Board of
Directors
Special and
Regular Meeting
January 20, 2022
2 Special
Meeting
Agenda
Call to Order
Roll Call
Action Item
1. Approval of Findings to Continue Holding Remote/Teleconference Meetings Pursuant to Assembly Bill 361.
Public Comments on Closed Session Items
Closed Session
2. Public Employee Appointment Pursuant to Government Code Section 54957
Title: Chief Executive Officer
3. Conference with Labor Negotiators Pursuant to Government Code Section 54957.6
Agency designated representative(s): Cindy Krebs, Alliance Resource Consulting
Unrepresented employee: Chief Executive Officer
Report from Closed Session
Adjournment
3 Closed
Session
Closed Session
2. Public Employee Appointment Pursuant
to Government Code Section 54957
Title: Chief Executive Officer
3. Conference with Labor Negotiators
Pursuant to Government Code Section
54957.6
Agency designated representative(s):
Cindy Krebs, Alliance Resource Consulting
Unrepresented employee: Chief Executive
Officer
4 Special
Meeting
Agenda
Report from Closed Session
Adjournment
5 Regular
Meeting
Agenda
Welcome
Call to Order
Pledge of Allegiance
Ceremonial Oath of Office
Roll Call
Report from Closed Session
Items to be Added, Withdrawn, or Reordered on the Agenda Public Comment for Items Not on the Agenda
Consent Agenda
Regular Agenda Items:
9. Election of Chair and Vice Chair for Calendar Year 2022
10.Approval of 2022 Rates
11.Update on CEO Search Ad Hoc Committee Efforts
Reports by Management and General Counsel
Director Comments
Adjournment
6 Oath of Office
Councilmember from the
City of San Diego
8 Regular
Meeting
Agenda
Roll Call
Report from Closed Session
Items to be Added, Withdrawn or
Reordered on the Agenda
Non-Agenda Public Comments
10 Consent
Agenda
1. Approval of September 23, 2021 Meeting Minutes
2. Receive and File Treasurer’s Report for Period
Ending 11/30/2021
3. Receive and File 6/30/2021 Fiscal Year End
Audited Financial Statement
4. Appointment of Director LaCava to the Finance
and Risk Management Committee
5. Update on Back Office Metrics/Dashboard
6. Update on Regulatory and Legislative Affairs
7. Update on Community Advisory Committee
8. Update on Residential Enrollment Public
Relations
11 Item 9:
Election of Chair and Vice Chair for Calendar
Year 2022
Presenter:
Chair Mosca
12 Approval of 2022 Rates to be effective
February 1, 2022
Recommendation: Approve the rates contained
in Attachment A to be effective as of February 1,
2022.
Item 10:
Presenter:
Cody Hooven, Chief Operating Officer
Lucas Utouh, Director of Data Analytics and
Account Services
13 Rate Setting Process
Steps
• Guiding principles
• Timeline
• What’s changed?
• Pro forma analysis – no change and proposal
• Projected bill comparisons and assessment of ratepayer equity • Adoption of proposed rates
14 Guiding Principles
Key Considerations
1. Determine costs
• Power costs
• Renewable and system power contracts
• Resource Adequacy
• Operations
• Staffing, professional services, marketing, etc.
• Programs – Community Power Plan, Feed-in tariff, community solar, etc. • Credit/bank obligations
• Reserves
2. Customer Value
• Quality – higher renewables at competitive costs
• Stability – consider future years
• Communication – ensuring transparency in rates and products for customers • Future enrollments – 2023 new customers
3. Compare to SDG&E
• Ensure competitiveness in cost and quality
15 2021/2022 Rates Timeline
April
2021
June
2021
Aug.
2021
Nov.
2021
Dec.
2021
Jan.
2022
Feb.
2022
Board adopted
rates, effective
June 1
SDCP expanded
service to Phase
2 customers
Board review of
2022 rate
expectations
Board adopts
2022 rates
SDG&E rate
change
SDG&E submits
application for
its 2022 Electric
Sales Forecast
SDG&E rate
change;
SDG&E files Nov.
update to 2022
ERRA Forecast
Application;
2021 ERRA
balance still
outstanding
CPUC approved
SDG&E’s 2022
ERRA Forecast
Application
SDG&E 2022
rates and PCIA
effective Jan. 1
SDCP rates
effective Feb. 1
16 $-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
On-Peak Power Prices for Summer 2022 (SP-15 Forwards)
What’s Changed
Market prices increased causing rates to increase across utilities and CCAs 17 Pro Forma Analysis
Fiscal impact with no rate change
• Projected revenues of $353.6M for
fiscal year ending June 30, 2022.
