SOLANA BEACH — As part of the city’s outreach efforts to explain community choice aggregation, or CCA, a presentation was given to the Climate Action Commission during the advisory board’s July 19 meeting.
CCA, also called community choice energy, is identified in the Climate Action Plan adopted one week earlier by City Council as the most effective measure to achieve 100 percent renewable electricity by 2035, a stated goal in that document.
Cities, counties or other government agencies can pool, or aggregate, the electricity demand of their communities. Investor-owned utilities — in this case San Diego Gas & Electric Co. — continue delivering power, maintaining infrastructure and billing.
“It’s a very exciting project to undertake,” said Barbara Boswell, former finance director for Lancaster, who was involved from start to finish with that city’s CCA creation.
She said benefits include customer choice, increased use of renewable energy and local control to set rates, energy products and programs.
“The City Council would hold a hearing to set the rates,” said Boswell, who has been advising Solana Beach as it moves to possibly become the first city in San Diego to form a CCA program.
“The rate setting is closer to customers so it’s easier for them to participate,” she added. “Most people don’t think to go to Sacramento and participate in the rate-setting process for San Diego Gas & Electric. It’s a pretty daunting undertaking.”
CCA can also create new revenue, which would remain with the city.
Boswell said CCA is not without its risks, however, they can be mitigated.
For example, the number of people who may decide to remain with SDG&E is unknown, but as people become more familiar and comfortable with the program, CCA opt-out rates are lower, she said.
Predicting the cost of energy can also be risky because it is purchased on the open market, where prices fluctuate.
Boswell said that can be addressed by hiring third-party experts who can forecast the amount of energy that will be needed.
There are three government structures being used by the eight existing CCA programs in California.
Most are governed by a joint powers authority, under which each member usually has one vote to decide rates, the renewable portfolio and revenue control. There are no risks but revenues are shared.
Under enterprise and hybrid JPA models, a single agency has full control over rate setting, renewable portfolio choices and revenue and program decisions.
The enterprise model, which Solana Beach is considering, assumes full risk for operation and administrative costs.
A hybrid JPA shares operating risks and administrative costs.
Each CCA program is required to maintain on its website a continuously updated joint rate comparison, which lists average household use and what an average bill would be for CCA and investor-owned utility customers.
According to a chart presented by Boswell, prices in all categories varied by about a dollar or two, except for customers who opted for 100 percent renewable energy. They paid up to $17 more.
Solana Beach began looking into CCA in 2012. After a study concluded it is feasible, the city contracted in May with The Energy Authority, a nonprofit organization, for design and operation, and Calpine, which generates electricity from natural gas and geothermal resources.
The process is currently in program development, the first of three phases, which includes completing a technical study, updating the financial pro-forma, drafting an implementation plan required by the Public Utilities Commission and creating operations, budget and staffing plans.
It also calls for extensive community outreach. City officials plan to have information available at Concerts at the Cove, farmers markets and Beach Blanket Movie Night. They will also meet with area businesses, civic groups and homeowners associations.
A public workshop is planned for early September.
Once phase one is completed, the city can continue moving forward or opt out. Should it choose the latter, the consultants will absorb all costs to that point.
The city can also back out in phase two, which is program launch, but it will be required to pay the consultants the total amount of costs they have incurred, up to a maximum of $156,000.
“This decision has not been made, although we’re lining it up,” City Manager Greg Wade said. “The contracting services allow us to go from this point all the way through to launch and operation of a CCA but we’re going to be doing it in a systematic approach.”
More information, including general frequently-asked-questions, is on the city website, where the July 19 meeting can also be viewed. Wade said more targeted FAQs are being created to address net metering, renewable energy credits and exit.
If Solana Beach decides to move forward and all goes as planned, the program could launch within the next 12 to 16 months.
If other cities in the county follow suit, Wade said Solana Beach is open to being part of a JPA.
1 comment
Comments are closed.