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CC SR 20200901 02 - Clean Power Alliance CITY COUNCIL MEETING DATE: 09/01/2020 AGENDA REPORT AGENDA HEADING: Regular Business AGENDA TITLE: Consideration and possible action to receive an update on the Clean Power Alliance feasibility study. RECOMMENDED COUNCIL ACTION: (1) Receive and file an update on the Clean Power Alliance feasibility study; and (2) Review proposed options on how to proceed and p rovide Staff with further direction. FISCAL IMPACT: The preparation of the feasibility study will cost approximately $15,000 which is included in Fiscal Year 20-21 budget Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Megan Barnes, Senior Administrative Analyst REVIEWED BY: Karina Bañales, Deputy City Manager APPROVED BY: Ara Mihranian, AICP, City Manager ATTACHED SUPPORTING DOCUMENTS: A. June 2, 2020 staff report and attachments (page A-1) B. SCE Community Choice Aggregator Non-Disclosure Agreement (page B-1) C. Public comments received since the June 2 City Council meeting (page C-1) BACKGROUND: On June 2, 2020, the City Council authorized the City Manager to execu te a letter providing notice of the City’s intent to consider joining Clean Power Alliance (CPA), a community choice aggregator (CCA) that provides renewable energy to 3 million customers in 32 communities in Southern California. The City Council also authorized Staff to proceed with the preparation of a feasibility study, the first step in the process of potentially joining CPA. The cost of the study was not to exceed $15,000, and Staff was to be part of the selection process of the independent consultant retained to prepare the study. 1 Background on community choice aggregation, CPA, the process of joining the CCA and launching electricity service is available in the June 2 staff report (Attachment A). During the presentation, the City Council expressed a desire to use the feasibility study as an opportunity to obtain electricity usage data that could help the City determine Rancho Palos Verdes’ greenhouse gas (GHG) emissions from energy consumption. Status of Feasibility Study After sending the notice of intent in June, Staff began working with CPA on the first steps in the preparation of the feasibility study. According to CPA, the minimum required scope of the study was to include:  Projection of expected revenues from new customers by rate class, assuming the new customers are placed on similar rates as current customers. Three expected revenue scenarios would be required for each of CPA’s different default power products (i.e. Lean, Clean, and 100% Green Power)  Cost of service for new customers, allocated by rate class  A comparison of total costs and expected revenues  Estimates of the greenhouse gas emissions and renewable energy procurement impacts of Rancho Palos Verdes joining CPA, assuming different power product mix on the Lean, Clean, and 100% Green products For a better idea of what to expect in the study, Staff requested a copy of the feasibility study conducted for CPA’s newest member city, Westlake Village. Staff was informed that Westlake Village’s feasibility study is not publicly available because the feasibility study contains confidential financial information about CPA, as well as market information. Only summaries of the studies can be made public. CPA provided Staff with a list of consulting firms with the expertise needed to perform the study, as well as a proposal from MRW & Associates, a consultant selected by CPA via a competitive solicitation to build its cost of service model and revenue forecasting database. The cost proposal included Palos Verdes Estates in the study, however, that city’s council decided not to proceed. The cost was estimated to be $25,630. In discussion with Staff, CPA indicated it was willing to cover costs over the $15,000 estimate initially provided to Staff and approved by the City Council in June. Staff ultimately determined that rather than gathering quotes from firms, it would be best to release a request for proposals (RFP) to retain a consultant to prepare the study. Separate from the consultant selection, CPA contacted Staff about submitting requests for electricity usage data from SCE for all customer accounts in Rancho Palos Verdes for the preparation of the feasibility study. This is necessary to determine the electricity load that CPA would be taking on by expanding service to RPV, as well as GHG emission estimates and renewable energy procurement impacts . City Staff submitted a 2 request for usage data for City facilities, and CPA submitted a request for community- wide usage data (residential and commercial). In conversation with SCE, it is Staff’s understanding that the residential usage data would be provided in aggregate form and would be broken down by rate class. Only the data for commercial users would include names, service account numbers, physical addresses and billing usage. This confidential data cannot be made public and all City and CPA staff members with access to it are required to sign a non-disclosure agreement (NDA) with SCE (Attachment B). The NDA states that: “The confidential and proprietary information disclosed to CCA in connection herewith may upon request include, without limitation, the following billing information about Utility Customers: Customer-specific information from the current billing periods as well as prior 12 months consisting of: service account number, name on service account, service address with zip code, mailing address with zip code, email address, telephone number, meter number, monthly kWh usage, monthly maximum demand where available, electrical or gas consumption data as defined in PU Code Section 8380, other data detailing electricity or needs and patterns of usage, Baseline Zone, CARE participation, End Use Code (Heat Source) Service Voltage, Medical Baseline, Meter Cycle, Bill Cycle, Level Pay Plan and/or other plans, Horse Power Load and Number of Units and monthly rate schedule for all accounts within the CCA's geographic territory (collectively, “Confidential Information”). Confidential Information shall also include specifically any copies, drafts, revisions, analyses, summaries, extracts, memoranda, reports and other materials prepared by CCA or its representatives that are derived from or based on Confidential Information disclosed by Utility, regardless of the form of media in which it is prepared, recorded or retained.” In reviewing the NDA, Staff noticed the terms limit the use of the data “solely for the purposes of investigating, pursing [sic] or implementing CCA Service,” meaning, the City could not also use the data to produce its own analysis of GHG emissions from energy use, as desired by the City Council. Staff asked the City Attorney’s Office to review the agreement. The City Attorney’s Office raised concerns with some of the language in the NDA. Pursuant to the NDA, the City must agree to only provide the information in question to “need to know” employees, and has to follow certain procedures in allowing employees to access the information. As part of this obligation, it makes the employees personally liable for damages associated with release of the information. Although the City could provide a defense for the employee, the City Attorney’s Office feels it is concerning that a City employee could face liability for actions taken as part of their daily duties. Further, the City agrees to indemnify SCE related to damages from use or release of confidential data, which could be a significant source of liability for the City. As a matter of course, the City usually requires that other parties indemnify the City. Finally, the NDA does not contain a provision to allow for release pursuant to California Public Records Act 3 requests, court orders, or subpoenas. This could place the City in a situation of having to choose between complying with a legally-issued court order or the NDA. The City Attorney’s Office has expressed concern with each of these contract provisions. Additionally, the language of the NDA indeed strictly limits the City’s use of the data to those purposes involved with applying to join CPA. As such, the City could not use the data provided in the NDA for other purposes. The City Attorney’s Office contacted CPA about whether the NDA could be negotiated and was informed that CPA is not aware of any cities successfully negotiating the agreement, which was approved by the California Public Utilities Commission. The City Attorney’s Office also contacted a few cities in the JPA and found that none had made any changes to the NDA. It is Staff’s understanding that the City should submit a separate data request through a different division at SCE for the purpose of determining RPV’s GHG emissions from energy use. It should be noted that the City has presumably signed NDAs with SCE in the past when requesting usage data for the preparation of GHG inventories for 2005, 2007, 2010 and 2012, and would need to do so for future inventories. As of the writing of this report, Staff is working to locate copies of any past agreements. Due to the issues raised in the course of requesting the data, City Staff has not signed the NDA, nor issued an RFP to prepare the feasibility study, but is bringing these issues to the City Council and seeking direction on how to proceed. Due to these delays, the City has missed the window to join CPA in 2020 (the process of joining a CCA is dictated by calendar year). Since the June meeting, the City has received numerous comments from residents concerning joining CPA. These emails, a PVP Watch newsletter item on the topic of joining CPA, and a response from CPA Executive Director Ted Bardacke are attached (Attachment C). Options on How to Proceed Given the knowledge that the data gathered for the study cannot be used for the additional purpose desired by the City Council, Staff presents the following options for consideration: 1) Direct Staff to proceed with the RFP and the feasibility study. If the City Council still desires to continue exploring joining CPA, it can direct Staff to release an RFP to retain a consultant to prepare the feasibility study, but CPA’s Board of Directors would not consider inviting RPV to join its joint powers authority (JPA) until 2021, as the process would be delayed by one year. The City could also wait to do the study with another city interested in joining CPA in 2021 to share the cost of the study, but would presumably need the other city to be willing to participate in choosing a consultant via the RFP process. 