Finance & Risk
Management
Committee
Meeting
May 16, 2024
Welcome
&
Call to
Order
Roll
Call
4 Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
Regular
Meeting
Agenda
Welcome
Roll Call
Items to be Added, Withdrawn or Reordered on
the Agenda
Public Comment for items Not on the Agenda
REGULAR AGENDA
2. Review of Treasurer’s Report for Period Ending March 31, 2024
3. Presentation and Discussion of the FY 2024-25 Operating Budget
4. Recommend Board Approval of Power100 Green-e Certified Service Committee Member Announcements
Adjournment
8 Item 1
Approval of April 11, 2024, Meeting Minutes
Recommendation:
Approve April 11, 2024, Meeting Minutes
Presenter:
Sandra Vences
Assistant Clerk of the Board
Public
Comment
for Item 1
10 Item 1
Recommendation:
Approve April 11, 2024, Meeting Minutes
11 Item 2
Treasurer’s Report for Period Ending 3/31/24
Recommendation: Receive and File Treasurer’s
Report for Period Ending 3/31/24
Presenter:
Dr. Eric Washington,
Chief Financial Officer
12 Results for the period underperformed overall
compared to the adopted budget:
• Net operating revenues 6.0 percentage
points under budget.
• Operating expenses came in 4.0
percentage points under budget
Financial results for the YTD FY24:
• $998.84M in net operating revenues
• $810.67M in total expenses (includes
energy costs of $790.83M or 79% of net
revenues)
• $188.17M change in YTD net position
Item 2: Treasurer’s Report
YTD FY24 Budget v. Actual
Budget Comparison
YTD FY24 as of
03/31/24 (9 mos)
FY24 YTD
Amended Budget
Budget Variance
($) Budget (%)
Net Operating Revenues $ 998,841,535 $ 1,064,910,269 $ (66,068,734) 94% Total Expenses $ 810,669,218 $ 842,219,623 $ (31,550,405) 96% Change in Net Position $ 188,172,317 $ 222,690,646 $ (34,518,329) -16% $-
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY24 Results v. Budget
YTD FY24 as of 03/31/24 (9 mos) FY24 YTD Amended Budget 13 $M $100M $200M $300M
Item 2: Treasurer’s Report
$502M
Total Liquidity
FY 2023-24 YTD
$0M
Outstanding
Debt
FY 2023-24 YTD
$188M
Reserve
Contribution
FY 2023-24 YTD
74%
Percent Reserve
Goal Met
FY 2023-24
CONTRIBUTION RESERVES
GOAL DEBT
Reserve contribution
for the fiscal year
Outstanding loans
FY24 YTD
Total available liquidity
FY24 YTD
$525M 180-DCOH
Reserve Target FY24
$188M Actual
FYTD $223 Budget
FYTD
Reserve Contribution
$M $20M $40M $60M
LOC $0
M
$M $200M $400M $600M
$389M
Cash
$113
LOC $614M
Cash
74%
Unmet
Reserves
26%
14 Item 2: Treasurer’s Report
133
Days
Cash on Hand
172
Days
Cash on Hand with
Total Liquidity
$168.3M $158.9M $159.7M $180.0M
$237.1M
$318.7M
$382.7M
$432.2M $434.1M $462.8M
$482.6M $496.3M $501.5M
22%
23%
24%
35%
25%
40%
52%
67%
65%
71%
75%
78%
74%
$0.0M
$100.0M
$200.0M
$300.0M
$400.0M
$500.0M
$600.0M
3/31/20234/30/20235/31/20236/30/20237/31/20238/31/20239/30/2023 10/31/202311/30/202312/31/2023
1/31/20242/29/20243/31/2024
Rolling 12 Month Reserves FY 2023-24
Unrestricted Cash Lines of Credit Reserve Goal Total Reserves FY24 RESERVE GOAL: $525.0M
15 Item 2: Treasurer’s Report
Public
Comment
for Item 2
17 Item 2
Recommendation:
Receive and File Treasurer’s Report for Period
Ending 3/31/24
18 Item 3
Presentation and Discussion of the FY 2024-25
Operating Budget
Recommendation:
Receive staff presentation on the preliminary
proposed FY 2024-25 Operating Budget.
