City Council
MEETING DATE: 6/14/2017
TITLE:
Title
Presentation on Community Choice Aggregation
End
FROM:
Charles McClendon, City Manager
RECOMMENDATION:
Recommendation
This item is presented for information, discussion and direction only.
Body
BACKGROUND:
Community Choice Aggregation (CCA) is a program that enables local governments to pool (or aggregate) the electricity demand of their communities for the purpose of supplying electricity. Often called Community Choice Energy, a CCA buys and/or develops power on behalf of the electricity users in its jurisdiction. Southern California Edison would continue to provide transmission and distribution of electricity, as well as maintenance and customer service. Areas served by a public utility are not eligible for CCA programs.
CVAG is currently working with member agencies in Southern California Edison territory to evaluate the potential to establish a Community Choice Aggregation program in the Coachella Valley region. CVAG staff will provide a presentation during the June 14 study session to update the City Council on progress and answer any questions. CVAG has established a CCA Ad Hoc working group which is meeting monthly to evaluate options for governance structure and plans for implementation of a CCA. The Ad Hoc working group includes elected representatives and staff from cities served by Southern California Edison that are interested in participating in CVAG’s CCA program, including Councilmember Kaplan and Charlie McClendon from Cathedral City. This staff report provides a brief summary of Community Choice Aggregation.
CVAG Executive Director Tom Kirk will attend the study session to provide an overview on CCAs and an update on the status of the potential Coachella Valley CCA.
DISCUSSION:
In 2002, the California Legislature (AB 117) permitted the creation of “Community Choice Aggregation” (CCA) programs by cities, counties, or joint powers authorities to offer property owners competitive electricity rates derived from greener energy sources. This state policy tool provides a means for local governments to aggregate electricity demand within their jurisdictions in order to procure alternative energy supplies while maintaining the electricity provider for transmission service. Once formed, customers can opt out of a CCA and continue to receive power from the current utility provider.
There are many reasons for forming a CCA, including:
• Competitive and stable electricity rates
• Local control and management
• Choice for consumers on the type of energy used, emphasizing clean energy sources
• Higher renewable energy content
• Stimulates economic development - job creation and local energy projects
In California, the County of Marin and Sonoma, as well as the City of Lancaster have all implemented CCA programs and have them fully operational. CCAs are a rapidly growing opportunity for local governments. Los Angeles County is developing a CCA program and new CCAs are launching throughout the state. The California Public Utilities Commission recently held a symposium on CCAs and is hosting regular calls with existing and potential CCAs.
CVAG has completed a feasibility study/business plan, which indicates that formation of a CCA would result in a net savings to consumers, an increased use of renewable energy, economic benefits, and greenhouse gas reductions. The feasibility study analyzes three scenarios for consumer cost savings which vary depending on the percent renewable energy; in all cases the percent savings accounts for all costs to implement a CCA program. The predicted savings compared with SCE rates are as follows:
1. 4.9% savings with 33% of electricity from renewable sources (based on SCE current renewable portfolio standard (RPS))
2. 3.8% savings with 50% of electricity from renewable sources (11.2% savings over SCE 50% green power rate)
3. 5.7% additional cost with 100% of electricity from renewable sources (9.4% savings over SCE 100% green power rate)
With local control, Community Choice Aggregation also provides opportunities to offer programs to promote energy efficiency, renewable distributed generation, energy storage, and other clean energy benefits. These programs would also be expected to spur innovation in energy efficiency and renewable technologies. The development of a CCA could also promote investment in the diverse renewable energy resources in the Coachella Valley.
Benchmark Steps to CCA Formation. Based on the recommendations of existing CCAs and others, May is the best time to launch a CCA. A draft schedule providing for launch of a CCA in May 2018 was reviewed by the Ad Hoc working group. To meet this aggressive schedule, the Ad Hoc members agreed to work with CVAG on scheduling outreach to participating jurisdiction staff and city councils during the summer recess to the extent possible. This includes review of the JPA agreement. The schedule is estimated and may be adjusted. Other actions to be completed include establishing financing for start-up costs, data testing with SCE, and selection of a vendor to provide power supply and data management services. The filing of an Implementation Plan with the California Public Utilities Commission and a notice of intent with Southern California Edison (SCE) are essential steps for the formation of a CCA. Prior to and after launch of a CCA, all SCE customers will be sent a minimum of four opt-out notices explain how a CCA works and their choices to join the CCA or stay with SCE.
Link to Feasibility Study:
1. Final Inland Choice Power Community Choice Aggregation Business Plan - December 8, 2016
<http://www.cvag.org/library/pdf_files/enviro/CCA_CVAG_WRCOG_SBCOG_Final_Feasibility_Study%20_12_08_16.pdf>.
FISCAL IMPACT:
There is no cost to the City if Council chooses to join the JPA to create a Consumer Choice Aggregate in the region. Start-up costs are repaid and ongoing costs are paid by customers of the CCA through their utility charges.
ATTACHMENTS:
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