Agenda packet — Sonoma Clean Power Board of Directors, October 5, 2023

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AGENDA

BOARD OF DIRECTORS MEETING

THURSDAY, OCTOBER 5, 2023

9:00 A.M.

EXCEPT AS PERMITTED BY GOVERNMENT CODE SECTION 54953(F), MEMBERS OF THE BOARD OF DIRECTORS MAY PARTICIPATE IN THE OCTOBER 5, 2023, MEETING AT ANY OF THE LOCATIONS SHOWN BELOW.

SONOMA CLEAN POWER HEADQUARTERS
431 E STREET
SANTA ROSA, CA 95404

WILLITS CITY HALL (TELECONFERENCE LOCATION)

111 E ST.

WILLITS, CA 95490

MEMBERS OF THE PUBLIC MAY PARTICIPATE IN THE MEETING AT THE ABOVE PHYSICAL LOCATIONS OR REMOTELY THROUGH:

Webinar link: https://us06web.zoom.us/j/88546704126

Telephone number: 1 (669) 444-9171

Meeting ID: 885 4670 4126

NOTICE of CHANGE: How to Submit Public Comment - Effective October 5, 2023:

Comments may be provided in person at the physical meeting locations. Comments may be submitted in writing to [email protected]. For detailed public comment instructions, please visit this page. Please note that live remote public comment will not be taken unless required by Government Code section 54953(f). If required, it will be announced by the Chair. Members of the public should attend in person or provide written comment to ensure they can provide public comment.

For written comments, state the agenda item number that you are commenting on and limit to 300 words. Written comments received prior to the meeting and/or the agenda item you wish to comment on will be read into the record up to 300 words. Written comments may be provided during the meeting.

DISABLED ACCOMMODATION: If you have a disability which requires an accommodation or an alternative format, please contact the Clerk of the Board at (707) 757-9417, or by email at [email protected] as soon as possible to ensure arrangements for accommodation.

For further clarification on any of the items listed please contact (855) 202-2139 and staff will be available to assist.

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Staff recommendations are guidelines to the Board. On any item, the Board may take action which varies from that recommended by staff.

CALL TO ORDER (Any private remote meeting attendance will be noticed or approved at this time)

BOARD OF DIRECTORS CONSENT CALENDAR

1. Approve August 3, 2023, Draft Board of Directors Meeting Minutes

(Staff Recommendation: Approve)

2. Approve Resolution 2023-04 Attesting to the Accuracy of Sonoma Clean Power Authority’s 2022 Power Source Disclosure Annual Reports for CleanStart and EverGreen Products and 2022 Power Content Label (Staff Recommendation:

Approve)

3. Approve an Update to the NetGreen Tariff to Adjust Sonoma Clean Power Authority’s Premium Net Surplus Compensation Rate (Staff Recommendation:

Approve)

4. Approve Continued Use of Updated EM-TOU Rate Effective October 1, 2023 (Staff Recommendation: Approve)

5. Receive Internal Operations and Monthly Financial Report and Provide Direction as Appropriate (Staff Recommendation: Receive and File)

6. Receive Legislative and Regulatory Updates and Provide Direction as Appropriate (Staff Recommendation: Receive and File)

BOARD OF DIRECTORS REGULAR CALENDAR

7. Receive Geothermal Opportunity Zone Update (Staff Recommendation: Receive and File)

8. Approve and Delegate Authority to the CEO or his Designee to Execute an Agreement with Enphase Energy for a Battery Storage Grid Services Manager program with a Not-To-Exceed Amount of $980,000 through November 30, 2029 (Staff Recommendation: Approve)

9. Receive Update on Empower and Programs Equity (Staff Recommendation: Receive and File)

10. Discuss and Provide Direction on Staff Proposed Customer Rate Reductions which would Establish Parameters Following Changes to Distribution Utility Rates and Fees on or After January 1, 2024, and Amendments to Financial Policy B2 to allow Local Investments with Excess Reserve Funds (Staff Recommendation: Receive and File)

BOARD OF DIRECTORS MEMBER ANNOUNCEMENTS

PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA
(Comments are restricted to matters within the Board’s jurisdiction. Please be brief and limit spoken comments to three minutes, or 300 words if written.)

ADJOURN
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COMMONLY USED ACRONYMS AND TERMS

CAC Community Advisory Committee
CAISO California Independent Systems Operator – the grid operator CCA Community Choice Aggregator – a public power provider CEC California Energy Commission
CleanStart SCP’s default power service
CPUC California Public Utilities Commission
DER Distributed Energy Resource
ERRA Energy Resource Recovery Account – one of PG&E’s rate cases at the CPUC EverGreen SCP’s 100% renewable, 100% local energy service, and the first service in the United States providing renewable power every hour of every day.

Geothermal A locally available, low-carbon baseload renewable resource GHG Greenhouse gas
GRC General Rate Case – one of PG&E’s rate cases at the CPUC GridSavvy GridSavvy Rewards are available to SCP customers for reducing household energy use when needed to help California ensure reliable low-emission power. A form of ‘demand response.’
IOU Investor-Owned Utility (e.g., PG&E)
IRP Integrated Resource Plan – balancing energy needs with energy resources JPA Joint Powers Authority
MW Megawatt is a unit of power and measures how fast energy is being used or produced at one moment.

MWh Megawatt-hour is a unit of energy and measures how much energy is used or produced over time.

NEM Net Energy Metering. NEM is a billing mechanism that credits solar energy system owners for the electricity they add to the grid.

NetGreen SCP’s net energy metering bonus
PCIA Power Charge Indifference Adjustment – a fee charged by PG&E to all electric customers to ensure PG&E can pay for excess power supply contracts that it no longer needs.

RA Resource Adequacy – a required form of capacity that helps ensure there are sufficient power resources available when needed.

RPS Renewables Portfolio Standard refers to certain kinds of renewable energy which qualify to meet state requirements, including wind, solar, geothermal.

SCP Sonoma Clean Power
TOU Time of Use, used to refer to rates that differ by time of day 3 of 109
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___________________________________________________________

DRAFT MEETING MINUTES

BOARD OF DIRECTORS MEETING
THURSDAY, AUGUST 3, 2023
9:00 A.M.

CALL TO ORDER
(9:03 a.m. - Video Time Stamp: 00:04:01)
Chair Fudge called the meeting to order.

Board Members present: Chair Fudge, and Directors Bagby, Ford, Rogers, Zollman, Farrar-Rivas, Strong, and Gjerde. Directors Barnacle, Elward, and Vice Chair Hopkins were absent with prior notice.

Staff present: Geof Syphers, Chief Executive Officer; Michael Koszalka, Chief Operating Officer; Rebecca Simonson, Director of Programs; Kate Kelly, Director of Public Relations and Marketing; Neal Reardon, Director of Regulatory Affairs; Brytann Busick, Marketing and Events Manager and Josh Nelson, Special Counsel.

BOARD OF DIRECTORS CONSENT CALENDAR
(9:04 a.m. - Video Time Stamp: 00:04:23)

1. Approve July 6, 2023, Draft Board of Directors Meeting Minutes

2. Receive Geothermal Opportunity Zone Update

3. Approve and Delegate Authority to the CEO or his Designee to Execute First Amendment to Contract with Frontier Energy, Inc. to add $10,536 for an Amount Not-to-Exceed $150,179 through August 30, 2023, to Close Out Remaining Projects with On-Bill Financing Agreements

4. Approve and Delegate Authority to the CEO or his Designee to Execute an Agreement for Professional Services with Alternative Energy Systems Consulting, Inc. through December 31, 2024, with a Not-To-Exceed Amount of $118,000 to Provide Technical Assistance for Sonoma Clean Power’s Workplace Charging Research Project
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5. Approve and Delegate Authority to the CEO, or his Designee, to Execute a Contract with BlastPoint through June 30, 2024, with a Not-to-Exceed Amount of $176,000 for New Data-Driven Customer Insights
Director Farrar-Rivas requested a change to the draft minutes which should say, “the City of Sonoma was given a presentation regarding electrifying their fire trucks.”
Director Strong asked for a brief explanation of Item 5 and Michael Koszalka, COO, explained that BlastPoint is a company highly recommended by the Sacramento Municipal Utilities District (SMUD) and they will target markets for equity.

Public Comment: None
Motion to approve the August 3, 2023, Board of Directors Consent Calendar with the change to Item 1, the July 6, 2023, Draft Minutes by Director Bagby Second: Director Ford
AYES: Bagby, Ford, Rogers, Zollman, Farrar-Rivas, Strong, Fudge, Gjerde ABSENT: Barnacle, Elward, Hopkins

BOARD OF DIRECTORS REGULAR CALENDAR

6. Receive Internal Operations and Monthly Financial Report and Provide Direction as Appropriate
(9:08 a.m. - Video Time Stamp: 00:08:15)
COO Koszalka introduced a video of SCP’s Hall of Flowers exhibit at the Sonoma County Fair and photos of the new Climate Corner sections of Mendocino County Libraries. Director Gjerde added that the Willits Library will be the first community building to get a battery back-up system. Rebecca Simonson, Director of Programs, discussed technology, incentives, and changes to SCP’s offerings. She mentioned that California and the Federal government are coming in with more incentives in the future.

Director Ford asked what the status of Inflation Reduction Act (IRA) incentives are, and Director Simonson answered that they are expected in the beginning of 2024.

COO Koszalka then discussed SCP’s investment summaries and gave a financial update. Geof Syphers, CEO, mentioned that SCP had just sent out its 6 of 109

Joint Rate Mailer. COO Koszalka added that the September Board of Directors meeting was cancelled.

Director Farrar-Rivas asked if Community Development Financial Institutions could be used to support environmental policies and CEO Syphers stated that SCP’s investment policy would be added to the next packet.

CEO Syphers brought everyone’s attention to a Wall Street Journal article which stated that PG&E plans to stop its enhanced vegetation management program. Director Rogers then asked if PG&E was relying on Fast-Trip in place of the vegetation management program and CEO Syphers responded that data shows Fast-Trip is largely replacing Public Safety Power Shutoffs.

Public Comment: None

7. Receive Legislative and Regulatory Updates, Provide Direction and Approve Positions on Bills as Appropriate
(9:29 a.m. - Video Time Stamp: 00:30:18)
Neal Reardon, Director of Regulatory Affairs, discussed the North Coast Resiliency Initiative and explained the issue revolves around indirect power outages, where PG&E shuts off one large region to balance the grid because another neighboring region has a fire threat. He stated that, PG&E updated its predictions regarding the frequency of events and secondly, that PG&E stated it will upgrade all of the vulnerable circuits in the next 2 years. Director Reardon then discussed the California Public Utilities Commission (CPUC) adopting the new “slice-of-day” proposal to determine resource adequacy.

Director Ford asked if the diesel generator installation was beaten back in the North Coast Resiliency Initiative and Director Reardon responded that the CPUC has ordered PG&E to use cleaner energy, so they are moving away from diesel generators. Director Ford then asked if the new resource adequacy rules will make meeting compliance requirements harder and staff Director Reardon responded that it does because requirements don’t align with the existing available power products on the market. Director Bagby asked how often Cloverdale was discussed because they went without power for 5 days.

Director Reardon indicated SCP will continue to push for equity and resiliency.

Director Rogers stated that Oakmont had the same issue for Santa Rosa and CEO Syphers responded by thanking Ryan Tracey, Director of Planning and Analytics, for his help on finding a solution that has virtually eliminated the need for public safety power shutoff to the Oakmont community.

CEO Syphers stated that the Legislature was on its summer recess, and he thanked Senator McGuire for all his help with CCA legislation. 7 of 109

Public Comment: None
No new bill positions were presented during the discussion therefore no vote of the Board was required for this item.

8. Receive Presentation on 2023 Brand Awareness Survey Findings (10:00 a.m. - Video Time Stamp: 01:00:37)
Brytann Busick, Marketing and Events Manager, introduced Harry Hiner of Hiner & Partners. Mr. Hiner gave the Board a presentation on the 2023 Brand Awareness Survey. Kate Kelly, Director of Public Relations and Outreach mentioned she would make the presentation available to the Board.

Public Comment: None

9. Appoint an Ad Hoc Committee for the Community Advisory Committee Recruitment Process
(10:17 a.m. - Video Time Stamp: 01:17:33)
CEO Syphers stated that every 2 years the Board needs to make appointments to the Community Advisory Committee (Committee) and asked the Board to create an Ad Hoc committee to begin the selection process. Chair Fudge stated that she would like to have the entire service territory represented in the makeup of the of the Ad Hoc and she nominated Directors Elward, Gjerde, and Rogers. Director Rogers added that there should be a rural perspective also on the Ad Hoc and he nominated Director Farrar-Rivas.

Public Comment: None
Motion to Appoint an Ad Hoc Committee for the Community Advisory Committee Recruitment Process made up of Directors Elward, Gjerde, Rogers, and Farrar-Rivas by Director Ford
Second: Bagby
AYES: Bagby, Ford, Rogers, Zollman, Farrar-Rivas, Strong, Fudge, Gjerde ABSENT: Barnacle, Elward, Hopkins

10.Approve Salary Increases, Retirement Contribution, and Annual Contract Goals for Chief Executive Officer Syphers
(10:23 a.m. - Video Time Stamp: 01:23:08)
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Debora Fudge, Chair stated that the Board had met in Closed Session and given an outstanding review to CEO Syphers, and she also gave a big thank you to SCP’s staff for all that they do. She stated that CEO Syphers had agreed to a new set of goals and Joshua Nelson, Special Counsel, added that if the Board approved the salary increase, retirement contributions, and contract goals would go into effect September 1, 2023.

Public Comment: J. Mancillas asked for information regarding commercial office buildings and CEO Syphers encouraged him to call SCP’s customer service line.

Motion to Approve Salary Increases, Retirement Contribution, and Annual Contract Goals for Chief Executive Officer Syphers by Director Bagby Second: Gjerde
AYES: Bagby, Ford, Rogers, Zollman, Farrar-Rivas, Strong, Fudge, Gjerde ABSENT: Barnacle, Elward, Hopkins

BOARD OF DIRECTORS MEMBER ANNOUNCEMENTS
(10:31 a.m. - Video Time Stamp: 01:31:42)
Chair Fudge announced that the Sonoma County Fair had begun. Director Strong thanked SCP for working with Willits to install the new Climate Corner.

PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA
(10:32 a.m. - Video Time Stamp: 01:32:43)
Public Comment: None

ADJOURN
(10:33 a.m. - Video Time Stamp: 01:33:17)
The meeting was adjourned by unanimous consent.
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Staff Report – Item 02
To: Sonoma Clean Power Authority Board of Directors
From: Brian Goldman, Principal Compliance Analyst
Neal Reardon, Director of Regulatory Affairs
Issue: Approve Resolution 2023-04 Attesting to the Accuracy of Sonoma Clean Power Authority’s 2022 Power Source Disclosure Annual Reports for CleanStart and EverGreen Products and 2022 Power Content Label Date: October 5, 2023
Recommendation
Staff requests the Board of Directors approve Resolution 2023-04 affirming the 2022 Power Source Disclosure Annual Reports for Sonoma Clean Power Authority’s (SCP) CleanStart and EverGreen products (PSD Annual Reports) and SCP’s 2022 Power Content Label and attest to their veracity. The resolution is attached to this staff report as Attachment A, the 2022 PSD Annual Reports are attached to Resolution 2023-04 as Exhibit 1 and Exhibit 2, and the 2022 Power Content Label is attached as Exhibit 3.

