The URL can be used to link to this page

Home My WebLink AboutE-mail - Community Choice Aggregation Update Sweena, Kathleen From: Macarthy, Jennifer Sent: Monday, February 01, 20,16 2:39 PM To: Connelly, Bill; Kirk, Maureen; Teeter, Doug;Wahl, Larry; Lambert, Steve Cc: Cook, Holly, Borzage, Susie; Bennett, Robin; Guflickson, Caroll;Taber, Stephanie; Tenn, Tina; Hahn, Paul; Sweeney, Kathleen Subject: Community Choice Aggregation Update Attachments: SC Update#1 1-19-16,pdf Good afternoon, During your August 25 th Board meeting, l provide you information on Cornmur'ftV.Q,!0Jce Agf g gt�io — �p _g- il� �J. CCA allows local governments to become energy purveyors and to purchase electrical energy on the wholesale market from any source. CCA is a partnership with PG&E, whereby PG&E still holds the responsibility for distribution, transmission, and billing. CCA has, been successful 'In several California Communities. At flie August 25th rneeting, I provided you information on the benefits of CCA. One of the, major benefits seen by existing CCAs is lower cost energy. Since that time, per your direction, staff has been doing their due-diligence related to CCA. The attached document outlines the work that has been done to date. 'The document outlines that due to increased fees associated with the program, in 2016 CCAs will have less of an opportunity to be cost cornpetitive with PG&E. Due to the cost of the formation process, it makes sensetc, put formation consideration on hold until such time asthe pro rare becomes cost competitive again. Please let me know if you have any questions or need any additional Information. Thank you, Jen MacarthV JENNIFER MALAR-ri--iy DIEPUTY ADMINISTRxrIVE OFFICER ECONOMIC&COMMUNITY DEVELOPMENT Butte.ounLy Adminis.ca- do Q gpgrtMent ! —_R _ 25 Co Cer Dri Qro�Li Lle_QL9596.5 kqt y.. nte Direct: 530.538.2554 1 Mobile: 530.519.3575 "COUNTY OF BUTTE E.-MAIlL DISCLAIMER: This e-mail and any attachrnent thereto rnay contain private, confidential, and privileged material for the sole use of the intended recipient. Any review, copying, or distribution of this e-rnaii (or,any attachments thereto) by other than;the County of Butte or the Intended recipient is strictly prohibited. It you are NOT the intended recipient, please contact the sender immediately and permanently delete the original and any copies of this e-mail and any attachments thereto.:"' CA' Butte County Community Choice Aggregation —Steering Committee Update #1 Based on direction provided by the Butte County Board of Supervisors on August 31, 2015, County staff has been looking at opportunities through Community Choice Aggregation (CCA)for both residents and businesses to realize energy cost savings. The following provides an overview of the progress to date. Community Outreach: • August 25, 2015 - Butte County Board of Supervisors—Presentation • August 28, 2015 -Chico City Manager, Paradise Town Manager, Oroville Interim City Administrator, Biggs City Manager,Gridley City Manager—Presentation • September 22, 2015 - Manufacturing Support Readiness Team (MSRT)- Presentation • November 11, 2015 - Paradise Citizens Alliance—Presentation • November 10, 2015 - Paradise Town Council —Presentation • September 17, 2015—November 17, 2015 -Various large businesses within the City of Chico— Meetings with business and City Manager Research completed: • Identification of CCA formation tasks • Estimate of CCA formation costs • Identification of CCA consultants • Participation in various CCA webinars • Site visit to Sonoma Clean Power(meeting notes attached) • Conference call with Marin Clean Energy (conference call notes attached) • Identification of CCA potential benefits • Identification of current CCA constraints Next Steps: County staff had planned on taking an agenda item to the Board of Supervisors in late February detailing the work that had been done to date. The report would have included: information received during community outreach, the benefits/risks of CCA, the formation tasks and associated costs, along with a plan for staging the consideration of the formation of CCA within Butte County,with staffs' understanding that CCA was an opportunity for local residents and businesses to realize energy costs savings. However, a recent significant increase in the Power Cost Indifference Adjustment (PCIA) fee, which is proposed by PG&E and adopted by the California Public Utility Commission, will limit CCA's ability to compete on a cost basis with PG&E in 2016, therefore County staff is recommending that a decision on moving forward with CCA be put on hold until such time as the PCIA fee is either changed, or there is a modification to the calculation methodology. What is the Power Charge Indifference Adjustment(PCIA)? PG&E imposes exit fees on CCA customers called the Power Charge Indifference Adjustment (PCIA). This fee is billed monthly and is intended to cover any losses incurred by PG&E from customers departing their system after PG&E had already entered into power contracts to cover its power needs. The intent behind the Power Charge Indifference Adjustment is to ensure that PG&E customers do not experience any increase in their rates due to the fact that some customers have departed as new 1 community choice customers, making the PG&E customers"indifferent" to the fact that a new community choice program has launched.The premise is that PG&E has made long-term power purchases on behalf of the community choice customers who are no longer full customers of PG&E. PCIA Increase and the impact to CCAs In a rate application proceeding in December 2015, the California Public Utility Commission (CPUC), adopted PG&E's proposal to increase the PCIA exit fee by an estimated 100%from 2015 to 2016. PG&E's current PCIA methodology most heavily impacts residential customers. Based on conversations with Sonoma Clean Power (SCP) and Marin Clean Energy (MCE), the PCIA increase will significantly impact their ability to offer cost savings over PG&E. Sonoma Clean Power is still currently analyzing their numbers, but they estimate that the PCIA will increase their rates by 7%, creating a situation where some SCP customers will pay only 1% less than PG&E customers, and other SCP customers will potentially see an increase over PG&E rates. MCE estimates that for those customers with the 50% renewable portfolio, residential costs on average will be $4 more than PG&E. For those MCE residential customers with a 100%renewable portfolio, they will pay on average $9 more per month than PG&E customers. The commercial rate for MCE will be on par with PG&E's commercial rate. Summary Although CCA has historically proven to be an excellent tool to provide both residential customers and commercial customers lower energy costs as compared to PG&E, with the 2016 increase of the PCIA fee, CCAs will have a difficult time providing competitive rates. Until such time as the PCIA fee is decreased, CCA formation in Butte County will be put on hold. Due to the variety of benefits a CCA offers its communities, if CCA's can again become cost competitive with PG&E, Butte County will continue its consideration of formation. 2