4 2) Do not proceed with the feasibility study. If the City Council no longer desires to explore joining CPA, it can direct Staff to send a letter to CPA rescinding the City’s notice of intent to consider joining CPA and to proceed with the feasibility study. As an alternative strategy to help reduce GHG emissions from residential energy use, the City Council can direct Staff to perform robust public outreach encouraging residents to sign up for SCE’s Green Rates program. This lesser-known program 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. In combination with Options 1 or 2, the City Council can also consider the following options for how to proceed with determining RPV’s GHG emissions from energy use: 3) Explore other opportunities. The City Council can direct Staff to explore other opportunities to perform an updated inventory of RPV’s GHG emissions, including those from energy use. Staff has learned that the City has access to software used to help complete GHG inventories as a participant in the Beacon Program sponsored by the Institute for Local Government and the Statewide Energy Efficiency Collaborative. 4) Take no action at this time and wait for the SBCCOG to complete an updated GHG inventory. The City Council can direct Staff to wait until an updated GHG inventory is completed through the South Bay Cities Council of Governments (SBCCOG). SBCCOG is seeking funding to complete updated inventories for all South Bay cities that adopted climate action plans – including Rancho Palos Verdes – to track where they are toward reaching the first milestone year for emissions reduction targets, 2020 (the City’s reduction target for 2020 is 15% below 2005 levels). SBCCOG has indicated that these new inventories would likely not be complete until late 2021 or sometime in the first quarter of 2022. This is because the consultant would need to gather the full year’s worth of utility usage data for 2020, as well as updated census data. CONCLUSION: Given these developments, Staff seeks direction from the City Council on how to proceed at this time. If the City Council desires to move forward the feasibility study, it should be noted that this would not be a commitment to joining CPA. As outlined in the June 2 staff report, CPA’s Board of Directors would need to invite the City to join, and the City Council would need to adopt an ordinance joining the JPA. 5 ALTERNATIVES: In addition to the Staff recommendation, the following alternative action is available for the City Council’s consideration: 1) In addition to the options described above, the City Council can identify other actions, as deemed appropriate. 6 CITY COUNCIL MEETING DATE: 06/02/2020 AGENDA REPORT AGENDA HEADING: Regular Business AGENDA TITLE: Consideration and possible action to pursue joining the Los Angeles County Clean Power Alliance. RECOMMENDED COUNCIL ACTION: (1) Review a report on the potential impacts of the City joining Los Angeles County’s Clean Power Alliance; and, (2) If deemed acceptable, direct the City Manager to execute and submit a letter of intent to join CPA and to proceed with preparing a feasibility study. FISCAL IMPACT: The preparation of the feasibility study will cost a pproximately $15,000 which is included in Fiscal Year 20-21 Budget Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Megan Barnes, Senior Administrative Analyst REVIEWED BY: Same as below APPROVED BY: Ara Mihranian, AICP, City Manager ATTACHED SUPPORTING DOCUMENTS: A. January 21, 2020 staff report and attachments (page A-1) B. West Hollywood GHG Impact Summary (page B-2) C. March 2020 Clean Power Alliance Financial Dashboard (page C-3) BACKGROUND: On January 21, 2020, Staff presented the City Council with an overview of the City’s options for community choice aggregation, an energy procurement model that gives residents the ability to purchase their electricity from renewable sources as an alternative to traditional investor-owned utilities (IOUs). Community choice aggregators, or CCAs, purchase renewable energy and sell it to ratepayers in participating cities at prices that are lower or comparable to IOU prices, and the electricity is still transmitted by utility-owned power lines. The January 21, 2020 staff report providing an overview of local CCAs and the City’s options is included in this report as Attachment A. A-1 Among the options was Clean Power Alliance (CPA), a CCA launched by the County of Los Angeles that serves approximately 3 million customers in 32 communities throughout Southern California, including the South Bay cities of Carson, Hawthorne, Manhattan Beach, Redondo Beach and Rolling Hills Estates. That evening, the City Council directed Staff to return with further analysis of the potential impacts of joining CPA, including how it could impact residents and the City’s greenhouse gas (GHG) emissions. DISCUSSION: Joining Clean Power Alliance As noted in the January 21 staff report, the timeline for communities to join CCAs is determined by the California Public Utilities Commission (CPUC) and is based on calendar year. If the City were to pursue joining CPA, it would first need to provide formal notice of intent to the join the Joint Powers Authority (JPA). Due to the COVID-19 pandemic, CPA has extended the deadline to provide notice for cities intending to join this year to the end of June 2020. If the City Council wishes to join CPA this year and launch service in 2022, the Council has until the end of June 2020 to direct the City Manager to execute and submit a letter of intent to join CPA. The next step would then be the completion of a feasibility study. The cost of this study could be shared if it covered multiple cities intending to join CPA at the same time. It is Staff’s understanding that three or four other cities are considering joining CPA, however, they have put their plans on pause due to staffing and fiscal impacts related to the COVID-19 pandemic. At this time, Staff does not anticipate these impacts. According to CPA, a feasibility study that would cover only Rancho Palos Verdes could cost approximately $15,000. According to CPA, its newest member, Westlake Village, contributed about $6,000-$10,000 for its feasibility study. The study could take one month to complete before the JPA would consider allowing the City to join CPA. If the JPA approved adding Rancho Palos Verdes as a member, the City Council would then decide whether to adopt an ordinance joining the JPA or suspend the process for consideration at a later time. The City Council would later decide which rate tiers to enroll residents and businesses in. After joining the JPA and filing an implementation plan with the CPUC by the end of 2020, there would be a one-year gap period before going live in 2022. During this one- year period, CPA would work on the onboarding process, obtaining customer account data from SCE, developing public outreach with City Staff to inform residents of the impending switch and beginning to procure power on behalf of Rancho Palos Verdes customers. A-2 Residents and businesses would receive two notices in the mail informing them of their ability to opt out of CPA before the launch, and two notices afterward. The City would also perform robust public outreach to get the word out via social media, mailings, public meetings, RPVtv public service announcements, press releases, direct outreach to homeowners associations and the business community to ensure the community understands anyone can opt out before or after service goes live. As a reminder, CPA 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. 