Silicon Valley Clean Energy Finance & Administration Committee
March 5, 2026

1 New SV Clean Energy
PowerPoint Template
• Subtitle
Changing the Fiscal Period to a
Calendar Year
Amrit Singh
Finance and Administration Committee
March 5, 2026
Item 4

PRESENTATION

CLEAN ENERGY
2 Main Areas of Discussion
Purpose
Action: Recommend that the Board
approve changing the fiscal period to a
calendar year, along with the proposed
transition plan and changes to the
Budget Policy
1) Current budgeting and planning
timeline and process
2)Revised timeline and process
under a calendar year fiscal period
3)Proposed transition plan
4) Proposed changes to the budget
Policy
Item 4

PRESENTATION
3 Why Change the Fiscal Period?
More closely align adoption of Annual Budget with Customer Rate Changes Proposed Fiscal Period:
• Calendar Year, commencing January 1 and
ending December 31.

Benefits from the change:
• Avoids setting a budget in September and
then amending it 3 months later when there’s
more certainty on upcoming PG&E rates and
PCIA charges
• Aligns with the timeline for many external
compliance requirements and internal
planning processes
Background:
• JPA allows the Board to change the fiscal year
by resolution
• Changed once before in September 2016
• From the period July 1 - June 30 to the
current period, October 1 - September 30
• Changed to facilitate compliance with loan
covenants during SVCE’s startup, which are
no longer relevant.

Item 4

PRESENTATION
4 Current Budgeting and Planning Process and Timeline
January, February, and March
• Enterprise Risk Assessments
• Stress Tests Proposals
• Mid-year budget review and adoption
• Completion of prior year’s financial audit
May and June
• Stress test analyses
• Reserve adequacy
• Next fiscal year’s budget framework review
• Strategic plan review (biennially)
August and September
• Annual budget and strategic plan review and
feedback, and adoption one month later
November and December
• Budget adjusted to reflect updates to:
• PCIA and PG&E generation rate
forecasts
• Customer Rate Proposals
Larger timeline slide shown in the appendix
Planned Finance and Admin Committee meetings.

Item 4

PRESENTATION
January February March May June
Finance andAdmin Committee: Board: Finance andAdmin Committee: Staff: Board:

Executive Committee
Audit Committee: Reviews Strategic Plan
Auaust September November December
Finance and Admin Committee: Board: Finance andAdmin Committee: Board:

Audit Committee:

Kicks off theAudit
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
ReceivesAudited Financials 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 thatthe
Board adopt the ProposedAdjusted
Budget (reflecting updates to PCIA
and PG&E Gen Rate Forecasts) and
Customer Rate Proposals
Enterprise Risk^
Assessments
(ERM)
Reviews Proposed FinancialStress Test
Scenarios /
Reviews and Recommendsthe MidPiear
Budget Update to theBoard^^
Adopts Mid¬
Year Budget
(FY25-26)
Receives
Audited
Financials for
the last fiscal
year. (FY24-25)
Reviews Stresslest
Analyses
Optional: Reviews
Budget Framework fo
Next Fiscal Year
1) Reviews Stresslest Analyses
Reviews Budget Framework for the
xt Fiscal Year (FY26-27)
• Reviews and Recommendsthe BoardAdopt the
ProposedAnnual Budget for the Next Fiscal Year
X(FY26-27)
Board:

Executive Committee
(Optional):
5 February or March
• High-level Budget and Reserves update to
the Finance and Administration Committee
March, May, and June
• Enterprise Risk Assessments
• Stress Tests Proposals
• Mid-year budget review and adoption
• Completion of prior year’s financial audit
August and September
• Stress test analyses
• Reserve adequacy
• Next fiscal year’s budget framework review
• Strategic plan review (Biennially)
November and December
• Annual budget, strategic plan, and customer
rate proposal review by Committee(s) and
adoption by the Board in December
Full timeline slide shown in the appendix
Planned Finance and Admin Committee meetings.

Key Change: The Board will not have the opportunity to
review and provide feedback on the proposed budget two
months prior to the end of the fiscal year.

Budgeting and Planning Process and Timeline
If the Fiscal Period is Changed to Calendar Year
Item 4

PRESENTATION
Late February or March March May June
Finance andAdmin Committee: Staff: Finance andAdmin Committee: Board:

Audit Committee:

September December
Finance andAdmin Committee Board:

Executive Committee(Optional):

Executive Committee:

Reviews Strategic Plan Kicks off theAudit
High-level (“Mini”) Budget & Reserves j
Update (Revenues and Power Supply/
Updated) 7
Receives Audited Financials for the last
fiscal year.
• Reviews and Recommendsthat the
BoardAdopt the ProposedAnnual Budget
and Customer Rate Proposals
Adopts Mid-Year
Budget
Receives Audited
Financials for the
last fiscal year.

Enterprise Risk
Assessments
(ERM)
• Reviews Stress lest Analyses
• Optional: Reviews Budget
Framework for Next Fiscal Year
Reviews Proposed FinancialStress lest Scenarios\
Reviews and Recommendsthe Mid-Year Budget )
Update to the Board x
Finance and Admin Committee:
(• Reviews Stresslest Analyses )
^Reviews Budget Framework foi>tne
Next Fiscal Year
Late November
Board:
• Adopts the Proposed
Budget, Strategic Plan, and
Next Year’s Customer Rate
Proposals
Audit Committee:
6 Requires a Transition Period
Staff proposes to transition to a calendar fiscal period starting January 1, 2027

1. Need an interim 3-month transition fiscal
period, stub fiscal period, from October 2026 to
December 2026

2. Board sets the budget for the interim 3-month
fiscal period in September 2026

3. Board sets the budget for the new 12-month,
calendar-year fiscal period in December 2026

4. Board allows the auditor to perform a
combined, two-period audit covering:
• The 3-month stub period (October 2026 to
December 2026)
• The first full calendar year (1/1/27 to 12/31/2027) Full timeline slides are shown in the appendix Item 4

PRESENTATION
January 2026 February 2026 March 2026 May 2026 June 2026 Finance and Admin Committee: Board:

Audit Committee:
2026 September 2026 November 2026 December 2026
Receives AuditedFinancials for the last
fiscal year. (FY24-25)
Reviews Stresslest
Analyses
Optional: Reviews
Budget Framework foi
Next Fiscal Year
• Reviews Proposed FinancialStresslest
Scenarios
• Reviews and Recommends the Mid-Year
Budget Update to the Board Executive Committee:

Reviews Strategic Plan
Finance and Admin Committee:
1) Reviews Stress lest Analyses
2) Reviews Budget Framework for the
Next Fiscal Year (FY26-27)
Staff:
• Enterprise Risk
Assessments
(ERM)
Board:
• Adopts Mid¬
Year Budget
(FY25-26)
• Receives
Audited
Financials for
the last fiscal
year. (FY24-25)
Finance and Admin 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
Year 25-26
Finance and Admin 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:

ReceivesAudited Financials 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)
7 Requires Changes to Budget Policy
Remove the requirement to provide a budget overview two months prior to the end of the fiscal year, as staff will not have the updated PCIA and PG&E generation rata information in time to prepare the budget.

Item 4

PRESENTATION
III. Policy
A. Budget Adoption
*
The CEO, in concurrence with the Finance and Administration Committee, shall prepare aa budget and budget overview for the Board for the following fiscal year two months prior to the end of the fiscal year. The proposed budget shall be balanced and in alignment with the 8 Recommendation
Recommend that the Board of Directors approve:

1. Changing SVCE’s fiscal period to a Calendar Year (January 1 to December 31), beginning January 1, 2027

2. Establishing an interim 3-month stub fiscal period, starting October 1, 2026, and ending December 31, 2026, and adopting a schedule to approve the stub period budget at the September 2026 Board meeting

3. Authorizing a combined two-period audit covering the 3-month sub-period, along with the first audit of the new fiscal year

4. Amending the Budget, Adoption, Control and Reporting Policy to remove the requirement to provide a budget overview two months prior to the end of a fiscal year.

Item 4

PRESENTATION
9 Thank you! / Questions?
Item 4

PRESENTATION
10 SVCE’s Budgeting & Planning Process
SVCE Mission: Reduce dependence on fossil fuels by
providing carbon-free, affordable, and reliable electricity and innovative programs for the SVCE community.

Comprehensive assessment of risks and
opportunities to optimally achieve mission
Organization-wide priorities and
alignment toward achieving the mission
Funding in alignment with achieving
the strategic focus areas
Budget
Strategic Focus
Areas
Enterprise Risk
Management
Item 4

PRESENTATION
11 Current Budgeting and Planning Process and Timeline
December
Board:
• Adopts the
Adjusted
Budget and
Next year’s
Customer Rate
Proposals
Board:
• Reviews Stress Test
Analyses
• Optional: Reviews
Budget Framework for
Next Fiscal Year
Board:
• Adopts the Proposed Budget for
the Next Fiscal Year (FY26-27)
and the Strategic Plan
Finance and Admin Committee:

Executive Committee
(Optional):
• Reviews and recommends that the
Board adopt the Proposed Adjusted
Budget (reflecting updates to PCIA
and PG&E Gen Rate Forecasts) and
Customer Rate Proposals
Board:
• Adopts Mid-Year Budget
(FY25-26)
• Receives
Audited
Financials for
the last fiscal
year. (FY24-25)
January February
Staff:
• Enterprise Risk
Assessments
(ERM)
Finance and Admin Committee:
• Reviews Proposed Financial Stress Test
Scenarios
• Reviews and Recommends the Mid-Year
Budget Update to the Board
May
Finance and Admin Committee:
• Reviews and Recommends the Board Adopt the
Proposed Annual Budget for the Next Fiscal Year
(FY26-27)
Finance and Admin Committee:
1) Reviews Stress Test Analyses
2) Reviews Budget Framework for the
Next Fiscal Year (FY26-27)
June
September
Executive Committee:

Reviews Strategic Plan
August November
Audit Committee:
• Receives Audited Financials for the last
fiscal year. (FY24-25)
March
Audit Committee:
• Kicks off the Audit
Board:
• Reviews and provides feedback on the Proposed
Annual Budget for the Next Fiscal Year and the
Proposed Strategic Plan
Item 4

PRESENTATION
12 Budgeting and Planning Process and Timeline
If Fiscal Period Changed to Calendar Year
Board:
• Reviews the Proposed Strategic Plan
Board:
• Adopts the Proposed
Budget, Strategic Plan, and
Next Year’s Customer Rate
Proposals
August December
March
Board:
• Adopts Mid-Year
Budget
• Receives Audited
Financials for the
last fiscal year.