Presenter:
Dr. Eric Washington,
Chief Financial Officer
19 Budget Highlights
Thoughtfully scales the agency by adding
24 staff to grow to 80 total staff.
Continued outreach through community
events, sponsorships and advertising to raise public awareness of SDCP. Rescoping Professional Services
Operating
Budget Development for FY 2024-25
The Board adopted 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
Strategic planning
sessions with SDCP
Board
Staff develop
operating budgets
Baseline budget is
developed
May
Financial and Risk
Management
Committee Review
SDCP Board Preview
(Information Item)
June
Financial and Risk
Management
Committee Review
SDCP Board Approval
July 1st Budget
Implemented
Mid-year budget
review (February)
Budget amendments
as necessary
21 Budget Principles for FY 2024-25
• Maintain a fiscally responsible and sustainable
budget.
• Maintain sufficient funds and reserves to
sustain operations while considering future
economic conditions.
• Provide an easier to understand and user-friendly operating budget for both internal and external users.
• Develop budget within framework of public-agency guidelines and best practices. • Engage the SDCP Board, constituent groups,
and the public in the budget process and inform
them about sustainable energy needs.
• Keep the SDCP Board of Directors and Executive
Team informed on the fiscal condition of SDCP.
• Develop a budget that will ultimately prioritize
people, transparency, and our communities.
22 Draft Budget – Summary
Item FY 24 Amended
Budget, $M
FY 25 Draft Budget,
$M
Gross Revenue 1,365.7 1,223.9
Less Uncollectible Accounts (61.5) (55.1)
Net Revenue 1,304.3 1,168.8
Cost of Energy 1,020.8 1,059.1
Non-Energy Costs 43.8 54.1
Subtotal Operating Expense 1,064.6 1,113.2
Debt Service 2.4 2.5
Capital Investment Plan 3.9 10.3
Total Expense 1,071.0 1,126.0
Net Position 233.3 42.8
Cumulative Net Position 419.3 462.1
95% Cost of Energy
23 Draft FY 2025-29 Capital Investment Plan (CIP)
5-year planning document for tracking program spending over multiple years and non-recurring project costs
Leverages state and federal funding
Inform region of community anticipated needs
Key projects in the CIP:
Solar Battery Storage Program
Regional Energy Network
CIP
24 Draft Budget – Reserves
Operating Budget, $M FY21 FY21 FY22 FY23 FY24 FY25
Net Revenue 0.0 14.8 386.3 891.6 1,304.3 1,168.8
Total Expense 1.1 27.8 329.7 748.2 1,071.0 1,126.0
Annual Reserve (Net Position) (1.1) (13.0) 56.6 143.4 233.3 42.8 Cumulative Net Position (1.1) (14.0) 42.5 186.0 419.3 462.1 180-Day Expense 0.5 13.7 162.6 369.0 530.7 576.4
(1.1) (13.0)
56.6 143.5
233.3 42.8
0 200
400
600
800
1,000
1,200
1,400
1,600
FY20 FY21 FY22 FY23 FY24 FY25
Net Position
Total Expenses
Cumulative Net Position
180-Day Expense
$M
Historical Proposed
25 Draft FY 2024-25 Budget
Budget Changes by Category
Revenue
Cost of Energy
Enrollment complete. Board approved
rate change in January 2024.
All contracts updated. Forward energy
prices updated for open positions.
FY24
$1,365.7m
FY24
$1,020.8m
Professional
Services
Personnel
Marketing and
Outreach
General and
Administrative
FY25
$1,223.9m
FY25
$1,059.1m
Calpine higher with full enrollment.
ETRM included. IT managed services,
procurement counsel increased.
FY24
$22.3m
FY25
$25.1m
Recruitment strategy of 24 new staff
growing the agency to 80 total staff.
FY24
$11.7m
FY25
$17.9m
Customer interface improvements, slight
increases to Partnerships and Events &
Sponsorships.
FY24
$2.9m
FY25
$3.3m
Increased G&A budget to support
operating and staff growth anticipated for
FY25.
