Item 13 – Approve adoption of VCE’s Strategic Plan Major update. (Discussion/Action) — Valley Clean Energy Board of Directors, October 14, 2025

Item 13
1 VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 13
TO: Board of Directors
FROM: Mitch Sears, Chief Executive Officer
Edward Burnham, Chief Financial Officer
SUBJECT: VCE 2026-2029 Strategic Plan Major Update
DATE: October 14, 2025

RECOMMENDATION
Approve adoption of VCE’s 2026-2029 Strategic Plan Major Update

OVERVIEW
Valley Clean Energy (VCE) has undertaken a comprehensive and inclusive process to develop its 2026– 2029 Strategic Plan Major Update. This effort builds on the organization’s rolling strategic planning framework and reflects a commitment to aligning long-term goals with evolving community needs, regulatory landscapes, and energy market dynamics.

Key steps taken include:
• Strategic Planning Framework: VCE followed its Board-adopted Strategic Plan Guidelines, which emphasize a balanced, multi-year approach with annual reviews and periodic major updates. • Stakeholder Engagement: VCE formed a Strategic Plan Task Group within the Community Advisory Committee (CAC) and conducted two public workshops focused on financial strength, procurement, community engagement, and decarbonization. A customer survey was also distributed to over 45,000 contacts, gathering both quantitative and qualitative feedback. • Draft Development and Iteration: Staff developed an initial draft in early 2025, incorporating feedback from the CAC, public workshops, and survey results. Key themes included affordability, local distributed energy resources, and support for vulnerable customers. • Plan Refinement: Based on input, objectives were revised to emphasize cost-effective renewable energy strategies, rate competitiveness, and community resilience. Notably, Goal 2 was updated to reflect current renewable energy projections, project costs, and enable VCE to develop strategies for local distributed energy resources, as described under Objective 2.3. • Board and CAC Review: Draft versions were reviewed by the CAC in July and August 2025, with a final Board workshop in September 2025.

The purpose of this report is to provide an overview of the staff recommended 2026-2029 Strategic Plan Major Update for Board consideration.

Item 13
2 BACKGROUND
The purpose of the Strategic Plan (Plan) is to focus VCE on achieving better energy outcomes for its customers and communities by guiding the organization’s actions. The Strategic Plan is aligned with VCE’s mission and vision and guides the organization’s efforts over a multi-year time horizon. The Plan is the basis for developing annual organization goals, staff work plans, annual budgets, key decisions, and priorities. The Plan also informs the development of VCE’s compliance documents, including the Integrated Resource Plan (IRP), a document that sets out a 10-year roadmap for energy procurement that is typically updated on a 2-year basis.

Current Plan categories and key goals include:

Past Strategic Plan Actions
At the October 13, 2022, Board Meeting, Staff provided an update on the 2021-2023 Strategic Plan and introduced the concept of a rolling strategic plan. At the July 13, 2023, Board Meeting, the Board adopted the Strategic Plan Guidelines to ensure a balanced and comprehensive approach that aligns the strategic plan with VCE’s multi-year time horizon and achieves the benefits of timely updates associated with the “rolling” approach. At the September 14, 2023, Board Meeting, the Board approved a minor update to the 2021-2023 strategic plan and extended the plan through the end of 2025.

The Board staff reports can be found here:

Item 12 - VCE Three-Year Strategic Plan Guidelines (valleycleanenergy.org) Item 17 - VCE Strategic Plan Minor Update and Extension (valleycleanenergy.org) The Board received Item 17 describing the 2026-2029 VCE Strategic Plan major update process and timeline at the February 13, 2025 meeting.
2026-2029 Plan - Major Update
The purpose of a Major Plan update is to conduct a more detailed review/update of the Plan, including a review of VCE’s Vision/Mission and existing goals and objectives. Major Plan updates include •Goal: Maintain and grow a strong financial foundation and manage costs to achieve long-term organizational health. FINANCAL STRENGTH
•Goal: Manage power supply resources to consistently exceed California’s Renewable Portfolio Standard (RPS) while working toward a resource portfolio that is 100% carbon neutral by 2030.

PROCUREMENT AND POWER SUPPLY
•Goal: Prioritize VCE’s community benefits and increase customer satisfaction and retention. CUSTOMERS AND COMMUNITY
•Goal: Promote and deploy local decarbonization and grid innovation programs to improve grid stability, reliability, community energy resilience, and safety.

DECARBONIZATION AND GRID

INNOVATION
•Goal: Strongly advocate for public policies that support VCE’s Vision/Mission. STATEWIDE ISSUES: REGULATORY AND

LEGISLATIVE AFFAIRS
•Goal: Analyze and implement an optimal long-term organizational, management, and information technology structure at VCE.

ORGANIZATION, WORKPLACE, AND

TECHNOLOGY
Item 13
3 comprehensive reviews of the goals/objectives and incorporate workshops at various levels of the organization, including community stakeholder engagement. Major Plan updates incorporate those enumerated in the Minor Update that feature plan adjustments associated with changing legislative, regulatory, customer, economic, etc. requirements, as well as notation of plan milestones achieved.

