LA County’s New, Cheaper Energy Option for SoCal Edison Customers

Southern California Edison (SCE) ratepayers in Los Angeles County soon will have a different method of getting electricity — from a new government-executed energy utility that guarantees lower bills amounts and simpler access to renewable-energy generation.

The LA County Board of Supervisors last Tuesday unanimously adopted the community energy initiative, which they ensure will assist in reducing electricity payments by up to 5% lower than what ratepayers pay SCE. Homeowners and business owners will have the ability to remain with SCE or switch over to the county’s brand new utility.

“It’s an alternative to Southern California Edison,” remarked Supervisor Sheila Kuehl, who was one of the leads for the effort.

“Individual residences, individual businesses, every single person can join,” Kuehl added when asked for comment. Kuehl said a crucial new feature of the alternative is that the government electricity program will get most of its energy generation from green, clean sources, and supply it to customers at a more affordable cost.

In addition to bill amounts

Participants should not expect much of a difference. Electricity will still be sent via SCE through pre-existing power cables. SoCal Edison will additionally resume control of measuring the power usage with meters and deliver the bills to customers.

The county-run utility, however, will purchase power from the market or under contracted agreement from producers. Los Angeles can buy as much renewable energy as it likes and will even construct their own solar systems in the years to come.

In the past couple of years, a greater number of neighborhoods have been considering community choice aggregation programs, also known as CCAs, like LA County. Los Angeles County initially began studying the idea around two years ago, and the program has the potential to become California’s biggest.

The plan is related to a greater reconstruction of the electric utility grid, akin to what took place in telecommunications: a transition from centralized, broad service with Ma Bell handling all components of the industry, including upkeep of the telephone lines themselves, to diverse stakeholders that offer multiple services on various devices. Just as technology reshaped the position of the telephone company, so it is with power utilities.

For customers, the result is an increase in energy options.

Faced with greater competition from publicly owned power companies, So Cal Edison and other investor-owned utilities will need to revise their business and operational regimes.

“They will have to change,” noted Mark Cooper, a Vermont Law School Institute for Energy and the Environment senior research fellow. “The old system was in place for over one hundred years.”

At Tuesday’s gathering, Supervisor Mark Ridley-Thomas deemed Los Angeles’ CCA power plan “a game changer.” “It will allow us to buy and create new sources of green energy while leaving more money in ratepayers’ wallets,” he added.

To start, up to 500 thousand homes and 200 thousand offices in unincorporated areas within the county will be qualified to participate in the government-run operation. Incorporated cities like Long Beach and Torrance require authorization by elected representatives before their citizens can join.

The county move does not pertain to customers of existing city-owned utilities like the Los Angeles Department of Water and Power, Burbank Water and Power, and Pasadena Water and Power. SCE stated that its “position is neutral” on these CCA movements.

Over the last five years, California law has prevented power companies from openly critiquing the programs.

However, the Golden State’s two other investor-owned utilities, Pacific Gas & Electric Co. and San Diego Gas & Electric Co., raised concerns around the operations and costs of government energy programs. They argue for more research to be conducted before widespread participation occurs.

How Community Choice Aggregation Works

Local authorities from up and down the state have been starting the public power option as ratepayers are dealt costlier power bills, and California also demands renewable energy over larger, fossil-fuel generation facilities.

For the program, cities and counties facilitate their customers’ electricity procurement and set their own rates and engagement programs.

Los Angeles county-wide utility program, to be operated by the Los Angeles Community Choice Energy Authority, is anticipated to begin offering power in one year. Consumers who move to it from SCE can select if they prefer electricity from solar, wind or a different renewable power source. These selections by customers will affect the amount of green energy — and what types — the county chooses to develop in the future.

The program will begin purchasing power under agreement from electricity generators, but the larger plan also permits it to start community-scale solar projects, such as building solar systems atop factories and warehouses.

The supervisors authorized preliminary funds of ten million dollars. Two million dollars will be spent on administrative costs and the other eight million to buy the electricity.

After the three-year adoption of the program, revenue is anticipated to be $1.2 billion, according to research by the supervisors. This CCA, as a local government organization, is not permitted to make a profit from customer rates.

In 2002, California passed a law that allowed government-run electricity programs to act as a means to give electricity consumers more options. Few towns and counties had started such a program until very recently.

The Future of CCAs

Falling solar panel costs are steering this focused attention on CCAs. Government energy programs can use this inexpensive cost by constructing big community solar energy arrays, which both generate power to their participants and take advantage of the electric grid.

Eight CCAs now supply enrollees in the state, with seven more intended to begin in 2017.

In Southern California, Lancaster began its CCA in 2015, and Apple Valley in San Bernardino County started its own program on April 1.

Jason Caudle, Lancaster’s deputy city manager, said the city looked two years ago to community-scale power because “it permitted the city to take more of an active role to secure green power and more cost-effective power for our customers.”

Today, 94% of the Lancaster’s potential customer accounts — around 50,000 accounts in all — subscribe to this government power program, he noted. Utility bills have gone down, Caudle said, with the CCA in total saving $1.9 million, or around 4.5% for every customer on average.

Some ratepayers preferred Southern California Edison and opted to remain with the company; Caudle said, however, “we don’t have any complaints about being members of the CCA.”

The movement to help communities go solar can even be seen in utilities like SCE. We encourage you to explore the benefits of going solar. If you have any questions on CCAs or the value of solar please schedule a call with one of our solar educators and we will be in touch shortly!