Item 7
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 7
______________________________________________________________________________ TO: Board of Directors
FROM: Mitch Sears, Executive Director
Edward Burnham, Finance and Operations Director
SUBJECT: Financial Update – November 30, 2023 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending November 30, 2023
DATE: January 11, 2024
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of November 1, 2023 to November 30, 2023 (with comparative year to date information) and Actual vs. Budget year to date ending November 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 November 30, 2023.
Financial Statements for the period November 1, 2023 – November 30, 2023 In the Statement of Net Position, VCE, as of November 30, 2023, has a total of $24,744,373 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 $1,0179,761 restricted assets for the Power Purchases Reserve account. VCE has incurred obligations from Member agencies and owes as of November 30, 2023 a total of $9,987. 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 $226,276. On November 30, 2022, VCE’s net position was $33,312,080.
Item 7
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCE recorded $ 3,815,088 of revenue (net of allowance for doubtful accounts), of which $6,349,052 was billed in November, and $2,734,614 represent estimated unbilled revenue. The cost of electricity for the November revenue totaled $2,318,449. For November, VCE’s gross margin was approximately 39% and the net income totaled $1,164,259. The year-to-date change in net position was 17,901,546.
In the Statement of Cash Flows, VCE cash flows from operations were $2,981,756 due to November cash receipts of revenues being more than the monthly cash operating expenses.
Actual vs. Budget Variances for the year to date ending November 30, 2023 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($10,322,318) and -11% – Unfavorable variance due to retail load variance lower than forecasted due to mild winter and spring.
• Purchased Power – $1,671,092 and -1% – unfavorable variance due to gas prices driving short-term power market increases during winter offset by lower load than forecasted. • CC Power – ($57,264) and 247% unfavorable variance related to PPA contract participation. • Wholesale Energy Services – ($349,772) and -39% unfavorable variance related to the transition of services to TEA starting in Q123 budgeted for Q223.
• Credit Support Services (SMUD) – $101,982 and 40% favorable variance related to lower retail load than forecasted due to mild winter and summer.
• Operational Support Services (SMUD) – ($96,959) and -165% unfavorable variance related to Percentage of Income Payment Plan (PIPP) program implementation, bill presentment, and base green rate implementation. • Legal General Counsel – $123,038 and 82% favorable variance related to lower operational support requirements than budgeted.
• Strategic Plan Implementation – $106,721 or 81% favorable variance due to timing difference. • Contingency – ($220,00) 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) November 1, 2023 to November 30, 2023 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending November 30, 2023
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF NOVEMBER 1 TO NOVEMBER 30, 2023
PREPARED ON JANUARY 4, 2024
2 ASSETS
Current assets:
Cash and cash equivalents $ 24,744,373
Accounts receivable, net of allowance 10,390,525
Accrued revenue 2,734,616
Prepaid expenses 100,698
Inventory - Renewable Energy Credits 600,000
Other current assets and deposits 2,227,703
