CCA Local Power Begins California Expansion

Linda Hamilton of Shell Energy North America says her company is optimistic about the business that could flow from community choice aggregation (CCA) in California.   Ms. Hamilton, who is general manager of Shell Energy’s Portland office, played a key role in getting Marin Energy Authority, California’s first community choice aggregation utility, on line. 

“Much will depend on the outcome of pending legislation,” said Ms. Hamilton.  The state utilities commission is considering the size of the exit fee, which should come down.  There is also the bond that must be posted to the host utility in case CCA customers come back in a large block.”

The Richmond city council recently voted to begin the process of joining the Marin Energy Authority (MEA), an option that may be attractive to many other local governments in California.  The Richmond city staff reported to the council that the city would see no immediate or direct financial benefits or risks from joining MEA.  However, the move could provide an influx of investment to the local renewable energy and energy efficiency economy and create more jobs for Richmond residents.  MEA has expressed interest in local hiring initiatives for power purchase agreements, which could include Richmond.

MEA has the authority, the staff report noted, to develop more effective incentive programs to buy power directly from residents and businesses and thus encourage more rooftop renewable energy systems. The MEA business plan has a long-term goal of procuring 100 percent renewable power through power purchase agreements from local power providers. This would conceivably encourage developers to build locally and thus provide more tax revenue to the city and jobs for residents.

Among potential new CCA’s are the city and county of San Francisco, Sonoma County, and Yolo County.  Others who have tried in the past – King’s River Irrigation District, Victorville, and several Bay Area cities – may take a second look with the improving regulatory climate. 

One improvement that may be decisive is the defeat in June 2010 of Proposition 16, which would have made it more difficult for local entities to form either municipal utilities or CCAs by requiring a two-thirds vote of the electorate rather than a simple majority, for a public agency to enter the retail power business. PG&E contributed over $46 million in an effort to pass the initiative, while Prop 16’s opponents spent less than $100,000, according to one estimate. The defeat of the initiatives was a signal to local governments that they had the public on their side.

Additionally, a pending bill in the state legislation (SB790) would direct “public purpose energy efficiency funds from investor-owned utililities to CCAs. Public Purpose funds account for 3 percent of a customer’s utility bills. These funds are currently distributed across the state and consumed partly by private utility overhead costs and what the Richmond city staff called ineffective programs.  For a city the size of Richmond, public purpose funds come to millions of dollars.

Preliminary estimates of the initial costs to join MEA are expected not to exceed $200,000, a small sum compared to the cost of going it alone.

Shell Energy North America (SENA), which provided full service support to the Marin Energy Authority, may be a factor in getting new CCAs up and running.  With more than 200 million megawatt hours (MWh) in annual power sales, SENA and its subsidiaries, rank among the major wholesale power marketers in North America.

SENA’s capabilities include the capacity to generate 5,000 MWh from power plants across North America.  The firm is a registered provider of electricity in numerous states and provinces.

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Mark Braly was energy advisor to the mayor of Los Angeles during the 70s energy shock, author of the city's prize-winning energy plan, and president of a State of California non-profit corporation which made loans to renewable energy businesses. Now retired, he is a City of Davis, California, planning commissioner working on the city's zero-carbon program. He is president of the non-profit Valley Climate Action Center.

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