Silicon Valley Clean Energy Board of Directors
March 13, 2024

Staff Report – Item 1f
Item 1f: Adopt SVCE’s Load Management Standards Compliance Plan From: Girish Balachandran, CEO
Prepared by: Adam Selvin, Director of Energy Services and Community Relations Citlalli Sandoval, Senior Regulatory Advisor
Date: 3/13/2024

RECOMMENDATION
Staff recommends that the Board of Directors adopt the Silicon Valley Clean Energy Load Management Standards Compliance Plan (Attachment 1).

EXECUTIVE COMMITTEE RECOMMENDATION
At the February 23, 2024 Executive Committee meeting, staff presented SVCE’s Load Management Standards Compliance Plan (LMS Plan) in substantial form to the Executive Committee for approval prior to it being brought to the Board for adoption. At this meeting the Executive Committee voted unanimously to approve the LMS Plan and recommend its approval as a consent item at the March 13, 2024 Board meeting. Attached as Attachment 1 to this Staff Report is a public version of the LMS Plan, which redacts market sensitive information contained in the plan. The development of this LMS Plan helps to inform and guide SVCE’s demand flexibility efforts. Further discussion of SVCE’s demand flexibility strategy is part of SVCE’s broader rates strategy and will occur as part of an upcoming Board Study Session focused on SVCE’s future rates and rate affordability.

Certain types of load serving entities (investor owned utilities and publicly owned utilities) were required to submit their compliance plans to the California Energy Commission (CEC) at the end of last year. Community choice aggregators such as SVCE will submit their compliance plans to the CEC by April 1, 2024. At the request of the Executive Committee, SVCE Staff has attached a table as Attachment 2 to this Staff Report with information about load serving entities’ compliance plans that have already been submitted to the CEC.

BACKGROUND
The CEC adopted Load Management Standards (LMS) to promote electricity demand flexibility. These standards require load serving entities in California, such as Silicon Valley Clean Energy (SVCE), to develop a compliance plan that describes how the load serving entity plans to meet the goals of the Load Management Standards every three years. The goals of the Load Management Standards are to: 1) encourage the use of electrical energy during off-peak hours; 2) control daily and seasonal peak loads; 3) improve equity, efficiency, and reliability; 4) lessen/delay need for new electrical capacity; 5) reduce fossil fuel consumption and 6) reduce greenhouse gas emissions. Load serving entities are also required to evaluate dynamic rates or programs that enable automated responses to dynamic rates in their compliance plan. Load serving entities are required by the California Code of Regulations Title 20 § 1623.1 to submit their compliance plans to their rate approving body for adoption. SVCE’s Board of Directors (Board) is the governing board responsible for setting rates. Additionally, load serving entities can make revisions to their compliance plans and are required by the Load Management Standards to submit annual reports to the California Energy Commission demonstrating progress towards the implementation of their compliance plan or any changes to it.

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SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 1f Agenda Date: 3/13/2024

ANALYSIS AND DISCUSSION
In its first compliance plan, SVCE describes current and future programs and rates that accomplish the goals of the Load Management Standards, provides the results of an analysis on the impacts of moving to dynamic rates on SVCE’s load, describes the resources needed to implement dynamic rates, describes the status of SVCE’s progress towards meeting Load Management Standards requirements, and examines dynamic rates from an equity, technology, reliability, and customer-benefit perspective.

SVCE’s analysis of the impact of moving to dynamic rates on SVCE’s load consisted of examining three hypothetical scenarios of potential customer class participation and incrementally addressable load for 2024- 2027. Even under the scenario with the most aggressive customer participation and load change assumptions, the results indicated that dynamic rates are likely to have a very minor impact on SVCE’s load. However, SVCE acknowledges that real-life results may differ from the assumptions-based modeled load impact analysis included in its LMS Plan.

Additionally, in its LMS Plan, SVCE considers opportunities to provide customers with access to hourly rates, either through enrollment in marginal cost-based rates or through enrollment in programs that access hourly rates to shape program incentives. While today there is not enough information to know which customers would benefit the most from hourly rates or the potential scale of load shift and its impacts on supply, SVCE expects dynamic rates and/or programs accessing dynamic rates signals to incentivize customers to use energy during off-peak hours. Ultimately, the widespread adoption of dynamic rates will vary and depends heavily on regulatory policies, technical infrastructure, and customer acceptance.

SVCE is already contributing to meeting the LMS goals through its current program and rate offerings and will continue to encourage the use of energy at off-peak hours to improve the electrical system’s efficiency, reliability, and greenhouse gas footprint.

STRATEGIC PLAN
As referenced in SVCE’s Strategic Plan Goal 12, Measure 2, the LMS Plan will inform the development of programs to promote matching of clean energy supply and demand.

ALTERNATIVE
Noncompliance with the Load Management Standards, which may result in the Executive Director of the California Energy Commission filing a formal complaint with the California Energy Commission or seeking injunctive relief.

FISCAL IMPACT
The SVCE Board of Directors adoption of SVCE’s Load Management Standards Compliance Plan will not result in an immediate impact to the current fiscal year (FY 2024) budget. Programs, rates and/or other measures identified in the plan will come to the Board for approval as necessary.

ATTACHMENTS

1. Public version of SVCE’s Load Management Standards Compliance Plan, which contains redactions of market sensitive information.

2. Table providing information about already submitted load serving entities’ compliance plans.

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1 Silicon Valley Clean Energy
2024 Load Management Standards Compliance Plan
March 13, 2024
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Attachment 1
Draft LMS Compliance Plan - Redacted
2 Table of Contents
I. Executive Summary...............................................................................................................................3 II. Introduction ..........................................................................................................................................4 III. Rates and Programs to Support Load Management Goals...................................................................5 A. Existing Rates ...................................................................................................................................6 B. Existing Programs.............................................................................................................................7 C. Rates Under Consideration ..............................................................................................................9 D. Programs Under Consideration........................................................................................................9 E. Efforts to Reduce GHG Emissions and Fossil Fuel Consumption....................................................10 IV. Progress Towards Meeting LMS Requirements...................................................................................11 A. Market Informed Demand Automation Server (MIDAS) ...............................................................11 B. Rate Identification Number (RIN)...................................................................................................12 V. Background on Development of Marginal Cost-Based Rates, Programs and Rate Structures ...........13 VI. Description of Demand Flexibility Analysis Methodology ..................................................................14 VII. Results.................................................................................................................................................16 A. Cost Effectiveness...........................................................................................................................16 B. Equity Evaluation............................................................................................................................18

1. Program Equity Framework .......................................................................................................19

2. Socioeconomic Vulnerability Index (SEVI) .................................................................................19

3. SVCE Equity Programs................................................................................................................21 C. Technological Feasibility Evaluation...............................................................................................23 D. Grid Benefits Evaluation.................................................................................................................25 E. Customer Class Benefits Evaluation...............................................................................................26 VIII. Marginal Cost Rates Implementation..................................................................................................26 IX. Conclusion...........................................................................................................................................28 List of Tables
Table 1 Scenarios Analyzed .........................................................................................................................15 Table 2 Market Segment Participation Assumptions..................................................................................15 Table 3 Incrementally Addressable Load Assumptions...............................................................................16 Table 4 Scenario Cost Savings as a Percentage of Base Case Costs ............................................................17 Table 5 Energy Cost Impact (Savings) 2024-2027 .......................................................................................18 Table 6 SEVI Quartiles and Key Demographic Information .........................................................................20 Item 1f
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Draft LMS Compliance Plan - Redacted
3 Table 7 Programs Designed, Launched, and/or Evaluated Using the Programs Equity Framework and SEVI Metrics........................................................................................................................................................21 Table 8 Total Costs to Implement Real Time Pricing Across the Four Years Analyzed ................................28 List of Figures
Figure 1 Average TOU Usage Across All SVCE Rate Classes...........................................................................6 Figure 2 SVCE Annual Greenhouse Gas Emissions......................................................................................11 Figure 3 Total Load Impact Across Scenarios by Customer Class (2024-2027) with Large Commercial High Scenario Load Impact Callout .....................................................................................................................17 Figure 4 SEVI Quartiles in SVCE’s Territory..................................................................................................19 Figure 5 Housing Type Comparison of SEVI 4 (Worst-off) and SEVI 1 (Best-off) Quartiles .........................20 Figure 6 Near-term Marginal Cost Based Rate Implementation and MIDAS Compliance Timelines..........27 I. Executive Summary
In compliance with California Code of Regulations Title 20 § 1623.1, Silicon Valley Clean Energy (SVCE) has developed its 2024 Load Management Standards (LMS) Compliance Plan (Plan). In this Plan, SVCE considers opportunities to provide customers with access to hourly rates, either through enrollment in marginal cost-based rates or through enrollment in programs that access hourly rates to shape program incentives. While today there is not enough information to know which customers would benefit the most from hourly rates or the potential scale of load shift and its impacts on supply, SVCE expects dynamic rates and/or programs accessing dynamic rates signals to incentivize customers to use energy during off-peak hours. Ultimately, the widespread adoption of dynamic rates will vary and depends heavily on regulatory policies, technical infrastructure, and customer acceptance.

SVCE describes current and future programs and rates that accomplish the objectives of the LMS, provides the results of an analysis on the impacts of moving to dynamic rates on SVCE’s energy costs, describes the resources needed to implement dynamic rates, describes the status of SVCE’s progress towards meeting LMS requirements, and examines dynamic rates from an equity, technology, reliability, and customer-benefit perspective. The development of this Plan helps to inform and guide SVCE’s demand flexibility efforts.

SVCE offers a full range of time-of-use (TOU) generation rates corresponding with Pacific Gas and Electric Company’s (PG&E) TOU delivery rates. This includes a residential electrification rate with a greater price difference between off-peak and on-peak hours than the otherwise applicable TOU rate, resulting in more pronounced incentivization of electricity usage when grid conditions are most favorable. In terms of programs, SVCE offers its customers several programs that advance one or more of the LMS goals. These programs are described in this Plan.

In the Plan, SVCE evaluates the potential impacts of dynamic rates both quantitatively and qualitatively.

However, the quantitative evaluation focuses on modeled impacts to only SVCE’s energy costs due to the fact that there are many unknowns surrounding the implementation of dynamic rates in California and how customers might respond. The high-level model used to quantify the potential impacts of dynamic rates on SVCE’s energy costs examined three different scenarios of hypothetical changes in demand due to real time pricing. The results indicate that dynamic rates will have a minor impact on Item 1f
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Draft LMS Compliance Plan - Redacted
4 SVCE’s load in the next couple of years. Additionally, the modeled evaluation did not produce a hypothetical outcome that resulted in operational net cost savings. Further analysis is needed that quantifies the benefits of load shifts to non-peak periods, the benefits by customer class and by appliance/electric vehicle applications, and the benefits of changes to the capacity needs of the grid.

Intangible benefits, such as the opportunity to engage customers, and potential limitations, such as rate access and automation, are difficult to quantify but should be considered as well.

Furthermore, several California Public Utilities Commission (CPUC) dynamic rate pilots have been developed, in which SVCE may participate. The pilots have not yet launched and are not expected to launch until Summer of 2024.1For these reasons, SVCE plans to adapt its evaluation of dynamic rates based on the results of the pilots and will modify its demand flexibility strategy as more information is gathered.

In terms of continued compliance with the LMS regulations, SVCE has uploaded all its time-dependent generation rates into the CEC’s Market Informed Demand Automation Server and is actively participating in the workshops to develop the statewide Rate Identification Number (RIN) tool.

The abovementioned activities have required and continue to require considerable resources. SVCE provides estimates of the additional resources needed to support the implementation of real time pricing pilots in this Plan and will continue to evaluate the systems and staffing that will be necessary as real-world implementation experience is gained through pilot participation.

II. Introduction
SVCE commenced customer service in April 2017 and is chartered to source clean, competitively priced electricity on behalf of residents and businesses in the participating jurisdictions of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale and unincorporated parts of Santa Clara County. Within these communities, SVCE serves approximately 270,000 residential and commercial electric accounts, which consume approximately 3,800 gigawatt hours per year. SVCE is governed by a board of 13 locally elected officials, who set SVCE’s rates and policies and oversee its operations.

SVCE’s mission is to reduce dependence on fossil fuels by providing carbon free, affordable, and reliable electricity and innovative programs for the SVCE community. Consistent with this purpose, since inception, SVCE has offered its customers a variety of programs to help expedite electrification while providing clean electricity to its customers. From the outset, SVCE has acknowledged that while electrification is vital to decarbonization of the wider economy it must be done in a manner that also balances customer affordability. SVCE has developed and participated in numerous programs as well as the Business EV and E-ELEC rates which help ensure that electric load growth can be managed in a way that benefits the electrical grid’s operations as well as customer affordability. 1 Decision 24-01-032
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Draft LMS Compliance Plan - Redacted
5 SVCE’s efforts to date, and planned efforts going forward as outlined in this Plan, are aligned with the primary goals of the LMS regulations. The California Code of Regulations describes four primary goals associated with the LMS compliance plans2:

Goal 1: Encouraging the use of energy at off-peak hours; Goal 2: Encouraging the control of daily and seasonal loads to improve system efficiency and reliability;
Goal 3: Lessening/delaying the need for capacity additions; and Goal 4: Reducing fossil fuel consumption and greenhouse gas (GHG) emissions.

While each of these goals is unique, they are also all interrelated. Load management provides several value streams to the grid. First, when sufficiently dependable, it allows grid planners to build to a lower peak. Given that the grid infrastructure is built to meet peak demand, it generally follows that achieving Goal 1 dependably will support the achievement of Goal 4. In real time operations, dispatchable load management provides the grid operator tools to ensure they can maintain reliability. Additionally, because marginal energy prices have a strong positive correlation to grid emissions, price signals are an effective means to achieve lower emissions and more efficient use of the existing system.

SVCE’s load management activities to date include both rate and program options. In the future, SVCE's innovative rates and programs are expected to consistently reduce peak demand and shift load to non-peak hours, providing value to the grid and aligning with LMS goals. New rates and programs are also under consideration to accelerate these impacts. These activities are funded through a cumulative $116 million commitment from SVCE’s Board of Directors (Board) to create new and extend existing customer offerings, rebates, and rate-specific incentives to expand the use of clean electricity in homes, transportation, and commercial buildings.

SVCE’s existing rates and programs, and those under consideration, are discussed in the section below.

III. Rates and Programs to Support Load Management Goals SVCE is deeply committed to meeting the LMS goals and expects to continue to use a combination of rates and program incentives to encourage customers to adjust their energy usage behaviors. While the expectation is that the dynamic rate pilots (real time pricing pilots) under development will be effective at encouraging customers to shift their energy usage and could result in long-term behavioral change with significant grid management benefits, initial enrollment is expected to be low due to the complexity and newness of the rates, lack of automation services, and existing levels of customers’ comfort with and understanding of TOU rates. Therefore, SVCE is considering program incentives as well as rates to drive behavior change, and engagement and support to build customer awareness and interest in dynamic rate pilot enrollment. Additionally, SVCE is considering opportunities to amplify the impact of time-varying rates through off-peak use incentives that provide customer savings and help to improve grid reliability by lessening grid stress during peak times. SVCE will be evaluating the load impact of implemented rates and incentives, which will influence the development of future SVCE rates and programs.
2 California Code of Regulations Title 20 § 1623.1(a)(1).

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Draft LMS Compliance Plan - Redacted
6 A. Existing Rates
SVCE provides generation service to its customers, while the host investor-owned utility (IOU), PG&E, provides distribution and transmission services. SVCE offers a full range of time-of-use (TOU) generation rates corresponding with PG&E’s TOU delivery rates in order to incentivize daily shifting of load into hours when the grid is being supplied with cleaner energy and can be more efficiently utilized. This helps to lower peak demand and decrease grid infrastructure costs and emissions. Today, approximately 70% of SVCE customer accounts and 90% of SVCE load are enrolled in TOU rates. When considering SVCE’s total average load across all TOU rate classes, approximately 80% is used during off-peak hours.

Figure 1 Average TOU Usage Across All SVCE Rate Classes SVCE’s novel Electric Home rate (E-ELEC) is a customer generation TOU rate specifically designed to support beneficial home electrification that was approved by the Board in December 2022 and launched in January 2023. The SVCE E-ELEC rate provides a discount to SVCE customers that are enrolled in PG&E’s E-ELEC rate; however, rather than applying a fixed generation discount percentage (e.g., 4%) across all energy usage as with other SVCE rates, it increases the cost of energy consumed during peak periods by 10% relative to PG&E’s generation charges, while providing a 30% discount to all energy consumed during off-peak periods. By designing SVCE’s Electric Home rate discount around existing TOU periods, SVCE aimed to more strikingly promote behavioral and programmatic changes to participants’ energy consumption. Participating customer generation discounts have ranged from 2% to 22% based on their energy usage and willingness or ability to shape their daily consumption in response to SVCE’s more pronounced rate, with a median discount of 10% relative to PG&E’s rates. SVCE currently has over 1,200 customers enrolled in the SVCE E-ELEC rate and has funding to support an increased E-ELEC discount for up to 5,000 customers enrolling in the rate through 2027.

With large commercial and industrial customers, SVCE has begun to offer variable pricing structures that utilize CAISO day-ahead hourly energy costs. In 2022, SVCE announced an innovative 24/7 Carbon-Free Energy Agreement with Google. Under a 10-year contract, SVCE will serve Google’s Mountain View and Sunnyvale offices by matching carbon-free electricity (CFE) to Google’s local demand at least 92% of all Item 1f
Attachment 1
Draft LMS Compliance Plan - Redacted
7 hours of the year. Service costs are based on dynamic CAISO market prices. This 24/7 CFE service supports active demand management, providing for the integration of day-ahead price signals with Google’s flexible all-electric building and transportation systems, including thermal and battery storage, Electric Vehicle (EV) charging networks, and smart Heating, Ventilation, and Air Conditioning (HVAC).

Google is incented to flex demand based on the dynamic price signal to improve their cost savings and CFE performance. SVCE is evaluating opportunities to replicate and scale this offering to other commercial accounts.

B. Existing Programs
SVCE has launched several programs and initiatives to help shape customer demand. SVCE has historically and will continue to reinforce the importance of using electricity when it is cleanest and least expensive (non-peak hours) in its program design and marketing. Emissions from transportation comprise the largest source of GHG emissions in SVCE’s territory and SVCE expects the shift to electric vehicles to be a significant driver of future load growth. Managing the timing of this load to ensure that the grid can accommodate it with minimal grid impact is of particular importance to SVCE because it will affect the cost of build out and operation of the grid.

SVCE contracted with ev.energy in May 2020 to launch GridShift, a mobile app-based program to manage EV charging, in order to shape customer charging demand and help customers reduce their ongoing EV charging costs. GridShift helps residential customers optimize EV charging by shifting charging to off-peak hours. As this program scales, it will help manage reliability risk associated with transportation electrification by reducing EV charging’s impact on peak load. Ev.energy was recently awarded the California Energy Commission’s (CEC) Responsive, Easy Charging Products with Dynamic Signals (REDWDS) grant, which will support grid signal integration for dynamic rate pilots and strengthen the existing customer charging management and customer interface. SVCE plans to partner with ev.energy to amplify the REDWDS grant impact to grow GridShift enrollment and, once dynamic rate pilots are available, encourage our customers to enroll in the pilot rates. Furthermore, once vehicle-to-grid functionality becomes more prevalent, SVCE’s ability to use the program to benefit the grid reliability will increase. Today, the GridShift app is being used by more than 1,225 EV owners in SVCE’s service area. It shifts charging daily to avoid the worst times of day to charge, when grid conditions result in the greatest emissions and largest costs. SVCE has also layered demand response programmatic features to the Grid Shift program to further minimize charging during Flex Alerts. SVCE continues to evaluate the load modifying impact that GridShift has on everyday charging, avoiding summer peak events, and increasing usage during times of plentiful renewable generation on the grid. 3 Beyond EV charging, SVCE contracted with Sunrun for a Virtual Power Plan (VPP) to further support load shift to nonpeak hours. SVCE defines VPPs as aggregations of distributed energy resources (DERs) that can permit shifting of energy demand or injections of supply to the grid (i.e., can be used to increase or decrease load, as desired). Enrolling smart DERs into VPPs to provide value to the grid and return that value to customers is a critical part of SVCE’s vision for spurring a widespread increase in demand 3 SVCE has released a third-party evaluation report analyzing impacts of the app at https://www.svcleanenergy.org/research-analysis/#1639688703076-c88f0dce-ef3b.

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Draft LMS Compliance Plan - Redacted
8 flexibility and DER adoption. The Sunrun contract is part of the Lights on Silicon Valley program, which has installed MW of distributed solar and battery storage systems at single family and multifamily residences in SVCE’s territory. These systems are required to provide resiliency benefits to customers by being able to island from the grid in the event of a power outage, and the batteries will form a VPP to provide grid services to SVCE when not in use for back-up power. Sunrun dispatches these batteries for SVCE daily during the peak period to automatically offset consumption during peak hours. The Lights on Silicon Valley program aims to increase the deployment of behind-the-meter storage and will also help mitigate reliability impacts by reducing SVCE’s demand during system peak periods.

Additionally, to support demand response impacts in SVCE’s territory, SVCE launched an Emergency Load Reduction Program (ELRP) awareness initiative, which provided enrollment outreach to large commercial and industrial customers in its service territory – including customers with significant back-up generation capacity. SVCE led an effort coordinated with PG&E, Olivine, and other CCAs to convince more of these customers to enroll in ELRP. SVCE also chose to allow its eligible residential customers to be automatically enrolled in the A.6 residential ELRP program, leading to approximately 60,000 SVCE accounts being included in the program.

SVCE’s location in the Silicon Valley gives it a unique opportunity to engage with top innovators, startups, and local agencies. SVCE has successfully worked with eight member agencies to commit to solar and/or storage installations by providing $2.9 million through a community resiliency program, further supporting the reduction of load during peak hours and providing dispatchable storage.4SVCE also created an Innovation Onramp program to attract novel pilots that demonstrate scalable solutions to overcoming decarbonization’s major hurdles in cost effective ways. SVCE has funded 12 pilots over the last few years.5 While not all end up achieving their goals, these pilots can unlock paradigm-shifting approaches to intractable problems. This innovation lens also extends to technologies that can reduce need for grid infrastructure upgrades and help manage SVCE’s load (e.g., home outlet splitters to allow EV charging to share an outlet with a dryer – preventing the appliances from being active at the same time and spiking demand). Some of SVCE’s pilots have progressed into longer-term SVCE programs like the Data Hive for access to customer energy data to enable improved DER adoption or the GridShift EV Charging app. Some go on to attract significant outside funding (e.g., CEC grants for to install EV charging technology to serve multifamily residents in disadvantaged and low-income communities).

SVCE will continue to fund innovation pilots to try to unearth advances in thinking that will accelerate the transition to deep decarbonization and help SVCE best manage its load to support grid resilience.

Finally, SVCE has other programs that expedite customer installations of smart appliances. The incorporation of more electric appliances with demand response capabilities can greatly aid in creating a more flexible, efficient, and sustainable energy grid and will be fundamental to the success of responsiveness to dynamic rates in California. Appliances can be programmed to respond to real-time price signals, reducing power consumption during peak hours and shifting energy use to off-peak hours, better aligning with the availability of renewable energy sources on the grid. SVCE’s smart appliance programs are discussed in more detail in Section VII.B. 4 More information on this work can be found at https://svcleanenergy.org/community-resilience/. 5 More information on the 12 pilots can be found at https://svcleanenergy.org/innovation-pilots/.

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Draft LMS Compliance Plan - Redacted
9 C. Rates Under Consideration
SVCE sees further opportunity to shift customer electricity usage to nonpeak hours and reduce peak usage through participation in the CPUC’s dynamic rate pilots, which will utilize marginal cost-based rates. SVCE plans to seek approval from its Board to participate in the Day Ahead Hourly Real Time Pricing (DAHRTP) pilot being operated by PG&E as well as the Demand Flexibility AgFit Expansion pilots.

The start of the DAHRTP pilot has been delayed and the Demand Flexibility AgFit Expansion pilots are not expected to start until June of 2024 (notwithstanding any future delays) but the eventual result of the CPUC’s pilot evaluation will inform SVCE’s marginal cost-based rate development process. The focus for the next several years (2024-2026) will be to learn from these CPUC pilots and understand the potential load shift implications, customer benefits by rate class, and system and operational impacts of marginal cost-based rates. Further, SVCE will be evaluating opportunities to incorporate hourly rates into its demand flexibility and VPP programs, including GridShift and other future program offerings.

Marketing, education, and outreach plans will be developed to build awareness and understanding as well as encourage customer enrollment where benefits exist. SVCE anticipates leveraging its engaged customer base to build awareness of dynamic rate pilots through direct and electronic communications.

SVCE will be identifying data streams available for measurement and establishing internal pilot rate goals once the pilot rate structures, program design and launch dates are finalized and SVCE’s participation in the pilots has been authorized by its Board. In the meantime, SVCE is working with Evaluation, Measurement, and Verification (EMV) consultants to identify metrics to capture the value of the pilot rates for our customers and the entity as well as to gain insight into potential improvements. Key metrics under consideration include: load responsiveness, customer class bill impact relative to Other Applicable Tariff (OAT), GHG emissions impact, equity considerations, customer satisfaction/adoption rates/attrition, and SVCE cost recovery.

SVCE’s unique ability to educate, build awareness and interact with its 270,000+ customers with ongoing outreach and engagement through both direct and electronic channels is expected to be very valuable as customers are introduced to dynamic rate pilots. Dynamic rate pilots and programs will be discussed at quarterly community partners meetings, which will be used to gain feedback on SVCE’s energy services, pilot results, and upcoming plans.

D. Programs Under Consideration
As SVCE considers demand flexibility and VPP opportunities to further support load shift, demand response is one use case under consideration. SVCE is currently working with a demand-response aggregator (Autogrid) to engage member agencies in the development of a demand flexibility pilot program. This effort stems from part of a larger Distributed Energy Resources Management System (DERMS) effort with multiple goals including (1) establishing DERMS at SVCE; (2) enrolling member agency facilities in DERMS; (3) supporting SVCE to use DERMs to dispatch connected DERs; and (4) successful DERMS implementation. The objective of the pilot is to increase supply and reduce load through DERs during times of peak stress.

Additionally, SVCE plans to build upon the Commercial and Decarbonization Pilot Program, launched in the Fall of 2023, by expanding the program in mid-2024. The program seeks to align the energy and sustainability goals of SVCE’s key accounts with SVCE’s own decarbonization and load management goals.

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Draft LMS Compliance Plan - Redacted
10 In the near term, the program will focus on gas savings and electrification, but SVCE expects a long-term emphasis on energy management, and finding savings and load shifting opportunities in high cost, GHG-intensive hours.

SVCE is considering performance payments for both customers and vendors that encourage load management as well as GHG emissions. This would be accomplished by leveraging hourly incentive rates, or GHG-weighted incentive rates. Performance-based payments that are time-variable will encourage the program’s contractors and customers to seek load-shaped savings opportunities.

Finally, to help reduce the upfront customer costs associated with retrofit building electrification and allow more customers to be able to participate in the benefits of decarbonization and shifting load, SVCE has been exploring financing options to augment its other programs. With support from the state’s TECH Clean California initiative, SVCE submitted a proposal to the CPUC’s Clean Energy Financing proceeding (Rulemaking 20-08-022) for a tariffed on-bill financing (TOB) pilot. To maximize bill savings, TOB programs will require that the equipment be controlled to follow TOU and future dynamic rates. This approach will inherently optimize these new loads to the benefit of the customer and, provided the dynamic rates are appropriately set based on system costs, SVCE’s load shape. The draft scope includes heat pump water and space heating, along with efficiency improvements, and may ultimately include electrification of all devices in the home. Uniquely, TOB financing leverages the bill savings achieved through electrification and load shifting to offset the upfront costs of electrification upgrades. While deployment of TOB pilots in California is still pending regulatory approval, TOB is increasingly recognized as a powerful financing mechanism accessible to low and moderate-income households and renters, enabling accelerated scaling of electrification and load shifting.

E. Efforts to Reduce GHG Emissions and Fossil Fuel Consumption SVCE annually evaluates the overall progress made to reduce economy-wide GHG emissions within its service territory: 40% from the 2015 baseline by 2025, 50% by 2030, and the statewide target of net-zero emissions by 2045. SVCE strives to help its communities meet these goals through electrifying the buildings and transportation sectors while building new utility-scale renewable generation and battery storage resources to reduce electricity sector emissions. Implementation of innovative rates and programs support electrification while shaping load to help reduce demand at peak hours, thereby reducing dependency on fossil fuel usage.

California has set ambitious clean energy and emission goals – including a goal for all electricity to be generated by carbon-free and renewable sources by 2045. SVCE is ahead of the California targets, with about half of SVCE’s energy supply coming from renewable resources and the remainder historically coming from other carbon-free resources such as hydro power.

In 2022, energy and transportation-related emissions for the SVCE service territory were 3.08 million MT CO2e (excluding fugitive emissions from natural gas usage), 23.4% lower than the 2015 baseline year emissions. In 2023, due to higher vehicle miles traveled compared to prior years, emissions from the transportation sector returned to pre-COVID-19 levels. Despite projected short-term increases in vehicle miles traveled due to continued recovery from COVID-19, SVCE projects that future GHG emissions will decrease. This is attributable both to regional and local electrification efforts and the continued build Item 1f
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Draft LMS Compliance Plan - Redacted
11 out of its clean portfolio, which includes long-term PPAs for renewable and battery storage resources amounting to over 1300 MW of capacity, of which all but 119 MW are new incremental capacity for the CAISO system.

Figure 2 SVCE Annual Greenhouse Gas Emissions
6 Technical issues have been shared with CEC staff through e-mail communications.

IV. Progress Towards Meeting LMS Requirements
A. Market Informed Demand Automation Server (MIDAS)
SVCE’s Plan Attachment A shows the status of SVCE’s compliance with the LMS MIDAS requirements.

Attachment A lists all 163 current time-dependent rates and their associated RINs and demonstrates the availability of SVCE’s rates in MIDAS.

SVCE is responsible for the generation component of a customer’s bill. PG&E is responsible for the distribution and transmission rates charged to SVCE’s customers. SVCE has uploaded and will continue to upload its TOU generation rates and will not calculate the composite rate outside of MIDAS because it does not have access to the other rate components for which it is not responsible. At the moment, each service provider uploads its rates separately into MIDAS.

SVCE has been using its back-office data services provider, Calpine, to manually upload SVCE’s TOU rates to MIDAS. To date, this has been an extremely time-consuming process that has been complicated by a range of technical issues. These technical issues have been documented and shared with CEC staff.6For future uploads, because SVCE is using a third-party to connect to MIDAS, infrastructure upgrades will not occur at SVCE. Instead, Calpine will build out the infrastructure to automate the TOU upload Item 1f
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Draft LMS Compliance Plan - Redacted
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(SVCE, PG&E, Direct Access)
12 process. SVCE plans to have Calpine continue to upload TOU rates following the launch of the CPUC’s dynamic rate pilots.

To support the CPUC’s dynamic rate pilots, SVCE will be offering customers the opportunity to enroll in the dynamic rate pilots that PG&E will be administering and that the SVCE Board has approved. The internal infrastructure needed to support the pilots is not yet completely known. However, SVCE has participated in a series of working sessions with PG&E to understand how the pilots will be administered and the IT systems that will be needed to support SVCE unbundled customer participation. At the time of the writing of this report, SVCE has been instructed by PG&E to email adjustments to the generation rate components of the pilot’s composite dynamic rate (e.g., marginal generation capacity cost adjustment or revenue neutral adder adjustments) to PG&E. From there, PG&E will upload into PG&E’s Pricing Engine, which will ultimately upload SVCE adjusted rates into MIDAS and Calpine.

SVCE has been working with Calpine to test this process. Calpine continues to work closely with PG&E to test Calpine’s receipt of the file as well as the transfer to PG&E’s billing system. IOU billing systems are extremely complex in nature and to date, Calpine has not received all files to verify that there will be no issues with data integration at the time of the planned pilot launches. Calpine will continue to work with PG&E on behalf of SVCE to resolve various outstanding questions about the technical processes that will need to occur to enable the submission of pilot rates into MIDAS.

Once the data integration has been completed, the transfer of data for all pilot rates between Calpine and SVCE will occur. Calpine cannot provide cost estimates to support this process until PG&E provides necessary documentation.

All costs associated with the Pricing Engine provided by GridX are covered by PG&E throughout the life of the pilots. SVCE plans to evaluate load, customer benefits, adoption rates, systems, and processes during the duration of the CPUC pilots to determine the infrastructure it will need post-pilots. At this time, SVCE has not determined if it will continue to use GridX following the pilots’ completion or if they will consider other options to ensure SVCE’s dynamic generation rates are accurately reflected and uploaded into MIDAS.

B. Rate Identification Number (RIN)
In order to provide RIN(s) on customer billing and online accounts using both text and QR code, SVCE will provide PG&E with customer generation, export compensation, and bill protection costs for bill presentment. However, PG&E’s billing system must be updated to reflect the RIN(s) and QR code. PG&E will be leading this development because it is the entity responsible for metering customer usage, and providing bill presentment to SVCE’s customers. SVCE looks forward to working with PG&E and Calpine to agree on:
▪ bill presentment;
▪ implementation plan and timeline;
▪ billing system update plan and current progress; and
▪ proposed text design and QR code design and proposed placement.

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13 At this time, SVCE has not begun to plan for a QR code-linked webpage on its website. MIDAS and related systems’ structures and processes, including the RIN tool, must be finalized first before investing resources to design and implement modifications to the website. However, SVCE does plan on running a robust customer education and awareness campaign that details customer value and access to hourly rates.

In order to support the development of a Single Statewide RIN Access Tool, SVCE staff and third-party service providers (i.e., Calpine) participate in the Statewide RIN Access Tool working group meetings.

SVCE has committed three employees to support the RIN Access Tool working group – a Data Analytics Manager, an Energy Services Specialist, and a Real Time Pricing (RTP) Specialist. SVCE’s focus will be on customer ease of use and an accurate representation of customer rates. Beyond participating in the working group, it is still unclear what ongoing resource commitment will be necessary from SVCE to support the launch of the tool. As working group discussions develop, SVCE will determine the resources needed to launch what the working group ultimately decides is the best format for a Statewide RIN Access Tool. In order to support compliant implementation of the tool, the funding mechanism for the tool and a load serving entities review and identification of its internal infrastructure’s role in connection with the mechanics of the tool will need to be defined. SVCE plans to continue to participate in the working group and will make additional resource commitments once it is determined what is needed to support the implementation of the RIN tool.

V. Background on Development of Marginal Cost-Based Rates, Programs and Rate Structures
In order to understand the process through which SVCE has considered developing marginal cost-based rates or public programs it is important to clarify SVCE’s role as a generation-only service provider. SVCE service replaces the PG&E generation service on a customer’s bill. All of SVCE’s time-dependent rates are collected through generation rates. SVCE does not have any distribution or transmission rates, time-dependent or otherwise and SVCE’s Board has the sole authority to approve SVCE generation rates. 7 SVCE does not plan on developing marginal cost-based rates in the near-term but instead, if its Board approves, may largely adopt the IOU developed marginal cost-based rate, to be launched by July 1, 2025. Following Board approval, SVCE could plan to provide customers with access to the PG&E developed marginal cost-based rates by July 1, 2027. However, through the duration of the CPUC pilots, SVCE plans to explore opportunities to customize its hourly generation rates and provide customer access to marginal cost-based rates through unique program design. SVCE also plans to build customer awareness and incent marginal cost-based rate enrollment.

Uploading time dependent rates into MIDAS has informed SVCE of the significant technical challenges that must be addressed in order to offer rate structures and programs that use a real-time pricing signal to incent behavioral change. Until SVCE has had the opportunity to learn from the hourly pilots launched in 2024, SVCE cannot comment on potential generation rate structures or existing systems and 7 SVCE’s current rates can be found at: https://svcleanenergy.org/electricity-rates/.

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14 processes. However, it is critical that SVCE has the structures to be able to offer its customers generation rates that are different from PG&E generation rates.

VI. Description of Demand Flexibility Analysis Methodology SVCE explored the potential impacts of real time pricing on SVCE’s energy portfolio costs in order to begin to understand, with the information available at the time this plan was developed, how real time pricing might affect SVCE’s energy costs. SVCE analyzed how potential changes in load would affect the energy cost of serving that load based on forecast market prices. SVCE does not know the exact rates its customers would be paying or know the manner in which its customers would respond to real time pricing. This is due to the fact that to date, none of the real time pricing pilots SVCE plans to participate in have begun enrollment due to pilot start date delays and consolidations with the creation of an entirely new pilot, which is yet to have its implementation details finalized. 8 Because of the lack of information available on which to base assumptions for an analysis of the potential impacts of real time pricing, SVCE developed scenarios for load change based on existing studies of the potential for load shedding. Existing sources were used to develop values that were then used as a proxy for changes in customer energy usage by customer class. The analysis did not attempt to examine possible load shifting outcomes and instead solely examined the potential for load shedding.

The decision was made to only analyze potential load shed, effectively functioning as a demand response resource, because actual load shed represents the most material impact to SVCE’s energy purchase costs. Additionally, load shifting would add a level of complexity to the analysis not warranted given the uncertainty around the inputs to the analysis. Moving to real time pricing will very likely result in load shifting but the maximum potential for load shedding will reveal the maximum range of savings to SVCE’s energy cost portfolio that could be realized.

Three scenarios (Table 1), in addition to a Base Case, were developed to understand how energy portfolio costs could change based on varying levels of customer participation and addressable load. The Base Case represents SVCE’s load forecast based on the average of actual usage by customer class for the past three years (2020-2022). SVCE examined the potential impacts of real time pricing for 2024- 2027, the years during which real time pricing pilots are expected to launch and operate. 8 CPUC Decision 24-01-032, which approved the pilots, requires the IOUs to file Advice Letters containing the implementation plans at the end of March 2024. These will then go through the CPUC’s Advice Letter disposition process.

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15 Table 1 Scenarios Analyzed
Scenario Description
Low • Based on assessment of SVCE customer class behavior and end uses • Best estimate of realistic load shed potential
• Conservative customer participation
Medium • Less conservative assessment of participation and load shed potential High • Based on very robust customer participation and generous load shed potential assumptions
• Extreme bookend of potential; unlikely to be realized First, in order to estimate customer participation and addressable load, SVCE staff leveraged internal knowledge of SVCE’s unique customer class behavior, the results of the 2006 California Commercial End-Use Survey (CEUS), and the 2015 Lawrence Berkeley National Laboratory Demand Response Potential Study.

These sources informed the assumptions developed for market segment participation by customer class and incrementally addressable load by customer class. The percentages of assumed impact for each of the three scenarios are listed in Table 2 and Table 3.

Table 2 Market Segment Participation Assumptions
Scenario
Customer Class Low Medium High
Agricultural 5.0% 10.0% 30.0%
Large Commercial 1.0% 2.5% 5.0%
Lighting and Traffic
Control

0.0% 0.0% 0.0%
Residential 0.0% 0.4% 2.1%
Small Medium
Commercial

0.5% 1.0% 3.0%
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16 Table 3 Incrementally Addressable Load Assumptions
Scenario
Customer Class Low Medium High
Agricultural 5.0% 10.0% 10.0%
Large Commercial 1.0% 8.0% 17.0%
Lighting and Traffic
Control

0.0% 0.0% 0.0%
Residential 0.5% 4.0% 8.0%
Small Medium
Commercial

5.0% 10.0% 15.0%
Second, SVCE staff extrapolated the 8,760 hours of load in each year for 2024-2027 using SVCE’s existing hourly load forecast. The Base Case was then adjusted to create load profiles for each scenario based on the relevant customer participation and addressable load assumptions.

Finally, SVCE uses Ascend Analytics’ PowerSIMM™ platform for portfolio management and utilized the modeled hourly CAISO NP-15 prices provided by Ascend Analytics to calculate the energy costs for each scenario. The energy costs were then calculated by multiplying the changes in load across scenarios by the forward curves. As described in Section VII.D. below, due to on-going uncertainty in the Resource Adequacy (RA) market and regulatory structure, SVCE excluded any quantification of capacity value in the cost analysis.

VII. Results
A. Cost Effectiveness
SVCE examined the cost effectiveness of moving to real time pricing through the lens of the demand flexibility analysis described in Section VI. Although portfolio energy costs are a narrow lens through which to evaluate cost effectiveness, SVCE staff determined that with the current assumptions available and plethora of unknowns, a narrow evaluation of cost effectiveness could be completed for SVCE’s first LMS Plan. When developing future Plans, SVCE will have the results from the various CPUC demand flexibility pilots and plans to use those actual results to inform a more robust evaluation of real time pricing.

For the purposes of this Plan, cost-effectiveness was evaluated as the ratio of dollars saved to dollars spent. SVCE plans to broaden the way it evaluates cost-effectiveness in future LMS Plans by using a cost-effectiveness evaluation metric that is more inclusive of the entire sphere of benefits that could result from dynamic rates (e.g., by using the Total System Benefit test.) The cost impact of the Low, Medium, and High Scenarios were compared to the Base Case costs. As illustrated in Table 4, cost savings across scenarios and years are negligible when compared to the energy portfolio costs of the Base Case. This is due to the fact that even in the High Scenario, load does not shed in significant enough quantities to make a meaningful impact (see Figure 3).

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17 Table 4 Scenario Cost Savings as a Percentage of Base Case Costs Scenario
Year Low Medium High
2024 0.013% 0.110% 0.495%
2025 0.013% 0.109% 0.495%
2026 0.013% 0.110% 0.495%
2027 0.013% 0.110% 0.497%
As would be expected, across all four years, the Low Scenario has the least effect on load (2,121 MWh), the Medium Scenario results in increased load reductions (18,273 MWh), and the High Scenario results in the largest amount of total load reductions (81,904 MWh). When viewing the load impact results by customer class, the greatest load impact occurs in the large commercial class segment. The residential class has the smallest impact on load in both the Low and Medium scenarios. However, under the High Scenario, the agricultural customer class has the smallest impact on load. These results indicate that it may be more beneficial for SVCE to focus its demand flexibility efforts on its large commercial customers.

However, even under the High Scenario, large commercial yields a reduction in Base Case load of only .

Figure 3 Total Load Impact Across Scenarios by Customer Class (2024-2027) with Large Commercial High Scenario Load Impact Callout
SVCE staff estimates that implementing real time pricing from 2024-2027 would cost in total (see Table 8). This cost estimate is based on SVCE staff’s evaluation of the staffing, systems, and marketing costs that would be incurred and is described in further detail in Section VIII. Cost savings for each scenario do not vary significantly year over year. These results indicate that under the most realistic -90,000
-80,000
-70,000
-60,000
-50,000
-40,000
-30,000
-20,000
-10,000
0 Low Medium High
Scenario
Load Impact (MWh)
Agricultural Large Commercial
Residential Small Med Commercial
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Large Commercial Rate Class Load Impact
(2024-2027)
18 assumptions for market segment participation and addressable load (Low Scenario) SVCE would save in energy costs. The High Scenario would result in slightly over dollars of energy cost savings. These savings represent only 0.5% of total forecast Base Case energy costs across 2024 through 2027. However, many of the costs included in the cost estimate represent one-time upfront costs. If SVCE had examined offering dynamic rates over a time horizon beyond 2027 and accounted for benefits beyond modeled energy costs, then the cost-effectiveness indications would differ. As mentioned above, SVCE is evaluating the use of more inclusive cost effectiveness metrics such as the Total System Benefit test to widen the scope through which the benefits of dynamic rates can be examined.

