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This city could become region's first to offer SDG&E alternative for electricity.
Amid controversy with traditional utilities, a growing number of cities and counties in California are embracing what’s known as community choice aggregation (CCA).
Solana Beach has for years flirted with an energy program that would give its residents and businesses a government-run alternative to San Diego Gas & Electric. On Wednesday, it could launch official steps toward becoming the first municipality in the county to do so.
While the City Council’s planned vote on a resolution Wednesday wouldn’t legally bind Solana Beach to what’s known as community choice aggregation, or CCA, approval of the measure would trigger a formal process that could lead to roll-out of the program within 18 months.
Amid controversy with traditional utilities, a growing number of cities and counties in California are embracing CCA or moving toward it.
Under such programs, municipal government officials — or their appointees — decide which power providers to contract with on behalf of ratepayers in their jurisdiction, from natural gas plants to solar and wind installations. Ratepayers can opt out of the program if they prefer to deal directly with the utility, which in either case continues to maintain the pipes and wires that deliver the electricity.
In California, most local governments that have adopted CCA aim to aggressively ramp up use of renewable energy as a way to counter climate change — by reducing emissions of greenhouse gases linked to fossil fuels.
They also have worked to keep CCA electricity bills at or below what’s offered by private utility companies.
Solana Beach is no different in its approach. It has negotiated with two private companies — The Energy Authority and Calpine — to possibly set up and operate its CCA. Under that agreement, the city’s officials can back out within the first six months of approving Wednesday’s resolution with little financial consequence.
“The council has directed staff to not rush this and evaluate all the possibilities and risks and benefits as we move forward,” said City Manager Greg Wade.
To permanently launch the program, the council would need to approve an ordinance, a step that could occur this winter.
If the city votes to moves forward with CCA this week, it would be “huge,” said Nicole Capretz, executive director of the San Diego-based Climate Action Campaign. “It builds the momentum and sets the stage for what’s hopefully possible throughout the region.”
San Diego Gas & Electric’s parent company, Sempra Energy, has set up the state’s first shareholder-funded lobbying group on CCA.
“We will point out that there is much regulatory uncertainty both at the California Energy Commission and California Public Utilities Commission for the new retail energy markets,” said Frank Urtasun, a top official with the lobbying group, known as Sempra Service Corp.
“We believe it is our responsibility to engage in a robust dialogue that enhances transparency so that customers can continue to count on the clean and reliable energy that they deserve, without greater financial risk,” he added.
Currently, there are eight fully operational CCA programs in California: Marin Clean Energy, Sonoma Clean Power, Lancaster Choice Energy, CleanPowerSF, Peninsula Clean Energy, Redwood Coast Energy Authority, Silicon Valley Clean Energy and Apple Valley Choice Energy.
Following closely behind are entities such as Central Coast Power, East Bay Community Energy, Monterey Bay Community Power, San Jose Clean Energy and South Bay Clean Power.
In April, Los Angeles County voted in April to form a CCA that would pull in roughly half a million residents and 200,000 businesses in unincorporated areas. Cities in that region, including Long Beach and Torrance, are considering whether to join the program.
The city of San Diego is expected to review a report this fall comparing rates for a proposed CCA compared with what SDG&E; currently offers.
San Diego County’s government in February rejected the idea of studying the feasibility of CCA after a lobbying effort by Sempra Service Corp.
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Can the Golden State go 100% green?
California's Senate leader wants the Golden State to shift to 100 percent renewable electricity by 2045, pushing it to lead the country in grabbing that green power goal.
California's Senate leader wants the Golden State to shift to 100 percent renewable electricity by 2045, pushing it to lead the country in grabbing that green power goal.
Environmentalists are cheering California Senate President Pro Tempore Kevin de León's (D) plan to double, and accelerate, the state's current renewables mandate of 50 percent by 2050. Oscar-winning actor Leonardo DiCaprio even tweeted his thanks to de León among his 17 million followers.
The nation's most populous state switching to fully renewable electricity sounds idealistic. But several experts said it can be done — with a lot depending on definitions, technological advancements and acceptable price tags.
"2045 is a long way away," said Severin Borenstein, economics professor at the University of California, Berkeley's Haas School of Business. "A lot could happen between now and 2045."
Energy storage through batteries "could get a lot cheaper. That could make the goal much more attainable and much more cost-effective," he added. Wind and solar energy already are close in price to natural gas, he said. "If you could actually store the power cost-effectively, then you could make it work much more effectively."
Others warned major expenses would ensue. Large-scale solar and wind projects often go in deserts or other open areas, requiring added infrastructure to move the power to cities, said Evan Birenbaum, who led the environmental strategies program at Los Angeles-area utility Southern California Edison Co. before leaving in 2014. He now heads Chai Energy, which focuses on reducing household energy consumption.
"You would need to build new transmission lines to support the incoming [renewable] power," Birenbaum said. "Old power lines might not be able to support it."
Utility substations also likely would need upgrades, he said, adding, "You're talking about many billions of dollars that have to be invested in that new renewable energy future. It's the ratepayer who will have to pay for that."
Borenstein said that calculating how much it will cost nearly 30 years from now is "nearly impossible to answer. ... Imagine going back 30 years," when the internet-connected cellphones used now didn't exist.
"It's very hard to predict technology 30 years in advance," he added.
Electricity system shifting
De León's S.B. 584 comes as California leaders vow to aggressively push ahead on climate change policies and defy any attempt by the Trump administration to roll back climate and clean energy measures.
It also emerges as California's electricity market undergoes a multiyear transformation, said Jan Smutny-Jones, CEO of the Independent Energy Producers Association, a trade group that represents natural-gas-fired power and renewable generators.
The demand footprint of big utilities is shrinking as several cities have opted for community choice aggregation (CCA), forming groups that contract to buy power. Meanwhile, more people put solar power on their rooftops, and there's a state-ordered push for more energy storage.
California Senate President Pro Tempore Kevin de León (D). Photo courtesy of @kdeleon via Twitter.
Utilities, regulators, environmental groups and others, meanwhile, are dealing with the implications of a de León bill passed last year. S.B. 350 increased the renewables mandate to 50 percent by 2050 and ordered a doubling in the energy efficiency of buildings. It also ordered all utilities, including municipal ones and CCAs, to show they're making progress toward reducing greenhouse gas emissions.
