HomeMy WebLinkAbout11-27-2018 Item 09 - 2nd Reading for revised Community Choice Energy Meeting Date: 11/27/2018
FROM: Robert Hill, Interim Deputy Director, Office of Sustainability
Prepared By: Chris Read, Sustainability Manager
SUBJECT: ADOPTION OF AN ORDIN ANCE TO AUTHORIZE THE
IMPLEMENTATION OF A COMMUNITY CHOICE ENERGY PROGRAM
RECOMMENDATION
1. Adopt Ordinance No. 1656 (2018 Series) entitled “An Ordinance of the City Council of the
City of San Luis Obispo, California, repealing the existing community choice aggregation
ordinance and authorizing the implementation of a community choice aggregation program
by participating in Monterey Bay Community Power’s community choice aggregation
program” (Attachment A).
2. Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis
Obispo, California, terminating the Central Coast Community Energy Joint Powers
Agreement on behalf of the city of San Luis Obispo” (Attachment B).
3. Authorize the Mayor to execute an Agreement entitled, “An Agreement between the City of
San Luis Obispo and the City of Morro Bay terminating the Joint Exercise of Powers
Agreement Establishing Central Coast Community Energy” (Attachment C).
DISCUSSION
Community Choice Energy Ordinance
Community Choice Energy (CCE, referred to in California Public Utility Code as “community
choice aggregation”), authorized by Assembly Bill 117, is a state law that allows cities, counties
and other authorized entities to aggregate electricity demand within their jurisdictions to
purchase and/or generate electricity supplies for residents and businesses within their jurisdiction
while maintaining the existing electricity provider for physical transmission and distribution
services.
As discussed at the November 13, 2018 City Council meeting, the City of San Luis Obispo has
been studying potential benefits and risks associated with CCE since 2013. On September 18,
2018 the City Council approved Resolution No. 10943 (2018 series) approving the joint powers
agreement creating Central Coast Community Energy (CCCE) on behalf of the City of San Luis
Obispo and in partnership with the City of Morro Bay for the purpose of implementing a
community choice energy program. On October 11, 2018 the California Public Utilities
Commission amended the Power Charge Indifference Adjustment, which negatively impacted
CCCE’s ability to develop a program with the desired f inancial and environmental benefit. In
response, staff engaged Monterey Bay Community Power (MBCP), which is an established
community choice energy program capable of providing the desired financial and environmental
benefits. On November 7, 2018, the CCCE Board of Directors unanimously voted to direct staff
to staff to return to member cities with request to join MBCP. On November 13, 208, the City
Council voted 5-0 to join MBCP.
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Section 366.2(c)(12)(B) of the Public Utilities Code expressly contemplates the creation of a
Joint Powers Authority (JPA) so that counties and cities can “participate as a group in a
community choice aggregation program.” California cities and counties can exercise this option
by doing two things: 1) entering into a Joint Powers Agreement forming a JPA under Section
6500, et seq. of the Government Code; and 2) adopting an Ordinance electing to implement a
community choice program within its jurisdiction as required by Section 366.2(c)(12)(A).
On November 13, 2018 the City Council voted 5-0 to:
1. Adopt a resolution to join a JPA called Monterey Bay Community Power (MBCP) for the
purpose of implementing a CCE program;
2. Introduce Ordinance No. 1656 (2018 Series) to rescind the existing ordinance naming CCCE
as the implementing agency, and adopt a new ordinance establishing MBCP as the City’s
CCE program provider.
The Ordinance is now ready for adoption and will become effective on December 27, 2018.
Termination of Central Coast Community Energy
CCCE was established to host a regional CCE program. As the program will now be hosted by
MBCP, staff recommends terminating the CCCE JPA. Section 6.4 of the CCCE Joint Exercise of
Powers Agreement says that, “This Agreement may be terminated by mutual agreement of all the
Parties; provided, ho wever, the foregoing shall not be construed as limiting the rights of a Party
to withdraw its participation in the CCE Program, as described in Section 6.1.” The only other
member of CCCE, Morro Bay, also intends to take City Council action to terminate the CCCE
Agreement .
