PROPOSED FY 2019-20 BUDGET FINANCE & ADMINISTRATION COMMITTEE - PowerPoint PPT Presentation

Item 2 PRESENTATION PROPOSED FY 2019-20 BUDGET FINANCE & ADMINISTRATION COMMITTEE August 6, 2019 1

Item 2 PRESENTATION Strategic Jun Department Plan Jul Budgets approved developed Finance & Admin Aug Committee Review Proposed Budget Aug Budget Timeline reviewed by Board Roadmap FY 2019-20 Operating Budget Sept Approval from Board Oct 1 – New Budget Year Oct

Item 2 PRESENTATION HIGHLIGHTS 3

Item 2 PRESENTATION

Item 2 PRESENTATION REVENUES INPUTS • No changes to rates from last rate change Generation rates change effective August 1 • 4% discount to PG&E rates • Most likely rates remain stable till Spring • 2020 • No load growth Direct Access not a factor in 2020 • No change to customer participation rate • 5

Item 2 PRESENTATION ACCOUNTS & SALES Customer Accounts Energy Sales (MWh’s) • 267,000 Accounts • 3.9 million MWh’s Other Other C&I 2% 1% 9% Res 34% C&I 64% Res. 90% 6

Item 2 PRESENTATION TOTAL REVENUES Nearly all of $320.3 • Other 1% million of budgeted revenues are from energy sales to customers SVCE vulnerable to • economic downturn and changes in rates Long-term revenue • vulnerability from Direct Access Energy 99% 7

Item 2 PRESENTATION POWER SUPPLY Contingency Other 3% 5% Capacity $244.6 million • 12% Energy Supply Cost Modest increase vs. • the Mid-Year as commodity prices have stabilized Well hedged for FY • 2019-20 Energy & REC Capacity continues • 80% to creep up in costs 8

Item 2 PRESENTATION TOTAL EXPENSES $267.9 Million Expense $16.9 Million Fixed Cost Budget Budget Capex Fixed Other Debt Svd 3% G&A 1% 0% 6% Billing 10% 21% Marketing 7% Data Mgmt 8% Variable Professional Svc 94% 20% Personnel 30% 9

Item 2 PRESENTATION BREAK-EVEN $350 Millions $300 $250 $200 $150 $100 Low fixed costs keeps us nimble to changing environment $50 $0 MWh Sales 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 -$50 Total Costs Revenue Surplus/(Deficit) 10

Item 2 PRESENTATION Executive Administration Board PG&E Bankruptcy Collaboration Strategic Plan General Counsel Continued collaboration Funding for continued Funding to support with the “Mag 5” or monitoring and increased Board input Board/Committee other South Bay Area strategic action as the into the strategic meetings support CCA’s on various issues bankruptcy unfolds planning process. Overall focus change of the document to be less task specific and more agency direcitonal

Item 2 PRESENTATION Finance & Administration HR/Payroll Risk Facility Cybersecurity Credit Rating Power Pre-Pay Improvements Management Improvements Increased rent budget Major new funding to Funding for Moody’s Maintain competitive Support for risk to support larger work support cybersecurity Support for analysis and compensation and management of agency area initiatives Financial Advisor possible execution of an benefits package (insurance, etc.) agreement Increase capital budget Focus is on security and Renew Line of Credit Support for risk Rollout of better to support move either reliability management of energy payroll and human in this building or supply and compliance resource services somewhere else

Item 2 PRESENTATION Power Supply Integrated Portfolio Operations PPA Negotiations Resource Plan Optimization (IRP) Scheduling Coordination Consultants and Legal Controlling Power support for not just new Resource Adequacy cost- Supply Costs Preparation and filing in PPA negotiations but sharing consultant 2020 issues that arise from Assist with Direct the 3 PPA’s signed last Other Power Access strategies and All areas of the agency year Procurement support response involved but Reg/Leg will including risk be partnering with Power management, load Supply forecasting, and software tools to support more integrated trade system

Item 2 PRESENTATION Account Services & Community Relations Required Programs Data Management Outreach Awareness Notifications Support Continued rollout of Funding for various Market surveys Negotiations for Outreach grants Heat Pump Water mailers that are required contract renewal with Heater program by the CPUC such as the Advertising Calpine Events annual joint rate mailer Various support to with coordination of Long-Term data rollout programs PG&E management strategies

Item 2 PRESENTATION Regulatory & Legislative Workforce CalCCA Rates Pro-Active with Development Legislature Membership Dues PG&E General Rate Funding for Lobbyist Case Funding for continued presence Support of various support of the workforce committee’s and 2020 ERRA Forecast development initiative Funding for continued initiatives communications with key stakeholders

Item 2 PRESENTATION Decarbonization & Grid Innovations Other Programs Programs Funding Roadmap Various software and Continued rollout of Continue with the 2% of licensing support to various programs energy revenues pursue data analytics, identified in the formula for annual customer resource center roadmap with updates funding of programs and other programs during the fiscal year support Carryover unused $ from this fiscal year by creating programs fund

Item 2 PRESENTATION PERSONNEL • Increase of one (1) position Analyst position in the Decarbonization Grid • Innovations Dept. Support for programs rollout with a focus on the • “building/construction” related decarbonization • Adjust salary tables by 4% based on CPI Bay Area-Urban index • This summer conduct compensation survey (2 year cycle) 17

Item 2 PRESENTATION PERSONNEL (cont.) • Additional job titles/descriptions Sr. Communications Specialist • Sr. Communications Outreach Specialist • • Mid-Year Budget (March 2020) Rates Manager • Possible change approach to rates or more • customer specific options • Longer-Term may add 1-2 positions Unknown now but would reflect needs of the • agency in the future 18

Item 2 PRESENTATION

Item 2 PRESENTATION CASH RESERVES $300,000 $250,000 $200,000 $ in Thousands $150,000 $100,000 $50,000 $0 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2022-23 Reserves Target Min Max

Item 2 UNCERTAINTY AND RISK PRESENTATION PG&E POWER SUPPLY BANKRUPTCY Higher market prices Customer reserves; LEGISLATION for capacity and plan of reorganization energy; underlying REGULATIONS IOUs exit retail; commodity volatility; PG&E Restructuring; Central Buyer; credit credit rating Central Buyer rating RATES DIRECT ACCESS Still unknown on Prepare now for 2020 PCIA and PG&E Rates and potential further expansion RESERVES

Item 2 PRESENTATION STRATEGIC PLAN 8. Data Decision Goal 10: Bundled energy and Making, $273 renewable resources, $200 9. Leg and Reg, $547 7. Credit Rating, $52,420 6. Financial Excellence, $235 12: Carbon-Free Energy, 5. GHG Reductions, $7,000 $244,756 4. Customer Satisfaction, $225 3. Awareness, $470 2. Rates, $155 1. HR, $1,889 13. IT Security, $370 12. Energy Risk Mgmt., $1,207 $ in Thousands 22

Item 2 PRESENTATION THANK YOU 23