Clean Energy Alliance audit shows $2.68 million more in expenses compared to revenue over last fiscal year

Following an expansion into two more cities, the Clean Energy Alliance has about $2.68 million more in expenses compared to revenue for the fiscal year ending in June 2023, according to an audit report released during the agency’s Oct. 26 board of directors meeting.

The CEA, one of San Diego County’s two Community Choice Aggregation programs, adopted a budget for the 2022-23 budget that projects a net positive result of operations of about $17.55 million to eliminate that deficit, according to a staff report.

“The increase is due to a rate increase effective February 1, 2023, and the expansion to Escondido and San Marcos in April 2023,” the staff report read. “Expenses increased 45% compared to 2022, due to higher power supply costs in FY 2022/23 compared to the prior year and costs related to the expansion.”

Launched in 2019, the Clean Energy Alliance initially provided power to residences and businesses in the cities of Del Mar, Solana Beach and Carlsbad. It has since expanded to include the cities of Vista, Escondido, Oceanside and San Marcos.

According to the audit, CEA experienced a 103% increase in its assets from an influx of cash, accounts receivable and accrued revenues due to the recent additions of Escondido and San Marcos. The agency’s customer base increased by about 150%.

“CEA incurred costs related to the service expansion into Escondido and San Marcos beginning in January 2023, however, revenue associated with the expansion did not begin until April 2023,” according to the staff report. “This resulted in a need to draw down on the revolving line of credit with JPMorgan Chase.”

The CEA still owes $8.95 million on that line of credit, which is due to be repaid in full by February 2026, according to the staff report.

The main purpose of the annual audit, which was performed by Pisenti & Brinker, is to verify the accuracy of the CEA’s financial statements.

“It is wonderful that we have passed the audit again without any conditions,” said Dave Druker, a Del Mar council member and chair of the CEA board of directors.