Background
The California Public Utilities Code requires all retail sellers of electric energy, including SCP, to disclose “accurate, reliable, and simple-to-understand information on the sources of energy”1 that are delivered to their respective customers each year. SCP submitted its 2022 PSD Annual Reports on June 1, 2023. The PSD Annual Reports include SCP’s specified power purchases, resales, and self-consumption of energy by fuel type. Information from SCP’s 2022 PSD Annual Reports is included in SCP’s 2022 Power Content Label. The Power Content Label is mailed to SCP customers and posted on both SCP’s and the California Energy Commission’s (CEC) websites. 1 PUC § 398.1(b).
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Discussion
Staff will recommend that the Board adopt Resolution 2023-04 approving SCP’s 2022 PSD Annual Reports for SCP’s CleanStart and EverGreen products and attest to the veracity of the data in the PSD Annual Reports. Adoption of the attached resolution as recommended by staff enables SCP to comply with the CEC regulation implementing SB 1305.
2 During the 2022 calendar year, SCP provided CleanStart customers with an energy supply including 50.3% RPS eligible renewable energy from geothermal (17%), biomass and biowaste (16.4%), eligible hydroelectric (.4%), solar (9%), and wind (7.5%).

For EverGreen customers, SCP provided 100% renewable energy to participating customers including 86.5% purchased from geothermal sources and 13.5% purchased from solar sources. For comparison, California’s total renewable energy ratio is 35.8%.

Since 2020, retail sellers must include greenhouse gas (GHG) data for generation and procurement in the PSD Annual Reports and on the Power Content Label. 3 SCP reports
that it produces a GHG Emissions Intensity of 112 pounds of carbon dioxide equivalent per megawatt-hour (lbs. CO2e/MWh) for its CleanStart product, and just 70 lbs.

CO2e/MWh for its EverGreen product, compared to the 2022 California Utility Average of 422 lbs. CO2e/MWh.

Community Advisory Committee Review
On September 21, 2023, the Community Advisory Community unanimously approved staff’s recommendation to send this resolution to the Board of Directors to affirm the 2022 Power Source Disclosure Annual Reports for SCP’s PSD Annual Reports and SCP’s 2022 Power Content Label and attest to their veracity.

Fiscal Impact
Adoption of the Resolution will not result in any financial impact to SCP.

Attachments
➢ Attachment A – Resolution 2023-04 Approving SCP 2022 Power Source Disclosure Annual Reports for CleanStart and EverGreen Products and Approving and Attesting to the Veracity of SCP’s Power Content Label, available at this link or by request from the Clerk of the Board
2 20 CCR § 1390-1394.
3 Modification of Regulations Governing the Power Source Disclosure Program, May 4, 2020, p. 15.

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Staff Report – Item 03
To: Sonoma Clean Power Authority Board of Directors
From: Erica Torgerson, Managing Director of Customer Service Danielle McCants, Customer Operations Manager
Issue: Approve an Update to the NetGreen Tariff to Adjust Sonoma Clean Power Authority’s Premium Net Surplus Compensation Rate Date: October 5, 2023
Recommendation
Approve revisions to the NetGreen 2.0 Tariff.

Background
In 2020, SCPA’s Board of Directors approved the initial SCPA Tariff for NetGreen. The Board approved the transition to the NetGreen 2.0 Tariff revisions on December 1, 2022, effective January 1, 2023, primarily affecting cash out. Cash out is an annual process which pays customers who generate more energy than they consume over the course of a year a Premium Net Surplus Compensation (PNSC) payment.

Approximately 3% of SCP’s total customer base received a check for PNSC for the cash out in Spring 2023. The average cash out was $225. SCP has approximately 27,100 NetGreen customers
Note: This adjustment is unrelated to the recent CPUC approval of the Net Billing Tariff (NBT), also known colloquially as NEM 3.0.

Discussion
Staff proposes revisions to the Premium Net Surplus Compensation (PNSC) and cash out process of SCPA’s NetGreen 2.0 Tariff. Effective January 1, 2020, the California Solar Mandate requires all newly built homes to install solar photovoltaic systems.

Due to the significant increase in rooftop solar resulting from said mandate and the large growth in solar interconnection applications prior to the April 14, 2023, 13 of 109

deadline for customers to lock in their NEM 2.0 reservation, staff recommends revisions. These revisions aim to better align with current energy market prices and to ensure fiscal responsibility across all customer classes.

The proposed revisions to SCPA’s NetGreen tariff are as follows:

1. Change the methodology under which the PNSC is calculated, to mitigate unintended impacts resulting from current unusually high energy prices while still supporting solar customers.

2. Change the threshold at which a check will be automatically issued to $200 (from $100); amounts under $200 would be provided through an on-bill credit.

3. Sunset the “Net Generator Bonus” (i.e., bonus penny) effective July 1, 2024.

Staff is not recommending any programmatic changes to the NetGreen offering, however, as the wholesale rate for energy increases, it is no longer reasonable for SCP to pay two times the Net Surplus Compensation (NSC) rate to solar customers.

This would result in a large subsidy of solar customers from all non-solar customers, including low-income customers.

Net Surplus Compensation (NSC)
California AB 920 (Huffman) requires utilities to pay customers for surplus electricity generated annually, based on the value of that electricity delivered to the utility. The California Public Utilities Commission (CPUC) directed investor-owned utilities to calculate NSC based on the average wholesale value of electricity during solar generating hours over a calendar year.

In 2019, SCP’s Board of Directors approved setting SCP’s NSC rate to be double the 12-month average of PG&E’s NSC rate with a maximum payment of $5,000. At that time, the NSC rate was on average between two to five cents. Since then, energy costs have increased rapidly and based on the current methodology, SCP’s NSC rate in May 2024 is forecasted to increase by more than 230%. To ensure payments remain more reasonably close to energy value during periods of market fluctuations, staff propose an NSC adder of $0.01/kWh. This would result in an updated forecast NSC of $0.094/kWh, which is in line with the rate used during 2023 cash out. 14 of 109

On-Bill Payment Thresholds
The current SCP NetGreen 2.0 Tariff has a $100 threshold for checks to be automatically issued to customers; NSC payments under this threshold are provided as an on-bill credit. This results in an enormous number of check payments which must be issued annually. For example, in 2023, SCP issued 4,028 cash out checks to customers.

Staff propose to raise the threshold for a check to be issued to $200. If the $200 threshold had been implemented during the Spring 2023 cash out, SCP would have issued 1,583 fewer checks and more bill credits instead, with customers receiving the same value over time.

Proposed changes have four key benefits to customers:

1. Customers do not always cash the checks issued by SCP. In contrast, bill credits directly applied to customer invoices provide a more effective means of ensuring timely receipt and utilization of payments for customers.

2. SCP initiates follow-up with customers who haven't deposited their checks.

However, in numerous cases, SCP encounters difficulty in establishing contact with the customer. Minimizing these occurrences would result in a reduction of customer frustrations, unutilized funds, and delays in the check reissuance process.

3. Customers whose balance exceeds $200 due to over-generation will receive a check. This is due to the entirety of a bill credit might not be completely utilized in such cases.

4. Under updated PG&E billing procedures, on-bill credits are treated equivalent to cash payments on customer bills. SCP-provided credits are seamlessly applied to all utility charges.

Sunset Net Generator Bonus
SCP currently provides an additional $0.01/kWh retail credit, referred to as the bonus penny or net generation bonus, on all over-generation in a billing period. The bonus penny has been in place since the inception of the NetGreen program as an additional incentive for solar customers and to remain competitive with PG&E. Under this structure, SCP pays a premium retail rate for exported electricity that is higher than the value of the electricity during the bill cycle. This is due to customers 15 of 109

exporting electricity in the middle of the day when it may not be needed on the electric grid. As solar has expanded in California, the value of the electricity over-generated in the middle of the day is much lower than when the NetGreen structure was established. Staff recommends that the $0.01/kWh credit be phased out on July 1, 2024, as part of the transition to the revised tariff.

Community Advisory Committee Review
The Community Advisory Committee recommended that the Board of Directors approve the revision to the NetGreen 2.0 tariff at their September 21, 2023, meeting.

Fiscal Impact
The Spring 2023 annual cash out paid out over $1.4 million to solar customers who over-generated via check and approximately $118,000 via on bill credits. With the large growth outlined above, the 2024 cash out is predicted to be more than $3.5 million. Staff recommend using the reduced NSC rate, which would incentivize batteries and other all electric appliances to better take advantage of customer over-generation during solar hours. Any new program incentives would be brought to the Committee and Board before implementation.

Attachments
 Attachment A – Redlined NetGreen Tariff
 Attachment B – Final NetGreen Tariff
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431 E Street
Santa Rosa, CA 95404
sonomacleanpower.org
NetGreen 2.0 Tariff

Net Energy Metering Program

APPLICABILITY: This net energy metering (NEM) schedule is applicable to customers who use a Renewable Electrical Generation Facility (REGF) as defined in Pacific Gas & Electric Company (PG&E)'s Electric Schedule NEM, NEM2, or a California Public Utilities Commission (CPUC) approved successor NEM schedule. This rate schedule is available to customers that have a completed PG&E NEM Application, complied with all PG&E NEM interconnection requirements, received Permission to Operate, and are placed on PG&E Electric Schedule NEM, NEM2, or a successor NEM schedule. This includes customers served by Virtual Net Energy Metering (NEMV), Virtual Net Energy Metering for Multifamily Affordable Housing (NEMVMASH), NEM Aggregation (NEMA), Multiple Tariff facilities, and any other forms of Net Energy Metering as defined by PG&E Electric Schedules NEM, NEM2 and successor NEM schedules.

TERRITORY: This tariff is available to active Sonoma Clean Power (SCP) customers located in SCP’s service territory, which includes the Cities of Cloverdale, Cotati, Fort Bragg, Petaluma, Point Arena, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, Willits, the Town of Windsor, and the unincorporated areas of Sonoma County and Mendocino County (excludes the Cities of Healdsburg & Ukiah).

RATES: All SCP rates charged under this schedule will be in accordance with the customer-generator’s CleanStart Rate Schedule. A customer-generator served under this schedule is responsible for all applicable SCP charges from its CleanStart Rate Schedule including energy and demand charges, EverGreen premium (for EverGreen customers), taxes, and surcharges. Charges or credits for energy (kWh) supplied or delivered to SCP will be based on net metered usage in accordance with the customer CleanStart Rate Schedule and this Tariff.

PG&E NEM tariffs and rates still apply. SCP customers will continue to be subject to the terms, conditions, and billing procedures of PG&E for services other than electric generation.

SCP rates and rate design, including the rates and rate design reflected in this Tariff, are subject to change from time to time. Customers should take this into consideration when making any long-term decisions based on rate structures that are currently in place.

BILLING: For customer-generators taking service on the CleanStart Rate Schedule, any net monthly consumption or generation shall be valued as follows:

NetGreen 2.0 Tariff
Effective: January 1, 2023 October 1, 2023 Page 1
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1. Monthly Settlement of SCP Charges and/or Credits:
a. “Net Electric Consumption” is defined as when customer energy usage exceeds generation during any billing cycle and shall be billed in accordance with applicable TOU period-specific rates/charges, as described in the CleanStart Rate Schedule and Rates.
b. “Net Electric Generation” is defined as when customer energy generation exceeds usage during any billing TOU period and shall be credited in accordance with applicable TOU period-specific rates/charges, as described in the customer-generator’s CleanStart Rate Schedule. c. “EverGreen Premium” is defined as SCP’s voluntary 100% renewable service. The EverGreen Premium is charged on all net consumption of energy during a billing cycle. It is not credited to customers for over-generation. d. Any charges due for Net Electric Consumption will be assessed in each monthly statement. If the customer’s account has available credits from current or previous Net Electric Generation, these credits will be applied against usage charges first before any charges are assessed. e. Any excess Net Electric Generation credits will be tracked by SCP on the customer’s bill as a credit and will be applied to future billing cycles within the same SCP Annual Cash Out period as defined below.
f. Credit balances do not have any cash value except as defined in the Cash Out process below.

2. SCP Annual Cash Out and True-Up:
a. Following the final date and bill for each customer’s April billing cycle (if the customer does not have an April meter read, the prior or next available month will be used), SCP will initiate a True-Up of each customer account’s NEM balance. Any accrued credit balance will be reset to zero at the beginning of the next 12-month period.
b. A review will be conducted for each customer’s kilowatt-hour consumption and generation during the spring to spring annual true-up. If the customer’s account generated more electricity than it consumed, it is eligible for a Cash Out payment at SCP’s Premium Net Surplus Compensation (PNSC) rate.
c. The SCP’s “Premium Net Surplus Compensation” rate is intended to reflect double (200%) a $0.01/kWh increase on PG&E’s 12-month Net Surplus Compensation (NSC) average for the calendar year preceding the Cash Out.

NetGreen 2.0 Tariff
Effective: January 1, 2023 October 1, 2023 Page 2
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d. The PNSC rate will be updated each January for the remainder of the calendar year based on double (200%) PG&E average NSC for the previous calendar year. TheSCP’s NSC rate will be updated annually as part of SCP’s rate setting process, with consideration for changes in PG&E’s NSC rate and other market factors. PG&E’s NSC is set monthly at the rolling average of PG&E’s default load aggregation point price from 7 a.m. to 5 p.m.
e. The PNSC rate is located on SCP’s Rate Sheets located on its website at www.sonomacleanpower.org.
f. PNSC payments are subject to a cap of $5,000 per account annually. g. Customers will receive PNSC payments automatically, paid by check if they have $1200 or more, to the customer’s mailing address on their PG&E account. Customers with surplus credit balances of less than $1200 will receive an on-bill credit on their monthly statement.

3. Customers Returning to PG&E Bundled Service and Account Closures:
a. SCP customers with NEM service may opt out and return to PG&E bundled service at any time, subject to SCP and PG&E’s terms and conditions for return to bundled service. Customers are advised that PG&E will perform a True-Up of their account for any PG&E charges at the time of return to PG&E bundled service.
b. Customers returning to PG&E service or closing their PG&E account will have an SCP True-Up to determine if the customer is eligible for PNSC.

PNSC will be paid automatically (if applicable) by check to the customer’s PG&E mailing addresses unless another address is provided by the customer. There is no minimum threshold for receiving a PNSC check, but the maximum PNSC is $5,000 and any credits above that will be forfeited.

4. Aggregated NEM
a. Per the California Public Utilities Commission Section 2827(h)(4)(B), aggregated NEM customers are “permanently ineligible to receive net surplus electricity compensation.” SCP’s aggregated NEM NetGreen accounts are ineligible to receive PNSC payments and will have credits re-set to zero during the SCP True-Up period.

NetGreen 2.0 Tariff
Effective: January 1, 2023 October 1, 2023 Page 3
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TERMS AND Nothing in the NetGreen 2.0 Tariff precludes or supersedes SCP’s Terms and CONDITIONS: Conditions. SCP’s Terms and Conditions can be found at sonomacleanpower.org/terms-and-conditions.

More information about SCP’s NetGreen program can be found online at sonomacleanpower.org/programs/netgreen or by calling 1 (855) 202-2139.

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431 E Street
Santa Rosa, CA 95404
sonomacleanpower.org
NetGreen 2.0 Tariff

Net Energy Metering Program

PG&E NEM tariffs and rates still apply. SCP customers will continue to be subject to the terms, conditions, and billing procedures of PG&E for services other than electric generation.

BILLING: For customer-generators taking service on the CleanStart Rate Schedule, any net monthly consumption or generation shall be valued as follows:

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1. 2.

Monthly Settlement of SCP Charges and/or Credits:
a. “Net Electric Consumption” is defined as when customer energy usage exceeds generation during any billing cycle and shall be billed in accordance with applicable TOU period-specific rates/charges, as described in the CleanStart Rate Schedule and Rates.
b. “Net Electric Generation” is defined as when customer energy generation exceeds usage during any billing TOU period and shall be credited in accordance with applicable TOU period-specific rates/charges, as described in the customer-generator’s CleanStart Rate Schedule. c. “EverGreen Premium” is defined as SCP’s voluntary 100% renewable service. The EverGreen Premium is charged on all net consumption of energy during a billing cycle. It is not credited to customers for over-generation. d. Any charges due for Net Electric Consumption will be assessed in each monthly statement. If the customer’s account has available credits from current or previous Net Electric Generation, these credits will be applied against usage charges first before any charges are assessed. e. Any excess Net Electric Generation credits will be tracked by SCP on the customer’s bill as a credit and will be applied to future billing cycles within the same SCP Annual Cash Out period as defined below.
f. Credit balances do not have any cash value except as defined in the Cash Out process below.

