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REGULAR MEETING of the Policy Board of Directors

Wednesday, March 7, 2018 9:00 am

City of Watsonville City Council Chambers 275 Main Street, 4th Floor

Watsonville, CA 95076

AGENDA

Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact Bren Lehr, Board Clerk, at 831-641-7203 or blehr@mbcommunitypower.org. If you have anything that you wish to be distributed to the Board please hand it to a member of MBCP staff who will distribute the information to the Board members and other staff.

1. Welcome & Roll Call

2. Consideration of Late Additions and/or Deletions to Consent and Regular Agendas

3. Public Comment for Matters Not Listed on the Agenda The public may provide comments on any item not on the Agenda but the Board may not take action at this meeting on any item not listed on the Agenda other than to refer the matter to staff or set it for a future meeting.

CONSENT AGENDA

4. Approve Minutes of the December 13, 2017 Policy Board of Directors Meeting (Action Item)

5. Approve Minutes of the January 20, 2018 Joint Policy and Operations Board of Directors Meeting (Action Item)

6. Authorize CEO to Execute the First Amendments to the Credit Agreement, Promissory Notes, and Related Documents with River City Bank (Action Item)

7. Approve Amendment to MBCP Initial Organization Chart, Hiring and Salary Schedule

(Action Item)

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8. Approve Employment Agreement with CEO Tom Habashi (Action Item)

REGULAR AGENDA

9. CEO’s Report (Discussion Item) 10. Approve Amendment to FY 2017-2018 Budget (Discussion Item) 11. Adopt Resolution to Approve Agreement(s) with PARS for Employee

Retirement (Action Item) 12. Appoint Board Treasurer/Auditor (Action Item) 13. Adopt MBCP Energy Risk Management (ERM) Policy (Action Item) 14. Adopt Rate Schedule to Compensate Net Energy Metering (NEM) Customers for

Excess Generation (Action Item) 15. Determine Composition of Community Advisory Council (CAC), Direct Staff to Solicit

CAC Applications and Form a Subcommittee to Review CAC Applications (Discussion/Action Item)

16. Adjournment to Next Policy Board Meeting on Wednesday, June 6, 2018

Public records that relate to any item on the open session agenda for a regular board meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all members, or a majority of the members of the Board. Until MBCP has offices, the Board has designated the County of Santa Cruz General Services Department, located at 701 Ocean Street, Room 330, Santa Cruz, CA 95060 for the purpose of making those public records available for inspection. The documents are also available on the MBCP website located at: MBCommunityPower.org.

Monterey Bay Community Power info@mbcommunitypower.org

Meeting of the Policy Board of Directors

December 13, 2017 - 9:00 am City of Watsonville, Council Chambers

275 Main Street, Watsonville, CA 95076

MINUTES

1. The meeting was called to order at 9:17 a.m., with 7 members present and quorum established.

2. There were revisions/additional materials to the following items: Item #7 – The material item labeled “Resolution” (page 29) was a replacement page that contained language corrections. Item #8 – The staff report language pertaining to the proposed meeting schedule for the Operations Board meeting dates had two corrections: 1) meeting date of June 27, 2018 was added to the schedule; and meeting date of July 11, 2018 was deleted from the schedule.

3. No one spoke during Oral Communications.

CONSENT AGENDA

4. APPROVED the minutes from the September 13, 2017 Policy Board, by unanimous vote. Motion: Parker Second: Coffman-Gomez

5. APPROVED the appointment of Bren Lehr as MBCP Board Clerk, to serve as

the MBCP Board Secretary for Policy and Operations Boards of Directors, by unanimous vote. Motion: Brown Second: Termini

REGULAR AGENDA

6. CEO Tom Habashi discussed the latest updates on 2017 Recap and Status;

Staffing and Administration; Summary of Recent Power Contract Agreements; MBCP Product Offerings and SubBrands; December-March Priority Actions; November/December Regulatory Report; November Marketing and Outreach Report. Discussion only – no vote

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7. APPROVED 2018 Rates and Rebate Schedule, with authority to change typo in the resolution, by unanimous vote. Motion: Parker Second: Coffman-Gomez

8. APPROVED 2018 Policy Board Meeting Calendar, by unanimous vote. Motion: Termini Second: Brown

9. RECESSED at 11:15 am to closed session.

10. REPORT ON CLOSED SESSION at 11:35 am. General Counsel Dana McRae

reported that there was no reportable action.

11. ADJOURNED at 11:36 am to the next Policy Board meeting on March 7, 2018.

Monterey Bay Community Power info@mbcommunitypower.org

Special Joint Meeting of the Operations and Policy Board of Directors

January 20, 2018 - 8:30 am City of Watsonville, Community Room

275 Main Street, 4th Floor, Watsonville, CA 95076

MINUTES

1. The meeting was called to order at 8:37 a.m., with 7 members present on Operations Board and 9 members present on Policy board, and quorums established. Operations Board members Present: Palacios, Bernal, Montoya,

Bauman, Long; Vice Chair Corpuz; Chair Mendez

Operations Board members Absent: Goldstein, Harvey, Espinosa Operations Board member disqualified: None Policy Board members Present: Coffman-Gomez, Termini,

Parker, Haffa, Delgado, Orozco, De La Cruz; Vice Chair McShane, Chair McPherson

Policy Board members Absent: Brown, Friend Policy Board member disqualified: None

2. Guy Petraborg spoke during Oral Communications

CONSENT AGENDA

3. POLICY BOARD APPROVED the Contract with Estriatus Law PC for General Counsel Services, by unanimous vote. Motion: De La Cruz Second: Coffman-Gomez

4. OPERATIONS BOARD APPROVED the PG&E-MBCP EEI Master Cover Sheet & Collateral Annex, by unanimous vote. Motion: Vice Chair Corpuz Second: Montoya

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REGULAR AGENDA

5. Kirby Dusel, Pacific Energy Advisors, Inc. discussed the California Energy Market including Basic Operation & Oversight, Generating & Delivering Electric Power, Energy Products & Services, Power Portfolio Accounting, Key Market Considerations & Statistics, and AB1110 Implementation & Greenhouse Gas (GHG) Accounting.

6. Tom Habashi, CEO and Shawn Marshall, Executive Director, Lean Energy

discussed the MBCP Strategic Plan including setting the context for the vision and budget, as well as goals and strategies to maximize GHG reduction, lower customer bills/costs, and invest in local energy programs.

