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AGENDA BILL Agenda Item No. 5(B) Date: June 2, 2014 To: El Cerrito City Council From: Maria Sanders, Environmental Analyst Melanie Mintz, Interim Community Development Director Subject: Letters of opposition for Assembly Bill 2145 Electricity: Community Choice Aggregation ACTION REQUESTED Authorize the Mayor to send letters to the author and other appropriate legislators and legislative bodies in opposition to Assembly Bill (AB) 2145 (Bradford) Electricity: Community Choice Aggregation reversing the opt-out provisions of the original Community Choice Aggregation law (AB 117). BACKGROUND The City of El Cerrito’s Climate Action Plan (CAP), adopted May 2013, contains a strategy to “Explore opportunities for instituting or joining a regional Community Choice Aggregation effort” (Strategy EW-3.2). This strategy is identified in the CAP as one of the most cost-effective ways to reduce greenhouse gas emissions in El Cerrito, yielding an estimated 4,200 - 6,700 annual tons of CO2 reductions. Community Choice Aggregation (CCA) is an energy procurement framework that allows local governments to procure electricity to meet the collective load of their residents and businesses. CCA jurisdictions have access to the wholesale power market to procure electricity that meets their desired electricity supply portfolio, while still having the local utility provide transmission and distribution services. In 2010, the Marin Energy Authority, dba Marin Clean Energy, launched California’s first CCA for the purposes of reducing Marin’s carbon footprint by procuring a high percentage of clean energy for its constituents and spurring greater development of renewable energy resources both locally and regionally. Given the success of Marin Clean Energy, many communities throughout California are taking a fresh look at instituting CCAs. The City of Richmond successfully joined the Marin Energy Authority. Fifteen percent of eligible electricity customers in the City of Richmond opted to stay with PG&E. The cities of Albany and San Pablo and the County of Napa are currently in the process of analyzing the feasibility of joining the Marin Energy Authority. The City of El Cerrito has taken the following steps to investigate the various CCA options potentially available to the City. On October 2, 2012, City Council heard a presentation by Marin Clean Energy regarding CCA and their program offerings. During the spring of 2014, the El ---PAGE BREAK--- Agenda Item No. 5(B) Page 2 Cerrito Environmental Quality Committee (EQC) hosted several presentations from various groups involved in CCAs in the Bay Area. Community Development staff successfully applied for a small grant ($15,000) from the World Wildlife Fund to investigate the feasibility of joining a CCA. Staff anticipated bringing acceptance of this grant to Council for consideration in summer 2014. DISCUSSION In 2002, passage of Community Choice Aggregation (AB 117, Migden) allowed CCAs to operate in California. That legislation changed the procedures governing aggregated energy procurement to allow, among other things, cities and counties to aggregate on an “opt-out” basis, rather than an “opt-in” basis. This provision allows customers who wish to continue with the investor-owned utility (IOU) to choose to opt out of the CCA. The goal of the opt-out provisions of AB 117 was to level the playing field for CCAs so that they could enter California’s energy market. AB 2145 proposes to specifically change the language of AB 117 to require CCAs to enroll customers through an “opt-in” process instead of an “opt-out” process. This would recreate the prohibitive barriers for communities to enter the energy market that existed before AB 117. Proponents of CCAs agree that this change in enrollment processes will effectively stop any new communities from joining a CCA or any new CCAs from forming in California. At its May 13, 2014 meeting, the EQC passed a unanimous motion to request that City Council consider sending a letter of opposition to AB 2145. STRATEGIC PLAN CONSIDERATIONS Goal F “Foster environmental sustainability citywide” of the El Cerrito Strategic Plan contains objectives to implement the City’s Climate Action Plan by facilitating “energy and water efficiency and greater adoption