Item 6
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 6
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Executive Director
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – February 28, 2022 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending February 28, 2022
DATE: April 14, 2022
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of February 1, 2022 to February 28, 2022 (with comparative year to date information) and Actual vs. Budget year to date ending February 28, 2022.
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 Febaruary 28, 2022.
Financial Statements for the period February 1, 2022 – February 28, 2022 In the Statement of Net Position, VCEA, as of February 28, 2021, has a total of $918,812 in its checking, money market and lockbox accounts, $1,100,000 restricted assets for the Debt Service Reserve account, $1,998,276 restricted assets related to supplier deposits, and $2,462,533 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of February 28, 2021, $159,872. VCE member obligations are incurred monthly due to staffing, accounting, and legal services.
Item 6
The term loan with River City Bank includes a current portion of $1,120,082. On February 28, 2022, VCE’s net position is $6,908,534.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCEA recorded $2,644,501 of revenue (net of allowance for doubtful accounts), of which $3,417,595 was billed in February and $1,496,861 represent estimated unbilled revenue. The cost of the electricity for the February revenue totaled $4,195,943. For February, VCEA’s gross margin was approximate -53% and net loss totaled ($1,767,604). The year-to-date change in net position was ($3,103,087).
In the Statement of Cash Flows, VCEA cash flows from operations were ($1,571,782) due to February cash receipts of revenues being less than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending February 28, 2022 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue - $399,134 and 7% – favorable variance is due to load being more favorable than planned and the weather has been warmer than forecast.
• Purchased Power – ($1,076,916) and -17% – favorable variance is due to load being more favorable than planned, weather has been warmer than forecast, and lower power market prices for January and February.
Attachments:
1) Financial Statements (Unaudited) February 1, 2022 to February 28, 2022 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending February 28, 2022
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF FEBRUARY 1 TO FEBRUARY 28, 2022
PREPARED ON APRIL6, 2022
2 ASSETS
Current assets:
Cash and cash equivalents $ 918,812
Accounts receivable, net of allowance 5,826,084
Accrued revenue 1,698,209
Prepaid expenses 21,243
Other current assets and deposits 1,998,276
Total current assets 10,462,624
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 2,462,533
Total restricted assets 3,562,533
Noncurrent assets:
Other noncurrent assets and deposits
Total noncurrent assets -
TOTAL ASSETS $ 14,025,157
LIABILITIES
Current liabilities:
Accounts payable $ 412,776
Accrued payroll 64,455
Interest payable 2,260
Due to member agencies 159,872
Accrued cost of electricity 3,363,964
Other accrued liabilities (80,848)
Security deposits - energy supplies 1,980,000
User taxes and energy surcharges 94,062
Limited Term Loan 1,120,082
Total current liabilities 7,116,623
Noncurrent liabilities
Term Loan- RCB
Total noncurrent liabilities -
TOTAL LIABILITIES $ 7,116,623
NET POSITION
Restricted
Local Programs Reserve 224,500
Restricted 3,562,533
Unrestricted 3,121,501
TOTAL NET POSITION $ 6,908,534
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
FEBRUARY 28, 2022
3 FOR THE
PERIOD ENDING
FEBRUARY 31,
2022 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 2,751,191 $ 6,353,834
TOTAL OPERATING REVENUES 2,751,191 6,353,834
OPERATING EXPENSES
Cost of electricity 4,195,943 8,734,484
Contract services 140,515 368,494
Staff compensation 95,801 191,481
General, administration, and other 84,378 158,214
TOTAL OPERATING EXPENSES 4,516,637 9,452,673
TOTAL OPERATING INCOME (LOSS) (1,765,446) (3,098,839)
NONOPERATING REVENUES (EXPENSES)
Other Revenue
Interest income 637 2,315
Interest and related expenses (2,795) (6,563)
TOTAL NONOPERATING REVENUES
(EXPENSES) (2,158) (4,248)
CHANGE IN NET POSITION (1,767,604) (3,103,087)
Net position at beginning of period 8,676,138 9,749,097 Net position at end of period $ 6,908,534 $ 6,646,010
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF FEBRUARY 1, 2022 TO FEBRUARY 28, 2022 4 FOR THE
PERIOD ENDING
