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AGENDA SONOMA CLEAN POWER AUTHORITY BUSINESS OPERATIONS COMMITTEE

Monday, September 12, 2016 9:00 A.M.

Sonoma Clean Power Authority

50 Santa Rosa Avenue, 5th Floor Santa Rosa, California

I. CALL TO ORDER

II. BUSINESS OPERATIONS COMMITTEE REGULAR CALENDAR

1. Approve the June 23, 2016 meeting minutes of the Business Operations Committee and the June 30, 2016 joint meeting minutes of the Sonoma Clean Power Business Operations and Ratepayer Advisory Committees.

2. Receive report on operations and financial performance.

3. Approve recommendation of proposed electric vehicle, electric vehicle charging equipment and installation incentives related to Sonoma Clean Power’s Bulk Electric Vehicle Purchase and Lease pilot.

I I I . COMMITTEE MEMBER ANNOUNCEMENTS

IV . PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA

(Comments are restricted to matters within the Committee jurisdiction. The Committee will hear public comments at this time for up to thirty minutes. Please be brief and limit your comments to three minutes.)

V. ADJOURN

DISABLED ACCOMMODATION: If you have a disability which requires an accommodation, an alternative format, or requires another person to assist you while attending this meeting, please contact the Clerk at (707) 978-3463, as soon as possible to ensure arrangements for accommodation.

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COMMONLY USED ACRONYMS/TERMS TO KNOW

BOC Business Operations Committee

CAISO California Independent Systems Operator

CAM Cost Allocation Mechanism

CCA Community Choice Aggregation.

CEC California Energy Commission

CleanStart SCP’s basic service

CPUC California Public Utility Commission

ERRA Energy Resource Recovery Account

EverGreen SCP’s 100% renewable, 100% local energy product

Geothermal A locally-available, low-carbon baseload renewable resource

GHG Greenhouse gas

IOU Investor Owned Utility (e.g., PG&E)

JPA Joint Powers Authority

MW Megawatt (Power = how fast energy is being used at one moment)

MWh Megawatt-hour (Energy = how much energy is used over time)

NEMA Net Energy Metering Aggregation (referred to as NetGreen Aggregation for SCP customers) allows customers to share electricity production from one generation system across multiple meters and properties.

NEMV Virtual Net Energy Metering (referred to as Virtual NetGreen for SCP customers) is allows customers to generate and share electricity production between multiple customers on the same property.

NetGreen A program offered by SCP which gives its customers financial credit for generating electricity.

PCIA Power Charge Indifference Adjustment (This fee is intended to ensure that customers who switch to SCP pay for certain costs related to energy commitments made by PG&E prior to their switch.)

ProFIT SCP’s “Feed in Tariff” program for larger local renewable energy producers

PV Photovoltaics for making electric energy from sunlight

REC Renewable Energy Credit – used to track all renewable energy for compliance in California, but also colloquially used to refer to a specific subset of REC called an “unbundled REC” where the environmental attributes of renewable energy are sold separately from the energy.

RAC Ratepayer Advisory Committee

SCP Sonoma Clean Power

SCWA Sonoma County Water Agency

TOU Time of Use, used to refer to rates that differ by time of day

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SONOMA CLEAN POWER AUTHORITY

BUSINESS OPERATIONS COMMITTEE

MEETING MINUTES

JUNE 23, 2016

I. CALL TO ORDER:

Meeting called to order by BOC Chair Dowd at 9:00 A.M.

Committee members present: Dick Dowd, Ken Wells, George Beeler, Bill Mattinson, Paul Brophy

Staff Present: CEO Geof Syphers, General Counsel Steve Shupe, Director of Programs Jan

McFarland, Internal Operations Manager Stephanie Reynolds

II. BUSINESS OPERATIONS COMMITTEE REGULAR CALENDAR:

1. Approve the April 21, 2016 meeting minutes of the Sonoma Clean Power Business Operations

Committee (9:00 A.M.)

Public Comment: None

Motion to approve minutes, as presented by CM Wells

Seconded by CM Mattinson

Motion approved 4-0-1 (Brophy, abstain)

2. Receive update on Operations and financial performance. Discuss programs and regulatory

issues and provide direction as appropriate (9:02 A.M.)

CEO Syphers updated committee members on current news including: PG&E

Diablo Nuclear Plant closing by 2025; Peninsula Clean Energy hired Chief

Executive Officer, Jan Pepper; Silicon Valley Clean Energy hired CEO Tom

Habashi and plans to start service in the summer of 2017. Visits to the

Mendocino County is still deliberating on whether or not they would want service

from Sonoma Clean Power and has asked for a more detailed proposal..

Chair Dowd asked for more info on what the goals are for other newly formed

CCA programs and if they compare with SCP’s goals. CEO Syphers stated there

is not enough information on the new CCA programs, yet. He also reported on

a newly formed trade association, which would aid CCAs to have a more unified

voice at the CPUC and during the lawmaking process. The trade association’s

goal is to come up with a funding structure and potentially hire staff in 2017.

Dues for the association have not been finalized but are estimated at $50,000

per year, per member agency, with a possibility of different types of

membership. Chair Dowd expressed the importance of the trade association

starting and the need to stay abreast of lobbying issues.

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Business Operations Committee Meeting

June 23, 2016

Six Electric Vehicle (EV) test drive events are planned for 2016

Discussion on future marketing campaigns. CEO Syphers stated that

EverGreen and other specific programs will be a focus of future marketing

efforts.

CM Beeler asked about SCP’s work on fuel switching. Programs Director Jan

McFarland stated that the current focus is on the EV program but SCP will be

working towards pilot programs to get Sonoma County off of fossil fuels in

homes and businesses.

Public Comment:

Andy Ferguson asked about SCP’s Regulatory Manager’s roles in CPUC

proceedings. CEO Syphers stated there is a current need to deal with

regulatory issues in house and the newly formed trade association can support

with legislature and CPUC issues to coordinate a response with other CCA

programs. SCP still needs to be present as an individual entity.

3. Receive report and presentation on electric vehicle program planning and provide direction

as appropriate (9:32 A.M.)

CEO Syphers provided a detailed presentation on program activities and what

SCP is planning for the future programs. Long term efforts are needed to

maintain local control of programs. SCP continues to look for opportunities to

work with local entities to grow programs and offer help to the community. He

also spoke about the need to strategize management of energy load with

increased solar in the mix. Over production negatively impacts values. Work

to self-balance and match needs to supply is a Programs focus.

Brandt Arthur from the Regional Climate Protection Authority/Sonoma County

Transportation Authority (RCPA/SCTA) was present and spoke on work he is

doing on mapping infrastructure locations for EV charging stations.

Programs Director Jan McFarland spoke about working to increase smart

charging during the day, expanding the market for local energy, both solar and

geothermal. SCP is working in partnership with the California Independent

Systems Operator, Lawrence Berkeley National Labs, and the SCTA/RCPA to

expand use of EVs in Sonoma County. The Drive Evergreen program’s early

strategies include building on the experience of driving EVs, increasing driver

acceptance/interest and to recruit daytime charging locations.

SCP is also working with SCWA to explore the load shaping of energy use when

water pumping.

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June 23, 2016

Recess for break at 10:28 A.M.

Reconvene from Break at 10:38 A.M.

CM Mattinson asked about the financial commitment to start the EV program.

CEO Syphers responded that the discounts on vehicles is to be provided by

manufacturers, with a possible additional incentive to low income/CARE

customers and that SCP is coordinating with PG&E to ensure there will not be a

conflict. CM Wells suggested a battery warranty would provide peace of mind

on used vehicles and that programs should be easy to find and easy to use. He

suggested a multi-year program budget. CM Beeler spoke on the issue of

finding trained electricians familiar with the variety of EV charging stations

available. CM Brophy commented on the confusion between SCP’s EverGreen

product and the Drive Evergreen Program.

Programs Director Jan McFarland stated the window of opportunity for bulk

purchases would be specific and limited. Incentive funds provided by SCP

would be ongoing, only limited by a set number to ease budget tracking. She

stated service to the low income/disadvantaged community is something SCP is

taking seriously, starting with definitions present in CARE-FERA programs.

