Several cities in western Riverside County are considering joining a joint powers authority called Western Community Energy, which will allow them to purchase power from Southern California Edison at slightly lower rates than they would otherwise.
Western Community Energy is a community choice aggregation, or CCA. Many local governments throughout California are creating or joining CCAs. By the end of 2018, there will be 20 CCAs online in the state, including one in unincorporated Riverside County.
So what exactly is a CCA?
“It’s just purchasing power, the same as SCE does, utilizing their distribution system,” Barbara Spoonhour, director of CCA development for the Western Riverside Council of Governments and the organizer for Western Community Energy, said.
Power customers in local governments that join a CCA like Western Community Energy are automatically enrolled in the CCA but can opt out whenever they like and buy their power from SCE instead, if, for instance, SCE is able to offer lower rates at some point down the road.
The power would be transferred to customers using Southern California Edison’s own power lines, so the utility would still get its money there. But CCAs purchase the power directly from the source, and that’s where the savings come in – Edison is locked into long-term fixed contracts, and CCAs are not.
Customers in local cities could save as much as 4 percent, Spoonhour told city leaders at a recent Lake Elsinore City Council meeting.
Electrical generation is a pass-through cost, however, what SCE pays for the electricity, the consumer pays for electricity. The utility company is only allowed to profit from distribution.
So when a customer leaves SCE for a CCA, the company loses a little money.
That cost is supposed to be made up by an exit fee, but the California Public Utilities Commission has not yet reached a conclusion on how much those exit fees are supposed to be.
Spoonhour said that even with WRCOG’s highest estimates for the exit fees, consumers should still save money. But if there is no savings, “I highly doubt the board would direct us to move forward,” Spoonhour said.
WRCOG has been working on the CCA plan since 2015, going through a feasibility study and discussions about government structure before officials decided to create a separate agency, with a representative from each member city sitting on the board of directors, Spoonhour said.
“Now it’s just been working with the different cities,” she said.
The cities of Perris, Wildomar, Canyon Lake, Hemet and Eastvale have all decided to join the CCA. Cities have until Aug. 15 to make a decision.
That date is set so that WRCOG can get an implementation plan to the California Public Utilities Commission by Jan. 1, 2019, for the CCA to go online by 2020.
Will Fritz can be reached by email at firstname.lastname@example.org.
What is a community choice aggregation?, by Will Fritz, Valley News, August 2, 2018.