The new bill in addition to the 100 percent mandate would speed up the 50 percent deadline to 2025.
The measure is intended as a draft to get people talking, see how much support exists and figure out what would be needed politically to get lawmakers and interested parties on board, said people familiar with the process. Competitive juices are flowing as Hawaii and Massachusetts look into 100 percent renewable power.
California's largest investor-owned utilities mostly declined to comment on the proposal. In conversations with legislative officials in Sacramento, they've indicated the 2045 goal is far enough out that they aren't panicked. But they wanted to discuss what flexibility would exist to reach the proposed mandate, said those aware of the talks.
Pedro Pizarro, CEO of Edison International, said he thinks it's technically possible for California to go to 100 percent renewable power, as resources could be paired with batteries. But he said questions remain around economic feasibility, reliability and timing.
"Is it doable tomorrow? No," Pizarro said in an interview at the CERAWeek by IHS Markit conference in Houston. "You don't have storage at scale. You also don't have the renewables at scale. You have to build up the renewables. You have to build up the storage."
California alone can't solve climate change, he said, but "I do think the long-term trend, certainly in California and probably more broadly, is going to be towards more and more renewables."
"Eventually there will be 100 percent," he added.
The proposed goal of speeding up the deadline on the 50 percent renewables to 2025 is likely to have utilities more concerned, Smutny-Jones said.
They'd likely argue against buying more renewable power "because they don't know who their customers are," as the growth in CCAs and in rooftop solar shrinks their demand base, he said.
How to calculate costs
The largest utilities in California said they are on the path toward meeting the existing 50 percent by 2050 mandate. That edict requires them to use wind, geothermal, biomass, small-scale hydropower and utility-scale solar. They cannot count household rooftop solar, large hydropower or nuclear.
San Diego Gas & Electric Co. now has 43 percent renewable power. Pacific Gas & Electric Co., located in the San Francisco region, generates nearly 33 percent. Southern California Edison for 2015 was at 25 percent. It hasn't yet updated the total for last year.
Statewide, renewable generation was 24.5 percent in 2015, the most recent year available. With solar alone and including panels on rooftops, California has an abundance of renewable power to meet daytime needs, experts said. On some days, there's too much solar energy, forcing the grid manager to ask generators to back down their production.
Calif.'s overall electricity mix,
including imported power
A breakdown of sources of electricity generation in California for 2015, including imported power. Data courtesy of the California Energy Commission; graph by E&E; News.
California also imports electricity. Last year that constituted about a quarter of the California grid's average daily demand, according to the U.S. Energy Information Administration.
Imports as a portion of overall generation have steadily increased in recent years, said Cara Marcy, renewable electricity analyst with EIA. In-state generation has been trending down since 2007. That has happened because of the 2008 recession, and then as the economy recovered, people bought more efficient appliances, electronics and lighting, Smutny-Jones said.
Mark Jacobson, professor in Stanford University's department of civil and environmental engineering, said the state can hit 100 percent renewable power.
"It's mostly a question of willpower," he said, adding that "from a technological, economic point of view it's possible to do it." The main obstacle, he said, is that there are people with a financial interest in stopping it from happening.
There are all kinds of energy storage options beyond batteries, he said. Stanford at night freezes ice in rooftop tubing, with the melted cold water from it used for air conditioning during the day. A pilot system in Okotoks, Alberta, uses solar plus heated rocks underground for winter heating.
Jacobson rejected the idea of consumers having to pick up the costs if natural-gas-fired plants in California were put out of service early. If you factor in health costs connected to air pollutants, he said, the plants "cost more to stay open."
Jacobson added that while aiming for 100 percent electricity is "a good start, we have to go a lot further than that." The emissions for electricity constitute about one-fifth of total greenhouse gas pollution, he said. The country needs to deal with emissions from aircraft and ships and electrify all transportation, he said.
Designing for rare peaks
The challenge in seeking 100 percent renewables is how to address peaks in demand that are well above the system average, said Arne Olson, partner at Energy and Environmental Economics, an energy consulting firm.
On the grid managed by the California Independent System Operator, the average electricity demand ranges between 20,000 and 35,000 megawatts. But there have been peaks of more than 50,000 MW. Those spikes have driven infrastructure planning for decades, he said.
"Every electric system in the developed world is built around the expected peak demands that might be placed on," Olson said, from the size of the transmission system to the size of distribution wires. "Every piece of infrastructure is designed around the highest peak it might see in 10 years."
Where renewable power stands in
Calif.'s electricity mix
Sources of electricity generation in California in 2015. Data courtesy of the California Energy Commission; graph by E&E; News.
It's "a matter of how much expense are we willing to bear to make sure that we've kept that level of reliability that we're accustomed to," Olson said.
It gets increasingly expensive to provide power as the renewables share of electricity gets closer to 100 percent, he said. It's similar to natural gas "peaker" plants that sit idle for most of the year and run only when needed. "This has been the way that we've done it for years," he said.
Birenbaum with Chai Energy noted that utilities in recent years have put about $100 billion into infrastructure and now are looking at more investments in battery storage. Anything additional utilities had to spend for an upgrade to meet the state's proposed 100 percent goal is "going to cost the customer more money," Birenbaum said.
"Everyone wants to push it farther and farther," he said. "All of a sudden the lights go out, like in Germany." In that country there were some blackouts in 2012 that some blamed on adding more renewable power than the grid could handle, without enough base load to support it.
"That's a very dangerous game that we're playing here in California," Birenbaum added. "We always try to put burden on utilities or think technology is going to solve it."
Birenbaum argued that the state needs to take steps to shrink electricity consumption and improve energy efficiency. About 30 percent of electricity use comes from waste, such as leaving lights on, he said.
Definitions matter
Lawmakers would have to decide if they are sticking with the current rules on what is renewable.
The state does not allow utilities to count large hydropower as part of their renewable electricity makeup. The intent of that was to prevent creating a reason to build more large dams, said a person familiar with the original renewable portfolio standard legislation. That's one aspect that might need another look if the state considers going to a 100 percent green power mandate, he said.
Large hydropower in recent years has generated 6 to 12 percent of the state's electricity, depending on precipitation and other water needs.
