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7.
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| INTERNAL OPERATIONS COMMITTEE - SPECIAL |
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| Information |
| Referral History: |
The Board of Supervisors referred the topic of Community Choice Energy (CCE) to the Internal Operations Committee (IOC) on August 18, 2015.
The IOC received an initial report on this topic at its meeting on September 14, 2015, at which time the IOC recommended that the Board of Supervisors (Board) direct the Department of Conservation and Development (DCD) to initiate outreach to cities within Contra Costa County to determine the level of interest cities have in partnering with the County to investigate three potential alternatives for implementing CCE in Contra Costa County. These three alternatives are as follows:
- Form a new Joint Powers Authority (JPA) of the County and interested cities within Contra Costa County for the purpose of CCE;
- Form a new JPA in partnership with Alameda County, and interested cities in both counties; and
- Join the existing CCE program initiated in Marin County known as Marin Clean Energy, or MCE
On October 13, 2015, the Board accepted the recommendations of the IOC and directed DCD to initiate outreach to cities within Contra Costa County to determine the level of interest cities have in joining with the County to investigate these three alternatives. The Board also authorized DCD to hire a consultant to assist the County with this outreach effort. The Board directed DCD to report back to the IOC regarding the outcome of outreach to cities. |
| Referral Update: |
This report will describe the outreach activities undertaken by County staff, discuss the responses the County has received from cities to these outreach efforts, and recommend next steps.
In summary, based on the interest expressed by cities in working with the County to further investigate options for potentially implementing CCE within the County, staff recommends the IOC and the Board direct staff to continue working with Contra Costa cities towards completion of a technical study that would evaluate options for potentially implementing CCE in Contra Costa County.
Outreach Activities
Between November 2015 and January 2016, County staff conducted a variety of outreach activities to engage cities on the topic of Community Choice Energy (CCE). These activities included meetings with City Managers and other city staff, attendance at the December 3, 2015 Mayors Conference, three public workshops in mid-December held in different regions of the County, and presentations provided by County staff and consultants at five City Council meetings during the month of January.
On November 13, 2015, the County Administrator sent a letter (Attachment A) to all City Managers in Contra Costa County asking for responses back from cities by January 31, 2016 indicating the level of interest cities have in partnering with the County to study CCE. This letter specifically asked if cities would authorize the County to obtain electrical load data from PG&E for the purpose of potentially conducting a technical study of CCE in Contra Costa County, and if the cities would be willing to contribute financially towards the cost of such a study if one were conducted.
To facilitate greater public understanding of CCE and assist cities in their deliberations on the subject, DCD staff and consultants hosted three public workshops in December 2015: the first on December 10 at Walnut Creek City Hall, the second on December 14 at the Hercules Public Library and the third on December 16 at the Brentwood Community Center. Average attendance at these workshops was approximately 20 people, and several cities sent representatives to attend the workshops.
During the month of January 2016, many City Councils throughout the County placed items on their agendas to discuss their interest in partnering with the County to further study implementation of CCE. County staff and consultants were invited to attend and make presentations at the Concord, Clayton, Pinole, Lafayette and Brentwood City Council meetings.
The workshops and city council meetings held in December and January generated several press articles, which can be viewed at the following links:
Responses from Cities
By the end of January, all 16 cities in Contra Costa County not currently enrolled in a CCE program (Richmond, El Cerrito and San Pablo are currently enrolled in Marin Clean Energy) provided written responses to the County (Attachment B) authorizing the County to request electrical load data from PG&E necessary for a technical study of CCE in Contra Costa County. Approximately half of these cities indicated varying degrees of willingness to participate in the cost of a technical study of this data, should such a study proceed. These responses are summarized in Table 1 below.
| Table 1. City Responses to County |
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| City |
Load Data Authorization |
Cost Sharing for Tech Study |
| Antioch |
Yes |
No indication |
| Brentwood |
Yes |
Yes, not to exceed $30,000 |
| Clayton |
Yes |
Yes, pending more details |
| Concord |
Yes |
Yes, not to exceed $25,000 |
| Danville |
Yes |
Yes, not to exceed $18,000 |
| Hercules |
Yes |
No indication |
| Lafayette |
Yes |
No indication |
| Martinez |
Yes |
No indication |
| Moraga |
Yes |
No indication |
| Oakley |
Yes |
No indication |
| Orinda |
Yes |
Need more information |
| Pinole |
Yes |
Need more information |
| Pittsburg |
Yes |
Yes, pending more details |
| Pleasant Hill |
Yes |
Yes, not to exceed $15,000 |
| San Ramon |
Yes |
Maybe, pending more details |
| Walnut Creek |
Yes |
Yes, not to exceed $20,000 |
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| Recommendation(s)/Next Step(s): |
Given the interest of Contra Costa cities in participating with the County to further investigate potential implementation of Community Choice Energy, staff recommends the Board direct DCD to continue with the steps required to undertake a technical study of CCE in Contra Costa County.