Table 5 Energy Cost Impact (Savings) 2024-2027
Year
Scenario
Low Medium High
2024
2025
2026
2027
All
B. Equity Evaluation
SVCE defines underserved communities, broadly, as those that have historically been excluded from participating in the benefits of electrification and/or have low energy security. SVCE’s underserved communities face multiple barriers that could prevent them from benefiting from the dynamic rate pilots. These households may lack the flexibility to shift their energy use to off-peak times due to rigid schedules and lack of access to smart appliances and technology, or may receive communications about how to shift their energy usage in a language they do not speak. Participation often requires smart meters yet some customers in mobile home parks and multiunit dwellings do not have smart meters. As a result, communities without access to these appliances and technologies cannot participate in dynamic pilots and may face higher overall energy costs. In addition, households that are already struggling with energy insecurity may find it challenging to adapt to the fluctuating prices in the RTP pilots. RTP rate structures must include price protection (e.g., shadow billing) to eliminate financial risk for these customers, which is especially crucial to encourage pilot rate adoption in underserved communities. SVCE knows that other barriers will arise in helping all of its customers benefit from future dynamic rates and plans to learn more about necessary solutions during the upcoming dynamic rate pilots.

SVCE is taking specific steps to address underserved communities and will look for opportunities to address barriers that keep customers from accessing and benefiting from dynamic rate pilots. Today, SVCE provides lower rates for income-qualified customers, has developed a Programs Equity Framework to help incorporate key considerations into its decarbonization program work, and uses the CPUC’s Socioeconomic Vulnerability Index (SEVI) metric to guide program planning and design, rate evaluation, and ongoing community engagement and outreach efforts. These tools and how they will be used to support equitable demand flexibility efforts are described below.

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19 1. Program Equity Framework
SVCE’s decarbonization programs and community outreach are customer-focused and designed to be inclusive of the needs of underserved communities. SVCE utilizes an internally developed Programs Equity Framework to guide a process for learning and considering needs of underserved communities, defining these groups, understanding their current state of DER adoption and barriers, designing programs that serve these groups, and tracking ongoing impacts of SVCE programs. Learnings from the Programs Equity Framework, combined with program evaluation, monitoring, and verification data will be used to guide future program design, including for dynamic rate pilots.

2. Socioeconomic Vulnerability Index (SEVI)
SVCE has identified the SEVI, originally developed as part of the CPUC’s Affordability Report, as the primary equity indicator to be used to identify underserved communities and develop programs and rate evaluations. SEVI captures education attainment, housing burden, linguistic isolation, poverty, and unemployment at the census tract level to paint a picture of energy security and decarbonization participation. SVCE has calculated the SEVI metric for all census tracts in our service territory and grouped the tracts into four quartiles, as shown in Figure 4, below. DACs within SVCE’s service territory, as defined by CalEPA, are exclusively in the SEVI 4 quartile.

Figure 4 SEVI Quartiles in SVCE’s Territory

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20 SVCE has performed an analysis to understand the different demographics in these SEVI quartiles using utility and tax assessor data. Table 6 shows a high-level overview of some example statistics by SEVI quartile that SVCE uses to inform program design.

Table 6 SEVI Quartiles and Key Demographic Information
SEVI 1 SEVI 2 SEVI 3 SEVI 4
Residential
Accounts
53k
(23%)
62k
(27%)
64k
(28%)
44k
(19%)
Population 177k
(19%)
251k
(27%)
245k
(26%)
242k
(26%)

CARE/FERA
Accounts

2.8k
(10%)

4.6k
(17%)

8.2k
(30%)

10.5k
(39%)
Median
Income
$166,000 $145,000 $117,000 $79,000
The goal of using SEVI as a primary indicator is to provide a first pass at identifying varying community and customer demographics, associated decarbonization needs, and to support and track how those needs are being met. SEVI quartiles help SVCE staff think about program design, outreach, and rate evaluation, and to analyze program participation data to better understand how different groups engage with SVCE’s programs.

Figure 6 demonstrates one example of the value of using SEVI as the primary equity indicator.

Housing composition varies among SVCE customers in SEVI 1 (best-off) and SEVI 4 (worst-off) quartiles. Considering that the population in SEVI 4 tends to have lower electrification rates overall is important but understanding the differences in housing composition is critical to decide how best to formulate offerings for this underserved community.

Figure 5 Housing Type Comparison of SEVI 4 (Worst-off) and SEVI 1 (Best-off) Quartiles Item 1f
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Worst-off Quartile; Housing Composition Best-off Quartile: Housing Composition •MFH •Condo /Townhome •STH MFH •Condo /Townhome SFH
21 3. SVCE Equity Programs
Summarized in Table 7 are a sampling of programs that were designed, launched and/or evaluated using the Programs Equity Framework and SEVI metrics. These programs strive to provide underserved communities with electrification opportunities and tools to flex their demand, reduce their electricity bill, and address the LMS goals.

Table 7 Programs Designed, Launched, and/or Evaluated Using the Programs Equity Framework and SEVI Metrics Item 1f
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Transportalion Electrification
Progra ms
Description LMSGoal Status
Charging nsta at'on ncent'ves
Program (CHI P)
ncent'ves for LI and L2 EV charger
"nsta afons at existing
mu tifamily properties. Deeper
'ncent'ves prnv'ded foraffordab e
hous'ng properties.

Goa 4:

Reducine
fassi fue
consum ptlon
and GHG
emissions
Ongoing
Priority Zone DC Fast Charging
Program
Incentivizes EV5E vendorsto
Install DC fast chargers within
specific priority areas In proximity
to older multifamily housing that
would be harderto add chargers
at.

Goal 4:

Reducing
fossil fuel
consum ption
and GHG
emissions
Ongoing
California Electric Vehicle
Infrastructure Project (CALeVIP)
Incentives forDCFC and L2 EV
charger Installations at
multlfamily properties, public
parking lots, or retail locations..

Deeper Incentives for Installations
In disadvantaged and low-income
communities.

Goal 4:

Reducing
fossil fuel
consum ption
and GHG
emissions
Ongoing
CEC REACH Grant EV
Infrastructure Direct Install
Match fu ndlng provided to
Ecology Action to Install EV
charglngtechnology to serve
multlfamily residents in
disadvantaged and low-income
communities.

Goal 4:

Reducing
fossil fuel
consum ption
and GHG
emissions
Ongoing
22 Item 1f
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Buildl ng El ectrification
Progra ms
Description LMSGoal Status
FutureFit Homes Up to $8K Incentives for residents
toInstall heat pump water
heaters* heat pump space
conditioning, panel upgrades and
pre-wiring. Additionalrebates of
$5K for Income-quaIlfied and
CARE/FERA customers.

Goal 4:

Reducing
fossill fuel
consum ption
and GHG
emissions
Ongoing
FutureFit Homes Up to $2CK in 'ncent'vesfor small
aid medium businesses to
rep ace gas app "ances with
electric. Additions rebates of $5K
for non-profit organizations.

Goa 4:

Reducing
toss' fue
consum ption
and GHG
emissions
Ongoing
Clean and Healthy Affordable
MuItifam lly Properties Program
(CHAMP)
Electrify BOOto 1,000 units +
install 125 EVSE ports at existing
deed-restricted affordable
multifamily properties at no cost
to property ownersor tenants.

Buildings will he enrolled in
SVCE's E-ELEC rate.

Goal 4:

Reducing
fossill fuel
consum ption
and GHG
emissions
Design underway
Access'b e F'nanc'ngPi ot D'rect insta ation of
e ectrificat'on upgrades to
se ected low-moderate income
custom ers, with the goa of
achieving customer bill savings
and oad sh'ft'ngto offset upfront
costs of e ectrification upgrades.

Goa 4:

Reducing
toss' fue
consum ption
and GHG
emissions
Design underway
Single-Family Turnkey and
Direct Installation Services
Direct Installation of
electrification upgrades for low-income customers at no-cost and market-rate customerswitfi
transparent costs using 5VCE
contractors. Also indu des
emergency water heater
replacement services.

Goal 4:

Reducing
fossill fuel
consum ption
and GHG
emissions
PlannIng stage
23 C. Technological Feasibility Evaluation
SVCE has evaluated technological feasibility through a near-term perspective: operation of the CPUC pilots to offer real time rates temporarily; and through a long-term perspective: permanent operation of a real time rate offering. In order to support the implementation of the CPUC’s dynamic rate pilots, SVCE will be working through its back-office provider, Calpine, and PG&E to operationally support the dynamic rate pilots and plans to use existing systems that are already available.

Resilience/Other Description LMS Goal Status
Medical Baseline Battery Partnered with a local non-profit to give away (free) portable batteries to
customers on medical
baseline rates living in tier 2
or 3 PSPS area to sustain life-supporting equipment
during power outages.

Goal 2:

Encouraging
the control
of daily and
seasonal
loads to
improve
system
efficiency
and
reliability
Ongoing
Community Resilience Provided grants to member
jurisdictions to improve
resilience to climate change
at their critical facilities.

Included solar and/or battery
storage installations, cool
pavement, and other
measures. Battery
installations have potential
to be enrolled in grid
resilience through DR
platforms.

Goal 3:

Lessening/
delaying the
need for
capacity
additions
Ongoing
Territory-specific heat
wave assessment
Map and track heating
trends across service
territory to develop more
accurate predictions for
space-cooling technology
adoption with special
considerations for load
growth and GHG emissions
impacts. Conclusions will be
used to consider incentives
for HPHVAC systems for
heat-vulnerable customers.

Goal 1:

Encouraging
the use of
energy at
off-peak
hours
Complete
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24 All costs associated with the Pricing Engine will be recovered by PG&E through CPUC-jurisdictional ratepayer funding throughout the life of the pilots. During the period the pilots are operating, SVCE will evaluate the effectiveness of existing processes to determine whether ongoing use of PG&E’s Price Machine, which will cost approximately per year makes operational sense or whether switching to another provider would be more beneficial. However, the systems that will need to be in place to support long-term implementation of real-time rates will be costly and load entities should be able to recover shared categories of costs for the development of systems and processes through a statewide ratepayer mechanism.

Various issues have already arisen that indicate that the technological feasibility of offering permanent long-term dynamic rates depends on numerous changes to the near-term pilot implementation systems.

First, CCAs require the ability to provide customers with unique rates that are different from PG&E’s bundled generation rate – today this will be accomplished through a manual process of submitting emails with adjustments to PG&E; PG&E will then update the Pricing Engine. This cumbersome process is required because the Pricing Engine is a closed system that cannot be accessed by any entity other than PG&E. The lack of automation and long-term systems approach for SVCE to reflect discounted and unique hourly rates in billing systems and in MIDAS must be coordinated amongst the three entities involved with billing: PG&E, Calpine and SVCE. Second, the MIDAS upload is unnecessarily labor-intensive, time consuming and must be automated once the MIDAS systems are more stable. Due to the number of LSEs uploading to MIDAS at approximately the same time, Calpine has experienced the following technological challenges during MIDAS uploads:

1. MIDAS Server Fragility: when MIDAS access is high, the server cuts off rates haphazardly. If Calpine attempts any methods for uploading more than one rate at a time, MIDAS drops about a third of the rates.

2. MIDAS Server Latency: MIDAS receives rates very slowly - about 30 seconds per rate.

Now that modifiers are included in the upload requirements, each CCA upload can take many hours or the better part of a day. Because Calpine is responsible for multiple rate uploads, completing the MIDAS upload requirement can take 3 days or more. This is an additional three days beyond the ten days needed for Calpine to incorporate new/revised rates into their systems.

3. MIDAS Server Congestion: MIDAS can freeze and stop responding when many LSE’s are uploading at the same time. To-date, the only solution suggested has been for users to attempt manual uploads after 8PM or on weekends to avoid peak upload times.

Calpine is working closely with PG&E to test file transfers to PG&E’s billing system but as of the drafting of this Plan, Calpine has not received all files to ensure smooth data integration.

Additionally, although SVCE’s time-dependent generation rates are accurately uploaded to MIDAS, SVCE staff does not control transmission and distribution rate uploads and so cannot validate the compiled customer rates.

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25 Finally, the LMS require SVCE to upload rates into MIDAS prior to their effective rate date. Given today’s TOU billing system processes, and the MIDAS Server challenges described above, it is not possible to provide all customers rates into MIDAS prior to the effective rate date.

Through Calpine, SVCE provides PG&E with customer generation and export compensation and bill protection for pilot bill presentment. However, PG&E’s billing system must be updated to reflect the applicable RIN(s) and QR code. PG&E will be leading this development and SVCE looks forward to working with PG&E and Calpine to agree on:
o bill presentment
o implementation plan and timeline
o billing system update plan and current progress
o proposed text design and QR code design and proposed placement on the bill Finally, broader issues related to CCAs being able to successfully implement hourly rates and or programs that access hourly rates to encourage flexible load shifts post-CPUC pilots were documented in the CPUC’s Demand Flexibility proceeding (Rulemaking 22-07-005). In order to support compliance with the LMS, certain processes regulated by the CPUC that intersect with the LMS must be resolved. It is critical that CCAs have the opportunity to learn from pilots and that there is flexibility to revise pilots as needed improvements arise. The CPUC should continue to facilitate data sharing and data collection between PG&E & SVCE. More specifically, the CPUC should require PG&E to provide billing quality usage data to CCAs at hourly or sub-hourly intervals and require all IOUs to provide non-billing quality hourly customer interval usage data for CCA load forecasting and offering dynamic pricing to unbundled customers.

For the long-term dynamic rate system, the CPUC should require the use of MIDAS as a price portal, with necessary upgrades as determined by the CPUC and CEC. The CPUC should require IOUs to provide CCAs access to customer usage data and if dual enrollment between demand response programs and demand flexible rates is prohibited, the CPUC should require IOUs to provide customer enrollment data in demand response programs. Additionally, the CPUC should ensure equivalent bill presentation between bundled and unbundled customers.

D. Grid Benefits Evaluation
Any reductions to the capacity needs of a portfolio due to real time pricing are indicative of the potential grid benefits of real time pricing. The electrical grid is built to have enough capacity to meet the peak load on the system and if customer demand can be shifted to times when grid conditions are more favorable, or altogether shed, then the grid stands to become more reliable. As described in Section VI, SVCE examined the potential changes to load under three different scenarios representing a low, medium, and high level of real time pricing responsiveness. These load scenarios were also examined for their potential peak savings in order to understand the potential contributions of SVCE’s portfolio to reducing peak demand on the grid.

When compared to the Base Case, the High Scenario resulted in the greatest peak reductions across all months, reducing SVCE’s peak load on average by 3.2 MW. The Medium Scenario reduced the peak load Item 1f
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26 by an average of 0.88 MW, while the Low Scenario reduced the peak by an average of 0.11 MW. In terms of inter-month variability, the greatest peak savings occurred in September.

As a CPUC-jurisdictional load serving entity, SVCE is required to procure RA product to meet the CPUC’s RA program obligations. The RA program ensures that load serving entities have sufficient capacity to meet their peak load along with a reserve margin. SVCE staff considered associating the peak savings across scenarios with the potential dollar value of RA product savings that SVCE could realize. However, given the current RA market volatility in California, SVCE staff determined that any savings amount calculated using today’s pricing would likely not produce results that would be indicative of future outcomes. In addition to general RA market volatility, the RA program in California is currently transitioning to a Slice of Day framework and it is not yet clear how the market will respond and what RA pricing will be under the Slide of Day structure.

Furthermore, load serving entities need clarification from the CEC regarding whether reductions to load resulting from real time pricing would be processed by the CEC and applied to their calculation of a load serving entity’s load, which is used to set CPUC RA obligations. Whether the load impacts of real time pricing will be considered load modification to the forecast or be considered supply-side RA, remains an open question. For the abovementioned reasons, SVCE staff focused only on calculating peak savings, which indicated that the scenario most indicative of realistic real time pricing uptake (Low Scenario) has a very minor impact on SVCE’s Base Case peak load.

E. Customer Class Benefits Evaluation
Today, SVCE has no hourly generation rates available for general customer enrollment. Therefore, it is not possible to quantitatively evaluate customer benefits by customer class. However, there are several unknowns that will directly impact customer adoption rates. First, the final PG&E pilot rate structures and associated pilot implementation details for the CPUC’s real time pricing pilots are not yet known.

Second, customers have limited customer access to behind-the-meter automation technology. Third, the level of customer acceptance of risk to market rates and new, complex rate structures is not known.

Finally, the ease of access to rates prior to, and following the operability of the statewide RIN tool for access to MIDAS is currently still under development.

Following the launch of the CPUC pilot rates, SVCE will evaluate its resulting customer data to better understand potential flexible load shifts and associated savings. Marketing, education and outreach plans to build awareness and understanding based on these results will be used to encourage customer enrollment if clear customer benefits result.

VIII. Marginal Cost Rates Implementation
SVCE is closely tracking the timelines for the implementation of marginal cost-based rates and has developed Figure 6 to illustrate its implementation plan. The figure includes the process for receiving SVCE Board approval of rates.

Item 1f
Attachment 1
Draft LMS Compliance Plan - Redacted
27 Figure 6 Near-term Marginal Cost Based Rate Implementation and MIDAS Compliance Timelines In terms of SVCE’s commitments to-date for permanent marginal rate design, SVCE has not yet committed to anything because it plans to make resource commitments after the effective dates of the pilots, so that the learnings from the pilots can inform these commitments. However, it has mapped the resources needed to support marginal cost-based rates in the near term (Table 8). SVCE estimates that it will spend $2.3 million to support pilot implementation of marginal cost-based rates in the near term.

These costs are made up of two categories: labor and staffing, including both the start-up costs in Year 2024 and ongoing annual implementation costs through 2027. Other costs include (i) marketing, Date: 7.1.23 10.1.23 Dec. 23
MIDAS Uploads
Calpine uploads TOU rates; Price Engine uploads hourly rates PG&E RIN Customer Bill Placement Discussion (ongoing)
Date: Jan '24 Feb '24 Mar '24 10.1.24 May '24 June '24
MIDAS Uploads Uploads for TOU updates + new hourly rates TOU/Calpine; RTP/Price Engine
PG&E RIN Customer Bill Placement Discussion
LMS Board Working Session
Advice Letter BOD Approval- AgFIT/CalFUSE Pilots Expansion* Compliance Plan Board Approval, then Submission to CEC
RIN on Customer Billing Statement
AgFIT/CalFUSE Pilots Review - Executive Committee*
AgFIT/CalFUSE Pilots - Board Approval*
* Best estimate at this time
Date: May '25 June '25 May '27 June '27
MIDAS Uploads Uploads: TOU updates + new hourly rates
TOU/Calpine; RTP/Price Engine
Marginal Cost-Based Rate Review: Executive Committee
Marginal Cost-Based Rate Board Approval
Marginal Cost-Based Rate Available to All Cust - Exec Comm Review Marginal Cost-Based Rate Available to All Cust - Board Approval Item 1f
Attachment 1
Draft LMS Compliance Plan - Redacted
28 education, and outreach; (ii) IT and systems; (iii) customer support; (iv) annual bill settlements support; and incentive costs.

Table 8 Total Costs to Implement Real Time Pricing Across the Four Years Analyzed In order to build out internal infrastructure within SVCE that works to support marginal cost rates adoption, SVCE will review its current billing system’s compatibility with permanent dynamic rate offerings and develop an improvement plan before amending any of SVCE’s existing systems. SVCE will learn from existing pilot rate system processes and plan accordingly.

IX. Conclusion
SVCE’s evaluation of its current and future rate and program offerings in order to support the goals of the LMS indicates that SVCE has already contributed to meeting the LMS goals and is on track to continue encouraging the use of energy at off-peak hours to improve grid system efficiency and reliability and reduce California’s GHG emissions. SVCE’s future plans for offering dynamic rates or programs that respond to dynamic rate signals are tied to the outcomes of the CPUC’s various dynamic rate pilots. SVCE has committed resources to support dynamic rates and plans to continue working with California’s agencies and relevant stakeholders to resolve the technological challenges that could prevent successful long-term implementation and customer uptake of real time rates or slow down the near-term implementation of the pilots.

SVCE acknowledges that real-life results from the CPUC pilots will be more indicative of future outcomes than the assumptions-based modeled energy cost benefit analysis included in this LMS Plan. The results of the CPUC pilots will allow SVCE to expand the lens through which cost effectiveness can be examined.

SVCE hopes to gain information about realized customer and grid benefits and expand the cost-effectiveness perspective it uses to evaluate those benefits in future LMS Plans.

SVCE is excited to partner with the CEC, CPUC, and PG&E to help develop the rates and programs that will move customers to a dynamic-signal incentivized world and help make a meaningful impact to the operations of California’s grid and energy emissions profile. Although the task is not easy, as illustrated by the numerous challenges that have already arisen, with a persistent and collaborate approach, SVCE believes that the LMS goals can continue to be met. SVCE also believes that dynamic rates will be a key tool for optimizing the grid of the future and that they will allow load serving entities to align customer incentives for consumption with their procurement costs more granularly than is possible today. With much of the expected growth in new load over the next 10-20 years coming from building and transportation electrification, SVCE is confident that electricity end users will have more opportunities to shift their usage based on a dynamic price signal.

Cost Summary
Year 2024 2025 2026 2027
Labor/Staffing
Other Costs
Total Annual Costs
Item 1f
Attachment 1
Draft LMS Compliance Plan - Redacted
29 Attachment A
Item 1f
Attachment 1
Draft LMS Compliance Plan - Redacted
30 [Data will be transmitted to the CEC in .xlsx file format] Item 1f
Attachment 1
Draft LMS Compliance Plan - Redacted
Information About Other Load Serving Entity Load Management Standards Compliance Plans Name of Load Serving Entity Link to Compliance Plan Key Information in Plan Pacific Gas and Electric
Company
(PG&E)
https://efiling.energy.ca.gov/G
etDocument.aspx?tn=252489&
DocumentContentId=87506
• PG&E has been developing its preferred real time pricing rate as part of various California Public Utilities Commission (CPUC) proceedings for the past several years (the CPUC approves IOU rates) and has received approval for several real time pricing pilots.
• PG&E plans to use its real time pricing pilots to inform its plan for achieving LMS-compliant rates. • PG&E plans to file an application for LMS-compliant dynamic day-ahead hourly rates for each customer class in its next GRC Phase II filing (Q3 2024). • PG&E is enhancing its billing capability to support hourly rates.

Southern California Edison
Company
(SCE)
https://efiling.energy.ca.gov/G
etDocument.aspx?tn=252487&
DocumentContentId=87505
• SCE has been designing rates based on marginal costs that include time-dependent relationships for many years and is now focused on transitioning from production model-based marginal energy costs to hourly locational marginal energy cost and the development of marginal cost-based transmission rates. • SCE currently has a pilot in place that will inform the development of a LMS compliant real time pricing rate.

San Diego Gas and Electric
Company (SDG&E)
https://efiling.energy.ca.gov/G
etDocument.aspx?tn=252478&
DocumentContentId=87498
• SDG&E is seeking approval from the CPUC for a real time pricing pilot (at the time its plan was filed it had not yet received approval for a pilot like the other IOUs had).
• SDG&E expects to file its real time pricing application at the CPUC sometime in Q3 of 2024.
• SDG&E has created a real time pricing department that has been and will continue to work on all dynamic pricing issues.

Note: Investor Owned Utilities (IOUs) and Publicly Owned Utilities (POUs) defined as "Large" by the Load Management Standards (LMS) were required to file their LMS compliance plans in the Fall of 2023.

Item 1f
Attachment 2
—
—
—
Sacramento Municipal Utility
District (SMUD)
https://efiling.energy.ca.gov/G
etDocument.aspx?tn=253402&
DocumentContentId=88616
• SMUD has not conducted a dynamic rate pilot and does not have supporting data on estimated implementation costs or benefits.
• SMUD cannot conclude, based on its qualitative evaluation of dynamic rates, that implementing real time prices that change at least hourly would result in material reductions in peak load relative to SMUD’s existing time-dependent rates and programs, or be cost effective.
• SMUD's evaluation also does not demonstrate that adding new programs or modifying existing programs to enable automated dispatch based on real time pricing signals is likely to provide material incremental reductions of peak load or other benefits relative to SMUD’s current programs.

Los Angeles Department of
Water and Power (LADWP)
https://efiling.energy.ca.gov/G
etDocument.aspx?tn=253631&
DocumentContentId=88868
• The implementation of marginal cost-based rates according to the timeline required in the LMS would result in extreme hardship to LADWP and is not technologically feasible.
• LADWP plans to delay compliance with implementing real time pricing until such time as implementing dynamic rates would be technologically feasible and equitable.
• LADWP will continue to address identified challenges, actively look into options, and plans to pursue Meter/IT/Billing infrastructure that can facilitate the Load Management Standards requirements.

Item 1f
Attachment 2

Staff Report – Item 1g
Item 1g: Executive Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Larry Klein, Executive Committee Chair
Date: 3/13/2024
The Executive Committee met February 23, 2024 with all six members present and discussed SVCE’s proposed Load Management Standards compliance plan, received an update on SVCE’s policy review update, discussed a proposed assignment of funds to new and existing programs, and received information on the 2023 SVCE and electric awareness residential customer survey results.

Citlalli Sandoval, Senior Regulatory Advisor, presented the proposed Load Management Standards Compliance plan. At the last Executive Committee meeting, staff provided an introduction to the plan; the purpose of the presentation this time around was to get the Executive Committee’s feedback and support to recommend that the Board of Directors adopt the proposed SVCE Load Management Standards plan. The Executive Committee discussed the proposed plan in great length, suggesting staff include information about other load serving entity plans. Due to the strategic nature of the subject covered in the report staff proposed to offer an in-depth review of rates and affordability issues in an upcoming study session. The Executive Committee also discussed having the item on Consent, which was supported given dynamic rates are projected to have a very small impact on SVCE’s load. The Executive Committee voted to unanimously support the recommendation for the Board of Directors to adopt the plan.

Gia Ilole, Director of Human Resources, introduced SVCE’s Policy Review project, which outlined the project plan of SVCE staff to review the existing 48 SVCE policies to determine if they should remain board approved policies or be repurposed as an internal standard or procedure for staff. Director of Human Resources Ilole noted revised policies would be brought back to the Board of Directors for approval, the list of retired or realigned policies would be reviewed, and policies would be reviewed on a consistent basis.

Justin Zagunis, Director of Decarbonization Programs and Policy, provided a presentation seeking feedback from the Executive Committee on proposed program funding assignments. The Executive Committee was supportive of the proposal, which will be presented to the Board of Directors for consideration at the March board meeting.

Adam Selvin, Director of Energy Services and Community Relations, and Michaela Pippin, Principal Communications Specialist, presented an informational item on the annual residential customer survey results. These results will also be included on the Consent Calendar at the March board meeting.

Materials from this meeting can be found on SVCE’s website: SVCE Executive Committee Meeting, February 23, 2024
The next meeting of the Executive Committee will be March 22, 2024 at 10:00 a.m.; materials will be posted no later than 72 hours in advance of the meeting.

Item 1g
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Staff Report – Item 1h
Item 1h: Finance and Administration Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Hung Wei, Finance and Administration Committee Chair Date: 3/13/2024
The Finance and Administration Committee met for its first meeting of the year on Monday, February 26, 2024 with three of four committee members present; the committee selected me as Chair and Alternate Director Murali Srinivasan as Vice Chair.

Amrit Singh, SVCE’s CFO and Director of Administrative Services, provided an informational overview on SVCE’s planning and budgeting process and proposed financial stress test scenarios for 2024. Information covered included a timeline of the budgeting and planning process, an overview of Enterprise Risk Management and Stress Tests, review of key drivers of financial risks, and review of planned financial stress test scenarios. The next steps identified were for staff to present the financial stress test scenario analysis results at the May Finance and Administration Committee meeting, and to use the risks and opportunities identified from the enterprise risk management framework to shape the next fiscal year’s strategic focus areas and workplan.

CFO and Director of Administrative Services Singh presented a staff recommendation for the committee to recommend the SVCE Board of Directors approve the mid-year adjusted operating budget, which projects contributing $112.6 million to SVCE’s reserves. CFO Singh’s presentation included the budget timeline, changes since the adoption of the annual budget in December, a comparison of mid-year and annual adopted budget key line items, a review of five-year reserve projections, and a staffing update on additional positions that would bring total full-time employees to 62. Following CFO Singh’s presentation, the committee voted to recommend that the SVCE Board of Directors approve the proposed mid-year 2023-2024 adjusted operating budget. This item will be on the March Board meeting agenda for the Board’s consideration.

CFO and Director of Administrative Services Singh presented a report of SVCE’s third prepay transaction, which reviewed the goals of the prepay, reviewed execution parameters, and provided a summary of executed transactions. This third prepay will provide an average savings of $7.7M annually through 2032.

Gia Ilole, Director of Human Resources, presented information on staff’s policy review project. This topic was brought up at the last meeting of the Finance and Administration committee, and staff has been working on a project plan to review existing policies to identify which policies need to be revised, realigned/retired or reassigned as an internal standard or procedure. Staff plans to bring recommendations back to the committee as the project progresses and the policies are reviewed.

Materials from this meeting can be found at the following link: SVCE Finance and Administration Committee Meeting, 2/26/24.

The next Finance and Administration Committee meeting is anticipated for May 2024 and will be determined by Finance and Administration Committee member availability; materials will be posted 72 hours before the meeting.

Item 1h
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Staff Report – Item 1i
Item 1i: Audit Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Bryan Mekechuk, Chair, Audit Committee
Date: 3/13/2024
On behalf of the Audit Committee, I am submitting this report to the Board of Directors. I regret that, due to airline changes to my international travel, I will not be able to attend the Board of Directors meeting on March 13, 2024. Vice Chair Sheila Mohan will attend that meeting.

The Audit Committee held its first meeting of 2024 on Thursday, February 29, 2024. Returning members to the committee included Alternate Director Sergio Lopez (City of Campbell), Sheila Mohan (City of Cupertino), Committee member Harjot Sangha (City of Gilroy) and me (City of Monte Sereno). Three Committee members participated in person, and one was remote.

The Audit Committee selected me to continue serving as Chair and Director Mohan to continue serving as Vice Chair for 2024.

Amrit Singh, CFO and Director of Administrative Services, gave an overview of SVCE’s primary inhouse finance functions and accounting services provided by Maher Accountancy, reviewed the purpose of the Audit Committee, reviewed the financial audit process, and discussed the timing of future Audit Committee meetings.

Mr. Singh outlined that the primary users of the audited financial statements include bond rating agencies and counterparties to power purchase agreements. He stated that SVCE has no regulatory filing requirements for its audited financial statements.

On February 19, 2024, as Chair of the Audit Committee, I met with Mr. Kellin Gilbert, the partner with Pisenti & Brinker LLP that is responsible for auditing SVCE so I could ask him questions regarding the financial audit without management present. During that meeting, Mr. Gilbert asked me questions relating to management.

At the Audit Committee meeting, Mr. Gilbert presented the results of the Fiscal Year 2022-23 financial audit to the group; he explained that the audit was almost complete and, based on their work, Pisenti & Brinker expects to issue an unmodified audit opinion (a “clean audit opinion”). Importantly, Pisenti & Brinker did not find any significant deficiencies in internal controls, did not have any disagreements with financial accounting and were not expecting to propose any adjustments to the financial statements. Mr. Gilbert stated there were no disagreements with management concerning the scope of their audit, the application of accounting principles, or the basis for management’s judgements on any significant matters. Mr. Gilbert confirmed his firm was independent of SVCE.

Mr. Gilbert confirmed that, if there were any items found upon completion of the audit that would affect the audit opinion then he would contact the Audit Committee. Mr. Gilbert expected the date of the audit opinion to be February 20, 2024.

Following the presentation, the Audit Committee voted unanimously that if Pisenti & Brinker issues a clean audit opinion then the Audit Committee recommends the SVCE Board of Directors accept the audit report and findings; this recommendation will be presented to the Board for consideration at the March 13, 2024 Board of Directors meeting.

Item 1i

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Agenda Item: 1i Agenda Date: 3/13/2024

The last item discussed at the Audit Committee meeting was presented by SVCE’s Senior Manager of Technology and Administrative Services Nik Zanotto on SVCE’s technology audits/assessments and cybersecurity efforts.

Materials from this meeting can be found at the following link: SVCE Audit Committee Meeting, 2/29/24.

The next meeting of the Audit Committee is anticipated to be in September 2024 and will be determined by Audit Committee member availability; materials will be posted no later than 72 hours in advance of the meeting.

Item 1i

Staff Report – Item 1j
Item 1j: California Community Power Report
To: Silicon Valley Clean Energy Board of Directors
From: Girish Balachandran, CEO
Date: 3/13/2024
Per direction from the SVCE Board on December 9, 2020 for the CEO to provide a report of the ongoing activities of California Community Power (CC Power) after each of its meetings, this is to report CC Power held a regular board meeting on Wednesday, February 28, 2024.

Attached is a summary report from General Manager Alex Morris; materials from the January board meeting can be found here on the CC Power website: CC Power Meeting, 2/28/24 The next meeting of the board will be March 20, 2024 at 1:00 p.m.; meeting materials can be found on the CC Power website: https://cacommunitypower.org/meetings/
ATTACHMENTS:

1. CA Community Power Board Meeting Summary from General Manager Alex Morris, February 28, 2024 Item 1j
SILICON VALLEY \3/ CLEAN ENERGY

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Attachment 1

The Legislative Response to Industry Transition 2024 Ad Hoc Committee has not yet met; the first meeting of the committee is expected to be held in late March or early April 2024 and will be scheduled based on member availability.

Staff Report – Item 1k
Item 1k: Legislative Response to Industry Transition 2024 Ad Hoc Committee Report To: Silicon Valley Clean Energy Board of Directors
Prepared by: Andrea Pizano, Sr. Executive Assistant and Board Clerk Date: 3/13/2024
Item 1k

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Staff Report – Item 2
Item 2: CEO Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Girish Balachandran, CEO
Date: 3/13/2024
REPORT
Staff Updates
David Hicks joined SVCE February 26, 2024 as a Data Engineer supporting the Power Resources team. David brings a range of technical skills and abilities that will help the Power Resources department optimize and scale the work we’re doing in managing our wholesale portfolio. This includes helping refine existing data workflows, building new data structures, and working on the ongoing Business Process Optimization (BPO) project. David has a varied background in research and technology roles in the private sector; he also has a Masters of Science and Bachelor of Science in Materials Science and Engineering, both from Virgina Tech.

Kaila Kiefer joined SVCE March 5, 2024 as our new Decarbonization Fellow. She’s joining us through the Climate Corps program and will be on the DPP team supporting our Small-to-Medium Business Rebates program as well as assisting with some invaluable research and data collection to support our residential programs. Kaila brings administrative law experience as well as a background in operations management where she has handled customer relations, marketing, systems optimization, and outreach and engagement to local businesses. Kaila holds a Bachelors in Environmental Studies from CSU San Bernadino and a Master of Environmental Law and Policy from the Vermont Law School.

Personnel Officer Update
Under the Personnel Authority we have added two positions, a General Counsel and a Board Clerk/Executive Assistant, the former is in the pre-employment stage and the latter will be posted soon.

SVCE has two job postings: Wholesale Energy Markets Planner or Manager and Energy Trading Planner or Manager. Job descriptions and applications can be found on SVCE’s website: Current Job Openings CalCCA Annual Meeting Registration – Last Call
This year’s CalCCA annual conference is scheduled for April 16-18, 2024 in San Jose. For Board members who are unable to attend the full conference, there will be a scheduled elected officials lunch. Board members who are interested in attending should reach out to Board Clerk Andrea Pizano for registration.

CEO Agreements Executed
The following agreements have been executed by the CEO, consistent with the authority delegated by the Board:
1) SMUD, Task Order: SMB Program Support, not to exceed $122,740, expires 1/31/26 2) SMUD, Task Order 4: Charging Installation Incentives Program (CHIIP) Support, not to exceed $149,090, expires 1/31/26
3) SMUD, Task Order 5: Priority Zone Direct Current Fast Charging (PZDCFC) Program Support, not to exceed $39,270, expires 1/31/26
Item 2
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Agenda Item: 2 Agenda Date: 3/13/2024

4) Cohen Ventures, Inc., Agreement: Pro Bono Market Data Analysis in Support of Inclusive Utility Investment Program Design, 2/15/24 – 12/31/26
5) NewGen Strategies & Solutions, Task Order: Fixed Cost Analysis, not to exceed $22,552, expires 12/31/24 6) Cascade Energy, Amendment: Decarbonization Consulting, extends date to May 31, 2024 7) School of Thought, Agreement: Marketing and Advertising Services, not to exceed $300,000, 3/1/24 – 2/26/26. Approved by the Board of Directors at the 2/14/24 Board of Directors meeting. 8) Arup, Agreement: Electrification Solution Analysis, not to exceed $295,000, 2/15/24 – 10/30/24.

Approved by the Board of Directors at the 2/14/24 Board of Directors meeting.

CEO Power Supply Agreements Executed
There have been no power supply agreements since the last report.

Presentations & Relevant Meetings Attended by CEO
- Participated in CalCCA Monthly board and executive meetings - 2/28/24, CC Power Board Meeting (meeting report included on Consent Calendar)

ATTACHMENTS

1. Clean Power Update, March 2024

2. Decarbonization Programs Quarterly Report, FY24 Q1 Milestones

3. Energy Services & Community Relations Update, March 2024

4. Regulatory and Legislative Update, March 2024

5. Agenda Look Ahead, March 2024 – July 2024
Item 2
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 1
Clean Power Update, March 2024

SILICON VALLEY

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CEO Report
Clean Power Update
SVCE Board Meeting
March 13, 2024
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Item 2
Attachment 1
Clean Power Update, March 2024
CD Clean Long-term Power Agreements
SACRAMENTO Q g GEOTHERMAL

BATTERY STORAGE
X SOLAR + STORAGE
X. SOLAR POWER
• WIND GENERATION
$3.7B+ in commitments
21 PPAs signed
18 new build projects
896 MW of Renewable Power
1,845 MWh of Battery Storage
7 Projects now delivering to SVCE
meeting "33% of energy needs:

COSO geothermal - January 2022
Slate Solar + Storage -January 2022
Casa Diablo geothermal-September 2022
Mountain View wind - July 2022
Rabbitbrush Solar + Storage -October 2022
Terra-Gen Wind - January 2023
Yellow Pine Solar + Storage - July 2023
2 Seller Project Name Technology Generation MW
Storage
MW Storage MWh
Approximate % of Annual
load in 2030
Term
(years)
Lifetime Not to
Exceed Authority
(MM$)
SVCE Board
Approval Status
1 MN8 Slate Solar + Storage 93 46.5 186 6.2% 17 $198 Oct-18 Online 2 Ormat Casa Diablo Geothermal 7 1.4% 10 $43 Feb-20 Online 3 Atlantica Coso Geothermal 43.8 6.1% 15 $331 Mar-20 Online 4 Leeward Rabbitbrush Solar + Storage 40 8 20 2.9% 15 $64 Apr-20 Online 5 NextEra Yellow Pine Solar + Storage 50 26 104 3.8% 20 $128 May-20 Online 6 Avantus Aratina Solar + Storage 80 50 200 6.3% 20 $368 Jun-20 Pre-construction 7 174 Power
Global Atlas Solar 50 3.6% 10 $32 Jan-21 Pre-construction 8 SB Energy Angela Solar + Storage 20 10 40 1.4% 15 $35 Mar-21 Pre-construction 9 AES Mountain View Wind 33.3 3.1% 20 $128 Apr-21 Online 10 Origis San Luis West Solar + Storage 62.5 15.625 62.5 3.9% 15 $132 Apr-21 Pre-construction 11 Clearway Victory Pass Solar + Storage 100 25 100 7.6% 15 $173 May-21 Construction 12 Terra-Gen Cameron Crest Wind 77.7 4.6% 15 $150 May-21 Online 13 Rev Renewables Tumbleweed
Long Duration
Storage 15.9375 127.5 15 $100 Feb-22 Pre-construction
14 Onward Goal Line
Long Duration
Storage 14.2 113.6 15 $100 Mar-22 Pre-construction
15 Ormat Geothermal Portfolio Geothermal 16.75 4.2% 20 $256 Jun-22 Pre-construction 16 OME Fish Lake Geothermal 1.82 0.4% 20 $30 Jun-22 Pre-construction 17 AES Baldy Mesa (RA-only) Storage 0 75 300 10 $81 Sep-22 Construction 18 MRP Hanford Thermal + BESS 99.4 131.4 131.4 12 $280 Apr-23 Pre-construction 19 NextEra Grace Solar 120 0 8.3% 15 $286 Aug-23 Pre-construction 20 NextEra Yellow Pine III Storage 0 115 460 15 $420 Aug-23 Pre-construction 21 Pattern SunZia Wind 100 0 0 7.6% 15 $361 Nov-23 Pre-construction Item 2
Attachment 1
Clean Power Update, March 2024
•
•
•
•
•
•
•
•
Item 2
Attachment 1
Clean Power Update, March 2024
Clean Energy Resources Online Progress
as of 3/5/2024
F
2024 -Q1
1 •Victory Pass Solar + Storage: Construction mode- delayed Angela Solar + Storage: Pre-construction- delayed
2024 -Q2 Baldy Mesa (RA-Only Storage): Construction mode 2024 -Q4 •Hanford BESS on Peaker: Construction mode
2025 -Q2 •Goal Line Long Duration Storage: Pre-construction •Aratina Solar + Storage: Pre-construction - delayed
•San Luis West Solar + Storage: Pre-construction - delayed 2025 -Q3+
Fish Lake Geothermal: Pre-construction
Ormat Geothermal Portfolio: Pre-construction
Tumbleweed Long Duration Storage: Construction mode
Atlas Solar: Pre-construction - delayed
Yellow Pine III Storage: Pre-construction
Grace Solar: Pre-construction
SunZia Wind: Pre-construction
Item 2
Attachment 1
Clean Power Update, March 2024
CA
RPS
Requirements
SVCE Progress Toward RPS Requirements
CALIFORNIA RPS REQUIREMENTS vs $VCE PROJECTED/REALIZED RPS 40% of SVCE’s total load is
2021
2023
Yellow Pine I
being met
by long-term
projects
Rabbitbrush
Mountain View
Diablo
Coso
Slate
Terra-Gen
2025
2030
Item 2
Attachment 1
Clean Power Update, March 2024
SVCE Has Contracted 896 MWh of Clean
Generation Capacity
|Geothermal Solar Wind
Project Name 6
Item 2
Attachment 1
Clean Power Update, March 2024
SVCE Battery Storage Projects
Stand Alone Storage
Long Duration Storage
Solar + Storage
Hybrid Storage
0 SVCE Has 1,845 MWh of Clean Storage
Item 2
Attachment 1
Clean Power Update, March 2024
BESS: 25 MW
Will meet approx. 8% of SVCE’s load
Developer: Clearway
Riverside County, CA
PV: 100 MW
CD Victory Pass Solar + Storage
COD in Q12024
8 Item 2
Attachment 1
Clean Power Update, March 2024
1,200 E-ELEC
customers
enrolled

DECARBONIZATION PROGRAMS
FY24 Q1 Milestones
Quarterly Report
1,303
EVs enrolled in
GridShift
470
completed
electrification
projects for
FutureFit Homes
Item 2
Attachment 2
DPP Quarterly Update

SILICON VALLEY

CLEAN ENERGY
Name Budget Potential Impact Cumulative Impact
To-Date Last Quarter (Update) Next Quarter (Target)
Electrification Rate
Discount $9.5M 5,000 customers enrolled 1,200 enrolled
Reevaluated program via
design review, updating
tracking system
2 awareness campaigns,
targeted outreach,
enrollment of 1,500
customers
CHIIP, including
Affordable Housing
EVI Incentives
$8.9M
25 MUDs with EVI
4,000 L1/L2 chargers at
affordable housing
23 reservations
(198 ports)
3 completed
(18 L2 and 20 L1)
Processed applications and
completed installations Expand enrollment
CALeVIP 1.0 $6M 85 DCFC installed
1,100 L2 installed
10 DCFC installed
227 L2 installed
Continued monitoring
installations
Continue making payments
to DCFC and L2 projects as
they are completed
Community Energy
Resilience $5.15M 13 agencies completeprojects
13 agencies finalized
agreements
Continued monitoring
progress of projects
Develop engagement plan,
develop standardized
EM&V
FutureFit Homes -
Residential
Incentives
$4.05M 750 homes fully/partially
electrified
470 homes
fully/partially
electrified
Continued to see strong
uptake in Q1 FY24, around
$400k in claims
Add induction and increase
flexibility around other
rebates, such as prewiring
& electrical upgrades
Decarbonization
Demonstration
Grants
$3.2M 8 local public facing
electric projects 1 project complete Grantees continue toimplement their projects Prepare for a Summer
release of a new solicitation
for the $10M in new Board-approved funding
Permit
Modernization $3.2M
13 member agencies
improve electrification
permitting
Data gathered for all
13 agencies. Program
just began rolling out
Launched, and began
outreach to member
agencies
Roll out in conjunction with
policy experimentation and
reach code modernization
FutureFit
Fundamentals
Contractor Training
$1.7M 300 contractors trained
500 graduate incentives
138 contractors
completed training
Continued offering online
video training
Increase program
marketing
FutureFit Homes
and Buildings: C&I
and SMB Incentives
$1.25M 20-30 SMBs electrified 2 SMBs fully/partially
electrified
Campaigns sent, first 2
rebates completed and
awarded
Increase outreach and
engagement, particularly
with school districts, and
award 2 more rebate claims
Customer Resource
Center (eHub) $1.1M 1.5M email opens350K unique web visits 313K email opens,
313K web visits, 164
induction cooktop
rebate claims
Sent email marketing, drove
online traffic
100K email opens, 15K web
visits, 50 induction cooktop
rebate claims

PROGRAMS PORTFOLIO
Active Programs
See Glossary for program descriptions. Title links to program homepage (if available).