SCP Annual Cash Out and True-Up:
a. Following the final date and bill for each customer’s April billing cycle (if the customer does not have an April meter read, the prior or next available month will be used), SCP will initiate a True-Up of each customer account’s NEM balance. Any accrued credit balance will be reset to zero at the beginning of the next 12-month period.
b. A review will be conducted for each customer’s kilowatt-hour consumption and generation during the spring to spring annual true-up. If the customer’s account generated more electricity than it consumed, it is eligible for a Cash Out payment at SCP’s Net Surplus Compensation (NSC) rate.
c. SCP’s “Net Surplus Compensation” rate is a $0.01/kWh increase on PG&E’s 12-month Net Surplus Compensation (NSC) average for the calendar year preceding the Cash Out.

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d. SCP’s NSC rate will be updated annually as part of SCP’s rate setting process, with consideration for changes in PG&E’s NSC rate and other market factors. PG&E’s NSC is set monthly at the rolling average of PG&E’s default load aggregation point price from 7 a.m. to 5 p.m. e. The NSC rate is located on SCP’s Rate Sheets located on its website at www.sonomacleanpower.org.
f. NSC payments are subject to a cap of $5,000 per account annually. g. Customers will receive NSC payments automatically, paid by check if they have $200 or more, to the customer’s mailing address on their PG&E account. Customers with surplus credit balances of less than $200 will receive an on-bill credit on their monthly statement.

3. Customers Returning to PG&E Bundled Service and Account Closures:
a. SCP customers with NEM service may opt out and return to PG&E service at any time, subject to SCP and PG&E’s terms and conditions for return to bundled service. Customers are advised that PG&E will perform a True-Up of their account for any PG&E charges at the time of return to PG&E bundled service.
b. Customers returning to PG&E service or closing their PG&E account will have an SCP True-Up to determine if the customer is eligible for NSC.

NSC will be paid automatically (if applicable) by check to the customer’s PG&E mailing addresses unless another address is provided by the customer. There is no minimum threshold for receiving a NSC check, but the maximum NSC is $5,000 and any credits above that will be forfeited.

4. Aggregated NEM
a. Per the California Public Utilities Commission Section 2827(h)(4)(B), aggregated NEM customers are “permanently ineligible to receive net surplus electricity compensation.” SCP’s aggregated NetGreen accounts are ineligible to receive NSC payments and will have credits re-set to zero during the SCP True-Up period.

TERMS AND Nothing in the NetGreen 2.0 Tariff precludes or supersedes SCP’s Terms and CONDITIONS: Conditions. SCP’s Terms and Conditions can be found at sonomacleanpower.org/terms-and-conditions.

More information about SCP’s NetGreen program can be found online at sonomacleanpower.org/programs/netgreen or by calling 1 (855) 202-2139.

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Staff Report – Item 04
To: Sonoma Clean Power Authority Board of Directors
From: Chris Golik, Revenue Manager
Issue: Approve Continued Use of Updated EM-TOU Rate Effective October 1, 2023
Date: October 5, 2023
Recommendation
Approve the continued use of Sonoma Clean Power’s (SCP) updated Multifamily Time-of-Use (EM-TOU) rate, adopted on October 1, 2023, under the CEO’s authority to make temporary rate changes. The new EM-TOU rate matches SCP’s current E-TOU-C rate.

Background
In November 2015, the California Public Utility Commission issued Decision 15-11- 013. The decision specified a gradual transition of the seasonal and time-of-use period definitions for master-metered residential customers on schedule EM-TOU.

The intent of updating these definitions was to better align with changed cost conditions, particularly in the summer season (with higher-cost hours occurring in the late afternoon and evening).

PG&E’s October 1, 2023, update to EM-TOU modified time-of-use period definitions and rates to mirror their E-TOU-C rate.

Per Section 4.5.2.1.1 of SCPA’s Joint Powers Agreement, “…the Chief Executive Officer may change any rate for power sold by the Authority or any charge for services provided by the Authority if (a) the need for the change arises from…(ii) a change in rates or charges imposed on the Authority or its customers by PG&E, the CPUC, or any other regulatory agency…; and (b) the Chief Executive Officer determines, following consultation with the Chair of the Board of Directors, that the change is reasonably necessary for budgetary reasons or to keep the 25 of 109

Authority's rates and charges competitive. Changes in rates or charges made by the Chief Executive Officer under this Section shall be brought to the Board of Directors at the next scheduled meeting for consideration and shall expire after 90 days unless ratified by the Board of Directors.”
Discussion
On October 1, 2023, PG&E updated their EM-TOU rate and time-of-use hours to match their E-TOU-C rate and time-of-use hours. In response, and because some of the time-of-use period definitions were updated, the CEO decided to update SCP’s EM-TOU rate on October 1, 2023, to match SCP’s current E-TOU-C generation rates (see Figure 1). On average, the update is not expected to materially change total bills for SCP’s EM-TOU customers.

Figure 1:

SCP RATE
SCHEDULE Season Charge type Charge unit Time of Use
Feb 1, 2023 SCP

GENERATION RATE
Oct 1, 2023 SCP

GENERATION RATE
Oct 1, 2023 PG&E

GENERATION RATE
Oct 1, 2023 SCP WITH

PG&E DELIVERY &

SURCHARGES
Oct 1, 2023 PG&E TOTAL

BUNDLED RATES
EM-TOU Summer Energy $/kWh On Peak $ 0.25931 $ 0.17948 $ 0.21085 $ 0.42404 $ 0.45082 EM-TOU Summer Energy $/kWh Part Peak $ 0.17864 n/a n/a n/a n/a EM-TOU Summer Energy $/kWh Off Peak $ 0.11231 $ 0.12921 $ 0.14741 $ 0.35377 $ 0.36738 EM-TOU Winter Energy $/kWh On Peak n/a $ 0.13557 $ 0.16225 $ 0.32602 $ 0.34811 EM-TOU Winter Energy $/kWh Part Peak $ 0.14511 n/a n/a n/a n/a EM-TOU Winter Energy $/kWh Off Peak $ 0.11185 $ 0.12141 $ 0.13722 $ 0.30854 $ 0.31976 Fiscal Impact
The October 1, 2023, EM-TOU rate change is not expected to materially impact FY2023-24 revenue.
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Staff Report – Item 05
To: Sonoma Clean Power Authority Board of Directors
From: Stephanie Reynolds, Director of Internal Operations Mike Koszalka, Chief Operating Officer
Issue: Receive Internal Operations and Monthly Financial Report and Provide Direction as Appropriate
Date: October 5, 2023
CalCCA ANNUAL RETREAT
The statewide trade association of community-owned power providers across California held its annual staff and board retreat at Sonoma Clean Power on September 26 and 27. At the invitation of CalCCA, the CEOs of all community choice programs spent a day wiäÉ äÉÂ GÕêÂàÓÕà’á ¡ÕÑÊ¾í DÊàÂ¾äÕà CÉàÊáäÊÓÂ HÊàÕÓµÐµ CEC CÕÒÒÊááÊÕÓÂà AÓÀàÂë M¾AÑÑÊáäÂà äÉÂ C¡¨C’á EìÂ¾åäÊêÂ DÊàÂ¾äÕà ¤µ¾ÉÂÑ ¡ÂäÂàáÕÓ µÓÀ äÉÂ CAI¥O’á CEO EÑÑÊÕä MµÊÓðÂà ÀÊá¾åááÊÓÈ áÕÒÂ ÕÇ äÉÂ ¾ÕÒÝÑÂì ÈÕµÑá ÕÇ ÊÒÝàÕêÊÓÈ CµÑÊÇÕàÓÊµ’á power reliability while maintaining energy affordability and enabling the shutdown of fossil fuel power plants. Staff viewed the event as a good opportunity to educate key decisionmakers about community choice power providers and to hear directly from the people who are shaping the policy and practice of how new clean power resources can be connected to the grid and whether that process will be improved in the future.

SONOMA CLEAN POWER’S ENERGY SOURCES
At the September Community Advisory Committee meeting, there was public comment related to information provided on the SCP Joint Rate Mailer. This postcard was provided to the Board at the August meeting, but is attached to this report again, as reference. The public comment was regarding the inclusion of Biomass/Biowaste in ¥C¡’á öôöö ¡ÕëÂà GÂÓÂàµäÊÕÓ MÊì §ÉÂ ÇÕÑÑÕëÊÓÈ Êá ½ÂÊÓÈ ÝàÕêÊÀÂÀ äÕ äÉÊá BÕµàÀ µá background and current information on our power purchases and use.

1. Community input over the past two years has been received on our Local Supply Plan. In specific, public input effectively secured an expectation that SCP would not pursue the construction of new forest biomass power generation in Sonoma 27 of 109

and Mendocino Counties without first bringing significant scrutiny to the matters of ensuring a sustainable on-going feedstock from waste materials alone in a manner that protects forests from harvesting for the purpose of producing power, and addresses serious air quality concerns.

2. The State of California has mandated the continuing operation of a number of biomass power plants to ensure grid reliability, and has further required that all IOU, CCA and direct access providers pay for their operation. As a result, SCP pays for these plants to operate whether we use the power or not.

3. The California Air Resources Board, California Energy Commission and California Public Utilities Commission have all designated existing biomass ÝÕëÂà ÈÂÓÂàµäÊÕÓ µá “àÂÓÂëµ½ÑÂ” µÓÀ µá µ ÝàÂÇÂààÂÀ àÂáÕåà¾Â ÇÕà ÈàÊÀ àÂÑÊµ½ÊÑÊäí due to its ability to operate through summer evenings and winter nights, when there are otherwise insufficient resources available to ensure reliability in California today.

4. As a result of all of the above, a few years ago SCP bid to obtain a portion of ¥CE’á ½ÊÕÒµáá ÝÕëÂà ÕåäÝåä ÕêÂà µ ÇÂë íÂµàá äÕ ÒÊÓÊÒÊðÂ ¾Õáäá ÕÓ àµäÂÝµíÂàá and deliver on our mission of rate stability and energy cost equity.

SCP expects the amount of biomass in our portfolio will generally decline as these contracts end over the coming years. What replaces this resource is an important question, though, and one that staff have not yet heard any public input on. ¥C¡’á current GeoZone effort is seeking to completely replace all biomass AND natural gas power with new local geothermal sources, but that will likely take quite a few years.

Until that time, SCP is working to secure a suitable amount of firm clean power that operates every single summer evening and all through winter nights.

COMMUNITY ADVISORY COMMITTEE RECRUITMENT UPDATE
The CAC Recruitment opened to the public on August 16, 2023, and remained open until October 2, 2023. On August 3, the BOD appointed Directors Elward, Gjerde, Rogers, and Farrar-Rivas to serve on the Ad Hoc committee to review applications and make appointment recommendations to the Board. The applications are currently under review and the Ad Hoc is on track to make recommendations at the December Board meeting.

ART EXHIBIT AT SCP BUSINESS OFFICE
On Saturday, September 9th, SCP celebrated the end of our first local art exhibition at the Business Office. Artworks featuring ten local artists had been on display for the last five 28 of 109

months, much to the enjoyment of staff and visitors alike. SCP appreciates the opportunity to share this artwork and support local artists from our communities.

NORTH BAY BUSINESS JOURNAL’S BEST PLACES TO WORK AWARD
FÕà äÉÂ ÇÊÇäÉ íÂµà ÊÓ µ àÕë ¥C¡ Éµá ½ÂÂÓ ÓµÒÂÀ ÕÓÂ ÕÇ äÉÂ NÕàäÉ Bµí BåáÊÓÂáá JÕåàÓµÑ’á Best Places to Work. SCP's award was based on the employer application, benefits offered to employees, confidential survey ratings by employees, the number of responses, and a breakdown of responses by management and non-managers. SCP holds our team in high regard and will work to continue this winning streak for years to come.

SONOMA COUNTY BICYCLE COALITION BIKE FRIENDLY BUSINESS OF THE YEAR ¥ÕÓÕÒµ CÑÂµÓ ¡ÕëÂà Éµá ½ÂÂÓ ÓµÒÂÀ äÉÂ ¥ÕÓÕÒµ CÕåÓäí BÊ¾í¾ÑÂ CÕµÑÊäÊÕÓ’á BÊÐÂ Friendly Business of the Year. SCP is the first entity in Sonoma County to receive the Gold level certification as a Bicycle Friendly Business by the League of American Bicyclists. SCP supports employees with indoor bike parking, availability of showers and supported employees in obtaining their own ebikes. In addition, SCP launched an e-bike incentive campaign that offered low-income customers $1000 off at the register when purchasing via a local bike shop; participants also got free helmets and bike education classes. SCP has been a participant in Bike to Work Day and an ongoing sponsor of SCBC. Scott Salyer and Leif Christiansen led the effort to obtain this award for SCP.

RECENT AND UPCOMING COMMUNITY EVENTS
With community events season coming to a close, Sonoma Clean Power has been sponsoring and participating in several events benefitting Sonoma and Mendocino counties including the Sonoma County Fair, the recent Closing Reception for the Art at SCP Exhibit, the 14th Annual Fiesta de Independencia, a group volunteer project at ¤ÂÀëÕÕÀ EÒÝÊàÂ FÕÕÀ BµÓÐ LÕá CÊÂÓ’á LµäÊÓì CåÑäåàµÑ EìÝÂàÊÂÓ¾Â and 10th Annual State of the Latinx Community Address äÉÂ LIME FÕåÓÀµäÊÕÓ’á Believe in the Dream Gala, the Made in Santa Rosa Education Foundation annual fundraiser, the Petaluma Educational Foundation Bash, and the Gravenstein Apple Fair, to name just a few.

UPDATE ON COMMUNITY NEEDS ASSESSMENTS
SCP continues to conduct needs assessments in three important areas: transportation and mobility, residential energy use and resiliency, and agricultural energy use. A commercial energy use and resiliency study will begin later this year. We remain 29 of 109

committed to making informed choices in program development to meet the needs of our community with particular emphasis on Environmental Social Justice communities, low-income, and underserved populations.

Transportation and mobility needs:

A series of 3 focus groups is being planned in coordination with local community-based organizations, as well as a survey that will provide a territory-wide perspective on community needs for transportation and mobility.

Residential energy use and resiliency needs:

An online survey is being conducted in both English and Spanish to gather insights from our residential customers. 20,000 residential customer emails have been randomly selected from SCP's customer database to take part in the survey. Response rates will be closely monitored among different customer groups to ensure the final responses are àÂÝàÂáÂÓäµäÊêÂ ÕÇ Õåà áÂàêÊ¾Â µàÂµ’á ÝÕÝåÑµäÊÕÓ
To hear from customers who may not have access to internet, computers, or mobile phones, SCP will partner with local community groups. These groups will help identify these customers and encourage them to fill out paper surveys in person. This is important because it includes people who can't do online surveys, and they often get left out of research.

A final report with customer insights and recommended approaches will be completed near the end of 2023.

FUEL SUBSTITUTION AND ELECTRIFICATION INCENTIVES PER APPLIANCE SCP staff monitors federal, state, and regional incentives for energy efficiency, electrification and fuel-substitution projects that are available to our residential customers. These incentives are in addition to or supplemental to SCP offerings and incentives. Each incentive has its own eligibility criteria, product specifications, and application process.

Attached to the end of this staff report is a list of active and anticipated incentives by technology/appliance. For a comprehensive list of current rebates and their associated requirements, visit The Switch Is On: https://incentives.switchison.org/. Note there are many more programs specifically targeted at multi-family, electric vehicles, distributed energy resources, and non-residential customers not included in the attached list. 30 of 109

INVESTMENTS
§ÉÂ ÈÕµÑá ÕÇ ¥C¡’á IÓêÂáäÒÂÓä ¡ÕÑÊ¾í ÊÓ ÕàÀÂà ÕÇ ÝàÊÕàÊäí µàÂ äÕ ÝàÕäÂ¾ä ¥C¡'á ¾µáÉ balances, retain sufficient liquidity, and produce a return on investment to preserve value over time. Allowed investments are listed in the Local Agency Investment Guidelines issued by the California Debt and Investment Advisory Commission (CDIAC), which is ÊÓ¾ÑåÀÂÀ ÊÓ ¥C¡’á IÓêÂáäÒÂÓä ¡ÕÑÊ¾í FÊÓµÓ¾ÊµÑ ¡ÕÑÊ¾í Bù As requested in the August BÕµàÀ MÂÂäÊÓÈ µääµ¾ÉÂÀ Êá ¥C¡’á Board Approved Investment Policy for reference. We have also reproduced the investment quarterly report for the quarter ending June 30, 2023, that the Board already reviewed at the August meeting.

