County to join 5-city CCA as alternative to SDG&E. Will it bring lower electric rates?
Article by: Rob Nikolewski
The San Diego County Board of Supervisors voted Tuesday, Aug. 31, to join the larger of two local community choice aggregation programs to serve as an alternative to San Diego Gas & Electric when it comes to purchasing energy contracts.
The board, on a 3-2 vote, selected San Diego Community Power — a community choice aggregation program, or CCA, made up of the cities of San Diego, Chula Vista, La Mesa, Encinitas and Imperial Beach — over the Clean Energy Alliance that buys power for customers in the North County cities of Del Mar, Solana Beach and Carlsbad.
“For me in the final analysis, San Diego Community Power is going to make the biggest impact on achieving a cheaper, more equitable and more reliable clean energy future for our region,” said Supervisor Terra Lawson-Remer.
The move greatly expands San Diego Community Power, or SDCP for short. Before Tuesday’s vote, SDCP already anticipated being the second-largest CCA in the state, with about 772,000 customers by the time it adds residential customers next spring to its current municipal and commercial-industrial accounts. Now, it will add about 180,000 energy users in the county’s unincorporated areas.
“We’re really excited to have a new member,” said Joe Mosca, SDCP chair and also an Encinitas City Council member. Mosca said the organization’s size gives it economies of scale for lining up power purchase agreements. “We’re coming online with renewable energy projects and we’re doing it fairly quickly.”
The county will now proceed with signing a joint powers authority agreement with SDCP. The agreement will include language to protect the county’s general fund should the CCA ever run into financial difficulty.
Lawson-Remer was selected to be the county’s representative on the SDCP board, with Supervisor Nora Vargas serving as an alternate.
Created by the California Legislature to boost cleaner energy sources such as wind and solar at rates equal to or lower than investor-owned utilities, CCAs purchase power contracts for a given community. The decisions are made by government officials instead of the incumbent utility. In addition to purchasing power, community energy programs look to use the revenue they generate from customers to invest in renewable energy projects in their areas.
The establishment of a CCA does not, however, mean traditional utilities go away. SDG&E, for example, will still perform all of the tasks outside of power purchasing, such as transmission and distribution of energy and customer billing. There are more than 20 CCAs up and running across the state.
As is the case throughout the state, customers in San Diego County will eventually be automatically enrolled in SDCP but if they prefer to stay with SDG&E, they can do so for free.
Supervisors Joel Anderson and Jim Desmond voted no, with Anderson saying it should be “set in stone” that the county’s SDCP board representative come from a district with a large percentage of unincorporated residents. “Forty percent of my district is unincorporated,” Anderson said.
Lawson-Remer countered by saying residents who live in incorporated cities such as San Diego or Chula Vista pay the same SDCP rates as those who live in unincorporated areas.
In a presentation before the vote, county staff did not make a recommendation on which CCA the supervisors should vote to join, saying both “are in solid financial shape.”
Staff mentioned while the Clean Energy Alliance’s customer base of 59,200 is much smaller than SDCP, the county could have more say in power decisions because it would be the largest entity in the Clean Energy Alliance — something that appealed to Desmond.
“We’d be the big fish in the tank,” Desmond said. “Plus, by joining with San Diego, we’re making one huge conglomerate. We’re just going to be a mini-SDG&E.”
Staff said the language of the Clean Energy Alliance’s Joint Powers Authority was stronger than SDCP’s but said SDCP has 12 full-time employees and may grow to as many as 26. Board of Supervisors Chair Nathan Fletcher liked that.
“The ultimate, day-to-day administration of a (CCA) I think is better off being run by full-time permanent staff who have their full focus and attention there,” Fletcher said, adding that he thinks SDCP has a stronger renewable energy portfolio.
SDCP has recently signed three power purchase agreements totaling 300 megawatts of solar and 220 megawatts of energy storage — one project in Riverside County, another in Imperial County and earlier this month the county OK’d a controversial 600-acre solar and battery storage project in Jacumba.
Barbara Boswell, the interim CEO at the Clean Energy Alliance, said she was disappointed to come up short in the vote.
“We thought we were a very good match and a great option for the county and their unincorporated residents and businesses,” Boswell said, “but we support the expansion of community choice” with whatever CCA the county picked. Boswell said the alliance is still looking to expand to other cities, adding the group is in “initial discussions” with the city of San Clemente.
Earlier in the meeting, Anderson called for the board to delay taking a vote for 30 days to update a feasibility study on the potential risks and costs of joining a community energy program.
In June, a CCA in Riverside County — Western Community Energy — filed for bankruptcy, becoming the first CCA in the state to go belly-up.
Anderson also worried the original study did not properly take into consideration the costs of building long-duration energy storage systems. In addition, he questioned whether the residents in unincorporated areas who face hot summers and rely on electric heating during the winter have that much in common with CCA residents who live closer to the coast.
“I’m not comfortable moving forward with it,” Anderson said. “The reason why there’s not a whole slew of people speaking about this today is because they don’t even know this is happening.”
But Fletcher said the county discussed the CCA issue in detail in 2019 and earlier this year voted to move forward on making a selection between SDCP and the Clean Energy Alliance. “If we don’t act today, we’re going to be delaying this entire thing a full year,” Fletcher said. “This is the timeline.”
Anderson’s motion was defeated, 3-2, with Fletcher, Lawson-Remer and Vargas voting no.