Board of
Directors
Regular Meeting
June 23, 2022
2 Regular
Meeting
Agenda
Welcome
Call to Order
Pledge of Allegiance
Roll Call
Items to be Added, Withdrawn, or Reordered on the Agenda Public Comment for Items Not on the Agenda
Consent Agenda
Regular Agenda Items:
9. Consideration of SDCP Mission, Vision, Core Values and Goals for 2023-2027
10.Approval of FY 2023 Operating Budget
11.Approval of SDG&E Modified Cost Allocation Mechanism (mCAM) Resource Adequacy Transaction
Reports by Management and General Counsel
Director Comments
Adjournment
3 Roll
Call
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT on
the
Agenda
7 Consent
Agenda
1. Approval of Findings to Continue Holding
Remote/Teleconference Meetings Pursuant to Assembly
Bill 361
2. Receive and File Treasurer’s Report for Period Ending 4/30/22
3. Approval of Amendment to Professional Services
Agreement with Maher Accountancy for up to $223,000
for services in FY2023
4. Approval of Amendment to Professional Services
Agreement with Tosdal APC for up to $314,000 for Legal
and Regulatory Services in FY2023.
5. Approval of Amendment to Professional Services
Agreement with Keys & Fox, LLP for up to $250,000 for
Legal Services in FY2023.
6. Update on Regulatory and Legislative Affairs
7. Update on Back Office Metrics/Dashboard
8. Approval of Community Advisory Committee (CAC)
Reappointment of Members for Terms Ending in 2022
8 Item 9
Consideration of SDCP Mission, Vision, Core Values
and Goals for 2023-2027
Recommendation:
Discuss and consider approval of SDCP Mission,
Vision, Core Values and Goals for 2023-2027 as
identified at the June 11, 2022 Board Workshop
and Strategic Planning Session.
Presenter:
Karin Burns
Chief Executive Officer
Strategic Planning
Presentation
Consideration of SDCP Mission,
Vision, Core Values & Goals
2023 – 2027
June 23, 2022
Karin L Burns, CEO
10 Our Purpose
Vision
Mission
Core Values
Key Focus Areas
Organizational Goals & Objectives
Implementation & Monitoring
Develop the mission,
vision, core values
and key organizational
focus areas
Introduction and Process Overview
Proposed SDCP
Mission Statement
San Diego Community Power
is a community-owned
organization that provides
affordable clean energy and
invests in the community to
create an equitable and
sustainable future for the San
Diego region.
Proposed SDCP
Vision Statement
A global leader inspiring
innovative solutions to
climate change by
powering our communities
with 100% clean affordable
energy while prioritizing
equity, sustainability, and
high-quality jobs.
14 Proposed
Core Values
15 Proposed
Core
Values
Justice, Equity, Diversity, &
Inclusion (JEDI)
Impact
Integrity
Innovation
Servant Leadership
Togetherness
Core Values – The ‘JIST’ of SDCP
16 Core Values Cont’d
1. Justice, Equity, Diversity and Inclusion • We prioritize inclusivity and champion environmental justice.
• We believe we are stronger together and it is
important to have a team that represents
our diverse communities through a lens of equity.
• We are intentional about inclusion and
collaboration.
2. Impact • We will be 100% renewable and
consider environmental impact in all decisions.
• We are committed to making an impact by reducing
GHGs while prioritizing our communities’ needs.
3. Integrity • We value and encourage mutual transparency and respect.
• We report to the people we serve. We respect each
other and our communities.
17 Core Values Cont’d
4. Innovation • We are proactive in our approach to innovation. • Inspire creativity • We recognize we are doing something that has not been done before.
• We believe in the creation of an organization fueled
on innovative and sustainable solutions.
5. Servant Leadership • We will demonstrate leadership in sustainability by constantly pursuing an innovative approach.
• We believe that climate change is a generational
challenge. We believe community choice energy is
our way to affect change and make a
positive difference.
• We are intentional in our mission to serve our
communities.
• We are stewards of the environment,
our communities, and each other.
• We strive for excellence in all we do.
18 Core Values Cont’d
6. Togetherness • We value, respect, and empower all people at the table in this transition.
• We will value customers by being
approachable, transparent, and responsive.
• Ensure community empowerment through
transparency and accountability.
• Community Empowerment (Notes) • Inclusivity and champion environment justice • Innovative and sustainable solutions • We are together in our mission to serve our communities.
