CalCCA Statement on the San Diego City Council’s Decision to Join a Regional JPA to Implement CCA

Today, in a -7-2 vote, the San Diego City Council gave the green light for the city to participate in the San Diego Regional Community Choice Energy Authority. The joint-powers authority (JPA) will govern and operate a regional community choice aggregation (CCA) program, with the primary goal of achieving a 100 percent renewable energy portfolio. San Diego – California’s second-largest city – is an affiliate member of the California Community Choice Association (CalCCA).

“CalCCA congratulates San Diego for moving ahead with CCA after a lengthy public process. We appreciate the city’s efforts to reach consensus with other communities in the region, and its willingness to make changes to the JPA agreement based on stakeholder input, all of which led to the creation of community-responsive principles for implementing CCA in the San Diego region,” said Beth Vaughan, CalCCA’s executive director. “CalCCA stands ready to support the city and its JPA partners as they continue on a path to launching a CCA program in 2021.”

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About CalCCA
Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state Legislature and at regulatory agencies, advocating for a level playing field and opposing policies that unfairly discriminate against CCAs and their customers. There are currently 19 operational CCA programs in California serving approximately 10 million customers.

For more information about CalCCA visit www.cal-cca.org.

San Diego City Council takes the leap into community choice energy

The city of San Diego is about to enter the power-purchasing business.

On a 7-2 vote Tuesday afternoon, the San Diego City Council approved the formation of a community choice aggregation, or CCA, energy program. The council also approved a joint powers agreement that will see San Diego partner with Chula Vista, La Mesa, Encinitas and — by all indications — Imperial Beach to take the place of San Diego Gas & Electric when it comes to purchasing sources of electricity within their jurisdictions.

“This really is an important day for San Diego,” said Council President Pro Tem Barbara Bry. “We have an entrepreneurial culture in San Diego and I think we will be the gold star of what community choice energy should look like across the country.”

But council members Chris Cate and Scott Sherman voted no, each raising concerns about whether the city is moving into shaky financial and political territory.

Read more

Microgrids Offer Communities Bridge to Sustainable Future

In September 2017, Hurricane Maria, a Category 4 storm packing sustained winds of 155 miles per hour, took direct aim at Puerto Rico. Ranking as the worst natural disaster to ever hit the island, the hurricane devastated Puerto Rico’s electrical grid and left most of its residents without power for more than six months, according to the U.S. Department of Energy.

Today, the Environmental Defense Fund reports that Puerto Rico has largely restored its grid using a smarter, more resilient approach: microgrids. Recovery of the island’s power grid is just one in a growing number of microgrid applications by communities who want to ensure a future with greener, more affordable and more reliable sources of electricity. Microgrids are also becoming increasingly central to sustainability efforts undertaken by universities, industrial organizations and cities to combat climate change.

Building a Safety Net

The U.S. Department of Energy defines a microgrid as a localized electric grid that can disconnect from the traditional electric grid and operate autonomously in the event of a power outage.

Microgrids typically include multiple energy resources that support critical, interconnected power loads within a building, campus or community. These resources may include diesel-powered generators, renewable energy installations (solar or wind), transmission lines and battery-based energy storage systems. Most microgrids are designed to back up or complement the local electric grid.

“Think of a microgrid as a safety net,” said Peter Shattuck, a renewable energy expert with Anbaric Development Partners who has helped customers update their microgrids to meet new climate change goals. “As your dependence on electricity to power critical functions increases, so does your need for a safety net.”

He notes that microgrids, by continuing to operate when the main grid is down, add reliability and resilience to the main grid. They can also help to reduce energy costs for their owners. When demand (and electric rates) are low, microgrids can draw power from the local grid. When the local grid is experiencing high demand and rates are high, microgrids can draw power from their own resources at lower rates or even send power back to the main grid. By drawing on these “local” sources of power, utilities can also reduce their need to build out expensive transmission infrastructures.

