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Home My WebLink About2020-05-21; Clean Energy Alliance JPA; ; Review and Provide Input on Clean Energy Alliance Proposed Fiscal Year 20/21 BudgetClean Energy Alliance JOINT POWERS AUTHORITY Staff Report DATE: May 21, 2020 TO: Clean Energy Alliance Board of Directors FROM: Barbara Boswell, Interim Chief Executive Officer ITEM 3: Review and Provide Input on Clean Energy Alliance Proposed Fiscal Year 20/21 Budget RECOMMENDATION: Receive and provide input on Clea n Energy Alliance Proposed Fiscal Year 20/21 Budget and direct st aff t o return a final budget for adoption on June 18, 2020. BACKGROUND AND DISCUSSION: In the coming fisca l year, CEA will be focused on the procurement, regulatory and administrative activities related to its May 2021 launch. The work plan includes: Timinl! 7/1/20 7/16/20 7/16/20 7/16/20 7/16/20 7/16/20 7/16/20 7/16/20 8/1/20 8/20/20 11/1/20 11/1/20 1/1/21 2/1/21 3/1/21 5/1/21 May 21, 2020 Clean Energy Alliance Timeline of Action Items CCA Program Related Description MarketinR/Customer Outreach Plan Development & Kickof Approve Policies: Inclusive & Sustainable Workforce Policv Unsolicited Prooosals Policv Non-Enernv Procurement Policy Records Retention Policv Investment Policy Enerl!V Risk Manal!ement Policv Review Authorize RFO for Wholesale Energy Services RFO for Lon2-Term Renewables RFO for Resource Adeauacv Bid Evaluation and Criteria Scoring System Award Schedulino Coordinator & Wholesale Enerov Services Establish Communitv Advisorv Committee Enerl!v Risk ManaRement Policy Develooment Approve Energy Risk Manaoement Policv Strategic Plan Svstem Testino with SDG&E Set uo Call Center/Scriotino/lVR Recordinos Create Customer Pre· and Post-Enrollment Notices Rate Settinl! Customer Noticinl! Launch Kev: Board Actions/Activity Staff/Consultant ActivitY MarketinR/Customer Outreach CCA Launch 3rd Qtr 4th Qtr 1st Qtr '20 '20 '21 APr-21 May-21 Jun-21 Item #3 Jul-21 7 Page 1 of 4 May 21, 2020 FY 20/21 Proposed Budget Page 2 of 4 At its April 16, 2020 meeting the Board provided direction to continue existing consulting services agreements to support CEA's launch. The budget as currently proposed reflects the extension of existing contracts as well as the additional services that are projected to be needed. FISCAL YEAR 20/21 PROPOSED BUDGET Staffing/Consultants Legal Services Professional Services CalCCA Membership & Dues Print/Mail Services Advertising Graphic Design Services Website Maintenance Audit Services CCA Bond OPERATING EXPENDITURES CAISO Deposit Cash Flow & Lockbox Reserves NON-OPERATING EXPENDITURES TOTAL $ FY 19/20 B d u 1get 50,000.00 130,000.00 115,000.00 1,500.00 6,500.00 147,000.00 450,000.00 - $ 450,000.00 Clean Energy Alliance FY 19/20 Estimates and FY 20/21 Proposed Budget FY 19/20 E • st1mates $ 40,000.00 75,000.00 79,000.00 1,500.00 100,000.00 295,500.00 - $ 295,500.00 $ FY 20/21 d Prooose 120,000.00 320,000.00 310,000.00 15,000.00 132,000.00 10,000.00 10,000.00 2,500.00 40,000.00 47,000.00 1,006,500.00 500,000.00 2,500,000.00 3,000,000.00 $ 4,006,500.00 NOTES Interim CEO, other staffing needs General Counsel & Special Counsel Energy Consultants, Communications & Marketing & Other Support Affliliate Membership 19/20, Operational Membership 20/21 Required mailers (58,000 • 4 mailers • $.56) Public Hearing Notices Logo/Mailers/Letterhead etc Monthly Website Maintenance Annual Financial Audit Required Participation in Congestion Revenue Rights Lockbox Reserve/Cash Flow The proposed budget summarizes expenditures into Operating and Non-Operating categories. Operating expenditures include funds for interim CEO, legal, technical consultants and marketing and communications. Non-operating