L.A. County Plans a Utility to Compete with Southern California Edison

Southern California Edison customers in Los Angeles County soon will have a new way to get their electricity under a plan approved Tuesday by the County Board of Supervisors to lower bills and increase clean energy use.

The board, which voted 5-0 in favor of the public energy program, says the plan will help reduce customer power bills by as much as 5% below Edison’s costs. Residents and business operators will have the choice to stay with Edison or join the new government-run utility.

Initially, as many as 500,000 residential and 200,000 commercial utility customers in unincorporated cities throughout the county will be eligible to join the county-run operation. Incorporated cities such as Long Beach and Torrance require approval by elected officials.

The decision does not affect existing municipal utilities such as the Los Angeles Department of Water and Power, Pasadena Water and Power or Burbank Water and Power.

Board members began studying creation of a so-called “Community Choice Aggregation” program, or CCA, about a year ago. In addition to choosing between Edison and the public program, customers can pick who provides the electricity and the type of generation, whether solar, wind or some other clean energy source.

“It’s an alternative to Southern California Edison, which is where everybody but L.A. city and a few in the county really has no choice but to buy their electricity,” said Supervisor Sheila Kuehl, who helped lead the effort.

“The most important thing is you get green energy at a lower cost,” Kuehl said in an interview. “Individual residences, individual businesses, every single person can join.”

Southern California Edison issued a statement saying that its “position is neutral” on such power programs.

How the utility will work

Governments from Southern California to Humboldt County in the north have been adopting the public energy alternative as consumers face higher electric bills and the state pushes for clean energy over centralized, fossil fuel production sources.

Under the CCA model, cities and counties become responsible for generating and purchasing power as well as setting rates and establishing customer programs. The investor-owned utility, such as Edison, continues to maintain the electric grid’s transmission and distribution lines, as well as read customer meters and send out the bills.

The new utility, to be governed by the Los Angeles Community Choice Energy Authority, is expected to start providing electricity next year.

The supervisors approved initial funding of $10 million — $2 million of administrative costs and $8 million to buy power.

The reshaping of the electric utility industry is similar to that of the telecommunications shift from centralized, universal phone service where the utility also maintained the telephone lines. As technology redefined the role of the phone company, so it is with electric companies.

The state passed legislation in 2001 that made possible the creation of public energy programs. Few cities and counties had taken advantage until recently.

There are eight CCAs now operating in California, with seven more set to launch this year.

In Southern California, Lancaster established its program in 2015 and Apple Valley in San Bernardino County began its effort on April 1.

A driver for the renewed focus on CCAs is the falling cost of solar power. Public energy programs can take advantage of the low cost of solar by building large community solar programs that not only provide power to their customers but can also feed the electric grid.

“I think the more choices the better,” said Mark Cooper, senior research fellow at the Institute for Energy and the Environment at Vermont Law School.

But as the public program captures customers and produces its own power, Edison and other investor-owned utilities will have to revisit the structure of their business model.

“They will have to change,” Cooper said. “The old system was in place for over 100 years.”

L.A. County Plans a Utility to Compete with Southern California Edison, by Ivan Penn and Nina Agrawal, The Los Angeles Times, April 18, 2017.

1 reply
  1. Paul Berry
    Paul Berry says:

    Energy appears to be taken for granted by the mainstream media. Virtually the entire Bay Area has gone to CCAs and now the other megacity, SoCal, is adopting the CCA model. Yet, the media finds it too difficult to put away the “utility” moniker. This is a bit unfortunate because it continues to give the impression of energy as a mundane aspect of life and human endeavor, and it turns out that is extremely far from the truth.

    Reply

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