Pursuant to the Americans with Disabilities Act, if you need special assistance in this meeting, please contact the Clerk for the Authority at (408) 721-5301 x1005. Notification 48 hours prior to the meeting will enable the Authority to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 35.105 ADA Title II).
Larry Klein, Chair
City of Sunnyvale
Sally Meadows, Vice Chair
City of Los Altos
Elliot Scozzola
City of Campbell
R “Ray” Wang
City of Cupertino
Zach Hilton
City of Gilroy
George Tyson
Town of Los Altos Hills
Rob Rennie
Town of Los Gatos
Garry Barbadillo
City of Milpitas
Bryan Mekechuk
City of Monte Sereno
Yvonne Martinez Beltran
City of Morgan Hill
Pat Showalter
City of Mountain View
Chuck Page
City of Saratoga
Otto Lee
County of Santa Clara
svcleanenergy.org
333 W El Camino Real
Suite 330
Sunnyvale, CA 94087
Silicon Valley Clean Energy
Finance and Administration Committee Meeting
Wednesday, February 25, 2026
3:00 pm
Silicon Valley Clean Energy Office
333 W. El Camino Real, Suite 330
Sunnyvale, CA
Teleconference Meeting Information:
https://svcleanenergy-org.zoom.us/j/84085345562
Or by Telephone (Audio only):
US: +1 669 219-2599
Webinar ID: 840 8534 5562
Members of the public may observe this meeting electronically by accessing the meeting via instructions above. Public Comments can be sent in advance of the meeting to Board Clerk Andrea Pizano at [email protected] and will be distributed to the Finance and Administration Committee. The public will also have an opportunity to provide comments during the meeting. Members of the public using Zoom may comment during public comment or the applicable agenda item by using the Raise Hand feature and you will be recognized by the Chair. Those using the telephone (audio only) feature should press star 9 on your phones to initiate the “Raise Hand” function in Zoom. You will then be announced, unmuted, and your time to speak will begin.
The public may provide comments on any matter listed on the Agenda. Speakers are customarily limited to 3 minutes each, however, the Committee Chair may increase or decrease the time allotted to each speaker based on the number of speakers, the length of the agenda and the complexity of the subject matter. Speaking time will not be decreased to less than one minute.
If you are an individual with a disability and need a reasonable modification or accommodation pursuant to the Americans with Disabilities Act (“ADA”) please contact Board Clerk Andrea Pizano at [email protected] prior to the meeting for assistance.
AGENDA
Call to Order
Roll Call
Public Comment on Matters Not Listed on the Agenda
The public may provide comments on any matter not listed on the Agenda provided that it is within the subject matter jurisdiction of SVCE. Speakers are customarily
SILICON VALLEY
CLEAN ENERGY
Pursuant to the Americans with Disabilities Act, if you need special assistance in this meeting, please contact the Clerk for the Authority at (408) 721-5301 x1005. Notification 48 hours prior to the meeting will enable the Authority to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 35.105 ADA Title II).
Larry Klein, Chair
City of Sunnyvale
Sally Meadows, Vice Chair
City of Los Altos
Elliot Scozzola
City of Campbell
R “Ray” Wang
City of Cupertino
Zach Hilton
City of Gilroy
George Tyson
Town of Los Altos Hills
Rob Rennie
Town of Los Gatos
Garry Barbadillo
City of Milpitas
Bryan Mekechuk
City of Monte Sereno
Yvonne Martinez Beltran
City of Morgan Hill
Pat Showalter
City of Mountain View
Chuck Page
City of Saratoga
Otto Lee
County of Santa Clara
svcleanenergy.org
333 W El Camino Real
Suite 330
Sunnyvale, CA 94087
limited to 3 minutes each, however, the Committee Chair may increase or decrease the time allotted to each speaker based on the number of speakers, the length of the agenda and the complexity of the subject matter. Speaking time will not be decreased to less than one minute.
Consent Calendar (Action)
1) Approve Minutes of the November 24, 2025, Finance and Administration Committee Meeting
Regular Calendar
2) CFO Update (Informational)
3) Elect Chair and Vice Chair of the 2026 SVCE Finance and Administration Committee (Action)
4) Recommend Approval to Change SVCE’s Fiscal Year Period from October to September to a Calendar Year Period Effective January 1, 2027 and Other Necessary Changes to Allow for the Implementation of the New Fiscal Year (Action)
5) Recommend Approval of the Fiscal Year 2025-2026 Mid-Year Adjusted Operating Budget (Action)
6) Financial Levers Update: Modeled Scenario and Reflecting Feedback (Discussion)
7) Enterprise Risk Management and Proposed Stress Test Cases (Discussion) Committee/Staff Remarks
Adjourn
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Silicon Valley Clean Energy
Finance and Administration Committee Meeting
Monday, November 24, 2025
1:00 p.m.
Silicon Valley Clean Energy Office
333 W. El Camino Real, Suite 330
Sunnyvale, CA
DRAFT MEETING MINUTES
Call to Order
Chair Srinivasan called the meeting to order at 1:02 p.m.
Roll Call
Present:
Chair Murali Srinivasan, Sunnyvale
Vice Chair Pat Showalter, Mountain View
Director Elliot Scozzola, Campbell
Alternate Director Maria Ristow, Los Gatos
Absent:
Alternate Director Sheila Mohan, Cupertino
Public Comment on Matters Not Listed on the Agenda
Bryan Mekechuk, SVCE Board member, introduced Terry McCarthy, Monte Sereno resident, to the Finance and Administration Committee.
Consent Calendar
Chair Srinivasan opened Public Comment.
No speakers.
Chair Srinivasan closed Public Comment.
MOTION: Alternate Director Ristow moved and Director Scozzola seconded the motion to approve the Consent Calendar.
The motion carried with Alternate Director Mohan absent. 1) Approve Minutes of the August 4, 2025, Finance and Administration Committee Meeting Item 1 1 Draft Minutes: 11/24/25 Finance & Admin Committee Meeting SILICON VALLEY <3/ CLEAN ENERGY
Regular Calendar
2) CFO Update (Informational)
Amrit Singh, Chief Financial Officer (CFO), addressed the following in his report:
• Thanked committee members for their attendance during the Thanksgiving holiday week; • Announcement that the fiscal year 2024-2025 audit kickoff began, with the Audit Committee meeting October 6, 2025 to hear from the independent auditor on the financial audit process; and • Timing for upcoming items and the next Finance and Administration Committee meeting.
Staff responded to questions regarding timing of the next Finance and Administration Committee meeting, access to the financial auditor’s report, and if there were any odd findings in the financial statements that they would be presented to the Finance and Administration Committee.
Chair Srinivasan opened Public Comment.
No speakers.
Chair Srinivasan closed Public Comment.
3) Recommend the Silicon Valley Clean Energy Board of Directors Approve the Proposed Updated Fiscal Year 2025-2026 Budget and 2026 Rate Changes (Action) CFO Singh presented the proposed updated fiscal year 2025-2026 budget and proposed SVCE rate changes.
Highlights from the updated financial forecast included:
• The five-year margins remaining negative (under business-as-usual, defined as SVCE rates set at a competitive advantage comparable to PG&E rates);
• Fiscal year 2026 draw on reserves increasing to $60 million from $40 million; and • A 1% 2026 customer discount and additional $12 bill credit for low-income customers.
CFO Singh’s presentation included a comparison of the adopted and updated budget, SVCE’s financial reserves outlook and management, and setting 2026 SVCE rates. CFO Singh noted delaying any changes to the pricing methodology by one year enables staff to finalize the financial levers analysis, and work with the Finance and Executive Committees and Board to design any changes to SVCE’s products and services, along with rates that continue to promote the agency’s mission and balance customer value and the agency’s finances.