7. Tom Habashi and Shawn Marshall, discussed the Community Advisory Group

and Key Customers Stakeholder Group.

6. ADJOURNED at 1:36 pm to the next Operations Board meeting on February 7, 2018 and the next Policy Board meeting on March 7, 2018.

Monterey Bay Community Power 70 Garden Court, Suite 300, Monterey, CA 93940 info@mbcommunitypower.org

Staff Report Item 6

TO: MBCP Policy Board of Directors FROM: Tom Habashi, Chief Executive Officer SUBJECT: Authorization to Execute the First Amendment to the Credit Agreement,

Promissory Notes and Related Documents with River City Bank DATE: March 7, 2018

RECOMMENDATION Authorize the Chief Executive Officer to execute the first amendment to the credit agreement, promissory notes and related documents with River City Bank. BACKGROUND On December 4, 2017, MBCP filed an amendment to the Notice of Joint Powers Agreement with the California Secretary of State amending its name from “Monterey Bay Community Power Authority of Monterey, Santa Cruz, and San Benito Counties” to “Monterey Bay Community Power Authority”. On August 16, 2017, MBCP Board adopted a resolution amending MBCP’s fiscal year end from March 31 to September 30 to facilitate the repayment of its initial loans. ANALYSIS & DISCUSSION For River City Bank, the MBCP’s lender, to correct our legal name from “Monterey Bay Community Power Authority of Monterey, Santa Cruz, and San Benito Counties” to “Monterey Bay Community Power Authority” and to change in covenants based on the fiscal year end change from March 31 to September 30, an executed amendment to the loan agreement, promissory notes and related documents is required. BUDGETARY/FISCAL IMPACT The amendment is to correct MBCP’s legal name and fiscal year end. No budgetary/fiscal impact.

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CONCLUSION To authorize MBCP’s CEO to execute the first amendment to the credit agreement, promissory notes and related documents with River City Bank. ATTACHMENT 1. River City Bank’s First Amendment to Credit Agreement

FIRST AMENDMENT TO CREDIT AGREEMENT

Reference is made to the Credit Agreement, Promissory Notes and Related Documents

(collectively, the “Loan Documents”), all dated October 13, 2017, between the Monterey Bay

Community Power Authority (“Borrower”), erroneously identified therein as the Monterey Bay

Community Power Authority of Monterey, Santa Cruz, and San Benito Counties, and River City

Bank (“Lender”);

WHEREAS, on October 3, 2017, Borrower filed a Notice of Joint Powers Agreement with the

California Secretary of State in which its name was erroneously identified as ”Monterey Bay

Community Power Authority of Monterey, Santa Cruz, and San Benito Counties;”

WHEREAS, the correct legal name of Borrower is the “Monterey Bay Community Power

Authority;”

WHEREAS, Borrower corrected the error in its filing with the California Secretary of State by

filing an amendment to the Notice of Joint Powers Agreement on December 4, 2017.

WHEREAS, Borrower and Lender desire to correct the erroneous identification of Borrower’s

name as it appears in the Loan Documents as well make administrative corrections to certain

dates contained in Section 9 as more fully set forth herein.

AGREEMENT. In view of the recitals and for other valuable consideration, receipt of which is hereby

acknowledged, Borrower and Lender agree as follows:

Effective Date. This Agreement shall be effective as of October 13, 2017.

Defined Terms. Terms used herein that are not otherwise defined herein, shall have the meaning

as set forth in the Credit Agreement.

Correction of Name. Lender and Borrower hereby acknowledge and agree that, the correct legal

name of Borrower is the Monterey Bay Community Power Authority.

Definition of Borrower. Notwithstanding the erroneous identification of Borrower as the

“Monterey Bay Community Power Authority of Monterey, Santa Cruz, and San Benito

Counties” in the Loan Documents, any reference to “Borrower” in the Loan Documents shall

mean and refer to the Monterey Bay Community Power Authority.

Definition of “Fiscal Year End”. The definition of “Fiscal Year End” is hereby changed to

mean September 30th

.

Section 9.2 (a) (iii) Financial Reports. The words “September 30th

” contained in the first

sentence of Section 9.2 (a) (iii) are hereby changed to “March 31st”.

ATTACHMENT 1

Section 9.5. Debt Service Coverage Ratio. The words “March 31, 2019” contained in the first

sentence of Section 9.5. Debt Service Coverage Ratio are hereby changed to “September 30,

2019”.

Section 9.6. Unrestricted Tangible Net Assets. The words “March 31, 2019” contained in the

first sentence of Section 9.6. Unrestricted Tangible Net Assets are hereby changed to

“September 30, 2018”.

Representations of Borrower. Borrower hereby acknowledges represents and warrants to

Lender that this agreement only corrects the erroneous name of Borrower identified in the Loan

Documents, and, except as expressly provided herein, does not modify, amend, waive or

otherwise affect any provision of the Loan Documents or any rights or remedies of Lender

thereunder. Further, nothing herein or in any other document or agreement relating to the

misidentification of Borrower’s correct legal name shall constitute or be deemed to result in any

assignment, transfer or conveyance of Borrower’s assets or change in the legal status,

organization, management, taxpayer identification or tax reporting structure of Borrower.

MONTEREY BAY COMMUNITY POWER AUTHORITY, Borrower

By: _____________________________

Tom Habashi

Its: Chief Executive Officer

By: _____________________________

Bruce McPherson

Chairman of the Board

RIVER CITY BANK, Lender

By: _____________________________

Name: Alice Harris

Its: SVP, Loan Center Manager

ATTACHMENT 1

Monterey Bay Community Power 70 Garden Court, Suite 300, Monterey, CA 93940 info@mbcommunitypower.org

Staff Report Item 7

TO: MBCP Policy Board of Directors FROM: Tom Habashi, Chief Executive Officer SUBJECT: Approve Amendment to MBCP Initial Organization Chart, Hiring and Salary

Schedule DATE: March 7, 2018

RECOMMENDATION On February 7, 2018 the Operations Board approved this item for review by the Policy Board. Staff recommends approval of amendment to MBCP initial organization chart, hiring and salary schedule. The proposed amendments are as the following: 1. Addition of a new Financial Analyst position under the Director of Internal Operations 2. Addition of a new Power Supply Analyst I/II position under the Director of Power Services 3. Addition of a Business Development Manager position under the Director of Power Services 4. Addition of three Intern/Temporary Staff Support in the Communications and External

Affairs group 5. Retitle Marketing Manager to Marketing and Communications Manager 6. Retitle Key Account Manager to Strategic Account Manager 7. Reclassify the Government and External Affairs Manager position to Government and

External Affairs Coordinator 8. Reclassify the Regulatory/Legislative Analyst position to Regulatory/Legislative Manager BACKGROUND In September 2017, the MBCP Board approved the attached proposed job classifications, initial organization chart, hiring and salary schedule. MBCP is currently staffed through a combination of 7 full-time employees and consultant support under contract to MBCP and directed by the CEO. As MBCP achieves critical milestones and nears the first enrollment phase, there is a need to update the initial organization chart to sustainably meet the core needs of the operations.

