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 – May 31, 2024 (unaudited) financial statements (with comparative year to date information) and Actual vs. Budget year to date ending May 31, 2024
DATE: July 11, 2024
RECOMMENDATION:
Accept the following Financial Statements (unaudited) for the period of May 1, 2024 to May 31, 2024 (with comparative year to date information) and Actual vs. Budget year to date ending May 31, 2024.
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, 2024.
Financial Statements for the period May 1, 2024 – May 31, 2024 In the Statement of Net Position, VCE, as of May 31, 2024, has a total of $36,342,470 in its checking, money market and lockbox accounts, $1,100,000 restricted assets for the Debt Service Reserve account, and $1,800,000 restricted assets related to supplier deposits. On May 31 2024, VCE’s net position was $43,558,878.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCE recorded $ 6,150,654 of revenue (net of allowance for doubtful accounts), of which $7,004,677 was billed in May, and $4,033,150 represent estimated unbilled revenue. The cost of electricity for the May revenue totaled $3,920,722.
For May, VCE’s gross margin was approximately 72% and the net income totaled $2,045 ,218. The year-to-date change in net position was $7,135,702.
Item 5
In the Statement of Cash Flows, VCE cash flows from operations were $5,296,129 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, 2024 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($4,854,512) and -13% – Unfavorable variance due to retail load variance lower than forecasted due to mild and wet winter and lower spring temperatures reducing agriculture and residential revenues compared to forecast.
• Purchased Power – $372,527 and 2% – Favorable mainly due to budgeted renewable energy certificates not procured, lower load due to mild and wet winter, lower energy prices, and lower spring temperatures reducing agriculture and residential usage compared to forecast. • Reimbursable Revenues $608,500 (AgFIT) – Unfavorable Variance - Reimbursable AgFIT revenues and associated program costs expected in May resulting in budget timing differences. • General Programs Costs $159,448 – Favorable Variance – Budgeted program costs are amortized for the year resulting in timing differences.
• AgFIT Programs Costs $471,814 (AgFIT) – Favorable Variance – Program costs are expected in May resulting in budget timing differences.
Attachments:
1) Financial Statements (Unaudited) May 1, 2024 to May 31, 2024 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending May 31, 2024
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF May 1 TO May 31, 2024
PREPARED ON July 7, 2024
2 ASSETS
Current assets:
Cash and cash equivalents $ 36,342,470
Accounts receivable, net of allowance 9,713,517
Accrued revenue 4,033,150
Prepaid expenses 90,870
Inventory - Renewable Energy Credits -
Other current assets and deposits 3,700,487
Total current assets 53,880,494
Restricted assets:
Debt service reserve fund 1,100,000
Total restricted assets 1,100,000
TOTAL ASSETS $ 54,980,494
LIABILITIES
Current liabilities:
Accounts payable $ 363,115
Accrued payroll 141,977
Interest payable -
Due to member agencies (1,723)
Accrued cost of electricity 7,037,505
Other accrued liabilities 2,070,106
Security deposits - energy supplies 1,800,000
User taxes and energy surcharges 10,636
TOTAL LIABILITIES $ 11,421,617
NET POSITION
Net position:
Local Programs Reserve $ 840,000