Proposed
Key Focus Areas &
Organizational Goals
Financial Stability
Practice fiscal strategies to
promote long-term organizational
sustainability
21 GOALS
Adopt financial controls and policies to meet or
exceed best practices and manage risk.
Obtain an investment grade credit rating by Nov
2025.
Adopt plan to increase reserves to $175M by
10/2023 (90 DCOH) and $360M by 10/2025 (180
DCOH).
Develop Rate Stabilization Reserve of $70M to
mitigate power cost fluctuations and economic
downturns.
Energy
Portfolio Development
Provide sufficient, reasonably
priced, clean electricity to our
customers
23 GOALS
Manage portfolio to manage risk, cost, and reliability objectives through risk management tools, sufficient staffing, and staff training.
Develop secure Clean Energy Portfolio with goals of 50% RE (2022), 75% (2027), 85% (2030), and 100% (2035).
15% of our energy coming from new, distributed infill storage/solar+ storage resources in Member Agencies by 2035. 600MW of new Local Wholesale Energy and/or Battery Storage Projects (utility scale projects within San Diego and Imperial counties) by 2035
Support development of innovative energy sources to improve resiliency through pilot programs, grant programs, and
partnerships.
Create high quality local jobs in renewable energy that support healthy families and vibrant communities.
Community Program
Delivery
Implement energy projects and programs
that reduce greenhouse gas emissions,
align energy supply and demand, and
provide benefits to community
stakeholder groups
25 GOALS
Implement CPP recommended programs through
continuous community engagement and assessment
of community benefits while considering technology/
market changes and changing community needs.
Invest in programs that target underserved
communities (communities of concern) and are
distributed throughout our Member Agencies.
Invest in programs that promote residential and
commercial solar, infill solar and/or distributed battery storage.
Develop local support for deep decarbonization
through building and transportation electrification.
26 GOALS
(Continued)
Develop workforce opportunities in the local clean
energy economy (green careers).
Support local government and state initiatives to
advance decarbonization in alignment with
Member Agency Climate Action Plans.
Provide all customers with actionable clean
energy education.
Maintain appropriate and sufficient data sources
to support smart program design, implementation
and evaluation.
Marketing/Branding
(Trusted Brand Building)
Develop trusted brand reputation to
help drive participation in programs
and support customer service
and retention
28 GOALS
Identify and address gaps between perception
and desired brand identity.
Translate policy issues into consumer-friendly information and communication. Become known as leadership experts on the
CCA model and the industry.
Foster relationships with city planning offices, CBOs, NGOs, and Trade Associations.
Develop relationships with industry media
and influencers.
Engage community through participation in
local events.
Legislative/Regulatory
Advocate for public policies
that advance
SDCP organizational priorities
30 GOALS
Proactively educate and engage policymakers to
develop policies that support SDCP’s organizational
priorities, including advocacy around PCIA reductions.
Sponsor and support legislation and regulation that
is consistent with SDCP’s mission, vision, and goals.
Develop annual legislative plan to advance and support SDCP objectives and share with local Senate and Assembly members and staff.
Develop plan to meet more proactively with and educate key decisionmakers (e.g. CEC, CPUC commissioners).
Coordination with Member Agency government affairs’ teams to align on legislative positions.
Continue to be an active participant in CalCCA and develop partnerships and coalitions to advance SDCP’s policy
and legislative agenda through CalCCA efforts.
Customer Service
Ensure high customer retention
and satisfaction
32 GOALS
Ensure customer satisfaction through
key relationships including back-office support
and key stakeholders.
Continually strive to offer competitive rates.
Maintain and grow high levels of customer
participation and satisfaction.
Achieve 10% of our load at the Power 100 service
level by 2027.
Build a robust data ecosystem for effective
procurement, including program design,
management & evaluation.
Organizational Development
& Excellence
Ensure excellence by adopting sustainable
business practices and fostering a workplace
culture of innovation, diversity,
transparency and integrity
34 GOALS
Create an organizational culture of inclusion, mutual respect, trust, innovation, and collaboration that
upholds organization's core values.
Develop an annual staffing plan that identifies and
addresses resource needs and gaps.
Provide training and professional development
opportunities that build new skills and abilities.
Foster culture of innovation to yield solutions that
accelerate our mission and drive toward SDCP’s vision.
Design & implement an internal program that attracts
workforce from our member cities and
creates opportunities for candidates new to CCAs and
the industry.
Build institutional capacity of CAC to support the
mission and core goals of SDCP.
