California Community Ignites Choice Model and Stays in the Driver’s Seat — Episode 98 of Local Energy Rules Podcast

Jessica Tovar

We’re not just reducing greenhouse gases and providing cheap energy that’s bought off of the market, but that there’s so many more opportunities to create this clean energy infrastructure and create jobs for the community, but also have other environmental justice and social benefits.

John Farrell

Jessica Tovar is the coordinator of the East Bay Clean Power Alliance, one of the community powers behind the East Bay community energy programs serving Oakland and surrounding communities in California. We talked about this community-run, multi-city energy purchasing group that’s securing more renewable energy and bigger economic benefits for community members since it took over the electricity supply in 2019. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a podcast sharing powerful stories about local renewable energy. Jessica, welcome to the program.

Jessica Tovar

Thank you.

John Farrell

I wanted to start with what I thought was the most exciting element of East Bay Community Energy, which was this focus on local economic benefits and jobs. So I just want to read a little bit, there’s this great quote from the program launch press release from Reverend Ken Chambers. He’s the pastor of West Side Missionary Baptist Church in Oakland. So I’m just going to read that here. “We need to create opportunities for low income people traditionally shut out of the clean energy economy. We need to train and employ local people like the formerly incarcerated and people of color with family-sustaining wage jobs so that we can afford to stay in the Bay area.” So can you tell me a little bit about what is in what’s called the local development business plan that is part of this publicly run utility?

Jessica Tovar

Sure. So the local development business plan is pretty much a plan for how we can develop local clean energy in Alameda County, but it’s not just limited to wind and solar, but it includes things such as energy efficiency for example, and other benefits like creating opportunities for people to start shared solar programs for example. And really kind of opening the door and having a plan for the different options and opportunities that we could be actually having a more clean energy incentives in the East Bay. So, for example, creating like a community innovation fund to begin funding projects such as the community shared solar program or cooperative, other things that are in there is like energy efficiency kind of incentives like on bill repayment for example. So that we can actually do energy efficiency retrofits to low income people’s homes. You know, a lot of homes in the, in the Bay area are old and obviously contribute to a lot of energy. And so to begin to be able to upgrade our homes and actually reduce that waste and really acknowledged that, you know, it’s, it’s expensive to do those things, but if we have this opportunity of paying for that kind of program through our savings, then that’s beneficial to low income folks in the East Bay area. I guess there’s local developing business plan is like a roadmap for how we can start over time developing these clean energy projects in the East Bay, but at the same time weaning off market purchased energy, which is part of, you know, our problem is that, you know, we’re constantly being bombarded with market based solutions, which are not solutions. They’re false solutions. Right. And some sources of energy are things that we don’t necessarily agree with. Like large hydroelectric damning, which is bad for the environment, bad for the fish, for the water. Certainly bad for the communities that live by hydroelectric dams and also a lot of that energy is in other states, it’s not here at home. And so really the local development business plan, you know our, our point for advocating for that was really the creation of jobs and stimulating our local economy and at the same time really providing benefits that benefit people who are otherwise shut out of the clean energy economy. Does that make sense?

John Farrell

Absolutely. I wanted to note too that in my digging into this a little bit before we spoke, I was just amazed at the range of different tools. I mean you mentioned them some already. I like the on-bill financing tools, the innovation fund, but there was also like a feed in tariff focused on developing local energy sources. Like on public buildings. There was community solar, there was what’s in called enhanced net metering, which is to say that there were envisioning payments for things like projects on low and moderate income property for projects that in particular helped hire folks be more inclusive in the workforce. And there was also that a goal to have projects supported through the business plan, pay prevailing wages. So it was clear that this isn’t just, you know, a vision statement, but there’s clearly a lot of very concrete tools as part of this business plan about how to do it.

Jessica Tovar

Sure. Yeah. One of the things, I mean again, there’s a lot of stuff in the local development and business plan, but one of the things that’s related to what you just mentioned, is there something called community benefit adders. And so an additive would be to incentivize, you know, if there is some family sustaining wage or union wage job creation. So there’s incentive for that. If you’re like doing a particular project in a low income community, there’s a low income community benefit. There’s also an adder for storage, for example. So there’s all these different opportunities to incentivize. And you know, this is something that even though it’s created for our community in the East Bay area, Alameda County, it’s still also a useful tool for other communities to look at opportunities that go beyond installing wind and solar energy in your community. Right? And as you mentioned, feed-in tariffs are important because if we’re incentivizing our municipal buildings to become solar, then we’re able to provide solar energy into our East Bay community energy program that then local people could be buying that energy. And you know, over time that stable energy, it’s local clean energy. It’s, it’s a way to stimulate our economy, create jobs and create that clean energy infrastructure that we want so badly to combat climate change and all these other injustices in our community.