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ANALYSIS & DISCUSSION AND BUDGET IMPACT 1. The addition of the Financial Analyst will provide high level administrative, project

coordination, and analytical finance support to the Director of Internal Operations. This proposed new position will result in an average monthly increase of $7,300.

2. The addition of the Power Supply Analyst I/II will provide the Power Resources and Energy team with data related to acquiring power suppliers, risk mitigation, deal structuring, contract negotiations, and project development to support the goals of supplying carbon free power. This proposed new position will result in an average monthly increase of $6,700.

3. In December 2017, MBCP executed a consulting service agreement with Mr. James Mark through May 2018. Mr. Mark performs the duties of the Business Development Manager, focusing on agricultural and industrial accounts, and resources management. The earlier change from a contract basis to a new full-time position after March 2018 will provide support for MBCP business development; resulting in an average monthly saving of $5,400 from April to May 2018. This proposed new position will result in an average monthly increase of $8,600 after May 2018.

4. The addition of the three interns/temporary staff will provide support for the

Communications and External Affairs group, during the enrollment phases in March and July 2018 respectively. These proposed new positions will result in an average monthly increase of $6,900.

5. The retitling of Marketing Manager to Marketing and Communications Manager will accurately reflect the nature of the job and the duties being performed. No budgetary impact.

6. The retitling of Key Account Manager to Strategic Account Manager will accurately reflect

the nature of the job and the duties being performed. No budgetary impact.

7. The Government and External Affairs Coordinator position will provide support to implement MBCP’s strategy in customer service and business and community development. This reclassification will result in an average monthly saving of $1,700.

8. The Regular/Legislation Manager position will provide support for a wide range of MBCP’s

regulatory and legislative matters, with emphasis on representation of MBCP’s interests at the California Public Utilities Commission (CPUC). The reclassification will result in an average monthly increase of $1,700.

FISCAL/BUDGETARY IMPACT The overall average monthly budgetary impact is $24,100.

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CONCLUSION To approve the Revised MBCP Organization Chart, Hiring and Salary Schedule so that MBCP can start the recruitment procedures in order to meet the core needs of the operations. ATTACHMENTS

1. Approved Job Classifications, Initial Organization Chart, Hiring and Salary Schedule 2. Revised MBCP Organization Chart 3. Revised Hiring Schedule and Salary Schedule

1

Proposed Job Classifications, Hiring and Salary Schedule  

Job Classifications: 

Job classifications/positions have been categorized to reflect the nature of the duties and the role 

within the organization. Job descriptions will be drafted for each position, including a description of the 

duties, minimum education and experience qualifications, and skills and abilities required to perform 

the functions of each position. Specific positions and their corresponding job descriptions are proposed 

to be updated by the HR Manager and CEO as needed. Material changes in job titles/classifications 

and/or roles will be provided to the Board for approval as needed. 

ATTACHMENT 1

  2

Proposed Hiring Schedule: 

The following is a proposed hiring schedule based on the previous experience of MBCP’s interim CEO.  

It is subject to change as may be needed to fulfill each position with qualified candidates.  

Position Group 1

Sep 01 2017 Group 2 

Jan 1, 2018 Group 3

Mar 1 , 2018 

Chief Executive Officer  Complete     

Board Clerk/Executive Assistant  X     

General Counsel (contract position)  X     

Regulatory Counsel (contract position)    X   

Director of Internal Operations     X   

Finance Manager  X     

IT/ Data Manager    X   

HR Manager      X 

Administrative Assistant  X     

Director of Power Services       X 

Energy Trading Manager  X     

Energy Planning Manager      X 

Contract & Compliance Manager      X 

Key Account Manager  X     

Director of Communications & External Affairs    X   

Marketing Manager  X     

Media and Communications Coordinator  X     

Community Outreach & Events Coordinator   X     

Government and External Affairs Manager   X     

Programs Coordinator      X 

Regulatory/Legislative Analyst      X 

 

Proposed Salary Schedule:  

These proposed salary ranges are based on salary surveys of similar positions conducted in 2016 for 

Silicon Valley Clean Energy and on current (June 2017) salary information received from Marin Clean 

Energy; where there was great divergence, judgment was applied. These numbers do not include 

MBCP benefits which are estimated to be valued at an additional 35%‐40% of the total salary.  

Position/Title Minimum Salary 

(Annual $) Maximum Salary 

(Annual $) 

     

Board Clerk/Executive Assistant  $75,000  $120,000 

General Counsel    (contract)    $120,000 

Regulatory Counsel     (contract)    $120,000 

Director of Internal Operations   $120,000  $180,000 

ATTACHMENT 1

  3

Finance Manager  $90,000  $150,000 

IT Manager  $75,000  $120,000 

HR Manager  $75,000  $120,000 

Administrative Assistant  $50,000  $75,000 

Director of Power Services  $150,000  $240,000 

Energy Trading Manager  $120,000  $180,000 

Energy Planning Manager  $120,000  $180,000 

Contract & Compliance Manager  $100,000  $150,000 

Key Account Manager  $80,000  $125,000 

Director of Communications & External Affairs   $120,000  $180,000 

Marketing Manager  $80,000  $120,000 

Media and Communications Coordinator   $60,000  $90,000 

Community Outreach & Events Coordinator   $50,000  $75,000 

Government and External Affairs Manager   $80,000  $120,000 

Programs Coordinator   $60,000  $90,000 

Regulatory/Legislative Analyst  $60,000  $100,000 

 

The chart below represents a market salary survey done by SVCE in 2016 (collecting data from five 

electric utilities, including MCE and SCP). 

