San Jose Is Latest, Largest City in California to Embrace Community Choice

Dive Brief:

  • The San Jose City Council this week voted unanimously to form the largest community choice energy program in California, ensuring residents will have more supply options than simply taking service from Pacific Gas & Electric.
  • The vote requires San Jose Clean Energy to provide at least one option with 10% more renewable energy than PG&E’s power mix, as well as a 100% greenhouse gas-free option.
  • Community choice aggregation (CCA) is growing in popularity in California, as the state’s utility sector embraces more forms of customer choice. A recent report estimated that by the mid-2020s, up to 85% of retail load could be supplied through CCAs, rooftop solar and direct access providers.

Dive Insight:

While some concerns lingered about possible budget impacts, San Jose City Council’s unanimous decision reflects California’s growing embrace of community choice programs.

“While leaders in Washington continue to languish in a petroleum-fueled past, cities like San Jose will chart the path to a more sustainable future,” Mayor Sam Liccardo said in a statement. The program aims to lower San Jose’s greenhouse gas emissions and boost renewable energy supply, at a cost-competitive rate, he added.

After several notifications, residents will be automatically enrolled in the new program, though they can choose to re-enter PG&E’s service. The program will “spur local green energy production and boost the San Jose economy,” according to Kerrie Romanow, environmental services director with the city.

Studies performed for the city concluded that if all consumers chose an electricity option with 10% more
renewables than PG&E, San Jose could see greenhouse gas emissions reductions from 10% to 18%. The program is expected to launch in 2018 and will serve 300,000 customers by 2019.

The growth of community choice aggregation has been a major contributor to customer choice in California. A new report from the California Public Utilities Commission and the California Energy Commission estimated more than 900,000 customers take service from a CCA.

Since Marin Clean Energy formed the state’s first CCA in 2010, the CCA trend has been accelerating. Marin’s program now serves more than a quarter million customers, and Los Angeles County is moving forward with a CCA that could eventually serve a million customers.

The Mercury News reports San Jose City Councilman Johnny Khamis has some concerns about the CCA’s possible budgetary impacts on the city, but he ultimately voted in favor of it anyway.

“Our residents are owed this security as we enter a new line of business and experience the risks and unknowns that naturally attend any new venture,” Khamis told the paper. He wants to ensure the program is separated from the city’s general fund, so the cost of renewable energy does not impact critical services.

San Jose Is Latest, Largest City in California to Embrace Community Choice, by Robert Walton, UtilityDive, May 18, 2017.

UC Santa Barbara students kick off project to create program evaluation tool for Community Choice agencies and stakeholders

Awarded scholarships to attend Business of Local Energy Symposium

Previously announced in the Center for Climate Protection’s e-news, in late March a group project entitled “Developing a Toolkit to Optimize Community Choice Energy Programs,” initiated by a group of UC Santa Barbara students in the Bren School of Environmental Science & Management, was selected for support by the school. On April 14th a kick-off meeting was held among the participants including the Center for Climate Protection.

To be completed in the spring of 2018, project deliverables under consideration include:

  • An Excel-based interactive Community Choice program evaluation tool
  • A list of appropriate or “best fit” practices with descriptions and real-world examples where available
  • A user-friendly public-facing website “dashboard” with above-mentioned deliverables and possibly a wiki section where Community Choice agencies and stakeholders can share information and ideas

The students will also produce a final written report, policy brief, poster and oral presentation.

Some of the questions to be answered by the proposed project include: What are the possible costs and benefits of Community Choice agency programs, policies, and projects meant to reduce greenhouse gas emissions and rates/costs? What can be done to minimize costs and maximize benefits? How can a community or existing agency know what program design and practices will work best for it?

Erica Petrofsky, one of the initiators of the project said that “my teammates and I are elated to be working with the Center for Climate Protection to help the environment and communities in California and beyond. Each of us applied to be on this project team due to our individual interests in greening the energy sector, the economics of energy, and local ways to take action. For me, this is an opportunity to gain expertise and get involved in the promising area of Community Choice Energy. It’s the perfect Bren School group project to prepare me for the career I hope to pursue.”

