor
SB 488, Alvarado-Gil (D) – California Renewables Portfolio Standard Program: bioenergy projects:
community choice aggregators
Impact to Pioneer: Yes
Agenda Item: 4 Agenda Date: 10/19/2023

Page 6 of 7 ends

The Legislature in 2016 (SB 859), required IOUs and POUs to procure their proportionate share of 125 MW of biomass energy. Since that time, these contracts have been extended. SB 1109 (Caballero, Statutes of 2022) required the extension of these contracts, except in the circumstances where a contract was entered into, and the biomass facility declared bankruptcy or where the contract does not deliver energy to the grid. This means that approximately 30MW of the original 125 would never be procured. This bill would allow community choice aggregators to participate in the BioRAM program in instances where the exception in SB 1109 occurred.

Priority: High
Recommended Action/Position: Sponsor/Support. This bill would allow CCAs access to the BioRAM program which helps offset the high cost of biomass and could help to realize the full benefits of 125 megawatts of bioenergy originally intended by the Legislature. Additional benefits include assisting California in treating 1 million acres of forests a year and converting waste into a valuable product (i.e., baseload, renewable energy).

Biomass avoids the need for open pile burning, averts significant emissions when compared to wildfires or open pile burning, and is part of a broader strategy to reduce wildfires.

Status: Died in Senate Energy, Utilities, and Communications SB 529, Gonzalez (D) – Electric vehicle sharing services: affordable housing facilities Impact to Pioneer: Yes
This bill would require the CEC to create a competitive grant program for electric vehicle car sharing services operated at affordable housing facilities for the exclusive use of residents.

Priority: High
Position: Support. Pioneer will be looking to support legislation that provides incentives for future program opportunities, especially as it relates to electric vehicles.

Status: Held in Senate Appropriations
SB 537, Becker (D) – Open meetings: multijurisdictional, cross-county agencies: teleconferences Impact to Pioneer: Yes
This bill would expand the circumstances of “just cause” under the Brown Act to apply to the situation in which an immunocompromised child, parent, grandparent, or other specified relative requires the member to participate remotely.

This bill would a board, commission, or advisory body of a multijurisdictional, cross county, local agency with appointed members that is subject to the Brown Act to use alternate teleconference provisions, if specified conditions are met. This bill, among other things, would require the legislative body to identify in the agenda each member who plans to participate remotely and to include the address of the publicly accessible building from which each member will participate via teleconference. This bill would also prohibit a member from participating remotely pursuant to these provisions unless the remote location is the member’s office or another location in a publicly accessible building and is more than 40 miles from the in-person location of the meeting.

This bill would repeal these alternative teleconferencing provisions on January 1, 2026.

Priority: High
Position: Support. This bill is part of a package of bills intended to address the restrictions and need for flexibility in the post-COVID era with regards to the Brown Act. The sponsor of this bill is Peninsula Clean Energy.

Status: Inactive File
Agenda Item: 4 Agenda Date: 10/19/2023

Page 7 of 7 ends

FISCAL IMPACT
None.

ATTACHMENTS
None.

Page 1 of 1 ends

Staff Report – Item 5
To: The Governing Board
From: Donald Eckert, Executive Director
Item 5: Authorize the Preparation of the Second Amended and Restated Joint Exercise of Powers Agreement for Pioneer Community Energy
Date: 10/19/2023

RECOMMENDATION
Authorize the preparation of an Amendment to the Joint Exercise of Powers Agreement (“JPA”) making non-substantive administrative updates to the document and eliminate the requirement that each Member Agency adopt resolutions approving new members to the JPA as described.

BACKGROUND
In September 2015, Pioneer’s JPA was began as the Sierra Valley Energy Authority which was an agreement between the County of Placer and the City of Colfax to engage in the PACE program known as mPOWER.

In 2017, the JPA was amended and restated to allow new members with the purpose of launching a Community Choice Aggregation program.

At the July 20, 2023, Governing Board meeting, the Board provided direction to staff to amend the JPA to eliminate the requirement that each Member Agency adopt resolutions approving new members. In the same discussion, Pioneer’s General Counsel recommended further non-substantial administrative changes to the JPA to improve governance efficiency and reflect the current state of Pioneer.

ANALYSIS & DISCUSSION
Staff recommends updating the JPA by combining the amendment to improve the expansion process with non-substantial administrative changes through a Second Amended and Restated JPA for Pioneer. Board approval would generate thirty-day notice for our Member Agencies.

Staff would bring the Second Amended and Restated JPA to the Board for adoption at the December 14, 2023, Board meeting.

STRATEGIC PLAN
The recommendation supports the Operational Excellence priority.

FISCAL IMPACT
There is no fiscal impact with the recommendation.

ATTACHMENTS
There are no attachments to this report.

Page 1 of 2 ends

Staff Report – Item 6
To: The Governing Board
From: Donald Eckert, Executive Director
Item 6: Update on Expansion into Unincorporated Nevada County Date: 10/19/2023

RECOMMENDATION
Receive an update of Pioneer Community Energy’s (“Pioneer”) expansion efforts into Unincorporated Nevada County (“County”).

BACKGROUND
The Nevada County Board of Supervisors was first introduced to the Community Choice Aggregation model and Pioneer in January 2022. Subsequently, the County authorized funding of their share of an Impact Assessment Study (“IAS”). The IAS results were favorable for expansion but due to a variety of reasons, the expansion process was halted.

In Spring 2023, talks resumed of expansion between Pioneer and the County and authorization was given for a new IAS to reflect changes in the power supply markets.

At the September 28, 2023, Governing Board meeting, the Board received the results of the IAS. The Board provided directions to continue the expansion process with an evaluation of the power supply markets in April 2024 before the annual Resource Adequacy (“RA”) filings are due. Once Pioneer files an RA report that includes the requirements to service the County, Pioneer is then committed to purchase. The Board also provided direction that the County should expect and must agree on two conditions to join Pioneer:

1. A customer generation rate differential from existing ratepayers to prevent existing ratepayers of subsidizing the new ratepayers.

2. A service date of late 2025 to avoid extremely expensive forecasted power procurement in summer 2025.

ANALYSIS & DISCUSSION
Pioneer’s Board Chair, accompanied by Pioneer and Pacific Energy Advisors staff, presented to the Nevada County Board of Supervisors at their October 10, 2023, meeting. The Board of Supervisors received the results of the IAS and the conditions to continue the expansion process. The Board of Supervisors unanimously decided to postpone the expansion process to 2024.

Pioneer staff over the past six months developed great relationships with the Board of Supervisors, staff, and Nevada County citizens. A strong foundation is in place for when the expansion process restarts.

STRATEGIC PLAN
The recommendation supports the following strategic plan priorities:

1. Quality of Service

2. Financial Stability & Strategic Growth

FISCAL IMPACT
Pioneer’s share (50%) of commissioning the IAS is capped at $15,000. The County will reimburse Pioneer for the remaining cost of the IAS.

Agenda Item: 6 Agenda Date: 10/19/2023

Page 2 of 2 ends

ATTACHMENTS
There are no attachments to this report.

Page 1 of 2 ends

Staff Report – Item IV-B
To: The Governing Board
From: Donald Eckert, Executive Director
Item IV-B: Executive Director Report
Date: 10/19/2023

PERSONNEL
Current recruitments include the Sr. Manger of Quantitative Analysis and the Community Outreach Manager.

EXECUITVE DIRECTOR AGREEMENTS EXECUTED (NON-POWER SUPPLY) The following agreements have been executed by the Executive Director, consistent with the authority delegated by the Board:
• Law Office of David Peffer for Joint Regulatory Representation services, Amendment No. 1 updating scope of services with no change to cost or term of Agreement not-to-exceed amount of $15,000 through December 31, 2023.

FIVE-YEAR ANNIVERSARY EVENT
Nearly 150 invitations have been sent, and we are counting RSVPs as our 5-Year Celebration draws near.

Scheduled for November 1 from 5-7 pm at the Blue Goose in Loomis, this event will celebrate the people who have contributed to our success since 2018. The event will include entertainment and a short, scripted program that highlights key milestones from the past five years. All catering and decorations for the event are coming from local vendors from throughout our service territory as a way to show our commitment to community partnership and the customers we serve.

OFFICE RENNOVATIONS
There are improvements needed to our suite including ceilings installed on the offices. For various reasons, work has been delayed over the past two years. However, work began on those improvements in early October and will conclude by December. Through early November, staff will have limited access to the office.

The Board Room area is not impacted. During this construction period, Pioneer will continue to host Board meetings, the Audit & Finance Committee, and Community Advisory Committee.

