At the end of June, 325 Community Choice agency (CCA or Community Choice) operators and advocates, clean energy businesses, and elected officials from around the state converged in Irvine in Southern California at the fifth Business of Local Energy Symposium. Hosted by the Center for Climate Protection (Center) and our partners, the event brought parties together to discuss best practices and what leadership in a dynamic environment of advancing local clean energy means. During the event the Center announced our bold, new initiative Advanced Community Energy (ACE), which seeks to reshape the California energy system to provide clean, safe, reliable power while supporting community engagement and resilience and accelerated distributed energy resource (DER) deployment, all in alignment with achieving state decarbonization goals.
The Center’s Executive Director Ann Hancock started the day noting that Community Choice has grown exponentially in the last few years in California. There are now 19 agencies serving cleaner more affordable electricity to over 10 million customers in 160 cities around the state. She pointed out that on average the electricity of those 19 agencies is 86% greenhouse gas emissions free, and that the California Public Utilities Commission (CPUC) estimates that CCAs will be responsible for procuring 90% of California’s new renewable energy between now and 2030.
Challenges Facing the California Energy System
At the same time many speakers noted that California’s energy system is facing serious challenges. The Governor’s Strike Force on Wildfires released a report in April pointing out that approximately 25 percent of the state’s population – 11 million people – live in an area that is classified as under very high or extreme wildfire threat. The liabilities for property damaged or destroyed by the fires in 2017 and 18 drove PG&E to file for bankruptcy protection and two other major investor-owned utilities in southern California have had their credit ratings downgraded.
The State faces the challenge of managing PG&E’s bankruptcy, ensuring that wildfire victims are taken care of and trying to make California safer in the new normal of heightened wildfire risk brought on by a combination of climate change and antiquated or poorly maintained electricity transmission and distribution infrastructure. The last several years have seen DERs like solar grow apace and are presenting challenges to a grid that was not designed to optimize their variable supply profile, and becoming a victim of their own success. There is frequently surplus solar generation in the middle of the day that is currently being curtailed, when it is fossil generation that should be curtailed, but due to ramping constraints, cannot be.
Given these realities, what is the role of CCAs? Geof Syphers, the CEO of Sonoma Clean Power addressed some of these issues in a short video presented at the Symposium. He pointed out that costs of the wildfires and PG&E’s past mistakes are now being foisted upon ratepayers – while they also must contend with the utilities de-energizing the lines to avoid future wildfires. Syphers said that when customers are paying more money for less reliable service, remaking California’s entire energy market is squarely on the table.
To address some of these issues he said that the state has considered municipalizing PG&E which is an idea with some merit, but he suggested that CCAs provide much of the benefit of this approach and are a more politically feasible and less costly approach. He said the state legislature and the CPUC need to stop trying to undermine CCA authority through pursuing centralized procurement. He pointed out that CCAs are laboratories for new climate and clean energy programs having developed 60 programs in the last five years. These programs will help us get to the state’s climate goals and should be encouraged. He also suggested that the state set up a multi-million dollar bridge loan fund that could help disadvantaged communities, like those in the Central Valley and inland areas of Southern California, launch a CCA as a way to move our energy system in the right direction.
Keynote Panel and Speaker
The Keynote panel included CPUC Commissioner Clifford Rechtschaffen, Angelina Galiteva, Boardmember of the California Independent System Operator, Shalini Swaroop, General Counsel for MCE, Kendall Helm, Vice President Energy Services for
San Diego Gas & Electric and was moderated by Rick Brown, President of TerraVerde Energy. They tried to address the question of how we reach California’s clean energy and climate goals while providing reliability, safety, and resilience to our communities? What role do the utilities play and how do they need to change? What reform is needed at the CPUC? Commissioner Rechtschaffen said that the CPUC is laser focused on wildfire safety concerns and pointed to the speed with which they approved the Public Safety Power Shutoff tool for the utilities when conditions are hot, dry, and windy. He acknowledged that it is difficult for the CPUC to keep up with the pace of changing technologies, but that they have a number of proceedings that are focused on better integration of DER technology. Helm said that SDG&E is seriously considering leaving the retail electricity sales market and becoming a wires only company focused on maintaining grid infrastructure, partly in response to CCA success in the retail energy market.