The Bren School has earned a reputation as one of the top schools of its kind in the nation. It is among a handful of schools in the U.S. — and the only one in the West — that integrate science, management, law, economics, and policy as part of an interdisciplinary approach to environmental problem solving.

More recently, two of the four students in the group project, Erica and Symphony, were awarded scholarships to attend the Business of Local Energy Symposium in Long Beach on May 5. This will be an opportunity for a full day of immersion in all things Community Choice, as well as an opportunity for the students to meet many of the people involved in day-to-day Community Choice operations, and vice versa.

We will post occasional updates as milestones are reached so be sure to check your CPX e-news!

Why Electric Companies Should Help Their Customers Reduce or Eliminate Natural Gas

Retail electricity providers, especially Community Choice agencies, should move quickly to help their customers “fuel-switch” their home heating fuels from (natural gas, heating oil, propane) to electricity that is more and more being generated from low carbon energy sources. New high efficiency heat pump water heaters plus ducted or ductless heat pump systems for space heating exist that can replace natural gas furnaces, and boilers. Moreover, such systems are easy to install, offer improved living environments, and are rapidly coming down in price. Such systems can combine with rooftop or community supplied solar energy, or an increasingly clean electricity grid, to create ultra-low emission homes and commercial buildings. The next time you need to replace your gas-fired furnace or water heater, think about switching to a modern, efficient electric system.

Background of the Problem

Previous estimates grossly underestimated the severity of the green house gas threat posed by methane, the principal component of natural gas (~85%). Methane emissions from natural gas leakage during oil and gas extraction and distribution, as well as emissions from animal feedlots and public waste facilities, all threaten to push global warming past the tipping point where unstoppable melting of frozen arctic soils could lead to catastrophic releases of naturally occurring methane. To avoid this outcome, several steps should be taken. In particular, public policies that tout natural gas as a “bridge fuel” to cleaner energy should be discarded as misguided and dangerous.

Because methane, carbon dioxide (CO2) water vapor, and other greenhouse gases (GHGs) remain in the atmosphere for vastly different lengths of time, scientists calculate their combined effects over an arbitrary time frame, usually 100 years. This allows, for example, the effects of the gas HFC-134, a refrigerant used in automobile air conditioning systems (~13 year atmospheric life), to be summed up with the effects of other gases like carbon tetrafluoride (atmospheric life ~50,000 years).

Scientists use the term “global warming potential” (GWP) to describe the characteristics of each gas individually. The GWP compares each gas to carbon dioxide (CO2). The result is a number that indicates the climate changing effect of the gas when compared to CO2 over a 100 year span. Nitrous oxide, for example, has a GWP of 298, meaning it has 298 times the global warming effect of carbon dioxide over 100 years.

The serious flaw in this approach comes from the short term effects of common gases that remain in the atmosphere for only a few days or a few years, and represent a danger not considered in the arbitrary 100 year time frame used to measure combined GHG effects. Methane, the other big GHG besides carbon dioxide, remains in the atmosphere for about 10 years, so combining it with CO2 and other gases into a 100 year time frame effectively masks methane’s actual short term effects. Methane is second only to CO2 as an anthropogenic (man-made) contributor to warming, but it is increasingly the focus of scientific attention because of its short term threat to push the planet past a tipping point whereby global warming may increase rapidly due to natural positive feedback loops. Two such feedback loops cause considerable concern. One is the vast amount of natural methane that will be released into the atmosphere as arctic soils warm, methane that will be created from long frozen biological material in the ground (mainly frozen plant matter). Another feedback and potential tipping point comes from a warming atmosphere that can hold more water vapor, itself an extremely potent greenhouse gas, that will increase as the atmosphere warms.

Policymakers should, therefore, take methane’s effect over its 10 year atmospheric presence into consideration, not simply the arbitrary 100 year time frame that is still widely applied. In a 10 year time frame, methane is known to be about 100 times as powerful as CO2 as a greenhouse gas, not the 28 to 36 times figure that is still used to guide public policies.

