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SR 02-14-2017 8A Ci ty Counc il Report City Council Meeting : February 14, 2017 Agenda Item: 8.A 1 of 11 To: Mayor and City Council From: Susan Cline, Director , Public Works, Office of Sustainability & the Environment Subject: Update to Council on Community Choice Aggregation Recommended Action Staff recommends that Council: 1. Provide direction to staff to p ursue one or more Community Choice Aggregation (CCA) implementation pathways: opt to join either the LA County or the South Bay Clean Power JPA, explore initiating a CCA on its own, or choose not to participate in a CCA ; and 2. Adopt a resolution that establi shes a platform of goals and objectives for negotiation and a ppoint s one Council representative, one staff liaison and one staff alternate to formally participate in Community Choice Aggregation Joint Powers Authority negotiations . Executive Summary Commu nity Choice Aggregation (CCA) allows local governments to purchase and sell electricity to customers in their jurisdictions as an alternative to traditional investor owned utility (IOU) power procurement. Existing CCAs in other parts of California provide higher levels of renewable energy to their customers and offer lower prices than the IOUs that previously served them. In order for Santa Monica to achieve carbon neutrality by 2050 or sooner, sourcing electricity from renewable sources is an essential st rategy. On January 31, 2015, Council adopted a non -binding resolution to join 12 cities from the South Bay and Westside, in what is collectively known as South Bay Clean Power (SBCP), in a study that would assess the feasibility of a subregional community choice aggregation (CCA). SBCP then approached the County of Los Angeles to fund the feasibility study of a countywide CCA. On June 30, 2016, the County of Los Angeles published a feasibility study and business plan to develop a countywide CCA. Both LA Cou nty and SBCP have convened advisory and stakeholder groups to discuss the pathways to initiating joint powers authority (JPA) agencies to establish CCAs . Staff are currently attending meetings of both groups to monitor their processes, but requires Council direction in order to fully participate in the JPA negotiations. Staff recommend that Council provide direction to staff to pursue one or more Community Choice Aggregation implementation pathways: o pt to join either the LA County or the SBCP JPA, explore initiating a CCA on its own , or choose not to participate in a CCA . Staff also recommend that Council adopt a resolution that affirms 2 of 11 the city’s goals and objectives as a platform for negotiations and appoints representatives to participate in the LA Count y and SBCP JPA negotiations. Background On January 13, 2015, Council adopted a non -binding resolution to join 12 cities from the South Bay and Westside cities area in what is collectively known as South Bay Clean Power in a study that would assess the fea sibility of a subregional CCA. After securing resolutions from 13 cities, South Bay Clean Power approached LA County to take the lead in financing the feasibility study for a countywide CCA. On June 30, 2016 the County of Los Angeles published the feasibi lity study in the form of a Business Plan. The Business Plan determined that a CCA is feasible and could result in cost -savings for residential and commercial electricity customers. On September 27, 2016 the LA County Board of Supervisors (LACBOS) passed a motion to authorize the Chief Executive Officer to engage stakeholders, determine the CCA governance structure and begin negotiations with eligible and interested cities. Discussion Community Choice Aggregation (CCA) allows local governments to purchase and sell electricity to customers in their jurisdictions as an alternative to traditional investor owned utility (IOU) power procurement. Existing CCAs in other parts of California provide higher levels of renewable energy to their customers and offer low er prices than the IOUs that previously served them. In order for Santa Monica to achieve carbon neutrality by 2050 or sooner, sourcing electricity from renewable sources is an essential strategy. Santa Monica consumes over 900,000 MWh per year, with an approximate gross revenue value of $55 million. The LA County Business Plan concluded that the formation of a Los Angeles Community Choice Energy program (LACCE) is financially viable and would yield considerable benefits for the County’s residents and bus inesses, including:  Lower rates – The LACCE rate for 50% renewable energy could be 4% lower than the Southern California Edison (SCE) base rate for an energy mix that 3 of 11 includes only 28% renewables. The LACCE rate with 100% renewables could be only 6% higher than SCE’s base rate.  Greenhouse Gas Reductions – At full implementation of LACCE, GHG emissions in Los Angeles County could be reduced by 7% at a 50% renewable content and by 14% at a 100% renewable content.  Economic development and jobs – LACCE could support the development of local and regional energy projects, creating local jobs.  Local Control and Energy Management – The County and cities would have the ability to offer choices for retail customers, like varying levels of renewable energy at differ ent prices. Funding could be acquired for end -user programs such as energy efficiency, retail distributed generation, energy storage, water efficiency, and electric vehicle charging, etc. While this study was done specifically to develop the Los Angeles Co mmunity Choice Energy program, the similar benefits could be delivered to Santa Monica or a subregional CCA. Both LA County and South Bay Clean Power have convened stakeholder working groups to negotiate the governing structures and relationship between a County and subregional CCA. There are several options that the City could pursue to implement a CCA, each with pros and cons: 1. Engage the Los Angeles Community Choice Energy program, and participate in Joint Powers Authority formation 2. Engage the South Bay C lean Power subregional CCA program, and participate in Joint Powers Authority formation 3. Independently seek to become a CCA as a City, and contract services for initiation from Lancaster Choice Energy, or a private third party Los Angeles Community Choice E nergy The City could participate in stakeholder workshops and negotiations to form a Joint Powers Authority (JPA) agreement with the County and participating cities. Even once formed, there is no obligation to join LACCE should it not meet the City’s needs . As a member of the JPA, there would be no cost to the City for initial power procurement or program initiation costs or services. The City could have a seat on the LACCE JPA Board of Directors and would have the opportunity to work with the LACBOS and up to 4 of 11 81 other cities within the County. The County has initially proposed a voting structure that would give each city one vote, unless a board member calls for a weighted vote. The weighting of votes could be based on the electric power load of the members or some other weighting formula. Currently with the County and 37 interested cities as potential members, Santa Monica would have a weighted vote of 3.89%, ranking as the 6 th largest electrical consumer behind the County, Long