Total current assets 40,797,915
Restricted assets:
Debt service reserve fund 1,100,000
Power purchase reserve fund 1,079,761
Total restricted assets 2,179,761
TOTAL ASSETS $ 42,977,676
LIABILITIES
Current liabilities:
Accounts payable $ 360,152
Accrued payroll 96,142
Interest payable 904
Due to member agencies 9,987
Accrued cost of electricity 5,242,272
Other accrued liabilities 1,913,941
Security deposits - energy supplies 1,800,000
User taxes and energy surcharges 15,922
Limited Term Loan 226,276
TOTAL LIABILITIES $ 9,665,596
NET POSITION
Net position:
Local Programs Reserve $ 224,500
Restricted 2,179,761
Unrestricted 30,907,819
TOTAL NET POSITION $ 33,312,080
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
NOVEMBER 30, 2023
3 FOR THE PERIOD
ENDING
NOVEMBER 30, 2023 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 3,815,088 $ 87,088,683
Other revenue - 701,719
TOTAL OPERATING REVENUES 3,815,088 87,790,402
OPERATING EXPENSES
Cost of electricity 2,318,449 64,287,694
Contract services 239,019 2,924,470
Staff compensation 129,529 1,300,492
General, administration, and other 9,962 1,640,833
TOTAL OPERATING EXPENSES 2,696,959 70,153,489
TOTAL OPERATING INCOME (LOSS) 1,118,129 17,636,913
NONOPERATING REVENUES (EXPENSES)
Interest income 46,760 279,633
Interest and related expenses (630) (15,001)
TOTAL NONOPERATING REVENUES (EXPENSES) 46,130 264,632
CHANGE IN NET POSITION 1,164,259 17,901,546
Net position at beginning of period 32,147,821 15,410,534 Net position at end of period $ 33,312,080 $ 33,312,080
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
(UNAUDITED)
CHANGES IN NET POSITION
FOR THE PERIOD OF NOVEMBER 1, 2023 TO NOVEMBER 30, 2023 (WITH COMPARATIVE YEAR TO DATE INFORMATION)
4 FOR THE
PERIOD ENDING
NOVEMBER 30, 2023 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 3,377,285 $ 84,127,224 Payments received from other revenue sources - 701,719
Payments to purchase electricity (4,545,314) (59,935,589) Payments for contract services, general, and adminstration (381,764) (3,998,564) Payments for staff compensation (109,523) (1,320,635)
Other cash payments - (268,507)
Net cash provided (used) by operating activities (1,659,316) 19,574,155
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt (44,832) (304,692)
Interest and related expenses (833) (16,338)
Net cash provided (used) by non-capital financing activities (45,665) (321,030)
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 46,760 279,632
Net cash provided (used) by investing activities 46,760 279,632 NET CHANGE IN CASH AND CASH EQUIVALENTS (1,658,221) 19,264,250 Cash and cash equivalents at beginning of period 28,582,355 154,735,743 Cash and cash equivalents at end of period 26,924,134 173,999,994 Cash and cash equivalents included in:
Cash and cash equivalents 24,744,373 24,744,373
Restricted assets 2,179,761 2,179,761
Cash and cash equivalents at end of period $ 26,924,134 $ 26,924,134
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
FOR THE PERIOD OF NOVEMBER 1 TO NOVEMBER 30, 2023
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
NOVEMBER 30, 2023 YEAR TO DATE
Operating Income (Loss) $ 1,118,129 $ 13,318,055
Depreciation expense
(Increase) decrease in net accounts receivable 1,788,305 694,562 (Increase) decrease in accrued revenue (2,170,119) 695,781 (Increase) decrease in prepaid expenses 15,343 (100,698) (Increase) decrease in inventory - renewable energy credits - (600,000) (Increase) decrease in other assets and deposits - (268,507) Increase (decrease) in accounts payable (21,626) (39,383) Increase (decrease) in accrued payroll 20,006 (20,143)
