Staff Report
DATE: June 26, 2025
TO: Clean Energy Alliance Board of Directors
FROM: Andy Stern, Chief Financial Officer
ITEM 8: Consider Adoption of Resolution No. 2025-026, Approving the Fiscal Year 2025/2026 Budget
RECOMMENDATION:
That the Clean Energy Alliance (CEA) Board a dopt Resolution No. 2025-026 approving the Fiscal Year 2025/2026 Budget.
BACKGROUND AND DISCUSSION:
At its May 29 , 2025 regular meeting, the Clean Energy Alliance (CEA) Board reviewed and discussed a preliminary version of the Fiscal Year 2025/2026 Budget.
The following key assumptions were used to develop the preliminary Budget:
• Revenue based on current adopted rates and projected usage • Power supply costs based on actual executed contracts and a recent version of forward energy price curves
• Reasonable power supply cost contingency based on historical volatility • Consulting services based on approved contracts
At that meeting, the Board asked questions about various budget assumptions. Based on those questions and the direction of the Board, Staff is proposing a FY 2025/2026 Budget for approval that is unchanged from the preliminary version that was presented to the Board on May 29, 2025.
Proposed Fiscal Year 2025/2026 Operating Budget
The FY 2025/2026 proposed budget is based on the following priorities and goals:
Financial Stability
Meeting Regulatory Compliance
Meeting Line of Credit Covenants
Supporting the Achievement of Member Agency Climate Action Plan Goals
A. Energy Expenses
The single largest expense category for CEA is Energy procurement representing more than 96% of total expenses. Costs are budgeted at $333.5 million, an increase of $24.8 million in the upcoming fiscal year as compared to the year-end forecast for the FY 2024/2025 year despite recent declines in projected pricing for attributes (e.g. Resource Adequacy and Renewable Energy Credits) . Costs are projected to be higher as a result of a full year of service to Oceanside, Vista, and the Channelside desalination plant (the prior year June 26, 2025
Proposed FY 2025/2026 Budget
included partial year service). In addition, the proposed budget includes a 10% contingency (equal to $28.7 million). Given the volatile nature of energy costs, Staff recommends a 10% contingency to ensure that we have adequately protected against unexpected increases. If some or all of the contingency is not necessary, any difference will revert back into the general fund.
B. Other Operating Expenses
The Proposed Budget also reflects an increase of approximately $3. 9 million in the projected cost of Other Operating Expenses (excluding Energy expenses) . The budgeted line item for Programs of $2.0 million represents more than 50% of that increase. In the prior year, $600,000 was allocated to Programs but none of that allocation was spent. All other expense increases reflect increased activity relative to expanded territory as well as an increase in staffing levels to support the increased activity.
Forecast through Proposed Budget
6/30/2025 F Y2025-2026
Total Operating Revenues $350,984,553 $383,146,909
Resource Adequacy 49,509,059 69,054,700 Energy Purchases 160,845,050 157,078,636 Energy Carbon Free 6,203,429 7,860,061 Congestion Revenue Rights (2,350,356) - RECS Purchases PCC1 71,549,627 65,056,940 RECS Purchases PCC2 4,000 - CAISO 17,400,006 3,164,522
CAISO Chg/Credit Other 327,655 - Broker Fees 419,197 -
VAMO Adjustment - - Contingency 2,280,755 28,716,809
Total Cost of Energy 306,188,422 330,931,667 NEM Expense 2,547,883 2,608,654
Total Cost of Energy 308,736,305 333,540,321
Forecast through Proposed Budget
6/30/2025 FY2025-2026
Communications and Outreach 361,518 409,791 General and Administrative 941,954 1,080,635 Consultants & Professional Services 6,423,201 7,142,001 Staff compensation 1,691,506 2,730,818 Programs - 2,000,000 Total Other Expenses (excluding Energy) 9,418,179 13,363,246 June 26, 2025
Proposed FY 2025/2026 Budget
C. Revenues
The primary source of revenue comes from payment of customer electricity rates. CEA sets customer rates based on the following priorities:
Address cash flow needs
Rate Stability
Financial stability and credit rating
JPMorgan credit line covenant compliance
o Result in revenues sufficient to recover costs and fund reserves o Meet Debt Service Coverage Ratio & Days Liquidity on Hand Fund Board-established operating reserve policy
Sufficient funding to support increased renewable energy procurement to achieve climate goals and implement local programs
Rates competitive to SDG&E
The Board previously approved customer rate increases at its meeting on June 27, 2004. Staff believes the current rates are sufficient to provide adequate revenues to meet all of the above priorities for the proposed Budget and for the following 4 years of operations.