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. CPA is in the process of developing a five-year strategic plan outlining what these programs will look like. Potential Impacts on Residents If the City were to join CPA, the most noticeable changes to residents would be on their power bills. SCE would still handle billing, but the bills would have separate charges for distribution (SCE) and generation (CPA). Customers would also see a Power Charge Indifference Adjustment, or “exit fee.” This fee is paid to IOUs to cover the costs of legacy investments when a CCA takes over providing power service. Exit fees vary by jurisdiction and depend on various factors, but typically, the fee is a small percentage of a customer’s power bill. Rates Depending on what tier they are enrolled in, customers could notice their energy rates change. When a city joins CPA, the city council chooses to automatically enroll residents and businesses in one of three tiers:  Lean Power (36% renewable)  Clean Power (50% renewable)  Green Power (100% renewable) Customers would see their power bills slightly decrease, remain about the same, or increase, depending on their tier. They can upgrade, downgrade, or opt out and return to service with SCE at any time. A resident could also return to the CPA after opting out at any time. As a reminder, SCE’s 2018 default power mix already included 36% renewable energy, the same amount in CPA’s Lean Power tier. Since 2016, SCE customers have had the option to use more renewable energy by enrolling in the Green Rates program, however, very few customers in Rancho Palos Verdes participate. As of January, only 20 of the City’s nearly 29,000 customer accounts were subscribed to Green Rates. A-3 City Staff has reached out to SCE for an update on the status of the Green Rates program, including local participation and will be prepared to provide more information at the Council meeting. A table comparing CPA’s rates with SCE’s base rate and Green Rates as of January 2020 is included below (Please note that CPA has indicated that it is awaiting up -to-date Green Rate comparison data): 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 CPA’s rates are established to meet standard bill comparison targets approved by its Board of Directors (1-2% cost savings for Lean Power, 0-1% savings for Clean Power, and 7-9% cost premium for 100% Green Power). Any changes to CPA rates are adopted at public meetings of the Board of Directors. Cost Savings As shown in the table above, Rancho Palos Verdes residents and businesses would see minimal cost savings of 1-2% if the City enrolled in Lean Power (36%) or Clean Power (50%). If the City opted for Green Power (100%), residents and businesses would be expected to pay 7-9% more. Residents with home solar panels would see greater cost savings, according to CPA. After paying off any previous SCE energy charges not offset by energy credits at the time of true-up, customers who generate more than they consume in one year will be eligible for net surplus compensation at a rate 10% higher than SCE's net surplus compensation rate. Impacts on Emissions As noted in the January 21 staff report, as part of the development of the City’s Emissions Reduction Action Plan (ERAP), in 2015, 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 Rancho Palos Verdes and the South Bay. According to the Council-approved 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. The most recent GHG emissions data for Rancho Palos Verdes comes from the L.A. County 2015 GHG Inventory, produced by the Chief Sustainability Office. A-4 According to the inventory, residential electricity in Rancho Palos Verdes produced 67,489 metric tons of carbon emissions in 2015. Residential electricity produced 86,129 metric tons of carbon emissions in 2012, according to the City’s ERAP. Without knowing the methodologies used to calculate each data set, it is difficult to compare these figures. It is Staff’s understanding that overall GHG emission reduction data for CPA is not yet available. However, according to CPA, customers and jurisdictions enrolled in Green Power (100%) have effectively zeroed out their GHG emissions from energy generation .  Of the 1 million customer accounts in CPA’s service territory, only approximately 6% opted out and returned to SCE bundled service .  Of the customers remaining in CPA service, 30% are enrolled in the 100% Green Power rate option, 53% are on Clean Power, and 17% are on Lean Power. Without recent GHG emissions data for the City and for CPA, it is difficult to estimate how much joining CPA could reduce Rancho Palos Verdes’ emissions. However, to give the City a better idea, CPA provided Staff with estimates for the City of West Hollywood (Attachment B), which also has about 29,000 customer accounts. CPA made the following estimates based on the amount of energy purchased by residents and businesses in West Hollywood: ● In 2019, West Hollywood residents and businesses purchased 181,000,000 kilowatt-hours of electricity from CPA.1 ● 98% of this electricity was 100% Green Power – 100% renewable energy, 100% carbon free, with zero greenhouse gas emissions.2 ● By choosing CPA’s 100% Green Power, West Hollywood reduced its greenhouse gas emissions by more than 41,000 metric tons in less than one year.3 ● This is equivalent to: ○ Taking 8,475 passenger cars off the road for one year ○ Eliminating the electricity consumed by 6,642 homes in one year ○ Planting 648,634 trees and growing them for 10 years.4 1This is less than the total electricity consumed by West Hollywood customers in 2019 because residential and commercial/municipal customers began receiving electricity from CPA in February and May 2019 respectively. 2West Hollywood chose 100% Green Power as the default CPA product for all customers in its jurisdiction. Fewer than 5% of those customers have switched to a lower rate tier or opted out of CPA service. 3Based on SCE reported greenhouse gas emissions factor of 513 lbs (0.23 MT) CO2e/MWh (Edison International 2018 Sustainability Report, May 2019). 4US Environmental Protection Agency Greenhouse Gas Equivalencies Calculator, March 2020. It is also worth noting that unlike SCE’s Green Rates program, CPA customers are automatically enrolled. If the City were to enroll residents in Green Power (50%) or Clean Power (100%), this would likely result in emission reductions unless there were a high number of opt-outs. A-5 According to the most recent available data, the overall residential opt-out rate for CPA members at the end of April 2020 was 5.76%, and the non-residential opt-out rate was 6.95%. In Rolling Hills Estates, the only Palos Verdes Peninsula city in CPA, the residential opt-out rate was 6.28%, and the non-residential opt-out rate was 7.98%. The highest residential opt-out rate was 16.92% in Thousand Oaks. Benefits and Challenges Because residential power use is a major source of GHG emissions, CCA is widely regarded as a tool for cities to reduce their carbon footprint. The Council-approved ERAP included exploring CCA as a meaningful strategy to reduce the City’s GHG emissions. While the City has implemented numerous sustainability measures at City facilities, joining CPA presents an opportunity to make a profound community-wide impact on reducing GHG emissions. In addition to reducing the City’s GHG emissions and helping Rancho Palos Verdes reach its reduction goals, joining CPA would give the City the benefits of collective buying power and local control. The City would have one elected representative on the JPA’s Board of Directors and two voting alternates, giving Rancho Palos Verdes a say over its energy supplies, rates and local reinvestment programs. Joining CPA would give the City and residents choice where none existed before. As noted in the January 21 staff report, the risks associated with joining a CCA are related to the unknowns of the CCA’s long-term performance, including the ability to remain competitive with IOUs. For information on CPA’s financial health, a copy of its most recent available financial dashboard from March 2020 is included as Attachment C. If the City wanted to leave CPA, it could do so before or after launching. However, as part of the JPA agreement, the City would be financially responsible for any unused power procured on behalf of residents. As a reminder, residents and businesses could opt out of CPA and return to service with SCE at any time. CONCLUSION: Staff recommends the City Council consider the information in this report and, if deemed acceptable, authorize the City Manager to submit a letter of intent to join CPA by June 30, 2020 and to proceed with a feasibility study. Taking this step would not be a commitment to launching service. The City Council could proceed with the feasibility study, but choose not to join the JPA and launch service. The City Council could only consider becoming a member of the JPA and moving forward with launching service after the JPA agrees to allow the City to join. A-6 ALTERNATIVES: In addition to the Staff recommendation, the following alternative action s are available for the City Council’s consideration: 1) Do not proceed at this time. The City Council can choose not to proceed with the feasibility study at this time, or to revisit joining CPA in the future. 