• Net surplus for FY22 is $579K and a
(- $31M) Net Deficit in FY23
• Cash flow negative in some months
• Loss of confidence from creditors
Scenario 0: No Rate Change
Annual Pro Forma Projections
Year Ending: 2022 2023 2024 2025 2026
I. Revenue
Base Retail Revenue 351,557,466 552,120,233 676,319,949 679,701,548 683,100,056 Power100 Premium 2,055,952 3,384,750 4,153,561 4,174,329 4,195,201 Subtotal Operating Revenue 353,613,418 555,504,983 680,473,510 683,875,878 687,295,257 II. Operating Expenses
Power Supply 321,943,425 556,402,001 621,732,417 610,162,174 605,073,341 Staff 4,500,000 4,635,000 4,774,050 4,917,272 5,064,790 Professional/Technical services 843,483 941,194 1,007,560 1,031,853 1,056,845 Legal 300,000 309,000 318,270 327,818 337,653
Communications, Mktg, Enrollment 3,371,116 1,768,444 2,045,190 2,067,749 2,090,791 Other General and Administrative 420,000 432,600 445,578 458,945 472,714 Regulatory and CalCCA Fees 895,000 921,850 949,506 977,991 1,007,330 Data Management 1,670,376 8,975,759 11,494,481 11,666,041 11,724,371 Utility Service Fees 803,581 3,328,677 4,122,141 4,267,034 4,417,020 Uncollectibles/Other 1,673,735 2,888,573 3,234,446 3,179,384 3,156,224 Subtotal Operating Expenses 336,420,716 580,603,098 650,123,638 639,056,261 634,401,079 Operating Margin 17,192,703 (25,098,115) 30,349,872 44,819,616 52,894,178 III. Financing
Interest 686,256 572,377 436,054 296,283 152,978
Principal 2,202,120 5,379,529 5,515,569 5,655,049 5,798,057 Reserve Contribution - - - - -
Subtotal Financing 2,888,376 5,951,906 5,951,623 5,951,332 5,951,034 Operating Margin Less Financing 14,304,326 (31,050,021) 24,398,249 38,868,284 46,943,144 IV. Cash From Financing - - - - -
V. Other Uses
CPUC and CAISO Deposits - - - - -
Collateral Deposits 13,725,000 - - - -
Subtotal Other Uses 13,725,000 - - - -
VI. Net Surplus/(Deficit) 579,326 (31,050,021) 24,398,249 38,868,284 46,943,144 18 Pro Forma Analysis
Fiscal impact of proposed rates
• Projected revenues of $386.7 million
during the current fiscal year ending
June 30, 2022.
• Net surplus for FY22 is $29.5M (7.65%
reserve)
• Cash flow positive
• Reserve target of operating/working
capital of 90 days cash on hand (policy
adopted June 24, 2021)
FY2022
(No Rate Change)
FY2022
(Proposed Rate Change)
Gross Revenues $353,613,418 $386,707,472
Oper. Expenses $337,106,972 $341,209,566
Net Surplus/(Deficit) $579,326 $29,570,787
Cumulative Reserve
Amount $579,326 $30,150,113
Gross Rev. Reserves % 0.16% 7.65%
19 Projected Bill Comparison – Vintage 2020
Small Commercial
*PCIA and Franchise fees are included in SDG&E’s generation costs Ave. monthly usage: 7806 kWh
Current Rates Effective: Proposed Rates Effective:
6/1/2021 11/1/2021 2/1/2022 1/1/2022
Rate: TOU-M (Small Commercial) SDCP SDG&E SDCP SDG&E SDCP Discount Generation $576.69 $861.68 $661.68 $956.11 -
*PCIA $247.13 $251.43 -
*Franchise Fees $18.48 $22.52 -
Total Generation Related Charges $842.30 $861.68 $935.63 $956.11 -2% SDG&E Delivery $1,136.26 $1,136.26 $1,263.65 $1,263.65 - TOTAL AVERAGE MONTHLY BILL $1,978.56 $1,997.94 $2,199.28 $2,219.76 -1% Total Bill Change Since 11/2021 11% 11%
Total Bill Change Since 6/2021 11% 13%
20 Projected Bill Comparison – Vintage 2021
Residential
*PCIA and Franchise fees are included in SDG&E’s generation costs Ave. monthly usage: 447 kWh
Current Rates Effective: Proposed Rates Effective:
6/1/2021 11/1/2021 2/1/2022 1/1/2022
Rate: DR (Residential) SDCP SDG&E SDCP SDG&E SDCP Discount Generation $35.73 $54.67 $54.52 $70.49 -
*PCIA $16.85 $12.67 -
*Franchise Fees $1.45 $1.77 -
Total Generation Related Charges $54.03 $54.67 $68.96 $70.49 -2% SDG&E Delivery $92.05 $92.05 $99.12 $99.12 -
TOTAL AVERAGE MONTHLY BILL $146.08 $146.72 $168.08 $169.61 -1% Total Bill Change Since 11/2021 15% 16%
Total Bill Change Since 6/2021 15% 20%
21 Bifurcation of Rates by Vintage
• 2022/Phase 3 customers will be assessed a
different PCIA by SDG&E than Phase 1 and
2 customers because they are different
“vintage” years
• Two sets of rates are needed in 2022 to
balance this
• Bifurcation will maintain a fair, equitable,
and balanced rate structure for all
customers
22 Summary of Proposed Rates
How does SDCP compare to SDG&E?
• Savings are maintained or increased from 1% to 2%
• Higher renewable content (50% SDCP vs 31% SDG&E)
• Power100 significantly lower cost than SDG&E’s EcoChoice • Community Power Plan and other customer programs underway • 2022 contributions towards reserves maintain financial stability • Prepares for 2023 expected market/costs shifts and unexpected costs • Satisfies credit obligations
23 Item 11:
Update on CEO Search Ad Hoc Committee
Efforts
Presenter:
Cindy Krebs, Alliance Resource Consulting
24 Regular
Meeting
Agenda
Reports by Management and
General Counsel
Director Comments
Adjournment
Board of
Directors
Next Regular Meeting
February 24, 2022