Under a law enacted in 2002, communities in California were alllowed to aggregate electric utility customers and take control over their electric system. Three years later, implementation plans are being developed or under consideration by about two dozen California cities.
A “community aggregator” (also known as the default supplier) is allowed to take over the responsibility of negotiating electric services and rates on behalf of a block of ratepayers. Individual ratepayers are able to “opt out” of the program if they wish. The aggregator was also granted the authority to administer cost-effective energy efficiency and conservation programs using funds that are being collected from ratepayers in California.
In May 2004, San Francisco adopted an Energy Independence Ordinance using California’s Community Choice Aggregation law (Laws of California 2002 Chapter 838) as a purchasing and ratesetting authority, and will issue revenue bonds, called H Bonds, to finance a 360 MW public works project. The energy projects would be equivalent to more than a third of the city’s electrical capacity needs and on average would supply about 14 percent of the city’s electric consumption (MWhs) without a rate increase. The new energy projects are expected to be a combination of energy efficiency, solar photovoltaics, wind energy and other distributed generation technogies.
Oakland-based Local Power, which has worked with the San Francisco Board of Supervisors since 1998, is now preparing an implementation plan in parallel with city agencies. The plan is expected to be submitted to the CA Public Utilities Commission in May 2005 with competitive bidding for the demand-side and supply-side resources to follow later in the summer of 2005.
According to Paul Fenn, author of the Energy Independence ordinance and the community aggregation state law, there are another 22 California cities and counties that have agreed to similar goals to develop a 40 percent renewable power portfolio, double the levels required by California’s Renewable Portfolio Standard law, a 28% increase over current statewide levels of renewable energy as opposed to a required 8% increase.
Local Power is providing assistance and encouraging the California cities to complete their community aggregation and self-generation implementation plans in time to ward off a massive push for power plant construction by California’s bailed out electric utilities, PG&E, Southern California Edison and Sempra (San Diego Gas & Electric). Local Power is also suggesting that the cities move quickly so that they can lock-in the current exit fee levels for any departing loads – set at around 2.5 cents per kilowatt-hour.
On March 15, 2005, the Berkeley California city council voted to spend $100,000 to prepare and file their Community Choice Implementation Plan with the CA PUC. The plan will propose that Berkeley aggregate their ratepayers and seek to acquire 40 percent of their electricity from renewable resources.