2) Take other action, as deemed appropriate. A-7 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. A-8 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 A-9 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. A-10 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: A-11 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. A-12 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 A-13 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 A-14 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. A-15 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-16 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-17 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 A-18 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. A-19 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 A-20 (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. A-21 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 A-22 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. A-23 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. A-24 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. A-25 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. A-26 Joint Powers Authority –JPA of Community Choice Aggregators A-27 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 A-28 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 A-29 Current Operational Members Launched April 2017/ Joined December 2018 May 2015 September 2017 April 2018May 2018 A-30 New Members October 2020 October 2020June 2021 October 2020 TBD A-31 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 A-32 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 A-33 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 A-34 Deposit Account Control Agreement •Agreement with Financial Institution for CCA lockbox •River City Bank –Provides same services for CalChoice Members A-35 What Differentiates Us? A-36 CLEAN POWER ALLIANCE Impact of West Hollywood’s 100% Green Power ●In 2019 West Hollywood residents and businesses purchased 181,000,000 kilowatt-hours of electricity from Clean Power Alliance.1 ●98% of this electricity was 100% Green Power –100% renewable energy, 100% carbon free, with zero greenhouse gas emissions.2 ●By choosing CPA’s 100% Green Power West Hollywood reduced its greenhouse gas emissions by more than 41,000 metric tons in less than one year.3 ●This is equivalent to: ○Taking 8,475 passenger cars off the road for one year ○Eliminating the electricity consumed by 6,642 homes in one year ○Planting 648,634 trees and growing them for 10 years.4 1This is less than the total electricity consumed by West Hollywood customers in 2019 because residential and commercial/municipal customers began receiving electricity from CPA in February and May 2019 respectively. 2West Hollywood chose 100% Green Power as the default CPA product for all customers in its jurisdiction. Fewer than 5% of those customers have switched to a lower rate tier or opted out of CPA service. 3Based on SCE reported greenhouse gas emissions factor of 513 lbs (0.23 MT) CO2e/MWh (Edison International 2018 Sustainability Report, May 2019). 4US Environmental Protection Agency Greenhouse Gas Equivalencies Calculator, March 2020. A-37 Agr 3%Com-Lg 16% Com-Sm 37% Res 44% in $000,000's Actual Budget Variance %Actual Budget Variance % Energy Revenues $47.5 $46.1 $1.4 3% 596.6 574.5 22.1 4% Cost of Energy $47.1 $44.4 $2.7 6% 553.7 552.7 1.1 0% Net Energy Revenue $0.4 $1.7 -$1.3 -77% 42.9 21.8 21.0 96% Operating Expenditures $1.9 $2.2 -$0.3 -14% 16.4 18.9 -2.5 -13% Net Income -$1.5 -$0.5 -$1.0 26.5 3.0 23.6 797% March Year-to-Date Active Accounts 987,000 CUSTOMERS YTD Sales Volume 8,570 GWh Cumulative Revenue Net Energy Revenue Summary of Financial Results Definitions: Accounts: Active Accounts represent customer accounts of active customers served by CPA per Calpine Invoice. Opt-out %: Customer accounts opted out divided by eligible CPA accounts YTD Sales Volume: Year to date sales volume represents the amount of energy (in gigawatt hours) sold to retail customers Revenues: Retail energy sales less allowance for doubtful accounts Cost of energy: Cost of energy includes direct costs incurred to serve CPA’s load Operating expenditures: Operating expenditures include general, administrative, consulting, payroll and other costs required to fund operations Net income: Net income represents the difference between revenues and expenditures before depreciation and capital expenditures Cash and Cash Equivalents: Includes cash held as bank deposits. Year to date (YTD): Represents the fiscal period beginning July 1, 2019 Opt-Out % 5.8% Cash & Cash Equivalents $596.6 $574.5 $743.4 $0 $100 $200 $300 $400 $500 $600 $700 $800 JulAugSepOctNovDecJanFebMarAprMayJunActual Budget $42.9 $21.8 $55.8 $0 $10 $20 $30 $40 $50 $60 JulAugSepOctNovDecJanFebMarAprMayJunActual Budget YTD March 2020 •CPA recorded satisfactory results for the period.Expenditures remain within authorized budget limits.CPA increased the allowance for doubtful accounts by $3.4 million as a result of Shelter in Place and economic conditions and recorded bad debt expense equal to the same amount.Bad debt expense is netted from revenue.Absent this bad debt expense increase,CPA would have recorded net income of $1.9 million in March. •For year-to-date: •Revenues of $596.6 million were $22.1 million or 4%above budget.Cost of energy of $553.7 million was about flat to budgeted energy costs. •Operating expenditures of $16.4 million were 13% lower than budgeted primarily due to lower than budgeted staffing,legal services,and Data & SCE service fees.Net income of $26.5 million was $23.6 million above budgeted net income of $3.0 million. •Management believes that available liquidity and bank lines of credit are sufficient for CPA to continue to meet its obligations.in $000,000’sFinancial Dashboard 0 10 20 30 40 50 60 70 JulAugSepOctNovDecJanFebMarAprMayJunUnrestricted Restricted Note:Numbers may not add up due to rounding. FINANCE COMMITTEE ITEM 2 Return to Agenda A-38 Southern California Edison Revised Cal. PUC Sheet No. 61464-E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No. 59526-E Sheet 1 (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 3577-E Caroline Choi Date Filed Mar 22, 2017 Decision Senior Vice President Effective Apr 21, 2017 1C9 Resolution COMMUNITY CHOICE AGGREGATOR NON-DISCLOSURE AGREEMENT Form 14-769 B-1 Form 14-769 2/2017 Page 1 COMMUNITY CHOICE AGGREGATOR NON-DISCLOSURE AGREEMENT This Non-Disclosure Agreement (“Agreement”) is entered into by and between Southern California Edison Company (SCE) (“Utility”) and , a City, County, or Joint Powers Authority who is (Check only one option) a Community Choice Aggregator (“CCA”) ; or an eligible entity under California Public Utilities Code (“PU Code”) Section 331.1 who is actively investigating delivery of electric service to customers located within the geographic territory of the CCA This Agreement is effective as of _______________, ____________. (“Effective Date”); This Agreement is executed pursuant to California Public Utilities Commission (“CPUC”) Order Instituted Rulemaking (“OIR”) 03-10-003, PU Code Section 366.2 et seq., and applicable Utility tariffs (as modified hereafter from time to time). As used herein the Utility and CCA may each be referred to individually as a “Party” and collectively as “Parties.” The CPUC has determined that CCA may obtain specified confidential customer information from Utility pursuant to Tariff Schedules Community Choice Aggregation – Information Fees (“CCA-INFO”) and Community Choice Aggregation – Service Fees (“CCA- SF”) (as modified hereafter from time to time) as a CCA, as defined by PU Code Section 331.1, solely in order to investigate, pursue or implement Community Choice Aggregation Services pursuant to PU Code Section 366.2, et seq. or solely to administer energy efficiency programs in the CCA’s geographic territory upon CPUC authorization pursuant to PU Code Section 381.1 (“CCA Service”). The provisions of this Agreement and Schedules CCA-INFO and CCA-SF govern the disclosure of Utility’s confidential customer information to CCA (“Disclosure Provisions”). (L) (T)(L) B-2 Form 14-769 2/2017 Page 2 The Parties hereby mutually agree that: 1. Subject to the terms and conditions of this Agreement, current proprietary and confidential information of Utility regarding customers of Utility (“Utility Customers”) may be disclosed to CCA from time to time in connection herewith as provided by the Disclosure Provisions and solely for the purpose of CCA Service. Such disclosure is subject to the following legal continuing representations and warranties by CCA: (a) CCA represents and warrants that, pursuant to PU Code Section 331.1, (1) it is either (i) a city, county, or other entity as defined in PU Code Section 331.1 whose governing board has elected to combine the loads of its residents, businesses, and municipal facilities in a community wide electricity buyers, or (ii) a city, county, or other entity as defined in PU Code Section 331.1 that intends to actively investigate or pursue delivery of electric service to customers located within the geographic territory of the CCA; and (2) that to investigate, pursue or implement CCA Service, it requires certain Confidential Information, as defined in Section 2, below; (b) CCA represents and warrants that it has all necessary authority to enter into this Agreement, and that it is a binding enforceable Agreement according to its terms; (c) CCA represents and warrants that the authorized representative(s) executing this Agreement is authorized to execute this Agreement on behalf of the CCA; and (d) CCA confirms its understanding that the information of Utility Customers is of a highly sensitive confidential and proprietary nature, and that such information will be used as contemplated under the Disclosure Provisions solely for the purposes of investigating, pursing or implementing CCA Service, and that any other use of the information may permit Utility to suspend providing further information hereunder. B-3 Form 14-769 2/2017 Page 3 (e) CCA represents and warrants that it will implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the Confidential Information from unauthorized access, destruction, use, modification, or disclosure, and prohibits the use of the data for a secondary commercial purpose not related to CCA Service or energy efficiency purposes without the customer’s prior consent to that use. 2. The confidential and proprietary information disclosed to CCA in connection herewith may upon request include, without limitation, the following billing information about Utility Customers: Customer-specific information from the current billing periods as well as prior 12 months consisting of: service account number, name on service account, service address with zip code, mailing address with zip code, email address, telephone number, meter number, monthly kWh usage, monthly maximum demand where available, electrical or gas consumption data as defined in PU Code Section 8380, other data detailing electricity or needs and patterns of usage, Baseline Zone, CARE participation, End Use Code (Heat Source) Service Voltage, Medical Baseline, Meter Cycle, Bill Cycle, Level Pay Plan and/or other plans, Horse Power Load and Number of Units and monthly rate schedule for all accounts within the CCA's geographic territory (collectively, “Confidential Information”). Confidential Information shall also include specifically any copies, drafts, revisions, analyses, summaries, extracts, memoranda, reports and other materials prepared by CCA or its representatives that are derived from or based on Confidential Information disclosed by Utility, regardless of the form of media in which it is prepared, recorded or retained. 