Presentation — San Diego Community Power Finance and Risk Management Committee, December 4, 2025

1 The December 4, 2025,
Regular Meeting of the
Finance and Risk
Management Committee
will Begin Shortly
[email protected]
2 Finance and Risk
Management Committee
Regular Meeting
December 4, 2025
3 Welcome and Call to Order
4 Roll Call
55 6
Land Acknowledgement
7 Items to be Withdrawn or
Reordered on the Agenda
8 Public Comment on non-Agenda Items
9 Consent
Calendar

1. Approve November 13, 2025, Meeting
Minutes
10 Public Comment on Consent Calendar
11 Regular
Agenda

2. Treasurer’s Report for Period Ending
September 30, 2025

3. Fiscal Year End 2024-25 Performance Review

4. Recommend Board Adoption of Resolution No.
2025-23, Approving a Fourth Revision to the
Financial Reserves Policy

5. Update on SDG&E's 2026 Projected Rates
12 Item No. 2
Treasurer’s Report for
Period Ending
September 30, 2025
Presenters:

Dr. Eric Washington, Chief Financial Officer/Treasurer
Dan Delaney, Chandler Asset Management
Recommendation: Receive and file
Community Power’s revisions to the existing
Net Energy Metering Tariff/Program (NEM)
and to the existing Net Billing Tariff (NBT) and
Community Power’s establishment of the new
Net Billing Tariff Virtual (NBT-V) and a Net
Billing Tariff Aggregation (NBT-A) for all new
customers who elect this and who have
installed onsite generation on or after
February 15, 2024 that qualifies for the tariff
and for existing customers transitioning out of
the Virtual Net Energy Metering Tariff (VNEM)
or the Net Energy Metering Aggregation Tariff
(NEMA) following the conclusion and/or
termination of their 20-year VNEM or NEMA
legacy period.

Recommendation:

Receive and File Treasurer’s Report for Period
Ending September 30,2025.
13 Results for the period overperformed overall
compared to the approved budget:
• Net operating revenues 2.0 percent under
budget.
• Operating expenses came in
(6.0) percentage points under budget.

Financial results for YTD FY26:
• $466.2M in net operating revenues
• $379.4M in total expenses (including
energy costs of $349.7M)
• $86.9M change in YTD net position
Item 2: Treasurer’s report
YTD FY26 as of
9/30/25 (3 months) FY26 YTD Budget Budget Variance ($) Budget (%) Net Operating Revenues $ 466,231,915 $ 475,903,000 $ (9,671,085) 98.0% Total Expenses $ 379,353,090 $ 403,031,000 $ (23,677,910) 94% Change in Net Position $ 86,878,826 $ 72,872,000 $ 14,006,826 Budget Comparison
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
$500,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY26 Results v. Budget
YTD FY26 as of 9/30/25 (3 months) FY26 YTD Budget
14 $M $50M $100M $150M $200M
Item 2: Treasurer’s Report
$M $200M $400M $600M
$87M
Reserve
Contribution
FY 2025-26 YTD
$677M
Total Liquidity
FY 2025-26 YTD
$0M
Outstanding
Debt
FY 2025-26 YTD
90%
Percent Reserve
Goal Met
FY 2025-26

CONTRIBUTION RESERVES

GOAL DEBT
Reserve contribution
for the fiscal year
Outstanding Debt
FY26 YTD
Total available
liquidity FY26 YTD
$499M 180-DCOH
Reserve Target FY26
$499M
$87M Actual
FYTD $73M Budget
FYTD
$449.9M
Cash + investments
$227.5M
LOC
$M $20M $40M $60M
Cash
90%
Unmet
Reserves
10%
15 162
Days
Cash on Hand
245
Days
Cash on Hand with
Total Liquidity
Item 2: Treasurer’s report
16 Item 2: Treasurer’s Report
17 INVESTMENT REPORT
San Diego Community Power | As of September 30, 2025
CHANDLER ASSET MANAGEMENT | chandlerasset.com
Chandler Team:

For questions about your account, please call (800) 317-4747, or contact [email protected]
Information contained herein is confidential. We urge you to compare this statement to the one you receive from your qualified custodian. Please see Important Disclosures at the end of the statement. 18 ECONOMIC UPDATE
19 -400
-200
0 200
400
600
800
1,000
MOM Change In Thousands (000's)
Nonfarm Payroll (000's)
Non-farm Payroll (000's)
3-month average (000's)

0.0%

4.0%

8.0%

12.0%

16.0%

20.0%
Unemployment Rate
Underemployment Rate (U6)
Unemployment Rate (U3)
Rate (%)
Source: US Department of Labor Source: US Department of Labor

EMPLOYMENT
The U.S. economy added just 22,000 jobs in August, falling short of consensus expectations and punctuating the softening trend in the labor market. The three-month moving average and six-month moving average payrolls totaled 29,000 and 64,000 respectively. The unemploymentrate rose to 4.3% in August from 4.2% in July. The labor participation rate inched up to 62.3%, remaining below the pre-pandemic level of 63.3%. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons jumped to 8.1% in August from 7.9% in July. Average hourly earnings fell to 3.7% year-over-year from 3.9% last month.
20 10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%
Consumer Price Index (CPI)
CPI YOY % Change
Core CPI YOY % Change
YOY (%) Change

10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%
Personal Consumption Expenditures (PCE)
PCE Price Deflator YOY % Change
PCE Core Deflator YOY % Change
Fed Target
YOY (%) Change
Source: US Department of Labor Source: US Department of Commerce

INFLATION
Despite the Federal Government shutdown, the Bureau of Labor Statistics released the Consumer Price Index (CPI) data for Septemberon October 24th. Both headline and core measures came in below estimates. Headline CPI edged up 0.3% from August and 3.0% on an annual basis, while core CPI was up 0.2% from the prior month and 3.0% on an annual basis. The release was essential as third-quarter CPI data is used by the Social Security Administration to calculate the annual COLA, i.e. the cost-of-living adjustment. Other US Government data releases continue to be impacted by the shutdown. 21 Source: Federal Reserve Source: Bloomberg
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0 Federal Reserve Balance Sheet Assets
Recession
In $ millions

