The Local Government Commission  has obtained funding from the California Energy Commission and the US Department of Energy to assist a limited number of cities in studying the feasibility of community choice aggregation. Richmond is one of four Bay Area communities that have been chosen for assistance. Others include Berkeley, Pleasanton, and Vallejo.

Following is a description of the program.

Community Choice Aggregation Pilot Project Proposal to the California Energy Commission

The Local Government Commission (LGC) seeks to assist cities, counties and Joint Powers Authorities in implementing Community Choice Aggregation (AB 117) in their communities. The LGC is a 24-year old nonprofit organization serving over 800 city and county members in California. The League of California Cities (League) and California State Association of Counties (CSAC) are co-sponsoring this effort. The League and CSAC memberships include each city and county in California. The three entities have partnered on numerous projects in the past.

LGC's subcontractor for this project, Navigant Consulting, Inc. (NCI), is an energy and water, technical, financial and regulatory consulting company, with 1,300 employees across the nation, with a background in serving local, state and the federal government; the energy industry including municipal and investor owned utilities; and energy utility customers among others.

With participation from the California Energy Commission, the US Department of Energy and other potential funding sources, the project team will provide comprehensive technical analysis to selected entities for Feasibility Studies, Implementation Plans and a Regulatory Engagement strategy that will allow decision points for those communities as they seek to become Aggregators in their area.

The project team will implement an Outreach Plan to fully inform and educate as many elected officials and public sector professional staff throughout California about how to proceed with Community Choice Aggregation and to achieve the greatest possible inclusion of renewable energy in local energy plans.

Background

With the passage of community choice aggregation legislation (AB 117, 2002, Migden), new and innovative options will soon become available to cities and counties whose constituents are currently taking electric service from the investor owned distribution utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. There are significant advantages, and inherent challenges, in aggregating community electric load. As the state recovers from the energy crisis and moves forward in the regulatory and legislative arena to restore consumer choice in electricity markets, it is imperative that cities and counties be fully aware of their options to develop the most beneficial strategies for their residents and businesses.

Community Choice Aggregation (CCA), as defined by AB 117, permits any city, county or group of cities and counties to aggregate the electric loads of residents, businesses and municipal facilities to facilitate the purchase and sale of electrical energy. Prior to AB 117, individual customer participation in electric load aggregation programs required their positive written declaration indicating their choice to participate (opt-in programs). In contrast, CCA under AB 117 provides for aggregating customer loads within city or county boundaries, with each customer given an opportunity to opt out of their community's aggregation program and thereby continue to be served by the incumbent distribution utility (opt-out program). This is a major departure from previous aggregation structures as it frees the aggregator from the need to market the program and ensures wide-scale customer participation.

Distribution utilities are directed to cooperate fully with any community choice aggregator in its efforts to develop their aggregation program including providing all necessary data as well as to continue to provide all metering, billing, collection, and customer service to retail customers that participate in CCA programs. Community Aggregation programs cannot begin until the California Public Utilities Commission (CPUC) has determined rules and protocols for implementing aggregation programs, including departing load fees.

Local governments may choose Community Choice Aggregation to further local priorities that may include securing less expensive electricity for its constituents, purchasing a greater share of renewable energy than in the state energy mix, or developing local energy efficiency programs with a share of the public goods charge funds collected in their communities.

Although an increasing number of local governments are expressing interest in Community Choice Aggregation, many have limited staffing capabilities in terms of experience, time and funding to take advantage of CCA. The project team can assist local governments in evaluating their community choice aggregation alternatives by clarifying legislated program parameters, open issues and time-lines for community involvement. Further, the project team will share the experience of lessons learned in a set of pilot communities with other local governments in California.


Community Choice Aggregation Pilot Project Overview

The overall methodology for evaluating the potential benefits for local governments to implement a Community Choice Aggregation program  (CCA) is both straightforward and comprehensive. Decision points or "off-ramps" are designed to limit project financial exposure consistent with demonstrated community benefits.

The methodology can be summarized as consisting of the following steps:

1. Participate on behalf of local governments in the upcoming CPUC decision-making process to implement AB117, Community Choice Aggregation.
2. Select three communities, or groups of communities, to receive CCA feasibility study assistance.
3. Meet with chosen communities to understand their particular interest in CCA and to start the data gathering process.
4. Assemble known and predictable cost-benefit variables and incorporate these into a pre-screening model.
5. Adopt assumptions for resolution of key variables pending review by the California Public Utilities Commission (CPUC).
6. Assess the overall cost-benefit potential to support a threshold decision to move forward with CCA.
7. Engage the regulatory process by filing a CCA Implementation Plan with the CPUC.
8. Participate in proceedings to resolve outstanding issues while iteratively modeling the impacts of proposed decisions and intervening as indicated.
9. Develop final evaluation prior to implementing.
10. Produce a guidebook for local government staff and a fact sheet for local elected officials with the lessons learned from this project.
11. Convene six workshops around the state to provide more information to interested communities.