VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Interim General Manager
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – December 1, 2021 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending December 31, 2021
DATE: February 10, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of December 1, 2021 to December 31, 2021 (with comparative year to date information) and Actual vs. Budget year to date ending December 31, 2021.
BACKGROUND & DISCUSSION:
The attached financial statements are prepared in a form to satisfy the debt covenants with River City Bank pursuant to the Line of Credit and are required to be prepared monthly.
The Financial Statements include the following reports:
• Statement of Net Position
• Statement of Revenues, Expenditures and Changes in Net Position • Statement of Cash Flows
In addition, Staff is reporting the Actual vs. Budget variances year to date ending December 31, 2021.
Financial Statements for the period December 1, 2021 – December 31, 2021 In the Statement of Net Position, VCEA, as of December 31, 2021, has a total of $3,990,009 in its checking, money market and lockbox accounts, $1,100,000 restricted assets for the Debt Service Reserve account, $1,989,603 restricted assets related to supplier deposits, and $2,461,158 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of December 31, 2021, $117,945. VCE member obligations are incurred monthly due to staffing, accounting, and legal services.
The term loan with River City Bank includes a current portion of $1,153,026. On December 31, 2021, VCE’s net position is $9,749,097.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $4,195,092 of revenue (net of allowance for doubtful accounts), of which $3,808,159 was billed in December and $1,768,193 represent estimated unbilled revenue. The cost of the electricity for the December revenue totaled $4,458,815. For December, VCEA’s gross margin was approximate -23.78% and net loss totaled ($1,158,362). The year-to-date change in net position was ($2,732,293).
In the Statement of Cash Flows, VCEA cash flows from operations were ($450,670) due to December cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending December 31, 2021 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue - $4,939,612 and 20% – variance is due to load being more favorable year-to-date than planned, the continued COVID and recessionary impacts, and the weather has been warmer than forecast, and rate adjustment starting November 1, 2021.
• Purchased Power - $2,689,275 and 10% – variance is due to load being more favorable year-to-date than planned, the COVID and recessionary impacts, and the weather has been warmer than forecast, and rising power costs.
• Program Costs – ($67,500) and (100%) – favorable variance to budget is due to not having utilized budgeted annual program costs expected in later periods.
• Contingency – ($67,867) and (100%) – favorable variance to budget is due to not having a need yet to utilize the contingency funds set aside in the budget.
Attachments:
1) Financial Statements (Unaudited) December 1, 2021 to December 31, 2021 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending December 31, 2021
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF DECEMBER 1 TO DECEMBER 31, 2021
PREPARED ON FEBRUARY 2, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 3,990,009
Accounts receivable, net of allowance 7,129,816
Accrued revenue 1,768,193
Prepaid expenses 885,230
Other current assets and deposits 1,998,276
Total current assets 15,771,524
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 2,461,158
Total restricted assets 3,561,158
Noncurrent assets:
Other noncurrent assets and deposits
Total noncurrent assets -
TOTAL ASSETS $ 19,332,682
LIABILITIES
Current liabilities:
Accounts payable $ 529,237
Accrued payroll 63,909
Interest payable 2,786
Due to member agencies 117,945
Accrued cost of electricity 5,332,169
Other accrued liabilities 285,750
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 118,763
Limited Term Loan 1,153,026
Total current liabilities 9,583,585
Noncurrent liabilities
Term Loan- RCB
Total noncurrent liabilities -
TOTAL LIABILITIES $ 9,583,585
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 3,561,158
Unrestricted 5,963,439
TOTAL NET POSITION $ 9,749,097
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
DECEMBER 31, 2021
3 FOR THE PERIOD
ENDING
DECEMBER 31, 2021 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 3,616,867 $ 29,676,961
TOTAL OPERATING REVENUES 3,616,867 29,676,961
OPERATING EXPENSES
Cost of electricity 4,458,815 30,132,779
Contract services 195,280 1,383,829
Staff compensation 94,690 537,689
General, administration, and other 24,224 341,143
TOTAL OPERATING EXPENSES 4,773,009 32,395,440
TOTAL OPERATING INCOME (LOSS) (1,156,142) (2,718,479)
NONOPERATING REVENUES (EXPENSES)
Other Revenue
Interest income 1,325 8,731
Interest and related expenses (3,545) (22,545)
TOTAL NONOPERATING REVENUES
(EXPENSES) (2,220) (13,814)
CHANGE IN NET POSITION (1,158,362) (2,732,293)
Net position at beginning of period 10,907,459 12,481,390 Net position at end of period $ 9,749,097 $ 9,749,097
