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HomeMy WebLinkAbout2017-07-11; City Council; ; Community Choice Energy Technical Feasibility StudyCA Review URA 0* CANS CITY COUNCIL.5) Staff Report 4,,F0„ Meeting Date:July 11, 2017 To:Mayor and City Council From:Kevin Crawford, City Manag Staff Contact:Jason Haber, Assistant to the City Manager lason.FlaberQcarlsbadca.gov or 760-434-2958 Subject:Community Choice Energy Technical Feasibility Study Recommended Action Approve a resolution authorizing the City Manager to negotiate, execute and fund a cost share agreement allowing for the City of Carlsbad's participation in the preparation of a Community Choice Energy Technical Feasibility Study in an amount not to exceed $60,000, and to request energy load data from San Diego Gas & Electric Company. Executive Summary The City of Carlsbad has been invited to join the cities of Del Mar, Encinitas and Oceanside in a cost share agreement to prepare a Community Choice Energy (CCE)Technical Feasibility Study. CCE is a mechanism that allows local governments to purchase and supply electrical power to customers within their jurisdictions as an alternative to the service provided by an investor- owned utility, such as San Diego Gas & Electric. Preparing a Technical Feasibility Study would be the first step in determining whether, and under what conditions, establishing a CCE might benefit Carlsbad and the North County coastal region. Requesting SDG&E energy load data would be necessary to allow a consultant to conduct the analysis required to make such a determination. This report presents the City Council with four options to consider in deciding how to move forward; however, staff is recommending approval of the resolution as presented in Exhibit 1. Adoption of the proposed resolution would only authorize the city's participation in the preparation of the Technical Feasibility Study, and would in no way obligate the City of Carlsbad to participate in any future decision to establish a Community Choice Energy Program. Discussion Background City staff have participated in ongoing discussions regarding Community Choice Aggregation (CCA or CCE)with community stakeholders since 2012.In 2015,the city adopted the City of Carlsbad General Plan, including Sustainability Element Policy 9-P.14, which reads as follows: 478 Support a regional approach to study the feasibility of establishing Community Choice Aggregation (CCA)or another program that increases the renewable energy supply and maintains the reliability and sustainability of the electrical grid. In January 2016, the city hosted 'The Future of Energy Workshop' to educate and inform staff, elected officials and the community-at-large on CCE and other emerging energy opportunities. Through 2016 and 2017 city staff monitored regional activity concerning CCE by attending public meetings of the City of Encinitas City Council Subcommittee on Community Choice Energy (Encinitas CCE Subcommittee),as well as several technical meetings with staff from Del Mar, Encinitas, Oceanside, San Diego and Solana Beach. Within the past six months, staff attended the San Diego Community Choice Energy Forum, consulted with legal and financial experts with experience in CCE start-up and operation, and interviewed staff and elected officials representing agencies that have initiated and completed the CCE development process. Cost Share Proposal On April 25, 2017 the city received a proposal from the City of Encinitas to participate in a cost share agreement to prepare a regional CCE Technical Feasibility Study. The proposal suggests that the cities of Carlsbad, Del Mar, Encinitas and Oceanside share the cost of the study on a combined fixed cost (10%) and population-based proportional cost basis, including a 5% administrative fee to be paid to the City of Encinitas for project management and contract administration services. The City of Carlsbad cost share amount is estimated at between $32,000 and $60,000. The city's cost share amount will be determined by two primary factors. The first factor will be the actual cost to complete the study, which will be known upon completion of an RFP and consultant selection process. The City of Encinitas will release an RFP on behalf of the participating cities indicating a not to exceed amount of $100,000, although it is possible that proposals could come in lower than that amount. The second determining factor relates to how many, and which cities decide to participate in the agreement. While the cities of Del Mar and Encinitas have each taken affirmative actions to participate, the City of Oceanside's participation remains uncertain at this time. If all four cities agree to participate, then the City of Carlsbad cost share is estimated at $32,000. However, if the City of Oceanside declines to participate, then Carlsbad's cost share is expected to approach $60,000. CCE Technical Feasibility Study Scope The proposed CCE Technical Feasibility Study is expected to include the following areas of analysis: 479 1.CCE Governance, Operations and Financing a.Evaluate potential CCE governance and operational models, including: i.Independent by jurisdiction ii.JPA among participating cities iii.Hybrid JPA —centralized administration /decentralized governance b.Estimate CCE Start-Up & Operating Costs c.Evaluate CCE Financing Options d.Estimate CCE Start-Up Timeline 2.CCE Rate Projections a.CCE rate projections under various governance and operational models,a variety of renewable energy portfolio scenarios, and various customer enrollment scenarios b.Compare to equivalent SDG&E rates (current and projected) 3.Factors Influencing CCE Feasibility (Risks & Benefits) a.Power Charge Indifference Adjustment (PCIA) b.Energy Market Dynamics c.Customer Opt-Out Rates d.Regulatory & Legal Risk e.Local Solar Generation Rates f.Net Energy Metering Rates g.Direct Access Customers h.Economic Impacts Analysis As noted above, four options are presented for the City Council to consider in deciding how to move forward: Option 1 (Recommended Action): Approve a resolution authorizing the City Manager to negotiate, execute and fund a cost share agreement allowing for the City of Carlsbad's participation in the preparation of a Community Choice Energy Technical Feasibility Study in an amount not to exceed $60,000, and to request energy load data from San Diego Gas & Electric Company. Participation in the proposed cost share agreement would allow the city to implement an adopted General Plan policy to "support a regional approach to study the feasibility of establishing CCA..." With the City of Encinitas providing project management and contract administration services, the administrative burden on city staff resources will be minimized, while provisions to be included in the agreement will ensure appropriate oversight and input regarding consultant selection and work product. The city does not