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Businesses Urged To Help Valley Set Its Energy Future

The City of Hanford is on track to become the first Valley community to take more control of its energy sources and costs when it launches its Community Choice Aggregation (CCA) program next year.

Other Valley communities are at various stages of considering whether to form CCAs, with Fresno, Huron, Clovis, Sanger, Parlier and Kerman among them.

Potentially, the programs could save residential customers a few dollars off their electric bills, and the savings could be considerably more for manufacturers and other businesses with heavy demand, a trio of men advocating for CCAs told attendees at a seminar during the recent Valley Made 5th Annual Manufacturing Summit in Fresno.

 

Setting an energy destiny

The actual savings would stem from the decisions made by the governing boards of the individual CCAs, which would be run by local government leaders.

Those decisions would include from where the CCAs buy power; how much of that power would come from solar, wind and other renewable sources or if generators burning fossil fuels and some waste products might be in the mix; and how any profits are spent.

Options for using those profits include reducing rates for customers or funding incentive programs for homes and businesses to become more energy efficient, the experts said.

In any of these decisions, business people should be at the table, whether it’s at the beginning stages, as Fresno is doing, or when its farther along, as in Hanford, or if an authority is fully formed, as in Marin and Lancaster, said Barry Vesser, deputy director of the nonprofit Center for Climate Protection in Santa Rosa, one of the invited speakers.

 

Business input crucial

“A CCA will allow Fresno to have a say in how that looks, not just leaving it to a state or major utility,” he said, adding that businesses need to be part of this if Fresno or any other Valley cities go forward, “because if you want the kind of program that will serve local business interests and will help grow the economy here, you want to be part of helping develop that.”

As for what CCAs are, they stem from a 2002 law passed by the California Legislature allowing communities in the state to combine the electricity loads of their residents and businesses into community-wide electricity aggregation programs.

Not that a CCA could completely break free from Pacific Gas & Electric, Southern Californian Edison or one of the other investor-owned utilities.

What the law does is give the CCAs more local control, specifically the ability to chose from where they buy power. They also have the authority to own and run their own electrical sources — including solar and wind farms — though so far the 19 existing CCAs in California largely buy their power from businesses that generate electricity, as PG&E mostly does, the advocates told the audience.

 

More flexibility

CCAs being able to choose from whom they buy their power creates a more competitive market, so the CCAs may negotiate more favorable rates for their electricity than the utilities could, explained Mike Dozier, a Clovis-based, independent energy consultant.

So communities can work with energy suppliers closer to their areas, helping keep the money they pay local, or they could pay for power generated from far away, he said.

The distance isn’t important from a technical standpoint, because a supplier doesn’t actually direct power to a particular city. Instead, the power is fed from the source into the electrical grids operated by the big utilities, and communities draw from it like farmers drawing their portions of the water they’re entitled to from a reservoir, Dozier explained.

This also allows individual power customers to decide to opt out of their respective CCAs and continue being customers of the utilities.

As such, even in a Valley community that forms a CCA, customers would still pay the electrical distribution costs — usually about 60 percent of an electric bill — and the utilities still own and maintain their electrical infrastructure and handle the customer billing, he said.

An effort had been underway years ago to create the state’s first CCA in the Valley, but the Great Recession helped ground it in 2008, Dozier said.

 

CCAs come into their own

The first started in Marin in 2010, and since then more have formed, serving 60 cities and parts of 20 counties.

The question of whether to start a CCA is likely to become more prevalent in Fresno and other communities that don’t have them, as this new system of contracting for electricity is gaining momentum.

A newly formed CCA in Los Angeles County is serving 32 cities, and expectations are that Fresno will more actively explore the possibility of forming one in the future. The speakers at the May 2 summit noted that some of the smaller communities interested may wait for Fresno to go forward and — if that happens — then join its CCA.

“And we project that by 2020, [CCAs] will be serving half of the load of the state of California.”

 

Savings in Hanford

Dozier said Hanford expects to cut electric bills by 10 percent once its CCA is up and running, adding that the chief driver to create the program was to reduce energy costs for Faraday Future, which has been building its first electric car manufacturing plant in a million-square-foot former tire plant on the city’s south end — though financial troubles have so far stalled the project.

While some savings may be considerably less — including the average 2.5 percent savings for Sonoma Clean Power customers — the CCA advocates said it’s important to note that the savings also are hedges against power utilities raising their rates.

“Can it save you money? Absolutely. If you look at PG&E’s record over the past 30 years, it’s basically a 4% [rate] increase every year,” Vesser said.

With the utility having filed for bankruptcy and facing billions of dollars in liabilities for reportedly causing a series of California wildfires in recent years — including the Camp Fire that destroyed more than 21,000 homes in parts of six counties in the northern part of the state — more rate hikes seem inevitable in the near future, he said.

 

Incentive opportunities

For businesses, the monthly electric bill savings may be less important than the programs the CCAs my impose that could draw new businesses or incentivize existing ones to stay.

Though the audience for the seminar was small, those in attendance seemed highly interested in what was said, among them Mike Betts, CEO of the Betts Co., a Fresno manufacturer of industrial springs and truck accessories.

“The real bottom-line issue for manufacturing is we’re paying three to five times more than we should be paying today,” when compared to electric rates in Texas, Oklahoma and many other parts of the country, as well as other countries, he said after the seminar.

