City Seeks to Broker Own Power

By: Charles F. Bostwick | September 2, 2014

LANCASTER – Moving ahead with plans to sell electricity to residents and businesses, the City Council agreed to take the next steps in the 2- to 2-year-long process that requires obtaining approval from Southern California Edison and state power regulators.

The council approved a service agreement with Southern California Edison to become a so-called “Community Choice Aggregator” – the name for what the city is doing – and approved a registration application form to become an electric service provider, which begins the process of registration with Edison and the California Public Utility Commission.

“The Lancaster Energy program will be well underway by this time next year, and we are extremely excited about offering our citizens the power to choose,” Mayor R. Rex Parris said in a city announcement after the vote at this past week’s city council meeting.

City officials say they expect to be able to offer electric rates that will meet or beat Southern California Edison’s prices, but the rates aren’t likely to be set until early next year. That will be done in a public vote by City Council members.

Before that happens, the city must hire a firm that will acquire power contracts – such as with solar fields, wind farms and conventional power plant operators – for sale to Lancaster. City staffers are investigating and interviewing firms that expressed an interest, documents show. The power broker firm could be named by the end of this month.

As envisioned now, the new power arrangement would first be used for city buildings, parks and other facilities starting in early 2015, then Lancaster business, and then residences by May or November 2016 – a slippage from the initial hope to have it all done by the end of next year, officials said. There are 5,500 commercial and industrial electric customers and 48,865 residential customers in Lancaster, city officials say.

Under the plan, Southern California Edison would continue to own and maintain power lines and other electrical distribution equipment in Lancaster.

Residents and businesses would continue to get electric bills sent out by Edison, which would contain an electrical delivery fee charged by Edison plus an electrical generation charge from the city’s energy authority.

City officials envision customers could sign up for a renewable-energy option or an economy package.

In addition, residents and businesses could choose to remain customers only of Edison, officials said.

Once the new system is in place, residents and businesses will be offered several chances to “opt out” of switching from Edison to the Lancaster energy authority.

Under the new arrangement, Lancaster electricity rates will be set by the city, rather than by the California Public Utility Commission, which has authority over Southern California Edison, Pacific Gas & Electric and other investor-owned utilities.

The new power arrangement is possible under a state law passed in 2002, following California’s so-called “electricity crisis” that saw statewide rolling blackouts.

California’s first “community choice aggregation” to go into operation was in Marin County, where the Marin Energy Authority began serving customers four years ago as Marin Clean Energy.

About 125,000 homes and businesses are customers, or about 80% of the county and neighboring Richmond, while about 20% remain customers of Pacific Gas & Electric, spokeswoman Jamie Tuckey said. Sonoma County’s community choice aggregation agency began serving its first customers May 1.

For a typical Marin County residence using 500 kilowatts a month, the average monthly electric bill is about $83 for PG&E customers, $82 with Marin Clean Energy’s Light Green plan and $87 with its Dark Green plan, she said. For a typical commercial customer using a little more than 1,000 kilowatts a month, the monthly bill is about $272 with PG&E, $259 with Light Green and $270 with Dark Green, she said.

The Light Green plan uses 50% “renewable” sources including solar, wind, geothermal and small hydro-electric power, she said. The Deep Green plan uses 100% renewable sources.

The agency recently launched a third plan that uses energy from a new solar field in Marin County, she said.
Marin Clean Energy customers get one bill, which carries Marin Clean Energy’s electrical generation charge and PG&E’s delivery charge. For residential customers, that’s about $36 of the $82 or $87 typical bill, records show.