have the technical expertise in house to fully evaluate the potential benefits and risks involved with CCE. Such analysis requires unique experience in energy procurement and financing, legal, and operational areas.By joining the participating cities in contracting with a subject matter expert consultant to prepare a CCE Technical Feasibility 480 Study, the city will gain a better understanding of the overall viability and desirability of pursuing a CCE for the City of Carlsbad. Proponents of CCE often argue that it is one of the most effective actions a city can take to reduce greenhouse gas emissions. It is further suggested that emerging CCE governance models provide a greater degree of local control over rate setting and product offerings, while creating operating efficiencies that allow competition to be introduced in the electric utility marketplace. The financial and operating track records,as well as anecdotal reports on the eight CCE's currently operating in California, appear to suggest a viable business model with compelling revenue-and economic development-generating potential. However, critics suggest that there may be more cost-effective and less risky opportunities to achieve emissions reductions by focusing on other energy-consumptive sectors, such as transportation. It has been suggested that CCE's might not actually result in new emissions reductions, nor new jobs due to provisions allowing for Renewable Energy Credits (RECs) from existing renewable energy resources to account for a certain portion of a CCE's energy portfolio. And finally there are concerns that uncertainties in future energy pricing and the possibility of an unfavorable regulatory landscape could present additional risks to CCE's. Participating in the proposed cost share agreement, regardless of which other cities participate, would provide valuable Carlsbad-specific information to help the city better understand the pros and cons of CCE,and to determine whether, and under what circumstances, further investment and consideration of CCE might be warranted. Option 2: Decline to participate in the proposed cost share agreement. Council could determine that participation in the proposed cost share agreement and CCE Technical Feasibility Study would not meet the intent of General Plan Policy 9-P.14, or that the Council desires to study the feasibility of "another program that increases the renewable energy supply and maintains the reliability and sustainability of the electrical grid." Further Council discussion, direction and staff research would be required in order to identify other programs that might be available to implement this policy direction. Option 3: Approve an amended resolution authorizing the City Manager to negotiate, execute and fund a cost share agreement allowing for the City of Carlsbad's participation in the preparation of a CCE Technical Feasibility Study in an amount not to exceed $32,000, and to request energy load data from San Diego Gas & Electric Company. This option would limit the city's cost share to $32,000, essentially requiring that all four cities (Carlsbad, Del Mar, Encinitas and Oceanside) participate in the study. The analysis presented under Option 1,above, generally applies here as well. However, should Council choose this option, the City of Oceanside's decision regarding their participation would determine whether or not the City of Carlsbad would participate. 481 Staff will be prepared to provide amendment language for the resolution, in the event Council decides to pursue Option 3. Option 4: Direct staff to initiate an alternative method of investigation of CCEfeasibility. As an alternative to joining the participating cities in studying the feasibility of CCE,for instance, the City of Carlsbad could initiate our own, independent study, or could pursue other partnership scenarios. While this might provide the city with greater control over the consultant contract and work product, it is expected that this option would result in higher costs to the city,an increased workload, and a delayed completion timeline,as compared to the approach suggested by the City of Encinitas. In consideration of the analysis provided above, staff is recommending that Council approve the resolution as presented in Exhibit 1. Fiscal Analysis The recommended action requires a transfer and appropriation from the City Council Contingency Fund in an amount not to exceed $60,000 to fund the City of Carlsbad's portion of the cost share agreement to prepare a regional Community Choice Energy Technical Feasibility Study. Next Steps Upon receiving direction from Council, staff will notify the City of Encinitas of the city's decision regarding their proposal. Should the Council decide to participate in the CCE Technical Feasibility Study, staff will enter into negotiations with the participating cities to complete a cost share agreement, and will submit an energy load data request to SDG&E. It is anticipated that a CCE Technical Feasibility Study could be completed by July 2018. Environmental Evaluation (CEQA) The project is exempt from the California Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15262 —Feasibility and Planning Studies, which exempts a project involving only feasibility or planning studies for possible future actions which the agency, board, or commission has not approved, adopted, or funded. Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to scheduled meeting date. Exhibits 1.Resolution authorizing the City Manager to negotiate, execute and fund a cost share agreement allowing for the City of Carlsbad's participation in the preparation of a Community Choice Energy Technical Feasibility Study in an amount not to exceed $60,000, and to request energy load data from San Diego Gas & Electric. 482 EXHIBIT 1 RESOLUTION NO. 2017-141 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO NEGOTIATE, EXECUTE AND FUND A COST SHARE AGREEMENT ALLOWING FOR THE CITY OF CARLSBAD'S PARTICIPATION IN THE PREPARATION OF A COMMUNITY CHOICE ENERGY TECHNICAL FEASIBILITY STUDY IN AN AMOUNT NOT TO EXCEED $60,000, AND TO REQUEST ENERGY LOAD DATA FROM SAN DIEGO GAS &ELECTRIC COMPANY WHEREAS,Community Choice Energy (CCE)is a mechanism that allows local governments to purchase and supply electrical power to customers within their jurisdictions as an alternative to the service provided by an investor-owned utility; and WHEREAS,the terms 'Community Choice Energy' and 'Community Choice Aggregation' are used interchangeably; and WHEREAS,the City of Carlsbad General Plan Sustainability Element includes Policy 9-P.14 to support a regional approach to study the feasibility of establishing Community Choice Aggregation (CCA)or another program that increases the renewable energy supply and maintains the reliability and sustainability of the electrical grid; and WHEREAS,Community Choice Energy, if determined to be technically and financially feasible, could provide environmental and economic benefits to residents and businesses in the City of Carlsbad; and WHEREAS,Community Choice Energy, if determined to be technically and financially feasible, could provide an opportunity to fund and implement a variety of energy-related programs of interest to the community; and WHEREAS,determining the technical and financial feasibility of Community Choice Energy requires obtaining and analyzing SDG&E energy load data, and conducting a Technical Feasibility Study; and WHEREAS,the City of Carlsbad has been invited to join the cities of Del Mar, Encinitas and Oceanside in a cost share agreement to prepare a Community Choice Energy (CCE)Technical Feasibility Study; and WHEREAS,adoption of this resolution in no way obligates the City of Carlsbad to participate in any future decision to establish a Community Choice Energy Program. NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Carlsbad, California,as follows: 1.That the above recitations are true and correct. 