Solana Beach embarks on new energy future

Solana Beach is on its way to becoming the first jurisdiction in San Diego to move toward an energy alternative to SDG&E, striving for the promise of cheaper electricity rates, greater local control and a higher percentage of renewable energy.

In a historic 4-1 vote on Wednesday, May 24, the Solana Beach City Council launched into the exploratory phase of a three-phase plan to shift Solana Beach’s 7,800 energy customers out of SDG&E’s monopoly and into city-run community choice aggregation (CCA).

The vote initiated contracts with two energy consulting firms — The Energy Authority (TEA) to run operations and Calpine (formerly Noble Energy) to handle data management. The city would set its own energy rates and run the CCA as a non-profit, with any surplus revenues going into a “lockbox” reserved for purchasing energy or lowering residents’ rates.

The council made plans to avoid exposure to financial risk; throughout the first phase, the city can abandon the CCA entirely without having to pay its consultants a dime.

Phase One of the program will last roughly six months, during which time the consultants will delve into regulatory affairs, develop an implementation plan, conduct a technical study and, most importantly, embark on a wide-reaching campaign to teach residents about their options and opportunities under the proposed energy regime.

If the city does follow through with a CCA, it would form a separate entity — similar to its sanitation department — and buy energy from wherever it pleases and SDG&E’s infrastructure to deliver energy. All Solana Beach residents will be automatically enrolled in the CCA and will be able to opt out at no cost if they prefer to retain their SDG&E service.

Workshops and public forums could start as early as this month. That information-gathering will be crucial, said Solana Beach Mayor Mike Nichols, to giving the council the confidence to move on to the plan’s later phases.

“Time will tell,” he said. “The only way to do that in a smart and thorough manner is to enter into Phase One to find out what that means. I’m hoping all the answers will come back and we’ll be able to keep the ball rolling. Let’s see how this goes.”

In Phase Two — slated to take six months to a year — the city will set rates and identify energy sources. If the city chooses to back out then, the most it would owe TEA and Calpine is $156,000.

Phase Three would see the CCA in full operation for up to five years before the contract needs to be renegotiated.

After speculating that the prospect of CCAs is already compelling SDG&E’s parent company, Sempra Energy, to offer more renewable power, Councilman David Zito started to make the motion for the vote. But Councilwoman Judy Hegenauer — an avid CCA advocate prior to joining the city council this year — chimed in first, seizing the historic moment.

“I think I’m going to cry,” she said before uttering the formal motion.

Once the vote went into the record books, a round of applause went up from the two dozen supporters and activists looking on — many of whom had spent many an evening at city hall during Solana Beach’s six-year saga to find energy alternatives.

“You guys are paving the way for every other city in the region. That’s a legacy,” said Nicole Capretz, executive director of the San Diego-based Climate Action Campaign and a member of Solana Beach’s climate advisory board. “You will all be remembered for this vote. You will have moved us forward.”

While Solana Beach is the first jurisdiction in SDGE’s 4,000-square-mile service area to break away, other parts of California have gotten further along. Nine cities in California have created their own CCAs, none of them south of Los Angeles.

Del Mar and Encinitas are exploring their own CCAs, and the city of San Diego is expected to take up the issue after the summer. San Diego County, meanwhile, voted earlier this year to hold off on a feasibility study in order to see how other jurisdictions proceed.

The council’s lone dissenter was Councilwoman Ginger Marshall, who peppered consultants with questions all night and cast doubt on the presumption that a CCA would necessarily lead to cheaper rates or the city using a higher percentage of renewable energy.

Without switching to 100 percent renewable energy, Solana Beach will not be able to meet the goals laid out in its draft Climate Action Plan, the first draft of which was opened to public two weeks ago.

Recent Solana Beach resident Bob Wilcox — a postdoctoral researcher into fusion energy — urged the city to maintain its long-term resolve to prioritize low-emission energy, even if it ends up costing more in the decades ahead.

“This is a relatively affluent community, and we need to recognize that responsibility and lead by example,” he said. “The first 50 percent or so of carbon reductions is relatively easy, relatively cheap. As we get closer and closer to zero emissions, it’s going to get more expensive, and we need to recognize that and be prepared that we’re going to need to spend some money on storage, spend some money on pumped hydro[electric], things like this, in order to get our emissions much lower.

“And this might wind up being more expensive than what we could get through SDG&E, but I encourage the city to go forward with the CCA and be prepared for the sort of difficult decisions that will be made in the future as we push closer and closer toward zero emissions.”