D. Overall Budget
The forecasted FY 2024/2025 Budget and the proposed FY 2025/2026 Budget are as follows:
E. Five-Year Outlook
CEA has grown to be an organization serving electricity to more than 250,000 customers and generating $388 million in revenues. Customers depend on the stability of CEA’s operations based on CEA’s financial stability and to meets its obligations even if energy costs are volatile. To that end, Staff believes it important to take a long-term view of the organizations expected financial results and position. While the Board is only approving a Budget covering the upcoming one-year period, it is expected that t he current rates will be Forecast through Proposed Budget
6/30/2025 F Y2025-2026
Total Operating Revenues $350,984,553 $383,146,909
Total Cost of Energy 308,736,305 333,540,321
Other Expenses (excluding Energy) 9,418,179 13,363,246 Total Operating Expenses 318,154,485 346,903,567 Operating Income (Loss) 32,830,068 36,243,342
Total Nonoperating Income/(Expense) (1,077,968) (380,692) CHANGE IN NET POSITION $31,752,100 $35,862,650
Net Position at the end of period $14,787,266 $50,649,916 June 26, 2025
Proposed FY 2025/2026 Budget
sufficient to meet obligations for at least the following 4 years while building financial reserves consistent with industry norms.
The proposed FY 2025/2026 Budget along with the estimated Net Position for each of the following four fiscal years is as follows:
FISCAL IMPACT:
Revenues from energy sales to customers would provide sufficient funds for the proposed expenditures and the required contribution to reserves.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Resolution No. 2025-026, Approving the Fiscal Year 2025/2026 Budget
Proposed Budget Outlook Outlook Outlook Outlook
FY2025-2026 FY2026-2027 FY2027-2028 FY2028-2029 FY2029-2030 Total Operating Revenues $383,146,909 $388,089,267 $383,501,212 $383,507,082 $383,513,055 Total Cost of Energy 333,540,321 334,844,585 312,629,543 298,903,726 297,664,935 Other Expenses (excluding Energy) 13,363,246 16,646,758 20,674,112 25,379,524 31,715,530 Total Operating Expenses 346,903,567 351,491,343 333,303,655 324,283,250 329,380,465 Operating Income (Loss) 36,243,342 36,597,923 50,197,557 59,223,832 54,132,590 Total Nonoperating Income/(Expense) (380,692) (3,635) 444,240 1,481,379 2,703,573 CHANGE IN NET POSITION $35,862,650 $36,594,289 $50,641,797 $60,705,211 $56,836,163 Net Position at the end of period $50,649,916 $87,244,205 $137,886,001 $198,591,212 $255,427,375 C EA No. Resolution 2025-026
FY 2026-2026 Budget
E
xhibit A
Proposed Budget
FY2025-2026
Total Operating Revenues $383,146,909
Total Cost of Energy 333,540,321
Other Expenses (excluding Energy) 13,363,246
Total Operating Expenses 346,903,567
Operating Income (Loss) 36,243,342
Total Nonoperating Income/(Expense) (380,692)
CHANGE IN NET POSITION $35,862,650
Net Position at the end of period $50,649,916
Staff Report
DATE: June 26, 2025
TO: Clean Energy Alliance Board of Directors
FROM: Greg Wade, Chief Executive Officer
ITEM 9: Consider Adoption o f Resolution Nos. 2025-027, 2025-028 and 2025-029 Approving the Fiscal Year (FY) 2025/26 – 2026/27 Work Plan, an Amendment to the Clean Energy Alliance Position Control Listing and Amendment to the Adopted Salary Schedule, Respectively
RECOMMENDATION:
That the Clean Energy Alliance (CEA) Board:
1) Adopt Resolution No. 2025-027 approving the FY 2025/26 – 2026/27 CEA Work Plan 2) Adopt Resolution No. 2025-028 amending the CEA Position Control Listing for FY 2025/26 3) Adopt Resolution No. 2025-029 amending the CEA Salary Schedule