Smutny-Jones said his group would oppose allowing large hydro, because excluding it as a renewable has been state policy for decades.
The trade group also would oppose allowing rooftop solar to count. Panels on roofs already lower the amount utilities have to generate to meet their renewables mandate, he said. That's because the RPS requirement is based on a percent of retail sales. A consumer with rooftop photovoltaics is buying less electricity. So including household PV toward the 100 percent renewables would be "double-counting," he said.
California needs to look at how it will define 100 percent renewable electricity, Berkeley's Borenstein said. Does the state only want clean power within its borders on an every-second basis, he asked, or does it want at the end of a year to say it consumed all clean power?
If the latter, the state could calculate how much power it consumes, then buy from outside the state what it couldn't make in California. It would sign agreements for renewable power amounts to match what's needed, Smutny-Jones said.
"It really comes down to more of a system of accounting," he said.
If California wanted to ensure 100 percent all the time, it probably couldn't expand its grid to take power from other Western and Midwest states. California might aspire to get wind power from Iowa overnight, Borenstein explained, but there wouldn't be any guarantees that the Golden State wouldn't take in fossil-fuel-generated electricity.
"Electricity is electricity," Borenstein said. "You can't identify the electrons coming in, where they came from."
Reporter Edward Klump contributed.
Twitter: @AnneCMulkern Email: amulkern@eenews.net
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This tiny California town has found a new way to cut emissions.
This enclave in north San Diego County is known for its small-town feel, the summer concerts held on a bluff above crashing ocean waves and the non-chain stores in its arts district. Now it's considering a landmark move to cut carbon pollution.
SOLANA BEACH, Calif. — This enclave in north San Diego County is known for its small-town feel, the summer concerts held on a bluff above crashing ocean waves and the non-chain stores in its arts district.
It's also seen as a progressive stronghold. Incorporated 30 years ago after local residents grew concerned about overdevelopment, Solana Beach jumped ahead of others regionally on environmental causes. It was first in California to ban smoking on beaches. It banned single-use plastic bags before other cities in the county. Last year, it was the first to restrict Styrofoam containers.
Now it's considering a landmark move to cut carbon pollution.
Solana Beach is considering taking on the role of quasi-utility. It would form a collective to buy power on behalf of residents and businesses, a practice known as community choice aggregation, or CCA. Under state law, residents are automatic members of the CCA but can later opt out and go back to incumbent utility San Diego Gas & Electric Co. (SDG&E;).
The intent is to acquire more power made from renewable sources in order to shrink greenhouse gas pollution. The city is looking at potentially passing a climate plan that would commit to a greenhouse gas reduction. And it would create a CCA in a way that so far hasn't been done.
"The city has always had residents or a population that is really concerned about improving their community and improving the planet," said Peter Zahn, Solana Beach deputy mayor and a member of the Climate Action Commission. "Residents have banded together and really used their collective muscle and intelligence and wit to do really whatever they could to make it a better place to live.
"That carries over to the environmental initiatives," he added. "It was something that was really sort of a natural for the city to be at the forefront of these battles and really lead the way."
CCAs already exist in San Francisco, in the Bay Area cities of Marin and Sonoma, and Lancaster in north Los Angeles County. Because Solana Beach, population 13,000, is small, it could be difficult and costly to go it alone. Several other cities in San Diego County are also considering CCA and could form a joint partnership.
But Solana Beach might not have to wait.
As cities in the Golden State are entering the new world of competing with large utilities, entrepreneurs are offering options. A new one would have a private company put up money to help launch the program. The city in return would pay the investor group part of the revenues from CCA.
Solana Beach, if it went this route, would be the first in the county, and potentially the first in the state, to do so. Humboldt County in Northern California is also looking at it.
"It hasn't been done in California, this public private partnership," said Dan King, assistant city manager at Solana Beach. "It's kind of intended for smaller cities who want to get this up and running."
It takes place as the larger region is aiming for major action on climate change. San Diego last year adopted a climate action plan that calls for switching to 100 percent renewable power by 2035. Starting a CCA — or what San Diego is calling "community choice energy" (CCE) — is expected to be part of that.
Starting sooner could cut more GHGs
But it could be 2018 before San Diego puts a CCE into place, said Nicole Capretz, executive director of the Climate Action Campaign, a nonprofit watchdog group. She was director of environmental policy for San Diego interim Mayor Todd Gloria (D) in 2013 when he drafted what eventually became that city's climate plan. Mayor Kevin Faulconer (R) after his election made some changes and endorsed the plan (ClimateWire, April 7).
Del Mar, the city just south of Solana Beach, has also adopted a plan to switch to 100 percent renewable power (ClimateWire, Aug. 8). In the case of that town, it's a road map and not legally binding. The city will need to consider and adopt individual actions to achieve the goal. It's also talking about a CCA, and has said the CCA will likely be needed to reach the green power plan.
Nearby, the cities of Encinitas, Carlsbad, Oceanside and others have met to talk about forming a joint powers agreement that would operate a CCA. Solana Beach could be part of that larger JPA if it gets approved.
Solana Beach is moving faster than its neighbors. It's released a request for proposals (RFP), asking companies to show how they'd help the city run a CCA. It was modeled after the RFP that Humboldt did, King said.
The responses to that RFP are due tomorrow. Depending on whether there are questions that need to be resolved, the City Council could review those as early as Sept. 28 and look at approving a service agreement Oct. 26.
Starting a CCA in Solana Beach and later combining with one in nearby cities is another possibility. A larger JPA would have more purchasing power, Zahn said. But Solana Beach potentially could act more nimbly if it went first.
"Forming our own energy district and keeping it small probably would enable us to move faster," he said.
Pete Hasapopoulos, organizer of the Sierra Club's My Generation campaign, is advocating for community energy in the region. While not speaking specifically about Solana Beach, he cautioned that the model of working with a for-profit business is untested.
"It just has to be proven that this for-profit model can help a city meet its objectives," he said, including reducing greenhouse gases and offering the same if not better rates than the incumbent utility.
It's true there are risks with going first with a for-profit partner, Zahn said. He said the city would be sure to vet its partner if is goes that route. But right now there is no larger JPA to join, he said, and the greenhouse gas clock is ticking.
The city is looking at a climate plan that potentially would commit to cutting emissions 50 percent by 2050, which he said is a steep hill.
