SOLANA BEACH — The county’s second smallest city is poised to become its first to launch community choice aggregation, or CCA.
Council members voted 4-1 at the May 24 meeting to award contracts to a consulting team that will create, implement and operate the alternative energy program.
“We’re talking about a milestone,” said resident and former Councilman Peter Zahn.
“It’s a really important example of leadership in climate change for this region,” added former Del Mar Councilman Don Mosier.
Since 2011 Solana Beach has been discussing CCA, also called community choice energy, which allows cities, either on their own or as part of a group or agency such as a joint powers authority, to buy or generate renewable electricity for their jurisdiction.
The city won’t own power poles or utility lines, nor would it deliver the energy. Transmission and distribution services will remain the responsibility of San Diego Gas & Electric.
CCAs are considered an effective way to reach state-mandated greenhouse gas emission reductions.
There are currently nine programs operating in the state. Two people involved in their creation have been advising Solana Beach during the consulting team selection process.
The city contracted with The Energy Authority for design and operation, and Calpine, which generates electricity from natural gas and geothermal resources.
The program will be implemented in three phases. Program development, which is estimated to take six months, includes completing a technical study, drafting an implementation plan and creating operations, budget and staffing plans.
There will also be “extensive and robust” community outreach that includes a presence at events such as the farmers market and meeting with residents, community groups, homeowner associations, large energy users and businesses.
Once that is completed, the city will decide whether to continue moving forward or opt out, Should it choose the latter, the consults will absorb all costs to that point.
Phase two is the program launch, which is expected to last from six months to a year and includes certifying the implementation plan, establishing data management, accounting and utility services agreements, regulatory registrations, bond posting, power procurement, continued public outreach and rate setting.
Should the city decided to end the process during this phase it will be required to pay the consultants the total amount of costs they have incurred, up to a maximum of $156,000.
In the final phase, which will take about two to five years, services are provided, customer accounts are managed and other jurisdictions can enroll, a move one of the city’s neighbors may consider.
“Del Mar would like to join you if you’re successful,” Mosier said.
Under the contract, a “lockbox” account will be established and held at a commercial bank for customer payments. The funds will be used for operations, energy purchases and to create a reserve.
TEA will be paid up to $1 per megawatt hour, or about $80,350 annually.
Calpine will be compensated based on the number of customers in the CCA. If all of Solana Beach’s 7,800 utility users do not opt out, that comes to a little more than $126,000 per year.
The consultants said fewer people than expected have opted out of the existing CCA programs. They also are confident a CCA program can provide energy at a lower cost than what SDG&E customers currently pay.
The contracts with both companies are for five years, with automatic one-year extensions with TEA and two years with Calpine.
According to state law, once a CCA program is formed, all utility customers in the jurisdiction are automatically enrolled. However, they have four opportunities to opt out, beginning about two months before the program is launched.
The city received seven emails supporting the program and all 16 people who spoke at the meeting urged council members to move forward.
In an email from SDG&E’s parent company, Francisco Urtasun stated that Sempra Energy applauds the city for seeking ways to reduce greenhouse gas emissions but recommended engaging in a “robust and transparent dialogue to review all potential” measures to do so.
Council members said the first phase is designed to do just that.
“I think this is a really great thing for us to get more information on,” Mayor Mike Nichols said. “Enter into this phase one, hopefully move onto phase two and three. But time will tell. The only way to do that in a smart and thorough manner is to enter into phase one.”
“I do think it’s important that we move onto the community outreach part of this,” Councilman Dave Zito said. “One of the stifling problems of a council meeting is that we do have limited back and forth. … We are going to have community meetings where that back and forth can be had and people can get their questions answered in a more direct way.”
Resident Bill Stoops sent an email opposing the plan.
“Fundamentally a CCA is government interference in markets, and government fails to produce anything better than a free market process,” he wrote. “And since the CCA cannot exist without SDG&E’s infrastructure, instead of having one monopoly we will have two.
“I don’t see the logic in complaining about Sempra, and then creating another government construct and somehow expect a better outcome,” he added. “Whether you buy from Sempra or the CCA, you won’t know the generation source of the electricity you use, and nor will your appliances care.”
Also opposed is Councilwoman Ginger Marshall, who voted against awarding the contracts.
Although she said she supports renewable energy and has solar panels on her home, she has concerns about the cost to ratepayers and how much a CCA will actually reduce the city’s carbon footprint, among other things.