New SV Clean Energy
PowerPoint Template
Subtitle
Item 2
PRESENTATION
SILICON VALLEY
CLEAN ENERGY
Financial Policy 7 - Purchase
Card Policy Amendment
Karen Chang
Amrit Singh
November 30, 2023
Item 2
PRESENTATION
Purpose
Action:
1. Recommend Board to Approve
the First Amendment to Finance MB
Policy 7 -Purchase Card Policy
2. Recommend Board to Ratify
Past Exceedance
1. Introduction and Background
2. Current Operating Needs and Ml
Amendment Recommendation
3. Past Exceedance Ratification MM
4. Recommended Purchase Card HI
Policy Update Ml
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Item 2
PRESENTATION
Purchase Card Policy was First Adopted in March 2017, Has Not Been Updated Since Inception.
Introduction and Background of Purchase Card Policy
Purchase Card (“P-Card”) Uses:
Business travel (airfare, lodging,
vehicle rental, rideshare,
parking/tolls)
Conference registrations
Online/offsite training for
continuous learning
Social media marketing
Office supplies
Periodical publications and
subscriptions
Downpayment for events to
secure booking
IT software subscriptions
Policy outlines guidelines for the use of corporate credit cards.
Policy grants CEO, Board Clerk, Directors to use for
operational expenses not feasible through invoicing,
check payments, or bank transfers.
Policy has a limit of $3,000 per credit card per month. 3 •
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Item 2
PRESENTATION
Current Operating Needs and Amendment
Recommendation
Current Reasoning Amendment Recommendation
1) Growth and Monthly Card Limits
Monthly charges have consistently
increased, surpassing the established
threshold of $3,000 per month per
card.
Since 2017, SVCE has experienced an
expansion in both its workforce and
vendor engagement. Consequently,
there has been a rise in the demand for
the use of P-Cards.
1) Recommendation on Monthly Card
Limit:
To raise the limit for each P-Card;
proposing to revise the language to “A
maximum limit of $20,000 per card per
month, subject to the CEO’s discretion"
Cards with higher usage will have higher
limits assigned.
2) Controls
Unclear guidelines on authorized and
unauthorized purchases.
The record-keeping requirements are
not explicitly defined.
Essential compliance and policy
reinforcement details are missing
Ambiguities exist regarding the
access of terminated employees to P-Cards.
Enhance process controls and
compliance
2) Recommendation on Controls:
To provide a more clearly defined list of
authorized and unauthorized charges.
Introduce specific requirements regarding
record-keeping for cardholders.
Incorporate a system for measuring
compliance and outlining consequences
for non-compliance.
Implement a policy addressing P-Cards
for terminated employees.
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Item 2
PRESENTATION
Past Exceedance and Ratification
Recommend Board to Ratify Previous Transactions that Did Not Comply With the 2017 Policy.
Since policy inception, monthly charges have periodically been exceeding the established limit of $3,000 per card
All exceedances were still within approved budget
Proposed amendment will address the monthly limit challenge Corrective actions going forward:
Dedicated finance staff for enhanced compliance on policy Monthly card limit monitoring
Monthly spending analysis review
Implement alert systems with credit card vendor for proactive monitoring Conduct annual policy reviews and make revisions as necessary 5 • Committee recommends the Board approve via the Consent Calendar
• The proposed revision policy - the First Amendment to the Finance Policy 7 – Purchase Card Policy, dated 11/30/2023 • To ratify previous transactions that did not comply with the previous policy
Item 2
PRESENTATION
Recommendations
6 Item 2
PRESENTATION
Backup
7 0
10 20
30 40
50 60
70 $-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Avg Monthly Charges Per Card Monthly Limit Total Employee Count Item 2
PRESENTATION