Powering Sustainability

Traditionally, microgrids have been used by college campuses, hospitals, military installations and other organizations that cannot afford to be without power. However, microgrid applications today are increasingly motivated by sustainability efforts at the local, city and state levels, both domestically and internationally.

The University of California San Diego microgrid project, for example, provides electricity, heating and cooling to a campus with a daily population of 45,000 individuals. It uses gas turbines, a steam turbine and a solar energy installation to meet 85 percent of the campus’ electricity needs and 95 percent of its heating and cooling needs.

In the remote Andes Mountains community of Huatacondo lies Chile’s first microgrid, developed by the University <a target=”_blank” href=”https://buildingof Chile. The microgrid developers are adding distributed energy resources, such as solar energy, wind, and battery storage systems, to the village’s existing diesel-powered generator. In recent years, Huatacondo’s consumption of diesel fuel has dropped by 50 percent while it has become increasingly energy-independent through its renewable energy resources.

Keeping the Lights On

Faced with a growing threat of wildfires exacerbated by climate change, some utilities, such as San Diego Gas & Electric (SDG&E), have developed plans to install battery-based microgrids to power community emergency services in the event of wildfires or other extreme weather events.

“Our goal is to ensure that our customers continue to have access to electricity and other essential services when their power is disrupted, either because of wildfires or public safety power shutoffs by the local utility,” explained Tom Bialek, chief engineer for Sempra Energy, the parent company to SDG&E.

To date, according to Green Tech Media, the utility has proposed seven of these community microgrids in the greater San Diego area. Collectively, they would provide 100 megawatts of backup power for emergency infrastructure, such as fire stations, law enforcement offices, emergency operations centers and community shelters.

Repurposing What Works

According to Bialek, the new San Diego microgrids will be created from a combination of new and existing resources, depending on what’s already available in each community. Every microgrid will need a source of power generation, a primary load to serve and control systems that allow it to “island” (run autonomously).

“If a community fire station already has a large solar photovoltaic array, for example, we would likely add some energy storage, size those resources to match critical emergency loads, then add an appropriate control system to manage it,” said Bialek.

He added that San Diego’s new microgrids will also benefit from “smart” optimization software that comes standard with most control systems.

“Traditional microgrids have been connected to the main grid by a single switch, so your resources were either ‘all on’ or ‘all off,’” explained Bialek. “Optimization software allows you to selectively power certain loads but not others within your microgrid, so you can make more efficient use of limited power resources for an extended period of time.”

Green Partnerships

Bialek has no doubt that microgrids will continue to proliferate and play a central role in the sustainability efforts of communities across the nation. He views their owners as key partners to utility companies in maintaining a safe, reliable and sustainable electrical grid.

“Our customers help us create greener, more sustainable communities through their use of rooftop solar and other renewable energy sources,” he said. “In return, we provide and maintain the underlying energy infrastructure and resources that allow them to be successful.”

 

Microgrids Offer Communities Bridge to Sustainable Future, by Brooks McKinney, Now, September 13, 2019.

Supervisors vote to go forward on Community Choice Energy; Gaspar votes no

The County Board of Supervisors voted 3-2 Tuesday to continue exploring the idea of getting into the business of buying and selling electricity. Supervisors Kristin Gaspar and Jim Desmond opposed the motion.

The action came after a feasibility study/business plan was presented to the Board on the pros and cons of community choice energy also known as community choice aggregation.

Third District Supervisor Kristin Gaspar, whose district includes Escondido and much of North County, told The Times-Advocate why she voted no on the proposal. “There are two important takeaways from our action. First, we are not creating any new energy and second, the projected savings to customers in negligible. I have maintained an open mind but the data simply isn’t there to support the County entering the energy business.”

CCA programs allow cities and counties to buy and/or generate electricity for residents and businesses. A CCA would offer those in the county’s unincorporated areas an alternative to buying power from San Diego Gas and Electric. SDG&E would still provide transmission and delivery services.

