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SVCE finance staff say reserves and stress testing leave agency positioned but recommend cautious budgeting
Summary
Staff presented a yearly stress test showing SVCE's reserves and financial policies would withstand a severe downward movement in forward energy prices; staff recommended no major budget changes now but said they will revisit the budget in December and begin internal work on financial levers.
Silicon Valley Clean Energy staff on June 11 presented the authority's annual financial stress-test results and recommended holding the draft September budget approach in place while preparing contingency options for the December budget update.
Amrit (staff member) framed the exercise as part of SVCE's enterprise risk management framework and said the test is designed to examine extreme but plausible market movements and the agency's capacity to continue operations. "It's time to do stress testing — not to stress us out, actually to keep us out of stress," Amrit said.
Staff's updated base-case forecast reflects continuing declines in forward market prices since the March midyear projection. The presentation said falling forward prices lower projected procurement costs but,…
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