Backup: Average Monthly Charges
P-Card Average Per Card Charges By Month
Specifically, the P-Cards for Board Clerk and F&A Director consistently surpasses the $3,000 threshold, primarily due to operational and administrative expenses. 8 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2021 2022 2023
4PRO Board Clerk CEO DPP ESCR F&A
Item 2
PRESENTATION
Backup: Average Monthly Charges By Dept
2023 Feb Board Clerk card charges were mainly due to training courses for SVCE employees. 9 New SV Clean Energy
PowerPoint Template
Subtitle
Item 3
PRESENTATION
SILICON VALLEY
CLEAN ENERGY
Budget Update and 2024 Customer
Rate Setting and Any Additional
Expenditure Discussion
Amrit Singh
Finance and Administration Committee
November 30, 2023
Item 3
PRESENTATION
Purpose
Review updated budget projections
and provide guidance on additional
funding scenarios
Main Areas of Discussion
1. Recap of assumptions used in
setting the adopted budget
and an update on the budget
forecast using the recent
PG&E Rate forecast
2. Comparison of Adopted and
Updated Budget
3. Updated Reserve Projection
4. Discussion on Additional
Funding Scenarios
5. Accounting True-Up of
Programs Fund Balance
Item 3
PRESENTATION
FY23-24 Budget Development Timeline
May May/June August 1 August 9
BOD adopts the budget and
agrees to revisit additional
expenditures later in the
year when there would be
more certainty on PG&E
rates
Executive Committee and Finance
and Admin Committee review the
updated budget based on the
revised PG&E rate filing and
provide feedback on any
additional expenditures
BOD reviews and adopts
amendments to the budget
incorporating any additional
expenditures
Mid-Year Budget
Review / Adjustment
3 Recap of Adopted Budget Assumptions
• Conservative assumptions used in estimating revenues
• CPUC’s updating of RA and RPS prices in setting the Market Price Benchmark (MPB) was highly uncertain
• MPB prices are used in calculating PCIA and PG&E generation rates • Staff had estimated a potential increase in revenues of $100 million if higher RPS and RA prices were adopted in MPB • Budget maintained the current 4% discount to the end of December 2023
• Budget set the initial discount starting in January 2024 to 1 %, with an additional 1% offered as bill credits to low-income customers • The board agreed to revisit the customer discount and any additional expenditures, including those for programs and an SVCE office building, when there would be more
certainty on PG&E rates
Highlights of the Updated Budget Using PG&E’s Recent
ERRA Forecast that Incorporates the New MPBs
• CPUC’s updated MPB account for a substantial
increase in RA and RPS prices
• SVCE’s forecasted revenues are higher by about $127
million
• Updating for revenues and power supply expenses, the
net contribution to reserves increases from the adopted budget forecast of $7.7 million to $127.9 million
• Without any additional expenditures, reserves increase above the target days of cash on hand of 300 to 334 but below the maximum target of 490
Item 3
PRESENTATION
Key Messages
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Item 3
PRESENTATION
CPUC issued Market Price
Benchmarks (MPB) reflecting higher
RPS and RA prices relative to budget
assumptions.
RPS prices for 2023/2024 have
increased 140%/154%.
RA prices for 2023/2024 have
increased 94%/79%.
PG&E’s updated rate forecast,
incorporating MPB prices, shows
rates in January increasing on
average by 8% from current rates
and then dropping in July by ~ 4.5%.
PCIA up from 0.28 to 0.55 (f/kWh.
Relative to budget assumptions,
SVCE’s margins on average,
improved by ~44%. Resulting in a
~$127 million increase in revenues.
Rates are not final until CPUC’s
decision at the 12/14 meeting.
CPUC may prefer one blended rate
increase and moderate or remove
some of the proposed rate increases.
Significant changes from CPUC are
not expected.
CPUC is expected to issue a
Proposed Decision on11/29.
