Don Mosier | Rimini Road
On June 5th, the Del Mar City Council unanimously approved proceeding with a technical study of Community Choice Energy (CCE) in cooperation with Encinitas, Carlsbad and Oceanside. A budget allocation of up to $35,000 was included in the resolution. The City of Solana Beach approved a similar study the prior week, although it is proceeding with a fully outsourced model that is similar to the established CCE operated by the City of Lancaster, northeast of Los Angeles.
At the June 5 meeting, the Council received a presentation from Daniela Battaglioli, which outlined the benefits and risks of Del Mar joining a regional CCE. Daniela is a graduate student in the Department of Advanced Studies in Climate Science and Policy at the Scripps Institution of Oceanography at UC San Diego. Al Swedler, a member of Del Mar’s Sustainability Advisory Board, and I were faculty advisors for Daniela’s thesis project. She reported that there are currently nine operational CCEs in California, and five more in the planning stage. Also, the City of San Diego is conducting a technical study of CCEs, with the final report due in the next few months.
The main advantage of a regional CCE is the choice to procure cleaner energy and control costs, with future options for local energy generation as revenue is accrued (as is being done by the first California CCE, Marin Clean Energy, which launched in 2010). While CCEs purchase energy and provide billing data to the local utility, the latter continues to bill customers and operate the energy distribution system. The 100% clean energy goal by 2035 in Del Mar’s Climate Action Plan will depend upon local control of the sources of energy, an important feature of a CCE. More importantly, local citizens will have options for either lower costs for 50-70% clean energy or a slightly higher bill for 100% clean energy.
The risks of a CCE include uncertainty about future regulatory actions by the California Public Utility Commission (CPUC), particularly with regard to exit fees for departing customers to pay for long-term energy contracts and other changes to rates. While the nine existing CCEs have experienced low opt-out rates—from 5-18%— higher opt-out rates could threaten the economic viability of a regional CCE. When a CCE is formed, customers who choose to stay with the legacy utility can opt out of joining the CCE.
Encinitas has approved participation in the CCE technical study, and Carlsbad will consider joining the study at their June 27th Council meeting. Oceanside has not put the study on their council agenda at the time this article was written. However, the participating cities (including Del Mar) have agreed to cap the cost of the study at $100,000, which will greatly reduce the cost to each participating city.. The technical study will provide detailed energy load data for each city, including time of peak energy use. This information is critical in the decision to move forward with a CCE and to develop a business plan that will be subject to CPUC approval.