Beach, Torrance, Carson, San ta Clarita and Industry. Benefits of Joining LACCE  Los Angeles County has financial strength and human resources  The County has experience and expertise with running c ountywide programs  The County has the potential to be the largest CCA in California with 5 County districts and 82 eligible cities , and therefor e wield the greatest amount of purchasing power  The County would secure funding and services for all participating cities  The County would assume all of the risk associated with starting a CCA  There i s strong support from County Supervisors and staff  The City of Santa Monica, as a South Bay Clean Power city, has been engaged in the CCA feasibility process for two years and is well positioned to influence the goals, mission, design, po licy, and procedur es of the JPA Potential D isadvantages of Joining LACCE  The County could move slowly due to size and miss important deadlines and milestone dates  The County has no prior experience with CCA and would rely on outside consultants that are also available to S outh Bay Clean Power cities and the City of Santa Monica  Because of the size and diversity of County cities, the JPA may not reflect the values and goals of the City of Santa Monica  There could be less local control and influence, working with such a larg e number of cities  The City would not receive any direct revenue from CCA operations 5 of 11 South Bay Clean Power (SBCP) The City could join a JPA with other interested South Bay and Westside cities and establish a subregional CCA. Each participating city would b e represented with a seat on the JPA Board of Directors. SBCP would issue a Request for Services that includes all CCA funding and development costs with no cost to any individual city. The City, as a board member, would have the opportunity to determine a nd approve all goals and objectives of the program. SBCP has signaled that it would pursue an advanced CCA model that promotes maximizing local distributed energy resources (like rooftop solar) and the necessary build -out and job creation to do so. SBCP wo uld hire an experienced Executive Director or CEO to run the CCA’s power authority and hire staff. SBCP would employ best practices from existing public power and regional power authorities. SBCP could collaborate as a subregional CCA with the LACCE to sha re economies of scale, but still retain autonomous decision -making. Currently with among the 14 interested cities, Santa Monica would have a 14% and 15% weighted vote by population and electric load, respectively. Benefits of Joining SBCP  SBCP has access to the same funding and services as Los Angeles County  SBCP could collaborate and share economies of scale with the County without having a dedicated County seat on the LACCE Board of Directors  SBCP could have lowest possible rates due to a greater combin ed power load than the remaining power load of LACCE, Lancaster Clean Energy, or any other CCA in California  SBCP cities share common ground and would support new economic opportunities and environmental justice to frontline refinery communities.  SBCP is committed to CCA revenue going back into the program to maximize positive economic and environmental impacts  SBCP’s ability to be a statewide leader in the Distributed Energy Resources model is already embraced by state regulators and SCE  An existing stron g and diverse coalition of stakeholders, political supporters, and endorsers provides advantages neither LACCE or LCE have 6 of 11  SBCP has over 2 years of Working Group experience and networking of CCA connections statewide and County -wide  With a much smaller mem bership the governance model for SBCP JPA would be simpler than that for LACCE, would provide the City of Santa Monica with a greater voice in decisions, and would serve as a model for other regional CCAs in the County to work together. Potential D isadvan tages of Joining SBCP  There is the potential that SBCP cities could drop out and undermine the viability of the JPA  There could be disagreement on goals and objectives and inability to come to a JPA governance agreement  There is no proof of ability to achi eve 50% renewables portfolio at a lower rate than SCE, as no feasibility study or business plan was developed specifically for SBCP  SBCP may have a challenge gathering enough community support and pa rticipation to achieve the high uptake rate that is requi red to be successful and competitive  SBCP may not be able to attract or retain a top quality Executive Director or CEO to run the CCA’s power authority  The County could oppose SBCP and refuse to collaborate  There could be less local control and influence, working with a smaller group of cities of whom some may have greater influence due to their weighted vote potential  The City would not receive any direct revenue from CCA operations Lancaster Choice Energy Lancaster Choice Energy Service (LCE) has offered cities and counties its services to develop and launch CCAs. The City could pay LCE $154,000 in two phases to produce load forecasting, data analysis, and pro -forma development based on the city’s energy data. LCE would prepare an Ordinance of Intent to F orm a CCA and Implementation Plan Document for the City. Once the CCA is operating, the City would pay a monthly fee for LCE Services. Council would have the ability to set the rates, determine the 7 of 11 percentage of renewables, set the policy and program eleme nts, do community outreach marketing, and have local governance and oversight. The City would be free to use revenue from the program for any General Fund purpose. Benefits of Hiring LCE  Lancaster has experience operating the only CCA in Los Angeles Coun ty and SCE territory  The City would have sole control over the energy destiny without partnering with any other city or the County  The CCA could be branded as the City of Santa Monica’s alone, creating an opportunity to establish an integrated utility of w ater, waste management & electricity services  The City would have the ability to use revenue from the CCA to finance City projects of any kind  City Council and staff would have complete control of the program  No participation in a JPA would be required  The City would have access to Lancaster’s current and future renewable energy portfolio Potential D isadvantages of Hiring LCE  The up -front cost for development is not required by other options  The program would not be anchored by a JPA, which would place the City’s General Fund at risk if the CCA became insolvent  The cost for energy to consumers would likely be higher than other options as a smaller CCA  Lancaster is the State’s smallest CCA, less than two years old, and the only single city non -JPA CCA in Cali fornia  There is no apparent value -added: all consultants and vendors that would provide key services are also available to cities, County, or SBCP directly without the LCE markup cost 8 of 11  LCE has no distributed energy focus , goals or commitment to building out local energy resources, jobs, job training, apprenticeship programs, or help for impacted and frontline communities Private Third Party Service Providers CCAs can also be developed and implemented directly by third party service providers. Power services companies provide a broad array of expert services