CCA Digest
CALIFORNIA Roundup, August 2015
A Message from LEAN's Executive Director
It was standing room only on our CCA Market Webinar earlier this month. Thanks to all who listened in and a special thank you to our terrific guest speakers: Geof Syphers (SCP), Dawn Weisz (MCE), Barbara Boswell (LCE), Jason Fried (SF Local Agency Formation Commission) Nicole Capretz (Climate Action Campaign), Mary Lynch (Constellation) and Steve Fleming (River City Bank). We truly appreciate your willingness to share your valuable insights and experience! A copy of the webinar power point presentation can be found here.
California CCAs have faced plenty of challenges from incumbent utilities, and the latest of these appears to be a strategy to undermine progress in program areas that CCAs are so well positioned to implement - those that promote local renewable resources and energy efficiency.
In recent months, proposed utility initiatives would:
- penalize customers who install on-site solar projects
- offer subsidized "green tariffs"
- require calculations of greenhouse gas savings that artificially increase estimates of their own savings and performance
- and bill CCA customers for renewable resource commitments made on behalf of non-CCA customers
PG&E has also proposed that CCA customers subsidize PG&E's electric vehicle charging infrastructure (through distribution rates) with program benefits going to PG&E and its customers.
The good news is that the competition from CCAs and the public's support of a new energy paradigm is motivating the large utilities to pay more attention to customers and renewable development. The bad news is that they want government to approve special subsidies, protect them from competition, and promote a centralized approach to resource development.
MCE has been very effective in ferreting out the effects of the fine print in the utilities' regulatory and legislative proposals. Sonoma Clean Power and Lancaster are getting involved as well. We are expecting continued utility proposals that would stifle competition from CCAs and Direct Access - and we will continue to support a response that puts the interests of consumers, competition, the natural environment and local communities in the forefront.
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Update of CCA Program Developments in California
Continued progress in numerous California communities...
Nicole Capretz of Climate Action Campaign in San Diego reports that South Coast cities, including Oceanside, Solana Beach, Encinitas, Del Mar and Carlsbad, are gearing up their investigations of CCA programs. Solana Beach has engaged California Clean Power to develop a feasibility study and Encinitas' Environmental Commission is developing an initial report for the City Council. The City of San Diego meanwhile, is planning to commission a validation study in order to complete the technical feasibility work that started in 2014.
Jason Fried from the City of San Francisco's LAFCO reports that the City has issued an RFO for energy supplies and expects responses by September 3. Jason also reports that the City's Civil Grand Jury issued a report on CCA that highlighted misunderstandings about unbundled RECs and labor issues. See this report HERE.
He also notes the status of IBEW's November ballot initiative, which would require some uneven reporting on energy portfolio content between CleanPowerSF, the City's unlaunched CCA, and PG&E. The Board of Supervisors countered the measure with a legislative proposal that would require PG&E to disclose nuclear resources, which apparently led to an agreement by the IBEW not to actively campaign for its initiative. It does, however, remain on the ballot so risks remain. Stay tuned...
Updates in other communities...
| San Mateo County |
Technical Study to be complete in early September; Currently working on JPA agreement and local ordinances. Next committee meeting 8/27; Matter comes back before the Board of Supervisors in October.
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| Silicon Valley CCE Partership: Santa Clara County, Cities of Sunnyvale, Cupertino and Mountain View |
Technical Study to commence in late August with target completion by mid-November; County and 12 cities participating. JPA discussion and community outreach underway.
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| Alameda County |
RFP for Technical Study released; bids due in mid-October; Expanded study scope to include local labor/jobs study; Next committee meeting 9/17.
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| City/County of San Francisco |
Grand jury issued report on CleanPowerSF; IBEW 1245 standing down on November ballot initiative; SFPUC planning to launch Phase I in January 2016. Bids for energy supply services due Sept 3.
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| Mendocino County |
Exploring program management options; community outreach and education to begin in Sept.
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| Lake County |
Board of Supervisors approved contract for legal review and analysis of CA Clean Power offering. |
| City of Davis/Yolo County |
Issued RFP for Tech Study- bids currently under review; Also sent a letter of interest to MCE; Community outreach and education to expand this Fall.
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| Santa Barbara County |
Issued RFP for program support; RFP for technical study expected this Fall. SB Co. will be the first to explore CCA in a split utility territory (PG&E and Edison) |
| Ventura County |
Committed funding to participate in Santa Barbara County's Tech study.
