Del Mar remains committed to Clean Energy Alliance

Del Mar’s city council voted 4-1 Thursday, April 16, to remain with the Clean Energy Allliance, a community choice energy program that also includes the cities of Solana Beach and Carlsbad.
(Luis Sinco/Los Angeles Times)

The Del Mar City Council voted 4-1 to affirm its commitment to the Clean Energy Alliance, the new Community Choice Energy Program scheduled to begin delivering energy to local residents and businesses next year.

With a key deadline approaching, council members held a special meeting on April 16 to discuss the merits of moving forward. The CEA, which will serve the cities of Del Mar, Solana Beach and Carlsbad, has to submit a resource adequacy forecast to the state’s Public Utilities Commission by April 20.

Before that filing, member cities would have been able to withdraw from the CEA without giving a one-year notice and incurring additional expenses, according to city staff.

Council members also discussed the possibility of delaying the CEA’s launch date by one year.

“That may be something that we need to do,” said Del Mar Mayor Ellie Haviland, who represents the city on the CEA’s board of directors. “It’s way too soon to make that call.”

The three-member CEA board, which also includes Solana Beach City Councilwoman Kristi Becker and Carlsbad City Councilwoman Cori Schumacher, would have to make that decision. Board members have not yet discussed that option at their monthly meetings.

Due to the novel coronavirus pandemic and economic downturn, some residents wanted the city to hold off on committing to the CEA. Del Mar is expecting a precipitous drop in revenue from hotel and sales taxes.

The special meeting was held remotely and livestreamed on the city’s website. During a period of public comments that were read into the record by the city clerk, Del Mar resident Laura DeMarco compared the impending financial questions to the Titanic.

“Like the Titanic, you are speeding through dangerous and uncharted waters,” she said.

But other residents, including Betty Wheeler, said it’s important to forge ahead with the CEA so the city can continue reducing greenhouse gases and meeting its other environmental goals.

“We pay a huge price for failing to follow science,” Wheeler said.

Del Mar City Councilman Dwight Worden, who serves as the city’s alternate on the CEA board, said dropping out of the Community Choice Energy program isn’t “financially warranted.”

Each of the three member cities contributed $150,000 in startup costs for the CEA, to be repaid from future CEA revenue. But because of the COVID-19 crisis and budgetary constraints cities are facing, the CEA board might look to reimburse each city sooner.

Additional startup costs will be funded by loans or lines of credit that the CEA board will consider at its next meeting on May 21.

The CEA board will host a workshop on May 7, either online only or at Carlsbad City Hall, depending on public health orders, and a vote on the fiscal year 2020-21 budget is scheduled for June 18.

Even with the current state of the economy, CEA staff members project that over the next five years, the program will generate enough revenue to cover expenses, build reserve funds and leave a net surplus for board-approved discretionary spending. The program is also still anticipating that it will be able to offer a slight discount compared to San Diego Gas & Electric rates.

Worden added that if the CEA goes bankrupt, the member cities would not face any financial liabilities.

Deputy Mayor Terry Gaasterland, the lone vote against the motion, said she was wary of the projections. She added that it may not be “financially prudent” to proceed under the economic circumstances.

“We are in a financially uncertain and unsound time in Del Mar and will be for the next year,” she said.

With SDG&E planning to eventually discontinue energy procurement, Councilman Dave Druker said he still wants the city to be part of a Community Choice Energy program that offers more local control. But he also mentioned the possibility of postponing the CEA launch year because of the economic downturn spurred by COVID-19.

“We’re in very tenuous times right now,” Druker said. “We don’t know what’s going to be happening.”