sorren.com
Silicon Valley Clean Energy Authority
Report to the Board of Directors
March 11, 2026
Item 3
PRESENTATION
§sorren
Introduction
Kellin Gilbert, CPA
Audit Partner
17 years in public accounting and performing audits of government entities Currently working with several CCA’s throughout California Aliandra Schaffer
Engagement Supervisor
6 years in public accounting and performing audits of governments (CCA’s) Alauna Rico
Audit Supervisor
4 years in public accounting and performing audits of governments (CCA’s) Item 3
PRESENTATION
sorren
Transition to Sorren CPAs P.C.
As of May 2025, legacy Pisenti & Brinker combined practices with several other like-sized firms and rebranded as one unified firm “Sorren.” By combining resources with the strategic merger, we can make even greater investments in technology as well as our greatest assets, our people and clients.
Sorren is a new national top 50 firm and currently has twenty-three office locations and over a thousand employees.
The Santa Rosa office will continue to be the lead office for Silicon Valley Clean Energy Authority. No changes to the current engagement team, costs or timing of the services we provide to SVCE.
Item 3
PRESENTATION
sorren
Results of Current Year Audit
The audit is complete. We reported the following:
• Unmodified opinion – Based on our audit, the financial statements are materially accurate.
• No significant deficiencies or material weakness in internal control noted.
Item 3
PRESENTATION
sorren
Audit of the year ended September 30, 2025
Financial Statements
Relative Roles & Responsibilities
• Management is responsible for preparing the Financial Statements and establishing a system of internal control.
• Auditor is responsible for auditing the Financial Statements • Considering risks of material misstatement in the Financial Statements • Considering internal controls relevant to the Financial Statements • Performing tests of year-end balances based on risk assessment • Evaluating adequacy of disclosures
Item 3
PRESENTATION
sorren
Risk Assessment for the year ended
September 30, 2025
Our audit is a risk-based audit. Risk assessment procedures include:
• Gain understanding of the entity’s operating characteristics, practices, and procedures.
• Compare to our knowledge of similar entities, industry and professional guidance.
• Review procedures and controls surrounding significant transaction cycles and business processes.
Item 3
PRESENTATION
sorren
Risk Assessment for the year ended
September 30, 2025
Significant areas of focus for the audit:
• Revenue recognition
• Accounts receivable and accrued revenue
• Test a sample of customer billings
• Relate total cash received during the year to revenue • Review revenue recognition through year-end and method for determining (accrued revenue)
• Cash & Investments
• Confirmations sent to financial institutions
• Accrued Cost of Electricity
• Review subsequent bills from electricity providers and cash payments • Financial Statement Note Disclosures – Complete and without bias Item 3
PRESENTATION
sorren
Required Board Communications
• As discussed in Note 11, SVCE adopted GASB 102 and 104 which did not have a material effect on the financial statements.
• We did not propose any audit adjustments to the financial statements. • We did not identify any significant or unusual transactions or applications of accounting principles where a lack of authoritative guidance exists.
• There have been no disagreements with management concerning the scope of our audit and we have not encountered any difficulties in dealing with management during the performance of our audit.
• We issued a letter to the board dated February 23rd detailing these required communications.
Item 3
PRESENTATION
sorren
Kellin Gilbert
Partner
[email protected]
(707) 577-1511
sorren.com
Item 3
PRESENTATION
1 New SV Clean Energy
PowerPoint Template
• Subtitle
Changing the Fiscal Period to a
Calendar Year
Amrit Singh
Board of Directors
March 11, 2026
Item 4
PRESENTATION
CLEAN ENERGY
2 Main Areas of Discussion
Purpose
Action: Adopt Resolution Approving
changing the fiscal period to a
calendar year, along with the proposed
transition plan and change 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 change 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
Item 4
PRESENTATION
January February March May June
Staff: Finance and Admin Committee: Board: Finance and Admin Committee: Board:
Executive Committee:
Audit Committee: Reviews Strategic Plan
Auaust September November December
Finance and Admin Committee: Board: Finance and Admin 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 Mid-Year
Budget Update to the Board
Adopts Mid¬
Year Budget
(FY25-26)
Receives
Audited
Financials for
the last fiscal
year. (FY24-25)
1) Reviews Stress Test Analyses
2) Reviews Budget Framework for the
Next Fiscal Year (FY26-27)
Reviews Stresslest
Analyses
Optional: Reviews
Budget Framework fo
Next Fiscal Year
• Reviews and Recommendsthe BoardAdopt the
ProposedAnnual Budget for the Next Fiscal Year
(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
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: Board:
Audit Committee:
September December
• High-level (“Mini”) Budget & Reserves
Update (Revenues and Power Supply
Updated)
Receives Audited Financials for the last
fiscal year.
Adopts Mid-Year
Budget
Receives Audited
Financials for the
last fiscal year.
