CARLSBAD — The Clean Energy Alliance received more good news as a peer-reviewed study release last week indicates no “fatal flaws” with the newly formed Community Choice Aggregation joint powers authority.
The review was conducted by Pacific Energy Advisors, Inc., while the Carlsbad City Council also approved a $150,000 advance to CEA, which is reimbursable, according to Jason Haber, Carlsbad’s assistant to the city manager.
The newly formed JPA includes Carlsbad, Del Mar and Solana Beach. The CEA board will hold its second meeting on Nov. 19 and must file its implementation plan to the California Public Utilities Commission by Jan. 1, 2020, to launch in 2021.
“In general, the Study (sic) provided a comprehensive analysis of the revenues and costs that would be associated with implementation and operation of a CCA Program (sic) serving electric customers within communities represented by the Partners,” PEA’s review reads. “In particular, projected power supply costs, the largest component of a CCA program’s anticipated operating budget, were observed to be fairly conservative (meaning somewhat higher) than PEA’s current overall power supply cost forecasts, which suggests that eventual operating outcomes for the prospective CCA program could be somewhat better than reflected in the study (based on current market conditions, which are subject to change).”
The original feasibility study detailed potential risks and concerns associated with Community Choice Energy, or CCE, including power supply costs, financial risks, customer participation and the availability of renewable power. The CCE is an opt-out program, meaning ratepayers must decline participation with CEA to stay with San Diego Gas & Electric for their power supply.
The study revealed when taking these variables into account, projected costs under most combinations of variables and potential market conditions will not negatively affect CEA rates compared to SDG&E’s, while risks can be mitigated.
The peer review showed the formation of a CCE is financially feasible; financial benefits include electric retail rates are 2% lower compared with SDG&E rates; local control over power supply sources, rate levels and customer programs; and CCE start-up costs could be fully recovered within the first three years of CCE operations.
After cost recovery, revenues generated by CEA would be used to finance a rate stabilization fund, new local renewable resources, economic development projects and lower customer electric rates.
Each of the three cities will pay the $150,000, although the costs may end up lowering if other municipalities join the CEA. Oceanside joined in the initial feasibility study, while Escondido, San Marcos and Vista are currently undergoing a study.
Haber reported the term of the $150,000 is three years at 0% interest. Carlsbad’s funds were allocated from the city’s contingency fund.
“That would be within three years from the program launch,” he said.
To start, 50% of the CEA’s power will be from clean or renewable sources with a target of 100% clean and renewable power by 2035.
Councilwoman Cori Schumacher, who was elected chair of the CEA board, said the board is committed to hitting the tight deadlines.
“We actually have a firm that we have on board to help us within the dynamic regulatory environment,” she said. “That has actually positioned us to be the one single voice from all of San Diego County at this point at the table at the CalCCA.”
The CEA is an affiliate member of CalCCA, Haber said, noting CalCCA is an advocacy and regulatory agency serving all CCAs in the state.
Opt out. You know it is a bad deal when the cities automatically enroll everyone as a customer.
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