SCP maintains investments with two banks and the Sonoma County Treasury Investment Pool. The bank funds are either insured by the Federal Deposit Insurance Corporation (FDIC) or collateralized at 110% per California Government Code Section 16521. The summary below reflects year-to-date figures for the twelve months ended June 30, 2023.

Investment Summary
Twelve Months Ended June 30, 2023
Investment Type Avg. Balance Interest Earned Avg. Annual Percentage Yield Money Market (1) $8,338,409 $228,309 2.78%
Certificate of Deposit (CD) (1) $822,779 $44,924 5.61%
Insured Cash Sweep (ICS) (2) $38,752,732 $784,988 2.05% Certificate of Deposit Account Registry Service (CDARS) (2) $20,594,081 $983,143 4.89% Sonoma County Treasury Investment Pool (3) $36,673,513 $615,078 1.69% Total (4) $105,181,513 $2,656,442 2.56%
Investment Location Avg. Balance
Summit State Bank $31,304,132
River City Bank $37,203,868
Sonoma County Treasury Investment Pool (3) $36,673,513
Total (4) $105,181,513
(1) Collateralized at 110% per California Government Code Section 16521 (2) Insured by the Federal Deposit Insurance Corporation (FDIC) (3) Excludes fair market value adjustment from financial statements (4) Excludes cash in non-interest-bearing accounts
MONTHLY COMPILED FINANCIAL STATEMENTS THROUGH JUNE 30, 2023 (End of FY 2022-2023)
The year-to-date change in net position is better than projections by approximately $7,580,000. Year-to-date revenue from electricity sales is slightly under budget by less than 2% and cost of energy is under budget projections by about 3%. Year-to-date electricity sales reached $276,560,000.
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SCP maintains a balanced portfolio by procuring electricity from multiple sources. Net position reached a positive $200,860,000, which indicates healthy growth as SCP continues to make progress towards its reserve goals. Approximately $95,207,000 is set aside for operating reserves.

Other operating expenses continued near or slightly below planned levels for the year.

BUDGETARY COMPARISON SCHEDULE THROUGH JUNE 30, 2023 (End of FY) The accompanying budgetary comparison includes the 2022/23 budget approved by the Board of Directors.

The budget is formatted to make comparisons for both the annual and the year-to-date perspective. The first column, 2022/23 YTD Budget, allocates the Board approved annual budget at expected levels throughout the year with consideration for the timing of additional customers, usage volumes, staffing needs etc. This column represents our best estimates, and this granular approach was not part of the Board approved budget.

Revenue from electricity sales to customers is slightly under budget by less than 2% at the end of the reporting period.

The cost of electricity is less than the budget-to-date by approximately 3%. Variation in this account is typically due to fluctuating market cost of energy on open position purchases.

Major operating categories of Data Management fees and PG&E Service fees are based on the customer account totals and are closely aligned to budget.

In addition to the items mentioned above, SCP continues its trend of remaining near or under budget for most of its operating expenses.

MONTHLY COMPILED FINANCIAL STATEMENTS THROUGH JULY 31, 2023 The year-to-date change in net position is better than projections by approximately $2,075,000. Year-to-date revenue from electricity sales is under budget by less than 4% and cost of energy is under budget projections by about 16%. Year-to-date electricity sales reached $25,631,000.

SCP maintains a balanced portfolio by procuring electricity from multiple sources. Net position reached a positive $208,787,000, which indicates healthy growth as SCP continues to make progress towards its reserve goals. Approximately $95,207,000 is set aside for operating reserves.
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Other operating expenses continued near or slightly below planned levels for the year.

ATTACHMENTS
➢ Fuel Substitution and Electrification Incentives List ➢ June 2023 Financial Statements
➢ July 2023 Financial Statements
➢ B.5 Investment Policy_Adopted 2021.10.07, available at this link or by request to the Clerk of the Board.

UPCOMING MEETINGS
➢ Community Advisory Committee – October 19, 2023
➢ Board of Directors – November 2, 2023
➢ Community Advisory Committee – November 16, 2023
➢ Board of Directors – December 7, 2023
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Fuel-substitution and electrification incentives per appliance

Below is a list of active and anticipated incentives by technology/appliance. For a comprehensive list of current rebates and their associated requirements, visit The Switch Is On: https://incentives.switchison.org/. Note there are many more programs specifically targeted at multi-family, electric vehicles, distributed energy resources, and non-residential customers that are not included here.

Air-source heat pump heating and cooling
Program Incentive Amount Who Applies? Eligible Customers Website IRS Federal Tax Credit Up to $2,000 Taxpayer Home must be an existing home in US. New construction is not eligible.
https://www.energystar.gov/ about/federal_tax_credits/a ir_source_heat_pumps Clean TECH CA (branded as TECH)
$1,000 Participating
Contractor
Single-family homeowners, multi-family property owners. https://incentives.switchison .org/
Sonoma Clean Power $1,000 Customer Sonoma Clean Power
customers.
https://scpadvancedenergyc enter.org/residential-rebates BayREN Home+* $400 Participating
Contractor
Sonoma County customers who receive electric or gas service from PG&E . https://www.bayren.org/hea t-pumps
Coming 2024: IRA High-Efficiency Electric Home Rebates (HEERA) $8,000 TBD Point-of-sale rebates for
low or moderate-income residents (at or below 150% Area Median Income) or LMI multi-family housing. https://www.rewiringameric a.org/app/ira-calculator
Heat pump water heater

Program Incentive Amount Who Applies? Eligible Customers Website IRS Federal Tax Credit Up to $2,000 Taxpayer Home must be an existing home in US. New construction is not eligible.
https://www.energystar.g ov/about/federal_tax_cr edits/water_heaters_non _solar Golden State Rebates* $700 Contractor or
Customer
Investor-owned utility customers, tank size specifications. https://goldenstaterebat es.com/goldenstaterebat
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es/rebates/heat-pump-water-heaters/
Sonoma Clean Power $700 Customer Single-family homeowners, multi-family property owners, tenants/landlords.
https://scpadvancedener gycenter.org/residential-rebates BayREN Home+* $400 Participating
Contractor
Sonoma County customers who receive electric or gas service from PG&E. https://www.bayren.org/ hp-water-heaters
Coming Fall 2023: Self-Generation Incentive Program (branded as TECH) $3,100 Participating
Contractor
Single-family homeowners, multi-family property owners. https://incentives.switchi son.org/
Coming 2024: IRA High-Efficiency Electric Home Rebates (HEERA) $1,750 TBD Point-of-sale rebates for
low or moderate-income residents (at or below 150% Area Median Income) or LMI multi-family housing. https://www.rewiringam erica.org/app/ira-calculator
Induction cooking

Program Incentive Amount Who Applies? Eligible Customers Website Sonoma Clean Power $500 Customer Sonoma Clean Power customers.
https://scpadvancedene rgycenter.org/residentia l-rebates BayREN Home+* $250 Participating
Contractor
Sonoma County customers who receive electric or gas service from PG&E. https://www.bayren.org /homeowners/induction -cooktops
Coming 2024: IRA High-Efficiency Electric Home Rebates (HEERA) $840 TBD Point-of-sale rebates for
low or moderate-income residents (at or below 150% Area Median Income) or LMI multi-family housing. https://www.rewiringam erica.org/app/ira-calculator
Whole home retrofits

Program Incentive Amount Who Applies? Eligible Customers Website CA Energy Smart Homes*
$5,550 Customer Each property must install
heat pump space heating, heat pump water heating, induction cooking, and an electric dryer. https://scpadvancedene rgycenter.org/residentia l-rebates 35 of 109
IRA Coming 2024:

Homeowner Managing Energy Savings (HOMES)
Up to $8,000 TBD Homeowner or aggregator
(energy savings company).
https://www.energy.ca.g ov/programs-and-topics/programs/inflati on-reduction-act-residential-energy-rebate-programs-california *These are CPUC-funded incentives and cannot be layered. Customer/Contractor must select only one program. Rebate application process and assistance Sonoma Clean Power’s rebate application is designed to be user-friendly and easy to complete. SCP’s customer service team at the Advanced Energy Center answers customer questions over the phone and in-person. We understand that rebate applications are submitted electronically, and that may not be accessible to everyone. For those that do not have connectivity or capabilities to submit a Sonoma Clean Power application, we can assist with a submission in-person at the Advanced Energy Center. BayREN Home+ and TECH Clean CA rebate applications are submitted by the contractor, so the customer is largely left out of the application process aside from authorization signatures. Golden State Rebate is also designed to be simple for a customer/homeowner to complete. The program administrator, CLEAResult offers oboth an email address and phone number to field any questions. 36 of 109
ACCOUNTANTS’ COMPILATION REPORT
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Management
Sonoma Clean Power Authority
Management is responsible for the accompanying financial statements of Sonoma Clean Power Authority (a California Joint Powers Authority) which comprise the statement of net position as of June 30, 2023, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Sonoma Clean Power Authority’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
August 16, 2023
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SONOMA CLEAN POWER AUTHORITY

STATEMENT OF NET POSITION
As of June 30, 2023
ASSETS
Current assets
Cash and cash equivalents $ 65,450,786
Accounts receivable, net of allowance 25,168,510
Other receivables 3,125,083
Accrued revenue 12,609,835
Prepaid expenses 1,473,807
Deposits 8,789,058
Investments 86,253,076
Total current assets 202,870,155
Noncurrent assets
Land 860,520
Capital assets, net of depreciation 17,536,150
Deposits 846,256
Total noncurrent assets 19,242,926
Total assets 222,113,081

LIABILITIES
Current liabilities
Accrued cost of electricity 12,939,088
Accounts payable 1,018,452
Advanced from grantors 3,074,682
Supplier security deposits 2,467,200
Other accrued liabilities 1,034,035
User taxes and energy surcharges due to other governments 719,779 Total current liabilities 21,253,236

NET POSITION
Investment in capital assets 18,396,670
Unrestricted 182,463,175
Total net position $ 200,859,845
See accountants' compilation report. 2
38 of 109

SONOMA CLEAN POWER AUTHORITY

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION

Year Ended June 30, 2023

OPERATING REVENUES
Electricity sales, net
Evergreen electricity premium
Grant revenue
Total operating revenues
$ 271,954,226
2,661,646
624,015
275,239,887

OPERATING EXPENSES
Cost of electricity
Contract services
Staff compensation
Other operating expenses
Program rebates and incentives
Depreciation
Total operating expenses
Operating income (loss)
187,499,814
9,024,836
7,381,276
1,702,146
3,155,539
1,394,577
210,158,188
65,081,699

NONOPERATING REVENUES (EXPENSES)
Grant revenue
Investment earnings (loss)
Nonoperating revenues (expenses), net
1,958,716
2,692,871
4,651,587

CHANGE IN NET POSITION
Net position at beginning of period
69,733,286
131,126,559
Net position at end of period $ 200,859,845
See accountants' compilation report. 3
39 of 109

SONOMA CLEAN POWER AUTHORITY

STATEMENT OF CASH FLOWS
Year Ended June 30, 2023

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 280,616,885
Receipts from grantors 3,955,568
Other operating receipts 3,452,362
Payments to electricity suppliers (187,424,754)
Payments for other goods and services (11,233,943)
Payments for staff compensation (7,298,120)
Tax and surcharge payments to other governments (3,399,274) Payments for program rebates and incentives (5,677,569) Deposits and collateral paid (9,560,000)
Deposits and collateral returned 6,150,000
Net cash provided (used) by operating activities 69,581,155

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Grant revenue 1,958,716

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments to acquire capital assets (293,374)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 1,100,747
Purchase of certificates of deposit (50,000,000)
Net cash provided (used) by investing activities (48,899,253) Net change in cash and cash equivalents 22,347,244
Cash and cash equivalents at beginning of year 43,103,542 Cash and cash equivalents at end of period $ 65,450,786 See accountants' compilation report. 4
40 of 109

SONOMA CLEAN POWER AUTHORITY

STATEMENT OF CASH FLOWS
(Continued)
Year Ended June 30, 2023

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:

Depreciation expense
Revenue adjusted for provision for uncollectible accounts (Increase) decrease in:

Accounts receivable
Other receivables
Accrued revenue
Prepaid expenses
Deposits
Increase (decrease) in:

Accrued cost of electricity
Accounts payable
Advanced from grantors
Accrued liabilities
User taxes due to other governments
Supplier security deposits
Net cash provided (used) by operating activities
$
$
65,081,699
1,394,577
2,859,914
(1,124,513)
(940,372)
821,974
1,487,436
(3,326,077)
(1,861,619)
(293,207)
3,074,682
61,897
44,364
2,300,400
69,581,155
See accountants' compilation report. 5
41 of 109
ACCOUNTANTS’ COMPILATION REPORT
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Board of Directors
Sonoma Clean Power Authority
Management is responsible for the accompanying Budgetary Comparison Schedule for the Operating Fund of Sonoma Clean Power Authority (a California Joint Powers Authority) for the period ended June 30, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management.

Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of Sonoma Clean Power Authority.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
August 16, 2023
1 42 of 109

SONOMA CLEAN POWER AUTHORITY

BUDEGTARY COMPARISON SCHEDULE - OPERATING FUND
Year Ended June 30, 2023
2022/23 YTD
Amended Budget 2022/23 YTD
2022/23 YTD 2022/23 YTD Variance (Under) Actual / Amended 2022/23 2022/23 Amended Amended Budget Actual Over Budget % Amended Budget Budget Remaining REVENUE AND OTHER SOURCES:

Electricity (net of allowance) * $ 279,200,000 $ 273,897,872 $ (5,302,128) 98% $ 279,200,000 $ 5,302,128 Evergreen Premium (net of allowance) 2,389,000 2,661,646 272,646 111% 2,389,000 (272,646) CEC Grant 1,414,000 624,015 (789,985) 44% 1,414,000 789,985 Investment income 1,488,000 2,692,871 1,204,871 181% 1,488,000 (1,204,871) Miscellaneous Income 1,025,000 15,070 (1,009,930) 0% 1,025,000 1,009,930 Total revenue and other sources 285,516,000 279,891,474 (5,624,526) 98% 285,516,000 5,624,526 EXPENDITURES AND OTHER USES: CURRENT EXPENDITURES
Cost of energy and scheduling 193,510,000 187,499,814 (6,010,186) 97% 193,510,000 6,010,186 Data management 2,677,000 2,623,343 (53,657) 98% 2,677,000 53,657 Service fees- PG&E 979,000 986,057 7,057 101% 979,000 (7,057) Personnel 7,650,000 7,381,276 (268,724) 96% 7,650,000 268,724 Energy Center, marketing & communications 2,951,000 2,359,764 (591,236) 80% 2,951,000 591,236 Customer service 291,000 160,933 (130,067) 55% 291,000 130,067 General and administration 1,190,000 1,131,645 (58,355) 95% 1,190,000 58,355 Legal 430,000 290,464 (139,536) 68% 430,000 139,536
Regulatory and compliance 460,000 207,845 (252,155) 45% 460,000 252,155 Accounting 258,000 268,900 10,900 104% 258,000 (10,900) Legislative 220,000 96,000 (124,000) 44% 220,000 124,000 Other consultants 746,000 365,284 (380,716) 49% 746,000 380,716 Industry memberships and dues 560,000 469,126 (90,874) 84% 560,000 90,874 Program implementation 5,456,000 2,402,789 (3,053,211) 44% 5,456,000 3,053,211 Program - CEC grant 4,180,000 2,520,371 (1,659,629) 60% 4,180,000 1,659,629 Total current expenditures 221,558,000 208,763,611 (12,794,389) 94% 221,558,000 12,794,389

OTHER USES
Capital outlay 600,000 189,536 (410,464) 32% 600,000 410,464 Total expenditures, other uses 222,158,000 208,953,147 (13,204,853) 94% 222,158,000 13,204,853 Net increase (decrease) in available fund balance $ 63,358,000 $ 70,938,327 $ 7,580,327 $ 63,358,000 $ (7,580,327) * Represents sales of approximately 2,156,000 MWh for 2022/23 YTD actual.

