Quiet Energy Revolution Underway in Japan as Dozens of Towns Go off the Grid

(Reuters) – A northern Japanese city’s efforts to rebuild its electric power system after the 2011 earthquake and tsunami mark a quiet shift away from the country’s old utility model toward self-reliant, local generation and transmission.

After losing three-quarters of its homes and 1,100 people in the March 2011 temblor and tsunami, the city of Higashi Matsushima turned to the Japanese government’s “National Resilience Program,” with 3.72 trillion yen ($33.32 billion) in funding for this fiscal year, to rebuild.

The city of 40,000 chose to construct micro-grids and de-centralized renewable power generation to create a self-sustaining system capable of producing an average of 25 percent of its electricity without the need of the region’s local power utility.

The city’s steps illustrate a massive yet little known effort to take dozens of Japan’s towns and communities off the power grid and make them partly self-sufficient in generating electricity.

“At the time of the Great East Japan earthquake, we couldn’t secure power and had to go through incredible hardships,” said Yusuke Atsumi, a manager at HOPE, the utility Higashi Matsushima created to manage the local generation and grid.

Under a large-scale power system a “blackout at one area would lead to wide-scale power outages. But the independent distributed micro-grid can sustain power even if the surrounding area is having a blackout.”

The Resilience Program is mainly for building back-up capabilities for Japan’s cities and towns in the event of another disaster such as the earthquake and tsunami that caused meltdowns at the Fukushima nuclear power plant.

However, the Program has spurred the creation of micro-grids and distributed power generation across Japan that reduces municipalities dependence on large power plants.

Japan’s government ministries are seeking to raise the budget for the Program by another 24 percent for the fiscal year starting in April 2018, the cabinet office said last month.

The money earmarked for this fiscal year is going in part to the creation of smart energy management systems and distributed generation systems in towns across Japan.

“Since Fukushima, there has been a gradual elaboration of policies to realize that kind of local autonomy, local consumption paradigm,” said Andrew Dewit, a professor of energy policy at Rikkyo University in Tokyo.

Distributed generation uses small-scale power generation fueled by natural gas or solar and wind power arrays. Smart energy systems use the internet to connect appliances and meters to better direct electric power where and when its needed.

Higashi Matsushima has built its own independent transmission grid and solar generating panels as well as batteries to store power that can keep the city running for at least three days, according to Atsumi.

Companies in Japan are shifting their focus in response to the changes heralded by cities like Higashi Matsushima.

Sekisui House (1928.T), Japan’s biggest builder of detached homes, constructed Higashi Matsushima’s smart micro-grid for 85 housing units in 2016.

Taisei Corp (1801.T), one of Japan’s biggest construction companies, set up an energy strategy division this year to take advantage of the drive for smart energy systems.

The company is planning to double energy-related orders to around 120 billion yen over the next five years, focusing on renewables, energy efficient buildings and smart communities, a spokesman said.

Steps taken by cities like Higashi Matsushima were the brainchild of Takao Kashiwagi, a professor at the International Research Centre for Advanced Energy Systems for Sustainability at the Tokyo Institute of Technology.

He designed Japan’s first smart town and is the head of the New Energy Promotion Council that has paid out more than 100 billion yen in subsidies from the Ministry of Economy, Trade and Industry for smart energy communities.

“We are moving towards a day when we won’t be building large-scale power plants. Instead, we will have distributed power systems, where small power supply systems are in place near the consumption areas,” he said.

For a graphic on Japan’s energy mix, click: reut.rs/2f6XOIT

(Reporting by Aaron Sheldrick and Osamu Tsukimori in TOKYO; Editing by Henning Gloystein and Christian Schmollinger)

Quiet Energy Revolution Underway in Japan as Dozens of Towns Go off the Grid, by Aaron Sheldrick and Osamu Tsukimori, Reuters, September 19, 2017.

Clean, Renewable Energy Programs Make Their Way around California!

In the move toward cleaner, greener energy, more and more California cities and counties are choosing to join Community Choice Aggregation (CCA) programs. CCA programs offer energy consumers a choice regarding where their energy is sourced from — previously, consumers had only investor-owned utilities, such as PG&E, as energy providers unless they had their own independent power source. CCA energy rates are comparable to PG&E’s, and in some cases can be even lower. In addition, the money consumers spend for CCA-generated power goes toward projects like creating more renewable energy infrastructure and jobs.

