Item 9
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 9
______________________________________________________________________________ TO: Board of Directors
FROM: Edward Burnham, Finance and Operations Director / Treasurer Mitch Sears, Executive Officer
SUBJECT: Monthly Treasurer’s Report (Informational Item) – August 31, 2024 DATE: October 10, 2024
RECOMMENDATION:
Accept the Treasurer’s report on VCE’s cash, investments, debt, and unaudited financial statements (with comparative year to date information) and Actual vs. Budget year to date for month ending August 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 August 31, 2024.
Financial Statements for the period August 1, 2024 – August 31, 2024 In the Statement of Net Position, VCE, as of August 31, 2024, has a total of $46,822,280 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 August 31, 2024, VCE’s net position was $54,130,963.
In the Statement of Revenues, Expenditures, and Changes in Net Position, VCE recorded $11,962,671 of revenue (net of allowance for doubtful accounts), of which $11,613,196 was billed in August, and $7,040,765 represents estimated unbilled revenue. The cost of electricity for the August revenue totaled $12,576,087. For August, VCE’s gross margin was approximately -10% and the net loss totaled ($1,529,748). The year-to-date change in net position was $17,707,787.
Item 9
In the Statement of Cash Flows, VCE cash flows from operations were $11,962,671 due to August cash receipts of revenues being less than the monthly cash operating expenses.
Bank Account Balances (as of 7/31/2024):
Operating Account: $ 24,283,905
Insured Cash Sweep Account: $ 23,840,144
Debt Service Account: $ 1,100,000
CAISO Operational Account: $ 3,123,984
Total Cash on Deposit $ 52,348,033
Note: VCE receives 4.45% interest earnings for the average balance on the ICS account and CAISO operational account equal to the Local Agency Investment Fund (LAIF) state investments rate. August 2024 earnings were $78,162.
VCE’s Outstanding Loan Balances (as of 7/31/2024):
Valley Clean Energy Alliance has available at the financial institution a line of credit totaling $11,000,000 with a $7,000,000 withdrawal limit, which expires on April 15, 2026. The related debt outstanding at the close of business on August 31, 2024 was $0. VCE has issued, but undrawn, letters of credit for a total of $3,897,000 for regulatory and power purchase requirements.
Actual vs. Budget Variances for the year to date ending August 31, 2024 Below are the financial statement line items with variances >$50,000 and 5% • Electric Revenue – ($1,747,822) and -2% – 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 – $1,063,351 and 13% – Favorable mainly due to lower load due to mild and wet winter, lower energy prices, and lower spring temperatures reducing agriculture and residential usage compared to forecast.
• CC Power Fees - $53,010 and 88% - Favorable due to timing delay on annual dues that will be paid in future months.
• Reimbursable Revenues $503, (AgFIT) – Unfavorable Variance - Reimbursable AgFIT revenues and associated program costs are expected later this year resulting in budget timing differences. • General Programs Costs $613,000 – Favorable Variance – Budgeted program costs are amortized for the year resulting in timing differences.
• AgFIT Programs Costs $321,743 (AgFIT) – Favorable Variance – Program costs are expected later this year resulting in budget timing differences.
Attachments:
1) Financial Statements (Unaudited) August 1, 2024 to August 31, 2024 (with comparative year to date information.)