Key activities in a Major Update include:
• Identify changes in the overall CCA environment (economics, policy, technology, etc.) and describe their relevance for VCE
• Review key organizational fundamentals (Mission, Vision, and Strategic Plan Goals) • Long-term adjustments based on strategic factors
As outlined in the strategic plan guidelines, Staff will continue to review and update the Plan on an annual basis to ensure that VCE remains on track and makes course corrections as necessary.

ANALYSIS
As part of the update process, the CAC formed the Strategic Plan Task Group to review and provide feedback. Over the course of developing the proposed 2026-2029 Strategic Plan Update, Staff incorporated comments and input from the Strategic Plan Task Group, CAC, workshop participants from the public, and results from customer surveys. The general themes and several specific points are outlined below. VCE held three workshops and a customer survey was conducted to support the development of the Major update. The initial two workshops were hosted by the CAC with the third hosted by the Board:
• May 22, 2025 Workshop – Focused on Goal 1: Financial Strength and Rates and Goal 2:

Procurement & Power Supply
• June 26, 2025 Workshop – Focused on Goal 3: Customers and Community and Goal 4:

Decarbonization and Grid Innovation
• September 25, 2025 – General workshop hosted by the VCE Board Workshop & Survey Feedback
Over the course of the two CAC hosted workshops comments and feedback from the CAC and a limited number of participants from the public were gathered. The Strategic Plan Survey was distributed via email to VCE’s customer list of 45,117 contacts and included a raffle for prizes from local vendors to encourage engagement. The survey was distributed on May 16, 2025, with a follow-up email sent to recipients who did not open the initial email on May 20, 2025. The survey aimed to gather input from VCE’s customers and stakeholders to help shape the direction for the 2025 Strategic Plan revisions.

The open rate (the percentage of recipients who opened the email) was almost 13%, which is on the low side of the industry average. The survey yielded a mix of feedback, with a large number of participants choosing to provide written comments that ranged from positive to negative. VCE asked survey participants what they think VCE’s Strategic Plan priorities should be, and participants ranked their top choices:
• #1 (46%): 100% clean or renewable electricity
• #2: (41%): Giving discounts to customers
Item 13
4 • #3: (39%): Customer-benefiting programs
• #4: (38%): Building financial reserves
Qualitative feedback was varied, but several themes emerged, including affordability/high rates; the need for more education so customers are familiar with VCE; and the desire for VCE to be municipalized in Yolo County.

Generally, these include added emphasis on:
• Affordability
• Energy resilience
• Incorporating additional local distributed energy resources into VCE’s resource mix • Affirming commitment and focus on low-income and other vulnerable customers.

Feedback Incorporation into the recommended 2026-2029 Strategic Plan Major Update The examples below and other sections of the draft Initial Plan Update have been modified to reflect the input and feedback received during the Workshops and the survey. • Affordability – An emphasis has been generally incorporated in the Goals and Objectives of the attached draft Update.
o e.g. Objective 1.4: Manage customer rates to optimize VCE’s financial goals while maintaining rate affordability and competitiveness with PG&E. • Grid Resiliency - Reinforcing local partnerships and efforts to support grid resiliency. o Objective 4.2: Work with member jurisdictions (e.g., city and school district planning staff) to help plan and implement local energy resilience, decarbonization and electrification initiatives and where practical, powered by local supply resources. • Emphasis on incorporating additional local distributed energy resources into VCE’s resource mix.
o e.g. Objective 2.3: Develop strategies to identify and pursue cost-effective, local distributed energy resources. Strategies could include, but are not limited to, an allocation of resource portfolio investment in cost-effective local energy and storage resources even though such local investment may affect achievement of overall resource portfolio goals.
• Re-emphasize commitment and focus on low-income and other vulnerable customers. o e.g Objective 3.5: Develop and implement customer programs and initiatives that prioritize decarbonization, community resiliency, rate affordability, and customer savings, including focused efforts on low-income and medically vulnerable customers.

At the August 28, 2025 CAC meeting, Staff presented the draft 2026-2029 strategic plan major update for their input and recommendation.

Item 13
5 Community Advisory Committee Recommendation
The CAC recommended approval of the 2026-2029 strategic plan update with no recommended changes.

Based on the final Board Workshop feedback, Staff have made additional minor updates to the recommended 2026-2029 Strategic Plan Major Update, including the following:
• Goal 2 was updated with additional resiliency language • Goal 6 updated for VCE growth, development, and effectiveness • Objective 6.3 updated to prioritize possible load growth and expansion • Addition of Appendix I for definitions of renewable and carbon fee electricity

CONCLUSION
Staff believe the recommended 2026-2029 Strategic Plan Major Update represents a balanced approach to moving the organization forward with setting reasonable goals for the near-term based on the input from VCE’s stakeholders. Staff seek approval of the attached 2026-2029 Strategic Plan Major Update.

ATTACHMENTS

1. 2026-2029 Strategic Plan Major Update – Clean

2. 2026-2029 Strategic Plan Major Update – Redlined
1 2026-2029 Strategic Plan Major Update
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Valley Clean Energy
Strategic Plan
2026-2029 Major Update
Approved [Enter Date]

VCE MISSION
Deliver cost-competitive affordable clean electricity, product choice, price stability, energy efficiency, and greenhouse gas emission reductions.