Quarterly Report
View our active rebates here. 1
FY24 Q1
Item 2
Attachment 2
DPP Quarterly Update

SILICON VALLEY

CLEAN ENERGY
Name Budget Potential Impact Cumulative
Impact To-Date Last Quarter (Update) Next Quarter (Target) Go Electric
Advisor $892K
3,600 customers use
hotline, 1,200 use
tech assistance, 350
use electrification
plans
25 customers use
service Soft launched service mid-Q1
Ramp up the service to
generate more customer
demand
Priority Zone DC
Fast Charger
(PZDCFC) 2.0
$875K 10 DCFC installations
near MUD hotspots
4 of 10 ports are
live now (1 of 4
sites)
Waited for project installs Monitor site construction
progress and milestones
FutureFit Assist $725K
60 assessments
36 projects done
250 ports
52 applications Supported additional projects Expand enrollment GridShift EV
Charging $600K
Bill/emissions savings
and load shifting
capacity
1,303 EVs
enrolled
30 charger
rebates
Continued enrolling EVs
Offer an ongoing enrollment
incentive, launch a referral
program, and continue e-mail
marketing
Reach Codes

2.0 $600K
Require all new
buildings to be
emissions-free
13 agencies adopt
electrification
ordinances
Monitor and support agencies
as the Berkeley legal case
evolved (BAAQMD)
Present alternative reach codes
to member agencies
Decarbonization
Engagement
Grants
$442K
5 communities
engage residents on
climate action topics
In progress 5 communities executed
agreements
Work to complete projects,
share during MAWG meetings
Fleet
Electrification $300K
Complete for 5
member agency and
5 SMB fleets
7 fleets in
progress
Supporting fleet
transformations
2-3 agencies anticipate
completing
SV
Transportation
Electrification
Clearinghouse
$150K
Create cohort to
enable equitable
electrification.

In progress Conduct relaunch to assess
how to increase impact Relaunch program
Lights On
Silicon Valley
Power
Supply
Budget
750 SFH and 5 MF
completed 657 enrolled SFH Sunrun continued to enroll andinstall customers Delivery begins SV Building
Electrification
Stronger
Together
$150K
Educate stakeholders
about building
electrification
30 new
stakeholders
engaged to date
Identified renters groups,
workforce, and low-moderate
income individuals as key
stakeholders
Launch engagement incentive
program to invite new feedback
from members of workforce,
housing, and LMI groups on
SVCE programs

PROGRAMS PORTFOLIO
Active Programs
View our active rebates here. 2
FY24 Q1
Item 2
Attachment 2
DPP Quarterly Update
TT
©

SILICONVALLEY

CLEAN ENERGY
Name Budget Potential Impact Last Quarter (Update) Next Quarter (Target) Multifamily Direct
Install (TE and BE) $12.5M 300 to 1,000 MF AH unitselectrified Contract with Association for
Energy Affordability (AEA)
approved in December 2023
Convene affordable housing developer
and tenant rights groups to gather
input on program design
Tariffed On Bill
(TOB) Financing $3M 500 to 1,000 customers financeelectrification Supported CPUC Working Group &
Equity Committee with IOUs to
develop Joint Proposal for a TOB
financing pilot
Submit joint proposal to CPUC for
consideration & complete bill savings
analysis for SVCE territory
Innovation Onramp $2.4M
1-2 pilot projects per year that
advance electrification programs
and strategies
Identified theme of application
cycle Open applications for pilot proposals
Existing Building
Policy Experiment $1.9M
Spur action on building
electrification and reduce building
gas combustion
Outreach to member agencies
Roll out in conjunction with policy
experimentation and reach code
modernization
Feasibility
Assessment,
Natural Gas Phase
Out
$300K Complete study that informs local,
regional, and statewide policies Issued RFP and selected vendor Send contract to BOD and beginanalysis

PROGRAMS PORTFOLIO
Planning
View our active rebates here.

Name Budget Summary
FutureFit Homes Heat Pump Water
Heater $1.5M Program closed in December 2022, and active applications were transitioned to FutureFit HomesIncentives program Electric Showcase Awards 2.0 $1.5M 150 applications, 16 winners, $95,000 awarded Reach Codes 2019 $400K Reach Codes 2019 were adopted by 12 of 13 member agencies, and several agencies updated Reach Codes in the 2022 code cycle
Medical Battery Program $200K All 50 batteries are claimed by customers who require electricity for medical devices and are at high risk of power outages
Closed/Inactive
3 FY24 Q1
Item 2
Attachment 2
©
DPP Quarterly Update

SILICONVALLEY

CLEAN ENERGY
10/2
12/2
2/23
4/23
6/23
8/23
10/23
12/23
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Rebates claimed:

Total $ Funds Reserved (in 000s)
0 10 20 30 40
Commercial business
Government
Multifamily
School/Nonprofit
Incentive program for L1 and L2 EV charging
infrastructure at multifamily properties
0 50 100 150 200 250 300 350
HPWH

HP HVAC
Panel Upgrades
Pre-wiring
Meter Removals
Funds Reserved:

Approved Reservations:

Goal:

FutureFit Homes
Provide incentives to residents for electric heat
pump water heaters (HPWH), heat pump HVAC
systems, service panel upgrades, and pre-wiring
upgrades to replace gas appliances.

Future Fit Assist
Assistance in site assessment, preliminary
design, and applying to rebates for charging at
multifamily housing and small and medium
workplace properties.

Cumulative Applications
Charging Installation
Incentive Program (CHIIP)
Number of Claims
PROGRAMS HIGHLIGHTS FY24 Q1
4 $1.36M
$1.32M
23 $883K
35 Sites, 150 ports
Rebates reserved:

Item 2
Attachment 2
DPP Quarterly Update
SILICON VALLEY <3/ CLEAN ENERGY
CALeVIP
Level 2 DCFC
0 1
2 3
4 5
6 1 /21
1/23/25/2
7/29/2
1 /2
1/23
3/23
5/23
7/23
9/23
1 /23
1/24
0 50
100
150
200
250
Reserved
Provide incentives for electric vehicle (EV) chargers
as part of a regional program.
= 25 Level 2 Installations
150 Participants Complete
the Course (Phase 1)
Goal:

Funding: $1.5M
Completions
FutureFit Fundamentals
Provide financial relief to contractors by
expanding their knowledge of electrification
technologies.
1K Level 2 + 85 DC Fast
Chargers by 2023
Goal:

Funding: $11.58M
= 5 Participants Complete Course
Funds Issued = 5 DCFC Installations
138
Remaining Funds
Registrations
241
$5.2M
$1.1M $700K
$1.5M
$3.0M
$6M
$4M
$2M
5 PROGRAMS HIGHLIGHTS FY24 Q1
Item 2
Attachment 2
DPP Quarterly Update
**********
**********
**********
**********
S
1/23/25/2
7/29/2
1 /2
1/23
3/23
5/23
7/23
9/23
0 200
400
600
800
1,000
1,200
1,400
9/23 10/23 11/23 12/23
0 50,000
100,000
150,000
200,000
250,000
300,000
350,000
GridShift EV Charging
Managed EV charging app that optimizes charging
to reduce associated costs and emissions.

Charger Rebates Reserved: 30
Number of Enrolled EVs
1,303
Rebate Goal: $30K
Goal: 120 EV Chargers
eHub Report
Online customer resource center to enable
engagement, education and action related to clean
electricity, EVs and home electrification.
= 1 email campaign completed
313,932
27,335
Unique Visits Return Visits
FY 22-23
6 PROGRAMS HIGHLIGHTS FY24 Q1
Website Visit Goal:

Reach 350K Unique Visitors
Conduct 6 email campaigns
Email Goal:

Item 2
Attachment 2
DPP Quarterly Update

A A A A A A A A
AiAAAA A A A

A A A A A A A

AAAAAAAA

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A A A A
Built Environment
Community Energy Resilience: Resources (grants) and tools for member agencies to increase individual and collective capacity to adapt to future power outages.

Electric Showcase Awards 2.0: Award program to recognize residential, commercial, and non-profits who are early adopters of existing building electrification.

Decarbonization Demonstration Grants: Grants to encourage member agencies and other key groups an opportunity to electrify their facilities. Focus on projects with public visibility for education/awareness purposes.

Decarbonization Engagement Grants: Grants for member agencies and other key groups to work on smaller electrification engagement initiatives to engage their communities.

Electrification Rate Discount: Custom rate to promote building electrification.

Existing Building Policy Experimentation: Assess and support potential policy levers that member agencies can explore to mitigate emissions from existing buildings.

Feasibility Assessment of Natural Gas Phase Out by 2045: Feasibility study to identify technical, legal, and economic barriers and opportunities for phasing out natural gas service by 2045 in SVCE's service territory.

FutureFit Fundamentals Contractor Training: Training and financial incentive program for contractors to expand their knowledge and installation of electrification technologies.

FutureFit Homes - Concierge: Comprehensive one-on-one phone or web assistance to SVCE customers to assist them in applying for electrification incentives, technical assistance, or developing a whole-home electrification plan.

FutureFit Homes - Residential Incentives: Incentives for various building electrification technologies for single- and small multi-family residential customers. Includes major appliances as well as eventual gas meter removal.

FutureFit Homes and Buildings - C&I Incentives: Incentives for demonstration projects at a handful of small and medium business properties.

Multifamily BE Direct Install: Comprehensive building electrification retrofits with a direct installer for multifamily affordable housing sites.

Permit Modernization: Benchmark and streamline member agency permitting and inspection processes to identify barriers and opportunities to electrification.

Reach Codes 2.0: Provide model building energy codes supportive of all-electric design and EV infrastructure to member agencies along with consultant support. 7 GLOSSARY FY24 Q1
Item 2
Attachment 2
©
DPP Quarterly Update

SILICONVALLEY

CLEAN ENERGY
CALeVIP 1.0: Incentives for L2 and DCFC publicly-accessible EV chargers funded by California Energy Commission and SVCE as part of a regional collaboration.

CHIIP: Incentive program for L1 and L2 EV charging at hard-to-reach multifamily properties.

Fleet Electrification Program: Competitive application for SVCE’s fleet electrification planning support and funding for site upgrades targeting a broad set of fleet types.

FutureFit Assist: Technical assistance for preliminary site design and pertinent rebates for charging at multifamily housing and small and medium workplace properties.

Multifamily TE Direct Install: Comprehensive transportation electrification retrofits with a direct installer for multifamily affordable housing sites.

Priority Zone DC Fast Charger (PZDCFC) 2.0: Competitive grant application for DCFC installations in “priority zones” that support designated multifamily housing clusters.

SVTEC: Regular regional stakeholder meetings focused on information sharing, solving critical issues, and attracting external funding to the SVCE community in support of EV infrastructure deployment.

GLOSSARY
Lights On Silicon Valley: Provide incentives for enrolling solar and battery systems in the SVCE grid services program.

Medical Battery Program: Pilot program to deploy ~50 portable batteries to qualified customers who rely on power for medical equipment.

Customer Resource Center (eHub): Online customer resource center and marketplace to enable engagement, education, and action related to clean electricity, EVs, and home electrification.

Mobility
Power Supply
Education & Outreach
Built Environment
SVBEST: Regular regional stakeholder convenings to coordinate program alignment across building decarbonization workstreams.

Tariffed On Bill (TOB) Financing: Equitable financing pilot program for electrification for low-moderate income residents focusing cost recovery through on-bill charges that are lower than bill savings.

GridShift EV Charging: Managed EV charging phone app that optimizes charging to reduce associated costs and emissions. Includes incentives for reducing grid peak demand.

Grid Integration
8 FY24 Q1
Item 2
Attachment 2
©
DPP Quarterly Update

SILICONVALLEY

CLEAN ENERGY
1 1. Outreach Events & Sponsorships
Date Sponsorship Location
3/1/2024 JVSV State of the Valley
8:30 a.m. – 12:30 p.m.

Attendance and sponsorship
SJSU Diaz Compean Student Union, 2nd Floor Ballroom
211 South 9th Street
San Jose, California 95192
3/7/2024 Silicon Valley Central Chamber Mayors’
Breakfast
7:30 a.m. – 10:30 a.m.

Attendance
Embassy Suites by Hilton Milpitas Silicon Valley
901 East Calaveras Boulevard
Milpitas, CA 95035
3/9/2024 Silicon Valley Reads Education & Career Fair
10 a.m. – 12 p.m.

Tabling
Santa Clara County Office of Education
1290 Ridder Park Drive
San Jose, CA 95131
3/23/2024 Destination Electric: A Los Altos EV
Showcase
1 p.m. – 4 p.m.

Tabling
Los Altos Community Center Parking Lot
97 Hillview Ave
Los Altos, CA 94022
3/28/2024 SV Reads Story Time at Gilroy Library
10:30 a.m. – 11:30 a.m.

Attendance and Tabling
Gilroy Library
350 W 6th St
Gilroy, CA 95020
Item 2
Attachment 3
ESCR Update, March 2024
2 1. Outreach Events & Sponsorships (cont.)
Date Sponsorship Location
3/30/2024 Bunnies & Bonnets Campbell Parade
Parade starts at 12 p.m.

Agency truck in parade
Downtown Campbell, near VTA Light Rail tracks and run along Campbell Avenue to Third Street
4/2/2024 SPUR Webinar: Reaching 1 Million Electric
Vehicle Chargers by 2030
12:30 p.m. – 1:30 p.m.

Sponsorship
Virtual
4/5/2024 Los Altos Village Association First Friday
6 p.m. – 9 p.m.

Tabling
State St & Main Street
Los Altos, CA 94022
4/7/2024 Science is Elementary 15th Anniversary Fair
2 p.m. – 5 p.m.

Sponsorship and Tabling
Los Altos Community Center
97 Hillview Ave
Los Altos, CA 94022
Item 2
Attachment 3
ESCR Update, March 2024
3 Participation Rate
Overall Participation
Rate
Residential 96.18%

96.23%
Commercial 96.62%

2. Customer Participation
Item 2
Attachment 3
ESCR Update, March 2024

SILICON VALLEY

CLEAN ENERGY
4 3. EmPower SV Short Video Competition
SVCE is kicking off the Spring with the
EmPower Silicon Valley Short Video
Competition.
• Application period: February 26 -
May 3
• Students can submit 60 second
videos aligned to 1 of 3 creative
prompts on electric technologies.
• Winners will be announced in June.
www.svcleanenergy.org/empower-sv/
Item 2
Attachment 3
ESCR Update, March 2024
$3,0
For your
Clean Energy
Earn up to

EMPOWER

SILICON VALLEY

SILICON VALLEY

CLEAN ENERGY

STUDENT

SHORT VIDEO

COMPETITION
short-video
Apply today
svcleanenergy.org/empower-sv/
5 The most recent MAWG meeting was held on February 22, 2024 and was attended by 8 different agencies and organizations with a total of 21 participants.

The following agenda items were presented and discussed:
• Findings from MAWG Survey and Evaluation Report
• Feedback on Next Round of SVCE Member Agency Grants
• Follow-Up Discussion on External Grant Support
• Introduction to Policy & Permitting Efforts
• Electrifying Decarbonization Engagement for Healthy and Safe Communities

4. Member Agency Working Group –
February Update
Item 2
Attachment 3
ESCR Update, March 2024
6 5. Press Release & Media
Press Releases
• Silicon Valley Clean Energy Prepay Bonds Valued at $1.1 Billion, Press Release, 02-20-24 News Coverage
• Local Scene: Rebates available to upgrade to electric appliances, The Morgan Hill Times, 02-01-24 • 2024 Silicon Valley Power 100, Silicon Valley Business Journal, 02-02-2024 • FutureFitting homes, The Mercury News, 02-04-2024
• Saratoga councilmember named chair of clean energy nonprofit, The Mercury News, 02-04-2024 • Silicon Valley Clean Energy Prepay Bonds Valued at $1.1 Billion, American Public Power Association, 02-20- 2024
Item 2
Attachment 3
ESCR Update, March 2024
7 5. Press & Media (continued)
News Coverage (continued)
• Los Altos Hills pioneers innovative Sustainability Reach Code to combat climate change , Public CEO, 02-21- 24 • Here’s who is running for the Santa Clara County Board of Supervisors District 5 seat, The Mercury News, 02-22-24
• ev.energy to Scale Electric Vehicle Charging Solutions Across California with $41 Million California Energy Commission Grant, ev.energy, 02-21-24
Media Mentions
• Full transcript: Cupertino mayor’s 2023 State of the City, San Jose Spotlight, 02-15-24 • Election Guide 2024: Five compete to represent District 5 on the Santa Clara County Board of Supervisors, Palo Alto Online, 02-16-24
• El ecosistema conectado será el catalizador del crecimiento industrial en 2024 y más allá, ITware Latam.com, 02-20-2024
Item 2
Attachment 3
ESCR Update, March 2024
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
CD Policy Updates
Regulatory Update:

1. Integrated Resource Planning

2. Resource Adequacy

3. Energization
Legislative Update:

1. CaICCA Lobby Day

2. Bill Update

3. 2024 Legislative Calendar
2 Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
Regulatory
Update
Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
Key Regulatory Activities
Activity Purpose Status
Order Instituting
Rulemaking to Establish
Energization Timelines
(R.24-01-018)
To establish timely energization
timelines.

SVCE filed formal comments in response to the establishment of the new Order Instituting Rulemaking at the CPUC to establish reasonable average and maximum target energization time periods, as well as a procedure for customers to report energization delays. SVCE's comments focused on emphasizing the changes needed to utility processes to improve the customer experience and recommended that the establishment of energization timelines be based on the specific barriers contributing to the delays instead of general or inconsistent statements about possible contributing factors. With regard to the effect of local ordinances on timelines, SVCE recommended that the CPUC evaluate the past effects of local ordinances and use that historical data to inform the timeline requirements that are to-be developed. 4 Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
Legislative
Update
5 •
•
Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
2/21/22 CaICCA Lobby Day
Chair Walia and 2023 Legislative Ad Hoc Committee Chair Director Martinez Beltran joined annual CaICCA Lobby Day.

Strong attendance from CCAs throughout the state. Overall, CaICCA members met with 57 legislative offices. SVCE team met with 11 offices.

Major themes from legislators were concerns with energy affordability and reliability. 6 Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
0 Bill Update
SVCE is reading and analyzing several bills this session. Preliminary bills of interest include:

Topic Area Bill Number(s) Summary
Income Graduated Fixed Charge AB 1999 (Irwin), SB 1312 (Nguyen), SB 1314 (Nguyen), AB 2805
(Essayli), AB 1326 (Jones), SB
1292 (Bradford)
Most of the legislature’s
proposals would repeal income
graduated fixed charges on
electricity bills.

Net Billing Tariff AB 2619 (Connolly), SB 1374
(Becker), AB 3269 (Essayli)
Legislative proposals would
impact rooftop solar by repealing
or modifying the Net Billing Tariff.

Building Electrification SB 382 (Becker), AB 2513
(Pellerin), and SB 1095 (Becker)
Sen. Becker has two proposals to
help implement the Bay Area’s
home electrification regulations,
and Asm. Pellerin has a bill on
warning labels for gas
stoves/ranges.
•
•
•
•
•
•
•
•
•
•
•
•
•
Item 2
Attachment 4
SVCE Leg and Reg Update, March 2024
1 Key 2024 State Legislative Milestones
January 3—Legislature Reconvenes
January 12—Last day for policy committees to hoar fiscal bills from their house last year January 19—Last day to submit bill requests to Legislative Counsel; last day for committees to hoar and report to the floor bills introduced last year
January 31—Last day for each house to pass bills introduced last year February 16—Last day for bills to bo introduced
April 26 -Last day for policy committees to vote on fiscal bills May 17 - Last day for fiscal committees to hear bills introduced in that house May 24- Last day for each house to pass bills introduced in that house June 15 -Budget bill must pass by midnight
July 3 - Last day for policy committees to vote on bills August 16 - Last day for fiscal committees to vote on bills August 31- Last day for each house to pass bills
September 30 - Last day for Governor to sign bills
8 SVCE Agenda Look Ahead
March 2024 - July 2024
March 2024 April 2024 May 2024 June 2024 July 2024
Board of Directors, March 13: Board of Directors, April 10:

Consent:

Minutes
February 2024 Treasurer Report
Committee Reports
Regular Calendar:

Study Session
MRP/Gas Peaker Community Investment
Policy
Board of Directors, May 8:

Consent:

Minutes
March 2024 Treasurer Report
Committee Reports
Regular Calendar:

TBD
Board of Directors, June 12:

Consent:

Minutes
April 2024 Treasurer Report
Committee Reports
Regular Calendar:

Introduction to SVCE Budget Framework
Board of Directors, CANCELLED: No meeting
in July
Executive Committee, March 22:

MRP/Gas Peaker Community Investment
Policy
Program Snapshot
Executive Committee, April 26:

Program Snapshot
Executive Committee, May 24:

Program Snapshot
Intro to 2025 Strategic Plan (Focus Areas)
Executive Committee, June 28:

Program Snapshot
Executive Committee, CANCELLED: No
meeting in July
Finance & Admin Committee, TBD:

Review Stress Case Analyses and Budget
Framework
3/6/24
Item 5
Attachment 5

Staff Report – Item 3
Item 3: Receive Audit Results and Accept the Findings from Independent Auditor From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO and Director of Administrative Services Karen Chang, Manager of Finance and Risk Controls
Date: 3/13/2024

RECOMMENDATION
Receive the Year-End Financial Statements and the Independent Auditor’s Report for the Fiscal Year 2022-23.

AUDIT COMMITTEE RECOMMENDATION
At the February 29, 2024 meeting of the Audit Committee, committee members received a presentation by the Independent Auditor discussing the status of the audit and the preliminary auditor’s opinion. The Audit Committee also received a draft of the financial report.

BACKGROUND
In accordance with Financial Policy #1 (FP1), Accounting Policy, the annual audit of the financial statements has been completed and the report prepared by Pisenti & Brinker, LLP has been issued to the Agency. The auditors have rendered a clean opinion and found “the financial statements referred to above present fairly, in all material respects, the financial position of SVCE as of September 30, 2023 and 2022 and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.”
Basic Financial Statements
The Statement of Net Position presents information about assets and liabilities with the difference between the two reported as net position. The change in net position over time is an indicator of whether the financial position of the Agency is improving or deteriorating.

The Statement of Revenues, Expenses and Changes in Net Position reports how net position changed during the year and present a comparison between operating and non-operating revenues and operating and non-operating expenses. Operating revenues and expenses are related to the Agency’s principal business of providing carbon-free electricity.

The Statement of Cash Flows reports the cash provided and used by operating activities, as well as other sources and uses, such as financing and investing activities.

Notes to the Financial Statements
Various notes provide additional information that is essential to a full understanding of the information provided in the basic financial statements. These are found immediately following the financial statements to which they refer.

Item 3
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 3 Agenda Date: 3/13/2024

ANALYSIS & DISCUSSION
The following represents highlights as of September 30, 2023:
• As of September 30, 2023, total assets were $434.8 million, with $376.7 million of current assets.

Current assets are mostly comprised of $230.5 million of cash and cash equivalents, $49.9 million in accounts receivable, $30.4 million in accrued revenue, $25.6 million in deposits, and $163 thousand in restricted cash. The total of current assets increased during the fiscal year as a result of SVCE’s operating surplus.
• As of September 30, 2023, total liabilities were $110.3 million. Current liabilities consist mostly of the cost of electricity delivered to customers that is not yet due to be paid by SVCE. Other components include taxes and surcharges due to other governments and various other accrued liabilities.

Noncurrent liabilities of $24.3 million consist of mostly supplier security deposits provided as cash, rather than letters of credit.
• As of September 30, 2023, total revenues were $503.7 million primarily from the sale of carbon-free electricity. Operating revenues exceeded the cost of electricity by $128.7 million resulting in an operating margin of 25.5%.
• As of September 30, 2023, total expenses were $401.1 million. The increase in operating expenses from fiscal year 2022 to 2023 is largely the result of an increase in energy costs. Expenses for staff compensation, consulting, and other general and administrative expenses increased in 2023 as the organization grew operations and responded to the challenges of a changing business landscape.

STRATEGIC PLAN
This report supports the fiscal management goals of the strategic plan.

ALTERNATIVE
There is no alternative to this recommendation as the financial audit is a requirement of Board Policy FP1.

FISCAL IMPACT
During Fiscal Year 2022-23, SVCE’s total expenses exceeded total revenues, resulting in an increase to Net Position of $111.9 million.

SVCE’s Auditors, Pisenti & Brinker, LLP, issued an unqualified (“clean”) opinion on the Agency’s financials for the fiscal year ended September 30, 2023.

ATTACHMENTS

1. Audited Financials for the fiscal year ended September 30, 2023

2. SVCE Representation Letter

3. Letter of Significant Deficiencies or Material Weaknesses Item 3
Financial Statements
Years Ended:

September 30, 2023
September 30, 2022
With Report of Independent Auditors
Silicon Valley Clean Energy Authority
Item 3
Attachment 1
SILICON VALLEY <3/ CLEAN ENERGY

SILICON VALLEY CLEAN ENERGY AUTHORITY
YEARS ENDED SEPTEMBER 30, 2023 AND 2022

TABLE OF CONTENTS
Independent Auditor’s Report ……………………………………………………....... 1 Management’s Discussion and Analysis ……………………………………………... 3 Basic Financial Statements:

Statements of Net Position …………………………………………………… 9
Statements of Revenues, Expenses and Changes in Net Position …................. 10 Statements of Cash Flows …………………………………………………….. 11
Notes to the Basic Financial Statements ……………………………………… 13 Item 3
Attachment 1
SANTA ROSA Ÿ PETALUMA
RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM 3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
(707) 542-3343 Ÿ Office
(707) 527-5608 Ÿ Fax
pbllp.com
Independent Auditor's Report
To the Board of Directors
Silicon Valley Clean Energy Authority
Report on the Audits of the Financial Statements
Opinion
We have audited the accompanying financial statements of Silicon Valley Clean Energy Authority (SVCE), as of and for the years ended September 30, 2023 and 2022, and the related notes to the financial statements, which collectively comprise SVCE’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SVCE as of September 30, 2023 and 2022, and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audits of the Financial Statements section of our report. We are required to be independent of SVCE and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about SVCE’s ability to continue as a going concern for 12 months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor's Responsibilities for the Audits of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.

Item 3
Attachment 1
PISENTI & BRINKER up
Certified Public Accountants A Advisors
RSM A* tnocpcnrjcntly ov/qcorncTOcr
RSM US Alliance
Independent Auditor's Report (continued)
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we
· Exercise professional judgment and maintain professional skepticism throughout the audits. · Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. · Obtain an understanding of internal control relevant to the audits in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of SVCE’s internal control. Accordingly, no such opinion is expressed. · Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
· Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about SVCE’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that we identified during the audits.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Santa Rosa, California
February20, 2024
Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
3 The Management’s Discussion and Analysis provides an overview of Silicon Valley Clean Energy Authority’s (SVCE) financial activities as of and for the years ended September 30, 2023 and 2022. The information presented here should be considered in conjunction with the audited financial statements.

BACKGROUND
The formation of SVCE was made possible by the passage, in 2002, of California Assembly Bill 117, enabling communities to purchase power on behalf of their residents and businesses and creating competition in power generation.

SVCE was created as a California Joint Powers Authority (JPA) on March 31, 2016. SVCE was established to provide electric power at competitive costs as well as to provide other benefits within Santa Clara County, including reducing energy related greenhouse gas emissions, securing energy supply and price stability, and providing energy efficiencies and local economic benefits.

Governed by a board of directors (Board) consisting of elected representatives from each jurisdiction, SVCE has the rights and powers to set rates for the electricity it furnishes, incur indebtedness, and issue bonds or other obligations. SVCE is responsible for the acquisition of electric power for its service area. SVCE serves the unincorporated areas of Santa Clara County and the cities and towns of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, and Sunnyvale.

Financial Reporting
SVCE presents its financial statements as an enterprise fund under the economic resources measurement focus and accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) for proprietary funds, as prescribed by the Governmental Accounting Standards Board (GASB).

Contents of this Report
This report is divided into the following sections:
· Management’s discussion and analysis.
· The basic financial statements:
o The Statements of Net Position include all of SVCE’s assets, liabilities, and net position and provide information about the nature and amount of resources and obligations at a specific point in time.
o The Statements of Revenues, Expenses, and Changes in Net Position report all of SVCE’s revenue and expenses for the years shown.
o The Statements of Cash Flows report the cash provided and used by operating activities, as well as other sources and uses, such as financing and investing activities. o The Notes to the Basic Financial Statements provide additional details and information related to the basic financial statements.

Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
4 FINANCIAL HIGHLIGHTS
The following table is a summary of SVCE’s assets, liabilities, and net position, and a discussion of significant changes during the years ended September 30:
2023 2022 2021
Current assets 376,699,458$ 270,632,455$ 206,813,185$
Noncurrent assets
Investments 56,819,513 - -
Capital and lease assets, net 1,259,365 1,681,871 2,122,391 Other noncurrent assets 45,130 45,330 45,330
Total noncurrent assets 58,124,008 1,727,201 2,167,721
Total assets 434,823,466 272,359,656 208,980,906
Current liabilities 86,003,663 51,733,663 34,519,867
Noncurrent liabilities 24,283,988 7,942,472 8,425,392
Total liabilities 110,287,651 59,676,135 42,945,259
Net position
Net investment in capital assets 348,144 287,728 269,927 Restricted for security collateral 163,861 162,014 4,000,216 Unrestricted 324,023,810 212,233,779 161,765,504
Total net position 324,535,815$ 212,683,521$ 166,035,647$ Current Assets
Current assets were approximately $376,699,000 at the end of 2023 and are mostly comprised of cash, accounts receivable, investments and accrued revenue. Accrued revenue differs from accounts receivable in that it is the result of electricity provided to SVCE customers that has not yet been invoiced. Current assets increased each year as a result of SVCE’s operating surpluses.

Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
5 Noncurrent Assets
During 2023, SVCE purchased investments that are scheduled to mature in more than one year.

SVCE reports investments, other than non-negotiable CDs, at fair value in the noncurrent assets section of its Statements of Net Position.

Capital assets, including right-of-use assets, were approximately $1,259,000 at the end of 2023, net of accumulated depreciation, primarily consisting of furniture and electronic equipment for use in SVCE’s administrative office. SVCE does not own assets used for electric generation or distribution.

A lease asset is reported in accordance with Governmental Accounting Standards Board No. 87 Leases (GASB 87) that was implemented during 2022, with a restatement back to 2020. According to GASB, the Statement aims to increase the usefulness of governments’ financial statements by requiring reporting of certain lease assets and liabilities that previously were not recognized on the statement of net position.

Other noncurrent assets consist of various deposits for energy supply, regulatory and other operating purposes. The deposits have remained relatively stable over the last three years.

Current Liabilities
The most significant element of current liabilities is the obligation to pay the cost of electricity delivered to customers. Accrued cost of electricity at the end of fiscal year 2023 increased compared to the prior year. This was a result of increased prices of electricity purchased as well as a small increase in the volume of purchased electricity outstanding.

Other components include taxes and surcharges due to other governments and various other accrued liabilities.

SVCE receives deposits from energy suppliers as a form of collateral on committed future purchases. As of September 30, 2023, SCVE held approximately $1.0 million of deposits expected to be returned or applied within one year.

Noncurrent Liabilities
Noncurrent liabilities increased in 2023 as a result of collateral deposits from energy suppliers held by SVCE that are not due to be returned within a year. There was little change in deposits from 2021 to 2022.

Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
6 The following table is a summary of SVCE’s results of operations and a discussion of significant changes for the years ended September 30:
2023 2022 2021
Operating revenues 503,675,151$ 363,521,534$ 242,600,167$ Nonoperating revenues 9,262,831 1,870,954 273,895
Total income 512,937,982 365,392,488 242,874,062
Operating expenses 401,057,113 318,708,488 257,751,261
Nonoperating expenses 28,576 36,126 230,632
Total expenses 401,085,689 318,744,614 257,981,893
Change in net position 111,852,293$ 46,647,874$ (15,107,831)$ Operating Revenues
SVCE’s operating revenues are derived from the sale of electricity to commercial and residential customers throughout its territory. SVCE’s customer territory was stable each year, with approximately 280,000 customers enrolled. Rate increases in effect during 2023 and 2022 account for the majority of the increase in revenue from the prior years.

Nonoperating Revenues
The nonoperating revenue increase from 2021 to 2022 was primarily the result of grant income from the California Arrearage Payment Plan (CAPP) that was received in 2022. The increase from 2022 to 2023 was the result of investment income from market rate increases and increased invested amounts.

Operating Expenses
SVCE’s largest operating expense is the purchase of electricity for retail customer use. SVCE procures energy from a variety of sources, aiming at purchasing electricity at competitive costs and maintaining a balanced renewable power portfolio. Electricity costs increased as a result of rising market prices. Expenses for staff compensation, consulting, data management, and other general and administrative expenses increased each year as the organization continued to grow to support its operational demands.

Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
7 ECONOMIC OUTLOOK
SVCE serves approximately 96% of all eligible customers in the service area, and that rate of participation is expected to remain stable in 2024.

SVCE procures energy consistent with its Board-approved Energy Risk Management Policy that aligns customer demand for clean energy with short and long-term purchases of clean energy resources. SVCE complies with state laws and its own targets for renewable and greenhouse gas (GHG) free energy. California’s Renewable Portfolio Standard (“RPS”) requires load-serving entities (LSEs) such as SVCE to supply their retail sales with minimum quantities of eligible renewable energy both on an annual basis and through long-term commitments of greater than ten years. The state has also directed LSEs to procure new clean energy and capacity resources by 2026 to meet grid reliability goals. Senate Bill 100 directs all LSEs to procure 60% of their portfolios from RPS-eligible resources by 2030, and 100% of their retail sales from GHG-free resources (or eligible renewable resources) by 2045. Senate Bill 1020 sets interim clean targets of 90% and 95% by 2035 and 2040. SVCE’s current policy is to procure 100% of retail sales, adjusted for transmission and distribution losses, from GHG-free resources. To date SVCE has executed 17 RPS contracts of ten years or more in duration and has met its RPS requirements for long-term procurement. SVCE is on the path to meeting its requirements as ordered by the CPUC under the Mid-term Reliability Procurement decision (R.20-05-003).

SVCE uses a portfolio risk-management approach in its power purchasing program, seeking low-cost supply as well as diversity among technologies, production profiles, project sizes and locations, counterparties, length of the contract, and timing of market purchases. SVCE’s procurement strategy through 2030 includes regularly procuring new and existing California renewables by 2030, via contracts with terms of 10 years or more. The strategy also includes investing in storage paired with solar, stand-alone storage, long-duration storage, geothermal and large hydroelectric resources. SVCE continually manages its forward load obligations and supply commitments with the objective of balancing cost stability and cost minimization. SVCE closely monitors its open positions for Portfolio Content Category 1 (“PCC 1”) renewable energy and carbon-free, non-RPS eligible, based on calendar-year targets. SVCE maintains its clean portfolio coverage targets of up to 100% in the near term and leaves a greater portion open in the medium-to long-term, consistent with generally accepted industry practice.

SVCE also procures electric capacity or Resource Adequacy (“RA”), a California program jointly administered by the CPUC, the CEC, and CAISO. The RA resources ensure there will be enough supply in the right locations and with sufficient ramping capability to meet the load in the CAISO market.

Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
8 ECONOMIC OUTLOOK (continued)
In the fiscal year ending September 30, 2023, SVCE’s retail load increased by about 2% from the prior fiscal year to 3.82 Terrawatt-hours (TWhrs). SVCE expects retail load to grow to 3.99 TWhrs for the Fiscal Year ending September 30, 2024, resulting primarily from commercial load increase along with load modifier load growth. Over the next ten years, SVCE expects the load to grow by about 1% per year. SVCE’s long-term load forecast is driven primarily by the number and types of customers that SVCE expects to serve. The forecast also incorporates load- modifying effects of increasing electric vehicle adoption and charging, behind-the-meter solar and/or storage (via net energy metering), and energy efficiency.

In 2019, the Board of Directors approved a Commercial Pricing Policy that allows SVCE to be innovative in customized contract offerings to customers that supports long-term customer retention. SVCE has now signed long-term arrangements with two major customers for customized power supply offerings and is working with additional prospective customers.

SVCE expects to continue to provide competitive electric rates. Volatile energy prices and the variability of the PG&E customer exit fee can be barriers to providing stable rates. The exit fee will increase in 2024, relative to the 2023 rate. As of January 2023, SVCE has increased its discount relative to PG&E’s generation service to 4 percent. SVCE is engaged in the development of both legislative and regulatory policies that impact rates (e.g., procurement mandates, load management standards, and reliability proceedings). Additionally, SVCE’s commitment to building healthy cash reserves has placed SVCE in a stable position to manage volatile energy prices, and future regulatory and legislative risks.

SVCE has a strong focus on continuing to build credit capacity through increased cash reserves, complying with the energy risk management policy and credit guidelines, and entering into favorable energy purchase commitments. SVCE received a “Baa1” credit rating in the Summer of 2023 from Moody’s and an ‘A’ credit rating from S&P Global in May 2023, both affirmed a stable outlook for SVCE.

REQUEST FOR INFORMATION
This financial report is designed to provide SVCE’s customers and creditors with a general overview of SVCE’s finances and to demonstrate SVCE’s accountability for the funds under its stewardship.

Please address any questions about this report or requests for additional financial information to 333 W. El Camino Real, Suite 330, Sunnyvale, CA 94087.

Respectfully submitted,
Girish Balachandran, Chief Executive Officer

Item 3
Attachment 1

BASIC FINANCIAL STATEMENTS
Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF NET POSITION
SEPTEMBER 30, 2023 AND 2022
The accompanying notes are an integral part of these financial statements.9 2023 2022
Current assets
Cash and cash equivalents - unrestricted 230,530,644$ 167,673,753$ Accounts receivable, net of allowance 49,889,393 55,663,227 Investments 34,331,496 -
Accrued revenue 30,432,122 25,508,698
Other receivables 4,396,286 81,714
Prepaid expenses 1,353,177 977,928
Deposits 25,602,479 20,565,121
Cash - restricted 163,861 162,014
Total current assets 376,699,458 270,632,455
Noncurrent assets
Deposits 45,130 45,330
Investments 56,819,513 -
Lease asset, net of amortization 842,625 1,324,125
Capital assets, net of depreciation 416,740 357,746
Total noncurrent assets 58,124,008 1,727,201
Total assets 434,823,466 272,359,656
Current liabilities
Accrued cost of electricity 78,604,532 36,054,862
Accounts payable 2,857,744 1,007,808
Other accrued liabilities 1,286,104 1,094,075
User taxes and energy surcharges due to other governments 1,726,800 1,693,997 Supplier security deposits 1,020,000 11,400,000
Lease liability 508,483 482,921
Total current liabilities 86,003,663 51,733,663
Noncurrent liabilities
Supplier security deposits 23,881,250 7,031,250
Lease liability 402,738 911,222
Total noncurrent liabilities 24,283,988 7,942,472
Total liabilities 110,287,651 59,676,135
Net investment in capital assets 348,144 287,728
Restricted for security collateral 163,861 162,014
Unrestricted 324,023,810 212,233,779
Total net position 324,535,815$ 212,683,521$

NET POSITION
ASSETS

LIABILITIES
Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
The accompanying notes are an integral part of these financial statements.10 2023 2022

OPERATING REVENUES
Electricity sales, net 500,150,468$ 359,373,795$
GreenPrime electricity premium 1,456,427 1,741,940
Liquidated damages 2,019,600 2,371,250
Other income 48,656 34,549
Total operating revenues 503,675,151 363,521,534

OPERATING EXPENSES
Cost of electricity 375,015,282 300,290,056
Contract services 10,228,607 9,255,297
Staff compensation and benefits 9,682,535 6,744,553
Other operating expenses 5,509,407 1,836,654
Depreciation and amortization 621,282 581,928
Total operating expenses 401,057,113 318,708,488
Operating income 102,618,038 44,813,046

NONOPERATING REVENUES (EXPENSES)
Grant income 716,553 1,545,172
Interest and investment returns 8,546,278 325,782
Financing costs (28,576) (36,126)
Nonoperating revenues (expenses), net 9,234,255 1,834,828 CHANGE IN NET POSITION 46,647,874 111,852,293
Net position at beginning of year 212,683,522 166,035,647 Net position at end of year 324,535,815$ 212,683,521$
Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
The accompanying notes are an integral part of these financial statements.11 2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 511,002,951$ 326,719,985$
Receipts of liquidated damages 2,019,600 2,371,250
Other operating receipts 38,633,263 11,512,300
Payments to suppliers for electricity (372,229,527) (313,073,540) Payments for other goods and services (14,469,068) (11,536,855) Payments of staff compensation and benefits (9,393,101) (6,554,946) Payments of taxes and surcharges to other governments (8,512,842) (5,469,828) Net cash provided by operating activities 147,051,276 3,968,366

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Grant revenue received 716,553 1,545,172
Finance costs paid (28,576) (170,068)
Net cash provided by non-capital
financing activities 687,977 1,375,104

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments under lease obligation (507,480) (500,642)
Payments to acquire capital assets (188,270) (141,408)
Net cash (used) by capital and related
financing activities (695,750) (642,050)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 6,946,208 325,783
Purchase of investments (91,130,973) -
Net cash provided (used) by investing activities (84,184,765) 325,783 Net change in cash and cash equivalents 62,858,738 5,027,203 Cash at beginning of year 167,835,767 162,808,564
Cash at end of period 230,694,505$ 167,835,767$
Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 230,530,644$ 167,673,753$ Cash - restricted 163,861 162,014
Total cash 230,694,505$ 167,835,767$
Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
The accompanying notes are an integral part of these financial statements.12 2023 2022
Operating income 102,618,038$ 44,813,046$
Adjustments to reconcile operating income to net
cash provided by operating activities
Depreciation and amortization expense 621,282 581,928
(Increase) decrease in:

Accounts receivable 5,773,835 (29,673,042)
Accrued revenue (4,923,424) (11,098,078)
Market settlements receivable - 269,012
Other receivables (2,734,538) 148,771
Prepaid expenses (375,249) 1,400,308
Current deposits (5,037,158) (19,839,037)
Increase (decrease) in:

Accrued cost of electricity 41,494,549 5,140,221
Accounts payable 1,839,430 (529,568)
Other accrued liabilities 216,587 628,293
Energy settlements payable 1,055,121 87,550
User taxes and energy surcharges due to other governments 32,803 638,962 Supplier security deposits 6,470,000 11,400,000
Net cash provided by operating activities 147,051,276$ 3,968,366$

RECONCILIATION OF OPERATING INCOME TO NET

CASH PROVIDED BY OPERATING ACTIVITIES
Item 3
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
13 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY
Silicon Valley Clean Energy Authority (SVCE) is a Joint Powers Authority created on March 31, 2016. As of September 30, 2023, parties to its Joint Powers Agreement consist of the following local governments:

Unincorporated areas of Santa Clara County Milpitas
Campbell Monte Sereno
Cupertino Morgan Hill
Gilroy Mountain View
Los Altos Saratoga
Los Altos Hills Sunnyvale
Los Gatos
SVCE is separate from and derives no financial support from its members. SVCE is governed by a Board of Directors whose membership is composed of elected officials representing the member governments.

