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3 O.C. cities look to unplug from Southern California Edison – OCRegister


Nov 25, 2020

Three Orange County cities are preparing to pull the plug on Southern California Edison as their electricity procurer and take up the task themselves, a move they say will cut customer rates and hasten the move to clean energy.

Edison would continue delivery of electricity. But Irvine, which is spearheading the effort, has been joined by Costa Mesa and Fullerton in initial approval for a joint powers authority that will do the actual purchasing of power before it reaches Edison’s transmission lines.

Several other Orange County cities are considering joining the coalition, the likes of which is fairly common beyond county lines.

Ten million people — a quarter of the state’s population — already get their electricity from what is variously dubbed “community choice energy” and “community choice aggregation.”

“Community choice energy is a proven model,” said Nicole Capretz, founder of the Climate Action Campaign. “The difference is whether your electricity is controlled by a private monopoly or controlled by a non-profit public interest group.”

Capretz’s group successfully lobbied San Diego and several other cities in San Diego County to take the reins of buying their own power and is now courting Orange County cities.

Orange County’s new municipal energy coalition is expected to take over procurement of electricity for participating cities in 2022.

While there’s expected to be a modest savings for customers, Irvine Councilwoman Melissa Fox said that’s not the biggest incentive.

“The primary objective is to use cleaner power … to slow down climate change and address the pollution issue,” she said. “A lot of the households in Irvine, that’s what they want. They want to be able to choose cleaner power at a comparable price.”

Coming clean

At the outset, municipal providers — which are not full-fledged utilities — typically buy electricity from the same sources as the investor-owned electric companies.

But unbound by long-term contracts many utilities hold, they can adjust the mix to take advantage of lower costs or to favor renewable energy — or both. Additionally, they can be more aggressive than private utilities in encouraging and developing clean local power generation and battery storage, said Salem Afeworki, sustainability services manager for the city of Costa Mesa.

“This allows for more competition, more choice,” Afeworki said, noting that the Orange County community choice program will initially have the same energy sources as Edison but may adjust the mix of those sources.

A feasibility study by the city of Irvine calculated a 2% decrease in customer costs. For businesses, that can add up, but Kean Coffee owner Martin Diedrich said he views the savings as just an added bonus.

“We’re facing a pretty serious situation with the human contribution to climate change. And it comes about because of our use of fossil fuels,” said the Costa Mesa-based businessman. “Any opportunity to find a course to reduce those is very welcome.”

Some community choice aggregators offer customers a variety of clean energy blends, with the highest renewable energy option sometimes costing more.

Additionally, customers have the ability to opt out of the program and instead, continue getting utility-procured electricity. Afeworki said about 5% of customers statewide have opted out of their area’s community choice energy.

Key elements of the municipal energy procurement process, including rate structures, must be approved by the California Public Utilities Commission, just as they are for the investor-owned utilities, Capretz said.

Additionally, the community choice energy could reduce the risk of wildfires and blackouts by encouraging more local energy production and storage, she said.

Earlier fiasco

Community choice energy, approved by the state Legislature in 2002, was an effort to fix problems resulting from the state’s deregulation of the electricity industry in the late 1990s — a move that resulted in blackouts and a statewide energy crisis.

“That was a big fiasco,” Capretz said. “There was no regulation, no consumer protection.”

The community choice corrective drew opposition from some private utilities. In 2010, Pacific Gas and Electric spent $44 million on a ballot measure that would have made it more difficult to form the municipal providers, while opponents spent less than $100,000.

The measure failed, with 53% of ballots cast against it. The first community choice aggregator launched that year in Marin County.

Unlike PG&E and other utilities back then, Edison has offered no opposition and has been cooperative with the process, according to both Capretz and Edison spokesman Robert Laffoon-Villegas.

“SCE supports customers’ right to purchase power from a CCA and we routinely provide factual analysis to jurisdictions that request it as they consider their decision to launch a CCA or join an existing entity,” Laffoon-Villegas said.

Edison currently generates 19% of the power it distributes to its customers, with the rest purchased from other generators, he said. While the company is allowed a return on its investment in transmission and delivery infrastructure, it is not allowed to profit from procuring energy, he said.

The company now is focusing primarily on delivering electricity rather than creating or buying it.

“The majority of our ongoing investment is in the transmission and distribution system,” he said.

Laffoon-Villegas noted that in areas where Edison delivers community choice energy, customer bills are divided into the community choice procurement costs and Edison’s charge for transmission, delivery and customer service.

More cities interested

The Fullerton City Council unanimously approved joining the Orange County coalition with its final vote Nov. 17. Irvine unanimously approved it on an initial reading and is expected to give the same support at the final vote Tuesday night, Nov. 24. Costa Mesa initially approved it unanimously, with a final vote scheduled for Dec. 15.

Once those approvals are completed, the cities will finalize the language in the joint powers agreement and seek required approval from the state Public Utilities Commission.

Additionally, the cities of Huntington Beach, Santa Ana, Lake Forest and Villa Park have expressed interest in joining the pact, although their councils have yet to vote on it. Other cities will be able join even after the new system is in place.

Irvine will cover start-up expenses, estimated at $12.5 million to $20.5 million. Those costs will be reimbursed once the authority is up and running, said Fox, a leading advocate for the change.


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