and are experienced in risk management and scheduling for public power agencies. They can still buy power from Power Marketers for the CCA, but have more options and flexibility; and they are agnostic as t o what combination of wholesale power and local distributed energy best meet the CCA’s power needs. The City could issue a request for proposals to conduct a feasibility study, develop a business plan and select a service provider to initiate CCA services on behalf of the City, with no startup costs. The selected provider would provide these services and recoup its costs through the electrical rates. As no study has been performed at the City level, it is undetermined if this would be a cost - competitive off er compared to SCE, LACCE, SBCP or LCE. The City would be free to use revenue from the program for any General Fund purpose. Benefits of Third Party Service Providers  Service providers will bear the risk of CCA formation  Service providers will have incent ive to ensure the CCA is successful in order to recoup their capital costs  No participation in a JPA would be required  The City would have sole control over the energy services and programs without partnering with any other city or the County  The CCA could be branded as the City of Santa Monica’s alone, creating an opportunity to establish an integrated utility of water, waste management & electricity services  All CCA net revenues would be directed to the General Fund for community energy services  The City Council and staff would have complete direct control of the program Potential D isadvantages of Third Party Service Providers 9 of 11  The program would not be anchored by a JPA, which would place the City’s General Fund at risk if the CCA became insolvent  Addition al City staff and resources would need to be dedicated to managing the CCA  The ongoing cost may not be as competitive as other options  There is only one precedent of a city -only CCA; Santa Monica would be a small CCA, and the second non -JPA CCA Next Steps The City may participate in the LACCE JPA formation discussions with no obligation to participate in the actual JPA implementation. The LA County Chief Executive Officer will present the final draft LACCE JPA document to the LACBOS for approval. The LACCE JPA would be formed when at least one other city becomes a member. After which, Council would have to approve its participation in the LACCE. If the City does not join the JPA within a specified period, the City may risk having a smaller role in initiation and/or initiation costs that would not be applied to initial members. The City may also participate in the SBCP JPA formation discussions with no obligation to participate in the actual JPA implementation. Once a final draft JPA is agreed upon by partici pating stakeholders, South Bay Clean Power will work with member cities to support its adoption and approval. A minimum number of cities and amount of electrical load will be required for the SBCP CCA to be successful, but that amount has not been determin ed. Staff are currently attending meetings of both groups to monitor their processes, but require Council direction in order to fully participate in the JPA negotiations. In order to proceed, staff recommend that Council provide direction to staff to purs ue one or more options of implementing a CCA. Staff also recommends Council adopt the attached resolution which would affirm Santa Monica’s goals and objectives as a platform for negotiations; and appoint a Council representative, staff liaison and alterna te liaison to participate in formal negotiations. 10 of 11 Recommendation from the Task Force on the Environment On January 23, 2017, staff presented the Task Force on the Environment with an update on the City’s involvement to date in local CCA activities. The T ask Force on the Environment adopted a motion to support the City’s participation in both the LACCE and SBCP JPA formation discussions and recommends that Council adopt the draft platform of goals and objectives when entering negotiations: Draft Goals:  To eliminate carbon emissions associated with Santa Monica’s electricity generation sources by 2050 or sooner  To achieve the highest rate of renewable sources that are cost competitive  To increase the deployment of energy efficiency and demand response servi ces, distributed energy resources, electric vehicle infrastructure and other clean technologies in Santa Monica and the Los Angeles metro area Draft Objectives:  Implement or participate in a community choice energy/aggregation with goals and objectives th at are aligned with Santa Monica’s goals and objectives  Seek to achieve the highest percentage of renewable energy from local sources and the highest level of participation in the community  Ensure that Santa Monica has voting representation that reflects i ts achievements in energy efficiency, solar and electric vehicles deployment, or population, instead of total electrical load  Ensure that Santa Monica will receive a sustainable and equitable source of funds that will support projects that reduce emissions from energy and fossil fuel use  Ensure that all Santa Monicans will have equitable and affordable access to clean energy and energy services Financial Impacts and Budget Actions There is no immediate financial impact or budget acti on necessary as a resul t of the recommended action. 11 of 11 Prepared By: Garrett Wong, Sustainability Analyst Approved Forwarded to Council Attachments: A. Jan 13, 2015 Council Meetin g Staff Report - Resolution to Participate in Community Choice Aggregation Feasibility Study B. Resolution C. Written Comments D. PowerPoint Presenation 1 Vernice Hankins From:Council Mailbox Sent:Wednesday, February 08, 2017 4:01 PM To:Ted Winterer; Gleam Davis; Pam OConnor; Sue Himmelrich; Terry O’Day; Kevin McKeown Fwd; Tony Vazquez Cc:councilmtgitems; Elaine Polachek; Susan Cline; Dean Kubani Subject:FW: Community Choice Energy Council ‐  Please  see  the  email  below  re: Community  Choice  Aggregation.  Thank  you,  Stephanie   From: Jill  Boberg  [mailto:jill.boberg@gmail.com]   Sent: Wednesday, February  8, 2017  9:39  AM   To: Council  Mailbox  <Council.Mailbox@SMGOV.NET>  Subject: Community  Choice  Energy   Hi I would like to express my support for Community Choice Energy and teaming up with South Bay Clean Power. I am fully in favor of Santa Monica forgi ng ahead with sustainable, renewable energy solutions. Thank you! Jill Bobe rg Sunset Park Santa Monica -- jill Item 8-A 02/14/17 1 Item 8-A 02/14/17 1 Vernice Hankins From:Council Mailbox Sent:Tuesday, February 14, 2017 8:35 AM To:Ted Winterer; Gleam Davis; Pam OConnor; Sue Himmelrich; Terry O’Day; Kevin McKeown Fwd; Tony Vazquez Cc:councilmtgitems Subject:FW: Agenda Item 8.A, February 14, 2017, Community Choice Aggregation: Feasibility Study for Santa Monica-only CCA Council ‐    Please  see  the  email  below  re: Community  Choice  Aggregation.    