Chair Dowd spoke about a long-term budget and how that may not be practical,

locking in a budget for a set time period. Important to stay nimble while going

forward as new technology and obstacles come about.

Public Comment:

Doron Amran noted a local group driving around the world in EVs. There are

long-range goals and there needs to be a focus on dealers who do not make

money on cars, but on service. CEO Syphers stated that SCP will be focusing

the story to the public on low maintenance costs.

Mike Nicholls thanked staff and committee for presentation and comments.

He stated the importance of dealing with range anxiety and that GIS mapping

will assist, as it has with wireless and broadband availability.

Jake Gold spoke on daytime incentives, charging data needs to be collected

from current charging stations, commented on the use of park-and-ride areas

and other options for charging.

Bob Williamson stated that Boulder, CO is a good example to follow. Important

to look at projects on a long term basis, just recognize as a recurring part of

budget. He would like to see statistics on GHG savings for dollars invested.

Andy Ferguson cautions on assumptions on behavior. Current technology is

changing quickly. Important to examine present day data to be sure GHG

numbers are not underestimated.

Shelly Browning commented on discounts from dealers and SCP. Suggests

coinciding with other State and Federal benefits available to make the most

during the purchase time.

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June 23, 2016

CM Mattinson expressed concern with the lack of advertisements for EVs

locally. CM Wells asks that the program also include motorcycles, three-

wheelers, and other vehicles.

4. Review and recommend approval of Third Amended Agreement for Professional

Services with the Sonoma County Water Agency (11:41 A.M.)

CEO Syphers provided a background on the work done for SCP by the Sonoma

County Water Agency (SCWA). The amended agreement provides for a

continuation and refinement of the scope of work. The new amendment

includes an increase of $256,000.

Chair Dowd expressed support for the amendment and feels the funds have

been well spent to date. CM Mattinson stated appreciation for the value and

help with staff. CM Brophy expressed concern for the lack of deliverables in

the scope. CEO Syphers clarified that the contract is not a place to turn to for a

major long-term effort or project. SCWA is more of a background source when

staff is unable to complete work. CM Beeler stated that other consultants with

more energy backgrounds/expertise should be worked with, as well, to build on

SCP’s technical resources. CM Wells expressed concern with the financial data

and would like to see more detail in all consultant agreements. .

Public Comment:

Mike Nicholls asked for clarification on admin fees on top of hourly rates. CEO

Syphers stated the hourly rate is all inclusive for each employee.

Motion to recommend amendment of the SCWA contract by CM Mattinson.

Seconded by CM Wells.

Motion passed: 5-0-0

III. COMMITTEE MEMBER ANNOUNCEMENTS (11:55 A.M.)

None

IV. PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA

None

V. ADJOURNMENT: Meeting adjourned by Chair Dowd at 11:56 A.M.

Respectfully submitted,

Stephanie Reynolds,

Internal Operations Manager

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Joint Meeting Minutes BUSINESS OPERATIONS (BOC) and RATEPAYER ADVISORY (RAC)

COMMITTEES Thursday, June 30, 2016

I. CALL TO ORDER

The meeting was called to order at 9:00 A.M. by RAC Chair Art Deicke BOC Members Present: Chair Dick Dowd, Paul Brophy, Ken Wells, Bill Mattinson, George Beeler RAC Members Present: Chair Art Deicke, Anita Fenichel, Peter Renfro, Joe Como, Mike Nicholls (Margaret Spaulding and Bob Williamson absent with notice.)

II. REGULAR CALENDAR

1. (RAC) Approve the April 12, 2016 meeting minutes of the Sonoma Clean

Power Ratepayer Advisory Committee

Motion to approve as presented by CM Nicholls Seconded by CM Fenichel Public Comment: None Motion approved: 5-0-0

2. Receive update and provide comments to staff regarding proposed

amendments to Joint Powers Agreement (9:02 A.M.) CEO Syphers present:

An overview of proposed JPA changes by CEO Geof Syphers was given. One core change centers on merging into one committee, the Community Advisory Committee (CAC). Discussion continues with the Board of Directors on the size and exact role of the new committee. General Counsel Steve Shupe stated that the goal is to combine functions of two committees, keeping customer ratepayers in mind, while using good business strategies. Another significant change is in the purpose of the JPA. The main interest of SCP would not clarified that reducing the use of electricity is a secondary goal to reducing GHG emissions and supporting the local economy. Outdated language on unbundled RECs and startup financing have been removed, along with element of JPA that could have been interpreted at setting rates at a level to recover 100% of rates. CEO Syphers stated that in the future we may need to utilize reserves to cover costs to offset rates, and the new language allows flexibility. Voting shares were also updated.

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BOC/RAC Joint Meeting June 30, 2016

The Board indicated that they wanted to change the JPA to reflect members of the Board be elected officials, not staff. Any current non-elected staff serving on the Board would be allowed to remain for a designated period of time. Chair Deicke asked about a schedule for the amendments. CEO Syphers responded that SCP staff is presenting to cities and the County in July and August and expects to bring a final draft to the Board in August, asking for further changes and a timeline for approval. Chair Deicke requests that if any major changes are made to the committee structure that an updated version come back to the committees for discussion. (BOC Comments) BOC Chair Dowd commented that the elected official requirement may be an issue for smaller communities joining in future. He also stated it is important to keep diversity on the new CAC committee, but not to overlook the need for expertise when looking for new members. CM Brophy commented that he has concerns with item “c” of the JPA purposes and feels that given our major program is one that will increase energy usage, the statement needs a qualifier to state clearly that programs may conflict. General Counsel Shupe added that the goal is to make the JPA as broad as possible to allow for flexibility over time. CM Wells stated there is a need to state clearly that we are working to lower “fossil” fuel energy consumption. CM Mattinson stated combining the committees is a positive move, allowing more opportunities to engage in other areas. He encourages the language in the amendment reflect that the committee meet bi-monthly, as quarterly is not frequent enough. CM Beeler also agreed with the combining of the two committees and suggested the voting structure be changed to reflect conservation efforts or general population. (RAC Comments) CM Fenichel, agrees with combining committees. Discussion on removal of language related to unbundled RECs and why SCP no longer uses them. SCP goals are tied to reduction in GHGs. CM Renfro stated he had no specific issues or recommendations, but agrees with the overall direction of changes, bi-monthly meetings vs. quarterly. CM Como stated he was in favor of evolving into one committee. Appropriate to allow committees to have a more powerful advisory function and it would be hard to affect rates if the business as a whole is not understood. Sec 4.5.1, he would like to see some language that seeks to retain diversity on the CAC. CEO Syphers discussed having a Board policy or resolution to have the practice of doing outreach for diverse applicants to the CAC. Under Section C.c. (recitals), he suggested adding the word “total” in front of energy to be

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clear that the intent is to reduce different types of fuels, not just electricity. CM Nicholls agrees with synergies of combining committees and streamlining input efforts. Chair Deicke expressed concern with the composition of the CAC. It may be ineffective if too large. He stated it would be good to have placeholders to keep positions open to represent all areas of the County. Discussion held on weighted voting and the use of energy as a basis for the number of votes a jurisdiction is allotted. Chair Deicke suggested an ad hoc committee be formed with the Chairs of both committees and SCP staff to work out issues. Public Comment: Woody Hastings had 3 comments: 1- If SCP requires the CAC be made of SCP customers, it may limit someone out of our service area with expertise that is needed; 2-Agrees with the idea of having the number of votes determined by population instead of energy use; 3- Diversity is important and should also include gender. Cary Chris Jaener SCP needs to make the distinction that the state policy is rooftop solar, which is currently classified as unbundled RECs. Important to make the distinction when aligning policy with the IOUs and to take credit for where energy is used. CEO Syphers asked for recommendations from the committee on the recommendations made. Chair Deicke reviewed the points made:

