PALMDALE — Palmdale’s road to providing electricity to its residents by forming a Community Choice Aggregation program was further paved Tuesday as the City Council approved a number of measures intended to lay the foundation for the entity that officials hope will mean lower energy bills for residents.
The council on March 19 decided to proceed with joining California Choice Energy Authority, the joint powers authority that brings together individual cities’ own Community Choice Aggregation programs, including Lancaster’s.
Under the program, the city will purchase electricity to sell to residents, but Southern California Edison will continue to provide and maintain the infrastructure. Residents’ electricity bills will have two components, one paid to Edison for these infrastructure costs and one to the city’s aggregation program for the electricity itself, which may be obtained at a lower rate, officials said.
With a changing landscape of rules and fees for these types of programs, it is not yet known for certain how much the savings may be, but one calculation provided by city staff last month suggested a savings of 50 cents on a $100 monthly electricity bill.
The council approved, on 4-1 votes each time, four separate items regarding establishing the program and paying for the startup costs.
As before, Councilwoman Laura Bettencourt was the lone dissenting vote on each of the items relating to the program, voicing concerns she still has about its effectiveness.
“I hope one day you prove me wrong, but at this moment I am not convinced,” she said.
The council approved an ordinance to establish the program and a resolution authorizing joining the California Choice Energy Authority, as well as an agreement with Southern California Edison.
The council also granted authority to City Manager James Purtee to submit bond payments and to negotiate and finalize agreements relating to starting the program. The state Public Utilities Commission requires a $100,000 bond to start a CCA, money that is held in case the program is unable to operate and Edison is needed to step back in to ensure electrical service continues unabated, Energy and Technology Manager Ben Lucha said.
There have been some changes to the proposed program timeline since the council’s March 19 decision, Lucha said.
Instead of a May 2020 start, the city is now looking at September 2020 for residential customers, and May 2021 for commercial customers. This slip is due to changes happening with Southern California Edison, he said.
The later start date, however, means the city may not need as much as $700,000 originally planned to be set aside to show the state it has the ability to pay costs before revenues are sufficient. Without the need to make this proof until April 2021, staff believes the city should generate enough revenues from the program itself to cover that amount, Lucha said.
As part of the March 19 decision, the council authorized transferring up to $1.5 million from the General Fund reserves to pay for the startup costs. The $700,000 was part of that transfer that may instead be returned to the reserves.
Even after these steps have been taken, the city still has opportunities to back out of the effort before purchasing energy prior to the start date, officials said.
“There’s off-ramps at each one of these junctures,” Mayor Steve Hofbauer said.
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Palmdale moves toward new energy plan, by Allison Gatlin, Antelope Valley Press, April 4, 2019.