"The sooner we start, the better chance we have of making them," Zahn said. "Even starting a year or two later can make it tremendously difficult to achieve those objectives."
100% renewable is costly
Solana Beach is an affluent community. The median home price here is $1.2 million, according to online real estate company Zillow.
That sometimes makes it easier to take progressive positions, Zahn said, because if there are concerns it might raise costs, "the residents are not taking as big of a risk." He added that often, the worries about higher expenses created by environmental actions have been proved untrue.
If Solana Beach goes for a CCA, there will likely be a battle with Sempra Energy, parent company of SDG&E.;
The state now bars utilities from talking about CCA unless it's done through a separate affiliate, funded by shareholder dollars. SDG&E; last November told the California Public Utilities Commission (CPUC) that it was creating just such an affiliate. SDG&E; is the first utility in the state to make the move. CPUC said it's reviewing the filing.
"SDG&E; supports a customer's right to choose its electricity service provider, including a CCA," the utility said in a statement.
Solana Beach and Del Mar recently sent a team that told the CPUC the cities have concerns about that SDG&E; effort.
"We're concerned that there could be undue influence from SDG&E; into this separate marketing arm," Zahn said. "It's really hard to build a wall between the two." Because Sempra is big with financial resources, "that really could be a disadvantage."
Solana Beach, meanwhile, still is in the process of setting its climate goals, Zahn said. The City Council must decide whether to implement a climate action plan.
Action on a CCA could come before approval of a climate action plan. The city started looking at the CCA option in 2012, King said, after Marin and Sonoma started their programs. A Solana Beach CCA could start as soon as early next year.
Starting a CCA takes upfront money, however. The city recently received results of a feasibility study that estimated a cost of $1.8 million to $2 million per year to develop a CCA. That wouldn't include the expense securing the funds or credit line needed to start buying energy, "which could potentially be close to $1 million, depending on how the program is launched."
The feasibility study looked at four options for the amount of renewables, starting with one that would mirror SDG&E;'s obligation to have 35 percent green power by 2021. If Solana Beach did that, it could save its residents about 3 percent on rates compared with SDG&E;, the study said. The city in the first five years would retain nearly $6.8 million in revenues that could be used to fund local renewable power generation and energy efficiency.
If it opted for 100 percent renewable power, the bill savings versus SDG&E; would be just 1 percent, and there would not be much money left over, the study said.
"The premiums spent on purchasing renewable grid power would be lost for investment in local renewables and energy efficiency — effectively paying more to rent green power year to year rather than owning it for the long haul," the report said.
The study also looked at the results of providing 50 or 75 percent green power.
Other CCAs offer partial green power
With Marin's CCA, customers can choose 100 percent renewable power but have to pay more for it, said Nilmini Silva-Send, assistant director of the Energy Policy Initiatives Center (EPIC) with the University of San Diego.
"They are providing mostly 50 percent renewable electricity," she said.
Sonoma's CCA has a baseline of 35 percent renewable power, with the option of picking 100 percent green for a premium price, according to the feasibility study. The city of Lancaster's program also has 35 percent green electricity as its baseline product.
On a recent weeknight, Solana Beach's Climate Action Commission worked with Silva-Send of EPIC on an experiment to see what would be needed to cut greenhouse gas emissions 50 percent by 2035, a state aim approved last year.
With a CCA that bought 100 percent green power, Solana Beach would get close to the aspirational 50 percent greenhouse gas emissions cut, but would also need to add other measures, Silva-Send said.
With a CCA with fewer renewables, the city would need to do even more. Most of the other options the Climate Action Commission members examined, including cutting waste that goes to landfill, adding trees and converting gas water heaters to solar thermal, shrunk carbon pollution by only small amounts.
The EPIC tool, "it makes us realize how difficult it's going to be. We're going to have to make sacrifices," said Judy Hegenauer, member of the Climate Action Commission. "That is a conversation we're going to have to have with citizens."
Business opportunities
The group that did Solana Beach's feasibility study, California Clean Power, came together in 2015 to expedite CCA programs through public-private deals. The market for companies serving CCAs is developing so quickly that it's since been bought by Pilot Power Group Inc. of San Diego.
Pilot Power Group is one of those looking at Solana Beach's RFP. In essence, a private company would procure energy on behalf of Solana Beach and could administer all of the data and handle customer billing, said Denis Vermette, chief financial officer at Pilot Power Group.
The company would procure fixed price contracts with suppliers, securing the level of renewable power that Solana Beach says it wants. The grid wouldn't deliver that green power specifically to residents' homes, he said, but 1 megawatt of clean electricity purchased would displace a dirty one in the state.
Pilot Power Group has been around since 2001, Vermette said, and has been securing power for commercial and industrial customers. It bought California Clean Power because it already has relationships with cities it's been talking to about forming CCEs, he said.
"The CCE market has kind of ramped up, we obviously feel we have an expertise," Vermette said. "It's just sort of a natural segment we can move into."
For a CCA to succeed, it needs at least 80 percent of the city's consumers to stay as members, Vermette said.
"An attractive price, an attractive product" with renewable energy "has to be key," because residents must be given four notices that they can opt out.
Twitter: @AnneCMulkern Email: amulkern@eenews.net
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This SoCal beach town could be driving a renewables revolution.
Vehicle-related greenhouse gas pollution is just one of the challenges Del Mar faces as it aims to go very green. The city has pledged to switch to 100 percent renewable power by 2035.
DEL MAR, Calif. — On summer weekends, traffic is jammed coming into and out of this tiny beach town.
People flock to the ocean, to the downtown village with Tudor-themed architecture, to the fairgrounds that host San Diego County's summer fair, and the horse races held at the same site.
That vehicle-related greenhouse gas pollution is just one of the challenges Del Mar faces as it aims to go very green.
The city has pledged to switch to 100 percent renewable power by 2035, a goal approved by the City Council as part of a climate action plan (CAP). Del Mar is the second regionally to adopt a CAP with that ambitious renewables goal. San Diego did it late last year (ClimateWire, April 8).
"Climate change is here, and it is posing great threats to our beaches and our wave quality," Mandy Sackett, with Surfrider Foundation, told the City Council before its vote. "The [climate action plan] is an extremely important tool to combat those threats."
