Community Choice Energy decision awaits state commission findings

On Sept. 7, San Diego-based Climate Action Campaign held a forum on Community Choice Energy (CCE) at the University of California San Diego. This model, which was approved by the state in 2002, could ultimately provide ratepayers with the option to choose where their power comes from.

CCE has been championed by the CAC and other environmental groups for its emphasis on clean energy and more affordable rates, but Sempra Energy representatives counter that it would be too risky, have little benefit to the environment and that even an increase in rates is plausible.

When the La Jolla Village News last reported on CCE (often interchanged with ‘Community Choice Aggregation’) on March 10, it was stated that the California Public Utilities Commission’s (CPUC) study was necessary for municipalities to proceed.

While little information has been divulged from the study, on Wednesday, Aug. 1, Stephen Roscow, administrative law judge of the CPUC, handed down ratepayer exit fees to be charged by monopoly utilities in the state in lieu of choosing CCE.

These exit fees are set in place to ensure that the burden is not transferred to existing ratepayers who do not choose to switch to a CCE provide. Regardless of whether a ratepayer switches or not, SDG&E will still manage billing and oversight of the City’s energy.

“The CPUC decision has been pushed back, which perhaps is a good thing,” said Tony Manolatos, an attorney with Manolatos, Nelson, and Murphy representing the Clear the Air Coalition. “The big question is… Will the state legislators cause a cost shift to the ratepayer or not? The legislators seem to recognize that and are trying to fix it.”

Mayor Kevin Faulconer has remained tight-lipped on which way City Council seems to be leaning, though it seems to look good for CCE as an option.

Neighboring municipality Solana Beach, which has had a CCE program since June, the Solana Energy Alliance, has seen a decrease of 2 to 3 percent in their rates.

At the UC San Diego forum, Faulconer said: “In the coming weeks, of course, I’ll be making a decision for the City of San Diego on our pathway to clean electricity. And this, along with the other steps that we are taking, really is going to place us with that goal of 100 percent renewable energy by 2035.”

Faulconer has garnered support from both sides of this issue, due in part to his conservative stance moving forward.

“The mayor has done the right thing on this issue,” said Manolatos. “He’s said, ‘We need clarity from these regulators to know what a government-run utility program would ultimately cost.’”

While the mayor frequently touts the administration’s dedication to their overarching Climate Action Plan, this will ultimately remain a political issue.

“The vote will come down to a decision by City Council, as it is not a public referendum,” said Mark Hughes, volunteer legal counsel for Climate Action Campaign. “Thus far, we know that councilmembers Bry, Ward, Cole and Gomez are on- board with the decision. [Councilmembers] Sherman and Kersey are on the fence. Chris Cate is completely opposed to this notion. This will not be a referendum voted on by the public.”

“Despite the CPUC decision having been pushed back, our expectations have moved up. As soon as the decision comes out, City Council will vote on this measure. The mayor has been very coy on this issue, not coming out for either side. Things are looking very good, however,” Hughes added.

When prompted on their contested issues of CCE (risk, cost-effectiveness, and environmental impact), Manolatos said: “Being in San Diego, I believe that we can all say, ‘We’re for clean water, clean energy and a good quality of life.’ The truth is, there are multiple risks involved with operating a government-run utility program.”

“If San Diego does decide to launch a program like this, ultimately, taxpayers could be on the hook to pay subsidies. Another aspect that is often ignored is that CCAs really haven’t been around that long, so they haven’t proven themselves. If you look at a similar program in a city like Chicago, the government-run utility could not compete on price, so they had to close down the CCA.”

Although little will occur until the CPUC’s findings have been thoroughly taken into account, of which no exact time frame has been set, this issue should see some signs of daylight within the weeks to come. La Jolla Village News will publish updates once more information is disclosed.

Community Choice Energy decision awaits state commission findings, by Blake Bunch, San Diego Community News Group, September 20, 2018.

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