Staff responded to committee member questions on the monthly dollar bill impact from potential future rate premiums, impact on days of cash on hand if SVCE’s rates were the same as PG&E’s, other options to prevent having higher rates than PG&E, the volatility of the market and its impact on projections, customer rates for 2026, the financial levers that will be addressed at a future meeting and addressing the bigger picture variables that are not controlled by SVCE, the request to transfer $5.5 million to the building fund, the budget projections balance, 2027 customer rates, and the possibility of changing SVCE’s fiscal year.
Monica Padilla, Chief Executive Officer (CEO), noted staff’s plans to have a financial levers discussion with the Board in December that would allow a more in-depth conversation on value proposition.
Director Scozzola shared his desire that SVCE be cheaper and cleaner than PG&E.
Chair Srinivasan opened Public Comment.
Bryan Mekechuk shared his support for changing SVCE’s fiscal year, a question of how GASB 62 would impact the earmarked funds, support for sharing the days of cash on hand if SVCE’s rates equal PG&E’s rates when presenting the item to the Board, if the analysis includes the impact of any increase in electricity demand due to Item 1 2 Draft Minutes: 11/24/25 Finance & Admin Committee Meeting
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AI or desalination, clarification on number of CARE customers, and request that the Finance and Administration Committee support staff’s recommendation.
Chair Srinivasan closed Public Comment.
MOTION: Alternate Director Ristow moved and Director Scozzola seconded the motion to recommend that the Board of Directors approve the updated Fiscal Year 2025-26 operating budget that includes:
1. Implementing SVCE generation rates to establish a 1% discount to PG&E’s applicable generation rates,
2. Providing a monthly bill credit of $12 for CARE/FERA customers,
3. Approving the new GreenPrime rate of $0.0074/kWh ($7.40/MWh) starting in January 2026, and transferring
4. $5.5 million to the building fund.
The motion carried with Alternate Director Mohan absent. 4) Implementation of GASB 62 Rate Stabilization Fund (Discussion) CFO Singh presented information on staff’s plan for implementation of the Governmental Accounting Standards Board (GASB) 62 for the fiscal year that ended September 30, 2025. CFO Singh provided information on the following: a recap of GASB 62, which enables SVCE to defer revenues to future periods and recognize them later when expenditures occur that correspond to the Board’s direction on the utilization of those revenues; reviewed the Board-approved criteria for implementing GASB 62; and reviewed staff’s plan for deferring revenues to the GASB 62 Rate Stabilization Fund.
Chair Srinivasan opened Public Comment.
Terry McCarthy, Monte Sereno resident, inquired if GASB 62 reflects the income statements.
Chair Srinivasan closed Public Comment.
5) Treatment of GASB 96 (Discussion)
CFO Singh provided information on GASB 96, which covers subscription-based IT arrangements (SBITAs) such as cloud software and certain IT services, noting staff plans to formalize a policy with specific thresholds for recognition and to present the policy to the Finance and Administration Committee at a future meeting date.
Staff responded to questions on the impact for fiscal year ending September 30, 2025, and identifying a threshold.
Chair Srinivasan opened Public Comment.
No speakers.
Chair Srinivasan closed Public Comment.
6) Review of Silicon Valley Clean Energy’s Fourth Power Prepay Transaction (Informational) CFO Singh introduced Zak Liske, Deputy Director of Power Resources, who provided an update on SVCE’s fourth power prepay transaction. Deputy Director of Power Resources Liske reviewed the goals of the prepay, the Board authorized execution parameters, a summary of executed transactions, and next steps.
Staff responded to questions on the aggregate principal amount of bonds not to exceed $1.25 billion, and prior prepay totals.
Item 1 3 Draft Minutes: 11/24/25 Finance & Admin Committee Meeting
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Chair Srinivasan opened Public Comment.
No speakers.
Chair Srinivasan closed Public Comment.
Committee/Staff Remarks
Chair Srinivasan thanked staff and the committee.
CEO Padilla reminded the committee about the planned discussion at the Board meeting on December 10, 2025 and the Special Meeting on December 12, 2025 on financial levers.
Adjournment
Chair Srinivasan adjourned the meeting at 2:26 p.m.
ATTEST:
_____________________________
Andrea Pizano, Board Secretary
Item 1 4 Draft Minutes: 11/24/25 Finance & Admin Committee Meeting
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Staff Report – Item 2
Item 2: CFO Update
From: Monica Padilla, CEO
Prepared by: Andrea Pizano, Sr. Executive Assistant and Board Clerk Date: 2/25/2026
This item will be addressed in the form of an oral report to the Finance and Administration Committee from Amrit Singh, Chief Financial Officer.
Item 2
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Staff Report – Item 3
Item 3: Elect Chair and Vice Chair of the 2026 SVCE Finance and Administration Committee From: Monica Padilla, CEO
Prepared by: Andrea Pizano, Sr. Executive Assistant and Board Clerk Date: 2/25/2026
RECOMMENDATION
Establish a Chair and Vice Chair of the Silicon Valley Clean Energy (SVCE) Finance and Administration Committee (Committee) to preside over Committee meetings.
BACKGROUND
At the February 14, 2018 SVCE Board of Directors meeting, the Board approved the formation of a Finance and Administration Committee, consistent with Board Policy FP-01A02, Establish Finance and Administration Committee.
ANALYSIS & DISCUSSION
As a permanent standing committee of the Board of Directors, the Committee is subject to the Brown Act for all meetings. In order to provide for efficient and reliable Committee meeting organization, Staff recommends the Committee appoint a Chair to preside over its meetings, and a Vice Chair to act in the absence of the Chair. The last Chair and Vice Chair of the committee were selected at the February 26, 2025 meeting (Alternate Director Murali Srinivasan and Director Pat Showalter, respectively).
Since 2026 committee membership was ratified at the February Board of Directors meeting and new members have joined, this committee is in need of a new Chair and Vice Chair.
STRATEGIC PLAN
N/A
ALTERNATIVE
Staff is open to any suggestions from the Committee on selection of the Chair and/or Vice Chair.
FISCAL IMPACT
No fiscal impact from the selection of a Chair and Vice Chair of the Committee.
Item 3
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Staff Report – Item 4
Item 4: Recommend Approval to Change SVCE’s Fiscal Year Period from October to September to a Calendar Year Period, Effective January 1, 2027, and Other Necessary Changes to Allow for the Implementation of the New Fiscal Year From: Monica Padilla, CEO
Prepared by: Amrit Singh, CFO
Date: 2/25/2026
RECOMMENDATION
Staff requests that the Silicon Valley Clean Energy (SVCE) Finance and Administration Committee recommend that the SVCE Board of Directors (Board) approve:
1. Changing the current fiscal year (October to September) period to follow the calendar year (January to December), beginning January 1, 2027;
2. Establishing an interim three-month fiscal period (“stub period”), starting October 1, 2026, and ending December 31, 2026, and adopting a schedule to approve the stub fiscal period budget at a September 2026 Board meeting;
3. Authorizing a combined two-period audit covering the three-month stub period along with the first audit of the new fiscal year starting January 1, 2027, and ending December 31, 2027, including waiving any conflicting annual requirements during the transition period from October 1, 2026, to December 31, 2027, in accordance with the Board-approved Policies1; and
4. Amending the Budget Adoption, Control and Reporting Policy FP-02 (“Budget Policy”) as shown in the redlined version in Attachment A, removing the requirement to provide a budget overview two months before the end of the fiscal year.