Del Mar now must determine how to move forward. Its vote to adopt the plan differs from San Diego's action in an important way. San Diego approved its CAP as part of a general plan update subject to the California Environmental Quality Act, a protection law. That means the city could be sued if it failed to take pledged actions. Del Mar's move right now is more of a road map, without a legal obligation to cut emissions.
"It's voluntary, basically," for the time being, said Kristen Crane, management services director for Del Mar. But, she added, "the community feels really passionately about the environment and wanted to do it."
The city of 4,300 people created a list of actions it could take to meet the green goal. At the forefront is offering community choice aggregation (CCA), through which the city would become a kind of alternative utility that buys electricity for residents. It could then seek renewable power beyond the levels of utility San Diego Gas && Electric Co. (SDG&E;).
Other options include making streets more pedestrian-friendly to reduce vehicle trips, putting in roundabouts to curb idling, reducing waste sent to landfills, designating parking spaces for electric cars and for scooters and motorcycles, and collaborating with neighboring cities on adding a nearby fueling station for alternative fuel vehicles. The City Council would need to approve most of those actions.
Nicole Capretz, executive director of the Climate Action Campaign, a nonprofit watchdog group, called Del Mar's decision "a hugely symbolic victory, because they were the first city to adopt a climate plan after San Diego."
Capretz was director of environmental policy for San Diego interim Mayor Todd Gloria in 2013 when he drafted an early version of what became that city's CAP. GOP Mayor Kevin Faulconer after his election made a few changes to the blueprint and backed it (ClimateWire, April 7).
Del Mar's move is important, Capretz said, because it's part of a regional shift. Multiple cities near Del Mar are taking or considering similar actions.
"If we're moving as a region, then we're leveraging our resources," Capretz said. She's been encouraging other cities to pass climate plans.
Offering 'choice' appealing
Nearby, the city of Encinitas is talking with neighbors Del Mar, Solana Beach and Carlsbad about possibly joining together for a CCA, alternatively named "community choice energy." Representatives from the cities of Oceanside, Escondido and Poway also have attended meetings. If they linked, it would unite all cities north of San Diego along the coast, plus two cities to the east. That would give it more buying power.
There's interest even in places like Carlsbad — which politically is more conservative than the others — because there's the opportunity to offer customers a choice of electricity providers, said Pete Hasapopoulos, organizer of the Sierra Club's My Generation campaign. It's pushing for California to switch to 100 percent renewable power.
"Pretty much our lead message, no matter who we talk to, is monopoly versus choice," he said, adding, "It's not necessarily a hard sell to people of any particular political stripe."
Cities also like the idea that the program can generate money to invest in local energy projects, he said.
Meanwhile, Encinitas is revising a CAP passed in 2011 because "the climate science is advancing so quickly that it's time to update," said Crystal Najera, climate action plan program administrator for Encinitas. Capretz said in an email that Encinitas is "committed to developing a binding Climate Action Plan tied to state climate goals." She added that it "most likely means another 100 percent clean energy Climate Plan is coming."
Oceanside recently hired a consultant to update its CAP. Carlsbad passed a climate plan in 2015. Like San Diego, it made it binding as an update to the general plan. Action items include mandating solar on new, large, nonresidential buildings and mandating that new developments include parking for zero-emissions vehicles. Those would still need to be approved by the City Council.
Carlsbad just issued a report on the risks of sea-level rise. It said 27 acres of beaches face moderate threat by 2050 and 145 acres would see high vulnerability by 2100.
Sea-level rise an issue
Concerns about extreme heat, wildfires and drought are motivating cities, said Laura Engeman, director of the San Diego Regional Climate Collaborative, composed of staff from local governments working on climate action planning.
"The general environment and culture around taking action to address climate change has really taken a giant leap forward across the county," Engeman said. "We have cities adopting these CAPs happening all over the county. Those cities are actually also budgeting for staff to implement, which to me is a giant indicator of their commitment to deal with it."
The coastal cities are moving because they are among the first to see climate impacts, Capretz said.
"The coasts, they actually have a visceral view," she said, with seaside cliffs crumbling in places. There's sea-level rise in Del Mar, and the infrastructure there is vulnerable, including the horse race track, fairgrounds and homes on cliffs.
Cities here are likely a few years out on a joint CCA. To form a common group, they'll have to agree on the goals: how much renewable power to buy; whether to ensure rates are lower than SDG&E;'s, to keep residents from going back to that utility; and whether the coalition should generate revenue from rates that could be used for climate-related or other programs, said Najera with Encinitas.
"There's been no commitments yet," she said. "We're all just exploring the options."
Solana Beach is ahead of the rest, having done a feasibility study on a CCA and issuing a request for proposals for private companies to help finance and run the program. It might go first and then link up with the other later, said Dan King, assistant city manager at Solana Beach. That city is also looking at a CAP but said it likely will come after the CCA action.
CAP implementation not clear
Del Mar approved its CAP only after a few of the council members asked how much of a commitment they were making. Some wanted to know whether it was more of a blueprint, or whether the city was promising certain steps to get to that 100 percent green future.
"I'm ready to adopt this as a road map," Councilman Terry Sinnott said. In terms of the implementation plan, he said, "We need to balance those costs and figure out how we pay for things and figure out relative benefits."
Crane, the management services director for Del Mar, told Sinnott and the others that the suggested actions included with the CAP were not "hard and fast and set in stone."
"But it's more like we're setting this long-term target that we're trying to get to, and here's this menu of strategies that we need to look at to get there," she said. "We're going to work on those and bring them back to the council."
Sinnott said that while the action plan Crane referred to included "priorities we should try to get done," a subsequent implementation plan would need to be more detailed with costs.
"It needs to balance against other competing issues," Sinnott said. "That's one of our key problems, is resources." He suggested that the implementation plan be "part of our normal budgeting process."
Mayor Sherryl Parks jumped on the statement.
"Except for the fact that this is time-sensitive," Parks said. "The climate's getting hotter. This is the thing that we can't just decide it's budget-worthy. It's something that is right here, and it needs to be addressed."
The city at this point doesn't have a strict timetable for bringing back to the council any of the recommended actions. CCA is one at the top of the list, and a working group is looking at the option.
