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CC SR 20200121 06 - City Options for CCA CITY COUNCIL MEETING DATE: 01/21/2020 AGENDA REPORT AGENDA HEADING: Regular Business AGENDA DESCRIPTION: Consideration and possible action to receive and file a report on the City’s options for community choice aggregation of electrical service RECOMMENDED COUNCIL ACTION: (1) Receive and file a report on the community choice aggregation of electrical service and possible joining options for the City Council’s consideration; and, (2) Provide Staff with further direction, as deemed appropriate. FISCAL IMPACT: None Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Megan Barnes, Senior Administrative Analyst REVIEWED BY: Kit Fox, AICP, Interim Deputy City Manager APPROVED BY: Ara Mihranian, AICP, Interim City Manager ATTACHED SUPPORTING DOCUMENTS: A. SCE Green Rate Program brochure (page A-1) B. February 2019 Los Angeles Times article on the Clean Power Alliance (page B-1) C. Clean Power Alliance fact sheet (page C-1) D. CalChoice overview (page D-1) BACKGROUND AND DISCUSSION: What are CCAs? In 2002, California became the third state to give residents the ability to purchase their electricity from renewable sources as an alternative to traditional investor-owned utilities (IOUs) via community choice aggregators, or CCAs. CCAs purchase renewable energy and sell it to ratepayers in participating cities at prices that are lower or comparable to IOU prices. The electricity is still transmitted by utility-owned power lines. 1 CCAs were made possible by Assembly Bill No. 117, which was passed by the state Legislature in response to the energy crisis of 2000-2001. In 2010, California voters defeated a ballot measure that would have required two-thirds voter approval for local governments to use public funds or issue bonds to establish or expand public electricity service. However, it wasn’t until the 2012 passage of Senate Bill 790, which established rules for utilities’ interactions with CCAs, that community choice programs began taking off across the state. Today, 19 CCAs are operational in California, and numerous cities are developing or considering joining community choice programs. Irvine is in the process of starting Orange County’s first CCA with four neighboring cities. According to a May 2017 report by the UCLA Luskin Center for Innovation, in one year, California’s CCAs achieved emission reductions equivalent to approximately 600,000 metric tons of carbon dioxide (CO2), translating to $7.5 million in annual savings for electricity ratepayers. IOUs have increased their renewable energy offerings in recent years. The City’s provider, Southern California Edison (SCE), created a Green Rate program (Attachment A), which gives customers the option of paying slightly higher rates to have 50% or 100% of their electricity to come from solar power without having to install solar panels. According to SCE, only 20 of its 28,992 customer accounts in Rancho Palos Verdes are subscribed to Green Rates. Six opted for the 50% rate, and 14 for the 100% rate. SCE included 36% renewable energy in its default power mix for all customers in 2018, and in a 2017 white paper, called for providing 80% carbon-free power by 2030. How CCAs Work CCAs are locally-run programs that aggregate a community’s buying power to secure renewable energy contracts, offering ratepayers a locally-controlled alternative to power provided by investor-owned utilities at lower or similar rates. CCAs buy electricity generated by renewable sources, such as solar and wind, and sell it to ratepayers in participating jurisdictions. Utilities deliver the power using their existing distribution infrastructure and remain responsible for customer billing. Ratepayers in jurisdictions that join CCAs are automatically enrolled and have the option of opting out and returning to their IOU at any time. Cities that join or form CCAs determine how much of their ratepayers’ electricity will come from renewable sources. Rates are typically less than or similar to those of IOUs, except for 100% renewable energy, which is more expensive. When a CCA takes over providing power in a city, it must pay the local utility a Power Charge Indifference Adjustment — or “exit fee” — to cover the costs of legacy investments, such as long-term contracts or power plants. CCA customers see the fee 2 as an itemized charge on their monthly bills. Exit fees vary by jurisdiction and depend on various factors, including what year the jurisdiction’s CCA formed, but typically, the fee is a small percentage of a customer’s power bill. Exit fees are regulated by the California Public Utilities Commission (CPUC), and varies depending on when a city forms a CCA and a customer’s monthly energy usage. Benefits and Challenges of CCAs CCAs create choice for ratepayers where none existed before and give cities local control over their energy supplies and rates. They are widely viewed as a way for cities to help California reach its goals of reducing GHG emissions to 40% below 1990 levels by 2030, 80% by 2050, and of sourcing 100% of the state’s electricity