To enjoy the option of getting power from a CCA, Californians must live in a city or county that has agreed to join a community choice energy program. In the Bay Area, some areas have moved forward more rapidly than others. For instance, while Marin County launched the state’s first CCA in 2010 and San Francisco launching their program shortly after in 2015, residents of Alameda County will have to wait until next spring to begin receiving power from the developing CCA, East Bay Community Energy. In Contra Costa County, cities such as San Ramon, Concord and Martinez are among those that recently voted to join community choice energy programs.

Across the state, CCA programs are growing in popularity and expanding rapidly. Such programs became possible 15 years ago, when the state assembly opened the door to local control by passing AB 117. Since then, CCA programs in California have grown to serve 915,000 customers and are projected to deliver approximately 1,572 megawatts of power to consumers in 2017, according to the California Public Utilities Commission (CCA). Within the next 10 years, 85% of power consumers in California will receive energy from sources other than investor-owned utilities, predicts the CPUC, and a large percentage of this is expected to come from CCA programs.

California is aiming for 50% of all its electricity to be renewably sourced by 2030, and a bill, SB 100, that would mandate 100% renewable energy by 2045 has cleared the senate and moved to the assembly. CCA programs are helping to meet these goals. CCA programs’ base energy services are more renewably sourced than PG&E, and many offer 100% renewably sourced energy services.

If you’re interested in learning more about CCA programs, visit Cal-CCA.org, where you can find information about CCA programs across the state.

The Bay Chapter of the Sierra Club is actively engaged in the development and expansion of Community Choice energy programs throughout the Bay Area and beyond. To learn whether there’s a CCA program serving your community, contact Conservation Coordinator Melissa Yu at melissa.yu@sierraclub.org.

Clean, Renewable Energy Programs Make Their Way around California!, by Emily Fong, Sierra Club, September 12, 2017.

California Lawmakers Mull Using Carbon Trading Revenues for EV Incentives

Dive Brief:

  • The Los Angeles Times reports California lawmakers are considering a spending deal that would earmark $1.5 billion in revenues from the state’s cap-and-trade carbon scheme for clean energy vehicles, including rebates for EVs, farm equipment and large freight vehicles.
  • California Gov. Jerry Brown (D) in July signed legislation extendingthe state’s greenhouse gas emissions cap and trade program. The monies potentially being directed towards transportation electrification do not represent all of the program’s revenues.
  • The California legislative session ends on Friday, and the deal will need to be voted on by the end of the week.

Dive Insight:

Six weeks after extending the cap and trade program, and just days before the legislative session ends, California lawmakers are reportedly close to a deal that would inject more than a billion dollars into the state’s electrification efforts.

According to the Times, the largest portion of spending, almost $900 million, would go towards putting more electric vehicles on the roads in the form of rebates and incentives. Another $300 million will also flow through the clean vehicle program, but will be directed towards improving air quality in polluted neighborhoods.

The Sacramento Bee reports the spending deal was reached after another provision related to labor unions was inserted. The United Auto Workers has been trying to organize workers at Tesla’s Freemont, Calif., facility.

If approved, the provision would require manufactures to be certified as “fair and responsible in the treatment of their workers” by the state in order to be eligible for zero-emission rebates, beginning in summer 2018.

California’s cap-and-trade program is part of the state’s wider effort to reduce greenhouse gas emissions 40% by 2030 compared to 1990 levels. Some portion of the annual revenues is distributed under a set formula.

Just this month, lawmakers abandoned a bill that would have authorized $3 billion in funding for electric vehicle incentives. Instead, it was rewritten to direct the state’s Air Resources Board to conduct a lengthy study on the issue of EV rebates. That report is due in early 2019.

California Lawmakers Mull Using Carbon Trading Revenues for EV Incentives, by Robert Walton, Utility Dive, September 14, 2017.

Power Grid Expansion Plan Withdrawn amid Political Backlash

The late-session plan to restructure management of the California power grid skidded to a halt Wednesday in the wake of growing opposition from interest groups and a spate of negative publicity.