There are actions with climate tie-ins that could be put in place faster as part of the city's normal planning process. Those include making the city more pedestrian-accessible, Crane said.
The CAP implementation plan also talked about incorporating energy efficiency measures into Del Mar's Design Review Board process. That panel oversees development in the city. Right now, efficiency upgrades are recommended. The council would have to act to make those mandatory, said City Councilman Don Mosier.
Dr. Bruce Bekkar, a physician, vice chairman of the Design Review Board and activist among those who pushed Del Mar to pass the CAP, said he is concerned that "they'll be too cautious. They'll be too worried that someone will object, or it will cost a few bucks. This town can afford it."
Capretz said she and others will have to stay on the city to make sure it follows through.
"At the end of the day, frankly, implementation is always political, and you always need to build that will to make local governments take action on the plan," Capretz said.
Twitter: @AnneCMulkern Email: amulkern@eenews.net
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Reef balls make maiden deployment for oyster habitat.
Teamwork from Maryland environmentalists — from elementary schoolers to nonprofit workers — could result in new oyster habitat, and consequently cleaner water, for the Chesapeake Bay.
Teamwork from Maryland environmentalists — from elementary schoolers to nonprofit workers — could result in new oyster habitat, and consequently cleaner water, for the Chesapeake Bay.
Maryland Coastal Conservation Association members and partners dumped 70 concrete reef balls into the bay on Thursday, the first deployment for the organization's Living Reef Action Campaign.
Reef balls, gumdrop-shaped concrete structures with holes in their walls, are designed to be a foundation for oysters, which filter pollution from water. Each ball was covered with about 1,700 spat, or baby oysters. Oysters often grow on the shells of other oysters, but when populations and reefs decrease, it's harder for the next generation.
"The goal is first to improve water quality to filter out excess nutrients," said Rick Elyar, president of the central region chapter of CCA. "It also creates habitat for marine life and creates an amazing fishing spot for recreational watermen. There's so much life there."
Program organizers aim to place 200 reef balls and over 250,000 oyster shells on an 84-acre site off the western edge of Tilghman Island this fall and next year.
As the reef gets taller, the oysters will filter water from the bay's floor to the water's surface, hitting different parts of the water column, organizers said. With the up to 300-pound structures, they hope to generate 3 million oysters by the end of 2017.
Students from fourth- through 12th-grade in Carroll and Anne Arundel counties spent class time this spring making the structures and assisting with the project.
Leslie Bollinger, a fourth-grade teacher at Cranberry Station Elementary School in Westminster, rode along for the deployment on Thursday. Her students participated in an over month-long, multi-discipline project in which they were challenged to engineer a mechanism that would funnel oyster shells efficiently into mesh bags. The shells bagged by her students will eventually be released with spat over the reef balls.
"They were very invested in the whole thing," said Bollinger, who took photos of the reef ball deployment for her students. "It'll be cool to show them: This is what you did."
Elyar praised the organizations and people who volunteered supplies and time, including the Oyster Recovery Partnership and the Chesapeake Bay Foundation.
"I'm extremely proud how many partners came together to make this happen," he said. "It was inspiring."
The program is exploring possible expansions in West Virginia and Pennsylvania, Elyar said.
"We're getting the agriculture community interested in marine conservation," he said.
Glenn Schneider, 64, is a lifelong fisherman on the bay. The Edgewater resident recalled more abundant but admittedly less sustainable days when watermen were permitted to take hundreds of fish home.
He isn't sure the bay can go back to when 3-foot trout were plentiful, but he said the reef ball project makes him optimistic.
"It's a change of paradigm," he said. "It means better water quality, which means more fish."
Schneider said some may call the project's potential effects a "drop in the bucket."
"But a number of drops in a bucket makes a full pail."
Working together for water quality
The Living Reef Action Campaign relies on donations from several organizations:
•Seeding and management of oyster shells collected from local restaurants by the Oyster Recovery Partnership
•Concrete from Lehigh Cement in Carroll County
•Concrete molds from the Stevenson University School of Science and the Chesapeake Bay Foundation, which also contributed seeding work
•Permits and funding assistance through the Maryland Artificial Reef Initiative
•Money from BaySaver Technologies in Mount Airy
•Volunteers from the Coastal Conservation Association and students in Carroll and Anne Arundel counties
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Meet the latest disruption for utilities: community power.
Local power agencies - under the distinctly wonky moniker of "community choice aggregation" - are gathering steam in California as an alternative to retail sales from utilities.
Behind the vanguard of distributed energy, another threat to traditional utilities' hegemony has been steadily rising.
Local power agencies -- under the distinctly wonky moniker of "community choice aggregation" -- are gathering steam in California as an alternative to retail sales from utilities.
Under the community choice model, local governments can form energy agencies that buy electricity from sources other than the incumbent utilities. The attraction is, variously, lower retail rates, a higher mix of renewable energy, or simply local control.
San Francisco, San Diego, San Jose and Los Angeles County are all moving toward community choice programs. Sixty percent of California residents who aren't already served by municipal utilities could be in CCAs by 2020, according to an analysis by the Center for Climate Protection, a nonprofit that sees community choice as a potent tool to reduce greenhouse gases.
Paul Fenn, who is known as the father of the CCA model for his authorship of enabling legislation in Massachusetts in 1997 and California in 2002, calls their advent a "slow explosion."
"It's basically the whole coast of California," he said. "It's one of those things that took a long time to explode."
"I don't know why they're not talked about," said Mark Ferron, a member of the board of California's grid operator, the California Independent System Operator, and a former California Public Utilities commissioner. "They're certainly on the utilities' radar screen."
Community power's potential penetration in California
Service start date Program Population served
2010 Marin Clean Energy (MCE) 261,000
2014 Sonoma Clean Power 488,000
2013-2015 MCS adds Richmond, Benicia, El Cerrito, San Pablo, Napa 220,000
2015 Lancaster Choice Energy 161,000
2016 CleanPowerSF 852,000
2016 Peninsula Clean Energy 759,000
2017 MCA adds interested entities from Napa and Contra Costa counties 428,000
2017 Silicon Valley Clean Energy 600,000
2017 San Jose 1,016,000
2017 Alameda County and cities 1,535,000
2017 Davis and parts of Yolo County 120,000
TBD Los Angeles County and cities 5,800,000
TBD Monterey, Santa Cruz, San Benito counties 750,000
TBD Santa Barbara, San Luis Obispo, Ventura counties 1,500,000
TBD Santa Diego County and cities 3,263,000
Total population of communities with/launching/exploring CCAs 17,753,000
California population (38,800,000) - 25% served by municipal utility districts 29,100,000
Total percent eligible population to potentially be served by CCA by 2020 60%
Courtesy of the Center for Climate Protection.