John Farrell

So if you could go into one more little piece of this. So there was this innovation fund and it was going to be focusing on these projects with local economic benefits. You know, I’ve been doing some interesting interviews I did with some folks at Portland who just passed a local funding initiative for kind of equitable solutions to climate change. I’ve worked with folks in Minneapolis, they’re putting together like $2 million a year for the city to help invest in climate solutions. Can you give us a sense of how much money is going to be invested out of this community-run utility into some of these local solutions, these incentives?

Jessica Tovar

Yeah, so that is actually like the question that we have right now. The program just launched in June for municipal and commercial customers and then it rolls out on November 1st for residential ratepayers. So this program will be generating, I mean in the first year it’s millions of dollars and then from the year thereafter we’ll be billions of dollars. Initially the board said that they would be allocating about 2 million to kickstart the first year of local clean energy development. But right now it’s a little bit uncertain and the uncertainty comes from, you know, recent attacks on community choice, specifically the PCIA, which stands for power charge indifference adjustments. And it’s pretty much an ongoing fee that’s imposed by investor owned utilities like PG&E on community choice programs. And because very recently, our California public utilities commission approved what they call the alternative proposed decision, which has pretty much an increase, a big increase on the PCIA charge. Now we’re faced with actually probably dealing with a good chunk of money going to the PCIA. So that means that there’s less money for local development and for the program. And we’re kind of in the dark about where things are at right now. And we probably won’t have actual numbers until either late December or sometime in January. So initially it was projected that this first year would net $43 million. But it sounds like it’s going to be less than that as a result of this recent attack with the PCIA, which is a real bummer because at the same time we’re dealing with PG&E injustices in different ways, right? Like the recent wildfires in the Bay Area, which destroyed a lot of people’s homes and you know, many people have died and to this date people are still doing recovery efforts to find remains and identify people that are still on the missing persons list. So I think we’re at a time where now people are really seeing how much, how much is at stake as a result of having this really corporatized infrastructure for electricity. And people are really, really outraged. And so yeah, the PCIA is just one of many, many problems that come from PG&E.

John Farrell

And just for people who, unlike you and I aren’t more into the weeds here about how community choice works out, we’ll talk a little bit more about the whole concept of community choice. But this, this PCIA charge is basically, some people have described it as an exit fee. So these communities are now going off to make their own energy plans like the East Bay community choice energy and the incumbent utility, the investor owned utility says, oh, but we made all these plans to sell you power for many years and we built things in anticipation you guys would remain our customers and now they’re saying, oh, we need to recoup more of that money because you’re leaving. And the dispute is really about whether or not the utility can have expected to keep those customers or not, given that the reason communities are doing this is that they were dissatisfied with what the utilities were up to, right?

Jessica Tovar

Yeah, and I think I initially was calling it an exit fee, but now just really understanding, most exit fees are usually like one time fee. The PCIA is a fee that never goes away and has recently been pretty much the CPUC allowed it to be raised, so it’s very problematic. I see it really as an attack on community choice. They’re literally taking money from us and taking money away from our opportunities of actually more local, clean energy benefits in our community. So yeah, it’s really problematic. It is often complicated and the language that’s used is really designed so people don’t understand what’s going on, but at the end of the day, it’s just PG&E taking more money from ratepayers.

John Farrell

We’re going to take a short break. When we come back, I ask Jessica about the community engagement process behind the business plan, how community choice differs from how most Americans receive their electricity and whether this community run model means more clean energy on the grid.

John Farrell

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John Farrell

One of the things that I thought was so interesting about East Bay in particular is that the equitable focus on jobs and local economic benefits comes out of to some degree an inclusive process in creating the community choice agency. Could you tell me a little bit about kind of what community engagement efforts took place before you even had this agency created to focus on local energy and local jobs?