Long-Term % of Long-Term
RESERVES Current Balance Targeted Target
Operating Reserve (as of June 30, 2022) $ 95,207,000 $ 171,080,000 56% See accountants' compilation report. 2
43 of 109

SONOMA CLEAN POWER AUTHORITY

BUDGETARY COMPARISON SCHEDULE - OPERATING FUND (CONTINUED)

RECONCILIATION OF NET INCREASE IN AVAILABLE FUND BALANCE

TO CHANGE IN NET POSITION

Year Ended June 30, 2023

Net increase (decrease) in available fund balance
per budgetary comparison schedule: $ 70,938,327
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:

Subtract depreciation expense
Add back capital asset acquisitions
Change in net position $
(1,394,577)
189,536
69,733,286
See accountants' compilation report. 3
44 of 109
ACCOUNTANTS’ COMPILATION REPORT
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Management
Sonoma Clean Power Authority
Management is responsible for the accompanying financial statements of Sonoma Clean Power Authority (a California Joint Powers Authority) which comprise the statement of net position as of July 31, 2023, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
September 12, 2023
1 45 of 109

SONOMA CLEAN POWER AUTHORITY

STATEMENT OF NET POSITION
As of July 31, 2023
ASSETS
Current assets
Cash and cash equivalents $ 71,816,422
Accounts receivable, net of allowance 27,232,232
Other receivables 3,045,606
Accrued revenue 14,559,745
Prepaid expenses 1,562,357
Deposits 8,749,975
Investments 86,576,959
Total current assets 213,543,296
Noncurrent assets
Land 860,520
Capital assets, net of depreciation 17,438,629
Deposits 846,256
Total noncurrent assets 19,145,405
Total assets 232,688,701

LIABILITIES
Current liabilities
Accrued cost of electricity 15,283,979
Accounts payable 1,390,773
Advanced from grantors 3,074,682
Supplier security deposits 2,467,200
Other accrued liabilities 1,042,195
User taxes and energy surcharges due to other governments 642,620 Total current liabilities 23,901,449

NET POSITION
Investment in capital assets 18,299,149
Unrestricted 190,488,103
Total net position $ 208,787,252
See accountants' compilation report. 2
46 of 109

SONOMA CLEAN POWER AUTHORITY

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION

One Month Ended July 31, 2023

OPERATING REVENUES
Electricity sales, net
Evergreen electricity premium
Total operating revenues
$ 25,428,996
201,899
25,630,895

OPERATING EXPENSES
Cost of electricity
Contract services
Staff compensation
Other operating expenses
Program rebates and incentives
Depreciation
Total operating expenses
Operating income (loss)
15,749,523
788,490
609,785
220,352
734,833
116,454
18,219,437
7,411,458

NONOPERATING REVENUES (EXPENSES)
Investment earnings (loss)
Nonoperating revenues (expenses), net
515,949
515,949

CHANGE IN NET POSITION
Net position at beginning of period
7,927,407
200,859,845
Net position at end of period $ 208,787,252
See accountants' compilation report. 3
47 of 109

SONOMA CLEAN POWER AUTHORITY

One Month Ended July 31, 2023

STATEMENT OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Other operating receipts
Payments to electricity suppliers
Payments for other goods and services
Payments for staff compensation
Tax and surcharge payments to other governments
Payments for program rebates and incentives
Net cash provided (used) by operating activities
$ 21,911,611
209,829
(13,341,263)
(779,899)
(619,169)
(371,507)
(865,253)
6,144,349

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments to acquire capital assets (9,930)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received
Net cash provided (used) by investing activities
231,217
231,217
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of period $
6,365,636
65,450,786
71,816,422
See accountants' compilation report. 4
48 of 109

SONOMA CLEAN POWER AUTHORITY

STATEMENT OF CASH FLOWS
(Continued)
One Month Ended July 31, 2023

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:

Depreciation expense
Revenue adjusted for provision for uncollectible accounts (Increase) decrease in:

Accounts receivable
Other receivables
Accrued revenue
Prepaid expenses
Deposits
Increase (decrease) in:

Accrued cost of electricity
Accounts payable
Accrued liabilities
User taxes due to other governments
Net cash provided (used) by operating activities
$
$
7,411,458
116,454
549,796
(2,613,517)
40,326
(1,949,910)
(88,550)
39,083
1,172,786
363,317
1,180,265
(77,159)
6,144,349
See accountants' compilation report. 5
49 of 109
ACCOUNTANTS’ COMPILATION REPORT
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Board of Directors
Sonoma Clean Power Authority
Management is responsible for the accompanying Budgetary Comparison Schedule for the Operating Fund of Sonoma Clean Power Authority (a California Joint Powers Authority) for the period ended July 31, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management.

Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
September 12, 2023
1 50 of 109

SONOMA CLEAN POWER AUTHORITY

BUDGETARY COMPARISON SCHEDULE - OPERATING FUND
One Month Ended July 31, 2023
2023/24 YTD
2023/24 YTD 2023/24 YTD Budget Variance 2023/24 YTD 2023/24 Budget Budget Actual (Under) Over Actual / Budget % 2023/24 Budget Remaining REVENUE AND OTHER SOURCES:

Electricity (net of allowance) * $ 26,379,007 $ 25,428,996 $ (950,011) 96% $ 243,952,000 $ 218,523,004 Evergreen Premium (net of allowance) 238,766 201,899 (36,867) 85% 2,689,000 2,487,101 CEC Grant 175,000 - (175,000) 0% 470,000 470,000
Investment income 250,000 515,949 265,949 206% 3,540,000 3,024,051 Miscellaneous Income 171,473 - (171,473) 0% 2,058,000 2,058,000 Total revenue and other sources 27,214,246 26,146,844 (1,067,402) 96% 252,709,000 226,562,156 EXPENDITURES AND OTHER USES: CURRENT EXPENDITURES
Cost of energy and scheduling 18,781,719 15,749,523 (3,032,196) 84% 193,762,000 178,012,477 Data management 223,333 216,896 (6,437) 97% 2,680,000 2,463,104 Service fees- PG&E 82,500 81,298 (1,202) 99% 990,000 908,702 Personnel 674,000 609,785 (64,215) 90% 8,346,000 7,736,215 Energy Center, marketing & communications 255,548 205,080 (50,468) 80% 3,061,000 2,855,920 Customer service 8,500 14,822 6,322 174% 220,000 205,178 General and administration 113,714 127,278 13,564 112% 1,360,000 1,232,722 Legal 39,583 24,578 (15,005) 62% 475,000 450,422
Regulatory and compliance 38,333 22,150 (16,183) 58% 460,000 437,850 Accounting 21,473 20,140 (1,333) 94% 309,000 288,860 Legislative 18,333 8,000 (10,333) 44% 220,000 212,000
Other consultants 51,017 12,264 (38,753) 24% 624,000 611,736 Industry memberships and dues 103,383 84,734 (18,649) 82% 695,000 610,266 Program implementation 472,972 175,220 (297,752) 37% 8,101,000 7,925,780 Program - CEC grant 330,000 751,215 421,215 228% 1,712,000 960,785 Total current expenditures 21,214,408 18,102,983 (3,111,425) 85% 223,015,000 204,912,017

OTHER USES
Capital outlay 50,000 18,934 (31,066) 38% 600,000 581,066 Total expenditures, other uses 21,264,408 18,121,917 (3,142,491) 85% 223,615,000 205,493,083 Net increase (decrease) in available fund balance $ 5,949,838 $ 8,024,927 $ 2,075,089 $ 29,094,000 $ 21,069,073 * Represents sales of approximately 174,000 MWh for 2023/24 YTD actual.

Long-Term % of Long-Term
RESERVES Current Balance Targeted Target
Operating Reserve (as of June 30, 2022) $ 95,207,000 $ 171,080,000 56% See accountants' compilation report. 2
51 of 109

SONOMA CLEAN POWER AUTHORITY

BUDGETARY COMPARISON SCHEDULE - OPERATING FUND (CONTINUED)

RECONCILIATION OF NET INCREASE IN AVAILABLE FUND BALANCE

TO CHANGE IN NET POSITION

One Month Ended July 31, 2023

Net increase (decrease) in available fund balance
per budgetary comparison schedule: $ 8,024,927
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:

Subtract depreciation expense
Add back capital asset acquisitions
Change in net position $
(116,454)
18,934
7,927,407
See accountants' compilation report. 3
52 of 109

Staff Report – Item 06
To: Sonoma Clean Power Authority Board of Directors
From: Neal Reardon, Director of Regulatory Affairs
Geof Syphers, Chief Executive Officer
Issue: Receive Legislative and Regulatory Updates and Provide Direction as Appropriate
Date: October 5, 2023
Requested Action
Receive legislative and regulatory updates and provide direction as appropriate.

Regulatory Updates
CPUC Considering Proposals to Reduce Risk of Utility-Induced Wildfires PG&E’s General Rate Case (“GRC”) has been underway since last Spring. General Rate Cases, in conjunction with the Energy Resource Recovery Account (“ERRA”) proceedings, are the two central venues in which the utilities propose – and gain guaranteed cost recovery for – investments in transmission, distribution, generation, incentives for staff retention, etc. A critical issue in this year’s GRC is how to best ensure reliable service and reduce the on-going threat of utility infrastructure causing additional wildfires.

PG&E’s initial proposal, made via press release instead of through a formal proceeding, was to bury 10,000 miles of electrical lines. In practice, the utility has been proposing annual, incremental targets towards this publicly stated goal. PG&E’s progress has been very slow. In 2021, the utility reported 72 miles of undergrounding.

In 2022, they achieved another 180 miles for a total of 252 miles of the 10,000-mile goal. In the current General Rate Case, PG&E is requesting cost recovery for a significantly larger undergrounding effort totaling 2,100 miles. While this would reduce the risk of utility equipment starting additional wildfires, it would come at a cost of over $6 billion dollars to ratepayers. Coupled with other approved rate 53 of 109

increases, this would yield a significant increase in customer charges over the period from 2016-2026.

Below is a graph produced by The Utility Reform Network (“TURN”) showing the PG&E’s cumulative rate increases compared with the Consumer Price Index over the same period.

If the full 10,000-mile undergrounding effort were approved, TURN estimates that it would take over a decade to complete and would add $18,000 per customer over the next 50 years.

According to TURN, PG&E can reduce most of its wildfire risk by a back-to-basics strategy of improving vegetation management and complying with existing requirements. TURN outlines a significantly cheaper alternative to undergrounding:
covered conductors. Lines would be triple insulated and run along the ground as opposed to either elevated on poles or buried underneath. TURN notes that this solution is not only more cost effective – coming in at $2.1 billion compared with PG&E’s $6.3 billion proposal – but could be deployed in a fraction of time. In this approach, undergrounding would be reserved for the highest risk areas where burying lines is the most cost-effective approach to mitigate the risk of fire. The assigned Administrative Law Judge issued a Proposed Decision (“PD”), while the President of the CPUC issued an Alternate Proposed Decision (“APD”) providing for different treatment of PG&E’s request.
54 of 109

The PD relies more heavily on TURN’s proposal, adopting a significant portion of covered conductors in lieu of the more costly undergrounding. It would lead to a $1.6 billion dollar increase to PG&E’s authorized revenue requirement in 2023. Despite favoring less costly safety improvements, the PD would adopt 100% of the escalation (I.e., inflation) that PG&E requested. This would drive an $842 million increase between 2022 and 2023 alone, or roughly half of the $1.6 billion in additional cost.

The APD issued by President Reynolds incorporates more undergrounding and accepts PG&E’s argument that the utility will be able to reduce the cost of undergrounding from $3.3 million/mile today by over 10%, yielding a 4-year average of $3 million/mile. The additional capital costs allowed in the APD are nearly double those proposed in the PD - $4.27 billion. However, the counter-intuitive result is a lower revenue requirement, and customer bills, in the near term. This is driven by tax treatment of capital assets, which are eligible for accelerated depreciation. This puts downward pressure on the earlier-year bills, when the large depreciation charge reduces the revenue requirement. However, ratepayers pay for that benefit and much more over the 30–40-year financing period.

A CPUC press release summarizing the PD and APD is below:

Both the PD and the APD deny PG&E’s request for a $94 million or 68% increase to funds for employee bonuses, reasoning that a recent Total Compensation Study concluded that PG&E compensation was competitive at 8.9% above market rates.

SCP staff are actively engaging in this proceeding and working in conjunction with CCAs across Northern California. Maintaining affordability as we transition to a clean energy economy is paramount, and SCP staff will offer recommendations to protect customers from the most damaging elements of the PD and APD.

Aliso Canyon Gas Storage Filled
The CPUC unanimously voted on August 31 to direct Southern California Gas to increase the amount of natural gas stored in Aliso Canyon. The action was opposed by local residents and environmental groups because of the facility’s accidental release of over 100,000 tons of methane in 2015. The facility is California’s largest gas storage resource and provides significant protection against winter price spikes as gas usage peaks across the U.S. However, it is also a symbol of California’s failure to reduce 55 of 109

reliance on fossil fuel heating and power quickly enough. The Decision raises the allowed storage capacity from 41 to 69 billion cubic feet of natural gas, which consists of flammable gases – primarily methane – extracted from deep underground.

Legislative Update
The legislative session ended September 14, when all bills needed to pass in order to continue on to the Governor. With SCP’s primary legislative objectives secured, the agency’s lobbying is essentially done for 2023. Updates on bills are provided next, but staff first wish to thank CalCCA for its extraordinary work in sustaining the right of CCAs to purchase reliability resources in advance of any CPUC-ordered state procurement.

Staff also wish to thank Senator McGuire for his tireless work protecting CCAs from repeated attacks this session, and for rallying fellow lawmakers to press for critical changes to AB 1373. Senator McGuire was recently elevated to Pro Tem starting in January and staff look forward to working collaboratively with him in 2024 on important energy, climate and ratepayer issues.

Energy Reliability Budget Trailer Bill / AB 1373
CalCCA worked with SCP and its members across California to successfully secure a number of critical amendments to the Budget Trailer Bill (aka AB 1373), sufficient for SCP and all other CCAs to be neutral.

So-called “frontstop” procurement of “eligible energy resources” must now be done with the Department of Water Resources and not PG&E or the other investor-owned utilities. Frontstop procurement is industry jargon for the CPUC having the power to request DWR to buy resources without any option for IOUs or CCAs to buy them first.

Eligible energy resources are defined as new resources that meet all five of the following criteria:

1. The resource directly supports the state's SB 100 zero-carbon and renewable energy goal by 2045;

2. The CPUC determines the resource to not be under contract at sufficient levels as shown in electric providers’ most recent individual integrated resource plans;

3. The resource has a construction and development lead time of at least five years;

4. The resource does not generate electricity using fossil fuels or fuels derived 56 of 109

from fossil fuels;

5. The resource does not use combustion to generate electricity (except ancillary and necessary to facilitate geothermal electricity generation).

In practical matters, this will include offshore wind and may also include Salton Sea geothermal power, but could theoretically include additional similarly complex resources requiring new transmission systems and very long construction schedules.

The shift to DWR is critical because the costs of these resources will now be shared by all California electric customers, rather than only the customers of CCAs and the IOUs.

DWR already has statutory authority to buy the output from a number of natural gas power plants to supplement California’s grid reliability under a program called the Strategic Reliability Reserve. Unfortunately, this pathway creates a risk that California’s dependency on natural gas for electric reliability will be sustained for many years without any utility or CCA appearing to purchase or use the energy. As a result, SCP staff are keenly focused on daylighting this situation and ensuring that all greenhouse gas emissions are properly reported, and also to ensure that state purchases of natural gas power doesn’t reduce the market value for renewable power and storage.