While lobbyists and advocacy groups spent much of the week pressing for passage or defeat of the proposal long-backed by Gov. Jerry Brown, the lawmaker who introduced the bill withdrew his dual measures early in the afternoon.

Assemblyman Chris Holden, D-Pasadena, said he was not abandoning the idea of restructuring the California Independent System Operator, or Cal-ISO, the nonprofit in charge of most of the state energy grid.

“But there is still more to discuss, starting with the role of the Legislature in review of any proposed governance structure of a new ISO,” said a statement from Holden, who added the nearly identical language to two different bills. “We will continue our work on the issues over the fall and likely revisit it in the second half of this two-year session.”

The legislation would have created a process to begin transferring authority of the grid from Cal-ISO to a commission of elected officials or appointees that would then develop a governing plan to expand the grid to five Western states.

The bills also were challenged by supporters of what’s known as community choice aggregation, a power-buying program that allows cities and counties to purchase electricity in bulk from specific sources rather than relying on for-profit utilities.

Both Cal-ISO and Gov. Brown said the expansion would benefit consumers and allow utilities to market excess solar power to other states and to import cheaper wind energy into California.

“The goal of regionalizing the grid is to lower consumer costs and greenhouse gas emissions and improve electricity reliability and renewable energy development,” Brown spokesman Evan Westrup said. “This proposal is the product of years of discussion and input from all parties.

The Governor’s Office did not respond to questions about Holden’s decision to withdraw the amendments, saying the assemblyman’s statement speaks for itself.

Critics worried that expanding the grid outside state lines would undermine California’s ability to regulate which sources of electricity are bought and sold within its borders.

Cal-ISO board members are appointed by the governor, who answers to voters. Expanding the network to other states could jeopardize state control of the network and leave oversight to the less environmentally conscious Trump administration, according to critics.

Opponents also complained that, much like last year, lawmakers were asked to approve the expansion without a rigorous debate or even formal hearings. Holden introduced his amendments late last week with almost no public notice.

“This is a real victory for consumers of the state and the environment,” said Jamie Court of the Consumer Watchdog advocacy group. “This deregulation scheme would not hold up in the light of day. We’re happy to have this debate next year, when there is sunshine on the proposal.”

The amendments generated a groundswell of opposition beginning Monday morning, after The San Diego Union-Tribune and other news organizations reported that the grid-expansion effort had quietly resurfaced.

Numerous interest groups organized to fight the proposal, urging members to contact lawmakers and register their disapproval. Meanwhile, newspaper editorial pages up and down the state urged lawmakers not to pursue the changes without a more thorough public discourse.

“Bad policy and bad tactics defeated the plan to surrender California’s electricity grid system to private corporate control,” said former San Diego City Attorney Michael Aguirre. “Control of our grid remains where it should be: in the hands of the people of California.”

Ralph Cavanagh, co-director of the Natural Resources Defense Council’s energy program, said he and other supporters would continue to pursue the regionalized grid concept.

“We need a fully integrated Western grid to avoid throwing away California’s pollution-free solar and wind generation,” he said. “Fortunately, we are only halfway through a two-year legislature session, and we won’t pause in our efforts to make progress.”

The failure of the regionalization effort leaves open the question of what will happen with Senate Bill 100, which calls for California to generate 100 percent of its electricity from renewable sources by 2045.

The bill is among the top legislative priorities for Senate President Kevin De Leon, but has nonetheless stalled in the statehouse.

Matt Freedman of the Utility Reform Network consumer group blamed Holden for the log jam.

“It is deeply disappointing that Assembly Member Holden has decided to hold SB 100 hostage unless and until the governor’s poorly constructed grid regionalization plan receives legislative approval,” he said. “There is no reason to tie these two efforts together other than to create political leverage that is almost certain to result in a bad deal for California consumer and the environment.”

The withdrawal Wednesday represents the second straight year that Brown failed to win legislative approval for the grid expansion plan.

In August 2016, the governor withdrew the measure in the face of rising skepticism by leaders in the Senate and Assembly.

Leaders in both chambers had sent Brown a list of questions early in 2016 but never received a written response to their concerns about the impacts of the plan.

The regionalization effort would have wedded the nonprofit Cal-ISO with PacifiCorp, a for-profit utility based in Oregon that serves millions of customers in multiple states.