ENHANCED POWERLINE SAFETY SETTINGS (“EPSS”) EVENTS
EPSS events are similar to Public Safety Power Shutoff events but do not require notification, are shorter in duration and more frequent in certain areas of the state. According to the latest statistics, Pioneer has been particularly impacted when compared to other areas of the state. Pioneer is working with Joint CCAs, local governments, and Rural County Representatives of California and had a meeting with the Public Advocates Office (“PAO”) on October 10th. The PAO believes that the CPUC is uninclined to intervene and regulate Fast Trip events. The Public Advocates Office is sympathetic to our cause and is committed to putting together a report to show the real impact of Fast Trip outages. Working with their office should increase our visibility.

QUARTERLY SPONSORSHIP ACTIVITY
The Board requested quarterly updates on sponsorship activity when the sponsorship policy was adopted in July 2023. The following is activity for the 1st quarter of the fiscal year:

Agenda Item: IV-B Agenda Date: 10/19/2023

Page 2 of 2 ends

COMMUNITY ADVISORY COMMITTEE (“CAC”)
There was no CAC meeting in September. The next scheduled meeting of the CAC will be October 25th.

EXECUTIVE DIRECTOR POWER SUPPLY CONTRACTS EXECUTIED
The following agreements have been executed by the Executive Director, consistent with the authority delegated by the Board:

Presentations and Relevant Meetings attended by the Executive Director

1. Participated in CalCCA Weekly/Monthly Board meetings.

2. Participated at Annual California Biomass Energy Alliance

3. Presented at Nevada County Board of Supervisors

ATTACHMENTS

1. Agenda Planning Document

2. Monthly Legislative and Regulatory Report

3. Monthly Public Outreach Report

4. Quarterly Strategic Plan Progress Report
Date
Member
Community Vendor Purpose Date(s) Amount
7/1/2023 Grass Valley Grass Valley Chamber Independence Day 07/04/23 $ 500 7/14/2023 Lincoln City of Lincoln
2nd Annual Lincoln Airport Open
House & Family Festival 08/26/23 $ 750
9/14/2023 Auburn Mandarin Orange Education Foundry Annual Mountain Mandarin Festival 11 17/19 2023 $ 1,400 9/21/2023 Auburn Auburn Chamber of Commerce State of the Community 10/05/23 $ 1,000 9/27/2023 Loomis Loomis Basin Chamber Of Commerce Loomis Eggplant Festival 10/07/23 $ 750 $ 4,400
Fiscal Year 2023-24, Q1 Sponsorship Activity
TOTAL Q1 EXPENSES:

Counterparty Name
Execution
Date Type Product Start Date End Date
Notional
Value
Pacific Gas & Electric Company 9/19/2023 Sell Resource Adequacy 5/1/2024 5/31/2024 $175,500 Calpine Energy Services, L.P. 9/22/2023 Buy Resource Adequacy 1/1/2026 12/31/2035 $4,032,000 Calpine Energy Services, L.P. 9/22/2023 Buy Resource Adequacy 1/1/2026 12/31/2035 $6,336,000 High Desert Power Project, LLC 9/26/2023 Sell Resource Adequacy 4/1/2024 4/30/2024 $133,000 High Desert Power Project, LLC 9/26/2023 Sell Resource Adequacy 4/1/2024 4/30/2024 $342,000 NRG Business Marketing 9/19/2023 Sell Resource Adequacy 2/1/2024 11/30/2024 $318,750 NRG Business Marketing 9/21/2023 Buy Resource Adequacy 6/1/2024 9/30/2024 $2,793,000 Agenda Planning Document – Pioneer Community Energy Updated 10-13-2023 C: Pioneer Community Energy\Executive Director - General Documents\Board\Board Meeting Templates

BOARD OF

DIRECTORS
OCTOBER 19, 2023
3:00 PM
(Post Agenda: October 13)
NOVEMBER 16, 2023
3:00 PM
(Post Agenda: TH, November 9)
DECEMBER 14, 2023
3:00 PM
(Post Agenda: December 8)

IN THE FUTURE
CAISO facility tour (2024)
General Function I Agenda Review Agenda Review Agenda Review Consent
1a
Minutes for Approval
SEPTEMBER 28, 2023
Minutes for Approval
OCTOBER 19, 2023
Minutes for Approval
NOVEMBER 16, 2023
(DEC-JAN) RES Adopt 2024 Governing
Board Meeting Schedule
(pending 12/14 participation)
1b Receive Draft Financials: AUGUST
2023 (Koehn)
Receive Draft Financials: SEPT 2023
(Koehn)
Receive Draft Financials: OCT 2023
(Koehn)
1c Updated New Member Reserve Policy
(Koehn)
Contract (RWG)
1d Contract (NewGen)
1e New Members Reserves Target –
Nevada City & Grass Valley (Action-Koehn)
Regular
2 Program discussion Participate.Energy
(Discussion - Stassi-Vanacore)
Mike Kimball
RES Contract Renewal -Calpine Data
Management (Action-Koehn)
Calpine
RES 2nd Amended & Restated JPA
(Action-Eckert)
(NOV-DEC) WPWMA Biomass Plant
update (Discussion-Kang)
3 RES Risk Oversight Policy Update &
discussion (Action-Koehn)
RES Feed-In Tariff (Action-Kang) Nevada City & Grass Valley Expansion update (Discussion-Stassi-Vanacore)
New Proposed Rates:

RES-BCT
Green75
4 2023 Legislative Session in Review
(Discussion-Kang)
Update on Prepay Transaction
(Discussion-Eckert)
Public Hearing - RES Rates 2024
including Net Billing Tariff discussion &
Policy (Action)
(JAN 18) Annual Audit Report
5 Authorize 2nd Amended & Restated
JPA (Action-Eckert)
6 Update on Expansion into
Unincorporated Nevada County
(Discussion-Eckert)
General Function II
IV-B
Executive Director’s Report
Reports: Leg/Reg; Community Engagement;
EPSS Update; Quarterly Updates: Strategic
Plan; Sponsorship Activities; Income-Based
Fixed Charge; 5-yr celebration Agenda;
Executive Director’s Report
Reports: Leg/Reg; Community Engagement;
proposed CAISO tour JAN;
Executive Director’s Report
Reports: Leg/Reg; Community Engagement;
Executive Director Report-QTRLY Updates
JAN – APR – JULY – OCT
 Strategic Plan Objectives
 Sponsorship Activity
 Income-Based Fixed Charge for IOUs
IV-C Informational Items
Glossary of Terms
Informational Items
Glossary of Terms
Informational Items
Glossary of Terms
Agenda Planning Document – Pioneer Community Energy Updated 10-13-2023 C: Pioneer Community Energy\Executive Director - General Documents\Board\Board Meeting Templates

AUDIT/FINANCE COMMITTEE
WEDNESDAY, 12/6/23
3:00 PM
in-person & remote locations

DATE IN THE FUTURE
Greg Janda, Chair
Holly Andreatta
John Hidahl
Gary Petersen
Rates Discussion
Audit Update
TBD – January 2024

ENERGY PROCUREMENT REVIEW

AD HOC COMMITTEE
DATE
zoom only DATE IN THE FUTURE
John Hidahl, Chair
Greg Janda, Vice Chair
Amanda Cortez
Alice Dowdin Calvillo
2024 – Q1

EXPANSION

AD HOC COMMITTEE
DATE
zoom only DATE IN THE FUTURE
Jim Holmes, Chair
Alice Dowdin Calvillo, Vice Chair
David Yarbrough
2024 – Q1
By-Laws Article V, Section 5.3
Each committee shall on an annual basis choose its officers, comprised of a Chairperson and Vice-Chairperson
Ad Hoc Member Limit fewer members than majority of board (<6) Ad Hoc Member Limit fewer members than majority of board (<6) 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update Pioneer Community Energy Legislative and Regulatory Update October 19, 2023
Legislative Affairs
California Legislature and Capitol Update:

The 2023 Legislative Session concluded on September 14, 2023; the Governor had until October 14, 2023 to sign or veto all bills on his desk.