FEBRUARY28, 2022 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 3,917,591 $ 7,881,178 Payments to purchase electricity (5,606,047) (10,618,494) Payments for contract services, general, and adminstration 204,255 (103,853) Payments for staff compensation (87,581) (190,935)
Net cash provided (used) by operating activities (1,571,782) (1,460,322)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (32,944) (32,944)
Interest and related expenses (3,219) (7,089)
Net cash provided (used) by non-capital financing activities (36,163) (3,870)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 637 2,315
Net cash provided (used) by investing activities 637 1,678 NET CHANGE IN CASH AND CASH EQUIVALENTS (1,607,308) (3,069,822) Cash and cash equivalents at beginning of period 6,088,653 13,639,820 Cash and cash equivalents at end of period $ 4,481,345 $ 6,088,653 Cash and cash equivalents included in:
Cash and cash equivalents 918,812 918,812
Restricted assets 3,562,533 3,562,533
Cash and cash equivalents at end of period $ 4,481,345 $ 4,481,345
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF FEBRUARY 1 TOFEBRUARY 28, 2022
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
FEBRUARY28, 2022 YEAR TO DATE
Operating Income (Loss) $ (1,765,446) $ (3,098,839)
(Increase) decrease in net accounts receivable 1,206,144.00 1,481,760.59 (Increase) decrease in accrued revenue - 69,984.26
(Increase) decrease in prepaid expenses 558,068 863,987.00 Increase (decrease) in accounts payable (3,878) (31,966.00) Increase (decrease) in accrued payroll 8,220 546.00
Increase (decrease) in due to member agencies 20,963 41,927.00 Increase (decrease) in accrued cost of electricity (1,494,299) (1,968,205.00) Increase (decrease) in other accrued liabilities (61,510) (366,598.00) Increase (decrease) in user taxes and energy surcharges (40,044) (24,700.90) Net cash provided (used) by operating activities $ (1,571,782) $ (1,460,322)
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
FOR THE PERIOD OF FEBRUARY 1 TOFEBRUARY 28, 2022
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
VALLEY CLEAN ENERGY
2022 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 02/28/22
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 3,602,643 $ 3,355,600 $ 247,043 7%
Interest Revenues $ 1,678 $ 1,500 $ 178 12%
Purchased Power $ 4,538,541 $ 5,480,900 $ (942,359) -17% Purchased Power Base $ 4,538,541 $ 4,838,600 $ (300,059) -6% Purchased Power Contingency 2% $ - $ 642,300 $ (642,300) -100% Labor & Benefits $ 95,679 $ 109,900 $ (14,221) -13%
Salaries & Wages/Benefits $ 77,674 $ 90,800 $ (13,126) -14% Contract Labor (SMUD Staff Aug) $ - $ 4,900 $ (4,900) -100% Human Resources & Payroll $ 18,005 $ 14,200 $ 3,805 27% Office Supplies & Other Expenses $ 40,597 $ 16,400 $ 24,197 148% Technology Costs $ 4,568 $ 2,900 $ 1,668 58%
Office Supplies $ 24 $ 200 $ (176) -88%
Travel $ - $ 500 $ (500) -100%
CalCCA Dues $ 9,115 $ 10,600 $ (1,485) -14%
CC Power $ 26,891 $ 2,000 $ 24,891 1245%
Memberships $ - $ 200 $ (200) -100%
Contractual Services $ 210,924 $ 209,600 $ 1,324 1%
Other Contract Services $ - $ 2,100 $ (2,100) -100%
Don Dame $ 380 $ 800 $ (420) -53%
SMUD - Credit Support $ 50,937 $ 43,500 $ 7,437 17%
SMUD - Wholesale Energy Services $ 48,987 $ 48,800 $ 187 0% SMUD - Call Center $ 65,656 $ 65,800 $ (144) 0%
SMUD - Operating Services $ 1,108 $ 5,000 $ (3,892) -78% Commercial Legal Support $ - $ - $ - 100%
Legal General Counsel $ 13,983 $ 12,900 $ 1,083 8%
Regulatory Counsel $ 21,596 $ 16,600 $ 4,996 30%
Joint CCA Regulatory counsel $ 192 $ 2,700 $ (2,508) -93% Legislative - (Lobbyist) $ 5,000 $ 5,000 $ - 0%
Accounting Services $ 1,084 $ 2,200 $ (1,116) -51%
Financial Consultant $ - $ 2,100 $ (2,100) -100%
Audit Fees $ 2,000 $ 2,100 $ (100) -5%
Marketing $ 17,053 $ 20,500 $ (3,447) -17%
Marketing Collateral $ 17,053 $ 20,000 $ (2,947) -15%
Community Engagement Activities & Sponsorships $ - $ 500 $ (500) -100% Programs $ 1,058 $ 14,500 $ (13,442) -93%
Program Costs $ 1,058 $ 14,500 $ (13,442) -93%
Rents & Leases $ 3,200 $ 1,800 $ 1,400 78%
Hunt Boyer Mansion $ 3,200 $ 1,800 $ 1,400 78%
Other A&G $ 28,932 $ 28,000 $ 932 3%
Development - New Members $ - $ 2,100 $ (2,100) -100%
Strategic Plan Implementation $ 5,892 $ 2,100 $ 3,792 181% PG&E Data Fees $ 21,730 $ 23,000 $ (1,270) -6%
Insurance $ 1,310 $ 700 $ 610 87%
Banking Fees $ - $ 100 $ (100) -100%
Miscellaneous Operating Expenses $ 51 $ 600 $ 600 100%
Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 4,936,036 $ 5,902,200 $ (925,015) $ -16% Interest on RCB loan $ 3,768 $ 3,400 $ 368 11%
Interest Expense - Bridge Loan $ - $ - $ - 100%
NET INCOME (1,335,483) $ (2,548,500) $ 1,171,868 $ -46%