2.That the City Manager is authorized to negotiate and execute a Cost Share Agreement that may include the cities of Oceanside,Del Mar, Encinitas and Carlsbad to prepare a CCE Technical Feasibility Study. 3.That the City Manager, or his designee,is authorized to transfer and appropriate from the City Council Contingency Fund an amount not to exceed $60,000.00 for the City of Carlsbad portion of the cost to prepare a CCE Technical Feasibility Study. 4.That the City Manager is authorized to request energy load data from SDG&E for the purposes of preparing a CCE Technical Feasibility Study. PASSED,APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 11th day of July, 2017, by the following vote, to wit: AYES:M. Hall,K.Blackburn, M. Schumacher,C.Schumacher, M. Packard. NOES:None. ABSENT:None. M T HALL,Mayor BARBA ENGLESON,ity Clerk (SEAL)....0..• (J...oFEA-4. 0 Morgen Fry From:Paul and Mayela Manasjan AU Receive -Agenda Item #17-- Sent:Monday, July 10, 2017 10:44 PM For the Information of the: To:Council Internet Email CITY COUNCIL Cc:Manager Internet Email ACM v7 - CA t/CC / Subject:Support the CCE Regional Feasibility Study on 7/11/17 Date-AMCity Manager vy Dear Carlsbad City Council, I'm writing to ask you to support the Community Choice Energy (CCE) Regional Feasibility Study at our City Council meeting tomorrow, 7/11/17. My husband and I have been proud residents and homeowners in the City of Carlsbad since 2008. We recently launched our own small business in the City of Carlsbad (an Environmental Consulting firm) and I also currently serve on the City of Carlsbad's Community Development Block Grant Advisory Committee. We're very worried about climate change and it turns out we're not alone.According to a new report published by the Yale Program on Climate Change Communication,a majority of people in the United States (58%) believe that climate change is real and that it is mostly the result of human activities. Over half of Americans (57%) say they are least "somewhat worried" about global warming. http://climatecommunication.vale.edu/publications/climate-chancle-american-mind-mav-2017/ CCE is the single biggest thing any city can do to reduce greenhouse gases (GHGs) and meet its climate action targets.I don't know how else the City of Carlsbad proposes to meet its Climate Action Plan goals otherwise. Currently, there are over 70 California cities and counties served by CCE providers.It's been proven to be feasible and successful. CCEs create new markets, spur local economic development in the community, provide good local clean energy jobs and create a more resilient and sustainable economy. Plain and simple, we support CCE because it provides consumers with choice, cleaner energy, lower rates, local control and an investment in our communities. Please support the residents of Carlsbad along with your city staff (including Jason Haber) who have worked diligently on this matter by adopting this important resolution.Thank you kindly for your service to our community. Sincerely, Mayela &Paul Manasjan Carlsbad, CA 92009 All Receive -Agenda Item #11 For the Information of the: CITY COUNCIL ACM NI CA V/CC Morgen Fry Datel/ioin City Manager V' Subject:Phone message in support of CCE Resident Christiana Carter called to express support for community choice energy. She is not able to attend the July 11 City Council Meeting. City of Carlsbad Morgen Fry Secretary to City Manager Kevin Crawford City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 www.carlsbadca.gov 760-434-28211 760-720-9461 fax 1 Morgen Fry From:Council Internet Email - 7Sent:Tuesday, July 11, 2017 8:39 AM All Receive -Agenda Item # To:Morgen Fry For the Information of the: Cc:City Clerk CI COUNCIL ,./1Subject:FW:Community choice energy ACM CA CC Date City Manage Please distribute to council. From: Ryan Vaughn Sent: Monday, July 10, 2017 11:06 PM To: Council Internet Email <CityCouncil@carlsbadca.goy> Subject: Community choice energy Members of the Carlsbad City Council: I am a resident of Carlsbad and urge you to to support the Community Choice Energy Feasibility Study. I care about this issue because I am a member of the community, and I have 2 small children that will be among the next generation to deal with impacts of climate change. Coastal cities around the globe are already seeing the impacts of rising sea levels and while Carlsbad may not see obvious impacts right now, we have a responsibility as global citizens to do our part to reduce our reliance of damaging fossil fuels. Supporting the Community Choice Energy Feasibility Study is one easy step in the right direction to allow the community to make choices about their energy provider and source of energy. Carlsbad has the opportunity to become the leader it should be in creating a brighter future for its residents with renewable energy. Thank you for your consideration. Sincerely, Ryan Vaughn 1 Morgen Fry From:Council Internet Email Sent:Tuesday, July 11, 2017 8:40 AM To:Morgen Fry Cc:City Clerk Subject:FW: Clean Energy for Carlsbad Please distribute to council. From: gall buteau Sent: Monday, July 10, 2017 8:03 PM To: Council Internet Email <CityCouncil@carlsbadca.gov>;Matthew Hall <Matt.Hall@carlsbadca.gov> Subject: Clean Energy for Carlsbad My name is Gail Buteau and I live in Carlsbad.I stand by the Sierra Club in wanting clean energy for our city to preserve the health and beauty of our irreplaceable coast.Please vote for clean energy! Morgen Fry From:Council Internet Email Sent:Tuesday, July 11, 2017 8:40 AM To:Morgen Fry Cc:City Clerk Subject:FW: CCE implementation study Please distribute to council. Original Message From: Susan Neptune Sent: Monday, July 10, 2017 6:45 PM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject:CCE implementation study Dear Mayor and Council Members I understand that on Tuesday, you will be voting on whether or not to approve moving