PacifiCorp is owned by Berkshire Hathaway, the holding company controlled by billionaire investor Warren Buffett.

The utility generates two-thirds of its electricity from coal and other fossil fuels, raising questions about whether California could require PacifiCorp to limit imports to renewable power.

Power Grid Expansion Plan Withdrawn amid Political Backlash, by Jeff McDonald, The San Diego Union-Tribune, September 13, 2017.

Tom Steyer’s Message on Climate Change Comes to San Diego

More than 400 San Diegans arrived at St. Paul’s Cathedral in Hillcrest Thursday evening to hear an energetic message on clean energy and climate action from advocate and philanthropist Tom Steyer.

Organized by the grassroots climate action organization SanDiego350, the talk was open to the public and co-sponsored by more than 20 local community groups. In a week that brought devastation from natural disasters — hurricanes Harvey in Houston and Irma in Florida; wildfires on the West Coast; flooding in Pakistan and Bangladesh; and landslides in Sierra Leone — and controversial political announcements, the clarity of Steyer’s clean energy mission was warmly received.

Steyer with Rev Bridges pre-lecture. Credit Bee Mittermiller

After a moment of silence for the victims of the recent natural disasters, Steyer — the epitome of the casual Californian dressed in a t-shirt and slacks — began by noting the irony that hurricanes Harvey and Irma struck big oil and gas regions, the home of climate denial.

“This is not a phenomenon that will spare you just because you don’t believe in it,” he said. “Let’s not waste the pain.”

Steyer continued with the good news that it’s now cheaper to build new renewable energy plants than it is to maintain existing coal and gas plants and the prediction that renewable energy costs will continue to fall as battery storage technology advances.

He described clean energy as a “giant jobs program for the middle class,” comparing the prosperity of a nation like Japan — which has no oil and gas industry — versus Venezuela, one of the world’s largest oil exporters.

During questions from the audience, the issue of the different leveraging powers of grassroots organizations versus the massive personal wealth of a philanthropist like Steyer was raised: How can low-income groups be engaged in climate advocacy?

Steyer’s responded that climate policies — like clean air acts or vehicle regulations — must first and foremost help and protect lower-income communities and communities of color. He cited the example of California towns where thousands of passing diesel trucks have led to an increase of childhood asthma rates of up to 70 percent in poor neighborhoods close to freeways.

A sick child cannot attend school, explained Steyer, which impacts their future.

Steyer was optimistic when asked about another elephant in the room — political partisanship — asserting that most Republican voters support clean energy, though their support is “cold comfort” while Republican elected officials are “violently against us.”

His final message? “Tell the truth,” he urged, “and let people be smart. Because they are smart and decent.”

San Diego City Councilmember Barbara Bry spoke following Steyer, outlining San Diego’s plans for a Community Choice Energy (CCE) program. CCE allows cities and counties to purchase power on behalf of residents to provide cleaner power options at competitive prices. Bry drew on Steyer’s message that clean energy would bring prosperity to the San Diego region through jobs and innovation, with reinvestment in the local economy, rather than payouts to shareholders.

Joyce Lane of SanDiego350 concluded the event by posing two action items to the audience: to contact the mayor and City Council to express support for CCE and to contact their state assembly member to express support for SB100 — a bill in the California legislature that would set a 100 percent renewable energy goal for California by 2045.

Postcards advocating CCE and addressed to the mayor and the City Council were distributed to audience-members, which were signed and returned to SanDiego350 for hand-delivery. CCE will go to a council vote in early 2018. SB100 goes to a final vote in the California Assembly before Friday, September 15.

Another strong message from Steyer was the need for climate activism to join forces with a progressive coalition that “wins on everything.” This includes immigration rights, reproductive rights, and economic equality.

The event’s co-sponsoring organizations, represented by members at display tables in the St. Paul’s forecourt before Steyer’s talk, together demonstrated what a coalition of grassroots groups can look like. While some groups exclusively combat climate change, others have begun addressing climate change as a crucial component of related campaigns.

Steyer Greeting audience members. Credit: Bill Wellhouse

The Democratic Woman’s Club of San Diego County is targeting climate change as a women’s issue because of its disproportionate effects on women, especially women of color and low-income women.