BACKGROUND
SVCE’s Joint Powers Agreement (JPA) Section 6.1 authorizes the Board to change the fiscal year by resolution.
The Board has once before changed the fiscal year (period) in September 2016 from the initial 12-month period starting July 1 to June 30 to the current 12-month fiscal period beginning October 1. The change was made to facilitate compliance with loan covenants during SVCE’s startup, which are no longer relevant.
ANALYSIS & DISCUSSION
Calendar Year – Fiscal Year
The primary reason for proposing to adopt a calendar year fiscal period is to closely align the Board’s budget adoption with customer rate changes. Currently, the Board approves SVCE’s annual budget in September, when staff have limited information about Pacific Gas and Electric’s (PG&E) generation rate and Power Charge Indifference Adjustment2 (PCIA) charges for the upcoming year. With the California Public Utilities 1 For example, Finance Policies include criteria such as the requirement to conduct an annual audit and annually retain or appoint an independent auditor.
2Public 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 Item 4
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 4 Agenda Date: 2/25/2026
Commission’s (CPUC) publishing of the market price benchmarks (MPBs) in the fall and PG&E’s subsequent Energy Resource Recovery Account3 (ERRA) update using the latest MPBs, by around mid-November, staff can significantly improve the forecast for the prompt year’s PG&E generation rates and PCIA charges, both of which significantly impact the estimation of SVCE’s revenue forecast. Because of this late availability of information, for the past few years, the Board has amended the adopted budget in December of each year.
Changing the fiscal year to start in January avoids setting a budget and then having to amend it three months later. Having a calendar fiscal year also provides additional benefits by aligning with the timeline for many external compliance requirements and the internal planning processes.
The figure below illustrates the current, new, and transition period budgeting and planning process and timeline, including reviews and/or approvals by the Finance and Administration Committee, the Audit Committee, and the Executive Committee for budgets, stress test analyses, the strategic plan, and financial audits.
Current Planning Process and Timeline
indifference, CCAs and Direct Access or departing load customers are required to pay a power charge indifference adjustment (PCIA).
3 ERRA, the Energy Resource Recovery Account, is a balancing account utilized by PG&E to record and recover power costs associated with PG&E’s authorized procurement plan. ERRA proceedings are used to determine fuel and purchased power costs that can be recovered in rates.
Item 4
January February March May June
Staff: Board:
Audit Committee:
Auaust September November December
Board: Finance and Admin Committee: Board:
Adopts the
Adjusted
Budget and
Next year's
Customer Rate
Proposals
Reviews and provides feedback on the Proposed
Annual Budget for the Next Fiscal Year and the
Proposed Strategic Plan
• ReceivesAuditedFinancials for the last
fiscal year. (FY24-25)
• Adopts the Proposed Budget for
the Next Fiscal Year (FY26-27)
and the Strategic Plan
Reviews and recommends that the
Board adopt the ProposedAdjusted
Budget (reflecting updates to PCIA
and PG&E Gen Rate Forecasts) and
Customer Rate Proposals
Enterprise Risk
Assessments
(ERM)
Finance andAdmin Committee:
• Reviews Proposed FinancialStress Test
Scenarios
• Reviews and Recommends the Mid-Year
Budget Update to the Board
• Reviews Stresslest
Analyses
• Optional: Reviews
Budget Framework fo
Next Fiscal Year
Finance and Admin Committee:
1) Reviews Stress lest Analyses
2) Reviews Budget Framework for the
Next Fiscal Year (FY26-27)
Finance and Admin Committee:
• Reviews and Recommendsthe BoardAdopt the
ProposedAnnual Budget for the Next Fiscal Year
(FY26-27)
Board:
Executive Committee
(Optional):
Audit Committee:
• Kicks off theAudit
Executive Committee:
Reviews Strategic Plan
Board:
• Adopts Mid¬
Year Budget
(FY25-26)
• Receives
Audited
Financials for
the last fiscal
year. (FY24-25)
Agenda Item: 4 Agenda Date: 2/25/2026
New Planning Process and Timeline
Transition Period Planning Process and Timeline
Stub Period and Exception from Annual Audit Requirement in Finance Policy 1 The transition to the proposed new fiscal period requires a three-month stub period from October 2026 to December 2026. Staff proposes that the Board adopt the stub period budget in September 2026 and set December 2026 as the deadline for adopting the annual budget. To avoid costly and time-consuming audits for the stub period, and as is common in such circumstances, staff further recommends that the Board authorize a combined audit covering both the stub period (October 2026 to December 2026) and the first new fiscal period (January 2027 to December 2027). This requires an exception from the Board requirement in Finance Policy 1, which mandates an annual audit.
Item 4
Late February or March March May June
Board:
Audit Committee:
September Late November December
Finance andAdmin Committee Board:
Executive Committee(Optional):
Executive Committee:
Receives Audited Financials for the last
fiscal year.
Reviews and Recommendsthat the
BoardAdopt the ProposedAnnual Budget
and Customer Rate Proposals
Adopts Mid-Year
Budget
ReceivesAudited
Financials for the
last fiscal year.
• Adopts the Proposed
Budget, Strategic Plan, and
Next Year’s Customer Rate
Proposals
Audit Committee:
Board:
• Reviews Stress Test Analyses
• Optional: Reviews Budget
Framework for Next Fiscal Year
Finance and Admin Committee:
• Reviews StressTest Analyses
• Reviews Budget Framework for the
Next Fiscal Year
Finance andAdmin Committee:
• Reviews Proposed FinancialStresslest Scenarios
• Reviews and Recommendsthe Mid-Year Budget
Update to the Board
Finance andAdmin Committee: Staff:
• High-level (“Mini") Budget & Reserves
Update (Revenues and Power Supply
Updated)
Enterprise Risk
Assessments
(ERM)
• Reviews Strategic Plan • Kicks off theAudit
January 2026 February 2026 March 2026 May 2026 June 2026 Board:
Audit CQmmitt€€;
2026 September 2026 November 2026 December 2026
ReceivesAuditedFinancials for the last
fiscal year. (FY24-25)
Reviews Stress "fest
Analyses
Optional: Reviews
Budget Framework fo
Next Fiscal Year
Enterprise Risk
Assessments
(ERM)
Finance and Admin Committee:
• Reviews Proposed FinancialStress Test
Scenarios
• Reviews and Recommendsthe Mid-tear
Budget Update to the Board
Finance and Admin Committee:
1) Reviews Stress "fest Analyses
2) Reviews Budget Framework for the
Next Fiscal tear (FY26-27)
Executive Committee:
Reviews Strategic Plan
Board:
• Adopts Mid¬
tear Budget
(FY25-26)
• Receives
Audited
Financials for
the last fiscal
year (FY24-25)
Finance andAdmin Committee:
• Reviews and recommends that the Board adopt the
Proposed Budget for October 2026 to December
2026. a 3-month stub fiscal period budget
Board:
• Adopts the Proposed 3-month
Stub Period Budget
Audit Committee:
• Kicks off theAudit for Fiscal
tear 25-26
Finance andAdmin Committee:
Executive Committee
(Optional):
• Reviews and recommends that the
Board adopt the Proposed Budget
for Calendar Fiscal Year 2027 and
Customer Rate Proposals
Board:
• Adopts the
Proposed Budget
for Calendar
Fiscal Year 2027
Strategic Plan, and
2027 Customer
Rate Proposals
February 2027
Audit Committee;
ReceivesAuditedFinancials for the fiscal
year ending September 30. 2026(October
2025 to September 2026)
December 2027
Audit Committee:
Audit kick-off for the fiscal year ending
December 31, 2027 (January 2027 to
December 2027) and Stub Period
(October 2026 to December 2026)
Agenda Item: 4 Agenda Date: 2/25/2026
Budget Adoption, Control and Reporting Policy FP-02 – Budget Policy To support the adoption of a new fiscal year period, staff recommends that the Board eliminate the Budget Policy requirement to provide a budget overview two months before the end of the fiscal year. With the updated budget approval schedule, staff will not receive the latest PCIA and PG&E generation rate information in time to prepare a budget overview, as such data becomes available only from mid-October to mid-November.