Section 6.5 of the CCCE Joint Exercise of Powers Agreement says that, “Upon termination of
this Agreement, any surplus money or assets in possession of CCCE for use under this
Agreement, after payment of all liabilities, costs, expenses, and charges incurred under this
Agreement and under any program documents, shall be returned to the then-existing Parties in
proportion to the contributions made by each.” CCCE is free of all debts, liabilities, surplus
money, and asset. Attachment B provides the Resolution and Attachment C provides the
Agreement to terminate CCCE.
ENVIRONMENTAL REVIEW
The establishment of a CCE is exempt from the requirements of the California Environmental
Quality Act (“CEQA”) pursuant to the CEQA Guidelines, as it is not a “project” as it has no
potential to result in a direct or reasonably foreseeable indirect physical change to the
environment because energy will be transported through existing infrastructure (14 Cal. Code
Regs. § 15378(a)). Further, establishing a CCE is exempt from CEQA as there is no possibility
that this it would have a significant effect on the environment (14 Cal. Code Regs. §
15061(b)(3)). Further, the establishment of a CCE is also categorically exempt because it is an
action taken by a regu latory agency to assume the maintenance, restoration, enhancement or
protection of the environment (14 Cal. Code Regs. § 15308).
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FISCAL IMPACT
The City set aside $250,000 in carryover funding from the fiscal year 2017-18 budget. At the
November 13, 2018 City Council meeting, staff requested that this set aside be used to cover
approximately $66,000 ($30,000 in TEA consultant fees, $15,000 in outside legal counsel fees,
$6,000 for a contract extension with LEAN Energ y, and $15,000 to repay MBCP for updating
their Implementation Plan). There are no known additional direct costs.
ALTERNATIVES
1. Reject the proposed ordinance. The City Council may reject the proposed ordinance, which
would effectively end the City’s pursuit of CCE.
2. Reject the proposed resolution. The City Council may choose to retain the Central Coast
Community Energy JPA. Staff does not recommend this as retaining the JPA would require
administrative costs without providing any clear benefit.
Attachments:
a - CCE Implementing Ordinance
b - Resolution Terminating Central Coast Community Energy
c - Agreement Terminating Central Coast Community Energy
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O ______
ORDINANCE NO. 1656 (2018 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, REPEALING THE EXISTING COMMUNITY
CHOICE AGGREGATION ORDINANCE AND AUTHORIZING THE
IMPLEMENTATION OF A COMMUNITY CHOICE AGGREGATION
PROGRAM BY PARTICIPATING IN MONTEREY BAY COMMUNITY
POWER’S COMMUNITY CHOICE AGGREGATION PROGRAM
WHEREAS, on December 12, 2017, the City Council directed staff to investigate the
feasibility and formation of a Community Choice Aggregation (CCA) program under the
provisions of the Public Utilities Code Section 366.2 in order to provide electric service to
customers within the City of San Luis Obispo with the intent of achieving reduced greenhouse gas
emissions, local renewable power development, competitive electric rates, and the implementation
of energy conservation and other energy programs ; and
WHEREAS, the City of San Luis Obispo commissioned a technical study showing that a
CCA program serving the City and surrounding communities would prov ide several benefits,
including:
▪ Providing customers a choice of power providers and power supply options;
▪ Increasing local control and involvement in energy rates and other energy-related
matters;
▪ Providing stable electric rates that are competitive with those provided by the
incumbent utility;
▪ Reducing greenhouse gas emissions arising from electricity use within the City and
surrounding region;
▪ Increasing local renewable generation capacity;
▪ Increasing energy conservation and efficiency projects and programs;
▪ Increasing regional energy self-sufficiency;
▪ Improving the local economy resulting from the implementation of a CCA program
and local renewable and energy efficiency projects over time; and
WHEREAS, on September 18, 2018 the Cities of San Luis Obispo and Morro Bay, formed
a Joint Powers Authority called Central Coast Community Energy (“CCCE.”) to host a CCA
program; and
WHEREAS, on October 2, 2018 the City of San Luis Obispo adopted Ordinance No. 1654
(2018 Series) as required by Public Utilities Code section 366.2 authorizing the implementation of
a Community Choice Aggregation program through CCCE; and
WHEREAS, on October 11, 2018 the California Public Utilities Commission amended
the Power Charge Indifference Adjustment, which negatively impacted CCCE’s ability to develop
a program with the desired financial and environmental benefit ; and
WHEREAS, Monterey Bay Community Power (MBCP) is an established CCA program
capable of providing the desired financial and environmental benefits, and
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Ordinance No. 1656 (2018 Series) Page 2
O ______
WHEREAS, MBCP will enter into Agreements with electric power suppliers and other
service providers, and based upon those Agreements MBCP will be able to provide power to
residents and businesses at rates that are competitive with those of the incumbent utility (“PG&E”).
