The Solana Beach City Council will hold a hearing March 11 over rates for Solana Energy Alliance customers, following regulatory changes that will impact the program’s finances.
Through its default product, the Solana Energy Alliance has provided customers with 50% renewable energy, 75% carbon-free at a targeted 3% savings compared to San Diego Gas & Electric rates. Maintaining those figures would result in a negative cash balance in 2021, current projections show.
At their Feb. 12 meeting, council members reviewed possible ways to modify the targeted rate discount and percentage of carbon-free energy to maintain a positive cash flow.
At approximately $5.2 million, SEA revenues were .5% more than projected for the 2018-19 fiscal year; the $5.21 million in expenditures were 7.7% higher than expected, driven mainly by pension and other post-employment benefit costs, according to city staff.
Solana Beach City Councilman David Zito said he thinks maintaining the city’s environmental goals is the most important objective, even if it involves sacrificing the rate discount.
“The money that we’re saving really hasn’t been, at least from this council’s perspective, the primary objective of the program that we started,” he said. “We started the program because we wanted local control, we started the program because we wanted to meet our climate action goals and we wanted to drive greenhouse gas-free energy generation.”
City Councilwoman Kelly Harless added that “even if there’s not a rate reduction, as far as I’m concerned we’ve met our goals.”
Solana Energy Alliance was the first Community Choice Energy program in San Diego County when it launched a few years ago. CCE programs offer customers more renewable energy, typically at slight discounts compared to their traditional utility provider, such as SDG&E, which has announced plans to discontinue energy procurement in the years ahead.
Solana Energy Alliance customers will switch to the Clean Energy Alliance, a new Community Choice Energy program formed through a Joint Powers Agreement among the cities of Solana Beach, Del Mar and Carlsbad. The SEA’s three-member board has been holding monthly meetings since late last year, and plans to begin delivering energy to local residents and businesses in 2021.
“I think we’ve proven that it can be done and while we’re just not exactly where we should’ve been, I don’t think it could have ever been anticipated that these regulatory changes would have been so severe,” said City Councilwoman Kristi Becker, who represents Solana Beach on the CEA board.