 

 

 

 

 

 

ATTACHMENT 1

  4

 

 The chart below represents salary ranges for Marin Clean Energy Positions 

 

ATTACHMENT 1

  5

 

ATTACHMENT 1

Policy Board

Operations Board

CEO

Director of Internal Operations

Finance Manager (contract)

HR Manager (contract)

IT/Data Manager (contract)

Financial Analyst

Director of Power Services

Energy Trading Manager

Energy Planning Manager

Contract & Compliance

Manager

Business Development

Manager

Power Supply Analyst I/II

Director of Communications &

External Affairs

Strategic Account Manager

Program Coordinator

Marketing & Communications

Manager

Media & Communications

Coordinator

Community Outreach /

Events Coordinator

Intern/Temp Staff Support (3)

Regulatory / Legislative Manager

Government & External Affairs

Coordinator

Board Clerk / Executive Assistant

Administrative Assistant

General Counsel (contract)

Revised 2/7/18

Revised MBCP Organization ChartATTACHMENT 2

Revised Salary Schedule:

Position/TitleMinimum Salary

(Annual $)Maximum Salary

(Annual $)

Board Clerk/Executive Assistant $75,000 $120,000Administrative Assistant $50,000 $75,000

General Counsel (contract position) $120,000Director of Internal Operations $120,000 $180,000

Finance Manager (contract position) $90,000 $150,000HR Manager (contract position) $75,000 $120,000IT/ Data Manager (contract position) $75,000 $120,000Financial Analyst $75,000 $100,000

Director of Power Services $150,000 $240,000Energy Trading Manager $120,000 $180,000Energy Planning Manager $120,000 $180,000Contract & Compliance Manager $100,000 $150,000Business Development Manager $80,000 $125,000Power Supply Analyst I/II $60,000 $100,000

Director of Communications & External Affairs $120,000 $180,000Marketing and Communications Manager $80,000 $120,000 Media and Communications Coordinator $60,000 $90,000 Community Outreach & Events Coordinator $50,000 $75,000Strategic Account Manager $80,000 $125,000Programs Coordinator $60,000 $90,000Intern/Temp Staff Support (3) $15/hour $20/hour

Regulatory/Legislative Manager $80,000 $120,000Government and External Affairs Coordinator $60,000 $100,000

ATTACHMENT 3

Monterey Bay Community Power 70 Garden Court, Suite 300, Monterey, CA 93940 info@mbcommunitypower.org

Staff Report Item 8

TO: MBCP Policy Board of Directors FROM: Angela Lipanovich, General Counsel SUBJECT: Employment Agreement with Chief Executive Officer (CEO) Tom Habashi

DATE: March 7, 2018

RECOMMENDATION Approve appointing Tom Habashi as permanent Chief Executive Officer (“CEO”) of Monterey Bay Community Power (“MBCP”) and approve the Employment Agreement between MBCP and Tom Habashi as CEO. BACKGROUND MBCP requires a strong and skilled leader to perform the duties of CEO. Currently, Mr. Habashi is performing the duties of Interim CEO to MBCP under an employment agreement, which expires on June 30, 2018. A longer-term employment agreement for CEO provides a more stable path for both CEO and MBCP. On December 13, 2018, the Policy Board met in Closed Session, under the personnel exception to the Brown Act, for the purpose of evaluating Mr. Habashi’s job performance as Interim CEO. The Policy Board agreed that Mr. Habashi has been outstanding in the performance of his duties and services as Interim CEO as such duties and services are set forth in his current employment agreement and the MBCP Joint Exercise of Powers Agreement, effective as of February 21, 2017 (“JPA”). At Mr. Habashi’s request to be made permanent CEO, the Chair of the Policy Board, Mr. Bruce McPherson tasked an ad hoc Operations Board Subcommittee, comprised of Carlos Palacios, Lew Bauman, Ray Espinoza and Ray Corpuz, with negotiating and recommending an employment contract extension with Mr. Habashi. The recommendation of this Operations Board Subcommittee is now being brought to the Policy Board for approval. DISCUSSION Attached for your review today is the Employment Agreement for CEO (“Agreement”) with Mr. Habashi that is recommended by the ad hoc Operations Board Subcommittee as agreed upon by Mr. Habashi. Overall, the Agreement includes the customary elements related to employing Mr. Habashi as CEO of MBCP, including making the term of the Agreement ongoing, requiring those duties and obligations of CEO set forth in the JPA,

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providing time off, employee benefits and a car allowance. The Agreement provides that Mr. Habashi will remain an at-will employee serving at the pleasure of the Policy Board. Mr. Habashi’s current salary shall remain at $27,500 per month (the “Base Salary”). This means that his Base Salary shall remain at its current level with no increase. In addition to the Base Salary, Mr. Habashi shall be entitled to such bonus compensation as the Policy Board may determine from time to time in its sole discretion. For 2018, Mr. Habashi shall be entitled to receive a performance bonus of $30,000 (“2018 Bonus”). Mr. Habashi’s eligibility to receive the 2018 Bonus shall be based on his performance relative to the metrics and goals set forth in i) the scope of services of CEO as set forth in Section 3.4 of the JPA, ii) the key metrics from the MBCP Strategic Plan, and iii) such other criteria as may be approved and adopted by the Policy Board. The decision about whether the necessary criteria have been met for the 2018 Bonus shall be made in the sole discretion of the Policy Board and is final. The Policy Board shall review Mr. Habashi’s performance in October of 2018, and provided the Policy Board is satisfied with Mr. Habashi’s performance, the 2018 Bonus, should one be awarded, shall be payable on January 1, 2019. The Agreement also requires the CEO’s performance to be reviewed on an annual basis going forward. As you are aware, Mr. Habashi has been successfully performing the services of Interim CEO. Mr. Habashi is committed to continuing in the position of CEO on a permanent basis and his ongoing presence in the position of CEO will be beneficial to the continued and ongoing success of Monterey Bay Community Power. We look forward to your approval of the Agreement and the change of Mr. Habashi’s status to permanent CEO. ATTACHMENTS Employment Agreement with Chief Executive Officer (CEO) Tom Habashi

v.el12398-426cj Employment Agr for CEO_Habashi Page 1 of 4

EMPLOYMENT AGREEMENT FOR CHIEF EXECUTIVE OFFICER (CEO)

This Employment Agreement (“Agreement”), which is effective on the date it is fully executed (the “Effective Date”), is between the Monterey Bay Community Authority, hereinafter called “MBCP,” and Tom Habashi, hereinafter called “Employee.” MBCP and Employee are occasionally referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

This Agreement is entered into on the basis of the following facts, understandings and intention of the Parties:

A. MBCP was formed on February 21, 2017 as an independent joint powers authority dulyorganized under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code § 6500 et seq.).

