Rancho Mirage Ditches CVAG Energy Plan, Says More Local Control Needed

The animosity between Rancho Mirage and the Coachella Valley Association of Governments surrounding CV Link has spilled over into an unrelated regional energy plan.

CVAG has been working to form a “community choice aggregator,” through which its member cities can ditch Southern California Edison and buy electricity directly from power providers, cutting out the utility. Community choice aggregators, or CCAs, have helped other parts of California reduce their electricity bills while increasing their reliance on climate-friendly solar and wind energy.

Rancho Mirage officials want to form a CCA — but if they do, they’ll go it alone.

In a 4-0 vote, Rancho’s City Council chose Thursday to tell CVAG that the city will not participate in the regional plan, which could also involve the Western Riverside Council of Governments and the San Bernardino Associated Governments. City officials said they want more local control than a regional CCA could offer them. After reviewing a feasibility study commissioned by CVAG and the other regional agencies, they decided they could run a leaner, more cost-effective CCA on their own, with a greater ability to tailor their decisions to Rancho Mirage’s needs, they said Thursday.

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The council’s frustration over CV Link — a 50-mile biking and hiking pathway that would run through most of the valley — also motivated its decision. Council member Dana Hobart, a fierce critic of the proposed pathway, attacked CVAG during Thursday’s meeting, criticizing CV Link and other projects he believes exceed the regional agency’s authority. He said CVAG is “becoming an empire.”

“I don’t think CVAG has earned our trust to justify our city being part of this (community choice) project,” Hobart said. “I personally just think that CVAG is out of control.”

Erica Felci, CVAG’s governmental projects manager, pushed back against those criticisms.

“CVAG has on many occasions expressed its desire to have a productive and collaborative relationship with the City of Rancho Mirage. It would be unfortunate to see the Council’s opposition to an unrelated transportation project limit out abilities to work together on other important endeavors,” Felci wrote in a letter to Mayor Ted Weill, from which she read excerpts during the meeting.

READ MORE: Will Riverside County ditch Southern California Edison

Community choice is an increasingly popular tool for cities and counties across California, which see it as a way to keep electricity rates low while buying energy from cleaner sources. There are already five CCAs operating in California, and many more are proposed. If the Coachella Valley, western Riverside County and San Bernardino County were to form a joint CCA, it would provide electricity for more than 900,000 customers, even in the unlikely scenario that more than a quarter of homes and businesses decide to stick with Edison, according to the regional feasibility study.

Under that scenario, Edison would lose a fifth of its 5 million residential and commercial customers. The investor-owned utility would still operate the power lines and possibly send out electric bills, but it wouldn’t have any other role. CCA customers would be required to pay Edison monthly “exit fees,” to compensate the utility for the stranded costs of power contracts it no longer needs.

RELATED: NorCal CCA to buy power from desert solar farm

The regional study, conducted by Washington state-based EES Consulting, found that if the three government associations form a single CCA, they could offer their customers a 50 percent clean energy mix while cutting electricity costs 3.7 percent below Edison’s rates. A 100 percent clean energy slate would cost 3.7 percent more than Edison would otherwise charge, the consultant found.

Losing Rancho Mirage probably wouldn’t change those numbers much. But going it alone could be a risky move for Rancho Mirage, community choice advocates said. In general, larger CCAs can save more money for their customers because of their increased purchasing power. Rancho Mirage has a population of just 18,000, compared to several million people served by Edison in Riverside and San Bernardino counties.

“If you increase the size of the (energy demand) that you’re meeting, you can usually get energy at better terms, because of economies of scale,” said Al Weinrub, a coordinator for the Local Clean Energy Alliance, an Oakland-based group that promotes community choice.

Riverside County officials are also pursuing their own community choice plan, which would cover unincorporated areas. The county could file an application with the California Public Utilities Commission as early as April to form a CCA, according to Brian Nestande, the county’s deputy executive officer and a former state assemblymember, who first pitched local leaders on community choice more than a year ago. The county’s feasibility study, conducted by the New York-based consultant Good Energy, found the average home would save between $50 and $55 annually.

Rancho Mirage officials believe they can reduce energy bills on their own, too. The city commissioned an initial study, also by Good Energy, which found community choice could slash overall electricity costs between 4 and 5 percent over the next few years. And city officials said Thursday they could eventually partner with other local CCAs to purchase energy together.

Like other community choice efforts, Rancho’s push for a CCA could boost clean energy. City officials have contemplated giving customers the option of paying more to get all of their electricity from renewables, as other CCAs have done, and offering rebates for rooftop solar. Like all California CCAs, Rancho Mirage would be required to meet the state’s 50 percent renewable energy mandate by 2030.

The city’s primary goal, though, is reducing energy bills.

“I’ve been on the City Council for almost 17 years, and I think the decision we make here today is probably as important a decision as any of us will make with the city,” council member Richard Kite said at Thursday’s meeting.

The Coachella Valley Association of Governments could still form its own CCA, or partner with the other regional governments. The regional agencies could also join with Riverside County’s CCA. Whatever decisions local leaders make, Nestande sees the desert’s abundant sunlight — and the cheap, climate-friendly energy it can generate — as a natural reason to pursue community choice.

“If it’s going to work, it’s going to work in the desert,” Nestande told The Desert Sun last year.

RELATED: California hits 100,000 solar jobs as industry grows at record pace

Imperial Irrigation District customers in the Coachella Valley wouldn’t be affected by community choice, since only customers of an investor-owned utility like Southern California Edison can form a CCA. The Imperial Irrigation District is publicly owned, and it already offers some of the lowest electricity rates in the state.

Edison has said the company is “neutral” on community choice,  but other utilities have taken a more antagonistic stance.

In Northern California, Pacific Gas & Electric spent $46 million to bankroll Proposition 16, a failed 2010 initiative that would have made it harder for CCAs to get started by requiring a two-thirds public vote. In Southern California, San Diego Gas & Electric’s parent company formed an independent marketing division, paid for by shareholders, to lobby local officials against community choice.

San Diego County’s board of supervisors rejected a proposal to study community choice earlier this week, although San Diego and several other cities in the county are still working to form CCAs.

Sammy Roth writes about energy and the environment for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.

Rancho Mirage Ditches CVAG Energy Plan, Says More Local Control Needed, by Sammy Roth, The Desert Sun, February 20, 2017.

 

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