Board of
Directors
Special Meeting
February 7, 2025
Welcome
and
Call to
Order
Roll
Call
4 Land
Acknowledgement
6 Regular
Agenda
1. Review and Approval of 2025 Rates
7 Item No. 1
Recommendation:
Review and approve rate adjustments for the PowerBase and PowerOn services, as contained in Attachment A, to go into effect retroactively to February 1, 2025. The recommendation includes San Diego Community Power (Community Power) default PowerOn service electricity generation/commodity rates that are 3% less expensive compared to San Diego Gas and Electric’s (SDG&E) generation rates and PowerBase service electricity generation rates that are 5% less expensive than San Diego Gas and Electric’s generation rates. Power100 and Power100 Green-e Certified will maintain premiums of $0.01/kWh and $0.02/kWh, respectively.
Presenters:
Jack Clark, Chief Operating Officer
Lucas Utouh, Sr. Director of Data Analytics & Customer Operations Tim Manglicmot, Director of Finance
Review and Approval of 2025 Rates
8 Rate development policy objectives
Reserves
Simplicity
Transparency
Avoid Cost-Shifting
Cost Recovery
Competitiveness
Stability
Equity
Cost of Service
Objectives
9 Community Power Board
adopts rates
SDG&E rates and PCIA
effective Jan. 1
January
Community Power's rates
effective Feb. 1
February
SDG&E submits application
for annual ERRA & Electric
Sales Forecast
May
Transition from Winter to
Summer rates
June
SDG&E’s November ERRA
update
November
Board/Committee review of
rate process
CPUC’s Final Decision on
ERRA & Electric Sales
Forecast Application
December
Board reviews & adopts rates
SDG&E rates and PCIA
effective Jan. 1
January
Community Power's rates
effective no later than Feb. 15
February
Typical rate development timeline
10 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+ and PowerBase,
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 filed consolidated filing for 2025 rates on Jan. 21 and SDG&E filed corrections to their filing on Jan. 29, 2025. 2025 rates timeline
11 Scenarios Conservative Balanced
(Staff Recommended) Uncertain
PowerOn premium/(discount) compared to SDG&E 2.5% (3.0%) (5.0%) PowerBase (discount) compared to SDG&E (2.5%) (5.0%) (7.0%) Year over Year Community Power rate change 2.7% (2.8%) (4.9%) FY2025 operating margin (million $) 63 44 36
Meets Credit Rating Metrics?
Meets Debt Service Coverage Ratio (DSCR)?
Meets 180-Day Cash on Hand?
2025 Community Power rate scenarios summary
12 Energy market uncertainty
At the 3/25/21 Board meeting Community Power expected CY25 energy costs of $349.5 million. In Community Power’s latest January forecast, Community Power projects CY25 energy costs of $1,116.8 million or a $767.3 million increase in the last four years. $767 million
cumulatively
Competitor rates
Rate Competition and PCIA
SDG&E remains a direct competitor to Community Power and investor-owned utilities generally remain in competition with their CCA counterparts. In June 2022, for example, SDG&E unexpectedly lowered its rates. A 10-point reduction in SDG&E rates on 1/1/26, for example translates in up to ~$200M in net income if Community Power reduces rates in lockstep. $200 million
annually
Participation rates
CCA participation rates range from 80% to
97%
At the 1/23/25 Board meeting Community Power’s participation rates for were reported at 95.4%.
The 5-year forecast assumes a 95% participation rate; other CCAs report participation rates as low as 80%. An 80% participation rate would drop Community Power net income by ~$100M annually. $73 million
annually
Heat wave
Additional, unhedged energy needs in a
heat-wave scenario
Community Power modeled a scenario for what a “bad month” in summer 2022 could look like regarding cashflow. The two key drivers of the analysis were day-ahead market exposure and DA-RT imbalance cost as summarized here with notes and assumptions below. $22 million
annually
Regulatory/legislative uncertainty
Administration changes signals change in
energy landscape
New federal administration has signaled rollback of green energy initiatives, incentives, programs, and support. Uncertainty around the future of the energy landscape, such as the rollback of the Investment Tax Credit (ITC), may negative impact Community Power’s net income.
Undetermined
Risk factors – impact to net income
13 400
800
1,200
1,600
M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J Energy Non-Energy
$ Millions
2021 2022 2023
FY25 Expense Projections
+$767.3M
FY25 Cost of
Energy Increase
Mar 21 to Jan 25
2024 2025
Cost of energy projection
14 Resource
adequacy
Renewables
Base load
Renewable prices
increaseas IRA
credits reduced by
federal government.
Resource adequacy
prices increase due
to uncertainty.
