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As it relates to rate setting,since 2018,the EBCE Board of Directors have mandated that the rates of the entry level service of Bright Choice remain 1.5 percent less than PG&E and the intermediate service level Brilliant 100 remain at price parity with PG&E, thus tying EBCE'rates to PG&E's rates.When PG&E's rates fluctuate,so do EBCE's. In the last several months, EBCE has faced financial constraints,which have made it difficult to remain competitive with PG&E.These constraints include the following: • In May 2020, PG&E decreased the generation component of the rate by 8 percent. Since EBCE's rates are tied to PG&E's rates, EBCE made the same change, resulting in loss in revenue. • In May 2020,the Power Charge Indifference Adjustment(PCIA),also referred to as an"exit fee,"increased by 30 percent and will likely increase again in 2021. The PCIA is annually set by the California Public Utilities Commission(CPUC) with the intent to ensure that customers who switch to EBCE(and other Community Choice programs like MCE)pay for energy that was contracted by PG&E to serve them prior to their switch. Because the EBCE Board has determined to maintain rates competitive with PG&E,when the PCIA increases, it reduces EBCE's profit margin. • Procurement costs for the large hydroelectric power in the Brilliant 100 portfolio have been higher than expected.While the difference in rates between Bright Choice and Brilliant 100 is 1.5 percent,the costs of providing Brilliant 100 exceeds 1.5 percent.As a result,the additional cost is being subsidized by Bright Choice. In April 2020,the EBCE Board voted to address the financial concerns in part by establishing renewable energy content as the benchmark for comparing EBCE's power content to that of PG&E. Now, EBCE projects the entry level service Bright Choice's 2021 energy mix to be a minimum of 50.3 percent combined renewable and carbon free energy(39.5 percent renewable, 10.8 percent large hydro)and with the remainder likely to be from natural gas which will better control costs. In June 2020,the EBCE Board approved their annual budget and decided to change the discount for the entry level service Bright Choice from 1.5 percent to 1.0 percent below PG&E rates,effective July 1,2020.The Board also decided to maintain the rate for the service level Renewable 100 at$0.01/kWh more than PG&E rates. On November 18, 2020,the EBCE Board discussed the following options for intermediate service level Brilliant 100: Option A. Discontinue the Brilliant 100 product for all accounts. Option B.Offer Brilliant 100 at a cost premium above PG&E rates,which would be an estimated 2 to 5 percent increase or a$2-$3 per month increase for Pleasanton residential accounts,compared to PG&E rates. 3