The bill reiterates existing law that so-called “backstop” procurement can still be ordered by the CPUC for the IOUs to buy “diverse” resources and assign those costs to CCAs, but importantly now clarifies that CCAs must be provided an opportunity to buy those resources first. “Backstop procurement of diverse resources” is industry jargon for resources that the CPUC deems essential for system reliability or achieving the state’s climate goals, but which IOUs and CCAs are afforded an opportunity to purchase on their own before any central procurement order is issued. “Diverse resources” are not defined in statute, but is widely interpreted to mean resources needed to integrate renewables – especially solar power – into the grid in a manner that continues to ensure system reliability. In practice, this could be interpreted to include almost anything.

Many other details in the bill will have to be sorted out in future regulatory proceedings and potentially in clean-up bills.

At Senator McGuire’s request, the bill includes budget line-item language to make future General Fund investments easier for the California Coastal Commission to work on permitting for prospective offshore wind energy development, specifically for the regions leased by the Bureau of Ocean Energy Management of the U.S. Department of the Interior.

The bill is expected to pass and be signed by the Governor. 57 of 109

Status of Other Bills
 AB 50 (Wood) – Timely Electrical Interconnection – Support Sets reporting requirements for IOUs that are failing to timely connect new homes and businesses to the grid. Requires IOUs to share information about where the grid is deficient and will likely lead to problems with new construction, home electrification and EV charging.
 AB 538 (Holden) – Regionalization – Watch
This is a 2-year bill. Would join California’s largest grid reliability operations at CAISO with grid operators in other states to “regionalize” the reliability of our grid. The Author’s goal is to increase coordination across state boundaries to create a more efficient wholesale power market, lower costs and lower emissions by allowing more day-ahead planning for the use of clean power resources outside California.
 AB 593 (Haney) – Carbon emission reduction – Support
Bill is on hold this year and is eligible for consideration in 2024. Would require the CEC by June 2024 to identify an emission reduction strategy with milestones for the building sector. To date, the State’s building codes have a number of implied emission reduction elements (e.g., energy efficiency) but are not explicitly linked. The strategy would need to maximize workforce development, minimize impacts on ratepayers, support the State’s extreme heat goals, switch to heat pumps in areas with extreme weather, and reduce barriers for low-income households.
 AB 914 (Friedman) – Transmission upgrade CEQA timelines – Watch This is a two-year bill. This bill originally proposed CEQA exemptions for expanding the capacity of existing transmission lines, but despite support from labor, the IOUs and municipal power, it was narrowed to simply setting a two-year timeline for permitting review. The bill pertains to infrastructure projects needed to accommodate increased electrical demand associated with transportation electrification, building electrification and distributed-energy projects, and the renewable energy and storage supply resources needed to provide for those new loads.
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 AB 982 (Villapudua) – Public Purpose Programs – Watch This bill is a two-year bill. Would shift the financing from gas and electric rates to state general tax appropriations for most programs funding low-income weatherization, energy efficiency, customer-owned renewable energy and storage incentives, home insulation programs, rate assistance for food banks and the small-scale biomass program.
 SB 233 (Skinner) – EV Bidirectional Capability – Support Bill is dead. The bill would have required the CEC to study and make recommendations on the costs and benefits of bidirectional charging and submit a report to the Governor and Legislature by January 1, 2026.  SB 319 (McGuire) – Electricity transmission planning – Support Would require the CEC, CPUC, and CAISO to review and report on their transmission needs and plans over the next decade.

 SB 410 (Becker) – Powering Up Californians Act – Support Would require the CPUC to ensure IOUs connect new buildings and electricity service capacity upgrades to customers on a reasonable timeframe. Sets an average and maximum timeline in which electrical utilities should connect customers to the grid.
 SB 527 (Min) – Neighborhood Decarbonization – Support Held in the first house. Would require the CPUC for a five-year pilot period to facilitate neighborhood-scale retrofits from gas to electric infrastructure when it is cost effective (e.g., during times when the gas infrastructure would otherwise need major repairs or replacement), and where it prioritizes alleviating the pollution burden in areas with the highest impacts (e.g., low-income, disadvantaged). After five years, the pilot would be assessed and the CPUC would decide in its sole discretion whether to continue it. Critically, the bill would clarify that a gas company does not have an obligation to provide gas when SB 527 conditions allow a conversion to electric energy. 59 of 109

 SB 537 (Becker) – Public meeting teleconference – Support Would allow multijurisdictional, cross county legislative bodies to use alternate teleconferencing provisions similar to the emergency provisions indefinitely and without regard to a state of emergency. Requires a multijurisdictional legislative body to provide a record of attendance on its internet website within seven days after a teleconference meeting along with immunocompromisation in the list of health exemptions from previous legislation.

Proposed New Legislative Positions
None.

Attachments
 Attachment A - SB 233 Support
 Attachment B - AB 1068 Valencia - SCP Oppose
 Attachment C - AB 1373 Garcia - SCP Neutral
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431 E Street
Santa Rosa, CA 95404
sonomacleanpower.org
August 22, 2023
The Honorable Nancy Skinner
Member of the Senate
1021 O Street, Suite 8630
Sacramento, CA 95814
Subject: SB 233 (Skinner) – Support as Amended on August 14, 2023 Sonoma Clean Power (SCP) is pleased to support SB 233 (Skinner) as amended on August 14, 2023, which will require the California Energy Commission (CEC) to convene a stakeholder working group to make recommendations on the costs and benefits of bidirectional charging and submit a report to the Governor and Legislature by January 1, 2026. We support the amendments taken on August 14, 2023, that considers the potential benefits and cost impacts to consumers and ratepayers along with making sure the report considers the technological innovation or infrastructure upgrades needed from the electricity sector to implement the various modes of bidirectional charging.

SCP recognizes the importance of expanding California’s electric vehicle (EV) infrastructure.

Building on SCP’s successful Drive EV program, where over 1,250 EVs were incentivized, SCP partnered with the California Energy Commission and three local air districts. Together we launched an incentive project, investing potentially over $6 million to expand publicly accessible EV charging infrastructure in Sonoma and Mendocino counties. SB 233 will assist California with understanding how EV bidirectional charging not only expands the usefulness of an EV, but can also strengthen California’s grid.

Sonoma Clean power is the public electricity provider for Sonoma and Mendocino counties.

We provide our customers with cleaner electricity at competitive rates from sources like solar, wine, geothermal and hydropower, and promote local solutions to climate change. SCP is a not-for-profit agency, independently run by the participating Cities of Cloverdale, Cotati, Fort 61 of 109

Bragg, Petaluma, Point Arena, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, Willits,

Windsor, and the Counties of Sonoma and Mendocino.

Thank you for your leadership on this very important issue.

Sincerely,

Geof Syphers, CEO
cc: Members of the Assembly Appropriations Committee
2 !
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431 E Street
Santa Rosa, CA 95404
sonomacleanpower.org
September 7, 2023
The Honorable Avelino Valencia
Member of the Assembly
1021 O Street, Suite 4650
Sacramento, CA 95814
Re: AB 1068 (Valencia) – Oppose
Dear Assembly Member Valencia:

We appreciate the time your staff and sponsor provided to Sonoma Clean Power (SCP) regarding our concerns with AB 1068 and your acceptance of SCP’s proposed amendment that will ensure the written ex parte is relevant to the content changed in the decision.

However, we still have grave concerns with reducing transparency and giving well-funded actors like the investor-owned utilities a new advantage over public advocates.

Therefore, Sonoma Clean Power, unfortunately, must oppose your AB 1068. As amended, AB 1068 authorizes the California Public Utilities Commission (CPUC), by order or rule, to prohibit only oral ex parte communications in rate setting cases and catastrophic wildfire proceedings, along with expressly authorizing a written ex parte communication to occur at any time without restriction during rate setting cases and catastrophic wildfire proceedings if copies of the communication are transmitted to all parties on the same day as the original communication.

Sonoma Clean Power is the public electricity provider for Sonoma and Mendocino counties.

We provide our customers cleaner electricity at competitive rates from sources like solar, wind, geothermal and hydropower, and promote local solutions to climate change. SCP is a not-for-profit public agency, independently run by the participating Cities of Cloverdale, Cotati, Fort Bragg, Petaluma, Point Arena, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, Willits, Windsor, and the Counties of Sonoma and Mendocino.

Again, we appreciate your consideration of our concerns and will be closely monitoring the CPUC process if AB 1068 becomes law.
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Sincerely,
Geof Syphers, CEO
cc: Members of the Senate
2 !
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431 E Street
Santa Rosa, CA 95404
sonomacleanpower.org
September 7, 2023
The Honorable Eduardo Garcia
Member of the Assembly
1021 O Street, Suite 8120
Sacramento, CA 95814
Re: AB 1373 (Garcia) – Neutral
Dear Assembly Member Garcia:

As the public electricity provider for Sonoma and Mendocino counties, Sonoma Clean Power (SCP) is pleased to inform you that with the September 7th amendments SCP has adopted a neutral position on AB 1373.

We appreciate your attention to detail in making sure the language in AB 1373 has guardrails around the Department of Water Resources (DWR) as they take on the task of being California’s central procurement entity. Your understanding of SCP’s concerns about preserving the existing right of CCA’s to self-procure diverse resources that are not otherwise procured by the DWR in their central procurement capacity is appreciated.

However, as California moves to meet its renewable and zero-carbon energy resources and reliability goals with the passage of AB 1373, we must not forget that future decisions made by DWR as the central procurement entity could have significant consequences for ratepayers.

We share and applaud your commitment to improving the state’s energy reliability and resource diversity and look forward to continuing to work with you to address California’s energy reliability needs.

Sincerely,
Geof Syphers, CEO
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cc: The Honorable Steven Bradford
The Honorable Anthony Portantino
The Honorable Mike McGuire
The Honorable Bill Dodd
The Honorable Damon Connolly
2 !
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Staff Report – Item 07
To: Sonoma Clean Power Authority Board of Directors
From: Ryan Tracey, Director of Planning & Analytics
Geof Syphers, Chief Executive Officer
Issue: Receive Geothermal Opportunity Zone Update
Date: October 5, 2023
Background
The Geothermal Opportunity Zone (GeoZone) is SCP’s initiative to guide the development of local geothermal power that is compatible with community values and enables SCP to phase-out its dependence on natural gas power plants for reliability.

The Community Advisory Committee (CAC) meetings are a regularly scheduled public forum for the community to receive updates and provide input on the GeoZone. The updates provided to the CAC each month, and minutes from any discussion are posted on SCP’s website at https://sonomacleanpower.org/geozone-public-updates.

Additional background on the GeoZone can be found on the GeoZone webpage at https://sonomacleanpower.org/geozone.

Special Community Stakeholder Meeting
SCP hosted a special community stakeholder meeting in Cloverdale on September 18th to discuss proposed principles for new geothermal development. The presentation for the meeting has been posted on the GeoZone webpage (available directly at this link).

Attendees included SCP’s GeoZone partners, members of the local community, local and state government, labor, and environmental non-governmental organizations (NGOs). Staff will post minutes of the meeting and a summary of any written comments received by October 16, 2023. Feedback from this event will be shared with the public and the Community Advisory Committee to inform SCP’s developer partners on our communities’ principles for new geothermal development. 67 of 109

Geothermal Listening Tour
In late August, SCP’s CEO and Director of Planning and Analytics met with community members around Lake County to better understand how geothermal development can impact communities. Lake County was visited because unlike Sonoma and Mendocino counties, it has a concentration of local communities that are near existing geothermal power facilities. The tour provided SCP staff with important background to inform the September 18th Cloverdale workshop and early stakeholder engagement for the GeoZone. A document summarizing the listening tour is included as an appendix to this staff memo and is posted on the GeoZone webpage.

Community Advisory Committee Discussion
Staff provided a brief recap of the community stakeholder meeting in Cloverdale during the September 21st CAC meeting. Following the presentation, committee members asked for staff to walk through the potential impacts of geothermal development to communities. Staff provided a high-level list including induced seismicity, water usage, traffic, air emissions, and visual impacts, and recommended the geothermal listening tour summary as a resource for more detail.

Partner Activity
Chevron New Energies and Eavor Inc. continue to be focused on evaluating potential site opportunities for GeoZone pilot projects. Identifying potential project sites involves the partners connecting with landowners, researching mineral ownership rights (which govern who has the right to extract heat from the ground), geologic modeling, and characterizing electric grid transmission infrastructure. Eavor is currently completing an evaluation of surface geology to calibrate their modeling.

Meanwhile, both Chevron New Energies and Eavor are working with contractors to develop a permitting plan. After site control is secured, both entities will need to apply for a geothermal exploration permit which will trigger a California Environmental Quality Act (CEQA) process. This process is distinct from a separate CEQA process that will be required for a future geothermal power plant and wellfield.

Cyrq Energy’s long duration energy storage project is dependent on securing a commercial agreement from an existing geothermal operator. SCP is supporting Cyrq Energy in developing a business case, including forecasting potential market revenues, to inform discussions with a potential host. Securing a commercial agreement may be dependent on engineering work beyond a feasibility analysis Cyrq Energy performed to support a grant application earlier this year.
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Grant Funding
Cyrq received notice in late September that their application with SCP to the Department of Energy’s (DOE) Office of Clean Energy Demonstration’s (OCED) Long Duration Energy Storage Demonstration grant was not selected. DOE funding is very competitive—particularly from the OCED—and awardees of the OCED grant articulated very clear environmental justice and workforce development benefits. One award recipient is a project in Petaluma by ReJoule and developer Redwood Energy to use decommissioned electric vehicle batteries to install long-duration energy storage at two affordable housing complexes. SCP will be reviewing the selected applications with its partners to assess strategies to improve the competitiveness of future GeoZone grant applications.

Chevron New Energies is awaiting news on its application to the Geothermal Technology Office’s Enhanced Geothermal Systems Pilot Demonstration grant (selections expected October 2023). SCP submitted an application to PG&E’s Innovation Pitch Fest in August proposing a partnership for progressing GeoZone, but was not selected as a presenter. However, PG&E offered to potentially connect on GeoZone in Q4 of 2023. SCP is also working on connecting with the California Energy Commission to identify potential funding opportunities for the above-market costs of early GeoZone pilot projects.

Advocacy
SCP’s CEO published an op ed in the August 13, 2023, Press Democrat on the North Coast’s Dirty Little Secret, highlighting our entire state’s heavy dependency on natural gas fired power plants – many in poor neighborhoods in the Central Valley and Southern California. The article (attached in the appendix to this report) makes a case that the North Coast needs to stop exporting our air and water pollution to poor communities that have no effective political advocacy and draws the connection to GeoZone Initiative as SCP’s most promising means to achieve this goal.

SCP continues to invest in regulatory and legislative advocacy that is supportive of the GeoZone. In early September, SCP submitted comments in response to the California Energy Commission’s kick-off of the 2025 Senate Bill 100 report that highlighted the importance of considering advanced geothermal technologies in planning the resource portfolio to meet the state’s decarbonization goals. The last SB 100 report, released in 2021, relied on retaining natural gas capacity to provide reliability—which continues to burden neighboring disadvantaged communities with air and water pollution. Advanced geothermal technologies and other “clean firm” resources 69 of 109

provide the types of capabilities that would allow the state to evaluate portfolios that do not require fossil resources and their corresponding health impacts.

SCP has also been closely monitoring several California Independent System Operator (CAISO) stakeholder initiatives that impact development of local resources. SCP submitted comments on the CAISO’s proposed reforms to the interconnection process requesting that load serving entities like SCP have more influence on projects that receive deliverability. SCP also advocated for prioritization for projects that improve resource diversity and have long-lead times—such as geothermal. SCP is also working with CalCCA on advocacy in the CAISO’s generation deliverability stakeholder process and is preparing for the CAISO to release more details on its 2023-24 Transmission Planning Process (TPP). To unlock local project development, it will be critical that the CAISO approve several large network upgrades in PG&E territory.