1-Continue to carry out programs to reduce energy consumption with the addition to “C.c” adding “fossil fuel” or “total” energy consumption. (Agreed by both committees) 2-Add geothermal to example types of renewable energy production (Agreed by both committees) 3-Notion of shifting weighted voting. This may be an issue due to fewer businesses but more residential accounts. The committees did not determine a specific recommendation on how to calculate the votes. CEO Syphers to bring the idea to the board instead of a specific direction on how to calculate the votes. 4-Remind the Board that there needs to be an operational committee at the time of dissolution of the current committees and to reach out to current BOC and RAC chairs for assistance during transition. (Agreed by both committees) 5- Discussion on broadening prohibition of committee members not

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as just no Board members, but to also to exclude elected officials. After discussion, this item was dropped as a recommendation. 6-Discussion on the requirement that committee members be SCP customers. CM Brophy stated it should be allowed only if someone is not able to be an SCP customer, outside of our service area. Chair Dowd strongly encourages recommendation to BOD that all committee members be SCP customers. CM Como stated that he agreed with the principle of encouraging SCP customers to apply, but it should not be a requirement. It remains more important that they meet other areas of expertise and diversity. CM Beeler stated the requirement should be left out. CM Mattinson understands value of having SCP customers on the committee they represent. On the issue of diversity, it is important to embrace and state the issue, but he would be hesitant to specify a list as it may cause us to lose a qualified person. General Counsel Shupe stated it may be best to add under Board appointment rules/policies under recommendations. CEO Syphers to let Board know that the committee members are not in agreement on the issue of restricting appoints to SCP customers. 7-Bi-monthly regularly scheduled meetings should be the minimum. (Agreed by both committees). 8--Support for combination of two committees (Agreed by both committees) 9-Request that if significant changes are proposed regarding the committee structure at the next Board meeting, bring items back to current committees for discussion. (Agreed by both committees)

I I I . COMMITTEE MEMBER ANNOUNCEMENTS 1035AM

CM Mattinson noted that Peninsula Clean Energy voted to go with 75% carbon free as its base. CM Wells made staff aware that he is an owner of VW, and there will be a settlement that includes millions for CA with a specific mitigation fund towards electric issues.

IV . PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA

Carrie Chris Jaener, - continuation from last comment, pointing out initiatives at State level and promoting goals of local renewable energy. She announced a

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meeting to discuss grid needs and how to mitigate load curves and work on resources that will be a benefit to the grid. Kate Kelly offered tickets to the 7/3 Sebastopol fireworks event. Shelly Browning stated the need to include renters when looking for diversity. Bruce Niden – visited Maui jump start, working on feeding energy from Nissan Leafs back into the grid to stabilize grid.

V. ADJOURN at 10:44 A.M.

Respectfully submitted,

Stephanie Reynolds, Internal Operations Manager

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Staff Update – Item 2

To: Sonoma Clean Power Authority Business Operations Committee

From: CEO Geof Syphers

Issue: Monthly Report on Operations and Financial Performance

Date: September 12, 2016

NEWS & MILESTONES

Mendocino County passed Resolution to receive service from SCP

SCP continues to meet with Pacific Gas & Electric regarding Diablo Canyon shutdown.

CPUC Proposed Decision regarding PCIA vintaging

New staff member, Braiden Gugel

MENDOCINO COUNTY

SCP continues to make progress toward providing service to Mendocino County. The County unincorporated areas have voted unanimously to authorize service from SCP, and the Cities of Fort Bragg, Willits and Point Arena are now considering the matter. The incorporated cities will vote prior to the October 13 SCPA Board of Directors meeting, where the SCPA Board will consider the matter of responding to Mendocino’s request for service. The City of Ukiah has a municipal utility that would not be a part of SCP.

DIABLO NUCLEAR PLANT SHUTDOWN

On August 16, 2016, PG&E filed Application (A.16-08-006) with the CPUC requesting authority to procure “unprecedented” amounts of energy efficiency (EE)

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and GHG-free resources through solicitations in 2018 and 2019. Other parties supporting the proposal include two labor unions (Brotherhood of Electric Workers and Coalition of CA Utility Employees) and three environmental NGOs (NRDC, Alliance for Nuclear Responsibility, and Friends of the Earth). They reason that given PG&E’s decision to retire the Diablo Canyon Power Plant (DCPP), additional GHG-free energy will be needed to meet current and future mandates. Furthermore, they argue that these resources provide societal benefit, and should be paid for through new non-bypassable charges levied on all customers – including SCPA’s customers. This introduces a dangerous precedent: that already-departed CCA customers must pay not only for PG&E’s past generation costs (through the PCIA), but for PG&E’s future generation costs (through the new non-bypassable charge).

SCP Staff have attended several meetings with PG&E and other interested parties to discuss the details of this application as well as any potential for settlement. We will continue to do so for the purposes of gathering information and evaluating the probability and terms of a settlement proposal amongst interested parties. The details of those discussions are subject to confidential treatment under Rule 12 of the Commission’s Rules of Practice and Procedure.

In addition, Geof Syphers and Deb Emerson have met with staff from Commissioner Randolph’s and Commissioner Peterman’s offices to explain the deleterious impact of this application on our customers, and to highlight how this contradicts existing Commission policy.

Protests to the application are due September 15th. The application proposes a Commission decision in May 2017.

CPUC PCIA Vintaging Decision

On Sept. 2, the CPUC issued a Proposed Decision on PCIA Vintaging that corrects some prior errors in how departing load charges were calculated by PG&E. “Vintaging” is the process of grouping departing customers based on the date they leave the distribution utility. The proposed decision agrees with SCP’s argument that a single vintage should be applied to an entire CCA territory, and not to individual customers or addresses as requested by the distribution utilities. This means all SCPA customers would have the same PCIA vintage, and any new customers that join SCPA in the future would also be assigned that same (more

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favorable) SCPA-wide vintage. The only exception is that SCPA customers who opt out of service, then opt back into SCPA at a later date would receive a new (less favorable) vintage.

To address the overall PCIA, the working group led by SCPA and Southern California Edison are developing a proposal for increasing the transparency of PCIA. SCPA and SCE will present their findings – which may recommend modifying previous decisions – to the Commission in March of 2017.

NEW STAFF

We are happy to introduce our newest team member, Executive Assistant and Clerk of the Board, Braiden Gugel. Braiden came to SCP from the Windsor Unified School District and has direct experience with public policy, Brown Act meeting protocols and a wealth of public service experience.

CUSTOMER PARTICIPATION UPDATE

As of mid-August, 2016 Sonoma Clean Power was serving 195,138 unique accounts, with 1,067 Evergreen customers and an opt-out rate of 11.7%.

PROGRAMS UPDATE

NetGreen

During the month of May, customers whose accounts had accumulated more than $100 of NetGreen credits (for generating more value than they used) were mailed checks for those credit amounts. 1,362 accounts received checks, which totaled nearly $690,000, with approximately $70,000 going to schools. This total reflects a moderate increase over the forecast amount of $650,000, and a significant increase over last year’s $207,000 value. This increase is due to having all jurisdictions participating and continued growth in customer-sited solar installations. Staff has allocated $850,000 for 2016-2017 budget.

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Electric Vehicle Survey

On behalf of SCP, ICF International has mailed the first round of invitations to a randomly selected group of 1,600 households countywide to participate in an online electric vehicle survey. A second round of mailings with the full survey included will be mailed out this month to households that did not respond to the online survey. Staff will use survey results to inform educational and outreach efforts related to electric vehicles.

Electric Vehicle Guidebook

ICF International has also sent Staff a first draft of the consumer-facing electric vehicle “how to” guidebook. Staff submitted comments back to ICF International and will be receiving the next draft incorporating comments this month. The guidebook is scheduled to be completed by the end of October.

The Guidebook will help SCP and its partners raise awareness about electric vehicles and help consumers navigate the details of electric vehicle drivership including: public charging, installing home charging equipment, and how electric vehicles may impact electricity bills.