Thank  you,    Stephanie     From: Dana  Palmer  [mailto:dppalmer04@yahoo.com]   Sent: Monday, February  13, 2017  10:46  PM   To: Council  Mailbox  <Council.Mailbox@SMGOV.NET>  Cc: Garrett  T. Wong  <Garrett.Wong@SMGOV.NET>; Dean  Kubani  <Dean.Kubani@SMGOV.NET>; Susan  Cline   <Susan.Cline@SMGOV.NET>; Rick  Cole  <Rick.Cole@SMGOV.NET>  Subject: Agenda  Item  8.A, February  14, 2017, Community  Choice  Aggregation: Feasibility  Study  for  Santa  Monica ‐only   CCA   Dear Honorable Santa Monica City Councilmembers: As a resident of Santa Monica for nearly 12 years, there is no issue that gives me greater civic pride than the progressive stances our city has taken concerning protection of the envir onment. Thank you for your nationally-significant leadership on this issue. That the City is now inte rested in community choice aggregation is yet another testament to this leadership for which my family is grateful. I write today to urge you to direct staff to solicit bids fo r a feasibility study concerning formation of a Santa Monica-only CCA. Until such a study is performed, the City simply will not be able to intelligently determine which CCA path provides the correct amount of risk and reward. Given the pot ential revenues that the City could receive by creating its own CCA, the cost of the study is trivial. While the study is being performed, you should direct staff to stay engaged with discussions at Los Angeles Community Choice Energy and South Bay Clean Power. Ultimately, it is my sense that Santa Monicans will profit from complete control over energy procurement and more direct governance of its CCA, and I suspect that the requested feasibility study will bolster these conclusions. Beyond the feasibility study, I urge the City to act swiftly to pursue a CCA before opponents change the law to erect further obstacles toward CCA formation. Thank you for considering these thoughts. Sincerely, Dana P. Palmer Item 8-A 02/14/17 2 Item 8-A 02/14/17 2 Sunset Avenue Santa Monica c (310) 463-6706 Item 8-A 02/14/17 3 Item 8-A 02/14/17 1 Vernice Hankins From:Freeman Hall <fhall@solarelectricsolutions.com> Sent:Tuesday, February 14, 2017 3:44 PM To:councilmtgitems Subject:Comments RE: Agenda #8.A. re: Santa Monica 's evaluation of CCA opportunities / recommend also stud ying single jurisdiction feasibility Attachments:SantaMonicaCityCouncil_CCA_Staff Report_021417.pdf My  comments  on  agenda  item  #8.A. for  tonight’s  City  Council  meeting  are  below.    Freeman S. Hall Solar Electric Solutions, LLC 11726 San Vicente Blvd., Suite 414 Los Angeles, CA 90049 o (310) 826-8510 c (404) 374-5099 This communication and any accompanying document(s) are confidential and privileged. They are intended for the sole use of the addressee. If you receive this transmission and are not the addressee, you are advised that any disclosure, copying, distribution or taking of any action in reliance upon the communication is strictly prohibited. Moreover, any such inadvertent communication disclosure shall not compromise or waive any privilege as to this communication or otherwise. I f you have received this in error, please contact the sender at the email address or phone number indicated above.   From: Freeman  Hall    Sent: Friday, February  10, 2017  12:25  PM   To: 'ted.winterer@smgov.net' <ted.winterer@smgov.net>; 'gleam.davis@smgov.net' <gleam.davis@smgov.net>;  'tony.vazquez@smgov.net' <tony.vazquez@smgov.net>; 'kevin@mckeown.net' <kevin@mckeown.net>;  'sue.himmelrich@smgov.net' <sue.himmelrich@smgov.net>; 'pam.oconnor@smgov.net' <pam.oconnor@smgov.net>;  'terry.oday@smgov.net' <terry.oday@smgov.net>  Cc: 'dean.kubani@smgov.net' <dean.kubani@smgov.net>; 'susan.cline@smgov.net' <susan.cline@smgov.net>;  'rick.cole@smgov.net' <rick.cole@smgov.net>  Subject: Comments  RE: Santa  Monica's  evaluation  of  CCA  opportunities  / recommend  also  studying  single  jurisdiction   feasibility   Santa Monica City Council, I am writing as a concerned Santa Monica resident regarding the City’s CCA opportunity on the agenda for Tuesday’s meeting (staff report attached) and want to encourage you to authorize a feasib ility study (Hermosa Beach paid $77k for a feasibility study with LCE) to assess the potential significan t advantages and risks for the City to pursue a single jurisdiction CCA, even while the City continues to assess the opportunity to join in a CCA through a Joint Powers Authority (“JPA”) whether through LACCE or through the South Bay coalition. By also launching a relatively inexpensive feasibility study to build on the learnings of existing single jurisdiction CCAs such as Lancaster Choice Energy (LCE) and Clean Power SF, as well as the numerous CCAs formed through a JPA, the City can preserve the option to develop a plan, much as Hermosa Beach is doing, that may better fit our City’s needs. Given the inevitable governance challenges of a JPA, I w ould recommend the City assess feasibility to form a single jurisdiction CCA. Such a step would not preclude continued participation of LACCE and South Bay JPA negotiation. It would preserve an option for Santa Monica to streamline governance and control, while potentially avoiding creditworthiness issues that hamper the initial years of CCAs formed as JPAs. Furthermore the assumption that a much larger scale than the City’s current el ectricity load is needed to achieve favorable power supply purchasing no longer holds due to the revolution in pricing of Distributed Generation (I can speak to this issue as an expert in the field.) The bigger driver of favorable economics is strong credit. Sa nta Monica has this and could use its strong credit to its advantage by pursuing a single jurisdiction CCA while mainta ining acceptable levels of risk to the City’s general fund. The following chart from Hermosa Beach’s recent actions in July 2016 to explore a single jurisdiction CCA Item 8-A 02/14/17 4 Item 8-A 02/14/17 2 illustrates the advantages of a hybrid appr oach that maintains clear control while saving costs through partnerships with other like-minded CCAs:   Hermosa  Beach  CCA  chart  (July  2016)    Furthermore, by exploring this option, Santa Monica may fi nd it can implement enlightened strategies such as realizing the synergies between grid services and the electrification of tr ansportation. For example, City of Lancaster has just committed to purchase an all-electric fleet of city buses fro m BYD, a leading supplier of EVs. The buses will be manufactured at a plant recently established by BYD in Lancast er. And the City intends to schedule battery charging and discharging to address the flexible ramping needs of its power supply that seeks to rely h eavily on intermittent renewable energy that LCE is providing. Santa Monica may well further its ability to roll out an all-electric Big Blue Bus service by realizing such synergies as a single jurisdiction CCA. I strongly recommend the City take the opportunity to study th e hybrid single jurisdiction CCA opportunity and that you do so on an expedited basis. Given the challenges CCAs po se to the entrenched Investor Owned Utilities (IOUs), it would not surprise me if future legislative changes dimmed the opportunity that CCAs currently provide for communities like Santa Monica. By way of background, I’m the President of Solar Electric Solutions (www.solarelectricsolutions.com ), a developer of 2- 20MW solar projects to the wholesale market. We’ve devel oped ~80 MW of projects now in operation. We’re based in Brentwood and I have lived in Santa Monica for over 8 years. Regards, Freeman S. Hall Solar Electric Solutions, LLC 11726 San Vicente Blvd., Suite 414 Los Angeles, CA 90049 o (310) 826-8510 c (404) 374-5099 This communication and any accompanying document(s) are confidential and privileged. They are intended for the sole use of the addressee. If you receive this transmission and are not the addressee, you are advised that any disclosure, copying, distribution or taking of any action in reliance upon the communication is strictly prohibited. Moreover, any such inadvertent communication disclosure shall not compromise or waive any privilege as to this communication or otherwise. If you have received this in error, please contact the sender at the email address or phone number indicated above.   