The City Council will consider Tuesday which direction to go when pursuing a new plan to buy and sell electricity in Santa Monica.
A year ago, the Council decided to move forward to establish a local, not-for-profit, public agency to make decisions on sources of energy. The pursuit is part of an overall strategy in Santa Monica to become Carbon Neutral by 2050.
“It presents an opportunity for us to significantly lower our greenhouse gas emissions related to electricity use by making much higher levels of renewable energy available to everyone in our community,” Said Dean Kubani, Chief Sustainability Officer for Santa Monica.
“It also has the potential to lower energy bills and can lead to the creation of local green jobs and more local renewable power generation,” Kubani said.
Individual customers would have a choice to get their energy from the public agency or their existing utility company. Similar community non-profits have been popping up across California and are called Community Choice Aggregation (CCA).
“They are the single most powerful tool we have to reduce greenhouse gases,” said Joe Galliani, Co-Chair of South Bay Clean Power.
The Council will consider entering into a contract with other cities called a Joint Powers Authority, JPA, to essentially create the CCA to manage local energy.
“The revenue and the profits that are made can go back into the community instead of into an executive’s pocket,” said Katharine King, co-founder of Climate Action Santa Monica. King is familiar with the negotiations to form the agencies.
Other jurisdictions have succeeded in managing local power. In San Francisco, CleanPowerSF offers customers tiered options for increasing their use of renewable energy. Customers can sign up for level “Green” (35 percent clean energy) or SuperGreen (100 percent clean energy) for an extra 2 cents per kilowatt-hour. So far, less than 1 percent of customers have decided to opt out of the program.
As Santa Monica moves toward a similar program, staff is weighing available partnerships to offer customers the lowest rates and the best clean energy mix.
The first option is to join other cities in Los Angeles County. The Countywide CCA would potentially offer the lowest rates, bringing together the combined interests of 82 cities to wield immense purchasing power. It would be the largest CCA in the state.
“Theoretically, the County’s feasibility study said we could offer customers a baseline of 50 percent renewable power right now,” Galliani said. “Add on top of that, we could charge 4.1 percent less than Edison charges. If you extrapolate that across the entire county, that’s an incredible amount of money.”
However, along with strength, size can also slow an agency down. The County and participating cities must decide on a management structure that works for everyone.
Fourteen cities in the South Bay and on the Westside got the County involved after exploring their own CCA, South Bay Clean Power. As a whole, it is possible the values and mission of the smaller CCA would more closely align with Santa Monica. While Santa Monica values clean energy, other cities may value lower electric bills.
To King, who has been involved in discussions with both CCAs, she hopes eventually to combine both groups into a hybrid that combines the purchasing power of the County but allows cities more control managing the money.
“I think cities have different values sets and Santa Monica is pretty clear with its goals,” King said, adding Santa Monica could use the proceeds from the CCA for sustainability projects.
Santa Monica could still go it alone – partnering with an energy service to develop a City CCA or hire a third party provider. The City would pay the up-front cost for development of a CCA, but could eventually integrate a water utility, waste management and electricity services.
At Tuesday’s City Council meeting, members can decide whether to focus on one way or participate in negotiations of several options. A City task force on the environment recommended pursuing both the County and South Bay CCAs with clear negotiating guidelines: to achieve the highest rate of renewable sources that are cost competitive.
Council meets at 5:30 p.m. on Tuesday, Feb. 14 in City Hall, 1685 Main St.
Santa Monica to Discuss Creating Clean Energy Non-Profit, by Kate Cagle, Santa Monica Daily Press, February 13, 2017.