Pacific Gas and Electric Co., the state's largest utility with 5.4 million electricity customers, has 370,000 CCA customers in its territory. That number could rise rapidly with San Francisco's program, which started last month with 30 megawatts serving 7,400 commercial customers and plans to add 20 MW -- enough to serve up to 48,000 residential customers -- by November.
San Francisco is offering a mix of natural gas and 35 percent renewable energy from Calpine Corp., as well as a 100 percent renewable option, which comes from Iberdrola Renewables' Shiloh Wind project in Solano County. About 220 customers have opted for the "super green" option, which costs about $6 more per month, according to the San Francisco Public Utilities Commission.
While 35 percent isn't much greener than PG&E;'s own mix of about 27 percent renewables, San Francisco has other plans to differentiate itself. It will offer net-energy metering "more attractive than what PG&E; is offering," spokesman Charles Sheehan said, so customers with rooftop solar can join, as well as a feed-in tariff to incentivize local renewable projects.
California's rules for CCAs require the programs to send several notices offering customers the option to stay with the incumbent utility. San Francisco expected an opt-out rate of around 20 percent, but so far only about 1 percent has chosen to stay with PG&E;, Sheehan said.
"It's something that a lot of people seem to want," said California Public Utilities Commissioner Mike Florio.
Besides buying wholesale renewables, the programs can offer incentives for rooftop solar and other renewables, and can finance larger-scale local installations, as in the case of the state's first CCA, Marin Clean Energy.
Begun in 2010, the program now covers all of Marin and Napa counties and is reaching into Contra Costa and Solano counties. It charges about a penny more per kilowatt-hour than PG&E; does and plans to become fully cost-competitive this September.
Its electricity, from a combination of renewable energy credits, large-scale hydropower and generic "unspecified" electricity, is 52 percent renewable, compared with PG&E;'s mix of about 30 percent renewables. For another penny per kilowatt-hour, customers can upgrade to 100 percent wind power; another 6 cents will buy supplies from a 2-MW solar plant within the county that's scheduled to come online later this year.
The laws have changed
The state's utilities have had years to get used to CCAs. A 2002 state law expressly allowed their creation, but the first one didn't emerge until 2010.
After PG&E; sponsored a ballot initiative that year that would have required local governments to achieve a two-thirds vote before forming CCAs or municipal utilities, a 2011 law created a "code of conduct" for utilities to abide by; they are now required to use shareholder money if campaigning against CCAs, among other guidelines. Since then, there have been more attempts to hamstring CCAs at the ballot box and in the Legislature, but all have failed.
"Things have definitely changed," Sheehan said. "New laws have helped streamline and regulate the process, and it's much easier for CCAs to get off the ground."
The utilities aren't eager to expound on how they view CCAs today. Southern California Edison Co., which is home to Los Angeles' nascent CCA program, is neutral on them, per the 2011 law. "SCE's position is NEUTRAL on CCA programs," spokesman Robert Laffoon-Villegas said.
San Diego Gas & Electric has applied to the CPUC for approval to spend shareholder money on communicating about CCAs. A November 2015 filing asks for permission to form an independent marketing division to fill the "informational vacuum" created by the 2011 law.
"This vacuum is the product of the utility's concern that it might be accused of advocating against CCA, as opposed to the utility simply participating in a healthy public discussion of the region's efforts and progress toward a greener future," SDG&E; wrote. "Moreover, this vacuum is often filled by information from CCA proponents who seem to believe that non-utility service is the only means by which to achieve a greener and more local energy supply. ... SDG&E; understands the goal of such local efforts but does not believe that a CCA program is the only means to such an end."
In the meantime, spokeswoman Allison Torres said SDG&E; "supports a customer's right to choose its electricity service provider, including a community choice aggregation; unfortunately, we're prohibited from participating in discussions specific to CCA by the CCA code of conduct."
Observers say there shouldn't necessarily be a conflict between investor-owned utilities and government-owned electricity suppliers.
"I don't know that they're necessarily a threat to the utilities, other than they represent a change, and anytime you give customers choice, the monopoly incumbent is not going to be too pleased about that," Ferron said. "At least the ones I know about, [CCAs] don't have any aspirations to operate the distribution grid, so the role of a distribution system operator, which utilities perform in part, I think will be intact."
'The threat lies in the eyes of the beholder'
California utilities don't make money on electricity sales, so they won't lose profits to community choice. But to the extent that they depend on rates to fund fixed expenses, they face a shrinking pool of customers to shoulder increases. That increases the risk of driving more governments to CCAs -- a similar cycle to that posed by rooftop solar systems.
On the other hand, distribution-side grid upgrades are an opportunity for profitable investment.
"The threat lies in the eyes of the beholder," said Ahmad Faruqui, a principal with the Brattle Group. "I think utilities are concerned about these new forces that are going to threaten their revenue recovery for their fixed costs. As long as that is assured, they should not see it as a threat."
State regulators allow the utilities to levy a charge on departing CCA customers to compensate them for the cost of the power that the utilities had already purchased to serve anticipated load. That has cut into CCAs' cost-competitiveness, but regulators say it's needed to make up for the expensive long-term contracts that utilities signed in the early days of the state's renewable portfolio standard.
"We've been very successful through the RPS and other programs of driving down the cost of renewables, but now you've got these 20-year contracts that the utilities were told to enter into that are two to three times the price it is today," Florio said. "Nobody wants to pay for it, but it's kind of the price we paid to build the market, and if you say only the customers who stay with the utility have to pay that, everybody leaves and the last person is paying a billion-dollar utility bill."
Some environmentalists are skeptical that CCAs can stimulate low-carbon energy as well as utilities can. The Natural Resources Defense Council argues that CCAs make it harder for utilities to do long-term, comprehensive energy planning due to uncertainty about their future customer base. "That also means it is less likely that the utilities will invest as much in long-term projects promoting clean energy, like renewables," said Lara Ettenson, the group's director of California energy efficiency policy.
