The Carmel Valley Community Planning Board supported community choice energy as a way for San Diego to promote cleaner energy and competitive energy rates at its April 27 board meeting. The vote for community choice was 9-1 with board member Kimberly Elliott voting against it.
In 2015, the planning board supported San Diego’s Climate Action Plan which calls for 100 percent clean and renewable energy and requires the city to reduce greenhouse gases by 50 percent by 2035.
“One of the key programs that’s going to get us to that 100 percent is community choice energy,” said Alicia Race, the community choice coordinator from the Climate Action Campaign, a non-profit organization doing a lot of education and outreach to help the city reach its goals.
The idea of community choice aggregation has spread throughout California—63 cities and nine counties have moved forward with community choice, including most recently Los Angeles County. Race said there’s a lot San Diego can learn from the “early adopters” like Marin County and Lancaster County, where residents have seen a 4.5 percent drop in their energy bills and the renewable energy content is higher.
San Diego City Council is expected to consider taking action on community choice this fall.
In February, the San Diego County Board of Supervisors voted not to go forward on a feasibility study on community choice aggregation, waiting instead to see how other jurisdictions fare. Currently Solana Beach is conducting a study on community choice and cities like Del Mar and Encinitas are also considering it.
Today, San Diego customers only have the one utility option of SDG&E.
“SDG&E has two roles, they purchase our energy and deliver that energy to our homes. Unfortunately the majority of that fuel that’s powering our lifestyles is still coming from dirty fuel sources and in San Diego we have the highest rates in California when it comes to our bills,” Race said.
Race said just as people can now choose how they watch or stream TV or who provides their cellphone service, San Diego residents should also have a choice when it comes to their electricity.
“We see community choice energy as a public and private partnership between the city and the utility. With community choice, the city would set up a non-profit entity that would take over purchasing that power and because of the Climate Action Plan, they would be buying the fuel from renewable energy sources. SDG&E would continue delivering that power over their lines and their infrastructure which is where they make the majority of their money and that power would still go to your home,” Race said “It shifts our power from a for-profit to a non-profit model, breaking up the monopoly and giving us control here locally and accountability to set our rates.”
Customers would always have a choice to opt out as well.
Race said right now millions of dollars are leaving San Diego to pay for electric generation elsewhere and over time, a local community choice entity can start to build infrastructure here and purchase power locally.
“Ninety percent of buildings in San Diego are solar viable so this could be an incentive to start harnessing that energy,” Race said, noting that would led to an increase in local jobs and economic development.
Environment California Research and Policy Center’s “Shining Cities” report recently ranked San Diego first in the nation in solar installation with 303 megawatts of installed solar capacity. Researchers said that San Diego currently has enough solar capacity to power the equivalent of nearly 76,000 homes.
One resident said it might be worthwhile for the utility to present their reasons for opposing or supporting community choice. Utilities are barred from using ratepayer dollars to lobby on programs like community choice however state law does allow investor-owned utilities to set up independent, shareholder-funded marketing districts. SDG&E’s parent company Sempra Energy has developed the marketing arm Sempra Services Corporation.
At February’s supervisor meeting, Frank Urtasun of Sempra Services Corp recommended that the county refrain from adopting community choice as the best practice on renewable energy until all available alternatives are explored. He argued that community choice can discourage investments in renewable projects and that there’s no guarantee that it will result in more renewables and lower emissions.
One resident shared concerns about the infrastructure costs now that there’s more solar now than anyone thought there would be.
“The cost of solar is coming down. When a developer builds a new community, he puts solar on each of the 100 homes. The homes pay zero to the utility, the utility has to put all the distribution in, has to put in all the backup power for night and cloudy days and then has to buy a $10 million battery pack because the surge is so great. So then they’ve got a $30 million investment in these 100 homes and they’re paying zero,” the resident said. “It’s a broken model which is way beyond what she’s trying to solve and way beyond what your committee is trying to solve when it gets to electric generation, electric distribution, solar, who pays and who doesn’t pay.”
The resident said he has solar and he doesn’t pay— he gets a credit.
Board member Laura Copic argued for the most part people who have solar are not paying zero, they have to pay to connect to the grid and store energy.
Copic said she sees a lot of value in transitioning from a for-profit to a non-profit.
“Whenever there is an issue like a fire or nuclear plant issue, all of the costs associated with those things seems to fall to the burden of the ratepayers and never to the investors. It is the company’s job to maximize shareholder value, however the shareholder does take on a risk and that never seems to be the case with SDG&E,” Copic said. “In that sense I would like to see a competitor.”
As Race said competition is the “American way”, people like having options.
“We see this really as adding an option, something that’s popular and moving across the state, that will help us get to that 100 percent goal,” Race said.