The Club president, Susan Peinado, explained the economic uncertainties of a changing climate threaten individuals in precarious economic circumstances — such as those in low-paying service industry jobs, most of which are filled by women. The impact of resource scarcity and price fluctuations in utilities will also be most acutely felt by low-income households.

The San Diego chapter of Interfaith Worker Justice has also lately begun addressing climate justice as a key factor in economic and labor justice.

“It’s not enough to believe,” member Steve Rivera asserted. “You have to walk your faith”.

The San Diego chapter of the Sierra Club, a long-time advocate for wildlife and the environment, has been throwing its weight behind local issues, such as working to dismantle the San Onofre nuclear power plant; clean up sewage spills in the Tijuana estuary; and detoxify the Salton Sea.

The club’s several action committees — some bi-national — have achieved environmental successes where local governments have stalled. And their efforts have intensified this year.

“We have an Irma in the White House,” said Karenlee Robinson, a steering committee member, “A hurricane of bad decisions.”

Ruben Arizmendi, steering committee chair, explained the need to engage with climate deniers. Hope for this effort comes from China, a nation which has previously taken minimal climate action, but is now “coming ’round to the full realization that you cannot deny climate change”.

Stay Cool 4 Grandkids is also a locally-focused organization, mobilizing seniors and grandparents to take action on climate change. Founding member Peg Engel described the group’s motivation as “harnessing the moral authority of elders,” and taking a multi-generational approach by leading children’s programs.

Lake San Marcos Democratic Club’s president Gary Bland insisted on the crucial role of community organizations to influence and compensate for an equivocating legislature.

“I don’t think they know what their role is,” said Bland of Congress. “They should be doing a lot more”.

The event’s other co-sponsoring organizations included NextGen America; San Diego CALSEIA; Change Begins with ME (Indivisible); Citizens Climate Lobby San Diego; Climate Action Campaign; San Diego Coastkeeper; American Federation of Teachers Guild Local 1931; North County Climate Change Alliance; San Diego Climate Mobilization Coalition; Equinox Project; Preserve Calavera; Martin Luther King, Jr., Democratic Club; Pt Loma Democratic Club; La Jolla Democratic Club; Escondido Democratic Club; and the Democratic Club of Carlsbad/Oceanside.

Celeste Oram is a composer, musician, writer, and SD350 volunteer from Aotearoa New Zealand, currently studying at UC San Diego. No, she is not far from home; the Great Pacific Oceanic Highway does more to connect us than divide us.

Tom Steyer’s Message on Climate Change Comes to San Diego, by Celeste Oram, San Diego Free Press, September 13, 2017.

Key Lawmaker Says California Energy Legislation Will Hold until next Year

Ambitious legislation on clean energy and regional electricity cooperation won’t advance until next year, said Assemblyman Chris Holden, a key committee chairman.

“Every piece of legislation needs work,” he said in an interview on Wednesday.

Holden (D-Pasadena) is directly involved in two controversial energy measures. He authored legislation, Assembly Bill 762, that contains a proposal from Gov. Jerry Brown to lay the groundwork for a regional electricity grid. A separate proposal, Senate Bill 100 from Senate leader Kevin de León, for phasing out fossil fuels for electricity is currently pending in the utilities and energy committee that Holden chairs.

He said both measures should be considered as part of a “comprehensive conversation” next year.

The legislative session ends Friday, and the deadline for amending the measures was Tuesday night. Changes that might be needed to assuage various concerns from utilities, unions and lawmakers were not made.

“There’s not a lot of time for the engagement we need to make it work,” Holden said. He also said there wasn’t enough support in the Assembly to pass the energy legislation.

De León (D-Los Angeles) said during a brief interview in the Capitol that nothing was final.

“It’s too early to tell,” he said when asked if the legislation stood a chance during the last few days.

Assembly Speaker Anthony Rendon (D-Paramount) said it was up to Holden whether the measures advance.

Key Lawmaker Says California Energy Legislation Will Hold until next Year, by Chris Megerian, Los Angeles Times, September 13, 2017.