Listed below are Pioneer’s bills of interest and their current statuses. 2023 Pioneer Bill Proposals:

AB 625 (Aguiar-Curry):
• This bill, among other things, would have required the California Public Utilities Commission (CPUC) to continue the BioMAT program until implementation of the provisions authorizing CCAs to participate in the program has been resolved and adequate time is given to CCAs to participate in the program.
• The bill was held in Assembly Appropriations and is dead SB 488 (Alvarado-Gil):
• This bill would have authorized CCAs to participate in the BioRAM program for any portion of a local publicly owned electric utility’s required proportionate share of 125 MW that was not procured because of an exemption. • This bill failed passage in the Senate Energy, Utilities, and Communications Committee by a vote of 7-2-9 and is dead
2023 Pioneer Priority Bills to Support or Oppose Unless Amended:

AB 538 (Holden): Support
• Delegates to the California Energy Commission (CEC) the ability to authorize the transformation of the California Independent System Operator (CAISO) into a multistate regional transmission system, if specified requirements are satisfied. Prohibits a California electrical transmission facility owner, a retail seller of electricity, or a local publicly owned electric utility from joining a multistate regional transmission system organization, if specified requirements are not met.
• Assembly Appropriations: Two-year bill
AB 557 (Hart): Support
• Revises the authority of a legislative body to hold a teleconference meeting under abbreviated teleconferencing procedures when a declared state of emergency is in effect. Extends indefinitely that authority in the circumstances under which the legislative body either 1) meets for the purpose of determining 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update whether, as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees, or 2) has previously made that determination. This bill would incorporate additional changes to Section 54953 of the Government Code proposed by SB 537 to be operative only if this bill and SB 537 are enacted and this bill is enacted last. • Approved by the Governor and Chaptered by the Secretary of State - Chapter 534, Statutes of 2023.

AB 643 (Berman): Support
• Requires the CPUC to commence the consideration of adopting mechanisms for distributed renewable generation interconnections to enforce timelines, reduce administrative burden, and provide transparency and certainty to customers. Requires the CPUC to create process improvements to, and potential timelines for, Electric Rule 21 to address certain types of delays. • This bill was held in Assembly Appropriations and is Dead AB 704 (Jim Patterson): Support
• Requires any residential construction intended to repair, restore, or replace a residential building that was damaged or destroyed as a result of a disaster in an area in which the Governor has declared a state of emergency to comply with the state’s requirement for photovoltaic systems that were in effect at the time the building was originally constructed, if certain conditions are met with respect to the building owner's income, insurance coverage, and the location and square footage of the construction.
• This bill was held in Assembly Appropriations and is Dead AB 998 (Connolly): Support
• Requires the CEC to report by December 31, 2025 on utility-scale biomass combustion facilities still in operation as of January 1, 2024 and specifies information the report must contain.
• This bill was held in Senate Appropriations and is Dead AB 1373 (Garcia): Neutral/Watch
• Provides the Department of Water Resources (DWR) authority to act as a centralized procurement entity (CPE) until January 1, 2035 for procurement of “eligible energy resources” and authorizes the CPUC, within 6 months of making that determination, to request the DWR to procure those specified resources that meet the portfolio of resources for Load Serving Entities (LSEs). The bill authorizes the CPUC to order the procurement of resources with specific attributes by LSEs resulting from the integrated resource planning process and require the CPUC to enforce any resource procurement requirements. Requires the CPUC and the CEC to apply capacity payments for LSEs and local Publicly Owned Electric Utilities (POUs) that are deficient in their reliability obligations until June 30, 2027. This bill authorizes the CPUC additional enforcement and 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update subsequent penalty authority over the LSEs' integrated resource plans. It allows for POUs and LSEs to voluntarily obtain resources that DWR-CPE acquires on their behalf. POUs and LSEs will also have to submit to a nonbypassable charge.

The bill provides that, upon appropriation by the Legislature, additional moneys from the General Fund will be made available for the 2024–25 fiscal year and subsequent fiscal years to support the California Coastal Commission’s coastal development permitting of prospective offshore wind energy development in and around regions in which offshore wind energy areas have been leased by the bureau, pending future legislation.
• Approved by the Governor and Chaptered by the Secretary of State - Chapter 367, Statutes of 2023.

AB 1533 (Committee on Utilities and Energy): Oppose Unless Amended • Serves as the Utilities and Energy Committee’s omnibus code clean-up measure. Excludes energy, capacity, or any attribute from the Diablo Canyon Power Plant from counting toward California's statutory renewable energy mandates, zero-carbon resource targets, or climate goals beyond its current retirement date of August 26, 2025.
• Senate Energy, Utilities, and Communications: Two-year bill SB 83 (Wiener): Support
• Requires the CPUC to establish maximum energization time periods by when an electrical corporation would be required to energize a development project.

Requires electrical corporations to energize development projects within the maximum time period established by the CPUC. Requires electrical corporations to compensate development projects for failing to meet the deadline. • This bill was held in Senate Appropriations and is Dead SB 410 (Becker): Support
• Requires the CPUC on or before September 30, 2024 to establish reasonable average and maximum target energization time periods for interconnection projects, establish a procedure for customers to report energization delays, and require the electrical corporations to take remedial actions to achieve CPUC targets and would require all reports to be publicly available. • Approved by the Governor and Chaptered by the Secretary of State- Chapter 410, Statutes of 2023
SB 529 (Gonzalez): Support
• Requires the CEC to create a program to award grants to facilitate EV sharing services operated at permanent affordable housing properties. Recipients of the grants must purchase or commit to purchase two electric vehicles and two Level two charging stations. The bill would provide that a grant recipient may be eligible to purchase up to two direct current fast chargers if the grant recipient meets specified requirements.
2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update • The bill was held in Senate Appropriations and is Dead SB 537 (Becker): Support
• Allows a board, commission, or advisory body of a multijurisdictional, cross county, local agency with appointed members that is subject to the Brown Act to use alternate teleconference provisions if specified conditions are met.

Requires at least a quorum of members of the legislative body to participate from locations within the boundaries of the territory over which the local agency exercises jurisdiction, requires the legislative body to identify in the agenda each member who plans to participate remotely and to include the address of the publicly accessible building from each member who will participate via teleconference and prohibits a member from participating remotely pursuant to these provisions unless the remote location is the member’s office or another location in a publicly accessible building and is more than 40 miles from the location of the in-person meeting. The bill requires a member who receives compensation for their service on the legislative body to participate from a physical location that is open to the public. Repeals these alternative teleconferencing provisions on January 1, 2026. This bill incorporates additional changes to Section 54953 of the Government Code proposed by AB 557 to be operative only if this bill and AB 557 are enacted and this bill is enacted last.

The bill authorizes the legislative body of a multijurisdictional, cross-county agency, as specified, to use alternate teleconferencing provisions if the eligible legislative body has adopted an authorizing resolution. The bill also requires the legislative body to provide a record of attendance of the members of the legislative body, the number of community members in attendance of the members of the legislative body, the number of community members in attendance in the teleconference meeting in the teleconference meeting, and the number of public comments on its internet website within 10 days after a teleconference meeting.
• Assembly Floor: Two-year bill
Regulatory Proceedings
Below is a summary table of the key issues, followed by further detail on activities since our last Board Meeting on a few ongoing priority Pioneer regulatory Proceedings and matters. More updates will follow at future Board meetings as regulatory proceedings and matters evolve.

Proceeding Issue Pioneer Position
R.22-07-005 Order Instituting
Rulemaking (OIR) to
advance Demand
Flexibility through
Limit negative impacts of
the Income Based
Graduated Fixed Charge
and educate Pioneer
2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update electric rates Board and customers
prior to the rollout
R.22-10-010 Order Instituting
Rulemaking to
Implement AB 843
(2022) – The Bioenergy
Adjusting Tariff Program
Expeditiously implement
AB 843 to allow CCA
access to the BioMAT
program for future
subsidies for biomass
procurement
A.20-02-009; A.21-03-
008; A.21-06-001;
A.22-05-029
PG&E 2019 Energy
Resource Recovery
Account (ERRA)
Compliance Application;
PG&E 2020 ERRA
Compliance Application;
2021 ERRA Compliance
Application; 2022 ERRA
Compliance Application;
2023 ERRA Compliance
Application; 2023 ERRA
Forecast Application;
2024 ERRA Forecast
Application
Reduce the ERRA impact
on the PCIA; increase
data transparency from
the IOUs
R.20-08-020 Rulemaking to develop a
successor to existing Net
Energy Metering (NEM)
tariffs and to review and
refine existing NEM
tariffs
Mitigate impacts to
Pioneer NEM customers
and inform customers of
upcoming changes to the
program
R.21-03-011 Provider of Last Resort
(POLR) Order Instituting
Rulemaking
Limit the impacts of
changes to the Financial
Security Requirement
(FSR)
R.17-09-020; R.19-11-
009; R.21-10-002
Resource Adequacy (RA)
Reform &
Implementation Tracks
Refine the current RA
Program construct;
reduce volatility of RA
prices; increase RA
procurement availability
and grid reliability
R.18-12-005 Utility De-energization,
Public Safety Power
Reduce impacts of PSPS
and EPSS events;
2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update Shutoffs (PSPS), and
Enhanced Powerline
Safety Settings (EPSS)
increase coordination
and communications
with IOUs to ensure
public safety during de-energization; limit PSPS
and EPSS impacts on
CCA load scheduling
CEC - OIR – 21-OIR-03,
23-LMS-01
Load Management
Standards (LMS)
Ensure Pioneer Maintains
compliance with CEC
mandates and
requirements
R.19-09-009 Microgrids Rulemaking Ensure Pioneer’s
inclusion in microgrid
programs
AB 843 OIR:
• The OIR was opened on October 20, 2022, to examine issues in the implementation of AB 843 which Pioneer and other CCAs championed in 2021. • A Workshop was held on April 28, 2023 to provide a venue to discuss the process for administration of CCA BioMAT contract terms and conditions, tariffs, program queue coordination, cost recovery, contract management, and oversight.
• CalCCA held a meeting on August 28, 2023 with the IOUs to discuss issues surrounding Accion.
• A Proposed Decision was issued on October 10, 2023. This decision is not final until the CPUC hears and votes to approve it. The earliest this item may be heard is November 16. The Decision is in line with what CalCCA and Pioneer have been advocating for. There are a few deviations.
• The CPUC agrees with the Joint IOUs and Cal Advocates that CCAs with BioMAT programs should develop a standard template for reporting forecasted costs and to submit them in Tier 2 Advice Letters to seek Commission approval.