35 Item 9
Consideration of SDCP Mission, Vision, Core Values
and Goals for 2023-2027
Recommendation:
Discuss and consider approval of SDCP Mission,
Vision, Core Values and Goals for 2023-2027 as
identified at the June 11, 2022 Board Workshop
and Strategic Planning Session.
Presenter:
Karin Burns
Chief Executive Officer
36 Item 10
Approval of FY 2023 Operating Budget
Recommendation:
Approve the FY2023 Operating Budget
Presenter:
Eric Washington
Chief Financial Officer
Budget Development for FY 2022-23
The schedule for budget development is the following.
Develop Operating
Revenue Estimate
Develop Operating
Expense Estimate
Develop financial
plan for credit rating
in 3-years
February March-April
Staff develop
operating budgets
Baseline budget is
developed
May
Strategic planning
sessions with SDCP
Board
SDCP Board Preview
(Presentation)
June
Financial and Risk
Management
Committee Review
SDCP Board Approval
July 1st Budget
Implemented
Mid-year budget
review (February)
Budget amendments
as necessary
38 • Focus on community programs by
staffing up our Programs team and
launching initial pilot programs.
• Phase 4 enrollment of the County of
San Diego and National City during the
first half of calendar year 2023.
• Continued outreach through community
events, sponsorships and advertising
to inform customers about SDCP.
• High cost of energy with continued
increases in forward electricity prices.
Budget - Highlights
39 Budget – Summary
Ratepayer
Revenue (Net),
$716M (99%of
GR)
FY 23 Operating Budget
Revenue Projection
Cost of Energy,
661M (93% of
Total Expense)
Personn
el, …
Profession
al … Programs, $1M, General and Administrative 0% ,
$3M, 0%
FY 23 Operating Budget
Expense Projection
Item FY 23 Proposed
Budget, $M
FY 22 Amended,
$M
Gross Revenue 716.1 380.8
Less Uncollectible Accounts (7.2) (2.7)
Net Revenue 709.0 378.1
Cost of Energy 661.6 329.5
Non-Energy Costs 33.0 11.7
Subtotal Operating Expense 694.6 341.1
Debt Service 1.3 0.7
Total Expense 695.9 341.9
Net Position 13.0 36.1
Cumulative Net Position 49.1 36.1
Days Cash on Hand 35.6 38.6
40 Budget – Changes since 5/26 Board Meeting
Item 5/26 Board
Meeting, $M
6/23 Board
Meeting, $M
Net Change Update
Net Revenue 689.2 709.0 19.8ERRA reduction removed due to higher energy costs
Cost of Energy 641.9 661.6 19.7Forward market prices continue to increase since May 2022
Interest and Related Expense 6.3 1.3 (5.0)Principal payments offset by restricted cash Professional Services and
Consultants 17.0 16.8 (0.2)Reclass programs consultant to Programs Personnel Costs 7.5 8.0 0.5Administrative adjustments. Two positions added related to data analytics (database).
General and Administration 2.5 2.6 0.1Minor addition related to software/database procurement.
Programs 0.7 1.4 0.7Reclass programs consultant. Add’l community engagement resulting from strategic planning.
Marketing and Outreach 4.1 4.2 0.1Minor addition to sponsorships related to the Community Power plan.
Total 3.9
41 Item FY 23 Proposed Budget,
$M
FY 22 Amended,
$M
Gross Revenue 716.1 380.8
Net Revenue 709.0 378.1
Subtotal Operating Expense 694.6 341.1
Total Expense 695.9 341.9
Net Position 13.0 36.1
Days Cash on Hand 35.6
Budget – Reserves
SDCP will allocate up to 15% of gross
revenue annually toward building an
Operating/Working Capital Reserve
equivalent to 90 days of total operating
expenses held as unrestricted cash.