consumption with zero-carbon energy by 2045. A primary concern with CCA programs is the risk of rates becoming higher than those of IOUs. Rising exit fees heighten this concern. Additionally, forming an independent CCA can be infeasible for cities that lack the finances, resources, expertise and staffing needed for such an endeavor. For a deeper discussion of California’s CCA landscape, view the full UCLA Luskin Center report referenced above at: https://innovation.luskin.ucla.edu/wp- content/uploads/2019/03/The_Promises_and_Challenges_of_Community_Choice_Aggr egation_in_CA.pdf Local CCA Formation The following describes the various local CCAs available in the general area. A. Clean Power Alliance In 2016, Los Angeles County initiated a study exploring the feasibility of forming a CCA that would serve unincorporated areas and 82 cities and offer rates that would be competitive with SCE. The study produced a business plan, which concluded that a CCA for the county was financially feasible and would yield considerable environmental and financial benefits to participating communities. The Board of Supervisors authorized the creation of a joint powers authority (JPA) then known as Los Angeles Community Choice Energy (LACCE), and began working with interested cities, including several in the South Bay that were part of South Bay Clean Power, a previous local CCA effort that did not see fruition. Startup costs for LACCE were funded by a $10 million loan from the county. In 2018, LACCE re-branded as the Clean Power Alliance and began providing service, first to county-owned municipal buildings, then to commercial and industrial customers, and finally to residents. 3 Today, the CCA serves approximately 3 million customers in 32 communities throughout Southern California, including unincorporated areas of Los Angeles and Ventura counties, and the cities of Agoura Hills, Alhambra, Arcadia, Beverly Hills, Calabasas, Camarillo, Claremont, Carson, Culver City, Downey, Hawaiian Gardens, Hawthorne, Malibu, Manhattan Beach, Moorpark, Ojai, Oxnard, Paramount, Redondo Beach, Rolling Hills Estates, Santa Monica, Sierra Madre, Simi Valley, South Pasadena, Temple City, Thousand Oaks, Ventura, West Hollywood, Whittier, and most recently, Westlake Village. Operation Clean Power Alliance has a small staff that procures power, negotiates and sets rates, and performs a variety of regulatory, administrative and customer support services on behalf of member cities. The JPA is governed by a Board of Directors made up of one elected representative from each member jurisdiction. Each director has two voting alternates. Revenues generated by the CCA are shared by the JPA for re-investment into local customer programs, such as solar projects or electric vehicle charging stations. Clean Power Alliance is in the process of developing a five-year strategic plan outlining what these programs will look like. Clean Power Alliance has an extensive section of frequently asked questions (FAQs) about its program on its website at https://cleanpoweralliance.org/customer- support/faqs/ Costs Clean Power Alliance does not currently charge its member cities fees for services; however, it is Staff’s understanding that the Board of Directors may consider introducing fees for new members in the future. Startup costs associated with joining Clean Power Alliance include the completion of a feasibility study the JPA uses to determine if it can take on a new city. According to Clean Power Alliance, its newest member, Westlake Village, contributed about $6,000- $10,000 for its feasibility study. The cost of a feasibility study for Rancho Palos Verdes would be determined in the future. If other cities join at around the same time, the study could cover all of them and the cost could be shared. Rates Clean Power Alliance offers three rates to its members, and ratepayers can upgrade, downgrade, or opt out at any time: 4 Rate Renewable Energy % Average Cost Compared to SCE Base Rate (36% Renewable) Average Cost Compared to Equivalent SCE Green Rate Lean Power 36% 1-2% less n/a Clean Power 50% 0-1% less 6% less Green Power 100% 7-9% more 5% less Source: Clean Power Alliance Locally, Hawthorne enrolled its residents in Lean Power (36% renewable), Carson and Manhattan Beach in Clean Power (50% renewable), and Rolling Hills Estates in Green Power (100% renewable). Opt-Outs According to the most recent data, the residential opt-out rate for Clean Power Alliance members at the end of December 2019 was 5.36%, and the non-residential opt-out rate was 6.37%. In Rolling Hills Estates, the only Palos Verdes Peninsula city in the CCA, the residential opt-out rate was 5.87%, and the non-residential opt-out rate was 7.95%. B. CalChoice Elsewhere in Los Angeles County, the City of Lancaster formed a standalone CCA in 2015, Lancaster Choice Energy, and later partnered with the City of San Jacinto to create a JPA called the California Choice Energy Authority. The JPA rebranded as CalChoice in 2019, and today serves 125,000 customer accounts in five CCAs in Lancaster, Pico Rivera, San Jacinto, Rancho Mirage, and the Town of A pple