MARCH 1, 2019
GROUP
A7
T he C oast News
ENERGY
Carlsbad, Encinitas on board with Community Choice Energy
By Steve Puterski
REGION — Community Choice Energy is on the doorstep for Carlsbad and Encinitas. The two cities, along with Oceanside and Del Mar, agreed to a cost-share feasibility study in 2017. The draft study was released last week during the Encinitas City Council meeting, while Carlsbad received the report on Feb. 26. Both city councils approved for their respective staffs to explore governance options, while the Carlsbad City Council charged its staff with drawing up a statement of intent to pursue a CCE. The Oceanside and Del Mar city councils will hear their respective presentations next week. The draft study, conducted by EES Consulting, reveals a total bill reduction of 2 percent compared to what ratepayers current-
ly pay with San Diego Gas & Electric, should the four cities form a joint powers authority. If each city were to stand alone, Carlsbad and Oceanside could still save 2 percent, while Encinitas would be at 1 percent, but a CCE would not be feasible for Del Mar. The four cities are holding a public meeting from 6 to 8 p.m. on March 21 at the Senior Center Auditorium, 799 Pine Ave in Carlsbad. The final study will be released in April. “We’re in the midst of an energy revolution. This is exactly where environmentalism and a strong, sustainable economy merge,” Councilwoman Cori Schumacher said. “We had a speaker … who talked about the San Diego Green New Deal and that is exactly where we need to go,” Both councils are attempting to move quickly on creating a CCE, which
CARLSBAD and Encinitas are moving forward to research governance options for Community Choice Energy. Above, Encinitas Mayor Catherine Blakespear. Photo by James Wang
is possible to do before the Jan. 1, 2020, deadline. The cities must have an implementation plan submitted to the California Public Utilities Commission before the deadline to launch a CCE by April or May 2021. San Diego County also approved moving forward with looking into a CCE. In addition, SDG&E is attempting to remove itself from buying and selling power, according to numerous reports, city officials
and Gary Saleba of EES. Saleba, though, said one of the biggest concerns comes from exit fees and the action of the CPUC and politicians in San Francisco and Sacramento. “My biggest concern with this, at the end of the day, is the cost,” Carlsbad Mayor Matt Hall said. “We need to be very cautious moving forward with this.” There are three approaches for the cities for energy sources including SDG&E’s portfolio, 100 per-
cent renewables by 2030 or starting with 100 percent renewables. The governance options Carlsbad and Encinitas are researching include a stand-alone JPA, a three or four-member JPA with Del Mar and Oceanside or join an existing JPA. During the Feb. 20 Encinitas City Council meeting, Deputy Mayor Jody Hubbard asked whether they should consider three cities without Oceanside, since Oceanside may not be
ready to move as fast. Councilman Joe Mosca said there is not enough information and suggested waiting for the final report to be released before moving on potential JPA partners. Mosca said the study on governance will also explore how JPAs with other cities, including San Diego, would be laid out with more details giving Encinitas options on how to move forward. “By 2030, the cumulative surplus of the JPA for the four partner cities would be $111 million,” Mosca said. “That money would be here for us to build local projects in Encinitas, Carlsbad and any of the partner cities. I think there’s a huge incentive there as well.” Regarding the governance of a JPA, Encinitas Mayor Catherine Blakespear said there are various methods throughout the state worth researching. In addition, she said a weighted vote structure should be considered. “To me, it seems like the governance model that we will end up choosing is to go with the other cities in the county who are ready to go at the same time we are, which would include the city of San Diego” she added. “I think we do want to have a regional approach. If we can affect other cities and get them to join in and create a county culture, it will have a better effect on carbon reduction.”