90-Day Total Reserve Goal
Goal
FY23 Reserves
Year-end
Goal
(90-Days)
$173.7 m
FY22
$36.1 m
SDCP is projected to hit 28.2% of its
90-day reserve target in FY23
FY23
$13.0 m
Total
(35.6 days cash on hand w/ LOC)
$49.1 m
42 Budget – Current Projection
36.1 13.0
26.7 63.4 109.4
0 100
200
300
400
500
600
700
800
900
1,000
1,100
FY22 FY23 FY24 FY25 FY26
90-Day
Threshold
180-Day
Threshold
$M
Operating Budget, $M FY22 FY23 FY24 FY25 FY26
Net Revenue 378.1 709.0 872.7 910.7 949.6
Total Expense 341.9 695.9 854.8 856.5 849.8
Annual Reserve (Net Income) 36.1 13.0 26.7 63.4 109.4
Reserves (Cumulative Net Surplus) 36.1 49.1 213.8 277.2 386.6 90-Day Expense Target 85.5 173.7 213.7 214.1 212.5
180-Day Expense 171.0 347.4 427.4 428.3 424.9
43 Budget – Reserve Comparison
Central Coast
Community
Energy
S&P (‘A’ Issuer Credit
Rating)
Maintains a minimum reserve balance
equal to 30% of total operating
budget expenditures, with a goal of
increasing the reserve to 50% of
total op budget expenditures. The
maximum reserve is 75% of total
operating budget expenditures.
180 days
Of Operating
Expense
$179.3m
FY22 Operating
Expense
Marin Clean
Energy
Fitch (BBB+/Stable)
Staff will carefully monitor MCE’s
liquidity to ensure it meets the
objectives of the organization with the
goal of securing 240 days liquidity on
hand (includes lines of credit).
240 days
Of Operating
Expense
$295.9m
FY22 Operating
Expense
Peninsula Clean
Energy
Fitch (BBB+/Stable)
PCE will maintain an Operating /
Working Capital Reserve equal to one
hundred eighty (180) days of total
operating expenses.
180 days
Of Operating
Expense
$120.9m
FY22 Operating
Expense
SD Community
Power
SDCP will allocate up to 15% of gross
revenue annually toward building an
Operating/Working Capital Reserve
equivalent to 90 days of total
operating expenses.
90 days
Of Operating
Expense
$173.7m
FY23 Operating
Expense
Contingencies • Power supply shocks
• Maintain rate competition
• economic downturns
Reserves help with:
Cash Availability
• Used to bridge temporary low
levels of cash
Interest • Avoids interest expense with
borrowing debt
Credit Rating • Favorable terms with vendors
• Helps with issuing debt
(bonds, commercial paper…)
44 Budget – Personnel
Department
FY23
Proposed
Budget, $M
Current
Positions
Proposed
Positions
Power Services 1.74 2 8
Programs 0.85 2 7
Operations 1.46 4 6
Data Analytics and
Account Services 1.10 3 6
External Affairs 0.95 3 6
Finance 1.19 2 4
Regulatory Affairs 0.7 3 3
Total 7.95 19 40
Budget increases Power Services
team to 8 total positions
Provides redundancy in SDCP’s largest
expense category
Currently 2 filled positions
3 positions in active recruitment
Budget increases Programs team to 7
total positions
Sets Programs team to be ready
after Community Power Plan
Expect full recovery of 2 positions
from DAC GT-CSGT program
Budget funds key positions to authorize
full hiring by January 2023 subject to
actual recruitment.
Budget generally increases positions to
levels similar to other CCAs in
California.
45 Budget – Personnel
Department
SDCP
(Proposed)
Marin Clean
Energy
Clean Power
Alliance
East Bay
Community
Energy
Peninsula
Clean Energy
Central Coast
Com. Energy
Power Services 8 4 9 4 5 3
Programs 7 16 4 7 6 6
Operations 6 5 6 6 4 5
Data Analytics and
Account Services 6 10 5 7 5 4
External Affairs 6 13 6 6 7 4
Finance 4 4 6 2 2 2
Regulatory Affairs 3 10 3 6 6 3
Total 40 62 39 38 35 27
46 Budget – Personnel
22 FTE
$0.39 m
23 FTE
$0.41 m
36 FTE
$0.64 m
37 FTE
$0.65 m
40 FTE
$0.72 m
Position additions occur over time with
recruitment expected starting on July 1st.
Jul 2022 Sep 2022 Oct 2022 Nov 2022 Jan 2023
Costs above reflect monthly total personnel costs at the time a position is added.
The hiring strategy assumes SDCP will achieve full staffing by January 2023. This is a conservative estimate given current hiring timelines and the potential for attrition.
47 Budget – CCA Comparison
Community Choice
Aggregator
Years Est.
(JPA eff.