Jessica Tovar

Well the local Clean Energy Alliance has been engaged for years advocating for community choice energy. Um, and its earlier time there was an Alliance called Clean Energy Jobs Oakland and the intent was to advocate for a community choice program in Oakland through East Bay MUD. And then there was some talk about pursuing it at the city level, but eventually the community advocates are able to get the attention of the County Board of Supervisors. And once the County Board of Supervisors for Alameda County showed interest and put money towards a feasibility study on community choice, then you know, folks reorganized and said, Oh we’re, this is going to be bigger than we thought and now we need a bigger Alliance. And so the East Bay Clean Power Alliance was formed to be able to include organizations and advocates from different parts of the County. And so there was a lot of obvious lobby efforts with local elected officials to become interested in community choice. It ended up being that County board supervisor, Scott Haggerty showed interest and became kind of the champion for community choice in Alameda County. And so there was a lot of efforts in really advocating for community choice program. But all along the interest was not just in having a community choice program, but having a community choice program that offers community benefits and really invest in developing local, clean energy over time so that we’re not, not just buying energy off of the market, we’re not just reducing greenhouse gases and providing cheap energy that’s bought off of the market, but that there’s so many more opportunities to create this clean energy infrastructure and create jobs for the community, but also have other environmental justice and social benefits like, you know, we do see, you know, our local pollution, creating a community that’s obviously safer and healthier and certainly addressing the need for having more safer jobs in the community. Right? More dignified work, family sustaining wage, union wage jobs where some of the goals that we were very much interested in. And certainly one of the things that we really emphasized was the only way to have a good community choice program would be to have community at the center of the governance of the program. So initially we were actually advocating for community to be part of the board of the program. And it turns out that according to the law of California you know, the only people who could be board members of any state community energy program would have to be an elected official. So we said, well we still need community to be part of this governance. And so what was created was a community advisory committee made up of different nine different stakeholders and the chair of the community advisory committee sits on the board with the rest of the electives to advocate and sway the board vote. So that’s what we have right now. And that person is actually Ann Olivia Eldred is part of the California Nurses Association and she’s been really incredible, really emphasizing the advocacy of the, of the community advisory committee that’s made up of nine different people with nine different, you know, nine different angles. But ultimately everybody agrees that we need local clean energy development. So that’s been working really well. You know, the other thing we wanted to see is just more local community ownership and control. And so part of that is having the participation of the community, but also having incentives for creating, you know, energy cooperatives for example, community shared solar. And then you know, other incentives are keeping the among local and boosting our local economy. And then also recognizing that we could be producing so much more local renewable, better than PG&E and better than what the California state mandates. Right?

John Farrell

So, I was interested in just taking a quick step back, we dove right into the details about East Bay community energy in part because of my own excitement about this. But I want to just explain for people this space, that concept of community choice energy. So East Bay is one of several communities like Sonoma County or Marin Clean Energy that are now doing this community choice model where they get to pick their own electricity sources. They get to be the buyer. They say, you know, do we want local wind power or do we want to buy from the big hydro? That kind of thing. What legal authority allows communities in California to do this? And how is that different from how say folks in Minnesota or Iowa or Florida are able to make their energy choices?

Jessica Tovar

Right, So I guess California really is a deregulated state and so we are able to literally purchase energy off of the market. And that’s pretty much what brokering energy is, is buying energy off of the market and selling it that to our local ratepayers. But one of the things that we’re really emphasizing is that when we say change that right, we need to start producing our own energy and incentivizing people to be producing energy for our local program. So that’s something that we really emphasize in creating our community choice program because we really want to see our infrastructure change to where we actually know that the energy is truly clean. And the only way to do that is to be producing it locally through wind and solar. And so that’s something that we is very valuable to us and that’s something we really want to see you take community energy, invest in more over time with the money that they’re generating from buying and selling energy that they’re currently doing right now.

John Farrell

We’ve talked a lot about the local jobs and economic development that have been a big priority, but I noticed there are like three choices that a customer has when they sign up. There’s a default option, which has some cost savings, but also more renewable energy than PG&E offers. I notice there’s also a carbon free and a 100% renewable energy option. Why are there multiple options? What’s the goal of having those choices for customers?