PG&E ERRA Rate Forecast Update**
PG&E Gen Rate:
5 Average Jan-Sep 2024 Rate
Higher PG&E Rate Forecast Improving SVCE
Revenue Projections by ~$127 million
PG&E Gen Rate:
15.48 <t/kWh
Adopted
Budget 2024
Rate***
* Source: PG&E 2023 Average Rate, effective January 7, 2023 (Weighted for SVCE Portfolio Load) PG&E 2024 ERRA Forecast Update, released in October,2023 (Weighted for SVCE Portfolio Load) *** Using NewGen Model with 7/7/2023 Forward Curves and 10% modeling error haircut Above margin analyses ignores minor reductions for franchise fees (0.09 <t/kWh) PG&E Gen Rate:
16.20 e/kWh
Tl^SVCEdiscount
Jul-Dec 2024
Rate
Current 2023
Rate*
Jan-Jun 2024
Rate
($ in thousands)
FY 2023-24 FY 2023-24
ADOPTED ADJUSTED
DESCRIPTION BUDGET BUDGET $ %
Energy Revenues 440,404 567,585 127,181 28.9%
Power Supply Expense 391,624 399,546 7,922 2.0%
Operating Margin 48,780 168,038 119,259 244.5%
Operating Expenses 32,361 32,361 0 0.0%
Non-Operating Revenue (Expense) 5,498 6,431 932 17.0%
Annual Transfers and Other Expenses
Program Fund 8,874 8,874 0 0.0%
Nuclear Allocation 2,188 2,188 0 0.0%
Multi Family Direct Install Program 0 0 0 -
Electrification Discount Program 0 0 0 -
Customer Bill Relief 3,136 3,136 0 0.0%
Building Fund 0 0 0 -
Other 50 50 0 0.0%
BALANCE AVAILABLE FOR RESERVES $7,669 $127,860 $120,191 1567.1% Change
Item 3
PRESENTATION
O FY 24 Adopted and Updated Budget
Primarily Revenues and Power Supply Expenses are Updated 6 •
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Item 3
PRESENTATION
Reserve Projection
Projected End of FY Reserves
without additional Expenditure:
$405 Million
334 Days of Cash on Hand
(DCOH)
Based on a forecast of
program expenditures
Unspent program dollars
count toward reserves
"292 DCOH if unspent
program dollars are removed
from reserves
SILICON VALLEY
CLEAN ENERGY
Reserve Forecast
$700
$600
490 days
$500
«$400
300 days
^$300
c
$200
120 days
$100
$0
FY 2023-24
Total Adjusted Ending Reserves "Target Reserves Maximum Reserves Minimum Reserves 7 •
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Item 3
PRESENTATION
Discussion: Balancing Priorities
1% customer discount over 12 months of 2024
is ~$5.7 million*
1% discount over 9 months (Jan -Sep 2024)
~$4.3 million*
Monthly Average Bill Savings of 1%* Discount:
Residential - ^$0.78
Small Commercial - ~$2.80
Medium Commercial -~$30.87
* Based on October PG&E ERRA Forecast
To initiate discussion, on the next slide, staff is proposing the following funding items:
1. Increasing customer discount
2. Trueing up the intended1% bill credit to low-income customers to account for higher rates than anticipated in the original budget
3. Setting aside funds for an SVCE office building
4. Setting aside funds to maintain higher customer discounts over the next two years
5. Increasing funding for programs that include decarbonization grants for cities
SILICON VALLEY
CLEAN ENERGY 8
$ Million
Additional Expenditures
1. General Customer Rate Discount Level 1% - 4% 12.90 4% 12.90 4% 12.90
2. True-up 1% Bill Credit to Reflect Higher Rates 1.16 1.16 1.16 1.16
3. Transfer to Building Fund 20.00 20.00 20.00 20.00
4. Set Aside to Fund 4% Discount for 2 Additional Years 34.20 34.20
5. Additional Program Expenditures Including Grant to Cities 20.00
21.16 34.06 68.26 88.26
**Resulting Financial Forecast Reserve Level (DCOH*)
- End of Fiscal Year 333 322 322 322
- High-Level Estimate*** Reserve 3 years out 350 340 312 312 - High-Level Estimate*** Reserve 5 years out 379 369 341 324 * Days cash on hand.
2. Increase
Rate Discount
3. Longer-term
Affordability
4. Add'l Set Aside
for Programs
1. Build
Reserves
Funding Scenarios
**Not expected to have any significant impact on forecast of the current fiscal year financialreserves since expenditure is likely delayed to future years.
Item 3
PRESENTATION
Funding Scenarios
All scenarios maintain projected reserves above the target level of 300 DCOH* and well below the maximum level of 490 DCOH over the next 5 years