Board:
• Reviews Stress Test Analyses
• Optional: Reviews Budget
Framework for Next Fiscal Year
Finance and Admin Committee
Executive Committee (Optional):
• Reviews and Recommends that the
Board Adopt the Proposed Annual Budget
and Customer Rate Proposals
Staff:

Enterprise Risk
Assessments
(ERM)
Late February or March
Finance and Admin Committee:
• High-level (“Mini”) Budget & Reserves
Update (Revenues and Power Supply
Updated)
May
Finance and Admin Committee:
• Reviews Stress Test Analyses
• Reviews Budget Framework for the
Next Fiscal Year
Finance and Admin Committee:
• Reviews Proposed Financial Stress Test Scenarios
• Reviews and Recommends the Mid-Year Budget
Update to the Board
June
September Late November
Audit Committee:
• Receives Audited Financials for the last
fiscal year.

Audit Committee:
• Kicks off the Audit
Executive Committee:
• Reviews Strategic Plan
Item 4

PRESENTATION
13 Transition Timeline and Plan
New Fiscal Period Starts January 1, 2027
December 2026
Board:
• Adopts the
Proposed Budget
for Calendar
Fiscal Year 2027,
Strategic Plan, and
2027 Customer
Rate Proposals
Board:
• Reviews Stress Test
Analyses
• Optional: Reviews
Budget Framework for
Next Fiscal Year
Board:
• Adopts the Proposed 3-month
Stub Period Budget
Finance and Admin
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 Mid-Year Budget
(FY25-26)
• Receives
Audited
Financials for
the last fiscal
year. (FY24-25)
January 2026 February 2026
Staff:
• Enterprise Risk
Assessments
(ERM)
Finance and Admin Committee:
• Reviews Proposed Financial Stress Test
Scenarios
• Reviews and Recommends the Mid-Year
Budget Update to the Board
May 2026
Finance and Admin Committee:
• Reviews and recommends that the Board adopt the
Proposed Budget for October 2026 to December
2026, a 3-month stub fiscal period budget.

Finance and Admin Committee:
1) Reviews Stress Test Analyses
2) Reviews Budget Framework for the
Next Fiscal Year (FY26-27)
June 2026
September 2026
Executive Committee:

Reviews Strategic Plan
August 2026 November 2026
Audit Committee:
• Receives Audited Financials for the last
fiscal year. (FY24-25)
March 2026
Audit Committee:
• Kicks off the Audit for Fiscal
Year 25-26
Item 4

PRESENTATION
14 Transition Timeline and Plan - Continued
New Fiscal Period Starts January 1, 2027
February 2027 December 2027
Audit Committee:

Receives Audited Financials for the fiscal
year ending September 30, 2026 (October
2025 to September 2026)
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)
• Starting in 2028, the
February Audit
Committee will move
to May
• September Audit
Committee moves to
December
~August 2027*
Audit Committee:

Selects a new auditor
* An additional Audit Committee meeting in 2027 to select a new auditor is not because of the change to a new fiscal period.

SVCE’s policies require selecting a new auditor every 5 years. The proposed period is tentative; the new auditor needs to be selected before December 2027, the kick-off of the new audit.

Item 4

PRESENTATION
1 New SV Clean Energy
PowerPoint Template
Subtitle
MY 25 -26 Adjusted
Operating Budget
Amrit Singh
Finance and Administration Committee
March 5 , 2026
Item 5

PRESENTATION
Updated 3/3/26

SILICON VALLEY

CLEAN ENERGY
MY 25-26 Adjusted
Operating Budget
Amrit Singh
Finance and Administration Committee
March 5, 2026
2 Main Areas of Discussion
Purpose
Action: Recommend that the Board
Adopt Mid-Year 2025-2026 (MY
26) Adjusted Operating Budget
• Highlight changes since the
adoption of the adjusted budget in
December
• Compare mid-year and adjusted
budget key line items
• Compare final 2026 PG&E
Generation and PCIA rates with
those forecasted in December and
the impact on SVCE margins
• Review 5-yr Reserve Projections
• Committee Vote
Item 5

PRESENTATION
Updated 3/3/26
Purpose
Action: Recommend that the Board
Adopt Mid-Year 2025-2026 (MY
26) Adjusted Operating Budget
Main Areas of Discussion
Highlight changes since the
adoption of the adjusted budget in
December
Compare mid-year and adjusted
budget key line items
Compare final 2026 PG&E
Generation and PCIA rates with
those forecasted in December and
the impact on SVCE margins
Review 5-yr Reserve Projections
Committee Vote
3 Mid-Year FY26 Budget Highlights
Negative 5 -yr Financial Outlook Trend Continues;
Deteriorates Further with Declines in Energy Prices
• Ending 5 -year Days Cash on Hand (DCOH)
Forecast* :
• December 2025 Adjusted Budget: 200
• Mid-Year Budget : 142
• With declining prices, the FY26 budget improves ,
but at the expense of a larger deterioration of the
FY27 outlook (Net Negative )
• 2026 PCIA and PG&E rates are set
• Deviations between actuals and market price
estimates used to set the 2026 rate will be trued -up
in setting next year’s rates
• Leading to larger 2027 PCIA and likely lower
2027 PG&E Generation rates
*With additional operating liquidity assumptions
FY26 Budget Update:
• December 2025 Budget: Negative $60.5 Million
• Mid-Year Budget: Negative $12.5 Million ($12.5 million draw from reserves) $48 Million improvement
• $32 million decrease in power supply costs
• $16 million increase in revenues
• Power costs decrease due to lower prices
• Revenues improve due to a positive regulatory
outcome that reduced some (vintages) PCIA rates and
increased PG&E’s generation rates
FY27 Outlook:
• December 2025 Adjusted Budget: Negative $81 Million
• Mid-Year Budget: Negative $131 Million
Item 5

PRESENTATION
Updated 3/3/26
Mid-Year FY26 Budget Highlights
Negative 5-yr Financial Outlook Trend Continues;
Deteriorates Further with Declines in Energy Prices
Ending 5-year Days Cash on Hand (DCOH)
Forecast*:

December 2025 Adjusted Budget: 200
Mid-Year Budget: 142
With declining prices, the FY26 budget improves,
but at the expense of a larger deterioration of the
FY27 outlook (Net Negative)
2026 PCIA and PG&E rates are set
Deviations between actuals and market price
estimates used to set the 2026 rate will be trued-up
in setting next year’s rates
Leading to larger 2027 PCIA and likely lower
2027 PG&E Generation rates
FY26 Budget Update:

December 2025 Budget: Negative $60.5 Million
Mid-Year Budget: Negative $12.5 Million ($12.5 million draw from reserves) $48 Million improvement
$32 million decrease in power supply costs
$16 million increase in revenues
Power costs decrease due to lower prices
Revenues improve due to a positive regulatory
outcome that reduced some (vintages) PCIA rates and
increased PG&E’s generation rates
FY27 Outlook:

December 2025 Adjusted Budget: Negative $81 Million
Mid-Year Budget: Negative $131 Million
3 *With additional operating liquidity assumptions
4 Annual Adjusted Budget vs. Mid -Year Budget
• Revenues slightly
higher
• Final PG&E 2026
gen rates came in
higher than
projected due to a
positive regulatory
decision, adjusted
RA modeling
methodology
(+$20 million).
• Power Supply Cost
decrease
• Market price
decreases,
benefiting SVCE’s
physical open
positions
* Positive values (increases) in contribution to reserves can result from increases in Revenues, as well as decreases in Expe nses.

Negative values (decreases) in contribution to reserves can result from decreases in Revenues, as well as increases in Expens es.

FY25-26 FY25-26

ADJUSTED MID-YEAR

ADJUSTED
($ in thousands) BUDGET BUDGET $ %
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 (13,263) (13,362) (99) -0.7%
BALANCE AVAILABLE FOR RESERVES (60,500) (12,458) 48,042 79.4% Changes to Reserves
Contribution*
Item 5

PRESENTATION
Updated 3/3/26
Annual Adjusted Budget vs. Mid-Year Budget
Revenues slightly
higher
Final PG&E 2026
gen rates came in
higher than
projected due to a
positive regulatory
decision, adjusted
RA modeling
methodology
(+$20 million).

Power Supply Cost
decrease
Market price
decreases,
benefiting SVCE’s
physical open
positions
* 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. 5 Final PG&E Rate Improved SVCE Margins • Relative to
Assumptions in the
December Adjusted
Budget:
• PG&E’s average
2026 generation
rate increased by
about 9%
• PCIA increased
from 3.37¢/kWh
to 3.56¢/kWh
• Relative to Adjusted
Budget, SVCE’s 2026
margin improved by
about 11%
• The rate changes
were effective Jan 1,
2026.