3. Except for electric usage information provided to CCA pursuant to this Agreement, Confidential Information does not include information that CCA proves (a) was properly in the possession of CCA at the time of disclosure; (b) is or becomes publicly known through no fault of CCA, its employees or representatives; or (c) was independently developed by CCA, its employees or representatives without access to any Confidential Information. 4. From the Effective Date, no portion of the Confidential Information may be disclosed, disseminated or appropriated by CCA, or used for any purpose other than for CCA Service as permitted under this Agreement and the Disclosure Provisions. B-4 Form 14-769 2/2017 Page 4 5. CCA shall, at all times and in perpetuity, keep the Confidential Information in the strictest confidence and shall take all reasonable measures to prevent unauthorized or improper disclosure or use of Confidential Information. CCA shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the Confidential Information from unauthorized access, destruction, use, modification, or disclosure and prohibits the use of the data for a secondary commercial purpose not related to CCA Service. Specifically, CCA shall restrict access to Confidential Information, and to materials prepared in connection therewith, to those employees or representatives of CCA who have a “need to know” such Confidential Information in the course of their duties with respect to the CCA Service and who agree to be bound by the nondisclosure and confidentiality obligations of this Agreement, provided, however, that, an Energy Service Provider, agent, or any other entity, including entities that provide both direct access (as codified in Assembly Bill No. 1890, Stats. 1996, ch. 854) and CCA Service shall limit their utilization of the information provided to the purposes for which it has been provided and shall not utilize such information, directly or indirectly, in providing other services, including but not limited to Direct Access services, in order to effectuate the obligations of this Agreement. Prior to disclosing any Confidential Information to its employees or representatives, CCA shall require such employees or representatives to whom Confidential Information is to be disclosed to review this Agreement and to agree in writing to be bound by the terms of this Agreement by signing the “Non-Disclosure Agreement for CCA Employees or Representatives” form attached as Exhibit A hereto. CCA shall provide Utility with copies of the signed Exhibit A forms at Utility request. CCA shall also provide Utility with a list of the names, titles, and addresses for all persons or entities to which Confidential Information is disclosed in connection herewith (“Disclosure List”). This Disclosure List shall be updated by CCA on a regular basis, and will be provided to Utility once each quarter at a minimum. 6. CCA shall be liable for the actions of, or any disclosure or use by, its employees or representatives contrary to this Agreement; however, such liability shall not limit or prevent any actions by Utility directly against such employees or representatives for improper disclosure and/or use. In no event shall CCA or its employees or representatives take any actions related to Confidential Information that are inconsistent with holding Confidential Information in strict confidence. CCA shall immediately notify Utility in writing if it becomes aware of the possibility of any misuse or misappropriation of the Confidential Information by CCA or any of its employees or representatives. However, nothing in this Agreement shall obligate Utility to monitor or enforce CCA’s compliance with the terms of this Agreement. B-5 Form 14-769 2/2017 Page 5 7. CCA shall comply with the consumer protections and requirements concerning subsequent disclosure and use of Confidential Information pursuant to CPUC Decision No. 12-08-045. 8. CCA acknowledges that disclosure or misappropriation of any Confidential Information could cause irreparable harm to Utility and/or Utility Customers, the amount of which may be difficult to assess. Accordingly, CCA hereby confirms that Utility shall be entitled to apply to a court of competent jurisdiction or the CPUC for an injunction, specific performance or such other relief (without posting bond) as may be appropriate in the event of improper disclosure or misuse of its Confidential Information by CCA or its employees or representatives. Such right shall, however, be construed to be in addition to any other remedies available to Utility, in law or equity. 9. In addition to all other remedies, CCA shall indemnify and hold harmless Utility, its affiliates, subsidiaries, parent company, officers, employees, or agents from and against and claims, actions, suits, liabilities, damages, losses, expenses and costs (including reasonable attorneys’ fees, costs and disbursements) attributable to actions or non-actions of CCA and/or its employees and/or its representatives in connection with the use or disclosure of Confidential Information. 10. If, at any time, CCA ceases its investigation, pursuit or implementation of community choice aggregation pursuant to PU Code Section 366.2 et seq., CCA shall promptly return or destroy (with written notice to Utility itemizing the materials destroyed) all Confidential Information then in its possession at the request of Utility. Notwithstanding the foregoing, the nondisclosure obligations of this Agreement shall survive any termination of this Agreement. 11. This Agreement shall be binding on and inure to the benefit of the successors and permitted assigns of the Parties hereto. This Agreement shall not be assigned, however, without the prior written consent of the non-assigning Party, which consent may be withheld due to the confidential nature of the information, data and materials covered. 12. This Agreement sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior discussions, negotiations, understandings, communications, correspondence and representations, whether oral or written. This Agreement shall not be amended, modified or waived except by an instrument in writing, signed by both Parties, and, specifically, shall not be modified or waived by course of performance, course of dealing or usage of trade. Any waiver of a right under this Agreement shall be in writing, but no such writing shall be deemed a subsequent waiver of that right, or any other right or remedy. B-6 Form 14-769 2/2017 Page 6 13. This Agreement shall be interpreted and enforced in accordance with the laws of the State of California, without reference to its principles on conflicts of laws. 14. This Agreement shall, at all times, be subject to such changes or modifications by the CPUC as it may from time to time direct in the exercise of its jurisdiction. IN WITNESS WHEREOF, the authorized representatives of the Parties have executed this Agreement as of the Effective Date. SOUTHERN CALIFORNIA EDISON COMPANY SIGNATURE: __________________________________ PRINT NAME: __________________________________ TITLE: __________________________________ DATE: __________________________________ __________________________________ [CCA name] SIGNATURE: __________________________________ PRINT NAME: __________________________________ TITLE: __________________________________ DATE: __________________________________ (N) (T) (N) (N) (T) (N) B-7 Form 14-769 2/2017 Page 7 EXHIBIT A NON-DISCLOSURE AGREEMENT FOR CCA EMPLOYEES OR REPRESENTATIVES I, ________________________________, declare under penalty of perjury that (1) I am employed as ____________________(title) at _____________________ _____________________________(employer and address); and (2) I have personally reviewed the attached COMMUNITY CHOICE AGGREGATOR NON- DISCLOSURE AGREEMENT as executed by ____________________ __ City, County, or Joint Powers Authority (check only one) relating to disclosure and use of Confidential Information (as defined therein) and I agree to be bound by its provisions. SIGNATURE: __________________________________ PRINT NAME: __________________________________ TITLE: __________________________________ DATE: __________________________________ (T) | | (T) B-8 1 Megan Barnes From:Al Sattler <alsattler@igc.org> Sent:Wednesday, June 3, 2020 12:57 PM To:CC Subject:Thank you for approving the Feasibility Study for joining the LA County Clean Power Alliance Mayor Cruikshank and City Council, Thank you very much for voting to do the Feasibility Study for joining the LA County Clean Power Alliance. I agree with Mayor Cruikshank that this will be valuable