VCE VISION
Valley Clean Energy Alliance (VCE) is a joint-powers authority working to implement a state- authorized Community Choice Energy (CCE) program. Participating VCE governmentsinclude the City of Davis, the City of Woodland, the City of Winters, and County of Yolo. The purpose of VCE is to enable the participating jurisdictions to determine the sources, modes of production and costs of the electricity they procure for the residential, commercial, governmental, agricultural and industrial users in the VCE territory. PG&E continues to deliver the electricity procured by VCE and performs billing, metering, and other electric distribution utility functions and services. Customers within the participating jurisdictions have the choice not to participate in the VCE program.

Near-Term Vision (Launch)
The near-term vision was essential for the launch of VCE to provide electricity users with greater choice over the sources and prices of the electricity they use, by:
• Offering basic electricity service with higher renewable electricity content, at a rate competitive with PG&E;
• Developing and offering additional low-carbon or local generation options at modest price differentials;
• Establishing an energy planning framework for developing local energy efficiency programs and local energy resources and infrastructure; and • Accomplishing the goals enumerated above while accumulating reserve funds for future VCE energy programs and mitigation of future energy costs and risks.

Long -Term Vision
The long-term vision for VCE is to continuously improve the electricity choices available to VCE customers, while expanding local energy-related economic opportunities, by:
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• Causing the deployment of new renewable and low carbon energy sources; • Evaluating and adopting best practices of the electricity service industry for planning and operational management;
• Substantially increasing the renewable electricity content of basic electricity service, with the ultimate goal of achieving zero carbon emissions electricity;
• Developing and managing customized programs for energy efficiency, on-site electricity production and storage;
• Accelerating deployment of local energy resources to increase localized investment, employment, innovation and resilience;
• Working to achieve the climate action goals of participating jurisdictions to shape a sustainable energy future;
• Saving money for ratepayers on their energy bills; and • Remaining open to the participation of additional jurisdictions.

STRATEGIC PLAN
The VCE Strategic Plan is focused on achieving better energy outcomes for its customers, communities and member jurisdictions by guiding the organization’s actions. The Plan and major update map a route to VCE’s goals and allow for course correction as new information and learning occurs. The energy sector in California is in a transformational period and VCE allows local energy priorities and needs to be heard and ultimately acted upon.

This plan helps VCE build a strong foundation from which to identify and guide strategic actions, being mindful of the longer-term aspirations of the Agency. The Plan is designed to be reviewed periodically to ensure that VCE remains on track and course corrects if necessary.

METHODOLOGY AND ORGANIZATION
VCE’s initial strategic plan was based on the experience of the Agency’s first two years in operation as well as current energy market conditions. The original Plan incorporated a strengths/weaknesses/opportunities/threats (SWOT) analysis which was completed in 2019, and detailed feedback from the Board of Directors, Community Advisory Committee (CAC) members and VCE staff. This 2025 Plan update continues to cover six topical categories which are most relevant to VCE’s operations. Within each category, the Plan specifies a set of aspirational goals and follows with strategies to achieve or make progress toward those goals during the planning period of 2026- 2026. Subsequent, Strategic Plan major updates will occur every four years.

Strategic Plan Update Schedule
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Minor
Update
Major
Update
Minor
Update
Major
Update
Minor
Update
Major
Update
2021-2023 Plan Extension Strategic Plan Strategic Plan
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VCE’s STRATEGIC GOALS

A) FINANCIAL STRENGTH
A successful CCA program requires disciplined financial strategies and policies. VCE is committed to managing its financial resources responsibly and setting a standard of transparency and accountability, ensuring efficiency and strong stewardship of the agency’s financial resources. At VCE, our commitment to financial and operational excellence will ensure that all processes and operations are clearly defined and efficiently designed to align people, systems, and policies to maximize productivity and improve efficiency. Adhering to these policies and actively examining and assessing risk will help earn a high credit rating and a healthy position from which to deliver customer and community value.

Goal 1: Maintain and grow a strong financial foundation and manage costs to achieve long-term organizational health.

1.1. Objective: Develop a model to maintain reserve policies to fund VCE’s mission, vision, and goals.

1.2. Objective: Maintain investment-grade credit rating.

1.3. Objective: Commit to fiscal efficiencies to build a program foundation from which to deliver customer and community value.

1.4 Objective: Manage customer rates to optimize VCE’s financial goals while maintaining rate affordability and competitiveness with PG&E.

1.5 Objective: Develop a long range financial model for financial health and rate stability.

1.6 Objective: Develop a long term cash reserve and community investment strategy for reserve management.

B) PROCUREMENT AND POWER SUPPLY
Navigating the world of wholesale power markets and state-mandated power mix and reliability requirements while fulfilling our commitment to sourcing low/no-carbon electricity requires a constant search for the right resources to meet sustainability and value proposition goals. The threat of losing load, either to Direct Access or the investor-owned utility (IOU) presents challenges and opportunities to enhance product offerings to meet VCE’s decarbonization goals and our customers’ own environmental goals while considering financial and risk impacts. VCE is committed to providing carbon free electricity through a balanced approach that considers cost, risk, long-term value and best fit in meeting community goals while exceeding California’s RPS mandates. 4 2026-2029 Strategic Plan Major Update
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Goal 2: Manage power supply resources to consistently exceed California’s Renewable Portfolio Standard (RPS) while working toward a resilient resource portfolio that is 100% Carbon Free and a minimum of 90% Renewable by 2030.