SVCE was formed to study, promote, conduct, operate, and manage energy and energy-related climate change programs, and to exercise all other powers necessary and incidental to accomplishing these objectives. A core function of SVCE is to provide electric service that includes the use of renewable sources under the Community Choice Aggregation Program under California Public Utilities Code Section 366.2.

SVCE began its energy delivery operations in April 2017. Electricity is acquired from commercial and municipal suppliers and delivered through existing physical infrastructure and equipment managed by Pacific Gas and Electric Company (PG&E).

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
14 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

BASIS OF ACCOUNTING
SVCE’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements.

SVCE’s operations are accounted for as a governmental enterprise fund and are reported using the economic resources measurement focus and the accrual basis of accounting – similar to business enterprises. Accordingly, revenues are recognized when they are earned, and expenses are recognized at the time liabilities are incurred. Enterprise fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Reported net position is segregated into three categories – net investment in capital assets, restricted and unrestricted.

When both restricted and unrestricted resources are available for use, it is SVCE’s policy to use restricted resources first, and then unrestricted resources as they are needed.

CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, SVCE defines cash to include cash on hand, demand deposits money market funds, and short-term investments with an original maturity of three months or less. SVCE has cash that is restricted under various security agreements. This is reported as restricted cash on the Statements of Net Position and the Statements of Cash Flows.

INVESTMENTS
Investments are stated at fair value based on prices listed on a national exchange for debt securities. Certificates of deposits are stated at cost. While SVCE intends to hold its securities to maturity, all investments could readily be converted to cash should SVCE choose to do so.

Investments with a maturity of less than one year are shown as current assets in the Statement of Net Position. Investments with a maturity of one year or more are shown as noncurrent assets in the Statement of Net Position.

SVCE’s Investment Policy permits the investment of funds in depository accounts, certificates of deposit, the Local Agency Investment Fund (LAIF) program operated by the California State Treasury, United States Treasury obligations, Federal Agency Securities, commercial paper, corporate notes, and asset-backed securities.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

PREPAID EXPENSES AND DEPOSITS
Contracts to purchase energy may require SVCE to provide the supplier with advanced payments or security deposits. Deposits are generally held for the term of the contract and are classified as current or noncurrent assets depending on the length of time the deposits will be outstanding.

Also included are prepaid expenses and deposits for regulatory and other operating purposes.

LEASE ASSET AND LEASE LIABILITY
SVCE recognizes an asset and liability when it enters into certain leasing arrangements. The leased asset is amortized over the term of the lease. The lease liability is the present value of payments expected to be paid to the lessor during the lease term. SVCE’s only leased asset and liability relates to its office premises.

CAPITAL ASSETS AND DEPRECIATION
SVCE’s policy is to capitalize furniture and equipment valued over $1,000 that is expected to be in service for over one year. Depreciation is computed according to the straight-line method over estimated useful lives of three years for electronic equipment, five years for automobiles and seven years for furniture and leasehold improvements. SVCE does not own any electric generation assets.

SUPPLIER SECURITY DEPOSITS
Various energy contracts require the supplier to provide SVCE with a security deposit. These deposits are generally held for the term of the contract or until the completion of certain benchmarks. Deposits are classified as current or noncurrent depending on the length of time the deposits will be held.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
16 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

NET POSITION
Net position is presented in the following components:

Net Investment in capital assets: This component of net position consists of capital assets, net of accumulated depreciation and amortization and reduced by outstanding borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted: This component of net position consists of constraints placed on net asset use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or constraints imposed by law through constitutional provisions or enabling legislation.

Unrestricted: This component of net position consists of net position that does not meet the definition of “investment in capital assets” or “restricted”.

OPERATING AND NONOPERATING REVENUE
Revenue from the sale of electricity to customers is considered operating revenue.

Investment income includes interest earned on bank deposits as well as unrealized gains and losses on its investment holdings. Grant revenue, interest and investment income are considered nonoperating activity.

REVENUE RECOGNITION
SVCE recognizes revenue on the accrual basis. This includes invoices issued to customers during the reporting period and electricity estimated to have been delivered, but not yet billed.

Management estimates that a portion of the billed amounts will be uncollectible. Accordingly, an allowance for uncollectible accounts has been recorded. Revenue is presented net of estimated uncollectible charges.

OPERATING AND NONOPERATING EXPENSES
Operating expenses include the costs of electricity and services, administrative expenses, and amortization and depreciation of capital assets. Expenses not meeting this definition are reported as nonoperating expenses.

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SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

COST OF ELECTRICITY
During the normal course of business SVCE purchases electrical power from numerous suppliers.

Electricity costs include the cost of energy and capacity arising from bilateral contracts with energy suppliers and for generation credits, and load and other charges arising from SVCE’s participation in the CAISO’s centralized market. The cost of electricity and capacity is recognized as “Cost of Electricity” in the Statements of Revenues, Expenses and Changes in Net Position.

To comply with the State of California’s Renewable Portfolio Standards (RPS) and self-imposed benchmarks, SVCE acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (Certificates) recognized by the Western Renewable Energy Generation Information System. SVCE obtains Certificates with the intent to retire them and does not sell or build surpluses of Certificates with a profit motive. An expense is recognized at the point that the cost of the Certificate is due and payable to the supplier.

SVCE purchases capacity commitments from qualifying generators to comply with the California Energy Commission’s Resource Adequacy Program. The goals of the Resource Adequacy Program are to provide sufficient resources to CAISO to ensure the safe and reliable operation of the grid in real-time and to provide appropriate incentives for the siting and construction of new resources needed for reliability in the future.

STAFFING COSTS
SVCE pays employees bi-weekly and fully pays its obligation for health benefits and contributions to its defined contribution retirement plan as they come due. SVCE is not obligated to provide post-employment healthcare or other fringe benefits and, accordingly, no related liability is recorded in these financial statements. SVCE provides compensated time off, and the related liability is recorded in these financial statements.

INCOME TAXES
SVCE is a Joint Powers Authority under the provision of the California Government Code. As such it is not subject to federal or state income or franchise taxes.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

RECLASSIFICATIONS
Certain amounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation of the current-year financial statements. These reclassifications did not result in any change in previously reported net position or change in net position.

2. CASH AND CASH EQUIVALENTS
SVCE maintains its cash in both interest-bearing and non-interest-bearing accounts. SVCE’s deposits are subject to California Government Code Section 16521, which requires banks to provide 110% collateralization on public funds in excess of the Federal Deposit Insurance Corporation limit of $250,000. Certain short-term investments with original maturities of less than three months are classified as cash and cash equivalents, which are not subject to the collateral requirement or FDIC coverage previously mentioned. Accordingly, the amount of risk is not disclosed. SVCE monitors its risk on an ongoing basis.

At the end of each year, SVCE had restricted cash that was held as collateral for either its bank letters of credit postings, or collateral held in accordance with certain security agreements with suppliers.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
19 3. ACCOUNTS RECEIVABLE
Accounts receivable were as follows as of September 30:
2023 2022
Accounts receivable from customers 52,689,393$ 58,563,227$ Allowance for uncollectible accounts (2,800,000) (2,900,000) Net accounts receivable 49,889,393$ 55,663,227$
The majority of account collections occur within the first few months following the issuance of customer invoices. SVCE estimates that a portion of the billed accounts will not be collected.

SVCE continues collection efforts on accounts in excess of de minimis balances regardless of the age of the account. Although collection success generally decreases with the age of the receivable, SVCE continues to be successful in collecting older accounts. The allowance for uncollectible accounts at the end of a period includes amounts billed during the current and prior fiscal years and is adjusted for write-offs. In 2023 and 2022, SVCE received CAPP funds (see Note 7) that helped recover previously written off accounts receivable.

4. INVESTMENTS
During the year ended September 30, 2023, SVCE purchased investments with original maturities of three months or more. As of September 30, the fair value of investments was as follows:
2023 2022
Current Investments:

U.S. Treasury Bonds and Notes 8,750,279$ -$
Commercial Paper 18,981,723 -
Certificate of Deposits 6,599,494 -
Total current investments 34,331,496$ -$
2023 2022
Noncurrent Investments:

U.S. Treasury Bonds and Notes 41,492,790$ -$
Federal Agency Commercial 1,336,930 -
Corporate Notes 9,893,896 -
Certificate of Deposits 829,694 -
Asset-Backed Securities 3,266,203 -
Total noncurrent investments 56,819,513$ -$

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
20 4. INVESTMENTS (CONTINUED)

FAIR VALUE MEASUREMENT
GASB Statement No. 72, Fair Value Measurement and Application, sets forth the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. SVCE’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

As of September 30, 2023, SVCE’s investments are considered Level 1 inputs. Quoted prices in active markets were used for determining fair value measurement (except CDs, which are based on the nominal value).

CREDIT RISK
Credit risk is the risk an issuer or other counterparty to an investment will not fulfill its obligations. Certain investments, such as obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government, are not considered to have credit risk.

As of June 30, 2023, credit risk for other investments were rated as follows:

Moody's Investors Service 2023
Commercial Paper NR to P-1
Corporate Notes BBB+ to AA1
Certificate of Deposits A1 to P-1
Asset-Backed Securities NR to Aaa
SVCE’s investment policy addresses this risk. SVCE limits investments to those allowed by Section 53601 of the California Government Code that addresses the risk allowable for each investment.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
21 4. INVESTMENTS (CONTINUED)

CUSTODIAL CREDIT RISK - CERTIFICATE OF DEPOSITS
Custodial credit risk is the risk that in the event of a financial institution failure, SVCE’s deposits may not be returned to SVCE. SVCE’s deposits are subject to California Government Code Section 16521, which requires banks to collateralize public funds in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 by 110%.

As of September 30, 2023 and 2022, none of SVCE’s bank balances are known to be individually exposed to credit risk.

CUSTODIAL CREDIT RISK - INVESTMENTS
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, SVCE would not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. All of SVCE’s investments are exposed to credit risk.

SVCE’s investment policy addresses this risk. All investments owned by SVCE shall be held in safekeeping by a third-party custodian, acting as an agent for SVCE under the terms of a custody agreement.

INTEREST RATE RISK
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Duration is a measure of the price sensitivity of a fixed income portfolio to changes in interest rates. Duration is calculated as the weighted average time to receive a bond’s coupon and principal payments. The longer the duration of a portfolio, the greater its price sensitivity to changes in interest rates. SVCE manages its exposure to declines in fair values by limiting the weighted average maturity of its investments.

Following is a summary of investment maturities as of September 30, 2023:

Investment Maturities
Investment Type Fair Value Less Than 1 Year 1-5 Years
U.S. Treasury Bonds and Notes 50,243,069$ 8,750,279$ 41,492,790$ Federal Agency Commercial 1,336,930 - 1,336,930
Commercial Paper 18,981,723 18,981,723 -
Corporate Notes 9,893,896 - 9,893,896
Certificate of Deposits 7,429,188 6,599,494 829,694
Asset-Backed Securities 3,266,203 - 3,266,203
$ 34,331,496$ 56,819,513$ 91,151,009

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
22 5. CAPITAL ASSETS AND LEASE ASSET
Capital asset activity for the years ended September 30, 2023 and 2022 was as follows:

Furniture &
Equipment
Leasehold
Improvements
Accumulated
Depreciation Total
Balances at September 30, 2021 482,096$ 77,876$ (243,206)$ 316,766$ Additions 85,011 56,397 (100,428) 40,980
Balances at September 30, 2022 567,107 134,273 (343,634) 357,746 Additions 198,776 - (139,782) 58,994
Dispositions (7,000) - 7,000 -
Balances at September 30, 2023 758,883$ 134,273$ (476,416)$ 416,740$ Lease asset activity for the years ended September 30, 2023 and 2022 was as follows:

Lease Asset
Accumulated
Amortization Total
Balances at September 30, 2021 2,287,125$ (481,500)$ 1,805,625$ Additions - (481,500) (481,500)
Balances at September 30, 2022 2,287,125 (963,000) 1,324,125 Additions - (481,500) (481,500)
Balances at September 30, 2023 2,287,125$ (1,444,500)$ 842,625$

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
23 6. LEASE
A lease asset is reported in accordance with Governmental Accounting Standards Board No. 87 Leases (GASB 87) that was implemented during 2022, with a restatement back to 2020.

According to GASB, the Statement aims to increase the usefulness of governments’ financial statements by requiring reporting of certain lease assets and liabilities that previously were not recognized on the statement of net position.

In December 2019 SVCE amended its non-cancelable lease for its office premises, extending the lease through June 30, 2025.

Rental payments under this lease were $519,000 and $501,000 for the years ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, future minimum lease payments under the lease were projected as follows:

Principal Interest Total
Years ending September 30,
2024 508,483$ 14,222$ 522,705$
2025 402,738 3,554 406,292
Total 911,221$ 17,776$ 928,997$

7. GRANT REVENUE
SVCE administers a grant from the California Arrearage Payment Program (CAPP) that offers financial assistance for California energy utility customers to help reduce past due energy account balances that increased during the COVID-19 pandemic. In 2022 this program was funded through the federal American Rescue Plan Act (ARPA) with Coronavirus State and Local Fiscal Recovery Funds. The program was funded by the State of California in 2023. Grant revenue recognized for the years ended September 30, 2023 and 2022 was approximately $717,000 and $1,545,000, respectively.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
24 8. DEFINED CONTRIBUTION RETIREMENT PLAN
SVCE provides retirement benefits through the Silicon Valley Clean Energy Authority Public Agency Retirement System Defined Contribution Plan (Plan). The Plan is a defined contribution 401(a) Retirement Plan established to provide benefits at retirement to employees of certain qualified employers admitted by the Plan. The Plan is administered by Public Agency Retirement System (PARS). At September 30, 2023 and 2022, SVCE had 48 and 40 plan participants, respectively. SVCE is required to contribute up to 10% of covered payroll as a match to required employee contributions. SVCE contributed approximately $758,000 and $519,000 during the years ended September 30, 2023 and 2022, respectively. Plan provisions and contribution requirements as they apply to SVCE are established and may be amended by the Board of Directors.

9. RISK MANAGEMENT
SVCE is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; and errors and omissions. During the year, SVCE purchased insurance policies from investment-grade commercial carriers to mitigate risks that include those associated with earthquakes, theft, general liability, errors and omissions, and property damage. SVCE has general liability coverage of $2,000,000 with a deductible of $500.

SVCE maintains risk management policies, procedures and systems that help mitigate credit, liquidity, market, operating, regulatory and other risks that arise from participation in the California energy market.

Credit guidelines include a preference for transacting with investment-grade counterparties, evaluating counterparties’ financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. In addition, SVCE enters into netting arrangements whenever possible and, where appropriate, obtains collateral and other performance assurances from counterparties.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
25 10. PURCHASE COMMITMENTS

POWER AND ELECTRIC CAPACITY
In the ordinary course of business, SVCE enters into various power purchase agreements to acquire renewable and other energy and electric capacity. The price and volume of purchased power may be fixed or variable. Variable pricing is generally based on the market price of either natural gas or electricity at the date of delivery. Variable volume is generally associated with contracts to purchase energy from as-available resources such as solar, wind and hydro-electric facilities.

SVCE enters into power purchase agreements in order to comply with state law and voluntary targets for renewable and greenhouse gas (GHG) free products and to ensure stable and competitive electric rates for its customers.

The following table represents the expected, undiscounted, contractual obligations outstanding as of September 30, 2023:

Years ending September 30,
2024 301,000,000$
2025 206,000,000
2026 184,000,000
2027 186,000,000
2029 193,000,000
2029-2046 2,206,000,000
Total 3,276,000,000$
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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
26 11. JOINT VENTURE
The SVCE participates in a joint powers agreement (JPA) through the California Community Choice Financing Authority (CCCFA). CCCFA was formed as a conduit issuer to assist its members by undertaking the financing or refinancing of energy prepayments that can be financed with tax advantaged bonds on behalf of one or more of the members by issuing or incurring bonds and entering into related contracts with its members. Any debt or liability incurred by CCCFA on behalf of a member to prepay for renewable energy is not a debt or liability of that member.

Furthermore, the assets of CCCFA in the form of prepaid energy or reserves held by the respective bond trustees for any prepayment transaction undertaken on behalf of a member does not constitute an asset or reserve of that member.

In September 2021, CCCFA issued bonds partially related to SVCE in the amount of $1,234,720,000, excluding original issue premium, the applicable proceeds of which are to be used to finance energy purchases that will be delivered to SVCE. No debt, liability, or obligation of CCCFA is a debt, liability, or obligation of SVCE. SVCE will purchase energy from CCCFA in the same manner as it purchases energy from other suppliers. SVCE purchased approximately $29,081,000 and $15,320,000 from CCCFA during fiscal years 2023 and 2022, respectively. In January 2023, CCCFA issued additional bonds related to SVCE in the amount of $841,550,000, excluding original issue premium. The outstanding purchase commitments related to these financing facilities are included in Note 10.

Each member of CCCFA is responsible for paying an equal portion of CCCFA’s general and administrative operating costs as determined by its board. During the years ended September 30, 2023, and 2022, SVCE contributed approximately $87,000 and $46,000, respectively, to CCCFA to assist in its operating activities.

The financial statements of CCCFA are available online at http://www.cccfa.org/key-documents.html.

12. FUTURE GASB PRONOUNCEMENTS
The requirements of the following GASB Statements are effective for years ending after September 30, 2023:

GASB has approved GASB Statement No. 100, Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62, and GASB Statement No. 101, Compensated Absences.

Management is evaluating the effect of implementation of these statements.

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Attachment 1
Silicon Valley Clean Energy Authority
For the Year Ended September 30, 2023
Report to the Board of Directors
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Attachment 2
SANTA ROSA  PETALUMA
RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. 3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
+1 (707) 542-3343 Office
+1 (707) 527-5608 Fax
pbllp.com
To the Board of Directors
Silicon Valley Clean Energy Authority
333 W El Camino Real, Suite 330
Sunnyvale, CA
We are pleased to present this report related to our audit of the financial statements of Silicon Valley Clean Energy Authority (“SVCE”) as of and for the year ended September 30, 2023. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for SVCE’s financial reporting process.

This report is intended solely for the information and use of the Audit Committee, Board of Directors and management of SVCE and is not intended to be and should not be used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have regarding this report. We appreciate the opportunity to continue to be of service to Silicon Valley Clean Energy Authority.

Santa Rosa, California
March 5, 2024
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Attachment 2
PISENTI & BRINKER up
RSM At independently ownedmeuber
RSM US Alliance

TABLE OF CONTENTS
Required Communications 1
Significant Accounting Estimates 4
Exhibit A— Representation Letter 5
Exhibit B—Recent Accounting Pronouncements 9
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Attachment 2
1 REQUIRED COMMUNICATIONS
Generally accepted auditing standards (AU-C 260, The Auditor’s Communication With Those Charged With Governance) require the auditor to promote effective two-way communication between the auditor and those charged with governance. Consistent with this requirement, the following summarizes our responsibilities regarding the financial statement audit as well as observations arising from our audit that are significant and relevant to your responsibility to oversee the financial reporting process.

Our Responsibilities With Regard to the Financial Statement Audit Our responsibilities under auditing standards generally accepted in the United States of America have been described to you in our arrangement letter dated September 22, 2023. Our audit of the financial statements does not relieve management or those charged with governance of their responsibilities, which are also described in that letter.

Overview of the Planned Scope and Timing of the Financial Statement Audit We have issued a separate communication dated January 8, 2024 regarding the planned scope and timing of our audit and identified significant risks, if any.

Accounting Policies and Practices
Preferability of Accounting Policies and Practices
Under generally accepted accounting principles, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice.

Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by SVCE. SVCE did not adopt any significant new accounting policies, nor have there been any changes in existing significant accounting policies during the current period.

Significant or Unusual Transactions
We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Management’s Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates.

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Attachment 2
2 REQUIRED COMMUNICATIONS
Audit Adjustments and Uncorrected Misstatements
We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.

Departure From the Auditor’s Standard Report
Reporting – Expected Other-Matter Paragraph
Accounting principles generally accepted in the United States of America and the Governmental Accounting Standards Board require that the management’s discussion and analysis be presented to supplement the financial statements. We do not express an opinion or provide any assurance on the information. In light of this matter, we will include an other-matter paragraph in the auditor’s report. This matter will not modify the opinion. Below is the paragraph included in the auditor’s report:

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Observations About the Audit Process
Disagreements With Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit or significant disclosures to be included in the financial statements Consultations With Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.

Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or the subject of correspondence with management.

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3 REQUIRED COMMUNICATIONS
Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.

Shared Responsibilities: AICPA Independence
The American Institute of Certified Public Accountants (AICPA) regularly emphasizes that auditor independence is a joint responsibility and is managed most effectively when management, audit committees (or their equivalents), and audit firms work together in considering compliance with AICPA independence rules. For Pisenti & Brinker to fulfill its professional responsibility to maintain and monitor independence, management, SVCE, and Pisenti & Brinker each play an important role.

Our Responsibilities
• AICPA rules require independence both of mind and in appearance when providing audit and other attestation services. Pisenti & Brinker, LLP is to ensure that the AICPA’s General Requirements for performing non-attest services are adhered to and included in all letters of engagement.
• Maintain a system of quality management over compliance with independence rules and firm policies.

SVCE’s Responsibilities
• Timely inform Pisenti & Brinker, before the effective date of transactions or other business changes, of the following:
− New affiliates, directors, or officers.
− Change in corporate structure impacting affiliates such as add-on acquisitions or exits. • Provide necessary affiliate information such as new or updated investment structure charts, as well as financial information required to perform materiality calculations needed for making affiliate determinations.
• Understand and conclude on the permissibility, prior to SVCE and its affiliates, officers, directors, or persons in a decision-making capacity, engaging in business relationships with Pisenti & Brinker.
• Not entering into relationships resulting in close family members of Pisenti & Brinker covered persons, temporarily or permanently acting as an officer, director, or person in an accounting or financial reporting oversight role at SVCE.

Significant Written Communications Between Management and Our Firm Copies of significant written communications between our firm and the management of SVCE, are attached as Exhibit A.

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Attachment 2
4 SIGNIFICANT ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates.

The following summarizes the significant accounting estimates reflected in SVCE’s September 30, 2023 financial statements.

Significant Accounting Estimates
Accrued Revenue
Accounting policy/
Management’s estimation
process
Management’s estimate of accrued revenue includes historical trends and anticipated energy usage.

Basis for our conclusion on
the reasonableness of the
estimate
We tested management’s estimate analytically and determined management’s estimate to be reasonable in relation to the financial statements taken as a whole.

Cost of Electricity
Accounting policy/
Management’s estimation
process
Management’s estimate of accrued cost of electricity includes historical trends and anticipated energy usage.

Basis for our conclusion on
the reasonableness of the
estimate
We tested management’s estimate through subsequent
disbursements and analytical procedures and determined
management’s estimate to be reasonable in relation to the financial statements taken as a whole.

Allowance for Uncollectible Accounts
Accounting policy/
Management’s estimation
process
Management’s estimate of the allowance for uncollectible accounts includes historical collection trends and anticipated future collections.

Basis for our conclusion on
the reasonableness of the
estimate
We evaluated the key factors and assumptions used to develop the estimate in determining that the allowance is reasonable in relation to the financial statements taken as a whole.

Item 3
Attachment 2

EXHIBIT A
Representation Letter
Item 3
Attachment 2
333 W El Camino Real, Suite 330 | Sunnyvale, CA 94087 | 1-844-474-SVCE (7823) | SVCleanEnergy.org February 20, 2024
Pisenti & Brinker LLP
3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
This representation letter is provided in connection with your audit of the basic financial statements of Silicon Valley Clean Energy Authority (SVCE) as of and for the years ended September 30, 2023 and 2022 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

We confirm, to the best of our knowledge and belief, that as of February 19, 2024:

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated September 22, 2023 for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP.

2. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

3. We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.

4. The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of U.S. GAAP, and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.

5. Related-party transactions have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S.

GAAP.

6. All events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed.

7. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.

8. Management has followed applicable laws and regulations in adopting, approving and amending budgets.

9. Risk disclosures associated with deposit and investment securities and derivative transactions are presented in accordance with GASB requirements.

10. Provisions for uncollectible receivables have been properly identified and recorded.

DocuSign Envelope ID: 2D439FF4-54AC-41A7-81B2-2C9D0477E27B Item 3
Attachment 2

SILICON VALLEY

CLEAN ENERGY
333 W El Camino Real, Suite 330 | Sunnyvale, CA 94087 | 1-844-474-SVCE (7823) | SVCleanEnergy.org Pisenti & Brinker LLP
February 20, 2024

Campbell | Cupertino | Gilroy | Los Altos | Los Altos Hills | Los Gatos | Milpitas | Monte Sereno | Morgan Hill | Mountain View | Saratoga | Sunnyvale | Unincorporated Santa Clara County

11. Capital assets, including infrastructure, intangible assets, and right of use assets are properly capitalized, reported and, if applicable, depreciated.

12. The government properly separated information in debt disclosures related to direct borrowings and direct placements of debt from other debt and disclosed any unused lines of credit, collateral pledged to secure debt, terms in the debt agreements related to significant default or termination events with finance-related consequences and significant subjective acceleration clauses in accordance with GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements.

13. Components of net position (net investment in capital assets, restricted, and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved.

14. The SVCE policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and appropriately disclosed and that net position is properly recognized under the policy.

15. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, that is not disclosed in the financial statements.

16. We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance.

17. We believe the implementation of the GASB Statements listed below is appropriate:
a. GASB Statement No. 87, Leases

18. We have no knowledge of any uncorrected misstatements in the financial statements.

Information Provided

19. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the basic financial statements such as records, documentation and other matters. b. Additional information that you have requested from us for the purpose of the audit. c. Unrestricted access to persons within SVCE from whom you determined it necessary to obtain audit evidence.
d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared.

20. All transactions have been recorded in the accounting records and are reflected in the basic financial statements.

DocuSign Envelope ID: 2D439FF4-54AC-41A7-81B2-2C9D0477E27B Item 3
Attachment 2
/ASILICON VALLEY <3/ CLEAN ENERGY
333 W El Camino Real, Suite 330 | Sunnyvale, CA 94087 | 1-844-474-SVCE (7823) | SVCleanEnergy.org Pisenti & Brinker LLP
February 20, 2024

Campbell | Cupertino | Gilroy | Los Altos | Los Altos Hills | Los Gatos | Milpitas | Monte Sereno | Morgan Hill | Mountain View | Saratoga | Sunnyvale | Unincorporated Santa Clara County

21. We have disclosed to you the results of our assessment of risk that the basic financial statements may be materially misstated as a result of fraud.

22. It is our responsibility to establish and maintain internal control over financial reporting. One of the components of an entity’s system of internal control is risk assessment. We hereby represent that our risk assessment process includes identification and assessment of risks of material misstatement due to fraud.

23. We have no knowledge of allegations of fraud or suspected fraud affecting SVCE’s basic financial statements involving:
a. Management.
b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the basic financial statements.

24. We have no knowledge of any allegations of fraud or suspected fraud affecting SVCE’s basic financial statements received in communications from employees, former employees, analysts, regulators, short sellers or others.

25. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations.

26. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements.

27. We have disclosed to you the identity of all of SVCE’s related parties and all the related-party relationships and transactions of which we are aware.

28. We are aware of no deficiencies in internal control over financial reporting, including significant deficiencies or material weaknesses, in the design or operation of internal controls that could adversely affect SVCE’s ability to record, process, summarize and report financial data.

29. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.

30. It is our responsibility to inform you of all current and potential affiliates of SVCE as defined by the “State and Local Government Client Affiliates” interpretation (ET sec. 1.224.020). Financial interests in, and other relationships with, affiliates of SVCE may create threats to independence. We have:
a. Provided you with all information we are aware of with respect to current and potential affiliates, including degree of influence assessments and materiality assessments. b. Notified you of all changes to relevant considerations that may impact our determination of the existence of current or potential affiliates involving (i) changes in the determination of the DocuSign Envelope ID: 2D439FF4-54AC-41A7-81B2-2C9D0477E27B Item 3
Attachment 2
/ASILICON VALLEY <3/ CLEAN ENERGY
333 W El Camino Real, Suite 330 | Sunnyvale, CA 94087 | 1-844-474-SVCE (7823) | SVCleanEnergy.org Pisenti & Brinker LLP
February 20, 2024

Campbell | Cupertino | Gilroy | Los Altos | Los Altos Hills | Los Gatos | Milpitas | Monte Sereno | Morgan Hill | Mountain View | Saratoga | Sunnyvale | Unincorporated Santa Clara County materiality of an entity to SVCE’s financial statements as a whole, (ii) the level of influence SVCE has over an entity’s financial reporting process or (iii) the level of control or influence SVCE or a potential or current affiliate has over an investee that is not trivial or clearly inconsequential, sufficiently in advance of their effective dates to enable SVCE and Pisenti & Brinker, LLP to identify and eliminate potential impermissible services and relationships between Pisenti & Brinker, LLP.
c. Made you aware, to the best of our knowledge and belief, of any nonaudit services that SVCE or any of our affiliates has engaged Pisenti & Brinker, LLP.

31. During the course of your audit, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us.

Required Supplementary Information

32. With respect to the Management’s Discussion and Analysis presented as required by GAAP and the Governmental Accounting Standards Board to supplement the basic financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary information.
b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.

Amrit Singh, Chief Financial Officer
Silicon Valley Clean Energy Authority
Mike Maher, Accountant
DocuSign Envelope ID: 2D439FF4-54AC-41A7-81B2-2C9D0477E27B Item 3
Attachment 2

SILICON VALLEY

CLEAN ENERGY
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DocuSigned by:

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EXHIBIT B
Recent Accounting Pronouncements
Item 3
Attachment 2

RECENT ACCOUNTING PRONOUNCEMENTS
The following accounting pronouncements have been issued by GASB and may affect the future financial reporting by SVCE.

Pronouncement Summary
GASB Statement No. 101,
Compensated Absences
GASB Statement No. 101, Compensated Absences, is effective for fiscal years beginning July 1, 2023. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.
9 Item 3
Attachment 2
A.

SANTA ROSA  PETALUMA
RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. 3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
(707) 542-3343  Office
(707) 527-5608  Fax
pbllp.com
February 22, 2024
To Management and the Board of Directors
Silicon Valley Clean Energy Authority
333 W. El Camino Real, Suite 330
Sunnyvale, California
In planning and performing our audits of the financial statements of Silicon Valley Clean Energy Authority (SVCE) as of and for the years ended September 30, 2023 and 2022, in accordance with auditing standards generally accepted in the United States of America, we considered SVCE’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of SVCE’s internal control.

Accordingly, we do not express an opinion on the effectiveness of SVCE’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively.

A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, we did not identify any deficiencies in internal control during our audits that we consider to be material weaknesses or significant deficiencies. However, material weaknesses or significant deficiencies may exist that were not identified.

This communication is intended solely for the information and use of management and the Board of Directors and is not intended to be, and should not be, used by anyone other than these specified parties.

PISENTI & BRINKER LLP
Kellin Gilbert
Partner
Item 3
Attachment 3
PISENTI & BRINKER llp
Certified Public Accountants A Advisors
RSM a* nrocponaentiv ownedmcTOirr
RSM US Alliance

Staff Report – Item 4
Item 4: Adopt Resolution Approving the Mid-Year 2023-24 Adjusted Operating Budget From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO and Director of Administrative Services Date: 3/13/2024

RECOMMENDATION
Staff recommends that the Board of Directors adopt Resolution 2024-05, approving the Mid-year 2023-2024 (MY 2024)1 Adjusted Operating Budget that projects depositing $112.6 million into the reserves.

FINANCE AND ADMINISTRATION COMMITTEE RECOMMENDATION
Staff presented the proposed MY 2024 Adjusted Operating Budget to the Finance and Administration Committee at its meeting on February 26th, 2024. The Committee reviewed the budget and asked clarifying questions, including comparing the size of the power supply expenses relative to the other operating expenses and the budgeting and setting of the target compensation range for the proposed new Associate Power Analyst position. After discussion with staff, the Committee unanimously recommended that the Board of Directors approve the MY 2024 Adjusted Operating Budget.

BACKGROUND
The Board of Directors first adopted the annual budget for the fiscal year 2023-24 (FY 2024) at the September 23rd, 2023, meeting. Because of great uncertainty regarding PG&E’s January 2024 rate changes, the adopted budget was based on conservative rate change assumptions, and staff committed to updating the budget in December 2023. At the December 13th, 2023, Board meeting, the Board adjusted the budget to reflect better information on PG&E’s January 2024 generation rate changes and Power Charge Indifference Adjustment2 (PCIA) charges. Due to PG&E rate changes that improved SVCE’s margins, the Board in December adjusted the budget to maintain a 4% general customer discount rate relative to comparable PG&E generation rates and to provide a bill credit for low-income (CARE/FERA) customers that was equivalent in total dollars to a 1% rate discount for all customers. The Board also transferred an additional $20 million to the Programs Fund, set aside $20 million for an SVCE office building fund, and planned in reserves for a 4% rate discount over the next two additional fiscal years.

At Midyear, Staff is adjusting the budget to update the energy supply expenses using the latest market price data and portfolio positions, update the revenues to reflect the final rate changes that went into effect starting January 2024, and update other minor changes in operating expenses and projected investment income.

ANALYSIS & DISCUSSION
The MY 24 Adjusted Operating Budget is balanced and presents SVCE in stable financial condition. 1 The fiscal year 2023-24 started on October 1, 2023, and ends on September 30, 2024. 2 Public Utility Code Sections 366.1 and 366.2 require the CPUC to make sure that customers leaving PG&E do not burden remaining PG&E customers with costs that were incurred to serve them. To ensure customer indifference, CCAs and Direct Access or departing load customers are required to pay a power charge indifference adjustment (PCIA).

Item 4
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 4 Agenda Date: 3/13/2024

The projected available balance for reserves of $112.6 million is an increase of $38.8 million from the $73.8 million presented in the December 2023 adjusted FY 24 Budget. The improvement in contribution to reserves primarily results from decreased energy costs resulting from lower realized and forward energy market prices, a slight improvement in SVCE margins from CPUC’s adoption of the 2024 PG&E rates, and increased investment income from continued higher interest rates. These improvements are partially offset by lower energy sales realized from October 2023 to December 2023 and slight increases in operating expenses.

The table below illustrates the $38.8 million increase:

Revenues - $1.8M
Power Supply Cost - $33.9M
Other Operating Expenses -$0.2M
Investment Income +$6.4M
Reserve Balance +$38.8
Energy Revenues
The energy revenues are slightly lower by about $1.8 million from the December budget. While CPUC’s final adopted PG&E generation rates and charges overall improved SVCE’s margins by 2%, as shown in the illustration below, the decrease in realized sales from October to December 2023 due to milder weather more than offset the increases.

Power Supply Expenses
Power prices are highly volatile. Since adopting the adjusted budget in December 2023, calendar year 2024 prices have dropped about 14%, and the 5-year average forward prices have dropped 7%. The decrease in energy market prices and the weaker realized load primarily contribute to the reduction of $33.9 million in energy supply costs. The October to December 2023 actuals were about $21.2 million lower than the adjusted budget. The projected costs for January to September 2024 are approximately $12.7 million lower than the adjusted budget, mainly due to lower market prices.

Operating Expenses
Operating expenses decreased by about -$0.2 million, mainly due to realized savings from October to December, partly offset by the addition of four staff positions and slightly higher professional services and marketing costs.

The CEO approved the following three new staff positions using the personnel authority:

Item 4
Adjusted Budget 2024 Rate*
Jan-Jun 2024
Rate
Jul-Dec 2024
Rate***
PG&E Gen Rate:

16.20 c/kWh
[4% SVCE discount
Current 2024 Rate
Jan-Jun 2024 Jul-Dec 2024
Rate** Rate***
PG&E Gen Rate:

16.99 c/kWh
Agenda Item: 4 Agenda Date: 3/13/2024

1. General Counsel to ensure adequate legal support both in complexity and volume as the agency grows and matures

2. Board Clerk/Executive Assistant to assist with Board meetings and provide additional administrative support to the organization

3. Senior Program Specialist to further support the development of the agency's increasing Decarbonization Programs
The MY 2024 requests approval of an additional Associate Power Analyst position to support the increasing complexity of managing the energy procurement portfolio. Including the four positions after accounting for already realized vacancy savings decreases the annual staffing expenses by $558,000.

The professional services budget increased by $126,000 due in part to contracting for a third-party consulting service to analyze the economics of providing 24x7 clean energy and implementation of a new human resources information system, which upfronts the implementation cost for this fiscal year, but ongoing costs are comparable to the retirement of the current HR payroll tool.

The marketing and communications cost increased by about $194,000, resulting from additional anticipated marketing materials.

Programs Budget
SVCE will continue incorporating projected Decarbonization Programs spending over the 5-year forecast into the reserve balance projections. For this fiscal year, Program spending is forecasted at $21.6 million, CRCR3 spending at $2.7 million, and E-Elec, the all-electric discounted rate, discount utilization at $675,000.

Non-Operating Revenues
Investment income is projected to increase by $6.4 million, resulting from continued high interest rates from SVCE’s investments.

STRATEGIC PLAN
The recommendation supports all goals of the board's adopted strategic plan. Specifically, the recommendations strongly support Goal 19 - “Commit to maintaining a strong financial position” and the accompanying Measure, “Present balanced budget that achieves cash reserve targets, weighs tradeoffs between customer value proposition and contribution to reserves and maintains competitive rates.”

ALTERNATIVE
Staff is open to feedback and suggestions from the Board. At a strategic level, the Board can change the discount to PG&E, the carbon-free percent of the power supply portfolio, the renewable percent of the power supply portfolio, and the funding for the Decarbonization Programs.

Staff does not recommend any specific changes given a sufficient projected reserve balance that maintains SVCE’s stable financial condition.

FISCAL IMPACT
The MY 2024 Adjusted Operating Budget includes $552.86 million in revenues and $440.28 million in expenses, non-operating revenues, and transfers, resulting in a contribution to reserves of $112.6 million.

ATTACHMENTS

1. Exhibit A: Mid-Year 2023-24 Adjusted Operating Budget

2. Resolution 2024-05, Adopting the Mid-Year 2023-24 Adjusted Operating Budget 3 CRCR, the ~$10 million Customer Relief and Community Resilience Program, was established in 2020 to provide COVID credit payments to income-qualified customers as bill assistance, support local workforce training, and fund resiliency planning and capital expenditures at SVCE member cities.

Item 4
Exhibit A: Mid-Year 2023-2024 Adjusted Operating Budget

SILICON VALLEY CLEAN ENERGY
FY 2023-24 OPERATING BUDGET
($ in thousands)
FY 2023-24

MID-YEAR

ADJUSTED

DESCRIPTION BUDGET

ENERGY REVENUES
Energy Sales 550,852
Green Prime 1,962
Other Income 50
TOTAL ENERGY REVENUES 552,864

ENERGY EXPENSES
Power Supply 365,617
OPERATING MARGIN 187,247

OPERATING EXPENSES
Data Management 3,413
PG&E Fees 1,470
Salaries and Retirement 14,818
Professional Services 8,210
Marketing & Promotions 1,250
Notifications 315
Lease 551
General & Administrative 2,091
TOTAL OPERATING EXPENSES 32,118
OPERATING INCOME (LOSS) 155,129

NON-OPERATING REVENUES
Interest Income 12,867
Grant Income 0
TOTAL NON-OPERATING REVENUES 12,867

NON-OPERATING EXPENSES
Financing 3
Interest 0
TOTAL NON-OPERATING EXPENSES 3

TOTAL NON-OPERATING INCOME
(EXPENSES) 12,864
CHANGE IN NET POSITION 167,994

CAPITAL EXPENDITURES, INTERFUND

TRANSFERS & OTHER
Capital Outlay 50
Building Fund 20,000
Transfer to CRCR Fund 0
Program Fund 28,874
Nuclear Allocation 2,188
Multi Family Direct Install Program 0
Electrification Discount Program 0
Customer Bill Relief 4,300
Other 0

TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER $55,412
BALANCE AVAILABLE FOR RESERVES $112,582
Item 4
Attachment 1
1 RESOLUTION 2024-05

SILICON VALLEY CLEAN ENERGY AUTHORITY RESOLUTION
NO. 2024-05

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY TO APPROVE THE MID-YEAR 2023-2024

ADJUSTED BUDGET FOR SILICON VALLEY CLEAN ENERGY
WHEREAS, the Silicon Valley Clean Energy Authority (“Authority”) was formed on March 31, 2016, pursuant to a Joint Powers Agreement to study, promote, develop, conduct, operate, and manage energy programs in Santa Clara County; and WHEREAS, the Authority operates on a fiscal year budget cycle from October 1st through September 30th;
WHEREAS, a mid-year adjusted version of the Authority’s budget for each fiscal year is generally presented to the Board of Directors at the midpoint of the fiscal year in March;
WHEREAS, staff has incorporated direction from recent Board discussions around rates, programs, and customer relief and has prepared an adjusted budget, set forth in Exhibit A (the “Adjusted Budget”);
NOW THEREFORE, the Board of Directors of the Silicon Valley Clean Energy Authority does hereby resolve that:

1. The foregoing recitals are true and correct.

2. The Board of Directors hereby approves and adopts the Mid-Year Adjusted Budget, as set forth in Exhibit A, as the Authority’s fiscal year 2023-2024 budget.

PASSED AND ADOPTED this 13th day of March 2024, by the following vote:

JURISDICTION NAME AYE NO ABSTAIN ABSENT
City of Campbell Director Scozzola
City of Cupertino Director Mohan
City of Gilroy Director Hilton
City of Los Altos Director Meadows
Town of Los Altos Hills Director Tyson
Town of Los Gatos Alternate Director Ristow
City of Milpitas Director Chua
City of Monte Sereno Alternate Director Craig
City of Morgan Hill Director Martinez Beltran
Item 4
Attachment 2
2 RESOLUTION 2024-05
City of Mountain View Alternate Director Abe-Koga
County of Santa Clara Director Lee
City of Saratoga Director Walia
City of Sunnyvale Director Klein
Chair
ATTEST:

Andrea Pizano, Board Secretary
Item 4
Attachment 2

Staff Report – Item 5
Item 5: Adopt Resolution Approving Funding Allocations for Decarbonization Programs From: Girish Balachandran, CEO
Prepared by: Justin Zagunis, Director of Decarbonization Programs & Policy Douglas Bernard, Management Analyst
Date: 3/13/2024

RECOMMENDATION
Staff recommends that the Silicon Valley Clean Energy (SVCE) Board of Directors (Board) adopt Resolution No. 2024-06 to approve the initial funding allocations and details provided for the programs herein. This resolution allocates approximately $34 million in already-authorized programs funding to several program categories. The allocations and some additional draft programmatic details are summarized in the table below.

Allocation Category Planned Program Elements Allocation Expanded single family
home electrification
(renters, lower costs,
etc.)
• No-cost installs for income-qualified
• “Turnkey” installs using SVCE-selected contractor, with customer co-payment
• Emergency water heater replacement that supports
electrification
• Aggregating projects to test electrification of entire neighborhoods at once
• Support for portable, window-unit heat pumps
+$16.00M
Customer awareness
(experiential and
marketing)
• Grants for community-specific projects and programs
supporting decarbonization to agencies and local
organizations
• Updated online resources in SVCE’s eHub
• Funds for marketing current and upcoming programs to
increase uptake
+$11.50M
E-mobility incentives • Income-qualified electric vehicle (EV) rebates and education activities
• Income-qualified e-bike incentives
+$2.00M
Workforce • Enhance regional electrification workforce efforts in partnership with local initiatives and stakeholders +$1.30M Commercial and Industrial
(C&I) projects
• Technical support and decarbonization incentives for
C&I customers +$2.00M
Other • Support demand flexibility (and virtual power plant) enrollment and responsiveness
• Third-party evaluation of new programs
+$0.75M
TOTAL +$33.55M
Table 1: Summary of allocations and draft program details Item 5
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 5 Agenda Date: 3/13/2024

BACKGROUND
As of the end of Fiscal Year 2022-2023, approximately $86 million had cumulatively been set aside by the SVCE Board since SVCE’s inception to support innovative and impactful decarbonization programs and policies. Today, SVCE is offering over 20 initiatives to its customers and roughly 85% of the approved funds have been spent, are currently available to customers via an incentive or service, or will be deployed soon. The remainder of the funds are allocated to other future efforts and a small portion of these funds were not yet allocated to any specific program.