Item 8-A 02/14/17 5 Item 8-A 02/14/17 February 14, 2017 TO: Santa Monica City Council Members FROM: Joe Galliani, South Bay Clean Power Working Group Chair RE: Agenda Item #8 Update to Council on Community Choice Aggregation OUR ASK We are asking for the City of Santa Monica to collaborate with the 13 other cities of the South Bay Clean Power (SBCP) initiative to come to an agreement on a Joint Powers Authority (JPA) agreement and form a truly local Community Choice Aggregation (CCA) program with these cities who have been exploring their CCA options together. We are likewise requesting that the City of Santa Monica review our SBCP Business Plan by ask ing Council City Council to direct City Staff to review, analyze and make recommendations to Council regarding Santa Monica’s best CCA options. We believe that best option is becom ing a founding member of South Bay Clean Power (a working name which will be replaced by the founding board of directors of the JPA ) because we believe SBCP mo st closely aligns with Santa Monica’s DNA, vision, goals and objectives and offers a superior program vision. W e r equest that Santa Monica evaluate the regional JPA of CCA approach detailed in our SBCP business plan and critically compare it with the opt ion of being a member of an LA County JPA. We oppose a single -city, standalone CCA for Santa Monica which achieves none of the potential for Community Choice Aggregation to maximize its ability to cut greenhouse gases or hasten the transition to 100% renewable energy and provides no assistance to surrounding frontline communities. CCA’s that do not form a JPA with other municipalities and who do not invest the revenue from the CCA program back into the CCA program put their city’s General Fund at risk and cannot achieve the financial stability or reserves necessary for a CCA to succeed long term. HISTORY OF SOUTH BAY CLEAN POWER INITIATIVE South Bay Clean Power’s effort began as a grassroots community initiative and grew out of the MB2025 community forum in Manhattan Beach held March 29, 2014. South Bay Clean Power community volunteers, including leaders of many community organizations , formed an ad hoc Working G roup with representatives from 15 different South Bay and Westside cities and began meeting monthly in June 2014 . SBC P Working Group members successfully advocated for passage of resolutions to participate in a CCA feasibility study in 13 individual cities, including the City of Santa Monica, all of whom voted to do so unanimously . Those cities are : Hermosa Beach, Manhattan Beach, Santa Monica, Carson, Torrance, Redondo Beach, Lomita, Culver City, West Hollywood, Beverly Hills, Malibu, Palos Verdes Estates, Rolling Hills Estates. In addition , the city of Rancho Palos Verdes also asked to be included in the feasibility study. Item 8-A 02/14/17 6 Item 8-A 02/14/17 COMMON GOALS & OBJECTIVES The South Bay Clean Power Working Group has shared common goals & objectives from the beginning of the initiative. The #1 goal of the initiative from day one has been to get to 100 % renewable power asap - with a 10 year target that grew out of MB2025: 1. The fastest path to 100% renewable power – with a goal of reaching that 10 years after our CCA launches; 2. No use of Category 3 unbundled Renewable Energy Certificates (RECs) to achieve our 100% renewables goal; 3. A Distributed Energy Resources (DER) model with a Los Angeles County -wide buildout of distributed renewable generation, storage, energy efficiency, demand response and electric car infrastructure to maximize our DER potential; 4. A f ocus on local economic investment, local power generation, local jobs, local career opportunities; 5. A partnership with labor – including project labor agreements, community benefit agreements, sustainable workforce agreements, job training, and apprenticesh ip program; 6. A program focus and emphasis on environmental justice in frontline communities where economic, workforce, and health needs are the greatest. Achieving these admittedly ambitious but necessary goals and objectives here in Los Angeles County wil l take an innovative next generation Community Choice Aggregation program, one that leverages not only the best practices of other California CCAs but also our most successful and effective municipal utilities. SBCP is offering that program. S BCP ’s SANTA MONICA PARTNERSHIP Santa Monica’s Dean Kubani reached out to SBCP unsolicited in 2014 and has been an integral member of the Working Group as have Katharine King and Cris Gutierrez . Santa Monica’s inclusion was immediately and enthusiastically embraced by SBCP . In 2015 SBCP helped present a CCA workshop for Climate Action Santa Monica in which we partnered with the Local Energy Aggregation Network (LEAN ) to deliver the CCA overview (included - zero participation from County.) In October of 2016 SBCP presented an update on its progress and Santa Monica’s role at the Community Climate Action Summit. THREE UNIVERSITY STUDIES SUPPORT A LOCAL CCA There has been published support for SBCP in 3 different university studies - two of them done by Ju an M atute’s UCLA Practicum students, and one done by the USC Capstone project - produced for the cities of Hermosa Beach, Santa Monica and Torrance all recommend our cities working together. HISTORIC & UNPRECENDNTED PARNTERSHIP WITH LABOR As part of its c ore strategy, SBCP has initiated, cultivated developed and maintained a unique and close partnership with the labor union most critical to CCA success, the International Brotherhood of Electrical Workers (IBEW 11) as well as the Los Angeles Chapter of the National Electrical Contractors Association (NECA). Both organizations have provided funding for expenses and expert consultants to assist in drafting our JPA and Business Plan documents as well as the video we produced on behalf of the LA County program: https://youtu.be/MGXrjIYG4Rw Item 8-A 02/14/17 7 Item 8-A 02/14/17 COMMITMENT TO LOCAL, DISTRIBUTED ENERGY RESOURCES SBCP’s Distributed Energy Resources (DER) focus and commitment is specific and unique. Only SBCP is advocating for maximum buildout of our DER infrastructure including distributed renewable generation, energy efficiency on steroids, energy storage, demand response and e lectric vehicles and has a step -by -step a plan to achieve it based on proven models. DER is where the econom ic and workforce development for cities comes from, this is where the power industry is headed, this is where the opportunity for local build out of resources is and how we achieve resiliency/safety/homeland security benefits . ENVIRONMENTAL JUSTICE FOR FR ONTLINE COMMUNITIES South Bay Clean Power wasn’t created to simply help upscale L.A. coastal