Jerry Brown’s Western Grid Plan Is Dead in Sacramento, at Least for Now

Gov. Jerry Brown’s grand plan to bring Wyoming wind power to California and export solar power to neighboring states won’t get a vote in Sacramento before the legislative session ends Friday, following opposition from ratepayer watchdogs, labor unions, the utility industry, community choice advocates and even some environmental groups.

Assemblymember Chris Holden, a Pasadena Democrat who chairs the Assembly’s energy committee, said his legislation to make good on Brown’s plan is being tabled until next year. In a statement, Holden said lawmakers “will continue our work on the issues over the fall and likely revisit it in the second half of this two-year session.”

Click the link below to read more

Jerry Brown’s Western Grid Plan Is Dead in Sacramento, at Least for Now, by Sammy Roth, The Desert Sun, September 13, 2017.

Assemblymember Chris Holden’s Statement on AB 726 and AB 813:

Press Release

“Assembly Bills 726 and 813 will not move forward this year.  After several months of questions and reviews of the ISO studies, including an informational hearing of the Assembly Committee on Utilities & Energy, there has been constructive dialogue on the process that the ISO should utilize in further consideration of regionalization.  It’s important to recognize that these bills did not authorize regionalization of the grid.  The bills established the next steps for the ISO to follow.  But there is still more to discuss starting with the role of the Legislature in review of any proposed governance structure of a new ISO.  We will continue our work on the issues over the fall and likely revisit it in the second half of this two-year session.”



Garo Manjikian

O: 626.351.1917

M: 626.394.9832

E: garo.manjikian@asm.ca.gov

Where Is Community Energy Going?

Yolo County’s new community choice energy agency recently approved negotiation with SMUD for a set of technical services designed to get the agency online by June next year.

The Valley Clean Energy Alliance’s current staff consists of city and county employees borrowed from local sustainability programs, essentially a zero-sum game that may limit rather than facilitate local clean energy resource development.

The borrowed team would retain local managerial control, in theory, but it would be increasingly dependent on the advice and expertise of the SMUD team.

We can be encouraged that the VCEA board has finally taken a decisive step after a primarily political process that has taken too long. It spent 18 months organizing a joint power authority comprising the cities of Davis and Woodland as well as Yolo County. According to the technical study commissioned by Davis and presented to the Davis City Council in early 2016, the process from that point to serving customers could have taken six to nine months.

Now, a year and a half later, according to information presented at the Aug. 31 VCEA board meeting, the target date for serving customers is still 10 months in the future. One apparent reason for the lengthy delay is that VCEA has yet to appoint a permanent chief executive officer or recruit for any other managerial positions. VCEA interviewed CEO candidates but for unexplained reasons abandoned the effort without choosing anyone.

A similar agency involving many more participating jurisdictions and customers, East Bay Community Energy serving Alameda County, had a CEO in place within three months. East Bay is accepting applications for a chief operating officer and other permanent positions.

Again, for unexplained reasons, VCEA set up a citizen advisory committee including local energy sector experts, but did not call a meeting until last week, after the SMUD proposal had already been chosen by staff and consultants to recommend to the board.

One of the VCEA directors admitted to me that the SMUD deal will allow the agency to operate indefinitely without a permanent CEO. But how well has this worked so far? Is it a good idea going forward?

In summary, Davis and Yolo County have become enmeshed in a political process rather than the business planning process any private-sector startup would have in place before engaging contractors. VCEA will be committing resources without a plan and without appropriately experienced management in place.

With this easy-going approach, will we get what we want from our community energy agency? For example, will we get 100 percent locally produced renewable energy in the county as soon as possible? Such transformational outcomes are what make VCEA worth doing. Achieving them is a tall order that will require exemplary and aggressive planning and management.

Community Choice is a competitive public business that must be managed as such. VCEA should recognize the need for an accountable, permanent management team to be in place while the contract with SMUD is negotiated.

Then, the VCEA management team can turn its attention to other requirements of the Community Choice formation process, including development of a proper business plan.

— Mark Braly and Alan Pryor are members of the city’s Natural Resources Commission and of its advisory committee, which recommended a community energy agency.

Where Is Community Energy Going?, by Mark Braly and Alan Pryor, The Davis Enterprise, September 10, 2017.