BACKGROUND AND DISCUSSION:
At the Board Meeting on April 24, 2025, the CEA Board (Board) adopted Resolution No. 2025-018 approving the FY 2025/26 CEA Strategic Plan (Strategic Plan) . Also during that meeting, the Board reviewed and discussed the FY 2025/26 Work Plan (Work Plan). The Strategic Plan was developed through review of key formation documents, prior Board direction and input gathered from meetings of the Community Advisory Committee (CAC). The Strategic Plan sets forth CEA’s core guiding principles, goals and objectives for the next two years while the Work Plan is intended to identify specific implementation measures and key performance indicators to track progress towards meeting goals and objectives of the Strategic Plan. The Work Plan is also inte nded to set forth the priorities for staff to carry out as directed by the Board. Finally, the Work Plan identifies key partners/consultants and staff identified to lead the implementation of each listed objective.
The Strategic Plan consists of Core Guiding Principles , Goals and Objectives for CEA to follow in the next two years. The Core Guiding Principles of the Strategic Plan around which the Work Plan is based are:
1. Promote Use & Development of Clean Energy – reduce GHG emissions by providing 100% renewable energy as the default product for all CEA customers by 2035.
2. Build & Maintain Financial Sustainability – achieve financial sustainability and build reserves.
June 26, 2025
Work Plan, Position Control Listing & Salary Schedule
3. Provide Beneficial Customer Programs – offer a variety of programs that serve the needs of our customers, promote affordability, address communities of concern and further reduce GHG emissions.
4. Actively Engage in Customer Advocacy – engage and advocate for CEA and its customers in regulatory and legislative matters.
5. Provide Exceptional Customer Service & Community Engagement – provide highly responsive and helpful customer service and opportunities for our staff to engage with our customers and the communities in which they live.
6. Promote Organizational Development – create an organization that fosters employee creativity and engagement in meeting CEA’s goals, recognizes employee achievements and supports employee development and growth.
Each of the se Six Core Guiding Principles are broken down into specific Goals and Objectives to be implemented through the Work Plan. The Work Plan prioritizes the Goals and Objectives of the Strategic Plan in alignment with prior Board direction and input from the CAC and community members and identifies specific implementation Measures, Key Performance Indicators (KPI) , Staff Leads, Key Partners and Funding Source for each Objective. It is anticipated that the Work Plan will be an evolving document that can be modified over time to include or adjust to updated Board priorities.
Position Control Listing & Salary Schedule
Given the scope and breadth of the Work Plan, additional staff support will be needed both to carry out its implementation measures and to decrease dependency on consultant services upon which CEA has largely relied since its inception. As such, the FY 2025/26 Budget contemplates six (6) additional positions to support operational needs in the areas of power supply, energy programs, regulatory/legislative engagement and/or administrative support. Should the Board approve the FY 2025/26 Budget, Staff will return at a future Board meeting to identify the added positions along with recommended salaries.