9 Staff recommends funding scenario 4.
SILICON VALLEY
CLEAN ENERGY
$ Million
Additional Expenditures
1. General Customer Rate Discount Level 4% 12.90 7.2% 26.66 7.2% 26.66
2. True-up 1% Bill Credit to Reflect Higher Rates 1.16 1.16 1.16
3. Transfer to Building Fund 20.00 20.00 20.00
4. Set Aside to Fund at least 4% Discount for 2 Additional Years 34.20 34.20 34.20
5. Additional Program Expenditures Including Grant to Cities 20.00 6.24 20.00
88.26 88.26 102.02
**Resulting Financial Forecast Reserve Level (DCOH*)
- End of Fiscal Year 322 311 311
- High-Level Estimate*** Reserve 3 years out 312 300 300 - High-Level Estimate*** Reserve 5 years out 324 324 313
5. Keep Rates
Unchanged
6. Rates Unchanged with
Lower 5th Yr Reserves
Funding Scenarios
4. Add'l Set Aside
for Programs
Item 3
PRESENTATION
Funding Scenarios - Continued
SILICON VALLEY <3/ CLEAN ENERGY 10
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Item 3
PRESENTATION
Accounting True-up of Program Dollars
Clarify that unspent program dollars were to roll into the program funds when it was created Program fund was created in the fiscal year 2019-2020
Prior to funds creation, the Board allocated funds in each fiscal year’s operating budget The net amount allocated, including adjustments for some grants received, was $10,125 million When the program fund was created, the intent was to rollover the $10,125 million into the fund Staff requests the Board to explicitly authorize the rollover of $10,125 to the program’s fund The reserve projections in the prior slides account for this rollover After the Board’s approval, the accounting records and the program fund balance shown in the Treasurer’s Report will be updated
SILICON VALLEY
CLEAN ENERGY 11
Item 3
PRESENTATION
Thank you! / Questions?
12 •
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Item 3
PRESENTATION
With the recommended
4% customer discount,
SVCE’s customer
generation rates, on
average, are expected to
increase by about 3.5%,
inclusive of PCIA.
A 7.2% discount on
average is
expected to keep
SVCE’s customer
generation rates
unchanged,
inclusive of PCIA.
PG&E Gen Rate:
13 Average Jan-Sep 2024 Rate
Rate Comparison with the Recommended 4%
Customer Discount
* Source: PG&E 2023 Average Rate, effective January 1, 2023 (Weighted for SVCE Portfolio Load) " PG&E 2024 ERRA Forecast Update, released in October,2023 (Weighted for SVCE Portfolio Load) *** Using NewGen Model with 7/7/2023 Forward Curves and 10% modeling error haircut Above margin analyses ignores minor reductions for franchise fees (0.09 cf/kWh) Adopted
Budget 2024
Rate***
PG&E ERRA Forecast Update**
Jul-Dec 2024
Rate
Current 2023
Rate*
Jan-Jun 2024
Rate
Units 2023 2024 2023 2024 2023 2024
On-Peak Energy MPB* $/MWh 75.14 77.99 68.28 72.88 -9% -7% Off-Peak Energy MPB* $/MWh 65.89 69.57 62.23 65.77 -6% -5% Average ATC Energy MPB* $/MWh 71.08 74.29 65.62 69.76 -8% -6% RPS MPB** $/MWh 12.63 12.50 30.30 31.73 140% 154%
System RA MPB** $/kW-Month 7.39 8.50 14.37 15.23 94% 79% Local RA MPB** $/kW-Month 6.93 8.46 8.38 9.52 21% 13%
Flex RA MPB** $/kW-Month 7.15 8.38 7.82 9.12 9% 9%
** Based on PG&E's 2024 forecast update testimony, released on October 16th, 2023 Adopted Budget Revised Budget % Change
*CY 2023 rates are based on average NP-15 market prices (actual+forward); 2024 rates were set as Market Benchmarks for 2024 per PG&Es October 16th, 2023 filing.
