Board of
Directors
Special Meeting
November 21, 2024
Welcome
and
Call to
Order
Roll
Call
4 Land
Acknowledgement
6 Warm Welcome!
Amy Whitehouse
Senior Program Manager
Desiree Daugherty
Marketing Manager
Ethan Toth
Data Engineer
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
not
on the
Agenda
9 Consent
Agenda
1. Approve October 24, 2024, Meeting Minutes
2. Receive and File Treasurer’s Report for Period Ending August 31, 2024
3. Receive and File Update on Programs
4. Receive and File Update on Power Resources
5. Receive and File Update on Customer Operations
6. Receive and File Update on Human Resources
7. Receive and File Update on Marketing, Public Relations, and Local Government Affairs
8. Receive and File Update on Regulatory and Legislative Affairs
9. Approve Contract for Managed Charging (V1G) Software Procurement with Optiwatt in a not to exceed value of $420,000 over Two Years, and authorize the Chief Executive Officer to Execute the Contract
Public
Comment
for
Consent
Agenda
11 Regular
Agenda
10. Approve Fiscal Year End 2023-24 Financial Audit
Recommendation: Approve Fiscal Year End 2023-24 Financial Audit.
11. Presentation and Update on Clean Energy Prepayment Financing.
Recommendation: Receive and file Presentation and Update on Clean Energy Prepayment Financing.
12. Board Discussion and Consideration of Amendments to Existing San Diego Community Power (Community Power) Board and Committee Compensation and Reimbursement Policy; and, if Approved, Make Amendments Effective January 1, 2025
Recommendation: Adopt Resolution No. 2024-10, Amending San Diego Community Power (Community Power) Board and Committee Compensation and Reimbursement Policy effective January 1, 2025.
13. 2023 Power Source Disclosure Program Annual Reports and Power Content Label; and Adoption of Resolution No. 2024-11, Approving the Submission and Attesting to the Accuracy of Community Power’s 2023 Power Source Disclosure Annual Reports for PowerOn and Power100 and the 2023 Power Content Label Recommendation: Adopt Resolution 2024-11 approving the submission and attesting to the accuracy of SDCP’s 2023 Power Source Disclosure annual reports for PowerOn and Power100 and the 2023 Power Content Label
14. 2026-2028 Strategic Plan Process Overview
Recommendation: Receive and file Strategic Plan Process Overview. 12 Item No. 10
Recommendation:
Recommendation: Approve Fiscal Year End 2023-24
Financial Audit.
Presenter:
Dr. Eric Washington, CFO
Brett Bradford and Aliandra Schaffer
Approve Fiscal Year End 2023-24 Financial
Audit
San Diego Community Power
Report to the Board of Directors
November 21, 2024
Introduction
• Brett Bradford, CPA
• Audit Partner
• 21 years in public accounting and performing audits of government entities
• Currently working with several CCA’s throughout California • Aliandra Schaffer
• Supervisor
• 5 years in public accounting and performing audits of governments (CCA’s)
Results of current year audit:
• The 2024 audit is complete. We have reported the following:
• Unmodified opinion – Based on our audit, the financial statements are materially accurate.
• No significant deficiencies or material weakness in
internal control noted.
Audit of the year ended June 30, 2024
Financial Statements
Relative Roles & Responsibilities
• Management is responsible for preparing the Financial Statements and establishing a system of internal control.
• Auditor is responsible for auditing the Financial Statements • Considering risks of material misstatement in the Financial Statements
• Considering internal controls relevant to the Financial Statements • Performing tests of year-end balances based on risk assessment • Evaluating adequacy of disclosures
Risk Assessment for the year ended
June 30, 2024
Our audit is a risk-based audit. Risk assessment procedures include:
• Gain understanding of the entity’s operating characteristics, practices, and procedures.
• Compare to our knowledge of similar entities, industry and professional guidance.
• Review procedures and controls surrounding significant transaction cycles and business processes.