2) Actual vs. Budget for the year to date ending August 31, 2024
VALLEY CLEAN ENERGY ALLIANCE
FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE PERIOD OF AUGUST 1 TO AUGUST 31, 2024
PREPARED ON OCTOBER 2, 2024
2 ASSETS
Current assets:
Cash and cash equivalents $ 46,822,280
Accounts receivable, net of allowance 15,507,076
Accrued revenue 7,040,765
Prepaid expenses 2,068,679
Inventory - Renewable Energy Credits -
Other current assets and deposits 4,728,934
Total current assets 76,167,734
Restricted assets:
Debt service reserve fund 1,100,000
Total restricted assets 1,100,000
TOTAL ASSETS $ 77,267,734
LIABILITIES
Current liabilities:
Accounts payable $ 349,147
Accrued payroll 87,583
Interest payable -
Due to member agencies (1,723)
Accrued cost of electricity 18,801,028
Other accrued liabilities 2,058,388
Security deposits - energy supplies 1,800,000
User taxes and energy surcharges 42,349
TOTAL LIABILITIES $ 23,136,771
NET POSITION
Net position:
Local Programs Reserve $ 840,000
Restricted 1,100,000
Unrestricted 52,190,963
TOTAL NET POSITION $ 54,130,963
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
August 31, 2024
(UNAUDITED)
3 FOR THE
PERIOD ENDING
August 31, 2024 YEAR TO DATE
OPERATING REVENUE
Electricity sales, net $ 11,962,671 $ 72,453,649
Other revenue - -
TOTAL OPERATING REVENUES 11,962,671 72,453,649
OPERATING EXPENSES
Cost of electricity 12,576,087 50,688,649
Contract services 802,608 2,207,839
Staff compensation 118,076 1,096,993
General, administration, and other 73,809 1,268,900
TOTAL OPERATING EXPENSES 13,570,581 55,262,382
TOTAL OPERATING INCOME (LOSS) (1,607,910) 17,191,267
NONOPERATING REVENUES (EXPENSES)
Interest income 78,162 516,521
Interest and related expenses - -
Other Non Operating Revenues - -
TOTAL NONOPERATING REVENUES (EXPENSES) 78,162 516,521
CHANGE IN NET POSITION (1,529,748) 17,707,787
Net position at beginning of period 19,237,535 36,423,176 Net position at end of period $ 17,707,787 $ 54,130,963 (WITH COMPARATIVE YEAR TO DATE INFORMATION)
(UNAUDITED)
VALLEY CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENDITURES AND
August 31, 2024
4 FOR THE
PERIOD ENDING
August 31, 2024 YEAR TO DATE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from electricity sales $ 11,962,671 $ 72,453,649 Payments received from other revenue sources - -
Receipts for security deposits with energy suppliers - - Payments to purchase electricity 533,470
Payments for contract services, general, and adminstration (876,417) (3,476,740) Payments for member agency services - -
Payments for staff compensation (118,076) (1,096,993)
Return of security deposits to energy suppliers - -
Other cash payments - -
Net cash provided (used) by operating activities 11,501,647 67,879,916
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 78,162 516,521
Net cash provided (used) by investing activities 78,162 516,521 NET CHANGE IN CASH AND CASH EQUIVALENTS 11,579,809 68,396,436 Cash and cash equivalents at beginning of period 36,342,470 28,579,933 Cash and cash equivalents at end of period 47,922,280 96,976,370 Cash and cash equivalents included in:
Cash and cash equivalents 46,822,280 95,876,370
Restricted assets 1,100,000 1,100,000
Cash and cash equivalents at end of period $ 47,922,280 $ 96,976,370
VALLEY CLEAN ENERGY ALLIANCE
STATEMENTS OF CASH FLOWS
August 31, 2024
(WITH YEAR TO DATE INFORMATION)
(UNAUDITED)
5 FOR THE
PERIOD ENDING
August 31, 2024 YEAR TO DATE
Operating Income (Loss) $ (1,607,910) $ 5,613,073
Depreciation expense
Revenue reduced for uncollectible accounts