SVCE Gen Rate 13.55 ¢/kWh
December
Adjusted Budget
2026 Rate**
2026 Rate *
PG&E Gen Rate:

11.49 ¢/kWh SVCE Gen Rate 7.82 ¢/kWh
1% SVCE discount
PCIA 3.56 ¢/kWh
Billing Gen Rate 11.38 ¢/kWh
PG&E Gen Rate:

10.50 ¢/kWh SVCE Gen Rate 7.03 ¢/kWh
1% SVCE discount
PCIA 3.37 ¢/kWh
Billing Gen Rate 10.40 ¢/kWh
* 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 ¢/kWh) • Final PG&E Cost True UP 
• RA Modeling Adjustment 
Item 5

PRESENTATION
Updated 3/3/26
Relative to
Assumptions in the
December Adjusted
Budget:

PG&E’s average
2026 generation
rate increased by
about 9%
PCIA increased
from 3.37(t/kWh
to 3.56(t/kWh
Relative to Adjusted
Budget, SVCE’s 2026
margin improved by
about 11%
The rate changes
were effective Jan 1,
2026.
6 Business -as-Usual Scenario* with Additional
Operating Liquidity Assumptions from December
Update Additional Operating
Liquidity Assumptions:

1. Lag in customer
uptake of programs
• $25 million program
fund balance remains
at the end of the 5 -
year period -
(Beginning of FY 26
unspent program fund
balance was ~$100 million)

2. Operational flexibility
within operating
expenses (other than
power supply expenses)
• $6.5 million a year in
expected underrun of
other operating
expenses
* Business -as-usual here is defined as all SVCE rates set at a competitive advantage to comparable PG&E rates. 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

PRESENTATION
Updated 3/3/26
Business-as-Usual Scenario* with Additional
Operating Liquidity Assumptions from December
Additional Operating
Liquidity Assumptions:

1. Lag in customer
uptake of programs
$25 million program
fund balance remains
at the end of the 5-
year period -
(Beginning of FY 26
unspent program fund
balance was ~$100 million)

2.Operational flexibility
within operating
expenses (other than
power supply expenses)
$6.5 million a year in
expected underrun of
other operating
expenses
Business-as-usual here is defined as all SVCE rates set at a competitive advantage to comparable PG&E rates. 7 Title of the Page
Summary – While Declining Energy Prices
Improve FY26 Adjusted Operating
Budget, 5-year Financial Outlook
Deteriorates Further
Reserves
Next Steps
• Staff continues the work on Financial Levers
Analyses started last year
• Reserves built for such financial outcomes position
SVCE well even under the business -as-usual
scenario, with reserves over the critical 2 -year
forecast period remaining above 350 DCOH
• However, if the 5 -year expected trend prevails,
SVCE will need to adjust the business -as-usual
operating scenario, which is the objective of the
Financial Levers Analyses
• Staff will conduct additional financial stress test
analyses and recommend any updates to the
reserve targets in May to the Finance and Admin
Committee and in June to the Board
Item 5

PRESENTATION
Updated 3/3/26
Summary - While Declining Energy Prices
Improve FY26 Adjusted Operating
Budget, 5-year Financial Outlook
Deteriorates Further
Next Steps
Staff continues the work on Financial Levers
Analyses started last year
Reserves built for such financial outcomes position
SVCE well even under the business-as-usual
scenario, with reserves over the critical 2-year
forecast period remaining above 350 DCOH
However, if the 5-year expected trend prevails,
SVCE will need to adjust the business-as-usual
operating scenario, which is the objective of the
Financial Levers Analyses
Staff will conduct additional financial stress test
analyses and recommend any updates to the
reserve targets in May to the Finance and Admin
Committee and in June to the Board
Many Risks can Deplete Reserves
Market Prices
ReducedRevenues
via Higher PCIA and
Lower PG&E Rates;
IncreasedPower
Supply Expense
SUPPLY
Project delays;
PPAs Default or
Renegotiate for
Higher Prices

L&R ISSUES LOAD LOSS CYBER-RISK

IRP, RPS, RA
Reform/Penalties,
PCIA. POLR
Customer Defaults DirectAccess Hardware, Software,
and Potential for and Trainingto combat
Expansion Ransomware and
Phishing
Rate Increasesdue
to socialized wildfire
costs.Energy Price
Increaseswill
ultimately impact
usage and
electrification
7 8
Recommendation
Recommend that the Board of Directors adopt the
proposed Mid-year (MY) 2025-26 Adjusted
Operating Budget.

Item 5

PRESENTATION
Updated 3/3/26
Recommendation
8 9
Thank you! / Questions?
Item 5

PRESENTATION
Updated 3/3/26
Thank you! / Questions?
9 10
Title of the Page
2025 -2026
Mid-Year
Adjusted
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

PRESENTATION
Updated 3/3/26
2025-2026
Mid-Year
Adjusted
Operating
Budget
11 5-Title of the Page Year
Forecast
Budget View – without additional
liquidity assumptions
For forecast years FY25 -26 onward:
- Revenues are based on SVCE’s load
forecast and CalCCA NewGen Model
for SVCE margin analysis using
market data as of 1/31/2026
- Power Supply Costs are based on
updated portfolio positions and latest
market data
- Operating Expenses are assumed to
grow 5% / year
($ 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 $539,673 $388,466 $290,563 $218,250 Adjustment for Program Expenditure and Building Fund2
$(33,198) $(19,934) $(16,534) $(15,204) $(7,281)
End, Net Financial Position $539,673 $388,466 $290,563 $218,250 $135,662

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

PRESENTATION
Updated 3/3/26
5-Year
Forecast
Budget View - without additional
liquidity assumptions
For forecast years FY25-26 onward:

Revenues are based on SVCE’s load
forecast and CaICCA NewGen Model
for SVCE margin analysis using
market data as of 1/31/2026
Power Supply Costs are based on
updated portfolio positions and latest
market data
Operating Expenses are assumed to
grow 5% / year
11 12
• Relative to Final PG&E Rate Improved SVCE Margins
Assumptions in the
December Adjusted
Budget:
• PG&E’s average
2026 generation
rate increased by
about 9%
• PCIA increased
from 3.37¢/kWh
to 3.56¢/kWh
• Relative to Adjusted
Budget, SVCE’s 2026
margin improved by
about 11%
• The rate changes
were effective Jan 1,
2026.
2025 Rate **
PG&E Gen Rate:

15.17 ¢/kWh SVCE Gen Rate 13.55 ¢/kWh
4% SVCE discount
PCIA 1.02 ¢/kWh
Billing Rate 14.57 ¢/kWh
PG&E Gen Rate:

10.50 ¢/kWh SVCE Gen Rate 8.29 ¢/kWh
1% SVCE discount
PCIA 2.11 ¢/kWh
Billing Gen Rate 10.39 ¢/kWh
PG&E Gen Rate:

10.50 ¢/kWh SVCE Gen Rate 7.03 ¢/kWh
1% SVCE discount
PCIA 3.37 ¢/kWh
Billing Gen Rate 10.40 ¢/kWh
• Energy 
• RA 
• RPS 
• Energy 
• RA 
• RPS 
PG&E Gen Rate:

11.49 ¢/kWh SVCE Gen Rate 7.82 ¢/kWh
1% SVCE discount
PCIA 3.56 ¢/kWh
Billing Gen Rate 11.38 ¢/kWh
Adopted Budget
2026 Rate *
Adjusted Budget
2026 Rate** * 2026 Rate **
• Final PG&E Cost True UP 
• RA Modeling Adjustment 
* Source: CalCCA NewGen Model analysis using market data as of 6/27/2025 and estimated CPUC attribute benchmarks for CY 2025 -2026 (Weighted fo r SVCE Portfolio Load) ** PG&E 2025 and 2026 Average Rates, effective January 1, 2025 and 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 ¢/kWh) Item 5

PRESENTATION
Updated 3/3/26
Relative to
Assumptions in the
December Adjusted
Budget:

PG&E’s average
2026 generation
rate increased by
about 9%
PCIA increased
from 3.37(t/kWh
to 3.56(t/kWh
Relative to Adjusted
Budget, SVCE’s 2026
margin improved by
about 11%
The rate changes
were effective Jan 1,
2026.
4% SVCE discount
5 1% SVCE discount
CO in
CD cd CD CD
ct^ Ct J ex
12 Final PG&E Rate Improved SVCE Margins
PCIA 1.02 c/kWh
PCIA 3.56 <t/kWh
PCIA 2.11 <t/kWh
PCIA 3.37 c/kWh
tn CM
tn tn
tn
a
cd in
in
Final PG&E Cost True UP
RA Modeling Adjustment
00 CO
CM
00 o
CD
Ct o
CD
Ct
o
CD
Ct
o
CD
o Ct
0 LU CD
0 CD
0 LU
CD
0 CD
0 LU
CD
0 CD
0 LU
PG&E Gen Rate

15.17 C/kWh
Energy
RA
RPS
Energy
RA
RPS
PG&E Gen Rate:

10.50 c/kWh
PG&E Gen Rate:

11.49 e/kWh
* Source: CaICCA NewGen Model analysis using market data as of 6/27/2025 and estimated CPUC attribute benchmarks for CY 2025-2026 (Weighted for SVCE Portfolio Load) " PG&E 2025 and 2026 Average Rates, effective January 1, 2025 and January 1, 2026 (Weighted for SVCE Portfolio Load) m 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 <t/kWh) Adjusted Budget
2025Rate** 2026Rate***
PG&E Gen Rate:
£ 10.50 <t/kWh
2026 Rate**
Adopted Budget
2026Rate*
13 Reserve Projection Under Business -as-Usual
Scenario
Budget View – Does not include additional liquidity assumptions Projected End of FY
Reserves:
• 519 Days of Cash on
Hand (DCOH)
• If unspent Program
Funds and Building
Fund were included in
the reserve calculation
• 445 Days of Cash on
Hand (DCOH)
• Excludes Unspent
Program Funds and
Building Fund
Calendar year 2027 onwards assumes 1% discount is provided as either 1) Discounts to all customers, or,
2) As bill credits to CARE/FERA customers only (and 0% discount to all customers) 519
346
259
183
105
445
295
226
165
94 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

PRESENTATION
Updated 3/3/26
Reserve Projection Under Business-as-Usual
Scenario
Projected End of FY
Reserves:
519 Days of Cash on
Hand (DCOH)
If unspent Program
Funds and Building
Fund were included in
the reserve calculation
445 Days of Cash on
Hand (DCOH)
Excludes Unspent
Program Funds and
Building Fund
Calendar year 2027 onwards assumes 1% discount is provided as either 1) Discounts to all customers, or,
2) As bill credits to CARE/FERA customers only (and 0% discount to all customers) 13 14
Implementing Rate Premium in 2027 to Keep
DCOH Above 250
On average, SVCE
rates would need to be
about 7.7% higher than
PG&E starting in CY
2027 (no CARE/FERA bill credits)
Recommended Reserve
Management Goal:

Keep DCOH Above:
250 (under these financial
conditions)
531
388
339
299
250
452
329
296
270
228
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

PRESENTATION
Updated 3/3/26
Implementing Rate Premium in 2027 to Keep
DCOH Above 250
Recommended Reserve
Management Goal:

Keep DCOH Above:
250 (under these financial
conditions)
On average, SVCE
rates would need to be
about 7.7% higher than
PG&E starting in CY
2027 (no CARE/FERA bill credits)
14 15
Implementing Rate Premium Starting in 2028 to
Keep DCOH Above 250
On average, SVCE rates
would need to be about

10.6% higher than PG&E
starting in CY 2028 (no
CARE/FERA bill credits)
2027 rates at set at 1%
discount to PG&E with an
additional 1% directed
towards CARE/FERA bill
credits
Recommended
Reserve Management
Goal: Keep DCOH
Above: 250 (under these
financial conditions)
531
365
317
288 250
452
306
274 260
228
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

PRESENTATION
Updated 3/3/26
Implementing Rate Premium Starting in 2028 to
Keep DCOH Above 250
Recommended
Reserve Management
Goal: Keep DCOH
Above: 250(under these
financial conditions)
On average, SVCE rates
would need to be about

10.6% higher than PG&E
starting in CY 2028 (no
CARE/FERA bill credits)
2027 rates at set at 1%
discount to PG&E with an
additional 1% directed
towards CARE/FERA bill
credits 15
16 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PCIA & Franchise Fee* (₵/kWh) 3.29 4.76 1.97 0.37 1.14 1.12 3.62 3.93 2.59 2.39 2.32 SVCE Gen Rate* (₵/kWh) 7.59 6.10 12.41 13.99 14.22 12.53 7.76 5.55 8.74 9.16 9.39 SVCE gen rate discount vs PG&E 4% 1% 1% 4% 4% 10% 1% 1% 1% 1% 1% 0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0 2
4 6
8 10
12 14
16 18
20 SVCE gen rate
discount vs PG&E
Customer Billing
Rate (₵/kWh)
Estimated**
Average Effective Customer Billing Rates
*Weighted for SVCE portfolio load. The 10% discount for 2025 includes a one -time bill credit, equal to 6% annual discount (up to $35 million in total additional credits) **CalCCA NewGen Model analysis using market data as of 1/30/2026 and estimated CPUC attribute benchmarks for CY 2026 -2030 (Weighted fo r SVCE Portfolio Load) SVCE Gen Rate discount excludes CARE/FERA customer discount equal to 1% general discount distributed among CARE/FERA customer s • 2026 Average Customer Billing
Generation Rate decreased 17%
Year over Year, inclusive of
SVCE One -Time Bill credit
disbursement in September
2025
• 2026 SVCE margins decline 38%
• 2027 Estimated Average
Customer Billing Generation Rate
is expected to decrease further
by around 17% Year over Year
• 2027 SVCE margins decline 28%
Item 5

PRESENTATION
Updated 3/3/26
CD Average Effective Customer Billing Rates
2026 Average Customer Billing
Generation Rate decreased 17%
Year over Year, inclusive of
SVCE One-Time Bill credit
disbursement in September
2025
2026 SVCE margins decline 38%
2027 Estimated Average
Customer Billing Generation Rate
is expected to decrease further
by around 17% Year over Year
2027 SVCE margins decline 28%
★Weighted for SVCE portfolio load. The 10% discount for 2025 includes a one-time bill credit, equal to 6% annual discount (up to $35 million in total additional credits) “CaICCA NewGen Model analysis using market data as of 1/30/2026 and estimated CPUC attribute benchmarks for CY 2026-2030 (Weighted for SVCE Portfolio Load) SVCE Gen Rate discount excludes CARE/FERA customer discount equal to 1% general discount distributed among CARE/FERA customers 16 17
With Estimated PG&E Delivery Rates, Customers’ Total Rate Expected to Drop on Average by 6% from 2025 Level
PG&E delivery
rate, on average,
is estimated to
increase by
about ~5%
PG&E Total 2025
Rate: 36.69 ¢/kWh* SVCE Gen Rate 13.55 ¢/kWh
4% SVCE discount
PCIA 1.02 ¢/kWh
Total SVCE Customer Electric Billing Rate (incl. PG&E Delivery Charges) 36.09 ¢/kWh Av. Delivery Rate Gen Rate 21.52 ¢/kWh
PG&E Total 2026
Rate: 33.98 ¢/kWh** SVCE Gen Rate 7.82 ¢/kWh
1% SVCE discount
PCIA 3.56 ¢/kWh
Total SVCE Customer Electric Billing Rate (incl. PG&E Delivery Charges) 33.87 ¢/kWh Av. Delivery Rate Gen Rate 22.49 ¢/kWh
-6%
*PG&E 2025 Average Rate, effective January 1, 2025 and estimated total delivery rates as of September 1, 2025 (Weighted for SVC E Portfolio Load) **Gen rates are estimated based on PG&E Errata (November 6, 2025) and delivery rates are based on PG&E Preliminary Annual El ectric True -Up Submittal (November 17, 2025) data for CCA/DA customers.

Above margin analyses ignores minor reductions for franchise fees (0.1 ¢/kWh) Item 5

PRESENTATION
Updated 3/3/26
PG&E Total 2025
Rate: 36.69 <t/kWh»
PG&E delivery
rate, on average,
is estimated to
increase by
about ~5%
*PG&E 2025 Average Rate, effective January 1, 2025 and estimated total delivery rates as of September 1, 2025 (Weighted for SVCE Portfolio Load) **Gen rates are estimated based on PG&E Errata (November 6, 2025) and delivery rates are based on PG&E Preliminary Annual Electric True-Up Submittal (November 17, 2025) data for CCA/DA customers.

Above margin analyses ignores minor reductions for franchise fees (0.1 (t/kWh) 18 Estimated Customer Billing Rate Breakdown and
Comparison Y -o-Y
Note
Total CARE/FERA bill discount (including T&D) vs average residential customer, assuming the same usage (491 kWh/month) is about 48%.

On average, CARE/FERA usage is about 12% lower than that of an average E -TOUC customer.

Delivery rates are estimated to increase approximately 5% Y -o-Y (load weighted for SVCE customer portfolio) 2025** 2026*** 2025** 2026*** 2025** 2026*** 2025** 2026*** 2025** 2026*** Rate Schedule E-TOUC Est. Avg E-TOUCL Est. Avg B-1 B-1 B-10S B-10S B-19S B-19S PG&E Bundled Gen Rate ($/kWh) $ 0.1501 $ 0.1184 $ 0.1505 $ 0.1182 $ 0.1510 $ 0.1153 $ 0.1590 $ 0.1221 $ 0.1452 $ 0.1175 SVCE Gen Rate ($/kWh) $ 0.1323 $ 0.0801 $ 0.1327 $ 0.0798 $ 0.1338 $ 0.0778 $ 0.1409 $ 0.0824 $ 0.1283 $ 0.0800 PG&E Delivery Rate ($/kWh) $ 0.2766 $ 0.2813 $ 0.1078 $ 0.1169 $ 0.2886 $ 0.2989 $ 0.2085 $ 0.2304 $ 0.1637 $ 0.1913 PG&E PCIA/FF ($/kWh) $ 0.0118 $ 0.0372 $ 0.0118 $ 0.0372 $ 0.0112 $ 0.0364 $ 0.0117 $ 0.0384 $ 0.0111 $ 0.0363 Total Electricity Cost ($/kWh) $ 0.4207 $ 0.3985 $ 0.2523 $ 0.2339 $ 0.4336 $ 0.4131 $ 0.3611 $ 0.3512 $ 0.3031 $ 0.3075 SVCE CARE/FERA Monthly Credit* $ - $ (17.50) $ (12.00)
Est. Average Usage (kWh/month) 491 491 491 491 1,851 1,851 22,540 22,540 148,625 148,625 SVCE Gen Rate Discount vs PG&E** 4% 1% ~28%* ~24%* 4% 1% 4% 1% 4% 1% Est. Av. Monthly Savings vs PG&E** $ 2.95 $ 0.58 $ 20.46 $ 12.58 $ 11.18 $ 2.13 $ 143.58 $ 27.51 $ 865.00 $ 174.56 Av. Monthly Cost at SVCE Gen Rate* $ 206.56 $ 195.67 $ 106.38 $ 102.85 $ 802.58 $ 764.60 $ 8,140.10 $ 7,916.03 $ 45,048.24 $ 45,705.98 Av. Monthly Cost at PG&E Gen Rate* $ 209.51 $ 196.25 $ 126.84 $ 115.43 $ 813.76 $ 766.74 $ 8,283.68 $ 7,943.55 $ 45,913.24 $ 45,880.54 *Estimated, based on average historic SVCE usage for corresponding customer class. **Estimated, based on current PG&E 2025 rates as of September 1, 2025 and SVCE 2025 rates as of May 1st, 2025. Excludes One-Time Bill Credit distributed in Sept. 2025, equal to approx. 6% annual discount. ***Gen rates and T&D rates are based on PG&E Annual Electric True-Up Submittal (Advice 7797-E, released on December 30, 2025) data for CCA/DA customers.