SWITCH Electric Vehicles

The Career Technical Education Foundation (CTE) is evaluating its SWITCH Electric Vehicle program, and identifying ways to make it more effective. Preliminary input from students and teachers is very positive, but details like the timing of parts delivery need to be improved in the future. Staff is hopeful CTE will continue this important educational electric vehicle construction program and that Sonoma Clean Power can fund more schools in the future.

Drive Electric Events

REACH Strategies, along with subcontractor the Center for Climate Protection is planning a series of six “Workplace Ride and Drive Campaign” events to provide people with an opportunity to test drive electric cars in Sonoma County this fall. One event will be a large public event with targeted media, the remaining five will

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be hosted by large employers to help introduce their employees to test drive electric vehicles and expose them to an array of benefits associated with driving electric vehicles. Pre and post drive surveys from a sample of participants will be conducted. The education of consumers and workplaces about electric cars, charging and EV electric rates are the main focus of these events. The goal of these ride and drive events is to expose 2,000 SCP customers to test drive electric vehicles.

The North Bay Electric Auto Association’s “Drive Electric Day” is on Sunday, September 11 at the north parking lot at Coddingtown Mall. This event provides an opportunity to test drive the latest electric vehicle models, talk with existing EV owners, and learn about the affordability of electric vehicles. Sonoma Clean Power will have an informational booth at this event. Admission is free, there are also eco-themed carnival games on site for kids.

Technical Assistance for Electric Vehicle Programs

In February 2015, Sonoma Clean Power issued a “Request for Qualifications for Technical Assistance for Electric Vehicle Programs” (RFQ). The Center for Sustainable Energy (CSE) responded to this RFQ to assist Staff in our workplace charging pilot and our Drive EverGreen program. In August 2016, Sonoma Clean Power signed a contract and initial scope with CSE focused on electric vehicle incentive design, program administration and evaluation of our bulk purchase/lease program. CSE is a respected non-profit organization that manages energy, air quality and transportation for both utility and government incentive programs across the U.S. CSE currently manages the California Air Resources Board’s California Clean Vehicle Rebate Project (CVRP) along with the State of Connecticut’s and State of New York’s vehicle incentive programs.

Staff is holding off on the workplace charging case study program until we have identified three to five workplace sites. Our upcoming ride and drive events scheduled in October and November timeframe will help staff identify the best sites for workplace charging pilot sites. CSE efforts on this matter will help inform Staff on: electric vehicle charging equipment incentive design, technology, site agreements, payment mechanisms, coordination with electrical contractors, bidding requirements, and other important elements that must be considered. We

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anticipate needing to extend the current scope of the CSE contract to include workplace charging, possibly in the fourth quarter of 2016.

Energize

SCP’s work with Ohm Connect to develop a customized platform for residential demand response is evolving. Over the past year, efforts were directed at creating a unique platform specifically for SCP. However, we have identified a likely better approach that will be able to benefit from the development investments of the other California utilities.

Staff are still working with Ohm Connect to plan the future of the Energize tool, but it appears that the tool can be greatly improved and expenses can be kept minimal by leveraging Ohm Connect’s general platform and using a “brought to you by Sonoma Clean Power” branding rather than a full white-label system.

More details on this evolution will be provided at the next Business Operations Committee meeting.

PG&E 2017 Demand Response Auction Mechanism (DRAM)

SCP continues to make progress on defining the technology and outreach for utilizing an aggregated demand response network to participate in PG&E’s distribution system market. The current conceptual plan will utilize four types of EV equipment, including eMotorWerks JuicePlugs (a grid-connected adapter that fits onto existing home charging equipment), new residential Level 2 EV service equipment, new commercial Level 2 EV service equipment, and existing grid-enabled commercial equipment within SCP’s territory.

SCP has contracted with eMotorWerks to operate a small-scale pilot of an aggregated load, and has won a bid to participate in PG&E’s 2017 DRAM. There are a wide range of markets that exist for aggregated loads that will increase in value as California adds more variable renewable energy sources to the grid. Most of these markets currently operate at the transmission level by the California ISO, and SCP is planning ramp up participation in the CAISO Proxy Demand Response

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market in 2017 with its enhanced customer demand response tool (currently called Energize).

Marketing, Community Outreach & Public Relations Update

Sonoma Clean Power (SCP) continues to communicate our benefits through a wide variety of print, online, radio, TV, outdoor and other advertising mediums, including outreach to the Spanish-speaking community through advertisements in publications such as the Press Democrat’s new La Prensa.

SCP has recently participated in the following community/business-to-business events: The Sonoma County Fair; The Sonoma City Party; Guelaguetza 2016 Sonoma County; Cotati Kids Day Parade & Festival, and the Sonoma Valley Education Foundation’s Red and White Ball. Upcoming events include Sonoma Wine Country Weekend; Drive Electric Day; Chop’s Teen Center Back to the Future Event; Petaluma Education Foundation Bash, and the Rohnert Park Founders Day Festival.

SCP has received recent press coverage for the new 46 MW Wind Deal and in a positive Letter to the Editor of the Press Democrat.

A public workshop for the Russian River community is planned for October, focusing on general information about SCP, how to read the utility bill, understanding our savings over PG&E and more.

PRELIMINARY COMPILED FINANCIAL STATEMENTS (June AND July, 2016)

June marks the close of a very successful 2015/16 fiscal year for Sonoma Clean Power. The summer rate season continued through June, a period where aggregate rates are greater than in the winter season. SCP plans for increased revenues each month during this season, and the resulting positive change in net position helps move the agency closer to its reserve goals. The year-to-date growth in net position remains above projections, and is expected to increase through the end of the fiscal year. Year-to-date operating revenue reached $164,085,000, with the full Phase 3 rollout in effect.

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Electricity sales (as reported on the Statement of Revenues, Expenses and Changes in Net Assets) is being offset by our estimate of uncollectible accounts, which is currently set at approximately 0.5% of electricity sales. As historical data is gathered on the collection patterns specific to SCP customers, this rate will be revisited and adjusted as necessary. Note that the accounts receivable line on the Statement of Net Position is also decreased by this allowance for uncollectibles.

SCP continues to procure electricity from multiple sources. The total cost for the year is slightly below projections. This is primarily due to the lower than expected cost of energy and slightly lower than expected sales volume. The effect of this is seen by an excess of electricity sales over cost of electricity of $35,780,000 for the year-to-date. You will notice a total net position of positive $40,912,000, which indicates healthy growth as SCP continues to make progress towards its reserve goals. Of this net position, approximately $6,273,940 and $1,107,166 is considered set aside for operating and project reserves, respectively. SCP will increase these project reserves after the 2015/16 audited financial statements have been completed.

Overall, other operating expenses continued near or slightly below planned levels for the year.

July marks the start of the 2016/17 fiscal year for Sonoma Clean Power. Starting at the beginning of July, average customer rates have been reduced as of the beginning of the fiscal year, as SCP intends to keep rates attractive compared to those of PG&E. The summer rate season continued through July, a period where aggregate rates are greater than in the winter season. SCP plans for increased revenues during this season, and the resulting positive change in net position helps move the agency closer to its reserve goals. The month and year-to-date growth in net position remains above projections, and is expected to increase through the end of the fiscal year. Month and year-to-date operating revenue reached $15,082,000.

SCP continues to procure electricity from multiple sources, with the total cost for the month and year-to-date landing above projections. This is primarily due to the purchase of excess energy that is being re-sold to another retailer. You will notice a total net position of positive $41,411,000, which indicates healthy growth as SCP continues to make progress towards its reserve goals. Of this net position, approximately $6,273,940 and $1,107,166 is considered set aside for operating and project reserves, respectively. SCP will increase these project reserves after the 2015/16 audited financial statements have been completed.

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Overall, other operating expenses continued near or slightly below planned levels for the year.

PRELIMINARY BUDGETARY COMPARISON SCHEDULE (June AND July, 2016)

The accompanying budgetary comparison includes the 2015/16 budget approved by the Board of Directors in June 2015 and the budget adjustments made in the February 2016 and April 2016 board meetings.