information. Being a resident of RPV, I want to make sure the interests of our city and its residents are protected, while also knowing that we need to move forward as fast as is reasonably feasible to reduce our emissions of greenhouse gases. It was good to see you all again, even if only virtually. Al Sattler C-1 1 Megan Barnes From:PVP Watch <info@pvpwatch.com> Sent:Tuesday, July 14, 2020 8:55 AM To:CC Subject:PVP Watch Newsletter PVP Watch Newsletter – July 2020 July 13, 2020 SOUTHERN CALIFORNIA EDISON V. CLEAN POWER ALLIANCE Soon the Rancho Palos Verdes (RPV) City Council will make a decision affecting who the citizens of RPV will be purchasing their C-2 2 electric power from. Since we all depend upon this necessity in our homes and businesses PVP Watch feels this is an issue that should be brought to the attention of all RPV residents. PVP Watch advises the city council to reject any change. And here are the reasons why. Southern California Edison (SCE) has been delivering electrons (electricity) through their transmission lines to RPV since the city was incorporated on September 7, 1973. SCE is an investor owned regulated utility incorporated in 1909 with over 5,000,000 accounts that serve 15,000,000 people throughout Southern California. During its June 2, 2020, meeting the city council heard a presentation and discussed at length discontinuing its relationship with SCE for a new power provider, the Clean Power Alliance (CPA). In 2002 California enacted a law allowing the creation of Community Choice Aggregators (CCA). This was done to encourage companies to form and then undercut electric utility rates being charged by the traditional utility companies such as SCE. CCAs subsequently claimed that they could also offer products with less greenhouse gas emissions. As a result, CPA was formed in 2018. CPA will buy power and then sell it to RPV residents and businesses while using SCE transmission lines and SCE will continue to bill the customer. CPA generation charges to the customer will be shown on the SCE bill and SCE will forward these funds to the CPA. The goals of CCAs appear to have merit, however, looks can be deceiving and PVP Watch believes this is the case here. Perhaps its name, Clean Power Alliance, is even a misnomer. RATES As far as rates are concerned, Ted Bardacke the executive director of the CPA and Megan Barnes a senior administrative analyst for RPV, the point person on this issue for the city, agree that CPA rates can be more, less or the same as SCE. Rates are determined by the pending and future electricity generation contracts each company has. A utility consultant recently was shown a monthly SCE bill for a 2,100 square foot RPV home with two residents and the consultant advised if CPA was the utility company the bill would have been 71 cents less. ENVIRONMENT Regarding the environmental impact, 48% of the electricity that SCE currently provides comes from carbon-free resources, including solar and wind. This percentage will reportedly continue to increase C-3 3 becoming 80% in 2030 and 100% by 2045. These are energy percentages monitored and audited by the California Energy Commission (CEC). Also, SCE has a program where any RPV customer can, at any time, opt into their green program. SCE’s green rate literature indicates that to have 100% carbon-free resources and your monthly bill is now $100 it will increase about $6 monthly. To determine your personal increase in cost multiply kilowatt hours, found on your SCE bill under generation charges, by .0126. CPA in contrast has three tiers a customer can choose from which are Lean with a 36% renewable energy portfolio; Clean that has a 50% renewable energy portfolio; and Green that has a 100% renewable energy portfolio. The problem is that these renewable energy figures are not audited by state regulators or any other independent agency. These are figures simply provided by the CPA. LIABILITY PVP Watch feels there are serious issues that come with CPA membership. Perhaps the most odious is that once RPV joins it assumes a liability that is unknown at the time it joins. This is because all members of the CPA are liable for their share of power purchase contracts made while that entity is a member of the CPA until the contract expires. These multi-million-dollar contracts can be as long as 20 years. Therefore, an entity is exposed to a potentially expensive exit charge if it decides the CPA is not a good fit. EMINENT DOMAIN Another troubling aspect is that RPV will be mandated to sign a Joint Power Agreement (JPA), the governing document for CCAs, which gives the CPA the power of eminent domain in our city. This means that a new governmental agency will have the right to seize private property for its use. This is not something any city should regard lightly. CCAs IN CALIFORNIA Bardacke claims that no entity that has joined the CPA has ever left. Perhaps, but the company is only two years old. What he does not mention is: 1. The Foothills Tax Payers Association (FTPA) on April 6, 2017, reported that the San Bernardino Council of Governments (SBCOG), after a staff recommendation to move forward with a CCA for San Bernardino County, rejected the idea. There was a motion to accept C-4 4 by the chairman of the board, but when there was not a second to the motion the issue died. Bear in mind there are at least 25 members on the SBCOG board who could have seconded it. The FTPA found the consultant’s report to be “fatally flawed”. Dan Titus, identified in the FTPA article as being affiliated with the American Coalition for Sustainable Communities (ACSC), remarked that joining the CCA and saving 5% on consumer electric bills did not merit the millions of dollars of startup costs associated with the plan. Also, he felt that people should not be automatically enrolled in a new government agency; rather, consumers should take action to proactively join the program if that is what they choose to do. 2. The Lamorinda Weekly on May 31, 2017, reported that the Orinda City Council refused to consider joining a CCA. A motion was made by one council member to put joining Marin Clean Energy (MCE) on its agenda, which was never seconded, and the motion died. In 2016 the council declined to fund a study costing $10,000 regarding MCE citing lack of community interest and the need to direct funding to other priorities. The mayor noted the large amount of time needed for her and the city staff whenever dealing with a JPA. Other council members cited wanting to be good stewards of city finances, the possible future impact on ratepayers, opt-out provisions and long-term liabilities. 3. The Murrieta City Council meeting minutes for August 27, 2018, reflect that after a presentation, public comment and discussion the council voted to decline the opportunity to develop a CCA program. 4. The Menifee City Council meeting notes for August 15, 2018, reflect that after a presentation, public comment and discussion the council agreed that due to uncertainties about the program it would decline pursuing joining Western Community Energy, a CCA. 5. The Ventura County Star published stories in their June 24 and June 25, 2019, editions reporting that cities across Ventura County were moving some energy accounts back to SCE from the CPA to avoid paying higher energy bills, which can amount to many thousands of dollars annually. These increases were apparently due to the vagaries of energy contracts. Examples cited were Oxnard saving $206,000 per year by moving its street lighting account back to SCE; Moorpark City Council voted to move impacted accounts to save roughly $62,000; Camarillo moved some of its accounts to save $232,000; Thousand Oaks moved its street lighting account to save C-5 5 $70,000; and Simi Valley was contemplating moving back to SCE to save $325,000. 6. In a letter dated June 27, 2019, from the mayor of Rocklin to the chairman of Pioneer Community Energy (PCE), Rocklin’s CCA, the mayor complained about a PCE rate increase. He advised it will cost his city and taxpayers about $60,000, which will impact city services provided by Rocklin. These are some of the CCA cases found throughout the state the RPV City Council needs to be aware of. PALOS VERDES ESTATES On June 9, 2020, the CPA made a presentation to the Palos Verdes Estates (PVE) city council. Councilman Kenneth Kao made a motion that PVE proceed with, and pay for, a study conducted by the CPA, which is a requirement to joining the CPA. The motion did not receive a second and the issue died. Several citizens voiced opposition to joining citing amongst other things eminent domain, contract liability, miniscule representation on the CPA board, no CPA emission oversight and pressing problems facing PVE that need council attention more than this. One citizen Jim Phelps, a retired power engineer who tracks CCAs and helped implement California Energy Commission’s AB 1110 energy legislation, opined the CPA spewed one billion pounds of greenhouse gas emissions from energy into the atmosphere which CPA claimed as clean. This was done through their purchase of renewable energy credits. Council members did not support the study due to its cost, exposure to expensive long term energy contracts, the large amount of staff time necessary to administer a JPA and that there are several major issues facing the city more important than this. RANCHO PALOS VERDES CITY COUNCIL MEETING And so, what happened at the RPV city council meeting on June 2nd? Bardacke made his presentation and there were comments by city staff, council members, SCE and the public. Then