Citizen Concerned: Proposed CCA Plan Has Major Deficiencies

Over the past year or so there has been quite a bit of ‘jawboning’ over the mayor’s dream to create a CCA aka Community Choice Aggregation to address the issue of reducing CO2 in the atmosphere by only powering our homes and businesses with renewable energy.

Our current energy provider, SDG&E, is reportedly now using renewables for as much as 45% of the energy supplied to their marketplace and the state has mandated that to be 100% by the year 2045, or just ten years later than the city’s Climate Action Plan goal.

All this talk has caused me, as an interested citizen/resident/ratepayer, to scratch beneath the surface verbiage to better understand how such an entity could operate if the politicians in city hall choose to “move the needle on this initiative.”

The Feasibility Study

I have read/studied the 125 page July 2017 Feasibility Study and the 65 page October 2018 Business Plan. In addition, I have read/gathered what I could find in the local print media on this topic.

Further, I have initiated email communication with the chair of the council’s Environment Committee and that committee’s members and to my own city council person, plus to the city’s Chief Sustainability Officer.

To date I have received no responses from any of these folks at city hall.

Disheartening in that all I seek are answers to the many questions I have from the Feasibility Study and the Business Plan. As a business-minded citizen/resident, I don’t wish to see our city run off half-cocked because the right due diligence was not done in the initial thinking stage.

As a retired financial industry executive I am quite familiar with studying business plans to ensure they cover all aspects of a start-up entity, to make them bullet-proof.

There should be no major unaddressed deficiencies, and yet, in my opinion, what we have is a plan that is incomplete.

Areas of Concern

So many unknowns exist. Here are a few concerns that I believe need to be addressed:

  • The PCIA or “exit fee” created by the CPUC was much higher than the pols anticipated, so they are asking the CPUC to re-think it (to lower it). This fee would approximately be $20/month and would be in addition to the electricity charge appearing on a billing.
  • The business plan was drawn for a city-only CCA but now the pols are talking of a Joint Power Agreement with the county, making the current business plan useless.
  • A city centered CCA would be the largest such entity in the state. It could hinder working capital for CCA projects as capital markets will not know how to determine creditworthiness.
  • Would the city have to guaranty payment of that initial bond issue, thus putting the taxpayers on the hook at a time when the city’s budget projects large deficits in the coming years?.
  • It’s being considered to have the CCA be an Enterprise Fund, just like the Water & Sewer Department, with a Board of Directors being all elected politicians who know nothing about the electric power market and the setting of rates to charge ratepayers – could officials be manipulated?.
  • A city CCA projects a staff of 44 people at an estimated cost of $5,000,000 per year; just what we need – another government employee bureaucracy.

This CCA Example Isn’t Assuring

Solana Beach

If the City and County of San Diego decide that a CCA plan is what’s best for their residents, they can look to Solana Beach, which created a CCA last June to see how it’s fairing.

To date the average ratepayer for the Solana Beach CCA is saving a whopping $2.65/month on average – big whoop – or not even enough to buy a Starbucks latte. The“saving money” argument rings hollow.

I know the San Diego Regional Chamber of Commerce and the SD County Taxpayers Association have many serious reservations on the creation of a CCA, so shouldn’t those ‘reservations’ be made public and the city’s Chief Sustainability Officer address them in a public forum with specific commentary so we citizen/residents have the benefit of these ‘reservations’? And, if the CCA is relying “on existing sources for its power supply,” why would rates be lower than the IOU (Investor Owned Utility) aka SDG&E?

Where Will We Generate The Energy?

The plan states that “to the extent feasible the CCA will meet its GHG goals through new, preferably local, renewable generating capacity.”

Huh?

Is there sufficient vacant land within the city to do this? What would be the effect on the environment if said goal is achieved?  Will that cause NIMBY-ism to rear its head and will that result in a need for environmental impact studies for each location?

Plenty of unanswered questions.

In Houston, Texas, a city approximately the same size as San Diego – it needs 889 sq. miles of wind turbines, 156 sq. miles of solar panels + 21,000 sq. miles of corn to create ethanol to provide power for just 1 day, as compared to only 19.6 sq. miles of natural gas wells or only 39 sq. miles of oil wells.

In other words, the environmental destruction that would be caused by the local CCA achieving its goal is breathtaking!

The Opt-Out Issue

I believe that notice(s) to ratepayers have to be fairly and properly worded so we have a clear understanding of the proposal.

Friends in the Solana Beach community tell me their notices did not give all aspects of what they were being asked to decide upon and that said notices were rather non-descript to the point they were not taken seriously.

If San Diego is to proceed with CCAs, it has to make sure that doesn’t happen here. If an “exit fee” is to be assessed to a ratepayer who chooses to opt out at a later date, that fee should be included in the initial notices(s).

Conclusion

As the reader can surmise there are many moving parts to this initiative, and the above questions do not cover the many concerns we all should have.

More due diligence is required to get ALL the facts into the open for the general public to understand how they will be directly affected if a CCA is created, and for the decision makers on the city council to make an informed decision vs. just jumping into this thicket because it sounds/looks good to be acting on the city’s Climate Action Plan for that is the politically correct thing to do.

Remember what the Brookings Institution, a left of center think tank has stated about renewable energy: “wind and solar are much more expensive than conventional power; renewables require mandates because of their higher cost.”

How can the mayor and the city council even think of moving forward when there are so many unmeasured risks and unknowns which must be quantified prior to moving forward. Let’s hope they come to their senses before we taxpayers wind up picking up the broken pieces like we did with the Charger ticket guaranty.