Great news! The County of Santa Barbara, along with the cities of Santa Barbara and Goleta, voted on July 17th to move forward with launching a local Community Choice Energy program.
What is Community Choice Energy?
Right now, your electricity is sourced and delivered to you by one company. In Santa Barbara County the company is an Investor Owned Utility (IOU), either Southern California Edison (SCE) or Pacific Gas & Electric (PG&E). The utility decides where to purchase electricity from to meet the demand of customers, and pays to maintain and deliver the transmission lines of the grid.
With a Community Choice Energy (CCE) program, there is only one change: the community gets to decide where electricity is sourced from. Customers still receive their bill as usual from the utility, and information about the sourcing of your energy is delivered by the CCE agency.
Community Choice agencies are not owned by investors, but instead operate as a non-profit. That means that the decisions about sourcing energy are not driven by generating profit for shareholders. Community Choice Energy allows for local control to decide what energy best meets the community’s goals and needs. This local control can be especially helpful in meeting the community’s goals for renewable electricity. An extensive feasibility study for Santa Barbara found that 50% renewable electricity would be financially feasible through CCE. The study even found that any loans needed to start the program would be fully paid off within the first year. Other CCEs in California give their customers the option to pay for 100% of their electricity to come from renewable sources.
Because the agency operates as a non-profit, any revenue they receive beyond the cost of the electricity they buy is used for local energy projects. Surplus money can be used to fund local renewable energy installations, to lower customer rates, to start energy efficiency programs, incentivize electric vehicle adoption, and more.
CCEs can also decide to use their funds to implement a feed-in tariff for solar generation. Right now, if your solar panels generate excess electricity, you can sell it back to the grid only at the wholesale electricity price. A feed-in tariff guarantees a higher rate that you can receive by selling your excess solar energy generation back to the grid.
Do CCEs Actually Work?
Yes! The law that enabled CCEs to exist was passed in 2002. Since then, communities across the state have voted to take control of their energy. By the end of 2018 there will be over 20 programs in California. Those CCEs have consistently been able to deliver electricity to customers that has a higher content from renewable sources and lower or competitive prices to the existing utility.
Are There Any Downsides?
When a Community Choice agency is operating well, customers should see no difference. The main downside is a fee that may be charged to your account each month based on existing contracts the utility has made. The charge is called a Power Charge Indifference Adjustment (PCIA). Utilities have made long-term contracts that were intended to meet future demand that will not be needed if they are no longer purchasing energy on behalf of customers. The PCIA is like an exit fee for leaving the utility with stranded contracts.
How Do I Join?
Now that Santa Barbara has decided to go for Community Choice Energy, it will form what’s called a Joint Powers Authority made up of local elected officials to create an implementation plan. In Santa Barbara County, we expect that the CCE will not be delivering power to customers until 2021 as the details are all worked out. However, once CCE is up and running, customers do not need to change anything. The CCE will become the default provider of electricity, and customers will always have the opportunity to opt-out of the CCE and still use the utility as their provider.