The Keynote speaker, former Senator Fran Pavley, author of the groundbreaking AB 32 Global Warming Solutions Act and other significant climate and environmental legislation, reminded the audience what it took to enact comprehensive climate and energy legislation. One thing she emphasized was building the broadest coalitions possible. She joked that if you are trying to get something through the legislature “then you want CCP’s Ann Hancock on your side.” Pavley said that transportation, which represents 37% of total emissions by source, remains California’s big challenge in reducing carbon emissions. She recognized that CCAs are helping reduce greenhouse gas emissions in transportation and encouraged them to do more. Pavley said there are plenty of big things that still need to get done for the state to reach its climate goals and that CCAs could show leadership on measures such as helping to electrify everything, creating markets for energy storage, and creating safer, fire-resilient communities through energy storage, microgrids, and land use planning.
Risk Mitigation, DER, and CCA Projects
Chris Sentieri of EcoShift led a workshop on “Managing Risk in a Dynamic Environment.” The purpose of the workshops is to take longer to go deeper into complex issues and also have more audience participation. To achieve the latter objective with an estimated 150 attendees Sentieri deployed real time polling software which allowed the audience to interact with panel through their smart phones. In response to the polling question “What is the CCA risk that keeps you up at night?” “Reliability and grid resilience (i.e., wildfire, earthquake, extreme weather)” and “Competitive Rates/Rate Uncertainty (i.e., PCIA, Resource Adequacy pricing, market volatility)” tied for the audience’s two biggest concerns. When asked “Which of the following technologies and/or strategies do you think CCAs should focus on to help manage risks?” An overwhelming majority (61%) responded “Developing Dispatchable Resources (i.e., demand response, energy storage, microgrids, DER aggregation/Virtual Power Plant).”
In sessions throughout the day examples of the innovative programs that Syphers referred to were presented by some of the Symposium’s 67 speakers. Both Kathy Wells of Lancaster Choice Energy and Richard Schorske, a consultant with ZNE Alliance, spoke about an ambitious and exciting project Lancaster is working on under a California Energy Commission an Advanced Energy Community (AEC) grant with a host of technical partners. They plan to build two zero net energy residential developments with renewable microgrids, create a network of three school-based microgrids as Community Resiliency Centers, establish a Lancaster Virtual Power Plant, and develop large-scale customer-sited energy storage. Rafael Reyes of Peninsula Clean Energy spoke about their collaboration with Silicon Valley Clean Energy to assist over 30 municipal governments in their service territories in developing reach codes that would go beyond current state codes for energy efficiency and reducing the need for natural gas in new homes. Matthew Marshall, CEO of Redwood Coast Energy Authority, described a microgrid project that they are developing in partnership with Schatz Energy Research Center at Humboldt State University and PG&E on a 7-acre site with a 2.25 MW solar array and battery energy storage system that will keep their airport and local Coast Guard station up and running in times of emergency.
At the workshop Ali Chehrehsaz, EVP Engineering, TerraVerde Energy, presented about California Energy Commission supported research at MCE to create a tool to analyze buildings for a suite of DERs and to provide the optimum mix of resources for both the customer and the CCA. They looked at battery storage as a first DER example for analysis and did see load flattening and modest cost savings. Next step is to get some feedback from CCAs who would be users of this tool and to look at other battery types and assess potential resource adequacy opportunities.
Storn White also from TerraVerde Energy presented on an Advanced Rate Structure Project funded by the National Renewable Energy Laboratory’s Solar Energy Innovation Network. In partnership with Peninsula Clean Energy and Lancaster Choice Energy this project is intended to deliver a replicable, scalable, and actionable DER rate structure tool that will allow CCAs to expedite and guide solar plus dispatchable storage DER deployment. The Climate Center has been involved as a partner in both of these projects.