The practice of submitting a standard template to maintain consistency in reporting and efficiency in review should also be applied to the creation and design of balancing accounts and NBC rates.
• The CPUC agrees with the Joint IOUs that CCAs must purchase attributes based on MPBs, as calculated in the IOUs’ NBC methodology, true-up attribute costs in balancing accounts, bid and schedule PPAs in the CAISO market, and be directed not to resell them. Joint CCAs also concur with Cal Advocates’ recommendation for BioMAT projects to be counted as RA and RPS resources and therefore comply with RA and RPS requirements. These requirements 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update include but are not limited to reporting RA resources to the Commission and CAISO, and accounting of RPS-eligible projects in RPS forecasts and procurement plans.
• Since AB 843 only permits recovery of BioMAT PPA and associated environmental costs, beyond those vendor platform integration costs associated with Accion IT services procurement and independent third-party administration required of this Decision, the CPUC does not authorize CCAs to recover additional BioMAT administrative costs through IOU NBCs. It also does not grant authority for CCAs to receive load share MTR credits from CCA BioMAT resources that counts towards MTR requirements. This request should be considered in the IRP Rulemaking, R.20-05-003.
• On a positive side, the CPUC talked about the environmental benefits of CCAs participation in the BioMAT program.Based upon a review of party comments, joint CCAs find that the CCA BioMAT program has the potential to enhance local air quality through diversion of organic wastes, including but not limited to forest and agricultural residues, from landfills or uncontrolled combustion to their use as biofuels to generate electricity.

Demand Flexibility:
• On July 14, 2022, the Commission issued an OIR to begin this proceeding to establish demand flexibility policies and modify electric rates to advance the following objectives: 1) enhance the reliability of California’s electric system; 2) make electric bills more affordable and equitable; 3) reduce the curtailment of renewable energy and greenhouse gas emissions associated with meeting the state’s future system load; 4) enable widespread electrification of buildings and transportation to meet the state’s climate goals; 5) reduce long-term system costs through more efficient pricing of electricity; and 6) to enable participation in demand flexibility by both bundled and unbundled customers. • As part of this Proceeding, legislation passed last summer gave the CPUC the authority to approve a pricing structure that incorporates an Income Based Graduated Fixed Electricity Charge (IGFC). The changes would restructure customers' bills into two parts: first the fixed charge which pays for the grid (infrastructure improvements, wildfire mitigation efforts, settling wildfire lawsuits, and providing assistance to low-income customers, etc.), and second the costs of the volumetric amount of electricity customers use. The objective is to lessen the burden of electrical rates on lower income customers as the fixed charge would be the lowest for low-income customers and the volumetric rate would be lower than it is currently. The fixed charge would be in the mid-range for middle-income earners and the highest for high-income earners. • There are several proposals by parties and outstanding issues regarding these proposals: how will income be verified, would lower volumetric rates discourage 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update energy efficiency efforts, would the IGFC encourage electrification, what would the impacts be for solar customers, among others.
• On July 31, 2023, parties submitted Comments on the IGFC Implementation Pathways considering the ALJ Ruling’s questions. CalCCA reviewed the Comments and submitted Reply Comments on August 21, 2023 to refute parties arguments regarding including the PCIA or Competitive Transition Charge (CTC) as fixed costs eligible for inclusion in the IGFC. Additionally, CalCCA responded to further support its proposal that CCAs should be involved in marketing and implementation working groups for IGFC development. Specifically Reply Comments argue: 1) that the CPUC should define fixed costs eligible for the IGFC as costs that do not vary with electricity consumption to clear up any remaining confusion in this proceeding; 2) The CPUC should not consider generation costs as eligible fixed costs for the IGFC as it would require untenable and administratively burdensome processes like restructuring the PCIA and other generation rate components; 3) The CPUC should provide the opportunity for CCAs to provide input in the marketing, education, outreach, and implementation working groups to maximize customer understanding and acceptance of bill changes related to the IGFC.
• The IGFC should be authorized by July 1, 2024 and could go into effect in 2026.
• Track A (IGFC) – CalCCA is drafting an opening brief to exclude PCIA and to request inclusion of the CCA’s involvement with the IOUs in the implementation.

CalCCA is submitting Reply Comments on the expansion of the pilot programs to support the budgets submitted by VCE and 3CE.
• Track B – the deadline was extended from October 2 to October 11, 2023.

Net Billing Tariff (NBT):
• This Proceeding created a successor Program to NEM 2.0 to address some of the identified issues with the existing Program. The objective is to increase equity and eliminate cost shifts onto lower income customers who are subsidizing, to some degree, residential solar owners. The Proposed Decision (PD) was voted out unanimously at the December 15, 2022 Commission Voting Meeting and new solar customers that sign up after April 14, 2023 will be placed on NBT.
• On August 2, 2023, the CPUC issued a Proposed Decision on the remaining issues in the NBT proceeding, including virtual NEM, enhanced consumer protection, and fuel cell participation. The NBT Joint CCA billing group is working to require IOUs to work with CCAs on billing presentment confusion issues and how bills will be displayed and explained. Comments on the August 2, 2023 PD were filed on August 8, 2023 by Joint CCAs: SDCP, PCE, Pioneer, SCP, RCEA, and SJCE. The comments argued that the Proposed Decision, with some 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update adjustments, can improve bill clarity for NEM customers and future NBT customers. The Joint CCAs agree with the Commission that further stakeholder processes on bill presentment are needed to improve customer understanding of NBT bills. As part of the Commission’s suggested approach for improving bill presentment, the Commission should direct parties to consider bill presentment issues for unbundled customers. The CCAs request that the CPUC amend the Proposed Decision to include a collaborative process with the IOUs. The Joint CCAs urge the Commission to keep the record open to allow the Commission to address bill presentment questions that arise during implementation. • A California appeals court will hear a lawsuit seeking to overturn the CPUC’s rooftop solar decision which significantly reduced the credits customers receive.

Customers would no longer be credited at the retail rate of electricity when their systems generate excess energy but be paid at the “actual avoided cost.” Critics of NBT/NEM 3.0 say that it will undercut the incentive for customers to install solar on their homes and businesses.
• There was a letter signed by members of the Legislature on the NEM program for agricultural users.
• Joint CCAs have held some meetings with the CPUC, and President Reynolds recommended to take up NBT issues with the Energy Division.

PG&E ERRA Compliance and ERRA Forecast:
• The ERRA Proceedings act as a review of an IOU’s prior year portfolio management and accounting and seeks to identify errors and discrepancies between PG&E’s revenue requirements vis-à-vis collected revenues through the IOUs’ General Rate Case (GRC) which ultimately affects CCA rates through the Power Charge Indifference Adjustment (PCIA).
• 2024 PG&E ERRA Forecast: PG&E’s 2023 – 2024 ERRA Forecast and Testimony came out on May 15, 2023. NewGen sent over the new rate forecast spreadsheet on June 1, 2023. The forecast looks good with the PCIA remaining negative over many vintages, but this will change before the October Update.