STRATEGIC PLAN
By aligning the budget timeline with when customer rates are set, as well as with many external compliance periods and internal planning processes, the proposed changes generally support all goals of the strategic plan.
ALTERNATIVE
Many fiscal periods may be considered, including adopting a fiscal year similar to those of many cities, from July to June. Staff did not consider this alternative as it found no agency benefits.
FISCAL IMPACT
There is no fiscal impact.
ATTACHMENT
1. Redlined Budget Adoption, Control and Reporting Policy Item 4
Effective on 0312/11/20264
Finance Policy 2: Budget Adoption, Control and Reporting I. Purpose
This Budget Adoption, Control and Reporting Policy (“Budget Policy”) provides clarity about budget authority for the Chief Executive Officer (CEO) of Silicon Valley Clean Energy (SVCE) and lays out budget adoption and periodic budget reporting requirements. The policy also allows for sufficient flexibility to address changes in the market price of energy the volatility of the power supply portfolio consistent with SVCE’s Financial Reserves Policy.
II. Scope
All budget requirements.
III. Policy
A. Budget Adoption
• The CEO, in concurrence with the Finance and Administration Committee, shall prepare a budget and budget overview for the Board for the following fiscal year two one months prior to the end of the fiscal year. The proposed budget shall be balanced and in alignment with the proposed Strategic Plan. The budget shall reflect all activities, including operating, capital programs expenditures, revenues and risk. The CEO will maintain standards related to showings for capital expenditures for budgeting purposes. A balanced budget is one in which expenditures are matched by revenues and recommended changes to reserves. • The CEO shall submit a recommended budget document for adoption to the Board of Directors for approval by Resolution in the month following the proposed budget submittal. When approved by the Board, the budget shall be considered adopted and appropriated at the level it is controlled by the CEO, discussed below.
• In the event that the Board does not adopt the proposed budget by the end of the fiscal year, the Board of Directors may adopt a continuing appropriations resolution until such time as a budget is adopted. A Item 4
Attachment 1
SILICON VALLEY <3/ CLEAN ENERGY
Effective on 0312/11/20264
continuing appropriations resolution would provide that payments for services performed on behalf of the Agency and authorization of awarded contracts would continue until such time as the budget is adopted.
• Staff will prepare a five-year financial forecast as part of the budget process projecting revenues and expenditures for all operating funds and planned capital projects in alignment with the Strategic Plan. • The budget document will also contain the following, at minimum, a schedule showing revenues, expenses, and changes to financial reserves. The first year of the five-year horizon is the budget to be considered and formally adopted by the Board by Resolution. The final four years are shown for planning purposes and may be shown at more summary levels.
• The first-year proposed budget shall further show:
o Expenditures by expense type/category across the
organization;
o Projected revenues;
o Organization chart(s) showing all proposed budgeted positions in the organization;
o A current salary schedule for job classifications to be in effect for the proposed fiscal year (Salaries may be adjusted by the CEO in the fiscal year, with salary changes being reported to the Board).
B. Budget Control
• After adoption, the budget shall be controlled by the CEO at the total annual expenditure level for the SVCE organization, which includes power purchases, employee costs, contract and professional services, capital improvements, debt service, and all other costs. Customer Generation Rates will be set per the Board approved budget for the corresponding fiscal year or as designated by the Board after establishing the budget. The total budget may be amended by the Board during the year by Resolution.
Item 4
Attachment 1
SILICON VALLEY <3/ CLEAN ENERGY
Effective on 0312/11/20264
• The CEO may institute separate budget procedures internally that give the CEO further controls at the department and/or expenditure category level if the CEO so desires.
C. Budget Reporting
• A budget-to-actual status update report shall be presented to the Board on a quarterly basis.
D. Authority to Flexibly Staff and Over hire Budgeted Positions • Under the Human Resources Policy 01: Personnel and Reimbursement, the CEO is authorized to hire in excess of 10% of the number of positions shown in the annual budget without prior approval of the Board. • In no case shall positions be added or salaries be adjusted during the year that cause the total annual budget to be exceeded in total by fiscal year-end without prior Board approval by Resolution.
E. Power/Energy Purchases Contingency
• The nature of the energy power markets is one of rapid changes in prices and market volatility. The ability to quickly adapt to those changes is important for maintaining consistent power delivery to customers.
Therefore, the CEO is granted authority to overspend the total annual budget for energy power supply purchases by the lesser of 10% of the annual power supply budget, or $30 million, without Board approval provided the over expenditure is due to higher energy costs or greater customer demand. Overspending for these purposes may require use of reserves and the conditions on use of reserves as stated in the Financial Reserves Policy apply, where reserves cannot be drawn down more than 10% of the year’s budgeted cost of power supply or $30 million, whichever is less, nor below the baseline Minimum Operating Reserve level without Board approval.
IV. Policy Compliance
A. Violations
Item 4
Attachment 1
SILICON VALLEY <3/ CLEAN ENERGY
Effective on 0312/11/20264
• Any known violations of this policy must be immediately reported to the Finance and Administration Committee, CEO, and General Counsel. • Any employee found to have violated this policy may be subject to disciplinary action, up to and including termination of employment.
B. Cadence for Review
• This Policy will be reviewed at least every five (5) years.
Item 4
Attachment 1
SILICON VALLEY <3/ CLEAN ENERGY
Staff Report – Item 5
Item 5: Recommend Approval of the 2025-2026 Mid-Year Adjusted Operating Budget From: Monica Padilla, CEO
Prepared by: Amrit Singh, CFO
Scott Wrigglesworth, Director of Risk and Analytics
Karen Chang, Manager of Finance
Date: 2/25/2026
RECOMMENDATION
Staff recommends that the Finance and Administration Committee recommend that the Silicon Valley Clean Energy (SVCE) Board of Directors (Board) approve the 2025-26 Mid-year (MY26) 1 Adjusted Operating Budget
that projects withdrawing $12.5 million from the reserves.
BACKGROUND
The SVCE Board initially adopted the FY26 annual budget at the September 10, 2025, meeting. The budget was based on staff’s projections of the 2026 Power Charge Indifference Adjustment2 (PCIA) charges and Pacific Gas and Electric (PG&E) generation rates. Staff committed to updating the budget in December 2025, when it would include much better market and regulatory information regarding the 2026 PCIA and PG&E’s generation rates.
At the December 2025 Board of Directors meeting, staff presented an updated FY26 budget along with a five-year outlook, indicating that the financial trend staff has been discussing with the Board remains negative.
