Finance & Risk
Management
Committee
Meeting
January 16, 2025
Welcome
and
Call to
Order
Roll
Call
4 Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
not
on the
Agenda
Consent
Calendar
1. Approve October 17, 2024, Meeting
Minutes
2. Approve 2025 Meeting Schedule
Public
Comment on
Consent
Calendar
Regular
Agenda
1. Approve a Contract with Maher Accountancy
for General Accounting Professional Services
in an Amount Not-to-Exceed $1,131,000 from
February 1, 2025, through January 31, 2028,
and for Two Optional One-Year Extensions in
an Amount Not-to-Exceed $377,000 Each
Respective Year, and Authorize the Chief
Executive Officer to Execute the Contract
2. Review of Treasurer’s Report for Period Ending
November 30, 2024
3. Update on 2025 Projected Rate Changes
10 Item No. 3
Approve a Contract with Maher Accountancy for General Accounting Professional Services in an Amount Not-to-Exceed $1,131,000 from February 1, 2025, through January 31, 2028, and for Two Optional One-Year Extensions in an Amount Not-to-Exceed $377,000 Each Respective Year, and Authorize the Chief Executive Officer to Execute the Contract
Recommendation: Recommend Board approve a Contract with Maher Accountancy for General Accounting Professional Services in an Amount Not-to-Exceed $1,131,000 from February 1, 2025, through January 31, 2028, and for Two Optional One-Year Extensions in an Amount Not-to-Exceed $377,000 for Each Respective Year, and, Authorize the Chief Executive Officer to Execute the Contract.
Presenter:
Dr. Eric Washington,
Chief Financial Officer
11 General Accounting Professional Services
Timeline
Maher Accountancy
current general
accounting provider
Pre-November 2024 November 2024
Issuance of RFP for
General Accounting
Professional Services
December 2024
Deadline for proposals
Evaluation of
proposals
January 2025
Notification of intent to
award
Potential FRMC and
Board Approval
New Professional
Services contract in
place
12 Recommend Approval of Contract with
Maher Accountancy
Recommendation: Recommend Board approve a Contract with Maher Accountancy for General Accounting Professional Services in an Amount Not-to-Exceed $1,131,000 from February 1, 2025, through January 31, 2028, and for Two Optional One-Year Extensions in an Amount Not-to-Exceed $377,000 for Each Respective Year, and, Authorize the Chief Executive Officer to Execute the Contract.
Term • Initial three-year term of 2/1/25 to 1/31/28
• Two optional one-year extensions
Not-to-Exceed • Initial three-year term: $1,131,000
• Two optional one-year extensions: $377,000 per year
• Total: $1,885,000
Scope of Work
• Monthly Financial Operational Assistance ($28,000/month) • Financial Statement Audit Support ($16,000/yearly audit) • Grant Management Support (Cost included in monthly financial operational assistance)
• Contingency for out-of-scope items ($25,000/year)
Public
Comment for
Item No. 3
14 Item No. 4
Treasurer’s Report for Period Ending November
30, 2024
Recommendation: Receive and File Treasurer’s Report for Period Ending November 30, 2024
Presenter:
Dr. Eric Washington, Chief Financial Officer
15 Results for the period compared to the
adopted budget were as follows:
• Net operating revenues 3.0 percentage
points over budget.
• Operating expenses came in 7.0
percentage points over budget.