Brown power
decreasesas
federal government
eases drilling.
$-
$20.00
$40.00
$60.00
$80.00
$100.00
2021 2022 2023 2024 2025
Projected
$-
$20.00
$40.00
$60.00
$80.00
2021 2022 2023 2024 2025
Projected
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
2021 2022 2023 2024 2025
Projected
Renewables
RPS CPUC MPB
Resource adequacy
RA system CPUC MPB
Base load energy
Index on-peak
CPUC MPB
Cost of energy projections (continued)
15 Risk assessment based on variable market projections (1.1) (13.0)
56.6 143.5
189.4 43.8 (125.6)
0 200
400
600
800
1,000
1,200
1,400
1,600
FY20 FY21 FY22 FY23 FY24 FY25 FY26
Net Position
Total Expenses
$M
Historical Projection
Operating Budget, $M FY21 FY21 FY22 FY23 FY24 FY25 FY26 Net Revenue 0.0 14.8 386.3 891.6 1,264.4 1,221.3 1,145.0 Total Expense 1.1 27.8 329.7 748.2 1,075.0 1,177.4 1,270.6 Annual Reserve (Net Position) (1.1) (13.0) 56.6 143.5 189.4 43.8 (125.6) Cumulative Net Position (1.1) (14.0) 42.5 186.0 378.9 422.7 297.1 180-Day Expense 0.5 13.7 162.6 369.0 530.1 580.6 626.6
• Model assumes a
combination of factors
that would stress
reserves, but maintain
fiscal stability under
balanced rates proposal
• Volatile market
conditions have
significant potential
impacts to Community
Power’s reserves
16 Why reserves?
Power Purchase
Agreements
Rate stability
Debt issuance Long-term financial
health
Programs Leveraging
funds
180-Day target
$556.0 million
Current reserve target
17 Reserve strategic goals
90-Days Cash
$250.0 million
October 2023
Complete
180-Days Cash
$500.0 million
October 2025
In progress
Rate Stabilization
$70.0 million
TBD
In progress
In progress
Investment Grade
Credit Rating
November 2025
18 SDG&E
Generation Rates
Community Power
Generation Rates PCIA Franchise Fee
Rate mechanics: balanced scenario 2
February 2025 SDG&E
~3% average increase
February 2025 Community
Power
February 2025 SDG&E
Varies by Customer & Vintage
Unchanged 2025 SDG&E
1.088% x SDG&E
• Residential
• Small Commercial
• Medium and Large C&I
• Agriculture
• Lighting
Customer Classes:
• Vintage 2020 - Phase 1& 2
• Vintage 2021 - Phase 3
• Vintage 2022 - Phase 4
Vintage Year
19 TOU-DR1
SDG&E
Community Power
PowerBase
Community Power
PowerOn
Community Power
Power100
Community Power
PowerBase/ SDG&E Delta
Community Power
PowerOn/ SDG&E Delta
Community Power
Residential Power100/ SDG&E Delta
Generation ($) $49.27 $52.00 $53.02 $56.36
PCIA ($) $0.70 -$4.56 -$4.56 -$4.56
Franchise Fees ($) $1.01 $1.01 $1.01 $1.01
Total Generation ($) $50.98 $48.45 $49.47 $52.81 -5.00% -3.00% 3.00% Delivery ($) $82.54 $82.53 $82.53 $82.53
Average Monthly Bill ($) $133.52 $130.98 $132.00 $135.34 -1.90% -1.14% 1.36% Scenario 2: balanced (staff recommended) bill impacts
Rate: TOU-DR1
Average monthly usage (kWh) 334
PCIA vintage 2021
Rates as of February 1, 2025
20 ALTOU (secondary voltage)
SDG&E
Community Power
PowerBase
Community Power
PowerOn
Community Power
Power100
Community Power
PowerBase/ SDG&E Delta
Community Power
PowerOn/ SDG&E Delta
Community Power
Medium/Large Commercial Power100/ SDG&E Delta
Generation ($) $4,301.57 $4,241.88 $4,325.66 $4,571.05
PCIA ($) -$157.29 -$306.98 -$306.98 -$306.98
Franchise Fees ($) $98.89 $98.88 $98.88 $98.88
Total Generation ($) $4,243.17 $4,033.79 $4,117.57 $4,362.95 -5.00% -3.00% 3.00% Delivery ($) $4,845.64 $4,844.91 $4,844.91 $4,844.91
Average Monthly Bill ($) $9,088.81 $8,878.70 $8,962.48 $9,207.87 -2.31% -1.39% 1.31% Rate: AL-TOU (secondary voltage)
Average monthly usage (kWh) 24, 538
Average monthly demand (kWh) 68