At the CEA Board Meeting on January 30, 2025, the Board amended the CEA Position Control Listing by adding four (4) new positions during FY2024/2025 , which have since been filled, along with two (2) additional positions in FY2025/2026. The two positions authorized last January for FY2025/2026 included a Financial Analyst and an Administrative Clerk. As reported at the Board Meeting on May 29, 2025, it is recommended that, in addition to the Clerk to the Board/Executive Assistant (already filled), a candidate from that recruitment also be hired to fill an Executive Assistant/Office Manager position beginning in the next fiscal year . The latter of these positions would effectively replace the previously authorized Administrative Clerk with the combined salaries and resulting budget impact of these two positions being roughly equal. These positions provide additional executive, operational and administrative support as well as providing backup support for one another as needed.
The addition of two positions in the Position Control Listing is not expected to impact the FY 2025/26 Budget as they are replacing existing funded positions in the current Position Control Listing. The Executive Assistant/Office Manager position will replace the Administrative Clerk position already contemplated in the FY 2025/26 Budget. Similarly, the Senior Power Procurement Manager position will be filled by existing staff, which is also accounted for in the FY 2025/26 Budget. Other elements of the Work Plan will be funded in the proposed Operations Budget or, where applicable, through grant funding June 26, 2025
Work Plan, Position Control Listing & Salary Schedule
sources such as the state’s Self Generation Incentive Program (SGIP). Staff is seeking the Board’s approval of the following two positions in the CEA’s Position Control Listing and Salary Schedule:
POSITION ANNUAL SALARY RANGE
Executive Assistant/Office Manager $98,000 - $164,000 Senior Power Procurement Manager $145,000 - $280,000
Staff is seeking Board approval of an amended Position Control Listing and Salary Schedule to create and fill an Executive Assistant/Office Manager position as well as adding a Senior Power Procurement Manager to provide proper operational structure in the Power Supply Department.
FISCAL IMPACT:
As noted above, the requested approval of the FY 2025/26 – 2026/27 Work Plan and the amendments to CEA’s Position Control Listing and Salary Schedule are not expected in increase costs beyond those already contemplated and incorporated into the FY 2025/2026 Budget.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Resolution No. 2025-027 approving the FY 2025/26 – 2026/27 CEA Work Plan B. Resolution No. 2025-028 amending the CEA Position Control Listing for FY 2025/26 C. Resolution No. 2025-029 amending the CEA Salary Schedule D. Fiscal Year 2025/26 – 2026/27 Final Work Plan
CEA FY26-27 Work Plan
Guiding Principle # Objective Measure KPI Staff Lead Key Partners Funding Source
1. CLEAN ENERGY a)
Gradually increase CEA’s Renewable Portfolio Standard (RPS) to achieve 100% renewable energy
Increase base RPS to 55% in 2026, 60% in 2027,
75% for 2028-2030, and 100% by 2035.
Meet or exceed the aforementioned
RPS targets for each calendar year. Dan P PEA Operational Budget b)
Sup
port customer retention and engagement by highlighting
customers that have opted up to CEA’s 100% renewable energy Green Impact product
- C
ontinue implementation of Green Impact
Champion Program
- A
dd at least one more member
agency to our Green Impact
Champions list per year
- A
dd two new Green Impact
Champion businesses per year
-
H
ost one Green Impact
Champions recognition event to
r ecognize commercial participants Kaitlin M & Rob H Tripepi Smith Operational Budget c)
Sup
port achievement of member agencies’ CAP goals for building decarbonization and energy efficiency goals through customer access to grant-funded and/or ratepayer-funded energy efficiency programs
- P
ursue programs through the SoCal EBD Grant
Coalition or SDREN
- T
ap into existing ratepayer funds to implement
energy efficiency programs
- Su
pport member cities in achieving their CAP
GHG Reduction Goals
- Monitor each member agency
CAP for compliance with its goals
- Su
bmit application to Elect to
Administer Energy Efficiency funds
-
E
stablish a policy for member
cities to adjust their default energy
product
- P
resent a draft policy for Board
Adoption by May 2026 Kaitlin M & Rob H
Member Agency Staff,
Frontier Energy. PEA Operational Budget
d)
Pu
rsue local generation and dispatchable capacity projects, including in partnership with member agencies to utilize publicly owned facilities for solar and energy storage projects
- T
otal MW of local generation and dispatchable
capacity projects
- N
umber of relevant program offerings for
publicly owned facilities