An advocate in the Los Angeles region disputes that community choice will hurt renewables or utilities' ability to do long-term planning.
"You can easily forecast the trends of what's happening right now," said Joe Galliani, organizer of the South Bay chapter of the 350.org climate action group. "Any utility executive worth their salt can see what's coming."
Los Angeles has two CCA efforts underway: a group of 20 cities including Torrance, El Segundo, Carson and Beverly Hills, and a separate program that the county of Los Angeles is considering for its unincorporated areas. Galliani is involved in the cities' effort and estimates they could be ready to launch by the summer of 2017. He envisions the CCA growing gradually from the original core, similar to Marin Clean Energy's trajectory.
"At least 50 percent of the load of the IOUs is going to go to CCAs in this state," he said. "At some point down the line, it's going to be a third IOU, a third [municipal] and a third CCA. This is a train you can't stop."
Twitter: @debra_kahn Email: dkahn@eenews.net
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Why Coalition climate scare campaign is not credible and makes no sense.
Malcolm Turnbull is attempting to discredit Labor’s new emissions plan. Here are six reasons the government’s campaign is wrong.
1. The prime minister says that by promising to cut emissions by 45% by 2030, rather than 26% to 28% (as the government has pledged) Labor is “doubling the burden” on Australians. But modelling commissioned by the Coalition from leading economist and former Reserve Bank board member Warwick McKibbin showed that a 45% cut would shave between 0.5% and 0.7% from gross domestic product (GDP) by 2030, whereas a 26% cut would shave between 0.2 and 0.3%. In other words the difference in the economic cost of the Coalition’s target and Labor’s target is about 0.3% of GDP in 2030. That’s 0.3% of an estimated GDP of over $3.5 trillion. It’s not hard to work out that is not doubling an economic burden.
2. Greg Hunt and Barnaby Joyce have recycled the discredited claim that different modelling has shown that Labor’s 45% target will increase electricity prices by 78%.
That is wrong. The numbers come from Treasury’s 2013 modelling from the Climate Change Authority. The CCA itself has said it is “incorrect” and “wrong” to interpret its report this way. Its former chairman, Bernie Fraser, said the claim was “weird” and “misleading”. The 78% increase refers to wholesale prices in a scenario where Australia did nothing at all, compared with a scenario where we reached a higher target using only a high carbon price. We have already decided doing nothing is not an option, and no political party is proposing to reach a target using only a carbon price. So the figure is entirely irrelevant to the debate. The McKibbin modelling is far more useful in estimating the costs of what might actually happen.
3. Scott Morrison claims Labor “learned nothing from the last election when voters said ‘no’ to a carbon tax” and is “bringing back ... a big thumping electricity tax” that will “punish Australian families”.
Except it isn’t. It is proposing a separate intensity-based emissions trading scheme for the electricity sector, different from the ETS for heavy industry. This idea is very, very similar to one Malcolm Turnbull himself proposed as opposition leader in 2009, and very, very similar to the scheme “Direct Action” could be converted into after the election – something most in the business community assume will have to happen since Australia’s emissions are rising and Direct Action has little hope of reaching the government’s long term target. It’s the scheme the energy market regulator – the Australian Energy Market Commission – recommended that the government adopt in a submission last year and said could operate “without a significant effect on absolute price levels faced by consumers” and which state and federal energy ministers asked that body to develop further late last year.
So if prices increase slightly – and they may – it’s a price rise the Coalition itself is very likely to find itself considering when it starts figuring out how to reshape Direct Action into something workable after the election.
4. Malcolm Turnbull says Labor’s proposed target is out of step with the rest of the world, because it is higher than the target he pledged at the Paris conference.
But that’s not really right either. The Paris conference was a “bottom up” process, which means countries got to promise whatever they were prepared to do, and peer pressure was the only thing pushing them to higher levels of ambition. Many have judged the Coalition’s target to be too low to represent our fair share of the global effort. Analysis by Climate Action Tracker rates it as “inadequate” The CCA recommended a reduction of 40% to 60% on 2000 levels by 2030. The Climate Institute said the government’s target was “pathetically inadequate”. And the prime minister acknowledges that Australia will almost certainly have to increase its target over time, which raises the question as to whether we wouldn’t be better designing policy to achieve the emission reductions we know we are going to have to achieve.
5. The government claims the broader industrial ETS will be “yet another economic handbrake that Labor is putting on our economy”.
But – evidently not keen to walk straight into another major scare campaign – Labor has gone to great lengths to make sure this claim cannot be substantiated.
In its first stage, from 2018 to 2020, heavy industry will only have to buy permits over a yet-to-be-determined “cap”. If it’s a trade exposed industry and exceeds its “cap” those permits can all be bought on the international market. The cheapest of those permits, “certified emission reductions”, are selling for less than $1. So while we can’t calculate exactly what a particular firm might have to pay, it isn’t going to be much.
After 2020 it will introduce a longer term industrial ETS, and also decide what other sectors might be covered, for example agriculture or road transport. Here the details become even more vague, with most to be determined in consultation with industry after a Labor government won office.
And just in case anyone still had concerns, there’ll be a “strategic industries taskforce”, to help design the scheme, and a $300m fund to help hard-hit communities with the transition.
Labor might be criticised for leaving important details until later, for erring on the side of caution, for claiming it will get to net zero emissions by 2050 without explaining exactly how it would do it. But it’s made absolutely sure it can’t be attacked for applying an economic handbrake on anything.
6. Which brings us to the final reason this new carbon tax scare campaign rings so totally hollow. Labor, and those in the Coalition who understand that climate change is a thing, are actually converging in their ideas about what policies Australia should adopt. They are moving towards sectoral, and maybe intensity-based, trading schemes and towards using a suite of policies (energy efficiency, vehicle standards, regulations) to get to our targets. And every interest group with a stake in this argument – business, environment groups, investors – are desperately willing the major parties to find some kind of consensus. The Business Council of Australia said Labor’s policy could be a “platform for bipartisanship”. They are right.
And the barren, stupid climate wars and dumb fact-free scare campaigns are a guaranteed recipe for a terrible economic and environmental failure.
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