Currently, Solana Beach is the only operating CCA in the county. The City of San Diego is working to form a Regional Joint Powers Authority (JPA) with Encinitas, Chula Vista and La Mesa. Other local cities have completed feasibility studies or plan to start one.

The County’s feasibility report cited estimated start-up and operation costs, a comparison of projected CCA and SDG&E rates, potential environmental benefits and options on how to govern the program.

The study found a CCA option that would provide 90% renewable energy by 2030 would save the average residential customer about $2 a month. Several governance options were considered, including the County operating on its own, forming a Joint Powers Authority with other local cities or joining the City of San Diego’s Regional JPA. All three options would allow for launching the CCA in 2021.

The Board initially requested staff look to CCA options last February and held a workshop in April to hear what utility experts, consumer groups and representatives from city and counties that offer the program had to say about it.

Residents had a chance to offer their input on the idea at five public forums around the county.

Tuesday’s action directed staff to negotiate a JPA with potential city partners including Carlsbad. Staff was asked to return to the Board with a CCA ordinance and JPA agreement on Oct. 15.

 

Supervisors vote to go forward on Community Choice Energy; Gaspar votes no, by Times Advocate Staff, Times Advocate, September 12, 2019.

Power Moves Put Pressure on SDG&E

San Diego Gas & Electric’s long-running regional monopoly is quickly coming to an end.

That much was clear following back-to-back votes at Thursday’s meeting of the San Diego City Council’s environment committee.

First, the committee approved a plan to start a government-run “community choice” energy agency to buy and sell electricity. The full City Council is expected to vote on a final deal next week to enter the energy market with several other neighboring cities and sell power directly to nearly 2 million people.

Then the committee OK’d hiring a group of consultants to help renegotiate the 50-year-old agreement that allows SDG&E to operate its power and gas lines within city limits.

Together, the votes signal a once-in-a-generation change to how the region gets its energy. Both are aimed at preparing the region for climate change, but also represent an ideological shift in favor of elected officials, rather than regulated monopolies, calling the shots.

The first move, despite objections from union electrical workers, has been a foregone deal since last fall. That’s when Republican Mayor Kevin Faulconer decided the city should enter the energy business because SDG&E didn’t offer him a plan to meet the city’s goal to use 100 percent clean energy by 2035. The city’s environmental goals have become a legacy policy of the mayor.

The proposal amounted to a crack in SDG&E’s monopoly, but the company brushed it off because it doesn’t make its money from buying and selling power. The company instead makes money by operating the sprawling system of power lines and cables it’s built over the last century to each home and business in the region. It also delivers natural gas.

So, even if the city takes over the job of buying and selling power, SDG&E still collects money because those city-owned electrons still get to customers on company-owned power lines.

But now that profitable part of the company is coming under increased local scrutiny, too. Consultants hired by the city are meant to arm officials as they negotiate what’s known as a franchise agreement, without which it would be impossible for SDG&E to continue operating in San Diego. The current deal, signed in 1970, expires on Jan. 17, 2021.

At the least, the city is likely to ask for more money from SDG&E in exchange for that right.

In the most extreme – though unlikely – scenario, the city could buy that whole system, putting the city in charge not just of electrons but of all energy-related infrastructure, too. Right now, San Francisco is trying to do something similar with its own local power company, Pacific Gas & Electric. San Francisco just offered $2.5 billion to buy PG&E’s equipment within its limits.

SDG&E believes its days in the electricity market are numbered. It doesn’t want to be forced to buy power as it loses customers to a city-run alternative. That’s why last year it began floating an idea that would eventually require the state to buy out its long-term power contracts and possibly pay the company for several natural gas-fired power plants it owns.

Legislation to make that so didn’t move forward this year, in part because utilities were focused on wildfire-related bills, said Mitch Mitchell, SDG&E’s vice president of state governmental affairs and external affairs.

(Disclosure: Mitchell sits on Voice of San Diego’s board of directors.)

“We anticipate that there will be a bill that moves early next year,” he said. “Negotiations are ongoing. We’re talking to everybody that will be impacted.”