B. MBCP and Employee entered into an agreement under which Employee agreed to performcertain duties and services as the Interim CEO for MBCP, beginning on September 1, 2017 through June 30, 2018 (“Agreement for Interim CEO”).

C. Employee has been successfully performing the duties and services of Interim CEO andMBCP now desires Employee to serve as permanent CEO of MBCP on an ongoing basis.

D. Employee possesses the skill, experience, ability, background, and knowledge to performthe duties and services of Chief Executive Officer of MBCP.

E. MBCP desires to employ Employee as its Chief Executive Officer on the terms providedby this Agreement to provide stability for both the CEO and MBCP during the term of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals and mutual promises and conditions in this Agreement, it is agreed as follows:

1. DUTIES AND AUTHORITY: MBCP shall employ Employee as the Chief ExecutiveOfficer (“CEO”) of MBCP, with the full power and authority to perform all of the duties of the CEO. Employee shall perform the scope of services of CEO as set forth in Section 3.4 of the MBCP Joint Exercise of Powers Agreement, effective as of February 21, 2017. In furtherance of Employee’s duties, the key metrics from the MBCP Strategic Plan shall be incorporated by reference herein and establish the goals for Employee in the performance of his duties. Employee shall, during the Term, use his best efforts to faithfully perform the duties as may be, from time to time, assigned to him by the Policy Board of the MPCP (the “Board”) or their designee(s).

2. TERM: The term of Employee’s employment hereunder shall commence on the EffectiveDate and continue until terminated as provided herein (the “Term”).

3. COMPENSATION: Effective as of the Effective Date hereof, MBCP agrees to payEmployee as compensation for his services hereunder, in equal semi-monthly installments, the sum of Twenty-Seven Thousand Five Hundred Dollars ($27,500) per month (the “Base Salary”), less such deductions as shall be required to be withheld by applicable law and regulations. In addition to the Base Salary, Employee shall be entitled to such bonus compensation as the Board may determine from time to

ATTACHMENT 1

v.el12398-426cj Employment Agr for CEO_Habashi Page 2 of 4

time in its sole discretion. For 2018, Employee shall be entitled to receive a performance bonus of $30,000 (the “2018 Bonus”), which shall not be deemed earned, in whole or in part, until such time as the bonus is approved by the Board. The Employee’s eligibility to receive the 2018 Bonus shall be as determined by the Board based on Employee’s performance relative to the metrics and goals described in Section 1 above and such other criteria as may be approved and adopted by the Board. The decision about whether the necessary criteria have been met for the 2018 Bonus and whether to award such performance bonus shall be in the sole and absolute discretion of the Board and is final. The Policy Board shall review Employee’s performance in October of 2018, and provided the Board is satisfied with Employee’s performance, the 2018 Bonus, should one be awarded, shall be payable on January 1, 2019. The work described herein shall be done in collaboration with consultants and advisors that Employee may recommend hiring from time to time. Employee is an executive manager who is exempt from the Fair Labor Standards Act (FLSA).

4. RESTRICTIONS ON OUTSIDE BUSINESS, ACTIVITIES, AND CONFLICTS: Employee shall devote his full energies, interest, abilities, and productive time to the performance of this Agreement and shall not, without MBCP's prior written consent, tender services to others of any kind for compensation, or engage in any other business activity in excess of five (5) hours per calendar week. In addition, Employee shall not engage in any activity, for compensation or otherwise, that would interfere or conflict with the performance of his duties under this Agreement, including activities that may reasonably be expected to conflict with the CEO's duties. Without limitation to the foregoing, a conflict includes, but is not limited to, a conflict of interest under the California Political Reform Act, Government Code §1090 or other state or federal laws.

5. EVALUATION OF PERFORMANCE: The Board shall evaluate the performance of

Employee on an annual basis over the Term. Evaluations may be conducted more often at the Board's discretion. Employee will request and schedule the minimum required evaluations as appropriate under the MBCP's agenda procedures or as otherwise directed by the Board.

6. TIME OFF: Employee shall be entitled to 240 hours Paid Time Off (“PTO”)

annually. Payout of PTO will be limited to 50% of the accumulated balance. The accumulated balance of PTO will be limited to two years of accrual per existing MBCP rules. Except as provided in this Agreement, PTO shall be subject to any MBCP PTO policy applicable to employees generally.

7. BENEFITS: Employee shall be entitled to participate in any group insurance plan (including medical, dental, vision, life and disability, if any) retirement program or similar program of MBCP established by the Board (the “Benefit Plans”) during the Term to the extent Employee is eligible under its provisions. MBCP may establish additional benefit programs and may modify or eliminate any benefit plan or program in its discretion, in accordance with applicable law.

8. TRAVEL EXPENSES: Costs associated with travel shall be reimbursed for

reasonable out-of-pocket expenses incurred in connection with MBCP's business, including in state travel, food and lodging. Receipts for reimbursements shall be submitted to the Operations Chair Board for review and approval. Reimbursements will be compensated pursuant to the applicable state and federal per diems.

9. CAR ALLOWANCE: Employee shall receive a monthly payment of Five Hundred

Dollars ($500) for Employee’s use of a personal automobile for business use (“Car Allowance”). The Car Allowance shall be subject to all required federal, state, and local withholding.

10. AUTOMOBILE INSURANCE: Employee shall maintain Automobile Liability

Insurance for each of his vehicles used in the performance of this Agreement, including owned, non-owned, leased or hired vehicles, in the minimum amount of $500,000 combined single limit per

ATTACHMENT 1

v.el12398-426cj Employment Agr for CEO_Habashi Page 3 of 4

occurrence for bodily injury and property damage. Liability insurance maintained by Employee will be primary to any insurance or indemnification provided by MBCP.