Once the California Public Utilities Commission certifies the amended Implementation Plan
adopted by MBCP, MBCP will be able to provide service to customers within the City of San Luis
Obispo; and
WHEREAS, under Public Utilities Code section 366.2, customers have the right to opt -
out of a CCA program and continue to receive service from the incumbent utility. Customers who
wish to receive service from the incumbent utility will be able to do so; and
WHEREAS, on November 13 and November 27, the City Council held public hearings
on the manner in which San Luis Obispo will participate in a CCA program at which time
interested persons had an opportunity to testify either in support of or opposition to the
implementation of a CCA program serving the City of San Luis Obispo through MBCP; and
WHEREAS, this ordinance is exempt from the requirements of the California
Environmental Quality Act (CEQA) pursuant to the CEQA Guidelines, as it is not a “project” as
it has no potential to result in a direct or reasonably foreseeable indirect physical change to the
environment. (14 Cal. Code Regs. § 15378(a)). Further, the ordinance is exempt from CEQA as
there is no possibility that the ordinance or its implementation would have a significant effect on
the environment. (14 Cal. Code Regs. § 15061(b)(3)). The ordinance is also categorically exempt
because it is an action taken by a regulatory agency to assume the maintenance, restoration,
enhancement or protection of the environment. (14 Cal. Code Regs. § 15308).
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The above recitations are true and correct and material to this Ordinance.
SECTION 2. Repeal of Ordinance No. 1654 (2018 Series). Based upon the forgoing, the
City Council hereby repeals Ordinance No. 1654 (2018 Series)
SECTION 3. Authorization to Implement a Community Choice Aggregation Program.
Based upon the forgoing, and in order to provide business es and residents within the City of San
Luis Obispo with a choice of power providers and with the benefits described above, the City
Council hereby elects to implement a community choice aggregation program within the
jurisdiction of the City by participating as a group in the Community Choice Aggregation Program
of Monterey Bay Community Power, as generally described in its Joint Powers Agreement.
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Ordinance No. 1656 (2018 Series) Page 3
O ______
SECTION 4. This Ordinance shall be in full force and effective 30 days after its adoption
and shall be published and posted as required by law.
INTRODUCED on the ____ day of ____, 2018, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 2018, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo , California, this ______ day of ______________, _________.
