Published on June 19th, 2014 | by Roy L Hales1
UCLA Practicum Warns AB 2145 Might Render CCAs Ineffective
June 19th, 2014 by Roy L Hales
Every year, fourth-year students from UCLA’s B.S. Environmental Science Program do a practicum with outside partners, and this year’s project explored ways to decarbonize the electricity supply for the city of Hermosa Beach. The students recommended forming a community choice aggregate (CCA), depending on what the California legislature does, and warned that AB 2145 might render CCAs ineffective.
“If passed and signed in its current form, AB 2145 would require all future CCAs to become opt-in programs,” it says on page 18 of their report. “This would decrease CCA program participation rates, perhaps to levels similar to that projected for … (Southern California Edison’s soon to be launched Green program)…. Because CCAs would aggregate less electricity demand, they would have less bargaining power when negotiating contracts. This would all-but-eliminate the ability of CCAs to provide cost-competitive rates with higher renewable content as compared to the utility. The City of Hermosa Beach should consider formally opposing AB 2145 in order to preserve their options to decarbonize the city’s electricity in pursuit of aggressive GHG emissions reductions.”
CCAs need large numbers of customers in order to negotiate for energy sources.
When Community Choice Aggregation was authorized, in 2002, everyone within a community that chose to form its own utility was automatically enrolled. People could “opt out” if they choose.
Marin Clean Energy was launched under this platform and 76% of Marin county’s population is currently enrolled.
AB 2145, which is backed by the state’s utilities, would make it necessary for people to “opt in” to a CCA.
This could reduce a CCA’s customer base to the amount projected for Southern California Edison’s (SCE) Green rate: ½%. The utility will be offering this program in obedience to California law and the customers can “opt-in” to if they choose. SCE is not required to offer this program after 2019, when the entire state will use 33% green energy sources. Looking at these stats, one has to wonder if this program is designed to fail.
By way of contrast, MCE’s motivation is to adopt a community controlled green energy program, and they are hoping to eventually enroll 100% of the potential customers in their area.
As you can see in the chart below, MCE offers its customers a “Light Green” (50% blend) that is both cheaper and much more environmentally friendly than their old utilities (PG&E). They also have a “Deep Green (100%) which costs the average household around $4.60 more than PG&E is charging.
The students recommended that Hermosa Beach help form a CCA, which would allow them to reduce their carbon footprint by 33% for just over $4 per household per month (equivalent to the Deep Green rate above).
Due to the extensive set-up costs, this option would necessitate joining with a number of cities, and the students recommended five potential partners.
Their study also encompassed a number of other aspects of this subject. For example, the students found that Hermosa Beach has the potential to service 100% of its energy needs through rooftop solar, but this option is not practical. Without extensive system upgrades, the city would have too much energy during the day and not enough at night.