State’s largest ‘community choice’ energy program takes a hit

Utilities are increasingly being told they should stick to running the power grid and leave the decisions on energy procurement to local governments.

The community choice aggregation (CCA) movement has built considerable momentum in California in recent years. In CCA programs, groups of local government agencies team up to take over decision-making on what sources of power to use in the local electric grid – with utilities continuing to hold responsibility for maintaining the grid. 

CCA advocates contend that not only will this lead to use of more environment-friendly types of energy, it will bring down rates for businesses and households by creating competition for utility companies that often have no rivals. Critics say decisions on what types of energy are used are already mostly dictated by state laws requiring a long-term shift to cleaner renewable energy sources. They also question whether local governments have the necessary expertise for the responsibilities they are taking on.

But since the state’s first CCA, Marin Clean Energy, was launched in Marin County in 2010, the programs have proven popular and kept expanding. Nineteen programs serving 10 million of the state’s 40 million residents have been established.

Last week, however, saw the first major bad news for CCAs in years. The Ventura County Star reported some of the local governments in California’s largest CCA – the Clean Power Alliance – were unhappy enough with the cost of power for street, highway and outdoor lighting that they had opted to return to Southern California Edison to provide that power.

The backlash is limited. The alliance includes Los Angeles County, Ventura County and 30 local cities. The cities of Ventura, Camarillo, Moorpark, Oxnard and Thousand Oaks have taken steps to limit their reliance on the alliance, and at least two other cities are considering the same step. They must give six months notice. 

Edison blamed for defections from Clean Power Alliance

Most member agencies are satisfied, with many choosing to use the 100 percent clean energy option provided by the alliance even if it carries a cost premium of 7 percent to 9 percent. 

Alliance leaders blame the defections on pricing decisions by Edison that they say were attempts to punish their CCA’s members. Edison said all its decisions had been ratified by the state Public Utilities Commission in a transparent process and challenged claims that the utility subsidized some customers at the expense of others.

But as cities are squeezed by the cost of pensions and look to save money wherever they can, the decisions made by Ventura, Camarillo, Moorpark, Oxnard and Thousand Oaks could be copied by other local governments. And while the cities are retaining use of the Ventura-L.A. CCA for most of their energy accounts, the street, highway and outdoor lighting accounts are among the biggest of all in terms of total bills, and thus most coveted by CCAs. 

Nevertheless, the news continues to be mostly bright for CCAs. In February, the San Diego City Council voted to begin negotiating on establishing a CCA with other local governments. San Diego would be the largest city in the nation with a CCA. The cities of Carlsbad, Chula Vista, Del Mar, Encinitas, La Mesa and Oceanside have expressed interest in joining the regional initiative.

Large utilities split on how to deal with CCAs

The decision was made easier by the surprising decision of the giant investor-owned San Diego Gas & Electric utility to welcome a new era in which it runs the regional grid but others choose energy sources. The utility disclosed in November that it hoped for state legislation “that would allow us to begin planning a glide path out the energy procurement space.” Edison and Pacific Gas & Electric have been far cooler to the CCA movement.

In another sign of CCAs’ acceptance as part of the California energy landscape, in May, Moody’s gave Peninsula Clean Energy an investment-grade credit rating. Peninsula serves 300,000 accounts in the Bay Area.

Only one other CCA has such a high rating from Moody’s: the Marin program that launched the movement in 2010. It has about 255,000 customers.

10 comments

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  1. Richard Cohen
    Richard Cohen 29 June, 2019, 14:06

    This should not come as a big surprise. After all, these organizations are really more than ‘regulatory arbitrage’ set up by some well minded environmentalists and shoved down our throats by state and local regulators. You had to know something was wrong when you had to ‘opt out’ or you would automatically be tossed into their pool. These CCA’s really don’t do much of anything–they don’t produce power, they don’t operate or maintain the grid, have back offices or much of anything else. They exist because our utility bills do not adequately separate all these expenses from the actual provision of power…so the CCA’s arbitrage that their customers aren’t charged properly relative to utility customers. And even with these massive advantages it doesn’t sound like things are working out so well. The CCA’s as set up in CA do not make energy cleaner really, but they do make it even more expensive. We opted out and are staying out.