Risk Assessment for the year ended
June 30, 2024
Significant areas of focus
• Revenue recognition
• Accounts receivable and accrued revenue
• Test a sample of customer billings
• Relate total cash received during the year to revenue • Look at cash received subsequent to year-end and relate to A/R • Review revenue recognition through year-end and method for determining (accrued revenue)
• Cash
• Confirmations sent to financial institutions
Risk Assessment for the year ended
June 30, 2024
Significant areas of focus
• Accrued Cost of Electricity
• Review subsequent bills from electricity providers and cash payments • Supplier Security Deposits
• Reviewed contracts and determined completeness of amounts recorded • Financial Statement Note Disclosures – Complete and without bias Required Board Communications
• There were no new material
accounting policies adopted by
San Diego Community Power
throughout the period audited.
• No alternative treatments of
accounting principles for material
items in the financial statements
were discussed with management.
Required Board Communications
(continued)
• We did not identify any
significant or unusual
transactions or applications of
accounting principles where a
lack of authoritative guidance
exists.
• We did not propose any
adjustments to the financial
statements.
• There were no disagreements with management concerning the scope of our audit, the application of accounting principles, or the basis for management’s judgments on any significant matters. • We did not encounter any difficulties in dealing with management during the performance of our audit.
Required Board Communications
(continued)
Brett Bradford: 707-577-1582
Questions?
Public
Comment
for Item
No. 10
25 Item No. 11
Recommendation:
Receive and file Presentation and Update on Clean Energy Prepayment Financing.
Presenter:
Dr. Eric Washington, CFO
Presentation and Update on Clean Energy
Prepayment Financing
26 Prepayment Transaction Overview
Goal – Reduce cost of power purchases by 8% or more per prepayment transaction How – Leverage use of tax-exempt bonding capacity to secure long-term supply Background
• Codified in the U.S. tax law
• Used since the 1990s largely for natural gas transactions • Over 100 transactions totaling over $75 billion completed in the U.S. – mostly for gas • Twelve energy prepayment transactions totaling $11.3 billion completed over the last few years for six California Community Choice Aggregators:
Ava Community Energy Pioneer Community Energy
Silicon Valley Clean Energy Clean Power Alliance
Marin Clean Energy Central Coast Community Energy
27 Nov 7, 2023: Request-for-Proposal (RFP) was issued for Municipal Financial Advisor (MFA) Dec 28, 2023: PFM Financial Advisors LLC (PFM) was selected as MFA Feb 15, 2024: Finance and Risk Management Committee (FRMC) Prepaid Financing Presentation Feb 22, 2024: Board Presentation Prepaid Financing Presentation Apr 19, 2024: RFP issued for underwriter and legal services (bond, tax, disclosure) Aug 22, 2024: Legal counsel agreement with Chapman & Cutler for disclosure services – Potential Board approved
Sep 19, 2024: FRMC – Presentation and potential recommendation for Board approval of Resolution for Bond Issuer
Sep 26, 2024: Board – Presentation and potential approval of Resolution for Bond Issuer Oct 11, 2023: Bond Issuer admits SDCP Associate Member
Oct 17, 2024: FRMC – Presentation and recommendation for Board approval on prepay Resolution to authorize prepay transaction parameters and documents Oct 24, 2024: Board – Presentation and approval on prepay Resolution to authorize prepay transaction parameters and documents
Nov 5, 2024: Execute bond purchase agreement and Bond pricing (bond pricing date) Nov 20, 2024: Closing
Prepayment Transaction Timeline
28 Prepayment Transaction Parameters
Aggregate Bond Principle
$1.5 billion
Parameters
Minimum Discount
8.0%
Maximum Transaction Fee
1.0%
Aggregate Bond Principle
$1.0 billion
Actual Results
Actual Discount
12.0%
Transaction Fee
0.6%
29 Prepayment Transaction Parameters
Aggregate Bond Principle
$1.5 billion
Parameters
Minimum Discount
8.0%
Maximum Transaction Fee
1.0%
Aggregate Bond Principle
$1.0 billion
Actual Results
Actual Discount
12.0%
Transaction Fee
0.6%
+$6.8 million
Annual Savings through 9/30/32*
*Guaranteed annual savings of $3.5 million through 12/31/54 Public
Comment
for Item
No. 11
31 Item No. 12
Recommendation:
Recommendation: Adopt Resolution No. 2024-10, Amending San Diego Community Power (Community Power) Board and Committee Compensation and Reimbursement Policy effective January 1, 2025.