Attachments
 Attachment A – SCP Geothermal Listening Tour Summary
 Attachment B – Press Democrat Op Ed on the North Coast’s Dirty Little Secret 70 of 109

Attachment A
)
SCP Geothermal Listening Tour Summary
On August 23 and 24, Sonoma Clean Power’s CEO and Director of Planning and Analytics met with community members throughout Lake County to better understand and learn about how geothermal energy can impact communities.

Lessons from these meetings are informing SCP’s process for exploring the development of new geothermal power in Sonoma and Mendocino Counties as part of the “GeoZone”. We chose to visit Lake County because that area has a population living closer to geothermal facilities than in Sonoma and Mendocino Counties, despite the fact that most of the existing geothermal facilities are located in Sonoma County.

During our tour, some community members shared specific concerns about how existing geothermal power facilities are operating, but we explained that we were not there to address problems with any existing facilities since we do not own or operate them. Rather, our goal is to plan ahead to build new facilities. For that reason, these notes record comments in a manner that captures concerns without connecting them to the individual who shared it and without details about specific locations.

The listening tour provided us with important background heading into SCP’s planning for new geothermal facilities and gives SCP’s private development partners insight into likely community concerns when they consider projects in Sonoma and Mendocino Counties.

Themes from these meetings included:
 Transparency and early community engagement is critical.

Experiences of surprises and projects proposed by unknown organizations can lead to distrust, which is difficult to overcome later. Make sure that project proponents are known, visible and available to answer community questions.

We were thanked repeatedly for meeting with community members before a project is proposed and encouraged to continue.
 Projects are always evaluated in context, not in isolation.

We were repeatedly reminded that everything SCP is doing in a community – all of the benefits and all of the impacts – are considered when deciding if a project should receive community support or opposition. Advice is to think through the entire relationship with the community near a project. A community’s receptiveness to new development can be influenced by the past—as an example, much of Lake County feels a sense of exploitation from the long-lasting environmental impacts of logging, mining, geothermal development, and wetland reclamation.
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 Engage early with local tribes.

If projects are likely to be proposed near Cloverdale, engage early with the Cloverdale Rancheria, Hopland, Dry Creek, and even Point Arena. We were advised that tribes often have been engaged too late to effectively evaluate the potential impact to cultural resources.
 Access to experts should extend to the community.

Trusted experts in geothermal operations, seismicity, and air quality are available as part of the existing geothermal facilities, and access to their data and viewpoints are very important to the community. Some of the examples provided included the experts who engage with the existing Geysers area Geothermal Air Monitoring Program and Seismic Monitoring Advisory Committee.
 Air quality monitoring is working.

Existing Geysers area geothermal air quality monitoring and abatement is functioning well, and any new geothermal facilities would be advised to learn from it and potentially duplicate it. Some concerns that local air monitoring stations might be improved by having local power backup were raised, but overall opinion was that the system is working, and that air quality issues are generally addressed well. Decades ago, there were more issues with hydrogen sulfide emissions, so we would be well-served to study how improvements were made.
 Water is (and will always be) complicated.

We heard recognition that when water sources come from more than one basin or supplier, it can get complicated and involve many stakeholders. There was an understanding that the environmentally-preferred disposal of treated wastewater is high value, but also concern that any water supplied to new geothermal operations in the dryer months will be difficult to obtain. Advice to SCP is to work on a sustainable and environmentally-appropriate water supply early in the process, since this will be a key constraint.  Induced seismicity is a deep concern for close neighbors.

We learned that in residential areas close to existing geothermal production, frequent small earthquakes are common. There was recognition that some of the quakes are naturally occurring because of local faults, but also concern that many of the quakes are created because of the geothermal operations. We learned that sensors allow the seismic monitoring program to evaluate induced seismicity, and that a fund exists to compensate homeowners for damage caused by induced quakes. We took away that limiting induced seismicity on close neighbors and providing an accessible mechanism for reimbursing damages is an important element in good design.
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 Plan for end-of-life.

We heard that thinking far ahead to how a facility can be appropriately retired someday is important. What does decommissioning look like?  Provide communities with multiple ways to provide input.

We heard that public meetings are important, but that providing opportunities for written input both during and outside of public meetings is equally important. Not all people are comfortable speaking. We heard that leveraging local organizations, such as the municipal town councils in Lake County, as a venue for engaging the community is effective.
 Give context for the GeoZone work.

Provide the public with early information about why new geothermal energy is needed, both to provide year-round reliability and to end our existing dependency on natural gas power plants in poor communities. We heard we need to share the context about what the State is requiring, what other power sources SCP is building, and why SCP is looking in certain regions of Sonoma and Mendocino Counties.
 Cracking rock or “fracking” has a bad reputation from oil and gas.

We heard that there is a dislike and a distrust of hydraulic fracturing. There was understanding that there are a wide variety of methods – some better and some worse – but the lesson was that if a new project is going to use any of these techniques in a geothermal project it would be subject to significant skepticism, scrutiny and review. While perhaps something that shouldn’t be generalized, the bad reputation from the natural gas industry makes the use of this technique in the geothermal industry harder.
 Traffic and noise in rural areas.

Neighbors reminded us that even impacts like traffic and noise in rural areas can be disruptive. We are advised to care about these impacts early and find ways to minimize them.
 Drawing on community knowledge.

After many decades of living near geothermal facilities, some members of our local community have developed significant knowledge on local geology, water, air quality and seismicity. We would do well to tap into that expertise at the right time by continuing to meet people and learn what they know.  Make reasonable economic assessments.

Some experiences in the past with developers who made overly-ambitious claims about tax revenues and job creation led to community skepticism.

Advice is to get off on the “right foot” by ensuring that claims about community value are reasonable from the start.
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 Learn about other community energy projects and engage.

In our travels throughout Lake County, we learned about community support for other kinds of energy projects, such as tank-to-tank pumped hydropower as a means of energy storage and a small “direct-use” geothermal project for heating. We learned more about how local residents and elected officials view the potential removal of Scott Dam. We learned about concerns that there aren’t nearly enough local electricians to support California’s transition toward electric appliances and the upgrades needed. We learned that the solar potential in some of the Lake County areas we visited is under-appreciated, since the winters are often sunnier than in other parts of California. We learned that local communities want access to the power that is produced in their backyard so they can enjoy the benefits when they are bearing the impacts.

More generally, we were encouraged to be fully engaged in the spectrum of local community energy projects in the regions around any potential GeoZone projects to ensure we understand them and can support the community’s ambitions.

We are grateful to the significant time community members from around Lake County shared with us and specifically wish to thank those who sat down with us for extended conversations:

Robert Stark
Supervisor Eddie Crandall
Holly Harris
Chuck Lamb
Former Supervisor Denise Rushing
Anderson Springs Community (six residents)
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Attachment B
)
Close to Home: North Coast’s
dirty little energy secret
Californians across the state rely on dirty power plants to keep the lights on, including all of us here in Sonoma and Mendocino counties.| 14
What does turning on your lights in Sonoma County or Mendocino County have to do with childhood asthma in Southern California?
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The answer lies in the interconnecGvity of our electric grid. During periods of peak demand, our local renewable energy sources are not enough. That’s when gas-fired power plants, including three in Oxnard, Long Beach and HunGngton Beach are fired up, creaGng air polluGon in neighborhoods largely populated by low-income families.

On Tuesday, the state Water Resources Control Board will vote on extending the deadline for compliance with certain water quality standards, which will allow conGnued operaGon of those three plants. Sadly, they may have to approve a three-year extension to avoid blackouts. If they do, they will violate a long-standing agreement to close them by the end of 2023.

But we can’t only place the blame on them.

Californians across the state rely on these dirty plants to keep the lights on, including all of us here in Sonoma and Mendocino counGes.

This is a criGcal issue for our clean energy future as well as for the affected communiGes.

We’re privileged on the North Coast to have no gas-burning power plants in our neighborhoods, but it’s past Gme we took responsibility for exporGng our air polluGon to poor communiGes in Southern California. A workable plan that keeps California’s lights on with renewable energy is overdue.

In 2018, state Senate Bill 100 boldly set a goal of reaching 100% renewable power by 2045, but it did not create a plan to get there.

Solar and baIeries will solve our summer power needs in just a few years, but we sGll will need offshore wind, geothermal and long-duraGon storage to close even a single fossil fuel power plant. That’s because of the long dark periods in the winter when solar isn’t producing and baIeries are empty.

Two years ago, Sonoma and Mendocino counGes partnered with Sonoma Clean Power to guide development of new geothermal resources in our region and preserve the precious exisGng Geysers power system. Our goal is to test some of the newest environmental technologies and find ways to scale up 24-hour renewable energy.

Building more local geothermal will allow us to shut down one dirty power plant someday, but on a state level California sGll needs a plan to quickly reGre all 39,500 megawaIs of them.

California needs to invest in replacing old, leaky windows in low-income neighborhoods. We need water heaters — the second-biggest consumer of energy in most households — to operate on renewable power. We need appliances and electric vehicles to automaGcally adjust their power use to avoid stressing the grid.

We also need to start building transmission lines to accommodate tripling power producGon.

We cannot pretend that delaying these projects is acceptable, because people are suffering every day we delay.
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To do this, California needs a plan that agrees to modest environmental impacts in exchange for definite closures of our dirGest power plants. We need development that provides great jobs and is supported by unions in exchange for narrowing the standards for suing criGcal clean energy projects.

We also need to protect the rights of community-owned power providers, like Sonoma Clean Power, to conGnue building renewable energy resources.

Some voices in Sacramento are pushing for the state Public UGliGes Commission to be allowed to order PG&E to build all power sources on behalf of community-owned power providers.

Instead, the PUC should focus state efforts where they belong — on hard-to-build stuff like offshore wind — and support community-owned power providers in their pursuit of renewable power projects.

CommuniGes across California are suffering from the consequences of our inacGon. Instead of making the water board decide between keeping the lights on and helping our communiGes of concern survive, we need a workable plan to build a reliable renewable energy system now.

Geof Syphers is CEO of Sonoma Clean Power, which serves the residents and businesses in Sonoma and Mendocino coun6es.
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Staff Report – Item 08
To: Sonoma Clean Power Authority Board of Directors
From: Carolyn Glanton, Programs Operations Manager
Rebecca Simonson, Director of Programs
Issue: Approve and Delegate Authority to the CEO or his Designee to Execute an Agreement with Enphase Energy for a Battery Storage Grid Services Manager program with a Not-To-Exceed Amount of $980,000 through November 30, 2029
Date: October 5, 2023
Recommendation
Approve and delegate authority to the CEO or his designee to execute an agreement with Enphase Energy through November 30, 2029, with a not-to-exceed amount of $980,000 for services related to battery storage management as part of the GridSavvy Rewards program.

Background
In 2017, Sonoma Clean Power (SCP) introduced the GridSavvy program, allowing SCP to remotely send signals to eligible residential smart devices, such as electric vehicle (EV) chargers and thermostats, to reduce peak demand. Customers can also receive alerts when the grid is stressed so they can turn off devices and save energy. This program enhances grid reliability, lessens the need for new transmission line capacity, reduces the reliance on natural gas power plants during peak periods (thereby cutting emissions), and paves the way for phasing out fossil fuel power plants in the long run.

SCP currently uses AutoGrid as our demand response partner for behavioral, EV chargers, and thermostats.

Customer load flexibility programs such as GridSavvy Rewards have become a priority for the state in the past several years because of the potential to transition to clean energy at affordable prices.
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In response to ongoing challenges with extreme weather and grid performance in California, the California Public Utilities Commission (CPUC) introduced the Emergency Load Reduction Program (ELRP) in 2021. This program was specifically designed to prevent rotating outages during peak electricity demand from May to October by using flexible customer load. Following the heatwaves of 2022, Governor Gavin Newsom declared a State of Emergency, urging energy providers to take immediate action to reduce the strain on the energy infrastructure, increase energy capacity, and make energy supply more resilient. The ELRP was dispatched to conserve customer demand, including with statewide alerts asking customers to reduce load.

Discussion
Staff are proposing to expand GridSavvy Rewards in response to interest from SCP’s Board and Committee and because of the ability to design an incentive equal to the reduced energy and capacity costs for SCP. The proposed behind-the-meter battery storage pilot can further support grid reliability efforts and provide additional flexible load. SCP proposes to partner with Enphase Energy for the pilot with a long-term goal to add more battery manufacturers over time.

Recent years have seen the installation of numerous Enphase battery storage systems in the Sonoma Clean Power service area, driven by wildfires and power outages. These battery storage systems enable customers to store surplus energy during off-peak hours and utilize it during peak times or emergencies, ensuring a consistent power supply. In our service area, the current Enphase market comprises around 1,100 customers, accounting for 8 MW and 22 MWh of capacity. While this capacity is already significant, it is also expanding daily. However, an estimated 40% of Enphase battery customers opt for the "standby only" mode, where the battery remains dormant until a power outage occurs.

Customers with eligible Enphase battery storage systems would be able to enroll in the GridSavvy Rewards battery storage option. SCP will manage the battery storage system by signaling the battery to charge during the day when solar energy is abundant, energy costs and grid emissions are low, and to utilize the stored energy within the battery during peak evening hours when solar energy is ramping down, energy costs and grid emissions are increasing. Customers decide the amount of capacity they want to enroll from their battery storage system. SCP will not signal battery use if a public safety power shutoff (PSPS) event or severe storm is forecasted to make reasonable efforts to ensure the battery remains fully charged in case of an outage. Customers can enroll at any time during the one-year enrollment period, agreeing to participate in the 80 of 109

pilot program for five years. Customers will receive an incentive for participating based on the battery capacity they enroll. See Attachment A for further details. The incentive levels provided are calculated to be covered by the reduced energy and capacity costs for SCP by optimizing the management of these batteries. In this way, lower income customers that do not have access to battery storage systems will not be subsidizing this program.

SCP will use the Enphase Grid Services Manager service to administer the GridSavvy Rewards Enphase Battery System Program. Enphase will enroll participants in the program through the Enphase App. They will also provide customer support for Enphase products and the Enphase App.

This program will offer valuable and adaptable assistance through residential solar and battery systems, particularly during the hottest months in the state when energy demand peaks, and energy supplies become more constrained.

By utilizing batteries to offset reliance on natural gas power plants, SCP can contribute to curbing air pollution in the vicinity of those facilities, particularly benefitting communities of people of color and low-income residents, notably in Southern California and the Central Valley.

Community Advisory Committee Review
On September 21, 2023, the Community Advisory Committee recommended the Board of Directors approve and delegate authority to the CEO or his designee to execute an agreement with Enphase Energy for a battery storage grid services manager program with a not-to-exceed amount of $980,000 through November 30, 2029.

Fiscal Impact
The agreement for Enphase services is not to exceed $980,000 through November 30, 2029. The approved Fiscal Year 2023/2024 budget includes this fiscal year amount.

Future years of the agreement will remain contingent on the SCP Board of Directors’ approval of the following fiscal years’ budgets.

Attachments
 Attachment A – Enphase Agreement and Statement of Work, available at this link or by request to the Clerk of the Board
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Staff Report – Item 09
To: Sonoma Clean Power Authority Board of Directors
From: Geof Syphers, CEO
Claudia Sisomphou, Communications and Engagement Manager Rebecca Simonson, Director of Programs
Issue: Receive Update on Empower and Programs Equity
Date: October 5, 2023
No written materials for this report. A presentation will be given at the meeting.

Presentations are attached.