(Increase) decrease in net accounts receivable (2,190,732) (593,095.56) (Increase) decrease in accrued revenue 497,220 313,839.15 (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 10,883 (54,547.41) Increase (decrease) in accrued payroll 16,726,201 (25,888.91) Increase (decrease) in due to member agencies - 5,855.40 Increase (decrease) in accrued cost of electricity (2,135,934) (1,645,382.32) Increase (decrease) in other accrued liabilities - -
Increase (decrease )security deposits with energy suppliers 201,259 - 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 21,062 16,094.60 Increase (decrease) in advances from public purpose programs - Net cash provided (used) by operating activities $ 11,501,648 $ 3,639,825 (UNAUDITED)
August 31, 2024
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
Adjustments to reconcile operating income to net cash provided (used) by
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 08/31/2024
Description YTD Actuals YTD Budget YTD Variance
% over
/-under
Total Revenues $ 72,969,699 $ 75,164,000 $ (2,194,301) -3% Electric Revenue $ 72,453,178 $ 74,201,000 $ (1,747,822) -2% Interest Revenues $ 516,521 $ 350,000 $ 166,521 48%
Reimbursable Revenues $ - $ 613,000 $ (613,000) -100%
Purchased Power $ 50,688,649 $ 51,752,000 $ (1,063,351) -2% Purchased Power Base $ 50,688,649 $ 49,287,000 $ 1,401,649 3% Purchased Power Contingency 5% $ - $ 2,465,000 $ (2,465,000) -100% Labor & Benefits $ 1,084,462 $ 1,088,000 $ (3,538) 0%
Salaries & Wages/Benefits $ 892,382 $ 896,000 $ (3,618) 0% Contract Labor $ 108,758 $ 136,000 $ (27,242) -20%
Human Resources & Payroll $ 83,323 $ 56,000 $ 27,323 49% Office Supplies & Other Expenses $ 193,598 $ 217,100 $ (23,502) -11% Technology Costs $ 55,397 $ 25,600 $ 29,797 116%
Office Supplies $ 7,864 $ 8,000 $ (136) -2%
Travel $ 20,501 $ 23,500 $ (2,999) -13%
CalCCA Dues $ 100,856 $ 96,000 $ 4,856 5%
CC Power $ 6,990 $ 60,000 $ (53,010) -88%
Memberships $ 1,990 $ 4,000 $ (2,010) -50%
Contractual Services $ 1,403,040 $ 1,509,200 $ (106,160) -7% Other Contract Services (e.g. IRP) $ - $ 23,000 $ (23,000) -100% Don Dame $ 2,624 $ 14,400 $ (11,776) -82%
Wholesale Energy Services (TEA) $ 561,552 $ 546,000 $ 15,552 3% 2030 100% Renewable & Storage $ - $ 20,000 $ (20,000) -100% Customer Support Call Center $ 516,092 $ 536,000 $ (19,908) -4% Operating Services $ 57,912 $ 40,000 $ 17,912 45%
Commercial Legal Support $ 6,488 $ 16,000 $ (9,513) -59% Legal General Counsel $ 32,724 $ 56,000 $ (23,276) -42% Regulatory Counsel $ 90,393 $ 136,000 $ (45,607) -34%
Joint CCA Regulatory counsel $ 45,471 $ 12,800 $ 32,671 255% Legislative - (Lobbyist) $ 49,500 $ 46,000 $ 3,500 8%
Accounting Services $ (5,855) $ 2,000 $ (7,855) -393%
Financial Consultant $ - $ 16,000 $ (16,000) -100%
Audit Fees $ 46,140 $ 45,000 $ 1,140 3%
Marketing $ 147,879 $ 200,000 $ (52,121) -26%
Marketing Collateral $ 147,879 $ 192,000 $ (44,121) -23% Community Engagement Activities & Sponsorships $ - $ 8,000 $ (8,000) -100% Programs $ 614,548 $ 1,452,000 $ (837,452) -58%
Program Costs (Rebates, Incentives, etc.) $ 96,291 $ 600,000 $ (503,709) -84% AG Fit $ 518,257 $ 840,000 $ (321,743) -38%
PIPP Program $ - $ 12,000 $ (12,000) -100%
Rents & Leases $ 39,780 $ 32,800 $ 6,980 21%
Hunt Boyer Mansion $ 39,780 $ 16,800 $ 22,980 137%
Lease Improvement $ - $ 16,000 $ (16,000) -100%
Other A&G $ 349,830 $ 375,200 $ (25,370) -7%
Development - New Members $ - $ 16,800 $ (16,800) -100% Strategic Plan Implementation $ 786 $ 51,200 $ (50,414) -98% PG&E Data Fees $ 176,740 $ 192,000 $ (15,260) -8%
Insurance $ 34,271 $ 32,000 $ 2,271 7%
Banking Fees $ 138,032 $ 83,200 $ 54,832 66%
Miscellaneous Operating Expenses $ 754 $ 8,000 $ (7,246) -91% Contingency $ - $ 160,000 $ (160,000) -100%
0 0
TOTAL OPERATING EXPENSES $ 61,490,468 $ 56,794,300 $ 4,696,168 8% Interest on RCB Term loan $ - $ - $ - 100%
Interest Expense - Bridge Loan \ Line of Credit $ - $ - $ - 100% NET INCOME $ 18,369,700 11,479,231 $ (6,890,469) $