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 – May 31, 2023 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending May 31, 2023
DATE: July 15, 2023
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of May 1, 2023 to May 31, 2023 (with comparative year to date information) and Actual vs. Budget year to date ending May 31, 2023.
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 May 31, 2023.
Financial Statements for the period May 1, 2023 – May 31, 2023 In the Statement of Net Position, VCE, as of May 31, 2023, has a total of $4,759,144 in its checking, money market and lockbox accounts, $1,100,000 restricted assets for the Debt Service Reserve account, $1,800,000 restricted assets related to supplier deposits, and $3,428,260 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of May 31, 2023 a total of $7,385. 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 $312,007 and long-term portion of 181,284. On May 31, 2022, VCE’s net position is $15,295,724.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCE recorded $ 6,839,195 of revenue (net of allowance for doubtful accounts), of which $6,666,069 was billed in May, and $5,076,213 represent estimated unbilled revenue. The cost of electricity for the May revenue totaled $5,454,972.
For May, VCE’s gross margin was approximate 20% and net income totaled $607,584. The year-to-date change in net position was $493,218.
In the Statement of Cash Flows, VCE cash flows from operations were $974,249 due to May cash receipts of revenues being more than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending May 31, 2023 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($4,828,307) and -13% – Unfavorable variance revenue model error on the timing of rate change isolated to January-2023 and retail load variance lower than forecasted due to mild winter and spring. • Purchased Power – ($2,243,400) and -8% – Unfavorable variance due to gas prices driving short-term power market increases.
• Wholesale Energy Services – ($358,667) and 129% unfavorable variance related to the transition of services to TEA starting in Q123 budgeted for Q223.
• Credit Support Services (SMUD) – $65,529 and 30% favorable variance related to lower retail load than forecasted due to mild winter and summer.
• Operational Support Services (SMUD) – ($97,557) and 368% unfavorable variance related to Percentage of Income Payment Plan (PIPP) program implementation, bill presentment, and base green rate implementation. • Strategic Plan Implementation – $60,270 or 100% favorable variance due to timing difference. • Contingency – ($100,00) 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) May 1, 2023 to May 31, 2023 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending May 31, 2023
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF MAY 1 TO MAY 31, 2023
PREPARED ON JULY 7, 2023
2 ASSETS
Current assets:
Cash in Yolo County Treasury
Cash and cash equivalents $ 4,759,144
Accounts receivable, net of allowance 9,609,435
Accrued revenue 5,076,213
Prepaid expenses 32,705
Other current assets and deposits 2,227,703
Total current assets 21,705,200
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 3,428,260
Total restricted assets 4,528,260
Noncurrent assets:
Total noncurrent assets -
TOTAL ASSETS $ 26,233,460
LIABILITIES
Current liabilities:
Accounts payable $ 504,328
Accrued payroll 102,538
Interest payable 1,516
Due to member agencies 7,385
Accrued cost of electricity 6,325,427
Other accrued liabilities 1,079,330
Security deposits - energy supplies 1,800,000
User taxes and energy surcharges 16,337
Limited Term Loan 312,007
Total current liabilities 10,148,868
Noncurrent liabilities
Term Loan- RCB 181,284
Total noncurrent liabilities 181,284
TOTAL LIABILITIES $ 10,330,152
NET POSITION
Net position:
Local Programs Reserve 224,500
Restricted 4,528,260
Unrestricted 11,150,548
TOTAL NET POSITION $ 15,903,308
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
MAY 31, 2023
3 FOR THE PERIOD
ENDING
MAY 31, 2023 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 6,839,195 $ 32,039,693
Other revenue 3,375 $ 627,844
TOTAL OPERATING REVENUES 6,842,570 $ 32,667,537
OPERATING EXPENSES
Cost of electricity 5,454,972 $ 28,938,400
Contract services 200,703 $ 1,641,485
Staff compensation 126,864 $ 639,799
General, administration, and other 471,873 $ 1,027,481
TOTAL OPERATING EXPENSES 6,254,412 $ 32,247,165
TOTAL OPERATING INCOME (LOSS) 588,158 $ 420,372
NONOPERATING REVENUES (EXPENSES)
Interest income 20,942 $ 81,037
Interest and related expenses (1,516) $ (8,635)
TOTAL NONOPERATING REVENUES (EXPENSES) 19,426 $ 72,402
CHANGE IN NET POSITION 607,584 $ 492,774
Net position at beginning of period 15,295,724 $ 15,410,534 Net position at end of period $ 15,903,308 $ 15,903,308 (UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF MAY 1, 2023 TO MAY 31, 2023
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
4 FOR THE
PERIOD ENDING