PCIA vintage 2020
Rates as of February 1, 2025
Scenario 2: balanced (staff recommended) bill impacts
21 TOU-A (secondary voltage)
SDG&E
Community Power
PowerBase
Community Power
PowerOn
Community Power
Power100
Community Power
PowerBase/ SDG&E Delta
Community Power
PowerOn/ SDG&E Delta
Community Power
Small Commercial Power100/ SDG&E Delta
Generation ($) $158.58 $162.86 $166.14 $178.55
PCIA ($) $2.64 -$9.82 -$9.82 -$9.82
Franchise Fees ($) $5.36 $5.36 $5.36 $5.36
Total Generation ($) $166.58 $158.40 $161.68 $174.09 -5.00% -3.00% 4.00% Delivery ($) $326.28 $326.24 $326.24 $326.24
Average Monthly Bill ($) $492.86 $484.64 $487.92 $500.33 -1.67% -1.00% 1.52% Rate: TOU-A (secondary voltage)
Average monthly usage (kWh) 1,241
Average monthly demand (kWh) 6
PCIA vintage 2020
Rates as of February 1, 2025
Scenario 2: balanced (staff recommended) bill impacts
22 Customer Class 1/1/2023 1/1/2024 3/1/2024 10/1/2024* 1/1/2025** 1/1/2025*** 2/1/2025 1/1/2023 -
1/1/2024
1/1/2024 -
3/1/2024
3/1/2024 -
10/1/2024
10/1/2024 -
1/1/2025
10/1/2024 -
2/1/2025
Residential 0.1967 0.1514 0.1517 0.1517 0.1519 0.1622 0.1578 -23.03% 0.19% 0.00% 6.96% 4.03% Small Commercial 0.1742 0.1283 0.1285 0.1285 0.1288 0.1385 0.1348 -26.34% 0.19% 0.00% 7.78% 4.85% M/L C&I 0.2039 0.1578 0.1581 0.1581 0.1578 0.1660 0.1616 -22.61% 0.18% 0.00% 5.04% 2.21% Agricultural 0.1455 0.1120 0.1122 0.1122 0.1116 0.1174 0.1142 -23.00% 0.18% 0.00% 4.61% 1.78% Lighting 0.1286 0.0991 0.0993 0.0993 0.0995 0.1063 0.1034 -22.92% 0.19% 0.00% 7.07% 4.13% System Total 0.1947 0.1499 0.1502 0.1502 0.1503 0.1595 0.1552 -23.03% 0.19% 0.00% 6.20% 3.32% * SDG&E 10/1/2024 rate change did not revise commodity rates and PCIA. ** SDG&E proposed 1/1/2025 rates from Oct. 2025 ERRA Update, filed 10/21/2024. ** *SDG&E proposed 1/1/2025 rates from Nov. Consolidated Rates Filing, filed 11/15/2024.
SDG&E Avg. Commodity Rate ($/kWh) SDG&E Avg. Commodity Rate Change (%) 2025 SDG&E commodity rates trajectory
Illustrative SDG&E rates, effective 02-01-2025
SDG&E’s system avg. commodity rates are projected to increase by 3.32% 23 Scenarios Conservative Balanced
(Staff Recommended) Uncertain
PowerOn premium/(discount) compared to SDG&E 2.5% (3.0%) (5.0%) PowerBase (discount) compared to SDG&E (2.5%) (5.0%) (7.0%) Year over Year Community Power rate change 2.7% (2.8%) (4.9%) FY2025 operating margin (million $) 63 44 36
Meets Credit Rating Metrics?
Meets Debt Service Coverage Ratio (DSCR)?
Meets 180-Day Cash on Hand?
2025 Community Power rate scenarios summary
24 Balanced (staff recommended) scenario summary
Rates to be retroactively effective for Feb. 1, 2025. Default PowerOn generation rates will be 3% less expensive than SDG&E rates. PowerBase generation rates will be 5% less expensive than SDG&E rates. Power100 and Power100 Green-e Certified services will maintain premiums of $0.01/kWh and $0.02/kWh, respectively.
Higher renewable content (PowerOn at 51.1% versus SDG&E at 41.4%, per latest 2023 Power Content Labels).
Allows Community Power to maintain its current reserve levels and work towards a 180-day cash on hand reserve target which will provide financial stability. Meets liquidity and FCC metrics that support an investment-grade credit rating. Satisfies credit obligations with lenders and power purchase agreements. Prepares Community Power for future energy market fluctuations and regulatory uncertainty.
Public
Comment on
Item No. 1
Adjournment
Next Regular Board
of Directors Meeting
February 27, 2025