- 15MW of local PPAs or ESSAs
executed by 2026
- 1
0MW of local PPAs or ESSAs
operational by 2028
- 1
-2 program offerings for publicly
owned generation and/or capacity
by
2026
Dan P
(PPAs/ESSAs)
Rob H / Kaitlin M
(program) Program partner (TBD) Operational Budget
2. F
INANCIAL STABILITY a)
Achieve sufficient financial reserves with a minimum of one hundred twenty (120) days liquidity on hand (DLOH) to mitigate the impact of energy cost volatility on customer rates and support rate stability. - End FY2025 with positive Net Position
- E
xtend JP Morgan Line of Credit
- Bu
ild reserves to meet all applicable targets
- End FY2025 with positive Net
Position
- E
xtend JP Morgan Line of Credit
- Bu
ild reserves to meet all
applicable targets Greg W/Andy S Operational Budget
b)
Minimize procurement and financing costs through achievement of investment grade credit rating Obtain investment grade credit rating by 2028 Obtain investment grade credit
rating by 2028 Greg W/Andy S JPMorgan Operational Budget c)
Analyze and adjust the rate premiums for the Clean Impact Plus and Green Impact energy products to ensure appropriate cost recovery. - Biannually calculate difference between cost
of
each rate product and the corresponding
premium.
Ensure rates are covering costs
annually Dan P PEA Operational Budget
d)
Support customer retention by offering competitive rates while maintaining financial stability and achieving renewable/clean energy goals. - Focus on building financial reserves
M
aintain rate competitiveness
including lower PCIAs Staff Keyes & Fox Operational Budget e)
Reduce Resource Adequacy (RA) costs by reducing peak load through energy demand management programs.
- Develop/Implement demand response
p
rograms Staff PE A Operational Budget
3. CUSTOMER PROGRAMS a)
Provide customers with access to programs that reduce energy use and address high electric bills
-
C
ontinue to implement Solar Plus and Battery
Bonus Programs
- I
mplement PeakSmartSavers Program
- Implement PeakSmart Savers
Program
-
I
mplement Grid Services for
battery dispatch Kaitlin M & Rob H P.E
Operational &
Programs Budget
b)
Provide access to solar and battery storage (and other Energy Programs) to all segments of the community that contributes to cost savings and decreases energy usage during peak periods while increasing the availability of and reliance upon clean energy. - Establish a policy that creates a fair and
ef
fective distribution of programs that benefits
all segments of the community and supports
CEA’s broader goals of sustainability and equity
Present a draft policy for Board
Adoption by May 2026 Kaitlin M & Rob H P.E, Calpine, TBD Operational &
Programs Budget
Attachment D
Guiding Principle # Objective Measure KPI Staff Lead Key Partners Funding Source c)
Expand access to solar and battery systems at significantly reduced costs to low-income customers
- Implement Solar Plus Connect Program
- Implement Battery Bonus Program
Achieve a 1% conversion rate for
the Battery Bonus Program. Kaitlin M & Rob H P.E
SGIP/Operational
Budget/Programs
Budget
d)
Retain customers and encourage participation in State funded income-based assistance programs Apply for SGIP assistance for eligible customers - Enroll 50-100 customers in Solar
Plus Connect the first year of
funding availability
- Enroll 50 customers in Battery
Bonus Program Kaitlin M & Rob H P.E
SGIP/Operational
Budget
e)
W
ork with member agencies to identify and design energy programs for government on City-owned properties or community hubs Participate in SDREN to develop and implement
programs
Regularly report out CPUC required
participation metrics tracked by
SDREN
Kaitlin M & Rob H SDCP
SDREN/Operational
Budget
f)
Collaborate with San Diego Regional Energy Network (SDREN) and Southern California Regional Energy Network (SoCal REN) to expand programs offered to CEA customers Develop and Implement programs - Execute MOU;
- Develop Programs with SDCP &
County Kaitlin M & Rob H SDCP
SDREN/Operational
Budget
4. CUSTOMER ADVOCACY a)
Maintain participation in legislative and regulatory proceedings that support CEA’s guiding principles and goals Work with Regulatory Counsel and hired lobbyist - Engage with Lobbyist;
- Engage with Keyes & Fox Emily F
Keyes & Fox
Summit Operational Budget
b)
Actively advocate for CEA and its customers in issues such as affordability, renewable energy procurement, and local control Hire a lobbyist to assist Legislative advocacy Emily F Keyes & Fox Operational Budget c)
Monitor and advocate for fair and reasonable Power Charge Indifference Adjustment (PCIA) charges
Work with Regulatory Counsel on PCIA/ERRA
proceeding Emily F Keyes & Fox Operational Budget
d)
Engage with local elected officials to communicate benefits CEA provides its customers and influence legislative decisions that support CEA's goals.
