7 Things To Understand About Community Choice In San Diego
The community choice aggregation study released -- makes for dense reading material. The study found that the simple answer to those questions is yes and yes. But the study in the plan are more complicated. Claire Trageser has been following the story and joins me now. The study looks at multiple scenarios with community choice customers using different amounts of renewable energy. Can you walk us through some of those conclusions. There are five different scenarios for how much renewable energy committee choice customers would use. It found that Cody Joyce would be cheaper then SDG&E by 2023. And another where all the committee choice customers used 80% renewable energy the study found that community choice will be cheaper by 2027 and the study did not produce out far enough to see how costs would compare where 100% of community choice customers only used renewable energy because that is down the road. Is there a scenario where sticking with SDG&E would be cheaper question mark It would be cheaper because it takes time for the cost savings to set it but the city says that it will make up that cost so that customers don't end up paying more in the first three years and then and all the scenarios SDG&E and something more expensive in the long term. The reason that San Diego is exporting this option is to make the goals of 100% renewable energy. Does this study say we can get there? Yes. That is a big take away is that they can get to 100% of renewable energy by 2035 using community choice so city officials say we know we have one way to reach that goal and there are looking at other potential ways to reach that goal so that they can be sure that they've explored all the options. If he and -- and even if they do -- Anyone can choose to stay with SDG&E . If they go with community choice customers will be automatically enrolled but then they could opt out. The study assumes that 40% of residents and businesses will opt out and stick with SDG&E. That is a pretty generous assumption because of what is happened in other places that have gone with community choice but if it is wrong and they do stay with SDG&E that it could impact the conclusions. There is a strange addition of exit fees that SDG&E can charge the city if they do decide to go with community choice energy. Why is SDG&E allowed to charge that feet? Because SDG&E has already bought energy for the city to use in the future so if they go with the choice and they don't use the energy they will have to pay SDG&E back for the energy they've bought. The study assumes that exit fees will stay the same as they were in March of this year. If they increase by 10%, then they conclusion that community choices cheaper could be wrong. That is unlikely right now. The California Public Utilities Commission is deciding whether utilities like SDG&E should be allowed to set the amounts for these exit fees and it could end up decreasing them. This seems like a tremendously complicated subject. How are people going to get acquainted with this study? That is what we are try to do is explain to people in the city will be hosting workshops to tell people about community choice and the other energy programs that they might be considering. I think it's also important to know that if they go with community choice, the average resident or business may not notice a difference. Their bill will still come from SDG&E and they will still -- their power will be delivered in the same way so it may not make that much of a difference to a regular person. I've been speaking with Claire Trageser. You can find more details about the community choice aggregation study in her story at KPBS.org. Thank you so much. Thank you.
Last week, the city of San Diego got its answer on whether switching to an alternative energy program that would bypass San Diego Gas & Electric is possible and cost-effective.
The broad answers, contained in a feasibility report conducted by Willdan Financial Services, were yes it is feasible and yes it is cost-effective. But the study is more complicated than that, and there are a variety of terms and concepts to understand that show how the authors arrived at those answers.
The study looked at a program called community choice, which San Diego is considering using to reach its goal of using 100 percent renewable energy by 2035.
1. What Is Community Choice
Community choice would take the purchasing power away from SDG&E and give it to the city. If the city goes with community choice, the city would still use SDG&E's power grid and electric bills would still come from SDG&E, but the city would decide what energy sources to buy.
The idea is the city could then buy more renewable sources of energy, such as wind and solar power and less natural gas.
If the city switches to using community choice, residents and businesses will get to decide whether to stick with SDG&E or use the new community choice program.
The city's decision will likely be the focal point of a big political battle. SDG&E has formed a lobbying arm called Sempra Services that will try to convince city leaders not to opt for the new program. Already, Sempra Services released a statement saying the study is "incomplete because it is not possible to determine what a government-controlled energy model will cost customers. Until the true costs and benefits of such a program are transparent and shared with the public, we believe it is premature to move forward."
2. Different Scenarios
The study looked at five different scenarios for how much renewable energy community choice customers would use.
–98 percent of community choice customers use 50 percent renewable energy; 2 percent of customers use 100 percent renewable energy
–All community choice customers use 50 percent renewable energy.
–All community choice customers use 80 percent renewable energy.
–All community choice customers use 100 percent renewable energy.
–98 percent of community choice customers use 80 percent renewable energy; 2 percent of customers use 100 percent renewable energy.
The study found that in the second scenario, where 100 percent of community choice customers use 50 percent renewable energy, community choice will be cheaper than SDG&E by 2023.
In the third scenario, where 100 percent of community choice customers use 80 percent renewable energy, the study found community choice will be cheaper than SDG&E by 2027.
The study did not project out far enough to see how costs would compare in the fourth scenario, where 100 percent of community choice customers use 100 percent renewable energy.
3. Bundled Vs. Unbundled
There are two ways of acquiring renewable energy:
–Buying the power from a local source along with energy credits from the state, which are called bundled renewable energy credits.
–Buying just the energy credits from a nonlocal source, which are called unbundled renewable energy credits.
The feasibility study includes only bundled energy credits, because those are better for the local economy. However, this could be a point of discussion, because unbundled credits are cheaper.
RELATED: Battle Over San Diego’s Energy Future Will Heat Up Soon
4. Load Forecast
If the city goes with community choice, customers will not be required to switch to the new energy program. The study assumes that 40 percent of customers will stay with SDG&E.
This is a conservative assumption, but if it is wrong and more customers stay with SDG&E, it could impact the study's conclusions.
5. Exit Fees
San Diegans may be hearing a lot about exit fees if they follow the community choice debate. The term, formally called Power Charge Indifference Adjustment or PCIA, means the amount the community choice program would have to pay SDG&E if it opted for community choice.
That is because SDG&E has already bought energy for the city to use in the future, and so if the community choice program does not use that energy, it will have to pay the utility back for it.
The study assumes exit fees will stay the same amount that they were in March 2017, but if they increase by 10 percent then the study's conclusion that community choice is cost effective could be wrong.
However, that scenario is probably unlikely. The California Public Utilities Commission is currently deciding whether utilities like SDG&E should be allowed to set the amounts for these exit fees, and could end up decreasing them.
6. Electricity Rates
When the study talks about costs savings from community choice, it is important to remember that those savings may not be directly visible on residents' and businesses' electricity bills.
That is because the cost of the energy is only part of the bill — consumers also pay for delivery of energy and those exit fees mentioned above.
In fact, in the winter, the community choice charge only makes up 16 percent of a utility bill, while 62 percent goes to delivery fees and the rest to exit fees.
In the summer, community choice charges make up 56 percent of a utility bill, while 27 percent goes to delivery fees and the rest to exit fees.
7. What Comes Next
Now that the study is released, the city will hold a series of workshops to talk to residents about community choice and other options for reaching 100 percent renewable energy.
Then, the City Council is expected to vote in January on what program to use.