The Board approved $20 million in additional funding for programs in December 2023, on top of the roughly $9 million committed to programs in October 2023 as part of the Fiscal Year 2023-2024 budget (based on 2% of revenues). These funds, in addition to roughly $5 million in previously approved but unallocated funds, constitute the $33.55 million in the proposed allocation in this report.

In June 2023, the Executive Committee provided some feedback on a set of initial program elements to be considered for future funding. Staff continued to revise these concepts based on additional customer and stakeholder feedback, the impact of ongoing programs, and observation of additional needs. Now with certainty on how much funding had been allocated to decarbonization programs, a revised set of program categories and draft program elements were brought to the Executive Committee for feedback in February 2024 before being brought to the Board today.

ANALYSIS & DISCUSSION
Overview
The approximately $34 million in funding allocated herein towards decarbonization initiatives will likely take ~3 years to fully deploy. The total funding authorized by the Board to spend on decarbonization programs and policy, include the most recent authorizations, is currently ~$116 million – this report allocates remaining unallocated funds within this total. The programs proposed in this report will continue to be scoped, shaped, and adjusted in the coming months and years based on continued stakeholder input and ongoing evaluation of whether programs are meeting their objectives post-launch.

The selection of these programs was driven by learnings from previous and ongoing SVCE programs, along with an extensive review process including: analysis of existing programs (budget, objectives, impacts, state of market), analysis of portfolio (gaps, needs, program data, customer input), and evaluation of new proposed ideas (apply scoring methodology based on programs values/goals, review of proposed work plans). These new programs support SVCE’s ongoing efforts to enable policy as a key lever for driving large-scale impacts. Staff’s proposed program categories and elements will help continue to build the foundation for policy to succeed by addressing gaps on cost (e.g. no-cost installation program for income-qualified customers), ease of action (e.g. emergency water heater replacement program), and others.

Additional details on the envisioned program elements for each category and planned funding level:

Single family installation program (+$14 million)
• No-cost installation for low-income customers: offer no-cost complete home electrification to income-qualified customers, using an SVCE-selected contractor. Complementary to SVCE’s upcoming, already-contracted multifamily no-cost, income-qualified offer. • Emergency water heater replacement: quick-response installer to help in emergency failures. Provide a temporary unit if wiring upgrade work is needed for a permanent electric heat pump solution. • Turnkey install with co-payment: provide a simple pathway for residents who want to electrify but don’t have much time or knowledge, using an SVCE-selected contractor. Homeowners still pay for the project themselves, after the contractor pursues all available rebates (SVCE and other).

Neighborhood-scale electrification (+$1.5 million)
• Aggregating projects in an area may lead to lower per-customer project costs by simplifying things for the contractor. This program would help test whether entire neighborhoods are willing to electrify at once, which is essential to future “gas system pruning” – a concept where funds that would typically Item 5
Agenda Item: 5 Agenda Date: 3/13/2024

have been invested in upgrading or replacing the methane gas distribution system are instead invested in electrifying homes and decommissioning the gas system. This approach could unlock significant funding for electrification and help scale cost-effectively.

Portable heat pumps (+$0.5 million)
• For renters or properties that aren’t good fits for more permanent heat pump solutions, these window unit heat pumps can provide electrification benefits.

Community decarbonization grants (+$10 million)
• Provide grants to enable localized, community-specific decarbonization efforts that demonstrate electrification, provide decarbonization benefits to the community, and/or increase community resilience. Focus on building customer awareness through enabling local programs (e.g. targeted battery backup program to help mitigate outages), installations (e.g. public EV charging) or demonstrations (e.g. electrifying a school or a gym and driving residents to visit) beyond SVCE’s own programs. Some funds will be allocated to member agencies and the competitive portion will also be available to other community organizations.
eHub (+$1 million)
• SVCE is updating components of the SVCE website that help customers on their electrification journey.

Presently includes Solar/Battery Assistant, Appliance Assistant, and EV Assistant. Version 2.0 is being determined through an ongoing solicitation.

Programs marketing fund (+$0.5 million)
• Separate funding dedicated to marketing efforts to increase program enrollments. Covers email, social media, tabling, events, and other marketing channels to rapidly increase uptake, particularly in already-launched programs.

Targeted EV rebates and education (+$1.5 million)
• The EV education programming may consist of: Community Ride & Drive events where they are not already happening, and/or incentivizing short-term EV rentals for customers to test drive EVs and see how they integrate into their lifestyle. Will include incentives for EVs for income-qualified customers (considering new and used vehicles).

E-bikes (+$0.5 million)
• E-bike incentive for income qualified customers.

C&I technical support and incentives (+$2 million)
• Support energy and sustainability goals of C&I customers while strengthening customer relationships with SVCE. Facilitate the completion of energy efficiency and carbon emissions reduction projects, particularly upgrading to electric equipment.

Workforce development partnerships (+$1.3 million)
• Prepare workforce in SVCE territory to electrify buildings at scale. Identify opportunities to enhance regional electrification workforce efforts. Invest in local workforce initiatives, based on feedback from ongoing discussions with workforce stakeholders. May include regional supplier diversity training, apprenticeship scholarships, or support for existing pipeline initiatives to widen early career training.

Virtual power plant (+$0.5 million)
• Recruit, enroll, and encourage participation from customers in a demand flexibility service by providing bill savings or incentives for customers to earn, and minimal-to-no disruption in customer convenience and comfort.

Item 5
Agenda Item: 5 Agenda Date: 3/13/2024

EM&V (+$0.25 million)
• Post-closing or mid-program evaluation and measurement of a program impacts, successes, and challenges. Third-party validation of programs.

Once these program category allocations are approved, staff will continue to iterate and adjust program element details post-launch or during final scoping to incorporate stakeholder feedback, pivot to increase uptake based on what is learned, or address remaining gaps. Progress will continue to be reported to the Board via the quarterly programs report and any future contracts above $100K (or any revised threshold) will still be brought to the Board for approval.

STRATEGIC PLAN
The proposal primarily supports the 2024 Strategic Focus Area approved by the Board to “Accelerate Building and Electrification Transportation” and the Strategic Plan Goal “coordinate development of decarbonization and resilience strategy, lead design of local policy and programs, and support program deployment.”

FISCAL IMPACT
This item has no incremental fiscal impact, as the approximately $34 million being allocated has already been authorized by the Board. This resolution merely indicates how the funding will be split amongst program categories.

ATTACHMENTS

1. Resolution No. 2024-06 Approving Funding Allocations for Decarbonization Programs Item 5
RESOLUTION NO. 2024-06

RESOLUTION OF THE BOARD OF DIRECTORS OF SILICON VALLEY CLEAN

ENERGY AUTHORITY APPROVING FUNDING ALLOCATIONS FOR

DECARBONIZATION PROGRAMS

THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY HEREBY RESOLVES AS FOLLOWS:

WHEREAS, the Silicon Valley Clean Energy Authority (“Silicon Valley Clean Energy”) was formed on March 31, 2016 pursuant to a Joint Power Agreement to study, promote, develop, conduct, operate, and manage energy programs in Santa Clara County; and
WHEREAS, the Board adopted the Decarbonization Strategy and Programs Roadmap and initial budget for the implementation of decarbonization programs pursuant to the Roadmap on December 12, 2018 by Resolution No. 2018-20 with additional direction provided in subsequent roadmaps and approval of funding allocation; and
WHEREAS, the Board authorized additional funding for programs in December 2023, on top of funding authorized in the Fiscal Year 2023-2024 budget and already committed to programs; and
WHEREAS, Staff brought program concepts to the Executive Committee in February 2024 to get feedback;
NOW, THEREFORE, the Board of Directors of the Silicon Valley Clean Energy Authority does hereby approve the initial funding allocations and details provided for the five decarbonization programs as outlined in the following table:

Item 5
Attachment 1
Resolution 2024-06 1 DRAFT
ADOPTED AND APPROVED this 13
th day of March 2024, by the following vote:

JURISDICTION NAME AYE NO ABSTAIN ABSENT
City of Campbell Director Scozzola
City of Cupertino Director Mohan
City of Gilroy Director Hilton
City of Los Altos Director Meadows
Town of Los Altos Hills Director Tyson
Town of Los Gatos Alternate Director Ristow
City of Milpitas Director Chua
City of Monte Sereno Alternate Director Craig
City of Morgan Hill Director Martinez Beltran
City of Mountain View Alternate Director Abe-Koga
County of Santa Clara Director Lee
City of Saratoga Director Walia
City of Sunnyvale Director Klein
Chair
ATTEST:

Secretary
Item 5
Attachment 1
Resolution 2024-06 2 DRAFT

Staff Report – Item 6
Item 6: Authorize the Chief Executive Officer to Execute an Agreement with Franklin Energy Services, LLC for Program Design and Implementation Support Services of a Single-Family Home Installation Program for a Period of Three Years and a Not-to-Exceed Amount of $14 million From: Girish Balachandran, CEO
Prepared by: Justin Zagunis, Director of Decarbonization Programs and Policy Leanna Huynh, Senior Programs Specialist
Date: 3/13/2024

RECOMMENDATION
Staff recommends the Board authorize the Chief Executive Officer (CEO) to execute the attached agreement with Franklin Energy Services, LLC (Franklin Energy) with non-substantive changes approved by the CEO and subject to final review and approval by General Counsel. The agreement is for program design and implementation support services of a single-family residential installation program for a period of three years and a not-to-exceed amount of $14 million.

BACKGROUND
In November 2020, the Board approved the Building Decarbonization Joint Action Plan (BDJAP), which identified FutureFit Homes as an initial incentive program to support the decarbonization of existing residential buildings. While incentives have helped early adopters and “do-it-yourselfers” make the transition to all-electric homes, deeper assistance may be needed to achieve greater scale and a broader set of customer participation. Silicon Valley Clean Energy (SVCE) recently launched the "Go Electric Advisor” – a concierge/hotline service intended to answer questions, connect customers to resources, and walk them through steps necessary to take action – to provide a certain level of additional assistance on top of available incentives.

But some customers (e.g. low income) and situations (e.g., water heater failure) may require a greater level of support to enable widespread upgrades to electric equipment. Staff, in collaboration with Peninsula Clean Energy (PCE) has worked to design the Single-Family Home Installation (SFI) Program, described below.

ANALYSIS & DISCUSSION
Based on evaluations of SVCE’s customer programs and data from other state and regional programs, staff understands that there continue to be major barriers to decarbonizing single-family homes. Key barriers include:

1. Lack of reliable contractors and clear pricing: Incentive and technical assistance programs help to reduce cost and information barriers that customers experience in their electrification journey.

However, some customers encounter issues in finding reliable contractors with electrification experience, who can provide transparent cost quotes, and who can help the customer easily navigate the incentive landscape.

Item 6
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 6 Agenda Date: 3/13/2024

2. Incentive programs reach a limited audience: Incentive programs are not effective at reaching everyone – only 6% of FutureFit Homes incentives have been leveraged by low-income customers.

Analyses of customer participation in SVCE incentive programs indicate that participating customers are typically more engaged, energy-savvy, and able to invest in electrification; there is less participation from busier, lower-income, or less energy-aware customers. For such customers, programs must significantly lower project costs or offer free upgrades, provide reliable information, and offer convenient and reliable technical services.

3. Water heater electrification in emergencies is very difficult: For water heaters, switching from gas to a heat pump water heater can be complicated as it may require additional electrical service upgrades that cannot be implemented easily within a day. Most of SVCE’s water heater incentives have been used by customers who are proactively replacing their gas water heaters in non-emergency situations.

Customers who experience a water heater failure often install a replacement gas water heater because it is the fastest and most convenient option to restore hot water access. Such emergency situations may lead to electrification only if the customer is assured of hot water service continuity.

To address these customer barriers and meet the goals of the BDJAP, staff began scoping the SFI program.

Staff envisioned a full-service program that removes cost and implementation barriers for customers, including low-income customers and customers with emergency water heater failures. In spring 2023, SVCE began conversations with PCE to explore aligning this building decarbonization initiative with the intention of improving efficiencies in program deployment while providing consistent services across our geographies.

Consultant Selection
SVCE staff collaborated closely with PCE staff on the SFI program conceptual design and consultant selection via PCE’s competitive solicitation. PCE released a Request for Proposals (RFP) in August 2023 and received five proposals. SVCE staff served on PCE’s review team.

On February 22, 2024, the PCE Board of Directors approved a 3-year contract with Franklin Energy for a SFI program in PCE’s service territory1. The consultant team included:
• Franklin Energy, a design and engineering firm that delivers turnkey energy efficiency and decarbonization programs for residential, commercial, and industry customers of more than 60 utility and government partners in North America, will serve as the lead consultant and program operator; • Three vendors will serve as installation contractors:
o FUSE Service Inc. (Contractors State Licensing Board (CSLB) #1052421) is a General Contractor based in Santa Clara, CA with over 5,000 TECH Clean CA installations including 80 installations in SVCE territory;
o Enso Squared Building Solutions (CSLB #783892) is a General Contractor with statewide presence, including work with Marin Clean Energy, SoCal Edison, and San Diego Gas and Electric;
o Electrify My Home (CSLB #1070343) is an Electrical and HVAC Contractor based in Vacaville and is accredited by the Better Business Bureau with an A+ rating; and • Vistar Energy Inc., a consulting firm that provides customized building energy efficiency and electrification software solutions, will provide an energy and bill impact modeling tool to develop cost-effective upgrade packages for homes.

SVCE has prepared the attached contract with this same consultant team selected by PCE. Leveraging selections made in recent, similar solicitations from comparable organizations is often referred to as “piggybacking” and is widely used by government agencies to avoid duplicating related solicitation efforts and use staff time most effectively. PCE’s solicitation process meets with SVCE procurement standards. Franklin Energy included in their response to PCE a willingness to offer comparable terms, inclusive of price, to SVCE. 1 Item #6, PCE Board of Directors Meeting. February 22, 2024. www.peninsulacleanenergy.com/wp-content/uploads/2024/02/02-22-24-BOD-Agenda.pdf Item 6
Agenda Item: 6 Agenda Date: 3/13/2024

SVCE’s scope of work with Franklin Energy is included in Exhibit A of the proposed agreement (Attachment 1).

Staff requests the Board to approve the attached agreement with non-substantive changes approved by the CEO and subject to final review by General Counsel. This proposed 3-year agreement with a not-to-exceed amount of $14 million includes:
• Program design and administration ($726,000);
• Vendor-led marketing and outreach ($130,000);
• Technical assistance and support to single-family residential customers ($1,817,000); • Home electrification installation services and incentives, including emergency water heater replacement ($10,300,000); and
• Contingency funds, to reactively allocate towards incentives, services, or additional program elements that may be added based on customer experience and feedback following initial launch ($1,027,000).

Further, the alignment of scopes and vendor, neighboring service territories, and launch timing through this collaboration with PCE will result in approximately $1 million in administrative savings to SVCE over the 3-year contract term with Franklin Energy. Staff will continue to coordinate with PCE to leverage efficiencies of scale and provide regional consistency in this program.

The timeline of the solicitation process and next steps to launch the SFI program are shown below:

Program Details
The SFI program intends to help residents who have barriers that may not be addressed by typical incentive programs, as well as support local contractors and provide continued experience in electrification projects. The key benefit of this program is that it offers an easy way for customers to access reliable contractors experienced with electrification projects and pre-negotiated fixed pricing for home upgrades.

The SFI program aims to fully electrify single-family residential properties (four or fewer units) and provide emergency water heater replacements. The program is comprised of three main elements:

Program
Element
(1) No-cost installation (2) Cost-share turnkey
installation
(3) Emergency water
heater replacement
Service Whole-home electrification
service, including the
following as applicable:
electrical service upgrade,
energy efficiency, health and
safety measures, structural
Whole-home electrification
service, including the following
as applicable: electrical service
upgrade, energy efficiency,
health and safety measures,
structural remediation, air
Rapid replacement of failing
water heaters with heat pump
water heater in emergency
situations. Temporary water
heater provided to ensure no
service interruptions.

Item 6
Nov '20 - Ongoing Jun '23- Aug '23 Aug '23- Feb '24 Mar '24 Apr - Jul '24 Winter '24 BOD approves
expanded
electrification
SFI program
scoping

PCE RFP
released

SVCE BOD
approval of
contract
Program design
Program launch
Program launch
for turnkey
installation
incentives
FutureFit Homes
Consultant
selection Contract
executed
for low-income
customers and
emergency water
launches and
continues
adjustments
Contract
negotiations

PCE BOD
approval of
contract
heater services
Agenda Item: 6 Agenda Date: 3/13/2024

Program
Element
(1) No-cost installation (2) Cost-share turnkey
installation
(3) Emergency water
heater replacement
remediation, air quality
measures, and permitting.
quality measures, and
permitting.

Project
Cost-to-Customer
None. Any project costs not
covered by state/regional
incentives are covered by
SVCE.

Customer accesses pre-negotiated fixed pricing offered
by program. Customer pays for
project costs less all the
available incentives (SVCE and
state/regional).

No cost for low-income
customers. SVCE covers cost.

Market-rate customers pay
for project costs less all the
available incentives.

Audience Low-income Market-rate All customers
Target
Homes
250 350 650
Workforce
Support
SVCE will pay prevailing wage rates although it is not legally required for single-family installation projects. This helps to support the program’s contractor workforce. As the program scales, Franklin Energy will vet additional contractors for consideration in the program.

Some of the specifics in these program elements may be adjusted during the final design of the program with PCE and Franklin Energy, or based on customer and stakeholder input as the program is launched.

STRATEGIC PLAN
The Single-Family Home Installation program supports SVCE’s Strategic Plan Goal 14, Measure 2 to “lead programs on decarbonization focus areas” including the built environment.

ALTERNATIVE
Staff could pursue alternative designs to address single-family electrification, including adding funding to existing programs, such as FutureFit Homes or Go Electric Advisor. However, this single-family installation service with Franklin Energy is a critical opportunity to innovate and test this approach along with SVCE’s other ongoing programs. The end objective is to cost-effectively reach a broad audience of customers who may not be very invested in electrification by making it as convenient and easy as possible – an important set of customers to learn how best to reach to scale adoption.

FISCAL IMPACT
The program funding of $14 million for this program is already reflected in the total Board-approved programs allocation. Approval of this contract with Franklin Energy, therefore, will have no incremental fiscal impact.

ATTACHMENTS

1. Draft Agreement between SVCE and Franklin Energy Services, LLC for Single-Family Home Installation Program
Item 6
1 AGREEMENT BETWEEN THE SILICON VALLEY CLEAN ENERGY AUTHORITY AND

FRANKLIN ENERGY SERVICES, LLC
FOR

SINGLE-FAMILY HOME INSTALLATION PROGRAM
THIS AGREEMENT (“Agreement”), is entered into this 13 day of March, 2024, by and between the SILICON VALLEY CLEAN ENERGY AUTHORITY, an independent public agency, ("Authority"), and Franklin Energy Services, LLC., a Delaware limited liability company, located at 102 N. Franklin St, Port Washington, Wisconsin 53074 (hereinafter referred to as "Consultant") (collectively referred to as the “Parties” and individually as a “Party”).

RECITALS:

A. Authority is an independent public agency duly organized under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.) (“Act”) with the power to conduct its business and enter into agreements.

B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement pursuant to the terms and conditions described herein.

C. Authority and Consultant desire to enter into an agreement for single-family electrification installation services and water heater replacement services upon the terms and conditions herein.

NOW, THEREFORE, the Parties mutually agree as follows:

1. TERM
The term of this Agreement shall commence on March 13, 2024, and shall terminate on March 13, 2027, unless terminated earlier as set forth herein.

2. SERVICES TO BE PERFORMED
Consultant shall perform each and every service set forth in Exhibit "A" pursuant to the schedule of performance set forth in Exhibit "B," both of which are attached hereto and incorporated herein by this reference.

3. COMPENSATION TO CONSULTANT
Consultant shall be compensated for services performed pursuant to this Agreement in a total amount not to exceed fourteen million dollars ($14,000,000.00) based on the rates and terms set forth in Exhibit "C," which is attached hereto and incorporated herein by this reference.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 2 4. TIME IS OF THE ESSENCE
Consultant and Authority agree that time is of the essence regarding the performance of this Agreement.

5. STANDARD OF CARE
Consultant agrees to perform all services required by this Agreement in a manner commensurate with the prevailing standards commercially trained professionals under similar circumstances and in a manner reasonably satisfactory to Authority and agrees that all services shall be performed by qualified and experienced personnel. Consultant shall be responsible to Authority for any errors or omissions in the performance of work as described and specified in the applicable Scope of Services. Should any errors caused by Consultant be found in such services or products, Consultant shall correct the errors at no additional charge to Authority by redoing the professional work and/or revising the work product(s) specified for in the Scope of Services to eliminate the errors. Should Consultant fail to make such correction in a within ten (10) days, or a longer period of time to be mutually agreed to between the parties such correction may be made by Authority, and the cost thereof shall be charged to Consultant. In addition to all other available remedies, Authority may deduct the cost of such correction from any retention amount held by Authority or may withhold payment otherwise owed Consultant under this Agreement up to the amount of the cost of correction.

6. INDEPENDENT PARTIES
Authority and Consultant intend that the relationship between them created by this Agreement is that of an independent contractor. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. No civil service status or other right of employment will be acquired by virtue of Consultant's services. None of the benefits provided by Authority to its employees, including but not limited to, unemployment insurance, workers’ compensation plans, vacation and sick leave are available from Authority to Consultant, its employees or agents. Deductions shall not be made for any state or federal taxes, FICA payments, PERS payments, or other purposes normally associated with an employer-employee relationship from any fees due Consultant. Payments of the above items, if required, are the responsibility of Consultant.

7. NO RECOURSE AGAINST CONSTITUENT MEMBERS OF

AUTHORITY
Authority is organized as a Joint Powers Authority in accordance with the Joint Powers Act of the State of California (Government Code Section 6500 et seq.) pursuant to a Joint Powers Agreement dated March 31, 2016, and is a public entity separate from its constituent members. Authority shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Consultant shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Authority’s constituent members in connection with this Agreement.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3 8. NON-DISCRIMINATION
In the performance of this Agreement, Consultant, and any subconsultant under the Consultant, shall not discriminate against any employee, subcontractor or applicant for employment because of race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information, sexual orientation, military or veteran status, or other basis prohibited by law, except as provided in Government Code section 12940. Consultant shall have responsibility for compliance with this Section.

9. HOLD HARMLESS AND INDEMNIFICATION
A. General Indemnification. To the fullest extent permitted by law, Consultant shall, at its sole cost and expense, defend, hold harmless and indemnify Authority and its elected officials, officers, attorneys, agents, employees, designated volunteers, successors, assigns and those Authority agents serving as independent contractors in the role of Authority officials (collectively “Indemnitees”), from and against any and all third party claims, damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including fees of accountants, attorneys, or other professionals and all costs associated therewith (collectively “Liabilities”) directly caused by or arising out of the actions or omissions of Consultant, its officers, agents, servants, employees, subcontractors, materialmen, consultants or their officers, agents, servants or employees (or any entity or individual that Consultant shall bear the legal liability thereof) resulting in (i) bodily injury to, or death of, persons or damage to or destruction of property directly caused or arising out of Consultants performance of Services under the applicable SOW in connection with or incident to the performance of the Services, or any destruction, or unauthorized access, use, or theft of data or (ii) third party allegations that any services or deliverables, or any portion thereof infringe that third party’s copyright, patent, trademark, trade, name, trade secret, or any other intellectual property rights, provided that Consultant shall provide no indemnification and assume no liability to the extent any infringement, violation, trespass, or unauthorized us or misappropriation of any IP rights, that results from the Authority combining or modifying the services or materials provided to the Authority by the Consultant without permission of Consultant; except to the extent such Liabilities are caused by the Authority’s negligence or willful misconduct.

B. Consultants indemnification obligations under this Agreement are conditioned on (i) the Authority providing timely notice of any claim or proceeding to the Consultant under which it intends to seek to enforce the indemnification obligations; provided, however, that an Authority’s failure to notify the Consultant under this Section 9(B) will relieve the Consultant of its obligations under Section 9(A) only if and only to the extent the Consultant was prejudiced by not receiving timely notice of the claim , and (ii) the Authority fully cooperating with the Consultant, including making all defenses available to the Consultant that would be available to the Authority.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 4 C. The acceptance of the services by Authority shall not operate as a waiver of these rights of indemnification. The hold harmless and indemnification provisions of this Section shall apply regardless of whether or not any insurance policies are determined to be applicable to the Liability.

D. Consultant’s indemnifications and obligations under this section shall survive the expiration or termination of this Agreement.

E. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR

INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED

TO LOSS OF PROFIT, LOSS OF REVENUE OR LOSS OF OPPORTUNITY IN CONNECTION WITH THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY’S

LIABILITY FOR DIRECT DAMAGES RELATED TO THIS AGREEMENT EXCEED THE AMOUNT PAID BY THE AUTHORITY TO CONSULTANT DURING THE TWELVE (12)

MONTHS IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM,

EXCLUDING SUCH CLAIMS ARISING FROM THE RESPECTIVE GROSS NEGLIGENCE

OR WILLFUL MISCONDUCT OF THE PARTY, INTELLECTUAL PROPERTY CLAIMS

AND DATA BREACH CLAIMS THESE LIMITATIONS OF LIABILITY APPLY

REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, OR

OTHERWISE, EVEN IF NOTIFIED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES.

F. Required clause to be included in Subcontractor Agreements: Subcontractor Release of Claims Against, and Hold Harmless of Authority “Consultant/Subcontractor used by Franklin Energy to provide services for Silicon Valley Clean Energy (SVCE) discharges and releases SVCE and its officers, employers, employees, and agents from and against any and all claims, demands, liabilities, obligations, damages or chose in action, legal or equitable, of whatever kind or nature, including negligence by SVCE, in which Consultant/Subcontractor, and Consultant/Subcontractor’s successors in interest, heirs, estates or personal representatives, or family members, now may have or assert, or may have had in the past or may have in the future, against SVCE as the result of, based upon, arising out of, or connected with SVCE’s involvement with the Project. Consultant/Subcontractor is on notice of and hereby specifically and expressly waives the provisions of California Civil Code § 1542, which provides that a “general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. Consultant/Subcontractor also agrees to indemnify and hold harmless SVCE from any and all claims, actions, suits, procedures, costs, expenses, damages, and liabilities, including attorney’s fees and costs, brought as a result of SVCE’s involvement with the Project, and to reimburse SVCE for any such expenses incurred.” For purposes of this provision, Authority is hereby intended to be a third-party beneficiary of any and all contracts executed by Consultant to implement this Agreement, pursuant to California Civil Code § 1559.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 5 10. INSURANCE
A. General Requirements. On or before the commencement of the term of this Agreement, Consultant shall furnish Authority with certificates showing the type, amount, type of operations covered, effective dates and dates of expiration of insurance coverage in compliance with the requirements listed in Exhibit "D," which is attached hereto and incorporated herein by this reference. Such insurance and certificates, shall not limit Consultant’s indemnification obligations under this Agreement, Consultant shall provide thirty (30) days’ advance written notice of cancellation, except (10) days for non-payment of premium, to the Authority by certified mail, Attention: Chief Executive Officer." Consultant shall maintain in force at all times during the performance of this Agreement all appropriate coverage of insurance required by this Agreement with an insurance company carrying an AM Best Rating of A-II or Better that is acceptable to Authority and licensed to do insurance business in the State of California. Endorsements naming the Authority as additional insured shall be submitted with the insurance certificates.

B. Subrogation Waiver. Consultant agrees that in the event of loss due to any of the perils for which he/she has agreed to provide comprehensive general and automotive liability insurance, Consultant shall look solely to his/her/its insurance for recovery. Consultant hereby grants to Authority, on behalf of any insurer providing comprehensive general and automotive liability insurance to either Consultant or Authority with respect to the services of Consultant herein, a waiver of any right to subrogation which any such insurer of Consultant may acquire against Authority by virtue of the payment of any loss under such insurance.

C. Subconsultants. Consultant shall require that all subconsultants maintain the same minimum insurance requirements as set forth herein. In Authority’s sole discretion, it may require subconsultants to maintain different types of insurance as required by the type of work performed (for example only, builder’s risk), and may allow subconsultants to maintain a an amount different from those set forth herein, so long as Consultant’s insurance will cover any gaps in coverage. Consultant and any subconsultants shall not require customer insurance to be primary.

D. Additional Insured. Authority, its members, officers, employees and volunteers shall be named as additional insureds under all insurance coverages, except any professional liability insurance, required by this Agreement. The naming of an additional insured shall not affect any recovery to which such additional insured would be entitled under this policy if not named as such additional insured. An additional insured named herein shall not be held liable for any premium, deductible portion of any loss, or expense of any nature on this policy or any extension thereof. Any other insurance held by an additional insured shall not be required to contribute anything toward any loss or expense covered by the insurance provided by this policy.

E. Sufficiency of Insurance. The insurance limits required by Authority are not represented as being sufficient to protect Consultant. Consultant is advised to confer with Consultant's insurance broker to determine adequate coverage for Consultant. Insurance limits do not limit Consultant’s indemnity or other liability obligations under this Agreement.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 6 11. CONFLICT OF INTEREST
Consultant warrants that it, its officers, employees, associates and subcontractors, presently have no interest, and will not acquire any interest, direct or indirect, financial or otherwise, that would conflict in any way with the performance of this Agreement, and that it, its officers, employees, associates and subcontractors, will not employ any person having such an interest. Consultant and its officers, employees, associates and subcontractors, if any, shall comply with all conflict of interest statutes of the State of California applicable to Consultant’s services under this Agreement, including the Political Reform Act (Gov. Code § 81000, et seq.) and Government Code Section 1090. During the term of this Agreement, Consultant may perform similar services for other clients, but Consultant and its officers, employees, associates and subcontractors shall not, without the Authority Representative’s prior written approval, perform work for another person or entity for whom Consultant is not currently performing work that would require Consultant or one of its officers, employees, associates or subcontractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Consultant shall incorporate a clause substantially similar to this section into any subcontract that Consultant executes in connection with the performance of this Agreement. Consultant understands that it may be required to fill out a conflict of interest form if the services provided under this Agreement require Consultant to make certain governmental decisions or serve in a staff Authority, as defined in Title 2, Division 6, Section 18700 of the California Code of Regulations.

12. PROHIBITION AGAINST TRANSFERS
Consultant shall not assign, sublease, hypothecate, or transfer this Agreement, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of Authority. Any attempt to do so without such consent shall be null and void, and any assignee, sublessee, pledgee, or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer, provided, however, that the Consultant may in its discretion assign this Agreement or any of its rights or obligations under this Agreement to any parent, subsidiary or affiliated business entity of the Consultant or in the event of a merger, acquisition, the sale or transfer of majority of the assets, or change of control, so long as it provides written notice to Authority within thirty (30) days of assignment. Additionally, claims for money by Consultant from Authority under this Agreement may be assigned to a bank, trust company or other financial institution without prior written consent. Written notice of such assignment shall be promptly furnished to Authority by Consultant.

The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant, if Consultant is a partnership or joint venture or syndicate or cotenancy, which shall result in changing the control of Consultant, shall be construed as an assignment of this Agreement. Control means fifty percent (50%) or more of the voting power of the corporation.

13. SUBCONTRACTOR APPROVAL
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 7 Unless prior written consent from Authority is obtained, only those persons and subcontractors whose names are attached to this Agreement shall be used in the performance of this Agreement.

In the event that Consultant employs subcontractors, such subcontractors shall be required to furnish proof of workers’ compensation insurance and shall also be required to carry general, automobile and professional liability insurance in substantial conformity to the insurance carried by Consultant. In addition, any work or services subcontracted hereunder shall be subject to each provision of this Agreement.

Consultant agrees to include within their subcontract(s) with any and all subcontractors the same requirements and provisions of this Agreement, including the indemnity and insurance requirements, to the extent they apply to the scope of the subcontractor’s work. Consultant shall also require that all subcontractors maintain all necessary licenses and insurance and comply with all applicable laws for the type of work performed under this Agreement. Subcontractors hired by Consultant shall agree to be bound to Consultant and Authority in the same manner and to the same extent as Consultant is bound to Authority under this Agreement. Subcontractors shall agree to include these same provisions within any sub-subcontract. Consultant shall provide a copy of the Indemnity and Insurance provisions of this Agreement to any subcontractor. Consultant shall require all subcontractors to provide valid certificates of insurance and the required endorsements prior to commencement of any work and will provide proof of compliance to Authority, provided, Authority may allow, in its sole discretion, for a reduction in insurance requirements for subcontractors if the scope of subcontractor work does not necessitate all coverages or levels of coverage.

Authority approves the following anticipated subconsultants and their performance of the tasks noted below:

Table 1 – Anticipated Subconsultants
Anticipated
Subconsultant
Role Exhibit “A” Scope of Services Tasks
Vistar Energy,
Inc. (see Exhibit
“E” for
anticipated Scope
of Services and
Payment Terms)
Development of Home
Assessment tool
• Task 1 - Program design and set up
• Task 4 – Direct Install Implementation
• Task 5 - Cost-share Turnkey
Implementation
FUSE Service
Inc.

CSLB1#:
1052421
Eligible Measure
installation services
• Task 4 – Direct Install Implementation
• Task 5 - Cost-share Turnkey
Implementation
• Task 6 – Emergency Water Heater
Replacement Implementation
1 Contractors State License Board
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 8 Enso Building
Solutions Inc.

CSLB#: 1102528
Eligible Measure
installation services
• Task 4 – Direct Install Implementation
• Task 5 - Cost-share Turnkey
Implementation
• Task 6 – Emergency Water Heater
Replacement Implementation
Efficient Modern
Heat Pump –
HVAC dba
Electrify My
Home
CSLB #: 1070343
Eligible Measure
installation services
• Task 4 – Direct Install Implementation
• Task 5 - Cost-share Turnkey
Implementation
• Task 6 – Emergency Water Heater
Replacement Implementation

14. REPORTS
A. Each and every report, draft, work product, map, record and other document, hereinafter collectively referred to as "Report", reproduced, prepared or caused to be prepared by Consultant pursuant to or in connection with the applicable Scope of Services, shall be the exclusive property of Authority. Consultant shall not copyright any Report required by this Agreement and shall execute appropriate documents to assign to Authority the copyright to Reports created pursuant to this Agreement. Any Report, information and data acquired or required by this Agreement shall become the property of Authority, and all publication rights are reserved to Authority. Consultant may retain a copy of any Report furnished to the Authority pursuant to this Agreement.

B. All Reports prepared by Consultant may be used by Authority in execution or implementation of: (1) The original project for which Consultant was hired; (2) Completion of the original project by others; (3) Subsequent additions to the original project; and/or (4) Other Authority projects as Authority deems appropriate in its sole discretion.

C. Consultant shall, at such time and in such form as Authority may require, furnish reports concerning the status of services required under this Agreement.

D. All Reports shall also be provided in electronic format.

E. No Report, information or other data given to or prepared or assembled by Consultant pursuant to this Agreement that has not been publicly released shall be made available to any individual or organization by Consultant without prior approval by Authority.

F. Authority shall be the owner of and shall be entitled upon request to immediate possession of accurate reproducible copies of Reports or other pertinent data and information gathered or computed by Consultant prior to termination of this Agreement or upon completion of the work pursuant to the applicable Scope of Services.

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Draft Agreement: Franklin Energy Services, LLC and SVCE 9 15. RECORDS
Consultant shall maintain complete and accurate records with respect to costs, expenses, receipts and other such information required by Authority that relate to the performance of services under this Agreement, in sufficient detail to permit an evaluation of the services and costs. For Tasks 4, 5, and 6 of the Scope of Work, the work will be invoiced per the pre-negotiated pricing established in this contract. All such records shall be clearly identified and readily accessible. Consultant shall provide to the Authority, or its representatives, access to such books and records upon five (5) days written notice at the Consultant’s place of business during normal working hours, or electronically, and at Authority’s sole expense and gives Authority the right to examine and audit same, and to make transcripts therefrom as necessary, and to allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a minimum period of five (5) years after Consultant receives final payment from Authority for all services required under this agreement

16. PARTY REPRESENTATIVES
The Chief Executive Officer (“Authority Representative”) shall represent the Authority in all matters pertaining to the services to be performed under this Agreement. Justin Kjeldsen (Consultant Representative”) shall represent Consultant in all matters pertaining to the services to be performed under this Agreement.

17. CONFIDENTIAL INFORMATION AND DOCUMENTS
A. Consultant covenants that all data, reports, documents, discussion, or other information (collectively “Data”) developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed or released by Consultant without prior written authorization by Authority. Authority shall grant such authorization if applicable law requires disclosure. Consultant, its officers, employees, agents, or subcontractors shall not without written authorization from the Authority Representative or unless requested in writing by the Authority Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the Authority. Response to a subpoena or court order shall not be considered “voluntary,” provided Consultant gives Authority notice of such court order or subpoena, unless prevented by applicable law.

B. Consultant shall promptly, unless prevented by applicable law, notify Authority should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed thereunder or with respect to any project or property located within the Authority. Authority may, but has no obligation to, represent Consultant or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with Authority and to provide Authority with the opportunity to review any response to discovery Item 6
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Draft Agreement: Franklin Energy Services, LLC and SVCE 10 requests provided by Consultant. However, Authority’s right to review any such response does not imply or mean the right by Authority to control, direct or rewrite the response.

C. In the event Authority gives Consultant written notice of a “litigation hold”, then as to all data identified in such notice, Consultant shall, at no additional cost to Authority, isolate and preserve all such data pending receipt of further direction from the Authority.

D. Consultant agrees to comply with the confidentiality and data protection provisions set forth in Exhibit “E,” attached hereto and incorporated herein by this reference.

E. Consultant’s covenants under this section shall survive the expiration or termination of this Agreement.

F. It is understood that Authority is subject to the California Public Records Act (Gov.

Code § 7920.000 et seq., “Public Records Act”). If a request under the Public Records Act is made to view Consultant’s designated confidential information, Authority will notify Consultant of the request and the date that such records will be released to the requester unless Consultant obtains a court order enjoining that disclosure. If Consultant fails to obtain a court order enjoining that disclosure, Authority will release the requested information on the date specified.

18. NOTICES
Any notice, consent, request, demand, bill, invoice, report or other communication required or permitted under this Agreement shall be in writing and conclusively deemed effective: (a) on personal delivery, (b) on confirmed delivery by courier service during Consultant’s and Authority’s regular business hours, or (c) three Business Days after deposit in the United States mail, by first class mail, postage prepaid, and addressed to the Party to be notified as set forth below:

TO Authority:
333 W. El Camino Real
Suite 330
Sunnyvale CA 94087
Attention: Chief Executive Officer
TO CONSULTANT:

Franklin Energy Services, LLC
102 N. Franklin Street
Port Washington, WI 53074
With copy to:

Franklin Energy Services, LLC
Legal Department
102 N. Franklin Street
Port Washington, WI 53074
[email protected]
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Draft Agreement: Franklin Energy Services, LLC and SVCE 11 19. TERMINATION
In the event Consultant fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, Consultant shall be deemed in default in the performance of this Agreement. If Consultant fails to cure the default within the time specified (which shall be determined by the Authority but shall be not less than ten (10) days) and according to the requirements set forth in Authority’s written notice of default, and in addition to any other remedy available to the Authority by law, the Authority Representative may terminate the Agreement by giving Consultant thirty (30) days written notice if such cure is not completed. Authority Representative shall also have the option, at its sole discretion and without cause, of terminating this Agreement by giving thirty (30) days' prior written notice to Consultant as provided herein.

Upon receipt of any notice of termination, Consultant shall immediately discontinue performance. The Authority will compensate Consultant for all unpaid, undisputed amounts due prior to the termination date. In the event of Authority’s termination of this Agreement due to no fault or failure of performance by Consultant, Authority shall pay Consultant for services satisfactorily performed up to the effective date of termination, plus, all unpaid, undisputed amounts due prior to the termination date. Upon termination, Consultant shall promptly deliver to the Authority any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by Consultant or given to Consultant, in connection with this Agreement. Such materials shall become the property of Authority.

20. COMPLIANCE WITH LAWS
Consultant shall keep itself informed of all applicable federal, state and local laws, ordinances, codes, regulations and requirements which may, in any manner, affect those employed by it or in any way affect the performance of its services pursuant to this Agreement. Consultant shall, at all times, observe and comply with all such laws and regulations, including, but not limited to the Americans with Disabilities Act, the Stored Communications Act, 18 U.S.C. Section 2701, et seq., California Civil Code Sections 1798.80 through 1798.84, and the California Consumer Privacy Act, Civil Code Section 1798.100 et seq. Authority, and its officers and employees, shall not be liable at law or in equity by reason of the failure of the Consultant to comply with this paragraph.

Consultant represents and agrees that all personnel engaged by Consultant in performing services are and shall be fully qualified and are authorized or permitted under state and local law to perform such services. Consultant represents and warrants to Authority that it has all licenses, permits, certificates, qualifications, and approvals required by law to provide the services and work required to perform services under this Agreement, including a business license. Consultant further represents and warrants that it shall keep in effect all such licenses, permits, and other approvals during the term of this Agreement.

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Draft Agreement: Franklin Energy Services, LLC and SVCE 12 Consultant understands and agrees that it is Authority's requirement that the Consultant, including both its assignees and subcontractors for the installation of equipment as described in "Exhibit A Scope of Services" be subject to the payment of prevailing wage and Consultant and any subcontractors, shall be fully responsible for complying with all California public works requirements including but not limited to payment of prevailing wage. Consultant shall be responsible for ensuring subcontractor/assignee compliance during the Term and shall notify Authority of any noncompliance as soon as it is discovered.

At Authority's discretion, Authority may, but is not obligated to, require Consultant to remove a subcontractor from performance of work pursuant to the Agreement if it is found to be noncompliant with this section.

Consultant hereby certifies that it owns, controls, or licenses and retains all right, title, and interest in and to any intellectual property it uses in relation to this Agreement, including the design, look, feel, features, source code, content, and other technology relating to any part of the services and including all related patents, inventions, trademarks, and copyrights, all applications therefor, and all trade names, service marks, know how, and trade secrets (collectively referred to as “IP Rights”), except as otherwise expressly provided by this Agreement. Consultant warrants that the services to be provided pursuant to this Agreement do not infringe, violate, trespass, or constitute the unauthorized use or misappropriation of any IP Rights of any third party.

21. CONFLICT OF LAW
This Agreement shall be interpreted under, and enforced by the laws of the State of California. The Agreement and obligations of the Parties are subject to all valid laws, orders, rules, and regulations of the authorities having jurisdiction over this Agreement (or the successors of those authorities). Any suits brought pursuant to this Agreement shall be filed with the Superior Court of the County of Santa Clara, State of California.

22. ADVERTISEMENT
Consultant shall not post, exhibit, display or allow to be posted, exhibited, displayed any signs, advertising, show bills, lithographs, posters or cards of any kind pertaining to the services performed under this Agreement unless prior written approval has been secured from Authority to do otherwise.

23. WAIVER
A waiver by Authority of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character.

24. INTEGRATED CONTRACT
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Draft Agreement: Franklin Energy Services, LLC and SVCE 13 This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Agreement will be effective only by a written document signed by both Authority and Consultant.