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF DECEMBE 1, 2021 TO DECEMBER 31, 2021
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
4 FOR THE
PERIOD ENDING
DECEMBER 31, 2021 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 4,195,092 $ 31,566,898 Receipts for security deposits with energy suppliers - - Payments to purchase electricity (3,880,924) (31,379,421) Payments for contract services, general, and adminstration (671,295) (3,251,148) Payments for staff compensation (84,870) (517,485)
Other cash payments (8,673) (11,393)
Net cash provided (used) by operating activities (450,670) (3,592,549)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (32,943) (197,661)
Interest and related expenses (3,528) (23,018)
Net cash provided (used) by non-capital financing activities (36,471) (220,679)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 1,325 8,731
Net cash provided (used) by investing activities 1,325 8,731 NET CHANGE IN CASH AND CASH EQUIVALENTS (485,816) (3,804,497) Cash and cash equivalents at beginning of period 8,036,983 11,355,664 Cash and cash equivalents at end of period $ 7,551,167 $ 7,551,167 Cash and cash equivalents included in:
Cash and cash equivalents 3,990,009 3,990,009
Restricted assets 3,561,158 3,561,158
Cash and cash equivalents at end of period $ 7,551,167 $ 7,551,167
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF DECEMBER 1 TO DECEMBER 31, 2021
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
DECEMBER 31, 2021 YEAR TO DATE
Operating Income (Loss) $ (1,156,142) $ (2,718,479)
(Increase) decrease in net accounts receivable 304,244.41 674,395.41 (Increase) decrease in accrued revenue 257,252 1,167,097.74 (Increase) decrease in prepaid expenses (317,970) (870,087.00) (Increase) decrease in inventory - renewable energy credits - - (Increase) decrease in other assets and deposits (8,673) (11,393.00) Increase (decrease) in accounts payable (33,210) 45,276.00 Increase (decrease) in accrued payroll 9,820 20,204.00
Increase (decrease) in due to member agencies 20,963 (5,461.00) Increase (decrease) in accrued cost of electricity 577,891 (1,246,642.00) Increase (decrease) in other accrued liabilities (121,574) (695,904.00) Increase (decrease )security deposits with energy suppliers - - Increase (decrease) in user taxes and energy surcharges 16,729 48,443.90 Net cash provided (used) by operating activities $ (450,670) $ (3,592,549)
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
FOR THE PERIOD OF DECEMBER 1 TO DECEMBER 31, 2021
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
VALLEY CLEAN ENERGY
ACTUAL VS. BUDGET FYE 12-31-21 (6 Month)
FOR THE YEAR TO DATE ENDING 12/31/21
12/31/2021 12/31/2021
YTD YTD YTD %
GL# Description FY2022 Actuals FY2022 Budget Variance over/-under 301.00 Electric Revenue 24,737,349 29,676,961 4,939,612 20% 311.00 Interest Revenues 28,200 8,731 (19,469) -69%
415.00 Purchased Power 27,443,504 30,132,779 2,689,275 10% Labor & Benefits 579,577 537,689 (41,888) -7%
451.10 Salaries & Wages/Benefits 488,740 454,502 (34,237) -7% 451.20 Contract Labor 23,302 - (23,302) -100%
453.41 Human Resources & Payroll 67,536 83,187 15,651 23% Office Supplies & Other Expenses 94,224 101,938 7,714 8% 452.10 Technology Costs 17,016 15,652 (1,365) -8%
452.15 Office Supplies 1,152 1,547 395 34%
452.25 Travel 3,048 - (3,048) -100%
452.30 CalCCA Dues 62,107 56,075 (6,033) -10%
CC Power 10,000 28,440 18,440 184%
452.35 Memberships 900 224 (676) -75%
Contractual Services 1,368,998 1,296,794 (72,204) -5%
453.10 Other Contract Services 12,000 - (12,000) -100%
453.15 Don Dame 5,000 5,155 155 3%
453.20 SMUD - Credit Support 329,976 328,787 (1,189) 0% 453.21 SMUD - Wholesale Energy Services 292,986 293,922 936 0% 453.22 SMUD - Call Center 393,733 396,310 2,577 1%
453.23 SMUD - Operating Services 30,000 59,236 29,236 97% 453.24 Commercial Legal Support - - - 100%
453.25 Legal General Counsel 75,645 46,299 (29,346) -39% 453.36 Regulatory Counsel 97,330 79,726 (17,604) -18%
453.37 Joint CCA Regulatory counsel 15,759 602 (15,158) -96% 453.38 Legislative - (Lobbyist) 30,000 35,000 5,000 17% 453.40 Accounting Services 12,608 4,458 (8,150) -65%
453.41 Financial Consultant 12,500 - (12,500) -100%
453.42 Audit Fees 61,462 47,300 (14,162) -23%
453.60 PG&E Acquisition Consulting - - - 100%
Marketing 117,079 78,849 (38,230) -33%
459.05 Marketing Collateral 113,940 78,299 (35,641) -31% 459.15 Community Engagement Activities & Sponsorships 3,139 550 (2,589) -82% Programs 67,500 - (67,500) -100%
Program Costs 67,500 - (67,500) -100%
Rents & Leases 12,060 7,950 (4,110) -34%
457.10 Hunt Boyer Mansion 12,060 7,950 (4,110) -34%
Other A&G 204,145 236,718 32,574 16%
459.08 Development - New Members 12,000 - (12,000) -100% 459.09 Strategic Plan Implementation 37,500 62,261 24,761 66% 459.10 PG&E Data Fees 150,149 133,451 (16,698) -11%
459.20 Insurance 3,865 9,201 5,335 138%
459.70 Banking Fees 630 31,806 31,176 4946%
463.10 Miscellaneous Operating Expenses 3,221 2,722 (500) 0% 463.99 Contingency 67,867 - (67,867) -100%
TOTAL OPERATING EXPENSES 29,958,174 32,395,440 2,437,266 8% 481.10 Interest on RCB loan 23,019 22,545 (473) -2%
NET INCOME (5,215,643) (2,732,293) 2,483,350 -48%