Any sort of city takeover of the company’s poles and lines is further off.

In San Francisco, the full-on takeover of PG&E is far more likely than a San Diego takeover of SDG&E. Generations of Bay Area politicians have battled with PG&E to a degree we haven’t seen in San Diego. Plus, PG&E is now bankrupt.

Councilman Scott Sherman said he’s not sure the city should get into the business of running the system of poles and lines that are known collectively as the grid.

“When it comes to buying a grid, I don’t know about that one,” Sherman said. “It takes 11 months to replace a lid on a water meter box. I’m not sure I want to be in charge of the grid.”

Still, the city taking these negotiations seriously is a sign of changing times and some disenchantment with SDG&E. The consultants will come up with a value for all of SDG&E’s assets in the city – a step that would be necessary if the city wanted to buy all that equipment – and also compare the city’s deal to deals between other cities and their local power companies.

Erik Caldwell, the city’s deputy chief operating officer, told the City Council committee the city was entering the negotiations with a few things rattling around.

For instance, the city believes the franchise agreement requires SDG&E to pay to move its lines when the city needs them moved; SDG&E disagrees. That set off a dispute that may increase the cost of a major city water project by tens of millions of dollars and possibly end up in court.

Caldwell also hinted that it would want to shift some costs to SDG&E in an attempt to reduce ratepayer bills.

When the franchise agreement was last updated, the city imposed what amounts to a backdoor fee on city residents by asking SDG&E to put a surcharge on its bills to pay for a city power line undergrounding program. Those fees now amount to about $8-10 a month, according to the company.

This all represents a new degree of uncertainty for a company that, not long ago, looked as certain of a monopoly as a monopoly could be. In the past, SDG&E successfully outmaneuvered other local politicians looking to disrupt the company’s power monopoly. But things like the rise of solar power and the threat of climate change have combined to upend the energy sector and put business-as-usual utility operations under the microscope.

SDG&E counters that it is among the greenest energy companies in the country. It’s shed coal power and only about half of its power still comes from burning natural gas – though the company separately sells natural gas directly to customers.

SDG&E is working to make sure the city and the public understand what its 4,100 employees do on a daily basis. Mitchell said the city, if it’s serious about taking over the grid, will also have to look at what it takes to maintain that system, including repairs and liability.

“If the city decided that they wanted to try and buy the system, they’ve got to come up with a value first and they have to figure out how they’re going to pay for that value, if indeed they decided to move forward,” Mitchell said. “That’s a longer runway. And in the end, there’s all kinds of scenarios. They might say, ‘We want to buy it, but we want to hire you guys to maintain it.’”

Nicole Capretz, head of the Climate Action Campaign, which supports community choice energy, said her group will also start campaigning for the city to get a better franchise deal or else find someone else to run the infrastructure.

“SDG&E might not be the best partner for that,” Capretz said. “It’s a competition.”

She said her focus is on how SDG&E is run at an executive level and not upending the work of its employees.

“I think they are going to be part of the solution, because this is not about the workers, this is about management,” she said.

For the first time in modern history, it’s an open question who the city’s energy utility will be.

 

Power Moves Put Pressure on SDG&E, by Ry Rivard, Voice of San Diego, September 12, 2019.

Encinitas set to join regional Community Choice Energy program

The Encinitas City Council unanimously voted to enter a Community Choice Energy program with cities including San Diego, Chula Vista and La Mesa.

“We’re about to run through the ribbon with our arms up,” Encinitas Mayor Catherine Blakespear said moments before the council’s vote at its Sept. 11 meeting.

The vote culminated a nearly four-year process the city undertook to evaluate its options to offer local residents and businesses a Community Choice Energy program, which would provide an alternative to San Diego Gas & Electric.

The program would begin in 2021. SDG&E would still deliver the energy to local customers who take part in the regional CCE program.

