Board prepares to move ahead with energy purchasing plan

RIVERSIDE – A divided Riverside County Board of Supervisors tentatively scheduled a Nov. 7 public hearing to weigh the pros and cons of creating a “Community Choice Aggregation” system under which Riverside County would purchase electricity on the open market, competing with utilities to deliver power to residents in unincorporated communities at, ideally, lower prices.

In a 3-2 vote, with Supervisors Kevin Jeffries and Chuck Washington opposed, the board took the next major step toward submitting a plan to the California Public Utilities Commission seeking to create a CCA that would offer residents an alternative to Southern California Edison.

Jeffries said he was uncomfortable committing to the enterprise out of concern the county would have trouble justifying the eventual expenditure of $1.7 million in startup costs, as contentious contract talks drag on with multiple unions.

“This seems a bit risky,” the supervisor said. “I say we let the public utilities commission make a decision first before we start spending tax dollars we don’t have today.”

Supervisor Marion Ashley acknowledged that he, too, was worried about committing revenue without knowing all the details and future risks, but felt it was important to “keep going through the process” and laying the groundwork for a debate during the initial public hearing.

County Legislative Affairs Director Brian Nestande assured the board that the $250,000 expended to date on the CCA concept would be the final financial commitment until the commission completes a review of the board’s proposal, which could take up to three months.

“Studies and surveys show our electricity rates in California are some of the highest in the nation,” Nestande said. “This is a tool to bring rates down for residents and businesses.”

He noted that there are six CCAs in operation statewide, and both the Coachella Valley Association of Governments and the Western Riverside Council of Governments are on track with proposals of their own.

“We have an opportunity for reducing costs to residents,” Nestande said.

A summary report on the downside risks to starting a CCA, which would function similar to a municipally owned utility, indicated that CCA opt-outs could be costly.

Under the CCA structure, residents and business owners in unincorporated areas would be notified that they would be part of the county electricity distribution program unless they opted out. If enough people stay in, the program would be cost-neutral to the county. However, if people begin flocking back to SCE after the county has sealed futures contracts to procure power, the program could run into the red, according to the report.

The county would additionally have to employee people to operate the CCA, increasing outlays for salaries and benefits.

New York City-based Good Energy and Oakland-based Keyes, Fox & Wiedman created an implementation plan and model ordinance detailing how the prospective CCA would work.

Nestande introduced the CCA concept in January 2016, which culminated in the hiring of Good Energy.

The company’s research suggested that by converting to a publicly run energy program, residents could net a total $7.75 million in annual savings on electricity costs or about 9 percent off each resident’s power bill in the unincorporated communities. The study also indicated that commercial customers could shave up to 10 percent off their bills, though figures tended to fluctuate depending on the nature of the enterprise.

According to the study, the county would have the opportunity to tap a variety of energy sources for delivery to customers, making block purchases at preferred rates.

In addition to California, CCAs have sprouted in parts of Illinois, Massachusetts, New York and Ohio.

In Riverside County, Good Energy mainly examined the service delivery and costs borne by SCE customers.

Households consumed the highest volume of electricity, 34 percent, followed by large industrial operations at 28 percent. The cumulative total electricity used in the unincorporated areas came to 2.1 billion kilowatt-hours in 2015, according to Good Energy.

The study found that shifting to a market-driven purchasing plan under a CCA would result in “clear savings” to a high number of customers. However, utility rate structures that rely on “load factor” to determine a customer’s monthly bill might be more beneficial to some electricity consumers who tend to need greater wattage.

Ratepayers currently served by municipalities with their own utility companies, like the city of Riverside, would not be able to participate in the CCA.

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