3.4 Receive Federal Activity Report.
3.5 Approve Payment of California Community Power Annual Dues of Up to $175,000 and Joint Action Share of Up to $90,000 and Special Projects Participation Fees of Up to $300,000 for Fiscal Year 2025-26.
3.6 Award Professional Services Agreement to kW Engineering to Perform Northern Rural Energy Network (NREN) Normalized Metered Energy Consumption Program Support Services for a Not to Exceed Value of $318,000 Through June 30, 2028, and Authorize the Executive Director to Execute all Applicable Documents.
3.7 Award Professional Services Agreement to Frontier Energy to Perform Design Services for the NREN Finance Equity Program for a Not to Exceed Value of $98,020 Through December 31, 2025, and Authorize the Executive Director to Execute All Applicable Documents.
3.8 Authorize the Purchase of ChargePoint Electric Vehicle CP6000 “Head Units” from Campton Electric at a Price Not to Exceed $71,177.40 and Authorize Executive Director to Execute All Applicable Documents in Fulfillment of California Energy Commission Rural Electric Vehicle Charging Grant Requirements.
3.9 Approve Amendment to the Professional Services Agreement with Gallagher Benefit Services to Include the Addition of an Organizational Assessment for a Total Not-toExceed Value of $83,600 and Authorize the Executive Director to Execute all Applicable Documents.
3.10 Approve Amendment No.3 to the Professional Services Agreement with Sierra Business Council in the Amount of $120,000 for RuralREN North Startup Activities and Authorize the Executive Director to Execute All Applicable Documents.
No member of the Board or public requested consent calendar item discussion.
M/S: Schaefer, Woo: Approve Consent Calendar items.
The motion passed with a unanimous vote. Ayes: Arroyo, Bauer, Diaz, Gerace, Jorgensen, Napier, Ramos, Schaefer, Wilson, Woo. Noes: None. Absent: Tuttle. Abstain: None.
NEW BUSINESS
6.1 Financial Audit for Fiscal Years Ending June 30, 2022, and 2023 Auditor Baker Tilly’s Bethany Ryers presented results of the fiscal year 2021-22 and 2022-23 audits, and a fiscal year 2021-22 single year audit as required by a Federal loan. RCEA’s financial statements and procedures received the highest level of accuracy assurance with notes to improve financial statement closings, a common finding for agencies of RCEA’s size.
The directors discussed the handling of doubtful and aging accounts. Staff and the auditor anticipate beginning fiscal year 2023-24 and 2024-25 audits in August. There was no public comment on this item.
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M/S: Arroyo, Jorgensen: Accept and approve Redwood Coast Energy Authority Financial Statements June 30, 2023, and 2022, Associated Independent Auditors’ Report, and Report on Federal Awards by Baker Tilly US, LLP.
The motion passed with a unanimous vote. Ayes: Arroyo, Bauer, Diaz, Gerace, Jorgensen, Napier, Ramos, Schaefer, Tuttle, Wilson, Woo. Noes: None. Absent: None. Abstain: None.
COMMUNITY CHOICE ENERGY (CCE) BUSINESS - Chair Bauer confirmed that a CCE quorum was present.
OLD CCE BUSINESS
7.1 Old CCE Business: Semiannual Energy Risk Management Report Director of Business Planning and Finance Biondini presented the semiannual Energy Risk Management Report as it pertained to the agency’s financial position. The Energy Authority, RCEA’s energy market trader and risk management consultant, forecasted electricity generation rates to decrease and the Power Charge Indifference Adjustment to increase.
While RCEA revenues will decline next year, customers can expect some electricity generation savings. Power Resources Director Engel reported that RCEA electricity sales have also decreased. The number of residential and nonresidential customers went down by
2.5% and 2.3% respectively between 2022 and 2024. The decrease was not due to CCE program opt-outs. Staff noted a reported decrease in the number of indoor grow houses in Arcata and a decline in the larger local cannabis industry. Sun Valley Floral Farms’ closure also contributed to lower electricity usage, and termination of office leases for federal agencies may further contribute to this. Nordic Aquafarms extended their development timeline and staff do not expect near-term electricity load increases.
The directors noted that while electricity generation rates may decrease, electricity bills will likely remain high because transmission costs have gone up to pay for wildfire mitigation and infrastructure hardening. The group discussed how lower loads affect rates, how cost-ofservice rate setting may lessen the extreme ups and downs of the agency’s financial outlook, and how to increase RCEA’s customer base. In June, the Board will discuss how local renewable energy development and sourcing should be prioritized in power procurement decision making. There were no public comments on this item.
M/S: Schaefer, Gerace: Accept Energy Risk Management Semiannual Report.