Staff also noted that if SVCE continues to operate under the “business as usual” scenario in 2026, where all customer rates are set to be competitive with PG&E rates, the delay in charging premiums to meet SVCE’s financial targets over five years—specifically, charging above PG&E rates for one year—would not be significant. Staff demonstrated that delaying premium charges by one year would increase the 2027 premium by about 1%, or roughly $0.53 per month for residential customers. This delay in changing SVCE’s pricing methodology would also allow staff to finalize the financial levers analysis and collaborate with the Finance and Administration and Executive Committees, as well as the Board, to design any necessary adjustments to SVCE’s products, services, and rates. The financial analysis would enable SVCE to carefully assess changes to ensure they continue to support the agency’s mission and balance customer value with SVCE’s financial stability. Staff also noted that the financial reserves built for such financial outcomes do not place SVCE in immediate risk, especially over the next two years, allowing time to complete the financial levers analysis and avoid abrupt changes. The Board approved the adjusted budget that provided a 1% general customer discount compared to comparable PG&E generation rates and a $12 monthly bill credit to each low-income (CARE/FERA) customer starting in 2026 and a reduction in the GreenPrime premium to $0.0074 per kilowatt hour.
1 The fiscal year 2025-26 started on October 1, 2025, and ends on September 30, 2026. 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 5
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 5 Agenda Date: 2/25/2026
ANALYSIS & DISCUSSION
At midyear, the updated budget accounts for energy supply expenses using the latest market price data and portfolio positions, revenue estimates reflecting the final rate changes that went into effect in January 2026, and other minor adjustments, as well as projected increases/decreases in operating expenses and investment income. The MY26 Adjusted Operating Budget is balanced and presents SVCE in a stable financial condition (Attachment 1).
The MY26 budget projects a withdrawal of $12.5 million from reserves, a decrease of $48 million from the $60.5 million withdrawal in the December 2025 adjusted FY26 Budget. This seemingly positive outcome is mainly due to $32 million reduction in power supply costs and $20 million increase in revenues, driven by a favorable regulatory decision3that resulted in higher PG&E generation rates. Although falling prices for power supply resources, including energy, Resource Adequacy (RA), Renewable Portfolio Standard (RPS) prices, and Greenhouse Gas-free energy and attributes (GHG-free), improve FY26 projections, these gains are projected to be more than offset by margin deterioration in fiscal year 2026-2027 (FY27). Now that the 2026 PCIA and PG&E generation rates are set, any differences between actual power supply costs and the estimates used to set the 2026 rates will be trued-up during the next rate-setting cycle, further reducing SVCE’s FY27 margins.
The current projections forecast $131 million withdrawal from reserves for FY27, an increase of $50 million from the December 2025 forecast.
The table below compares the proposed MY26 adjusted operating budget (second column) with the adjusted budget adopted in December 2025 (first column):
The negative outlook in the 5-year financial forecast, which staff began projecting during last year’s mid-year budget update, has worsened as power supply resource prices (energy, RA, RPS, and GHG-free) decline. The 3 PG&E assigned zero value to the battery energy storage systems from the PCIA portfolio under the new slice of day resource adequacy market, which the CPUC rejected and assigned values in line with the methodology used by the Southern California Edison (SCE) utility.
Item 5
* Positive values (increases) in contribution to reserves can result from increases in Revenues, as well as decreases in Expenses. Negative values (decreases) in contribution to reserves can result from decreases in Revenues, as well as increases in Expenses.
($ in thousands)
FY25-26
ADJUSTED
BUDGET
FY25-26
MID-YEAR
ADJUSTED
BUDGET
Changes to Reserves
Contribution*
$ %
Energy Revenues 319,324 335,478 16,155 5.1%
Power Supply Expense (344,221) (311,996) 32,225 9.4%
Operating Margin (24,897) 23,482 (^48^379^) 194.3%
Operating Expenses (43,193) (42,684) 509 1.2%
Non-Operating Revenue (Expense) 20,854 20,106 (748) -3.6% Annual Transfers and Other Expenses
Capital Outlay (512) (611) (99) -19.3%
Transfer to Building Fund (5,500) (5,500) 0 0.0%
Program Fund (7,251) (7,251) 0 0.0%
TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER J13,263) J13,362) J99) J).7%
BALANCE AVAILABLE FOR RESERVES (60,500) (12,458) 48,042 79.4% Agenda Item: 5 Agenda Date: 2/25/2026
5-year financial outlook presented by staff at the December 2025 Board meeting showed 200 days of cash on hand (DCOH) at the end of five years (FY 2029-30), but this has now decreased to 142. The DCOH projections are based on the additional operating liquidity assumptions discussed during the December 2025 budget update. The additional liquidity scenario adjusts the forecasts to reflect a more realistic expectation of some delay in customer adoption of decarbonization programs, leaving an “earmarked” funds balance of $25 million at the end of the 5-year forecast period. It also reduces annual operating expenses by $6.5 million to remove amounts budgeted for contingencies. The current 5-year financial forecast is shown in Attachment 2, and the projected DCOH under the additional liquidity scenario is displayed below. The lighter shade of blue bars, with higher values, include allocated but unspent earmarked funds, mainly decarbonization program dollars, while the darker shade of blue bars, with lower values, exclude these earmarked funds. Because the Board can always redirect allocated but unspent funds, SVCE’s financial liquidity is assessed accordingly, using the higher values.
Although reserves are lower than those in the December 2025 budget update, they remain above 350 DCOH over the two-year forecast period. The two-year outlook is especially important because balancing account true-ups used in setting PCIA and PG&E rates settle the current year’s movement in power supply resource prices the following year; therefore, one year’s financial results cannot be relied upon. For example, as mentioned earlier, the gains in the FY 26 budget due to lower power supply resource prices will be more than offset in next year’s financials by reduced revenues when PCIA and PG&E generation rates are trued up.
Staff will continue the financial analyses work started with the Board of Directors, the Finance and Administration, and the Executive Committees, and will also perform additional annual financial stress test analyses. Staff plans to present the stress test results, along with a review of SVCE’s financial reserve targets, and budget contingency fund needed to cover power supply cost uncertainty to the Finance and Administration Committee in May and to the Board of Directors in June.
The discussion below provides additional information on the proposed MY 26 Adjusted budget. 531
367
288
217
142
452
308
245
190
123
0 100
200
300
400
500
600
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 DCOH Days Cash on Hand (DCOH)
DCOH (Inc. Unspent Earmarked Funds)* DCOH (Excl. Unspent Earmarked Funds)* Max Reserves (500 DCOH) Target Reserves (350 DCOH)
Min Reserves (120 DCOH)
* Earmarked funds are unspent SVCE Program Funds and Building Funds.
Item 5
Agenda Item: 5 Agenda Date: 2/25/2026
Energy Revenues
Net energy revenues are slightly higher by about $16.2 million from the December 2025 adjusted budget. The California Public Utilities Commission’s (CPUC) final adopted PG&E generation rates improved overall SVCE’s margins by about 11% (to 7.82 ¢/kWh) or about $20 million, partially offset by slightly higher final PCIA rate and adjustments to other SVCE revenues that vary with changes in power supply resource prices.
Power Supply Expenses
Power supply expenses have decreased significantly by about $32 million since the December budget update.
The reduction primarily results from much lower market prices for meeting SVCE’s load obligations.
The market prices, including actual/observed prices for October 2025 to December 2025 and forward prices for the remaining forecast period, for energy and RPS, have declined significantly. Since the December 2025 adjusted budget update, FY26 energy prices have dropped about 18%, and the 5-year average energy prices have decreased by roughly 11%. FY26 RPS prices fell by approximately 26%, and the 5-year average declined by about 7%. The decline in RPS prices does not lower power supply costs for FY26 as it does for the rest of the 5-year forecast period because SVCE has already secured its RPS needs for the current fiscal year. RA prices for FY26 decreased 3%, with the 5-year average dropping about 11%.
Operating Expenses
Operating expenses are approximately $0.5 million lower than the December 2025 adjusted budget. This decrease mainly results from reductions in vendor and consultant fees, leading to lower costs in Professional Services and Marketing & Promotions, along with reduced rental rates for the current office and lower property taxes for the future office location.