of clean energy.” CCA is identified in the CAP as one of the more powerful strategies for reducing greenhouse gas emissions in El Cerrito. If AB 2145 were to be passed, the resulting policies would create significant impediments to the City being able to pursue CCA as a clean energy strategy. ENVIRONMENTAL CONSIDERATIONS There is no direct environmental impact associated with opposing AB 2145. If AB 2145 were to be passed and implemented, the resulting policies would, however, make it more difficult for the City to reach its greenhouse gas emissions reduction targets. FINANCIAL CONSIDERATIONS There is no financial obligation associated with the requested action. ---PAGE BREAK--- LEGAL CONSIDERATIONS There is no legal obligation associated with the requested action. Reviewed by: Sco~ Attachments: 1. AB 2145 Opposition Letter 2. List of Entities Opposing AB 2145 from the Stop AB 2145 Campaign Page 3 Agenda Item No. 5(8) ---PAGE BREAK--- OFFICE OF THE MAYOR Janet Abelson CITY HALL 10890 San Pablo Avenue, El Cerrito, CA 94530 Telephone (510) 215-4305 Fax (510) 215-4379 http://www.el-cerrito.org June 2, 2014 Honorable Steven Bradford Chair, Assembly Utilities and Commerce Committee P.O. Box 942849 Sacramento, CA 94249-0062 RE: AB 2145 (Bradford) Electricity: Community Choice Aggregation NOTICE OF OPPOSITION Dear Assembly Member Bradford: The City of El Cerrito is writing to express its opposition to AB 2145. The proposed legislation violates the original intent of AB 117, is unnecessary, and thwarts California’s environmental goals. AB 2145 violates the original intent of AB 117 and is a blatant attempt to block Community Choice Aggregation (CCA) expansion in California. AB 117, which originally authorized CCA in California, intentionally structured CCAs as an opt-out program. The goal of the opt-out provisions of AB 117 was to level the playing field for CCAs so that they could enter California’s energy market. AB 2145 specifically reverses the language of AB 117 to require CCAs to enroll customers through an “opt-in” process instead of an “opt-out” process, thereby recreating the prohibitive barriers for communities to enter the energy market that existed before AB 117. Changing the law to require opt-in provision will severely limit the chances for new, successful CCA implementation and discourages competition in the energy market place. AB 2145 is unnecessary. The opt-out process for existing CCAs is already well defined. Customers can easily make a choice when a CCA begins offering service in a new community. This provision allows customers who wish to continue with the investor-owned utility (IOU) to choose to opt out of the CCA. There is a four-mouth public noticing process with a state requirement of at least four opt-out notices served upon every customer. In addition, customers can easily opt out during or after the public noticing process. AB 2145 creates significant impediments to achieving California’s environmental goals: The City of El Cerrito is committed to meeting its greenhouse gas emissions (GHGs) reduction targets and to helping the state meet its AB32 goals. ---PAGE BREAK--- OFFICE OF THE MAYOR Janet Abelson CITY HALL 10890 San Pablo Avenue, El Cerrito, CA 94530 Telephone (510) 215-4305 Fax (510) 215-4379 http://www.el-cerrito.org We believe that AB 2145 unreasonably limits our options and therefore ability to meet these goals. Our Climate Action Plan, adopted in 2014, has identified CCA as one of the more powerful strategies for reducing GHGs. Existing CCAs have demonstrated that they can, at competitive rates, deliver a much higher rate of renewable power to its customers than that provided by the IOUs. Defaulting customers to a utility provider with a higher emissions rate runs counter to AB 32 goals to curb greenhouse gas emissions. A CCA opt-in program would slow California’s steps towards meeting its environmental goals. As a local government committed to reducing our City’s carbon footprint, we urge you to oppose AB 2145 and leave the opt-out provisions of AB 117 in place. Sincerely, Janet Abelson Mayor City of El Cerrito cc: Assembly Member Nancy Skinner Senator Loni Hancock Members of the Senate Energy, Utilities, and Communications Committee: Senator Alex Padilla (Chair) Senator Jean Fuller Senator Marty Block Senator Anthony