Financial results for the YTD FY25:
• $696.0M in net operating revenues
• $637.5M in total expenses (includes
energy costs of $610.1M or 88% of net
revenues)
• $58.6M change in YTD net position
Item 1: Treasurer’s Report
YTD FY25 Budget v. Actual
YTD FY25 as of
11/30/24 (5 months) FY25 YTD Budget Budget Variance ($) Budget (%) Net Operating Revenues $ 696,048,805 $ 672,519,268 $ 23,529,537 103% Total Expenses $ 637,476,640 $ 593,720,209 $ 43,756,431 107% Change in Net Position $ 58,572,165 $ 78,799,059 $ (20,226,894) -26% Budget Comparison
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY25 Results v. Budget
YTD FY25 as of 11/30/24 (5 months) FY25 YTD Budget
16 $59M
Reserve
Contribution
FY 2024-25 YTD
Item 1: Treasurer’s Report
$583M
Total Liquidity
FY 2024-25 YTD
$47M
Outstanding
Debt
FY 2024-25 YTD
75%
Percent Reserve
Goal Met
FY 2024-25
CONTRIBUTION RESERVES
GOAL DEBT
Reserve contribution
for the fiscal year
Outstanding loans
FY25 YTD
Total available liquidity
FY25 YTD
$556M 180-DCOH
Reserve Target FY25
$59M Actual
$79M Budget
$M $50M $100M $150M $200M
FYTD
FYTD
$M $200M $400M $600M
$417M
Cash
$165
LOC
$M $20M $40M $60M
LOC
Cash
75%
Unmet
Reserves
25%
17 Item 1: Treasurer’s Report
135
Days
Cash on Hand
201
Days
Cash on Hand with
Total Liquidity
$321.1M
$349.8M
$369.6M
$383.3M
$388.5M
$361.7M
$336.0M
$299.8M
$296.1M
$346.3M
$367.7M
$422.2M
$417.2M
$434.1M
$462.8M $482.6M $496.3M $501.5M
$474.7M
$449.0M
$412.8M $409.1M
$450.3M $471.7M
$526.2M
$582.7M
$0.0M
$50.0M
$100.0M
$150.0M
$200.0M
$250.0M
$300.0M
$350.0M
$400.0M
$450.0M
$500.0M
$550.0M
$600.0M
$650.0M
$700.0M
11/30/202312/31/2023
1/31/20242/29/20243/31/20244/30/20245/31/20246/30/20247/31/20248/31/20249/30/2024 10/31/202411/30/2024
Rolling 12 Month Reserves FY 2024-25
Unrestricted Cash Lines of Credit
FY25 RESERVE GOAL: $556.0M
18 Item 1: Treasurer’s Report
Public
Comment for
Item No. 4
20 Item No. 5
Update on 2025 Projected Rate Changes
Recommendation: Receive and file the Update on 2025
Projected Rate Changes.
Presenter:
Lucas Utouh, Senior Director of Data Analytics and Customer Operations Aaron Lu, Rates and Strategy Manager
21 2025 Rates Timeline
Board adopted rates,
effective February 1, 2024.
January 18, 2024
SDG&E submitted its
Application for Approval of its
2025 Electric Sales Forecast.
May 15, 2024
Board adopted Power100
Green-e certified product
and Powerbase service,
effective July 1, 2024.
May 30, 2024
SDG&E filed October Update
to 2025 Electric Sales
Forecast.
October 21, 2024
SDG&E filed November
Prelim. 2025 Consolidated
Rates.
November 15, 2024
Staff provided update to CAC
& Board on 2025 rate
projections.
December 5, 2024 and
December 12, 2024
SDG&E’s implements its
2025 generation rates and
the Power Charge
Indifference Adjustment.
February 1, 2025*
Community Power's Board
adopts 2025 rates,
retroactively effective on
February 1, 2025.
February 7, 2025**
*SDG&E filed an extension request to the Commission on Dec. 9, 2024 to implement rates on Feb. 1, 2025, to allow for additional time to include 2024 General Rate Case revenue requirements and to reduce rate volatility. The Commission granted the extension on Dec. 19, 2024.
**SDG&E will therefore implement its consolidated 2025 rates on Feb. 1, 2025. SDCP will need to wait until end of Jan. To have final PCIA info to implement its rates, to be effective on Feb. 1, 2025 retroactively. 22 Rate Development Policy Objectives:
• Cost Recovery,
• Reserves,
• Rate Competitiveness and Customer Value,
• Rate Stability,
• Equity Among Customers,
• Rate Structure Simplicity and Comparability,
• Transparency,
• Avoidance of Cost Shifting, and
• Cost of Service.
Rate-Setting Process Overview
23 Rate-Setting Process Overview
• Generation costs
• SDG&E Delivery costs
• Additional fees
• Power Charge Indifference Adjustment (PCIA) includes above-market costs related to power supply commitments that the utilities made many years ago. • Franchise fees is a surcharge applied to electricity transported over SDG&E systems that are constructed in public streets and highways. All customers i.e., bundled and un-bundled, are assessed Franchise Fees.