councilor Eric Alegria made a motion to proceed with a CPA study at a cost to RPV taxpayers of $15,000. Initially there was not a second to the motion, but Mayor John Cruikshank began another discussion on the subject and was joined by the other council members, the city attorney and the city manager. After 27 minutes of talk councilman David Bradley seconded the motion, which then passed on a 4-1 vote. Ken Dyda C-6 6 joined Bradley, Cruikshank and Alegria in voting yes while councilwoman Barbara Ferraro voted no. Ferraro is concerned that the CPA is not regulated by the California Public Utility Commission (CPUC), that the CPA figures are not audited by an independent agency, that the JPA exposes RPV to eminent domain by another governmental agency and that the CPA is using their consultant and paying him/her with our money. GENERATION AND TRANSMISSION During the discussions Bardacke advised the consultant who will conduct the study to determine if RPV should join the CPA will be chosen by the CPA and paid for by RPV citizens. He made a point that if RPV joined the CPA that one of the council members will sit on the CPA board and therefore RPV will have local control. Not really. If RPV does join it will be one of 33 entities with members on the CPA board. A voice perhaps, but a very diluted voice. PVP Watch feels that RPV has five intelligent, civic minded members on our city council but is not aware of any of them having any expertise whatsoever in the generation and transmission of electric power. Therefore, it is questionable if he/she would be an asset to the board. That more than likely is the case of the rest of the board members who are all elected officials with no experience in an extraordinarily complex arena. An examination of Bardacke’s resume indicates his last job was working for Los Angeles Mayor Eric Garcetti and nothing indicates he has experience in the electricity field. Somebody needs to make decisions regarding purchases of long- and short-term power contracts from various sources to keep the electrons coming to our homes and businesses. If the leadership has limited experience in making these decisions who is CPA hiring to guide it and how much is that costing are legitimate questions. In contrast SCE’s president and chief executive officer has decades of experience in the industry as do others on his leadership team. Their board of directors is populated with men and women who are accomplished in various businesses and other fields. It is important to note that there is only one set of transmission lines bringing electrons to our city, neighborhood and homes. The electrons come from the same source no matter what rate you pay to the CPA or SCE. If one person pays the normal tier one rate at SCE and his neighbor pays the green rate for 100% renewable energy both receive the same electrons over the same lines. If SCE is the provider, the extra fee paid at the green rate goes into an account towards building C-7 7 facilities that produce renewable energy within the geographical area SCE serves. This is mandated by law and monitored by the CPUC and the CEC. If enough customers pay extra for greener energy it will lessen the time it takes for SCE to reach its goal of 100% renewables. That is not necessarily the case with CPA. They might, but are not obligated to, build renewable energy facilities. It can use the enhanced funds to simply purchase green energy from a producer in the western United States. This does not increase the amount of green energy, only the amount in the CPA portfolio, and thus no reduction in overall greenhouse gas emissions is achieved. Based on this it appears that SCE is the “cleaner” energy provider. RECAP Neither SCE nor CPA can assure what rates will be in the future since those rates are determined by the electric power generation market. The amount of renewable energy being sold to tier one customers by SCE is 48% now, will be 100% by 2040 and any customer can be at the 100% level now if it is requested. These figures are audited by the CEC and CPUC. The CPA states percentages noted above, but these are not audited by any government agency. If the CPA is chosen as our provider, the city must sign a JPA that exposes itself to many rules including the threat of eminent domain by another government agency and more staff time dedicated to the monitoring and enforcing provisions of the JPA. There is no guarantee RPV will be a good fit in the CPA. If it is not and the city attempts to depart RPV will potentially be burdened with a great cost to leave. Contract liabilities will exist plus the CPA might in the future issue bonds which will expose its members to debt liabilities as well. Several municipalities throughout California have rejected the idea of joining CCAs for a variety of good reasons. PVP Watch feels the city council has many challenges facing it including public safety; fire hazard monitoring and suppression; infrastructure needs; Ladera Linda; the Portuguese Bend slide; CalPers pension liability; COVID-19 effects on RPV; density issues; and many more. Going into the electric generation business has no upside and plenty of potential problems. PVP Watch believes that the RPV city council is spending its time looking for a solution to a problem that does not exist. Recipients of this newsletter are encouraged to contact RPV city councilors to express your opinions regarding this matter. One e-mail C-8 8 to cc@rpvca.gov will reach the entire council as well as RPV staff managers. ********************************************************** REEF RESTORATION The reef restoration project between Portuguese Bend and Point Fermin was mentioned in the last PVP Watch newsletter. The July 2020 issue of Peninsula Magazine reported that the Portuguese Bend landslide in 1956, and the Trump National Golf Course 18th hole landslide in 1999, plus the pollution from the White Point sewage outfall between 1937 and 1958 impacted the area. The $6,490,000 to fund the project is coming from Montrose Chemical as it was found to be essentially responsible for the toxic chemicals in the surf and soil there. According to the Occidental College website the 70,300 tons of rock is being brought on barges from a quarry on Catalina Island. On May 8, 2020, the first rocks were dumped in the water to begin building the reef. On June 3rd, the contractor left to do work in San Onofre and will return in early September to finish construction of the reef by September 30. This restoration is being done to enhance the flora and fauna of the Palos Verdes Shelf. ********************************************************** COVID-19 As of July 10, 2020, there are 167 confirmed cases of COVID-19 in Rancho Palos Verdes, including 12 deaths; 60 in Palos Verdes Estates; 29 in Rolling Hills Estates; three in Rolling Hills; and one in the unincorporated area of the Peninsula. PVP Watch extends its deepest condolences to all the residents of our community touched by this illness. ********************************************************** FUTURE TOPICS AND SUGGESTIONS Future newsletter topics might include efforts by the state legislature to increase density in our community; looking at the candidates in our upcoming local elections; and how the lack of tax revenue due to COVID-19 will effect our cities and school district. PVP Watch is always interested in our readers’ thoughts. Recipients of this newsletter are requested to e-mail PVP Watch at info@pvpwatch.com with your comments and suggestions on what you would like to see us address. ************************************************************* C-9 9 WHEN YOU EMAIL US Please include your name, email address and the name of the City where you live. *************************************************************** PVP WATCH WELCOMES YOUR CONTRIBUTIONS Thank you to several of our subscribers who have sent checks to PVP Watch as we rely on your financial support to continue to provide our newsletters. Those wishing to make a contribution of $25 or more, please send checks to PVP Watch, 5714 Wildbriar Drive, Rancho Palos Verdes, CA. 90275 David M Koch | 5714 Wildbriar Drive, Rancho Palos Verdes, CA 90275 www.pvpwatch.com Unsubscribe cc@rpvca.gov Update Profile | About Constant Contact Sent by info@pvpwatch.com in collaboration with Try email marketing for free today! C-10 1 Megan Barnes From:Lewis Bertrand <goodeal@cox.net> Sent:Tuesday, July 14, 2020 11:45 AM To:CC Subject:SOUTHERN CALIFORNIA EDISON V. CLEAN POWER ALLIANCE RPV Coty Council,    I read the July 2020 RPV PVP Watch News letter with great interest.  The presentation regarding the Clean Power  Alliance was very interesting.    Why did so many City Council  even think of considering the proposal?   Southern California Edison provides our power  at the current time.   Under the Clean Power Alliance proposal  the power will be purchased from SCE  and transmitted  over their lines to our area.   A middle man provider will only increase costs!    California Power Alliance will not provides the Electricity they acquire from Southern California Edison at no mark  up!   There will be more bureaucracy resulting in increased  costs and response times.       This proposal needs to be voted down!!!      