Community Choice Programs Shattering Revenue Expectations

Last week, Climate Action Campaign hosted their third annual forum on Community Choice  (CCE) at UC San Diego. CCE is spreading like wildfire throughout the state, with nearly one-quarter of California residents and businesses now being served by a CCE program.

Why is CCE so popular?

Simple: choice. Customers who have been stuck with a monopoly for their electricity now have a new option. They can stay with the existing monopoly or join the locally run, not-for-profit CCE.

CCE customers usually pay lower base rates than the utility’s base rates, averaging between 2-5% less, and typically get a greener mix of electricity to boot. Most CCEs have a default option with slightly lower rates and slightly greener mix, and a 100% renewable option at a slightly higher price, but still lower than the utility’s 100% renewable program.

Two-to-five percent may not seem like much savings to a typical household, but it’s a huge potential savings for commercial and industrial businesses. It also makes our state’s shareholder-owned utilities, whose base rates are 50% above the national average, think twice about new rate increases, making it just as much about cost avoidance as cost savings.

CCE Forum Takeaways

One key takeaway from last week’s forum is that CCE programs are bringing in impressive new revenue to their cities. For example, Peninsula Clean Energy, representing all cities in San Mateo county, launched in 2015. They took out a loan of $12 million for their start up costs, paid it back in 9 months, and now have $65 million in reserves after three years in operation. That’s after they invested in programs like free electric car charging for some communities. Wow. (By the way, Orange County has four times the population of San Mateo county.)

Solana Energy Alliance, serving only the city of Solana Beach, launched in June 2018. They outsource the operation of the program so they don’t have to hire more staff. Yet revenues are still shattering expectations. They estimated they would have reserves of $750K after three years. Instead they estimate they will have $1 million in reserves after one year. Not bad for a city with only 13,000 people.

Another takeaway is that San Diego Mayor Kevin Faulconer thinks moving to 100% clean energy is the right thing to do, and says the city will decide soon whether CCE is how they will get there. The other five cities in San Diego region who have committed to 100% clean energy have chosen CCE as the path to achieve it.

When Will it Be Our Turn?

So what about Orange County? Twenty-two cities attended OC Clean Power’s “Understanding CCE and its Opportunities” forum at UC Irvine back in April. Since then, several cities have started looking closer at CCE. This month the city of Irvine is expected to vote to award a contract for their CCE feasibility study, the recommended first step. SoCal Edison’s rates are the lowest of the three IOUs in California, meaning rate savings and projected reserves for a CCA in SCE territory may be more modest, but choice is still better than no choice!

Not wanting to be left behind, Tustin recently voted to get bids for a study and Lake Forest is looking to partner with other cities to share the cost of a study. However, cities typically don’t make CCE a priority if their residents and businesses aren’t asking them to. A few people speaking up could get a city council’s attention. So if you would like your city to evaluate CCE, call or email your city council, and join our movement for CCE!