Orange County CCA Update
Orange County was chosen as the location for the in part because there is some exciting Community Choice activity underway in the county. The Symposium featured a panel entitled Community Choice Energy in Orange County – Advancing the Model – with Scott Kitcher of Sustain So Cal moderating, Amber Nyquist of EES Consulting, Robin Ganahl of the Climate Action Campaign, and Sona Coffee of the City of Irvine as panelists.
Robin and Sona reported that the City of Irvine is expecting to have its technical study in hand very soon. And it came out during the course of the session, from an Orange County representative in the audience, that the County has reignited its own evaluation. Expect more out of Orange County in 2020.
A Solution: Advance Community Energy
Plenary speaker Lorenzo Kristov, who is a consultant working on the transition to an energy system with high levels local DERs and was a principal at California Independent System Operator for 16 years, tackled the issues of utility reform and community
resilience head on in his afternoon presentation. Kristov, talked about the need to achieve two major goals in the face of climate disruption. First, stop making things worse by ending the use of fossil fuels and start adopting sustainable energy practices and decarbonizing the electricity system and the economy. Second, prepare for impacts of damage done from the greenhouse gases we have already loaded into the atmosphere. He said that we do this by making communities more resilient.
He argued that both of these require engaging local communities. We decarbonize society through local planning and initiatives, by aligning local land use and other planning with energy system planning and state climate goals. We enhance resilience through local electricity systems like solar plus storage and microgrids that can continue service at critical community facilities when the grid is down in times of disruption. To be effective this approach needs to be coupled with reform of the IOU business model. The IOUs need to be incentivized through performance based regulations to focus them on distribution system operation and working as partners with local governments. This model would be an “Open Access Distribution System” that encourages DER non-wires generation and demand side management. He called this whole package the Advanced Community Energy (ACE) and quoted Buckminster Fuller, “In order to change an existing paradigm you do not struggle to try and change the problematic model. You create a new model and make the old one obsolete.”
Center for Climate Protection’s New Initiative: “ACE”
At the end of the day I told the audience that this will be the last time that the Center would host a Business of Local Energy Symposium focused on Community Choice. The reason? We accomplished what we set out to do with the Symposium. Our purpose from the beginning was to help foster the growth and success of CCAs and the Symposium played its role. A lot has changed since we did our first Symposium in 2014, when there were just two operating CCAs in California. Now CalCCA has built its institutional capacity and produces an excellent annual meeting, so we no longer see the Symposium as the best way that we can add value to the movement.
Through the Center’s Clean Power Exchange program, we will still work hard to help communities interested in exploring the possibility of starting a CCA. We will also continue to serve the existing CCAs through our CPX e-news, our DER Hub on the Clean Power Exchange website, and our on-going CPX webinars, and that they will also continue to do climate and clean energy related events that should be of interest to the CCA community.
We also used this gathering to invite the CCAs to join the Center for Climate Protection and their partners in implementing Dr. Kristov’s vision of Advanced Community Energy. The Center will be working to build a coalition of local governments, nonprofits and CCAs to advocate ACE legislation in Sacramento. We believe that ACE offers several benefits to CCAs and aligns with their values. ACE can provide a context where CCAs can more effectively differentiate themselves from the utilities and provide value to their communities and customers beyond retail electric service. It will make it far easier to do the great local program work that the CCAs are already engaged in. Imagine if the utilities were compensated based on local load balancing, DER deployment, rapid interconnection, and timely data transfer that saved customers money. ACE also supports a sustainable grid architecture that fosters innovation and that will provide customers safe, reliable and resilient power. We believe that CCAs have arrived as a political force that should be shaping California’s future energy system and that with their help this initiative can become law, so that California can continue to provide an example to other states on how to decarbonize the economy.