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| Cities of St. Helena, Yountville, Walnut Creek and Lafayette |
Issued non-binding letters of interest to join Marin Clean Energy. |
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The Latest from California CCAs
MCE Setting the Pace -
Dawn Weisz reports that MCE is in various stages of development for 152 MW of solar in MCE's territory and the Central Valley, which will enable MCE to phase out unbundled "RECs" from its supply portfolio in 2016. MCE has been working with the IBEW and Laborers' Union on several of these projects including the new 10.5 MW solar project in the City of Richmond.
MCE is also breaking new ground in the energy efficiency arena by filing a 2016 program proposal with the CPUC that would make MCE (not PG&E) the default provider for integrated energy efficiency services in its territory. A chief component of its integrated approach is to provide MCE customers with a single point of contact for EE programs and other initiatives such as solar hot water projects, demand response and battery storage.
SCP Considers Expansion, EVs -
Sonoma Clean Power is assessing how to be most helpful to new communities exploring CCA, and the SCP Board is considering program expansion outside the County's borders. Mendocino County has indicated interest in joining SCP if the Board decides to go in that direction. Geof Syphers also reports that SCP is planning to support the County's Climate Action Plan by focusing on programs that support electric vehicles in Sonoma County.
LCE's Early Popularity -
Barbara Boswell, Director of Lancaster Choice Energy, reports that the program is going through the customer notification process for its all-city launch in October which will result in ~55,000 accounts. So far in Phase I, its opt-out rate is below 2%...a nice contrast to its forecast of 20%! Barbara also reports that LCE just signed a PPA for 10MW of power from a Lancaster-based solar project.
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Got Money?!?
CCA Financing.
For many communities, the biggest hurdle in CCA development is how to finance it. Steve Fleming, CEO and President of River City Bank and banker to Marin Clean Energy, reports that financial institutions are increasingly open to CCA financing because of the success and financial performance of MCE and SCP, and the fact that it offers an essential service to a robust customer base. He describes four types of financing:
- "Seed" Financing and pre-revenue Bridge Loans-- Financing for pre-launch planning and credit for initial energy contract(s). This is the toughest capital to get because there is no collateral or program revenue established. However, banks may consider providing credit and cash with a loan guarantee from the sponsoring city or county.
- Operating Capital -- Financing to support CCA operations. This is initially done as a line of credit with credit guarantee that is refinanced once program revenues commence.
- Operating Capital for Expansion -- Funds needed to support program growth are available with solid revenue/financial performance and management track record
- Power Project Financing -- Once the CCA program is fully operational with positive cash flow, stable management and credit rating, bank financing may be available for specific energy resource projects that the CCA sponsors.
Steve reports that in assessing loan risk, banks will consider not only the revenue projections/financial performance, but the strength of the management team and the support of the local community as well. He also points out that the success of CCA "pioneers" -- MCE and SCP -- has added credit confidence in CCA programs.
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Regulatory and Legislative Happenings
A few CPUC updates this month...
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Residential Rate Design --
The CPUC's recent decision to flatten its tier structure will disporportionately hurt solar development, low income customers and customers who use small amounts of electricity. The rate changes won't affect utility generation rates, so CCA rates would not need to change, although CCAs will be affected as their customers realize the impacts on their bills. more here
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PG&E ERRA Application --
PG&E's recent "ERRA" application would reduce 2016 generation rates and increase the PCIA (by 70%), both of which will affect CCA competitiveness. MCE, SCP and LEAN Energy are participating in the proceeding and looking for ways to fight the proposals. Dawn Weisz advises that the drastic increase in the PCIA only affects PG&E's territory--SCE is proposing a zero PCIA in the coming year. more here on A1506001
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NEM 2.0: Utility Proposals for Customers with Roof Top Solar --
PG&E, SCE and SDG&E have filed proposals with the CPUC that would effectively penalize customers with roof top solar by proposing minimum bills and reduced credits for excess power. PG&E, for example, would reduce its credit from $.17 to $.10 per kilowatt hour, effectively charging solar customers for transmission and distribution facilities they are not using. It would also impose a $3 service charge per kilowatt. There will be plenty of opposition to these proposals by environmental groups and the solar industry. LEAN will be monitoring this for effects on CCAs and their customers. more here
At the California Legislature:
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AB 1110 (Ting) --
SCP and MCE have been working with authors and sponsors to fine-tune the bill language in ways that would mitigate unintended impacts on CCAs; placing the bill on a two-year track to ensure that "it gets done right" has also been proposed. Bill amendments were released on August 18 (view here) and SCP issued an updated letter in response; please see SCP's letter here. In addition, Center for Resource Solutions, manager of the Green-e REC certification program, sent detailed comments to Senator Ting's office. LEAN recommends an 'oppose unless amended' position on this bill.