forward on a regional CCE implementation study.I encourage you to vote yes because I believe green energy and local control will greatly benefit our community. Thank you, Susan Neptune Carlsbad Sent from my iPhone Morgen Fry From:Council Internet Email Sent:Tuesday, July 11, 2017 8:39 AM To:Morgen Fry Cc:City Clerk Subject:FW:Message just sent from Jodi Good 2/2 Please distribute to council. Original Message From: Jodi Good Sent: Tuesday, July 11, 2017 1:11 AM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Message just sent from Jodi Good 2/2 Mayor and City Council. I just inadvertently emailed an incomplete letter to you hoping for a yes vote on CCE tomorrow.I was in the process of editing the text and the dang thing seemed to send itself. Deleted portion was expressing the benefits of Community Choice.There were other items that were not meant to be included.You will see that I had asked Cori if it worthwhile to send the info. to Council, if indeed you would be interested. Truly sorry if I've wasted your time.Tomorrow will prove to be a marathon for us all. Once again, my apologies. Best, Jodi Good Sent from my iPhone 1 Morgen Fry From:Council Internet Email Sent:Tuesday, July 11, 2017 8:38 AM To:Morgen Fry Cc:City Clerk Subject:FW: Please vote for the CCE feasibility study Please distribute to council. From: GigiO Sent: Tuesday, July 11, 2017 6:13 AM To: Council Internet Email <CityCouncil@carlsbadca.gov> Cc: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Please vote for the CCE feasibility study Honorable Mayor and Council members, We would like to see Carlsbad join the other North County cities in the feasibility study for Community Choice Energy. From all we've read about CCE, we believe it would be a great asset for Carlsbad. And like most people who are concerned about air quality and the impacts of a changing climate, we would love to have the choice for 100% clean, renewable energy. Please don't let this opportunity slip by.Please vote in favor of the CCE feasibility study. Thank you. Bruce Grouse E.A.Orlowski Carlsbad, CA 92010 1 Morgen Fry From:Council Internet Email Sent:Tuesday, July 11, 2017 8:39 AM To:Morgen Fry Cc:City Clerk Subject:FW: Encinitas Votes YES on Community Choice and Climate Action Please distribute to council. From: Jodi Good Sent: Tuesday, July 11, 2017 12:44 AM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Fwd: Encinitas Votes YES on Community Choice and Climate Action Mayor and Council, We hope you do the right thing and vote for the CCE Feasibility Study. Joining our north coast sister cities in the quest to control our destiny in the search for clean, renewable, and less expensive energy is imperative. The benefits of CCE are many.Getting out from under a corporate monopoly controlled energy source is paramount.Why should we support the shareholders of an IOU (investor owned utility)?We pay the highest energy rates in the U.S. We also pay for bad management decisions including closure of San Onofre and the Witch Creek Fires. Sent from my iPhone Begin forwarded message: From:Jodi Good Date: July 10, 2017 Sent from my iPhone Begin forwarded message: From: Community Choice Energy for Coastal North County San Diego <social@ccenorthcoastal.org> Date: July 3, 2017 at 8:23:08 PM PDT To: <goodiodi007@yahoo.com> Subject: Encinitas Votes YES on Community Choice and Climate Action Reply-To: Community Choice Energy for Coastal North County San Diego <social@ccenorthcoastal.org> Encinitas Votes for Clean Energy Wednesday evening, June 28, 2017, was a huge night in Encinitas for local control of electricity rates and clean energy.In a marathon 5-hour Council meeting that took up four important action items, as well as a number of items pulled from the Consent Calendar by the public, the Council unanimously approved the resolution to get a Community Choice Energy (CCE) technical study done, and,in a separate vote, unanimously accepted the draft Climate Action Plan (CAP). You can read a more in -depth report in the latest blog on our website, at http://ccenorthcoastakorq/bloqs/post2017 07 03.html 2 r yun•i..wifsca.;.rxtsratatir -ownkalsrsThrilleferRISMIlitlfan Sne-rAf One highlight of the evening was when Climate Action Plan Administrator Crystal Najera demonstrated a new website that the City has built to provide the public with updated information on the pro_gress of the CCE effort and CAP.Try it out!Go to http://www.encinitasenvironment.org/ and check out the Dashboard and Resources features. is Mayor Blakespear Speaks Up for Community Choice In the week before the Encinitas Council voted to move forward with the CCE technical study,Mayor Catherine Blakespear wrote an excellent report on the many reasons why Communitty Choice Energy is so important. She starts by saying, "Faced with rising global temperatures from burning fossil fuels, the City of Encinitas is poised to do its part to cool the climate. It starts with a plan and measurable goals.This coming week at our City Council meeting, we're planning to consider an updated Climate Action Plan, and take the first steps toward Community Choice Energy, or CCE. Being an environmentally committed city doesn't mean just talking about it.It requires bold action." Originally published in her weekly newsletter, we have re-posted her report as a blog on our website at http://ccenorthcoastal.org/blogs/post2017 06 26.html. Investigative Journalism Takes on SDG&E Misinformation Tyson Siegele of 350 orq has published a well-researched piece in the San Diego Free Press, titled "Community Choice Energy Myths Debunked, SDG&E Misdirection Exposed". This is a great article that does a deep dive into comparing electricity rates and clean energy sourcing. This is great information for countering misinformation about Community Choice Energy. 3 •• Copyright 2017 Siena Club,rights reserved You are receiving this email because you wanted to receive updates about our progress to bring Community Choice Energy to our North coastal communities Good on ya, mate! Community Choice Energy for Coastal North County is supported by the Sierra Club Our mailing address is: Sierra Club 5304 Clairemont Mesa Boulevard San Diego, CA 92111 Want to change how you receive these enrolls? You can updateyour_preferences or unsubscribe from this list 4 Leticia Reyes From:Council Internet Email Sent:Tuesday, July 11, 2017 10:23 AM All Receive -Agenda Item #1'1To:Leticia Reyes For the Information of the: Cc:City Clerk CITY COUNCILSubject:FW:Community Choice Energy ACM v'CA ‘7 CC Date 7741.17 City Manager v` Please distribute to council. Original Message From: Tim Thompson Sent: Tuesday, July 11, 2017 9:01 AM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Community Choice Energy To All Council Members,I sincerely urge you to seriously consider adopting the CCE policy to be discussed on July 11. Climate change is major, major issue that needs our full attention.There must