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What You Need to Know About the Big Push to Give Residents an Energy Menu

The City Council wants to get the Climate Action Plan show on the road already. One part of the plan requires something called Community Choice Aggregation. Advocates consider it the plan’s most important element. It’s also pretty complicated. Here are some basics.

The City Council is taking a vote Thursday to tell Mayor Kevin Faulconer it really, really wants him to get cracking on passing the Climate Action Plan.

The plan is basically a bundle of policies meant to get the city to cut 49 percent of its greenhouse gas emissions by 2035. It was aggressively pushed by Council President Todd Gloria when he served as interim mayor, and the Council is holding a vote to reiterate that it likes the plan and wants to see it approved. Soon.

Faulconer’s staff has responded by matter-of-factly saying: Yeah, relax, we’re working on it.

“(The mayor) has taken multiple steps to make sure it reaches a public hearing in spring of 2015, which is the same timeframe that was expected under the prior, interim administration,” said Mike Hansen, Faulconer’s head staffer on land use and environmental policy, at a July 23 committee hearing.

The plan would, among other things, set up steps to get the city to use 100 percent renewable energy by 2035, with an emphasis on local sources.

Meeting that goal requires something called Community Choice Aggregation. Advocates consider it the plan’s most important and essential element.

It’s also pretty complicated. Here are some basics.

What Is It?

Community Choice Aggregation is meant to give residents a chance to use more renewable energy in their homes, rather than just having to use whatever type of energy San Diego Gas & Electric gives them.

Under a 2002 state law, cities and counties are allowed to form organizations called Community Choice Aggregators, or CCAs, that are technically independent entities but have a board of directors often composed of the City Council members or county supervisors in the jurisdiction it covers.

Those organizations then go out into the energy market and buy enough energy from companies that sell it to provide for all their residents.

Then residents can choose from a few energy packages based on price and the share of renewable sources within it. Someone to whom the environment is very important could opt for all renewable energy. A similar person on a tighter budget could choose a package with 50 percent renewable energy.  They could also opt out of the CCA and stay with the previous utility provider.

Energy delivery would still be handled by San Diego Gas & Electric. The energy would still run through their existing distribution system, they’d still handle billing and they’d still respond to outages.

The idea is that by taking the buying power of 1.3 million people, the city can negotiate really low rates with an electricity company that would like to get a piece of all those customers.

And, it can do so while giving those residents a choice to use cleaner energy sources.

State law says SDG&E needs to provide 33 percent of its power through renewable energy by 2020, which it’s on track to do.

But the Climate Action Plan sets a goal of 100 percent renewable energy by 2035. And since the city can’t dictate to SDG&E what type of energy it uses, it says it needs to take the job over for itself.

Where Else Is This Happening?

There are CCAs in Sonoma and Marin Counties already, and the city of Richmond joined Marin’s CCA after it was up and running. That could happen here too: once set up, Lemon Grove, Coronado or some other city could decide to join.

Six states have authorized CCAs or something similar, including Illinois, where Chicago has had one in place since 2012.

What’s Next?

There’s a feasibility study going on right now that would look into basic stuff, like making sure setting up a CCA can actually save money and provide for a more diverse mix of energy sources. That’s a necessary step before the city can establish a CCA at all. The goal in the Climate Action Plan is to have one set up by 2020.

The feasibility study is being done by a private group, but the city could sign on to it or pay for one of its own.

The entire Climate Action Plan itself still needs to go through environmental review before it’s eligible for a City Council vote. The mayor’s office says it intends to hire a consultant to run the environmental review this fall so it can have a public vote by spring, but the Council is getting antsy and wants evidence the process is moving.

Meanwhile, there’s a bill in Sacramento that could weaken the whole thing. Right now, state law says when a new CCA is set up, residents of the jurisdiction are automatically part of it, unless they opt out. A law working its way through the state house pushed by Democrats in the Assembly would have flipped that, and make it so you have to opt in to the program.

Since that would have required an extra level of participation, it would have meant CCAs losing one of their primary strengths: the huge buying power that comes with having so many customers.

That part of the bill has been removed, however, and now it’s focused on increasing the amount of disclosure CCAs need to make about their energy sources.

San Diego’s Toni Atkins, speaker of the Assembly, favors the legislation, and says it will force CCAs into being more transparent.

“California CCAs could legally tell their customers that they are providing green power when in fact most of the energy could be from non-(renewable sources),” she wrote in a letter to CCA-supporting constituents.

Advocates are still concerned, however, saying the bill would now force CCAs to provide customers who ask with specific rate quotes for five years, while normal utilities could provide projections.

But for now, the City Council is here to publicly remind you that it would really like to get this show on the road.

Correction: This post initially misstated the current state of AB 2145, the state law that could add new regulations on CCAs.
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