Next stop: Senate Appropriations.
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SB 350 -- (deLeon)
CCAs continue to support this bill, but there are a few devils in the details. As drafted, the bill would give the utilities RPS credit for existing roof top solar projects, which could dampen the impact of the bill on new renewables development. It would also require CCA customers to pay for part of the cost of renewables purchased for non-CCA customers through the utilities' "Cost Allocation Mechanism." Dawn Weisz reports that MCE has proposed language eliminating this provision. more here
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SB 286 (Hertzberg) --
Mary Lynch from Constellation reports that this bill, which raises the cap on Direct Access to 8,000 new Gwh over three years, is on its way to Senate Appropriations. With current amendments, the bill would require all new procurement within the expanded cap to meet California RPS requirements. more here
If you would like more information or have ideas for collaboration, please contact Kim Malcolm
[email protected]
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We'd like to extend an enthusiastic thanks to all our members, whether you're new on the scene or renewing your membership. Your support is critical to our success, and to the success of CCA everywhere.
WELCOME to our newest supporters! We're so happy to have you on board:
New Members
Community Environmental Council
Recurrent Energy
Climate Action Campaign
James Hendon
Eldon Cotton
Giselle Stahl
Renewing Members
Planet Ecosystems
Green Cities California
Direct Energy
San Francisco Water/Power/Sewer
Shell Energy North America
What?
You say you're not a member yet?! You can join through our website
sign-up form, or contact LEAN's Administrative Coordinator, Alison Elliott, at [email protected].
Click
here for our membership flyer information. Or
here for our quick digital brochure, explaining why the work we do is so important.
You can see logos of all our current members on our website HOME page. Please take the time to peruse their websites--you may find some important contacts there.
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Our Consulting Clients
In addition to providing open source informational resources to all interested parties, LEAN Energy also provides consulting services to communities involved in CCA investigation and development. Whether you're just considering formation or further along, LEAN can help flatten your learning curve, provide critical guidance, and prep you for launch in record time. You'll learn from those who have already done it successfully--all while keeping your profits within the community, to dedicate to local priorities.
Here are some of LEAN's current CCA consulting clients:
Alameda County
San Mateo County
City of San Diego/CSE
City of Lancaster
Silicon Valley CCE Partnership
Santa Cruz County/Monterey Bay Community Power
City of Davis
Looking for help with CCA Formation? Call Us!
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Odds and Ends
MCE Announces $150,000 in Rebates to its Rooftop Solar Customers
While the state's largest utilities are proposing ways to stifle behind-the-meter solar development, MCE is celebrating it by providing cash to customers who provide system energy to MCE.
Voice Your Concerns re: AB1110
Please consider expressing your concerns to Legislators over AB 1110. While we favor the concept of uniform GHG reporting, the bill needs fine-tuning! See below for the latest and contact us if you'd
like a draft
letter you can tailor to your organization or firm.
Educational Workshops Available
Would a workshop on CPUC regulation or an informational CCA webinar be useful for your community or working group? LEAN Energy can help!
Next Monthly Market Call
Friday, Sept. 11th, 10-11 am
Help Design our Market Calls
We're asking for input and suggestions about what's most important to YOU.
Please
click here
to take our very brief survey and make sure your voice is heard!
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of the Latest News!
Remember to follow us on facebook and Twitter for up-to-the-minute news flashes on the CCA marketplace.
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Acronym Cheat Sheet
Are the acronyms and abbreviations stumping you? Here's a quick glossary of some frequently used terms:
BOS - Board of Supervisors
CAM - Cost Allocation Mechanism
CPUC - California Public Utility Commission
ERRA - Energy Resource Recovery Account
iBank - California Infrastructure & Economic Development Bank
IBEW - Int'l Brotherhood of Electrical Workers
JPA - Joint Powers Authority
PCIA - Power Charge Indifference Adjustment
PPA - Power Purchase Agreement
REC - Renewable Energy Credit
T & D Rates - Transmission and Distribution Rates
TOU Rates - Time of Use Rates
CCA vs. CCE - What's the difference? Nothing!
Community Choice Aggregation is sometimes called Community Choice Energy. The first is a legal term; the second is more descriptive and consumer-friendly.
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