‘Community Choice’ Could Provide Cheaper, Greener Electricity for San Diego, Report Says

A government-run alternative to San Diego Gas & Electric could deliver more green energy while costing residents and businesses less money over time, according to a report released Wednesday by the city of San Diego.

The document sparked the latest round of jockeying by environmentalists, fiscal hawks, backers of investor-owned utilities and others, with each group espousing what it sees as the benefits, detriments or unknown factors of community choice aggregation — commonly called CCA.

Such programs have become increasingly popular across California, with a growing number of cities and counties considering them as a way to more rapidly boost use of renewable energy.

The California Public Utilities Commission recently predicted a transformation in the state’s power market: It said investor-owned utilities, which today buys and sells power for about 76 percent of the electricity market, could see its control over such decisions plunge to less than 15 percent by 2025, largely because of competition from CCAs and the installation of rooftop solar panels.

The study released Wednesday looked at the feasibility of launching a CCA program in San Diego, which might eventually be launched to satisfy the city’s pledge to use 100 percent renewable energy by 2035.

“We’re moving full speed ahead to reach our ultimate goal of using one hundred percent renewable energy citywide, and this draft study shows we have the ability to get there,” Mayor Kevin Faulconer said on Wednesday after the report’s release.

Under community choice, a utility still operates the poles and wires needed to deliver energy, but elected officials control the buying and selling of power for their jurisdiction. If a city or county votes to form or join such a program, ratepayers can opt out if they would rather have the rates offered by their traditional utility.

Specifically, the new report found that a community choice program has the potential to deliver cheaper rates than SDG&E’s while providing 50 percent renewable energy by 2023 and 80 percent green power by 2027. SDG&E currently offers about 43 percent renewable energy to its customers, and under state law must get to 50 percent by 2030.

Advocates of community choice hailed the report, which was compiled by the fiscal, engineering and energy consulting company Willdan Financial Services in Temecula.

“It confirms that we already knew — that San Diego families only stand to gain from the adoption of community choice,” said Nicole Capretz, executive director of the San Diego-based nonprofit group Climate Action Campaign. “The question is no long whether we move forward with community choice, the question is what are we waiting for.”

The SDG&E shareholder group that lobbies on CCA issues, Sempra Service Corporation, released a statement criticizing the report as flawed.

“San Diegans deserve an open and honest conversation about the best way to reduce emissions in our region. The city’s study is incomplete because it is not possible to determine what a government-controlled energy model will cost customers. Until the true costs and benefits of such a program are transparent and shared with the public, we believe it is premature to move forward.”

The lobbying group said issues that could impact rates for both community choice and utilities are still being debated by the state Public Utilities Commission. Specifically, the commission is reviewing whether to adjust an “exit fee” charged to CCAs to ensure that utilities are compensated for the long-term energy contracts they signed on behalf of ratepayers who subsequently became community-choice customers.

In the fight against climate change, San Diego approved a Climate Action Plan in December 2015 that calls for slashing its greenhouse-gas emissions in half by 2035 from the level in 2010. Electricity accounts for about 24 percent of the city’s carbon footprint, behind transportation at 55 percent.

The city has already met an interim benchmark of cutting such emissions by 15 percent by 2020 as a result of state and federal mandates to improve fuel efficiency and for utilities to purchase green power. But there’s debate about how San Diego can best get to its 2035 goal, which is legally binding.

The city is accepting alternative proposals for meeting its green-energy goals.

SDG&E officials said the utility plans to submit its own competing blueprint, which the City Council would likely weigh against community choice or other energy options. This process would include voting on a path forward sometime early next year.

“Over the coming months we will also look at other approaches, put all the alternatives on the table and have a public discussion about the best way to ensure reasonable rates for San Diegans and a sustainable future for our city,” Faulconer said.

Arguably the biggest opponent of CCA proposals in San Diego County is SDG&E. This year, it became the first investor-owned utility in the state allowed to form a shareholder-funded lobbying group to weigh in on community choice. Investigators at the utilities commission said they are looking into whether the SDG&E lobbying arm began meeting with elected officials before it was cleared to do so.

Sempra officials have denied any wrongdoing.

This lobbying arrangement followed the Legislature’s decision in 2011 to bar investor-owned utilities from using ratepayer dollars to speak out on CCAs. The lawmakers took action after a bitter fight between Marin County and Pacific Gas & Electric over establishment of the state’s first CCA program.

In the San Diego region, elected officials have had mixed reactions to establishing community choice programs.

In February, the county Board of Supervisors declined to study the feasibility of CCA for the unincorporated communities it governs.

Meanwhile, Solana Beach has taken official steps toward adopting community choice, and three other North County cities — Encinitas, Del Mar and Carlsbad — are jointly looking at a similar idea.

By the end of the year, community choice programs from Humboldt to Lancaster are expected to serve nearly 1 million people, according to state energy regulators. In addition, cities and counties representing more than 15 million of the state’s nearly 40 million residents are in various stages of considering community choice.

‘Community Choice’ Could Provide Cheaper, Greener Electricity for San Diego, Report Says, by Joshua Emerson Smith, The San Diego Union-Tribune, July 12, 2017. 

 

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