The immediate next step in this process would be for the County to obtain electrical load data from PG&E on behalf of the County and the 16 cities that have authorized the County to do so. This will provide the County with detailed information regarding electrical usage within the covered jurisdictions, and will constitute the raw data necessary to conduct a technical study of potential CCE implementation within the County.
Staff recommends that the Board direct DCD to work in partnership with interested cities to jointly fund a technical study of CCE in Contra Costa County that would evaluate three options: a program including only interested jurisdictions within Contra Costa County; a program that is a partnership with Alameda County and interested jurisdictions in the two-county region; and joining the existing CCE program originated in Marin County known as Marin Clean Energy.
Such a technical study would be conducted by a qualified consultant selected through a competitive process. The technical study would evaluate electrical load data to determine the amount of electricity a CCE program would need to procure in order to serve electricity consumers in the participating communities, and would estimate the billing rates that a CCE program would need to charge electricity customers in order to pay for program operations.
The study would analyze how rates might vary under scenarios in which the CCE program offered customers different levels of electricity originating from renewable sources (for example, rates associate with 50% renewable or 100% renewable options). Electricity rates for these scenarios would be compared to products offered by the incumbent utility, PG&E (Attachment C). The technical study would also include a risk analysis of factors that could potentially interfere with successful operation of a CCE program within the County, such as risks associated with price volatility in energy markets and risks stemming from legal or regulatory changes. CCE technical studies performed in other Bay Area counties have included additional components, including analysis of the impact a CCE program might have on local renewable power generation and local job creation.
As stated in Table 1 above, roughly half of the cities in Contra Costa County have indicated some degree of willingness to contribute financially towards the cost of a technical study. Staff recommends that the Board direct DCD to work with cities to finalize payment arrangement and initiate the technical study. Staff recommends that the County and each participating city pay for a portion of the cost of the technical study similar to its proportion of the total population covered under the study.
Staff proposes that DCD work with the cities to finalize the scope of the technical study, develop and issue a Request for Proposals (RFP), and select a consultant to perform the technical study. The County would then enter into a contract with the selected consultant. The results of the technical study would be reported to the cities and the Board of Supervisors, and staff would seek further direction.
Project Schedule and Budget
Completing a technical study of Community Choice Energy would represent the first major phase of activity related to potential implementation of CCE within Contra Costa County. Following a technical study, additional steps would be required to launch a CCE program, should the Board decide to proceed with implementation.
An estimated schedule and budget for fully implementing CCE within the County is attached to this report (Attachment D). The time and expense associated with implementing CCE within the County depends heavily on the outcome of the technical study and the resulting direction selected by the Board and participating cities.
The CCE option likely to require the greatest commitment of time and resources would be the option to form a new JPA comprised of the County and cities within Contra Costa County. Following the technical study, such an option would involve two additional phases of activity: JPA Formation and Program Launch. The activities associated with these additional project phases and the estimated time and expense to complete these activities are described in greater detail in Attachment D. Staff estimates the total time needed to implement the Contra Costa JPA option and begin providing electricity to customers would be in the range of two to three years and would cost approximately $2 million.
Recommendation(s)
Staff recommends the IOC and Board of Supervisors direct DCD and other County staff to take the following actions:
- Take all actions necessary to obtain electrical load data from PG&E on behalf of the County and all cities in Contra Costa County that have authorized the County to do so.
- Work with interested cities in Contra Costa County to conduct a technical study of options for potentially implementing CCE within Contra Costa County, anticipating the County’s share of cost is estimated to be in the range of $25,000 to $50,000.
- Authorize DCD to amend the consulting services contract with LEAN Energy to increase the payment by $75,000 to a new payment limit of $100,000 for consulting services through completion of the technical study.
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| Fiscal Impact (if any): |
Should the IOC and the Board approve the recommendations of this report, the cost to the County would be approximately $300,000. This includes an estimated $125,000 in consulting services and $175,000 in County staff costs to manage the project. Staff recommends that these consulting and staffing costs be funded from the County’s General Fund.
These costs would include an amendment to the County’s current consulting services contract with LEAN Energy to increase the contract limit by $75,000 to assist DCD with obtaining electrical load data from PG&E, refining the scope of the technical study and developing the RFP, evaluating proposals from consultants for conducting the technical study, interpreting the results of the technical study and reporting the findings of the technical study to cities, the IOC and the Board of Supervisors. LEAN Energy will also assist County staff is conducting a variety of community outreach activities to provide information and education to the public and to gather public input to assist decision makers in evaluating the results of the technical study.
The costs of the actions recommended by this report also include the County’s share of cost for conducting the technical study. The total cost of the technical study is estimated to be in the range of $75,000 to $150,000. The County’s share of this cost is estimated to be in the range of $25,000 to $50,000.
Costs of the actions recommended in this report also include the cost of DCD staff time until the end of 2016 at a cost of approximately $150,000 plus the cost of County Counsel staff time, estimated to be $25,000 during 2016.
The County would seek to have its costs reimbursed in the future from the revenues of a new CCE program should a new JPA be created for this purpose. If a new JPA is not established, the County’s costs are unlikely to be reimbursed. |
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