SB 237, authored by California State Senator Hertzberg (D-18), threatens to increase the use of fossil fuels in California by undercutting Community Choice Energy (CCE) programs. The bill would allow businesses to circumvent CCE providers and buy electricity directly from suppliers. These suppliers would be subject to the state’s required minimum on the renewable content of the electricity – whereas CCEs consistently exceed those minimums. Therefore, this bill would reduce the use of renewables, hurt renewable energy job growth, and likely bankrupt all current CCEs. This bill would effectively end existing CCE programs and halt their future expansion throughout California.
Community Choice Energy allows communities, rather than the utility companies, to purchase electricity. CCE programs offer different packages with varying renewable content, wherein residents can choose the pricing that works best for them. This increases renewable use and decreases fossil fuel emissions, at cheaper prices than the electricity provided by utilities. The California Community Choice Association estimates 2018 bill savings to be at 99 million.
In California, community adoption of CCE is expanding rapidly, with 16 established CCEs and 4 more emerging, not to mention the many communities considering adopting a community choice program. San Diego is among the numerous cities considering the adoption of Community Choice Energy as a means of achieving its goal of 100% renewable energy by 2035. Before the end of this year, the San Diego City Council is scheduled to vote on whether or not to establish a CCE program.
Allowing businesses to buy electricity directly from service providers and bypass community choice could leave Community Choice Energy programs with power contracts but not enough paying customers. Through the California Clean Energy and Pollution Reduction Act, by 2021 CCEs are required to purchase at least 65% of their renewables through contracts ten years or longer. If enough businesses purchased power directly from service providers, and not from CCEs, existing CCEs would go bankrupt because of a lack of customers to pay for the long-term power contracts. Failure of current CCEs will jeopardize the future of Community Choice, potentially reducing renewable use in California at a time when decreasing fossil fuel use is imperative.
CCEs provide cleaner, lower-cost electricity to customers. If CCEs fail due to the passage of SB 237, their residential customers would be sent back to the higher-priced utility companies, hurting low-income residents the most. One such example is San Jacinto, a city in inland Southern California where 18.4 percent of citizens live in poverty. The San Jacinto CCE, San Jacinto Power, saves residents money on their energy bill and also invests in local energy sources, which brings jobs to the region. Most CCEs in California focus on increasing use of local energy sources, the community benefits of which could be lost if CCEs go bankrupt.
CCE programs save residents money and encourage local investment and job growth in the renewable energy sector. We cannot let these benefits imparted by CCE programs, nor the potential to expand CCE into more of California to be taken away from residents by the enactment of SB 237. Allowing businesses to use more fossil fuels and less local energy through direct-access purchasing is not a step, but a sprint, in the wrong direction, away from the clean and prosperous California we must strive for.
SB 237 has passed the Assembly Utilities and Energy Committee and will continue to the Assembly Appropriations Committee, before returning to the Senate. Make a call to your state legislators to tell them that you oppose SB 237; you can find your representatives here. Let them know that allowing businesses to buy directly from service providers and sidestep Community Choice Energy will harm our communities and our environment. Remind them that California needs to be reducing the use of fossil fuels and increasing the use of renewables now, by protecting and expanding CCE programs.
Laura Sisk-Hackworth is a SanDiego 350 volunteer who has worked in environmental and research science fields. Originally from the Inland Empire, she became concerned about climate change in 6th grade and has since worked to educate herself and others on the challenges a changing climate will present.
SB 237 Threatens Community Choice Energy, by Laura Sisk-Hackworth, San Diego Free Press, July 11, 2018.