Presenter:
Chair Joe LaCava
Board Discussion and Consideration of Amendments to Existing San Diego Community Power (Community Power) Board and
Committee Compensation and Reimbursement Policy; and, if Approved, Make Amendments Effective January 1, 2025
Public
Comment
for Item
No. 12
33 Item No. 13
Recommendation:
Recommendation: Adopt Resolution 2024-11 approving the submission and attesting to the accuracy of SDCP’s 2023 Power Source Disclosure annual reports for PowerOn and Power100 and the 2023 Power Content Label.
Presenter:
Byron Vosburg, Chief Commercial Officer
2023 Power Source Disclosure Program Annual Reports and Power Content Label; and Adoption of Resolution No. 2024-11, Approving the Submission and Attesting to the Accuracy of Community Power’s 2023 Power Source Disclosure Annual Reports for PowerOn and Power100 and the 2023 Power Content Label
34 Item 13 - 2023 Power Source Disclosure Program
Annual Reports and Power Content Label
Background:
California Public Utilities Code requires all Load Serving Entities (LSEs) to disclose “accurate, reliable, and simple-to-understand information on the sources of energy, and the associated emissions of greenhouse gasses, that are used to provide electric services.” Power Source Disclosure, which is submitted to the CEC Power Content Label, which will be distributed to all SDCP customers who were served in 2023
Requires SDCP Board attestation prior to submission to CEC and distribution to SDCP customers
35 Item 13 - 2023 Power Source Disclosure Program
Annual Reports and Power Content Label
Summary:
Staff and technical consultants
have vetted and verified all data
Power 100: 50% solar, 50%
wind
PowerOn:
~ 51.1% renewable
~ 55.4% renewable/carbon free
36 Item 13 - 2023 Power Source Disclosure Program
Annual Reports and Power Content Label
Draft Mailer
Public
Comment
for Item
No. 13
38 Item No. 14
Recommendation:
Recommendation: Receive and file Strategic Plan
Process Overview.
Presenter:
Karin Burns, Chief Executive Officer
2026-2028 Strategic Plan Process Overview
San Diego
Community
Power
Strategic Planning Update
Presentation to the Board of Directors
Presenter: Karin Burns, CEO
November 21, 2024
Strategic Planning History
40 • Initial SDCP strategic plan developed and adopted in Q3 2022 • Plan reviewed on April 21, 2023 – decided to stay the course • Early 2024 – decided again to stay the course
• Late 2024/ early 2025 – We are ready for the development of our next 3-year plan (FY 2026-2028):
Tremendous growth of both customers, operations and staff 5 new departments
Operational programs
SD Regional Energy Network approved and launching
• Visibility into our 3rd ‘core growth’ phase
SDCP Strategic Plan High Level Timeline
Sep
• Process
overview
• Socialize w/ E-Team, L-Team,
All staff, & Chair
Oct-Dec
• Risks &
Opportunities
Matrix
• Department 3-
year outlook
• Socialize w/
Board & CAC
• E-Team & L-Team Retreats
Jan-Mar
• Board, Staff &
CAC input
• Board & CAC
discussions
• Strategic Plan
Staff Retreat
• CAC
Recommendation/
Board Approval
Apr-May
• Incorporate
Strategic Plan
into Annual
Budget
• Develop Annual
Work Plan, team
& individual goal
setting
41 Four High Level Themes
Infrastructure
• Enterprise Data
Platform
• Information
Technology
• Legal Support