There are no changes to the Data Management, PG&E Fees, and Salaries and Retirement operating expenses relative to the December 2025 adjusted budget.
The Professional Services expense has decreased by approximately $257,000. The favorable variance results from active vendor management negotiation and fee optimization, enabling staff to obtain more competitive market rates from various vendors and software providers.
The Marketing & Communications expense has decreased by approximately $160,000, also due to strategic vendor management and improved forecasting and alignment on resource timing compared to initial expectations.
Item 5
December
Adjusted Budget
2026 Rate**
PG&E Gen Rate:
• FinalPG&E Cost True UP
• RA Modeling Adjustment
10.50 0/kWh
§ t°/o SVCE discount
* Source: PG&E 2026 Average Rates, effective January 1, 2026 (Weighted for SVCE Portfolio Load) ” Estimated 2026 rates, based on PG&E Fall Update Errata, effective January 1, 2026 (Weighted for SVCE Portfolio Load) Above margin analyses ignores minor reductions for franchise fees (0.06 0/kWh) 2026 Rate
co
PCIA 3.56 0/kWh
CO
CM
co
co
co
0)
4-<
ns
CD
0 LLI
0)
0 PG&E Gen Rate:
11.49 0/kWh
1% SVCE discount
Q
•4-»
IX
Agenda Item: 5 Agenda Date: 2/25/2026
The General and Administrative expenses decreased by approximately $95,000, mainly due to two factors.
First, property taxes for the new office building were lowered after a successful exemption filing with the City of Sunnyvale in late 2025; this exemption will result in ongoing annual property tax savings. Second, a new lease agreement with the current landlord for the office led to reduced rental rates.
Non-Operating Revenues
Investment income is expected to decline by $610,000 due to lower interest rates and increased funds that are collateralized to support the letter of credit provided to PG&E per the CPUC Financial Security Requirement (FSR) for being the Provider of Last Resort (POLR)4for SVCE customers, which decreases the amount SVCE can invest.
Non-Operating Expenses
Financing expense has increased by $138,000. This is due to the latest Provider of Last Resort (POLR) Financial Security Forecast (FSR) forecast, which predicts a rise in POLR FSR posting requirements in the coming years, thereby increasing the estimated collateral posting fees charged by financial institutions.
Programs Budget
SVCE will continue incorporating projected Decarbonization Programs spending over the 5-year forecast into the reserve balance projections. For the current fiscal year, Program spending is projected to be $28.6 million, with an additional spend of $0.96 million from the Customer Relief and Community Resilience Program (CRCR) Fund, $1.7 million from the Nuclear Program Fund, $0.5 million in the E-Elec (all-electric) Fund, the all-electric rate discounts, and $0.45 million from the Handford Program Fund.
Capital Outlay
Capital Outlay has increased by $99,000. This change is due to updated projections for furniture expenses related to the new office building. Previously, the calculations were high-level estimates based on limited data and scope available at the time. Recently, the construction project management team provided more accurate estimates based on the latest available cost data. Also, attachment 3 provides an updated Capitol Projects report.
STRATEGIC PLAN
The recommendation supports all of the Board's adopted strategic plan goals. Specifically, this budget update supports SVCE Strategic Plan Goal 6 – “Maintain healthy financial position; avoid failures in the management of market risk, credit risk, liquidity risk, operational risks, and enterprise risks.”
ALTERNATIVE
Staff is open to feedback and suggestions from the committee. At a strategic level, the Board can change the discount to PG&E, reduce the power supply portfolio's carbon-free and/or renewable energy percentages, and cut expenditures on the Decarbonization Programs.
Staff does not recommend any specific reductions given a sufficient projected reserve balance that maintains SVCE’s stable financial condition.
FISCAL IMPACT
The MY 2026 Adjusted Operating Budget includes $335.5 million in revenues and $347.9 million in expenses, non-operating revenues, and transfers, resulting in a withdrawal from reserves of 12.5 million an improvement in net position of approximately $48 million from the December 2025 adjusted budget. 4 Provider of Last Resort refers to the obligation of a load serving entity, such as SVCE, to ensure continuous electricity service to customers in the event the LSE fails. The POLR for SVCE customers is PG&E. The CPUC requires LSEs to post financial security such as a letter of credit to the POLR to ensure sufficient funds for POLR to undertake LSE’s customers in the event of their failure.
Item 5
Agenda Item: 5 Agenda Date: 2/25/2026
ATTACHMENT
1. MY 2025-26 Adjusted Operating Budget
2. Five-year Forecast
3. Capital Projects Report
Item 5
Attachment 1: MY 2025-26 Adjusted Operating Budget
SILICON VALLEY CLEAN ENERGY
FY25-26 OPERATING BUDGET
($ in thousands)
FY25-26
MID-YEAR
ADJUSTED
DESCRIPTION BUDGET
ENERGY REVENUES
Energy Sales 335,858
Green Prime 2,439
CARE/FERA Bill Credit (4,163)
Other Income 1,344
TOTAL ENERGY REVENUES 335,478
ENERGY EXPENSES
Power Supply (311,996)
OPERATING MARGIN 23,482
OPERATING EXPENSES
Data Management (3,764)
PG&E Fees (1,569)
Salaries and Retirement (18,870)
Professional Services (10,645)
Marketing & Promotions (2,189)
General & Administrative (5,647)
TOTAL OPERATING EXPENSES (42,684)
OPERATING INCOME (LOSS) (19,202)
NON-OPERATING REVENUES
Interest Income 20,272
TOTAL NON-OPERATING REVENUES 20,272
NON-OPERATING EXPENSES
Financing (166)
TOTAL NON-OPERATING EXPENSES (166)
TOTAL NON-OPERATING INCOME (EXPENSES) 20,106
CHANGE IN NET POSITION 904
CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER
Capital Outlay (611)
Transfer to Building Fund (5,500)
Program Fund (7,251)
TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER (13,362)
BALANCE AVAILABLE FOR RESERVES (12,458)
Item 5
Attachment 1
Attachment 2: MY 2025-26 Adjusted Operating Budget – 5 Year View ($ in Thousands)
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
Operating Revenue (Forecast) (Forecast) (Forecast) (Forecast) (Forecast) Electricity Sales, Net1 $335,858 $238,142 $317,067 $367,680 $390,693 GreenPrime Electricity Premium $2,439 $2,510 $2,336 $2,309 $2,361 Reduction in Revenue1
$(4,163) $(928) $0 $0 $0
Other Income $1,344 $0 $0 $0 $0
Total Operating Revenues $335,478 $239,724 $319,403 $369,989 $393,054 Operating Expense
Power Supply $(311,996) $(336,336) $(356,970) $(378,051) $(414,042) Operating Margin $23,482 $(96,611) $(37,566) $(8,062) $(20,987) Data Management $(3,764) $(3,952) $(4,149) $(4,357) $(4,575) PG&E Service Fees $(1,569) $(1,647) $(1,729) $(1,816) $(1,907) Salaries and Retirement $(18,870) $(19,814) $(20,805) $(21,845) $(22,937) Professional Services $(10,645) $(11,177) $(11,736) $(12,323) $(12,939) Marketing & Promotions $(2,189) $(2,299) $(2,414) $(2,534) $(2,661) General and Administration $(5,647) $(5,537) $(5,814) $(6,104) $(6,410) Transfers to Programs Fund $(7,251) $(4,794) $(6,388) $(7,400) $(7,861) Total Operating Expenses $(361,931) $(385,555) $(410,004) $(434,430) $(473,331) Operating Income $(26,453) $(145,831) $(90,601) $(64,441) $(80,276) Nonoperating Revenue
Investment Income $20,272 $15,050 $10,070 $7,568 $5,191 Grant Income $0 $0 $0 $0 $0
Total Non-Operating Revenues $20,272 $15,050 $10,070 $7,568 $5,191 Nonoperating Expense
Financing Cost $(166) $(442) $(788) $(186) $(172)
Capital Outlay $(611) $(50) $(50) $(50) $(50)
Interest Expense $0 $0 $0 $0 $0
Total Non-Operating Expense $(777) $(492) $(838) $(236) $(222) Non-Operating Income $19,495 $14,558 $9,232 $7,332 $4,969 Change in Net Position/Available for Reserves $(12,458) $(131,273) $(81,369) $(57,109) $(75,308) Begin, Net Financial Position $585,328 $534,173 $382,966 $285,063 $212,750 Adjustment for Program Expenditure and Building Fund2
$(38,698) $(19,934) $(16,534) $(15,204) $(7,281)
End, Net Financial Position $534,173 $382,966 $285,063 $212,750 $130,162
1. Assumptions: 4% discount relative to comparable PG&E rates for CY 2025 and 1% discount for CY 2026-30. FY 2025-26 includes additional discount in the form of CARE/FERA bill credit estimates to low-income customers for $4.2 million and FY 2026-27 for $1 million (through Dec 2026 only). No CARE/FERA bill credit is assumed for CY 2027-30.