Attachments
 Attachment A – Empower Presentation
 Attachment B- Equity in Programs Presentation
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1 9/25/2023

Empower update
Timeline
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3 9/25/2023

What is Empower?
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Challenges to address
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Empower Communities
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Identifying our Empower Communities
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Empower Communities
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Thank you! Questions?
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1 Equity in Programs
Community Needs Assessments and Program Efforts
Presentation to SCP Board of Directors
October 5, 2023
1 Strategic Action Plan and Equity
Framework
Customer Offerings & Incentives
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www.sonomacleanpower.org/strategic-action-plan www.sonomacleanpower.org/program-equity-framework Acknowledgements
The Equity Framework's foundation originates
from the Greenlining Institute's “Equitable Building
Electrification – A Framework for Powering Resilient
Communities”
We value the foundational work that their
organization is doing in this space
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Timeline
Equity Framework
February 18, 2021
Draft presented to Community Advisory
Committee
March 4, 2021
Draft presented to Board of Directors
March 2021
3 public workshops including one entirely in
Spanish
April 14, 2021
Community Advisory Committee Review Final
Framework
May 6, 2021
Board of Directors Received Final Framework
2022 Strategic Action Plan
March 17, 2022
Presented to Community Advisory Committee
April 7, 2022
Presented to Board of Directors
2023 Strategic Action Plan
February 16, 2023
Presented to Community Advisory Committee
March 2, 2023
Presented to Board of Directors
How They Work Together
• The Strategic Action Plan does not eliminate the Programs Equity Framework, it seeks to incorporate it.
• Provides clear action and annual reporting in one place. • The Framework is woven into everything we do.
• Empower is used to identify partnerships and specific communities in need.

Past: One Action Plan, one Framework.

Present: One Action Plan that establishes concrete steps toward implementation of Equity Framework. Framework is still available on our website.

Future: More fully incorporate key elements and language of Framework in the 2024 Action Plan including findings from Community Needs Assessments.
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Community Needs Assessments
7 Purpose
Step 1 of the Programs Equity Framework: Assess the Communities’ Needs “Prior to designing programs, staff will conduct community needs assessments to identify communities’ unique needs”
“meaningful inquiry into the possible benefits that programs can deliver to Environmental and Social Justice communities”
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Environmental and Social Justice
Communities
Communities where residents are:
• predominantly people of color or living on low incomes • underrepresented in the policy setting or decision-making process • subject to disproportionate impact from one or more environmental hazards and
• likely to experience disparate implementation of environmental regulations and socioeconomic investments
Segments
Residential Commercial Agricultural Transportation
Adopting a community-centered approach that starts with listening first to understand the needs, concerns, priorities, barriers, and motivations of our communities.

Leveraging this valuable insight combined with data and research to inform:

1. how existing programs could be modified,

2. how communication about and access to programs could be improved,

3. what future programs SCP could potentially offer,

4. what partnerships SCP could form to better serve communities? 10 95 of 109
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Early Efforts
• April 7, 2022 - Board received 2022 Strategic Action Plan that actioned Community Needs Assessments
• July 7, 2022 - Request for Qualifications initiated
• August 12, 2022 - Responses received
• 3 firms were selected
• December 1, 2022 - Board of Directors approved contracts More detail on each segment in slides to follow
Residential Commercial
Sacramento Municipal
Utility District
Sacramento Municipal
Utility District
Agricultural Transportation
Tierra Resources
Consultant
EVNoire
 Review past research, data, and demographics
 Web usability analysis
• Evaluate program offerings on our website
 Key informant interviews
• Provide compensation for time in accordance with Equity Framework  Surveys (English & Spanish)
• Focus on low-income customers and customers who live in Empower Communities, while surveying overall customer base
• Provide compensation for time in accordance with Equity Framework • Initial Recommendations
• Final Report and Recommendations
• Community Feedback Loop
• Engage with the community for feedback and follow up
Residential Needs Assessment
 Means complete or near completion
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Transportation Needs Assessment
 Review past research, data, and demographics
 Establish relationship with community-based organizations  Conduct Key Informant Interviews
• Provide compensation in accordance with Equity Framework • Surveys (English & Spanish)
• Focus on low-income customers and customers who live in Empower Communities, while surveying overall customer base
• Provide compensation in accordance with Equity Framework • Community Engagement
• Conduct focus groups with individuals residing within Empower Communities • Initial recommendations
• Follow up with community-based organizations
• Final report and presentation of recommendations with community  Means complete or near completion
 Review past research, data, and demographics
• Surveys
• To be offered in English and Spanish
• Initial recommendations
• Final report and recommendations
• Community Feedback Loop
• Engage with the community for feedback and follow up
Commercial Needs Assessment
 Means complete or near completion
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Agricultural Needs Assessment
Assessment Status
 Draft industry profile and researched funding environment  Conduct Key Informant Interviews w/ 26 cross-sector stakeholders and fielded a customer survey (compensated)
 Synthesize findings to assess sector needs, challenges, and opportunities Next Steps
• Finalize program approach recommendations
• Complete final needs assessment report
• Close loop with stakeholders
 Means complete or near completion
Next Steps
Steps 2 through 5 of the Programs Equity Framework
Step 2: Establish Community-Led Decision-Making
Partner with community-based organizations
Step 3: Develop Metrics and a Plan for Tracking
Step 4: Ensure Funding and Program Leveraging
Utilize external public health and climate program funding and budget for investment in programs Step 5: Improve Outcomes
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Programs Achievements
Early progress
Alerts
No customer installed devices are needed
• Removes financial barriers to participate
• Serves renters
Saved energy = $ back
Choice to keep or donate rewards to local non-profit
community partners
Educates community about consumer impacts on grid
reliability
Participants
• 38% of participants are low-income qualified
• 14% of participants live in Empower Communities
• 247 customers prefer communication in Spanish
• 370 request voice call notifications only
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Bike Electric
100% low-income program
$1,000 point-of-sale discount
420 bikes incentivized
Free helmets and rider safety classes
99% program satisfaction
Advanced Energy
Center
Financial Assistance
Rebates and 0% on-bill financing
Low-income customers eligible for 50% of project cost
coverage, up to $10,000 per technology
• 53 low-income customers received rebates
• 11 low-income customers utilized zero-interest financing (7% of total participants)
• Early lessons learned to improve low participation rates Funds reserved for affordable housing & mobile homes
Other Benefits
• Community-based organizations

partnerships and assistance

• Educational and meeting space
• Help with general customer questions
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Non-Profit EVs

Since 2018, 18 nonprofits, including 3 in
Mendocino, have used SCP's EV rebate to
upgrade to clean vehicles serving residents
in SCP's service area
Current Rebates
• $15,000 for a passenger vehicle
• $22,500 for a vehicle with a payload
over 1,500 pounds

Multifamily
Designed to address electrical panel upgrade
barrier in multifamily housing
Partnered with the Bay Area Multifamily Building
Enhancements Program to fund in-unit and
building-level electrical upgrades
Affordable Housing Incentives
• $750 per unit
• $5,000 per central panel upgrades
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The Power of
Partnerships

Partnerships Are Essential
• Understand customers' needs
• Connect with the community
• Respond to emerging issues
Our Role
• Support local efforts
• Collaborate with organizations
Picture courtesy of the LIME Foundation's NextGen Trades Academy Thank you
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Staff Report – Item 10
To: Sonoma Clean Power Authority Board of Directors
From: Geof Syphers, CEO
Mike Koszalka, COO
Chris Golik, Revenue Manager
Issue: Discuss and Provide Direction on Staff Proposed Customer Rate Reductions which would Establish Parameters Following Changes to Distribution Utility Rates and Fees on or After January 1, 2024, and Amendments to Financial Policy B2 to allow Local Investments with Excess Reserve Funds
Date: October 5, 2023
Recommendation
No action. Three items in this report are for discussion and input from the Board with the expectation of Board action in the next meeting.
1) Amend Financial Policy B.2 to allow local investments per the redlines in Attachment A.
2) Set rates based on costs while allocating the excess ratepayer collections above SCP’s reserve target as of January 1, 2024 accordingly:
• 60% to rate reductions in 2024 and 2025
Return 60% of excess reserves to ratepayers in 2024 and 2025 in the form of rate reductions such that the savings relative to PG&E’s bundled customers is expected to be the same in both calendar years of 2024 and 2025 based on then-current regulatory filings and known market information. Reset all rate classes so SCP collects sufficient revenues to cover all current costs net of the reserve overcollection, and such that customer total bills have an equal target percentage difference from PG&E’s bundled service total bills. • 30% to establish a local investment fund
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The purpose of the fund would be to lower customer rates over time by investing in long-term assets to lower SCP’s energy expenditures or generate revenues to offset customer rates. Specific investments would be brought to the Board for approval in later meetings prior to commitment. • 10% for customer incentives in 2024 and 2025
Details on such incentives would be proposed and approved by the Board in a future meeting, but staff are contemplating proposing incentives that are exclusively or primarily geared toward low-income or disadvantaged customers in response to Board input in past meetings.
3) Establish ongoing local investments during years when costs and rates are favorable.

Background
It is valuable for credit rating agencies to see that SCP’s Board of Directors continues to be willing to raise rates to cover costs when necessary and build reserves when prudent. A strong rating, in turn, helps SCP secure favorably priced energy contracts that allow our transition to clean power while protecting customers from unreasonable energy costs. The agency is in good times now, with significant reserves growth over the past 18 months. It is also prudent for excess reserves to be used to protect customers from future rate shock, which staff is proposing.

SCP reached its long-term financial reserves target between July and August 2023 about nine months ahead of the ten-year goal. This is a positive development and creates the opportunity for SCP to lower rates and make investments in local energy projects that have the potential to generate income to offset customer rates far into the future.

SCP’s goals with customer rate setting include:
• Protect customers from sudden large changes in rates; • Have few rate changes in a given year to provide stability for customers; • Save customers money when we can, while still achieving progress on SCP’s climate goals;
• Maintain the minimum balance of long-term cash reserves to sustain SCP’s investment-grade credit rating and ability to secure affordable sources of 104 of 109

energy and seek to build and sustain the target balance of long-term cash reserves to ensure adequate liquidity to survive extreme energy market conditions (e.g., a broad energy crisis or a rapid increase in PG&E’s fees).

Over the past nine-and-a-half years, SCP has had rates that were lower than PG&E 80% of the time while supplying a consistently more environmentally preferred portfolio of power sources. Today, SCP customers enjoy bills that are between 3% and 5% lower than those of customers who have chosen PG&E for their power generation needs.

This proposal aims to enhance SCP customer savings by implementing further rate savings and proactively planning to limit the scale and risk of rate increases over the next two years. The exact amount of customer savings will depend on PG&E’s new rates and fees, which PG&E will likely not make public until December 31, 2023, however, it is reasonable to assume with today’s information that savings around 5% or slightly higher should be possible for both years.

PG&E is expected to implement changes to the Power Charge Indifference Adjustment (PCIA) and PG&E’s rates on January 1, 2024, or soon after that. While SCP does not expect to have final numbers for these changes until December 31, 2023, the most recent PG&E forecast indicates:
• An increase in PG&E delivery costs for all customers; • A large decrease in PG&E’s bundled service generation costs; and • A medium increase in the Power Charge Indifference Adjustment for CCA customers.

There are multiple pending cases with the CPUC that are hard to predict and will have significant impacts on PG&E’s 2024 rates. PG&E’s update to PCIA is currently expected to include a catch-up amount to make up for under collecting in 2023, but the outlook can change quickly based on changes to the market cost of energy. The potential for severe weather events like the heat storm in September 2022 adds to uncertainty. As with past years, the outlook should become clearer over the next few months.

Further out, SCP’s cost of energy will increase significantly in 2025 when some of the existing fixed-price contracts end and SCP is more exposed to current high market prices of energy. However, having a two-year strategy on rates will significantly help mitigate the high costs in 2025.
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Discussion
As used in the past five years, to facilitate the implementation of new customer rates as soon as possible following PG&E’s expected changes on January 1, 2024, staff is recommending the use of rate setting parameters. If PG&E’s final numbers are available on December 31, 2023, SCP expects to be able to implement new rates on February 1, 2024. If PG&E’s updates are delayed, then staff propose to make SCP’s rate change as soon as feasible after the information becomes available.

As a result of achieving its long-term financial reserves target, SCP can shift to charging only the cost of service, which means extending SCP’s ability to offer customers cost savings. Additionally, excess reserves give SCP an opportunity to protect customers from future large changes in rates and the ability to invest in local energy projects, in response to interest from the Committee and Board.

When SCP implements new rates, staff are recommending the then-most-recently-reported excess financial reserves be allocated as follows:
• 60% to rate reductions in 2024 and 2025
Return 60% of excess reserves to ratepayers in 2024 and 2025 in the form of rate reductions such that the savings relative to PG&E’s bundled customers is expected to be the same in both calendar years of 2024 and 2025 based on then-current regulatory filings and known market information. Reset all rate classes so SCP customer total bills have an equal target percentage difference from PG&E’s bundled service total bills. Per policy, staff will return to the Board following rate implementation to have the final rate tables ratified by the Board in the next meeting.
• 30% to establish a local investment fund
The purpose of the fund would be to lower customer rates over time by investing in long-term assets to lower SCP’s energy expenditures or generate revenues. Specific investments would be brought to the Board for approval. • 10% for customer incentives in 2024 and 2025
Details on such incentives would be proposed and approved by the Board in a future meeting, but staff are contemplating proposing incentives that are exclusively or primarily geared toward low-income or disadvantaged customers in response to Board input in past meetings.
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Staff also are anticipating ratepayer value in making ongoing investments in local income-producing projects to offset rates. While any allocation would be subject to annual Board authorization, setting up an expectation in the next several months could provide a helpful benchmark to future Boards of Directors. Staff propose:

In years when SCP rates are…
…budget toward local income-producing
investments
> 3% above bundled rates 0% of Revenues
Between equal and 3% above bundled rates 1% of Revenues Between 3% below bundled rates and equal 2% of Revenues Between 6% and 3% below bundled rates 3% of Revenues
More than 6% below bundled rates 4% of Revenues
Community Advisory Committee Review
The Committee expressed support for the proposal in this item and noted the value of smoothing rates and placing an emphasis on equity with customer incentives.

There was also interest in how a local investment fund could enhance distributed energy storage in our area.

Financial Impact
This draft proposal recommends setting rates to cover all current expenses through income net of excess collections. The proposed rate reductions, establishment of a local investment fund, and dedication of funds to customer program incentives are designed to return the excess funds collected to customers and have no impact on SCP’s current expenditures budget or dedicated long-term financial reserves.

Ongoing investments in local income-producing projects would represent between 0% and 4% of Revenues, with more invested in years when costs and rates are favorable, and this allocation would be adjustable by future Board action as needed.

Attachments
 Attachment A – B.2 Financial Reserves Amended 2023.09.12 - Redline 107 of 109

Financial Policy B.2
Financial Reserves
Purpose
SCP maintains financial reserves to maintain good standing with rating agencies, provide liquidity when current income is insufficient, protect customers from sudden large changes in rates, and to mitigate energy market risks. This policy governs how financial reserves are built, maintained and used.

Reserve Balances
◼ Minimum Reserves: 180 days of the annual budgeted operating expenses. ◼ Target Reserves: 280 days of the annual budgeted operating expenses. ◼ Excess Reserves: Any reserve balances in excess of the Target Reserves must be returned to customers through lower rates, invested in income-producing investments with the purpose of offsetting rates over time, or provided to customers in the form of program incentives in the following year on a timeline designated by the Board of Directors.

Building Reserves and Rate Setting
During periods when the Minimum Reserve is not met, SCP shall set rates in a manner to reach the required balance within 2 years.

During periods when SCP’s reserves are above the Minimum Reserve but below the Target Reserve, SCP shall set rates to reach the Target Reserve balance within 5 years in a manner that best protects customers from unreasonable rates.

Use of Reserves
The expenditure of reserve funds requires a vote of the Board of Directors. However, the CEO has the authority to use reserves for operating liquidity in emergency situations in consultation with the Board Chair and Vice Chair, and such actions must be noticed to the Board of Directors in the next meeting.

Investing Reserve Balances
Adopted: June 5, 2014
Amended: Jan 8, 2015, Jun 4, 2015, Apr 5, 2018, Apr 2, 2020 and May 5, 2022 108 of 109

The investment of reserve funds is governed by Financial Policy B.5 Investments.

Adopted: June 5, 2014
Amended: Jan 8, 2015, Jun 4, 2015, Apr 5, 2018, Apr 2, 2020 and May 5, 2022 109 of 109

Sonoma Clean Power Board of DirectorsOctober 5, 2023

Sonoma Clean Power Board of Directors
October 5, 2023