With Pacific Gas & Electric Co. filing for bankruptcy protection in wake of its wildfire liability issues, and more attention being paid to the environment, energy is at the top of many minds these days.
Some cities and counties in the state, including some in the Central Valley, are once again exploring Community Choice Aggregation (CCA) — an alternative to investor owned utility energy supply systems that allow local governments to obtain power for their residents, businesses and municipal accounts from alternative suppliers, but still receive transmission and distribution service from their existing utility provider. CCA was signed into law in 2002.
PG&E’s recent controversy has left more consumers and municipalities exploring alternative power, and CCAs are marketed as an option for communities that want more local control over electricity sources, more green power and lower electricity prices.
In California there are 19 community choice agencies that are operational in more than 160 cities serving 8 million customers.
In November 2018, the Hanford City Council voted to start the process of establishing a program plan and statement of intent, and a technical study has already been conducted.
Hanford is on schedule to launch its service around this time next year, and is the furthest along in the Central Valley with its program. Hanford has a completed implementation plan and is working with the California Choice Energy Authority to complete the project.
There is usually a delay in implementation for resource adequacy, a regulatory construct that ensures there will be sufficient resources available to serve electricity demand, and because of the handoff from PG&E to the community choice agency responsible for the procurement.
“Its actually kind of a good thing because it gives us an extra chunk of time to make the community aware of it, go to community meetings, work out bugs, and it allows for more time to communicate with the residents and citizens about the program,” said Woody Hastings, energy program manager for the Center for Climate Protection.
Founded in 2001, the Center for Climate Protection is a non-profit organization based in Santa Rosa with a mission to identify policies and programs that reduce greenhouse gas emissions that also have local economic benefits that are replicable. Community choice energy is an example of such a policy.
There were efforts early on in the Central Valley to bring a CCA into the area, led by the Kings River Conservation District from 2006 to 2008 that included cities in Fresno County, Kings County and Tulare County.
That plan failed because of the economic downturn, as well as obstruction efforts by PG&E, according to organizers.
In February, a workshop regarding community choice energy was presented to the Fresno City Council by Hastings, Hanford City Manager Darrel Pyle, Mike Dozier with the California Partnership for the San Joaquin Valley and Destiny Rodriguez with the Center for Climate Protection.
Hastings said that council members present at the meeting showed avid interest in pursuing aggregation.
PG&E would still own, maintain, and operate the infrastructure, and continue to be responsible for electricity delivery and transmission, reading the meter, and billing and collecting from customers, but the power will be purchased by the CCA, with the revenues collected staying in the city.
“This is $200 million or so that leaves the Fresno economy every year, and that revenue takes a U-turn into local control and the net revenues — after you’ve procured your power, sold your power — you can structure your rates so that there is a net revenue building reserves, building program funds, operational funds, and then offer programs that respond to the needs of the local community,” Hastings said.
Customers are able to opt out and stay with the service provided by PG&E rather than a CCA program.
A 2016 survey commissioned by the Clean Power Exchange, a program meant to accelerate the spread of Community Choice Energy, found that a majority of Central Valley Residents wants a choice in how their electricity is generated.
According to the survey, 66 percent of the voters are supportive of providing locally produced electricity if the revenues would be reinvested back into the economy, and 71 percent are in support of having a local and renewable electricity source owned by the community.
Jolt for the economy
Barry Vesser, deputy director for the Center for Climate Protection, said that CCAs provide competition as PG&E and other major utilities have somewhat of a monopoly in the energy industry, but that the investor-owned utility will not lose profits.
“PG&E’s business model is widely misunderstood in the public,” Vesser said. “PG&E doesn’t make profit, by law, on the generation side of their business. They provide service for customers and are only allowed to be reimbursed for the costs. Although they are losing revenue, they are not losing profits.”
Vesser said that the CCAs will influence utilities to compete for customers and provide better service.
Vesser also said that the business community should be involved in the CCA process so they could have input and express their needs, especially since businesses can be large consumers of power.
Al Galvez was a public affairs manager for PG&E for the Central and southern San Joaquin Valley, serving from Madera County to Kern County for 15 years. He recently wrote an op-ed published by The Fresno Bee about community choice in the Central Valley.
In the op-ed, Galvez details benefits of CCAs and how they are revolutionizing a 100-year-old utility system for newer, local, clean and community based energy systems.
“I think that if you have some of the bigger counties or cities like Fresno get in, it will influence the smaller cities,” Galvez said. “Its an opportunity for a city or a county to explore some opportunities that are maybe opening up, to look at from a cost perspective.”
Municipalities Taking Another Look At Community Choice Energy, by Frank Lopez, The Business Journal, April 9, 2019.