______________________________
Teresa Purrington
City Clerk
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R ______
RESOLUTION NO. _____ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, TERMINATING THE CENTRAL COAST
COMMUNITY ENERGY JOINT POWERS AGREEMENT ON BEHALF
OF THE CITY OF SAN LUIS OBISPO
WHEREAS, on September 18, 2018 the City Council approved Resolution No. 10943
(2018 series) approving the Joint Exercise of Power Agreement Relating to and Creating Central
Coast Community Energy (CCCE) on behalf of the City of San Luis Obispo for the purpose of
implementing a community choice energy program; and
WHEREAS, on October 11, 2018 the California Public Utilities Commission amended
the Power Charge Indifference Adjustment, which negatively impacted CCCE’s ability to develop
a program with the desired financial and environmental benefit; and
WHEREAS, Monterey Bay Community Power (MBCP), a joint powers authority, is an
established community choice energy program capable of providing the desired financial and
environmental benefits, and
WHEREAS, on November 7, 2018, the CCCE Board of Directors unanimously voted to
direct staff to staff to return to the member cities with a request to join MBCP; and
WHEREAS, on November 13, 2018, the City Council voted 5-0 to join MBCP; and
WHEREAS, Section 6.4 of the CCCE Joint Exercise of Powers Agreement provides that
the Agreement may be terminated by mutual agreement of all the Parties; and
WHEREAS, the only other member of CCCE, Morro Bay, intends to take City Council
action to terminate the CCCE Agreement;
WHEREAS, Section 6.5 of the CCCE Joint Exercise of Powers Agreement says that,
“Upon termination of this Agreement, any surplus money or assets in possession of CCCE for use
under this Agreement, after payment of all liabilities, costs, expenses, and charges incurred under
this Agreement and under any program documents, shall be returned to the then-existing Parties
in proportion to the contributions made by each.”; and
WHEREAS, CCCE is free of all debts, liabilities, surplus money, and assets.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
that :
SECTION 1. The City Council hereby approves the termination of the Joint Exercise of
Powers Agreement Relating to and Creating Central Coast Community Energy (the “JPA
Agreement”), and authorizes the Mayor to enter into the written agreement with the City of Morro
Bay, attached hereto, formally terminating the JPA Agreement.
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Resolution No. _____ (2018 Series) Page 2
R ______
SECTION 2. This resolution and the termination of the Central Coast Community Energy
Authority is exempt from the requirements of the California Environmental Quality Act (CEQA)
pursuant to the State CEQA Guidelines, as it is not a “project” since this action involves
organizational and administrative activities of government that will not result in direct or indirect
physical changes in the environment. (14 Cal. Code Regs. § 15378(b)(5)).
SECTION 3. This resolution shall be effective immediately upon passage and adoption.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo , California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington, City Clerk
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AN AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND
THE CITY OF MORRO BAY TERMINATING THE JOINT EXERCISE
OF POWERS AGREEMENT ESTABLISHING CENTRAL COAST
COMMUNITY ENERGY
This Termination Agreement is made and entered into this _______ day of November 2018
by and between the City of San Luis Obispo and the City of Morro Bay (hereinafter
collectively referred to as the “Parties”).
WHEREAS, the City of San Luis Obispo and the City of Morro Bay entered into a Joint
Exercise of Powers Agreement, effective October 5, 2018, establishing Central Coast Community
Energy (CCCE); and
WHEREAS, on October 11, 2018, the California Public Utilities Commission amended
the Power Charge Indifference Adjustment, which negatively impacted CCCE’s ability to develop
a program with the desired financial and environmental benefits; and
WHEREAS, Monterey Bay Community Power (MBCP), a joint powers authority, is an
established community choice energy program capable of providing the desired financial and
environmental benefits, and
WHEREAS, on November 13, 2018, the City Councils for both San Luis Obispo and
Morro Bay voted 5-0 to join MBCP; and
WHEREAS, Section 6.4 of the CCCE Joint Exercise of Powers Agreement provides that
such Agreement may be terminated by mutual agreement of all the Parties; and
WHEREAS, the Parties are the only members of CCCE, and have the authority to
terminate the CCCE Joint Exercise of Powers Agreement pursuant to this Agreement; and
WHEREAS, CCCE is free of all debts, liabilities, surplus money, and assets and therefore
no further actions are required by the Parties when the Joint Exercise of Powers Agreement is
hereby terminated.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions
hereinafter set forth, it is agreed by and between the Parties as follows:
SECTION 1. Pursuant to Section 6.4 of the Joint Exercise of Powers Agreement Relating
to and Creating Central Coast Community Energ y, effective October 5, 2018, the Parties hereby
terminate such Agreement effective upon the execution of this Termination Agreement by both
the City of San Luis Obispo and the City of Morro Bay.