FEDERAL RESERVE

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%
Effective Federal Funds Rate
Recession
Yield (%)
The Federal Reserve lowered its benchmark interest rate by a quarterpoint to a range of 3.75% to 4.00%% at its October meeting. There were two dissents to the rate decision, one from Federal Reserve Governor Stephen Miran in favor of a 50-basis point cut and the second from Kansas City Federal Reserve President Jeffrey Schmid who preferred to leave rates unchanged. Chair Jerome Powell referenced the weakening labor market despite some inflationary pressures and moderate economic growth. The Fed also announced the balance-sheet runoff program begun in June 2022 would conclude as of December 1, 2025. The Fed plans to replace Mortgage Backed securities paydowns with purchases of US Treasury Bills. Since the campaign launched, the Fed has reduced its securities holdings by about $2.35 trillion, bringing the total down to roughly $6.6 trillion. 22 Source: Bloomberg Source: Bloomberg

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%
US Treasury Note Yields
2-Year
5-Year
10-Year
Yield (%)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%
US Treasury Yield Curve
Oct-25
Jul-25
Oct-24
Yield (%)

BOND YIELDS
At the end of October, the 2-year Treasury yield was 60 basis points lower, and the 10-Year Treasury yield was 21 basis points lower, year-over-year. The spread between the 2-year and 10-year Treasury yield points on the curve decreased to +50 basis points at October month-end versus +54 basis points at September month-end. The prior 2-year/10-year yield curve inversion, which spanned from July 2022 to August 2024, was historically long. The average historical spread (since 2005) is about +99 basis points. The spread between the 3-month and 10-year Treasury yield points on the curve was +26 basis points in October versus +21 basis points in September. 23 ACCOUNT PROFILE
24 OBJECTIVES
Investment Objectives
The investment objectives of the San Diego Community Power are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio;second, to provide sufficient liquidity to meet all disbursement requirements; and third, to earn an acceptable rate of return afterfirst considering safety of principal and liquidity.

Chandler Asset Management Performance Objective
The performance objective forthe portfolio isto earn a totalrate of return through a market cycle that is equal to or above the return on the benchmark index.

Strategy
In orderto achieve this objective, the portfolio investsin high-quality fixed income securities that comply with the investment policy and all regulations governing the funds. 25 STATEMENT OF COMPLIANCE
San Diego Community Power ConsAgg| Account #11452| As of September 30, 2025 RulesName Limit Actual Complianc e
Status
Notes

AGENCY MORTGAGE SECURITIES (CMOS)
Max% (MV) 100.0 2.1 Compliant
Max% Issuer (MV) 30.0 2.1 Compliant
Max Maturity (Years) 5.0 4.7 Compliant
Min Rating (A-1 by 1,A- by 1) 0.0 0.0 Compliant

ASSET-BACKED SECURITIES (ABS)
Max% (MV) 20.0 1.8 Compliant
Max% Issuer (MV) 5.0 0.2 Compliant
Max Maturity (Years) 5.0 4.8 Compliant
Min Rating (AA- by 1) 0.0 0.0 Compliant

BANKERS' ACCEPTANCES
Max% (MV) 40.0 0.0 Compliant
Max% Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Days) 180.0 0.0 Compliant
Min Rating (A-1 by 1) 0.0 0.0 Compliant

CERTIFICATE OF DEPOSIT PLACEMENT SERVICE
Max% (MV) 50.0 34.6 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (A-1 by 1,A- by 1) 0.0 0.0 Compliant

COLLATERALIZED BANK DEPOSITS
Max% (MV) 100.0 33.7 Compliant
Max Maturity (Years) 5.0 0.0 Compliant

COLLATERALIZED TIME DEPOSITS (NON-

NEGOTIABLE CD/TD)
Max% (MV) 30.0 0.0 Compliant
Max% Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (A-1 by 1) 0.0 0.0 Compliant

COMMERCIAL PAPER
Max% (MV) 25.0 0.0 Compliant
26 STATEMENT OF COMPLIANCE
San Diego Community Power ConsAgg| Account #11452| As of September 30, 2025 RulesName Limit Actual Complianc e
Status
Notes
Max% Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Days) 270.0 0.0 Compliant
Min Rating (A-1 by 1,A- by 1) 0.0 0.0 Compliant

CORPORATE MEDIUM TERM NOTES
Max% (MV) 30.0 5.4 Compliant
Max% Issuer (MV) 5.0 0.3 Compliant
Max Maturity (Years) 5.0 5.0 Compliant
Min Rating (A- by 1) 0.0 0.0 Compliant

FDIC INSURED TIME DEPOSITS (NON-NEGOTIABLE
CD/TD)
Max% (MV) 30.0 0.0 Compliant
Max% Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (A-1 by 1,A- by 1) 0.0 0.0 Compliant

FEDERAL AGENCIES
Max% (MV) 100.0 0.2 Compliant
Max% Issuer (MV) 30.0 0.1 Compliant
Max Maturity (Years) 5.0 1.8 Compliant
Min Rating (A-1 by 1,A- by 1) 0.0 0.0 Compliant

LOCAL AGENCY INVESTMENT FUND (LAIF)
Max% (MV) 100.0 0.0 Compliant

MONEY MARKET MUTUAL FUNDS
Max% (MV) 20.0 0.1 Compliant
Max% Issuer (MV) 20.0 0.1 Compliant
Min Rating (AAA by 2) 0.0 0.0 Compliant

MORTGAGE-BACKED SECURITIES (NON-AGENCY)
Max% (MV) 20.0 0.0 Compliant
Max% Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (AA- by 1) 0.0 0.0 Compliant
27 STATEMENT OF COMPLIANCE
San Diego Community Power ConsAgg | Account #11452 | As of September 30, 2025 RulesName Limit Actual Complianc
e
Status
Notes

MUNICIPAL SECURITIES (CA, LOCAL AGENCY)
Max % (MV) 30.0 0.2 Compliant
Max % Issuer (MV) 5.0 0.2 Compliant
Max Maturity (Years) 5.0 4.0 Compliant
Min Rating (A- by 1) 0.0 0.0 Compliant

MUNICIPAL SECURITIES (CA, OTHER STATES)
Max % (MV) 30.0 0.0 Compliant
Max % Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (A- by 1) 0.0 0.0 Compliant

NEGOTIABLE CERTIFICATES OF DEPOSIT (NCD)
Max % (MV) 30.0 0.0 Compliant
Max % Issuer (MV) 5.0 0.0 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (A-1 or A- by 1) 0.0 0.0 Compliant

SRI PROHIBITED INVESTMENTS
Prohibited Investment - Fossil Fuels 0.0 0.0 Compliant

