REGION — A draft technical feasibility study released on Feb. 15 reveals Community Choice Energy is financially possible and could yield considerable benefits.
Four cities — Carlsbad, Encinitas, Del Mar and Oceanside — partnered in the study to determine whether an alternative power provider was an option.
The Encinitas City Council received the report on Feb. 13, while Carlsbad, Oceanside and Del Mar city councils will receive it in the next week and in early March, respectively.
The report was conducted by EES Consulting, Inc., in Kirkland, Washington. Each of the four cities contributed to the costs of the report, which totaled $104,515.20.
Oceanside’s share was $41,689.60 followed by Carlsbad at $30,774.86, Encinitas at $20,721.09 and Del Mar at $11,329.65.
Currently, there are 19 CCEs throughout the state covering dozens of cities and counties, according to the Clean Power Exchange website.
The study also looked each city individually, and whether they could provide a stand-alone CCE, also known as Community Choice Aggregation, to its residents. Only Del Mar, due to its small population, was found not to be feasible.
If all four cities were to band together, the start-up cost would be roughly $16 million.
Currently, only Solana Beach has a CCE in San Diego County, although several other cities including San Diego are exploring the option. Other than Solana Beach residents, residents and businesses must purchase their electricity from San Diego Gas & Electric.
CCE advocates consistently champion adding competition to the energy market, which results in financial savings for CCE customers and more local control over power supply sources and rate levels.
The report for the four cities shows an overall 2 percent bill reduction, while also building reserves for local programs or additional rate reductions, according to the study.
The study measured various issues such as exit fees (known as the Power Charge Indifferent Adjustment), renewable energy sources and future generation, non-renewable energy costs, capacity, reserves and operating, administrative and start-up costs. The latest ruling from the California Public Utilities Commission on exit fees has led to decreased revenue in Solana Beach, The Coast News reported in December.
Additionally, the study found start-up costs could be “fully” recovered in the first three years and would help in cities meeting their Climate Action Plan and state goals of reaching 100 percent renewable energy by 2035.
For projected costs, the study looked at market purchases over a 20-year period at $0.0471 cents per megawatt per hour, assuming a 4 percent discount rate. Renewable costs, however, vary from $0.035 cents to $0.06 cents per megawatt per hour for wind and solar, while geothermal power costs between $0.07 and $0.10.
Geothermal, though, holds a higher capacity, thus can bring additional value to a CCE for base load resources.
According to Jason Haber, Carlsbad’s assistant to the city manager, each City Council has several options. In Carlsbad, the council is expected to act on an agenda item regarding governance, which will be another report detailing those options, such as forming a joint-powers agreement, joining an existing JPA and how voting structures and other dynamics may work.
The final technical study is expected to be released in April, Haber said. He added these early reports and actions do not constitute any city approving a CCA. Much more information is needed, he stressed.
Of the four cities, Carlsbad consumes the most power per year, at 735 gigawatts, followed by Oceanside (703), Encinitas (258) and Del Mar (30).
According to the study, a four-member JPA is financially viable and suggests a limited number of board members.
“A JPA of this size is ideal for allowing other San Diego County cities that create their own CCEs to join,” the study said. “A JPA provides clear financial protection of cities’ general funds from CCE obligations. A JPA could apply to the CPUC for energy efficient program funds on behalf of the cities.”
A multi-city public workshop is scheduled for 6 p.m. March 14 in Carlsbad.