be choices that citizens have about using what energy source is delivered to them.The SDGE monopoly must end.They must be compliant to public wishes. Please consider this new policy and do the right thing.Show Carlsbad to be one of the new leaders in confronting this critical issue which affects everyone.Sincerely, Tim Thompson , Carlsbad Leticia Reyes From:Council Internet Email Sent:Tuesday, July 11, 2017 10:51 AM To:Leticia Reyes ,All Receive -Agenda Item #r7 cc:City Clerk For the Information of the: Subject:FW:Community Choice Energy CITY COUNCIL z ACM CA VCC v Date 'HI.11City Manager / Please distribute to council. From: Cathy Stoll ] Sent: Tuesday, July 11, 2017 10:47 AM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Community Choice Energy I'd like to urge city council to conduct a feasibility study for Community Choice Energy. We've had solar panels on our home for five years, and are appalled by the lack of support from SDG&E. It's time to have an option to the SDG&E monopoly,so I'd like the council to support Community Choice Energy. Sincerely, Cathy Stoll 760-822 -5988 1 Morgen Fry From:Council Internet Email rAll Receive -Agenda Item # Sent:Monday, July 10, 2017 4:31 PM For the Information of the: To:Morgen Fry CITY COUNCIL Cc:City Clerk ACM V CA v CC v/ Subject:FW:Support for Community Choice Energy Feasibility Study DateVigliCity Manager v Please distribute to council. From: Marin Vaughn [ Sent: Monday, July 10, 2017 4:04 PM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Support for Community Choice Energy Feasibility Study Members ofthe Carlsbad City Council: I am a resident of Carlsbad and urge you to to support the Community Choice Energy Feasibility Study. I care about this issue because I am a member of the community, and I have 2 small children that will be among the next generation to deal with impacts of climate change. Coastal cities around the globe are already seeing the impacts of rising sea levels and while Carlsbad may not see obvious impacts right now, we have a responsibility as global citizens to do our part to reduce our reliance of damaging fossil fuels. Supporting the Community Choice Energy Feasibility Study is one easy step in the right direction to allow the community to make choices about their energy provider and source of energy. Carlsbad has the opportunity to become the leader it should be in creating a brighter future for its residents with renewable energy. Thank you for your consideration. Sincerely, Marin Vaughn Carlsbad, CA Morgen Fry From:Council Internet Email All Receive -Agenda Item #Sent:Monday, July 10, 2017 8:42 AM For the Information of the:To:Morgen Fry CITY COUNCILCc:City Clerk; Jason Haber ACM CA &./CCSubject:FW: Feasibility Study Date71/7FiCity Manager f. Please print and distribute to council this agenda related item. From: Sandra Meador Sent: Sunday, July 09, 2017 2:54 PM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Feasibility Study Dear Council Members: As a longtime Carlsbad resident (since 1969), I urge you to approve the Feasibility Study for Community Choice Energy.I feel this study could affect future generations and the quality of life in our community. Thank you for your service to the city.I trust you will support this very important study. Sincerely, Sandra Meador Carlsbad, CA 92008 Morgen Fry From:Council Internet Email Sent:Monday, July 10, 2017 2:09 PM To:Morgen Fry Cc:City Clerk Subject:FW:Carlsbad's participation in study for coastal cities'CCE All Receive -Agenda Item #12Pleasedistribute to Council.For the Information of the: CITY COUNCIL From: PAMELA SLATER-PRICE ACM CA V CC V Sent: Monday, July 10, 2017 12:09 PM DatelfiofriCity Manager To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Carlsbad's participation in study for coastal cities'CCE Mayor Hall and Council members, I urge Carlsbad to vote to join Del Mar and Encinitas in studying CCE for Carlsbad. Carlsbad has long distinguished itself by looking out for the best interests of the residents and this is one more such forward looking action you can take. As I'm sure you'll agree,a monopoly with no competition that has given San Diego the highest rates in the nation needs a healthy dose of competition. A Joint Powers Authority for Community Choice Energy (composed of elected officials from participating agencies) would provide ratepayers with lower cost energy and the choice of type and percent composition of renewable energy. There is great potential,as illustrated in Mann County and Lancaster, for generating substantial resources for local, renewable energy projects as well as further decreasing rate payers energy costs. This project will center North County, and specifically Carlsbad,as an innovative, sustainable, energy and water independent and secure region. Local Control is always best! Respectfully, Pam Slater-Price "Mother Nature is cruel by design, humans are cruel by choice"—P Holmes Morgen Fry Subject:FW: Council Letter July 6th 2017 till Receive -Agenda Item #41 For the Information of the:From: Phil Rogul f ACM 7e i/7 CitNy CITY COUNCIL Sent: Thursday, July 06, 2017 10:44 AM Manager Subject: V7To: Council Internet Email <CityCouncil@carlsbadca.gov>D Subject: Council Letter July 6th 2017 Dear Carlsbad City Council Members, On behalf of Carlsbad Sustainability Coalition -Since 2008 (continuing your Carlsbad community outreach program of Envision/Imagine Carlsbad)-I would like to please request that Carlsbad City Council votes YES to participate in the proposed funding of the local N County CCE feasibility study that Encinitas has initiated. Allow me to please outline just a few of the very compelling reasons why Carlsbad should participate in this upcoming CCE feasibility study: A. CCE will offer -for the first time ever -an actual market choice to rate-payers. This fundamental idea of having consumer choice within our energy market is critical for both residential and commercial rate payers. Especially given that we currently are paying some of the highest power costs in N America. B. CCE will catalyze further local renewable E sources of power, which is important for Carlsbad if we truly wish to fully live up to the World Class City status that is often bragged about in city literature. C. CCE will quickly provide Carlsbad with significant sums of extra revenue -stemming from significant financial advantages we'll have gained by direct power purchasing. D. CCE is considered by the Sierra Club's objective scientific analysis to be a critical requirement in order for Carlsbad to effectively reach the very highest standards for our CAP. E.Technology involving renewable E is advancing rapidly -from E storage systems to micro-grids and beyond. With the flow of extra revenues (millions of dollars!) our community will be well positioned to more effectively implement exciting new innovations (like E storage) that will work to our collective advantage -by