Annual City Council presentations to Member
Agency's Councils Greg W/Staff CalCCA Operational Budget
5. CUSTOMER
SERIVCE/ENGAGEMENT
a)
I
ncrease CEA’s presence in the communities served and provide accurate information to customers
- Continue marketing, education and outreach
efforts
- Directed social media effort
- Increase social media followers
by [__] % annually
- Develop a toolkit for CBOs to
share information about CEA &
programs. Staff Tripepi Smith Operational Budget
b)
Promote CEA as the preferred customer-focused renewable energy service provider in North San Diego County and add value to the community and the environment
- Continue marketing, education and outreach
efforts. Improve strategic account management
and stakeholder relationships Develop strategic
relationships with large and/or under-
represented commercial customers and
community based organizations
- Directed social media effort
- Develop relationships with 20% of
the top 50 highest users by July
2026
- Establish a bench of partner
CBOs by July 2026. Staff Tripepi Smith Operational Budget c)
Engage with CEA customers to provide information about CEA’s programs, services and benefits; maintain strong customer participation and communication; and, gather feedback from customers and community members
- Co-host or host informational sessions,
workshops, and community forums to educate
residents and businesses about CEA
- Collaborate with local organizations,
businesses, and government agencies to expand
outreach efforts
- Work with newspapers, radio stations, and
local TV channels to feature stories and
advertisements about the CEA program
- Develop brochures, flyers, and FAQs that
explain how CEA works and its benefits and
introduce educational programs in local schools
to raise awareness among students and their
families
- Improve trust and communication with CEA's
customers
Increase external advertising
partnerships by [__] % in FY 2026.
Partner with at least 2 Spanish
language media outlets Staff Tripepi Smith Operational Budget d)
D
evelop a comprehensive customer communications strategy to reach CEA's diverse communities.
- Develop brochures, flyers, and FAQs that
explain how CEA works and its benefits and
introduce educational programs in local schools
to raise awareness among students and their
families
- Improve trust and communication with CEA's
Develop a plan in FY 2026.
Complete a review of marketing
collateral. Kaitlin M & Rob H Tripepi Smith Operational Budget Guiding Principle # Objective Measure KPI Staff Lead Key Partners Funding Source
6. ORGANIZATIONAL
DEVELOPMENT a)
A
chieve continuity in operations by developing or expanding upon key operational processes and procedures such as key workflows, performance evaluations, and recruitment and onboarding Expand staff per Board-approved Position
Control Plan
- Hire four employees in FY 2025
per Position Control Plan
- Hire two employees in FY 2026
per Position Control Plan Greg W Recruiting Consultant Operational Budget b)
Support employee development through participation in California Community Choice Association's committees, workshops and conferences.
- Assign/Attend CalCCA Committees
- Attend Annul CalCCA Conference (all staff) Greg W/Staff Operational Budget c)
Encourage employee participation in professional education opportunities.
- New CEA staff participation in the upcoming
USD EPIC Energy Academy Cohort (3). Greg W/Staff Operational Budget