Item 5
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 5
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Executive Director
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – September 30, 2023 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending September 30, 2023
DATE: November 9, 2023
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of September 1, 2023 to September 30, 2023 (with comparative year to date information) and Actual vs. Budget year to date ending September 30, 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 September 30, 2023.
Financial Statements for the period September 1, 2023 – September 30, 2023 In the Statement of Net Position, VCE, as of September 30, 2023, has a total of $17,595,420 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 $2,588,904 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of September 30, 2023 a total of $9,987. VCE member obligations are incurred monthly due to staffing, accounting, and legal services.
Item 5
The term loan with River City Bank includes a current portion of $134,550 and a long-term portion of 181,284. On September 30, 2022, VCE’s net position was $22,140,585.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCE recorded $ 8,892,110 of revenue (net of allowance for doubtful accounts), of which $11,012,340 was billed in September, and $4,297,193 represent estimated unbilled revenue. The cost of electricity for the September revenue totaled $8,781,428. For September, VCE’s gross margin was approximately 1% and the net income totaled $348,274. The year-to-date change in net position was 11,565,170.
In the Statement of Cash Flows, VCE cash flows from operations were $4,470,340 due to September cash receipts of revenues being more than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending September 30, 2023 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($8,494,066) and -10% – Unfavorable variance due to revenue model (January-2023) and retail load variance lower than forecasted due to mild winter and spring. • Purchased Power – $2,032,422 and 4% – Favorable variance due to gas prices driving short-term power market increases during winter off-set by lower load than forecasted. • Wholesale Energy Services – ($329,340) and 44% unfavorable variance related to the transition of services to TEA starting in Q123 budgeted for Q223.
• Credit Support Services (SMUD) – $101,327 and 40% favorable variance related to lower retail load than forecasted due to mild winter and summer.
• Operational Support Services (SMUD) – ($90,329) and -188% unfavorable variance related to Percentage of Income Payment Plan (PIPP) program implementation, bill presentment, and base green rate implementation. • Legal General Counsel – $105,320 and 88% favroable variance related to lower operational support requirements than budgeted.
• Strategic Plan Implementation – $73,947 or 68% favorable variance due to timing difference. • Contingency – ($160,00) 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) September 1, 2023 to September 30, 2023 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending September 30, 2023
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF SEPTEMBER 1 TO SEPTEMBER 30, 2023
PREPARED ON NOVEMBER 3, 2023
2 ASSETS
Current assets:
Cash and cash equivalents $ 17,595,420
Accounts receivable, net of allowance 14,886,596
Accrued revenue (21,664)
Prepaid expenses 94,123
Other current assets and deposits 2,227,703
Total current assets 34,782,178
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 2,588,904
Total restricted assets 3,688,904
TOTAL ASSETS $ 38,471,082
LIABILITIES
Current liabilities:
Accounts payable $ 366,866
Accrued payroll 60,116
Interest payable 1,108
Due to member agencies 9,987
Accrued cost of electricity 6,860,212
Other accrued liabilities 2,028,688
Security deposits - energy supplies 1,800,000
User taxes and energy surcharges 52,567
Limited Term Loan 134,550
Total current liabilities 11,314,094
Noncurrent liabilities
Term Loan- RCB 181,284
Total noncurrent liabilities 181,284
TOTAL LIABILITIES $ 11,495,378
NET POSITION
Net position:
Local Programs Reserve $ 224,500
Restricted 3,688,904
Unrestricted 23,062,300
TOTAL NET POSITION $ 26,975,704
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
SEPTEMBER 30, 2023
3 FOR THE PERIOD
ENDING
SEPTEMBER 30, 2023 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 8,892,110 $ 69,885,077
Other revenue - 631,219
TOTAL OPERATING REVENUES 8,892,110 70,516,295.78
OPERATING EXPENSES
Cost of electricity 8,781,428.00 54,074,363.61
Contract services 211,023.00 2,468,338.14
Staff compensation 120,796.00 1,063,927.35
General, administration, and other 161,132.37 1,520,857.61 TOTAL OPERATING EXPENSES 9,274,379.37 59,127,486.71
TOTAL OPERATING INCOME (LOSS) (382,269.00) 11,388,809.00
NONOPERATING REVENUES (EXPENSES)
Interest income 35,103 189,791
Interest and related expenses (1,108) (13,431)
TOTAL NONOPERATING REVENUES
(EXPENSES) 33,995 176,360
CHANGE IN NET POSITION (348,274) 11,565,170
Net position at beginning of period 27,323,978 15,410,534 Net position at end of period $ 26,975,704 $ 26,975,704 (WITH COMPARATIVE YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF SEPTEMBER 1, 2023 TO SEPTEMBER 30, 2023 4 FOR THE
PERIOD ENDING