Valley. Baldwin Park, Commerce, Palmdale, Pomona, Santa Barbara and Santa Paula are in the process of starting CCAs with CalChoice. Operation CalChoice is a hybrid CCA model, with member cities joining one JPA, but forming their own individual CCAs. Under the model, CalChoice contractors negotiate rates with energy suppliers on behalf of member cities and perform a variety of regulatory, accounting, administrative, and customer support functions. Each city sets its own local rates, controls its budget and policies, oversees governance of the CCA and controls revenues. The hybrid model is designed to assist cities that don’t have the budget, knowledge, resources, or liability coverage to take on creating their own CCA, but also give them the ability to set their own rates and policies and have their own brands. CalChoice does not have in-house staff, but uses contractors to provide services for member cities. The JPA is governed by the Lancaster City Council. Each CCA is governed by its city government and keeps revenues generated by its CCA. In Apple Valley, for example, which has about 28,000 customer accounts, net revenues from its CCA were $2.2 million in Fiscal Year 2017-18, according to the city’s Comprehensive Annual Financial Report. 5 Costs CCAs that form with CalChoice pay one-time startup costs as well as ongoing annual fees to contractors for administrative services. It is difficult to determine accurate cost estimates as they differ for each CCA depending on their needs and customer base. Additionally, shared costs could change as CalChoice is in the process of doubling its membership. CalChoice did, however, provide the following estimates in conversation with Staff: Startup costs:  $2 million - $2.5 million This figure covers a reserve fund and various one-time costs associated with launching a CCA with CalChoice, including a $147,000 minimum financial security requirement set by the CPUC. It also includes consulting fees to CalChoice contractors of $63,000 for a technical study and implementation plan development, and $160,000 for an implementation agreement Ongoing annual costs:  $267,000 for pass-through professional services fees to CalChoice contractors  TBD for data management and call center services based on the number of service accounts o According to CalChoice, data management fees are calculated using a formula of $1.10 per month per service account. Using the 28,992 figure for SCE customer accounts in RPV, a rough estimate of annual data management fees is about $382,700.  TBD for shared fees for regulatory affairs, legal services and CalChoice administration based on electricity load o CalChoice provided a rough estimate of $125,000 for a city of RPV’s size Based on these figures, a very rough estimate for annual costs would be about $774,700. Accurate cost estimates can only be determined if the City moves forward with the $63,000 technical study in the first phase of the development process. Rates CalChoice leaves rate-setting to its member cities, so there are no standard rates, however, according to CalChoice, cities most commonly aim to set their rates about 2-3% lower than SCE. Opt-outs 6 According to CalChoice, the most recent overall opt-out rates for its members were 11.46% in Apple Valley, 8.56% in Lancaster, 4.83% in Pico Rivera, 1.4% in Rancho Mirage and 8.46% in San Jacinto. RPV and Sustainability Rancho Palos Verdes is committed to conserving, protecting and enhancing the City’s environment, natural resources and beauty for the benefit and enjoyment of its residents, visitors and business community. The City’s departments work collaboratively to make this commitment a reality in providing a broad range of services, programs and practices, including encouraging energy and water conservation, promoting recycling and facilitating green improvements for homes and businesses, as well as for City- owned facilities and properties. In recent years, the City has received awards for its sustainability efforts, including the Institute for Local Government’s 2018 Beacon Spotlight Award for community GHG reductions, municipal energy savings and sustainability best practices, and a gold level designation from the Solar Foundation’s Solsmart program for the City’s efficient and streamlined permitting process for residents and business owners to go solar. In 2015, as part of the development of the City’s Emissions Reduction Action Plan (ERAP), the City set GHG emission reduction targets of 15% below 2005 by 2020, 49% below 2005 by 2035, and 80% below 2005 by 2050. The ERAP outlines a comprehensive set of strategies to reduce GHG emissions in RPV and the South Bay. It was adopted by the City Council in December 2017 and can be viewed online at: https://www.rpvca.gov/DocumentCenter/View/11625/Emmissions-Reduction-Action- Plan-ERAP-PDF According to the ERAP, the City reduced its GHG emissions by 8.1% from 2005 to 2012. Residential electricity was the second-largest source of emissions after on-road transportation. Staff is working to obtain more-recent data to assess the City’s progress toward its reduction goals. According to