The budget is formatted to make comparisons for both the annual and the year-to-date perspective. The first column, 2015/16 YTD Budget, allocates the Board approved annual budget at expected levels throughout the year with considerations for the timing of additional customers, usage volumes, staffing needs etc. This column represents our best estimates and this granular approach was not part of the Board approved budget.

Revenue from electricity sales is slightly below budget. This variance may be partially explained by lower volume usage by certain customer types than planned, combined with the effect of Phase 3 opt out rates.

The cost of electricity is around 99% of amended budget-to-date. Some of this variance is caused by the fluctuating market cost of energy on open position purchases.

Major operating categories of Data Management and PG&E Service fees costs are closely aligned to the annual budgeted amount. These costs are tied to the customer account total, which increased with the implementation of Phase 3. Due to lower than expected customer opt-outs, the Board approved an increase to these budget categories to account for costs related to these additional customers.

Other than the items mentioned above, SCP continues its trend of remaining near or under budget for most of its operating expenses.

For July, the accompanying budgetary comparison includes the 2016/17 budget approved by the Board of Directors in May 2016.

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The budget is formatted to make comparisons for both the annual and the year-to-date perspective. The first column, 2016/17 YTD Budget, allocates the Board approved annual budget at expected levels throughout the year with considerations for the timing of additional customers, usage volumes, staffing needs etc.

Revenue from electricity sales to customers is slightly below budget. This variance can be partially explained by lower volume usage by certain customer types than planned.

The cost of electricity is around 117% of budget-to-date. Most of this variance is due to an energy supplier that began operating its renewable energy facility sooner than anticipated at a time when SCP did not need the energy to provide to its customers. SCP has arranged to re-sell all of this energy to a retailer. Other causes of the variance are due to fluctuating market costs of energy on open position purchases.

Major operating categories of Data Management fees and PG&E Service fees, which are tied to the customer account totals, are closely aligned to the annual budgeted amount.

Other than the items mentioned above, SCP starts the new fiscal year continuing its trend of remaining near or under budget for most of its operating expenses.

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1

ACCOUNTANTS’ COMPILATION REPORT

Board of Directors Sonoma Clean Power Management is responsible for the accompanying special purpose statement of Sonoma Clean Power (a California Joint Powers Authority) which comprise the budgetary comparison schedule for the period ended June 30, 2016, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement. The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of SCP. Management has elected to omit substantially all of the disclosures required by accounting principles generally accepted in the United States of America. If the omitted disclosures were included in the special purpose budgetary comparison statement, they might influence the user’s conclusions about the Authority’s results of operations. Accordingly, this special purpose budgetary comparison statement is not designed for those who are not informed about such matters. We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy San Rafael, CA August 17, 2016

1101 FIFTH AVENUE • SUITE 200 • SAN RAFAEL, CA 94901

Prelim

inary

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2015/16 YTD Budget

(amended) 2015/16 YTD

Actual

2015/16 YTD Budget

Variance (Under) Over

2015/16 YTD Actual/Budget

%

2015/16 Annual Budget

(amended)

2015/16 Budget Variance

(Under) OverREVENUE AND OTHER SOURCES:

Revenue - Electricity (net of allowance) 164,824,000$ 162,386,133$ (2,437,867)$ 99% 164,824,000$ 2,437,867$ Revenue - Evergreen Premium (net of allowance) 671,000 291,857 (379,143) 43% 671,000 379,143 Revenue - Electricity sales for resale * - 1,406,857 1,406,857 n/a - (1,406,857) Revenue - Interest income - 52,479 52,479 n/a - (52,479) Total revenue and other sources 165,495,000 164,137,326 (1,357,674) 99% 165,495,000 1,357,674

EXPENDITURES AND OTHER USES:CURRENT EXPENDITURES Cost of energy and scheduling 130,110,000 128,305,229 (1,804,771) 99% 130,110,000 1,804,771 Data management 3,298,000 3,283,226 (14,774) 100% 3,298,000 14,774 Service fees- PG&E 1,051,000 1,040,303 (10,697) 99% 1,051,000 10,697 Personnel 1,883,000 1,665,149 (217,851) 88% 1,883,000 217,851 Outreach and communications 782,000 617,202 (164,798) 79% 782,000 164,798 Required noticing 352,000 227,566 (124,434) 65% 352,000 124,434 Legal 520,000 473,073 (46,927) 91% 520,000 46,927 Accounting and auditing 165,000 129,903 (35,097) 79% 165,000 35,097 Technical consultants 630,000 167,843 (462,157) 27% 630,000 462,157 Legislative consultants 235,000 82,720 (152,280) 35% 235,000 152,280 Other consultants 160,000 188,225 28,225 118% 160,000 (28,225) Program development 1,350,000 312,812 (1,037,188) 23% 1,350,000 1,037,188 General and administration 488,000 312,537 (175,463) 64% 488,000 175,463 Total current expenditures 141,024,000 136,805,788 (4,218,212) 97% 141,024,000 4,218,212

OTHER USES Collateral deposit payments 7,000,000 560,000 (6,440,000) 8% 7,000,000 6,440,000 Collateral deposit payments returned ** - (140,000) (140,000) n/a - 140,000 Capital outlay 282,000 68,079 (213,921) 24% 282,000 213,921

DEBT SERVICE 1,732,000 1,676,541 (55,459) 97% 1,732,000 55,459

Total expenditures, Other Uses and Debt Service 150,038,000 138,970,408 (11,067,592) 93% 150,038,000 11,067,592 Net increase (decrease) in available fund balance 15,457,000$ 25,166,918$ 9,709,918$ 163% 15,457,000$ (9,709,918)$

* Electricity sales for resale is the result of sales to other utilities for resale purposes. This revenue is not separately budgeted.** Collateral deposit payments returned provides for the display of the return of collateral during the year, this inflow is not budgeted separately.

RESERVES *** Balance Operating Reserve 6,280,545$ Progam Reserve 1,108,332

7,388,877$

*** Reserve balances do not include additions for the 15/16 year. This addition will occur after the accounting close of the fiscal year.


July 1, 2015 through June 30, 2016BUDGETARY COMPARISON SCHEDULE

OPERATING FUND

See accountants' compilation report. 2

Prelim

inary

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Net increase (decrease) in available fund balance per budgetary comparison schedule: 25,166,918$

Adjustments needed to reconcile to the changes in net position in the Statement of Revenues, Expenses and Changes in Net Position:

Subtract depreciation expense (40,198) Add back capital asset acquisitions 68,079 Add back principal payments on debt 1,640,537 Subtract collateral deposits returned (140,000) Add back collateral deposits 560,000

Change in net position 27,255,336$

REVENUES, EXPENSES AND CHANGES IN NET POSITION


OPERATING FUNDBUDGET RECONCILIATION TO STATEMENT OF

July 1, 2015 through June 30, 2016


Prelim

inary

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1


Management Sonoma Clean Power Management is responsible for the accompanying financial statements of Sonoma Clean Power (a California Joint Powers Authority) which comprise the statement of net position as of June 30, 2016, and the related statement of revenues, expenses, and changes in net position, and the statement cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements. Management has elected to omit substantially all of the disclosures required by accounting principles generally accepted in the United States of America. If the omitted disclosures were included in the financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, the financial statements are not designed for those who are not informed about such matters. We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy San Rafael, CA August 17, 2016


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inary

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ASSETSCurrent assets

Cash and cash equivalents 27,631,167$ Accounts receivable, net of allowance 15,625,796 Other receivables 1,041,433 Accrued revenue 9,730,966 Prepaid expenses 32,559 Short-term investments 7,007,726

Total current assets 61,069,647 Noncurrent assets

Capital assets, net of depreciation 198,923 Deposits 754,666

Total noncurrent assets 953,589 Total assets 62,023,236

LIABILITIESCurrent liabilities

Accounts payable 624,318 Accrued cost of electricity 19,841,081 Other accrued liabilities 182,434 User taxes and energy surcharges due to other governments 463,052

