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Commissioner Guzman Aceves: Low-income Valley towns get pilot projects for clean energy at 2,000 households

In California, we know climate change is real. We also know that methane and carbon emissions are some of the leading culprits in this accelerating change. And according to the state’s 4th Climate Assessment released last August, San Joaquin Valley residents as a result face more intense and frequent heat waves, increased and prolonged droughts, greater risks of natural disasters such as floods and wildfires and are more vulnerable to a number of likely public health threats.

San Joaquin Valley residents also face the most extreme energy burdens in the state, paying a much larger percentage of their income for energy. But there is another population in the San Joaquin even more burdened with high energy costs and direct, daily exposure to air pollution because — in this extraordinarily productive agricultural region — people live in communities and neighborhoods that haven’t had access to clean, affordable energy, relying instead on wood and propane to heat their homes and cook their food.

Last summer, at well-attended workshops in schools and gymnasiums in communities like Allensworth, Alpaugh, Le Grand, La Vina, Ducor, West Goshen and more, we heard from many of these residents.

We heard from hard-working people who endure icy showers and cold food when the propane or wood run out. We heard stories about people being manipulated and taken advantage of by unregulated propane suppliers. We heard stories about putting kids to bed cold and hungry because the fuel was gone. In this extraordinarily productive agricultural region, we heard about bad health and other impacts, particularly in winter when so many people don’t have clean energy options the rest of us enjoy.

Now, working with utilities regulated by the California Public Utilities Commission, we can finally offer about 2,000 San Joaquin Valley households cleaner and safer energy alternatives, and we can reach more families in the future.

At our last CPUC meeting of 2018, the commission approved a $56 million investment for pilot projects in 11 San Joaquin communities. In addition to the benefits from cleaner energy and healthier air, the program has a big economic development component. With more energy alternatives and infrastructure to deliver them, it should become easier to attract other investments, housing and jobs.

I am proud of the CPUC’s decision to bring cleaner, affordable energy to communities in California long unserved and overlooked. I am even prouder of these communities themselves, and of their tenacity and commitment. It has been a long road, and these pilots are just another step. But they will provide energy efficiency upgrades, electric heating, solar benefits, job training and more — while reducing energy costs and pollution.

When then-Gov. Jerry Brown signed Assembly Bill 2672 in 2015, the CPUC was directed to find ways to increase affordable access to energy for disadvantaged communities in the San Joaquin Valley. But we first had to identify eligible towns and households and meet with residents to determine which clean-energy strategies would work best. Collectively, we’ll learn from the different experiences as we move forward and seek to replicate the successes in other communities during the next phase of our still-open CPUC proceeding.

The pilots will allow eligible households to replace at no cost their propane- or wood-burning appliances with new energy-efficient appliances — either electric or natural gas — and will allow some minor home upgrades if necessary. The pilot communities will also benefit from a Community Energy Navigator program established to inform, engage and assist participating residents. And we’ll build in basic bill protections to ensure that energy costs do not go up for participants.

Everyone involved knows a lot of work remains. But we are excited about the positive impacts and value of investing in communities that have long been bypassed.

As California continues reducing methane or carbon emissions, we must also meet the challenge of our current heating needs — for water and for living and work spaces — with cleaner energy so no one is left behind. These pilot projects, in addition to improving the quality of life for several thousand residents, will give us the experience and reliable data needed to determine the best ways of continuing to reduce greenhouse gas emissions while also keeping monthly bills affordable for so many other hard-working Californians.

Martha Guzman Aceves was appointed to the California Public Utilities Commission by then-Gov. Jerry Brown in December 2016. She previously served as deputy legislative affairs secretary in the Office of the Governor, focusing on natural resources, environmental protection, energy and food and agriculture.

 

Low-income Valley towns get pilot projects for clean energy at 2,000 households, by Martha Guzman Aceves, The Fresno Bee, January 11, 2019.

PUC again tries to help utilities fight their fear

Until damages and liabilities from wildfires rose from mere hundreds of millions into the multi-billion-dollar range over the past 18 months, California’s big private utilities had no greater fear than the steady expansion of a phenomenon best known by the initials CCA.

That’s short for Community Choice Aggregation, a means allowing electricity consumers in some places to opt out of being served by the likes of Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric Co. Municipally-owned and-operated CCAs generally charge a little less per kilowatt hour than the private companies and provide more energy from renewable sources like wind and solar. They use existing transmission lines to fetch power for their customers.