It is important to note that since the industrial revolution worldwide oil and gas development, large scale agriculture, and other factors have caused the absolute amount of methane in the atmosphere to not only go up about 250% (Figure 1), but to continue to increase even though its atmospheric life is only ten years. This strongly indicates that the sustained increase over the last few centuries has been caused by human activities, and thus can be reversed.

Figure 1: The Rise of Atmospheric Methane Since 1750

Notice how worldwide atmospheric methane appears to have leveled out around the year 2000 and then started increasing again around 2008. A great deal of scientific debate centered on this development. Some scientists argue that the new increase is primarily due to increases in emissions from the tropics, from wetlands, or from agricultural sources. However, recent research points to natural gas recovery and distribution as the main source of increased emissions. This research points to shale fracturing, which expanded rapidly around the year 2008, as a primary driver of newly rising methane levels worldwide.

Underestimating the global warming effect of methane is common when setting public policy. The chart below indicates the estimated sources of GHG emissions in Sonoma County, California (Source: Climate Action Plan 2020 by the Regional Climate Protection Authority, Sonoma County). Notice that the amount of GHG emissions from the “Building Energy” sector is estimated at 33% of total emissions.

2010 Countywide GHG Emissions by Sector

Building emissions in this chart are derived almost entirely from natural gas consumption. Moreover, solid waste emissions and a substantial portion of livestock emissions in the report are from methane as well, leading to a total of about 40 percent or more of reported emissions to be from methane.

In the case of this report, the multiplier used for calculating building emissions was considered to be 28 times that of CO2. Clearly, if the true short-term methane to CO2 GWP ratio is about 100 in the short term, not 28, then the effect of natural gas emissions should occupy a much larger fraction of the pie chart. Whether relatively more resources should be spent on reducing transportation emissions, as opposed to building emissions, rests largely on the accuracy of such assessments.

It should be clear why some scientists have argued that total methane emissions, including agricultural emissions, may represent as big or bigger a GHG threat as do CO2 emissions from the transportation sector.

These facts point to the need to rapidly fuel-switch from natural gas as a fuel used for heating buildings and water, to cleaner electricity derived from renewable sources for those purposes. All retail electric service providers, including the big utilities, should be adopting fuel-switching to electricity as a high priority, but they are conflicted. However, Community Choice agencies are very well-suited to this purpose given that they operate exclusively in electricity service and exist to serve the interest of the communities they serve, as well as the broader public interest.

California Community Choice Association Quarterly Update Published

The April edition of Cal-CCA’s Quarterly update was released just as we were putting together this week’s e-news!

Cal-CCA is the official association of the 8+ Community Choice agencies in the state that work together to represent the interests of California’s Community Choice electricity providers and their customers.  Most of Cal-CCA’s work happens in the state legislature and at the relevant regulatory agencies, including the California Public Utilities Commission, California Energy Commission and California Air Resources Board.

The update includes highlights of activity since the last update was published in January, including news about the newest agencies: Apple Valley Choice Energy, Silicon Valley Clean Energy, and the Redwood Coast Energy Authority.

Download the Update HERE.

To make sure you don’t miss the next Update, click HERE.

 

Senate Bill 618 Amended

Threat removed for now, but vigilance required

At the request of Cal-CCA, SB 618, the bill that would have granted the CPUC greater regulatory authority over Community Choice agencies, was amended in the Senate Energy Committee on April 18 removing the most harmful element. Cal-CCA removed its opposition and the bill was approved in the committee unanimously. If the bill becomes a threat in the future we will post an action alert on our home page and in our e-news “News & Views.”

To learn more about the bill and to subscribe to official updates, click HERE.

 

 

Joint PCIA Working Group Releases Report April 5

Community Choice Agencies and Delivery Utilities also Issue Joint Petition to CPUC

In previous posts we have addressed the Power Charge Indifference Adjustment (PCIA) and efforts to remedy some of the more troublesome aspects of it like volatility, longevity, and transparency. For background, our original paper on what the PCIA is can be downloaded here.

Over the past six months a Working Group led by representatives from Sonoma Clean Power and Southern California Edison met about once per month to examine the existing PCIA and to see if there may be a way forward on reforming the PCIA in a way that is equitable for all parties.

