Palmdale to ponder power program

PALMDALE — The City Council will decide tonight whether to proceed with forming a Community Choice Aggregation pro­gram, in the hopes that the program may give it the ability to provide elec­tric­ity to residents at lower rates by negotiating power pur­­chases directly with en­er­gy producers, instead of Southern Cal­ifornia Ed­ison.

The meeting begins at 7 p.m. in the Council Cham­bers at City Hall, 38300 Sierra Highway, Suite B.

Should the Council de­cide to move forward with such a program by June 2020, it will need a loan of $1.5 million from the city’s General Fund reserves in order to cover the start up costs, which have not been budgeted, according to the staff report.

The program will not be able to generate enough revenue to pay back the loan until 2023, at the earliest, depending on the rates set for the program.

In addition to the start up costs, the city will also need to budget for ongoing op­erating costs in the 2019-2020 fiscal year, which be­gins July 1. According to the staff report, this may re­quire another loan from the General Fund reserves of up to $2.5 million. With the program set to begin in June 2020, it is not expected to generate the revenue to recoup op­erating costs until at least August 2020. These op­er­ating costs in­clude power pro­cure­ment, staff­ing and ad­min­is­tration and con­sult­ing, among others.

The additional start up and operating costs will include tentatively recruiting two and a half new positions on city staff to administer the program, according to the staff report. One position, a senior management an­al­yst, would be needed dur­ing the current fiscal year as part of the start up process. A senior fi­nan­cial analyst and half the fund­ing for an ad­min­is­tra­tive assistant would be required at a later date for operating the program.

In a study produced by California Choice Energy Auth­ority in early 2018 es­ti­mated customers would save 1% of the en­er­gy production costs of their electrical bills, or ap­prox­imately 50 cents per month for the average household.

In December, the City Coun­cil directed staff to submit its intention to join Lancaster’s Com­mu­nity Choice Energy Auth­or­ity pro­gram to the Cal­if­or­nia Public Utilities Com­mis­sion as a means of main­taining the option to proceed with the program with further study, but not yet fully committing to it.

The city nows faces an April deadline to provide ad­di­tional information sta­ting its intentions. This sec­ond phase of the process has a $160,000 price tag, which is not in the current bud­get, according to the staff report.

The Lancaster CCEA has five member cities, in­clu­ding Lan­cas­ter, and anoth­er four are con­sid­ering joining. With Palm­dale, it would make an or­ganization of 10 mem­bers.

Questions the Council had asked staff to in­ves­tig­ate in December remain, in­cluding uncertainty in the changes to policies and fees made by the Cal­if­ornia PUC with these types of agreements, in part to prevent harm to the util­ities facing an exodus of cus­tomers, which will in­crease energy rates.

To share your opinion on this article or any other article, write a letter to the editor and email it to editor@avpress.com or mail it to Letters to Editor, PO Box 4050, Palmdale CA 93590-4050.

 

City to ponder power program, by Allison Gatlin, Antelope Valley Press, March 19, 2019.

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