What are the components of Community Power rates?
24 • Equality means an individual or a group of
people is given the same resources or
opportunities.
• Equity recognizes that each person has
different circumstances and allocates the exact
resources and opportunities needed to reach
an equal outcome.
• This trifurcation will maintain a fair, equitable,
and balanced rate structure that does not
create winners and losers across our
customers.
Rate Setting Mechanics
Equality vs. Equity:
25 • Community Power's Phase 1 and 2
customers (vintage 2020), Phase 3
customers (vintage 2021), and Phase 4
customers (vintage 2022) are all charged a
different Power Charge Indifference
Adjustment (PCIA) by SDG&E because they
are enrolled in different “vintage” years.
• Due to the substantial deltas expected
between PCIA vintages 2020, 2021, and
2022, staff will recommend to the Board
trifurcation of three sets of rates in 2025.
Rate Setting Mechanics
Competitive Factor (Discount) 3% 3% 3%
Rates ($/kWh) Vintage 2020 Vintage 2021 Vintage 2022
SDG&E Commodity Rate 0.1800 0.1800 0.1800
PCIA -0.0051 0.0027 0.0364
Franchise Fees 0.0020 0.0020 0.0020
Resulting Illustrative SDCP Rate 0.1777 0.1700 0.1362
Illustrative Rate Setting Process Based On Trifurcation -0.0500
0.0000
0.0500
0.1000
0.1500
0.2000
SDG&E Commodity Rate PCIA Franchise Fees Resulting Illustrative SDCP Rate
Rates ($/kWh)
Rate Trifurcation By Vintage
Vintage 2020 Vintage 2021 Vintage 2022
26 Illustrative SDG&E commodity rates, effective 02-01-2025 • SDG&E’s system avg. commodity rates are projected to increase by 6.20%. • The primary drivers for the increase in commodity rates is adjustments between SDG&E’s balancing accounts and impacts from its General Rate Case. 2025 Commodity Rate Projections
Customer Class 1/1/2023 1/1/2024 3/1/2024 10/1/2024* 1/1/2025** 1/1/2025*** 1/1/2023 - 1/1/2024 1/1/2024 - 3/1/2024 3/1/2024 - 10/1/2024 10/1/2024 - 1/1/2025 Residential 0.1967 0.1514 0.1517 0.1517 0.1519 0.1622 -23.03% 0.19% 0.00% 6.96% Small Commercial 0.1742 0.1283 0.1285 0.1285 0.1288 0.1385 -26.34% 0.19% 0.00% 7.78% M/L C&I 0.2039 0.1578 0.1581 0.1581 0.1578 0.1660 -22.61% 0.18% 0.00% 5.04% Agricultural 0.1455 0.1120 0.1122 0.1122 0.1116 0.1174 -23.00% 0.18% 0.00% 4.61% Lighting 0.1286 0.0991 0.0993 0.0993 0.0995 0.1063 -22.92% 0.19% 0.00% 7.07% System Total 0.1947 0.1499 0.1502 0.1502 0.1503 0.1595 -23.03% 0.19% 0.00% 6.20% * SDG&E 10/1/2024 rate change did not revise commodity rates and PCIA. ** SDG&E proposed 1/1/2025 rates from Oct. 2025 ERRA Update, filed 10/21/2024. ** *SDG&E proposed 1/1/2025 rates from Nov. Consolidated Rates Filing, filed 11/15/2024.
SDG&E Avg. Commodity Rate ($/kWh) SDG&E Avg. Commodity Rate Change (%) 27 • Staff continues to monitor updates from SDG&E & CPUC in early 2025. • SDG&E commodity rates and PCIA rates, that will go into effect on February 1, 2025, will not be finalized until the last week of January.
• Staff will recommend to the Board to adopt a rate change on February 7, 2025. • A few key considerations are as follows:
• Final SDG&E commodity costs and PCIA rates will determine the trajectory of SDCP’s proposed 2025 rates.
• Due to variation in PCIA for vintage years, staff will continue to recommend trifurcated rates.
Next Steps
Public
Comment on
Item No. 5
Committee Member
Announcements
Adjournment
Next Regular
Finance & Risk
Management
Committee
Meeting
February 20, 2025