SUPRANATIONAL OBLIGATIONS
Max % (MV) 30.0 0.0 Compliant
Max % Issuer (MV) 10.0 0.0 Compliant
Max Maturity (Years) 5.0 0.0 Compliant
Min Rating (AA- by 1) 0.0 0.0 Compliant
U.S. TREASURIES
Max % (MV) 100.0 10.8 Compliant
Max Maturity (Years) 5.0 4.9 Compliant
Min Rating (A-1 by 1, A- by 1) 0.0 0.0 Compliant
28 PORTFOLIO CHARACTERISTICS
San Diego Community Power | Account #11293 | As of September 30, 2025 Benchmark* 9/30/2025
Portfolio
6/30/2025
Portfolio
Average Maturity (yrs) 2.65 3.18 3.18
Average Modified Duration 2.48 2.69 2.67
Average Purchase Yield 4.20% 4.29%
Average Market Yield 3.66% 3.86% 3.99%
Average Quality** AA+ AA AA
TotalMarket Value 93,445,189 72,406,555
*Benchmark: ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index **The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch. 29 SECTOR DISTRIBUTION
San Diego Community Power | Account #11293 | As of September 30, 2025 Sector as a Percentage of Market Value
Sector 09/30/2025 06/30/2025
US Treasury 52.30% 51.91%
Corporate 26.36% 24.40%
Agency CMBS 10.31% 11.29%
ABS 8.81% 8.91%
Agency 0.97% 1.25%
Muni Bonds 0.95% 1.22%
Money Mkt Fd 0.26% 1.00%
30 QUALITY DISTRIBUTION
Rating 09/30/2025 06/30/2025
AAA 7.95% 8.42%
AA 67.86% 64.71%
A 19.93% 22.39%
BBB 0.99% 1.29%
NA 3.28% 3.19%
Rating 09/30/2025 06/30/2025
Aaa 7.51% 8.62%
Aa 68.09% 66.01%
A 19.03% 21.23%
NA 5.37% 4.13%
Rating 09/30/2025 06/30/2025
AAA 14.08% 14.24%
AA 67.51% 67.43%
A 8.25% 9.69%
NA 10.16% 8.63%
San Diego Community Power | Account #11293 | As of September 30, 2025 S&P Rating Moody’sRating Fitch Rating
31 0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5-7 7+
Portfolio 0.3% 0.0% 4.6% 26.9% 27.9% 23.3% 16.9% 0.0% 0.0% ICE BofA 1-5 YearUnsubordinated US Treasury
& Agency Index 0.0% 0.1% 2.6% 35.0% 27.7% 22.6% 12.0% 0.0% 0.0%

DURATION DISTRIBUTION
San Diego Community Power | Account #11293 | As of September 30, 2025 Portfolio Compared to the Benchmark
32 3 Months 12 Months 2 Years 3 Years 5 Years 10 Years Since Inception TOTAL RATE OF RETURN*
San Diego Community Power 1.23% 4.23% 4.23%
Benchmark 1.14% 3.77% 3.77%
*Periods over 1 year are annualized.

Total rate of return: A measure of a portfolio’s performance over time. It isthe internal rate of return, which equates the beginning value of the portfolio with the ending market value; it includes interest earnings, realized and unrealized gains and losses in the portfolio. Realized rate of return: A measure of a portfolio’sreturn over time. It isthe internal rate which equates the beginning book value of the portfolio with the ending book value; it includes interest earnings, realized gains and losses in the portfolio.

Benchmark: ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index

INVESTMENT PERFORMANCE
San Diego Community Power | Account #11293 | As of September 30, 2025 Total Rate of Return : Inception | 10/01/2024
33 Public Comment on
Item No. 2
34 Item No. 2
Committee Members
Comments or
Questions
Treasurer’s Report for
Period Ending
September 30, 2025
Recommendation:

Receive and File Treasurer’s Report for
Period Ending September 30, 2025.
35 Item No. 3
Fiscal Year End
2024-25
Performance
Review
Presenter:

Dr. Eric Washington, Chief Financial Officer/Treasurer
Recommendation:

Receive and File Fiscal Year End 2024-25
Performance Review.
36 Fiscal Year End 2024-25 Performance Summary
Item Actuals Budget Difference ($)
Operating Revenue
Total Operating Revenues $1,243,031,946 $1,221,258,173 $21,773,773 Expenditures
Cost of Energy $1,101,545,238 $1,116,836,549 ($15,291,311) Non-Energy Expenses $53,668,137 $69,002,590 ($15,334,453) Subtotal Operating Expense $1,155,213,375 $1,185,839,139 ($30,625,764) Nonoperating Revenues
Investment Income $13,467,273 $0
Interest Expense $436,062 $1,276,000 ($839,938)
Nonoperating Revenues $13,031,211 ($1,276,000)
Net Position $100,849,782 $34,143,034 $66,706,748
37 Revenue Results
PowerBase:
• Budgeted for $2.6M or 15%
• Actuals at $0.3M or 1.3%
Uncollectibles:
• Budgeted for 1.75% of
Revenue $22M
• Actuals came in 1% or $12M
Demand:
• Actual Load higher than
expected
38 Operating Expense Savings
Energy Coast Savings: $15.3M
• Lower CPUC market price
benchmarks
• SDG&E VAMO savings
Non-Energy Cost Savings
$15.3M
• Professional services: $6.1 M
million
• Personnel: $2.9M
• General/Admin: $1.8M
• Marketing/Outreach: $1.0M
• Capital investment spend:
$3.5M
Non-Operating Income $13M
• Investment Earnings
• Interest expense savings
39 Historic Reserve Build
40 Investment History
($300,000)
($200,000)
($100,000)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
08/01/2024 09/01/2024 10/01/2024 11/01/2024 12/01/2024 01/01/2025 02/01/2025 03/01/2025 04/01/2025 05/01/2025 06/01/2025 Investments
Principal Return
41 Public Comment on
Item No. 3
42 Item No. 3
Committee Members
Comments or
Questions
Fiscal Year End 2024-
25 Performance
Review.