While a 2.5-percent savings may not seem like much, if it allows communities to avoid yearly rate bumps by the utilities, the savings could cumulatively be significant, Betts said.

But if a CCA is formed in Fresno, “Maybe there should be some manufacturers on that board,” to help ensure the decisions it makes are good for businesses here, he noted.

“I like what Hanford is doing because of Faraday. It was focused on an economic incentive of doing business [there] for industry.”

As for whether manufacturers would favor a Fresno CCA, Betts said not enough discussion has occurred to get a good sense of that. But until that happens, “We’ve got to just get the facts, do the research, talk with the other cities that have CCAs.”

 

Businesses Urged To Help Valley Set Its Energy Future, by David Castellon, The Business Journal, June 4, 2019.

Council begins to explore Community Choice Aggregation

HANFORD — The Hanford City Council met Nov. 20 and held a public hearing on a proposed ordinance to establish a Hanford Community Choice Aggregation implementation plan and statement of intent.

In a 4-1 decision, with Councilwoman Diane Sharp being the only “no” vote, Council decided to start the process of establishing a program plan and statement of intent.

During the public hearing, City Manager Darrel Pyle said the concept of Community Choice Aggregation was signed into law in 2002 and grants California Cities the right to combine the electricity load of its residents and businesses into a community-wide electricity aggregation program.

Right now, Pyle said most of Hanford is served by Southern California Edison, but the Industrial Park is served by Pacific Gas & Electric.

He said under a Community Choice Aggregation program, the incumbent utility — Southern California Edison or PG&E — continues to be responsible for electricity delivery and transmission, owning and maintaining the power and transmission infrastructure, reading the meter, and billing and collecting from customers.

The staff report on the issue said the only change under the program is that power consumed by customers is purchased by the Community Choice Aggregation, with the revenues collected staying in the city to benefit the citizens and businesses.

Pyle said a technical study that was conducted said Hanford customers would receive and increased opportunity to choose the type of electricity they prefer to come into their home, like renewable energy or a lower-cost option.

In addition to the financial benefits, he said the Community Choice Aggregation structure results in the Hanford City Council having full control of rate setting, budget approval, policy setting and program direction.

Officials said any Hanford customers who wish to stay with the incumbent utility provider have the ability to opt out of the Community Choice Aggregation.

“What we’re offering here is competition,” Vice Mayor Sue Sorensen said.

An additional fund would be established in the city’s budget and operate like the water or sewer fund, with reserves that would not affect the general fund, Pyle said.

Sharp said she felt like the city has enough on its plate and she didn’t feel comfortable with the level of risk going into this new business, but Council members like Sorensen and Mayor David Ayers said they were interested in the possibilities available in providing different options to residents and would at least like to begin moving forward at this point.

A motion made by Sorensen to begin the process of establishing an implementation plan and statement of intent was passed with support from Ayers and Council members Martin Devine and Justin Mendes.

Due to the many steps involved, if the council continues to pursue the option — which they are not obligated to do — anticipated implementation is not expected until May 2020 or later.

Town hall meeting

A town hall meeting that was previously scheduled to take place tonight, Nov. 27, to discuss a proposed homeless service center in downtown Hanford has been canceled.

Ayers said out of respect for the three new council members that were recently elected, he requested the meeting be postponed until the three new members are situated on the dais. He said after that point, the new council can decide when the meeting is to be held.

“They’re going to be the future decision makers,” Ayers said.

There was a general consensus from the rest of council to go ahead and postpone the town hall meeting.

“As we carry forward, I think it’s going to be important that we carry forward with that team that will be making those decisions for the next two years,” Sorensen said.

In the meantime, escrow has not been opened on the proposed building and Pyle assured Council that nothing will be happen until after a town hall meeting is conducted.

 

Council begins to explore Community Choice Aggregation, by Julissa Zavala, Hanford Sentinel, November 27, 2018.  

Hanford to Hold Public Hearing on Adopting Community Choice

HANFORD — Despite the Thanksgiving holiday around the corner, the Hanford City Council will still meet Tuesday night to hold a public hearing.

In addition to the consent calendar, items of which are considered routine and are voted on in one motion, Council only has one public hearing and no other items of new business on its agenda for the night.

The public hearing is on a proposed ordinance to establish a Hanford Community Choice Aggregation and approving implementation plan and statement of intent.

This type of plan combines the electricity load of its residents and businesses into a community-wide electricity aggregation program, known as a Community Choice Aggregation program.

According to the city staff report, under a Community Choice Aggregation program, the incumbent utility — Southern California Edison or Pacific Gas & Electric — continues to be responsible for electricity delivery and transmission, owning and maintaining the power and transmission infrastructure, reading the meter, and billing and collecting from customers.

The staff report said the only change under the program is that power consumed by customers is purchased by the Community Choice Aggregation, with the revenues collected staying in the city to benefit the citizens and businesses.

In addition to the financial benefits, the staff report said the structure results in the Hanford City Council having full control of rate setting, budget approval, policy setting and program direction.

During the public hearing, Hanford residents will have an opportunity to voice their concerns or support of the city moving forward with this plan.

Before the regular meeting, Council will hold a study session to discuss both reorganization in the Hanford Fire Department and a draft of the Kings County Association of Government’s Regional Active Transportation Plan.

 

Public hearing on Council agenda, by Julissa Zavala, Hanford Sentinel, November 17, 2018.