The motion passed with a unanimous vote. Ayes: Arroyo, Bauer, Diaz, Jorgensen, Napier, Schaefer, Tuttle, Wilson. Noes: None. Absent: None. Abstain: None. Non-Voting: Gerace, Ramos, Woo.
Director Arroyo noted that Director Gerace could not vote on, nor second, a CCE Business item.
M/S: Schaefer, Bauer: Accept Energy Risk Management Semiannual Report.
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The motion passed with a unanimous vote. Ayes: Arroyo, Bauer, Diaz, Jorgensen, Napier, Schaefer, Tuttle, Wilson. Noes: None. Absent: None. Abstain: None. Non-Voting: Gerace, Ramos, Woo.
NEW CCE BUSINESS
8.1 New CCE Business: Approve Community Choice Energy Funded Programs for Fiscal Year 2025-26
Executive Director Burks described programs which staff propose to be funded in the next fiscal year at least in part by CCE program electricity sales revenues. These programs would:
install new and maintain existing electric vehicle charging stations; fund staff time to draft Tribal Energy Resilience and Sovereignty (TERAS) Program microgrid development contracts; provide an annual cash out for net energy metering solar customers; encourage local Feed-In Tariff and Bioenergy Market Adjusting Tariff renewable energy projects; operate and maintain the Redwood Coast Airport Microgrid; and coordinate regional energy planning, strategic energy planning and increase community engagement in these processes. The directors discussed TERAS federal funding status. There were no public comments.
M/S: Schaefer, Napier: Approve the proposed programs funded by revenue generated from electricity sales and direct staff to include the programs in the fiscal year 2025-2026 budget for full Board adoption.
The motion passed with a unanimous vote. Ayes: Arroyo, Bauer, Diaz, Jorgensen, Napier, Schaefer, Tuttle, Wilson. Noes: None. Absent: None. Abstain: None. Non-Voting: Gerace, Ramos, Woo.
NEW BUSINESS (Continued)
10.1 New Business: Proposed Fiscal Year 2025-2026 Budget Introduction Executive Director Burks described how staff developed next fiscal year’s proposed budget, which the Board Finance Committee reviewed and approved. The draft budget prioritizes efficient internal operations, excellent delivery of existing programs, and community engagement and planning. About half of RCEA’s staff joined the agency since the pandemic, and internal file and payroll systems and organization structure must be updated to match RCEA’s workload and size. Staff stressed the importance of reaching and maintaining financial reserve goals to lower power procurement and other operational costs and to enable reserve fund investment. Management of the new Northern Rural Energy Network’s energy efficiency programs is expanding RCEA’s responsibilities and budget. Adequate staffing and support are needed to ensure effective delivery of this and other RCEA programs. Increased community outreach will better position RCEA for success when transitioning to a cost-ofservice rate setting model, which may allow RCEA to operate more independently from PG&E’s actions. Increased outreach will also engage the broader community when updating RCEA’s strategic plan.
Revenue projections for the next fiscal year are down compared to the current year, but expenses are not decreasing as much, leading to a decrease in net revenue from $13.8 million this year to $5 million next year. Staff recommend putting all net revenue into cash July 16, 2025
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reserves, as financial modeling shows negative net revenues for the following two years. The 2025-2026 budget includes external funding for various programs, increased personnel costs, and plans to reinstate renewable energy targets for calendar year 2026.
The directors discussed but did not oppose the proposed 6% cost of living allowance increase, an interim budget measure until full Classification and Compensation study results and any recommended salary adjustments are introduced for Board consideration mid-year.
The group discussed RCEA’s current building leases and the need to study whether designing and constructing an office building is feasible versus refurbishing an existing building or continuing to lease office space in the current construction market. Board members asked that a rebate and incentive program funding increase be considered during the midyear budget adjustment. There were no public comments on this matter.
STAFF REPORTS
11.1 Executive Director’s Report
RCEA and Schatz Energy Research Center’s battery storage workshop has been rescheduled for 5:30 p.m. on Wednesday, July 23, at Arcata’s D Street Neighborhood Center.
The Eureka City Council requested an electricity affordability presentation based on the RCEA Board’s April study session. Executive Director Burks offered staff presentations on what’s in an electricity bill to other member agency councils and boards. There were no public comments.
FUTURE AGENDA ITEMS
Director Wilson requested a staff report on artificial intelligence’s (AI’s) effect on Humboldt County’s power grid and customers’ electricity access. Chair Bauer recommended the Board Directors ask their agencies’ governing bodies to support SB 254, the Family Electric Rate Assistance program.
Chair Bauer adjourned the meeting at 6:02 p.m.
Lori Taketa
Board Clerk
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ADJOURN
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