expenditures include the CAISO deposit required for participate in the CAISO's congestion revenue rights program. In addition, it includes the estimated funds needed to for cash flow purposes and lockbox reserves that will be required by energy suppliers. Not to exceed amounts for existing agreements included in the proposed budget include: Interim Chief Executive Officer Bayshore Consulting Group $100,000 General Counsel RWG Law $120,000 Special Counsel -Regulatory Tosdal APC $100,000 Special Counsel -Energy Hall Energy Law $85,000 Transactions Technical Consultants Pacific Energy Advisors $163,200 Authorization to extend the existing agreements will be considered by the Board in separate actions. May 21, 2020 Item #3 Page 2 of 4 May 21, 2020 FY 20/21 Proposed Budget Page 3 of 4 The founding member agencies have been providing the following services to CEA through agreements: City of Carlsbad City of Del Mar City of Solana Beach Interim Secretary, Communications, clerk/hosting meetings Clerk/hosting meetings Interim Treasurer, Accounting, clerk/hosting meetings The term of the existing agreements with the member agencies is through June 30, 2020. Staff has discussed with the member agencies the capacity the city staff have of continuing to perform these services. Through these discussions it has been determined that the member agencies can no longer provide the communications, clerk/hosting and accounting support it has been providing. Carlsbad can continue to be the Interim Board Secretary of record and Solana Beach can continue to provide interim Treasurer support. CEA will need to seek outsourcing opportunities for clerk services for board meetings, communications and marketing services and accounting services. The Board will be considering authorization of Request for Proposals in a separate agenda item. Funds have been included in the staffing/consulting services and professional services line items in the proposed budget. FISCAL YEAR 20/21 FUNDING STRATEGY CEA will begin serving customers in May 2021. The typical cash flow of an operational CCA is depicted below: Month 1 Customer Uses Power Month 2 Customer is billed Month 3 Customer Payments Received As demonstrated by the flow chart above, CEA will not begin receiving customer payments until July 2021. As a result, CEA will need to obtain financing of its FY 20/21 budget, including funds for short-term cash flow needs, from 3rd parties. Staff is continuing to work with financial institutions and Calpine related to financing opportunities to fund the FY 20/21 budget. May 21, 2020 Item #3 Page 3 of 4 May 21, 2020 FY 20/21 Proposed Budget Page 4 of 4 As indicated in the Treasurer's report, it is anticipated that CEA will incur $295,500 in expenditures through June 30, 2020, leaving $154,500 in remaining funds available for fiscal year 20/21. Total funding needed for the proposed fiscal year 20/21 budget: Proposed Budget: Funds available from 19/20 Total Financing Needed Possible Calpine loan Financing from Bank $4,006,500 154,500 $3,852,000 650,000 $3,202,000 Staff will bring a recommendation to the Board for a financing strategy at its June 18, 2020 meeting. FISCAL IMPACT The CEA Board is providing input to the proposed fiscal year 20/21 budget that will be brought back for adoption on June 18, 2020. The proposed budget will be financed through remaining funds from FY 19/20 and loans from 3rd parties/financial institutions. The financing strategy will also be brought to the Board for approval on June 18, 2020. ATTACHMENTS: None May 21, 2020 Item #3 Page 4 of 4 Item 3: Clean Energy Alliance FY 20/21 Draft Budget Barbara Boswell, Interim Chief Executive Officer 5/21/20 CLEAN ENERGY ALLIANCE 14 Item 3: Clean Energy Alliance