A new Los Angeles County program that promises members cheaper electricity rates and cleaner power is catching on quickly.
Sixteen cities have signed on to the fledgling Los Angeles Community Choice Energy, founded in April with a directive by the Los Angeles County Board of Supervisors. The nonprofit program offers Southern California Edison customers an alternative option to power their homes and businesses with solar, wind, geothermal and hydroelectric energy.
Manhattan Beach, Carson, Redondo Beach, Rolling Hills Estates, Culver City, Downey, Paramount, South Pasadena, Claremont and others have joined the program during its initial roll-out period that ends Dec. 27. After that, cities that sign up might have to pay fees because the county only set aside $10 million for startup costs.
Redondo Beach is expected to finalize its submission to join next month, since the majority of council members voted in favor of the idea last week.
“Right now, we’re in a monopoly situation with Edison,” Redondo Beach Councilman Christian Horvarth said. “In this scenario, you give the consumer a choice. It’s also a way to incentivize customers to go greener. But any time you can give people a choice, it’s a wonderful thing.”
The initiative is expected to quickly take hold among cities not already served by municipal electricity providers such as the Los Angeles Department of Water and Power.
“The state of California estimates that within the next five to seven years, 80 percent of customers in an eligible territory will, in fact, be in a community-choice aggregation program,” said Gary Gero, the county’s chief sustainability officer. “The reason for that is really quite clear: Under these kinds of programs, the rate setting, the power procurement and, most importantly, the development of customer-based programs is determined locally.”
Similar community-choice aggregation programs are well underway in Marin, Napa, Sonoma, Mendocino, San Mateo, Monterey, San Benito, Santa Cruz, Alameda, Humboldt, Yolo, Placer, Santa Clara counties and elsewhere.
State legislators opened the door to these publicly owned utilities when Assembly Bill 117 was adopted in 2002. But it wasn’t until Senate Bill 790 was passed in 2012, giving providers more protections to compete with established utilities, that the concept took hold.
Now the state’s community-choice aggregation programs are working hand-in-hand with utilities. Likewise, the Los Angeles Community Choice Energy (LACCE) program will rely on Edison to maintain transmission lines, read meters, and provide billing services.
LACCE will procure wholesale sources of clean energy and set rates charged to customers. The board, made up of elected officials from member cities, will decide how profits are spent on renewable-energy projects.
Customers who don’t want to participate in the county-run energy program will have to opt out if their city joins.
Members will have the option of staying with Edison’s current rate of clean-energy power sources, which is 28 percent of its total supply. Or they can increase the amount of renewable sources to 50 or 100 percent of the energy they consume. Edison intends to increase the amount of renewable energy it sells to a third of its total supply by 2020.
In addition to giving people more choice, the program is expected to reduce rates mildly because it increases competition and is publicly run.
A feasibility study by EES Consulting found that members of the county’s program will pay 4 percent less than regular Edison customers, on average.
The program will begin rolling out in unincorporated county areas early next year. By March, residents in participating cities should be receiving service, Gero said.
“We have about 2,000 county facilities and we’re going to be the guinea pig on the transition of the billing system,” Gero said. “As soon as we’ve worked out those kinks, we’ll start rolling out to commercial and industrial customers by summer of next year at the very latest. Residential customers will come thereafter.”
Like many cities, Carson has been weighing the pros and cons of various community-choice aggregation programs for years. City officials decided it would be too costly to run it themselves, but jumped at the opportunity to join LACCE.
“This is a big change. But the benefits outweigh my skepticism,” Carson Councilwoman Lula Davis-Holmes said during a council debate on the issue. The city finalized its decision to join last week. “We can always opt out,” she said.
Davis-Holmes and other members of the Carson City Council said they will advocate for a contract with the International Brotherhood of Electrical Workers.
Dana Murray, Manhattan Beach’s environmental programs manager, said the LACCE program fits with the city’s goals of further reducing greenhouse gas emissions. Manhattan Beach has been considering ways to enable community-choice aggregation since 2014 and will likely finalize its intent to join LACCE on Dec. 5.
“A lot of our South Bay and Westside cities have clean-power goals,” Murray said. “We want to provide our residents with cleaner power and lower rates. We’ll be noticing the community about the options and incentives available. This is definitely one tool to achieve our climate-action goals.”
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