Residential Res CARE* Small Commercial Medium Commercial Large Commercial Item 5

PRESENTATION
Updated 3/3/26
Estimated Customer Billing Rate Breakdown and
Comparison Y-o-Y
Total CARE/FERA bill discount (including T&D) vs average residential customer, assuming the same usage (491 kWh/month) is about 48%.

On average, CARE/FERA usage is about 12% lower than that of an average E-TOUC customer.

Delivery rates are estimated to increase approximately 5% Y-o-Y (load weighted for SVCE customer portfolio) 18 19 Operating Expenses
FY25 -26 Adjusted Budget MY25 -26 Mid -Year Budget Updates • Data Management Fees
• $3.8M
• Unchanged
• Billing (PG&E Fees)
• $1.6M
• Unchanged
• Staffing (Salaries & Retirement)
• $18.9M
• Unchanged
• Professional Services
• $10.7M
• $257k lower due to lower -than-expected software and
consultant fees
• Marketing & Promotions
• $2.2M
• $158k lower due to lower -than-expected vendor fees
• G&A / Lease
• $5.6M
• $95k lower due to lower maintenance fees, lower
monthly rent for current office, and reduced property
taxes for new office building going forward, as the
property tax exemption was recently approved by the
city.

Item 5

PRESENTATION
Updated 3/3/26
Operating Expenses
FY25-26 Adjusted Budget MY25-26 Mid-Year Budget Updates Data Management Fees
$3.8M
Unchanged
Billing (PG&E Fees)
$1.6M
Unchanged
Staffing (Salaries & Retirement)
$18.9M Unchanged
Professional Services
$10.7M
$257k lower due to lower-than-expected software and
consultant fees
Marketing & Promotions
$2.2M $158k lower due to lower-than-expected vendor fees G&A / Lease
$5.6M
$95k lower due to lower maintenance fees, lower
monthly rent for current office, and reduced property
taxes for new office building going forward, as the
property tax exemption was recently approved by the
city. 19
20 CARE and FERA Customer Eligibility Criteria
Eligibility for California Alternate Rates for Energy
(CARE) or Family Electric Rate Assistance (FERA) is
based on household income and size.

For CARE, eligibility can also be obtained through
enrollment in one of the qualifying public assistance
programs*
CARE Income Guidelines
(valid through May 31, 2026)
Number of
people in
household
Total gross annual
household income
1-2 $42,300 or less
3 $53,300 or less
4 $64,300 or less
5 $75,300 or less
6 $86,300 or less
7 $97,300 or less
8 $108,300 or less
9 $119,300 or less
10 $130,300 or less
Each
additional
person, add
$11,000
*Before taxes and based on all current income sources.

FERA Income Guidelines
(valid through May 31, 2026)
Number of
people in
household
Total gross annual
household income*
1-2 $42,301 - $52,875
3 $53,301 - 66,625
4 $64,301 - $80,375
5 $75,301 - $94,125
6 $86,301 - $107,875
7 $97,301 - $121,625
8 $108,301 - $135,375
9 $119,301 - $149,125
10 $130,301 - $162,875
Each
additional
person, add
$11,000 - $13,750
*Before taxes and based on all current income sources.
* To qualify through other public assistance programs:

Someone in a household must take part in any of the following public assistance programs:
• Low Income Home Energy Assistance Program (LIHEAP)
• Women, Infants, and Children (WIC)
• CalFresh/SNAP (Food Stamps)
• CalWORKs (TANF) or Tribal TANF
• Head Start Income Eligible (Tribal Only)
• Supplemental Security Income (SSI)
• Medi-Cal for Families (Healthy Families A & B)
• National School Lunch Program (NSLP)
• Bureau of Indian Affairs General Assistance
• Medicaid/Medi -Cal (under age 65)
• Medicaid/Medi -Cal (age 65 and over)*
Eligible low -income customers
who are enrolled in the CARE
program receive around 40%
discount (not including additional
SVCE discount and bill credits) on
their total electric bills and a 20%
discount on their natural gas bills.

FERA offers an 18% discount
on total electric rates but not
on gas rates. CARE and FERA
share one application. If
applicants do not qualify for
CARE, they might still qualify
for FERA.

Item 5

PRESENTATION
Updated 3/3/26
CARE and FERA Customer Eligibility Criteria
Eligible low-income customers
who are enrolled in the CARE
program receive around 40%
discount (not including additional
SVCE discount and bill credits) on
their total electric bills and a 20%
discount on their natural gas bills.

FERA offers an 18% discount
on total electric rates but not
on gas rates. CARE and FERA
share one application. If
applicants do not qualify for
CARE, they might still qualify
for FERA.

Eligibility for California Alternate Rates for Energy
(CARE) or Family Electric Rate Assistance (FERA) is
based on household income and size.

For CARE, eligibility can also be obtained through
enrollment in one of the qualifying public assistance
programs*
* To qualify through other public assistance programs:

Someone in a household must take part in any of the following public assistance programs:

Low Income Home Energy Assistance Program (LIHEAP)
Women, Infants, and Children (WIC)
CalFresh/SNAP (Food Stamps)
CalWORKs (TANF) or Tribal TANF
Head Start Income Eligible (Tribal Only)
Supplemental Security Income (SSI)
Medi-Cal for Families (Healthy Families A & B)
National School Lunch Program (NSLP)
Bureau of Indian Affairs General Assistance
Medicaid/Medi-Cal (under age 65)
Medicaid/Medi-Cal (age 65 and over)*
20 21
Reserve Target Definitions
Current Reserve Targets:
• Minimum Reserve Level: 120 DCOH
• If reserves fall below the minimum level, develop plans to restore them to the minimum level within two fiscal years. • Reserve Goal: 350 DCOH
• No action required if the reserves are above the minimum and below the maximum levels. • Maximum Reserve Level: 500 DCOH
• If reserve funds are projected to exceed the maximum level, present the Board of Directors with options for disposition of those reserves during the next budget cycle.

Item 5

PRESENTATION
Updated 3/3/26
1 Reserve Target Definitions
Current Reserve Targets:

Minimum Reserve Level: 120 DCOH
If reserves fall below the minimum level, develop plans to restore them to the minimum level within two fiscal years.

Reserve Goal: 350 DCOH
No action required if the reserves are above the minimum and below the maximum levels.

Maximum Reserve Level: 500 DCOH
If reserve funds are projected to exceed the maximum level, present the Board of Directors with options for disposition of those reserves during the next budget cycle.
21 22
FY25 -26 Budget Development Timeline
Budget Framework Full-Year Update
“Adjusted December Budget” “Mid-Year Budget”
June August August
Discuss the high -level
budget framework
and stress analysis
with the Finance and
Admin Committee
Review the draft
budget with the
Finance & Admin
Committee
Present the draft
budget to the BOD
for review and
feedback
March
Present the mid -
year budget to
the BOD for
approval
Present the stress test
analysis to the BOD
June
November December
Review adjustments to the
budget to reflect updates to
PCIA and PG&E gen rate
assumptions with the Finance
and Admin Committee
Present the
adjusted
budget to the
BOD for
approval
February
Review the mid -year
budget with the
Finance and Admin
Committee
Present to the BOD the
budget, incorporating
any feedback received
in August
September
Oct 1st
Fiscal Year
Start
Item 5