communities lower their electric bills and get paid for their solar production. It was created as a true partnership between coastal communities and their neighbor s in adjoining communities who are bearing the brunt of fossil fuel pollution’s serious damage to health and quality of life. Front line, ethnically diverse, working class communities like Carson, Torrance, Lomita and others where oil production and toxic heavy industry have been the norm and had the worst impacts, will benefit most from the economic and workforce development opportunities in a local, DER -committed Community Choice Power program like the model SBCP has proposed. This has been a core objecti ve of our effort from day one. P A RTNERS, ALLIES, &, SUPPORTERS SBCP has two and 1/2 years of experience and work educating, informing, engaging and promoting Community Choice power both throughout LA County and beyond. SBCP has developed considerable expertise and relationships including those with Southern California Edison and the state’s already operating CCAs including - Marin Clean Energy, Sonoma Clean Power, Lancaster Choice Energy, Peninsu la Clean Energy, Alameda County’s CCA, and the Redwood Coast Energy Authority. SBCP also has ongoing relationships with members and staff of the California Public Utilities Commission, Senator Ben Allen and his staff, Congressman , Ted Lieu’s staff, Congresswoman , Nanette Barragan. The South Bay Clean Power Working Group has representatives from Climate Action Santa Monica, Sierra Club, Environment California, Food & Water Watch, GRID Alternatives, Surfrider Foundation, Heal the Bay, the Carson Coalition, the 100% renewable Policy Institute, UCLA, and USC. SBCP is represented on the Steering Committee of the statewide CCA coalition, California Alliance for Clean Power (CACE) and is a founding member of this organization which grew out of the successful sta tewide coalition to defeat AB 2145 in 2014. WORKING WITH THE COUNTY OF LOS ANGELES South Bay Clean Power’s has worked with the LA County Board of Supervisors since November of 2014 when we started meeting with staff in Knabe and Kuehl’s office to brief th em on our efforts and seek their support. SBCP solicited the Bo ard of Supervisors to have the C ounty fund a feasibility study and assign County staff explore CCA options . A fte r our first meeting, SBCP was recruited by the County’s Internal Services Department (ISD) to produce and deliver CCA briefings to eligible cities. In addition, SBCP, at the written request of ISD’s staff in 2015 successfully solicited the support and participation of labor, academia and NGOs in the County’s CCA task force. Item 8-A 02/14/17 8 Item 8-A 02/14/17 A PUBLIC POWER INDUSTRY BEST PRACTICES APPROACH TO WORKING TOGETHER SBCP wants to collaborate with the County on CCA and benefit from the economies of scale possible in power procurement, data management and back office services - but there are no advantages of doing so through a mega -JPA established by the County with the potential for 85 Board members which cannot deliver local representation for each eligible city. SBCP believes that it would be a best practic e to collaborate with the County and other regional CCAs (like the one being discussed on Long Beach) in LA County through the same model that municipal utilities throughout the state of California use - a JPA of CCAs. This model is detailed and explained in the South Bay Clean Power business plan being released this week. POOR EXPERIENCE WORKING WITH COUNTY’S ISD STAFF During 2015 to 2016 Los Angeles County’s Internal Services Department staff and the consultants they chose conducted 12 months of nonprod uctive task force meetings in which no tasks were assigned, no committees formed, and no cities were engaged with. Over the course of a year , ISD staff offered only a JPA draft which expressly forbid any city’s elected representatives from serving on its J PA board of directors. Input provided by SBCP wa s ignored and never responded to. LA C ount y’s CCA Business Plan (delivered in July of 2016) was written by consultants with no expertise or experience in Community Choice Aggregation programs who were designated without responding to an RFP. The lead consultant chosen by the County to supervise the project is owned by the Gas Technology Institute, a natural gas industry trade organization. The County’s CCA Business Plan was severely flawed and rebutted by SBCP’s 64 page response whose recommendations were adopted in the County motion. The County is still employing these same consultants on CC A. This experience provided an illustrative working example of how the LA County’s Internal Services Department operates and how they choose to work with cities. SBCP RESPONSIBLE FOR COUNTY PUSHING RESET BUTTON SBCP responded to the County’s JPA draft and Business Plan by working with Board of Supervisors staffs and our allies to have a motion drafted and unanimously passed to push the reset button and move the County’s program from under the direction of ISD to the direction of the County’s CEO with the new Chief Sustainability Officer of the County leading the effort. We intend to continue assisting Los Angeles County to create the most effective and progressive CCA program for its unincorporated areas and appropriate cities. We look forward to seeing the County’s CCA program join South Bay Clean Power, the Long Beach group we’re working with and other regional CCAs within the County in becoming a member of the JPA of CCAs. Item 8-A 02/14/17 9 Item 8-A 02/14/17     -­‐  1  -­‐   T o:  Mitchell  Shapson,  Staff  Attorney,  California  Public  Utilities  Commission   From:  Joe  Galliani,  Founding  Organizer,  South  Bay  Los  Angeles  350  Climate  Action  Group;  Chair,   South  Bay  Clean  Power  Working  Group;  and  Samuel  Golding,  President,  Community  Choice   Partners,  Inc.   Date:  January  20,  2017     RE:  Overview  of  Community  Choice  activities  in  Los  Angeles  County   We  appreciate  this  opportunity  to  brief  the  Commission  on  the  Community  Choice  activiti es  and   outlook  for  local  governments  in  the  Los  Angeles  County  region.  South  Bay  Clean  Power  is  a  group   of  14  cities  in  Los  Angeles  that  began  exploring  CCA  in  late  2014.  The  County  of  Los  Angeles,  the   City  of  Long  Beach,  and  the  City  of  Hermosa  Beach  are  also  exploring  CCA  to  varying  degrees.   There  is  a  high  degree  of  communication  between  these  initiatives,  as  cities  and  the  County   consider  how  best  to  implement  Community  Choice.     One  option  being  discussed  is  form  a  regional  Joint  Powers  Agency  (JPA)  of  multiple  CCAs .  Under   this  governance  model:   R  M ultiple  autonomous  and  sovereign  CCAs  are  formed  (as  JPAs)  by  groups  of  cities  with  similar   policy  goals  throughout  Los  Angeles  County;  each  CCA  determines  its  own  power  portfolio   choices  rates  and  program  eleme nts ,  and  also  retains  full  control  of  its  financial  polic ies,   revenues  and  reserve  funds.     