CPUC Sets Exit Fee, Paves Way For CCA In San Diego
October 12, 2018 1:30 p.m.
Rob Nikolewski, energy reporter, The San Diego Union-Tribune
Related Story: CPUC Sets Exit Fee, Paves Way For CCA In San Diego
Our top story on Midday edition the California Public Utilities Commission voted unanimously in support of a new exit fee formula for community choice aggregation programs. And if what I just said makes very little sense to you. We will explain in just a moment. So far advocates for San Diego's Climate Action Plan have welcomed the decision saying it brings stability to the process. But critics say the fee is too high and will hamper the move toward community choice energy. Joining me is Rob Nicol česky energy reporter for The San Diego Union Tribune. And Rob welcome to the program. I'm offering let's take it from the top. Remind us what community choice aggregation is and why San Diego may be interested in it.
Really Choice Aggregation basically is an alternative to the traditional utility model under the traditional utility model. The utility like the genie they pretty much do everything they do the transmission and distribution. They also do customer billing. They also purchase the power under SCCA the utilities still does the transmission and distribution they still do the customer billing. However the power purchases are done by a government entity that could be a city. It could be a county. It could be a combination thereof. So that's basically what it does.
And San Diego is interested in it because advocates of our climate action plan think that it could bring us to those goals quicker than staying with SKG any is that right.
Yeah that's one of the main drivers for the CCJ movement. We didn't have community choice aggregation until I think about 2010 and the very first SCCA was formed in Marin County. And since then we're up to 19 across the state. So it's been growing and one of the main things that they push is that if it's a community city government for example making a choice on power purchases maybe they'll have an opportunity to go to greener power and purchase more renewables. That's one of the main things that CEAs try to push. What does this exit fee all about since a utility makes lots of investments and has been making lots of investment for natural gas plants for renewable energy things like solar farms they make these investments to produce power. If people are going to leave the utility and go to a CCJ the utility by law by statute has to be compensated. So the exit fee basically it's a fee that every person who is in SCCA pays every month in order to help make up for those investments that the utility has made in the past and those investments weren't just made willy nilly they were all approved by the California Public Utilities Commission which oversees utilities and in our allocation those payments would be made to Estey and. Right. And the CPC had a vote yesterday Thursday in which they talked about the exit fee. They had to restructure it under the current plan even though San Diego doesn't have a few CA but if San Diego did have SCCA and also for direct access the fee is 2.5 cents per kilowatt hour. What the CPC did yesterday when they had their
meeting was they readjusted the exit fees across the state. They're different in different territories different utilities have. But in San Diego the adjustment was made upward from 2.5 cents a kilowatt hour to four point to five cents a kilowatt hour. So that if San Diego does go forward with SCCA that's what people in San Diego would pay who are in a SCCA.
The reaction from CC Advocates in San Diego was pretty positive. Here's Nicole Capra Its executive director of the Climate Action Campaign.
We can still move forward as a city with a successful community based program that will still offer affordable rate to San Diego families and finally give choice consumer choice to all Sandy again Rob why do you think this exit fee.
I mean it's actually an increase. Why is it being welcomed like that.
Well I think Nicole Kapranos it's been a big believer in CCH she's been a big fan of CCS and even though the fee goes up their feeling does that there's going to be some regulatory certainty. Also there was a feasibility study that the city of San Diego did. Looking at CCS fairly recently the feasibility study which I think came out last year showed that San Diego would be able to benefit from having SCCA but not all reactions to this exit they were positive were they know there's a number of people who are skeptical about CCS. Some of them in all fairness come from Sempra which is the parent company of San Diego Gas and Electric. But other people like the San Diego County Taxpayers Association there's also another group called clear the air coalition. They're concern as they see it is that if lots of people defect over to a city of San Diego CCJ what happens to other cities in San Diego County like Imperial Beach or La Mesa. If there is a massive defection does that mean that the rates for these other communities for rate payers would go up. And there's also a larger concern that some people have that if the power purchases eventually if the decisions are eventually made as they are in SCCA by a city government or a community government well do you really want elected officials making decisions on power purchases. I mean there's some people who say look we've got a city council that sometimes is fairly dysfunctional. So if they're making decisions on things that they're not energy experts so there's some concerns on that front. What's next in deciding whether or not the city of
San Diego will create a SCCA for now all eyes are on Kevin Faulkner because he spearheaded the Climate Action Plan that the city of San Diego adopted getting to 100 percent clean energy by 2035. So now the decision is up to Kevin Faulkner whether or not to bring this to the city council and he would bring it to the City Council. From what I understand he would go to the environment committee at city council but the mayor has to bring this forward. So now all eyes are on him whether or not he will do that. And I contacted the mayor's office yesterday they said we're on schedule to reach Mayor Faulkner's goal of choosing a pathway to achieve our renewable energy goals but they wouldn't give a specific timetable on when he's going to make a decision. All they said was within a few weeks so we're sort of wait and see at this point.
I've been speaking with Rob Nikolovski energy reporter for The San Diego Union Tribune. Rob thank you so much. Thank you Maureen. For the final installment of the new source.