San Francisco’s Mayor has approved a local power plan that could achieve a 51 percent renewable energy portfolio by 2017. The Community Choice Aggregation (CCA) plan creates an innovative new financial structure using municipal revenue bonds (“H Bonds”) to make San Francisco energy independent and finance construction of a 360 megawatt solar power network and make investments in energy conservation efforts.
The “Solar Bonds” measure, passed by San Francisco voters in 2001, would be used to fund the construction of the new renewable energy infrastructure. An energy service provider will share construction costs and assume the financial risk; when the system is paid off, San Francisco will buy out the private energy partner.
The plan was drafted by Local Power and sponsored by Supervisors Tom Ammiano, Ross Mirkarimi and Chris Daly. Over the last several years there have been hundreds of hours of televised public hearings and negotiation between the Community Choice Energy Alliance, San Francisco Public Utilities Commission and the Mayor’s office.
The CCA Plan creates a detailed business model and defines an ambitious portfolio of renewable energy and demand side technology rollouts to make every participating San Francisco resident and business 51 percent green powered by 2017, compared to the 20 percent green requirement for California utilities by the same year – all at rates that meet or beat Pacific Gas & Electric’s electricity rates.
Dozens of California cities are pursuing similar Community Choice Plans for energy independence and sustainability, including Marin County communities, Oakland-Berkeley-Emeryville, San Luis Obispo, and others.
Local Power gives the following overview of CCA in California in their 2007 Implementation Plan report:
The California legislature responded to the Electric Crisis of 2001-2002 – with its soaring prices, rolling black-outs, and public concerns about energy market manipulation – by passing a number of new electric industry initiatives. Amongst these legislative initiatives was Community Choice Aggregation (Assembly Bill 11711) sponsored by then Assembly member Carole Migden and passed in September of 2002. This bill authorized communities to aggregate the electric purchasing power of its citizens and businesses so as to: “reduce transaction costs, provide consumer protections, and leverage the negotiation of contracts”.
A CCA will usually serve its citizens with retail electricity supply contracted from a wholesale supplier. The San Francisco CCA will ensure delivery of that electricity combined with electricity generated from renewable plants both in and out of the city, via PG&E’s transmission and distribution lines, and bill its customers through PG&E’s billing system. Therefore CCA is different from municipalization because PG&E retains ownership of, and maintains responsibility for, transmission, distribution and some customer service functions for CCA customers. PG&E will continue to read CCA customer meters and bill them for their use of PG&E’s transmission and distribution system and well as non-bypassable charges such as those related to the energy crisis, PG&E’s bankruptcy, some public goods program charges and nuclear power plant decommissioning.