It’s a nightmare for the utilities, which have already lost cities big and small to CCAs, cutting into their profits a bit. San Francisco Clean Power is a CCA. Marin, Sonoma and Mendocino counties also offer CCA service. Starting next month, customers in 31 Southern California cities plus the unincorporated areas of Los Angeles and Ventura counties will join the biggest-ever CCA unless they opt out in favor of sticking with Edison.

That one will include cities like Ventura and Thousand Oaks, Santa Monica, Manhattan Beach and Calabasas, to name just a few. About one-third of those locales have chosen to give customers 100 percent renewable power unless they deliberately choose dirtier options priced a bit lower. Los Angeles itself won’t join the CCA because it already has the state’s largest municipally-owned utility, the Department of Water and Power.

The latest significant city wanting a CCA is San Diego, where Republican Mayor Kevin Faulconer the other day announced support for an alternative to SDG&E as the best means to fulfill the city’s pledge of running on 100 percent renewable energy by 2025.

Not surprisingly, California’s Public Utilities Commission, which regulates the big utilities and has long favored them over their customers, keeps throwing obstacles in the path of CCA expansion. In January 2018, it passed new rules that essentially delayed establishment of new CCAs for a year. As that time expired, the commission adopted new, higher levies on CCA customers as a way to compensate the existing utilities for expenses of previous power plant construction and long-term power purchase contracts they signed during the energy crunch almost 20 years ago. Never mind that consumers actually paid for all that via their monthly bills.

“We are updating the formula because everyone agrees it is broken,” newly termed-out Commissioner Carla Peterman, a Jerry Brown appointee, said at the time of the vote.

But not everyone agrees. Some activists, especially in the San Diego area, believe the new, higher charges — significantly more there than what’s paid by consumers leaving PG&E and Edison — are excessive.

“This is dangerous because it defeats the aim of better prices by CCAs than established utilities,” said Bill Powers, a San Diego energy engineer who helped California fight off utility plans to import high-priced foreign-sourced liquefied natural gas through Ventura County in the early 2000s. “In San Diego, it could set up an almost impossible burden for any new agency.”

 

PUC again tries to help utilities fight their fear, by Thomas Elias, Chico Enterprise-Record, January 8, 2019.

Community choice energy backers file for CPUC rehearing, say proposed exit fees are too high

Backers of community choice energy programs want the California Public Utilities Commission to take another look at a recent decision that supporters say is tilted too much in favor of traditional power companies and will discourage potential customers from switching to CCAs.

Last month, the commission voted 5-0 to increase the exit fees that Community Choice Aggregation, or CCA, customers must pay to utility companies in their respective service territories, effective next year.

Late Monday afternoon, the state’s CCA trade association and a pair of San Diego-based groups filed paperwork calling on the commission to hear the case again.

“This is an added fee that will increase the cost for customers to move over” to CCAs, said April Maurath Sommer, executive director and lead counsel for the Protect Our Communities Foundation, an environmental group based in San Diego County. The Utility Consumers’ Action Network joined Protect Our Communities in its filing.

The CalCCA trade group submitted its own application, saying the state’s decision “artificially inflates” the exit fees.

The utilities commission did not respond to a request for comment on the filings.

Largely formed as a way to offer customers power from cleaner energy sources, CCAs have grown rapidly across the state. The first CCA was established in 2010 in Marin County and since then 18 others have sprung up.

San Diego mayor Kevin Faulconer last month announced his support for creating a CCA that, under a joint powers authority, could also include multiple cities around the county.

Under the CCA model, utilities like San Diego Gas & Electric still maintain transmission and distribution lines (such as poles and wires) and handle customer billing. But decisions regarding what kind of power is purchased in a given community are made by government officials.

Once a CCA is formed, its customers must pay an exit fee — called a Power Charge Indifference Adjustment — to the legacy utility serving that particular region. The fee is included in customers’ monthly bills.

The fee is required to offset the costs of investments utilities have made over the years for things like natural gas power plants, renewable energy facilities and other infrastructure.

Utilities argue if the exit fee is set too low, it does not fairly compensate them for their investments; if it’s too high, CCAs complain it reduces the financial incentive for their potential customers.

In October, state commissioners unanimously voted for an adjusted exit fee backed by commissioner Carla Peterman. While expressing support for CCAs, Peterman said the commission had a “legal obligation” to make sure increased costs are not shouldered by “customers who do not, or cannot, join a CCA” and said the adjustment “ensures a more level playing field between customers.”

