HomeMy WebLinkAbout12/12/2017 Item 1, Cochran
Sent:Monday, December
To:E-mail Council Website
Subject:Comments from SLO Clean Energy for December 12's Meeting
Attachments:SLO Clean Energy Comments to SLO City Council Regarding Community Choice
Energy.pdf
Thank you for all your efforts.
June Cochran | Leadership Member
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773-2847 | june@slocleanenergy.org | slocleanenergy.org
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Contact
SLO
Clean
Energy
at
leadershipteam@slocleanenergy.org
December
12,
2017
Comments to SLO City Council Regarding Community Choice Energy
Supporters of SLO Clean Energy appreciate and encourage San Luis Obispo Mayor and City
Council’s leadership prioritizing climate action and pursing a carbon free city through creation of
a “SLO Clean Energy” Community Choice Energy program.
Why Community Choice Energy
Community Choice Energy (CCE) is much more than a program that offers a choice to
consumers for cleaner electricity at competitive prices.
Through persistent innovation, the technology and economics of clean energy are converging to
produce a market disruption which over the next decade will transform our energy and
transportation system from one that is dominated by carbon to one that is dominated by
renewable energy, battery storage, and electric and eventually fully autonomous vehicles.
In this special moment, our community has an opportunity to realize self-determination,
resilience, and local control of our energy and economic future. A Community Choice Energy
program is the most powerful tool available for our community to accelerate and benefit from
this transformation. Our community will benefit through cost savings for residents and
businesses, a more vibrant and innovative economy, and a safe and healthy environment.
Conclusion from the Central Coast Power feasibility study
SLO Clean Energy deeply appreciates the efforts of the Central Coast Power Advisory Working
Group in the exploration of a tri-county CCE program. While the results of the feasibility of a tri-
county CCE program are still under debate by consultants, the conclusion is clear:
1. Development of a CCE program that crosses two utility territories creates unnecessary
complexity and cost.
2. There are ten successful Community Choice Energy programs in PG&E territory that are
either launching or operational.
3. The City of SLO and neighboring communities focus should shift towards creating or
joining a program within PG&E territory.
Moving Forward
Thank you to city staff for developing a comprehensive and thoughtful staff report for Council.
In general, SLO Clean Energy is in alignment with staff recommendations and would like to
offer supplemental information in support of Council’s decision.
Contact
SLO
Clean
Energy
at
leadershipteam@slocleanenergy.org
December
12,
2017
Considerations
Following are a list of opportunities and challenges relating to the options of forming a “SLO
Clean Energy” Community Choice Energy program or joining Monterey Bay Community Power.
From SLO Clean Energy’s perspective, the key considerations are most generally: local control
and benefits vs. expediency and shorter term stability.
Form “SLO Clean Energy” Community Choice Program
Opportunities: Local Control of Priorities and Benefits
• Increased local control to set values and priorities and create a community-centric,
leadership, CCE 2.0 program that maximizes local benefits.
• “New Ways of Doing Business” to provide additional (non taxpayer) resources in the
face of the pension crisis.
• Self-determination of energy and economic future post Diablo Canyon
• Coordinate energy program policies with local land-use and transportation planning
policies – electrification
• Have successful models to follow to build a capable program with lower initial staffing
overhead at low cost/risk.
Challenges: Scale and Timing
• Moderate scale increases stability and capability - sooner than later, we will want SLO
County and Santa Maria to join program.
• Urgency to get a program going – bonding issue, PCIA uncertainty, launch of other large
programs in LA and San Diego may impact availability of non-RPS low carbon resources
short term.
Join Monterey Bay Community Power
Opportunities: Ready Made Program Just to our North
• Easy path to CCE by joining an existing one - low cost/risk.
• Generally aligned values and priorities – environmental & economic benefits
• Nearly operational – start delivery to customers Spring 2018
• Projections of positive financial position - $38 million in net revenues year 1
• Experienced interim CEO, Tom Habashi - career working for municipal utilities
• Larger program approximately 3 times the size of a SLO County-wide program.
Challenges: Governance, Local Control, and Distance
• Unconventional governance structure - rotating shared voting seats for communities
smaller than 50K.
• Reduced local control - benefits to SLO County communities will have to compete with 3
other counties and 20 total jurisdictions.
• Reduced influence on values and priorities - late comer to a large program with limited
influence due to governance structure.