A full report of the activities of the Working Group and of the issues they discussed was published on April 5. Although much progress was made in participants’ understanding of the issues, no agreement was reached on any firm recommendations for PCIA reform or replacement.

Outcomes of the effort include:

  • A comprehensive list of issues related to the current PCIA
  • A list of ideas to improve transparency, data access, consistency, and predictability of the PCIA
  • A list of sources of publicly available data and a proposal to create a central database
  • A Joint Petition for Modification to develop a standardized format for IOUs to use when submitting PCIA filings

Also, several ideas for replacing the PCIA were discussed but not agreed upon as recommendations:

  • A portfolio allocation methodology to allocate share and cost between IOUs and CCAs
  • Lump-sum buy-out
  • Assignment of specific contracts to CCAs

The next steps in the process are that the CPUC will consider the Joint Petition for Modification. If they approve it as written, then going forward, IOUs will present their PCIA data as recommended in the Appendix of the Petition. They will present this in their future PCIA filings. It is likely that the CPUC will approve the Joint Petition due to the fact that they asked the joint parties to file a recommendation, it is supported by all three IOUs and four CCAs, and it is not controversial. It is not clear at this time what the next steps are regarding any further changes of substance to the PCIA.

PCIA matters are addressed within the Energy Resource Recovery Account proceeding at the CPUC. We will continue to post occasional updates here at the Clean Power Exchange.

MCE and Cenergy Announce Local and Union Labor Plan for New Solar Construction

Subcontractors Shortlisted to Provide Jobs to Build MCE Solar One

RICHMOND, CA – MCE has partnered with solar developer Cenergy Power to build the largest publicly-owned solar project in the Bay Area, MCE Solar One. The 49.5 acre, 10.5 MW ground mounted solar farm in Richmond will support 341 jobs and provide power for 3,417 homes per year.

The City of Richmond and MCE committed to a 50% local hire requirement to build MCE Solar One, guaranteeing local benefits through clean energy job creation. Representatives from the City of Richmond, MCE, Cenergy and RichmondBUILD met last week to announce the local labor plan.

The following subcontractors have been formally shortlisted to work on the MCE Solar One project, expected to employ workers for an estimated 69,000 man hours with 60% or more expected to be provided through union labor and 50% or more through local labor.

Contractor

Location

Union

Overaa Construction

Richmond

UBC (Local 152) and Laborers Union

Net Electric

Richmond

IBEW (Local 302) and Laborers Union (Local 324)

Newtron Group, Inc.

Martinez

IBEW (Local 302), Laborer’s Union (Local 324) and Lineman’s Union (Local 1245)

Contra Costa Electric

Martinez

Laborers Union (Local 324), IBEW (Local 302), Linemen’s Union (Local 1245) as well as the Steamfitters and Pipefitters Unions

Goebel Construction

Richmond

Laborers Union (Local 324), Operating Engineers (Local 3) and Steamfitters (Local 342)

Russel Pacific

Monterey

N/A

MCE also funds programs that provide local, working class residents with green collar job opportunities beyond the minimum wage economy that pay living wages and provide benefits. One such program that MCE partners with, RichmondBUILD, will train and hire local residents to provide labor for MCE Solar One.

“In today’s economic climate where many struggle with the rising cost of living in the Bay Area, MCE is committed to helping retain the diversity of our community by supporting the development and training of our local talent,” said MCE CEO Dawn Weisz. ”The Bay Area has a rich history of industrial labor and we believe those jobs can continue to thrive as they evolve into the cornerstone of California’s new, green economy.”

Cenergy Power’s CEO, William Pham, echoed similar sentiments. “The Solar One project will be a showcase of MCE’s commitment to local communities in its service area, and we are looking forward to working with the City of Richmond and our local workforce on this project.”

Beyond MCE’s local efforts, the 2,800 in-state jobs and 1.2 million union labor hours provided by its 24 new California renewable energy projects have built the structures that will help the state reach its ambitious greenhouse gas reduction goals. The increased demand for non-polluting, renewable resources that MCE and its sister agencies are creating not only impact our environment for the better, it truly changes lives every day.