the Los Angeles County Chief Sustainability Office, residential electricity in RPV produced 67,489 metric tons of carbon emissions in 2015. Rancho Palos Verdes has not formally considered pursuing community choice at the City Council level, though Staff has researched the CCA concept over the years and monitored both the County’s CCA formation and the former South Bay Clean Power effort. The ERAP noted that the City planned to explore the feasibility of pursuing community choice. Options If the City Council wishes to pursue CCA for the City, it may consider joining the Clean Power Alliance, forming a CCA with CalChoice, or forming an independent CCA, though 7 the latter option is the least desirable, given the City’s lack of resources for such an undertaking. The timeline for joining or starting a CCA is determined by the CPUC and is based on calendar year. If the City were to file an implementation plan with the CPUC by the end of 2020, there would be a one-year gap period before launching in 2022. If the City were to pursue joining Clean Power Alliance, it would first need to provide formal notice of intent to the join the JPA. A feasibility study could take one month to complete before the JPA would consider letting the City join. If the JPA approved the addition of the City, the City Council would then need to adopt an ordinance joining the JPA. As discussed above, Clean Power Alliance does not currently charge its members fees for services, however, it may consider introducing them in the future. If the City were to pursue community choice with CalChoice, it recommends executing an agreement for phase one services no later than mid-June 2020. Phase one entails the technical study and implementation plan development and is estimated to take 3-6 months. Phase two includes executing an implementation agreement by March 2021. It is difficult to determine an accurate estimate for the cost of forming a CCA with CalChoice without moving forward with the technical study, though rough estimates are $2-$2.5 million for startup costs, plus $774,700 in annual contractor fees. However, the city would control all of the revenues generated by the program. CONCLUSION: Staff recommends the City Council consider the options outlined above and provide direction on if and how the City should pursue a community choice program. As of the writing of this report, representatives from Clean Power Alliance and SCE have confirmed they will be on hand for questions at the January 21, 2020, City Council meeting, but CalChoice is unable to send a representative. 8 SOUTHERN CALIFORNIA EDISON Green Rate and Community Renewables Programs Residential Customers YOUR NEW GREEN POWER OPTIONS... Supporting Local Solar Power to Create a Clean-Energy Future As a SCE customer, you can join one of two programs that enable you to tap into the power of the sun through new renewable energy options — without installing solar panels on your roof. These programs play a key role in creating a cleaner, healthier environment. GREEN RATE PROGRAM We purchase renewable energy from independently owned solar farms in California on your behalf. You then purchase this renewable power (equal to 50 percent or 100 percent of your electricity use). COMMUNITY RENEWABLES PROGRAM You enter into an agreement with a California renewable energy provider to buy energy from a share of their output. We purchase the electricity that is produced under your agreement — up to 120 percent of the power forecasted to meet your usage needs — and we pay you directly, via bill credits. WHY PARTICIPATE? Enrolling in either the Green Rate or Community Renewables program will help you make a difference in our region by: • Supporting local renewable power in our communities • Supporting clean energy for a brighter future in Southern California • Reducing your greenhouse gas emissions associated with electricity and contributing to a cleaner, healthier environment FREQUENTLY ASKED QUESTIONS What are the eligibility requirements for the Green Rate and Community Renewables programs? Both programs are voluntary and optional and are available to both residential and business energy users who receive power generation, metering, and related services from SCE, i.e. “bundled service”. You may participate in either program but not both. Direct Access and Community Choice Aggregation customers are not eligible for these programs. What is the participation cost? On the Green Rate program, you pay an extra (estimated) 2.7 cents per kilowatt-hour for renewable energy since it costs more than non-renewable energy sources. Here’s how it works: If you choose the 100 percent Green Rate participation level, multiply 2.7 cents (.027) by the total number of kilowatt-hours on your monthly SCE bill to come up with the extra amount you pay for renewable energy. If you choose the 50 percent option instead, multiply .027 by half the number of kilowatt-hours on your bill. Updated: 02/08/2019A-1 Examples: For the average SCE domestic customer: • For the 100 percent level: A $100 monthly SCE bill equals an average use of 550 kilowatt-hours. Multiply 550 by .027. This equals about $15 extra each month for renewable energy. • For the 50 percent option: Instead multiply 275 (half of 550) by .027, which equals approximately $8 extra each month for renewable energy. For customers on the D-CARE (California Alternate Rates for Energy) program (which provides an electric rate discount for low-income households): • For the 100 percent level: A $100 monthly SCE bill equals an average use of 448 kilowatt-hours. Multiply 448 by .027. This equals about $12 per month for renewable energy. • For the 50 percent option: Instead multiply 224 (half of 448) by .027, which equals approximately $6 extra each month for renewable energy. For the Community Renewables program, the actual cost you pay for your renewable energy (in addition to SCE’s standard bill charges) varies, based on the California facility. The credit you receive on your bill can potentially be approximately 4.5 cents per kWh for residential customers and 4.5 cents per kWh for commercial GS-1 customers. If you do not participate in either program, you do not have to pay any costs associated with them. How is the Green Rate program different from Net Energy Metering? With Net Energy Metering (NEM), you are the solar energy producer, so you receive the benefits of that production directly. Under the Green Rate program, because another company is producing the energy, there is an additional cost for SCE to obtain it and deliver it to your community. If you are an NEM customer, you may participate in the Green Rate program, but you will not receive a credit for the extra electricity you supply to the grid under NEM. The Green Rate program is primarily focused on customers (like renters), who want to support clean energy in their communities but may not be able to install solar panels on their roofs. Once I sign up, how soon will my account be placed on the new program? For the Green Rate program, your account will be enrolled on your next scheduled meter read date following eligibility confirmation. For the Community Renewables program, your account will begin to receive credits two to three months after the Californi solar facility is commercially operational and eligibility is confirmed. a Do I have to stay in either program for a certain amount of time? There is no required length of time to stay on the Green Rate program, and you can de-enroll at any time without a penalty. For the Community Renewables program, your commitment depends on your agreement with the provider. Why are these programs offered? In 2015, the California Public Utilities Commission approved a new rate option pursuant to Senate Bill 43, enabling residential and business customers of the state’s three largest investor-owned utilities to participate in a Green-e® Energy certified renewable energy option. The Green Rate and Community Renewables programs complement SCE existing solar and other renewable energy initiatives. We currently deliver more solar energy than any other U.S. utility — about 32 percent of our energy portfolio in 2017 — helping to provide clean energy for our long-term future. What’s the benefit of Green-e® Energy Certification? The Green Rate and Community Renewables programs are both Green-e Energy® certified. As the nation’s leading independent certification and verification program for renewable energy, Green-e Energy guarantees the programs meet strict environmental and consumer protection standards from the nonprofit Center for Resource Solutions. Learn more at www.green-e.org. TO LEARN MORE AND ENROLL For more information on the Green Rate and Community Renewables programs and to enroll, visit on.sce.com/greenrate or on.sce.com/CommRenew, or call (866) 701-7867. NR-699-V1-0216 ©2019 Southern California Edison. All Rights Reserved.A-2 BUSINESS What you need to know about Clean Power Alliance, SoCal’s newest electric company Electricity distribution lines at Southern California Edison’s grid control center in Ontario. (Irfan Khan / Los Angeles Times) By SAMMY ROTH STAFF WRITER FEB. 1, 2019 3 AM ADVERTISEMENT B-1 Southern California Edison has been the region’s dominant electric utility for more than a century. But for nearly 1 million homes across the Southland, the days of Edison’s monopoly are ending. Clean Power Alliance is becoming the default energy provider this month for residents of 29 cities, as well as unincorporated parts of Los Angeles and Ventura counties. The government-run power agency launched for a small group of customers last year and will continue its rollout in May, when it expands service to 100,000 businesses. If Clean Power Alliance is your new power company, you should have received notices in the mail by now. But you probably still have plenty of questions. Here’s everything you need to know about the switch, including what it means for your electricity rates and why Edison isn’t going away entirely. B-2 B-3 Areas served by Clean Power Alliance Nearly 1 million homes will start buying electricity from Clean Power Alliance in February. Residents of 29 cities and unincorporated Los Angeles and Ventura counties are being transitioned from Southern California Edison to the new government-run power provider. Default rate: 10 MILES • • 36% renewables Beve rl y 50o/o lOOo/o LOS ANGELES COUNTY Hi ll s · .,.. ' .....,....