Recommendation:

Receive and File Fiscal Year End 2024-25
Performance Review.
43 Item No. 4
Recommend Board Adoption
of Resolution No. 2025-23,
Approving a Fourth Revision
to the Financial Reserves
Policy
Presenter:

Tim Manglicmot, Director of Finance
Jeb Spengler, Senior Strategic Finance Manager
Recommendation:

Recommend Board Adoption of Resolution
No. 2025-23, Approving a Fourth Revision
to the Financial Reserves Policy.
44 Agenda

1. Reserve Background

2. Power Charge Indifference
Adjustment & Rates Deep Dive

3. New Reserves Policy Deep Dive
45 Reserve Background
46 Reserves
90-Days
Former Goal
180 Days
Community Power
Goal
SD Community Power
180 Days
AVA
180 Days
3CE
180 Days
PCE
180 Days
CPA
Days Cash on Hand Reserve Targets
180 Days
SJCE
180 Days
Desert Clean Energy
180 days cash on hand is the
investment-grade CCA and
municipal advisor generally
accepted best practice
47 Reserves
90-Days
Former Goal
180 Days
Community Power
Goal
SD Community Power
180 Days
AVA
180 Days
3CE
180 Days
PCE
180 Days
CPA
Days Cash on Hand Reserve Targets
180 Days
SJCE
180 Days
Desert Clean Energy
180 days cash on hand is the
investment-grade CCA and
municipal advisor generally
accepted best practice
Reserves
Is 180-days cash on hand
the right reserve target?
48 How We Approached the Question
Enterprise
Risk
Management
Bolstered risk management team
composed of representatives from the
Community Power’s senior leadership
and business units
Multi-Department
Risk Team
cQuant.io provides several price
simulation models that consume
internal data combined with the most
up-to-date market data available to
generate financial projections.
cQuant Energy
Risk Management
Used APPA risk framework to
proactively identify, assess, respond,
communicate, and monitor risks and
threats to Community Power.

APPA Risk Best
Practices
Hired expert risk consultant to
establish business-specific risk model
similar to Silicon Valley Clean Energy
and in alignment with American Public
Power Association best practices.

Risk Consultant
Onboarded
49 Multiprong Reserve Target Approach

1. Revenue (Load, Participation)

2. Expense (Energy, Operations, Litigation)

3. Other (Cybersecurity, Force Majeure)
Bottom-Up Risk
Analysis

1. Peer CCA Policy Comparison
Peer Analysis 2. Peer CCA Financial Metric Comparison

1. Moody’s

2. S&P

3. Fitch
Credit Rating
Agency Criteria

1. APPA recommendations

2. CA public power

3. National public power
National Medians
Data
50 Risks to Community Power Stability

1. Revenue (Load, Participation)

2. Expense (Energy, Operations, Litigation)

3. Other (Cybersecurity, Force Majeure)
Bottom-Up Risk Analysis
Category Risk Estimate of Adverse
Outcome
Market Price Benchmark Volatility* PCIA & Generation Rate “SNAPBACK” $420 million Energy Costs* Wholesale, Load and Open Position Volatility $245 million Load* Participation Rate Drops to 86% $51 million
Uncollectibles* Increase in uncollectibles to 5% $36 million Prepay Savings Loss Prepay savings loss to unforeseen event $12 million Operations Legal Loss $5 million
Operations Force Majeure or Cybersecurity Event $2 million Total $771 million
(Approx. 278 DCOH)
* Risk categories may fluctuate marginally due to changes in market conditions 51 Risks to Community Power Stability

1. Revenue (Load, Participation)

2. Expense (Energy, Operations, Litigation)

1. Revenue (Load, Participation)

2. Expense (Energy, Operations, Litigation)

1. Revenue (Load, Participation)

2. Expense (Energy, Operations, Litigation)

3. Other (Cybersecurity, Force Majeure)
Bottom-Up Risk Analysis
Category Risk Estimate of Adverse
Outcome
Market Price Benchmark Volatility* PCIA & Generation Rate “SNAPBACK” (65% Coverage) $420 million $273 million Energy Costs* Wholesale, Load and Open Position Volatility $245 million Load* Participation Rate Drops to 86% $51 million
Uncollectibles* Increase in uncollectibles to 5% $36 million Prepay Savings Loss Prepay savings loss to unforeseen event $12 million Operations Legal Loss $5 million
Operations Force Majeure or Cybersecurity Event $2 million Total $624 million
(Approx. 225 DCOH)
* Risk categories may fluctuate marginally due to changes in market conditions Target reserves $624 million or 225-days cash on hand
54 PCIA/Rates Deep Dive
55 PCIA Deep Dive
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 2017 2018 2019 2020 2021
Prior to Community Power,
SDG&E contracted long-term energy.
* Illustrative example of SDG&E’s contracted long-term energy 56 PCIA Deep Dive
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 2017 2018 2019 2020 2021
PCIA is designed to
make investor-owned
utilities whole for the
long-term energy it contracted for.
* Illustrative example of SDG&E’s contracted long-term energy 57 PCIA Deep Dive – Example
2024 2025 2026
Forecast
(Energy Resource Recovery Account)
True-Up (Portfolio Allocation Balancing Account)
PCIA
58 PCIA Deep Dive – Renewables Example
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E PCC1
renewable
cost for 2026.
* Illustrative example of calculating PCIA
59 PCIA Deep Dive – Renewables Example
2024 2025 2026
CPUC PCC1
projected
renewable
cost for 2026.

SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
* Illustrative example of calculating PCIA
60 PCIA Deep Dive – Renewables Example
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
PCIA pays
back SDG&E
$7.55/MWh
* Illustrative example of calculating PCIA
61 PCIA Deep Dive – Renewables Example
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
Forecast
(Energy Resource Recovery Account)
* Illustrative example of calculating PCIA
62 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E PCC1 renewable
cost for 2025.

SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
* Illustrative example of calculating PCIA
63 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
CPUC PCC1 projected renewable cost for 2025.
* Illustrative example of calculating PCIA
64 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E can make $1.24/MWh
in the open market and owes
customers through PCIA rates
effective 1/1/25.
* Illustrative example of calculating PCIA
65 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
But remember this was a
‘forecasted’ 2025 price by the CPUC.
* Illustrative example of calculating PCIA
66 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Actual MPB: $63.86/MWh
$71.24 – $63.86= $7.38/MWh
The actual price for 2025 was
$63.86
* Illustrative example of calculating PCIA
67 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Actual MPB: $63.86/MWh
$71.24 – $63.86= $7.38/MWh
SDG&E needs
to be made
whole for 2025.
* Illustrative example of calculating PCIA
68 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Actual MPB: $63.86/MWh
$71.24 – $63.86= $7.38/MWh
SDG&E is paid
through PCIA
rates effective
1/1/26.
$71.24 – $63.86= $7.38/MWh
* Illustrative example of calculating PCIA
69 * Illustrative example of calculating PCIA
PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Actual MPB: $63.86/MWh
$71.24 – $63.86= $7.38/MWh
$71.24 – $63.86= $7.38/MWh True-Up (Energy Resource Recovery Account) 70 PCIA Deep Dive – Renewables Example
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Forecast MPB: $71.24/MWh
$70.00 - $71.24 = ($1.24)
2024 2025 2026
SDG&E 2026 PCC1 Price: $70.00/MWh
CPUC 2026 Forecast MPB: $62.45/MWh
$70.00 - $62.45 = $7.55/MWh
SDG&E 2025 PCC1 Price: $70.00/MWh
CPUC 2025 Actual MPB: $63.86/MWh
$71.24 – $63.86= $7.38/MWh
$71.24 – $63.86= $7.38/MWh
PABA true-up
$70.00 - $62.45 = $7.55/MWh
ERRA forecast
* Illustrative example of calculating PCIA
71 * Illustrative example of calculating PCIA
PCIA Deep Dive – Example
2024 2025 2026
Forecast
(Energy Resource Recovery Account)
True-Up (Portfolio Allocation Balancing Account)
PCIA
72 Historical Generation Rates
SDCP Gen Rate

0.1667 $/kWh
PCIA (0.0136)
$/kWh
3% SDCP Discount
SDG&E Rate

0.1578 $/kWh
2025 Current
Effective
2021 2022 2023 2024 SDCP Gen Rate 0.1543 $/kWh
PCIA 0.0073
$/kWh

3.4% SDCP Premium
SDG&E Rate

0.1499 $/kWh
SDCP Gen Rate

0.1702 $/kWh
PCIA 0.0169
$/kWh
3% SDCP Discount
SDG&E Rate

0.1947 $/kWh
SDCP Gen Rate

0.1113 $/kWh
PCIA 0.0281
$/kWh
2% SDCP Discount
SDG&E Rate

0.1422 $/kWh
SDCP Gen Rate

0.0725 $/kWh
PCIA 0.0351
$/kWh

1.2% SDCP Discount
SDG&E Rate

0.1089 $/kWh
SDCP Costs0.1050 $/kWh Reserve Contribution
SDCP Costs0.1235 $/kWh Reserve Contribution
SDCP Costs0.1532 $/kWh Reserve Contribution
SDCP Costs0.1472 $/kWh Reserve Contribution
SDCP Costs0.0982 $/kWh Reserve Loss
* Illustrative example of generation rates using TOU-DR1 and PCIA using Vintage 2021 residential 73 $-
$20.00
$40.00
$60.00
$80.00
2021 2022 2023 2024 2025 2026
Projected
$-
$20.00
$40.00
$60.00
$80.00
$100.00
2021 2022 2023 2024 2025 2026
Projected
$-
$5.00
$10.00
$15.00
2021 2022 2023 2024 2025 2026
Projected
PCIA Deep Dive
Renewables

RPS CPUC MPB
Resource adequacy
RA Flex CPUC MPB (2021-2024)
Base load energy
Index on-peak

CPUC MPB
Historically, CPUC
market price
benchmarks for
energy have been
very volatile,
leading to big PCIA
fluctuations.
74 PCIA Deep Dive
Currently, CPUC
MPB prices are
very high
compared to prior
years.
$-
$20.00
$40.00
$60.00
$80.00
2021 2022 2023 2024 2025 2026
Projected
$-
$20.00
$40.00
$60.00
$80.00
$100.00
2021 2022 2023 2024 2025 2026
Projected
$-
$5.00
$10.00
$15.00
2021 2022 2023 2024 2025 2026
Projected
Renewables

RPS CPUC MPB
Resource adequacy
RA Flex CPUC MPB (2021-2024)
Base load energy
Index on-peak

CPUC MPB
75 PCIA Deep Dive
What happens if
energy prices drop
to 2021 levels?
$-
$20.00
$40.00
$60.00
$80.00
2021 2022 2023 2024 2025 2026
Projected
$-
$20.00
$40.00
$60.00
$80.00
$100.00
2021 2022 2023 2024 2025 2026
Projected
$-
$5.00
$10.00
$15.00
2021 2022 2023 2024 2025 2026
Projected
Renewables

RPS CPUC MPB
Resource adequacy
RA Flex CPUC MPB (2021-2024)
Base load energy
Index on-peak

CPUC MPB
76 Quantifying the Risks – Stress Test 1
Stress Test Scenario 1

1. Energy prices drop to 2021 market price
benchmark levels.

Risk
Register
Risk
Assessment
Risk
Mitigation
Stress
Test
77 $.0M
$100.0M
$200.0M
$300.0M
$400.0M
$500.0M
$600.0M
$700.0M
$800.0M
3/1/2021
6/1/20219/1/2021
12/1/2021
3/1/2022
6/1/20229/1/2022
12/1/2022
3/1/2023
6/1/20239/1/2023
12/1/2023
3/1/2024
6/1/20249/1/2024
12/1/2024
3/1/2025
6/1/20259/1/2025
12/1/2025
3/1/2026
6/1/20269/1/2026
12/1/2026
3/1/2027
6/1/20279/1/2027
12/1/2027
Base Case (Reserves)
Stress Test (Reserves)
Stress Test – 2021 Market Price Benchmarks
Reserves drop to $331 million or
120-DCOH due to PCIA true up and
low SDG&E rates from low market
prices.
78 Quantifying the Risks – Stress Test 2
Stress Test Scenario 2