2.1 Objective: Continue to identify and pursue cost effective local renewable energy and storage resources.

2.2 Objective: Through strategic procurement acquire sufficient clean energy and renewable resources including storage and other resource adequacy products to achieve VCE’s greenhouse gas reduction targets and regulatory requirements.

2.3 Develop strategies to identify and pursue cost-effective, local distributed energy resources. Strategies could include, but are not limited to, an allocation of resource portfolio investment in cost-effective local energy and storage resources even though such local investment may affect achievement of overall resource portfolio goals.

2.4 Evaluate and pursue opportunities for shared investment and procurement strategies with other CCAs.

2.6 Objective: Optimize the hedging strategy to mitigate risk in accordance with the energy risk guidelines and procurement plan.

C) CUSTOMERS AND COMMUNITY
VCE is a customer- and community-focused organization. We use all available channels and platforms to cultivate relationships with, and bring customer value to, all segments of the communities we serve – including those that have been historically underserved/under-resourced. These channels include leveraging existing outlets established by our member agencies, partnering with commercial customers to enhance their community presence, and re-engaging with those who have opted out. Partnerships with commercial and agricultural customers are particularly important to building VCE’s brand in a region rooted in food production and innovation. Focusing on affordability for customers wherever possible will help us to continue to build a loyal and satisfied customer base. Communicating our competitive rates and product and service benefits in clear and accessible ways will strengthen customer loyalty and enhance our financial standing, enabling us to better serve our communities.

Goal 3: Enhance and amplify VCE’s community benefits and increase customer satisfaction and retention.

3.2 Objective: Develop and implement programs and initiatives to better support community goals, including supporting member agency achievement of energy-sector emissions reduction targets.

3.3 Objective: Design and implement a strategy to more effectively engage local business and agricultural customers.

3.4 Objective: Build awareness and trust of the VCE brand through direct engagement with customers, communities and organizations in VCE’s service territory.

3.5 Objective: Develop and implement customer programs and initiatives that prioritize decarbonization, community resiliency, energy efficiency, building weatherization, rate affordability, and customer savings, including focused efforts on low-income and medically vulnerable customers.

3.6 Objective: Measure and increase customer satisfaction, using tools such as surveys and focus groups, while maintaining an overall participation rate of no less than 90%.

3.7 Objective: Develop a roadmap to integrate and address the concerns and priorities of emerging and historically marginalized communities in the design and implementation of VCE's services and programs.

3.8 Objective: Consider affordability when making rates, services, and program design decisions. 5 2026-2029 Strategic Plan Major Update
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D) DECARBONIZATION AND ENERGY SERVICE RESILIENCE
One of the key factors driving the formation of VCE was to address climate change and improve local resiliency.

We will play a vital role in this decades-long endeavor, with the ongoing support of our community and our Board.

In addition to providing carbon-free electricity, we are reinvesting in our region and expanding our toolset for furthering emissions reductions and energy resiliency by launching decarbonization and grid innovation programs.

These programs represent the next stage in VCE’s maturity and are the mechanism by which VCE will further engage our communities to achieve our mission. We will leverage partnerships, prioritize innovation and use data science to manage and influence carbon-free energy use. We will embody the entrepreneurial and innovative spirit of the community in which we live and work, the spirit of Yolo County, to bend the carbon curve downwards and improve the lives of our community members while maintaining rate affordability.

Goal 4. Promote and deploy local decarbonization and energy resilience programs to improve grid stability, reliability, and safety.

4.1 Objective: Work with a variety of local, regional and state partners, to develop strategies and initiatives to pressure state policy makers to remove barriers to technical feasibility and economic viability of local renewable and storage resources, both FOM and BTM.

4.3 Objective: Increase participation in VCE’s UltraGreen 100% renewable product.

4.4. Objective: Identify external funding sources to support decarbonization, community energy resilience and grid-related programs and initiatives.

4.5 Objective: Identify and pursue cost effective, local distributed energy (e.g., behind the meter opportunities) resources to help meet reliability needs.

E) STATEWIDE ISSUES: REGULATORY AND LEGISLATIVE AFFAIRS The regulatory and legislative processes wield critical influence over VCE’s ability to serve our customers and fulfill our core goals and mission. Working with CalCCA and other operating CCAs, VCE will actively engage with the regulatory and legislative communities in order to advance a positive narrative on the value of CCA, manage operational risk, protect the interests of our customers, enhance our ability to mitigate greenhouse gas emissions, and help build a regulatory framework that supports innovation and customer choice in an equitable and cost-effective manner while preserving reliability and universal access.

Goal 5. Strongly advocate for public policies that support VCE’s Vision/Mission.

5.1 Objective: Work with CalCCA and other partners to proactively engage State regulators, legislators, and other State authorities in developing policy that furthers VCE’s mission and facilitates our contributions to decarbonization, grid reliability, energy resiliency, affordability, local programs and social equity.

5.2 Objective: Work with partners and policy makers at the local, regional and state levels to remove barriers to the technical feasibility and economic viability of local solar+storage and other renewable resources, for both in front of the meter and behind the meter installations.

5.3 Objective: Work with statewide allies to develop utility cost reduction solutions, including promotion of local energy resources to enhance climate resilience, reduce cost impacts of grid outages, and reduce needs for transmission investment.

