SOLANA BEACH — Consistently a leader in sustainability, Solana Beach will be the first city in the county to offer residents community choice aggregation.
Council members at the Feb. 28 meeting authorized several actions, including launching the alternative energy program, approving its name, product names and procurement strategy and setting a March 14 public hearing to adopt a risk management policy and discuss and set rates.
If all goes as planned, the CCA will start June 1. Although she said she supports alternative energy options, Mayor Ginger Marshall was the lone dissenter, as she has been in the past.
“I’m still worried about all the risks involved,” she said before the 3-1 vote, with Judy Hegenauer absent. “I think the rest of the council is very positive and it looks like they want to move forward with this. I hope it works out.
“I would prefer to join forces with some of the other larger cities in the area who are studying their own CCAs,” she added. “I just think that that would be a more prudent way to go about it.
“I’m definitely not an energy expert, and this is all very technical and complicated,” Marshall said. “I just hate to see any of the city’s funds being put to risk at the expense of saying that we’re the first ones in San Diego to launch a CCA.”
The goal of CCA, also called community choice energy, is to provide a higher percentage of renewable electricity at competitive and potentially lower rates, give customers local choices and promote the development of renewable power sources.
San Diego Gas & Electric, which currently offers 43 percent renewable energy, will continue to deliver electricity through its system and provide maintenance and outage response services.
Under state law, all customers must be automatically enrolled in the program but they are given several chances to opt out.
Solana Beach has been discussing CCA for more than five years, aggressively moving forward in mid-2016 when a request for proposals was released to find a partner to gather data, provide the necessary renewable energy and address economic concerns.
About a year later the city contracted with The Energy Authority for design and operation, and Calpine, which generates electricity from natural gas and geothermal resources.
According to TEA estimates, if Solana Energy Alliance — the newly adopted name — offers rates 3 percent lower than SDG&E, Solana Beach customers using 400 kilowatts per month would save .95 a month if they choose a base-energy program of 50 percent renewables and 75 percent carbon-free sources.
The cost for 100 percent renewables would be $91.60 per month, or .62 cents below SDG&E’s current estimated rate.
TEA also provided projection costs for 2018 and 2019, based on a June 1 start. The numbers differ because the program will be operational for only seven months rather than 12.
According to the estimate, the cost for SDG&E services will be $5 million this year and $7.3 million in 2019.
CCA costs are expected to be about $2.4 million and $3.7 million. Those amounts include all costs incurred to date by TEA, which agreed to pay any upfront fees until the program was launched, after which time the city would begin reimbursement.
So far TEA has spent about $50,000 and city staff time amounts to around $55,000. When Solana Beach officials agreed to form a CCA program, they did so with a guarantee from the consultants that no city funds would be put at risk.
Other estimated costs include exit fees of about $1 million the first year and $2 million the next — on average, $10 a month — for customers who do not opt out of the program.
Reserves, which will be used to buy power in future years, are expected to be about $1.4 million and $1.3 million in 2018 and 2019, respectively.
A risk management team or committee will be created to oversee the day-to-day management of the program and ensure it is staying on track with its goals and objectives.
Solana Beach utility customers can expect to receive enrollment notices in April and May, at which time they can opt out.
Base energy will be called SEA Choice. The 100 percent renewable program will be known as SEA Green. Net energy metering customers, or those with rooftop solar, will be referred to as SEA NEM.
Resident Tracy Richmond said he supports CCA but had a concern with the name. Other cities may be reluctant to join the Solana Energy Alliance and “we definitely want more members,” he said.
Several other San Diego cities, including Carlsbad, Encinitas and Oceanside, are currently looking into forming a CCA program. They could create their own or partner with Solana Beach and form a joint powers authority.
Assistant City Manager Dan King said the name could be changed, as was done in Los Angeles recently.
“We’ve had a lot of good public input,” Councilman Dave Zito said, adding that residents asked a lot of good questions during the public workshops.
“It’s allowed us to end up with a better product in the end,” he said. “I think this is a great opportunity. The numbers up there speak for themselves that within the first year-and-a-half of operation our model’s showing that the venture should have $2.6 million in buffer to allow us to potentially do lots of different things, including either more rate discounts or renewable purchases and help meet our climate action plan.”