lowering E costs and more efficient delivery of renewable E thru the entire day. Reasons why SDGE is aggressively fighting against implementation of CCE: A. Out of our three state power utilities -SDGE, SCE, and PGE -SDGE is the only one actively and aggressively opposing formation of CCE -per their continuing mission of maintaining full monopoly control of our energy. Yet they aggressively pursue this monopoly position to the clear detriment of We The Carlsbad Rate Payers. B. Please reference LA Times Article "California Pays a High Price for Electricity Glut"-FEB 5th 2017. The over-building of gas-fired power capacity lies at the foundation of the "Big Three" utility operator's continuing quest to lock-in their existing (powerful) monopoly position by forcing rate-payers to bear tremendous capital costs -costs which will tether us to billions and billions of debt servicing for many years to come -for what amounts to be unneeded and unwanted additional gas fired power. CCE organizations will finally give our local communities the needed ability to begin to steer our E future into the direction that best serves our local communityinterests. Finally -let me please.point out that the best interests of our City of Carlsbad lie at the heart of this groundswell of local community support for CCE. We the local concerned and involved Public Citizens of Carlsbad stand before you fully transparent in our continuing efforts to pursue only those public policies that will clearly and definitively further the very best interests of our entire community of 112,000 citizens. We are advocating exclusively on behalf of the best interests ofwe the Carlsbad rate-payers. Period. Thank you very much for your time and consideration. We hope and fully expect -that our Carlsbad City Council is ready to make the correct decision. Respectfully, Phil Rogul Chair -Carlsbad Sustainability Coalition -since 2008 National Eagle Scout Association -member since 1980 Siena Club -founded 1892 2 Francisco J.Urtasun Sempra Services Corporation Reg. Vice President of External Affairs Sempra Services Corporation All Receive -Agenda Item #J488 8th Avenue, HQ 1353 For the Information of the:San Diego, CA 92101 CITYCOUNCIL 619-696-2233 ACM V CA v CC furtasun@SempraServices.com Date-741AiCity Manager V July 10, 2017 Honorable Mayor Matt Hall City of Carlsbad 1200 Carlsbad Village Dr. Carlsbad,CA 92008 Dear Mayor Hall: The city of Carlsbad has made great strides in its efforts to curb greenhouse gas emissions and explore new strategies to achieve that goal.In addition to passing its Climate Action Plan, Carlsbad has proven its commitment to reducing GHGs by exploring positive strategies that will help keep the city green and improve the quality of life for its residents. Recent discussions have been underway to improve infrastructure, increase the amount of efficient transportation options, and explore and expand new renewable energy resources, including alternative energy procurement strategies such as Community Choice Aggregation (CCA).As the city considers emission reduction strategy options, we recommend that it adheres to several important policy principles: •Ensure emission reductions measures result in real and additional emission reductions; •Ensure that policymakers provide citizens with honest, accurate and reliable information regarding the costs and benefits of any options the city decides to pursue •Ensure that analysis into the feasibility of emission reduction strategies is based on accurate data that can be relied on for planning purposes; and, •Implement strategies that achieve the greatest emission reductions at the lowest cost and lowest risk with maximum economic benefits to the city. I.CAP Measures Should be Designed to Achieve Real and Additional Emission Reductions In order to analyze emission reduction opportunities in the energy sector, it is important to understand that investor-owned utilities (IOUs) and CCAs have distinctly different renewable procurement strategies.IOUs generally enter into long-term contracts that result in new renewable construction and the generation of additional renewable power.Because this new construction causes a higher overall percentage of energy demand to be met with zero emitting resources, Sempra Services Corporation is not the same company as the California utilities,San Diego Gas & Electric Company (SDG&E)or Southern California Gas Company (SoCalGas), and Sempra Services Corporation is not regulated by the California Public Utilities Commission. Honorable Mayor Matt Hall July 10, 2017 Page 2 overall emissions are reduced.On the other hand,CCA providers in California have primarily relied on short-term contracts with existing renewable resources to meet their needs.Because those resources already exist, and because they are dispatched on a "must-run" basis by the California Independent System Operator at all times, they are already generating renewable energy when they contract with a CCA provider.These contracts do not result in additional emission reductions or additional renewable generation; they merely shuffle who gets credit for emission reductions that are already occurring. II.Ensuring the Public is Informed with Honest and Accurate Information The forgoing discussion makes it clear that while a CCA could be implemented to achieve real and additional emission reductions, this is not the kind of business model that has been implemented in California to date.Citizens have a right to know this.While a contract shuffling CCA procurement strategy may deceive customers into believing that they are making a real difference to help curb Climate Change, it will not actually make a material difference.A procurement strategy based on long-term commitments that lead to additional renewable generation would be necessary to make a material difference.No analysis of CCA that relies on short-term commitments and contract shuffling can be honestly described as one that would result in additional emission reductions.If citizens are told that a program is being implemented to reduce emissions, that program should be designed to actually reduce emissions.Citizens should not be led to believe that a program that has been designed to merely take credit for emission reductions that have already been achieved by others will result in additional emission reductions. III.Ensuring Analysis is Based on Accurate Data that Can be Relied on for Planning Purposes Today, uncertainties exist in two key areas that make it impossible to assess either the costs or benefits of CCA as part of a feasibility analysis: (1) the exit fee that will apply to CCA customer bills; and (2) state law governing whether CCA could conceivably create any additional GHG emission reductions after implementation of state law. a.Data on Financial Benefits or Costs (PCIA) Analysis of emission reduction options must include, at some level,an analysis of