Keyes and Fox filed a Protest to PG&E's Forecast Application on June 16, 2023. • On August 10, CalCCA filed a Protest to PG&E’s ERRA Trigger Application proposing a rate increase in November to correct and account for under-collections. • Also being considered in this Proceeding are the IOUs’ “fixed generation costs” – fixed generation costs are costs paid by bundled customers as customers depart to CCAs. In a hypothetical scenario where there is “the last bundled customer,” how would these costs be dealt with? CCAs are concerned that the ALJ Ruling seeking comments on fixed generation costs may be an invitation to include as many of these costs as possible into a new nonbypassable charge for CCA customers and the potential for relitigating the PCIA Rulemaking within an 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update expedited ERRA Forecast Proceeding in which there is a de facto prohibition on policymaking. As such, CalCCA recommends that dealing with fixed generation costs requires a second phase to the Proceeding. CalCCA also needs an appropriate definition of these costs and to know if these costs are the same for all the IOUs. CalCCA also asks if these costs will be accounted for in a manner different from current practices and at what threshold of remaining bundled customers should the CPUC consider alternatives to cost recovery mechanisms, including the divestment of utility owned generation assets by selling them in the open market.
• CalCCA provided Testimony on the 2024 PG&E ERRA Forecast case on September 6, 2023 and touched upon the fixed generation cost issue. • There is currently a $947 million under collection in the PABA account which would result in an increase in PCIA rates relative to what was filed by 1 cent to 1 and a half cents compared to today. It will be somewhat mitigated by bundled customers who will also have to pay this. PABA for 2023 is going to push PCIA rates up. This would impact January 2024 rates.
• One of the Joint CCAs’ contested issues: PG&E's proposal to change the allocation of its ESA costs, which would have resulted in the allocation of more of those costs to the PCIA, will no longer be addressed in this phase of the Forecast Proceeding. It will be addressed in Phase two of the Proceeding. This is a very favorable outcome.

Resource Adequacy:
• On May 25, 2023, the CPUC issued a PD barring non-compliant LSEs from expansion for two calendar years following a system RA deficiency. CalCCA filed Opening Comments on June 14, 2023 and Replies on June 19, 2023. • CalCCA’s comments recommended that the Commission fully reject the PD’s restrictions on LSE expansion due to RA deficiencies, and also to modify the RA deficiency penalty clarifications.
• On June 27, 2023, a Redlined PD was issued. The revisions included: adopting a one percent minimum threshold for RA deficiencies that would limit CCA expansions; clarifying that if an LSE “cures” its year-ahead RA deficiency in the month-ahead timeframe, the year-ahead deficiency will not be applied to the expansion requirement. The PD was adopted by the Commission at their June 29, 2023 Voting Meeting.
• Subsequently, in late July 2023, CalCCA and CCCE filed two Applications for Rehearing (AfR) of the decision to limit CCA expansion for two years due to uncured RA deficiencies. CalCCA’s PfR cited a lack of CPUC statutory authority to limit CCA expansion, and that it gives itself new unauthorized powers to needlessly discriminate against CCAs to prevent their growth; it also asserted, that without credible evidence, the CPUC determined that addition of new CCA 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update load would be detrimental to grid reliability, and that the decision violates the CPUC’s legal requirement to apply RA enforcement measures in a nondiscriminatory manner, not just to CCAs. The CPUC’s deadline for a response has passed, and CalCCA filed a Petition for Writ of Review of Resolution E-5258 and D.23-08-052 over the decision. The Petition was filed on October 5, 2023 with the First Appellate District.
• The latest decision was issued on 9/5. The decision modifies Resolution E-5258 to add additional facts and support for the Commission’s finding that CCCE’s and EBCE’s past RA deficiencies provided sufficient evidence to suggest that future cost shifting would occur if CCCE and EBCE were to expand their respective service areas in 2024. In all other respects, the rehearing decision upholds Resolution E-5258 and provides legal support for the findings and conclusions made in the Resolution Energy Division hosted a workshop on September 7, 2023 to demonstrate and answer questions on the SOD showings tool LSEs will use to make their RA showing under slice-of-day beginning for the test year. Energy Division will host Office Hours, in which parties can submit questions and comments beforehand and Energy Division will respond. Office hours are tentatively scheduled for September 21, October 19, November 16, 2023. Submit questions three days prior to the office hour. CalCCA tiger team is working to come up with questions for ED for these office hour meetings. • On September 19, 2023, PG&E and SCE submitted their annual CPE reports.

PG&E is short RA for all months - up to 4,400 MW.

Utility Deenergization, PSPS, and EPSS:
• Pioneer staff is leading an effort among Joint CCAs and other stakeholders asking the CPUC for the consideration of PG&E’s Enhanced Powerline Safety Settings (EPSS) issues in the Deenergization or its own Proceeding. Pioneer, along with Joint CCAs, Joint Local Governments, and Rural County Representatives of California (RCRC), filed a motion with the CPUC on July 12, 2022, to consider EPSS issues in the Deenergization or its own Proceeding. The arguments in the motion are to treat EPSS events with the same regulations and oversight as Public Safety Power Shutoff (PSPS) events. • The Joint Parties and CCAs recently provided feedback with the Office of Energy Infrastructure Safety at the California Natural Resources Agency which has oversight on PG&E’s Revised 2023-2025 Wildfire Mitigation Plan (WMP). The feedback recommended further addressing issues with the EPSS program in the WMP and argued that PG&E must perform system hardening and infrastructure improvements to reduce the risk, number, frequency, and duration of EPSS outages.
• The CPUC approved a PSPS citation program, at their September 21, 2023 voting meeting, for violations of the established PSPS guidelines. 2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update • PG&E provided a post PSPS report for their August 30-31, 2023 PSPS event that affected eight counties in northern California. A total of 3,928 customers were deenergized.
• YTD 2023 Fast Trip Outages in Pioneer Service Territory: 125 separate outages in 2023 through August in Pioneer Territory.
• Causes of outages:
o The most common cause of the outages is “unknown causes” (45 outages or 36%).
o 22 outages were the result of equipment failure.
o 10 are company initiated.
• Placerville 2106 has had 13 outages this year.
o Total time until power restored was 5,895 minutes or just over 98 hours.
o The same circuit had 7 outages last year.
• Apple Hill 2102 has had 12 outages.
o Total time until power restored was 3,074 minutes.
• Pioneer has had 7 different circuits with 6 or more outages this year. • The longest single outage was Foresthill 1101 which was out for 1,189 minutes.
• Pioneer had 4 different circuits with a single outage over 1,000 minutes or 16 hours
• Comparison with 2022 Fast Trip Outages:
• Last year Pioneer had 141 separate outages.
• Last year Pioneer had 9 separate circuits with at least 6 outages. • Last year Pioneer had 12 outages that were due to equipment failure and 50 were from unknown causes, or 35.

Provider of Last Resort (POLR):
• This OIR will implement Provider of Last Resort (POLR) requirements directed by SB 520 and will establish cost allocation and recovery for the POLR. • Phase 1: IOUs as the POLR seeks to:
• Establish new policies to plan for and prevent catastrophic failures in the event of an unplanned return en masse of CCA customers to IOU service. • Review and update existing procedures and policies for Financial Security Requirements (FSR), reentry fees, and LSE deregistration process and compliance requirements.
• Address last-minute procurement in which market conditions have led to a shortfall of resource capacity that could put the POLR at risk and increase the cost to returning customers and bundled customers.
• Advance indicators of financial instability that could help provide orderly, less costly transitions to the POLR.
2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update • CalCCA's Reply Briefs were submitted on July 31, 2023 and address PG&E’s proposal to modify the FSR to reflect two months of forecast energy costs, other parties recommendations on elements of the existing FSR calculation, mandatory contract assignments, financial monitoring, and the duration of POLR service.
• This proceeding is expected to have a decision and an outcome by the end of 2023. CalCCA is waiting for that expected PD. In anticipation of the PD, CalCCA will be holding ex partes with CPUC Commissioners' Offices to reiterate CalCCA’s position on financial monitoring to limit monitoring to LSEs for only those that are at financial risk of failure and to deny PG&E's proposal that the FSR be based on two months of energy costs. CalCCA has circulated their slide deck of issues to be discussed at the ex parte meetings.

CEC Load Management Standards (LMS):
• LMS/MIDAS: Joint IOUs and CCAs sought an extension of the July 1, 2023 MIDAS rate data upload deadline once the CEC finalizes the MIDAS protocols.

They sought to delay the requirement by nine months. This request was denied by the CEC. Ultimately, the CEC only allowed a minimal extension of the rate upload deadline to August 1, 2023 and additional uploads by October 1, 2023. • Pioneer, through Calpine, uploaded its rates by the August 1, 2023 deadline and will continue to work with Calpine on uploading all time dependent rates by the October 1, 2023 deadline. By April 1, 2024, all CCAs are required to file their plan for compliance with all LMS regulations.
• The Joint IOUs filed a response to the guidance document for uploading rate modifiers. They believe it is not feasible nor cost effective. For the CCAs that have uploaded their rate adders, the CEC is asking for a list of RINs.