Jessica Tovar

So initially East Bay Community Energy, when it first launched for commercial and municipal, it offered, um, what they call a Bright Choice default, and it pretty much has a 1.5% discount in comparison to PG&E, right? Because the community service program has said from the very beginning that it would have rates are cheaper and competitive in compared to PG&E. So bright choice has that one, 1.5% discount. And then the second option is called brilliant 100 and this is where the advocates were not happy. Apparently the city officials that are part of this East Bay community energy program thought it would be a good idea to kind of address their climate action plans and reduce greenhouse gases through this community choice options. And so they created a quote-un-quote “carbon free” option that they call brilliant 100 and we really actually fought that because a lot of it is large hydroelectric and that’s something that we’re, again not supportive of. It’s not something you want to see. It isn’t the be all end all when it comes to, you know, addressing climate change. And so we were really upset about that, but there is a demand from the community to want more renewables. And certainly, you know, off the bat we’re not producing local renewables, right? So folks really wanted some kind of renewable options. So a third option was created as a result of advocacy and it’s called Renewable 100 but again, you know, market purchase energy is not necessarily completely 100% clean energy. And so as a result of that, you know, we keep our eyes on the prize and really say, look, this local development is something we really need to implement in the community because until we’re actually generating our own local clean energy, this stuff is not going to be truly clean. And so most community choice programs have options like that and it has to do with demand. A lot of people do want to purchase more clean energy options and they’re willing to pay a little bit more. So my is that the Renewable 100 costs a few bucks more a month and some people have signed up for that. But ultimately what we like to say is people should have a choice and be able to choose whichever option they want to go with. We certainly support people to either sticking with the bright choice at the 1.5% discount or if they want to do more than they can opt up to the renewable 100 and that thing in between, I referred to as Bogus 100 don’t even bother with it.

John Farrell

Oh my gosh, that’s great. So one of the questions that I think comes up for a lot of folks about this is there’s been some things in the news now saying that as many as like two thirds of electric customers of the big three investor owned utilities in California may have some sort of community run option like East Bay within the next five years. Why do you think so many communities are doing this? Why are so many communities choosing to make their own energy choices rather than sticking with the incumbent utilities?

Jessica Tovar

You know, I think people know that climate change is a real, is a real issue, you know, in our communities. And certainly we are seeing that in Northern California specifically with the recent wildfires. And so people do want to actually be part of the change, right? And they want to see cleaner options in our communities. So I think that as people are becoming more educated and understanding and seeing that these corporations are not accountable to our communities, more people are advocating for community choice and for alternatives. And one of the things that we’ve been, you know, sharing with folks is if we have local clean energy or you know as they call it distributed energy resources, there wouldn’t be a need for that transmission infrastructure that caused the fires in the first place. So we know that that’s, that’s where we want to go. We want to create an infrastructure that’s actually accountable to the people and not to shareholders.

John Farrell

So there are a lot of other communities, the Sierra Club actually just today announced their 100th city that has committed to 100% renewable energy. What advice would you give to the folks in those cities, whether it’s activists or whether it’s elected officials based on your experience helping launch East Bay community energy?

Jessica Tovar

Yeah, I think what I would say is, you know if you’re doing some kind of 100% clean energy commitments in your community, if it’s not about actually producing local clean energy in the community, then you have a lot more work to do because I think some people don’t, or are getting too comfortable with market based solutions. And what we really need to do is really emphasize that we need to develop local, clean energy in our communities because that’s the only way we’re going to have affordable, clean energy and actually have resilience in our communities. So for communities that really want to go that 100% it starts with producing energy locally. One of the things that I think is really important to keep in mind is that we’re making decisions, not that undercut other communities. And that’s something that I really, I see with a lot of these market-based false solutions, is that it’s often shifting burdens in the name of claiming 100% clean energy, which is really not that. So, you know, I think the best way to do that is to include communities that are often shut out of the clean energy economy and communities that are often bearing the burdens, right, of being dumped on. And so in order for us to have a true 100% clean energy infrastructure, it has includes those communities that are often bearing the brunt of pollution. And so if we do it that way, that’s way to do it right because climate change, you know, is really hurting a lot of low income communities and it’s just a matter of time and we have to like really look out for each other and we need to stop making these market based solutions and kind of wiping our hands and calling it, you know, a day. We really need to uplift all communities.

John Farrell

Well Jessica, thank you so much for talking to me. It’s really exciting to see the work that you have both already accomplished in the East Bay and are going to continue accomplishing and it’s an inspiration to those of us who are trying to help communities to do this kind of thing across the country. Thank you very much for your time.

Jessica Tovar

Yeah, for sure. Thank you John, bye.

John Farrell

This is John Farrell, director of ILSR’s Energy Democracy Initiative. I was speaking with Jessica Tovar of the East Bay Clean Power Alliance about her community’s community choice energy program. You can read more about community choice energy programs in ILSR’s February, 2020 report on the subject. While you’re at our website, you can also find more than 90 past episodes of the local energy rules podcast. Until next time, keep your energy local and thanks for listening.