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AboutMCE: MCEisanot-for-profit,publicelectricityproviderthatgivescustomersthechoiceof having 50% to 100% of their electricity supplied from clean, renewable sources such as solar, wind, bioenergy, geothermal and hydroelectric at competitive rates. MCE provides service to 255,000 California customers in Marin County, Napa County and the cities of Benicia, El Cerrito, Lafayette, Richmond, San Pablo, and Walnut Creek. By choosing MCE, customers help support new in-state and local renewable energy projects and jobs. For more information, visit www.mcecleanenergy.org

About Cenergy: Cenergy Power is a leading solar developer focused on the utility, agriculture and commercial markets throughout the United States. Cenergy is comprised of seasoned professionals in the areas of engineering, construction management and project financing. Solar Power World, a leading industry publication, has consistently ranked Cenergy among the top 10 commercial solar providers in the nation. For more information visit www.cenergypower.com

MCE and Cenergy Announce Local and Union Labor Plan for New Solar Construction, by Jamie Tuckey, MCE, April 17, 2017.

California Solar Spike Leads to Negative CAISO Real-Time Prices in March

Dive Brief:

  • Solar capacity on the California Independent System Operator (CAISO) system spiked last year, leading to negative prices at times when output is highest but demand is not.
  • According to the U.S. Energy Information Administration, total solar capacity in California (including both distributed and utility-scale systems) grew from less than 1 GW in 2007 to nearly 14 GW by the end of last year.
  • The rapid growth has led to low power prices in March, when energy demand is relatively low and solar production is high. On one day last month, real-time CAISO prices dipped below $0/MWh for roughly six hours, EIA said.

Dive Insight:

There is more evidence that the rapid growth of renewable energy is causing upheavals in organized power markets.

Power prices in CAISO plummeted last month, at times going negative, compared with average prices from $14/MWh to $45/MWh during the same time periods in recent years.

EIA explains the negative prices materialize when generators with high shut-down or restart costs are forced to compete with other generators to avoid operating below equipment minimum ratings or shutting down completely.

“Large price spikes immediately before and after mid-day periods when both utility-scale and distributed solar generation reaches its peak level suggest a need for dispatchable generation sources to help cover ramping periods, when the need for power from the grid to meet load is rapidly changing,” EIA concluded.

While gas displacing coal-fired generation has become a familiar story, the growth of renewable power in some markets has begun to pressure gas generators as well. Last year the La Paloma gas plant in California filed for bankruptcy.

In Texas, inexpensive wind energy has been hurting independent power producers with gas-fired facilities. The state now gets more energy from wind farms than nuclear plants, and as the fuel-free resource is dispatched first it has driven down energy prices, cutting revenues for IPPs.

Utilities in CAISO last year reported 5.4 GW of net-metered distributed solar capacity at the end of last year. According to EIA, that capacity would have generated approximately 4 million kWh during the peak solar hours on March 11.

“This level of electricity reduced the metered demand on the grid by about the same amount, suggesting that the total solar share of gross demand probably exceeded 50% during the mid-day hours,” EIA concluded. But it also caused prices to drop into negative territory for hours:

Credit: EIA

Low and negative pricing in CAISO today could be a sign of things to come for the state. California utilities are under a legislative mandate to increase renewable energy to 50% of their power mix by 2030.

California Solar Spike Leads to Negative CAISO Real-Time Prices in March, by Robert Walton, Utility Dive, April 10, 2017.

2017 Legislative Session Heats Up: Bills to Watch, and a Call to Action!

The Center for Climate Protection is tracking about 15 energy-related bills this legislative session, about half of which relate directly or indirectly to Community Choice Energy.

Among them is one of particular concern, SB 618, authored by none other than Steven Bradford, the southern California Senator who in 2014 introduced the most threatening legislation for Community Choice ever to emerge in Sacramento, AB 2145.

AB 2145 aimed to crush Community Choice by denying default service status to the local not-for-profit Community Choice agencies and returning that status to the for-profit large distribution utility. That battle, ultimately successful for Community Choice, was one of the milestones in catapulting Community Choice onto the radar of local governments throughout the state. Enter SB 618 in 2017. What does it do, where is it now, and what will it mean to Community Choice whether it is enacted or not?