Total current liabilities 21,110,885

NET POSITIONNet investment in capital assets 198,923 Unrestricted 40,713,428

Total net position 40,912,351$

As of June 30, 2016STATEMENT OF NET POSITION



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inary

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OPERATING REVENUES Electricity sales, net 162,386,133$ Evergreen electricity premium 291,857 Electricity sales for resale 1,406,857 Total operating revenues 164,084,847

OPERATING EXPENSES Cost of electricity 128,305,229 Staff compensation 1,665,149 Data manager 3,283,226 Service fees - PG&E 1,040,303 Consultants and other professional fees 881,503 Legal 473,073 Communications 844,768 General and administration 352,735 Total operating expenses 136,845,986 Operating income 27,238,861

NONOPERATING REVENUES (EXPENSES) Interest income 52,479 Interest expense (36,004) Total nonoperating revenues (expenses) 16,475

CHANGE IN NET POSITION 27,255,336 Net position at beginning of period 13,657,015 Net position at end of period 40,912,351$

July 1, 2015 through June 30, 2016AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES



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inary

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CASH FLOWS FROM OPERATING ACTIVITIESReceipts from electricity retail sales 157,740,748$ Receipts from electricity sales for resale 365,424 Tax and surcharge receipts from customers 2,428,922 Return of supplier security deposits (3,450,000) Cash payments to purchase electricity (122,317,192) Cash payments for staff compensation (1,612,583) Cash payments for contract services (5,632,164) Cash payments for communications (766,864) Cash payments for general and administration (355,874) Tax and surcharge payments to other governments (2,375,982)

Net cash provided (used) by operating activities 24,024,435

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIESPrincipal payments on loan (1,640,537) Deposits and collateral paid (560,200) Deposits and collateral returned 145,300 Interest expense payments (40,049)

Net cash provided (used) by non-capital financing activities (2,095,486)

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESAcquisition of capital assets (68,941)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of certificate of deposit (7,007,726) Interest income received 52,479

Net cash provided (used) by investing activities (6,955,247)

Net change in cash and cash equivalents 14,904,761 Cash and cash equivalents at beginning of year 12,726,406 Cash and cash equivalents at end of period 27,631,167$

July 1, 2015 through June 30, 2016STATEMENT OF CASH FLOWS



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inary

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Operating income 27,238,861$ Adjustments to reconcile operating income to net

cash provided (used) by operating activitiesDepreciation expense 40,198 (Increase) decrease in net accounts receivable (3,446,837) (Increase) decrease in other receivables (1,041,433) (Increase) decrease in accrued revenue (1,490,405) (Increase) decrease in prepaid expenses 646,947 Increase (decrease) in accounts payable 9,239 Increase (decrease) in accrued cost of electricity 5,403,437 Increase (decrease) in accrued liabilities 61,488 Increase (decrease) in user taxes and energy surcharges due to other governments 52,940 Increase (decrease) in supplier security deposits (3,450,000) Net cash provided (used) by operating activities 24,024,435$


STATEMENT OF CASH FLOWS (continued)July 1, 2015 through June 30, 2016

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES


Prelim

inary

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1


Board of Directors Sonoma Clean Power Management is responsible for the accompanying special purpose statement of Sonoma Clean Power (a California Joint Powers Authority) which comprise the budgetary comparison schedule for the period ended July 31, 2016, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement. The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of SCP. Management has elected to omit substantially all of the disclosures required by accounting principles generally accepted in the United States of America. If the omitted disclosures were included in the special purpose budgetary comparison statement, they might influence the user’s conclusions about the Authority’s results of operations. Accordingly, this special purpose budgetary comparison statement is not designed for those who are not informed about such matters. We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy San Rafael, CA September 2, 2016


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2016/17 YTD Budget

2016/17 YTD Actual

2016/17 YTD Budget

Variance (Under) Over

2016/17 YTD Actual/Budget

% 2016/17

Annual Budget

2016/17 Budget

Remaining REVENUE AND OTHER SOURCES:

Revenue - Electricity (net of allowance) 15,560,120$ 14,356,354$ (1,203,766)$ 92% 151,038,000$ 136,681,646$ Revenue - Evergreen Premium (net of allowance) 20,192 7,966 (12,226) 39% 196,000 188,034 Revenue - Electricity sales for resale * - 718,508 718,508 - - (718,508) Revenue - Interest income 12,583 12,024 (559) - 151,000 138,976 Total revenue and other sources 15,592,895 15,094,852 (498,043) 97% 151,385,000 136,290,148

EXPENDITURES AND OTHER USES:CURRENT EXPENDITURES Cost of energy and scheduling 11,436,358 13,418,703 1,982,345 117% 124,124,000 110,705,297 Data management 274,167 273,838 (329) 100% 3,290,000 3,016,162 Service fees- PG&E 89,000 86,805 (2,195) 98% 1,068,000 981,195 Personnel 228,000 186,226 (41,774) 82% 2,736,000 2,549,774 Outreach and communications 64,750 65,349 599 101% 777,000 711,651 Required noticing 51,167 3,276 (47,891) 6% 614,000 610,724 Legal 32,917 15,015 (17,902) 46% 395,000 379,985 Accounting and auditing 15,417 8,850 (6,567) 57% 185,000 176,150 Technical consultants 64,167 23,829 (40,338) 37% 770,000 746,171 Legislative consultants 30,417 6,500 (23,917) 21% 365,000 358,500 Other consultants 13,333 26,982 13,649 202% 160,000 133,018 Program implementation and development 291,667 3,500 (288,167) 1% 3,500,000 3,496,500 General and administration 42,083 40,263 (1,820) 96% 505,000 464,737 Total current expenditures 12,633,443 14,159,136 1,525,693 112% 138,489,000 124,329,864

OTHER USES Collateral deposit payments - - - - 2,000,000 2,000,000 Collateral deposit payments returned ** - (20,000) (20,000) - - - Capital outlay 17,000 1,532 (15,468) 9% 204,000 202,468

Total expenditures, Other Uses and Debt Service 12,650,443 14,140,668 1,490,225 112% 140,693,000 126,532,332 Net increase (decrease) in available fund balance 2,942,452$ 954,184$ (1,988,268)$ 32% 10,692,000$ 9,757,816$

* Electricity sales for resale is the result of sales to other utilities for resale purposes. This revenue is not separately budgeted.** Collateral deposit payments returned provides for the display of the return of collateral during the year, this inflow is not budgeted separately.

RESERVES *** Balance Operating Reserve 6,280,583$ Program Reserve 1,108,338

7,388,921$

*** Reserve balances do not include additions for the 15/16 year. This addition will occur after the completion of that year's audit.


July 1, 2016 through July 31, 2016BUDGETARY COMPARISON SCHEDULE

OPERATING FUND

See accountants' compilation report. 231/45

Net increase (decrease) in available fund balance per budgetary comparison schedule: 954,184$

Adjustments needed to reconcile to the changes in net position in the Statement of Revenues, Expenses and Changes in Net Position:

Subtract depreciation expense (3,983) Add back capital asset acquisitions 1,532 Subtract collateral deposits returned (20,000)

Change in net position 931,733$

REVENUES, EXPENSES AND CHANGES IN NET POSITION


OPERATING FUNDBUDGET RECONCILIATION TO STATEMENT OF

July 1, 2016 through July 31, 2016


1


Management Sonoma Clean Power Management is responsible for the accompanying financial statements of Sonoma Clean Power (a California Joint Powers Authority) which comprise the statement of net position as of July 31, 2016, and the related statement of revenues, expenses, and changes in net position, and the statement cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements. Management has elected to omit substantially all of the disclosures required by accounting principles generally accepted in the United States of America. If the omitted disclosures were included in the financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, the financial statements are not designed for those who are not informed about such matters. We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy San Rafael, CA September 2, 2016


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Current assetsCash and cash equivalents 29,653,048$ Accounts receivable, net of allowance 17,087,859 Other receivables 958,019 Accrued revenue 9,094,042 Prepaid expenses 16,449 Investments 7,007,726