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Page 2
CITY OF SAN LUIS OBISPO
____________________________________
Heidi Harmon, Mayor
CITY OF MORRO BAY
____________________________________
Jamie L. Irons, Mayor
ATTEST:
____________________________________
Teresa Purrington
City Clerk
ATTEST:
____________________________________
Dana Swanson
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
APPROVED AS TO FORM:
_____________________________________
Joseph W. Pannone
City Attorney
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THENewspaper of the Central Coast
MBUNE
RECEIVED
NOV 2 6 2018
SLO CITY CLERI{
3825 South Higuera • Post Office Box 112 • San Luis Obispo, California 93406-0112 • (805) 781-7800
In The Superior Court of The State of California
In and for the County of San Luis Obispo
49
�� ORIM
AD #3959277
ORDINANCE NO. 1656 (2018 SERIES)
CITY OF SAN LUIS OBISPO
AN ORDINANCE OF THE CITY COUN-
OFFICE OF THE CITY CLERK
CIL OF THE CITY OF SAN LUIS OBI -
SPO, CALIFORNIA, REPEALING THE
EXISTING COMMUNITY CHOICE AG -
STATE OF CALIFORNIA
GREGATION ORDINANCE AND AU-
THORIZING THE IMPLEMENTATION OF
SS.
A COMMUNITY CHOICE AGGREGA-
County of San Luis Obispo
TION PROGRAM BY PARTICIPATING IN
MONTEREY BAY COMMUNITY POW-
ER'S COMMUNITY CHOICE AGGREGA-
I am a citizen of the United States and a resident of the
TION PROGRAM
County aforesaid; I am over the age of eighteen and not
NOTICE IS HEREBY GIVEN that the City
interested in the above entitled matter; I am now, and at
Council of the City of San Luis Obispo, Cal -
ifornia, at its Regular Meeting of November
all times embraced in the publication herein mentioned
13, 201§, introduced the above titled ordi.
was, the principal clerk of the printers and publishers of
nance upon a motion by Council Member
Pease, second by -Vice Mayor Chrlslien-
THE TRIBUNE, a newspaper of general Circulation,
son, and on the following roll call vote:
printed and published daily at the City of San Luis
AYES: Council Members Gomez, Pease,
Obispo in the above named county and state; that notice
and Rivoire; Vice Mayor Christianson, and
Mayor Harmon
at which the annexed clippings is a true copy, was
NOES: None
published in the above-named newspaper and not in any
�_rdinan_�eNo. 165$ 20ip_�gdI_@q) —This
supplement thereof — on the following dates to wit;
is a City Ordinance authorizing the imple-
mentation of a community choice aggraga-
NOVEMBER 21, 2018 that said newspaper was duly
tion program in the jurisdiction of the City
and regularly ascertained and established a newspaper of
by pa rticfpal Ing as a group In the Com muni.
ty Choice Aggregation PrOgram of Monte -
circulation b Decree entered in the Superior
g Y P
My
rey Bay Community Power, as generally
described In Its Joint Powers Agrcaamanl.
Court of San Luis Obispo County, State of California, on
June 9 1952 Case #19139 under the Government Code
>
ti laid and complete copy of the r inspfo ection
Honed Ordinance is available for irrspecticn
of the State of California,
at 090 Palm Siree SanLLuiis Office, located
Ca�•
fornia, Or you may call (805) 781-7100 for
I certify (or declare) under the penalty of perjury that the
more information.
foregoing IS true and correct.
NOTICE IS HEREBY FURTHER GIVEN
Mm,
that the City Council of the City of San
Luis Obispo will consider adopting the
aforemenlioned Ordlnance.al its Regular
(S1i ure of Principal Clerk)
Meeting of November 27, 2018 at 6:00
p,m., which will be held in the Council
DATE: NOVEMBER 21, 2018
Chamber, located at 990 Palm Street, San
Luis Obispo, California.
AD COST: $167.04
Teresa Purringlon
City Cleric
Plavem nr 21, 2018 3959277