Increase (decrease) in due to member agencies - (196,457) Increase (decrease) in accrued cost of electricity (2,226,865) 633,247 Increase (decrease) in other accrued liabilities (126,500) 903,277 Increase (decrease) in user taxes and energy surcharges (55,989) (32,944) Net cash provided (used) by operating activities $ (1,659,316.00) $ 14,986,790.07 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)
FOR THE PERIOD OF NOVEMBER 1 TO NOVEMBER 30, 2023
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
VALLEY CLEAN ENERGY
2023 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 11/30/23
Description YTD
Actuals
YTD
Budget
YTD
Variance
%
over/-under
Electric Revenue $ 87,088,682 $ 97,411,000 $ (10,322,318) -11% Other Revenues - Programs $ 701,719 $ 605,000 $ 96,719 16% Interest Revenues $ 279,632 $ 38,500 $ 241,132 626%
Purchased Power $ 64,211,908 $ 65,883,000 $ 1,671,092 3% Purchased Power Base $ 64,211,908 $ 62,745,000 $ (1,466,908) -2% Purchased Power Contingency 2% $ - $ 3,138,000 $ 3,138,000 100% Labor & Benefits $ 1,302,208 $ 1,322,200 $ 19,992 2%
Salaries & Wages/Benefits $ 1,052,245 $ 1,100,000 $ 47,755 4% Contract Labor (SMUD Staff Aug) $ - $ 27,500 $ 27,500 100% Human Resources & Payroll $ 249,964 $ 194,700 $ (55,264) -28% Office Supplies & Other Expenses $ 269,116 $ 194,000 $ (75,116) -39% Technology Costs $ 43,699 $ 38,900 $ (4,799) -12%
Office Supplies $ 9,501 $ 2,200 $ (7,301) -332%
Travel $ 15,826 $ 5,500 $ (10,326) -188%
CalCCA Dues $ 118,272 $ 122,100 $ 3,828 3%
CC Power $ 80,263 $ 23,100 $ (57,163) -247%
Memberships $ 1,555 $ 2,200 $ 645 29%
Contractual Services $ 2,718,672 $ 2,609,600 $ (109,072) -4% Other Contract Services $ - $ 24,200 $ 24,200 100%
Don Dame $ 3,553 $ 9,900 $ 6,347 64%
SMUD - Credit Support $ 152,418 $ 254,400 $ 101,982 40% SMUD - Wholesale Energy Services $ 1,238,672 $ 888,900 $ (349,772) -39% SMUD - Call Center $ 807,467 $ 768,200 $ (39,267) -5%
SMUD - Operating Services $ 155,759 $ 58,800 $ (96,959) -165% Commercial Legal Support $ 32,156 $ 27,500 $ (4,656) -17% Legal General Counsel $ 26,562 $ 149,600 $ 123,038 82%
Regulatory Counsel $ 149,112 $ 192,500 $ 43,388 23%
Joint CCA Regulatory counsel $ 42,970 $ 30,800 $ (12,170) -40% Legislative - (Lobbyist) $ 60,500 $ 60,500 $ - 0%
Accounting Services $ 10,542 $ 26,400 $ 15,858 60%
Financial Consultant $ - $ 38,500 $ 38,500 100%
Audit Fees $ 38,960 $ 79,400 $ 40,440 51%
Marketing $ 273,909 $ 242,000 $ (31,909) -13%
Marketing Collateral $ 242,378 $ 231,000 $ (11,378) -5% Community Engagement Activities & Sponsorships $ 11,000 31,532 $ (20,532) $ -187% Program Costs $ 812,637 $ 764,500 $ (48,137) -6%
Programs - EV $ 667,154 $ 629,200 $ (37,954) -6%
Programs - AgFIT $ 49,452 $ 48,400 $ (1,052) -2%
Programs - Heat Pump $ 365,681 $ 518,150 $ 152,469 29%
Program Costs $ 170,209 $ 159,500 $ (10,709) -7%
Programs - AgFIT $ 642,428 $ 605,000 $ (37,428) -6%
Rents & Leases $ 24,726 $ 24,200 $ (526) -2%
Hunt Boyer Mansion $ 24,726 $ 24,200 $ (526) -2%
Other A&G $ 340,955 $ 493,950 $ 152,995 31%
Development - New Members $ - $ 23,100 $ 23,100 100%
Strategic Plan Implementation $ 25,279 $ 132,000 $ 106,721 81% PG&E Data Fees $ 198,748 $ 253,000 $ 54,252 21%
Insurance $ 32,340 $ 10,450 $ (21,890) -209%
Banking Fees $ 84,588 $ 75,400 $ (9,188) -12%
Miscellaneous Operating Expenses $ 2,311 $ 6,600 $ 4,289 65% Contingency $ - $ 220,000 $ 220,000 100%
TOTAL OPERATING EXPENSES 69,956,442 $ 71,760,050 $ 1,803,608 $ 3% Interest on RCB loan $ 15,001 $ 16,900 $ (1,899) -11%
Interest Expense - Bridge Loan $ - $ 40,000 $ (40,000) -100% NET INCOME 17,396,871 $ (71,738,450) $ 89,135,321 $ -124%