Total current assets 63,817,143 Noncurrent assets

Capital assets, net of depreciation 198,705 Deposits 734,666

Total noncurrent assets 933,371 Total assets 64,750,514

Current liabilitiesAccounts payable 543,594 Accrued cost of electricity 22,232,274 Other accrued liabilities 177,884 User taxes and energy surcharges due to other governments 386,289

Total current liabilities 23,340,041

Net investment in capital assets 198,705 Unrestricted 41,211,768

Total net position 41,410,473$

As of July 31, 2016STATEMENT OF NET POSITION


ASSETS

LIABILITIES

NET POSITION


OPERATING REVENUES Electricity sales, net 14,356,354$ Evergreen electricity premium 7,966 Electricity sales for resale 718,508 Total operating revenues 15,082,828

OPERATING EXPENSES Cost of electricity 13,418,703 Staff compensation 186,226 Data manager 273,838 Service fees - PG&E 86,805 Consultants and other professional fees 69,661 Legal 15,015 Communications 68,625 General and administration 40,263 Depreciation 3,983 Total operating expenses 14,163,119 Operating income 919,709

NONOPERATING REVENUES (EXPENSES) Interest income 12,024

CHANGE IN NET POSITION 931,733 Net position at beginning of period 40,478,740 Net position at end of period 41,410,473$

July 1, 2016 through July 31, 2016AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES



CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 13,135,153$ Receipts from electricity sales for resale 803,208 Tax and surcharge receipts from customers 216,278 Cash payments to purchase electricity (11,024,758) Cash payments for staff compensation (185,706) Cash payments for contract services (520,131) Cash payments for communications (91,498) Cash payments for general and administration (41,245) Tax and surcharge payments to other governments (293,041)

Net cash provided (used) by operating activities 1,998,260

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIESDeposits and collateral returned 20,000

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESAcquisition of capital assets (7,118)

CASH FLOWS FROM INVESTING ACTIVITIESInterest income received 10,739

Net change in cash and cash equivalents 2,021,881 Cash and cash equivalents at beginning of year 27,631,167 Cash and cash equivalents at end of period 29,653,048$

July 1, 2016 through July 31, 2016STATEMENT OF CASH FLOWS



Operating income 919,709$ Adjustments to reconcile operating income to net

cash provided (used) by operating activitiesDepreciation expense 3,982(Increase) decrease in net accounts receivable (1,460,033)(Increase) decrease in other receivables 84,700(Increase) decrease in accrued revenue 230,865(Increase) decrease in prepaid expenses 3,699Increase (decrease) in accounts payable (108,159)Increase (decrease) in accrued cost of electricity 2,050,136Increase (decrease) in accrued liabilities 350,124Increase (decrease) in user taxes and energy surcharges due to other governments (76,763) Net cash provided (used) by operating activities 1,998,260$


STATEMENT OF CASH FLOWS (continued)July 1, 2016 through July 31, 2016

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES


Staff Update – Item 3

To: Sonoma Clean Power Authority Business Operations

From: Jan McFarland, Program Director Nelson Lomeli, Program Specialist Geof Syphers, CEO

Issue: Incentives for Electric Vehicle Group Discount Program

Date: September 12, 2016

Requested Action:

Review and recommend SCP incentives for SCP customers purchasing or leasing electric vehicles during a 75-day group discount period in late 2016.

Background

As discussed during a series of Board of Directors and Committee budget meetings earlier this year, electric vehicles are a technology that can bring multiple benefits to residents and businesses in Sonoma County, and to Sonoma Clean Power. Potential benefits include reducing greenhouse gas emissions caused by personal vehicle use, reducing vehicle ownership and fuel costs, and enabling the use of more renewable power sources through the use of intelligent vehicle charging.

In June, staff provided a detailed presentation of Sonoma Clean Power’s approach to electric vehicles, including two near-term goals proposed for this fall:

• Bulk discounts for electric vehicle purchases and leases; and • Sonoma Clean Power incentives for customers, including income-qualified

customers, to encourage electric vehicle purchases and leases.

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With the assistance of the Sonoma County Water Agency, staff released a “Request for Proposals by The Sonoma Clean Power Authority for Electric Vehicle Group Discount Program” on July 25, asking manufacturers and dealers to provide standard discounts for anyone buying an electric car during a limited 75-day period in late 2016. The RFP was limited to new and used battery-electric and plug-in hybrid electric vehicles (hereafter referred to as “EVs”). To be eligible for the program, EVs were required to meet the following minimum requirements, based on EPA Fuel Economy and Environmental rules:

• All-electric vehicles must have a range of at least 70 miles on a full battery charge.

• Plug-in hybrid vehicles must have a battery-only range of at least 25 miles on a full charge.

Beyond these minimum requirements, staff encouraged additional warranties, service or programs the car manufacturers and dealers were willing to extend to purchasers in the group discount program. These could include: battery warranty, extended battery warranty, recycling services for batteries, non-EV vehicle availability for free or reduced price, and rebates or incentives to offset the cost of EV charging equipment.

Program Marketing and Education will include a customized website for promoting the discount program, registration to receive the discount (and, if approved, an SCP incentive), contact information for selected dealers, social media outreach, and collaboration with community organizations to help with word-of-mouth campaigns. Staff invite the public and Business Operations Committee members to help identify allies who could be helpful in getting the word out, once the Board authorizes the program on October 13.

“Ride-and-Drive” events will be held during the EV Group Discount purchase timeframe. Media outreach including print, radio and targeted mailing is also planned. Media outreach will start one week before the EV Group Discount program’s start date and will continue throughout the Group Discount period.

The Participant Engagement phase will begin in late October and continue for 75 days. The timeline for the SCP EV Discount Program timeline is:

• Launch of Website and other media and Registration for SCP EV Discount Program in mid-October

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• Official Launch of SCP EV Discount Program in late October • Participant Registration and Education Period starting mid-October and

running for 75 days • Final Deadline to Participate in SCP EV Discount Program January 2, 2016 • Program Completion and Evaluation Period January 3, 2016 – March 3,

2017

In August, staff received proposals from Nissan/Jim Bone Nissan, Honda/Manley Honda and BMW/Hansel BMW. All three manufactures/dealer responses provided significant discounts for purchases and/or leases. A proposal from VW was not considered by staff because the discount proposed of $2,267 was much lower than those proposed by the other respondents.

The dealer/OEM discounts are summarized in the following tables, along with Staff’s proposed SCP incentives, state rebates and federal tax credits. Before engaging the public, a simpler version of these tables would be developed for marketing purposes.

Nissan proposed a two-part discount for their 2016 Leaf Models S, SV and SL, which start with a MSRP (manufacture suggested retail price) of $32,000. It should be noted that the Model S has a range of 84-miles, the Models SV and SL have ranges of 107 miles. The first part of the discount is a $6,000 OEM discount. The second part is an additional dealer discount for: Leaf S model $2,200, Leaf SV model $2,300, and Leaf SL model $2,400. This incentive for the sale of the Leaf Model S reduces the purchase price of the car to $23,800 before taxes, license and documentation fees.

Lease incentives for the Leaf Model S from Nissan are also in two parts with an OEM discount of $13,625 (includes the federal tax credit) along with an additional dealer discount for $2,300 for the Model S. Lease payments with $2,500 down would be $199 per month plus taxes. Qualification for the best interest rate on a lease will require a credit score of 700 or above, lower credit scores may qualify but at an increased interest rate. The interest rate for purchase is 0% for up to 72 months. Jim Bone has access to large numbers of Leafs, and they are increasing their order for October and will be prepared to obtain more if the Group Discount is popular.

Through the Manly Honda dealership, Honda has proposed to make available previously leased 2013 and 2014 Honda Fit EVs, which were rated at 82 miles on a full charge when new, with a likely effective range of over 65 miles used. Honda is offering these popular cars for $199 per month for a period of 24 months. These

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pre-leased Fits are not easy to obtain, as only 1,100 were produced, but Honda has guaranteed 30 pre-leased Fits will be made available as part of the program. These pre-leased Fits will be reconditioned to ensure performance and reliability. Battery warranty is for the life of the lease, along with roadside assistance, and collision insurance. Lease holders will be required to obtain liability insurance. Honda also will be providing a Leviton home charging unit. Finally, Honda will develop a “wait-list” for Fit EVs to be made available after Sonoma Clean Power’s EV Discount Program ends, under the same terms.

