County cautiously pursuing authority to supply electricity

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The Riverside County Board of Supervisors moved one step closer to becoming an electric-power provider for the unincorporated areas of the county, largely replacing Southern California Edison.

In 2002, the Legislature passed Assembly Bill 117, which authorized local governments to procure or develop electrical power for themselves or their residents and businesses. In the 15 years since the law was enacted, only six Community Choice Aggregators have been established and are active in the state.

A CCA may purchase the electricity from an existing investor-owner utility, such as SCE, or generate the power itself.

Riverside County has studied the possibility of establishing a CCA, which would purchase electricity from SCE. The county projects savings for consumers — residents and businesses in the unincorporated areas — would range from 7 to 13 percent. Lower rates will be achieved through the purchase of electricity at wholesale rates rather than retail, according to the Implementation Plan prepared by Good Energy of New York.

The power will continue to be transmitted and delivered over existing SCE lines and equipment. SCE walso would do the billing and meter reading.

The supervisors reviewed a draft ordinance establishing the CCA and have scheduled a public hearing for Tuesday, Nov. 14. The adoption of an ordinance and Implementation Plan are required. These are final steps on the process, which began in 2015, when the county executive authorized a feasibility study. In December 2016, the board went forward with an Implementation Plan that was presented last week.

The consultants estimate that the annual staffing costs for a county CCA would be about $370,000 and $1.3 million for other services.

The exit fee, a charge that goes to the private utility, is not fixed yet. This concerned Supervisor Kevin Jeffries (1st District). If the California Public Utility Commission agrees with a significant increase, which SCE and other utilities are requesting, it will change the benefit calculation.

According to Brian Nestande, the county’s deputy executive officer, the CPUC will address this issue sometime in 2018.

If the board approves the CCA, the county will notify residents and businesses within the unincorporated area. It will take many months to be ready to operate and during that time, residents and businesses will have four opportunities to opt out of CCA service.

Accounts, which do not opt out of the CCA, are automatically enrolled after a notification process. The average participation rate in other CCAs is about 95 percent, according to the report to the board.

Despite the risks associated with the venture, the history of CCAs in California and other areas of the country led Good Energy, which prepared the Implementation Plan, to conclude that “the risk seems small.”

The Implementation Plan emphasized that only SCE customers are eligible for CCA service. Customers of other electric providers in the county, such as the Imperial Irrigation District and Anza Electric Cooperative, are not eligible.

Former CPUC member and consultant with Good Energy Timothy Simon told the board, “… in 2013, I directed [Good Energy] to the Inland Empire and to the SCE region. You have high cost of electric; some of the highest in the country.”

The county’s goals, besides lower-cost electric, include less volatility of rates, greater participation of local renewable-energy projects, custom rates for economic development and energy services unavailable from SCE, such as more renewable energy.

While the board generally supported the idea of a CCA, its timing raised some caution for two supervisors. The vote to proceed with the public hearing was 3-2. Both 3rd District Supervisor Chuck Washington and Jeffries opposed moving forward this soon.

After the meeting, Washington told the Town Crier, “My ‘No’ vote was because I have concerns about Good Energy’s report and the depth of our analysis of the true costs and benefits. The [Western Riverside Council of Governments] has been doing due diligence for a CCA proposal. So, there are two proposals currently being looked at. I would like to see a side-by-side comparison so that I’m confident we are making the best choice and giving our constituents the best opportunities to save money.”

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