• Large geographic area makes community engagement difficult - 2-3 hour drive time to
Watsonville for public meetings
• Monterey Bay identity is not our region’s identity – would need to rename, rebrand, and
expand the focus.
Contact
SLO
Clean
Energy
at
leadershipteam@slocleanenergy.org
December
12,
2017
Recommendation
In weighing the considerations discussed above, SLO Clean Energy values local control as a
key enabling force to maximize decarbonization and local benefits and recommends the SLO
City Council pursue the following approach:
Plan A – Form a “SLO Clean Energy” Community Choice Energy program
City of SLO should initiate and lead the development of a regional program in partnership with
neighboring communities. It would be best to work with a smaller coalition of early adopter
communities (2 to 4) that are ready and willing to move quickly. In parallel with seeking initial
partner communities, the City of SLO staff should develop a draft JPA document for circulation
informed by existing CCE programs and other local JPAs. The JPA should be structured in such
a way to encourage simple second and third phase expansion over time. Simultaneously, the
city staff should prioritize development and release of a single multi-vendor service RFP,
modeled after the Redwood Coast Energy Authority’s and other recent communities such as
Davis, East Bay, etc., for procurement of technical and operational services such as utility-grade
energy risk management, marketing and communication, data management, call center, and
credit support. A key requirement of the RFP that has become a standard practice in the
market is to require that all vendors defer compensation until the program starts generating
revenue. This requirement is important to make sure that the city can launch the program at low
cost and with shared risk by the vendors. This structure also aligns incentives between parties
to ensure that the program is designed to perform. Additionally, all costs incurred by the city
should be tracked and reimbursed upon program launch.
Plan B – Join Monterey Bay Community Power
During the development of a local CCE program, there are a variety of decision points which are
potential “off-ramps” for council and participating communities to take-all the way up to final
execution of energy procurement contracts. If at any of these decision points, it becomes
apparent that moving forward with a SLO CCE program has become a bad idea, joining
Monterey Bay Community Power will be a viable Plan B. It is recommended that SLO City staff
work with Monterey Bay Community Power to establish an on-boarding plan in preparation for
this contingency.
Council Questions for Consideration and Direction
SLO Clean Energy recommends the following responses:
A. Pursuit of Community Choice Energy (CCE) - Yes to 1. Continue pursuit of CCE, No to
Others.
B. Form a new Community Choice Energy program - Yes to 2. City of San Luis Obispo and
pursue other jurisdictions, No to Others.
C. Join an Existing Program - Yes to 1. Monterey Bay Community Power as a contingency
plan to forming a SLO CCE, No to Others.
D. Evaluation Factors - Set of criteria that should be prioritized in evaluating CCE options:
1. Local control (Governance, community empowerment, community/economic
benefit)
2. Risk and cost (funding approach, risks and risk mitigations, flexibility, scalability)
Contact
SLO
Clean
Energy
at
leadershipteam@slocleanenergy.org
December
12,
2017
3. Decarbonization potential (renewable sources, low carbon resources, local
resources, electrification of transportation, natural gas replacement, innovation).
Regarding CPUC Draft Resolution E-4907 Registration Process for Community Choice
Aggregators
CPUC draft resolution E-4907, Registration Process for Community Choice Aggregators, was
introduced December 8 and is set for vote January 11. This resolution would require that newly
forming or expanding CCE programs would submit load forecasts as part of a standard resource
adequacy planning process prior to launch, a process they currently participate in after launch.
This change would effectively create a one year timeline from submission of implementation
plan to first delivery of power where the current process takes approximately six months or
more.
There are legitimate concerns over the timing and due process of this resolution which may
cause its adoption to be delayed or rejected. However, if adopted, it does not itself create an
existential threat to a plan to create a SLO Clean Energy CCE or to join MBCP. It would make
joining MBCP and expansion of a SLO Clean Energy CCE in "Phase 2" take longer making the
timeline of creating our a SLO Clean Energy CCE or joining MBCP essentially the same. This
resolution would require us to submit our implementation plan to the CPUC by Jan 1 2019 in
order to start delivery of power by Jan 1 2020, which is about how long staff and council would
need anyway. There would be an impact in terms of expansion of the SLO Clean Energy CCE
to other communities so there would need to be an intentional process to have communities
register interest in joining the SLO Clean Energy CCE and coordinate new expansion in
scheduled batches.