the costs and benefits that would be associated with any emissions reduction strategy.In the case of CCA,the costs include procurement costs as well as an exit fee (the "PCIA") that must be paid by CCA customers and which significantly impacts whether CCA bills or utility bills will be higher or lower than the other. There has been significant debate over the CCA exit fee in California, and this issue was recently addressed by the Legislature in 56350.In order to implement this legislation (which requires that rates to non-CCA customers not increase as a result of another customer's decision to take CCA service), the CPUC has just initiated a new rulemaking proceeding.In this proceeding, the Sempro Services Corporation is not the same company as the California utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Services Corporation is not regulated by the California Public Utilities Commission. Honorable Mayor Matt Hall July 10, 2017 Page 3 Commission will consider a wide range of proposals from various parties and its outcome will largely drive future comparisons between IOUs and CCA bills, wherever CCA exists. Unfortunately, until this CPUC proceeding has been completed, it will be impossible to ascertain what the future exit fee will be or how it may be calculated.This makes it impossible to conduct a reasonable analysis of the feasibility of any CCA proposal, because there is no way to determine whether CCA would be more expensive or less expensive than utility service.This uncertainty also makes it impossible to determine how many customers choose to become or remain CCA customers or for what period of time.With this kind of uncertainty, it is also not possible to ascertain how much energy and capacity should be procured by a CCA provider or for how long.Of course, this also makes a CCA provider even less likely to make the long-term investments that are necessary to create real and additional emission reductions. Until the CPUC Rulemaking has been completed, it will not be possible to obtain accurate or reliable data regarding the PCIA exit fee or to make any reasonable forecast of CCA bills compared to utility bills.In addition, legislation currently pending in Sacramento creates additional uncertainty by making it impossible to ascertain what,if any, GHG reductions could result from CCA if it is implemented beyond reductions already mandated by state law. b.Data on Emission Reductions (Environmental Benefits) After Consideration of State Mandates SB100 which has already passed the state Senate is now being considered by the state Assembly. As currently written, this legislation would increase the Renewable Portfolio Standard from 50%to 60% and take additional actions to move the entire state to a 100% carbon free energy portfolio by 2045.If the electricity portfolio of SDG&E were to become 100% carbon free pursuant to state law, a CCA program would not be able to achieve any additional GHG reductions and,as a result, could not create any CAP benefits. When critical inputs to determine both costs and benefits associated with CCA are not yet available, it is obviously premature to conduct a feasibility analysis of the costs and benefits that could be achieved through CCA.SDG&E's power mix already includes a higher proportion of renewable energy than any other utility in the state, with SDG&E currently procuring 43% of its electricity from renewable facilities. This is 30% higher than the state's 2020 Renewables Portfolio Standard of 33% and puts San Diego well on its way to meeting the 2030 goal of 50% renewable.Under these circumstances, it is difficult to understand the need to rush to conduct a feasibility study when the information necessary to conduct that study is simply not yet available. Sempra Services Corporation is not the same company as the California utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Services Corporation is not regulated by the California Public Utilities Commission. Honorable Mayor Matt Hall July 10, 2017 Page 4 IV.Implement Measures with Greatest Emission Reductions at the Lowest Cost and Lowest Risk The two largest sources of emissions in the City of Carlsbad are transportation and energy, but transportation emissions are far higher than energy.While California is currently considering whether the entire state should move to a zero-emissions electricity portfolio, no statewide effort of similar magnitude is being considered in the transportation sector.Under these circumstances, the City should consider working on a regional basis with other cities in the county to see if unique opportunities exist in the transportation sector that may achieve greater incremental emission reductions at lower cost and with lower risk than implementation of a CCA program that may just end up doing what the state would require in any event.For example, most vehicle miles that begin in one city in San Diego County likely end in another city in San Diego County.What could the cities in the County do, working together, to dramatically increase the number of miles traveled between cities in the county with zero emission vehicles?This is an area that is receiving far less attention, at both the state and local level. V.Conclusion Sempra Services applauds the efforts of the city of Carlsbad to explore all options for protecting its environment and its commitment to efficient and renewable energy.As the City continues its efforts, we recommend the following principles: •Ensure emission reductions measures result in real and additional emission reductions; •Ensure that policymakers provide citizens with honest, accurate and reliable information regarding the costs and benefits of any options the city decides to pursue •Ensure that analysis into the feasibility of emission reduction strategies is based on accurate data that can be relied on for planning purposes; and, •implement strategies that achieve the greatest emission reductions at the lowest cost and lowest risk with maximum economic benefits to the city. By following the foregoing principles, the City will be able to maximize environmental and economic benefits while minimizing cost and risk.Above all else,if the City tells its citizens it is analyzing a program that will achieve emission reductions, it has an obligation to ensure that the strategy that is being analyzed would actually achieve real and additional emission reductions. incerely, ‘417---iiii F ank Urtasun c:Carlsbad City Council. City Manager. Sempra Services Corporation is not the same company as the California utilities, San Diego Gas &Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Services Corporation is not regulated by the California Public Utilities Commission. Morgen Fry From:Council Internet Email Sent:Tuesday, July 11, 2017 1:20 PM To:Morgen Fry \II Receive -Agenda item #17Cc:Sheila Cobian For the information of the:Subject:FW:Energy choice feasibility study.CITY