Item 3
PRESENTATION
CD Updated Market Price Benchmark
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Currrent Lease Details
Monthly Lease Cost 5.30 $/sf
Size 7,900 sf
New Lease Assumptions
New Monthly Lease Cost 7.50 $/sf (est)
Purchase Assumptions
Purchase Cost 700 $/sf (est)
Improvement Cost 100 $/sf (est)
Office Assumptions
Size 20,000 sf (est)
Location for Comps*
* further analyses to include broader service territory Sunnyvale, Mtn View, Santa
Clara, San Jose
Item 3
PRESENTATION
SVCE Office Space - Lease vs Buy
Issue: Financial Stewardship Staff Recommendation Implications/Reasons SVCE’s current lease runs
through Sept. 2025
Need time to explore
the alternatives of
buying or leasing new
space
SVCE should be prepared to
pursue attractive property
opportunities as they arise
Research alternatives
and establish an ad hoc
Committee to advise staff
and evaluate property
and financing options
Staff to continue
assessing market
opportunities and return
to the Board with a
purchase or lease
analysis
$16MM (based on
current
assumptions) + 25%
contingency =
$20MM set aside
Buying may be a cheaper
longer-term option
Initial back-of-the-envelope analysis
indicates a roughly 10-
year breakeven period
compared to leasing
SVCE is growing and requires
more space for employees and
expanded programs
Purchasing also enables
customization to suit the hybrid
work environment
Flexible workspace for
collaborative work
15 •
Item 3
PRESENTATION
CD Program Fund Budget Allocation
Programs Fund Over Time
FY23 Snapshot
Future / Still Planning ($11M)
Planned to Go Live in Coming
~6 Months ($20M)
Live I Available Now to
Customers ($31M)
Customer-Reserved
Incentives ($11M)
Spent ($12M)
16 Item 3
PRESENTATION
Purpose
Review updated budget projections
and provide guidance on additional
funding scenarios
Main Areas of Discussion
1. Recap of assumptions used in
setting the adopted budget
and an update on the budget
forecast using the recent
PG&E Rate forecast
2. Comparison of Adopted and
Updated Budget
3. Updated Reserve Projection
4. Discussion on Additional
Funding Scenarios
5. Accounting True-Up of
Programs Fund Balance
Item 3
PRESENTATION
FY23-24 Budget Development Timeline
May May/June August 1 August 9
BOD adopts the budget and
agrees to revisit additional
expenditures later in the
year when there would be
more certainty on PG&E
rates
Executive Committee and Finance
and Admin Committee review the
updated budget based on the
revised PG&E rate filing and
provide feedback on any
additional expenditures
BOD reviews and adopts
amendments to the budget
incorporating any additional
expenditures
Mid-Year Budget
Review / Adjustment
3 Recap of Adopted Budget Assumptions
• Conservative assumptions used in estimating revenues
• CPUC’s updating of RA and RPS prices in setting the Market Price Benchmark (MPB) was highly uncertain
• MPB prices are used in calculating PCIA and PG&E generation rates • Staff had estimated a potential increase in revenues of $100 million if higher RPS and RA prices were adopted in MPB
• Budget maintained the current 4% discount to the end of December 2023
• Budget set the initial discount starting in January 2024 to 1 %, with an additional 1% offered as bill credits to low-income customers • The board agreed to revisit the customer discount and any additional expenditures, including those for programs and an SVCE office building, when there would be more
certainty on PG&E rates
Highlights of the Updated Budget Using PG&E’s Recent
ERRA Forecast that Incorporates the New MPBs
• CPUC’s updated MPB account for a substantial
increase in RA and RPS prices
• SVCE’s forecasted revenues are higher by about $127
million
• Updating for revenues and power supply expenses, the
net contribution to reserves increases from the adopted budget forecast of $7.7 million to $127.9 million
• Without any additional expenditures, reserves increase above the target days of cash on hand of 300 to 334 but below the maximum target of 490
Item 3
PRESENTATION
Key Messages
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Item 3
PRESENTATION
CPUC issued Market Price
Benchmarks (MPB) reflecting higher
RPS and RA prices relative to budget
assumptions.
RPS prices for 2023/2024 have
increased 140%/154%.
RA prices for 2023/2024 have
increased 94%/79%.
PG&E’s updated rate forecast,
incorporating MPB prices, shows
rates in January increasing on
average by 8% from current rates
and then dropping in July by ~ 4.5%.
PCIA up from 0.28 to 0.55 (f/kWh.
Relative to budget assumptions,
SVCE’s margins on average,
improved by ~44%. Resulting in a
~$127 million increase in revenues.
Rates are not final until CPUC’s
decision at the 12/14 meeting.
CPUC may prefer one blended rate
increase and moderate or remove
some of the proposed rate increases.
Significant changes from CPUC are
not expected.
CPUC is expected to issue a
Proposed Decision on11/29.