1. Energy prices drop for renewables and
resource adequacy similar to PG&E CCAs. -Higher PCIA and lower gen rate

2. Negative Community Power sentiment
leads to customer opt outs -Customer participation rate drops

3. A disaster creates an inability for
customers to pay energy bills -Uncollectibles increase to 5% Risk
Register
Risk
Assessment
Risk
Mitigation
Stress
Test
79 Stress Test – PG&E PCIA/Rates, Uncollectibles, Participation $.0M
$100.0M
$200.0M
$300.0M
$400.0M
$500.0M
$600.0M
$700.0M
$800.0M
3/1/2021
6/1/20219/1/2021
12/1/2021
3/1/2022
6/1/20229/1/2022
12/1/2022
3/1/2023
6/1/20239/1/2023
12/1/2023
3/1/2024
6/1/20249/1/2024
12/1/2024
3/1/2025
6/1/20259/1/2025
12/1/2025
3/1/2026
6/1/20269/1/2026
12/1/2026
3/1/2027
6/1/20279/1/2027
12/1/2027
Base Case (Reserves)
Stress Test (Reserves)
Reserves drop to $238 million or
99-DCOH with: PG&E PCIA, increase
in uncollectibles and decrease in
participation.
80 PCIA Deep Dive – Renewables Example
Mitigation Strategies
Regulatory/Legislative
 CPUC knows volatility is an issue,
changed Resource Adequacy
methodology to a rolling average
 PCIA Track 2 Proceeding
Reserves
 Set a reserve target that accounts
for fluctuations in PCIA and rates
 Rate development policy goal to
reduce customer price volatility when
possible
$-
$20.00
$40.00
$60.00
$80.00
2021 2022 2023 2024 2025 2026
Projected
$-
$20.00
$40.00
$60.00
$80.00
$100.00
2021 2022 2023 2024 2025 2026
Projected
$-
$5.00
$10.00
$15.00
2021 2022 2023 2024 2025 2026
Projected
Renewables

RPS CPUC MPB
Resource adequacy
RA Flex CPUC MPB (2021-2024)
Base load energy
Index on-peak

CPUC MPB
81 Establishing Risk-Based
Reserve Target &
Thresholds
Presenter: Jeb Spengler
82 Reserve Policy Strategy
Target DCOH Current Proposed
Minimum N/A 180
Target 180 225
Maximum
(Upper Target)
N/A 270
Determining appropriate reserve levels involves assessing minimum requirements, recommended ranges, and upper thresholds:
o Minimum reserves protect against short-term liquidity risks and ensure operational continuity.  Ability to meet essential obligations and maintain short- term financial stability  Aligns with industry standards; supports a strong credit profile
o Target Reserves are based on factors such as operating expenses, risk exposure, peer comparisons and necessary credit metrics.
 Covers normal cyclical fluctuations to market price benchmark volatility resulting from fluctuations to PCIA and SDG&E rates.
o Maximum reserves (upper thresholds) prevent excessive accumulation of reserves.  Provides sufficient reserves for significant fluctuations in market volatility and/or unforeseen circumstances 83 Market Volatility = Moving Targets
Storage
Weather
Financial
Storage
Weather
Weather/
Storage
Weather
Pandemic
2 years 3 years 2 years 2 years 4 years 8 years 2 years Low price periods
historically persist
from anywhere
between 2-4 years.
84 Forecasted Financial Reserves – Base Case as of Sept. 30, 2025 Community Power’s Audited FYE 2025 Reserves
Projected* 2025-2026 FYE Reserves
Base Case projections* show target of 225 Day Cash On Hand is reached in FY 2026 -2027 $M
$100M
$200M
$300M
$400M
$500M
$600M
$700M
$800M
3/1/2021
6/1/20219/1/2021
12/1/2021
3/1/2022
6/1/20229/1/2022
12/1/2022
3/1/2023
6/1/20239/1/2023
12/1/2023
3/1/2024
6/1/20249/1/2024
12/1/2024
3/1/2025
6/1/20259/1/2025
12/1/2025
3/1/2026
6/1/20269/1/2026
12/1/2026
3/1/2027
6/1/2027
Base Case 180 DCOH 225 DCOH 270 DCOH
180 DCOH
225 DCOH
270 DCOH
Financial Reserves Projections* – Base Case
Actuals Projections
Total Unrestricted Cash &
Investments $363 million (115 days)
Net Position $476 million (170 days)
Total Unrestricted Cash &
Investments $583 million
Days Cash on Hand 213
*Projections as of Sept. 30, 2025
85 $M
$100M
$200M
$300M
$400M
$500M
$600M
$700M
$800M
3/1/2021
6/1/20219/1/2021
12/1/2021
3/1/2022
6/1/20229/1/2022
12/1/2022
3/1/2023
6/1/20239/1/2023
12/1/2023
3/1/2024
6/1/20249/1/2024
12/1/2024
3/1/2025
6/1/20259/1/2025
12/1/2025
3/1/2026
6/1/20269/1/2026
12/1/2026
3/1/2027
6/1/2027
Stress Test (Reserves) 180 DCOH 225 DCOH 270 DCOH
180 DCOH
225 DCOH
270 DCOH
Forecasted Financial Reserves – Moderate Stress Scenario Moderate Stress Case Assumptions:
o 2021 Market Price Benchmarks
• Low Reserves Balance:
o Occurs Q1 2027
o Use of Reserves = $232 million
o Low balance = $331 million (120 DCOH)
• Projected Reserves (Stress Scenario)
o 2025-2026 FYE = $583 million
o 2026-2027 FYE = $391 million
• Stress scenario projections show recovery to 180 DCOH minimum threshold by October 2027.

Financial Reserves Projections – Trough Scenario
Actuals Projections
86 Multiprong Reserve Target Approach

1. Revenue (Load, Participation)

2. Expense (Energy, Operations, Litigation)

3. Other (Cybersecurity, Force Majeure)
Bottom-Up Risk
Analysis

1. Peer CCA Policy Comparison
Peer Analysis 2. Peer CCA Financial Metric Comparison

1. Moody’s

2. S&P

3. Fitch
Credit Rating
Agency Criteria

1. APPA recommendations

2. CA public power

3. National public power
National Medians
Data
Validation
87 Validating Reserve Target – Peer Analysis

1. Peer CCA Policy Comparison

2. Peer CCA Financial Metric Comparison Peer Analysis Policy Comparison 88 Validating Reserve Target – Peer Analysis

1. Peer CCA Policy Comparison

2. Peer CCA Financial Metric Comparison Peer Analysis Metric Comparison Comparison of audited fiscal year end data for
California CCAs.