COUNCIL ACM v C.A CC 7 Date 4 City Manager v Original Message From:Ed Stoll Sent: Tuesday, July 11, 2017 1:09 PM To: Council Internet Email <CityCouncil@carlsbadca.gov> Subject: Energy choice feasibility study. I'd like to urge city council to conduct a feasibility study for Community Choice Energy. We've had solar panels on our home for five years, and are appalled by the lack of support from SDG&E. By adding this choice for the residents to vote on,the council will make another bold step to make Carlsbad one of the most unique cities in the nation. We have the water plant, now we need the power choice. Ed Stoll 1 Faviola Medina From:Carolina Rodriguez-Adjunta Sent:Tuesday, July 11, 2017 4:06 PM To:Matthew Hall; City Clerk; Council Internet Email; Keith Blackburn; Michael Schumacher; Cori Schumacher; mark.packard@carlsbad.gov Cc:Sophie Wolfram; Nicole Capretz; Subject:Letter RE City Council Meeting 7/11/17 Attachments:07-11-17_SDEDCACCarlsbad support letter.pdf Dear Mayor Hall and City Councilmembers, Please find attached a letter of support attached for today's City Council Meeting Agenda item #17 on the Technical Study for Community Choice Energy from Climate Action Campaign and San Diego Energy District. Thanks, Carolina Rodriguez-Adjunta Deputy Director of Operations and Programs (limate .1ctioil Campaign Follow us on Twitter: @sdclimateaction Our Mission is Simple: Stop Climate Change 1 Mayor Hall and Councilmembers July 11, 2017 Carlsbad City Council 1200 Carlsbad Village Drive Carlsbad, CA 92008 RE: Community Choice Energy Technical Study Mayor Hall and Councilmembers Packard, Blackburn, Schumacher, and Schumacher: On behalf of our collective members and the citizens of our communities, all of whom will benefit from the formation of a Community Choice program in the Cities of San Diego region, the San Diego Energy District and Climate Action Campaign urge you to vote YES on the resolution before you tonight. Community Choice is one of the most powerful and cost effective mechanisms available to combat climate change and is the single most powerful tool to enable cities to reach 100% renewable energy. With seven years of operating experience, eight operating Choice programs in California, and one million customers served, the models and operational feasibility of these programs are tried and true. Community Choice Energy offers myriad benefits to families and businesses:it gives us a choice when it comes to our electricity, allows the local community to have a voice in key decision-making processes related to procurement and rate-setting, spurs local economic development through the buildout of local renewable energy projects. By approving this resolution, Carlsbad can support an effort to quantify the benefits that may be available to the Carlsbad and north County region,in the form of electricity cost reductions, jobs created and jobs retained, to the region should a Community Choice program be launched in this jurisdiction. In San Jose,a similar study estimated the Community Choice program would spur creation of 12,000 jobs and $1.28 in related economic benefit over six years. Surely Carlsbad citizens deserve to know what the analogous benefits would be to their community and region. •t F -1/7/.0.4.1. Erika Morgan, Executive Director Sophie Wolfram, Policy Advocate San Diego Energy District Climate Action Campaign San Diego Energy District Foundation CLIMATE ACTION 249 S. Highway 101, P.O. Box 564,CAMP A I G N Solana Beach, CA 92075 4452 Park Blvd #209, San Diego, CA 92116sandiegoenergydistrict.orq climateactioncampaign.om 1 Jason Haber July 11, 2017 Community Choice Energy Technical Feasibility Study Overview •Community Choice Energy •Policy Guidance •Coastal North County -Cost Share Proposal •Technical Feasibility Study –Scope •Council Options CCE –What is it & How does it work? •CCE/CCA •AB 117 •SB 350 •SB 100 •CPUC •RPS •CEC •CAISO •REC •WREGIS •WECC •RE1/RE2/RE3 •IOU •SDG&E •PCIA •PAM •CAL CCA •NEM CCE –What is it? •Enabled by state law (AB 117) in 2002 •Allows local governments to purchase electrical power and deliver it to customers in partnership with local utility (SDG&E) transmission and distribution. •Opt-out program: customers are included unless they take specific action to remain with the local utility CCE –What is it? IOU CCA Public Utility IOU Purchases Power IOU Maintains Transmission Lines IOU Provides Customer Service IOU Maintains Transmission Lines IOU Provides Customer Service CCA Purchases Power Gov. Provides Customer Service Gov. Purchases Power Gov. Maintains Transmission Lines Policy Guidance •General Plan –Sustainability Element Policy 9-P.14: Support a regional approach to study the feasibility of establishing CCA or another program that increases the renewable energy supply and maintains the reliability and sustainability of the electrical grid. •Environmental Guiding Principles Coastal North County Cost Share Proposal •Encinitas, Del Mar, Oceanside, Carlsbad •Issue an RFP: $100,000 Study –10% Fixed Cost –Population-based Proportional Cost –5% Administrative Fee Coastal North County Cost Share Proposal •Carlsbad Cost Share Amount: –$32,000 to $60,000 –Depends on actual study cost; how many and which cities agree to participate Technical Feasibility Study -Scope 1. Governance / Operations / Financing –Independent –JPA –Hybrid JPA •Start-up and Operating Cost Projections •Financing Options •Program Timeline Technical Feasibility Study -Scope 2. Rate Projections & Comparison –Energy Mix Scenarios •Renewable Energy % Targets (RPS / Voluntary) •Renewable Energy by Category (1/2/3) –Customer Enrollment Scenarios –Current & Projected SDG&E Rates (Analysis based upon load data from SDG&E.) Technical Feasibility Study -Scope 3. Other Factors –Power Charge Indifference Adjustment –Energy Market Dynamics –Customer Opt-Out Rates –Regulatory & Legal Risk Technical Feasibility Study -Scope 3. Other Factors (cont.) –Local Solar Generation Rates –Net Energy Metering Rates –Direct Access Accounts –Economic Impacts Technical Feasibility Study •Engage SDG&E •Ensure valid cost-benefit analysis on projected CCA/IOU energy portfolios •Stress Test Uncertainties Council Options •Option 1 (Recommended Action): –Approve a resolution authorizing the City Manager to negotiate, execute and fund a cost share agreement allowing for the City of Carlsbad’s participation in the preparation of a CCE Technical Feasibility Study in an amount not to exceed $60,000, and to request energy load data from San Diego Gas & Electric Company. Council Options •Option 2: –Decline to participate in the cost share agreement. •Option 3: –Same as Option 1, but limiting participation in an amount not to exceed $32,000. •Option 4: –Direct staff to initiate an alternative method of investigation of CCE, or similar program feasibility, to meet General Plan Policy. July 11, 2017 Community Choice Energy Technical Feasibility Study