San Diego Community Power advisory committee backs FY 2026-27 budget, plans reserves to absorb PCIA "snapback"

San Diego Community Power's Community Advisory Committee on June 23 reviewed and received the draft FY 2026-27 operating and capital budgets and heard staff explain a reserve-focused strategy aimed at protecting customer affordability amid volatile market charges.

Acting CEO Jack Clark said the budget is "designed specifically to protect affordability while continuing to deliver reliable, cleaner energy to the communities we serve." He and staff framed the proposed spending plan as a mix of near-term rate relief and longer-term fiscal discipline.

Senior finance staff told the committee the agency expects a double-digit rate reduction for customers in the coming year because wholesale renewable prices in the open market have traded far below earlier California Public Utilities Commission benchmarks. "When that occurs, fundamentally it does mean that we do anticipate a rate reduction for the customer," said Timothy Manglano, senior director of finance and risk, while cautioning that the same dynamics drive the Power Charge Indifference Adjustment (PCIA) and can create a sharp catch-up "snapback" that reduces Community Power's net margins.

To manage that risk, staff presented a stress test and a reserves strategy. The proposed operating budget contributes $8 million to the capital investment plan and leaves a modest net position in FY27; the budget assumes the agency will grow reserves toward a 280-days cash-on-hand target to be able to absorb a potential PCIA snapback without raising rates. Manglano showed a stress-test distribution in which a downside scenario could see reserves fall toward roughly the mid-100s of days cash on hand, while an upside scenario could exceed 400 days.

On procurement and program lines, the FY27 capital budget incorporates $63.4 million of externally funded projects and $8 million of internal appropriation for a total FY27 capital request of $71.4 million. Will Weisman, associate director of finance, said the San Diego Regional Energy Network (SD REN) accounts for $63.1 million of that FY27 external funding. Gordon Samuel, chief commercial officer, noted power purchasing remains the single largest budget item and highlighted new tools to optimize storage and internalize load forecasting.

Staff also described a mix of program investments in FY27 that include a $3.5 million allocation to the Solar Battery Savings program, continued investments in pilot programs (about $2.5 million), and $1.5 million for a distributed energy resource management system. Lucas Uto, senior director of data analytics and customer operations, said renegotiation of the back-office contract with the agency—9s vendor Calpine produced about $1.3 million in annual savings by shifting from a per-meter to a per-account fee.

Committee members pressed staff on several technical points: the drivers of the fall in market renewable prices (supply and demand, expanded renewables and storage), how vintages and PCIA calculations interact with rate setting, and how Community Power benchmarks performance against other CCAs. Staff described new modeling capabilities (Monte Carlo stress testing using Sequent) and said staff will return to the board and the finance-risk committee with updated data in October.

Votes at a glance: The committee adopted the remaining consent calendar items by roll call and separately approved pulled items three (customer operations update) and five (power services update). No changes to the proposed FY27 appropriations were required at this meeting; the presentation was received and staff will bring recommended actions to the board as part of the formal budget adoption cycle.

What happens next: Staff said they will keep monitoring market signals over the summer and return to the board, the Finance Risk Management Committee and the CAC in October with updated load and price information and proposed rate-stabilization actions as needed. The FY27 budget materials will continue through the board adoption timeline.

(Reporting based on San Diego Community Power Community Advisory Committee meeting, June 23, 2026.)