    Reply this comment
    • ricky smith
      ricky smith 4 July, 2019, 08:59

      Good comments Richard.
      These CCA’s never were anything more than virtue signalling by the rich greens.
      I’m tired of getting screwed by PG&E with starting rates of 0.28 cents per kilowatt when my son over in Nevada pays less than 9 cents.
      Think I’ll start my own CCA based solely on imported coal power from Nevada and Utah. A virtual cheap power syndicate.
      Oh wait, this is California. We are not allowed to have reliable, cheap power.

      Reply this comment
  2. Queeg
    Queeg 4 July, 2019, 12:20

    Comrade Rickee

    You’re doomed!

    Reply this comment
    • ricky smith
      ricky smith 5 July, 2019, 08:19

      It’s true Queeg. Yes, I’m a doomer.
      I have tried to stay and resist the elitist, green, high tech slaver oligachies catered to by the pandering corrupt politicians in Excremento.
      But alas, it is time to go. Time to dismantle the gun towers,pack up the AR’s and leave the compound.
      Any specials going on at the rental yard? BTW: are your welding certs current? I don’t want my hitch falling off in the Nevada desert.

      Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 5 July, 2019, 09:48

    Ricky we always have specials posted in our Comfort Bunker and at Free Willy’s Gun Range in the Superstitious Mountains.

    We just got technicolor portraits of crusty Queeg cuddling Baby and Vicious complimentary for just stopping by and saying howdy. That tony style coffee always brewing and Mamma Clara’s hazelnut biscottis on hand for dipping-

    Trailers are scarce after 10:00 am Thursday-Sunday…. try Tuesdays for top service when we throw in a quart jar of Mamma Clara’s organic vodka pasta sauce, a real treat.

    And always scarce doomers….. we treat ya rite!

    Reply this comment
    • ricky smith
      ricky smith 5 July, 2019, 13:37

      We real doomers don’t drink ‘tony’ coffees. We drink Folgers in the can. And we don’t call our biskits ‘Biscotti’.
      BTW: if they don’t have sausage gravy on top we don’t eat ’em either.
      Now If you want to cater to doomers you need to know what they like. That’s just one of the reasons we’re leaving. Too many of the pansy, neutered male types infesting Cali these days. No real men out here just puppy hugging, manicured, pedicured, leg crossing metrosexuals like our current governor.
      I’m thinking about your offer provided you spruce the place up and start serving comfort food.
      But honestly I know I can just drive over to the new compound in a neighboring free state and rent a U-haul at 1/3 your price.

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 5 July, 2019, 19:14

        Ricky. We cannot do comfort food as the food/hygiene laws for flinging grease, breading, spicy gravies in black iron skillets a no no….

        We are conflicted….not many so called real men on the coast with moving proclivities, so we troll doomer sights for customers.

        Our rental yard is a security paradise, not pretty and metro fancy.

        Our Comfort Bunker is a throwback the Battle of the Bulge on the exterior and inside looks like General LaMay’s NORAD.

        We aim to please all types of patriots!

        Reply this comment
  4. Ulysses Uhaul
    Ulysses Uhaul 5 July, 2019, 09:53

    P.S.

    We got welder certifications grandfathered in when Pappa Uly ran the yard in our original yard in Palmdale in the late 1950’s.

    Relax. We know our stuff.

    Reply this comment
    • ricky smith
      ricky smith 6 July, 2019, 09:38

      You don’t have to be much of a welder over in Palmdale.
      It’s so hot, the metal just welds itself.

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 6 July, 2019, 09:51

        Dear old Pappa Uly always bragged about low energy bills in gritty Palmdale.

        Remember our promotional items included a fake signed Johnny Mize rookie card and a pack of Camels-

        Reply this comment

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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