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Energy Choices
Don Mosier | Rimini Road

The Del Mar City Council has to make an important choice soon. Two options for a regional Community Choice Energy (CCE) consortium are available. SDG&E has confirmed in writing that they plan on getting out of the electricity generation business, so one of these options needs to be adopted since either CCE will be the provider of last resort for this region.

The city can create a Joint Powers Authority (JPA) with the north coast cities of Solana Beach, Encinitas and Carlsbad. This avenue would yield a moderate size JPA with an annual energy load of about 1000 gigawatt/hr (1 gWh=1 million kilowatts/hr) with Del Mar customers using about 3% of the total. Although the terms of a new JPA remain to be negotiated, it is likely that each participating city would get one vote on most matters coming before the JPA Board. This means that Del Mar would be one of four voting members. Since Solana Beach has been operating the Solana Energy Authority (SEA) for the past year, their participation would provide valuable experience in starting a CCE and working with SDG&E on billing and energy distribution issues. SEA’s current contracts for energy procurement would need to be expanded to serve the much larger load needed by the four cities. There are significant start-up costs (e.g., $1-2 million) associated with this option that would need to be shared between the participating cities.

The second option is to join the City of San Diego which is in the process of starting their own CCE and has been discussing options for other cities to join a JPA with them. This could include the north coast cities in option 1 and as many as the 18 cities in the county. This would be a much larger JPA and Del Mar’s fraction of the energy load would be less than a drop in the bucket. Terms of a potential JPA agreement are being discussed, and the base proposal is that each participating city would get one vote, but some issues could be decided by a weighted vote if two or more members call for one. The City of San Diego has offered to pay the start-up costs that they will recover from revenues once the CCE starts operation.

In order for either CCE to start operations in early 2021, the JPA must be formed and a business plan submitted to the California Public Utilities Commission prior to the end of this year. This means that a decision must be made soon to comply with this aggressive timeline. The City of Del Mar will receive a report from EES Consulting (the same firm that performed the feasibility study) in July that compares the two JPA options, but it is likely that the final decision will need to balance local control over CCE operations with the north coastal cities option against some economies of scale with the San Diego option.

 

 

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