5.4 Objective: Develop relationships with and provide energy education for community stakeholder organizations that foster support for VCE‘s mission and vision.

5.5 Objective: Optimize regulatory compliance activities. 6 2026-2029 Strategic Plan Major Update
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F) ORGANIZATIONAL GROWTH, DEVELOPMENT AND EFFECTIVENESS Human capital is a successful organization’s greatest asset, and at VCE we’ve built a highly talented and dedicated team that will ensure the success and effectiveness of our organization. Building, valuing, and nurturing this team’s talent will require an adaptive culture that supports creativity, open communication, and the free flow of ideas to spur mission-focused innovation. We will provide an infrastructure within VCE that supports and cultivates our employees through professional and personal development, recognizes and rewards their contributions to achieving our mission, and offers opportunities that position our people, as well as VCE, for success. In attracting and maintaining skilled employees, VCE will continue to provide a rewarding workplace experience.

VCE will develop a decision support system that will enable it to nimbly assess and react to potential load growth and expansion opportunities as they arise. In addition, VCE will assess opportunities for shared services with other CCAs to optimize function and efficiency of service.

We also take customer information, privacy, and security seriously. Our systems and processes follow best practices and industry standards. Performance metrics are in place to ensure resiliency and high system availability on standard and mobile platforms. Periodic upgrades to IT resources will ensure continued adherence to these high standards. This strategic plan provides the approach that VCE is taking to address the challenges of delivering IT services in a dynamic environment with new regulations and continuous advancements in science and technology.

Goal 6: Analyze and implement optimal long-term organizational growth, development, and the effectiveness VCE’s services for current and future customers.

6.1 Objective: Develop a roadmap using non-ratepayer funds to evaluate and guide future steps toward formation of a local Publicly Owned Utility (POU).

6.2 Objective: Evaluate and pursue opportunities for shared services with other CCAs for certain functions.

6.3 Objective: . Actively engage with potential growth opportunities and expansion members under the new member policy.

6.4 Objective: Identify optimal management, staffing and contracting structure of VCE in the near and long term; factors include balance of internal staff vs. consultant support services.

6.5 Objective: Promote diversity, equity and inclusion in leadership, hiring, promotion, and contracting policies.

6.6 Objective: Develop a performance reward system that promotes health, wellness, and a productive workplace.

6.7 Objective: Create an innovation-focused culture that rewards based on active participation, proactive problem solving, new customer-focused initiatives, and creative use of partnerships and member agencies.

6.8 Objective: Deploy a modernized Enterprise Resource Planning (ERP) approach that enables knowledge management, dashboard analytics, and collaboration through robust use of live data and information resources.

6.9 Objective: Develop a quality management system (QMS) to improve effectiveness and efficiency continuously to meet customer and regulatory requirements.

TIMING, MEASUREMENT AND UPDATES
VCE’s Strategic Plan is a living document that will be revisited and updated regularly. At a minimum, staff will review and update the Plan on an annual basis, including goals, objectives and metrics. In addition, staff will establish an implementation timeline and appropriate reporting format to use in reporting performance against the Plan’s goals and objectives to VCE leadership and Board. The reports, commencing in 2021, will show metrics, 7 2026-2029 Strategic Plan Major Update
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status and mitigations where appropriate. Consolidated summary reporting on the status of all high-priority enterprise goals and objectives will be reported out as follows:
• Quarterly Report to VCE Management
Staff will report quarterly to the Executive Officer on the status of goals, objectives and metrics for which they are responsible.
• Annual Report to Board and CAC
Staff will report annually to the Board and CAC on the status of goals, objectives and metrics, and will recommend any mitigations or amendments as may be necessary for Board approval. 8 2026-2029 Strategic Plan Major Update
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APPENDIX I

DEFINITIONS
Renewable Electricity
Includes “biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current”, [(Public Resources Code § 25741), Renewables Portfolio Standard (RPS). (Public Utilities Code § 399.11 et seq.)] Renewable electricity is assumed to be free of GHG emissions.

Carbon Free Electricity -Any electricity that meets the definition of renewable electricity above plus other sources considered zero emission. These zero emission sources now in California include existing large hydro (greater than 30 MW) and existing nuclear. New technologies not now included in the zero-emission category can be added in the future. Carbon Free power uses no fossil fuel generation. See https://focus.senate.ca.gov/sb100/faqs for FAQs on existing large hydro and existing nuclear and their inclusion in SB 100. The percent of the power that must meet RPS is governed by SB 100 (De Leon, 2018) and shall be equal to or greater than 60% for 2030 and beyond.

By 2045 all electricity in California is to be Carbon Free.

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Strategic Plan
Last Approved update by VCE Board August 16,2023
2026-2029 Major Update (Staff Recommended Draft)

VCE MISSION
Deliver cost-competitive affordable clean electricity, product choice, price stability, energy efficiency, and greenhouse gas emission reductions.

Near-Term1 Vision (Launch)
The near-term vision was essential for the launch of for VCE is to provide electricity users with greater choice over the sources and prices of the electricity they use, by:
• Offering basic electricity service with higher renewable electricity content, at a rate competitive with PG&E;
• Developing and offering additional low-carbon or local generation options at modest price differentials;
• Establishing an energy planning framework for developing local energy efficiency programs and local energy resources and infrastructure; and • Accomplishing the goals enumerated above while accumulating reserve funds for future VCE energy programs and mitigation of future energy costs and risks.