PG&E ERRA Rate Forecast Update**
PG&E Gen Rate:
5 Average Jan-Sep 2024 Rate
Higher PG&E Rate Forecast Improving SVCE
Revenue Projections by ~$127 million
PG&E Gen Rate:
15.48 <t/kWh
PG&E Gen Rate:
16.20 e/kWh
Tl^SyCEdjscount
Adopted
Budget 2024
Rate***
* Source: PG&E 2023 Average Rate, effective January 7, 2023 (Weighted for SVCE Portfolio Load) PG&E 2024 ERRA Forecast Update, released in October,2023 (Weighted for SVCE Portfolio Load) *** Using NewGen Model with 7/7/2023 Forward Curves and 10% modeling error haircut Above margin analyses ignores minor reductions for franchise fees (0.09 <t/kWh) Jul-Dec 2024
Rate
Current 2023
Rate*
Jan-Jun 2024
Rate
($ in thousands)
FY 2023-24 FY 2023-24
ADOPTED ADJUSTED
DESCRIPTION BUDGET BUDGET $ %
Energy Revenues 440,404 567,585 127,181 28.9%
Power Supply Expense 391,624 399,546 7,922 2.0%
Operating Margin 48,780 168,038 119,259 244.5%
Operating Expenses 32,361 32,361 0 0.0%
Non-Operating Revenue (Expense) 5,498 6,431 932 17.0%
Annual Transfers and Other Expenses
Program Fund 8,874 8,874 0 0.0%
Nuclear Allocation 2,188 2,188 0 0.0%
Multi Family Direct Install Program 0 0 0 -
Electrification Discount Program 0 0 0 -
Customer Bill Relief 3,136 3,136 0 0.0%
Building Fund 0 0 0 -
Other 50 50 0 0.0%
BALANCE AVAILABLE FOR RESERVES $7,669 $127,860 $120,191 1567.1% Change
Item 3
PRESENTATION
Primarily Revenues and Power Supply Expenses are Updated ® FY 24 Adopted and Updated Budget
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Item 3
PRESENTATION
Reserve Projection
Projected End of FY Reserves
without additional Expenditure:
$405 Million
334 Days of Cash on Hand
(DCOH)
Based on a forecast of
program expenditures
Unspent program dollars
count toward reserves
"292 DCOH if unspent
program dollars are removed
from reserves
SILICON VALLEY
CLEAN ENERGY
Reserve Forecast
$700
$600
490 days
$500
«$400
300 days
^$300
c
$200
120 days
$100
$0
FY 2023-24
Total Adjusted Ending Reserves "Target Reserves Maximum Reserves Minimum Reserves 7 •
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Item 3
PRESENTATION
Discussion: Balancing Priorities
1% customer discount over 12 months of 2024
is ~$5.7 million*
1% discount over 9 months (Jan -Sep 2024)
~$4.3 million*
Monthly Average Bill Savings of 1%* Discount:
Residential - ^$0.78
Small Commercial - ~$2.80
Medium Commercial -~$30.87
* Based on October PG&E ERRA Forecast
To initiate discussion, on the next slide, staff is proposing the following funding items:
1. Increasing customer discount
2. Trueing up the intended1% bill credit to low-income customers to account for higher rates than anticipated in the original budget
3. Setting aside funds for an SVCE office building
4. Setting aside funds to maintain higher customer discounts over the next two years
5. Increasing funding for programs that include decarbonization grants for cities
SILICON VALLEY
CLEAN ENERGY 8
$ Million
Additional Expenditures
1. General Customer Rate Discount Level 1% - 4% 12.90 4% 12.90 4% 12.90
2. True-up 1% Bill Credit to Reflect Higher Rates 1.16 1.16 1.16 1.16
3. Transfer to Building Fund 20.00 20.00 20.00 20.00
4. Set Aside to Fund 4% Discount for 2 Additional Years 34.20 34.20
5. Additional Program Expenditures Including Grant to Cities 20.00
21.16 34.06 68.26 88.26
**Resulting Financial Forecast Reserve Level (DCOH*)
- End of Fiscal Year 333 322 322 322
- High-Level Estimate*** Reserve 3 years out 350 340 312 312 - High-Level Estimate*** Reserve 5 years out 379 369 341 324 * Days cash on hand.
2. Increase
Rate Discount
3. Longer-term
Affordability
4. Add'l Set Aside
for Programs
1. Build
Reserves
Funding Scenarios
**Not expected to have any significant impact on forecast of the current fiscal year financialreserves since expenditure is likely delayed to future years.
Item 3
PRESENTATION
Funding Scenarios
All scenarios maintain projected reserves above the target level of 300 DCOH* and well below the maximum level of 490 DCOH over the next 5 years
9 Staff recommends funding scenario 4.
SILICON VALLEY
CLEAN ENERGY
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Item 3
PRESENTATION
Accounting True-up of Program Dollars
Clarify that unspent program dollars were to roll into the program funds when it was created Program fund was created in the fiscal year 2019-2020
Prior to funds creation, the Board allocated funds in each fiscal year’s operating budget The net amount allocated, including adjustments for some grants received, was $10,125 million When the program fund was created, the intent was to rollover the $10,125 million into the fund Staff requests the Board to explicitly authorize the rollover of $10,125 million to the program’s fund The reserve projections in the prior slides account for this rollover After the Board’s approval, the accounting records and the program fund balance shown in the Treasurer’s Report will be updated
SILICON VALLEY
CLEAN ENERGY 10
Item 3
PRESENTATION
Thank you! / Questions?