2. Each year the Board transfers funds from the Operating Budget to the Decarbonization Programs Fund as shown in the above forecast under line item Transfers to Programs Fund. The line item Adjustment for Program Expenditure accounts for the difference between forecasted spend for programs versus the amount transferred to the fund. This adjustment is needed because program spending to date has been less than the amount transferred to the programs fund. The $20 million in Building Fund and the additional $5.5 million to be allocated in FY25-26 are expected to be spent by end of FY25-26.
Item 5
Attachment 2
Description Account Date Cost Life (months) Depreciation Operating Cost/Revenue Impact Effect on
Operations/
Reliability
Consequence of not funding the Capital
Project Source of Funding On-going Impact to Operational Budget January 2025 - Stage 1 Initial Roof Inspection - Building finalized in February 2025 Construction in Progress 01/31/2025 $ 3,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
January 2025 - deposit for stage 1 initial roof inspection -Building finalized in February 2025 Construction in Progress 01/31/2025 $ 1,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
Office Building on 298 South Sunnyvale Avenue, Sunnyvale CA 94086 Building 02/20/2025 $ 7,000,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
May 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 05/31/2025 $ 20,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
June 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 06/30/2025 $ 11,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
July 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 07/31/2025 $ 11,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
Aug 2025 - fumigation services Construction in Progress 08/18/2025 $ 37,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
August 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 08/31/2025 $ 19,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
June 2025 - SVCE HQ interior design services Construction in Progress 08/01/2025 $ 9,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
July 2025 - SVCE HQ interior design services Construction in Progress 08/01/2025 $ 52,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
September 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 09/30/2025 $ 12,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
August 2025 - Sunnyvale HQ - Elevator Modernization Management Services Construction in Progress 09/01/2025 $ 8,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
October 2025 Building Permit Fee Construction in Progress 10/20/2025 $ 34,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
October 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 11/01/2025 $ 13,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
November 2025 - Sunnyvale HQ - Construction Project Management Services Construction in Progress 12/01/2025 $ 19,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
September 2025 - SVCE HQ interior design services Construction in Progress 12/01/2025 $ 182,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
August 2025 - SVCE HQ interior design services Construction in Progress 12/01/2025 $ 63,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
November 2025 - SVCE HQ interior design services Construction in Progress 12/01/2025 $ 11,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
November 2025 - SVCE HQ interior design services Construction in Progress 12/01/2025 $ 27,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
December 2025 - Elevator modernization services Construction in Progress 12/16/2025 $ 93,000 480 not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
LAND Office Building on 298 South Sunnyvale Avenue, Sunnyvale CA 94086 Land 02/20/2025 $ 4,500,000 N/A Land not in service yet None (allocated towards Office Building Fund) N/A Need to fulfill staff office space needs Office Building Fund Reduction in 5-Year Reserves forecast
Office Furniture for 298 S Sunnyvale Furniture 09/01/2026 $ 561,000 84 not in service yet Listed in FY25-26 Mid-Year Proposd Budget Capital Expenditure N/A Need to fulfill staff office space needs FY25-26 Operating Budget One-time Capital cost in
FY25-26 budget
*Furniture depreciates at 84 months
*Software / electronics depreciate at 36 month
Updated 2/2026
SVCE Capital Projects Report
Item 5
Attachment 3
Staff Report – Item 6
Item 6: Financial Levers Update: Modeled Scenario and Reflecting Feedback From: Monica Padilla, CEO
Prepared by: Justin Zagunis, Director of Customer Success Date: 2/25/2026
This item will be addressed in the form of a presentation to the Finance and Administration Committee. This is a discussion item with no action requested by the Committee.
BACKGROUND
This item continues the discussion on financial levers from the following meetings: October 2025 Executive Committee, December 2025 Board of Directors, and December 2025 Board of Directors special meeting.
ATTACHMENTS
The presentation for this item will be posted to SVCE’s website.
Item 6
SILICON VALLEY \3/ CLEAN ENERGY
Staff Report – Item 7
Item 7: Enterprise Risk Management and Proposed Stress Test Cases From: Monica Padilla, CEO
Prepared by: Amrit Singh, CFO
Scott Wrigglesworth, Director of Risk and Analytics
Date: 2/25/2026
RECOMMENDATION
This is an informational item to provide the Silicon Valley Clean Energy (SVCE) Finance and Administration Committee (Committee) with an overview of SVCE’s planning and budgeting process and to seek feedback on this year’s planned financial stress test scenarios.
BACKGROUND
SVCE’s fiscal year planning begins using the enterprise risk management (ERM) framework that attempts to assess risks and opportunities that impact SVCE’s mission. From the ERM process, staff also considers stress test scenarios that can be extreme but plausible and severely affect the organization’s ability to achieve its mission. At this meeting, staff will review the proposed stress scenarios that can have severe and direct financial consequences for the organization and whose mitigations are prudent to account for in developing the fiscal year budget. The other risks and opportunities identified from the ERM process will be used to shape next fiscal year’s strategic focus areas, measures, and department work plans.
ANALYSIS & DISCUSSION
The ERM framework is a comprehensive organization-wide assessment of risks and opportunities that can enable SVCE to achieve its mission optimally. The attachment provides further information on the ERM framework.
Stress testing is an essential component of ERM. SVCE uses the ERM framework to assess the interrelatedness of various risks or their plausible combinations to model extreme but plausible (“Black Swan”) events that can have significant adverse consequences for SVCE. Such scenarios or stress tests are essential for managing risky commodity portfolios because of the inherent weakness in standard market risk measures in assessing “black swan” events such as market disruptions caused by, for example, an economic recession.
For the next fiscal year, staff proposes to continue to model the price collapse scenario and use it to assess the adequacy of reserve holdings. A collapse in energy prices will significantly reduce SVCE’s revenues because of higher Power Cost Indifference Adjustment (PCIA1) and lower Pacific Gas and Electric (PG&E) generation rates. While SVCE accounts for the ‘PCIA financial hedge’, it will not completely reduce energy purchase costs because the prices for most forward energy purchases are locked due to long-term power purchase agreements (PPA) secured at fixed prices.