PRESENTATION
Updated 3/3/26
FY25-26 Budget Development Timeline
Budget Framework Full-Year Update
June June August August September
Adjusted December Budget' Mid-Year Budget’
Oct 1st November December February March
22 Present the stress test
analysis to the BOD
Discuss the high-level
budget framework
and stress analysis
with the Finance and
Admin Committee
Present the mid¬
year budget to
the BOD for
approval
Present the
adjusted
budget to the
BOD for
approval
Present the draft
budget to the BOD
for review and
feedback
Review adjustments to the
budget to reflect updates to
PCIA and PG&E gen rate
assumptions with the Finance
and Admin Committee
Review the draft
budget with the
Finance & Admin
Committee
Fiscal Year
Start
Review the mid-year
budget with the
Finance and Admin
Committee
Present to the BOD the
budget, incorporating
any feedback received
in August
23 Glossary
• RPS – Renewable Portfolio Standard - The RPS program requires investor-owned utilities (IOUs), publicly owned utilities (POUs), electric service providers (ESPs), and community choice aggregators (CCAs) to increase procurement from eligible renewable energy resources to 60% of total procurement by 2030. RPS eligible resources include solar, wind, small hydro, biomass, and geothermal. • RA – Resource Adequacy - Under its Resource Adequacy (RA) program, the California Public Utilities Commission (CPUC) requires load-serving entities—including investor-owned utilities (IOUs), electric service providers (ESPs), and community choice aggregators (CCAs)—to demonstrate in both monthly and annual filings that they have purchased capacity commitments to contribute their share of system reliability.
• MTR – Mid-Term Reliability – Procurement order issued by the CPUC to focus on securing sufficient online resources to ensure reliability through at least 2028.
• PCIA – Power Charge Indifference Adjustment - Designed to recover the above-market cost of long-term power purchased on behalf of customers who later departed the IOU to be served by a CCA. The calculation methodology is set by the CPUC, and the amount is calculated annually, with vintages set for each year of customer departures. • OIR –Order Instituting Rulemaking - A procedural document that is issued by the CPUC to start a formal proceeding. A draft OIR is issued for comment by interested parties and made final by a vote of the five Commissioners of the CPUC. • ERRA – Energy Resource Recovery Account - ERRA proceedings are used to determine fuel and purchased power costs which can be recovered in rates. The utilities do not earn a rate of return on these costs and only recover actual costs. The costs are forecast for the year ahead, and actual costs are retroactively trued-up via balancing accounts. • MPBs – Market Price Benchmarks - estimated values per unit associated with key components of energy portfolios, such as the Energy Index, Renewable Portfolio Standard (RPS) Adder, and Resource Adequacy (RA) Adder.

Item 5

PRESENTATION
Updated 3/3/26
CD Glossary
23 • Subtitle
New SV Clean Energy
PowerPoint Template
Financial Levers Update:

Scenario Modeling and Reflecting
Feedback
Justin Zagunis and Monica Padilla
Finance and Administration Committee
March 2026
Item 6

PRESENTATION

SILICON
CLEAN
Today we are seeking additional feedback
on scenario design and key datapoints
Exec Committee
Oct 2025
Board
(introduction to
concepts)
Dec 2025
Exec Committee
Finance & Admin
Board
(specific modeled
scenario)
Feb/Mar 2026
Exec Committee
Finance & Admin
Board
(final decisions on
preferred approach)
May/Jun 2026
Board Study Session
(initial feedback on
values and priorities)
Dec 2025 (Fri)
Board (if
needed,
incorporate in
budget)
Sep 2026+
*Timeline subject to change
Item 6

PRESENTATION
"X
3 • Recap from December
• Review key numbers
• Example scenario and
questions
• Next steps
• Discussion
Agenda
Today, staff is seeking
input on:
• have we captured the board’s
feedback?
• board’s thoughts on the
scenario and framing/questions
• additional info/data desired for
next discussion
Item 6

PRESENTATION
0 100
200
300
400
500
600
FY2026 FY2027 FY2028 FY2029 FY2030
DCOH Forecast (incl. unspent programs $)
RECAP: forecast shows reserves drawdown, with DCOH
estimate dropping further since December
4 Base case
~530 days
cash on hand
~140 days
cash on hand
Min reserves
Target reserves
Max reserves
Item 6

PRESENTATION
0 100
200
300
400
500
600
FY2026 FY2027 FY2028 FY2029 FY2030
DCOH Forecast (chart shows individual impact of each lever) RECAP: there are many options (levers) to reduce the pull from reserves
5 Base case
Load at minimum
compliance
Stop program
activities
8% premium to PG&E
starting CY2027
~530 days
cash on hand
Item 6

PRESENTATION
6 Recap: SVCE Value Proposition
MISSION: reduce dependence
on fossil fuels by providing
carbon free, affordable and
reliable electricity and innovative
programs for the SVCE
community.

Customer-Facing
Value Proposition
Item 6

PRESENTATION

COMMUNITY

REINVESTMENT

LOCAL CONTROL
& PRESENCE

CLEAN POWER
& THE GRID

COMPETITIVE
RATES

ACCELERATING

ELECTRIC

UPGRADES
7 • A balanced approach is a good one
• Support customer choice and simplicity
• SVCE’s mission is focused on emissions
• Strongly interested in remaining cheaper than PG&E
• Community investments drive most positive associations • New steel-in-ground is most impactful (power supply and decarb) • Want to be innovative but not at “bleeding edge”
RECAP: some top-level input from board, from
December
Item 6

PRESENTATION
Revisiting revenues and costs
PG&E Gen Rate,

10.7 ¢/kWh
For FY2027 through FY2030
Item 6

PRESENTATION
PG&E Gen Rate,

10.7 ¢/kWh
SVCE Gen Rate,

7.7 ¢/kWh
SVCE Discount,

0.1 ¢/kWh
PCIA,

2.9 ¢/kWh
Revisiting revenues and costs
9 For FY2027 through FY2030
Item 6

PRESENTATION
PG&E Gen Rate,

10.7 ¢/kWh
Revisiting revenues and costs
10 revenues
SVCE Gen Rate,

7.7 ¢/kWh
SVCE Discount,

0.1 ¢/kWh
PCIA,

2.9 ¢/kWh
For FY2027 through FY2030
Item 6

PRESENTATION
Revisiting revenues and costs
11 revenues costs
PG&E Gen Rate,

10.7 ¢/kWh
SVCE Gen Rate,

7.7 ¢/kWh
SVCE Discount,

0.1 ¢/kWh
PCIA,

2.9 ¢/kWh
For FY2027 through FY2030
Item 6

PRESENTATION
Revisiting revenues and costs
12 11 ¢/kWh total cost
revenues costs
PG&E Gen Rate,

10.7 ¢/kWh
SVCE Gen Rate,

7.7 ¢/kWh
SVCE Discount,

0.1 ¢/kWh
PCIA,

2.9 ¢/kWh
For FY2027 through FY2030
Base Supply Cost, 9.1 ¢/kWh
Operating Expenses, 1 ¢/kWh
Program Spend, 0.5 ¢/kWh
Voluntary Clean, 0.4 ¢/kWh
Item 6

PRESENTATION
Base Supply Cost, 9.1 ¢/kWh
Operating Expenses, 1 ¢/kWh
Program Spend, 0.5 ¢/kWh
Voluntary Clean, 0.4 ¢/kWh
PG&E Gen Rate,

10.7 ¢/kWh
Revisiting revenues and costs
13 11 ¢/kWh total cost
revenues costs
SVCE Gen Rate,

7.7 ¢/kWh
gap

3.3 ¢/kWh
For FY2027 through FY2030
Item 6

PRESENTATION
Base Supply Cost, 9.1 ¢/kWh
Operating Expenses, 1 ¢/kWh
Program Spend, 0.5 ¢/kWh
Voluntary Clean, 0.4 ¢/kWh
Draw
from
Reserves
Pre-pay Savings,

0.5 ¢/kWh
Other Income, 0.5 ¢/kWh
PG&E Gen Rate,

10.7 ¢/kWh
If forecast becomes business as usual, higher
rate may be a required lever (long-term)
14 11 ¢/kWh total cost
revenues costs
SVCE Gen Rate,

7.7 ¢/kWh
gap

2.3 ¢/kWh
For FY2027 through FY2030
Item 6

PRESENTATION
0 100
200
300
400
500
600
FY2026 FY2027 FY2028 FY2029 FY2030
Illustrative: Range of Uncertainty
Near-term actions can buy time (for clarity, changes to forecast) and prolong reserves
15 Base case
Uncertainty
in forecast
Discrete moments of new info
Things could
improve on their
own (or worsen)
Item 6

PRESENTATION
16 Near-term actions should keep us positioned
strongly now and for any possible future
Customer-Facing
Value Proposition
Item 6

PRESENTATION

COMMUNITY

REINVESTMENT

LOCAL CONTROL
& PRESENCE

CLEAN POWER
& THE GRID

COMPETITIVE
RATES

ACCELERATING

ELECTRIC

UPGRADES
17 All decisions impact the value proposition
Move to a less
clean product?
Drive fewer new
renewable projects
Customer-Facing
Value Proposition
Item 6

PRESENTATION

ACCELERATING

ELECTRIC

UPGRADES
18 All decisions impact the value proposition
Stop running
local decarb
programs?
Customers don’t see
local activity
Not supporting a more
rapid decarb transition
Customer-Facing
Value Proposition
Item 6

PRESENTATION

LOCAL CONTROL
& PRESENCE

CLEAN POWER
& THE GRID

COMPETITIVE
RATES
19 All decisions impact the value proposition
Raise rates
above PG&E?
Customer-Facing
Value Proposition
Depends on how high and
what “competitive” means to
different customers
Item 6

PRESENTATION

COMMUNITY

REINVESTMENT

LOCAL CONTROL
& PRESENCE

CLEAN POWER
& THE GRID

ACCELERATING

ELECTRIC

UPGRADES
20 Also have to think about long-term
implications
First stop
clean goals
and programs,
then end up
needing to
raise rates
anyway?
Erosion of most of value
proposition by the end
Customer-Facing
Value Proposition
Item 6

PRESENTATION
21 Building a scenario with something for
everyone
Ideal: find a
way to balance
across all (for
as long as
possible) Customer-Facing
Value Proposition
Item 6