Long -Term Vision
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The future long-term vision for VCE is to continuously improve the electricity choices available to VCE customers, while expanding local energy-related economic opportunities, by:
• Causing the deployment of new renewable and low carbon energy sources; • Evaluating and adopting best practices of the electricity service industry for planning and operational management;
• Substantially increasing the renewable electricity content of basic electricity service, with the ultimate goal of achieving zero carbon emissions electricity;
• Developing and managing customized programs for energy efficiency, on-site electricity production and storage;
• Accelerating deployment of local energy resources to increase localized investment, employment, innovation and resilience;
• Working to achieve the climate action goals of participating jurisdictions to shape a sustainable energy future;
• Saving money for ratepayers on their energy bills; and • Remaining open to the participation of additional jurisdictions. 1 Launch Phase and First Year

STRATEGIC PLAN
The VCE Strategic Plan is focused on achieving better energy outcomes for its customers, and communities and member jurisdictions by guiding the organization’s actions. The Plan and majorminor update map a route to VCE’s goals and allows for course correction as new information and learning occurs. The energy sector in California is in a transformational period and VCE allows local energy priorities and needs to be heard and ultimately acted upon.

VCE’s major strategic plan update continues to focus on developing a cost-effective clean resource portfolio to combat the effects of climate change while balancing affordability. Since the initial strategic plan, VCE has grown its renewable power portfolio while recognizing that cost pressures – many of which are outside of VCE’s control – have increased the cost of electricity XX% over the last X years. During this time, VCE has actually lowered generation rates relative to the IOU, and this plan continues to put an emphasis on making affordability a priority in VCE’s decision-making. At the same time, the increasing severity of climate-related weather extremes and system disruptions has elevated concerns about energy resilience — ensuring continuous electric service especially for vulnerable customers during climate-driven utility grid outages. As VCE drafts this major strategic plan update, climate scientists are pointing to likely 3-degree C global warming, with severe impacts occurring more rapidly than was anticipated just a few years ago. At the same time, electricity customers in IOU service areas are experiencing an energy affordability crisis, driven mainly by escalating delivery charges. This plan therefore increases VCE’s emphasis on climate resilience (ensuring continuous electric service during heat extremes and utility grid outages) and affordability (engaging with our CCA allies to focus state policy makers on measures to reduce major cost drivers, rather than cutting needed services like low-income bill relief and energy efficiency).

METHODOLOGY AND ORGANIZATION
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VCE’s initial strategic plan was based on the experience of the Agency’s first two years in operation as well as current energy market conditions. The original Plan incorporated a strengths/weaknesses/opportunities/threats (SWOT) analysis which was completed in 2019, and detailed feedback from the Board of Directors, Community Advisory Committee (CAC) members and VCE staff. This 2025 Plan update continues to cover six topical categories which are most relevant to VCE’s operations. Within each category, the Plan specifies a set of aspirational goals and follows with strategies to achieve or make progress toward those goals during the planning period of 2026- 2026. Subsequent, Strategic Plan major updates will occur every four years.

Strategic Plan Update Schedule
VCE’s STRATEGIC GOALS

Goal 1: Maintain and grow a strong financial foundation and manage costs to achieve long-term organizational health.

1.1. Objective: Maintain consistently healthyDevelop a cash model to maintain reserves policies to fund VCE’s mission, vision, and goals.

1.2. Objective: Achieve an Maintain investment-grade credit rating by end of 2028.

1.3. Objective: Commit to fiscal efficiencies to build a program foundation from which to deliver customer and community value.

1.4 Objective: Manage customer rates to optimize VCE’s financial goals while maintaining rate affordability and competitiveness with PG&E andlowering customer costs .

1.5 Objective: Develop a long range financial model for financial health and rate stability.

1.6 Objective: Develop a long term cash reserve and community investment strategy for reserve management.

B) PROCUREMENT AND POWER SUPPLY
Navigating the world of wholesale power markets and state-mandated power mix and reliability requirements while fulfilling our commitment to sourcing low/no-carbon electricity requires a constant search for the right resources to meet sustainability and value proposition goals. The threat of losing load, either to Direct Access or the investor-owned utility (IOU) presents new challenges and opportunities to enhance product offerings to meet VCE’s decarbonization goals and our customers’ own environmental goals while considering financial and risk impacts. VCE is committed to providing carbon free electricity through a balanced approach that considers cost, risk, long-term value and best fit in meeting community goals while exceeding California’s RPS mandates. 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Minor
Update
Major
Update
Minor
Update
Major
Update
Minor
Update
Major
Update
2021-2023 Plan Extension Strategic Plan Strategic Plan
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Goal 2: Manage power supply resources to consistently exceed California’s Renewable Portfolio Standard (RPS) while working toward a resilient resource portfolio that is 100% Carbon Free and a minimum of 90% 100% Rrenewable by 2030.

2.1 Objective: Continue to identify and pursue cost effective local renewable energy and storage resources.

2.2 Objective: Through strategic procurement Aacquire sufficient carbon neutralclean energy and bundled energy and renewable resources including storage and other resource adequacy products to achieve VCE’s greenhouse gas reduction targets and regulatory requirements.

2.3 Objective: Deploy storage and other strategies to achieve renewable, carbon neutral, resource adequacy, and resiliency objectives.

