For the first time, residents and businesses up and down the state can buy electricity plans touted as “100 percent green” in their quest to fight climate change or simply be more environmentally friendly.
They can enroll in these programs through California’s three major investor-owned utilities – San Diego Gas & Electric, Southern California Edison and Pacific Gas & Electric – or through the growing number of cities and counties that offer alternative power programs called community choice aggregation, or CCA.
Does this mean all the electricity flowing into those customers’ homes and offices is created with renewable energy? No.
When residents pay a roughly $5 to $10 premium on top of the average monthly bill to get a 100 percent green plan, the provider buys a corresponding amount of renewable energy on their behalf. Almost all of that green power comes from existing inventory, which is mixed with electricity generated from fossil fuels, and the situation isn’t expected to undergo a transformation until far more people enroll in 100 percent plans. Whether that explosion in demand takes years or decades to realize remains to be seen.
“It doesn’t mean that when a customer signs up for 100 percent green, there’s a crew overnight wailing away and putting together another 6 kilowatts of solar somewhere. It’s an administrative process,” said Bill Powers of San Diego, an electrical engineering consultant and a consumer advocate.
CCA supporters note that some of their programs are starting to channel revenue into a number of projects exclusively serving all-green clients – and are expanding the total amount of clean energy produced on the market. Those projects are tiny when compared to the total electricity supply, but their backers said it’s evidence that the business model is valid.
The race to offer 100 percent green packages to more Californians marks the latest battle in a years-long war between traditional utilities and CCAs, which are public-energy programs that rose to prominence in the San Francisco Bay Area in the past decade and have gained a foothold in Southern California in recent years.
The outcome of the struggle between CCAs and utilities could influence not only how much of a power provider’s sourcing portfolio comes from renewable energy – CCA advocates envision eliminating any reliance on coal and natural gas – but also where that renewable energy is created.
Major utilities have emphasized economies of scale, consistently building extensive infrastructure to distribute electricity generated in remote locations. CCA architects emphasize ultra-local generation, meaning solar panels on the roofs and yards of homes and office buildings.
It’s not clear whether this conflict has resonated with the public, but advocates of CCA programs hope to raise the profile of their concept of hyper-local power generation.
“Most folks that sign up for these 100 percent green programs don’t insist that because of me signing up, some increment of renewables gets built locally,” Powers said. “But that’s really the way it should be. It’s real and you can touch it.”
Utility officials have said centralized renewable energy is important to keeping costs down, but that they too are making efforts to promote development of small-scale renewable resources. For example, revenues from SDG&E’s 100 percent renewable option, called EcoChoice, will help build such renewable projects in the future, said Allison Torres, spokeswoman for the utility.
“EcoChoice makes it possible for our customers to buy clean, renewable energy at an affordable price to help support the environment and promote the growth of local renewable energy sources,” she said in an email.
One that most experts agree on: The proliferation of CCAs has accelerated the offering of plans with more renewable energy than what’s required by the state, all the way up to the 100 percent label.
Under community choice, a utility still operates the poles and wires needed to deliver energy, but elected officials control the buying and selling of power for their jurisdiction. If a city or county votes to form or join such a program, ratepayers can opt out if they would rather have the rates offered by their local utility.
There are eight community-choice programs across much of the state, serving hundreds of thousands of people in communities from Humboldt to Lancaster.
“The advent of CCAs, regardless of what you think of them, has spurred competition – lowering prices, increasing the level of carbon-free content in our power supply,” said Shawn Marshall, executive director of LEAN Energy U.S., a nonprofit membership organization that promotes use of renewable energy and community choice aggregation.
More than half a dozen CCA programs are slated to launch next year and many other communities throughout the state are considering the option. On average, CCA programs have offered customers more green energy for slightly lower prices than the traditional utilities’ rates.
For example, the county of Los Angeles is set to roll out a massive CCA in the unincorporated areas of that region, which could eventually pull in cities such as Long Beach and Torrance.
The city of San Diego, which has committed to using 100 percent green energy by 2035, is set to release a study this coming week that outlines the feasibility of launching its own community choice program. Meanwhile, Solana Beach has taken official steps toward adopting a CCA, and several North County cities – including Encinitas, Del Mar and Carlsbad – are looking into the idea.
In California, CCA proponents have focused on the need to better tackle global warming by reducing greenhouse-gas emissions, which are linked to coal, natural gas and other fossil fuels.
“The reality is, if you want to make measurable progress on a climate action plan, you really have to consider your energy source,” said Encinitas Mayor Catherine Blakespear.
In general, the CCA business model calls for using ratepayer money to boost the amount of renewable energy purchased on the electrical grid. But power contracts often involve large amounts of energy and can span decades, so companies in charge of buying and selling electricity don’t ink new deals the instant someone decides to pays more for an all-green plan. At the same time, power providers routinely look to adjust their portfolios every six months to a year so they can reflect the latest customer-purchasing trends.
In the big picture, the competition between utilities and CCA programs is fueled by a changing energy sourcing and consumption environment.
As nuclear and fossil-fuel power plants retire and more aspects of people’s daily lives become electrified, from ovens to cars, the race to fill that demand with renewable energy has made strides in California. Investor-owned utilities are fast approaching, or have already exceeded, a state mandate to offer at least a third of all power they provide as renewable by 2020. And CCAs are outpacing those companies, in some cases offering as much as 55 percent green power to their customers.
“We have increased the amount of renewable energy being delivered to customers in California,” said Robert Freehling, an energy consultant who has done work for nonprofit groups, the Sacramento Municipal Utility District and the Imperial Irrigation District. “If you put a kilowatt hour of wind or solar on the grid, then what will ordinarily happen, up to a point anyway, is that flexible fossil (fuel) generators will turn down their output.”
The following is a comparison of electricity plans offered by the state’s leading CCA program, Marin Clean Energy, and its rival utility, Pacific Gas & Electric:
Marin Clean Energy
MCE Light Green
55 percent renewable energy.
$97.76 average monthly residential bill*.
MCE Deep Green
100 percent renewable energy**.
$102.21 average monthly residential bill (a penny more per kilowatt hour than the standard plan).
More than 2 percent of customers participate in this program.
Local Sol 100%
The project is capped at 300 customers and links ratepayers to a specific solar project in their neighborhood.
*Based on a typical usage of 445 kWh a month.
**Half of all premiums paid on the MCE Deep Green go into a local renewable development fund, which pays for the development of renewable energy projects in its service territory. The rest of revenue from Deep Green customers is used to buy renewable energy, adjusted annually.
Pacific Gas & Electric
PG&E traditional service
33 percent renewable energy.
$98.03 average monthly residential bill*.
50 percent renewable energy, $103.84 average monthly residential bill**.
100 percent renewable energy, $109.65 average monthly residential bill.
Less than 0.2 percent of customers participate in this program.
Regional Renewable Choice Program
Will facilitate an agreement between a customer and a local developer of renewable energy. The arrangement is used to offset the consumer’s bill, similar to the installation of rooftop solar.
*Based on a typical usage of 445 kWh a month.
**Premiums paid by Solar Choice customers go toward funding that’s paying for development of new solar program in PG&E service territory. When the project are completed, they will offer about 53 megawatts of power. Solar Choice customers currently account for 16 megawatts of electricity, which is being serviced by previously procured clean energy.
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