PRESENTATION

COMMUNITY

REINVESTMENT

LOCAL CONTROL
& PRESENCE

CLEAN POWER
& THE GRID

COMPETITIVE
RATES

ACCELERATING

ELECTRIC

UPGRADES
22 What is it?
• Default clean product a 4% premium
• Create a new, minimum compliance
product that is 1% discount to PG&E
• Let customers opt down
• Reduce program spend 10%
• Start with CY2027
Example Scenario – Customer Choice
Impacts
Benefits
• Customer choice
• Maintain high enrollment
• Cheaper option for price-sensitive customers
• Keeps more DCOH in reserves
Drawbacks
• Some additional emissions
• Savings opportunity diminishes as RPS
requirements grow
• Opt-outs still possible
Item 6

PRESENTATION
0 100
200
300
400
500
600
FY2026 FY2027 FY2028 FY2029 FY2030
DCOH Model
23 Example Scenario – Customer Clean Choice
How would it work?
• Sell existing clean energy resources
to bring clean position closer to
compliance
• Market to customers to help them
understand their options
• Pursue custom deals with large
loads to neutralize risk and meet
customer needs
• Deprioritize some decarb programs
per new roadmap
• Emphasize lifetime bill savings,
clean energy impact, and local
program investments
Base case
Scenario
+75 DCOH
to end at
215 DCOH
Buys ~1 yr to
hit 250 DCOH
Item 6

PRESENTATION
24 ✓A balanced approach is a good one
✓Support customer choice and simplicity
✓SVCE’s mission is focused on emissions
✓Strongly interested in remaining cheaper than PG&E
✓Community investments drive most positive associations ✓New steel-in-ground is most impactful (power supply and decarb) ✓Want to be innovative but not at “bleeding edge”
Does not fully close the gap, but could be a first step Scenario aligns with Board’s input
Item 6

PRESENTATION
Today we are seeking additional feedback
on scenario design and key datapoints
Exec Committee
Oct 2025
Board
(introduction to
concepts)
Dec 2025
Exec Committee
Finance & Admin
Board
(specific modeled
scenario)
Feb/Mar 2026
Exec Committee
Finance & Admin
Board
(final decisions on
preferred approach)
May/Jun 2026
Board Study Session
(initial feedback on
values and priorities)
Dec 2025 (Fri)
Board (if
needed,
incorporate in
budget)
Sep 2026+
*Timeline subject to change
Item 6

PRESENTATION
"X
26 • Corrections or additional feedback from December?
• Questions about key numbers?
• Reactions to modeled scenario?
• Additional info/data you would want to see?
Discussion
Next steps:
• Explore leg + reg adjustments
• Review appropriate reserves levels
• Keep pursuing operational savings
• Bring a proposal scenario and
alternatives back to weigh tradeoffs
Item 6

PRESENTATION
1 • Subtitle
New SV Clean Energy
PowerPoint Template
SVCE’s Planning & Budgeting Process
and Financial Stress Tests
March 5, 2026
Finance and Administrative Committee
Amrit Singh
Scott Wrigglesworth
Item 7

PRESENTATION

CLEAN ENERGY
2 Main Areas of Discussion • FY 26-27 Budgeting & Planning Timeline
• Overview of Enterprise Risk
Management (ERM) and Stress Tests
• Review Key Drivers of Financial
Risks
• Review Planned Financial Stress Test
Scenarios
• Next Steps
Purpose
Information Item:

1. Overview of SVCE’s Planning
and Budgeting Process and
Future Committee Meetings

2. Seek Feedback on the Planned
Financial Stress Test Scenarios
Item 7

PRESENTATION
3 SVCE’s Planning & Budgeting Process
SVCE Mission: Reduce dependence on fossil fuels by
providing carbon-free, affordable, and reliable electricity and innovative programs for the SVCE community.

Comprehensive assessment of risks and
opportunities to optimally achieve mission
Organization-wide priorities and
alignment toward achieving the mission
Funding in alignment with achieving
the strategic focus areas
Budget
Strategic Focus
Areas
Enterprise Risk
Management
Item 7

PRESENTATION
4 Stress Tests and ERM
Stress Test
An essential component of ERM
• Assess the interrelatedness of risks in the
ERM framework and model extreme but
plausible scenarios that can have major
adverse consequences for SVCE
• Important for commodity trading portfolios
because of the inherent weakness of market
risk measures in assessing black swans, such
as disruptions in markets
A comprehensive organization-wide
assessment of risks and opportunities that
leads to a more disciplined approach to
achieving the organization’s mission and
objectives
• Ensure risks that can be optimally
managed do not derail us from
achieving the organization’s objectives
efficiently and effectively
• Can also aid in identifying opportunities
that affect the organization’s strategic
priorities
ERM
Item 7

PRESENTATION
5 Key Components of the ERM Framework
Risk
Register
• Record of organization’s risks
• Identify current and additional planned mitigations
• Identify risk owner
Risk Matrix
• Risk Rubric. Assess the likelihood and consequence of risk events • Calibrate risks
• Identify risk tolerance – level of acceptance
Stress
Tests
• Model scenarios (financial position, systems, and processes) of interrelated risks that are extreme but plausible
• Develop appropriate risk management strategies, including the adequacy of reserves
Unmitigated With Current Mitigations With Additional Mitigations 1 Financial Economic Recession: Prices Collapse and PCIA goes up and revenues go down Amrit Reserves to withstand the shocks; Stress Tests, Cashflow Modeling Reassess reserve adequacy Extreme (15) Extreme (14) High? (13) (Depends on Reserve Set Aside) 2 Financial Price Collapse leads to insufficient liquidity (collateral postings) Amrit Reserves to withstand the shocks; Stress Tests, Cashflow Modeling Reassess reserve adequacy High (13) Moderate (12) Low (11) 3 Financial Load Loss to due economic recession (may not be immediate financial impact) Amrit Reserves to withstand the shocks Reassess reserve adequacy Moderate (12) Low (11) Low (11) 4 Financial Bad Debt increase due to economic recession Adam Send back to PG&E after 3 months of non-payment; Reserves to withstand the shock Reassess reserve adequacy Moderate (12) Moderate (12) Moderate (12) 5 Financial Price collapse and increase in desire for DA (as PCIA goes up) subject to the DA cap Amrit Reserves to maintain competitive pricing; CPUC Decision not opening DA None Low (22) Low (22) Low (22) 6 Financial Load Loss due to DA and distributed/ behind the meter (generation and storage) Adam Custom Customer Pricing; CPUC Decision not opening DA Moderate (12) Moderate (12) Moderate (12) 7 Financial Significant PPAs default/delay/renegotiate for higher prices Monica Supplier & Technology diversity; plan for contingencies; Contractual language for delay damages and default provisions Moderate (23) Moderate (23) Moderate (23) 8 Financial Counterparty Default - Loss of MS business - Risk of losing prepay Amrit Credit risk management Update credit guidelines Moderate (23) Moderate (23) Moderate (23) 9 Financial Member agency leaving Girish Strong SVCE value proposition; Effective communication and alignment with members Moderate (23) Moderate (23) Moderate (23) 10 Financial Governance Risk (Limited knowledge of key stakeholders resulting in an uneconomic/suboptimal business model/operations; Divergent Board member objectives) Girish Continous training and stakeholder interest alignment Moderate (23) Moderate (23) Moderate (23) 11 Financial PG&E failures affect our cashflows since they are our cash register (high gas prices leading to customer bad debt, billing issues) Adam Seek fair treatment from CPUC; No residential waterfall Moderate (12) Low (11) Low (11) 12 Regulatory/Compliance POLR Proceeding - Large Tie up of Financial Reserves Amrit Hold Adequate Reserves Manage and shape regulatory proceeding against PG&E Pool Proposal Extreme (14) High (13) Moderate (18) 13 Regulatory/Compliance CPE Policy Procurement (Pumped Storage, Ofshore wind etc, more asset procurement); Loss of procurement autonomy thru backstop procurement (@ governers office) Monica Manage and shape regulatory proceeding (add more specifics?) Moderate (23) Moderate (23) Moderate (23) 14 Regulatory/Compliance RA reform, uncertainties on design and procurement targets and penalties for market structural imbalances Monica Manage and shape regulatory proceeding (add more specifics?) High (13) High (13) High (13) 15 Regulatory/Compliance Loss of PG&E hydro and Nuclear allocation Monica Manage and shape regulatory proceeding (add more specifics?) Moderate (12) Moderate (12) Moderate (12) 16 Regulatory/Compliance CPUC rejects some of our MTR contracts - especially if it's out of money Monica Manage and shape regulatory proceeding (add more specifics?) Low (17) Low (17) Low (17) 17 Regulatory/Compliance CPUC imposed hedges that may not be optimal for our portfolio Monica Manage and shape regulatory proceeding (add more specifics?) High (19) High (19) High (19) 18 Regulatory/Compliance Potential for deregistration (CPUC No longer lets us operate as an LSE) Monica Manage and shape regulatory proceeding (add more specifics?) High (25) High (25) High (25) 19 Regulatory/Compliance Green Regulatory Risk - Change in the accounting of green. REC has a definition today, Green e / Green prime - VREP has some exchange between REC and Cap/Trade, this could increase our costs in the long term. Monica Low (22) Low (22) Low (22) 20 Reputational Risk of Relevancy - IOUs power portfolio just as green. How do we distinguish ourselves? What's our value proposition?Justin Cheaper (competitive advantage thru tax exempt financing) and community benefits from programs Moderate (18) Moderate (18) Moderate (18) 21 Reputational Emissions on PCL increase; Impact on our mission and customers perception of our value proposition Adam Effective customer communications Moderate (23) Moderate (23) Moderate (23) 22 Reputational Customer Activism & Unfavorable Political scenarios derailing our mission - High PG&E T&D costs and high energy prices resulting in more customer activism and movement against electrification; customer affordability - Political environments ("Make Coal Great Again!")
- Lobbying from natural gas industry Adam Effective customer communications Moderate (23) Moderate (23) Moderate (23) 23 Reputational Aggressive SVCE electrification efforts creates customer backlash ("Let go of my gas stoves!") Justin Moderate (23) Moderate (23) 24 Reputational Daisy and 3rd Party (Calpine, other Vendors) System Failures and Data Breach - Customer Identifiable data compromised; Mandatory customer communication - Customers Opt Out
- CPUC Compliance Risk
Justin CPUC Data audit; Contract provisions Moderate (18) Moderate (23) Moderate (18) 25 Reputational Risk of not spending program dollars well (impact on the reserves - give back the reserves) Justin Moderate (23) Moderate (23) Moderate (23) 26 Reputational Grid Readiness to support our mission Justin Moderate (23) Moderate (23) Moderate (23) 27 Reputational Stranded Program Assets (technology changes, hydrogen cheaper than electricity) Justin Moderate (23) Moderate (23) Moderate (23) 28 Reputational Major Disruption of the T&D/Grid operator, Grid Reliability - affects our mission Girish Moderate (18) Moderate (18) Moderate (18) 29 Operational and Business Continuity Natural Disaster Recovery (Earthquake, flooding) - Cover key business functions (procurement, scheduling, collateral calls …) Monica Key Desk Procedures Low (22) Low (22) Low (22) Operational and Business Continuity Staff turnover Amrit - Employer of Choice Initiatives -benefits,Comp, Hybrid Work, Team Buildings Key Desk Procedures; BPO Moderate (18) Moderate (18) Moderate (18) 30 Operational and Business Continuity Cyber risks (wire fraud, social engineering, ransomware) Amrit IT IRP Plans and Tabetop exercises, VCISO, Human Firewall Trainings Moderate (18) Moderate (18) Moderate (18) 31 Operational and Business Continuity Insider Threat/Rogue Employee Amrit Code of Conduct, Risk Controls Moderate (23) Moderate (23) Moderate (23) 32 Operational and Business Continuity Physical Security/Active Shooter Amrit Staff Training Moderate (23) Moderate (23) Moderate (23) 33 Operational and Business Continuity Scheduling system failure Monica Schedule remotely Low (22) Low (22) Low (22) 34 Operational and Business Continuity Calpine system failure Adam Moderate (23) Moderate (23) Moderate (23) 35 Operational and Business Continuity Daisy Failures (Quality of data impact on Revenue forecasting) Justin Low (22) Low (22) Low (22) Proposed Stress Tests (Modeled Scenarios) Economic Recession (Price Collapse -5th percentile) Coupled with Adverse Regulatory Outcomes (POLR) Extreme (20) Extreme (20) High(19) Draft Confidential Initial Placement to Get Discussions Going Risk Matrix Placement (Impact over 5-years) Risk ID Risk Category Risk Description Risk Owner (Initial Straw Proposal) Current Mitigations (High level right now to get discussions going) Any Additional Planned Mitigations/Actions (High level right now to get discussions going) Item 7