~o:-an~ta 0"t .,: "~i;.. Monica ·~ ~ Q {')1'" rf'd. Downey Hawthorne ~ Wcar ~on OR AN GE -. , COUNTY No t e : S hown are boundaries of some of the largest ci ti es se r ved. Source: Clean Powe r All iance . Graphics reporting by Thomas Su h Lauder @latimesgrap hi cs (Los Angeles Times) How do I know if Clean Power Alliance will be my new energy provider? If you live in one of these cities, you’ll be switched to Clean Power Alliance service by the end of February: Agoura Hills, Alhambra, Arcadia, Beverly Hills, Calabasas, Camarillo, Carson, Claremont, Culver City, Downey, Hawaiian Gardens, Hawthorne, Malibu, Manhattan Beach, Moorpark, Ojai, Oxnard, Paramount, Redondo Beach, Rolling Hills Estates, Santa Monica, Sierra Madre, Simi Valley, South Pasadena, Temple City, Thousand Oaks, Ventura, West Hollywood and Whittier. The February switch also applies to residents of unincorporated Los Angeles and Ventura counties. Westlake Village residents are on track to start receiving service from Clean Power Alliance in 2020. ADVERTISEMENT Residents of cities with their own municipal power departments, such as Los Angeles, Burbank and Glendale, will stick with their city-run energy provider. Can I sign up for Clean Power Alliance if I’m an Edison customer living somewhere else? No. Why is this happening? Do I need to do anything? You don’t need to do anything. Your electricity service will continue uninterrupted after you’re switched from Edison to Clean Power Alliance, which will happen automatically after your regularly scheduled meter reading in February. This is happening because the 29 cities and two counties got together and created a community choice aggregator, or CCA. Forming a CCA allows local governments to decide what kinds of power to buy for their communities, how much to charge and what incentives to provide for going solar or reducing energy use. California had 19 CCAs serving more than 8 million customers last year, but Clean Power Alliance will be the biggest one yet. Elsewhere in Southern California, local governments are making plans to form CCAs in Riverside County and San Diego, where Mayor Kevin Faulconer recently endorsed calls for community choice. Am I going to pay more for electricity? ADVERTISEMENT It depends what you want from Clean Power Alliance. The CCA offers three rate plans to its customers: One with a 36% renewable energy mix that the alliance says is 1% cheaper than Edison’s base rate, one with 50% renewables that’s on par with Edison, and one with 100% renewables that’s 9% more expensive than Edison. B-4 Every city and county in Clean Power Alliance has chosen one of those plans as the default for its residents. Eight cities picked the cheapest option; nine cities, plus Ventura County, opted for the 100% renewables rate. If you don’t like your local government’s choice, you can switch to another rate plan at any time. You can also opt out of Clean Power Alliance and return to Edison. Of the roughly 960,000 homes and businesses that will be eligible for Clean Power Alliance by the end of February, just 14,000, or less than 1.5%, have opted out. What is your rate plan? Each of the 29 cities and two counties in Clean Power Alliance has selected a default electricity rate plan for its residents. There are three options: a 36% renewable energy plan that’s 1% cheaper than Southern California Edison’s base rate, a 50% renewables plan that’s on par with Edison’s rate, and a 100% renewables plan that’s 9% more expensive than Edison. Clean Power Alliance customers can switch to a new rate plan if they don’t like the one their city or county government selected. City/County Renewables Agoura Hills 36% Alhambra 50 Arcadia 36 Beverly Hills 50 Calabasas 36 Camarillo 36 Carson 50 Claremont 50 Culver City 100 Downey 50 Hawaiian Gardens 50 Hawthorne 36 Malibu 50 Manhattan Beach 50 Moorpark 50 Ojai 100 Oxnard 100 Paramount 36 Redondo Beach 50 Rolling Hills Estates 100 Santa Monica 100 Sierra Madre 50 B-5 Simi Valley 36 South Pasadena 100 Temple City 36 Thousand Oaks 100 Ventura City 100 West Hollywood 100 Whittier 50 Unincorporated Los Angeles County 50 Unincorporated Ventura County 100 Source: Clean Power Alliance So who’s setting my electricity rate now? And what will they do with my money? Rates are set by Clean Power Alliance’s 31-member board of directors, with one representative from each city and county. The board is chaired by Diana Mahmud, a South Pasadena City Council member. Its monthly meetings are open to the public. Clean Power Alliance has big plans for cleaning up the region’s energy supply, said Ted Bardacke, the alliance’s executive director and a former infrastructure director for L.A. Mayor Eric Garcetti. Over time, that could mean incentives for customers to install electric water heaters or space heaters, reducing the need to burn natural gas in homes and other buildings. It could mean free or discounted electric vehicle chargers, or special electricity rates