FY24
$6.8m
FY25
$7.7m
Programs Programs budget included in CIP as
continuing projects. Overall admin in
operating.
FY24
$0.1m
FY25
$0.1m
26 Draft Budget – Personnel
Department
SDCP
(Existing/
Proposed)
Marin Clean
Energy
Clean Power
Alliance
East Bay
Community
Energy
Peninsula
Clean Energy
Central Coast
Com. Energy
Existing SDCP Staff 56 - - - - -
Data Analytics and IT/
Customer Operations 6 21 15 17 9 9
Executive Team - 5 8 4 6 4
Finance 1 5 12 5 2 5
Human Resources 1 5 3 5 1 1
Operations - 6 1 3 7 -
Power Services 6 7 14 12 9 5
Programs 4 19 6 12 7 4
Regulatory and
Legislative/Legal 3 11 11 8 6 2
Public Affairs 3 16 8 9 8 4
Total 80 95 78 75 49 38
27 Draft 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 1,006,961 1,393.30 67.51 1,585.29 88% San Diego Community
Power Oct 2019 921,471 1,059.10 54.10 1,168.80 91%
East Bay Community Energy Dec 2016 643,275 753.52 56.62 962.74 78% Marin Clean Energy Dec 2008 586,296 688.76 45.55 787.86 87% Central Coast Community
Energy Mar 2018 445,377 520.30 42.54 562.83 92%
Peninsula Clean Energy Feb 2016 309,994 437.86 56.71 466.93 94% *Source: CalCCA as of December 2023
**CPA from 5/16/24 Community Advisory Committee FY25 draft budget. SDCP from proposed FY25 budget. EBCE from 5/8/24 Finance Subcommittee FY25 draft budget. MCE from 3/21/24 Board meeting FY25 proposed budget. PCE from 5/13/14 Audit and Finance Committee FY25 draft budget. 3CE from FY24 adopted budget.
Public
Comment
for Item 3
29 Item 3
Presentation and Discussion of the FY 2024-25
Operating Budget
Recommendation:
Receive staff presentation on the preliminary
proposed FY 2024-25 Operating Budget.
Presenter:
Dr. Eric Washington,
Chief Financial Officer
30 Item 4
Recommend Board Approval of Power100
Green-e Certified Service
Recommendation:
Recommend Board Approval of the Power100
Green-e Certified Service
Presenter:
Lucas Utouh, Senior Director of Data Analytics
and Customer Operations
31 Background
SDCP currently offers two levels of service.
PowerOn – standard service offering with a
minimum of 50% renewable power
Power100 – premium service with 100% renewable
and carbon-free power
• $0.0075/kWh adder
• Adjusted to $0.01/kwh as of July 1, 2024
32 Customer Feedback and Needs
LEED Certification and SEC Disclosures
• Commercial and industrial customers desire a stand-alone 100% renewable and carbon-free Green-e® certified service.
• Cater to Leadership in Energy and Environmental Design (LEED) rating goals. • LEED is the world’s most widely used green building rating system. • Power100 Green+ allow for project/building to earn LEED renewable energy points towards certification.
• Cater to Securities and Exchange Commission (SEC) rules to enhance and standardize climate-related disclosure.
33 Power100 Green-e Certified
Service Offering Details
• Effective as of July 1, 2024.
• This new service will be called Power100 Green+
• Priced as a $0.02/kWh adder to PowerOn.
• Initially available to commercial and industrial customers. • Expects 2% of load will enroll; enrollment will be capped at 5% of load unless modified by the Board. • Fiscal Impact:
• $3.2 million in annual revenue.
• Estimate factored into fiscal projections reviewed and approved by the Board in SDCP’s 2024 Rates Schedule.
• Sourced primarily from resources under long-term contract to SDCP: Duran Mesa (wind), IP Oberon (solar), Vikings Energy Farm (solar)
Public
Comment
for Item 4
35 Item 4
Recommendation:
Recommend Board Approval of the
Power100 Green-e Certified Service
Committee Member
Announcements
Adjournment
Next Regular
Finance & Risk
Management
Committee
Meeting
June 20, 2024