R  These  CCAs  collectively  form  a  “R egional  JPA  of  CCAs”  to  provide  economies  of  scale  for   members  to  standardize  and  share  the  cost  of  required  services ,  streamline  startup  financing,   engage  in  joint -­‐‑planning  and  joint -­‐‑procurement  exercises ,  accelerate  the  credit -­‐‑rating  process   for  bond  issuances,  and  coordinate  DER  programs  and  regulatory  and  legislative  engagements .     This  model  draws  upon  the  experience  of  other  p ub lic  power  entities  in  California  in  creating   similar  arrangements:  as  examples,  the  Northern  California  Power  Agency  (NCPA)  is  a  JPA  of   fifteen  municipal  utilities  and  cooperatives,  and  the  Southern  California  Public  Power  Authority   (SCPPA)  is  a  JPA  of  twelve  municipal  utilities  and  irrigation  districts.   Additionally,  local  governments  are  reviewing  the  recent  achievements  of  the  Redwood  Coast   Energy  Authority  in  Humboldt  County  (which  is  launching  their  CCA  in  March  of  this  year).  The   manner  in  which  this  CCA  has  been  designed  and  implemented  appears  to  represent  a  significant   evolution  in  wholesale  self -­‐‑management  capabilities  for  CCAs ,  and  may  also  facilitate  the   integration  of  Distributed  Energy  Resources.   The  chief  advantage  is  that  the  Redwood  Coast  En ergy  Authority  hired  a  non-­‐‑profit  owned  by  a   group  of  municipal  utilities  to  provide  energy  services  for  the  CCA.  This  non-­‐‑profit  has  a   demonstrated  track  record  in  providing  a  full  suite  of  energy  services  to  serve  its  municipal  utility   members  and  other  clients .  These  services  are  provided  in  a  transparent  and  integrated  fashion,   and  appears  to  give  CCAs  a  comparable  level  of  sophistication  and  flexibility  (in  energy  planning,   origination,  contract  management,  market  operations  and  settlements)  as  compare d  to  the   Investor -­‐‑Owned  Utilities.     Implementing  this  approach  through  the  Regional  JPA  of  CCAs  would  be  advantageous,  given  the   scale  of  the  potential  transition  underway  in  Los  Angeles  County;  absent  the  formation  of  a   Regional  JPA  of  CCAs,  this  approach  could  also  be  implemented  by  individual  CCAs  (such  as  South   Bay  Clean  Power),  as  was  done  by  the  Redwood  Coast  Energy  Authority .     Item 8-A 02/14/17 10 Item 8-A 02/14/17 -­‐  2  -­‐   The  remainder  of  this  memo  covers  the  history  and  status  of  CCA  exploration  for  the  various   governments  in  Los  Angeles  County .     History of CCA Exploration in Los Angeles County In  May  of  2014,  South  Bay  Los  Angeles  350  Climate  Action  Group  and  the  City  of  Manhattan  Beach   held  a  “100%  renewables  forum ”  at  which  CCA  was  discussed.  Subsequently,  a  meeting  was  held   with  City  staff  from  Manhattan  Beach  and  Hermosa  Beach  to  discuss  exploring  CCA  options  for  the   15  cities  of  the  South  Bay  (as  defined  by  membership  in  the  South  Bay  Cities  Council  of   Governments).     Joe  Galliani ,  founding  organizer  of  the  South  Bay  Los  Angeles  350  Climate  Action  Group,  was  asked   to  conduct  outreach  to  the  other  13  cities  and  stakeholders  to  gauge  interest  in  CCA .   Formation of South Bay Clean Power (SBCP) Working Group Finding  significant  interest  in  CCA,  an  ad -­‐‑hoc  Working  Group  was  formed  composed  of  staff,   elected  officials ,  and  community  stakeholders  and  local  organizations .  This  group  began  meeting   monthly  in  June  of  2014.  Sub -­‐‑committees  were  formed  for  Program  Elements  and  Design,   Governance  and  Technical,  Labor  and  Wor kforce  Development,  and  Public  Outreach.     The  working  name  of  South  Bay  Clean  Power  (SBCP)  was  adopted,  as  were  the  following  six  goals   and  objectives  for  the  CCA  initiative:   1.Accelerate  renewable  portfolio  content  to  100%  (goal  of  10  years ); 2.No  use  of  Gree n-­‐‑E  or  Category  3  unbundled  Renewable  Energy  Certificates  (RECs); 3.Maximize  the  use  of  Distributed  Energy  Resources ; 4.Prioritize  l ocal  investment,  local  power  generation,  local  jobs  and  career  opportunities ; 5.Support  labor  in  advancing  project  labor  agreements,  community  benefit  agreements, sustainable  workforce  agreements,  job  training  and  apprenticeship  programs; 6.Focus  on  environmental  justice  in  frontline  communities  (where  needs  are  greatest ). In  June  2014 ,  SBC P  also  joined  the  “No  on  AB  2145”  statewide  CCA  coalition  and  successfully   solicited  letters  of  opposition  from  several  cities,  the  County  of  Los  Angeles  and  local  NGOs.   Resolutions  to  Participate  in  CCA  Feasibility  Study   Over  the  next  year ,  SBCP  met  with  staff  and  elected  officials  in  each  of  the  f ifteen  South  Bay  cities   and  held  several  public  forums  on  CCA.  Subsequently,  thirteen  cities  unanimously  passed   resolutions  to  participate  in  a  CCA  feasibility  study:   1.Hermosa  Beach  (resolution  passed  September  9,  2014) 2.Manhattan  Be ach  (October  21,  2014 ) 3.Santa  Monica  (January  13,  2015 ) 4.Redondo  Beach  (January  20,  2015 ) 5.Torrance  (January  28,  2015 ) 6.Carson  (February  3,  2015 ) 7.Beverly  Hills  (April  21,  2015) 8.Palos  Verdes  Estates  (April  28,  2015) 9.Lomita  (June  10,  2015 ) Item 8-A 02/14/17 11 Item 8-A 02/14/17     -­‐  3  -­‐   10.  West  Hollywood  (August  3,  2015)   11.  Malibu  (September  16,  2015)   12.  Rolling  Hills  Estates  (September  22,  2015)   13.  C ulver  City  (September  28,  2015)   An  additional  city,  Rancho  Palos  Verdes,  requested  to  participate  in  the  feasibility  stu dy  without   passing  a  resolution.   Inclusion  of  West  Side  Cities     In  August  of  2014,  staff  from  the  City  of  Santa  Monica  (which  is  not  a  member  of  the  South  Bay)   asked  to  join  the  SBCP  initiative  and  was  accepted  as  a  participating  city.    Subsequently,  our  target   group  of  cities  expanded  to  include  the  5  cities  of  the  West  side  of  Los  Angeles.   Support  of  Labor  Unions   In  July  of  2015 ,  members  of  our  SBCP  Working  Group  met  with  Jim  Willson,  Los  Angeles  County   leader  of  the  National  Electrical  Contra ctors  Association,  and  with  Dave  Gomez  of  the   International  Brotherhood  of  Electrica l  Workers  to  solicit  the  support  and  partnership  of  both   labor  unions  for  South  Bay  Clean  Power.    IBEW  11  and  NECA  have  been  partners  and  Working   Group  members  ever  since.   SBCP Engagement with the County of Los Angeles In  November  of  2014,  SBCP  held  our  fi rst  meeting  on  CCA  with  LA  County  Supervisor  Knabe's   Chief  Deputy,  Steve  Napolitano.  We  briefed  Napolitano  on  San  Mateo  County  and  Alameda   County’s  funding  of  their  County’s  feasibility  study ,  and  requested  funding  for  an  LA  County   feasibility  study  that  included  our  South  Bay  Clean  Power  Cities.   In  January  of  2015 ,  Joe  Galliani  met  with  LA  County  Energy  and  Sustainability  Manger,  Howard   Choy,  to  brief  him  on  SBCP’s  status  and  intent.    That  same  month  Choy  addressed  the  SBCP   Working  Group  about  LA  County's  interest  in  CCA,  offered  support  and  encouragement  and   enlisted  our  help  to  outreach  to  cities  beyond  our  initiative.   