MCE on track to approve $700M budget

The executive committee of MCE has approved management’s proposed 2026-2027 budget — a $700 million revenue and spending plan.

The proposed budget includes a 12.8% increase for staff compensation and no cuts to local electrification subsidies. The new fiscal year starts April 1.

Last month, the board of the renewable energy agency approved a rate cut of $11 a month for typical households that would take effect next month.

The rate cut came in response to a jump in monthly fees from Pacific Gas & Electric Co., which bills MCE customers for using its infrastructure, and a drop in wholesale energy costs.

The endorsed budget, approved by the committee on Monday and expected to be passed by the full MCE board on March 19, projects $683 million in revenue from 1.5 million consumers in Marin, Napa, Solano and Contra Costa counties, plus $19 million in investment earnings and grants.

The plan envisions spending about $710 million: $632 million on energy contracts, $54 million for staff and operations, $10 million for relief to low-income customers, $9.1 million for other local programs and $5.3 million in “non-operating” expenses.

A $70 million rainy day fund, which will subsidize the rate cut, would be partly replenished. By March 2027, MCE’s projected reserves would be $495 million, excluding the rainy day fund.

The budget for the current fiscal year projected $845 million in revenue, grants and investment income. It projected about $820 million in expenses.

Marin’s delegation on the executive committee was divided on endorsing the 2026-2027 budget. Directors from Contra Costa, Napa and Solano counties supported it.

Fairfax Councilmember Barbara Coler, the new board chair, San Rafael Councilmember Maika Llorens Gulati and Mill Valley Mayor Max Perrey voted for it.

Belvedere Mayor Sally Wilkinson and Larkspur Mayor Stephanie Andre voted no. Both said management did not explain compensation and energy market decisions.

Several spending categories drew critical comments from a handful of Marin committee members and environmentalists.

Most contentious was staff compensation, including raises and bonuses implemented by management on Jan. 1 that lock in costs for the upcoming fiscal year.

The proposed outlay for MCE’s 118 employees is $32.7 million, a $3.2 million increase from the current fiscal year, when the budget envisioned 119 employees.

“I read the staff report,” Andre said. “It doesn’t answer the question why are we going to be down one head count but our personnel costs are going to be up 10.8%.”

Maira Strauss, the chief financial officer of MCE, said the current budget did not fully fund recent hires, so those costs and five new jobs were built into the year starting in April.

“It’s just impossible for us as a board to understand what is going on,” said Wilkinson. “There’s just too many moving parts that we don’t have access to.”

Dawn Weisz, the chief executive officer, said, “We believe in fair compensation for our staff for internal growth opportunities with a philosophy really grounded in market competitiveness, internal equity, fiscal responsibility and transparency.”

The only savings management presented to the committee for discussion concerned electrification subsidies. Management proposed cutting or reducing up to $9 million in subsidies for electric vehicles, charging stations and home appliances.

“EV rebates is your most popular program,” said Jody Timms of 350 Marin, an environmental group. “It’s the most important for transportation for low- and very low-income people.”

“And you’re considering eliminating, cutting or eliminating that program,” she said. “That makes absolutely no sense.”

Andre and Wilkinson asked why MCE is paying the EV program contractor $1,200 per rebate when the subsidy is $2,000 per vehicle.

Alice Havenar-Daughton, customer relations vice president, said working with car dealerships and verifying eligibility is labor intensive.

The executive committee agreed it did not want cuts in the electrification program.

Management did not discuss altering its suggested mix of energy contracts, which several environmentalists noted were its largest expense.

These include straightforward power purchase agreements, “hedge” contracts to lock in prices and “attribute” contracts for renewable energy credits — which boost MCE’s green energy mix reported to regulators.

In January, MCE retracted its claim it provides “100% fossil free power” after Marin environmentalists documented some MCE contracts that include gas generation.

In the current fiscal year, MCE spent $144 million in two energy contract categories containing attributes. The proposed budget envisions spending $54 million on these contracts.

“These short-term attributes provide effectively no environmental benefits,” said Dan Segedin of the Marin Conservation League. “Fifty-four million dollars is a tremendous amount of money. … This is about $90 per household.”

Management did not respond to Segedin’s comment nor his earlier remark that MCE has not replied to public records requests for documentation of its carbon-free emissions.

Walnut Creek Councilmember Cindy Darling, vice chair of the executive committee, said MCE directors would look at the attribute issue in planning discussions later this year.

“I think we heard from the board, as we went through the workshops, that it is important to us to maintain our commitment to clean energy,” she said.