MAY 31, 2023 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 6,148,720 $ 31,409,297 Payments received from other revenue sources 3,375 627,844 Payments to purchase electricity (4,238,750) (27,221,998) Payments for contract services, general, and adminstration (1,250,231) (2,727,265) Payments for staff compensation (116,569) (653,546)
Net cash provided (used) by operating activities 974,249 (365,668)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (44,067) (37,677)
Interest and related expenses (1,599) (9,367)
Net cash provided (used) by non-capital financing activities (45,666) (47,044)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of nondepreciable assets
Acquisition of capital assets
Net cash provided (used) by capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 20,942 81,037
Net cash provided (used) by investing activities 20,942 81,037 NET CHANGE IN CASH AND CASH EQUIVALENTS 949,525 1,627,521 Cash and cash equivalents at beginning of period 8,337,879 40,660,016 Cash and cash equivalents at end of period $ 9,287,404 $ 42,287,537 Cash and cash equivalents included in:
Cash and cash equivalents 4,759,144 21,055,445
Restricted assets 4,528,260 21,232,092
Cash and cash equivalents at end of period $ 9,287,404 $ 42,287,537 (WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF MAY 1 TO MAY 31, 2023
5 FOR THE
PERIOD ENDING
MAY 31, 2023 YEAR TO DATE
Operating Income (Loss) $ 588,158 $ 420,372
(Increase) decrease in net accounts receivable 134,644.40 1,047,949 (Increase) decrease in accrued revenue (787,303) (1,645,816) (Increase) decrease in prepaid expenses 15,342 (32,705) Increase (decrease) in accounts payable (157,833) 104,799 Increase (decrease) in accrued payroll 10,295 (13,747)
Increase (decrease) in due to member agencies 651 (199,059) Increase (decrease) in accrued cost of electricity 1,216,222 1,716,402 Increase (decrease) in other accrued liabilities (435,815) 68,666 Increase (decrease) in user taxes and energy surcharges (37,816) (32,529) Net cash provided (used) by operating activities $ 974,249 $ 1,593,528 FOR THE PERIOD OF MAY 1 TO MAY 31, 2023
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY
2023 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 05/31/23
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 32,039,693 $ 36,868,000 $ (4,828,307) -13% Other Revenues - Programs $ 627,844 $ 275,000 $ 352,844 128% Interest Revenues $ 81,037 $ 17,500 $ 63,537 363%
Purchased Power $ 28,938,400 $ 26,695,000 $ 2,243,400 8% Purchased Power Base $ 28,938,400 $ 25,423,000 $ 3,515,400 14% Purchased Power Contingency 2% $ - $ 1,272,000 $ (1,272,000) -100% Labor & Benefits $ 625,094 $ 601,000 $ 24,094 4%
Salaries & Wages/Benefits $ 499,444 $ 500,000 $ (556) 0% Contract Labor (SMUD Staff Aug) $ - $ 12,500 $ (12,500) -100% Human Resources & Payroll $ 125,650 $ 88,500 $ 37,150 42% Office Supplies & Other Expenses $ 125,998 $ 86,000 $ 39,998 47% Technology Costs $ 15,440 $ 15,500 $ (60) 0%
Office Supplies $ 6,131 $ 1,000 $ 5,131 513%
Travel $ 8,083 $ 2,500 $ 5,583 223%
CalCCA Dues $ 53,760 $ 55,500 $ (1,740) -3%
CC Power $ 41,029 $ 10,500 $ 30,529 291%
Memberships $ 1,555 $ 1,000 $ 555 56%
Contractual Services $ 1,549,000 $ 1,272,500 $ 276,500 22% Other Contract Services $ - $ 11,000 $ (11,000) -100%
Don Dame $ 1,897 $ 4,500 $ (2,603) -58%
SMUD - Credit Support $ 150,071 $ 215,600 $ (65,529) -30% SMUD - Wholesale Energy Services $ 777,567 $ 418,900 $ 358,667 86% SMUD - Call Center $ 343,619 $ 346,000 $ (2,381) -1%
SMUD - Operating Services $ 124,057 $ 26,500 $ 97,557 368% Commercial Legal Support $ 8,100 $ 12,500 $ (4,400) -35% Legal General Counsel $ 18,112 $ 68,000 $ (49,888) -73% Regulatory Counsel $ 46,653 $ 87,500 $ (40,848) -47%
Joint CCA Regulatory counsel $ 7,525 $ 14,000 $ (6,475) -46% Legislative - (Lobbyist) $ 27,500 $ 27,500 $ - 0%
Accounting Services $ 7,939 $ 12,000 $ (4,061) -34%
Financial Consultant $ - $ 17,500 $ (17,500) -100%
Audit Fees $ 35,960 $ 11,000 $ 24,960 227%
Marketing $ 129,960 $ 110,000 $ 19,960 18%
Marketing Collateral $ 125,281 $ 105,000 $ 20,281 19%
Community Engagement Activities & Sponsorships $ 5,000 4,679 $ (321) $ -6% Programs $ 688,523 $ 347,500 $ 341,023 98%
Program Costs $ - $ - $ - 100%
Programs - EV $ 62,123 $ 63,000 $ (877) -1%
Programs - AgFIT $ 617,428 $ 275,000 $ 342,428 125%
Programs - Heat Pump $ 8,972 $ 9,500 $ (528) -6%
Rents & Leases $ 4,938 $ 11,000 $ (6,062) -55%
Hunt Boyer Mansion $ 4,938 $ 11,000 $ (6,062) -55%
Other A&G $ 184,680 $ 262,650 $ (77,970) -30%
Development - New Members $ - $ 10,500 $ (10,500) -100% Strategic Plan Implementation $ (270) $ 60,000 $ (60,270) -100% PG&E Data Fees $ 87,507 $ 115,000 $ (27,493) -24%
Insurance $ 14,700 $ 4,750 $ 9,950 209%
Banking Fees $ 82,743 $ 72,400 $ 10,343 14%
Miscellaneous Operating Expenses $ 127 $ 3,000 $ (2,873) -96% Contingency $ - $ 100,000 $ (100,000) -100%
TOTAL OPERATING EXPENSES 32,246,720 $ 29,488,650 $ 2,758,070 $ 9% Interest on RCB loan $ 8,635 $ 9,400 $ (765) -8%
Interest Expense - Bridge Loan $ - $ 15,000 $ (15,000) -100% NET INCOME 493,218 $ 7,647,450 $ (7,507,076) $ -98%