1 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 7
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 7 Agenda Date: 2/25/2025
Staff is also likely to explore other stress test scenario(s) identified from the ERM process. Staff will update the Committee at a future meeting, most likely in May 2026, on considering any additional stress scenario(s).
These scenarios include risks or opportunities around PCIA legislative and/or regulatory changes, and affordability considerations. While quantifiable impacts are difficult for staff to assess, staff is monitoring and mitigating other key impacts that surfaced through the ERM Process. These include but are not limited to:
other CCA failures, stranded cost with no recovery, re-opening of direct access, AI Data Center large loads coming onto the system, operational system interruptions, loss of program autonomy, cyber security breach, and federal policy changes.
Next steps
After completing the proposed financial stress test analyses, staff will present the findings to the Committee, which is expected in May 2026, and to the SVCE Board of Directors, which is expected in June 2026. Like last year, staff will recommend any changes to the reserve policy as part of the annual budgeting process to ensure the agency can withstand the modeled risks. The other risks and opportunities identified from the ERM framework will help shape next fiscal year’s strategic focus areas, measures, and department work plans.
STRATEGIC PLAN
The stress test analyses will support effective risk management strategies, enabling SVCE to withstand adverse events that can significantly deplete financial reserves and make SVCE uncompetitive. These analyses support SVCE Strategic Plan Goal 6 – “Maintain healthy financial position; avoid failures in the management of market risk, credit risk, liquidity risk, operational risks, and enterprise risks.”
FISCAL IMPACT
The stress test analysis does not result in a fiscal impact.
ATTACHMENT
1. Overview of the ERM Framework
Item 7
Agenda Item: 7 Agenda Date: 2/25/2025
Attachment: Overview of the ERM Framework
There are three main components of SVCE’s ERM framework:
1. Risk Matrix
2. Risk Register
3. Stress Tests
Risk Matrix
SVCE uses a risk matrix to assess the likelihood (frequency of occurrence) and consequence (impact) of potential risks and opportunities. The matrix helps the organization to calibrate risks and optimally direct resources to those with the most significant impact. The risk matrix, in conjunction with the risk register, will help identify the risk tolerance or acceptable level of risk after implementing planned mitigations. For example, those with a high likelihood of occurrence and high impact require an appropriate level of risk mitigation versus those with low probability and low impact.
The following is the current version of the risk matrix, which staff will continue refining. The matrix helps distinguish the significance among various potential risks/opportunities and enables optimal risk-based decision-making.
The numbers in the parentheses are for ease of referencing a particular box (level of frequency and impact) in the matrix.
Risk Register
SVCE uses the risk register to record the organization’s identified risks and potential opportunities. The risk register:
1. Briefly describes each risk driver or source of risk and opportunities
2. Lists existing mitigation strategies and additional planned mitigations
3. Ranks or quantifies, using the risk matrix, the risks listed on the register. Risks can be ranked if no mitigation actions were taken (unmitigated risks), with current mitigations (current level of risk), and with additional planned mitigations (acceptable level of risk).
4. Identifies a risk owner
The following is a draft illustration of the risk register.
Insignificant Minor Moderate Major Catastrophic
Risk Easily
Mitigated
through Day-to-Day Operations
Risk is
Manageable/Low
Impact on Mission
Moderate Erosion
of
Reserves/Impact
on Mission
Significant
Erosion of
Reserves/Impact
on Mission
Risk of
Existence
Certain >90% chance High (1) High (2) Extreme (3) Extreme (4) Extreme (5) Likely 50%- 90% Chance Moderate (6) High (7) High (8) Extreme (9) Extreme (10) Moderate 10%-50% Chance Low (11) Moderate (12) High (13) Extreme (14) Extreme (15) Unlikely but Plausible 5%-10% Chance Low (16) Low (17) Moderate (18) High (19) Extreme (20) Rare <=5% Chance Low (21) Low (22) Moderate (23) High (24) High (25) Frequency/Likelihood
Impact/Consequence
Item 7
Agenda Item: 7 Agenda Date: 2/25/2025
Stress Tests
Using the risk register, staff assesses the interrelatedness of various risks or combinations of risks that can materialize simultaneously to create plausible risk events that can have a significant adverse impact on the organization.
In the past, cross-functional teams at SVCE brainstormed on risks facing the agency over five years and prioritized the stress test scenarios that included:
1. A significant drop in energy prices results in higher Power Cost Indifference Adjustment (PCIA) and a lower Pacific Gas and Electric (PG&E) generation rate.
2. Insufficient financial liquidity caused by:
a. Energy price collapse that reduces SVCE’s margins and triggers credit downgrades b. Higher energy collateral postings from counterparties and the California Independent System Operator (CAISO)
c. Pending regulatory case that significantly increases Financial Security Requirements (FSR) to the Provider of Last Resort (POLR), which for SVCE currently is PG&E. FSR amounts posted are held by POLR as financial security in the event a community choice aggregator’s (CCA’s) customers are returned to POLR such as during a CCA bankruptcy.
3. Power Purchase Agreements (PPAs) default, renegotiate for higher prices, and delay their commercial start dates, resulting in RPS non-compliance penalties and replacement of energy and RA at higher market prices.
4. SVCE loses load due to direct access and growth in distributed energy resources.
5. Risks that threaten public services or facilities.
6. Risks and potential mitigations associated with load growth uncertainty. If load growth is higher than anticipated, SVCE can face difficulty meeting procurement and compliance targets. On the other hand, Unmitigated With Current Mitigations With Additional Mitigations
1 Financial
Prices Collapse; PCIA
Increases; Revenues Decrease Amrit
Reserves to withstand the
shocks; Stress Tests, Cashflow modeling
Reassess reserve
adequacy Extreme (15) Extreme (14) High (13)
.
7 Financial
Significant Number of PPAs
Default/Delay/Renegotiate for
higher prices
Kris
Supplier & Technology Diversity;
Plan for Contingencies;
Contractual language for delay
damages and default provisions
Moderate (14) Moderate (12) Moderate (12)
12 Regulatory/Compliance POLR Proceeding - Large Tie Up of Financial Reserves Amrit Hold Adequate Reserves
Manage and shape
regulatory
proceeding
Extreme (14) High (13) Moderate (18)
25 Reputational
Ineffective or sluggish
spending of approved program
dollars
Justin
Program plans developed with
stakeholders, ongoing feedback
during design/management,
increased staff/resources, and
emphasizing larger-scale
programs.
Additional staffing,
new supporting
systems, and public
reporting on impacts.
Moderate (23) Moderate (23) Moderate (23)
.
28 Reputational
Major disruption of the
T&D/Grid operator, Grid
Reliability - affects our mission
Bena Shape Regulatory and Legislative
Initiatives Moderate (18) Moderate (18) Moderate (18)
29 Operational and
Business Continuity
Natural Disaster Recovery
(Earthquake, flooding)
- Cover key business
functions (procurement,
scheduling, collateral calls …)
Gia System backups and desk
procedures
Add'l Desk
Procedures and
Continuity Plans
Low (22) Low (22) Low (22)
.
34 Operational and
Business Continuity
Calpine system failure Justin Moderate (23) Moderate (23) Moderate (23) Draft and illustrative
Risk Matrix Placement (Impact over 5-years)
Risk ID Risk Category Risk Description Risk Owner Current Mitigations Additional Planned Mitigations Item 7
Agenda Item: 7 Agenda Date: 2/25/2025
if load growth is lower than expected, SVCE can face stranded cost risks that can erode its competitiveness and ability to carry out its mission.
Item 7