25. AUTHORITY
The individual(s) executing this Agreement represent and warrant that they have the legal Authority and Authority to do so on behalf of their respective legal entities.

26. INSERTED PROVISIONS
Each provision and clause required by law to be inserted into the Agreement shall be deemed to be enacted herein, and the Agreement shall be read and enforced as though each were included herein. If through mistake or otherwise, any such provision is not inserted or is not correctly inserted, the Agreement shall be amended to make such insertion on application by either Party.

27. CAPTIONS AND TERMS
The captions in this Agreement are for convenience only, are not a part of the Agreement and in no way affect, limit or amplify the terms or provisions of this Agreement.

28. AUTHORITY’S RIGHTS TO EMPLOY OTHER CONSULTANTS
Authority reserves the right to employ other consultants in connection with the subject matter of the Scope of Services.

29. EXHIBITS
The Exhibits referenced in this Agreement are attached hereto and incorporated herein by this reference as though set forth in full in the Agreement. If any inconsistency exists or arises between a provision of this Agreement and a provision of any exhibit, or between a provision of this Agreement and a provision of Consultant’s proposal, the provisions of this Agreement shall control.

30. FORCE MAJEURE
Consultant shall not be liable for any failure to perform its obligations under this Agreement if Consultant presents acceptable evidence, in Authority’s sole judgment, that such failure was due to acts of God, embargoes, inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental controls, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, pandemics, epidemics or other causes beyond Consultant’s reasonable control and not due to any act by Consultant.

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Draft Agreement: Franklin Energy Services, LLC and SVCE 14 31. FINAL PAYMENT ACCEPTANCE CONSTITUTES RELEASE
The acceptance by Consultant of the final payment made under this Agreement shall operate as and be a release of Authority from all claims and liabilities for compensation to Consultant for anything done, furnished or relating to Consultant’s work or services. Acceptance of payment shall be any negotiation of Authority’s check or the failure to make a written extra compensation claim within ten calendar days of the receipt of that check. However, approval or payment by Authority shall not constitute, nor be deemed, a release of the responsibility and liability of Consultant, its employees, subcontractors and agents for the accuracy and competency of the information provided and/or work performed; nor shall such approval or payment be deemed to be an assumption of such responsibility or liability by Authority for any defect or error in the work prepared by Consultant, its employees, subcontractors and agents, provided the Authority will provide such written acceptance within thirty (30) days of receipt of final invoice from Consultant.

32. ATTORNEY FEES
In any litigation or other proceeding by which a Party seeks to enforce its rights under this Agreement (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing Party shall be entitled to recover all attorneys’ fees, experts’ fees, and other costs actually incurred in connection with such litigation or other proceeding, in addition to all other relief to which that Party may be entitled.

33. SEVERABILITY
If any provision in this Agreement is held by a court of competent jurisdiction to be illegal, invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way.

34. SUCCESSORS AND ASSIGNS
The terms and conditions of this Agreement shall be binding on the successors and assigns of the Parties to this Agreement.

35. NO THIRD PARTY BENEFICIARIES INTENDED
This Agreement is made solely for the benefit of the Parties to this Agreement and their respective successors and assigns, and no other person or entity may have or acquire a right by virtue of this Agreement.

36. COUNTERPARTS; FACSIMILE/PDF/ELECTRONIC SIGNATURE
This Agreement may be executed in multiple counterparts, all of which shall be deemed an original, and all of which will constitute one and the same instrument. The Parties agree that a Item 6
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Draft Agreement: Franklin Energy Services, LLC and SVCE 15 facsimile, PDF or electronic signature may substitute for and have the same legal effect as the original signature.

37. DRAFTING PARTY
This Agreement shall be construed without regard to the Party that drafted it. Any ambiguity shall not be interpreted against either Party and shall, instead, be resolved in accordance with other applicable rules concerning the interpretation of contracts.

IN WITNESS WHEREOF, the Parties have caused the Agreement to be executed as of the date set forth above.

RECOMMENDED FOR APPROVAL
_____________________________
Justin Zagunis, Director of Decarbonization Programs and Policy

RECOMMENDED FOR APPROVAL
__________________________________________________________ Amrit Singh, Chief Financial Officer/Director of Administrative Services Franklin Energy Services, LLC
By: ________________________
Name: Grace Wu
Title: Chief Operations Officer
Date: __________________________

SILICON VALLEY CLEAN ENERGY

AUTHORITY
A Joint Powers Authority
By: ___________________________
Name: Girish Balachandran
Title: Chief Executive Officer
Date: __________________________
APPROVED AS TO FORM:
_______________________
Counsel for Authority
ATTEST:
_____________________
Authority Clerk
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Exhibit A
Scope of Services
Consultant shall provide the Services detailed in this Exhibit A, entitled “Scope of Services.” Silicon Valley Clean Energy Authority’s (“Authority”) mission is to provide clean, carbon-free electricity at competitive rates, and to work with its member communities to reduce GHG emissions. One key avenue for this is through customer decarbonization programs. Authority has developed several programs roadmaps/plans and been deploying programs since 2019. A key focus of such programs is to provide incentives and technical assistance for building electrification2.

While incentives and technical assistance may assist early adopters in transitioning to all-electric buildings or vehicles, deeper assistance is needed to reach underserved customers. For many such customers, the economic, logistical, and technological barriers to electrification are significant. Therefore, Authority envisions a program that provides building electrification installation services to single-family or small multifamily residences, up to four units, with no central systems (hereafter referred to by the working title “Single-family Installation Program”).

Consultant will leverage its technical expertise and local experience to deliver the Single-family Installation Program to eligible Authority customers.

I. Overview of Single-family Installation Program
The Single-family Installation Program will provide installation services for building electrification upgrades. This will include project advising and planning, building evaluations, site visits, permitting, equipment installation, and assistance with applicable third-party incentives and financing. The intent of these services is to remove financial, workforce, and implementation barriers in transitioning participating single-family properties to all-electric equipment and appliances. Authority intends to demonstrate the success of such a program in the Bay Area and identify challenges and solutions for future scalability.

The Single-family Installation Program will include three program elements:

1. Income-qualified direct install electrification (“Direct Install”) – This element will provide no-cost direct installation services3for Eligible Measures, as outlined in Exhibit C, Table C-3, to eligible low-income customers living in single-family residences.

2. Cost-share turnkey electrification (“Cost-share Turnkey”) – This element will provide turnkey installation services4for electrification measures to market-rate customers living in single-family residences. Wiring, circuitry, plumbing, carpentry, and 2 Defined as the replacement of natural gas equipment for space heating, water heating, cooking, and clothes drying with efficient electric alternatives.
3 Direct installation means start-to-finish installation of equipment at no cost to the customer. 4 Turnkey installation means start-to-finish installation of equipment, which includes a Cost-share Payment contribution from the customer
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Draft Agreement: Franklin Energy Services, LLC and SVCE A-2
other services required to enable the installation of the equipment will be included in the installation.

3. Emergency Water Heater Replacement - This element will provide rapid replacement of failing natural gas water heaters with a heat pump water heater under qualified conditions. If remediation is required, such as an electrical circuit, a loaner gas water heaters may be installed to ensure there is no service interruption while work proceeds through the Direct Install or Cost-share Turnkey services.

A) Single-family Installation Program Goals and Objectives The intent of the Single-family Installation Program is to make the transition to all-electric construction as simple and easy as possible for single-family residences. The overarching goals of the Single-family Installation program are to: (1) reduce greenhouse gas emissions, and (2) efficiently and cost-effectively scale building electrification at single-family residences.

The program objectives in support of the Program goals are:

1. Ensure an affordable and easily accessible option for Authority customers to electrify their homes, including for emergency replacements.

2. Provide safer, healthier, resilient, zero carbon homes with improved indoor air quality, resilience, and lower energy bills.

3. Electrify low-income homes in Authority territory with a target of serving at least 250 Direct Install customers, 350 Cost-share Turnkey customers, and 650 Emergency Water Heater Replacement customers.

4. Establish dedicated crews of trusted, experienced installers with high quality equipment capable of whole home electrification using advanced methods to minimize the need to upgrade PG&E service lines.

5. Encourage establishment of sustainable and diverse electrification workforce.

6. Leverage all possible local, state, and federal electrification incentives to reduce Authority and/or customer’s direct costs.

7. Support Authority’s load-shaping needs.

B) Service Level Expectations (SLE)
The Service Level Expectations (SLEs) set minimum requirements for how a customer receives program services. The intent of the SLEs is to deliver timely, quality services and maintain high customer satisfaction. Consultant will track and aim to achieve the following SLEs:

1. Emergency replacements or loaners equipment must be installed within 48 hours of customer call including weekends and holidays.

2. For homes receiving a single electrification measure, install and energize equipment within 30 days of customer enrollment5, barring PG&E service upgrade delays or 5 Customer enrollment is determined upon receiving the customer’s signed and completed Program Participation Agreement
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building department-mandated delays regarding planning or building department permit review.

3. For homes receiving whole-home electrification6and/or minor home repair, install and energize all equipment within 60 days of customer enrollment, barring PG&E service upgrade delays.

4. When functioning gas-fired appliances and equipment (water heater, space heater, stovetop, clothes dryer) are electrified through the program, electric replacements must be installed, functional, and operating within 48 hours of the gas appliance(s) removal.

5. Achieve 90% satisfaction rating for program services from customer surveys.

C) Single-family Installation Program Staffing
Consultant agrees to staff the Single-family Installation Program in accordance with the Staffing Plan set forth in Table A-1. Consultant will notify Authority in writing concerning proposed changes to the staffing plan, and all such changes will require the prior written consent of Authority.

Authority may (i) request Consultant conduct criminal background checks to Authority’s satisfaction on all Consultant’s staff that may enter customer premises, and (ii) require that any staff of Consultant that fails the background check will not be permitted to enter any customer premises.

Peninsula Clean Energy Authority (PCE) intends to implement similar Services described in Exhibit “A” Scope of Services and execute its own agreement with Consultant, pending Board approval. In the event that PCE executes its own agreement with Consultant, PCE and Authority will jointly administer the Single-family Installation Program with Consultant as set forth in this Exhibit “A” Scope of Services.

Table A-1 Single-family Electrification Program Staffing Plan Staff Role & Responsibilities
Justin Kjeldsen
Regional Director
[email protected]
Responsible for all program delivery and client
satisfaction.

Gina Melekh
Director of Business Development
[email protected]
Ensures client success and satisfaction.

Melina Corona
Program Manager
[email protected]
Will provide program administration and delivery.
6 Whole-home electrification means space heating, domestic hot water, clothes drying, and stoves/ovens are all-electric post-installation.

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Brett Bishop
Operations Project Manager
[email protected]
Will contribute subject matter expertise and field
operations oversight.

Home Assessor (2 positions)
To be hired upon contract execution
Will complete home assessments and provide
technical assistance to customers
Joel Pereda
Principal, Enso Building Solutions Inc
[email protected]
Executive leadership in delivery of installation
services as subcontractor to Franklin Energy
Services.

Michael Yafasov
Principal, Fuse Service Inc
[email protected]
Executive leadership in delivery of installation
services as subcontractor to Franklin Energy
Services.

Larry Waters
President, Electrify My Home
[email protected]
Executive leadership in delivery of installation
services as subcontractor to Franklin Energy
Services.

II. Single-family Installation Program Implementation & Delivery 1 Program Design and Set Up

1.1 Kickoff and Check-in Meetings
Consultant will develop an agenda and lead a program kickoff meeting with Authority to review program goals and objectives, budget, timeline, and administrative processes at a mutually determined date following contract execution.

After the kickoff meeting, the Consultant will set up check-in meetings on a biweekly recurring schedule for the duration of the period of performance, unless more frequent meetings are necessary as determined by Authority. For check-in meetings, Consultant will work with the Authority’s program manager(s) to determine the agenda at minimum one day prior to the meeting. Meetings will focus on program progress updates, reviewing deliverables, and determining expected milestones for the next meeting.

Task 1.1 Deliverable: Meeting agendas and meeting minutes

1.2 Provide Compliance Documentation
Consultant will provide Authority with documentation of insurance, all legally required certifications, and other requirements including for all subcontractors. If any materials are renewed or subcontractors changed, updated documents must be provided at that time, in accordance with the terms of the Agreement. Consultant will provide all subcontracts to Authority for review and approval to verify compliance with contract terms prior to execution.

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Major supplementary documentation developed while delivering these services must also be provided as determined by Authority. This supplementary documentation shall be defined as:
executed subcontracts, technical designs, permits, photographs of installed equipment, and materials developed for Authority and Consultant use.

Task 1.2 Deliverable: Compliance documentation, including for all subcontractors

1.3 Finalize Program Design and Strategy
Consultant will assist Authority in finalizing the program strategy, plan, and design. Prior to program launch, Consultant will:

1.3.1 Develop a detailed project timeline prior to kickoff meeting.

1.3.2 Refine plan for incorporating underserved community opportunities in workforce.

1.3.3 Co-develop with Authority refinements to Direct Install, Cost-Share Turnkey, and Emergency Water Heater Replacement services as needed.

1.3.4 Finalize Eligible Measures List, including measures outlined in “Exhibit C Table C-3”. At Authority’s discretion, the Eligible Measure List may include additional measures as described in Task 7 and agreed upon by Authority and Consultant.

1.3.5 Determine cost-share pricing structure and operations for Cost-Share Turnkey customers.

1.3.6 Determine approach for procuring equipment including selecting high-quality equipment providers with strong customer ratings for selected equipment and method for securing preferential pricing and any stocking needs.

1.3.7 Finalize staffing plan based on final services and program rollout timing.

1.4 Develop Program Handbook
Consultant will draft a Program Handbook for use by Authority and the Consultant. The Program Handbook will describe in greater detail the design, implementation, and policies of the Program.

Consultant will submit a draft of the Program Handbook to Authority for review and approval before finalizing. Consultant will provide written revisions and update to the Program Handbook upon Authority request. The Program Handbook will include the following:

1.4.1 Customer and property eligibility requirements for Direct Install, Cost-Share Turnkey, and Emergency Replacement.

1.4.2 The terms and conditions for eligible customers to participate in the program.

1.4.3 The process for enrolling customers in the program, including customer journey, operational steps, and developing program referrals.

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1.4.4 Eligible Measures List as outlined in Exhibit C, Table C-3, and any additional measures added as part of Task 7

1.4.5 List of third-party programs that can be co-delivered/leveraged through the program, including measures and incentive amounts, and process for how they are applied for and accounted for through the program.

1.4.6 Home Assessment methodology including the following:

1. List of criteria that would deem a project ineligible for planned services by equipment type or issue (e.g., water heaters in locations too small for a heat pump water heater, knob and tube wiring in home, electric service capacity issues, etc.)

2. Testing and assessing procedures and required certifications, as appropriate.

1.4.7 Field verification standards for Eligible Measures, including handling of hazardous materials (e.g., asbestos and lead safe practices).

1.4.8 The process for getting building permits, including considerations that may be unique to particular jurisdictions.

1.4.9 The process for installing equipment, including manufacturer’s and workmanship warranty documentation processes, health and safety protocols, and quality assurance.

1.4.10 The process for emergency replacement processing that enables a restoration of hot water within 48 hours of customer notice, and results in an electrified appliance at the end of the project.

1.4.11 The process for collecting customer payments for the Cost-Share Turnkey and Emergency Water Heater Replacement services, including customer invoices and payment schedule.

1.4.12 Dispute resolution guidelines and standard procedures including processes for handling customer and/or Subcontractor issues.

1.4.13 The process for providing Program Progress Reports (Task 1.10) and Monthly Expense Reports (Task 1.11).

1.4.14 The mechanism and process for ensuring prevailing wage compliance for Subcontractors, including reporting and auditing capabilities for Authority.

1.4.15 The process for performing door-to-door canvassing to generate qualified leads, including standard operating procedures, scripts, and other items as directed by Authority.

Task 1.4 Deliverable: Program Handbook
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1.5 Develop and Maintain Technical Design Guidelines
The Technical Design Guidelines will be used by Consultant to guide the development of each participating home’s Project Scope of Work.

The Technical Design Guidelines will be based on the following principles:

1. Maximizing decarbonization with high cost-effectiveness.

2. Favoring installation and operation simplicity and reliability.

3. Delivering operating cost, comfort and air quality benefits to homeowners, while mitigating adverse conditions such as noise.

4. Designing for grid benefits and resilience where possible.

5. Permitting requirements of the local jurisdictions; and

6. Avoiding service upgrades through power-efficient, whole system design whenever possible. All program contractors will be expected to be trained on this topic.

In collaboration with Authority, Consultant will develop and maintain Technical Design Guidelines. Consultant will:

1.5.1 Draft the Technical Design Guidelines to Authority for review and approval before finalizing. Technical Design Guidelines shall, at a minimum, include the following:

1. Installation guidelines and diagrams, if applicable, for Eligible Measures outlined in Exhibit C Table C-3, and any additional measures added as part of Task 7.

Eligible Measures will also include minor home repair measures and, in some cases, energy efficiency and resilience measures.

2. Installation guidelines and diagrams, if applicable, for approved New Program Measures, Technologies and Methods (Task 7).

3. Home scenarios and a decision tree.

4. Process and guidelines for decommissioning gas equipment, capping gas lines, and if appropriate or necessary coordination with PG&E to remove gas meter.

1.5.2 Monitor industry best practice through associations such as ASHRAE and other forums.

1.5.3 Provide written revisions and updates to the Technical Design Guidelines based on industry best practices, learnings from the Program, and any additional measures added as part of Task 7 every 12 months or as mutually deemed appropriate

1.5.4 Design Technical Design Guidelines to be public-facing and consistent with Authority’s Branding Guidelines.

Task 1.5 Deliverable: Technical Design Guidelines
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-8

1.6 Develop Home Assessment Template
Consultant will modify an existing Home Assessment Template for use in conjunction with the XeroHome software platform (see “Exhibit E for XeroHome Scope of Work and Payment Terms”) for Authority review and approval before use. Consultant will perform an in-home or virtual assessment and use the Home Assessment Template to document existing home conditions and equipment and determine measures’ suitability to develop a customized Scope of Work (Task 5.5.1). The Home Assessment will include the following elements regarding equipment and appliances located at the residential property:

1.6.1 An inventory of physical conditions, age, and estimated remaining lifespan(s) of equipment, appliances, and home conditions.

1.6.2 Evaluation of the condition and capacity of the existing electrical systems and recommended upgrades that may be necessary to enable the proposed measures.

1.6.3 Analysis of panel capacity for recommended measures and whole-home electrification (either meter-based or electric load calculations as needed) to ensure home can electrify on service capacity and determine appropriate approach to electrical layout.

1.6.4 Recommended locations for new electrical equipment, noting any observed space or structural constraints and possible remedies.

1.6.5 Photos and diagrams (site, equipment, etc.).

Task 1.6 Deliverable: Home Assessment Template

1.7 Develop Project Scope of Work Template
In coordination with Authority, Consultant will draft a Project Scope of Work template for Authority review and approval before use. The Project Scope of Work will be provided by the Consultant to the homeowner and will include information necessary for the homeowner to understand the electrification opportunities available to them. The Project Scope of Work will be provided in electronic format, and available via paper upon customer request. Consultant will provide revisions and updates to the Project Scope of Work template upon Authority request.

The Project Scope of Work template shall include the following elements:

1.7.1 Customer contact information (name, address, email, phone number)

1.7.2 Program contact information (email, phone number)

1.7.3 Recommended Eligible Measures (measure, quantity, cost)

1.7.4 Incentives (Authority and third-party rebates and incentives)

1.7.5 Financing options (Authority and third-party financing)

1.7.6 Cost (total and net of incentives)
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-9

1.7.7 Proposed workplan and timeline that will be executed if customer opts to receive services
Task 1.7 Deliverable: Project Scope of Work Template

1.8 Develop Program Participation Agreement
In coordination with Authority, the Consultant will draft a Program Participation Agreement(s) that includes terms and conditions of the program and grants the Consultant and its subcontractors permission to perform activities necessary to participate in the Program including site visits, building evaluations, equipment installation, and evaluation, measurement and verification (EM&V). The Program Participation Agreement will be developed in paper and electronic formats. The Participation Agreement shall be signed by homeowners at the time of enrollment.

Task 1.8 Deliverable: Program Participation Agreement

1.9 Enroll in State or Local Programs
Complementary regional, state, and federal electrification incentive programs (“third-party programs”) will be available during the program term, including but not limited to BayREN Home+, TECH Clean CA, CA Smart Energy Homes, GoGreen Financing, and the Inflation Reduction Act (IRA) electrification rebates. Maximizing third-party program incentives is necessary to reduce project costs across the Single-family Installation Program. Some third-party programs require enrollment as a qualified contractor to be eligible for incentives. As such:

1.9.1 Consultant and/or its Subcontractors shall enroll in third-party programs as directed by Authority and provide Authority with proof of enrollment.

1.9.2 During the program term, Consultant shall complete and submit applications for third-party programs for projects completed.

1.9.3 Consultant and/or its Subcontractors shall capture incentives from third-party programs and report on funds received and net Authority costs on Monthly Expense Report.

Task 1.9 Deliverable: Proof of enrollment in other incentive programs as directed by Authority.

1.10 Setup Customer Relationship Management (CRM) System & Data Exchange A customer relationship management (CRM) system is critical to manage the pipeline of projects in an easily searchable and reportable way and analyze program performance. Consultant shall:

1.10.1 Set up an electronic customer relationship management (CRM) for the Program.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-10

1.10.2 With Authority, jointly define all the data elements to be captured. Data elements shall include the following:

1. Customer contact information (name, address, phone, email);

2. Customer enrollment in Direct Install, Cost Share Turnkey, or Emergency Water Heater Replacement program element(s) and status for receiving services, including whether projects were declined by customer or infeasible with rationale;

3. Scheduled program activities, including date and time of site assessments, installations, inspections, etc.;

4. Customer’s Project Scope of Work and resulting job orders;

5. Photos or diagrams of site conditions prior to installation;

6. Equipment and measures installation costs (quoted, actual);

7. Completed customer forms and records, including Program Participation Agreement, building permits, and inspection reports;

8. Customer payments collected as shown on contractor invoicing;

9. Installed equipment and measures (quantity, model, wattage);

10. Third-party rebate and funding sources utilized (program name, incentive amount, measure).

1.10.3 Transfer data to Authority’s Salesforce CRM. With Authority, jointly define data to be transferred and the method and frequency of the automated data transfer.

1.10.4 Ensure data systems meet industry-standard security and that data is encrypted, at rest and in transit.

Task 1.10 Deliverable: Customer Relationship Management system and data exchange method
2 Administrative Reporting Tasks

2.1 Develop and Provide Program Process Reports
Consultant will provide monthly Program Progress Reports. Consultant will share the report findings at the biweekly check-in meeting with the Authority program manager(s). Program Progress Reports will include at minimum: program performance towards goals and objectives, successes and challenges (e.g., technical problems, implementation barriers, or customer issues, if any), and next steps.

On a regular schedule, but no less than quarterly, review SLEs and participant surveys collected by Authority to assess performance of the program, Consultant and subcontractors, work completed, and recommend to Authority program improvements.

Task 2.1 Deliverable: Program Progress Report
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-11

2.2 Develop and Provide Monthly Expense Reports
Consultant will develop a Monthly Expense Report Template for Authority review. After Authority approval of the Monthly Expense Report Template, Consultant will provide Monthly Expense Reports including all associated invoices, including by subcontractors, by a mutually determined day of the month to receive payment for services provided for the previous month.

The Expense Report Template will include at minimum the following:

2.2.1 Measures installed (quantity, description, model number, cost);

2.2.2 Administration labor (task, subtask, hours, rate, total);

2.2.3 Project incentives from third-party rebate programs (program name, measure, total revenue);

2.2.4 Customer co-payments, collected by Subcontractors;

2.2.5 Total expenses for the reporting period by program element (i.e., Direct Install, Cost-Share Turnkey, and Emergency Water Heater Replacement);

2.2.6 Total program expenses by program element (i.e., Direct Install, Cost-Share Turnkey, and Emergency Water Heater Replacement);

2.2.7 Contingency expenses; and

2.2.8 Remaining program budget.

Task 2.2. Deliverables: Monthly Expense Report Template and Ongoing Monthly Expense Reports

2.3 Manage Prevailing Wage Compliance and Documentation Consultant will be responsible for all prevailing wage compliance, including for all Subcontractors. Consultant will develop a written compliance mechanism prior to program launch and abide by those terms during the contract term. Consultant shall:

2.3.1 Provide compliance verification documentation by auditing first invoice of each Subcontractor and one randomly selected invoice of each Subcontractor for each twelve consecutive months and provide reports of such audit results to Authority on a regular basis;

2.3.2 Provide auditing capabilities for Authority, including access to any third-party platforms used for compliance verification.

2.3.3 Notify Authority of any noncompliance as soon as it is discovered;

2.3.4 At Authority discretion, remove Subcontractor from program if they are found to be noncompliant.

Task 2.3. Deliverables: Ongoing Prevailing Wage Compliance Reports Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-12

2.4 Develop Annual Program Report
Consultant will develop an Annual Program Report consistent with Authority Branding Guidelines for public distribution within 3 months after completion of each 12-month period.

Consultant will draft the Annual Program Report for Authority review and approval prior to public distribution. The Annual Report will include at minimum the following:

2.4.1 Executive summary;

2.4.2 List of outcomes for each Program Objective;

2.4.3 List of any additional accomplishments;

2.4.4 Summary of each project including home characteristics, measures installed, completion date, project duration, funding sources, costs;

2.4.5 Summary of average project costs for each equipment type, and lessons learned broken down by project type;

2.4.6 Evaluated conclusions drawn from the project including lessons learned and recommendations for future work; and

2.4.7 Financial summary comparing expenditures to the project budget.

Task 2.4 Deliverables: Annual Program Report
3 Marketing and Outreach

3.1 Coordinate Marketing and Outreach Activities
Authority has in-house marketing and communications professionals. Authority’s Communications Team will be primarily responsible for marketing and outreach to customers via emails, mailers, digital ads, and messaging at public events and forums. Additionally, Authority will engage with community-based organizations (CBOs) partners to provide pre-qualified customer leads for the Program. Consultant will:

3.1.1 Work closely with Authority staff to ensure alignment with existing marketing and communications practices, including but not limited to branding guidelines and writing styles.

3.1.2 Participate in regular meetings (anticipated as quarterly) with Authority’s Communications Team to discuss marketing approach, program progress, and marketing needs.

3.1.3 As needed, propose additional materials needed for the program and co-develop webpages, flyers, enrollment forms, educational forms, and other program materials with Authority’s Communications Team.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-13

3.1.4 Assist in the development of a Marketing and Outreach Plan for the Program. The Marketing and Outreach Plan will include strategies such as door-to-door canvassing to target homes that are most likely to benefit from the services based on electric and gas meter data, building characteristics, demographics and other criteria as mutually determined.

3.1.5 Upon Authority’s direction and approval and per the Marketing and Outreach Plan and Program Handbook, perform outreach activities, including door-to-door canvassing, to screen, enroll, and educate customers on the Program services.

3.2 Develop Case Studies
Consultant will produce two to four case studies per year (2-4 pages each) throughout the program period. The case studies are intended for public distribution and will highlight successes, challenges, costs, and best practices with transition to all-electric construction.

Task 3.2 Deliverable: Case Studies
4 Direct Install Implementation

4.1 Screen, Enroll, and Educate Customers
Consultant will:

4.1.1 Intake customers leads via online interest form hosted on Authority’s website. Form will allow customer to specify preferred communication method (phone, text, email).

4.1.2 Screen customer leads based on Program Handbook (Task 1.4).

4.1.3 Respond to customers by their preferred communication channel within three (3) business days to enroll them in the program, which includes collecting eligibility verification documentation, such as income documentation, and scheduling a Home Assessment (Task 4.2).

4.1.4 Manage all customer communications in both English and Spanish by project staff.

As needed, offer access to interpretation service for other priority languages (e.g., Mandarin, Cantonese, Vietnamese, and Tagalog).

4.1.5 Provide customer with educational materials on home electrification and on use and maintenance of equipment to be installed in customer’s homes.

4.1.6 Where appropriate, refer customers to non-electrification programs, such as energy efficiency and home repair programs that customers may qualify for.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-14

4.2 Perform Home Assessment, Develop Customer Project Scope of Work, and Execute Program Participation Agreement
After completing Task 4.1 with the customer, Consultant will:

4.2.1 Serve as the enrolled customer’s principal point of contact for the Program, provide ongoing support, and resolve any customer issues.

4.2.2 Perform an in-person or virtual Home Assessment in eligible customer’s homes and update CRM (Task 1.10).

1. If an electrification plan was previously produced for the customer by Authority or a third-party, the electrification plan may be used as initial guidance for the Home Assessment but should be adapted as conditions and professional evaluation dictate.

4.2.3 Using data gathered from the Home Assessment, develop a proposed Project Scope of Work that is consistent with the Technical Design Guidelines (Task 1.5).

1. If within Program budget, whole home electrification scope is to be encouraged with the property owner. Property owner may decline measures, but at least one major electrification measure (i.e., water heater or space heating and cooling) is required to receive services.

4.2.4 Deliver Project Scope of Work to customer. Consultant will offer to review the Project Scope of Work with customer to explain findings, address any questions, and begin planning any installations.

4.2.5 Provide an unsigned version of the Program Participation Agreement (Task 1.8) to customer for their signature.

4.3 Install Measures and Provide Post-Installation Quality Control Upon receiving the customer’s signed Program Participation Agreement, the Consultant will:

4.3.1 Oversee Subcontractor who shall apply for building permits on behalf of the customer.

4.3.2 Oversee installation and manage Subcontractors installing measures outlined in the customer’s Project Scope of Work (Task 1.7)

1. All equipment must be installed in accordance with all applicable federal, state, and local laws, building codes, manufacturer’s specifications and permitting requirements.

2. If electrical service capacity upgrade is required, Subcontractor coordinate with PG&E on service and panel upgrades.

3. Consultant will notify Authority of any delays which may result in an installation start date later than 120 days from the customer’s signed Program Participation Agreement
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-15

4.3.3 Periodically, as mutually determined with Authority, perform quality control procedures to evaluate Subcontractors’ performance and implement changes as mutually deemed appropriate.

1. Where an inspection has been provided by the local Authority Having Jurisdiction (AHJ,) provide inspection report, which may be used as type of quality control for that installation. Consultant shall perform site visits in 5% of homes that didn't have an inspection report and provide reports to Authority on quarterly basis.

2. Additionally, Authority may request, upon five (5) days written notice site visits of up to 10 homes receiving services. Consultant shall participate in project site visits with the designated Authority staff member(s) at a mutually determined date.

4.3.4 Within ten (10) business days of installation, educate customer in successfully operating and maintaining the new measure(s) installed.

4.3.5 Provide customer with equipment technical manuals, equipment warranty documentation, installation warranty documentation that are supplied with the equipment by the manufacturer. Authority may pay for customer’s 5-Year Warranty on select Eligible Measures, as defined in Exhibit F and priced in Exhibit C.

4.3.6 Respond to workmanship warranty calls as needed and assist customer in responding to product warranty issues, according to the warranty obtained by customer. Address all workmanship and product replacement warranty issues to reasonable customer satisfaction.

4.4 Manage Program Funds and Third-Party Rebates
After completing the customer’s installation, Consultant will:

4.4.1 Submit application(s) for third-party program(s) the project is eligible for to reduce project costs.

4.4.2 Pay invoices for equipment, labor, and Subcontractor services.

4.4.3 Provide Monthly Expense Reports (Task 2.2) to receive payment for Program services.

4.5 Provide Supporting Documentation for Completed Projects Proper record-keeping is critical for the success of the Single-family Installation Program. As such, Consultant must timely and accurately make the following items available for each project in Consultant’s CRM in order to receive payment for Services under this Agreement:

4.5.1 Customers’ Project Scope of Work;

4.5.2 Photos, Permits, and Final Inspection Report;
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-16

4.5.3 Executed Program Participation Agreement and

4.5.4 Project Installation Data
5 Cost-share Turnkey Implementation

5.1 Screen, Enroll, and Educate Customers
Consultant will:

5.1.1 Intake customers leads via online interest form hosted on the Authority’s website.

Form will allow customer to specify preferred communication method (phone, text, email).

5.1.2 Screen customer leads based on Program Handbook (Task 1.4).

5.1.3 Respond to customers by their preferred communication channel within three (3) business days to enroll them in the program, which includes collecting eligibility verification documentation, if any, and scheduling a Home Assessment (Task 4.2).

5.1.4 Manage all customer communications in both English and Spanish by project staff.

As needed, offer access to interpretation service for other priority languages (e.g., Mandarin and Cantonese, Vietnamese, Tagalog).

5.1.5 Provide customer with educational materials on home electrification and on use and maintenance of equipment to be installed in customer’s homes.

5.1.6 Where appropriate, refer customers to other Authority programs such as Tariffed On-bill Financing or On-bill Financing Program, or non-electrification programs, such as energy efficiency and home repair programs that customers may qualify for.

5.2 Perform Home Assessment, Develop Customer Project Scope of Work, and Execute Program Participation Agreement
After completing Task 5.1 with the customer, Consultant will:

5.2.1 Serve as the customer’s principal point of contact for the Program, provide ongoing support, and resolve any customer issues.

5.2.2 Perform an in-person or virtual Home Assessment in eligible customer’s homes and update the CRM (Task 1.10)

1. If an electrification plan was previously produced for the customer by Authority or a third-party, the electrification plan may be used as initial guidance for the Home Assessment but should be adapted as conditions and professional evaluation dictate.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-17

5.2.3 Using data gathered from the Home Assessment, develop a proposed Project Scope of Work (Task 1.7 that is consistent with the Technical Design Guidelines (Task

1.5).

1. If within Program budget, whole home electrification scope is to be encouraged with the property owner. Property owner may decline elements but at least one major electrification measure (i.e., water heater or space heating and cooling) is required to receive Program services.

5.2.4 Deliver Project Scope of Work (Task 1.7) to customer which includes pricing of services, and information on all relevant rebates and financing options. Consultant will offer to review the Scope of Work to explain findings, address any questions, and begin planning any installations.

5.2.5 Provide an unsigned version of the Program Participation Agreement (Task 1.8) to customer for their signature.

5.3 Install Measures and Provide Post-Installation Quality Control Upon receiving the customer’s signed Program Participation Agreement, the Consultant will:

5.3.1 Oversee Subcontractor who shall apply for building permits on behalf of the customer.

5.3.2 Oversee installation and manage Subcontractors installing measures outlined in the customer’s Project Scope of Work.

1. All equipment must be installed in accordance with all applicable federal, state, and local laws, building codes, manufacturer’s specifications and permitting requirements.

2. If electrical service capacity upgrade is required, Subcontractor coordinate with PG&E on service and panel upgrades.

3. Consultant will notify Authority of any delays which may result in an installation start date later than 120 days from the customer’s signed Program Participation Agreement

5.3.3 Periodically, as mutually determined with the Authority, perform quality control procedures to evaluate subcontractors’ performance and implement changes as mutually deemed appropriate.

1. Where an inspection has been provided by the local Authority Having Jurisdiction (AHJ,) provide inspection report, which may be used as a type of quality control for that installation. Consultant shall perform site visits in 5% of homes that didn't have an inspection report and provide reports to the Authority on quarterly basis.

2. Additionally, Authority may request site visits of up to 10 homes receiving services.

Consultant shall participate in project site visits with the designated the Authority staff member(s) at a mutually determined date.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-18

5.3.4 Within ten (10) business days of installation, educate customer in successfully operating and maintaining the new measure(s) installed.

5.3.5 Provide customer with equipment technical manuals, equipment warranty documentation, installation warranty documentation that are supplied with the equipment via the manufacturer. Customer may choose to pay for extended warranty terms on select Eligible Measures, as defined in Exhibit F and priced in Exhibit C.

5.3.6 Respond to workmanship warranty calls as needed and assist customer in responding to product warranty issues, according to the warranty obtained by customer. Consultant shall not be responsible for any warranty remedies which are the responsibility of manufacturers

5.4 Manage Program Funds, Third-Party Rebates, and Customer Payments After completing the customer’s installation, the Consultant and/or its Subcontractors will:

5.4.1 Collect customer Cost-share Payments. Cost-share Turnkey projects shall be paid for by the customer and Authority. Customers will have a Cost-share Payment contribution, based on a fixed cost per Eligible Measure after applicable incentives are applied. The Subcontractor performing the work shall be responsible for collecting customer co-payments.

5.4.2 Submit application(s) for third-party program(s) the project is eligible for to reduce project costs. Where feasible, third-party program incentives shall be applied for by Consultant on behalf of the customer to reduce the cost of the customer’s co-payment contribution.

5.4.3 Submit documentation to Authority on third-party rebate and incentive sources such as amount captured per month and net Authority cost after third-party rebates.

5.4.4 Pay Subcontractor invoices for equipment incentives provided by Authority upon receiving Authority payments.

5.4.5 Provide Monthly Expense Reports (Task 2.2) to receive payment for Program services.

5.5 Provide Supporting Documentation for Completed Projects Proper record-keeping is critical for the success of the Single-family Installation Program. As such, Consultant must timely and accurately make the following items available for each project in Consultant’s CRM in order to receive payment for Services under this Agreement:

5.5.1 Customers’ Project Scope of Work;

5.5.2 Photos, Permits, and Final Inspection Report;
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-19

5.5.3 Executed Program Participation Agreement; and

5.5.4 Project Installation Data
6 Emergency Water Heater Replacement Implementation Tasks Most water heater replacements are performed after the equipment has failed, and customers expect access to hot water within 48 hours of failure. The Emergency Water Heater Replacement element of the Program will be available to both Direct Install and Cost-Share Turnkey participants. When a gas water heater fails, there are three common emergency replacement scenarios:

1. On-Site Electrification – This scenario allows for immediate installation of a heat pump water heater on the day of the site visit.

2. Gas Loaner Electrification - Electrification is not feasible on the day of the site visit, typically due to the need to coordinate with an electrician. In this scenario, Authority envisions an installation of the temporary gas loaner unit while electrical services are coordinated.

3. Infeasible - Electrification is infeasible at the site due to criteria developed in Technical Design Guidelines (e.g., physical constraints, constrained PG&E service line, or other factors).

6.1 Coordinate Emergency Water Heater Replacement Services Consultant will:

6.1.1 Provide a dedicated phone number (i.e., hotline) with dedicated Authority branded messaging for customers to call and schedule emergency water heater replacements.

The hotline will be managed by Consultant and appropriate Subcontractors 5 days a week from 5 AM – 6 PM Pacific Time and on Saturdays from 5 AM to 11 AM Pacific Time. During these times, phone, email and text support will be provided by the Consultant

6.1.1.1 During the hours not supported by the Consultant’s hotline, the phone number will roll to the hotline of the Subcontractor that is available 24/7/365 including holidays.

6.1.1.2 During hours not supported by Consultant’s hotline, only phone calls will roll over to the Subcontractor’s hotline. Texts and emails received during these hours will be answered by the Consultant during business hours indicated above.

6.1.2 When customers call the hotline, Consultant will promptly perform an over-the-phone initial screening to determine if an emergency replacement is feasible. If feasible, Consultant will schedule site visit.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-20

6.1.3 Perform in-person site visit within 24 hours of customer call to determine the emergency replacement scenario and applicable approaches (Tasks 6.2, 6.3, and

6.4)

6.1.4 Provide and manage gas water heaters for the “loaner” equipment to meet program volume.

6.2 Install Heat Pump Water Heater for On-Site Electrification Scenario Installation Subcontractors will be responsible for going on site to determine if it is feasible to install a heat pump water heater on the day of the customer site visit. If installation is feasible on the day of the customer site visit Subcontractor will:

6.2.1 Select equipment sizing, model, and configure in accordance with Technical Design Guidelines (Task 1.5)

6.2.2 Perform electric load calculations or other assessments as needed.

6.2.3 Propose a Scope of Work (Task 5.5.1) for the heat pump water heater including pricing services with information on all relevant third-party program rebates and financing options.

6.2.4 Coordinate installation of system within 48 hours of customer call.

6.2.5 Install heat pump water heater in accordance with all applicable federal, state, and local laws, building codes, manufacturer’s specifications and permitting requirements.

6.2.6 Apply for building permit and coordinate with the AHJ to obtain final inspections and complete job closure paperwork.

6.2.7 Within ten (10) business days of installation, educate customer in successfully operating and maintaining the new measure(s) installed.

6.2.8 Provide customer with equipment technical manuals, equipment warranty documentation, installation warranty documentation with paper documents in a durable envelope attached to the unit.

6.2.9 Respond to workmanship warranty calls as needed and assist customer in responding to product warranty issues. Address all workmanship and product replacement warranty issues to reasonable customer satisfaction.

6.2.10 Offer Customers the Direct Install or Cost-Share Turnkey Services (Tasks 4 and 5), as applicable.

6.3 Install Loaner Gas Water Heater for Gas Loaner Electrification Scenario If Subcontractor determines it is feasible to install heat pump water heater after additional upgrades to the home are made, Subcontractor will:

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-21

6.3.1 Install a temporary gas water heating “loaner” equipment.

6.3.2 Subcontractor to Invoice Cost-share Turnkey Customer for emergency loaner deposit. The deposit will be put towards the cost of the heat pump water heater purchase. In the rare event that the heat pump water heater installation does not move forward, the deposit will cover the labor cost of installing loaner. Direct Install customers will not need to pay a deposit.

6.3.3 If heat pump water heater installation does not move forward, Consultant will:

1. Remove gas water heating loaner equipment and return to loaner stock.

2. May provide estimate and coordinate with customer on installation of replacement equipment as a service outside the scope of this Program.

6.3.4 Within 6 weeks of loaner installation, create and provide to customer a Project Scope of Work for heat pump water heater installation.

6.3.5 Coordinate heat pump water heater installation as specified in Task 6.2. Remove gas water heating loaner equipment and return to loaner stock.

6.3.6 Offer Customers the Direct Install or Cost-Share Turnkey Services (Tasks 4 and 5), as applicable.

6.4 Referral for Infeasible Scenario
If Subcontractor determines it is infeasible to install a heat pump water heater, Subcontractor will:

6.4.1 Provide information to resident, including reason why installation of heat pump water heater is infeasible.

6.4.2 If there is a local code requirement, complete future, Authority-developed, worksheet recording that site was considered infeasible for electrification and provide to customer as required.

6.4.3 Provide a referral to a qualified installer for a replacement gas unit. If Subcontractor is able to install a replacement gas unit, Subcontractor may offer this service outside the scope of this Program.
7 New Program Measures, Technologies, and Methods
A goal of the Program is to fully decarbonize homes and transportation in Authority service territory while providing exceptional customer experience at the lowest installation cost. To that end, the Authority and Consultant may propose new measures, technologies and methods for inclusion in the Program. Any new measures, technologies, or methods adopted shall be incorporated as Eligible Measures into the Program Handbook (Task 1.4) Technical Design Guidelines (Task 1.5), and “Exhibit C Table C-3 Eligible Measures Compensation” as an executed amendment. Area of interest include at a minimum:

Item 6
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Draft Agreement: Franklin Energy Services, LLC and SVCE A-22

7.1 Energy Efficiency

7.1.1 Develop with Authority, criteria and program delivery methods for deploying low-cost energy efficiency measures such as: air sealing, targeted insulation, duct sealing, sink aerators, LED lights, etc.

7.1.2 Non-electrification, energy efficiency measures should be limited to specific homes and circumstances where they increase effectiveness of electrification equipment, decrease cost of electrification installation, or significantly improve bill savings opportunity.

7.2 EV Charging

7.2.1 Develop methods to ensure homes are capable of accepting an EV charger with at least a 20-amp, 120 volt outlet on a dedicated circuit unless technically infeasible, such as lack of off-street parking.

7.3 Solar and Storage

7.3.1 Develop with Authority, criteria and program delivery methods for deploying solar-only and solar and storage systems where deemed appropriate with the intention of incorporating this element in the second year of the program.

7.3.2 Approaches to program delivery may include directly subcontracting with qualified solar and storage installers and/or recommending that Authority directly contract with such providers.