11 •
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Item 3
PRESENTATION
With the recommended
4% customer discount,
SVCE’s customer
generation rates, on
average, are expected to
increase by about 3.5%,
inclusive of PCIA.
A 5.5% discount on
average is
expected to keep
SVCE’s customer
generation rates
unchanged,
inclusive of PCIA.
PG&E Gen Rate:
12 Average Jan-Sep 2024 Rate
Rate Comparison with the Recommended 4%
Customer Discount
* Source: PG&E 2023 Average Rate, effective January 1, 2023 (Weighted for SVCE Portfolio Load) " PG&E 2024 ERRA Forecast Update, released in October,2023 (Weighted for SVCE Portfolio Load) *** Using NewGen Model with 7/7/2023 Forward Curves and 10% modeling error haircut Above margin analyses ignores minor reductions for franchise fees (0.09 cf/kWh) Adopted
Budget 2024
Rate***
PG&E ERRA Forecast Update**
Jul-Dec 2024
Rate
Current 2023
Rate*
Jan-Jun 2024
Rate
Units 2023 2024 2023 2024 2023 2024
On-Peak Energy MPB* $/MWh 75.14 77.99 68.28 72.88 -9% -7% Off-Peak Energy MPB* $/MWh 65.89 69.57 62.23 65.77 -6% -5% Average ATC Energy MPB* $/MWh 71.08 74.29 65.62 69.76 -8% -6% RPS MPB** $/MWh 12.63 12.50 30.30 31.73 140% 154%
System RA MPB** $/kW-Month 7.39 8.50 14.37 15.23 94% 79% Local RA MPB** $/kW-Month 6.93 8.46 8.38 9.52 21% 13%
Flex RA MPB** $/kW-Month 7.15 8.38 7.82 9.12 9% 9%
** Based on PG&E's 2024 forecast update testimony, released on October 16th, 2023 Adopted Budget Revised Budget % Change
*CY 2023 rates are based on average NP-15 market prices (actual+forward); 2024 rates were set as Market Benchmarks for 2024 per PG&Es October 16th, 2023 filing.
Item 3
PRESENTATION
CD Updated Market Price Benchmark
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Currrent Lease Details
Monthly Lease Cost 5.30 $/sf
Size 7,900 sf
New Lease Assumptions
New Monthly Lease Cost 7.50 $/sf (est)
Purchase Assumptions
Purchase Cost 700 $/sf (est)
Improvement Cost 100 $/sf (est)
Office Assumptions
Size 20,000 sf (est)
Location for Comps*
* further analyses to include broader service territory Sunnyvale, Mtn View, Santa
Clara, San Jose
Item 3
PRESENTATION
SVCE Office Space - Lease vs Buy
Issue: Financial Stewardship Staff Recommendation Implications/Reasons SVCE’s current lease runs
through Sept. 2025
Need time to explore
the alternatives of
buying or leasing new
space
SVCE should be prepared to
pursue attractive property
opportunities as they arise
Research alternatives
and establish an ad hoc
Committee to advise staff
and evaluate property
and financing options
Staff to continue
assessing market
opportunities and return
to the Board with a
purchase or lease
analysis
$16MM (based on
current
assumptions) + 25%
contingency =
$20MM set aside
Buying may be a cheaper
longer-term option
Initial back-of-the-envelope analysis
indicates a roughly 10-
year breakeven period
compared to leasing
SVCE is growing and requires
more space for employees and
expanded programs
Purchasing also enables
customization to suit the hybrid
work environment
Flexible workspace for
collaborative work
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Item 3
PRESENTATION
CD Program Fund Budget Allocation
Programs Fund Over Time
FY23 Snapshot
Future / Still Planning ($11M)
Planned to Go Live in Coming
~6 Months ($20M)
Live I Available Now to
Customers ($31M)
Customer-Reserved
Incentives ($11M)
Spent ($12M)
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