North County energy program comes in 2.2% lower than SDG&E for most customers
Clean Energy Alliance offers lower power generation costs — but Solana Beach will pay more
A community choice aggregation energy program in North County anticipates offering a default product to most of its customers that is about 2 percent less expensive than San Diego Gas & Electric, with a higher percentage of renewable sources.
The Clean Energy Alliance — made up of the cities of Carlsbad, Del Mar and Solana Beach — will begin serving about 58,000 customers in May and June. As a CCA, it will replace SDG&E when it comes to purchasing power for those three municipalities.
SDG&E will still maintain other responsibilities, such as delivering energy, maintaining infrastructure (poles and wires) and sending bills to customers each month.
All three board members of the Clean Energy Alliance, known as CEA for short, voted Thursday, March 4, to adopt a default rate, as well as two other programs that offer higher levels of renewable power that would cost more per month.
Formed in 2019, CEA had set a goal to offer generation rates about 2 percent lower than SDG&E’s.
“We were definitely on the edge of our seats, waiting to see what the rates were going to look like,” said CEA board member and Carlsbad councilwoman Priya Bhat-Patel. “So it was really exciting to see that we will have savings.”
In accordance with California rules, customers in the three North County cities will be automatically enrolled in CEA in May and June.
The default program, called “Clean Impact,” will make power purchases from at least 50 percent renewable energy sources, compared to 39 percent renewables that SDG&E used in its default program in 2019. The Clean Impact program is scheduled to increase each year to 100 percent renewables by 2035.
For average residential customers using 353 kilowatt-hours of electricity per month, Clean Impact figures to be 2.2 percent cheaper for power generation — $42.10 per month on average, compared to $43.06 for SDG&E — for customers in Carlsbad and Del Mar.
For customers in Solana Beach, however, the default program translates to a 2.4 percent increase in generation costs — $44.11 per month versus $43.06. Solana Beach’s rate is higher because it pays a higher exit fee.
The fees are assessed each month to CCA customers to offset the costs the utility in a given region has spent over the years on things like building power plants and developing renewable energy projects — all done with the approval and/or direction of the California Public Utilities Commission.
Solana Beach formed its own CCA in June 2018 and its fees are higher than the fee that will be assigned to customers in Carlsbad and Del Mar.
When SDG&E delivery charges for power are added to the Clean Impact program, the total average monthly bill for Carlsbad and Del Mar CEA customers will come to $109.10, compared to $110.07 with SDG&E — 0.9 percent cheaper. For Solana Beach customers, it will be $111.11 on average — 0.9 percent higher.
Each of the three city governments have the ability to opt up to one of two default programs that are even cleaner but a bit more expensive.
The “Clean Impact 75" program purchases power from 50 percent renewable and 75 percent carbon-free sources.
And the “Green Impact” program makes power purchases that pencil out to use 100 percent renewable energy sources.
Clean Impact 75 is expected to result in generation costs that will be 1.4 percent lower than SDG&E for Carlsbad and Del Mar customers of CEA. Solana Beach customers will pay 3.2 percent more on average — again, because of the higher exit fee.
The Green Impact program is 3.9 percent more expensive compared to SDG&E for Carlsbad and Solana Beach customers and 8.6 percent more expensive, on average, for Solana Beach customers.
Should any of the cities opt for Clean Impact 75 or Green Impact as their default programs, CEA customers who do not want to pay more can opt down to the less expensive Clean Impact program for free.
CEA customers who prefer to stick with SDG&E, can go back to the traditional utility for free as well.
It will be up to each individual city government to determine which program to choose as its default option. The Carlsbad City Council is expected to vote on the issue Tuesday, March 9 and Solana Beach will makes its decision Wednesday, March 10.
CEA board member and Solana Beach Councilwoman Kristi Becker said, “I do feel certain that my residents will demand that the default product, at least for us, be 50 percent renewable/75 percent carbon-free, even if that is a few cents more a month.”
Del Mar’s city council will decide on March 15.
CEA board member and Del Mar Councilman Dave Druker said he was pleased all of the options exceed SDG&E’s default plan that uses 39 percent renewables. “I’m really happy with what we’re able to do,” Druker said.
The CEA board also approved a net energy metering program for customers with self-generating energy systems, such as rooftop solar. When a system produces more electricity than a customer uses over a 12-month period, CEA will set a compensation rate of 6 cents per kilowatt-hour. SDG&E’s rate in 2020 fluctuated between 1 cent to just over 4 cents per kilowatt-hour.
Later this month, CEA will discuss when to phase in rooftop customers.
Earlier last week, another regional CCA announced its launch. San Diego Community Power — comprised of the cities of San Diego, Chula Vista, La Mesa, Encinitas and Imperial Beach — lined up its first municipal customer accounts. By the start of 2020, it expects to serve more than 767,700 customers, making it the second-largest CCA in the state.
— Rob Nikolewski is a reporter for The San Diego Union-Tribune
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