DEL MAR — Residents of Del Mar, Solana Beach and Carlsbad were given the first look at energy rates they will receive upon the Clean Energy Alliance’s (CEA) launch in May as well as power supply options their cities will have to choose from.
During a regular meeting of the CEA board, it was announced the initial rates would be set at a level sufficient to ensure enough revenue to fund the power supply, make debt payments and administrative costs and establish a 5% operating reserve.
Directly comparing their rates to current SDG&E rates, the board established their summer rate at $.12627 per kilowatt-hour (kWh) with their winter rate at $.04600 per kWh. CEA says these rates are lower than current SDG&E rates with differences of about 25% and 47% for the winter and summer rates respectively.
These are not the savings that customers within the new CEA will see upon its launch. SDG&E will also be taking monthly “exit fees” from customers automatically enrolled in the CEA.
“SDG&E has made contracts and commitments assuming they would be serving the customers in Carlsbad and Del Mar [and Solana Beach],” said the board’s Interim CEO Barbara Boswell. “They now have these contracts without customers and they need to be liquidated in the open market.”
These fees are charged monthly to CEA customers on a per kWh basis and are another line item on their monthly power bill. For Carlsbad and Del Mar residents that rate is expected to be $.03769 per kWh.
Solana Beach, which had already formed its own community choice energy program called Solana Energy Alliance in 2017, will continue paying the $.04340 per kWh fee it has had since Solana Energy Alliance first launched.
“The exit fees last for as long as there are contracts within the portfolio for what would have been the benefit of those customers,” Boswell said. “It’s estimated that it will be about 10 years before we really start seeing a significant decrease in those fees.”
The board also moved forward with several energy options for cities to consider before the CEA launches. These options include a default 50% renewable product, a “Green Impact” 100% renewable energy product that can be a voluntary opt-up for customers or the default if chosen by the city and a 50% renewable and 75% carbon-free product that is comparable to the energy product currently being offered by the Solana Energy Alliance.
Also considered was a “Local Impact” option for low-income customers or small businesses affected by the COVID-19 pandemic. This product would only meet the minimum renewable energy requirements for the state and would have been aimed to offer a lower-cost option. The board found the savings for that product to amount to only about $.74 a month based on average energy usage.
“Due to the savings being so minimal, staff is not recommending this program at this time,” Boswell said. “It’s just not going to make an impactful difference for the customer.”
Chair Kristi Becker agreed with that recommendation but indicated the board will continue to look for ways to help those who need assistance.
“Unfortunately it doesn’t look like it’s worthwhile,” Becker said. “I know that in the future we will keep our eyes open and will continue to analyze that. We’ll be able to craft a better program that’s gonna respond to our community needs.”
The CEA board will next meet in a special meeting on March 25.