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North County cities of Del Mar, Solana Beach and Carlsbad are preparing to launch a new community choice energy joint powers authority on May 1. File photo
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Carlsbad approves power supply options for Clean Energy Alliance

CARLSBAD — The Clean Energy Alliance is preparing to set its own rates in February ahead of its May 1 launch to provide at least 50% green energy to three North County cities.

Before the rates are set, each city — Carlsbad, Del Mar and Solana Beach — must each bring back to the CEA board its options for power supply default allowing ratepayers to choose their preference. Carlsbad recommended three of four products to be presented for consideration by the multi-city community choice energy provider, which include Clean Impact, Solana Energy Alliance (SEA) product match and Green Impact.

The Local Impact, an opt-down product offering lower rates for lower-income ratepayers and small businesses with lower renewable thresholds, was not approved in the 3-2 vote during its Jan. 12 meeting. Mayor Matt Hall and Councilwoman Cori Schumacher were against it.

Councilwoman Teresa Acosta championed the three approved products but did not support the Local Impact program as an additional offering at this time.

However, Clean Energy Alliance CEO Barbara Boswell said low-income ratepayers, who meet the criteria, will still be allowed to continue their participation in statewide programs and can roll those programs over to the energy provider.

Residents will start receiving notices about the transfer to Clean Energy Alliance in March but may choose to opt-out and remain with SDG&E. Ratepayers may also opt-out after Clean Energy Alliance launch on May 1.

“If the number is too drastic, you’re going to lose a lot,” Hall said of the initial products and losing ratepayers. “For some businesses, bills run in the tens of thousands of dollars. For those businesses struggling, the more tools we give them, it shows that we are at least reaching out.”

The Clean Impact default option calls for 50% renewable energy, the Solana Energy Alliance match offers 50% renewables and 75% carbon-free and the Clean Impact is a 100% renewable energy option. The Local Impact option would not have been a default product, but rather eligible individuals could choose it if they meet specific criteria.

The current minimum state requirements under the Local Impact are 36% renewables for 2021 increasing annually to 60% by 2030.

“Alternative products agencies may select,” Boswell said. “The optional products ratepayers can select either to opt-up or opt-down depending on the default power supply their community has selected.”

The debate centered on the Local Impact as Hall said it would allow struggling businesses to have cheaper electricity bills, thus impacting jobs, while Councilwoman Cori Schumacher added in addition to small businesses the product would also help low-income residents and providing an equitable agency.

According to Hall, 72% of energy used in the city comes from businesses, while 12.15% of Carlsbad residents are enrolled in the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) programs. The CARE program offers 30% off an electric bill, while the FERA discount is 18%, according to Boswell.

While the state minimum is 36%, Hall said Clean Energy Alliance can opt to go with a higher percentage, but lower than 50% to help those struggling. Using 36% as the example, Boswell said the energy provider would cover the cost difference to reach the 50% threshold, noting there are no current state incentives or grant programs to assist in funding.

Acosta said Clean Energy Alliance can find other options outside of mandating an additional incentive such as lobbying for state funds or creating low-income programs in the future.

“They are created to help give us a greener option,” Acosta said of community choice aggregation (CCA). “I feel very strongly that CCA’s were set up to be a green product than what’s out there and opting out is the cheaper alternative or less green alternative.”

Boswell said opt-outs from community choice aggregation programs run between 5% to 7%, while Solana Energy Alliance has 90% participation.

As for the rates, Boswell said Clean Energy Alliance will set those during its Feb. 28 meeting. The energy provider does not require approval from the California Public Utilities Commission, unlike other utility companies such as SDG&E.

The Clean Energy Alliance board is expected to approve its power supply product options on Jan. 21 and its default power supply during the March 18 meeting.