Restricted 1,100,000
Unrestricted 41,618,878
TOTAL NET POSITION $ 43,558,878
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
May 31, 2024
(UNAUDITED)
3 FOR THE
PERIOD ENDING
May 31, 2024 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 6,150,654 $ 32,567,951
Other revenue - -
TOTAL OPERATING REVENUES 6,150,654 32,567,951
OPERATING EXPENSES
Cost of electricity 3,920,722 23,188,526
Contract services 15,572 961,706
Staff compensation 132,876 714,116
General, administration, and other 103,634 856,408
TOTAL OPERATING EXPENSES 4,172,805 25,720,757
TOTAL OPERATING INCOME (LOSS) 1,977,849 6,847,194
NONOPERATING REVENUES (EXPENSES)
Interest income 67,369 288,508
Interest and related expenses - -
Other Non Operating Revenues - -
TOTAL NONOPERATING REVENUES
(EXPENSES) 67,369 288,508
CHANGE IN NET POSITION 2,045,218 7,135,702
Net position at beginning of period 5,714,148 36,423,176 Net position at end of period $ 7,759,366 $ 43,558,878
(WITH COMPARATIVE YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
May 31, 2024
4 FOR THE
PERIOD ENDING
May 31, 2024 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 6,150,654 $ 32,567,951 Payments received from other revenue sources - -
Receipts for security deposits with energy suppliers - - Payments to purchase electricity 631,397
Payments for contract services, general, and adminstration (119,206) (1,818,115) Payments for member agency services - -
Payments for staff compensation (132,876) (714,116)
Return of security deposits to energy suppliers - -
Other cash payments - -
Net cash provided (used) by operating activities 6,529,968 30,035,720
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments of Debt - -
Interest and related expenses - -
Other Non Operating Revenue - -
Net cash provided (used) by non-capital financing
activities - -
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 67,369 288,508
Net cash provided (used) by investing activities 67,369 288,508 NET CHANGE IN CASH AND CASH EQUIVALENTS 6,597,338 30,324,228 Cash and cash equivalents at beginning of period 30,845,132 28,579,933 Cash and cash equivalents at end of period 37,442,470 58,904,161 Cash and cash equivalents included in:
Cash and cash equivalents 36,342,470 57,804,161
Restricted assets 1,100,000 1,100,000
Cash and cash equivalents at end of period $ 37,442,470 $ 58,904,161
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
May 31, 2024
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
May 31, 2024 YEAR TO DATE
Operating Income (Loss) $ 1,977,849 $ 5,613,073
Depreciation expense
Revenue reduced for uncollectible accounts
(Increase) decrease in net accounts receivable 802,648 (593,095.56) (Increase) decrease in accrued revenue (756,843) 313,839.15 (Increase) decrease in prepaid expenses (4,732) (5,880.34) (Increase) decrease in inventory - renewable energy credits - - (Increase) decrease in other assets and deposits (15,670) 15,756.69 Increase (decrease) in accounts payable 3,820,301 (54,547.41) Increase (decrease) in accrued payroll (14,006) (25,888.91) Increase (decrease) in due to member agencies - 5,855.40 Increase (decrease) in accrued cost of electricity 686,357 (1,645,382.32) Increase (decrease) in other accrued liabilities - -
Increase (decrease )security deposits with energy suppliers - - Increase (decrease) in user taxes and energy surcharges - - Increase (decrease) in security deposits from energy suppliers - - Increase (decrease) in user taxes due to other governments 34,064 16,094.60 Increase (decrease) in advances from public purpose programs - Net cash provided (used) by operating activities $ 6,529,968 $ 3,639,825 (UNAUDITED)
