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City renews contract with CCA lawyer

SOLANA BEACH — With a not-to-exceed contract on the verge of being exceeded, council members at the April 12 meeting continued an agreement with the law firm that is helping the city develop a Community Choice Aggregation (CCA) program.

Stephen C. Hall from Troutman and Sanders LLP, which provided legal counsel for the five existing CCA programs in California, was initially retained for an amount not to surpass $25,000.

During his tenure, Solana Beach received three responses to a request for qualifications and proposals from consultants to create, finance and administer a “turnkey” CCA program “that could provide the community with greater choice in the purchase of electricity with no cost or financial risk” to the city’s general fund.

Assistant City Manager Dan King said Hall helped assess the proposals and conduct interviews.

“We had no way of knowing how complex the process would be or how much (money) we were going to need,” King said. “But it was important that we had (Hall) onboard to protect the city and ensure the CCA is separate from the city. Hopefully we’re nearing the end.”

Since late last year, the team has been negotiating a contract, which could be presented to City Council for approval next month, with The Energy Authority/Noble Energy Solutions, the preferred consultant.

Hall has provided the city “with the needed expertise in the negotiations and for the potential development of the CCA,” the staff report states.

CCA is a state law that allows cities, counties and other authorized agencies to buy and sell power while investor-owned utilities — in this case, San Diego Gas & Electric — continue to deliver it.

The programs are considered an effective way to reach greenhouse gas emission reductions mandated by the state because they generally purchase and supply renewable electricity.

Solana Beach has been working on establishing a CCA program since 2011. Once a consultant is onboard the process will be conducted in three phases. The first is development, which is expected to take about six months.

It includes community and local government outreach and a feasibility study that will be in addition to one already conducted that concluded CCA is viable in Solana Beach, despite its small size, city officials said.

The next step would be the program launch, which could take up to a year. At this stage an implementation plan must be submitted to the Public Utilities Commission. During that time no less than four notifications must be sent to ratepayers to advise them CCA is being launched.

There is an opportunity to opt out at any one of those points. City Manager Greg Wade said he would recommend increasing the number of notifications to five or six.

The final phase includes developing an operation budget and staffing.

The new agreement with Troutman and Sanders does not include a not-to-exceed condition. Hall will be paid $625 per hour, with money coming from the legal services budget in the general fund.

King said there are “sufficient funds” in legal services, which began the current fiscal year that ends June 30 with a $500,000 budget.

If CCA is launched, “these costs will be recoverable through revenue received” by the program, the staff report states.