Since CCE programs typically give customers more renewable energy, cities like Encinitas, which is trying to reach 100% renewable by 2030, have embraced them as part of their efforts to combat climate change by reducing greenhouse gas emissions. City Councilwoman Kellie Hinze said tackling climate change is “the most important thing we’re going to do in our generation.”

According to the nonprofit Center for Climate Connection, there are 19 Community Choice Energy programs in California that have been established since 2002, when state law began allowing them. Customers have the choice to get energy from a CCE that serves their area, or they can remain with the existing provider. When customers take part in a CCE, they typically have the option to receive 50%, 75% or 100% renewable energy.

The increase in renewable energy provided by a CCE can help slightly lower customers’ rates, although 100% renewable energy can result in higher rates. In Los Angeles County’s newly formed Community Choice Energy program, for example, customers who select the 100% renewable energy option are projected to see as much as a 7-9% rate increase compared to Southern California Edison’s default rate.

At their Aug. 21 meeting, Encinitas council members elected to partner with San Diego, Chula Vista and La Mesa for a CCE instead of joining a North County CCE with Del Mar, Solana Beach and Carlsbad which is in the process of forming. The Del Mar City Council voted earlier this week to move forward with its North County neighbors, and Solana Beach council members will discuss it at a meeting on Sept. 16.

Encinitas City Councilman Joe Mosca will represent the city on the San Diego Regional Community Choice Energy Authority, which will oversee the program. Blakespear will serve as the alternate. The two serve as the council’s CCE subcommittee to study the possibility of starting one for Encinitas.

“I look forward to working with you going forward to make sure we’re addressing this climate crisis,” Mosca said to council members and supporters in attendance at Encinitas City Hall.

 

Encinitas set to join regional Community Choice Energy program, by Luke Harold, Del Mar Times, September 12, 2019.

San Diego Gas and Electric looks to quadruple customers’ minimum monthly bill

Customers of San Diego Gas and electric (SDG&E) could soon see a drastic increase in their monthly electric bills, as the utility has submitted to state regulators a proposal to raise the monthly minimum utility charge from $10 to $38.

The California Public Utilities Commission, is expected to make a decision on the proposal by spring of 2020.

In defense of the nearly 4x increase, SDG&E is arguing that the minimum bill increase is necessary in order to “ensure that all customers pay for their minimum threshold of service provided by SDG&E, even if they are departing load or DER customers.”

What the above quote shows is that SDG&E is employing the popular rhetoric that penetration of distributed solar customers onto the grid is raising overall service costs for the utility by virtue of these customers being able to profit off of their installations. This cuts into the utility’s overall profit, which is no bueno for said utility.

However this argument made, the existence of a “cost shift” from solar system owners to other utility customers, while common is not one made with the luxury of factual support. In fact, Lawrence Berkeley National Lab (LBNL) has looked at the overall potential rate impact of distributed solar under a variety of valuations, and has compared this to other rate impacts.

Putting the Potential Rate Impacts of Distributed Solar into Context finds that:

In most cases, the effects of distributed solar on retail electricity prices are, and will continue to be, quite small compared to many other issues.

So just how small are these effects? Well for starters, they’re just as well likely positives as negatives. At current national penetration levels, the report finds that distributed solar would bring no more than a .03 cent per kilowatt-hour ($0.0003/kWh) long-run increase in retail utility prices, but that the result could just as well be a decrease of the same magnitude.

Image: LBNL

But the state in question is California, with much higher residential PV penetration levels than the rest of the country. Well, the report adjusted for high penetrations levels too, finding that even if distributed solar were to represent 10% of total electricity sales, the impacts would be either a cost or a benefit of around half a U.S. cent per kilowatt-hour ($0.005/kWh). Meanwhile, energy efficiency measures are likely to have an impact of around $0.008/kWh, which could be a cost or a benefit.

