Elias: Will lawmakers kill energy independence moves?
June 27, 2014
Nothing is more important to California's large privately owned utilities than the virtual monopolies they enjoy in most of the state.
Those monopolies make it virtually impossible for almost all businesses and residents outside cities with municipal power companies to buy electricity from anyone but companies like Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, also guaranteeing significant profits to those utilities in perpetuity.
But the big energy companies feel threatened these days by a movement toward energy independence now afoot from Sonoma and Marin counties to big cities like San Francisco and San Diego. Movements are also active in Alameda County and Lancaster.
Whether the independence efforts succeed or not will depend in part on the fate of a proposed law now working its way through the state Legislature, one that advocates of competition say will surely kill their movement if it passes.
Bradford insists an opt-in system is needed because most citizens are clueless about CCAs.
The proposal, Assembly Bill 2145, looks innocuous on its surface: It would mandate an opt-in approach for newly independent electric arrangements known as community choice aggregations (CCAs), rather than the opt-out setup on which every such plan in America has been based.
So far, only two CCAs operate in California, covering much of Marin and Sonoma counties. They buy power from generators and sell it to residents, transmitting the energy over the power grid owned and operated by the big utilities. Customers still get bills from the big firms, but part of what they pay goes to the CCAs, set up on votes by city and county governments.
Organizers in Marin and Sonoma counties say their customers are saving a minimum of 4 percent on monthly bills, with some invoices reduced by about 6 percent. Net savings reported so far: More than $4 million.
In each area with a CCA, existing utility customers automatically get power from the new agency unless they opt out and go back to their former utility, which about 20 percent of Marin customers have done. AB 2145 would flip that around, forcing CCAs to recruit each of their customers.
"This would rob community choice programs of the critical mass they need to get off the ground," said San Diego County supervisors Dianne Jacob and Dave Roberts in a recent essay. The two want a CCA for the San Diego area.
"This change would cripple the creation of local initiatives and lock in an energy market that is rigged against consumers," they said.
AB 2145 sponsor Steven Bradford, a Democratic assemblyman from Gardena and a former Southern California Edison executive, argues that because most Californians have no idea what a CCA is, the new agencies should be forced to market themselves.
"These outfits need to go into the community and convince people to join," he said. "That is the consumerist way to introduce competition."
His argument is a "red herring," says Shawn Marshall, director of a pro-CCA group called LEAN Energy US, who helped organize the Marin and Sonoma agencies. "We have no problem with reporting all we do to the ratepayers. But Bradford and the utilities know opt-in is a poison pill that would kill this entire concept."
Bradford's bill passed the Assembly in May and is now before state Senate committees. It is the second utility-backed effort of the last four years to kill CCAs.
The first was the failed 2010 Proposition 16, which sought to require a two-thirds vote for a local ballot measure before any government could set up a CCA. PG&E invested more than $40 million in that failed proposition, far exceeding what CCA backers spent.
Neither it nor the other big utilities want to become mere common carriers that mainly supply transportation of power, rather than also providing the electricity.
Bradford insists an opt-in system is needed because most citizens are clueless about CCAs. The danger is that because his fellow lawmakers are for the most part also uninformed, they will pass AB 2145, leaving it up to Gov. Jerry Brown to sign or veto the measure, which is strongly backed by labor unions, big funders of his campaigns.
But if there is ever to be significant energy competition in California, this bill must die, despite the consumerist rhetoric in which Bradford carefully wraps it.
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