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Yolo County adopted its Climate Action Plan (CAP) in 2011. The Cap included direction to pursue a Community Choice Aggregation (now Community Choice Energy – CCE) program. In simple terms, CCE is a partnership with Pacific Gas and Electric wherein the County manages the purchase of electrical energy used by customers in the unincorporated portion of the county and determines the rates charged for this energy. The utility retains responsibility for transmission and distribution, as well as billing, repair, and other administrative services.
Establishing a CCE would enable the county to select a greater proportion of renewable energy and thereby contribute nearly one-half (45%) of the greenhouse gas reduction targets required by the CAP.
In furtherance of the requirement to establish a CCE, and recognizing that the relatively small population of the unincorporated area of the county might make it difficult for the county to form a CCE on its own, the county convened a working group consisting of representatives from each of the cities to discuss forming a countywide CCE. This effort was paused while the City of Davis explored establishing a municipal utility instead of joining a CCE. After extensive analysis, Davis decided to not opt for a public utility, turned its attention back to CCE, and formed a Community Choice Energy Advisory Committee (CCEAC) to determine its feasibility. Yolo County was invited to designate an ex officio representative to this committee. John Mott-Smith was appointed and serves in this capacity.
The CCEAC formed five subcommittees to examine existing CCE’s, evaluate legal and policy issues, develop estimates for the cost of forming and operating a CCE, developing an outreach program to take the temperature of the community in terms of support for a CCE, and to assist staff in developing an RFP soliciting bids for a Technical Study.
At all points in the work of the CCEAC Yolo County was included as a full participant in discussions and decision and the committee as a whole was consistently supportive of the possibility that Yolo County might be included in a CCE formed by the City of Davis.
Most specifically, the committee identified three possible options for forming a CCE. Option 1: The City of Davis would form its own CCE, leaving open the possibility that Yolo County, or other cities in Yolo County, might join in the future. Option 2: The “Davis Plus” option that would include Davis and Yolo County (and/or another possible jurisdiction). Option 3: Davis would join with an existing CCE such as Marin Clean Energy (MCE). Under Option 3 Yolo County could also apply for membership in MCE.
A report to the Board of Supervisors in October by Civic Spark interns recommended that the county continue to monitor CCEAC’s efforts and “If the pursuit of a CCA option appears to be more imminent, it would be beneficial to engage in public education/outreach with the unincorporated community now as well as to assess the community’s initial readiness to switch to an alternative energy option.”
The City of Davis and Yolo County separately submitted a “Letter of Interest” to MCE as a noncommittal placeholder to keep open the possibility of exercising Option 3. MCE has established a formal procedure for application to join its joint powers authority, the key element of which is a March 31, 2016 deadline to submit a binding application.
Both the city and the county also submitted an application to PG&E for electrical load data to be used to analyze potential costs and rate opportunities should a CCE be formed.
The CCEAC recommended the City Council affirm its intention to form or join a CCE and the council agreed, subject to two conditions: one, that there be a more formal technical and financial analysis done and, two, that the CCEAC develop and implement an outreach plan to determine the level of public support in Davis.
Subsequently, the CCEAC developed and issued an RFP for a technical analysis. Three bids were received and the city, upon the unanimous recommendation of the CCEAC, in early September chose The Energy Authority (TEA) to conduct the analysis.
The RFP requires that the technical analysis include, for each of the three options: load and demand analysis, power price simulations that indicate various potential costs to purchase power, administrative costs and governance structure, financing, impacts on greenhouse gas emissions, potential rates and costs to rate payers, an estimated number of customers that might choose to “opt out” of the CCE and stay with PG&E, potential energy efficiency programs, opportunities to develop local renewable energy resources, employment impacts, and other elements necessary for a fully informed decision by policy makers.
The consultant has been making weekly reports to the CCEAC Technical Advisory Committee. MCE and the Local Energy Aggregation Network (LEAN) have been assisting the City in evaluating TEA’s work and progress. It should be said that the CCEAC has the benefit of its own Technical Advisory Committee comprised of experts in the field of energy management and policy.
The draft report is expected to be available to the CCEAC in mid to late January and to be presented to the Davis City Council in February or March. Information to date includes the surprising determination by the consultant after analyzing the load data provided by PG&E for Davis and Yolo County that Yolo County accounts for approximately half the electrical load. This is largely a result of agricultural and industrial energy use in the county, but also a large contribution from the residential, small commercial, and street light/stop light segments.
Meanwhile, as Davis, Yolo County, and other jurisdictions around the state are analyzing the technical and financial feasibility of CCE, the California Public Utilities Commission is considering policies suggested by the utilities that could have a significant negative impact on both existing and future CCE’s in terms of being cost competitive with utility rate structures.
For example, PG&E has proposed doubling the current “Power Change Indifference Adjustment” (PCIA) --- commonly referred to as “exit fees” paid to the utility by customers departing to join a CCE. This is a very technical issue but the bottom line is that if the proposal is accepted by the CPUC it could detrimentally affect efforts to establish a CCE in Davis and/or Yolo County. The CPUC is scheduled to consider PG&E’s request on December 17, 2015.
Based on the above discussion, the Board sent a letter to the CPUC expressing its serious concern that the potential doubling of the PCIA could substantially interfere with the county’s efforts to form a CCE and that this would have potentially devastating effects on the county’s ability to meet its greenhouse gas reductions as identified in its Climate Action Plan (Attachment A).
As an immediate next step in the County's efforts to establish a CCA, staff is recommending that the Board Direct staff to initiate outreach and education efforts to residents and businesses in the unincorporated area of the county to assess public support for forming or joining a CCE, with specific outreach to the farming community. |