FY 20/21 Draft Budget • Recommendation 0 Review and provide input on Draft FY 20/21 Budget and direct staff to return final budget to Board for adoption June 18, 2020 S/21/20 CLEAN ENERGY ALLIANCE 15 Fiscal Year 20/21 Work Plan Timing 7/1/20 7/16/20 7/16/20 7/16/20 7/16/20 7/16/20 7/16/20 7/16/20 8/1/20 8/20/20 11/1/20 11/1/20 1/1/21 2/1/21 3/1/21 5/1/21 Description Marketing/Customer Outreach Plan Development & Kickof Approve Policies: Inclusive & Sustainable Workforce Policy Unsolicited Proposals Policy Non-Energy Procurement Policy Records Retention Policy Investment Policy Energy Risk Management Policy Review Authorize RFO for Wholesale Energy Services RFO for Long-Term Renewables RFO for Resource Adequacy Bid Evaluation and Criteria Scoring System Award Scheduling Coordinator & Wholesale Energy Services Establish Community Advisory Committee Energy Risk Management Policy Development Approve Energy Risk Management Policy Strategic Plan System Testing with SDG&E Set up Call Center/Scripting/lVR Recordings Create Customer Pre-and Post-Enrollment Notices Rate Setting Customer Noticing Launch Key: Board Actions/ Activity Staff/Consultant Activitv Marketing/Customer Outreach CCA Launch 3rd Qtr 4th Qtr 1st Qtr '20 '20 '21 Apr-21 May-21 Jun-21 Jul-21 5/21/20 CLEAN ENERGY ALLIANCE 16 Item 3: Clean Energy Alliance FY 20/21 Draft Budget Staffing/Consultants Legal Services Professional Services CalCCA Membership & Dues Print/Mail Services Advertising Graphic Design Services Website Maintenance Audit Services CCA Bond OPERATING EXPENDITURES CAISO Deposit Cash Flow & Lockbox Reserves NON-OPERATING EXPENDITURES TOTAL FY 19/20 Budget $ 50,000.00 130,000.00 115,000.00 1,500.00 6,500.00 147,000.00 450,000.00 - $450,000.00 Clean Energy Alliance FY 19/20 Estimates and FY 20/21 Proposed Budget $ FY 19/20 Estimates 40,000.00 75,000.00 79,000.00 1,500.00 100,000.00 295,500.00 - $ 295,500.00 $ FY 20/21 Proposed 120,000.00 320,000.00 310,000.00 15,000.00 132,000.00 10,000.00 10,000.00 2,500.00 40,000.00 47,000.00 1,006,500.00 500,000.00 2,500,000.00 3,000,000.00 $4,006,500.00 NOTES Interim CEO, other staffing needs General Counsel & Special Counsel Energy Consultants, Communications & Marketing & Other Support Affliliate Membership 19/20, Operational Membership 20/21 Required mailers (58,000 * 4 mailers* $.56) Public Hearing Notices Logo/Mailers/Letterhead etc Monthly Website Maintenance Annual Financial Audit Required Participation in Congestion Revenue Rights Lockbox Reserve/Cash Flow 5/21/20 CLEAN rnERGY ALLIANCE 18 Item 3: Clean Energy Alliance FY 20/21 Draft Budget Existing Agreements Continuing into FY 20/21 SERVICE PROVIDED CONSULTING FIRM Interim Chief Executive Officer Bayshore Consulting Group General Counsel RWG Law Special Counsel -Regulatory Tosdal APC Special Counsel -Energy Transactions Hall Energy Law Technical Consultants Pacific Energy Advisors FY 20/21 NOT TO EXCEED $100,000 $120,000 $100,000 $85,000 $163,200 5/21/20 CLEAN ENERGY ALLIANCE 19 Item 3: Clean Energy Alliance FY 20/21 Draft Budget • Typical CCA Cash Flow Month 1 Customer Uses Power Month 2 Customer is billed Month 3 Customer Payments Received • Cash from energy transactions not expected until July 2021 • Financing from financial institutions/3rd parties needed for start-up & reserves S/71/20 Cl[AN ENERGY All IANCf 20 Item 3: Clean Energy Alliance FY 20/21 Draft Budget Financing Needs Proposed Budget Funds from FY 19/20 Financing Needed Possible Loan from Calpine Bank Financing $4,006,500 s1s41soo $3,852,000 S6solooo $3,202,000 Staff returning June 18, 2020 Board Meeting with Financing Recommendation S/21/20 CLEAN ENERGY ALLIANCf 21 Item 3: Draft FY 20/21 Budget Board Discussion 5/21/20 CLEAN ENERGY ALLIANCE 22