that encourage people to charge their EVs at home. It also could mean community battery installations that reduce the need for polluting, gas-fired “peaker” power plants. ADVERTISEMENT “We’re very interested in projects that not only reduce greenhouse gas emissions but also reduce local air pollution, and that leads you to also improve public health,” Bardacke said. Can I still put solar panels on my roof? Yes. Clean Power Alliance offers a net metering rate plan for solar-powered homes and businesses just as Edison does, but with slightly more favorable terms. Does community choice have any drawbacks? So far, most CCAs seem to be living up to their promises of cleaner energy, lower rate options and local decision-making. But it’s yet to be seen how they’ll fare over the long term. Some renewable energy companies are worried the CCAs won’t be able to buy enough clean power over the next few years to meet the state’s climate change goals. The CCAs dispute that premise, saying they’re buying plenty of solar and wind energy. B-6 Michael Picker, president of the California Public Utilities Commission, has also warned that the shift from monopoly utilities to more decentralized decision-making could have dangerous unintended consequences, such as a repeat of the state’s early- 2000s energy crisis. The CCAs say that concern is hugely overblown.They point out that the state’s first community choice provider, Marin Clean Energy, launched in 2010, followed by Sonoma Clean Power in 2014 and Lancaster Choice Energy in 2015, and so far there have been no crises. But 16 more CCAs have started serving customers in the last three years, and it’s hard to predict how things will shake out — especially as California’s energy sector is also reshaped by other forces, including a mandate of 100% clean power by 2045 and the bankruptcy filing of the state’s biggest utility, Pacific Gas & Electric. Does community choice mean Edison is going away? No. Edison will still be responsible for operating the poles and wires of the electric grid, and Clean Power Alliance customers will still pay the investor-owned utility for those services. Edison will still send out everyone’s bills too. Clean Power Alliance customers will also see a new item on their bills: the “Power Charge Indifference Adjustment,” more commonly known as the exit fee. As the name suggests, it’s an additional monthly charge that CCA customers must pay Edison to cover the costs of long-term contracts signed by the utility years ago to provide electricity to all of its customers. State officials say it’s only fair for CCA customers to keep covering their share of those costs because Edison would otherwise have to increase rates for its remaining customers. How utilities are striking back against community choice » There’s an ongoing debate about how to calculate the exit fees, with CCAs arguing the investor-owned utilities are inflating the numbers. The Public Utilities Commission approved an increase in the exit fees last year, although the commission may continue to tweak that decision. So that’s everything I’ll still be paying to Edison, right? Not quite. For the next year, homes served by Clean Power Alliance will also pay an additional $100 million to Edison to help fill a hole in the company’s power budget. Edison said it spent about $815 million more than it expected on electricity in 2018, partly because of a summer heat wave. The utility asked the Public Utilities Commission for permission to charge some of those costs to homes leaving this month for Clean Power Alliance because Edison purchased the electricity on behalf of all its customers, including those now leaving. The Public Utilities Commission approved that request in a 5-0 vote on Tuesday, over the objections of Clean Power Alliance. The community choice provider had said it would have to cut into its financial reserves to offer customers the rate savings it promised, while accounting for the additional $100 million they will now pay. Cliff Rechtschaffen, a member of the Public Utilities Commission, said the additional charge will probably raise electricity prices for Edison and Clean Power Alliance customers by about 5% over the next year. B-7 How does it work? Clean Power Alliance will purchase clean power, and Southern California Edison (SCE) will deliver it through its existing utility lines. Nothing else changes—SCE will continue to deliver power to your home or business, send just one bill, and be responsible for resolving any electricity service issues. Clean renewable energy at competitive rates Clean Power Alliance is California’s new locally operated, electricity provider for communities across Los Angeles and Ventura counties, offering clean renewable energy at competitive rates. source delivery customer Clean Power Alliance buys electricity SCE delivers energy, maintains lines, bills customers You benefit from competitive rates, local control, and cleaner energy What are your options? Clean Power Alliance offers three rate options designed to suit the diverse needs of our communities. Lean Power offers 36% renewable content at the lowest possible cost, with the added benefit of local management and control. Clean Power offers 50% renewable content and the opportunity to support building a cleaner future, all at cost competitive rates. 