7.3.3 Solar and storage systems are anticipated to be financed through lease or power-purchase agreements unless customers opt for direct purchase (in the Cost-Share Turnkey service). However, Authority may elect at its discretion to pursue its own financing structures.

7.4 120 Volt Systems and Space + Water Heating Combo Systems

7.4.1 Monitor results of assessments for 120-volt water heater, space heating systems, and induction ranges.

7.4.2 Develop with Authority criteria and program delivery methods for deploying these systems as lower cost alternatives to traditional 240-volt systems under conditions that satisfy resident comfort needs.

7.5 Energy Resilience

7.5.1 Develop with Authority criteria and program delivery methods for deploying low-cost methods relevant across Authority climate zones for addressing heat wave and power outage measures which may include:

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE A-23

1. Heat Wave: Ceiling fans, evaporative cooling, awnings/shading, window tints, etc.

2. Power outages: oversized water heater tanks, battery enabled appliances, portable batteries and uninterruptable power supplies, etc.

7.6 Virtual Power Plant

7.6.1 Develop with Authority criteria and program delivery methods for deploying load shaping technologies such as smart thermostats and water heaters with the intention of incorporating this element on a mutually determined schedule.

7.6.2 Develop with Authority methods for aggregating grid-enabled systems into dispatchable “VPP” groups on a mutually determined schedule.

7.6.3 Incorporate storage systems into the VPP systems.

7.7 Panels and Service Capacity

7.7.1 To keep costs down, Authority seeks an approach that avoids service upgrades where possible. Identify or develop tool or process for National Electrical Code (NEC) 220.83 and/or 220.87 calculations which will assist with upgrading homes without requiring a PG&E service upgrade.

7.7.2 Develop criteria for a) service upgrades or b) panel replacements without service upgrades such as due to safety needs.

7.7.3 Work with PCE to assess scenarios where smart panels, smart breakers, and circuit pausers may be useful and cost-effective.

7.8 Innovations

7.8.1 Pilot technologies as mutually determined to meet program objectives including not only technologies mentioned above but circuit splitters, circuit pausers, smart panels, and other technologies as mutually determined.

7.8.2 Incorporate innovations deemed successful into Technical Design Guidelines and standard practices as mutually determined.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE B-1
Exhibit B
Schedule of Performance
Consultant shall perform the Services so as to complete each task by the due date specified below. The time to complete each task may be increased or decreased by written agreement of the project managers for Consultant and Authority so long as all work is completed within the term of the Agreement.

Table B-1 Project Deliverables and Schedule
Task Deliverable Timeline (start to end date, or
due date)
Task 1 – Program Design and Set Up

1.1 Kickoff and check-in
meetings
Meeting agendas and meeting
minutes
Within 5 days of contract
execution

1.2 Provide compliance
documentation
Compliance documentation,
including for all subcontractors
90 days from contract execution

1.3 Finalize program design and
strategy
60 days from contract execution

1.4 Develop Program Handbook Program Handbook 90 days from contract execution

1.5 Develop and maintain
Technical Design Guidelines
Technical Design Guidelines 90 days from contract execution

1.6 Develop Home Assessment
Template
Home Assessment Template 90 days from contract execution

1.7 Develop Project Scope of
Work Template
Project Scope of Work Template 90 days from contract execution

1.8 Develop Program
Participation Agreement
Program Participation
Agreement
90 days from contract execution

1.9 Enroll in State or Local
Programs
Proof of enrollment in other
incentive programs as directed
by SVCE
90 days from contract execution

1.10 Set up Customer
Relationship Management
(CRM) System and Data
Exchange
CRM system and data exchange
method
90 days from contract execution
Task 2 – Administrative Reporting Tasks

2.1 Develop and provide
Program Process Reports
Program Process Report Monthly by the 5th of the Month
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE B-2

2.2 Develop and provide
Monthly Expense Reports
Monthly Expense Report
Template and Ongoing Monthly
Expense Reports
Monthly by 5th of the Month

2.3 Manage Prevailing Wage
compliance and documentation
Ongoing Prevailing Wage
Compliance Reports
Once upon receipt of the first
invoice from the subcontractor
and then randomly once a year
for each subcontractor

2.4 Develop Annual Program
Report
Annual Program Report Annually by January 31st
Task 3 – Marketing and Outreach

3.1 Coordinate marketing and
outreach activities
Ongoing upon contract
execution

3.2 Develop Case Studies 2 to 4 case studies per year Annually, as agreed upon between Parties
Task 4 – Direct Install Implementation
4 – Direct Install
Implementation
• Monthly Expense Reports
• Project Scope of Work
• Photos, Permits, and Final
Inspection Report
• Executed Program
Participation Agreement
• Project Installation Data
90 days from contract execution
to end of Agreement term
Task 5 – Cost-share Turnkey Implementation
5 – Cost-share Turnkey
Implementation
• Monthly Expense Reports
• Project Scope of Work
• Photos, Permits, and Final
Inspection Report
• Executed Program
Participation Agreement
• Project Installation Data
120 days from contract
execution to end of Agreement
term
Task 6 – Emergency Water Heater Replacement Implementation Tasks 6 – Emergency Water Heater
Replacement Implementation
• Monthly Expense Reports
• Project Scope of Work
• Photos, Permits, and Final
Inspection Report
• Executed Program
Participation Agreement
• Project Installation Data
90 days from contract execution
to end of Agreement term
Task 7 – New Program Measures, Technologies, and Methods Recommendations for new
measures technologies or
methods
Updated Program Handbook,
Technical Design Guidelines,
and Table C-3 of Exhibit “C”
90 days from contract execution
to end of Agreement term
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-1
Exhibit C
Compensation
In consideration of the services provided by Consultant described in Exhibit "A” Scope of Services and subject to the terms of the Agreement, Authority, shall pay Consultant based on the following fee schedule and terms:

The compensation to be paid to Consultant for all services described in Exhibit A “Scope of Work” shall not exceed a total of $14 million ($14,000,000) for the Term of the Agreement and as set forth in Table C-1 “Total Not-to-Exceed Compensation”. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to Authority unless previously approved in writing by Authority.

Table C-1 “Total Not-to-Exceed Compensation” illustrates not-to-exceed (NTE) amounts for each budget category and invoicing and payment terms. Peninsula Clean Energy Authority (PCE) may implement the services described in Exhibit A and execute its own agreement with Consultant. In the event that PCE executes an agreement with Consultant for the services described in Exhibit A within three months of this Agreement’s Effective Date, the “SVCE-PCE Joint Program NTE” amounts shall apply. In the event no agreement is executed within three months of this Agreement or PCE terminates its agreement, the “SVCE Only Program NTE” shall apply. Consultant is responsible for tracking expenditures and ensuring neither the not-to-exceed amounts per budget category, nor the total not-to-exceed total compensation of this Agreement are exceeded. Authority may approve in writing the transfer of funds between budget categories listed in Table C-1 provided the total compensation for Work do not exceed $14 million ($14,000,000) for the Term of the Agreement, as set forth in Section 3 of this Agreement Consultant agrees to complete all Work within the amounts set forth in Section 3.

Authority will compensate Consultant based on the rates as set forth in Table C-2 "Consultant Hourly and Assessment Rates” and Table C-3 “Eligible Measure Compensation” up to the NTE amounts listed in Table C-1 “Total Not-to-Exceed Compensation” Authority will compensate Consultant the fixed price (the Cost per Unit) per Eligible Measure installed by Consultant and approved by Authority, up to the NTE amounts listed in Table C-1. Table C-3 includes the following compensation to Consultant:
• The "Compensation for Eligible Measure” set forth in Table C-3 includes all of Consultant’s costs to perform installation of Eligible Measures including, without limitation, Consultant’s base equipment costs, material costs, labor costs, a standard one (1) year warranty on parts and labor, and all manufacturer warranties transferred to the customer. No additional fees or charges will be required of Authority or its customers for Consultant to install the Eligible Measures listed in this Agreement. • The “Potential Compensation for 5-Year Extended Warranty” in Table C-3 describes compensation that participating Cost-share Turnkey Customers or Authority (on behalf of Direct Install Customers) may pay Consultant if Cost-share Turnkey customers or Authority (on behalf of Direct Install Customers) elect to purchase one. The terms and conditions of the “5-Year Extended Warranty” are included in this Agreement as Exhibit “F.”
• The “Potential Compensation for Premium Equipment Upgrade” in Table C-3 describes compensation that Cost-Share Turnkey Customers may pay Consultant for equipment choices (e.g. color, brand, etc.) beyond the base equipment provided with Eligible Measures if they elect to purchase this option.

Consultant understands that Consultant’s receipt of compensation for under this Agreement will depend on the number of customers who opt to participate in the Program by executing Program Participation Agreements, and Consultant’s satisfactory completion of invoicing activities as described in Exhibit “A”. Authority makes no guarantee, express or implied, regarding the number of customers who will participate in programs covered by this Agreement.

Consultant will subcontract with Vistar Energy Inc. to develop XeroHome™, a software platform, to perform Task 1 “Program Design and Set Up” as described in Exhibit A “Scope of Services”. Table C-1 illustrates the NTE for the development of XeroHome. Authority will reimburse Consultant for the development of XeroHome as set forth in Exhibit E “XeroHome Scope of Work and Payment Terms”.

The “Contingency NTE” in Table C-1 illustrates contingency funds which may be used for supplementing third-party rebates that do not materialize for the customer (e.g. rebate is rejected, Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-2
or third-party rebate funds depleted), addressing customer service concerns (e.g. equipment failures outside of warranty period, minor repairs, etc.), and other items as approved by the Authority. Consultant shall provide a written request to Authority describing the requested amount and reason for requesting contingency funds for Authority approval. If approved, Consultant shall track the expenditure by categorical reason and update the Monthly Expense Reports as applicable.

In no event shall Consultant have any access to or use any contingency funds without the explicit written approval of Authority. Approval of contingency funds for a one-time use does not guarantee approval for a similar use in the future. Use of contingency funds is at Authority’s sole and absolute discretion.

Invoices
Monthly Invoicing: In order to request payment, Consultant shall submit monthly invoices to the Authority describing the services performed and the applicable charges as described in Table C-1 and as set forth in the Monthly Expense Reports (Task 2.2). For tasks that are billed as “time and materials”, Consultant shall include a summary of the work performed during that period, personnel who performed the services, hours worked, task(s) for which work was performed.

Authority shall pay all undisputed invoice amounts within thirty (30) calendar days after receipt up to the maximum compensation set forth herein, provided the Authority must provide notice of any dispute within thirty (30) days of invoice receipt. Authority does not pay interest on past due amounts.

Reimbursable Expenses
Administrative, overhead, secretarial time or overtime, word processing, photocopying, in house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. Travel expenses must be authorized in advance in writing by Authority .

Additional Services
Consultant shall provide additional services outside of the services identified in Exhibit A only by advance written authorization from Authority Representative prior to commencement of any additional services. Consultant shall submit, at the Authority Representative’s request, a detailed written proposal including a description of the scope of additional services, schedule, and proposed maximum compensation. Any changes mutually agreed upon by the Parties, and any increase or decrease in compensation, shall be incorporated by written amendments to this Agreement.

Cost-share Turnkey Customer Cost Allocation
Cost-share Turnkey customers will pay Consultant a “Cost-share Payment”, which is based on the fixed Compensation per Eligible Measure listed in Table C-3 after applicable incentives are applied. Cost-share Turnkey customers will pay Consultant the costs of “5-Year Extended Warranty” and “Premium Equipment Upgrade” for Eligible Measures listed in Table C-3 if they elect to purchase these.

Authority bears no responsibility for any of Consultant’s cost and/or compensation to Consultant associated with Customer Cost-share Payments, 5-Year Extended Warranty, or Premium Equipment Upgrade for any Cost-share Turnkey customers. All such compensation will remain the sole responsibility of Cost-share Turnkey customers who may elect to participate in the Program.

All Cost-share Turnkey Customer Cost-share Payment amounts, 5-Year Extended Warranty compensation, and Premium Equipment Upgrade compensation, if applicable, will be included and clearly disclosed in each customer’s Project Scope of Work and Program Participation Agreement.

Updates to Table C-3 Eligible Measures Compensation
Thirty days before the start of each calendar year, Consultant will provide Authority proposed compensation for Eligible Measures listed in Table C-3 for the subsequent year, including the percent change in compensation for each Eligible Measures from the previous year, if any. In the event that the proposed compensation adjustment exceeds the Eligible Measure Compensation by more than 5% from the previous year, Consultant shall provide a detailed breakdown of costs including all relevant supporting documentation such as prevailing wage labor costs and material costs and must receive Authority approval in writing. Upon receipt of this documentation, Authority shall review the provided information within 10 business days.

Authority may, at its discretion, approve or deny the proposed Eligible Measure Compensation exceeding 5% from the previous year. If Authority approves the higher cost, Consultant shall Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-3
incorporate the updates into Table C-3 as an executed amendment to this Agreement. If Authority denies the higher cost, the existing Eligible Measure Compensation will remain in effect until both parties mutually agree.

Authority and Consultant may propose new Eligible Measures throughout the Term of this Agreement. New Eligible Measures and their compensation shall be incorporated into the Program Handbook (Task 1.4), Technical Design Guidelines (Task 1.5), and Table C-3. In the event that the addition of new Eligible Measures require additional scope or budget, this shall be formalized in a mutually negotiated and executed amendment to this Agreement.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-4
Table C-1 – Total Not-to-Exceed (NTE) Compensation
SVCE-PCE Joint Program NTE SVCE Only Program NTE Invoicing and Payment Terms Budget
Category
Year 1
NTE
Year 2
NTE
Year 3
NTE
Total NTE Year 1
NTE
Year 2 NTE Year 3 NTE Total NTE
Customer Estimates
Number of
Direct Install
Customers
50 100 100 250 50 100 100 250 N/A
Number of
Cost-share
Turnkey
Customers
50 150 150 350 50 150 150 350 N/A
Number of
Emergency
Water Heater
Customers
130 260 260 650 130 260 260 650 N/A
Program Implementation
Program Design
and Set Up
(Task 1)
$147,395 $0 $0 $147,395 $240,554 $0 $0 $240,554 Monthly - invoiced based on time & hourly rates in Table C-2
XeroHome
(Task 1)
$267,140 $112,536 $112,536 $492,212 $389,904 $134,376 $134,376 $658,676 Invoiced based on payment terms in Exhibit “E”
Admin
Reporting
(Task 2)
$22,636 $31,115 $31,815 $85,566 $33,704 $46,329 $47,372 $127,404 Monthly - invoiced based on time & hourly rates in Table C-2
Marketing &
Outreach
(Task 3)
$34,489 $47,407 $48,473 $130,369 $65,161 $89,569 $91,584 $246,314 Monthly - invoiced based on time & hourly rates in Table C-2
Direct Install
Implementation
(Task 4) $105,669 $145,249 $148,513 $399,436 $207,218 $284,836 $291,245 $783,298 Monthly - invoiced based on time &
hourly rates and assessment rates in
Table C-2
Cost-share
Turnkey
Implementation
(Task 5) $205,609 $282,624 $288,983 $777,216 $313,024 $430,273 $439,954 $1,183,251 Monthly - invoiced based on time &
hourly rates and assessment rates in
Table C-2
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-5
Table C-1 – Total Not-to-Exceed (NTE) Compensation
SVCE-PCE Joint Program NTE SVCE Only Program NTE Invoicing and Payment Terms Budget
Category
Year 1
NTE
Year 2
NTE
Year 3
NTE
Total NTE Year 1
NTE
Year 2 NTE Year 3 NTE Total NTE
Emergency
Water Heater
Replacement
Implementation
(Task 6)
$169,393 $232,843 $238,082 $640,318 $143,240 $196,894 $201,324 $541,459 Monthly - invoiced based on time & hourly rates and assessment rates in
Table C-2
Subtotal NTE -
Program
Implementation
$952,331 $851,774 $868,407 $2,672,512 $1,392,805 $1,182,276 $1,205,854 $3,780,935 N/A
Customer Incentives
Direct Install
Customers
$1,100,000 $2,200,000 $2,200,000 $5,500,000 $1,100,000 $2,200,000 $2,200,000 $5,500,000 Monthly – invoiced based on number of installed and approved
Eligible Measures in Table C-3, as
invoiced by Subconsultants
Cost-share
Turnkey
Customers
$400,000 $1,200,000 $1,200,000 $2,800,000 $400,000 $1,200,000 $1,200,000 $2,800,000 Monthly – invoiced based on number of installed and approved
Eligible Measures in Table C-3, as
invoiced by Subconsultants
Emergency
Water Heater
Replacement
Customers
$400,400 $800,000 $800,000 $2,000,400 $373,295 $772,885 $772,885 $1,919,065 Monthly – invoiced based on number of installed and approved
Eligible Measures in Table C-3, as
invoiced by Subconsultants
Subtotal NTE –
Customer
Incentives
$1,900,400 $4,200,000 $4,200,000 $10,300,400 $1873,295 $4,172,885 $4,172,885 $10,219,065 N/A Contingency
NTE
$342,362 $342,362 $342,363 $1,027,088 $0 $0 $0 $0 N/A
Total Annual
NTE
$3,195,098 $5,394,136 $5,410,769 $14,000,00 $3,266,100 $5,355,161 $5,378,739 $14,000,000 N/A Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-6
Table C-2 Consultant Hourly and Assessment Rates
Position 2024 Rate 2025 Rate 2026 Rate 2027 Rate
Regional Director $195.75 $201.50 $207.50 $213.75
Product Manager $173.00 $178.25 $183.50 $189.00
Program Manager $162.25 $167.00 $172.00 $177.25
Operations Project Manager $173.00 $178.25 $183.50 $189.00 Project Manager $159.75 $164.50 $169.50 $174.50
Senior Software Engineer $144.25 $148.50 $153.00 $157.50 Data Analyst $134.00 $138.00 $142.25 $146.50
Database Specialist $123.50 $127.25 $131.00 $135.00
Marketing Manager $123.50 $127.25 $131.00 $135.00
Marketing Specialist $97.25 $100.25 $103.25 $106.25
Engineer I $109.75 $113.00 $116.50 $120.00
Engineer II $129.75 $133.75 $137.75 $142.00
Principal Engineer $164.75 $169.75 $174.75 $180.00
Energy Advisor I $97.25 $100.25 $103.25 $106.25
Energy Advisor II $108.25 $111.50 $114.75 $118.25
Energy Advisor III $123.50 $127.25 $131.00 $135.00
Customer Care Manager $118.50 $122.00 $125.75 $129.50
Central Ops Supervisor $102.00 $105.00 $108.25 $111.50
CSR II $86.50 $89.00 $91.75 $94.50
Project Coordinator $84.50 $87.00 $89.50 $92.25
Assessments
Franklin Home Assessment per assessment $232.50 $244.00 $256.00 $269.00 A converted canvassing lead $225.00 $236.00 $248.00 $260.00 Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-7
7 Compensation to Consultant for 5-Year Warranty is not guaranteed because it is solely dependent on Authority’s or participating customer’s voluntary decision on whether to purchase a 5-Year Warranty, the terms and conditions for which are included in Exhibit “E” of this Agreement and will be included in the Program Participation Agreement if applicable.
8 Compensation to Consultant for Premium Equipment Upgrade is not guaranteed because it is solely dependent on participating customer’s voluntary decision on whether to purchase the premium upgrade.

Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Base Electrification Measures
Heat pump water heater (80 gallon, 240V) $7,050.00 Per Unit $675.00 N/A Heat pump water heater (65 gallon, 240V) $6,350.00 Per Unit $675.00 N/A Heat pump water heater (50 gallon, 240V) $5,850.00 Per Unit $675.00 N/A Heat pump water heater (80 gallon, 120V) $7,050.00 Per Unit $675.00 N/A Heat pump water heater (65 gallon, 120V) $6,350.00 Per Unit $675.00 N/A Emergency loaner cost $400.00 Per Unit N/A N/A
Heat pump HVAC, (ducted, inverter-driven) 2 Ton $10,900.00 Per Unit $750.00 $2,000.00 Heat pump HVAC, (ducted, inverter-driven) 3 Ton $12,300.00 Per Unit $750.00 $2,250.00 Heat pump HVAC, (ducted, inverter-driven) 4 Ton $14,200.00 Per Unit $750.00 $2,500.00 Heat pump HVAC, (ducted, inverter-driven) 5 Ton $17,300.00 Per Unit $750.00 $2,750.00 Heat pump mini-split system (Ductless, inverter-driven,) one zone $5,750.00 Per Unit $400.00 $2,000.00 Heat pump mini-split system (Ductless, inverter-driven,) two zone $9,800.00 Per Unit $500.00 $2,250.00 Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-8
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Heat pump mini-split system (Ductless, inverter-driven,) three zone $13,400.00 Per Unit $600.00 $2,500.00 Heat pump mini-split system (Ductless, inverter-driven,) four zone $18,435.00 Per Unit $700.00 $2,750.00 Electric induction range $2,450.00 Per Unit $500.00 $1,000.00 Electric induction cooktop $3,050.00 Per Unit $400.00 $1,000.00 High efficiency electric clothes dryer $2,000.00 Per Unit $500.00 $1,000.00 Condensing combo washer-dryer $1,000.00 Per Unit $500.00 $1,000.00 Electrical Services Measures
Electric panel replacement - Minor* $4,850.00 Per Unit N/A N/A Electric panel replacement - Moderate* $6,850.00 Per Unit N/A N/A Electric panel replacement -Major* $9,450.00 Per Unit N/A N/A Service upgrade $800.00 Per Unit N/A N/A
Sub-panel replacement / installation $1,600.00 Per Unit N/A N/A Electrical Repair Minor $800.00 Per Unit N/A N/A
Electrical Repair Moderate $1,600.00 Per Unit N/A N/A
Electrical Repair Major $2,400.00 Per Unit N/A N/A
Add 230 Volt Circuit (Homerun) Minor $1,200.00 Per Unit N/A N/A Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-9
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Add 230 Volt Circuit (Homerun) Moderate $1,600.00 Per Unit N/A N/A Add 230 Volt Circuit (Homerun) Major $2,000.00 Per Unit N/A N/A Add 120 Volt Circuit (Homerun) Minor $800.00 Per Unit N/A N/A Add 120 Volt Circuit (Homerun) Moderate $1,200.00 Per Unit N/A N/A Add 120 Volt Circuit (Homerun) Major $1,600.00 Per Unit N/A N/A Rare Breaker Adder Minor $50.00 Per Unit N/A N/A
Rare Breaker Adder Moderate $75.00 Per Unit N/A N/A
Rare Breaker Adder Major $100.00 Per Unit N/A N/A
Circuit sharing device $3,000.00 Per Unit N/A N/A
Circuit sharing device only (NTE) $1,020.00 Per Unit N/A N/A Circuit throttling/pausing device $3,300.00 Per Unit N/A N/A Circuit throttling/pausing device only (NTE) $1,122.00 Per Unit N/A N/A Smart panel $9,050.00 Per Unit N/A N/A
Tandem breaker $200.00 Per Unit N/A N/A
Efficiency Measures
Attic Insulation Final R 38-44 $2.50 Per Sq Ft N/A N/A
Subfloor or Platform Duct Sealing & Return Sizing Corrections $1,500.00 Per Home N/A N/A Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-10
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Deeply Buried Ducts $3.60 Per Sq Ft N/A N/A
High Performance Installation Verification (HPIV) $900.00 Per System N/A N/A HPIV Additional System $300.00 Per System N/A N/A
Health and Safety Measures
CO Detector 10 year $50.00 Per Home N/A N/A
Smoke Detector Minor $50.00 Per Home N/A N/A
Smoke Detector Hardwire Minor $150.00 Per Home N/A N/A
Smoke Detector Hardwire Moderate $250.00 Per Home N/A N/A Smoke Detector Hardwire Major $400.00 Per Home N/A N/A
ERV Minor $2,000.00 Per Home N/A N/A
ERV Moderate $2,850.00 Per Home N/A N/A
ERV Major $3,600.00 Per Home N/A N/A
Add 2" Filter HVAC Minor $40.00 Per Home N/A N/A
Add 2" Filter HVAC Moderate $80.00 Per Home N/A N/A
Add 2" Filter HVAC Major $120.00 Per Home N/A N/A
Add 2" Filter BOX Minor $300.00 Per Home N/A N/A
Add 2" Filter BOX Moderate $500.00 Per Home N/A N/A
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-11
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Add 2" Filter BOX Major $750.00 Per Home N/A N/A
Fix Water Leak (exterior cladding) Minor $600.00 Per Home N/A N/A Fix Water Leak (exterior cladding) Moderate $1,000.00 Per Home N/A N/A Fix Water Leak (exterior cladding) Major $1,500.00 Per Home N/A N/A Fix Water Leak (interior plumbing) Minor $250.00 Per Home N/A N/A Fix Water Leak (interior plumbing) Moderate $600.00 Per Home N/A N/A Fix Water Leak (interior plumbing) Major $1,000.00 Per Home N/A N/A Fix Drainage Gutters & Downspouts Minor $500.00 Per Home N/A N/A Fix Drainage Gutters & Downspouts Moderate $1,000.00 Per Home N/A N/A Fix Drainage Gutters & Downspouts Major $1,500.00 Per Home N/A N/A Pest Infestation Remediation Minor $500.00 Per Home N/A N/A Pest Infestation Remediation Moderate $1,500.00 Per Home N/A N/A Pest Infestation Remediation Major $3,000.00 Per Home N/A N/A Asbestos Abatement Minor $4,000.00 Per Home N/A N/A
Asbestos Abatement Moderate $8,000.00 Per Home N/A N/A
Asbestos Abatement Major $12,000.00 Per Home N/A N/A
Mold Remediation Minor $500.00 Per Home N/A N/A
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-12
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Mold Remediation Moderate $1,500.00 Per Home N/A N/A
Mold Remediation Major $3,000.00 Per Home N/A N/A
Remove Knob and Tube wiring $350 Per Junction N/A N/A
Debris Removal Minor $400.00 Per Home N/A N/A
Debris Removal Moderate $800.00 Per Home N/A N/A
Debris Removal Major $1,500.00 Per Home N/A N/A
Moving Person Items Minor $400.00 Per Home N/A N/A
Moving Person Items Moderate $800.00 Per Home N/A N/A
Moving Person Items Major $1,200.00 Per Home N/A N/A
Structural Remediation Measures
Roofing Repair Minor $800.00 Per Home N/A N/A
Roofing Repair Moderate $2,000.00 Per Home N/A N/A
Roofing Repair Major $4,000.00 Per Home N/A N/A
Exterior Door Replacement Minor $1,500.00 Per Home N/A N/A Exterior Door Replacement Moderate $2,500.00 Per Home N/A N/A Exterior Door Replacement Major $3,000.00 Per Home N/A N/A Whole House Weather Stripping Minor $500.00 Per Home N/A N/A Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-13
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Whole House Weather Stripping Moderate $750.00 Per Home N/A N/A Whole House Weather Stripping Major $1,000.00 Per Home N/A N/A Window Replacement Minor $1,250.00 Per Home N/A N/A
Window Replacement Moderate $1,600.00 Per Home N/A N/A
Window Replacement Major $2,000.00 Per Home N/A N/A
Drywall Repair Minor $400.00 Per Home N/A N/A
Drywall Repair Moderate $800.00 Per Home N/A N/A
Drywall Repair Major $1,200.00 Per Home N/A N/A
Plaster Repair Minor $600.00 Per Home N/A N/A
Plaster Repair Moderate $1,200.00 Per Home N/A N/A
Plaster Repair Major $1,800.00 Per Home N/A N/A
Air Quality Remediation Measures
Media Filter Upgrade Minor $150.00 Per Home N/A N/A
Media Filter Upgrade Moderate $200.00 Per Home N/A N/A
Media Filter Upgrade Major $300.00 Per Home N/A N/A
Kitchen Vent Hood Replace Minor $200.00 Per Home N/A N/A Kitchen Vent Hood Replace Moderate $300.00 Per Home N/A N/A Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-14
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Kitchen Vent Hood Replace Major $400.00 Per Home N/A N/A Kitchen Vent Hood New Minor $600.00 Per Home N/A N/A
Kitchen Vent Hood New Moderate $800.00 Per Home N/A N/A Kitchen Vent Hood New Major $1,000.00 Per Home N/A N/A
Bathroom Fan Replacement Minor $400.00 Per Home N/A N/A Bathroom Fan Replacement Moderate $600.00 Per Home N/A N/A Bathroom Fan Replacement Major $800.00 Per Home N/A N/A Bathroom Fan New / Nonexisting Minor $700.00 Per Home N/A N/A Bathroom Fan New / Nonexisting Moderate $900.00 Per Home N/A N/A Bathroom Fan New / Nonexisting Major $1,100.00 Per Home N/A N/A Exterior Vent Installation Minor $700.00 Per Home N/A N/A Exterior Vent Installation Moderate $900.00 Per Home N/A N/A Exterior Vent Installation Major $1,100.00 Per Home N/A N/A HVAC Optimization Measures
Ductwork Repair Minor $300.00 Per Home N/A N/A
Ductwork Repair Moderate $600.00 Per Home N/A N/A
Ductwork Repair Major $900.00 Per Home N/A N/A
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-15
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Ductwork Replacement $500.00 Per Home N/A N/A
Smart Thermostat Minor $105.00 Per Unit N/A N/A
Smart Thermostat Moderate $225.00 Per Unit N/A N/A
Smart Thermostat Major $342.00 Per Unit N/A N/A
New / Replacement Line Set Minor $400.00 Per Home N/A N/A New / Replacement Line Set Moderate $650.00 Per Home N/A N/A New / Replacement Line Set Major $900.00 Per Home N/A N/A Sheet Metal Fabrication Minor $400.00 Per Home N/A N/A
Sheet Metal Fabrication Moderate $650.00 Per Home N/A N/A Sheet Metal Fabrication Major $900.00 Per Home N/A N/A
Low Resistance Register Grilles Minor $400.00 Per Home N/A N/A Low Resistance Register Grilles Moderate $650.00 Per Home N/A N/A Low Resistance Register Grilles Major $900.00 Per Home N/A N/A New Register Cut In (per each) $275.00 Per Home N/A N/A Attic Infrastructure (bringing up to code) Minor $900.00 Per Home N/A N/A Attic Infrastructure (bringing up to code) Moderate $1,600.00 Per Home N/A N/A Attic Infrastructure (bringing up to code) Major $2,800.00 Per Home N/A N/A Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-16
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos Attic Hatch Retrofit Minor $450.00 Per Home N/A N/A
Attic Hatch Retrofit Moderate $600.00 Per Home N/A N/A
Attic Hatch Retrofit Major $750.00 Per Home N/A N/A
Heat Pump Water Heater Optimization Measures
Water Heater Duct In Minor $600.00 Per Home N/A N/A
Water Heater Duct In Moderate $750.00 Per Home N/A N/A
Water Heater Duct In Major $900.00 Per Home N/A N/A
Water Heater Enclosure Minor $400.00 Per Home N/A N/A
Water Heater Enclosure Moderate $500.00 Per Home N/A N/A Water Heater Enclosure Major $600.00 Per Home N/A N/A
Water Heater Relocation Minor $900.00 Per Home N/A N/A
Water Heater Relocation Moderate $1,600.00 Per Home N/A N/A Water Heater Relocation Major $2,800.00 Per Home N/A N/A Permitting Fees (w/ HERS verification included)
1st Unit $750.00 Per Home N/A N/A
Additional Unit(s) $300.00 Per Home N/A N/A
Market Rate Contractor Site Visit Consultation
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE C-17
Table C-3 Eligible Measures Compensation
Eligible Measure
Compensation
for Installed
Measure
Unit of
Measure
Potential
Compensation
for 5-Year
Warranty7
Potential
Compensation for
Premium
Equipment
Upgrade8
Prices in this table are specific to San Mateo and Santa Clara Counties and Los Banos 2-hour Virtual $247.000 Per Home N/A N/A
4-hour On-Site $494.00 Per Home N/A N/A
8-hour On-Site $988.00 Per Home N/A N/A
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-1
Exhibit D
Insurance Requirements and Proof of Insurance
Consultant shall maintain the following minimum insurance coverage:

A. COVERAGE:
(1) Workers' Compensation:

Statutory coverage as required by the State of California. (2) Liability:

Commercial general liability coverage with minimum limits of $3,000,000 per occurrence and $5,000,000 aggregate for bodily injury and property damage. ISO occurrence Form CG 0001 or equivalent is required. Such general liability coverage requirements may be fulfilled by Consultant’s primary and/or umbrella or excess liability policies.
(3) Automotive:

Comprehensive automotive liability coverage with minimum limits of $1,000,000 per accident for bodily injury and property damage. ISO Form CA 0001 or equivalent is required.
(4) Professional Liability:

Professional liability insurance which includes coverage for the professional acts, errors and omissions of Consultant in the amount of at least $1,000,000. (5) Privacy and Cybersecurity Liability
Privacy and cybersecurity liability (including costs arising from data hacking or unauthorized breaches, crisis management activity related to data breaches, and legal claims for security breach, privacy violations, and notification costs of at least $5,000,000 US per occurrence.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-1
Exhibit E
XeroHome Scope of Work and Payment Terms

XEROHOME SCOPE OF WORK
Vistar Energy Inc. (hereon referred to as ‘Subcontractor’) proposes to perform the work described in this section (‘Scope of Work’) for Franklin Energy (hereon referred to as ‘Consultant’) who is performing work under contract for Silicon Valley Clean Energy Authority (hereon referred to as ‘SVCE’ or ‘Authority).

The work is to provide the Consultant’s Team access to XeroHome’s energy analysis of individual existing single-family homes in SVCE’s service territory1(hereon referred to as ‘Analysis Region’). The Analysis Region includes approximately 154k single-family homes. The analysis will be designed and presented to Consultant to aid in their outreach and canvasing of homes for program participation, and to show utility bill impacts of specific electrification and energy efficiency upgrades for individual homes. Based on this, Consultant’s team will be able to identify energy efficiency and electrification upgrades for individual homes that will lower the home’s utility bills and quantify those savings.

About XeroHome™
XeroHome™ is a software platform developed by Subcontractor, that can build individual home energy models at the unprecedented scale of entire cities or regions, and provide personalized upgrade recommendations, based on each home’s unique conditions. Unique to XeroHome™ is its ability to use publicly available data, such as home size, year of construction, building permits, and GIS data, to build a custom (EnergyPlus™) energy simulation model for a home. It then runs multiple iterations of the energy model, to provide recommendations on which energy upgrades are most suited to a home based on utility bill impacts and/or cost-effectiveness.

XeroHome’s proprietary analysis method significantly speeds up complex building energy simulation calculations using advanced data analytics to provide recommendations for a home in seconds.

Built within the tool is the unique ability to improve the accuracy of each home’s simulation model, by adding home energy audit information, which makes the recommendations more reliable. This progression of improvement in accuracy is represented as badges associated with each home’s analysis. An energy model built using data accessible prior to an on-site assessment is referred to as a ‘White Badge Model’ and the analysis from this model is referred to as ‘White Badge Analysis’. When data is collected on-site (such as after an energy assessment), inputs to the energy model are refined based on this data, and the resulting model 1 This includes the following cities in Santa Clara County: Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale, and Unincorporated Santa Clara County
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-2
is referred to as a ‘Green Badge Model’ and the analysis from this model is referred to as ‘Green Badge Analysis’.

XeroHome Insights Package™ Dashboard
Analysis from XeroHome’s energy models is provided over a web-based interactive dashboard called the XeroHome Insights Package™ Dashboard (hereon referred to as ‘Dashboard’).

The Dashboard will be accessible to the Consultant and Authority through most modern web-browsers over desktop and laptop computers. Using the Dashboard, Contractor shall be able to evaluate individual homes in the analysis region for utility bill impacts of energy efficiency and electrification upgrade packages.
• The Consultant shall be able to visualize data from XeroHome’s White Badge Analysis of existing single-family homes in the analysis region via the Dashboard. The data will be visualized over a map of the analysis region along with charts, and data tables. • The Dashboard shall have interactive features that will allow its users to review region-level aggregate data, as well as home-level details of individual homes. On a region-level, users will be able to apply filters to identify specific groups of homes for targeted outreach and canvassing. On a home-level, users will be able to review parameters that make up an individual home’s energy model, and the results of energy analysis such as utility bill impacts for various energy upgrades.
• The Dashboard shall allow users to integrate data collected from on-site assessments (via Consultant’s digital data collection tool – Clipboard). The resulting update to XeroHome’s energy models from White to Green Badge and change in analysis shall be reflected on the data displayed on the Dashboard.
• The Dashboard shall provide the ability to create a custom package of upgrades for individual homes by selecting individual energy upgrades. The Consultant shall be able to review the combined impact of selected measures on the home’s baseline calculation of utility bill and carbon emissions. Consultant shall use the findings from the Dashboard to inform the home’s proposed scope of work. Consultant shall have the ability to export the Dashboard’s findings in a format best suited for their workflow.

Figure 1: Example screens of XeroHome Insights Package™ Dashboard for an analysis region.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE ••• • XeroHome'
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1.1 Task 1: Project Initiation and Reporting
The Subcontractor shall conduct a Project Initiation meeting with Consultant and Authority to confirm project tasks, requirements, and the timetable for deliverables. The project initiation meeting may also include other stakeholders such as city representatives, and community stakeholders as identified by the Authority. The Subcontractor shall report on the progress of various tasks (monthly or on a frequency suggested by the Consultant) to keep them informed on accomplishments, outstanding issues, and next steps.

Task 1 Deliverable(s)
• Project initiation meeting notes
• Progress updates to Consultant
Task 1 Time Frame
• Project Initiation Meeting to be held within 2 weeks of SVCE and Consultant Agreement signing.

1.2 Task 2: XeroHome Insights Package™ - Dashboard
This task consists of four distinct activities marked by four milestones where the Subcontractor shall provide deliverables as noted below.

Milestone 1 (M1): Data Acquisition
The Subcontractor shall work with various data vendors and access publicly available data sources to acquire data needed for energy modeling and analysis of homes in the Analysis Region. These datasets are noted below:
- Property tax assessment data
- Building permits data
- GIS shape files for home geometry
- TMY and AMY weather files
- Utility rate information
Task 2 – M1 Deliverable(s):
• Complete acquisition of datasets listed above.
• Merge datasets into single database including each residential customer.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-4
Task 2 – M1 Time Frame
• Within 2 months of Project Initiation.

Milestone 2 (M2): 50% Energy Model Development and Dashboard Access The Subcontractor shall use the XeroHome™ software platform to develop energy models (White Badge Models) for 50% of all existing single-family homes in the Analysis Region.

Subcontractor shall provide Consultant and SVCE access to these models over the XeroHome Insights Package™ Dashboard for the purpose of evaluating the Dashboard’s functionality and iterate on identifying needed Dashboard customizations (see Task 3).

Task 2 – M2 Deliverable(s):
• Access to energy models for 50% of homes in Analysis Territory over the XeroHome Insights Package™ Dashboard.

Task 2 – M2 Time Frame:
• Within 3 months of Project Initiation.

Milestone 3: 100% Energy Model Development and Dashboard Access The Subcontractor shall complete development of the energy models for 100% of existing single-family homes in the Analysis Region (White Badge Models) and provide Consultant access to these models over the XeroHome Insights Package™ Dashboard.

Task 2 – M3 Deliverable(s):
• Access to energy models for 100% of homes in Analysis Territory over the XeroHome Insights Package™ Dashboard.

Task 2 – M3 Time Frame:
• Within 4 months of Project Initiation.

Milestone 4: Data load, API integration and Dashboard Release The Subcontractor shall perform a portfolio-scale comparison of modeled energy use to historic electricity use and gas use data use of homes from SVCE. If SVCE cannot provide historical electricity or gas data for a particular home, NREL’s ResStock modeling of residential buildings for SVCE’s region can be utilized. Based on findings, Subcontractor may update the XeroHome energy models by adjusting their modeling assumptions to improve their modeling accuracy.

The Subcontractor shall provide Consultant and SVCE access to the updated models over the XeroHome Insights Package™ Dashboard.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-5
Subcontractor shall work with Consultant to identify data points for on-site data collection, and on API integration of Consultant’s digital data collection tool (Clipboard) into XeroHome™.

The Subcontractor shall perform a User Acceptance Testing (UAT) as part of the release process of the Dashboard with the Consultant’s and SVCE’s users to ensure usability and feature completion. Feature issues shall be identified, and Subcontractor shall work with the Consultant and SVCE to prioritize fixes to those issues to ensure smooth release of the dashboard.

The Subcontractor shall provide a maximum of 20 user accounts to individuals in the Consultant and Authority’s teams to access the dashboard. Each account shall be password protected and uniquely assigned to individual users. The accounts shall be transferable to other individuals upon request. Access to the Dashboard for an account will be limited to the service territory identified with the Consultant and the Authority. The Subcontractor shall work with Authority to facilitate exporting data from the Dashboard in a .csv file format.

Task 2 – M4 Deliverable(s):
• Presentation of portfolio-scale comparison of modeled energy use to energy use data. • API Integration of XeroHome Insights Package™ Dashboard with Consultant’s on-site data collection tool (Clipboard)
• Completion of User Acceptance Testing (UAT) for release of dashboard for use by Consultant.
• Release of XeroHome Insights Dashboard™ - up to 20 user accounts. • CSV file outputs related to individual homes or groups of homes by SVCE staff.

Task 2 – M4 Time Frame:
• Within 5 months of Project Initiation.

1.3 Task 3: XeroHome Insights Package™ - Dashboard Customization The Subcontractor shall work with Consultant and SVCE to identify customizations needed in the XeroHome Insights Package™ Dashboard to suit the needs of SVCE’s Single-family Installation Program in a requirements document. Subcontractor shall perform the Dashboard customization which shall include but not be limited to • Updating any additional data fields that need to be visualized. • Refining data field mapping between XeroHome and the data collected by Contractor’s team during site assessments.
• Changing how the data fields and the outputs from the analysis are visualized on the Dashboard for better integration with Contractor’s workflow.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-6
Task 3 Deliverables
• Requirements document outlining all requested customizations for Contractor and Authority approval.
• Release of XeroHome Insights Package™ Dashboard with customizations.

Task 3 Time Frame
• Requirements document: within 3 months of Project Initiation • Customized dashboard: within 6 months of Project Initiation.

1.4 Task 4: XeroHome Insights Package™ - Subscription and Annual Updates The Subcontractor shall provide continuous access to XeroHome™ analysis engine via the Dashboard outside of scheduled maintenance windows. This service will be available for the period of the project, starting with the release of Customized Dashboard to Consultant and SVCE (end of Task 3). The associated cost will be billed as a quarterly subscription fee.

The Subcontractor shall make quarterly updates to keep the White Badge analysis current with updates to building permits data and changes to rates and carbon emissions estimates information. The updates shall be tested and deployed by Subcontractor at the end of each quarter and will be automatically reflected on the live XeroHome Insights Package™ Dashboard.

Task 4 Deliverables
• Access to XeroHome™ Analysis Engine via the XeroHome Insights Package™ Dashboard.
• Quarterly updates to XeroHome Insights Package™ Dashboard Task 4 Time Frame
• Every quarter after initial deployment – 6 months after Project Initiation till end of contract.

1.5 Task 5: XeroHome Insights Package™ - API Access
The Subcontractor shall maintain a secure API service connecting XeroHome Insights Package™ Dashboard with Contractor’s on-site data collection tool, Clipboard to provide data transfer capability from site energy assessments.

Task 5 Deliverables
• Secure API service between XeroHome Insights Dashboard with Consultant’s Clipboard tool.

Task 5 Time Frame
• Every month after initial deployment – 6 months after Project Initiation, till end of contract.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-7

COMPENSATION
In consideration of the services provided by Vistar Energy Inc. (“Subcontractor”) described in Section 1 Scope of Work, Franklin Energy (“Consultant”) will pay Subcontractor based on the following fee schedule and terms:

The compensation to be paid to Subcontractor shall not exceed a total of $658,636 for the Term of the Single-family Installation Program Agreement between Consultant and Silicon Valley Clean Energy Authority (“Authority” or "SVCE") and as set forth in Table 1 below. Any new or additional tasks that are identified by the Authority or Consultant and which result in a change to the Subcontractor’s original scope of work outlined in Section 1, shall necessitate an amendment to this contract. The contract amendment will detail the new or additional tasks, any adjustments to the project timeline, and corresponding adjustments to compensation. The contract amendment shall be subject to written approval from the Authority, Consultant and Subcontractor.