SEPTEMBER 30, 2023 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 11,336,842.00 $ 69,539,329.78 Payments received from other revenue sources - 631,219
Payments to purchase electricity (6,276,465) (51,823,177) Payments for contract services, general, and adminstration (474,234) (3,294,419) Payments for staff compensation (115,803) (1,120,096)
Other cash payments - (268,507)
Net cash provided (used) by operating activities 4,470,340 13,932,857
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (44,558) (215,134)
Interest and related expenses (1,107) (14,566)
Net cash provided (used) by non-capital financing
activities (45,665) (229,700)
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 35,103 189,790
Net cash provided (used) by investing activities 35,103 189,790 NET CHANGE IN CASH AND CASH EQUIVALENTS 4,459,778 13,624,440 Cash and cash equivalents at beginning of period 16,824,546 70,769,086 Cash and cash equivalents at end of period 21,284,324 84,393,526 Cash and cash equivalents included in:
Cash and cash equivalents 17,595,420 17,595,420
Restricted assets 3,688,904 3,688,904
Cash and cash equivalents at end of period $ 21,284,324.00 $ 21,284,324.00 (WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF SEPTEMBER 1 TO SEPTEMBER 30, 2023
5 FOR THE
PERIOD ENDING
SEPTEMBER 30, 2023 YEAR TO DATE
Operating Income (Loss) $ (382,269) $ 11,388,809
Depreciation expense
(Increase) decrease in net accounts receivable 163,436 (3,801,509) (Increase) decrease in accrued revenue 2,265,479 3,452,061 (Increase) decrease in prepaid expenses 14,154 (94,123) (Increase) decrease in other assets and deposits - (268,507) Increase (decrease) in accounts payable 16,466 (32,667) Increase (decrease) in accrued payroll 4,993 (56,169)
Increase (decrease) in due to member agencies 650 (196,457) Increase (decrease) in accrued cost of electricity 2,504,963 2,251,187 Increase (decrease) in other accrued liabilities (133,349) 1,018,024 Increase (decrease) in user taxes and energy surcharges 15,817 3,701 Net cash provided (used) by operating activities $ 4,470,339.63 $ 13,664,350.07 FOR THE PERIOD OF SEPTEMBER 1 TO SEPTEMBER 30, 2023
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
Adjustments to reconcile operating income to net cash provided (used) by operating activities:
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 09/30/23
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 74,203,934 $ 82,698,000 $ (8,494,066) -10% Other Revenues - Programs $ 631,219 $ 495,000 $ 136,219 28% Interest Revenues $ 189,790 $ 31,500 $ 158,290 503%
Purchased Power $ 53,998,578 $ 56,031,000 $ 2,032,422 4% Purchased Power Base $ 53,998,578 $ 53,362,000 $ (636,578) -1% Purchased Power Contingency 2% $ - $ 2,669,000 $ 2,669,000 100% Labor & Benefits $ 1,065,643 $ 1,081,800 $ 16,157 1%
Salaries & Wages/Benefits $ 862,082 $ 900,000 $ 37,918 4% Contract Labor (SMUD Staff Aug) $ - $ 22,500 $ 22,500 100% Human Resources & Payroll $ 203,561 $ 159,300 $ (44,261) -28% Office Supplies & Other Expenses $ 197,924 $ 159,600 $ (38,324) -24% Technology Costs $ 34,278 $ 32,700 $ (1,578) -5%
Office Supplies $ 8,674 $ 1,800 $ (6,874) -382%
Travel $ 15,621 $ 4,500 $ (11,121) -247%
CalCCA Dues $ 96,768 $ 99,900 $ 3,132 3%
CC Power $ 41,029 $ 18,900 $ (22,129) -117%
Memberships $ 1,555 $ 1,800 $ 245 14%
Contractual Services $ 2,295,629 $ 2,164,700 $ (130,929) -6% Other Contract Services $ - $ 19,800 $ 19,800 100%
Don Dame $ 3,276 $ 8,100 $ 4,824 60%
SMUD - Credit Support $ 153,073 $ 254,400 $ 101,327 40% SMUD - Wholesale Energy Services $ 1,078,240 $ 748,900 $ (329,340) -44% SMUD - Call Center $ 644,138 $ 626,800 $ (17,338) -3%
SMUD - Operating Services $ 138,329 $ 48,000 $ (90,329) -188% Commercial Legal Support $ 26,876 $ 22,500 $ (4,376) -19% Legal General Counsel $ 17,080 $ 122,400 $ 105,320 86%
Regulatory Counsel $ 109,896 $ 157,500 $ 47,604 30%
Joint CCA Regulatory counsel $ 25,719 $ 25,200 $ (519) -2% Legislative - (Lobbyist) $ 49,500 $ 49,500 $ - 0%
Accounting Services $ 10,542 $ 21,600 $ 11,058 51%
Financial Consultant $ - $ 31,500 $ 31,500 100%
Audit Fees $ 38,960 $ 28,500 $ (10,460) -37%
Marketing $ 240,071 $ 198,000 $ (42,071) -21%
Marketing Collateral $ 209,289 $ 189,000 $ (20,289) -11% Community Engagement Activities & Sponsorships $ 30,782 $ 9,000 $ (21,782) -242% Program Costs $ 890,806 $ 625,500 $ (265,306) -42%
Program Costs $ 124,301 $ 130,500 $ 6,199 5%
Programs - EV $ 115,105 $ - $ (115,105) 100%
Programs - AgFIT $ 642,428 $ 495,000 $ (147,428) -30%
Programs - Heat Pump $ 8,972 $ - $ (8,972) 100%
Rents & Leases $ 21,426 $ 19,800 $ (1,626) -8%
Hunt Boyer Mansion $ 21,426 $ 19,800 $ (1,626) -8%
Other A&G $ 342,129 $ 415,250 $ 73,121 18%
Development - New Members $ - $ 18,900 $ 18,900 100%
Strategic Plan Implementation $ 34,053 $ 108,000 $ 73,947 68% PG&E Data Fees $ 198,748 $ 207,000 $ 8,252 4%
Insurance $ 26,460 $ 8,550 $ (17,910) -209%
Banking Fees $ 82,868 $ 72,800 $ (10,068) -14%
Miscellaneous Operating Expenses $ 2,311 $ 600 $ (1,711) -285% Contingency $ - $ 20,000 $ 20,000 100%
TOTAL OPERATING EXPENSES 59,054,517 $ 60,716,250 $ 1,661,733 $ 3% Interest on RCB loan $ 13,431 $ 14,800 $ (1,369) -9%
Interest Expense - Bridge Loan $ - $ 40,000 $ (40,000) -100% NET INCOME 15,956,995 $ 22,453,450 $ (6,496,455) $ -29%