• Policy Review
and Updates
• Standard
Operating
Procedures
• Short-Term
Office Space
• Brand
Recognition and
Web Design
Fiscal
Sustainability
• Build Reserves
• Sign LT PPAs
• Manage Risk
• Launch ETRM
• Leg/Reg
Changes
• External funds
• ST vs LT RPS
• Reduce
arrearages
• Credit rating
• Slice of Day
costs
Customer
Affordability
• Pre-Pay Bonds
• Rate Products
• RPS Trajectory
• Leg and Reg
Strategy
• SD REN
• Expanded Flex
Load & VPP
• Customer Bill &
Energy
Education
People / HR
• Institutional
culture of best
practices for all
managers
• Continue to build
core team
• Retention,
continuity &
succession plans
• Resource
constraints
• Career growth
• JEDI goals
• Team
optimization &
utilization 42
Mission - Vision - Values
(No Change At This Level)
Rate
Setting
Annual
Work Plan
3 -Year Department
Outlooks / Plans
Annual
Budget
&
Mid-Year
Updates
Annual
Department
Goals
Financials / Budget
All hands
retreat
Annual
Hiring
Plan
Risks &
Opportunities Matrix
Annual
Investment
Plan
Annual
Individual
Goals
Annual
Performance
Reviews
43 High Level Focus Areas – Next 3 Years
Infrastructure - Customer Affordability -Fiscal Sustainability - People 3 Year Strategic Plan
September
Strategic Planning Process overview
E Team -
Sep 6
Process
overview &
(Introduce/Ori
ent) Risks &
Opportunities
Matrix
Questions &
Feedback
Chair – Sept
10 L Team -
Sep 11
Process
overview &
(Introduce/Ori
ent) Current
Situation &
Opportunities
Matrix
Questions &
Feedback
E Team –
Sep 18
Risks &
Opportunities
Review &
discussion
Questions &
Feedback
JEDI Team –
Sep 19
Process
overview,
incorporate
JEDI actions
into Team
Retreat / SP
planning
Questions &
Feedback
All Hands -
Sep 25
Process &
Document
Overview
Questions &
Feedback
44 Ongoing: October - December
(Opportunities & Risks, Department 3-year Outlook; Board & CAC process overview)
E-Team &
L-Team
(through
Oct 11)
Complete
Opportunities
& Risks Matrix
3 Year Outlook
All departments
(Due Nov 8)
Complete first
draft: 3-year
Goals &
Outlook
Vision, goals,
staff needs,
inter-dependencies
E-Team Retreat – 11/15
L & E-Team Retreat –
12/13
Board SP Update – 11/21
All hands
retreat
Questions &
Feedback
Board Briefings
Board mtg –11/ 21
CAC mtg – 12/5
Leadership
and/or E-Team
Retreat
Process
overview
Status Update
for Boards
Questions &
Feedback
45 Expected: January - March
(Board & CAC input, Strategic Plan Workshop & Approval) Board Orientation
1/17
First Draft SP –
1/23
All Hands Retreat
– 1/31
Incorporate JEDI
Actions - 1/31
CAC & Board SP
Goals Briefings –
2/3 – 2/11
Second Draft SP
2/12
CAC & Board SP
Presentation –
2/13; 2/27
Final Draft SP
3/5
CAC
Recommend
Adoption 3/13
All Hands 3/19
Board Adoption
of SP 3/27
46 Expected: April - May
(Strategic Plan Informs the Annual Budget, Annual Work Plan, and Individual & Team Annual goals)
Incorporate
Strategic Plan
into annual
budget, hiring,
investments, etc.
by 4/15
Develop Annual
Individual &
Department
Work Plans
by 5/15
47 Develop Annual
Individual &
Department Goals
by 4/30
Next Steps – Board of Directors
48 • Seeking Initial Feedback
Core Process
Engagement level
Timing
High level themes
Public
Comment
for Item
No. 14
Report by
Chief
Executive
Officer
Directors'
Comments
Adjournment
Next Regular
Board of Directors Meeting
December 12, 2024