Lew Bertrand  RPV Resident Past District Governor 2012 - 2013  Rotary International District 5280  goodeal@cox.net (Primary)  DGBertrand2012.13@cox.net (Secondary)          C-11 1 Megan Barnes From:Charles Agnew <cvagnew@cox.net> Sent:Tuesday, July 14, 2020 3:20 PM To:CC Subject:Clean Power Alliance Attachments:2020-07 PVP Watch Newsletter.docx Hi, I’m Charles Agnew 32261 Phantom Dr. I’m a residence since 1971. I think a great deal of thought and investigation is needed before we switch from SCE to CPA. Either decide now to stay with SEC or really look into CPA. The attached article draws into question the merits of switching. C-12 1 Megan Barnes From:cjruona@cox.net Sent:Wednesday, July 15, 2020 2:39 PM To:CC Subject:Southern California Edison V. Clean Power Alliance Councilors‐  I recently took the time to look into the issue of changing the electric provider for our city & then wrote an article for the  PVP Watch newsletter.  All of you were sent a copy.  I hope you took the time to read it since this is an important matter  affecting all your constituents.  My conclusion is that you should not leave SCE.  To do that would not make good  sense.  There is absolutely no assurance rates will be lower or that more green energy will come to our community if you  switch.  By changing you would expose the city to potential great cost, possible eminent domain problems and other  risks I set forth in my article.  C. J. Ruona  Rancho Palos Verdes  C-13 1 Megan Barnes From:William Patton <billpatton21@icloud.com> Sent:Wednesday, July 15, 2020 3:37 PM To:cjruona@cox.net Cc:CC Subject:Re: Southern California Edison V. Clean Power Alliance Kit     Well done and Well said!    Print it!    Bill  Sent from my iPhone          On Jul 15, 2020, at 2:39 PM, cjruona@cox.net wrote:  Councilors‐  I recently took the time to look into the issue of changing the electric provider for our city & then wrote an article for the  PVP Watch newsletter.  All of you were sent a copy.  I hope you took the time to read it since this is an important matter  affecting all your constituents.  My conclusion is that you should not leave SCE.  To do that would not make good  sense.  There is absolutely no assurance rates will be lower or that more green energy will come to our community if you  switch.  By changing you would expose the city to potential great cost, possible eminent domain problems and other  risks I set forth in my article.  C. J. Ruona  Rancho Palos Verdes  C-14 To Whom It May Concern: Clean Power Alliance believes that customers deserve more choice in their energy providers because history has shown that competition breeds innovation and sparks creativity while monopolies tend to drive up prices and can lose touch with the customers they serve. This belief in competition extends to the marketplace of ideas and public policy; thus we appreciate PVP Watch’s July 13 Newsletter opinion regarding the potential expansion of our service territory to other areas on the Palos Verdes Peninsula. A functioning marketplace of ideas, however, presupposes a fulsome understanding of facts. With this principle in mind, Clean Power Alliance offers the following corrections and clarifications for your consideration: 1)CPA’s three rate products and renewable energy purchases are audited by third parties and state regulators. a.CPA’s 2018 Power Source Disclosure for Lean, Clean and 100% Green rate products was independently audited by Abbot, Stringham and Lynch and accepted by the California Energy Commission via the same process as Investor Owned Utilities (IOUs) throughout the state. Even though CPA has the option of self-certifying its 2019 Power Source Disclosure in 2019, CPA will have it independently audited again later this year. b.Each year CPA reports each renewable energy purchase that is used to meet or exceed the California Renewable Portfolio Standard requirements to the CPUC. As it does with the IOUs, the CPUC validates these purchases through certificates deposited into the Western Renewable Energy Generation Information System (WREGIS). c.In addition to fully complying with state law, CPA also chooses to voluntarily certify the content of its 100% Green rate product through the Green-e certification program and certifies the greenhouse gas emissions profile of each of its three rate products through The Climate Registry. Both of these programs require independent audits. 2)Joining a CCA does not “discontinue” a city’s relationship with SCE. All CCA customers remain customers of SCE for Transmission and Distribution services and all CCA customers, including municipal customers, always have the option of remaining SCE customers for generation services as well. 3)You are correct that CCAs are allowed to buy green energy from existing facilities and thus not increase the overall supply of renewable energy in the Western United States. However, this does not speak to CPA’s specific actions. CPA is expanding the amount of renewable energy supply. Between 2018 and 2022 will be responsible, through contracts it has already executed, for bringing on-line over 750MW of new renewable energy supply with hundreds more megawatts of new supply under negotiation. We are also now one of the largest purchasers of battery storage systems in the State of California. Through our buying power Clean Power Alliance is pumping hundreds of millions of dollars in new energy investment into the state economy and creating solid middle-class jobs at a time when such investment is sorely needed. Thus, your assertion that SCE is the “cleaner” energy provider seems to be based on what a CCA may do, not what Clean Power Alliance is actually doing. 4)CPA employs staff who have decades of experience in the energy business, public sector management, and finance. Staff bios are available here. Our Board is populated with leaders in climate action, municipal finance, and those who have struggled with the impacts of fossil fuel C-15 extraction and combustion in their communities. CPA’s Board Chair has over 20 years of experience as an attorney, most of it in the energy sector. 5)Over 170 local jurisdictions in California have joined CCAs, and in their 10 years of existence, not a single jurisdiction has left a CCA. This fact should be considered in context with the 6 “CCAs in California” examples cited in your newsletter. Your newsletter cites risks – including liability and eminent domain – for cities that choose to join a CCA. These risks are highly constrained but indeed, as with any new endeavor, there are risks; there are also risks in standing pat. Ultimately, Clean Power Alliance recognizes that different cities have different risk tolerances and each city that contemplates joining a CCA needs to evaluate those risks against the benefits of providing more choice for its residents, bringing competition to the energy marketplace, giving customers access to new forms of energy programs, and having a voice in how the inevitable transformation of California’s energy system unfolds. We may not be for everyone but we are a good option for some, are honored to be considered by new cities within Los Angeles County and always look forward to spirited, evidence-based debate and discussion. Best regards, Ted Bardacke Executive Director Clean Power Alliance C-16 1 Megan Barnes From:R. Gene Dewey <rgdewey@cox.net> Sent:Sunday, July 26, 2020 11:22 AM To:CC Subject:SOUTHERN CALIFORNIA EDISON V. CLEAN POWER ALLIANCE To RPV City Council    We agree with the analysis in the  RVP Watch newsletter of July 2020 regarding the Clean Power Alliance vs. Southern  California Edison.  Edison is mandated to ultimately source their power from clean energy facilities.  Their infrastructure  is in place and in our opinion they are in the best position to accomplish this goal in the long run without adding another  layer to the process.      Thank you,    R. Gene & Lynne J Dewey  3720 Vigilance DR  C-17 1 Megan Barnes From:anneruona@cox.net Sent:Sunday, August 23, 2020 12:30 PM To:CC Subject:Southern California Edison Mr. Mihranian‐  After reading the latest PVP Watch newsletter regarding Southern California Edison (SCE) &  the Clean Power Alliance (CPA) I want you to know that I agree with the analysis & conclusions  reached in the newsletter. I seems to me it would be foolish for our city to change our  established power provider to an unproven governmental agency. I was recently visiting  relatives in Marin County when this issue came up. Until my husband pointed out that Marin  Clean Energy (MCE) was providing their electricity & showed them the very small print on their  Pacific Gas & Electric bill indicating this they were unaware PG&E was not their provider. And  MCE has been doing this for ten years. There is something not right here, almost like a shell  game. Now I understand the city attorney is reviewing Rancho Palos Verdes’ potential  entanglement with CPA since SCE is apparently requiring CPA to provide some sort of non‐ disclosure agreement prior to SCE releasing residents’ personal information to a third party. I  had not thought of this before but seriously question whether I want my personal information  released. I strongly suspect my friends & neighbors feel the same way. Does RPV have the  legal right to do this? Someone recently mentioned that the price of the study RPV is  mandated to have by CPA has increased to $25,000. Really? I do not understand why the city  councilors are thinking about spending their constituents’ hard earned dollars on a study to  obtain information SCE will more than likely give to their good customer (RPV) for free. Due to  the pandemic we are living through I am sure incoming revenues to our city are suffering. I  urge you to counsel the four city councilmen to follow the lead of Barbara Ferraro and advise  the CPA that the city of RPV will not be joining them.  Respectfully.  Anne Ruona  Rancho Palos Verdes   C-18