Board of Supervisor to Vote on Community Choice Renewable Energy Default Rate: Tuesday, October 16

Clean Power Alliance vote:  Tuesday, October 16 @ 10am

Where: County Government Center, Hall of Administration, Board of Supervisors Hearing Room 800 S. Victoria Avenue

The Clean Power Alliance offers residents the choice of purchasing renewable energy at competitive costs to be distributed through the SCE grid. Communities that have opted into the Community Choice Energy program must choose a default option for the quantity of renewable energy they intend to purchase:  36%, 50% or 100%. Ojai has chosen the 100% default option, and Ventura County will decide on their default option at this Board meeting

For more details please read the following information sheet provided by OVGC Board Member, Michelle Ellison:

Clean Power Alliance: The Renewable Energy Default

Background on Clean Power Alliance

  • Clean Power Alliance (CPA) is a newly formed community choice energy provider serving Los Angeles and Ventura Counties. It will serve approximately one million customers across 31 communities including unincorporated Los Angeles County, unincorporated Ventura County, and the cities of Agoura Hills, Alhambra, Arcadia, Beverly Hills, Calabasas, Camarillo, Claremont, Carson, Culver City, Downey, Hawaiian Gardens, Hawthorne, Malibu, Manhattan Beach, Moorpark, Ojai, Oxnard, Paramount, Redondo Beach, Rolling Hills Estates, Santa Monica, Sierra Madre, Simi Valley, South Pasadena, Temple City, Thousand Oaks, Ventura, West Hollywood, and Whittier.
  • CPA procures the electricity, while Southern California Edison (SCE) distributes the electricity and handles billing.
  • Key benefits to CPA include customer choice, local control, cost savings, and more renewable energy content.
  • Customers have three rate options – currently they are 36%, 50% and 100% renewable energy.
  • Current projected cost savings (relative to SCE’s base rate) is 1-2% for the 36% rate tier, 0-1% for the 50% rate tier, and a cost premium of 7-9% for the 100% rate tier (but a cost savings of at least 5% relative to SCE’s comparable 100% renewable plan). Rates will be finalized in November 2018.
  • Service began in 2018 for municipal and commercial customers in unincorporated Los Angeles County, Rolling Hills Estates, and South Pasadena. All other residential accounts are scheduled to start service in February 2019 and non-residential accounts in May 2019.

The Renewable Energy Default

  • Each participating jurisdiction decides its own renewable energy default – 36%, 50% or 100%.
  • The default is the plan customers are enrolled in if they make no selection. All customers have the ability to choose another plan.
  • Member agencies must make their final default decisions by October 31, 2018. While many have indicated a selection already, there’s still time to reconsider.

Case for the 100% Renewable Energy Default

  • The urgency of the climate crisis necessitates that we transition to clean renewable energy in earnest.
  • Industry studies reveal there is overwhelming public support for renewable energy, and people are willing to pay more for it. In other words, the public wants cleaner energy and they want it now. Since we want more renewable energy, then our defaults should support that.
  • Defaults are extremely important. Behavioral studies demonstrate that a vast majority of people stick with the default status. For example, when employees are automatically enrolled in retirement savings plans, there’s a much higher participation rate than if they have to individually opt in.
  • By setting the default at 100%, we will get much more participation at that level than if we set it at a lower tier. Likely only a small percentage of customers will opt down, most will remain at 100%.
  • Likewise, if we set the default at a lower tier like 36% or 50%, that’s mostly what we’ll get. Despite our best intentions, few of us would opt up, not because we don’t want to, often just because of inertia or the busyness of life.
  • The default is simply a suggestion, nothing is being forced on anyone, customers have the freedom to choose another plan. Why wouldn’t we want to suggest 100% and encourage a dramatic reduction in polluting emissions?  
  • The projected cost difference for the 100% option is 7-9% more than Edison’s base rate, but the renewable content is 66% more, a compelling return. It’s a small price to pay for the long-term benefits. While there’s a slight rate savings of 1-2% in the lower two tiers, there’s far less renewable in those, so we must consider the costs of externalities associated with more polluting emissions. Emissions are costly to our society and need to be factored into our decision-making.  
  • For those communities with a 100% default, CARE and other low-income customers will have the plan benefit at no additional cost. This provision protects the most financially vulnerable customers.
  • California currently targets 100% clean energy by 2045. Consider this – the 100% default gives us an opportunity to achieve that goal 25 years ahead of schedule! Simply by setting the default at 100%, as early as the middle of next year 2019 when service begins, our communities will be powered by close to 100% renewable, a huge improvement from the roughly 30% renewable mix that is standard today. I can’t think of a more tangible, immediate, or easy way to make this kind of substantial leap forward. It’ll take much more time, effort and expense for our communities to get there otherwise.
  • While it might be possible to change the default in the future, it would be more difficult than setting it right from the get go.
  • The default plans we select today impact the amount of renewable energy powering us into the future.
  • Renewable energy is available and affordable, we just need to start choosing it.
  • So far, the following member agencies have set their default at 100%: Santa Monica (for commercial accounts), Culver City, West Hollywood, the unincorporated Ventura County (for commercial accounts) and Ojai. Others are considering doing so as well.

For more information on Clean Power Alliance refer to https://www.cleanpoweralliance.org/.  

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