11. TERMINATION OF AGREEMENT:

a. Termination by MBCP: Employee is employed at the pleasure of the Board, and is thus an at-will employee. The Board may terminate this Agreement with or without cause effective immediately.

b. Resignation: Employee may terminate this Agreement by giving MBCP at

least 60 days (or more if possible) prior written notice. MBCP may accelerate the effective date of the resignation to any date after the receipt of written notice, or upon request may reduce the notice period at its discretion.

c. Termination on Death: If Employee dies during the Term, this Agreement shall

be terminated on the date of Employee’s death. All checks for accrued salary, accrued PTO or other items shall be released to the person designated in writing by Employee pursuant to Government Code Section §53245 or, if no designation is made, to Employee’s estate.

12. NON-BINDING UNTIL APPROVED: Regardless of whether this Agreement has

been signed by all Parties, this Agreement is not binding on any Party until it has been approved by the MBCP Policy Board.

13. MISCELLANEOUS: This written Agreement, along with attachments, is the full and complete integration of the Parties' agreement forming the basis for this Agreement. The Parties agree that this written Agreement supersedes all prior written or oral agreements, understandings, commitments and practices between the Parties, including but not limited to the Agreement for Interim CEO, which is hereby rendered null. Any modifications to this Agreement must be made in a written document signed by all Parties. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal. Waiver by any Party of any portion of this Agreement shall not constitute a waiver of any other portion thereof. Any arbitration, mediation, or litigation arising out of this Agreement shall occur only in the Monterey Bay Area, notwithstanding the fact that one of the contracting Parties may reside outside of the area. This Agreement shall be governed by, and interpreted in accordance with, California law.

[Signature Page Follows]

ATTACHMENT 1

v.el12398-426cj Employment Agr for CEO_Habashi Page 4 of 4

SIGNATURES IN WITNESS WHEREOF, the Parties have executed this Agreement. By: __________________________________ TOM HABASHI

Date: __________________________________

By: __________________________________ CHAIRPERSON POLICY BOARD

Date: __________________________________

Approved As To Form: By: __________________________________ GENERAL COUNSEL

Date: __________________________________

ATTACHMENT 1

Page 1

Staff Report Item 9

TO: MBCP Policy Board of Directors

FROM: Tom Habashi, Chief Executive Officer

SUBJECT: CEO’s Report

DATE: March 7, 2018

New Employee Introduction

Mary Ann Hernandez: Administrative Assistant. On January 22, 2018 Mary joined the MBCP team focused on front counter reception and administrative duties. Mary has over 15 years of experience in customer service support. She has a Bachelor’s Degree in Biology and is currently working on a research project with Terrestrial Wildlife Ecology Lab at CSUMB.

Jeremy Clark: Energy Trading Manager. On March 7, 2018, Jeremy will join the MBCP team. He will be focused on power supply acquisition, short-term electricity trading and power portfolio management. Jeremy has 14 years of experience in energy trading and risk management. His most recent position was that of Director of Business Development at ACES, where he oversaw multiple energy commodities and markets, regulatory affairs, and contract administration. Jeremy has a Bachelor of Science degree from Oklahoma State University. Enrollment Update MBCP saw a bump in opt-outs since the last board update. This is expected due to the second notifications going out and the approach of the actual enrollment month. The total load that has opted-out is now at 34 GWh’s or slightly less than 1% of total customer demand. Staff is working with a few strategic customers to assist in mitigating a perceived sense of risk from enrollment. Staff believes that some of the customers may eventually opt back in.

Page 2

Long-Term Power Supply Acquisition Update

Staff continues to negotiate long-term arrangement with three renewable energy developers. We now believe that terms addressing credit issues have been satisfied and we are turning our attention to negotiating commercial terms. PG&E Generation Rates PG&E announced an increase in generation rates prompting MBCP to adjust its rates to match as directed by the Policy Board during the December 2017 meeting. ATTACHMENTS:

1. Marking and Outreach Update 2. Regulatory and Legislative Updates

MARKETING AND COMMUNITY OUTREACH UPDATE – March 7, 2018

Phase 1 Successes Media Outreach

- Steadily built a buzz leading up to launch (KAZU, Santa Cruz Sentinel, Monterey County Weekly, etc) - March 1 Press Conference commemorating first day of service for non-residential customers - Added depth to MBCP story and strengthened relationships with local and regional media

Community Outreach

- Collaborated with CalCCA affiliates for best practices, tools and templates - Ongoing presentations and workshops for business organizations, Chambers, Rotaries, City Councils - Booking community events in advance of spring and summer - Developing outreach tools to assist with Phase 2 of Marketing and Outreach Plan

Online and Social Media

- Used website to get out ahead of pushback from PG&E rates - Incorporated feedback from customers and Key Accounts team to refine our message - Adding new pages to narrow our focus in anticipation of intensifying marketing and outreach efforts - Dialing up effort to grow our online community

Emphasis on All Three Counties

- Press Conference featured speakers from Monterey, San Benito and Santa Cruz counties - Talking points addressed key topics for each county - Earned media attention from all three counties - Booking events in all counties

Phase 2 Marketing and Community Outreach Efficiencies in Transition from Phase 1 to Phase 2

- Reeling in tasks and project management from consultants - Facilitating training and acquiring tools to accelerate transition - Switching focus from non-residential to residential - Balancing enrollment objectives with customer retention and customer satisfaction

Widening Our Approach

- Making sure we connect with all communities, all demographics, all mediums - Expanding portfolio of marketing and communications assets - Collaborating on projects with CalCCA

Growing Outreach Capacity

- Internship program goes live in April - Building volunteer framework and continuing to grow strategic partner network - Working with Public Information Officers, City Clerks to educate staff, amplify MBCP message

Creating New Opportunities

- Goals: Engage community through education, support community organizations through inclusive agenda

ATTACHMENT 1

- Clean Air Fair Presented by MBCP and MBARD - Community Power Festival - Public Forum Series

ATTACHMENT 1

Regulatory and Legislative Updates

The following is a digest of current regulatory activities likely to have broad impact on the Community Choice Aggregation (CCA) community and emergent CCA programs. This memo provides an abbreviated update on key developments at the California Public Utilities Commission (CPUC) and California Energy Commission (CEC) in the past month.1 CCA-SPECIFIC ACTIVITY Draft Resolution E-4907 On February 8, the CPUC approved Draft Resolution E-4907, (DR) which proposes a registration and implementation plan process for CCA programs, including requirements on Resource Adequacy (RA) forecasting. This resolution delays until 2020 the launch of any CCA program that has not submitted an Implementation Plan as of March 1, 2018. The Commission has established a waiver process and it is likely that other elements dealing with resource adequacy issues beyond 2018/2019 will be addressed in a formal proceeding. Resolution E-4907 does not immediately impact MBCP unless it decides to expand service to new communities prior to 2020.