Solana Beach driving North County energy talks By Lexy Brodt
SOLANA BEACH — The wave of Community Choice Aggregation (CCA) that has swept over much of California is now making its way to San Diego. CCAs are a means by which cities can provide energy for their residents while reaping the benefits of local control. Currently Solana Beach is the only city in the county with a CCA — called Solana Energy Alliance. The city launched its program in June 2018, bringing 50 percent renewable and 75 percent greenhouse gas free energy to its residents, 92 percent of which are participating. The city opted to maintain rates 3 percent below those of the region’s investor-owned utility, San Diego Gas & Electric. And Solana Beach may soon be joined by others in North County and beyond. San Diego’s City Council approved a resolution on Feb. 25 to start a CCA, with the intention of establishing a Joint Powers Authority in the region. This would involve cities in the county banding together in pursuit of a jointly governed CCA, in order to achieve economy of scale. Del Mar, Encinitas, Carlsbad and Oceanside just came out with a study affirming the feasibility of a CCA program among the four cities. Solana Beach is playing an active role in the now countywide dialogue,
as its City Council has long expressed an interest in exploring various potential governance structures. “Those discussions have really started to heat up recently,” Assistant City Manager Dan King said. When it comes to considering a Joint Powers Authority, Solana Beach Mayor Dave Zito said “it’s a matter of finding a structure that’s able to balance all the competing interests.” Zito said a key element of the city’s CCA program is local control. Residents can “just come down to city hall” when faced with bill issues or concerns, and constituents have a stake in molding Solana Energy Alliance’s future priorities. A regional Joint Powers Authority would ideally aim to maintain local control while still providing the benefits of larger scale, Zito told The Coast News. He pointed to Los Angeles’ Clean Power Alliance as an example of “small steps in that direction”: about a third of the CCE program’s member cities have opted to set their own renewal rates — in this case, at 100 percent. Solana Beach has also been in contact with Chula Vista and La Mesa, which will be pursuing a technical study concerning CCA feasibility, according to King. The earliest another CCA could take off in the region is 2021. After a controversial California Public Utilities Commission decision to in-
crease “exit fees” and an increase in the cost of energy set back SEA’s revenue projections in November, consultants brought back more positive numbers at a Feb. 13 City Council meeting. The exit fee, or Power Charge Indifference Adjustment, is a fee charged to CCA customers by the inves-
It’s a matter of finding a structure that’s able to balance all the competing interests.” Mayor Dave Zito City of Solana Beach
tor-owned utility (IOU). The fee is meant to compensate IOUs for energy already procured on behalf of now former customers, and to make sure the IOUs existing customers aren’t left with the burden of increased costs. The fee was raised in September after the California Public Utilities Commission opted to change the methodology used to calculate it, to the benefit of IOUs. As a result, there was a jump in the fee from about 2 cents per kilowatt hour to over 3 cents per kilowatt hour in January. However, exit fees are taking slightly less of a toll than staff and
consultants had estimated in November. In November, consultants were anticipating negative annual net revenues in Fiscal Year 2019/2020 and 2020/2021. Those numbers have since climbed, with January projections anticipating positive net revenues for the next few years, with the city expected to accumulate $1.5 million in revenues by June of 2022. Staff also reported that as SDG&E’s generation rates have decreased as of late, the city has also decreased its rates to maintain a 3 percent discount. The city approved an updated rate schedule at the meeting that will be retroactive for the month of January. Winter rates for most residential users went from about 4.2 cents per kilowatt hour to about 3.2 cents per kilowatt hour, and summer rates decreased from just under 14 cents per kilowatt hour to about 12.4 cents per kilowatt hour. Staff estimated that current and projected rates over the next five years will yield $1 million in savings for SEA customers. According to City Manager Greg Wade, Solana Energy Alliance is “well ahead of the game in our projected goals.” Although regional discussions are taking off, the city’s current direction for Solana Energy Alliance involves maintaining and building a strong reserve to ensure that it “can with-
stand any potential upcoming headwinds,” said Zito. “You never know, the energy market is a little bit fickle.” Zito said the city is focusing on the issues that are
“key to our constituents”: offering lower rates than SDG&E and meeting the goals of the city’s climate action plan, to achieve 100 percent renewable energy by 2035.
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