The fees vary, depending on the service territories of the three investor-owned utilities across the state (SDG&E, Southern California Edison and Pacific Gas & Electric). According to estimates from the commission, the new exit fee in San Diego will be raised from 2.5 cents per kilowatt-hour to about 4.25 cents.

For a prospective CCA residential customer who uses 500 kilowatt-hours per month, that works out to about $21.25 per month.

The groups filing for a re-hearing said the state ruling contained legal errors. Among them:

  • allowing utilities to pass along the costs of generation the power companies themselves own onto the exit fees
  • not properly taking into account the value of cleaner energy sources, and
  • saying there is “substantial evidence” that utilities executed contracts for renewable energy at inflated prices.

Protect Our Communities also called on the commission to issue an immediate stay on its decision because it will go into effect in little more than six weeks — Jan. 1, 2019. The group projected the new exit fees would be 50 percent higher than the existing fee.

“If this decision is allowed to stand there’s going to be huge numbers of San Diegans who will be getting their electricity from a (CCA) at rates that are unfairly high,” Maurath Sommer said. “This is a gift to the utilities … and does not encourage good management because they can turn those costs over to the new (CCA) customers.”

A spokeswoman for SDG&E said the utility had no comment because it had not yet had a chance to review the filings.

The commission has scheduled a second phase of discussions to fine-tune the exit fees.

Maurath Sommer said the commission is under no specific deadline to announce whether it will rehear its decision. In addition, plaintiffs cannot lodge an appeal in court until the commission issues a decision on a rehearing.

“In an ideal world the commission would expediently respond to all applications for rehearing and unfortunately the commission has a long history and a continuing history of electing to ignore applications for rehearing, in some cases up to two or three years,” she said.

The only existing CCA in San Diego County, the Solana Energy Alliance out of Solana Beach, joined Cal CCA in its request. Voicemail messages left to the mayor and deputy mayor at the Solana Beach City Council by the Union-Tribune went unreturned.

 

Community choice energy backers file for CPUC rehearing, say proposed exit fees are too high, by Rob Nikolewski, The San Diego Union-Tribune, November 19, 2018.

Local government energy-buying idea bruised by ruling

The effort of Butte County and Chico to form an agency to buy electrical power for their citizens suffered a blow Thursday, but it’s unclear just how severe a blow it was.

The state Public Utilities Commission approved a set of costs for customers who leave PG&E or the state’s other investor-owned utilities (IOUs) to receive power from providers like the community choice aggregator that is being pursued locally.

“The ruling was favorable for the IOUs, so it’s not favorable for CCAs,” said Butte County Assistant Chief Administrative Officer Brian Ring.

Under a community choice aggregation program, a government entity buys power on the open market, which locally is estimated to result in savings of at least 2 percent. PG&E would still deliver the power and retain ownership of the power lines and other electrical infrastructure, but it would be delivering power provided by the county and city.

The other municipalities in Butte County could join in, but a study found in the minimum Chico and the county would both have to participate to provide the necessary customer base.

What the PUC approved on a 5-0 vote largely involves long-term power purchasing contracts PG&E and the other utilities have. The contracts were signed to provide power for a customer base that is shrinking as more and more CCAs and other alternatives form.

The utilities argue the people who leave owe a share of the costs of the contracts that were purchased partially for them. There hasn’t been much disagreement on that, but how much that cost would be has been contentious for more than a year.

The vote Thursday put the charge at an average of 1.68 percent for residential customers in PG&E’s service area. The costs for customers who leave Southern California Edison or San Diego Gas & Electric are even higher: 2.50 percent and 5.24 percent respectively.

Locally, that could still mean savings if the CCA is formed. The 2 percent figure was a conservative estimate, and savings could easily be more than that.

But Ring said it would mean less money coming to the CCA, and lengthen the time it will take to pay off the debt it will have to incur to form. Paying off the debt would give the CCA flexibility to reduce rates or pursue other initiatives.

He said the county’s consultant would be rerunning the data through the model used for the study to see if the CCA was still feasible here. “We’re crunching the numbers,” Ring said.

“It’s going to have an adverse impact on our study,” he said, “to what degree we haven’t determined.”

 

Local government energy-buying idea bruised by ruling, by Steve Schoonover, Chico Enterprise-Record, October 14, 2018.