Petition for Modification of the CCA Code of Conduc tOn January 30, 2018, the Joint Utilities filed a Petition for Modification of CPUC Decision 12-12-036, which adopted the CCA Code of Conduct as required by Senate Bill (SB) 790 (2011). The Joint Utilities request that the CCA Code of Conduct be modified to eliminate the current limitation imposed on utilities to refrain from “lobbying” against CCA programs, which is broadly defined as communicating with public officials or the public for the purpose of convincing a government agency not to participate in or to withdraw from a CCA program. The Joint Utilities claim that the current restriction is inhibiting their ability to provide timely and effective information to local governments on CCA formation decisions. Responses to the petition for modification are due on March 1. If passed, this modification could affect MBCP in the future if it chooses to expand service to additional communities.

CPUC REGULATORY CASE DEVELOPMENTS Power Charge Indifference Adjustment (PCIA) Rulemaking Proceeding As previously reported, the topics for consideration in the PCIA rulemaking include:

• Improving the transparency of the existing PCIA process;• Revising the current PCIA methodology to increase stability and certainty;• Reviewing specific issues related to inputs and calculations for the current PCIA methodology;• Considering alternatives to the PCIA;• Senate Bill (SB) 350 considerations on the treatment of bundled retail customers and departing load customers;• Status of PCIA exemptions for California Alternate Rate for Energy (CARE) and Medical Baseline (MB) customers.

On September 25, a Scoping Memo established two Tracks of the PCIA Rulemaking proceeding. Track 1 will address exemptions from the PCIA for customers participating in the CARE and medical baseline programs. Track 2 will consider alternatives to the current PCIA methodology, with initial emphasis placed on how to get proper access to PCIA data through a protective order. A PCIA workshop was held January 16-17, 2018. On March 12, Opening Testimony is due on the longer term issues under consideration through Track 2. Cal-CCA, LEAN and others are monitoring and participating in this proceeding. Integrated Resource Planning (IRP) This rulemaking proceeding is addressing the new IRP requirements associated with SB 350, as well as long-term procurement planning (LTPP) policies.

On May 16, 2017 the Energy Division issued their proposal on the IRP planning process. As previously reported, it appears that the Energy Division is proposing a prescriptive approach with respect to the IRP process, with significant requirements on Community Choice Aggregators serving 700 GWh or more per year in electric load. The Commission issued a Proposed Decision (PD) setting requirements for CCA programs and other load-serving entities’ IRPs and adopting a two-year planning cycle for the CPUC to consider IRP filings. (See Initial Summary and Recommendation.) As written, the PD minimizes the role of local CCA governing boards in approving IRPs, and elevates the CPUC’s role over such IRPs. Initial IRP filings by CCAs are now due on August 1, 2018.

1 This monthly memo is designed to provide LEAN’s clients with a current snapshot of key regulatory activities related to CCA in order to help them make informed decisions about whether and how to engage in regulatory processes during their program formation and early operations. This monthly report is not a comprehensive inventory of regulatory and statutory requirements impacting operational CCAs. Regulatory and statutory compliance requires a more comprehensive inventory than the subset of activities described herein, and must be tailored to the specific circumstances of each CCA program.

ATTACHMENT 2

CCA Bond Requirements This rulemaking proceeding was originally opened in 2003 to implement the CCA enabling statute (Assembly Bill (AB) 117). However, this rulemaking proceeding is now simply focused on the methodology for setting the CCA Bond, which is intended to cover the costs of involuntary re-entry fees of CCA customers to bundled investor-owned utility (IOU) service. Issuance of a proposed decision on this matter is expected in first quarter 2018.

PG&E 2018 Energy Resource Recovery Account (ERRA) Proceeding In the Consolidated ERRA Proceeding, the CPUC considered whether to end the PCIA for pre-2009 vintage customers and how to dispose of PG&E’s negative PCIA balance. CCA interests sought to ensure that any positive treatment for pre-2009 vintages also applies to CCA-related vintages. On January 11, 2018, Final Decision (D.18-01-009) was adopted.

Renewables Portfolio Standard (RPS)-Procurement Plans This rulemaking proceeding addresses ongoing oversight of the RPS program, including review of procurement plans and reporting on RPS progress. On December 12, the Agenda Redline Decision accepted CCA Parties’ request on the submission date for new CCAs. On December 14, the Commission adopted the Final Decision (D.17-12-007). On January 11 PG&E, Monterey Bay Community Power Authority and San Jacinto Power filed 2017 RPS Procurement Plans.

Resource Adequacy (RA) Rulemaking The CPUC regularly considers RA-related matters in a rulemaking proceeding. This proceeding was instituted in September 2017, and on January 18, 2018 a Scoping Memo was issued. Among other things, RA-related issues associated with CCA load migration will be addressed in a decision by June 1, 2018.

Green Tariff Shared Renewables (Green Tariff) The Green Tariff program was authorized in SB 43 (2013). The program allows the utilities an opportunity to offer optional Green Tariff rates for customers electing to receive a higher level of renewable energy. The CPUC approved the programs in D.15-01-051. In that decision, the CPUC set a termination date of January 1, 2019 and required the utilities to file advice letters to extend the programs. February 21: Annual Green Tariff program forum.

PG&E’s Diablo Canyon Power Plant Closure A final decision was adopted in this proceeding. On June 20, 2016, PG&E and other parties distributed a Joint Proposal governing the closure of Diablo Canyon and replacement of Diablo Canyon with a greenhouse gas (GHG) free portfolio of energy efficiency, renewables, and energy storage that includes a 55 percent RPS commitment by 2031. On January 11, 2018 the Commission approved D.18-01-022. (Redline Version). The only issue revised was additional funding ($241.2 million) for employee retention. On January 16, Green Nuclear Power filed an Application for Rehearing, asserting the decision is premature and violates the law. TBD: A Scoping Memo will be issued defining the scope of issues and procedural schedule.