Enterprise Risk
Assessments
(ERM)
1 Late November
Finance andAdmin Committee:
• Reviews Proposed FinancialStress Test Scenarios
• Reviews and Recommendsthe Mid-Year Budget
Update to the Board
Finance and Admin Committee:
• Reviews Stress Test Analyses
• Reviews Budget Framework for the
Next Fiscal Year
Executive Committee:
Board:
• Reviews Stress Test Analyses
• Optional: Reviews Budget
Framework for Next Fiscal Year
Finance andAdmin Committee
Executive Committee(Optional):
• Reviews and Recommendsthat the
BoardAdopt the ProposedAnnual Budget
and Customer Rate Proposals
Board:
• Adopts the Proposed
Budget, Strategic Plan, and
Next Year’s Customer Rate
Proposals
Audit Committee:
Reviews Strategic Plan Kicks off theAudit
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
Adopt Resolution 2026-08 Approving:
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 stub-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
Board of Directors Meeting
March 11, 2026
Item 5
PRESENTATION
SILICON VALLEY
CLEAN ENERGY
MY 25-26 Adjusted
Operating Budget
Amrit Singh
Board of Directors Meeting
March 11, 2026
2 Main Areas of Discussion
Purpose
Action: Adopt Resolution
Approving 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
• Adopt Resolution
Item 5
PRESENTATION
Purpose
Main Areas of Discussion
Action: Adopt Resolution
Approving 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
Adopt Resolution
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
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
(+$20 million).
• Power Supply Cost
decrease
• Market price
decreases,
benefiting SVCE’s
physical open
positions
* Positive values (increases) in contribution to reserves can result from increases in Revenues, as well as decreases in Expe nses. Negative values (decreases) in contribution to reserves can result from decreases in Revenues, as well as increases in Expenses.
FY25-26 FY25-26
ADJUSTED MID-YEAR
ADJUSTED
($ 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
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
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
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
• 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
Summary - While Declining Energy Prices
Improve FY26 Adjusted Operating
Budget, 5-year Financial Outlook
Deteriorates Further
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 PAYMENTS 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
Adopt Resolution 2026-09 Approving the Mid-year
2025-26 Adjusted Operating Budget that projects
withdrawing $12.5 million from the reserves.
Item 5
PRESENTATION
Recommendation
8 9
Thank you! / Questions?
Item 5
PRESENTATION
Thank you! / Questions?
9 10
Title of the Page
2025 -2026
Mid-Year
Adjusted
Operating
Budget
($ 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
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
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
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
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
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
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
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
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
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
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
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
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
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
CD Glossary
23 • Subtitle
New SV Clean Energy
PowerPoint Template
Financial Levers Update:
Scenario Modeling and Reflecting
Feedback
Justin Zagunis and Monica Padilla
Board of Directors
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
Board (if
needed,
incorporate in
budget)
Sep 2026+
*Timeline subject to change
Item 6
PRESENTATION
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
Days Cash on Hand
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
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 RECAP: load and emissions info
Item 6
PRESENTATION
Total Annual Electricity Usage [MWh],
Total = 3,900,000 MWh
Customer Glass
Lar£& Commerciat/IndustriaL
Residential
SmaU/Medition Commercial
SILICON VALLEY <3/ CLEAN ENERGY
Launched
8 RECAP: customer rate info
In 2026,
Generation
(SVCE’s charge
plus PCIA and
fees) makes up
only ~25% of the
total electricity bill
Item 6
PRESENTATION
Cost. ctntsAWh
9 • 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
11 For FY2027 through FY2030
Item 6
PRESENTATION
PG&E Gen Rate,
10.7 ¢/kWh
Revisiting revenues and costs
12 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
13 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
14 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
15 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)
16 11 ¢/kWh total cost
revenues costs
SVCE Gen Rate,
7.7 ¢/kWh
gap
2.3 ¢/kWh
For FY2027 through FY2030
Item 6
PRESENTATION
PG&E Gen
Rate, 10.7
¢/kWh
Point of comparison: 2025 rates
17 11 ¢/kWh total
cost
revenues costs
SVCE Gen
Rate,
7.7 ¢/kWh
gap
For FY2027 through FY2030
3.3 ¢/kWh
Item 6
PRESENTATION
PG&E Gen
Rate, 10.7
¢/kWh
Point of comparison: 2025 rates
18 11 ¢/kWh total
cost
revenues costs
SVCE Gen
Rate,
7.7 ¢/kWh
gap
For FY2027 through FY2030
2025 PG&E
Gen Rate: 15.2
¢/kWh
2025 SVCE
Rate: 13.6
¢/kWh
(at 4% discount,
after 1 ¢/kWh
PCIA taken out)
2.6 ¢/kWh
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
19 Base case
Uncertainty
in forecast
Discrete moments of new info
Things could
improve on their
own (or worsen)
Item 6
PRESENTATION
20 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
21 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
22 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
23 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
24 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
25 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
26 What is it?
• Default clean product a 4% premium
(~$2/month for res; ~1% of total electricity bill)
• Create a new, minimum compliance
product that is 1% discount to PG&E
• Let customers opt down (could treat res
and non-res differently)
• 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
27 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
28 ✓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
30 • 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