In light of these figures and the proposed minimum bill increase, SDG&E has come under fire by those who see this proposal as a direct attack on distributed solar. One of the opponents of the bill increase is NeoVolta battery storage company CEO Brent Wilson, who said:

This is just another example of a big investor-owned utility trying to undermine solar. This notion that solar customers are somehow shifting the financial burden to non-solar customers is one of their favorite myths.

For now, the future of SDG&E ratepayers hangs in the balance, however it is a balance that can be influenced, as the California Public Utilities Commission is accepting comments on the proposal.

 

 San Diego Gas and Electric looks to quadruple customers’ minimum monthly bill, by Tim Sylvia, PV Magazine, September 3, 2019.

Santee joins the list of cities opting for community choice energy

Add Santee to the list of cities moving toward joining a community choice aggregation, or CCA, energy program.

The Santee City Council late Wednesday night unanimously approved pursuing a CCA, the program in which communities offer an alternative to investor-owned utilities like San Diego Gas & Electric when it comes to purchasing sources of power.

“I think what we really need to do here is exactly what we’re doing — having a very close examination of what is best for us,” said mayor John Minto.

At the same time, the council has yet to decide what governance model the CCA should adopt. It directed city staff to look into three options:

  • Joining a proposed joint powers agreement, or JPA, that the city of Carlsbad wants to form
  • Accepting an invitation to join a regional JPA headed by the city of San Diego
  • Forming its own stand-alone CCA.

Under the community choice model, communities take on the responsibility of buying the source of electricity (solar, wind, natural gas, etc.) for a given jurisdiction. SDG&E would still assume all other duties, such as distributing the power and handling customer service and billing.

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Community energy: More and more cities want in on the power-purchase game

Judging by recent city council votes in places like La Mesa, Chula Vista, Carlsbad and Encinitas, the debate over community energy programs has become less about whether cities in the San Diego area will adopt the model but what form it will take in their respective jurisdictions.

The programs, known as community choice aggregation, started nine years ago in the Bay Area. There are now 19 in the state, committed to purchasing energy contracts from renewable sources while offering rates that are roughly equal to or lower than investor-owned utilities like San Diego Gas & Electric.

“It’s an exciting moment in history,” said Erik Caldwell, deputy chief operating officer for the city of San Diego. “I think people will look back at what the city of San Diego and our regional partners are doing doing today and say that this was the beginning of a transformation in how energy was procured, not only in California but across the nation.”

Under a traditional power model, an investor-owned utility like SDG&E handles everything — purchasing the sources of electricity (natural gas, solar, wind, etc.), maintaining the transmission and distribution lines (poles, wires, etc.) and handling the billing and other customer services.

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Encinitas City Council Votes To Join Community Choice Energy JPA

The city of Encinitas announced its intent Tuesday to join a countywide joint-powers authority that would provide energy service to residents and compete with private companies like San Diego Gas & Electric.

The Encinitas City Council voted Aug. 21 to join the JPA, which will be headed by the city of San Diego, because it aligns with the city’s Climate Action Plan. In February, the San Diego City Council voted to begin the process of establishing a so-called community choice energy program with the intention of inviting other cities into the fold as the program expands.

The county of San Diego and the cities of Chula Vista and La Mesa have also expressed a willingness to join the CCE program in recent weeks. Later this year, the San Diego City Council will officially vote to form the authority.

“We’re excited to work together with the City of San Diego in accomplishing this key component of our very similar Climate Action Plans,” Encinitas Mayor Catherine Blakespear said. “Partnering in a large regional JPA gives us many more opportunities to develop large-scale projects aimed at reducing greenhouse gases in the region.”

If the city of San Diego remains on its current timeline, the joint-powers authority would hire a CEO and CFO by the end of the year and begin hiring staff and securing funding in early 2020.

City officials hope to have the project off the ground and providing energy in 2021, but would need to submit the proposal to the state’s Public Utility Commission by the end of the year to make that deadline.

The Encinitas City Council plans to vote on a draft JPA agreement in September.

 

Encinitas City Council Votes To Join Community Choice Energy JPA, by City  News Service, KPBS, August 28, 2019.