2.3 Objective: Identify and pursue cost effective, local distributed energy (e.g., behind the meter rooftop solar+storage) resources to help meet reliability needs. Develop strategies to identify and pursue cost-effective, local distributed energy resources. Strategies could include, but are not limited to, an allocation of resource portfolio investment in cost-effective local energy and storage resources even though such local investment may affect achievement of overall resource portfolio goals. Identify and pursue cost-effective, local distributed energy resources, including both front-of-meter solar+storage resources for VCE’s renewable energy supply portfolio, as well as behind-the-meter solar+storage aggregations (VPPs) to help reduce RA requirements.

2.4 Evaluate and pursue opportunities for shared investment and procurement strategies with other CCAs.

2.2 Objective: Study and present options for achieving a 100% carbon neutral resource portfolio as well as 100% carbon free resource portfolio (carbon free hour by hour) by 2030.2[LK — Upon rereading, perhaps 2.5 is not needed (redundant) given the changes to the goal statement and the text of 2.3 and 2.4.]

2.5 Develop strategies to cost-effectively achieve the intent of the 100% renewable target while incorporating both utility-scale, front of meter, resources as well as behind the meter resourcesminimum

2.6 Objective: Optimize the hedging strategy to mitigate risk in accordance with the energy risk guidelines and procurement plan.

C) CUSTOMERS AND COMMUNITY
VCE is a customer- and community- focused organization. We will use all available channels and platforms to cultivate relationships with, and bring customer value to, all segments of the communities we serve – including those that have been historically underserved/under- resourced. These channels include leveraging existing outlets established by our member agencies, partnering with commercial customers to enhance their community presence, and re-engaging with those who have opted out. Partnerships with commercial and agricultural customers are particularly important to building VCE’s brand in a region rooted in food production and innovation. Focusing on affordability for customers wherever possible will help us to continue to build a loyal and satisfied customer base. Communicating our competitive rates and product and service benefits in clear and accessible ways will strengthen customer loyalty and enhance our financial standing, enabling us to better serve our communities while ensuring rate affordability.

Goal 3: Enhance and amplify Prioritize enhancing and marketing VCE’s community benefits, and increase customer satisfaction and retention.

3.1 Objective: Develop and implement engagement strategies to increase awareness of, and participation in, local control of VCE’s energy supply and programs with a particular focus on engaging disadvantaged and historically marginalized communities.
2 Carbon neutral electricity is net zero carbon electricity that may include the use of carbon credits and/or higher production of carbon free electricity that averages out to provide a carbon free portfolio over a period of time whereas carbon free hour-by-hour means all electricity consumed by VCE customers will be from carbon free and/or renewable resources.

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3.2 Objective: Develop and implement programs and initiatives to better support community goals, including supporting member agency achievement of energy-sector emissions reduction targets.

3.3 Objective: Design and implement a strategy to more effectively engage local business and agricultural customers.

3.4 Objective: Build awareness and trust of the VCE brand through direct engagement with customers, communities and organizations in VCE’s service territory.

3.6 Objective: Measure and increase customer satisfaction, using tools such as surveys and focus groups, while maintaining an overall participation rate of no less than 90%.

3.63.8Objective: Consider affordability when making rates, services, and program design decisions.

3.7 Objective: Develop and implement customer programs and initiatives that prioritize decarbonization, community resiliency and customer savings.

3.8 Objective: Measure and increase customer satisfaction, using tools such as surveys and focus groups, while maintaining an overall participation rate of no less than 90%.

3.9 Objective: Integrate and address the concerns and priorities of emerging and historically marginalized communities in the design and implementation of VCE's services and programs.

D) DECARBONIZATION AND ENERGY SERVICE RESILIENCEGRID INNOVATION One of the key factors driving the formation of VCE was to address climate change and improve local resiliency.

We will play a vital role in this decades-long endeavor, with the ongoing support of our community and our Board.

Goal 4. Promote and deploy local decarbonization and grid innovationenergy resilience programs to improve grid stability, reliability, community energy resilience, and safety.

4.1 Objective: Working with a variety of local, regional and state partners, to develop strategies and initiatives to pressure state policy makers to remove barriers to technical feasibility and economic viability of local renewable and storage resources, both FOM and BTM. Working with a variety of local, regional and state partners, to develop strategies and initiatives to pressure state policy makers to remove barriers to technical feasibility and economic viability of local solar+storage resources, both FOM and BTM. a grid innovation roadmap for VCE’s service territory that supports community energy resilience and reliability.

4.2 Objective: Work with member jurisdictions (e.g., city and school district planning staff) to help plan and implement local energy resilience, decarbonization and electrification initiatives and where practical, powered by local supply resources.Work with member jurisdictions (e.g., city and school district planning staff) to help plan and implement local energy resilience, decarbonization and electrification initiatives powered by local supply resources. Develop a VCE decarbonization roadmap to guide near and long-term program decisions and offerings.

4.3 Objective: Increase participation in VCE’s UltraGreen 100% renewable product.

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4.4. Objective: Identify external funding sources to support decarbonization, community energy resilience and grid-related programs and initiatives.

4.5 Objective: Identify and pursue cost effective, local distributed energy (e.g., behind the meter opportunities) resources to help meet reliability needs.