Microgrids Rulemaking/Microgrid Multi-Property Tariff:
• Track 5 of the Microgrids Rulemaking is considering issues related to a microgrid multi-property tariff. The issues to be determined or otherwise considered are: 1) What guiding principles should the Commission adopt to assist in the development of a microgrid multi-property tariff? 2) Whether PG&E should modify its Community Microgrid Enablement Tariff for the purposes of a statewide microgrid multi-property tariff. 3) Whether PG&E, SCE, and SDG&E should form a single, unified multi-property tariff for statewide application.

Should this single, unified multi-property tariff be modeled from PG&E’s Community Microgrid Enablement Tariff? 4) To what extent should a single, unified microgrid multi-property tariff align with or impact environmental and social justice communities; including the extent to which it could impact achievement of the Commission’s Environmental and Social Justice Action Plan goals?
2510 Warren Drive, Suite B, Rocklin, CA 95677 (916) 758-8969 PioneerCommunityEnergy.org October 19, 2023 – Pioneer Community Energy Legislative and Regulatory Update • On July 31, 2023, PG&E submitted its Community Microgrid Enablement Tariff into the record of this proceeding. An ALJ Ruling issued on August 8, 2023 ordered PG&E, SCE, and SDG&E to develop and submit into the record a pro-forma Standard Multi-Property Microgrid Tariff, and any necessary utility-specific deviations, that is based on PG&E's Community Microgrid Enablement Tariff. On October 9, 2023, the pro-forma Standard Multi-Property Microgrid Tariff was submitted into the record of this proceeding. In response to the IOUs’ proposed tariffs the Joint CCAs, including Pioneer, will submit comments.

Opening Comments on the IOUs’ pro-forma Standard Multi-Property Microgrid Tariff, and any necessary utility-specific deviations, will be filed on October 27, 2023. Reply Comments will be filed on November 10, 2023.

Marketing and Outreach Report
October 19, 2023
Notable Accomplishments
Outreach activity for Pioneer Community Energy’s expansion into Grass Valley and Nevada City is effectively engaging our new community members. We saw increases in
impressions, website activity and chatbot activity as a result of mailers and paid social, digital and newsprint ads.

Notably:
• Nearly 8,400 visitors engaged with our chatbot this
month (up from 5,800);
• Paid impressions grew to more than 1.5 M, an increase of 2,900%;
• New visitors to our website increased from 5,200 to 7,500 September Highlights
• Our Grass Valley and Nevada City expansion
customers received two of our four planned marketing
mailers. The first mailer was an introduction to Pioneer; the most recent mailer focuses on Green100 and the
value Pioneer brings to the community. Both mailers
highlight glowing recommendations from our customer
testimonial video series.
• Plans are well underway for the 5-Year Anniversary
party, scheduled for 5:00 p.m. on Wednesday, November 1, at the Blue Goose in Loomis. We look forward to seeing
our current and former Board members, partners, and
community members who have supported Pioneer
during the past five years. Cheers!
• Newsprint Ads
− Ads are running weekly in
multiple publications of
The Union newspaper.
− ~15,000 circulation
• Radio
− Ads are running on
hyper-local KVMR radio,
which broadcasts to over
50,000 listeners.
• Mailer sent to residents,
businesses, multifamily
properties, mobile homes, and
mobile home parks
• Paid Digital Advertising
Google, paid social media and
banner ads with YubaNet are
running. Google and paid social
ads target our service area by zip
code and demographics of 18+
male and female.
• Google
− 840,147 impressions
− 4,332 clicks
• Paid Social Media
− 406,036 impressions
− 2,422 clicks
• YubaNet
− 341,726 impressions
− 85 clicks
All of these efforts drive people to the
expansion webpage, which continues
to be the second most-visited page
on the site. This is great news, and
it shows that people are continuing
to return to the site for updated
information.

Soon, you’ll have a choice in energy
options with Pioneer Community Energy
Learn more at
PioneerCommunityEnergy.org/residential
or by calling (916) 758 - 8969.

Expansion
Our team continues to engage with and educate future customers and position Pioneer as the premier choice for stable and competitive electricity rates in Nevada City and Grass Valley, as well as offering options for building a sustainable clean energy future. The following items were completed in September:
18,786
100% of
total
7,720
100% of
total
Pioneer
Community
Energy |
Residential
3,853 2,350
Pioneer
Community
Energy |
Coming soon
to Grass Valley
& Nevada City
2,883 1,430
Pioneer
Community
Energy
2,559 1,725
400
300
200
100
0 August: 5,800 September: 8,379
Expansion Mailers
Our Grass Valley and Nevada City expansion
customers have received two of our four planned
marketing mailers geared toward familiarizing these
communities with Pioneer. The required regulatory
mailings are scheduled to be delivered in November.

Expansion Mailer - 1
Expansion Mailer - 2
Integrating Digital Channels
Our chatbot continues to consistently reduce the monthly volume of calls to our call center by approximately 10%.

This month, the number of chatbot user sessions jumped
from 5,800 to 8,379.

Events Held or Attended
• How to Save Money webinar
• Solar webinar
• Auburn Senior Center Field Day
• GO 156 Supplier Diversity En Banc
• Nevada City Rotary Club
Pioneer is a locally owned not-for-profit electricity provider, powering the unincorporated regions of Placer and El
Dorado counties and the incorporated areas of Auburn,
Colfax, Lincoln, Placerville, Rocklin and Loomis.

Effective January 2024, Grass Valley and Nevada City
homes and businesses will be automatically enrolled in
Pioneer’s service.

This choice helps customers save money, supports local
economic development, and offers an exclusive 100%
renewable energy option for customers who choose it.

Since our beginning in 2018, we have saved our customers $85 million – and those savings are reinvested in the
communities we serve.

Pioneer presents an outstanding alternative to PG&E. We operate for the benefit of the communities we serve — not to enrich corporate shareholders. With a Board of Directors that is composed of local leaders and a Community
Advisory Committee with customers from throughout
the region, our customers have a voice in shaping the
programs created to meet unique community needs.

Please take a moment to review the information
in this mailer. Our team is ready to answer any
questions you may have and can be reached at
[email protected].

We’re Excited to Meet
You and Make Your
Priorities Our Priorities
Pioneer has made a commitment to be among the most affordable Community Choice Aggregation (CCA) electricity providers in California. Since 2018, we have saved our customers $85 million. As part of this commitment to savings, we offer Grass Valley and Nevada City customers electricity rates with an average savings of 15% compared with PG&E’s generation rates.

We Make It Easy to Enjoy Savings
“We appreciate Pioneer partnering
with the Auburn Senior Center to
provide our seniors with in-person
workshops so that they can
understand their utility bills and
reduce their electricity costs.”
Lindsay Arfsten
Executive Director, Auburn Senior Center
For residential, business or municipal
customers that want renewable energy
as an electricity option, Pioneer is
pleased to offer Green100, the only
100% renewable energy option in our
area. Participation in the Green100
program is voluntary and affordable,
and customers can select this option
at any time. Green100 is currently more
affordable than PG&E’s standard rate.

We Offer the Only 100%
Renewable Energy Option
In the Region
Solar Customers Benefit With Pioneer
Learn more
about going solar
“I added rooftop solar in 2012 … I chose to
remain with Pioneer Community Energy…
I save money on the power I draw from
the grid.”
Glen Kramer
Auburn Resident,
Solar Customer
youtube.com/watch?v=XXj4gLmTtsE
(916) 758-8969 | PioneerCommunityEnergy.org
Website
Pioneer continues to see growth in the activity on our website.

Website Data
• Visits from Grass Valley IP addresses doubled this month, and visitors from Nevada City continue to increase.
• New general awareness paid media ads are driving
people to our “Residential” page. The visits to this page increased by 229% and made it our most-visited page.

Organic Search
Direct
Display
Paid Search
Organic Social
0 500 1K 1.5K 2K
Social Media
• Posts with the greatest reach on our
channels included photos of staff
participating at local events, customer
testimonial videos and content about
expansion-related topics.
− 71,581 Impressions
− 621 Clicks
− 11,552 Video Views
Strategic Plan
Quarterly Progress Report
October 19, 2023
Local Engagement
Objective Description
Current
Quarter
Prior
Quarter Comments

1.1 Reinforce community listening channels by increasing engagement with current, returning, and future customers. Achieve a 92% participation rate by Dec. 31, 2023 Pioneer will continue to focus on awareness through paid media and physical presence in the community. 2023 has been a 'blitz' of activity in outreach with the expectation of building trust which improves the participation.

1.2 Residents and businesses are the backbone of our communities. Pioneer will work to strengthen comprehensive relationships, which includes engaging the top 20 commercial and industrial customers in each county we serve by June 30, 2022 Commercial & Industrial accounts comprise 40% of Pioneer's revenues. Pioneer does have a Key Accounts Manager who focuses specifically on the business accounts.