Cannella Senator Ellen M. Corbett Senator Kevin de León Senator Mark DeSaulnier Senator Jerry Hill Senator Steve Knight Senator Fran Pavley Senator Lois Wolk ---PAGE BREAK--- OFFICE OF THE MAYOR Janet Abelson CITY HALL 10890 San Pablo Avenue, El Cerrito, CA 94530 Telephone (510) 215-4305 Fax (510) 215-4379 http://www.el-cerrito.org ---PAGE BREAK--- Stop AB 2145! www.no2145.org Contact: [EMAIL REDACTED], [PHONE REDACTED] x 117 Entities Opposing AB 2145 (as of 5/11/14) Local Governments City of Benicia City of Berkeley City of Cupertino City of Hayward City of Lancaster City of Menlo Park City of Mountain View City of Richmond City of San Carlos City of San Pablo City of Santa Cruz City of Sunnyvale County of Los Angeles County of Marin County of Santa Cruz County of Sonoma Monterey County San Benito County Town of Fairfax Governmental Agencies & Associations CA State Association of Counties (CSAC) California Air Pollution Control officers Association (CAPCOA) Green Cities California League of California Cities Monterey Regional Waste Management District Office of Ratepayer Advocates, California Public Utilities Commission (CPUC) Regional Climate Protection Authority Salinas Valley Solid Waste Authority Sonoma County Transportation Authority Sonoma County Water Agency South San Joaquin Irrigation District Community Choice Energy Programs Marin Clean Energy Sonoma Clean Power Authority Emerging Community Choice Energy Programs Friends of San Diego Clean Energy Monterey Bay Community Power (representing 21 communities in Monterey, San Benito and Santa Cruz Counties San Diego Energy District Foundation San Luis Obispo Clean Energy Community Choice Advocacy Organizations Clean Energy & Jobs Oakland Campaign of the Oakland Climate Action Coalition Community Choice Energy Working Group of the Berkeley Climate Action Coalition Local Energy Aggregation Network (LEAN Energy US) San Francisco Clean Energy Advocates Civic Organizations The Action Hub, Richmond Haight Ashbury Neighborhood Council Joint Venture Monterey Bay Kehilla Community Synagogue, Greening Committee Mainstreet Moms Our City San Francisco People United for a Better Life in Oakland (PUEBLO) Resilient Neighborhoods Richmond Progressive Alliance Sustainable Marin Sustainable Napa County Sustainable San Rafael and Novato Victory Garden Foundation West Oakland Environmental Indicators Project Elected Officials Councilmember Lynette McElhaney, City of Oakland Supervisor Brad Wagenknecht, Napa County Supervisor Scott Haggerty, Alameda County Supervisors Dianne Jacob and David Roberts, San Diego County Non-profit Advocacy Organizations 350.org – Bay Area, San Francisco, San Diego, Sonoma County, and Santa Barbara chapters Asian Pacific Environmental Network Bay Localize Carbon Free Mountain View Clean Coalition Climate Protection Campaign Communities for a Better Environment Community Environmental Council Environmental Health Coalition (EHC) Global Exchange Greenlining Institute Greywater Action Kyoto USA Local Clean Energy Alliance Movement Generation Justice and Ecology Project New Voices Are Rising Organizing for Action California Planting Justice Public Interest Coalition Rose Foundation for Communities & the Environment Sierra Club California The Utility Reform Network (TURN) Transition US World Wildlife Fund US Agenda Item No. 5(B) Attachment 2 ---PAGE BREAK--- Stop AB 2145! www.no2145.org Contact: [EMAIL REDACTED], [PHONE REDACTED] x 117 Energy Sector & Energy Sector Associations Alliance for Retail Energy Markets California Energy Storage Alliance California Solar Energy Industries Association (CalSEIA) Commonwealth Energy Consortium, LLC Energy 2001, Inc. Energy Solidarity Cooperative Enlightenment Energy Everybody Solar GenPower, Inc. OurEvolution Energy and Engineering Pacific Energy Advisors Panasonic Eco Solutions North America (PESNA) Planet EcoSystems RE-volv Recolte Energy REP Energy Inc. Retail Energy Suppliers Association School Project for Utility Rate Reduction (SPURR) Solar Energy Industries Association (SEIA) SolEd Benefit Corporation Sun Light & Power Sungevity West Coast Solar Energy Western Power Trading Forum (WPTF) Political Organizations Green Party of California Wellstone Democratic Renewal Club Other Braun Blaising McLaughlin & Smith, PC Douglass & Liddell, PC Rifkind Law Group