100% Green Power offers 100% renewable content and the opportunity to lead the way to a greener future! You don’t have to do anything to be enrolled in the rate option selected by your community, but you can always choose a different rate option that suits you or your family best. When will we start service? Clean Power Alliance currently serves commercial and municipal customers in unincorporated Los Angeles County, Rolling Hills Estates, and South Pasadena. In February 2019, we will expand service to residential customers across the entire Clean Power Alliance service territory. In May 2019, commercial customers who have not already started service will start service with Clean Power Alliance. C-1 Have questions? Visit www.cleanpoweralliance.org Contact us at customerservice@cleanpoweralliance.org or 888-585-3788 What changes and what stays the same? Stays the same New SCE delivery & grid reliability SCE billing SCE account services SCE rebates & incentives Call SCE to start or stop service Receive one bill each month Competitive pricing Choice of energy providers Higher renewable content Lower greenhouse gas emissions Local management & control Shape future incentives & programs What is our service territory? Clean Power Alliance will soon serve approximately one million customers across Southern California, including unincorporated Los Angeles County, unincorporated Ventura County and the cities of Agoura Hills, Alhambra, Arcadia, Beverly Hills, Calabasas, Camarillo, Claremont, Carson, Culver City, Downey, Hawaiian Gardens, Hawthorne, Malibu, Manhattan Beach, Moorpark, Ojai, Oxnard, Paramount, Redondo Beach, Rolling Hills Estates, Santa Monica, Sierra Madre, Simi Valley, South Pasadena, Temple City, Thousand Oaks, Ventura, West Hollywood, and Whittier. C-2 Joint Powers Authority –JPA of Community Choice Aggregators D-1 Services Technical Study Implementation Plan •Load Analysis •Financial Pro Forma •Rate Analysis •Implementation Plan Development •CCA Ordinance CCA Implementation •Resource Adequacy Reporting & Procurement •Implementation Project Management •Power Procurement & Forecasting •Policy Development •Rate Setting •Notice Development On-Going Support •Portfolio Management •Scheduling Coordinator •CRR Administration •Power Procurement & Forecasting •Rate Setting •IOU Relationship Mgmt •Regulatory Compliance •Regulatory Advocacy •Data Management •Call Center Operations •Website Setup Support •Call Center Setup Support •Noticing Support •Coordination with IOU & Data Manager •Power Procurement •Rate Setting D-2 Organization CalChoice Board of Directors Tripepi Smith Marketing & Communications Hall Energy Law Special Counsel Power Procurement Braun, Blaising, Smith, Wynne Special Counsel Regulatory Affairs Pacific Energy Advisors Load Analysis/Forecasting Power Procurement Regulatory Compliance Rate Setting Renewable Energy Portfolio Management Bayshore Consulting Group CalChoice Administration CCA Operational Support Regulatory Affairs Energy Supplier Relationships Contract Administration Calpine Energy Solutions Data Management Call Center CalChoice Executive DirectorAssociate Members D-3 Current Operational Members Launched April 2017/ Joined December 2018 May 2015 September 2017 April 2018May 2018 D-4 New Members October 2020 October 2020June 2021 October 2020 TBD D-5 Process to Join •Phase 1 –Technical Study & Implementation Plan Development -$63,000 •3 –6 months (depends on timing of data from SCE) •Implementation Plan due to CPUC by January 1, 2021 for 2022 launch •Phase 2 –Implementation Agreement -$160,000 •Execute by March 2021 to meet Resource Adequacy Requirements •Administrative Services Agreement & Related Documents •Pass Through Professional SVCS fees (PEA; Bayshore; Maher Accountancy) -$267,000 •Data Management & Call Center (Calpine) –TBD Based on # of service accounts •Shared Fees (Regulatory Affairs, Legal, CalChoice Administration) –TBD Based on Electricity Load D-6 Administrative Services Agreement •Establishes Terms & Conditions of CalChoice/City relationship •Services: •Power Procurement •Risk & Credit Management •Load Forecasting & Data Collection •Energy Scheduling Coordination •Regulatory Compliance •Reporting with CPUC, California Energy Commission, etc. •Regulatory & Legislative Advocacy •Relationship Management with SCE & 3rd party providers •Rate Analysis; On-going Financial monitoring & analysis D-7 Security, Intercreditor & Collateral Agent Agreements •Establish General Fund Protections •Parties include City, Financial Institution and Energy Suppliers •Each party agrees to general fund protection & waterfall of distribution from lockbox •Establishes Lockbox as Energy Supply Collateral D-8 Deposit Account Control Agreement •Agreement with Financial Institution for CCA lockbox •River City Bank –Provides same services for CalChoice Members D-9 What Differentiates Us? 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