San Diego Community Power on May 2025 approved a set of contract documents (EEI master agreement confirmation and collateral annex) with Clean Power Alliance of Southern California to enable a voluntary allocation market offer (VAMO) swap of annual renewable volumes between the two agencies. Andrea Torres, director of origination, said the agreement is intended to enable both agencies to include swapped volumes in future prepayment transactions that can lower costs for customers.

What staff told the board

Andrea Torres said the swap would exchange product on a megawatt‑hour‑for‑megawatt‑hour basis from annual volumes that each agency currently receives under utility contracts. The swap is a ten‑year arrangement commencing in July that staff said will not change either agency’s underlying renewable portfolio but will enable joint access to prepaid financing mechanisms. "We anticipate that as we include the VAMO volumes in a prepaid transaction that it will really result in material cost savings, with our customers," Torres said.

Why it matters

Torres and staff said the VAMO swap is a prerequisite to packaging certain annual volumes into a prepaid structure funded by tax‑exempt financing — a mechanism other California CCAs have used to reduce long‑term supply costs. Staff emphasized there is no immediate fiscal impact from signing the EEI confirmation itself; the savings would come if and when the parties include swapped volumes in a prepaid transaction and secure financing.

Contract details and scope

- Swapped product and volume: Staff described the swap as covering PV‑only renewable energy and associated renewable energy attributes and said initial swapped volumes start in the 720 GWh/year range and could approach about 1,000 GWh/year as additional volumes are included.

- Term and settlements: The swap confirmation is structured for a ten‑year term starting in July; under the structure each CCA would retain CAISO settlement revenues associated with the energy and pay an identical direct price for the swapped product so there is no net change to their portfolios of renewable attributes.

Board action and next steps

The board voted to approve the EEI master agreement confirmation and collateral annex with Clean Power Alliance. Staff said the approval enables the agencies to pursue prepaid financing opportunities; staff will return with specifics if they pursue a prepaid transaction and will present potential customer savings estimates at that time.

Background

Torres briefed the board on the broader prepayment practice; staff called it a tool used by other California CCAs, where prepayment can be funded by tax‑exempt municipal financing to reduce the after‑tax cost of long‑term renewable contracts. Staff framed the swap as a mechanism to give the parties a broader and more flexible pool of annual volumes that can be included in that toolkit, while keeping underlying renewable accounting intact.