Date)
Customer
Accounts*
Cost of
Energy, $M**
Non-Energy
Costs, $M
Net
Ratepayer
Revenue, $M
Energy
Costs/Net
Revenue (%)
Clean Power Alliance Jun 2017 972,500 834.28 32.665 895.25 93% San Diego Community
Power Oct 2019 931,675 661.64 33.983*** 708.98 93%
East Bay Community Energy Dec 2016 613,263 442.34 37.757 499.70 89% Marin Clean Energy Dec 2008 470,000 410.70 49.436 483.96 85% Central Coast Community
Energy Mar 2018 296,000 326.30 32.179 351.53 93%
Peninsula Clean Energy Feb 2016 296,000 216.70 24.994 222.24 98% *Customer accounts from CalCCA as of October 2021, SDCP customer accounts are projected as of April 2023 **Cost of energy, non-energy costs and ratepayer revenue are from FY22 adopted budgets. SDCP costs and revenue are from its proposed FY23 budget. ***SDCP includes debt service costs of $1.3M whereas most other CCAs do have minimal or zero debt service costs. 48 Budget by Category
Revenue
Cost of Energy
Includes Phase 1 through Phase
3. Phase 4 starts in 2023.
Assumes hedging as of June
2022 and forward prices for the
remaining, unhedged energy.
FY23
100.0%
FY23
93.3%
Professional
Services
Personnel
Marketing and
Outreach
General and
Administrative
FY23
$709.0m
FY23
$661.6m
Data Management and SDG&E
fees comprise majority.
FY23
2.4%
FY23
$16.9m
14 new staff and 2 interns - Power Services to 8 staff and Programs to 7 staff.
FY23
1.1%
FY23
$8.0m
Mandatory enrollment notices,
communication consultants,
mailers, printing, sponsorships.
FY23
0.6%
FY23
$4.2m
Office space, equipment,
membership dues, and other
general operational costs.
FY23
0.4%
FY23
$2.6m
Net Position
+13.0m
% of Net FY23 Revenues
Programs Initial pilot programs launch and
other community-based program efforts.
FY23
0.2%
FY23
$1.4m
Interest and
Related Exp.
Repayment of loan principle,
interest costs and potential
renewal fees or letters of credit.
FY23
0.2%
FY23
$1.3m
Proposed FY 2022-23 Budget - Highlights
49 Budget – Next Steps
• Budget book released with
additional detail.
• July 1st – Budget Implemented
• Mid-Year Budget Review (Feb)
• Budget amendments as
necessary
• .
50 Item 10
Presentation of the Fiscal Year (FY) 2023
Operating Budget
Recommendation: Recommend Board approval
of the FY 2023 Operating
Presenter:
Dr. Eric Washington,
Chief Financial Officer
51 Item 11
Approval of SDG&E Modified Cost Allocation
Mechanism (mCAM) Resource Adequacy
Transaction
Recommendation:
Approve the SDG&E Modified Cost Allocation
Mechanism (mCAM) Resource Adequacy
Transaction.
Presenter:
Byron Vosburg
Managing Director Power Services
52 SDG&E mCAM RA Transaction
Background:
•CPUC Integrated Resource Planning (IRP) Proceeding
•Modified Cost Allocation Mechanism (MCAM)
•Decision 19-11-016 ordered procurement of 3300 MW of System Resource Adequacy (RA)
•LSEs serving load shared procurement responsibility
•SDCP not yet serving load
•Cost recovery and other issues to be addressed in future decision •MCAM Decision approved May 19, 2022 requires SDG&E to enter into agreement to sell SDCP its share of resources
53 SDG&E mCAM RA Transaction
Proposed Transaction:
• SDCP to buy its load share (~35%) of SDG&E’s contracted capacity • 35% is based on SDCP’s 2022 load share
• SDG&E’s total obligation is 293 MW, required to be online by 2023 • Due to delays, SDCP’s share expected to be:
• ~50 MW in 2022
• ~75+ in 2023
• up to ~102 MW if/when all SDG&E resources are online
• Contract Start: Sept 1, 2022
• Term: Through expiration of SDG&E’s upstream contracts (~2037) • Price: CPUC Market Price Benchmark for RA
• Resources: Various energy storage, renewable energy, and natural gas 54 Item 11
Approval of SDG&E Modified Cost Allocation
Mechanism (mCAM) Resource Adequacy
Transaction
Recommendation:
Approve the SDG&E Modified Cost Allocation
Mechanism (mCAM) Resource Adequacy
Transaction.
Presenter:
Byron Vosburg
Managing Director Power Services
Reports by
Management &
General Counsel
Director
Comments
Adjournment
Board of
Directors
Next Regular Meeting
Thursday, July 28, 2022