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. 20, while Carlsbad and Del Mar city councils will receive it this week and in early March, respectively. The report was conducted by EES Consulting, Inc., in Kirkland, Washington.
Currently, there are 19 operating CCEs throughout the state covering dozens of cities and counties. 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.
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. 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.
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, but the technical study conclusions are based on the current exit fees.
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.