Pioneer has a strong participation rate with business accounts that is above 93% overall with a near 98% in the large users (>750,000 kWh).

1.3 Launch a Community Program Advisory Committee ("CPAC") in 2021 The Committee launched in late 2021. A final report by the Committee was received by the Governing Board in December 2022.

1.4 Pioneer staff will increase the organization's presence within the communities we serve by participation in local events
Staff has been very active in 2023 by being present in the community by participating in events such as the El Dorado County Fair and Auburn Home Show or through customer engagements.

1.5 Grow engagement and reach of communications channels and ensure all platforms are providing engagement opportunities for residents and local businesses a. In 2022, increase social media presence and following on Facebook by 400% Pioneer has invested resources to improve awareness through all media channels. The investments have provided staff with valuable feedback, significant increase in traffic to the website and enhanced our brand.
b. Conduct an annual customer survey in winter 2022
A survey was launched in late 2022. The results were shared with the Board in Spring 2023.
c. Increase presence in El Dorado County through targeted social media and digital ad buys
The residential sector in El Dorado County is the lowest participation rate amongst our Members. Staff continues to focus on all media channels.

Quality in Service
Objective Description Status
Prior
Quarter Comments

2.1 Maintain the trust and responsiveness Pioneer customers expect in their service experiences
a. Ensure quick response times to customer service inquiries Customer service response times will be enhanced with the hiring of our Customer Care Coordinator.
b. Monitor and evaluate Calpine call center and billing services performance quarterly Staff monitors our call center with Calpine to ensure customer service is timely and accurate.

2.2 Keep Pioneer's rates competitive through policies and programs that ensure stability and a choice in power
a. Commit to a policy that strengthens Pioneer's response to rate volatility in the energy market by Dec. 31, 2021
The Board adopted policies in late 2021 that provided the foundation for financial stability of Pioneer. Since those policies have been adopted the Board has adopted a balance approach to ratemaking which supports savings for our ratepayers and financial stability for Pioneer.
b. Develop cost-effective, grid-resilient product to increase access for the business community members interested in joining Pioneer
This process has been slow as internal resources are not available to support this.

However, staff is proposing a Sr. Quantitative Manager position in the FY 23-24 budget that would provide a resource to start exploring opportunities. Staff delivered an SB1383 compliance solution that helped six of our member agencies with compliance.

2.3 Prioritize community programs and develop new service programs by Dec. 31, 2022 a. Begin exploring economic development rates to incentivize businesses to move to the territory, using subsidized rates that benefit the community Work towards this will begin as we approach our cash reserves target. However, our current rates position offering between 15%-19.5% discount compared to PG&E's generation rate is a strong bridge until a more formal economic development program is established.
b. Explore rate programs that incentive local solar and biomass project development The Community Advisory Committee is preparing program options while staff collaborates with the CPUC to move AB843 legislation forward to begin the development of local biomass projects.

Employer of Choice
Objective Description Status
Prior
Quarter Comments

3.1 Conduct a biennial compensation and benefits study to ensure competitive wages and enhance employee retention
The biennial compensation study was completed in 2022. The study showed most positions are competitively compensated. Recommendations from the study were implemented through the FY 2023/24 budget process.

3.2 Uphold Pioneer's company culture through internal communication channels and team engagement opportunities
a. Conduct an annual all-staff survey
The annual survey was conducted in Q1 of 2023. The results of the survey assisted in shaping up future employee health and welfare enhancements. Many recommendations from the survey are reflected in the FY 23-24 budget.
b. The next quarterly team building event will be April 19th. Quarterly team building events have been occurring. Next one is scheduled in December. c. Invest in employee professional development pathways Professional development of staff is important to Pioneer's competitiveness. Funding is included in the budget including a Tuition and Professional Development policy presented to staff in early 2023.

Operational Excellence
Objective Description Status
Prior
Quarter Comments

4.1 Continue grid resiliency efforts to mitigate Public Safety Power Shutoff ("PSPS") events in our communities
There were no PSPS events in our territory in 2022 but staff has been active in teaming with other CCA's to apply pressure to PG&E through the CPUC to improve the communications to customers on EPSS which are short-term but more frequent shut-off events that have particularly impacted our El Dorado County territory. Staff presented was part of a larger coalition at a workshop in March to alert the CPUC of the impact of these events and provide oversight in their application. The results of the workshop will lead to further discussions.

4.2 Position our business portfolio to be capable of diversification through the development of one biomass project
Staff has signed an MOU with a project developer for a biomass project located at the Western Placer Waste Management Authority. Other potential sites and projects are being considered. The delay is the CPUC in implementation of AB843.

4.3 Diversify Pioneer's energy procurement by issuing requests for proposals to potential partners to procure energy at "least cost, best fit" for the portfolio Staff completed negotiations for a solar + storage long-term power purchase agreement ("PPA") with NextEra Energy earlier this year. Pioneer also concluded negotiations with Goldman Sachs end of 2022 for the execution of a power prepay transaction that when fully subscribed will reduce our power cost by $2.8 million annually.

4.4 Target diversification of Pioneer's power source portfolio through procurement with regional suppliers
Pioneer prioritizes power supply from regional projects when the power is available and it makes economic sense. The long-term PPA with El Dorado Irrigation District is a recent example with local biomass projects in the works for 2022.

4.5 Maintain zero customer data breach incidents through investment in information technology resources
a. Conduct annual IT cybersecurity audits and improve employee cybersecurity awareness through training and consistent messaging
Protecting our customer data is of upmost importance to Pioneer. Pioneer performed extremely well in the triennial AMI audit in 2022 and conducts annual cybersecurity audits to ensure our systems, assets and policies are current. Results of this years audit will be presented to the Board in May/June.

Financial Stability & Strategic
Growth
Objective Description Status
Prior
Quarter Comments

5.1 Pursue expansion opportunities with like-minded communities by initiating conversations with leadership within the jurisdictions
The CPUC approved Pioneer's addendum to the implementation plan and statement of intent in February approving the city of Grass Valley and Nevada City to the JPA with service expected to begin in January 2024. .

5.2 Build policies and procedures that facilitate the growth of our service area Pioneer has been active with Nevada County on expansion. The Impact Assessment Study did not support the expansion but a strong foundation is in place for next year.

5.3 Implement policies that support the achievement of cash reserve targets The Board approved rate changes for 2023 that balances savings for our ratepayers while building reserves. Pioneer continues to make progress towards its reserve targets.

5.4 Achieve an investment grade credit rating
It is recommended to begin communications with the rating agencies once Pioneer is near 160 expense coverage days. Staff is beginning the process end of this year.

5.5 Maintain participation in legislative and regulatory proceedings that positively impact the Power Charge Indifference Adjustment ("PCIA") rate, advocate for cost saving legislation and regulations and work to hold PG&E accountable through legislation Staff continues to work with the CPUC in the implementation of AB843 that supports local biomass projects. Staff is also weaving through the legislative process to ultimately achieve approval of two bills that further supports biomass development. The 2023 legislative platform will be presented to the Board in April.

Page | 1
Pioneer Community Energy
Glossary of Terms
CAISO - California Independent System Operator - a non-profit independent system operator that oversees the operation of the California bulk electric power system, transmission lines and electricity market generated and transmitted by its members (~80% of California's electric flow). Its stated mission is to "operate the grid reliably and efficiently, provide fair and open transmission access, promote environmental stewardship and facilitate
effective markets and promote infrastructure development. CAISO is regulated by FERC and governed by a five-member governing board appointed by the governor.

CALCCA - California Community Choice Association -Association made up of Community Choice Aggregation {CCA) groups which represents the interests of California's community choice electricity providers.

CARB - California Air Resources Board - The CARB is charged with protecting the public from the harmful effects of air pollution and developing programs and actions to fight climate change in California.

CEC- California Energy Commission
CPUC - California Public Utility Commission
C&I - Commercial and Industrial - Business customers
CP - Compliance Period -Time period to become RPS compliant, set by the CPUC {California Public Utilities Commission)
DA- Direct Access - An option that allows eligible customers to purchase their electricity directly from third party providers known as Electric Service Providers (ESP).

DA Cap- the maximum amount of electric usage that may be allocated to Direct Access customers in California, or more specifically, within an Investor-Owned Utility service territory.

DA Lottery - a random drawing by which DA waitlist customers become eligible to enroll in DA service under the currently-applicable Direct Access Cap.

DA Waitlist - customers that have officially registered their interest in becoming a DA customer but are not yet able to enroll in service because of DA cap limitations.

DAC - Disadvantaged Community
DASR - Direct Access Service Request - Request submitted by C&I to become direct access eligible.

Page | 2
Demand - The rate at which electric energy is delivered to or by a system or part of a system, generally expressed in kilowatts {kW), megawatts {MW), or gigawatts {GW), at a given instant or averaged over any designated interval of time. Demand should not be confused with Load or Energy.