What SB 618 does.

The main provision in SB 618 that affects Community Choice is that it empowers the California Public Utilities Commission (CPUC) to “approve” Community Choice Integrated Resource Plans. One of the hallmarks of Community Choice is that it grants decision-making authority about a host of energy service elements such as energy sources, rates, programs, policy, projects, and more. Removing that authority and delivering it to the distant and impenetrable CPUC is a huge step backward in the emerging advance toward energy democracy represented by Community Choice Energy.

Where it is.

SB 618 is currently scheduled to be heard in the Senate Energy, Utilities and Communications Committee on April 4. Senator Ben Hueso chairs that Committee. The full committee roster is included below. We urge Community Choice advocates throughout California to write to the Chair and the whole Committee urging them to reject this latest attempt to undermine one of the best things going for communities, local economies, and clean energy. You can read the Center for Climate Protection’s opposition letter here.

What does it mean?

If SB 618 makes it through the legislative process with this core provision about removing local control intact, it means an erosion of the whole point of Community Choice, as established in the original AB 117 law, and would set a bad precedent for a future legislative or regulatory whittling away of Community Choice agency autonomy. Whether it is enacted or not, SB 618, and perhaps some other pending legislation, may once again galvanize the Community Choice advocacy community and strengthen us for future endeavors.

Read about the legislation here. You can also subscribe to it to track it yourself at: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB618

The Senate Energy Committee Roster is below. Each name is hyperlinked to that Senator’s website. Call their office to register your opposition to SB 618.

Senator Ben Hueso (Chair)  (916) 651-4040
Senator Mike Morrell (Vice Chair)  916.651.4023
Senator Steven Bradford  (916) 651-4035
Senator Anthony Cannella  916.651.4012
Senator Robert M. Hertzberg  (916) 651-4018
Senator Jerry Hill  (916) 651-4013
Senator Mike McGuire  916-651-4002
Senator Nancy Skinner  (916) 651-4009
Senator Henry I. Stern  (916) 651-4027
Senator Andy Vidak  (916) 651-4014
Senator Scott D. Wiener  (916) 651-4011

Letters should be addressed to:

[Legislator]

State Capitol, Room 4035
Sacramento, CA 95814

The Committee staff phone number is: (916) 651-4107

To find your California State representatives click here.

The full list of bills we are monitoring is here. Stay tuned to CPX E-News for future updates.

Community Choice Baby Boom

To address the climate crisis, the Center for Climate Protection advances models that bring multiple benefits to communities, including greenhouse gas reductions. We identified Community Choice as a promising model in 2005, and began pursing in 2008 what became Sonoma Clean Power in 2014. Since then we’ve helped spread and optimize Community Choice in California.

In the next six weeks three new Community Choice services will start serving customers: Silicon Valley Clean Energy (April 3), Redwood Coast Energy Authority (April 22) and Apple Valley Choice Energy (May 1). Plus Mendocino County will become the newest jurisdictional member of Sonoma Clean Power.

Later in 2017 several more services may commence including the city of Davis and Yolo County’s Valley Clean Energy Alliance, and Placer County’s Sierra Valley Energy Authority.

Many more emerging agencies are expected to launch in 2018, likely to be the single biggest year for Community Choice yet – a veritable Community Choice baby boom!

  • Alameda County
  • Contra Costa County
  • Los Angeles County and its many cities
  • Monterey County, San Benito County, and Santa Cruz County (All part of Monterey Bay Community Power)
  • San Jose
  • San Luis Obispo County, Santa Barbara County, and Ventura County (All part of Central Coast Power)

Launching later in 2018 or perhaps in 2019 or 2020 are emerging efforts in:

  • Butte County
  • Cities and counties of the Central Valley
  • Cities within San Diego County
  • Lake County
  • Riverside County
  • San Bernardino County

Here is how our interactive map will look by the end of April. Lots more green!

Keep track of the growth of Community Choice Energy right here at the Clean Power Exchange’s unique interactive map of every city and county in the state and sign up for CPX E-News in your region. We welcome your contributions and suggestions.