CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 2 of 3 while still supporting the City’s environmental objectives. DISCUSSION The City is facing a severe and increasing structural deficit, meaning that expenses have and will continue to grow faster than revenues. Current forecasts indicate an average budget shortfall of approximately $13 million annually over the next eight years, which the City has been working to address proactively with a combination of reduced costs and new revenue. For that reason, staff has evaluated options to reduce discretionary spending in a variety of areas, including looking at existing agreements, such as the current Ava Community Energy plan. When considering this change, the first priority was to ensure the City would still meet its climate action goals as outlined in the Climate Action Plan (CAP) 2.0 (https://www.cityofpleasantonca.gov/our-government/key-initiatives/climate-action-plan/). To achieve this objective, staff analyzed the impacts on the City’s CAP 2.0 to assess outcomes. In the scenario where the City reduces service from Renewable 100 to Bright Choice from July 1, 2024 to July 1, 2028 as proposed in this recommendation, and then re-enrolls in Renewable 100 beginning July 1, 2028, the City would continue to meet its CAP 2.0 2030 goal (assuming all other actions from CAP 2.0 meet their quantified emissions reduction targets). The CAP 2.0 greenhouse gas (GHG) reductions are considered a point in time rather than cumulative. Assuming full implementation of CAP 2.0, the city has a small buffer of 1,336 metric tons (MT) of CO2e, which exceeds the 2030 reduction target. It is worth noting that this scenario results in no effect on GHG targets since it assumes 100 percent carbon-free electricity in 2030. Switching from Renewable 100 to Bright Choice will reduce the City's electricity costs while still providing a significant portion of renewable energy. Bright Choice offers 49.4 percent eligible renewable energy. This adjustment will not only help the City manage its budget but also maintain a commitment to environmental sustainability. Additionally, this change would not affect Residential, Commercial, and Industrial Accounts. These accounts, by default were set up as Bright Choice customers will still maintain the option to switch from Bright Choice to Renewable 100 if they wish. EQUITY AND SUSTAINABILITY While Bright Choice has a higher GHG emission factor than Renewable 100, it still supports the City’s sustainability goals outlined in the Climate Action Plan (CAP) 2.0. The impact on the City’s overall GHG emissions has been evaluated, and while there will be a temporary increase in emissions, the City will still make significant strides towards its 2045 carbon neutrality goal. OUTREACH No public outreach was conducted for this item. STRATEGIC PLAN ALIGNMENT This item aligns with the ONE Pleasanton Strategic Plan goals Funding Our Future: Fiscal Sustainability and Investing in Our Environment: Infrastructure, Public Facilities, and Sustainability. By optimizing the City's electricity expenses, the City is taking a proactive approach to stabilizing the near-term financial challenge. Page 6 of 248