DER - Distributed Energy Resource -A small-scale physical or virtual asset {e.g., EV charger, smart thermostat, behind-the-meter solar/storage, energy efficiency) that operates locally and is connected to a larger power grid at the distribution level.

Distribution - The delivery of electricity to the retail customer's home or business through low voltage distribution lines.

DLAP- Default Load Aggregation Point- In the CAISO's electricity optimization model, DLAP is the node at which all bids for demand should be submitted and settled. Pioneer settles its CAISO load at the PG&E DLAP as Pioneer is in the PG&E transmission access charge area.

DR - Demand Response - An opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives.

DWR - Department of Water Resources - DWR manages California's water resources, systems, and infrastructure in a responsible, sustainable way.

ELCC- Effective Load Carrying Capacity -The additional load met by an incremental generator while maintaining the same level of system reliability. For solar and wind resources the ELCC is the amount of capacity which can be counted for Resource Adequacy purposes.

EPIC - Electric Program Investment Charge -The EPIC program was created by the CPUC to support investments in clean energy technologies that provide benefits to the electricity ratepayers of PG&E, San Diego Gas & Electric Company {SDG&E), and Southern California Edison Company {SCE) ERRA - Energy Resource Recovery Account - ERRA proceedings are used to determine fuel and purchased power costs which can be recovered in rates. The utilities do not earn a rate of return on these costs, and only recover actual costs. The costs are forecast for the year ahead. If the actual costs are lower than forecast, then the utility gives money back, and vice versa.

ESP- Energy Service Provider - An energy entity that provides service to a retail or end-use customer.

EV - Electric Vehicle
GHG - Greenhouse gas - water vapor, carbon dioxide, tropospheric ozone, nitrous oxide, methane, and chlorofluorocarbons (CFCs). A gas that causes the atmosphere to trap heat radiating from the earth. The most common GHG is Carbon Dioxide, though Methane and others have this effect as well.

Page | 3
GRC- General Rate Case - Proceedings used to address the costs of operating and maintaining the utility system and the allocation of those costs among customer classes. For California's three large IOUs, the GRCs are parsed into two phases. Phase I of a GRC determines the total amount the utility is authorized to collect, while Phase II determines the share of the cost each customer class is responsible and the rate schedules for each class. Each large electric utility files a GRC application every three years for review by the Public Advocates Office and interested parties and approval by the CPUC.

GWh - Gigawatt-hour - The unit of energy equal to that expended in one hour at a rate of one billion watts. One GWh equals 1,000 megawatt-hours.

IEP - Independent Energy Producers - California's oldest and leading nonprofit trade association, representing the interest of developers and operators of independent energy facilities and independent power marketers.

IOU - Investor Owned Utility- A private electricity and natural gas provider.

IRP- Integrated Resource Plan -A plan which outlines an electric utility's resource needs in order to meet expected electricity demand long-term.
kW - Kilowatt - Measure of power where power (watts)= voltage (volts) x amperage (amps) and 1 kW= 1000 watts
kWh - Kilowatt-hour - This is a measure of consumption. It is the amount of electricity that is used over some period of time, typically a one-month period for billing purposes. Customers are charged a rate per kWh of electricity used.

LCFS- Low Carbon Fuel Standard -A CARB program designed to encourage the use of cleaner low-carbon fuels in California, encourage the production of those fuels, and therefore, reduce greenhouse gas emissions.

LCR - Local (RA) Capacity Requirements -The amount of Resource Adequacy capacity required to be demonstrated in a specific location or zone.

LMP - Locational Marginal Price - Each generator unit and load pocket is assigned a node in the CAISO optimization model. The model will assign a LMP to the node in both the day- ahead and real time market as it balances the system using the least cost. The LMP is comprised of three components: the marginal cost of energy, congestion, and losses. The LMP is used to financially settle transactions in the CAISO.

Load - An end use device or customer that receives power from an energy delivery system. Load should not be confused with Demand, which is the measure of power that a load receives or requires.

See Demand.

Page | 4
SE - Load-serving Entity- Entities that have been granted authority by state, local law, or regulation to serve their own load directly through wholesale energy purchases and have chosen to exercise that authority.

NEM - Net Energy Metering -A program in which solar customers receive credit for excess electricity generated by solar panels.

NRDC- Natural Resources Defense Council
OIR - Order Instituting Rulemaking - A procedural document that is issued by the CPUC to start a formal proceeding. A draft OIR is issued for comment by interested parties and made final by vote of the five Commissioners of the CPUC.

MW - Megawatt - measure of power. A megawatt equals 1,000 kilowatts or 1 million watts.

MWH - Megawatt-hour- measure of energy
NP-15 - North Path 15 - NP-15 is a CAISO pricing zone usually used to approximate wholesale electricity prices in northern California in PG&E's service territory.

PCCl - RPS Portfolio Content Category 1- Bundled renewables where the energy and REC are dynamically scheduled into a California Balancing Authority (CBA) such as the CAISO. Also known as "in-state" renewables.

PCC2 - RPS Portfolio Content Category 2 - Bundled renewables where the energy and REC are from out-of-state and not dynamically scheduled to a CBA.

PCC3 - RPS Portfolio Content Category 3 - Unbundled REC PCIA or "exit fee" - Power Charge Indifference Adjustment (PCIA) is an "exit fee" based on stranded costs of utility generation set by the California Public Utilities Commission. It is calculated annually and assessed to customers of CCAs and paid to the IOU that lost those customers as a result of the formation of a CCA.

PCL - Power Content Label - A user-friendly way of displaying information to California consumers about the energy resources used to generate the electricity they sell, as required by AB 162 (Statue of 2009) and Senate Bill 1305 (Statutes of 1997).

PD- Proposed Decision -A procedural document in a CPUC Rulemaking process that is formally commented on by Parties to the proceeding. A PD is a precursor to a final Decision voted on by the five Commissioners of the CPUC.

Pnode - Pricing Node - In the CAISO optimization model, it is a point where a physical injection or withdrawal of energy is modeled and for which a LMP is calculated.

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PPA- Power Purchase Agreement -A contract used to purchase the energy, capacity, and attributes from a renewable resource project.

RA - Resource Adequacy - Under its Resource Adequacy (RA) program, the California Public Utilities Commission (CPUC) requires load-serving entities-both independently owned utilities and electric service providers-to demonstrate in both monthly and annual filings that they have purchased capacity commitments of no less than 115% of their peak loads.

RE - Renewable Energy - Energy from a source that is not depleted when used, such as wind or solar power.

REC - Renewable Energy Certificate - A REC is the property right to the environmental benefits associated with generating renewable electricity. For instance, homeowners who generate solar electricity are credited with 1 solar REC for every MWh of electricity they produce. Utilities obligated to fulfill an RPS requirement can purchase these RECs on the open market.

RPS - Renewable Portfolio Standard - Law that requires CA utilities and other load serving entities (including CCAs) to provide an escalating percentage of CA qualified renewable power (culminating at 33% by 2020) in their annual energy portfolio.

SCE - Southern California Edison
SDG&E - San Diego Gas & Electric
SGIP - Self-Generation Incentive Program - A program which provides incentives to support existing, new, and emerging distributed energy resources (storage, wind turbines, waste heat to power technologies, etc.)
TCR EPS Protocol - The Climate Registry Electric Power Sector Protocol - Online tools and resources provided by The Climate Registry to assist organizations to measure, report, and reduce carbon emissions.

Time-of-Use (TOU) Rates - The pricing of delivered electricity based on the estimated cost of electricity during a particular time-block. Time-of-use rates are usually divided into three or four time-blocks per 24-hour period (on-peak, mid-peak, off-peak and sometimes super off peak) and by seasons of the year (summer and winter). Real time pricing differs from TOU rates in that it is based on actual (as opposed to forecasted) prices that may fluctuate many times a day and are weather sensitive, rather than varying with a fixed schedule.

TURN - The Utility Reform Network - A ratepayer advocacy group charged with ensuring that California IOUs implement just and reasonable rates.

Unbundled RECs - Renewable energy certificates that verify a purchase of a MWH unit of renewable power where the actual power and the certificate are "unbundled" and sold to different buyers.

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VPP - Virtual Power Plant - A cloud-based network that leverages an aggregation of distributed energy resources (DERs) to shift energy demand or provide services to the grid. For example, thousands of EV chargers could charge at a slower speed and hundreds of home batteries could discharge to the grid during a demand peak to significantly reduce the procurement of traditional supply resources.

Pioneer Community Energy Board of DirectorsOctober 19, 2023

Pioneer Community Energy Board of Directors
October 19, 2023