May 31, 2024
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Adjustments to reconcile operating income to net cash provided (used)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
(WITH YEAR TO DATE INFORMATION)
VALLEY CLEAN ENERGY
2024 YTD ACTUAL VS. BUDGET
FOR THE YEAR TO DATE ENDING 05/31/2024
Description YTD Actuals YTD Budget YTD Variance
% over
/-under
Total Revenues $ 32,855,988 $ 37,710,500 $ (4,854,512) -13% Electric Revenue $ 32,567,481 $ 36,892,000 $ (4,324,519) -12% Interest Revenues $ 288,508 $ 210,000 $ 78,508 37%
Reimbursable Revenues $ - $ 608,500 $ (608,500) -100%
Purchased Power $ 23,188,527 $ 22,816,000 $ 372,527 2%
Purchased Power Base $ 23,188,527 $ 21,729,000 $ 1,459,527 7% Purchased Power Contingency 5% $ - $ 1,087,000 $ (1,087,000) -100% Labor & Benefits $ 696,141 $ 680,000 $ 16,141 2%
Salaries & Wages/Benefits $ 587,320 $ 560,000 $ 27,320 5% Contract Labor $ 35,705 $ 85,000 $ (49,295) -58%
Human Resources & Payroll $ 73,117 $ 35,000 $ 38,117 109% Office Supplies & Other Expenses $ 125,165 $ 143,000 $ (17,835) -12% Technology Costs $ 38,160 $ 16,000 $ 22,160 139%
Office Supplies $ 6,281 $ 5,000 $ 1,281 26%
Travel $ 19,038 $ 22,000 $ (2,962) -13%
CalCCA Dues $ 59,696 $ 60,000 $ (304) -1%
CC Power $ - $ 37,500 $ (37,500) -100%
Memberships $ 1,990 $ 2,500 $ (510) -20%
Contractual Services $ 830,618 $ 958,750 $ (128,132) -13% Other Contract Services (e.g. IRP) $ - $ 13,000 $ (13,000) -100% Don Dame $ 1,924 $ 9,000 $ (7,076) -79%
Wholesale Energy Services (TEA) $ 321,325 $ 341,250 $ (19,925) -6% 2030 100% Renewable & Storage $ - $ 12,500 $ (12,500) -100% Customer Support Call Center $ 297,517 $ 335,000 $ (37,483) -11% Operating Services $ 35,301 $ 25,000 $ 10,301 41%
Commercial Legal Support $ (2,365) $ 10,000 $ (12,365) -124% Legal General Counsel $ 15,899 $ 35,000 $ (19,101) -55% Regulatory Counsel $ 52,765 $ 85,000 $ (32,235) -38%
Joint CCA Regulatory counsel $ 40,787 $ 8,000 $ 32,787 410% Legislative - (Lobbyist) $ 33,000 $ 28,750 $ 4,250 15%
Accounting Services $ (5,855) $ 1,250 $ (7,105) -568%
Financial Consultant $ - $ 10,000 $ (10,000) -100%
Audit Fees $ 40,320 $ 45,000 $ (4,680) -10%
Marketing $ 76,367 $ 125,000 $ (48,633) -39%
Marketing Collateral $ 76,367 $ 120,000 $ (43,633) -36% Community Engagement Activities & Sponsorships $ - $ 5,000 $ (5,000) -100% Programs $ 388,738 $ 1,027,500 $ (638,762) -62%
Program Costs (Rebates, Incentives, etc.) $ 140,552 $ 300,000 $ (159,448) -53% AG Fit $ 248,186 $ 720,000 $ (471,814) -66%
PIPP Program $ - $ 7,500 $ (7,500) -100%
Rents & Leases $ 21,840 $ 20,500 $ 1,340 7%
Hunt Boyer Mansion $ 21,840 $ 10,500 $ 11,340 108%
Lease Improvement $ - $ 10,000 $ (10,000) -100%
Other A&G $ 392,137 $ 265,100 $ 127,037 48%
Development - New Members $ 117,782 $ 10,500 $ 107,282 1022% Strategic Plan Implementation $ 5,235 $ 32,000 $ (26,765) -84% PG&E Data Fees $ 111,013 $ 120,000 $ (8,987) -7%
Insurance $ 20,075 $ 20,000 $ 75 0%
Banking Fees $ 138,032 $ 82,600 $ 55,432 67%
Miscellaneous Operating Expenses $ 754 $ 5,000 $ (4,246) -85% Contingency $ - $ 100,000 $ (100,000) -100%
0 0
TOTAL OPERATING EXPENSES $ 25,720,287 $ 26,140,850 $ (420,563) -2% Interest on RCB Term loan $ - $ - $ - 100%
Interest Expense - Bridge Loan \ Line of Credit $ - $ - $ - 100% NET INCOME $ 11,569,650 7,135,702 $ (4,433,948) $