Default Time of Use (TOU) and Marketing Education and Outreach (ME&O) Residential Rate Rulemaking On June 28, a Draft Resolution was issued on PG&E’s Pilot Residential Rate TOU program. MCE and SCP are the only CCAs participating in PG&E’s Pilot TOU program; all other CCAs are excluded from participation. On August 10, a Final Resolution approved PG&E’s Pilot Residential Rate TOU program. The resolution clarified that PG&E may recover costs necessary to provide CCA customers with rate comparisons for the default pilot entirely through distribution rates. However, the resolution declined to provide any direction regarding the appropriate method or cost recovery for creating a long term rate comparison tool solution for CCA customers. This issue will be addressed in the Rate Design Window consolidated proceeding.

CEC REGULATORY CASE DEVELOPMENTS Implementation of AB 1110 – Power Source Disclosure This proceeding considers modifications to the Power Source Disclosure Program. Retail sellers, which includes CCAs, will be required to disclose both GHG emissions intensity of their respective electricity portfolios offered to customers and the CEC’s calculation of GHG emissions intensity associated with all statewide sales. Retail sellers will also annually report other information to verify procurement claims and environmental claims made for the previous year. The CEC is required to adopt program guidelines by January 1, 2018. February 1: Staff Pre-Rulemaking Workshop on Updates to Power Source Disclosure.

Environmental Justice (EJ) and Disadvantaged Communities (DAC) Issues (Joint CPUC/CEC Matter) SB 350 requires that the CPUC and the CEC create a DAC Advisory Group (DACAG), which will assist the two Commissions in understanding how energy programs impact these communities. On November 1, the CPUC released a Draft Resolution and a Solicitation Letter proposing to establish a charter for the DACAG. On December 13/14, the CEC/CPUC approved the DACAG charter (see CPUC Resolution).

ATTACHMENT 2

Monterey Bay Community Power 70 Garden Court, Suite 300, Monterey, CA 93940 info@mbcommunitypower.org

Staff Report Item 10

TO: MBCP Policy Board of Directors FROM: Tom Habashi, Chief Executive Officer SUBJECT: Approve Amendment to FY 2017-2018 Budget DATE: March 7, 2018

RECOMMENDATION Staff recommends that the Policy Board approve the amendment to the MBCP FY 2017-18 Operating Budget. BACKGROUND The FY 2017-18 budget approved in September 2017 was prepared with the understanding that significant amounts of information were unknown. Revenues were adjusted to reflect Pacific Gas & Electric’s (PG&E’s) rate changes in mid February, power supply expenses are based on actual short-term contracts that have been executed in the past several months and other miscellaneous adjustments to MBCP general and administrative expenses. ANALYSIS & DISCUSSION The proposed budget update for FY 2017-18 projects MBCP in a stable financial condition. The projected program surplus balance available for reserve and rebate is $46.5 million or $8.2 million higher than the approved budget. In addition, funding for customer programs was increased to 2% of annual revenue. Revenues The projected total revenues of $136.6 million is an increase of $16.5 million compared to the approved budget. It includes the impact of PG&E’s rate change effective March 1 and references the financial forecast model prepared by Pacific Energy Advisors. MBCP’s revenues are from electric sales to our customers, a $3 million line of credit from River City Bank, and a $556k loan from the County of Santa Cruz. Expenses The projected total cost of $90.1 million is an increase of $8.3 million compared to the approved budget. The reasons for the variance includes:

Page 2 of 2

• Cost of Energy - Increase by $9.2 million which correlates to the increase in electric sales. The majority of MBCP’s power supply needs are under contract through the rest of the fiscal year.

• Staffing and Professional Services - Increase by $611k, reflecting new added positions, actual contract terms with the consulting service providers, and the newly proposed 401(a) retirement plan.

• IOU Fees (Including Billing) – Reduce by $124k due to the new CCA service fees filed by PG&E in February.

• Energy & Related Programs - Increase the budgeted ceiling from 1% of electric sales revenues to 2%.

• Debt Repayment/Bank Fees and Interest - $2.8 million lower than the approved budget because the repayment of principal will be made in October 2018 as per the loan agreements, which falls into the next fiscal year 2018-19.

FISCAL IMPACT The new budget forecast projects an increase in net revenue of $8.2 million, planned to be held in reserves. CONCLUSION Gross margin for FY 2017-18 is forecasted to be higher than initial projection by more than $8 million. This will increase funds allocated to reserves and improves the likelihood that MBCP will be able to reach the target balance for reserves within 2 years from launch ATTACHMENT 1) FY 2017-18 Approved Operating Budget 2) Proposed FY 2017-18 Updated Operating Budget

 

  1

 

BUDGET FY 2017‐2018 

October 1, 2017‐ September 30, 2018 

 

REVENUE/EXPENSE CATEGORY 

FY 2017‐18 

Budget 

I. REVENUES FROM OPERATIONS     

    ELECTRIC SALES REVENUE1   117,649,093 

    LESS UNCOLLECTIBLE ACCOUNTS   (588,245)

    LINE OF CREDIT    3,000,000 

TOTAL REVENUES   120,060,847 

     

II. COST OF OPERATIONS     

OPERATIONS AND ADMINISTRATIVE (O&A)    

        STAFFING & PROFESSIONAL SERVICES2   2,398,139 

        MARKETING /CUSTOMER ENROLLMENT3   1,498,694 

        DATA MANAGEMENT SERVICES   1,112,970 

        IOU FEES (INCLUDING BILLING)   479,988 

        OTHER ADMINISTRATIVE & GENERAL4   736,903 

        ENERGY & RELATED PROGRAMS5   1,170,608 

        SUBTOTAL O&A   7,397,302 

 

COST OF ENERGY   71,337,853 

DEBT REPAYMENT/BANK FEES & INTEREST    3,100,000 

     

TOTAL COST    81,835,155 

     

CCA PROGRAM SURPLUS/(DEFICIT)6   38,225,692 

                                                            1 Assumes revenues from 7 months of Phase 1 and 3 months of Phase 2 customers.   2 Includes MBCP contract and salaried staff; administrative, energy and legal services support; and expense reimbursement to Santa Cruz County. 3 Includes all marketing expenses including pre/ post mailing costs for enrollments in March and July 2018. 4 Includes office lease, equipment, other administrative and miscellaneous expenses  5 Represents 1% of electric sales revenues 6 Disposition of surplus revenues to reserves and/or customer discounts subject to Board policy direction. 

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ATTACHMENT 2