Some of California’s Major Utilities Are Trying to Block the Growth of Government-Owned Electricity Programs

Some of California’s big shareholder-owned utilities are working to thwart the expansion of government-owned electricity programs, including Los Angeles County’s proposed end run on traditional power providers.

San Diego Gas & Electric Co. and Pacific Gas & Electric Co. are seeking amendments to state legislation or even a separate bill before the session ends Sept. 15 that will impose a moratorium on the so-called community choice aggregation programs operated by local governments as alternatives to existing power companies. Southern California Edison so far has taken a wait-and-see stance.

The legislative effort has been dubbed the Freeze Bill for proposing to put the choice program expansion on hold, at least until the state develops what the utilities believe are appropriate fees to be paid by customers who leave for government-run providers. Some discussions have included language applying the moratorium to any community choice program not delivering electricity as of Sept. 1.

The community choice aggregation movement, which now includes Los Angeles County, is the latest potential blow to the shareholder-owned utilities, which have endured a dramatic shift in their industry with the proliferation of rooftop solar, improved energy efficiency, use of smart technology and the advent of battery storage that enables consumers to store electricity in their garages.

The technological advances have led to declining or flat usage in recent years of electricity produced by the utility companies. An industry report referred to these advances as “disruptive” technologies.

Although the shareholder-owned utilities say they support consumer choice, they insist that the current regulatory framework creates inequities for those who want to stay with their existing power provider.

“A diverse range of organizations, including seniors, small business, labor and consumer groups believes the current [system], which is supposed to ensure equity, is broken,” said Helen Gao, an SDG&E spokeswoman. “SDG&E agrees with these organizations, and believes we are headed for a major problem if regulators don’t fix the … issue soon.”

Southern California Edison said there is concern about how costs are managed and has communicated with lawmakers about the issue.

“SCE is not actively supporting a specific bill at this time on CCA-related matters, but continues to monitor bills and proposed legislation with a focus on protecting its customers,” Edison said in a statement.

At issue are obligations the utilities already have that need payment — in particular, contracts for energy that the power providers secured years ago at prices that are higher than what the government-run programs are able to secure today.

If customers fleeing the shareholder utilities for the government-run providers don’t help cover the costs, those who remain with Edison, SDG&E or PG&E could face higher bills, the utilities argue.

Proponents of the government-run choice programs say they believe some reasonable compensation for the utilities to cover their costs is fine. But the utilities already receive adequate compensation, said Shalini Swaroop, deputy general counsel for the state’s oldest choice program in Marin County, called MCE.

“Traditionally, MCE has argued that the fee is too high and it affects our customers disproportionately,” Swaroop said. “MCE does not believe a freeze is needed. The Public Utilities Commission is currently examining the power charge indifference adjustment fee.”

MCE customers currently pay about $160 a year to PG&E in compensation after having left the utility.

Swaroop said MCE has been raising the issue of the exit fees for the last five years with no resolution, so the move for a moratorium now doesn’t make much sense.

A moratorium would affect MCE, as it is planning to add as many as nine cities, which have some 1 million people.

Perhaps the biggest concern for the utilities is the decision by Los Angeles County to create a community choice aggregation program. It has the potential to be the state’s largest.

Right now, four areas have signed up for the county program — West Hollywood, Calabasas, South Pasadena and Rolling Hills Estates, representing 1.2 million residents, or more than 250,000 residential and commercial accounts. The county intends to phase in the program in 2018.

The change in provider isn’t overwhelmingly apparent to consumers, other than the size of the bill.

In the case of Los Angeles County customers, electricity will still be delivered by Edison over its existing power lines. Edison will also continue to read the meters and send the bills.

But the county utility will buy the electricity from the market or under contract. The county can choose as much green energy as it wants and even build solar projects in the future.

Los Angeles County Supervisor Sheila Kuehl, who helped lead the effort to establish a choice program in the county, said the shareholder-owned utilities are simply “freaked out” at the idea of competition.

“When you’re used to having a monopoly, competition is a very scary thing,” Kuehl said. She said the effort to seek the moratorium in the waning days of the legislative session was troubling.

“They decided to take what I think is a fairly sneaky tack,” Kuehl said.

Some of California’s Major Utilities Are Trying to Block the Growth of Government-Owned Electricity Programs, by Ivan Penn, The Los Angeles Times, September 8, 2017.