Table 1 Total Not-to-Exceed Compensation illustrates not-to-exceed (NTE) amounts for each budget category and invoicing and payment terms. Peninsula Clean Energy Authority (PCE) may implement the similar services described in the Single-family Installation Program Agreement and execute its own agreement with Contractor. In the event that PCE executes an agreement with Contractor for the services described Single Family Installation Program Agreement, the “SVCE-PCE Joint Program NTE ($)” amounts shall apply. In the event no agreement is executed with PCE, the “SVCE Only Program NTE ($)” amounts shall apply.

Consultant and Subcontractor are responsible for tracking expenditures and ensuring neither the not-to-exceed amounts per budget category, nor the total not-to-exceed total compensation of this Scope of Work are exceeded.

In the event that Single-family Installation Program Agreement between Consultant and Authority is terminated, this agreement with Subcontractor and Consultant shall also terminate.

In such an event, the Subcontractor shall be compensated for the tasks already performed. Any subscription fees, API access fees, and quarterly update fees that are paid for in advance by SVCE will be refunded to SVCE at a prorated amount within 45 days of contract termination.

In the event that Single-family Installation Program Agreement between Contractor and Peninsula Clean Energy (PCE) is terminated, this agreement with Subcontractor and Consultant shall be subject to modification. Upon such termination, compensation for the Subcontractor under the “SVCE Only Program NTE ($)”, as detailed in Table 1, shall become applicable for all remaining tasks on the project.

Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-8
In the event the resulting solution developed by XeroHome does not meet the needs of the Program, Consultant may, at its discretion replace it with an alternative solution that would better fit the program’s needs. Thereafter, Subcontractor will have the option of remedying the solution in a reasonable timeframe or objectively demonstrating that the solution does meet the needs of the program. If Authority determines that the Subcontractors initial and/or revised solution does not meet the needs of the program, the Authority may then authorize Consultant to secure an alternative solution.

Table 2 – Hourly Rates and Hours Estimation
Principal/Chief Executive Officer $ 250 8
Chief Technology Officer $ 250 12
Director $ 230 16
Engineer Level 2 $ 220 0
Engineer Level 1 $ 205 80
Administration Staff $ 125 0
Staffing Direct Labor
(Vistar Energy)
Hourly
Rate
Estimated
Hours
(Task 3)
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE E-9
Table 1 – Total Not-to-Exceed Compensation
SVCE-PCE Joint Program NTE SVCE Only Program NTE Invoicing and Payment Terms
Tasks
Year 1
NTE
Year 2
NTE
Year 3
NTE
Total
NTE
Year 1
NTE
Year 2
NTE
Year 3
NTE
Total
NTE
Task 1 - Project
Initiation $1,030 $0 $0 $1,030 $2,060 $0 $0 $2,060
Fixed fee paid upon Project
Initiation meeting
Task 2 M1 -
Data Acquisition $53,244 $0 $0 $53,244 $76,063 $0 $0 $76,063 Fixed fee paid upon milestone
completion and Authority
approval
Task 2 M2 -
Energy models
development
(50%) $53,244 $0 $0 $53,244 $76,063 $0 $0 $76,063
Fixed fee paid upon milestone
completion and Authority
approval
Task 2 M3 -
Energy models
development
(100%) $53,244 $0 $0 $53,244 $76,063 $0 $0 $76,063
Fixed fee paid upon milestone
completion and Authority
approval
Task 2 M4 -
Data load and
API integration $53,244 $0 $0 $53,244 $76,063 $0 $0 $76,063 Fixed fee paid upon milestone
completion and Authority
approval
Task 3
Customization $25,000 $0 $0 $25,000 $50,000 $0 $0 $50,000 Optional upon SVCE request.

Customization shall be quoted
and must be approved in writing
by SVCE. Invoiced as time and
materials per Table 2.

Task 4 -
Subscription to
XeroHome™
Analysis Engine $15,400 $61,600 $61,600 $138,600 $15,400 $61,600 $61,600 $138,600 Fixed quarterly fee of $15,400
paid every quarter after initial
deployment of XeroHome™
Insights Package (Task 2)
Task 4 -
Quarterly
Updates $5,066 $20,264 $20,264 $45,594 $7,238 $28,952 $28,952 $65,142 Fixed quarterly fee of $5,066 for
SVCE-PCE Joint program or
$7,238 for SVCE-Only program
paid every quarter after initial
deployment of XeroHome™
Insights Package (Task 2)
Task 5 - API
Access $7,668 $30,672 $30,672 $69,012 $10,954 $43,824 $43,824 $98,602 Fixed monthly fee of $2,556 for
SVCE-PCE Joint Program or
$3,652 for SVCE-only program
paid every month after initial
deployment of XeroHome™
Insights Package (Task 2)
TOTALS $267,140 $112,536 $112,536 $492,212 $389,904 $134,376 $134,376 $658,656 Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE F-1
Exhibit F
5-Year Warranty
The “JB Warranties Premium Protection Plan: Service Contract” as inserted below illustrates sample terms and conditions for extended service and repair of Eligible Measures for a term of five years following equipment installation (“5-Year Warranty”). Within 90 days of contract execution, Consultant will provide Authority with updated terms and conditions for the 5-Year Warranty for all Eligible Measures which have a “Potential Compensation for 5-Year Warranty” as listed in “Exhibit C, Table C-3”. Upon Authority approval, the updated terms and conditions of the 5-Year Warranty shall be formalized in an executed amendment to this Agreement. The 5- Year Warranty shall be provided to participating customers in the Program Participation Agreement, if applicable.
[Insert 5-Year Extended Warranty]
<<JBWTermsConditions2024.pdf>>
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE F-2
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE PREMIUM PROTECTION PLAN: SERVICE CONTRACT
This is Your Extended Service Contract. Please place this Contract in a safe place. You will need it in the event that service is required.

This contract is fully insured as noted under the Coverage section.

Obligor: The Service Agreement Provider/Obligor under this Service Agreement is Dealers Alliance Corporation located at 240 N. Fifth Street. Suite 350. Columbus. OH. 43215. In Florida - the Obligor is Dealers Assurance Company located at 240 N. Fifth Street. Suite 350, Columbus. OH 43215. 800-282- 8913 (Florida License # 02977).

Administrator: The Service Agreement Administrator is: Fortress Extended Warranty Administration, LP, Locatedat 2221 Justin Road.

Suite 119, PMB-153, Flower Mound, TX 75028. (833) 339-2366. /“7 For claims or information about this Contract, call Your Dealer. When calling Your Dealer for service please refer to the Contract number listed above in the left corner of this contact.

Your Dealer is the service agent for this Contract. You should contact Your Dealer for questions, transfers, renewals and purchase of additional Contracts. Your Dealer provides service repairs for this Contract during Your Dealer's normal working hours.

Shipping, handling, and refrigerant disposal fees are not covered and are the responsibility of the owner. Proper maintenance is required by owner and proof of such may be requested to validate coverage.

TERMS AND CONDITIONS

1. Service Agreement Provider (Obligor) Provider or Obligor: The Service Agreement Provider/Obligor under this Service Agreement is Dealers Alliance Corporation located at 240 N. Fifth Street, Suite 350, Columbus. OH 43215. In Florida - the Obligor is Dealers Assurance Company located at 240 N. Fifth Street. Suite 350, Columbus. OH 43215 (Florida License # 02977).

2. Definitions: "We', ’Us" and "Our" shall mean the obligor. In Florida "We'. “Us" and "Our" shall mean Dealers Assurance Company "You" or "Your" shall mean the consumer or purchaser of the product(s) covered by this Service Agreement. "Service Agreement" ("Agreement") shall mean this document together with Your original purchase receipt. "Administrator" shall mean Fortress Extended Warranty Administration, LP Located at 2221 Justin Road, Suite 119. PMB-153. Flower Mound, TX 75028.

For claims or information about this Agreement please call the Program Administrator (833) 339-2366.

There is no deductible under this Service Agreement.

3. WHAT IS COVERED:

In consideration of payment of the Service Agreement price, this Service Agreement provides for either the repair or replacement of the covered product(s) as described subject to the terms and conditions below. This Agreement does not cover repair or replacement of the product for any of the causes or provide coverage for any losses set forth in the section below entitled WHAT IS NOT COVERED. The covered product (or products) under this Service Agreement are set forth on page 1 of this Service Agreement. In the event of any conflict between this Section 3 and the description on page 1. the description on page 1 shall control.

Repair Protection: If Your product is eligible for repair protection this Agreement provides, at our discretion, for the repair or replacement of Your product to its standard operating condition provided the product, during normal usage, fails to perform its intended functions due to normal wear and tear; mechanical or electrical failure; or a defect in either materials or workmanship.

Parts used to repair or replace the covered product may be new. used, refurbished or non-original manufacturer's parts that perform to factory specifications of the product;
No Lemon Guarantee: This Agreement provides that following the expiration of the manufacturer's warranty term and after three service repairs have been completed for the same problem, on an individual product that requires a fourth repair, as determined by Us, We reserve the right to replace the product with one of like kind and quality not to exceed the original purchase price of the product. This clause will be exercised at our sole discretion; GENERATOR(S): All internally installed parts supplied by the manufacturer; CONDENSING UNIT(S): All internally installed parts supplied by the manufacturer. Evaporator coils, condenser coils, and metering devices are covered against leaks as received from the manufacturer. The Agreement will not pay for changeover from CFC to non-CFC refrigerant or oil changes on commercial compressors; EVAPORATOR COIL: A new evaporator coil is covered when sold as a part of a complete system; COMPRESSOR: All internal functioning parts supplied by the manufacturer; ELECTRIC FURNACES AND AIR HANDLERS: All internal functioning parts including heat modules and controls supplied by the manufacturer;
GAS FURNACE: All internal functioning parts supplied by the manufacturer; WATER HEATER: All internal functioning parts supplied by the manufacturer. Excludes any repair due to calcium build-up; BOILER(S): Coverage applies to internal parts as installed by the original manufacturer, additional external pumps excluded; • HEAT PUMP: Coverage applies to internal parts as installed by the original manufacturer, excludes exterior components (i.e. drain lines, disconnect breakers, external pumps) or any failure, leakage, or design problem associated with closed loop application or open discharge piping;
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Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3^ PREMIUM PROTECTION PLAN: SERVICE CONTRACT

WARRANTIES
REFRIGERANT LEAKS: Covers repair of the leak and replacement refrigerant charge as a result of leaks internal of the unit.

Refrigerant is covered only when a leak has been permanently repaired and/or a compressor or coil replaced;

4. MAINTENANCE REQUIREMENT: You must maintain the equipment in accordance with the service requirements set forth by the manufacturer to keep Your Service Agreement in force. Evidence of proper service, when required by Administrator, must be submitted in the event of a claim. Failure to maintain the product in accordance with the manufacturers instructions may result in denial of coverage under this Agreement.

5. CLAIM SUBMISSION: Upon inspection and diagnosis, if it is determined that the failure is covered by this Agreement, the service agent should repair the failure and proceed per the program guidelines and submit the claim along with proper documentation. You must sign all service invoices upon completion of the repair.

6. HOURS OF SERVICE: Repair service and service calls will be made during normal working hours of the service dealer. We do not cover overtime rates.

7. TERMS: This Service Agreement shall commence upon the date of Agreement purchase. The product manufacturer has primary responsibility for replacement or repair of the covered product during the manufacturer s warranty period. Claims will not be accepted before the standard waiting period expires. See Service Agreement for ‘Coverage Start Date"

8. LIMIT OF LIABILITY: The total amount that We will pay for repairs made in connection with all claims that You make pursuant to this Service Agreement shall not exceed the purchase price of the product, less taxes or our limit of liability table (Attachment: Limit of Liability), whichever is less. In the event that We make payments for repairs, which In the aggregate, are equal to the product Purchase Price or We replace the product with a new, rebuilt or refurbished product of equal or similar features and functionality, We will have no further obligations under this Service Agreement. For more details on Limit of Liability, please visit https://jbwarranties.com/lol. / /

9. TO OBTAIN SERVICE: If the covered product requires service, call the service contractor noted on the front page of Your Service Agreement. You must provide the Agreement number and explain the problem. They will attempt to resolve the problem you are experiencing over the telephone. If the service agent cannot resolve the problem, they will schedule a service call with you. We reserve the right to inspect the product from time to time. Service will be provided during normal business hours and in the USA only.

10. PURCHASER RECORDS: You may be required to provide proof of purchase as a condition for receiving service under the Agreement. Your Original Purchase Receipt and this Agreement should be kept in a safe place.

11. WHAT IS NOT COVERED:
•Any equipment located outside the United States of America; Equipment sold without a manufacturer s warranty;
•Refurbished products;
•Repair or replacement necessitated by loss or damage resulting from any cause other than normal use and operation of the product in accordance with the manufacturer’s specifications and owner s manual. This includes, but is not limited to. theft, operator negligence, misuse, abuse, improper electrical/power supply, spikes and surges, incorrect wiring, non-connected/loose wires, Field installed wiring, exposure to natural disasters (such as tornados, hurricanes, floods, earthquakes); Unauthorized repairs, repairs due to improper installationand/or improper application, leaks caused from non-factory welds; •Cosmetic damage to case or cabinetry or other non-operating parts or components, including corrosion or oxidation; •Lack of manufacturer specified maintenance, improper equipment modifications, vandalism, animal or insect infestation, rust, dust, corrosion, defective batteries, battery leakage, acts of nature, or any other peril originating from outside the product; Any and all pre-existing conditions that occur prior to the effective date of this Agreement; Service necessary because of improper storage, improper ventilation, reconfiguration of equipment, use or improper movement of the equipment, including the failure to place the equipment in an area that complies with the manufacturer’s published space or environmental requirements;
Any utilization of equipment that is inconsistent with either the design of the equipment or the way the manufacturer intended the equipment to be used;
Failures of products caused by any installation that prevents normal service; Any and all cases in which the manufacturer of the equipment would not honor any warranty regarding the equipment; Failure to use reasonable means to protect Your product from further damage after a failure occurs; Product(s) with removed or altered serial number;
•Service recommended (for convenience) by a repair facility not necessitated by mechanical or electrical breakdown even when components are operating outside manufacturers specifications but still providing proper heating and cooling; •Any repair that is a result of in-warranty parts not provided or shipped by the manufacturer; damage or equipment failure which is covered by manufacturer’s warranty, manufacturer’s recall, or factory bulletins (regardless of whether or not the manufacturer is doing business as an ongoing enterprise);
Systems or component(s) that are covered by a manufacturer's warranty, insurance or another service contract; •Consequential damages or delay in rendering service under this Agreement or loss of use during the period that the product is at the repair center or otherwise awaiting parts;
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Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3JS PREMIUM PROTECTION PLAN: SERVICE CONTRACT

WARRANTIES
•Service required as a result of any alteration of the equipment or repairs made by anyone other than the authorized service provider, its agents, distributors, contractors or licensees or the use of supplies other than those recommended by the manufacturer;
•Charges related to "No problem found" diagnosis or preventative maintenance performed without mechanical breakdown or electrical failure. Non failure problems, including but not limited to; noises, squeaks, unbalanced fan blades, tightening of fittings, resetting switches, etc. Intermittent issues are not product failures; JKF •Standard Programmable and digital thermostats are covered with a complete split or package system if listed on the first page of this Contract. Additional coverage required for thermostats when OEM coverage is less than the term of the system agreement and when the thermostat cost is > S125 wholesale cost. Humidistats. Combination. Zone controllers, and variable speed motor (ECM) controllers for zone or humidity control are not covered with a system, and require additional separate agreement purchase;
Services made mandatory by changes in Federal, State or Local regulations. •Clogged drain line, electrodes, nozzles or gaskets, are considered maintenance and are not covered. Exterior disconnect box and high voltage wiring. .
'^^^k
•Thermostat calibration and/or software updates, incorrect wiring and dead batteries.

Appearance features, aesthetics, paint and cabinet parts, knobs and buttons, routine maintenance, periodic cleaning, and customer education;.

Consequential damage caused by rust, oxidation corrosion, water, freezing, fire, lightning, general environmental conditions, insect or rodent infestation, vandalism, or other acts of Nature; •Special tooling, blocks, tackle, dollies, and scaffolding. j •Filters, duct work, vents, external fuses, external line sets, belts, connectors, piping, high or low voltage tines external of the equipment;
•Premium service cost over normal service charges. Items located outside the installed unit's cabinet; Shipping, handling, and refrigerant disposal fees are not covered and are the responsibility of the owner.

Failures due to incorrect refrigerants, improperly matched condensing units and evaporator coils, or metering devices; Dirty Sock Syndrome or odors;
•Automatic transfer switches above 400 amps and/or 3 phase, are excluded from coverage; •Portable generators are excluded from coverage. Repairs performed by unauthorized Service Agents. Generators used as rental or trailer mounted applications; /
\ \
•Generators used for prime power where utility power does or does not normally exist. Cost of normal maintenance (i.e. tune-ups and associated parts), adjustments, loose/leaking clamps, installation and start-up; Steel enclosures that are rusting due to improper installation, and/or location in a harsh or saltwater environment or scratched where integrity of paint applied is compromised;
•Failures resulting from exposure to corrosive environments, unless seacoast coverage is purchased. Corrosion caused by atmospheric environments contaminated by aerosols:
•Failures caused by any contaminated fuels, oils, coolants orlack of proper fluid amounts; •Batteries, fuses, belts, spark plugs and all engine fluids; Transportation deemed abnormal;
•Equipment that has been moved from original address such as mobile homes, etc; •Field installed accessories including but not limited to: float switch, secondary drain pan. baffle, drip eliminator, start kit, surge protector, condensate pump, wireless accessories, etc.; Refrigerant used during diagnostic, leak checks, or for temporary cooling/heating;

12. RENEWAL: This Service Agreement may at Our discretion be renewed at the expiration of its term. When We offer to renew the Service Agreement, the renewal price quoted will reflect the age of the product and the prevailing service cost at the time of the renewal.

13. TRANSFERABILITY This Agreement may be assigned or transferred at no charge to subsequent owners if the maintenance required has been performed. This can be done only if the original Service Agreement holder send s notice to the dealer and calls the Program Administrator toll-free at 833-339-2366 within one hundred and eighty (180) days of a change in ownership, the name and address of the new purchaser along with a copy of the original Service Agreement. In the event of a transfer of registered equipment, due to manufacturer/dealer replacement, the original start-up date will remain in effect for the duration of the Agreement.

14. CANCELLATION: You may cancel this Agreement at any time. To arrange for cancellation of this Agreement, call Administrator toll-free at 833-339-2366. If You cancel within the first thirty (30) days after purchasing this Agreement You will receive a full refund, less any claims paid or pending.

If You cancel after thirty (30) days following Your purchase of this Agreement. You will receive a pro rata refund based on the time remaining on Your Agreement, less any claims paid or pending, subject to an administrative fee of S10.00 or 10% of the Agreement purchase price, whichever is less.
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Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3^ PREMIUM PROTECTION PLAN: SERVICE CONTRACT

WARRANTIES
Administrator or We may only cancel this Agreement for the following reasons: nonpayment of the Agreement price, fraud or material misrepresentation. If We cancel this Agreement, Administrator will provide You with written notice of cancellation listing the reason for such cancellation not later than fifteen (15) days before the effective date of termination, and will refund Your payment in full, less any claims paid or pending.

15. INSURED AGREEMENT: This is not an insurance policy. However, We have obtained an insurance policy to insure Our performance under this Service Agreement. In the event We cease to operate, become bankrupt, or fail to pay any claim or fail to replace the Product covered under this Service Agreement within sixty (60) days after Product has been returned or, in the event that You cancel this Service Agreement, and We fail to refund the unearned portion of the Service Agreement price. You are entitled to make a direct claim against the insurer, Dealers Assurance Company, 240 N. Fifth Street, Suite 350, Columbus, OH 43215, 800-282-8913.

16. SUBROGATION: In the event that coverage is provided under this agreement, We shall be subrogated to all the rights You have to recover against any person or organization arising out of any defect which is the subject of a voluntary or mandatory recall campaign, as well as out of any order, judgment, consent decree, or other settlement, and You shall execute and deliver instruments and papers and do whatever is necessary to secure such rights. You shall do nothing to prejudice those rights. Further, all amounts recovered by You for which You have received benefits under this Agreement shall belong to. and be paid to JB Warranties, up to the amount of benefits paid under this Agreement. We shall recover only the excess after You are fully compensated for Your loss.

ENTIRE CONTRACT:

This Service Agreement together with your Purchase Receipt sets forth the entire contract between the parties and no representation, promise or condition not contained herein shall modify.

SPECIAL STATE DISCLOSURES
Regulation of service plans may vary widely from state to state.Any provision within this service agreement plan ("Service Agreement") which conflicts with the laws of the state where You live shall automatically be considered to be modified in conformity with applicable state laws and regulations as set forth below. The following state specific requirements apply if Your Service Agreement was purchased in one of the following states and supersede any other provision of Your Service Agreement terms and conditions to the contrary.

ALABAMA only:

The Service Agreement Provider is Dealer Alliance Corporation. You may return this Service Agreement within twenty (20) days of the date the Service Agreement was provided to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void and the full purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement.

If You cancel this Service Agreement after the first (twenty) 20 days, you will receive the unearned portion of the full purchase price of the Service Agreement, less an administrative fee of up to twenty-five dollars (S25.00).

ARIZONA only:

Definitions: A "consumer" means a contract holder, inclusive of a buyer of the covered product (other than for re-sale), any person to whom the product is transferred during duration of the contract coverage period, or any person entitled to receive performance on the part of the obligor under applicable law: "service Dealer" is any person or entity that performs or arranges to perform services pursuant to a service contract which the person issues; "service contract administrator" means an entity which agrees to provide contract forms, process claims and procure insurance for and on behalf of a dealer in performance of the obligations pursuant to a service contract, but which may not itself perform actual repairs. Dealers Alliance Corporation is the provider and the obligor for this Service Agreement in Arizona.

Cancellation: No claim incurred or paid shall be deducted from the amount of any refund. The cancellation provision shall not contain both a cancellation fee and a cance'lation penalty. Administrator or We may only cancel this Agreement for the following reasons:
nonpayment of the Agreement price by You, fraud or material misrepresentation by You.

ARKANSAS only:

You may return this Service Agreement within twenty (20) days of the date the Service Agreement was mailed to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void, and the full purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement.

CALIFORNIA only:
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Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3^ PREMIUM PROTECTION PLAN: SERVICE CONTRACT
This Service Agreement may be cancelled by the Agreement holder for any reason, including, but not limited to. the Product covered under this contract being sold, lost, stolen or destroyed. If You decide to cancel Your Service Agreement, and cancellation notice is received by the selling retailer within 30 days of the date you received the Service Agreement, and you have made no claims against the Service Agreement, you will be refunded the full Service Agreement price, less any claims; or if Your Service Agreement is cancelled by written notice after 30 days from the date you received this Service Agreement, you will be refunded a pro-rated amount of the Service Agreement price, less any claims paid or less an administrative fee of 10% of the Service Agreement price or S25, whichever is less, unless otherwise precluded by law. To arrange for cancellation of this Plan, please contact Your selling retailer.

COLORADO only:

Action under this Service Agreement may be covered by the provisions of the ‘Colorado Consumer Protection Act" or the "Unfair Practices Act*, articles 1and 2 of title 6. C.R.S. A party to this Service Agreement may have a right of civil action under the laws, including obtaining the recourse or penalties specified in such laws.

CONNECTICUT only:

Section 14. Insured Agreement - is deleted and replaced with the following: This is not an insurance policy. However, We have obtained an insurance policy to insure our performance under this Service Agreement. In the event We cease to operate, become bankrupt, or fail to pay any claim or fail to replace the Product covered under this Service Agreement within sixty (60) days after the Product has been returned or. in the event that You cancel this Service Agreement, and We fail to refund the unearned portion of the Service Agreement price, You are entitled to make a direct claim against the insurer, Dealers Assurance Company, 240 N. Fifth Street, Suite 350, Columbus, OH 43215. Please call the insurer at 800-282-8913 to make a direct claim. The term of Your Service Agreement is automatically extended by the length of time in which the covered Product is in the Obligor's custody for repair under the Service Agreement. You may cancel Your Service Agreement if the covered product is lost, stolen, or destroyed. This Service Agreement provides in-home service. In the event You are unable to resolve a dispute with the Administrator, you may contact the State of Connecticut Insurance Department: P.O. Box 816, Hartford. CT 06142-0816, Attn: Consumer Affairs. The written complaint must contain a description of the dispute, the purchase or lease price of the Product, the cost of repair of the Product, and a copy of the Service Agreement.

FLORIDA only:

The obligor and administrator under this Service Agreement is Dealers Assurance Company (License No. 02977). If you cancel this Service Agreement, you will receive a refund equal to 90% of the unearned pro rata purchase price of the Service Agreement, less any claims that have been paid. If we cancel this Service Agreement, you will receive one hundred percent (100%) of the unearned pro rata purchase price of the Service Agreement. The rates charged to You for this Service Agreement are not subject to regulation by the Florida Office of Insurance Regulation.

GEORGIA only:

You may cancel this Service Agreement at any time by notifying the selling retailer in writing or by surrendering the Service Agreement to the selling retailer, whereupon the selling retailer will refund the unearned pro rata purchase price based on the time remaining on the request for cancellation, less an administrative fee of $10 or 10% of the pro-rata refund amount, whichever is less. To arrange for cancellation of this Plan, please contact Your selling retailer. The Obligor is also entitled to cancel this Service Agreement at any time based upon fraud, misrepresentation, nonpayment of fees by you. The following exclusion: ANY AND ALL PRE-EXISTING CONDITIONS THAT OCCUR PRIOR TO THE EFFECTIVE DATE OF THIS CONTRACT is hereby amended with respect to Georgia contract holders as follows:

WHAT IS NOT COVERED:

ANY AND ALL PRE-EXISTING CONDITIONS KNOWN TO YOU OR REASONABLY SHOULD HAVE BEEN KNOWN TO YOU THAT OCCUR PRIOR TO THE EFFECTIVE DATE OF THIS CONTRACT. Procedures for cancellation of this Service Agreement will comply with section 33-24-44 of the Georgia code. Administrator may cancel this Service Agreement upon thirty (30) days written notice to you.

No claim incurred or paid shall be deducted from the amount of any refund.

HAWAII only:

The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. This provision applies only to the original purchaser of the Service Agreement.

ILLINOIS only:

The Administrator will pay the cost of covered parts and labor necessary to restore the Product(s) to normal operating condition as a result of covered or mechanical component failure due to normal wear and tear. You may cancel this Service Agreement at any time. If You cancel this Service Agreement within the first thirty (30) days of purchase and if no service has been provided to You, You shall meus.jbwarranties.com •Office: 877-243-8168|Fax: 469-464-1226|Claims Fax: 469-464-1227 Page 6 of 11 Form FWC-DAC-103 (02/19)
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Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE ,3^. PREMIUM PROTECTION PLAN: SERVICE CONTRACT
receive a full refund of the purchase price less a cancellation fee equal to the lesser of ten percent (10%) of the purchase price or fifty dollars ($50.00). If You cancel this Service Agreement at any other time or if You cancel after service has been provided to You. You shall receive a refund equal to the pro rata purchase price less the value of any service received and less a cancellation fee equal to the lesser of ten percent (10%) of the purchase price or fifty dollars ($50.00).

INDIANA only:

Your proof of payment to the issuing dealer for this Service Agreement shall be considered proof of paymentIo the insurance company who guarantees Our obligation to You. This Service Agreement is not insurance and is not subject to Indiana Insurance law.

MASSACHUSETTS only:

You may return this Service Agreement within twenty (20) days of the date the Service Agreement was mailed to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void, and the ftill purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement.

MAINE only:

You may return this Service Agreement within twenty (20) days of the date the Service Agreement was mailed to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void and the full purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement.

MARYLAND only:

You may return this Service Agreement within twenty (20) days of the date the Service Agreement was mailed to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void, and the full purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement.

MINNESOTA only:

You may return this Service Agreement within twenty (20) days of the date the Service Agreement was mailed to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void, and the full purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement.

MISSOURI only:

You may return this Service Agreement within twenty (20) days of the date the Service Agreement was mailed to You or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void, and the full purchase price will be refunded to You. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. These provisions apply only to the original purchaser of the Service Agreement. In the event of cancellation, no cancellation fee shall apply. In no event will claims paid be deducted from any refund.

NEVADA only:

This Service Agreement Is not an insurance policy. This Service Agreement does not provide replacement or service coverage for failures or breakdowns arising from pre-existing conditions or for any form of consequential damages. The cancellation provision in Your Service Agreement is hereby deleted and replaced with the following:

This Service Agreement is void and We will refund to You the purchase price of this Service Agreement, if no service or replacement claim has been made and You return the Agreement to Us: Within 20 days after the date this Service Agreement was mailed or otherwise sent to You; or Within 10 days after You have received a copy of the Service Agreement if We have furnished You with a copy of this Agreement at the time when this Agreement was purchased. To arrange for cancellation of this Agreement, please contact Your selling retailer. We will refund to You the purchase price of this Agreement within 45 days after it has been returned to Us. If We do not refund the purchase price within 45 days, We will pay the You a penalty of 10 percent of the purchase price for each 30-day period that the refund remains unpaid. You may also cancel this Service Agreement at any other time and receive a refund equal to the pro rata meus.jbwarranties.com •Office: 877-243-8168|Fax: 469-464-1226|Claims Fax: 469-464-1227 Page 7 of 11 Form FWC-DAC-103 (02/19)
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Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3^ PREMIUM PROTECTION PLAN: SERVICE CONTRACT

WARRANTIES
purchase price. These provisions apply only to the original purchaser of the Service Agreement. We may not cancel this Agreement once it has been in effect for at least seventy (70) days, except for the following conditions: Failure to pay the service Agreement purchase price; The Agreement holder being convicted of a crime which results in an increase in the service required under this Agreement; Discovery of fraud or material misrepresentation perpetrated by You in purchasing this Agreement or obtaining service; The discovery of an act or omission, or a violation of any condition of this Agreement by You which substantially and materially increases the service requested under the Service Agreement; or A material change in the nature or extent of the service required under the Service Agreement, which occurs after the purchase of this Agreement, and substantially and materially increases the service required beyond that contemplated at the time of purchase. If We cancel this Service Agreement for any of the above reasons, You will receive a refund equal to the pro rata purchase price. With respect to each Product covered under this Service Agreement, the Administrator and/or Obligor liability is limited to the original retail purchase price You paid for such Product. We may not cancel this Service Agreement until at least fifteen (15) days after the notice of cancellation has been mailed to You.

THIS SERVICE AGREEMENT IS SUBJECT TO A WAITING PERIOD AND PROVIDES NO COVERAGE PRIOR TO EXPIRATION OF THE WAITING PERIOD.

Repair Protection:

1. Emergency Repair - Service Within 24 Hours: For goods that are essential to the health and safety of the holder, such as loss of heating, cooling, plumbing or substantial electrical service, and such loss of service renders the home otherwise uninhabitable, will commence within 24 hours after the claim is reported.

2. Emergency Repair - Status Report:

In an emergency situation, if the repairs cannot be completed within three (3) calendar days after the report of the claim the Administrator, will provide a status report to the holder that will include the following:
•A list of the required repairs or services, \ \ //
The primary reason causing the required repairs or services to extend beyond the 3-day period, including the status of any parts required for the repairs or services.

The current estimated time to complete the repairs or services, and •Contact information for the holder to make additional inquiries concerning any aspect of the claim and a commitment by you to respond to such inquiries not later than one (1) business day after such an inquiry is made.

NEW HAMPSHIRE only:

In the event You do not receive satisfaction under this Service Agreement. You may contact the New Hampshire Insurance Department at 21 South Fruit Street. Suite 14. Concord. NH 03301, 1(800) 852-3416.

NEW JERSEY only:

The Agreement Provider/Obligor is Dealers Administrative Services Corporation. The Administrator will pay a penalty of 10% per month on a refund that is not paid or credited within forty-five (45) days after return of the service contract to the Administrator. This provision applies only to the original purchaser of the Service Agreement.

NEW MEXICO only:

Final Service Agreement price to be determine prior to presentation to Service Agreement holder for signature. You may return this Service Agreement within twenty (20) days of the date this Service Agreement was provided to You. If You made no claim, the contract is void, and the full purchase price will be refunded to You. The Administrator will pay a penalty of ten (10%) percent per month on a refund that is not made within sixty (60) days of the return of the Service Agreement. These provisions apply only to the original purchase of the Service Agreement. The Administrator may not cancel this Service Agreement once it has been in effect for seventy (70) days except for the following conditions: failure to pay an amount when due; the conviction of You in a crime that results in an increase in the service required under the Service Agreement; fraud or material misrepresentation by you in purchasing the Service Agreement or in obtaining service; or the discovery of an act or omission, or a violation of any condition of the Service Agreement by You which substantially and materially increases the service required under the Service Agreement. If Administrator cancels this Service Agreement. We will mail a written notice to You at Your last known address at least fifteen (15) days prior to cancellation with the reason for cancellation. The Administrator is not required to mail You written notice if the reason for cancellation is nonpayment of the provider fee. a material misrepresentation, or a substantial breach of duties by You relating to the covered property or its use. This service contract is insured by Dealers Assurance Company. If the service contract provider fails to pay you or otherwise provide you with the covered service within 60 days of your submission of a valid claim, you may submit your claim to Dealers Assurance Company at 240 N.

Fifth Street. Suite 350. Columbus. OH. 800-282-8913. If you have any concerns regarding the handling of your claim, you may contact the Office of Superintendent of Insurance at 855-427-5674.

NEW YORK only:
meus.jbwarranties.com •Office: 877-243-8168|Fax: 469-464-1226|Claims Fax: 469-464-1227 Page 8 of 11 Form FWC-DAC-103 (02/19)
F-9
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE JS PREMIUM PROTECTION PLAN: SERVICE CONTRACT
The Service Agreement Provider/Obligor under this Service Agreement is Dealers Administrative Services. You may return this Service Agreement within twenty (20) days of the date this Service Agreement was provided to You. or within ten (10) days if the Service ice Agree
of any service received.
th repairs. The Administrator will reimburse You
fifteen (15) days prior to cancellation with the reason for cancellation. Administrator is not required to mail Y reason for cancellation is nonpayment of the provider fee. a material misrepresentation, or a substantial to the covered property or its use.

TEXAS only:

Fortress Extended Warranty AdmWatration, LP. Administrator license #270. The Administrator will pay a penalty of ten (10) percent of the amount outstanding per month on a refund that is not made within forty-five (45) days. The provisions apply only to the original purchaser of the Service Agreermjnt In the event We cancel the Service Agreement. We will mail a written notice to You at Your last OREGON only:

If in an emergency situation and Administrator cannot be or the repairing facility in accordance with the Service the event the Administrator cancels this Service Agreement the Administrator will mail a written notice to You at Your last known address at east fifteen (15) days pnor to cancellation with the reason for cancellation. The Administrator is not required to mail You written notice if the reason for canceiiaton is nonpayment of the provider fee, a material misrepresentation, or a substantial breach of duties by You re atmg to the covered property or its use In the event You have a question or complaint. You may contact the South Carolina Department of Insurance. P.O Box 100105. Columbia. South Carolina. 29202-3105. Telephone (803) 737-6134.

Agreement was delivered to You at the time of sale If You made no claim, the Service Agreement is void and the full purchase price will be refunded to You. The Admmstrator wil pay a penalty of ten (10) percent per month on a refund that is not made within thirty (30) days of return of the Service Agreement to the Administrator. These provisions apply only to the original purchaser of the Service Agreement. In the event we cancel this Service Agreement. We will mail a written notice to You at your last known address at least notice rf the
duties by relating
SOUTH CAROLINA only:

In order to prevent damage to the coveredP
coverage for pre-existing conditions. This
resulting from 1) any cause other than normal use
owner's manual or 2) failure to use reasonable
failure occurs You may return this Service Agreement
or within ten (10) days, if the Service Agreement was deli is void and the full purchase price will be refunded to You. To ual. This Service Agreement does not provide
r and replacement necessitated by loss or damage
in accordance with manufacturer's specifications and/or from further damage after a breakdown or performance
(20) days of the date this Service Agreement was provided to You.

You at the time of sale. If You made no claim, the Service Agreement for cancellation of this Agreement, please contact Your selling retailer. The Administrator will pay a penalty of ten percent (10%) per month on a refund that is not made within forty-five (45) days of return of the Service Agreement to the Administrator. These provisions apply only to the original purchaser of the Service Agreement. In Service
You ci
afforded under this
s Service
o arrange for
ou shall receive a refund
NORTH CAROLINA only:

The purchase of a Service Agreement is not required in order to obtain financing. The Administrator may not Agreement except for nonpayment by You. or in violation of any of the terms and conditions of this Service Ag Your Service Agreement. You will receive a pro-rata refund, less the cost of any claims and less a cancellation (10%) of the amount of the refund
OKLAHOMA only:

Dealers Alliance Corporation Service Warranty License No « 44197929 Service Agreement is not guaranteed by the Oklahoma Insurance Agreement, You shall receive a refund equal to ninety percent (90%) cancellation of this Plan, please contact Your selling retailer. In the equal to one hundred percent (100%) of the unearned pro-rata a cancel
known address at least five (5) days prior to cancellation, which shall state the effective date of cancellation and the reason for cancel ation However, prfo' notice is not required if the reason for cancellation is nonpayment of the provider fee a material misrepresentation by You relating to the covered property or its use. or a substantial breach of Your duties relatng to the covered product or its use. You may apply directly to the insurer if a refund or credit is not paid before the 46th day after the date on which the Service Agreement is canceled Unresolved complaints concerning a provider or questions concerning the registration of a service contract provider may be addressed to the Texas Department Gt Licensing and Regulations. PO Box 12157, Austin TX 78711. telephone number 1-800-803-9202.

UTAH only:
meus jbwarranties.com • Office: 877-243-8168 | Fax: 469-464-1226|Claims Fax: 469-464-1227 Form FWC-DAC-103 (02/19)
Page9o(11
F-10
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE PREMIUM PROTECTION PLAN: SERVICE CONTRACT
We may cancel this Service Agreement by providing You with (30) days' written notice for the following reasons only: fraud, material misrepresentation, substantial change in the risk assumed, unless We should reasonably have foreseen the change or contemplated the risk when entering into the contract. We may cancel this Service Agreement by providing You with ten (10) days written notice if the reason for cancellation is non-payment by You. This Service Agreement does not provide coverage for pre-existing conditions or any product that is subject to neglect, abuse or damage prior to issuance of the Service Agreement. If in an emergency situation and Administrator cannot be reached, You can proceed with repairs. The Administrator will reimburse You or the repairing facility in accordance with the Service Agreement provisions. This Service Agreement may be paid in full at the time of purchase or financed.

Coverage afforded under this Service Agreement is not guaranteed by the Property and Casualty Guaranty Association. This Service Agreement is subject to limited regulation by the Utah Insurance Department. To file a complaint, contact the Utah Insurance Department. TERMS AND CONDITIONS ITEM 8 -TO OBTAIN SERVICE, is deleted and replaced with the following: 8. To Obtain Service: If the covered product requires service, contact the Selling Dealer noted on the front page of Your Service Agreement. You must provide the Agreement number and explain the problem. They will attempt to resolve the problem you are experiencing over the^ telephone. If the service agent cannot resolve the problem they will schedule a service call with You. In the event You are unable to contact the Selling Dealer, please contact the Administrator at 833-339-2366 to obtain service. We reserve the right to inspect the product from time to time. Service will be provided during normal business hours and in the USA only.

VERMONT only:

You may return this Service Agreement within twenty (20) days of receipt and. if no claim for service has been made, receive a full refund of the Agreement purchase price.

WASHINGTON only: U
You may return this Service Agreement within twenty (20) days of the date this Service Agreement was provided to You. or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void and the full purchase price will be refunded to You. The Administrator will pay a penalty of ten (10) percent per month on a refund that is not paid or credited within thirty (30) days after the return of the Service Agreement to the Administrator. These provisions apply only to the original purchaser of the Service Agreement. In the event the Administrator cancels the Service Agreement, the Administrator will mail a written notice to You at Your last known address at least twenty-one (21) days prior to cancellation, which shall state the effective date of cancellation and the reason for cancellation. You may make a claim directly with Dealers Assurance Company at any time, at 240 N.

Fifth Street. Suite 350, Columbus. OH 43215, 800-282-8913. The state of Washington is the jurisdiction for any civil action in connection with this Service Agreement.

WISCONSIN only:

THIS WARRANTY IS SUBJECT TO LIMITED REGULATION BY THE OFFICE OF THE COMMISSIONER OF INSURANCE. This Service Agreement may be cancelled by the purchaser within fifteen (15) days of the date of purchase for a full refund less actual administrative costs associated with issuance and cancellation. To arrange for cancellation of this Plan, please contact your selling retailer. The selling retailer shall return one hundred percent (100%) of the purchase price, less an administrative fee of ten percent (10%) of the Service Agreement price up to twenty-five dollars (S25.00). We may only cancel this Service Agreement for material misrepresentation by You. non-payment by You, or a substantial breach of duties by You relating to the covered product or its use. If We cancel this Service Agreement, We will mail written notice to You at Your last known address at least ten (10) days prior to cancellation.

The notice shall state the effective date and reason for cancellation.

Lack of pre-authorization shall not be the sole grounds for a claim denial; however, unauthorized repairs may not be covered if evaluated to have been an unreasonable expense. Our obligations under this Service Agreement are insured under a contractual liability insurance policy. Should We fail to pay a covered claim under this Service Agreement within sixty (60) days after You provide proof of loss or. in the event You cancel this Service Agreement and We fail to refund the unearned portion of the Service Agreement purchase price or, if We becomes insolvent or otherwise financially impaired. You are entitled to make a direct claim against the insurer, Dealers Assurance Company, at 1-800-282-8913 or 240 N. Fifth Street, Suite 350, Columbus, OH 43215 for reimbursement.

Terms & Conditions, Item 7.Limit of Liability, Is deleted and replaced with the following: The total amount that We will pay for repairs made in connection with all claims that You make pursuant to this Service Agreement shall not exceed the purchase price of the product less taxes, or our limit of liability table [Attachment: Limit of Liability], whichever is less. In the event that We make payments for repairs, which in the aggregate, are equal to the product Purchase Price, or We replace the product with a new. rebuilt or refurbished product of equal or similar features and functionality. We will have no further obligations under this Service Agreement. For more details on Limit of Liability, please visit https://jbwan-anties.com/lol.

WYOMING only:

You may return this Service Agreement within twenty (20) days of the date this Service Agreement was provided to You, or within ten (10) days if the Service Agreement was delivered to You at the time of sale. If You made no claim, the Service Agreement is void and the full purchase price will be refunded to You. The Administrator will pay a penalty of ten (10) percent on a refund that is not paid or meus.jbwarranties.com •Office: 877-243-8168|Fax: 469-464-1226|Claims Fax: 469-464-1227 Page 10 of 11 Form FWC-DAC-103 (02/19)
F-11
Item 6
Attachment 1
Draft Agreement: Franklin Energy Services, LLC and SVCE 3^ PREMIUM PROTECTION PLAN: SERVICE CONTRACT
credited within forty-five (45) days after return of the Service Agreement to the Administrator. These provisions apply only to the original purchaser of the Service Agreement. In the event Administrator cancels the Service Agreement, Administrator will mail a written notice to You at Your last known address, at least, ten (10) days prior to cancellation which shall state the effective date of cancellation and the reason for cancellation. However, prior notice is not required if the reason for cancellation is nonpayment of the provider fee. a material meus.jbwarranties.com •Office: 877-243-8168|Fax: 469-464-1226|Claims Fax: 469-464-1227 Form FWC-DAC-103 (02/19)