Goal 5. Strongly advocate for public policies that support VCE’s Vision/Mission.

5.1 Work with a variety of local, regional and state partners, to develop strategies and initiatives to pressure state policy makers to remove barriers to technical feasibility and economic viability of local solar+storage resources, both FOM and BTM.

5.2 As state’s search for affordability solutions proceeds, work with statewide allies to oppose false solutions (e.g., cutting energy efficiency or low-income assistance) and promote the benefits of local energy resources, including climate resilience (reducing cost impacts of outages) and reducing transmission needs.

5.13 Objective: Work with CalCCA and other partners to proactively engage State regulators, legislators, and other State authorities in developing policy that furthers VCE’s mission and facilitates our contributions to decarbonization, grid reliability, energy resiliency, affordability, local programs and social equity.

5.21 Objective: Work with partners and policy makers at the a variety of local, regional and state levels partners, to develop strategies and initiatives to pressure state policy makers to remove barriers to the technical feasibility and economic viability of local solar+storage and other renewable resources, for both in front of the meter and behind the meter installationsFOM and BTM.

5.32 Objective: As state’s search for affordability solutions proceeds, Wwork with statewide allies to develop utility cost reduction rate affordability oppose false solutions, including promotion of local energy resources to enhance climate resilience, reduce cost impacts of grid outages, and reduce needs for transmission investment. (e.g., cutting energy efficiency or low-income assistance) that and promote the benefits of local energy resources, including climate resilience (reducing cost impacts of outages), while and reducing transmission needs.

5.42 Objective: Develop relationships with and provide energy education for community stakeholder organizations that foster support for VCE‘s mission and vision.

5.53 Objective: Optimize regulatory compliance activities.

F) ORGANIZATIONAL GROWTH, DEVELOPMENT AND EFFECTIVENESS, WORKPLACE, AND TECHNOLOGY Human capital is a successful organization’s greatest asset, and at VCE we’ve built a highly talented and dedicated team that will ensure the success and prosperity effectivenewss of our organization. Contracting with Sacramento Municipal Utility District (SMUD) to deliver high quality services and personnel support during launch and early operations has allowed VCE to realize these objectives from the outset. Over the period of this strategic plan, VCE will explore transition from a contract dependent organization to one that balances the values and efficiencies of development and retention of high-quality in-house staff supported by high-quality outside services. Building, valuing, and nurturing this team’s talent will require an start-up adaptive culture that supports creativity, open communication, and the free flow of ideas to spur mission-focused innovation. We will provide an infrastructure within VCE that supports and cultivates our employees through professional and personal development, Item 7 – REDLINED CAC 8/28/25 Mtg.
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recognizes and rewards their contributions to achieving our mission, and offers opportunities that position our people, as well as VCE, for success. In attracting and maintaining skilled employees, VCE will continue to provide a rewarding workplace experience.

Goal 6: Analyze and implement optimal long-term organizational, management growth, and development, and the effectiveness information technology structure at VCE’s services for current and future customers.

6.1 Objective: Develop a roadmap using non-ratepayer funds to evaluate and guide future steps toward formation of a local Publicly Owned Utility (POU).

6.2 Objective: Evaluate and pursue opportunities for shared services with other CCAs for certain functions.

6.3 Objective: Develop an evaluation framework to guide future expansion opportunities beyond the existing service territory. Actively engage with potential growth opportunities and expansion members under the new member policy.

6.4 Objective: Identify optimal management, staffing and contracting structure of VCE in the near and long term; factors include balance of internal staff vs. consultant support services, transition of leadership positions to permanent internal employees.

6.5 Objective: Promote diversity, equity and inclusion in leadership, hiring, promotion, and contracting policies.

6.6 Objective: Support Develop a performance reward system that promotes health, wellness, and a productive workplace.

6.7 Objective: Create an innovation-focused culture that rewards based on active proactive participation, proactive problem solving, new ideascustomer-focused initiatives, and creative use of partnerships and member agencies.

6.8 Objective: Deploy a modernized IT infrastructure Enterprise Resource Planning (ERP) approach that enables knowledge management, dashboard analytics, and collaboration through robust use of live data and information resources.

6.86.9 Objective: Develop a quality management system (QMS) to improve effectiveness and efficiency continuously to meet customer and regulatory requirements.

TIMING, MEASUREMENT AND UPDATES
VCE’s Strategic Plan is a living document that will be revisited and updated regularly. At a minimum, staff will review and update the Plan on an annual basis, including goals, objectives and metrics. In addition, staff will establish an implementation timeline and appropriate reporting format to use in reporting performance against the Plan’s goals and objectives to VCE leadership and Board. The reports, commencing in 2021, will show metrics, status and mitigations where appropriate. Consolidated summary reporting on the status of all high-priority enterprise goals and objectives will be reported out as follows:
• Quarterly Report to VCE Management
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Staff will report quarterly to the Executive Officer on the status of goals, objectives and metrics for which they are responsible.
• Annual Report to Board and CAC
Staff will report annually to the Board and CAC on the status of goals, objectives and metrics, and will recommend any mitigations or amendments as may be necessary for Board approval.

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APPENDIX I

By 2045 all electricity in California is to be Carbon Free.

Valley Clean Energy Board of DirectorsOctober 14, 2025

Valley Clean Energy Board of Directors
October 14, 2025