BMW through their Hansel dealership is proposing a $10,500 discount off of all of their 2017 i3’s. i3 MSRPs range from $44,597 for the standard i3 BEV, $49,145 for the i3 Range Extender, and i3 Giga range extender of $52,945. The i3s come with a 10-year or 150,000-mile warranty at 70% battery performance or better. Hansel BMW also will provide access to gas vehicles for up to 15 days per year for longer trips.

Staff’s presentation at the June 2016 Business Operations Committee meeting outlined our goal of providing additional incentives as a part of the EV Group Discount program for our SCP customers, along the lines of the Northern Sonoma County Air Pollution Control District’s (NSCAPCD) “3-2-1 Go” Program. The NSCAPCD incentive program provides an incentive of $3,000 for battery EVs, $2,000 for plug-in hybrids with minimum range requirements and $1,000 for residential single-family level 2 smart chargers.

In July, Sonoma Clean Power retained the Center for Sustainable Energy (CSE) to assist with incentive design and program administration. CSE manages the California Air Resources Board vehicle incentive programs, along with the State of New York and State of Connecticut’s vehicle incentive programs. CSE is a credible non-profit organization that manages and evaluates other incentive programs for utilities and government entities ranging from energy efficiency, solar to alternative fueled vehicles. In working with CSE, Staff is proposing incentives from Sonoma Clean Power that are based on EV range. Staff proposes these additional EV incentives to create strong public interest in the Group Discount program, as well as some media “buzz” around EVs that would be harder to achieve without the incentives. The proposed incentives are:

• EVs with greater than 100 mile range on a full charge would receive a $3,000 SCP customer incentive;

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• EVs with 70-100 mile range on a full charge would receive a $2,500 SCP customer incentive;

• Charging Equipment would receive a $1000 incentive following receipt of proof of purchase and installation;

• For lower-income CARE & FERA qualified customers, an additional incentive of $2,500 for an EV; and

• For multifamily locations, up to $8,000 for qualified charging system installation, in coordination with PG&E’s program to minimize costs.

Staff’s proposed EV incentives would be funded within the previously-approved budget, up to the maximum amount of $1,400,000, which would be sufficient fund a minimum of 300 EVs for SCP customers and 80 SCP CARE/FERA customers on a first-come, first-serve basis.

Staff considered higher incentive levels, but concluded that the proposed incentives could reasonably be maintained in an extended second or third round, if the first round is successful. This is due to the fact that the acquisition and use of the EVs facilitated by the proposed incentives give rise to economic benefits to SCP that are roughly comparable to the cost of the incentives:

$640 Estimated net income from energy sales from a single EV over a ten-year life

$600 Minimum direct market value for aggregated load over ten years (assumes 50% participation in proxy demand response)

$900 Estimated greenhouse value at 4.5 metric tons of savings per car per year at $20 per ton of avoided CO2

$720 Estimate of wholesale market cost savings for purchasing energy over ten years

$2,860 Approximate minimum value to SCP associated with each EV

The above analysis ignores a number of likely value streams that are not certain, such as low-carbon fuel standard credits and participation in more valuable markets, such as the CAISO’s Non-Generating Resource market and Resource Adequacy.

In addition, there are value streams that are not captured by SCP, but which support the agency’s mission. These include maintenance and fuel cost savings for

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customers, increased markets for local solar vendors due to improved renewable integration, and local work for electricians and others to install equipment.

To date there is no formula on how best to deploy EVs, and our approach is one of the first anywhere across the U.S. Staff is proposing to take a performance-based approach that incentivizes EVs based on range, which staff believes is critical to our suburban/rural community as well as the grid integration of renewable energy.

The following tables illustrate staff’s proposed incentives and how they will stack up along with other incentives available to our customers including the State of California, Clean Vehicle Rebate Program (CVRP), Federal Tax credit and the Northern Sonoma County APCD’s 3-2-1 EV incentive program.

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Example1:“Typical”SCPCustomer

Model2016Nissan

LEAF

2016NissanLEAF

2016NissanLEAF

2016BMWi3

2017BMWi3

2017BMWi3

Trim/detail Sw/QC SV SL REx GigaRExAll-electricrange 84 107 107 110 110 110

BaseMSRP $30,780 $34,200 $36,790 $42,400 $46,250 $47,750Bulk-purchaseOEMdiscount $6,0001 $6,0001 $6,0001 $0 $0 $0

Bulk-purchaseDealerdiscount $2,200 $2,300 $2,400 $10,500 $10,500 $10,500SCPrebate $2,500 $3,000 $3,000 $3,000 $300 $3,000

StateCVRPrebate2 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500Federaltaxcredit(upto)3 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500

Totaldiscount $20,700 $21,300 $21,400 $23,500 $20,800 $23,500BaseMSRP–discount4 $10,080 $12,900 $15,390 $18,900 $25,450 $24,250

%savings 67% 62% 58% 55% 45% 49%1 Nissan’sbulkpurchaseOEMdiscountisavailabletobuyersusingNissanfinancing.2 InordertobeeligiblefortheCVRPstaterebateasofNovember1,2016,incomemustbeequaltoorlessthan:$150,000forsinglefilers,$200,000forhead-of-householdfilers,and$300,000forjointfilers.

3 FederalTaxCreditisan"upto"amountandnotrefundableorcarriedover.Actualutilizationofcreditamountwillvarywithamountoftaxesowed.Leasepaymentswillreflectthefulltaxcreditbeingclaimedbytheleasingcompany

4 BaseMSRPdoesnotincludedestinationfees.Discountsdonotincludevehicletrade-invalue,potentialdriverdownpayment,drivernegotiationsorotherdriver-initiatedbuydowns.

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Example2:CARECustomerinNorthernSonomaCountyAirPollutionControlDistrict

Model

2016NissanLEAF

2016NissanLEAF

2016NissanLEAF

2017BMWi3

2017BMWi3

2017BMWi3

Trim/detail Sw/QC SV SL REx GigaRExAll-electricrange 84 107 107 110 110 110

BaseMSRP $30,780 $34,200 $36,790 $42,400 $46,250 $47,750Bulk-purchaseOEMdiscount $6,0001 $6,0001 $6,0001 $0 $0 $0

Bulk-purchasedealerdiscount $2,200 $2,300 $2,400 $10,500 $10,500 $10,500SCPrebate $2,500 $3,000 $3,000 $3,000 $3,000 $3,000

SCPCAREbonus $2,500 $3,000 $3,000 $2,500 $2,500 $2,500NSCAPCD3-2-1rebate $3,000 $3,000 $3,000 $3,000 $2,000 $2,000

NSCAPCD3-2-1LIrebate $1,000 $1,000 $1,000 $1,000 $1,000 $1,000StateCVRPrebate $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

CVRPincreaseforLMI2 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000Federaltaxcredit(estimate)3 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Totaldiscount $23,700 $24,800 $24,900 $26,500 $25,500 $25,500BaseMSRP–discount4 $7,080 $9,400 $11,890 $15,900 $20,750 $22,250

%savings 77% 73% 68% 63% 55% 53%1 Nissan’sbulkpurchaseOEMdiscountisavailabletobuyersusingNissanfinancing.2 AsofNovember1,forhouseholdsequaltoorlessthan300%oftheFederalPovertyLevel3 FederalTaxCreditiscappedat$7,500,butamorelikelyfigureforCAREcustomersis$2,000,duetothelowertaxobligation.4 BaseMSRPdoesnotincludedestinationfees.Discountsdonotincludevehicletrade-invalue,potentialdriverdownpayment,drivernegotiationsorotherdriver-initiatedbuydowns.

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agenda sonoma clean power authority … clean power authority . business operations committee...

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