San Diego Community Power’s board on Dec. 11 approved a fourth amendment to the agency’s reserve policy, increasing the target reserve level from 180 days to 225 days cash on hand and authorizing the board to designate funds between the target and maximum as a rate‑stabilization reserve.

The measure passed on a roll call vote after finance staff laid out a risk analysis that named the Power Charge Indifference Adjustment (PCIA) and related market‑price benchmark volatility as the agency’s largest potential exposure. “The PCIA and generation rates comprise the biggest risk by far,” said Timothy Mangumot, director of finance, during the presentation explaining staff’s bottom‑up quantification and stress tests.

Why it matters: Community Power purchases or contracts for renewable generation while bundled utilities such as SDG&E still hold long‑term contracts. PCIA is the California Public Utilities Commission mechanism that reconciles those legacy contracts; when market benchmarks fall, PCIA true‑ups can require departing‑load customers to pay more to make investor‑owned utilities “whole,” a charge that can materially change Community Power’s discount to SDG&E and the agency’s revenue picture.

Staff described two stress‑test scenarios. One modeled a return to very low 2021 price benchmarks and estimated roughly $331 million of impact — about 120 days of cash on hand under that scenario. A second scenario combining moderate benchmark moves, participation declines and higher uncollectibles showed a roughly $238 million impact (about 99 days cash on hand). Based on those analyses, staff recommended keeping a 180‑day minimum, adopting 225 days as the target and retaining a 270‑day maximum to cover extreme, concurrent risks.

Jeff Spangler, senior strategic finance manager, summarized the policy language changes the board approved, including a shift in how reserves are defined: staff will measure reserves using unrestricted cash, cash equivalents and investments rather than net position, aligning the metric with credit‑rating practice.

Board members pressed staff on two threads: how PCIA true‑ups work and what regulatory or legislative remedies staff are pursuing. “If I can respond… there should be multiple opportunities here to help chime in on PCIA, especially with the PCIA track 2 proceeding being scoped out right now,” Mangumot said when asked about advocacy.

The vote: A majority approved the resolution (motion moved and seconded; aye votes recorded on the roll call). Staff said the treasurer’s report will continue tracking timing for reaching the adopted targets and that staff will return with ancillary policy language related to a rate‑stabilization fund in January.

Where it goes next: With the policy adopted, staff will incorporate the new thresholds into rate‑setting scenarios and continue regulatory engagement on PCIA rules. The agency’s finance team said the new approach balances the need to preserve rate stability for customers while maintaining prudent liquidity for market and operational risks.