Days Cash on Hand calculation compares:

San Diego Community Power 2025 Audit:
363,834,172 x 365 = 115 DCOH 1,155,213,375
Unrestricted Cash & Investments
x 365 = DCOH Total Operating Expenses
Source: 2024 CCA audit data for SCP, SVCE, PCEA, AVA, Pioneer, SJCE, CPSF, 3CE, CEA; 2025 CCA audit data for SDCP, MCE and CPA
441
392
308
222 218 195 187 174 149
115
0 50
100
150
200
250
300
350
400
450
500
Days Cash on Hand
89 Validating Reserve Goal – Credit Rating Agency Criteria

1. Moody’s

2. S&P

3. Fitch Credit Rating Agency Criteria Moody’s
• Moody’s uses Municipal Joint Action Agency Criteria to assess CCAs • The strongest rating assessment (AAA) suggests cash >250 days • Liquidity is 10% of Moody’s overall assessment
90 Validating Reserve Goal – Credit Rating Agency Criteria

1. Moody’s

2. S&P

3. Fitch Credit Rating Agency Criteria S&P
• S&P uses U.S. Municipal Retail Electric Criteria to assess CCAs • A “Very Strong” Liquidity Assessment assumes a minimum of 150 days • The highest assessment “Extremely Strong” assumes >270 days 91 Validating Reserve Goal – Credit Rating Agency Criteria

1. Moody’s

2. S&P

3. Fitch Credit Rating Agency Criteria Fitch
• Fitch uses Local Government Revenue Criteria to assess CCAs • Fitch’s liquidity cushion metric assumes greater than 90 days cash is neutral to the overall rating
• Liquidity of less than 90 days is considered “weak” and assumes additional risk 92 Validating Reserve Target – National Medians Data

1. APPA recommendations

2. California public power

3. National public power
National Medians Data
Retail Public Power Credit Rating Median Days Cash on Hand AA 296
AA- 208
A+ 165
A 143
A- 118
BBB 74
Source: Fitch Ratings – U.S. Public Power – Peer Credit Analysis (July 7, 2025) National Medians
• Public Power medians data is less relevant due to the different nature of risks that public power utilities use reserves for.
93 Updated Reserve Policy
94 Policy Language Revisions
Update language and definitions to better define Reserves as liquidity available for emergency purposes. • Policy Guideline Proposed Revisions:
o Minimum: 180-Days Cash on Hand
o Recommended Target: 225-Days Cash on Hand
o Maximum: 270-Days Cash on Hand
• “Reserves” definition:
o Current: Net position
o Proposed: Unrestricted cash, cash equivalents, and investments unencumbered by legal agreements and not earmarked for specific purposes
95 Policy Language Revisions
Updated Purpose and Intent of Reserves Balance Thresholds Reserves below the Minimum Reserve Balance:
o The Board should ensure that Reserves do not drop below the Minimum Reserve Balance unless determined by the Board to be necessary to address a Reserve Event.

Reserve above the Maximum Reserve Balance:
o The Board may evaluate opportunities for strategic investments, programmatic reserves, or other purposes as authorized by the Board.

Reserve Between Target and Maximum:
o The Board may authorize the use of Reserves between the Target Reserve Balance and Maximum Reserve Balance to be designated as Rate Stabilization Reserves*. Rate Stabilization Reserves allows Community Power to defer revenues in years of strong financial results for use in future years when financial results are weaker or stressed.

The Board shall determine the contribution to Reserves at least annually, with the goal of maintaining balances between the Target Reserve Balance and Maximum Reserve Balance.
*Rate Stabilization Policy to be introduced Q1 2026
96 Public Comment on
Item No. 4
97 Item No. 4
Committee Members
Comments or
Questions
Recommend Board Adoption
of Resolution No. 2025-23,
Approving a Fourth Revision
to the Financial Reserves
Policy
Recommendation:

Recommend Board Adoption of Resolution
No. 2025-23, Approving a Fourth Revision
to the Financial Reserves Policy
98 Item No. 5
Update on SDG&E's
2026 Projected Rates
Recommendation: Receive and file
Community Power’s revisions to the existing
Net Energy Metering Tariff/Program (NEM)
and to the existing Net Billing Tariff (NBT) and
Community Power’s establishment of the new
Net Billing Tariff Virtual (NBT-V) and a Net
Billing Tariff Aggregation (NBT-A) for all new
customers who elect this and who have
installed onsite generation on or after
February 15, 2024 that qualifies for the tariff
and for existing customers transitioning out of
the Virtual Net Energy Metering Tariff (VNEM)
or the Net Energy Metering Aggregation Tariff
(NEMA) following the conclusion and/or
termination of their 20-year VNEM or NEMA
legacy period.

Recommendation:

Receive and File Update on
SDG&E’s 2026 Projected Rates.

Presenter:

Aaron Lu, Rates and Strategy Manager
99 Rate Development Timeline
Board adopted
2025 rates,
effective
retroactively on
February 1,
2025.

February 7,
2025
SDG&E filed the
Application for
Approval of the
2026 Energy
Resources
Recovery Account
(ERRA) Forecast.

May 15, 2025
Commission
adopted
SDG&E’s
General Rate
Case (GRC)
Phase 2.

September 18,
2025
SDG&E filed
Update to the
2026 ERRA
Forecast.

October 14,
2025
SDG&E filed its
advice letter for
Preliminary
Consolidated
Filing to
Implement
January 1, 2026
Electric Rates.

November 17,
2025
Staff brief
committees and
the Board on 2026
rate projections
and schedule.

December 2025
SDG&E is
expected to file
its advice letter
for Final
Consolidated
Filing to
Implement
January 1, 2026
Electric Rates.

December 31,
2025
SDG&E’s
implements 2026
generation,
delivery, and the
Power Charge
Indifference
Adjustment (PCIA)
rates.

January 1, 2026
Community
Power Board
adopts 2026
rates, effective
retroactively on
January 1, 2026.

January 15,
2026
SDG&E is
expected to file an
advice letter on its
GRC Phase 2 rate
design changes.

March 1, 2026
Community
Power Board
adopts GRC
Phase 2 rate
design changes,
effective on April
1, 2026.

March 2026
SDG&E and
Community Power
implement GRC
Phase 2 rate
design changes.

April 1, 2026
100
Rate Development
Policy Objectives Competitiveness
Stability
Simplicity Equity
Reserves
Cost
Recovery
Cost of
Service
Avoid Cost-Shifting
Transparency
101
Community Power Rate Components
• Generation: Community Power charges for purchasing or generating electricity. • SDG&E Delivery: SDG&E charges for the delivery of electricity to the home or business. • Power Charge Indifference Adjustment (PCIA): above-market costs related to power supply commitments that the utilities made many years ago.
• Franchise fees: a surcharge applied to electricity transported over SDG&E systems that are constructed in public streets and highways.