PRESENTATION
Impact/Consequence
Frequency/Likelihood
Insignificant Minor Moderate Major Catastrophic
Risk Easily
Mitigated
through Day-to-Day Operations
Riskis
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 Extreme (3) Extreme (4) Extreme (5) Ukely 5O%- 90% Chance Moderate (6) High (7) ppi Extreme (9) Extreme (10) Moderate 10%-50% Chance low (11) 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) **<241 **<»> । Past, Current, and Stress Case Modeled Commodity Prices • Forward prices are at all time
high.
• Extreme case of runup in
prices
• Most of the increase occurred
in the last 12 months.
• Can't predict future but price
trends could reverse, and
prices could drop equally or
more.
• Prices were trading at the
modeled stress test levels as
recently as 12 months ago
6 Stress Test Cases for DCOH Impact
Staff recommends the following three cases for stress testing around margin and days cash on hand (DCOH) impacts)
Cases Description
Price Collapse Energy, RPS and RA collapse resulting in higher PCIA and lower generation rates.

Affordability Focus Customer, political, and/or legislative focus on affordability increases beyond current levels.

PCIA Reopening/Revamp CPUC track 2 and track 3 OIR leads to risk/opportunities around the PCIA with positive or negative implications for SVCE.

Item 7

PRESENTATION
7 2026 Stress Scenario: Power Price Collapse
• Energy, RA, and attributes prices collapse to the 1st percentile. • This is a core risk driver and ongoing financial stress scenario. • Considerations:
• Physical and financial (PCIA) hedge levels
• Rate-setting implications and PCIA Impacts
• Fundamental reasons for persistently low prices
(added supply, uncertain demand)
• Standard Ascend stochastic modeling used to
estimate 1st percentile energy prices.
• Use of third-party provided fundamental research
to model 1st percentile RA and attributes prices.

Item 7

PRESENTATION
8 PCIA and PG&E Gen Rate determine SVCE Rates and
therefore Revenues
Review of Key Financial Risk Drivers SVCE Gen Rate
SVCE
discount
PG&E Gen Rate: PCIA
Biggest contributor to revenue risk: PCIA and PG&E Generation Rate Uncertainty.

Revenues
PCIA
PCIA
Revenues
PG&E Rate
PG&E Rate
Revenues decline when prices decline
Item 7

PRESENTATION
9 Price Uncertainty– Cont’d
Price collapse continues to pose biggest financial risk. • Revenues drop significantly
• Loss of revenues far exceed
savings from lower power
procurement costs
• Power procurement savings
dampened by existing hedges
• SVCE is adjusting its energy
portfolio to mitigate this impact to
the extent possible and as best
estimated by SVCE
Item 7

PRESENTATION
1 2026 |pri
1 2°26 |Pri
| 2027 |Prices 1 2027 |prices xk

PCIA J,
PG&E Rate 'T
SVCE Revenues
^CIA't \
PG&E Rate xb
SVCE Revenues xb/
10 2026 Stress Scenario: Affordability Focus
• Heightened discussion in recent years on the
importance of power affordability to customers.
• Increasing public pressure to decrease electricity
rates.
• Political, Regulatory, Legislative and/or Customer
interests
• Evaluate both in isolation and in conjunction with
other stress scenarios.
• Investigate the expected change in price/load in an
affordability shift scenario.

Item 7

PRESENTATION
11 2026 Stress Scenario: PCIA Reopening
• Ongoing CPUC proceedings on
amendments to PCIA calculation
• Currently three tracks that address RA
MPB, REC’s vintages, and wholesale
changes
• Impacts could be across a spectrum of
positive to negative for CCAs
• Stress tests will consider implications
based upon legal, regulatory and/or
legislative potential
Item 7

PRESENTATION
12 Other Risks/Opportunities Worth Awareness
In addition to risks that staff is proposing for stress testing, staff also monitors the environment for other risks, manages strategy around those risks and where prudent takes pre-emptive or responsive risk mitigation action. Currently, the following are some key risk/opportunities that are more qualitative in nature, but still part of the overall risk register monitoring process. • CCA Failures
• Stranded cost with no recovery
• Re-opening of direct access,
• AI Data Center large loads coming onto the system
• Operational systems interruption (billing, SC)
• Loss of program autonomy
• Cyber security breach
• Federal Policy changes
Item 7

PRESENTATION
13 Ongoing Risk/Opportunity Monitoring
• The Enterprise Risk Matrix fuels continuous evaluation of risks and opportunities large and small.
• We consider several of the risks/opportunities raised by staff for additional stress testing, ad hoc, as needed throughout the year. • Staff will update the Finance and Administration Committee on any additional stress scenario(s) if conditions warrant throughout the year.

Item 7

PRESENTATION
14 Next Steps
• Present financial stress test scenario analysis results at the May 2026 meeting
• Present to the Board in June 2026
• Use the analyses to determine the adequacy of reserve-holding targets • Update the Committee at a future meeting, most likely in May 2026, on any other stress scenario(s)
• Other risks and opportunities identified from the ERM framework will help shape next fiscal year’s strategic focus areas, measures, and department work plans
Item 7

PRESENTATION
15 Thank you! / Questions?
Item 7

PRESENTATION
16 Risk Matrix
Impact/Consequence
• Assess the likelihood (frequency of
occurrence) and consequence (impact)
• Calibrate risks and optimally direct
resources
• Identify risk tolerance or acceptable level
of risk
• Most risks assessed based on the subject
matter expert’s (SME) judgment
• Will continue to refine further and attempt
to quantify risks
• Significant financial risks will be explicitly
quantified and used for reserve planning,
like last year’s stress test analyses
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
Item 7

PRESENTATION
17 Risk Register
• Risk Register:
• Record of risks
• Briefly describes each risk
• Lists existing and planned mitigations
• Ranks risks
• Identifies risk owner
• Cross-functional teams brainstormed and
identified an initial set of critical risks
• Bucketed the risks into the following initial
categories:
• Financial
• Regulatory and Compliance
• Reputational
• Operational and Business Continuity
An expanded view is also shown in the appendix.

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
Monica
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
Girish 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 …)
Monica 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 Adam Moderate (23) Moderate (23) Moderate (23) Proposed Stress Tests (Modeled Scenarios)
Reserves; Strong Advocacy
Additional Reserves;
Revist Hedging
Strategy
Extreme (20) High(19) Moderate (18) Economic Recession (Price Collapse -5th percentile) Coupled with Adverse Regulatory Outcomes (POLR); Increase RA/procurement costs 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

PRESENTATION