Illustration of current effective rates as of 6/1/2025. 102
Rate Trifurcation: Equality vs. Equity
• 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 of Community Power rates by
vintage will maintain a fair, equitable, and
balanced rate structure.
103
Rate Trifurcation
• 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 PCIA by SDG&E because they are
assigned different vintage years.
• Due to the substantial deltas expected
between PCIA vintages 2020, 2021, and
2022, staff will continue to recommend
trifurcation of three sets of rates to the
Board to ensure customer equity.

Illustrative Trifurcation Example
Competitive Factor (Discount) 5% 5% 5%
Rates ($/kWh) Vintage 2020 Vintage 2021 Vintage 2022
SDG&E Commodity Rate 0.1800 0.1800 0.1800
PCIA 0.0100 0.0280 0.0540
Franchise Fees (FF) 0.0020 0.0020 0.0020
Resulting Illustrative Community Power Rate 0.1590 0.1410 0.1150 Community Power Rate + PCIA + FF 0.1710 0.1710 0.1710
104
2026 SDG&E Bundled Generation Rate Outlook
• SDG&E’s system avg. commodity rates are projected to increase by ~12%. • SDG&E attributes the increase in commodity rates to decreased credits and revenues from lower market values, as well as a lower sales forecast.

SDG&E Avg. Commodity Rate ($/kWh) SDG&E Avg. Commodity Rate Change (%) Customer Class 10/1/2025
(Current Effective)
1/1/2026
(Oct. ERRA Update)
1/1/2026
(Nov. Prelim)
10/1/2025 - 1/1/2026
(Oct. ERRA Update)
10/1/2025 - 1/1/2026
(Nov. Prelim)
Residential 0.15777 0.18929 0.17168 19.98% 8.82%
Small Commercial 0.13478 0.16134 0.15071 19.71% 11.82%
M/L C&I 0.16156 0.19444 0.19096 20.35% 18.20%
Agricultural 0.11424 0.13634 0.12773 19.35% 11.81%
Lighting 0.10341 0.12408 0.11745 19.99% 13.58%
System Total 0.15515 0.18453 0.17394 18.94% 12.11%
105
2026 PCIA Rate Outlook
• SDG&E’s PCIA rates are projected to increase by approximately 4 cents per kWh. 2021 Vintage PCIA ($/kWh) PCIA Change (%)
Customer Class 10/1/2025
(Current Effective)
1/1/2026
(Oct. ERRA Update)
1/1/2026
(Nov. Prelim)
10/1/2025 - 1/1/2026
(Oct. ERRA Update)
10/1/2025 - 1/1/2026
(Nov. Prelim)
Residential (0.01364) 0.03563 0.03636 361.22% 366.57%
Small Commercial (0.01178) 0.02958 0.02895 351.10% 345.76% M/L C&I (0.01769) 0.03384 0.03379 291.29% 291.01%
Agricultural (0.01216) 0.03340 0.03388 374.67% 378.62%
Lighting (0.01109) 0.02838 0.02755 355.91% 348.42%
106
2026 SDG&E Delivery Rate Outlook
• SDG&E’s system avg. delivery rates are projected to increase by ~8%. • SDG&E's delivery rates could change further because certain proposals have yet to be included (i.e., wildfire mitigation costs).

SDG&E Avg. Delivery Rate ($/kWh) SDG&E Avg. Delivery Rate Change (%) Customer Class 10/1/2025
(Current Effective)
1/1/2026
(Oct. ERRA Update)
1/1/2026
(Nov. Prelim)
10/1/2025 - 1/1/2026
(Oct. ERRA Update)
10/1/2025 - 1/1/2026
(Nov. Prelim)
Residential 0.21483

0.23583 0.25192 9.78%17.26%
Small Commercial 0.23628

0.25100 0.23315 6.23%-1.32%
M/L C&I 0.17517

0.18238 0.18445 4.12%5.30%
Agricultural 0.14770

0.15405 0.13595 4.30%-7.96%
Lighting 0.25186

0.26450 0.22485 5.02%-10.72%
System Total 0.19602

0.20851 0.21169 6.37%7.99%
107
SDG&E General Rate Case (GRC) Phase 2
• SDG&E filed its 2024 GRC Phase 2 Application on January 17, 2023, and the Commission adopted a decision on September 18, 2025.
o SDG&E is required to present the PCIA as a separate line item on bundled customers’ bills to ensure consistent comparison between bundled and CCA customers, expected in Q2 2026.
o The Commission granted approval of proposals for revenue allocation to customer classes and rate design changes, including three notable changes that Community Power will mirror.

Seasonality Adjustment for
Residential Tiered Rates
• Moves the seasonal (winter / summer)
adjustment from the delivery rate
component to the commodity /
generation rate component.
• Reduces seasonal volatility in
commodity rates.
• Effective January 1, 2026.

Time-of-Use (TOU) Super Off-Peak Extension
• Extends existing weekday mid-day
Super Off-Peak (10 a.m. - 2 p.m.),
currently applied to March and April, to
the full year.
• Reduces mid-day prices to encourage
load-shifting to the mid-day period.
• Effective April 1, 2026.

New Medium Commercial
Customer Class
• Creates a new Medium Commercial
customer class for customers with
demand between 20-200 kW.
• Reclassifies several schedules as
Medium Commercial.
• Effective April 1, 2026.
108
Next Steps
• Staff continues to monitor updates from SDG&E and CPUC. • SDG&E commodity rates and PCIA rates, that will go into effect on January 1, 2026, will not be finalized until December 31, 2025.
• Staff will recommend to the Board to adopt a rate change on January 15, 2026. • Due to variation in PCIA for vintage years, staff will continue to recommend trifurcated rates. • After SDG&E files its March 1, 2026 rate changes related to GRC Phase 2 implementation, staff will recommend to the Board to adopt appropriate rate design updates to be effective on April 1, 2026 to align rates with SDG&E to improve the overall customer experience. 109
Public Comment on
Item No. 5
110
Item No. 5
Committee Members
Comments or
Questions
Update on SDG&E's
2026 Projected Rates.

Recommendation:

Receive and File Update on
SDG&E’s 2026 Projected Rates.
111
Committee Member Announcements
112
Adjournment
113
Next Regular Finance and
Risk Management
Committee Meeting
February 19, 2026
[email protected]
114
We are experiencing technical
difficulties.

Please be assured that we are
working to resolve the issue and
meeting will resume shortly.

Thank you.

San Diego Community Power Finance and Risk Management CommitteeDecember 4, 2025

San Diego Community Power Finance and Risk Management Committee
December 4, 2025