On  March  17,  2015 ,  at  the  request  of  LA  County  Supervisors  Don  Knabe  and  Shelia  Kuehl,  the  LA   County  Board  of  Supervisors  voted  5 -­‐‑0  to  direct  staff  to  write  a  report  on  what  steps  must  be   taken  to  explore  a  CCA.   In  April  of  2015,  support  for  South  Bay  Clean  Power’s  CCA  efforts  was  submitted  by  Congressman   Ted  Lieu,  and  by  State  Senator  Ben  Allen  to  the  LA  County  Board  of  Supervisors.  (We  have   continued  to  this  date  to  keep  both  representatives  brief ed  and  to  meet  with  their  staff.)   County  CCA  Feasibility  Study     On  June  24,  2015  the  LA  County  Board  of  Supervisors  received  a  report  from  staff  recommending   a  feasibility  study  be  conducted,  requesting  a  budget  of  $300,000  and  the  formation  of  a  County   CCA  Task  force.     On  September  15,  2015  -­‐‑  LA  County  Board  of  Supervisors  voted  5-­‐‑0  to  approve  motion  offered  by   Supervisors  Knabe  and  Ke uhl  to  move  forward  with  staff's  recommendations  and  included   language  acknowledging  SBCP  efforts  and  labor/  workforce  elements.   Item 8-A 02/14/17 12 Item 8-A 02/14/17     -­‐  4  -­‐   Supporting Role of SBCP Working Group In  November  of  2015 ,  SBCP  Working  Group  members  were  asked  by  LA  County  staff  to  assis t  the   County’s  CCA  effort  by:   1.  M obilizing  and  conso lidating  organized  labor  support;   2.  O rganizing  support  among  academia  (USC,  UCLA,  et  c etera);   3.  Coordinating  support  among  local  NGOs;     4.  A ssisting  with  developing  a  labor  plan  which  shows  the  positive  job  creati on  benefits  of  CCA.   We  successfully  accomplished  all  four  requests.     Los Angeles County CCA Study & Staff Recommendations In  July  of  2016 ,  Los  Angeles  County  published  the  CCA  Business  Plan  produced  by  its  consultants.     The  plan  finds  CCA  feasible  for  Los  Angeles  County  and  calls  for  the  program  to  enroll  customers   in  the  County’s  unincorporated  areas  before  any  eligible  cities  might  partici pate.  County  staff  also   proposed  a  JPA  draft  agreement  that  prohibited  elected  representatives  from  eligible  cities  to   serve  on  the  Board  of  Directors,  and  issued  a  preliminary  Request  for  Qualifications.     Written Response of SBCP Following  the  release  of  the  LA  County  CCA  Business  Plan  and  staff’s  RFQ  issuance  and  proposed   JPA,  South  Bay  Clean  Power  submitted  a  written  response  and  recommendations  to  the  LA  County   Board  of  Supervisors  regarding  various  areas  needing  improvement.   Transition  of  Staff  Responsibilities  for  Future  CCA  Exploration   On  September  27,  the  Board  of  Supervisors  voted  unanimously  to  transition  oversight  of  the   County’s  CCA  initiative  from  the  Internal  Services  Department  to  the  County  CEO ,  with  the   County’s  new  Chief  Officer  of  Sustain ability  (Gary  Gero)  as  lead  staff.     The  Sept ember  27  motion  adopted  several  of  the  recommendations  made  by  SBCP.       Lancaster Choice Energy Engagement with City of Hermosa Beach In  November  2015,  the  City  of  Hermosa  Beach  engaged  Lancaster  Choice  Energy  Ser vices  to   explore  alternative  options  for  forming  a  single  city  CCA.       Hermosa  Beach  staff  and  City  Council  announced  that  they  would  be  exploring  three  options  for  a   CCA :  creating  their  own  single -­‐‑city  CCA  employing  Lancaster ’s  services ;  joining  the  County  of  Los   Angeles’  CCA  when  formed,  or  joining  the  South  Bay  Clean  Power  CCA  when  formed.   SBCP Engagement with the City of Long Beach In  April  of  2016,  members  of  the  SBCP  Working  Group  began  meeting  individually  with  Council   members  of  the  Long  Beach  City  Council  and  their  staff,  as  well  as  the  staff  of  Mayor  Robert  Garcia,   and  the  staff  of  the  Long  Beach  Oil  &  Gas  Division .     The  purpose  of  these  meetin gs  was  to  brief  elected  officials  and  staff  on  the  status  of  SBCP’s  CCA   initiative,  the  County’s  study,  and  to  encourage  the  City  to  adopt  South  Bay  Clean  Power’s  goals   and  objectives  and  form  a  CCA  with  neighboring  cities.     Item 8-A 02/14/17 13 Item 8-A 02/14/17     -­‐  5  -­‐   Current Status of CCA Initiativ es South Bay Clean Power In  October  2016,  the  South  Bay  Clean  Power  “Working  Group ”  transitioned  to  become  the  South   Bay  Clean  Power  “Advisory  Committee ”,  with  a  staff  member  and  elected  representative  from  each   participating  city  joining  the  members  of  th e  Working  Group.     Agreement  to  Explore  SBCP  CCA  Options   The  Advisory  Committee’s  first  meeting  discussed  the  options  proposed  by  Los  Angeles  County   and  Lancaster  Choice  Energy,  and  compared  these  to  South  Bay  Clean  Power ’s  option  of  forming   its  own  CCA.  Me mber  cities  agreed  to  continue  t o  explore  their  options  as  a  14 -­‐‑city  CCA  as  well  as   continuing  to  explore  the  possibility  of  joining  the  County ’s  CCA,  and  to  investigating  the  “JPA  of   CCAs”  concept  as  a  complementary  option.     Draft  S BCP  Joint  Powers  Agreement   South  Bay  Clean  Power  presented  its  draft  JPA  document  to  cities  and  held  a  JPA  workshop  at  its   December  15,  20 16  Advisory  Committee  meeting.   Draft  Business  Plan  for  SBCP  &  Regional  JPA  of  CCAs   This  month,  January  2017,  a  Business  Plan  designed  to  achieve  t he  goals  and  objectives  of  the   South  Bay  Clean  Power  Advisory  Committee  will  be  submitted  to  the  cities  for  review  and   potential  adoptio n.  This  plan  explains  various  best  practices,  details  the  step -­‐‑by -­‐‑step   implementation  process  and  timeline,  staffing  plan,  financing  strategy,  DER  strategy,   organizational  model  (the  CCA’s  practical  capabilities),  the  “JPA  of  CCAs”  governance  model,  and   the  advanced  program  design  and  contracting  process  recently  pioneered  b y  Humboldt  County.     City of Hermosa Beach Hermosa  Beach  continues  to  explore  Lancaster  Clean  Energy’s  proposal  in  addition  to   participation  in  SBCP  or  the  County’s  CCA .   City of Long Beach SBCP  has  been  meeting  with  members  of  the  Long  Beach  business  community,  the  Port  of  Long   Bea ch  and  community  organizations  for  several  months,  and  discussed  the  “JPA  of  CCAs”  option.   In  December  of  2016  SBCP  submitted  a  draft  JPA  agreement  to  the  City  for  conside ration ,  and  will   also  make  our  future  work  products  available  for  review  to  inform  the  City’s  CCA  initiative.   County of Los Angeles The  County  has  rejected  the  previous  JPA  and  RFQ  proposed  by  staff  from  the  Internal  Services   Department ,  and  is  currently  f ocusing  on  drafting  a  new  JPA  to  create  a  CCA  that  includes   interested  cities  in  addition  to  County’s  unincorporated  territory .  On  December  7,  2016,  newly -­‐‑ appointed  lead  staff  (Chief  Officer  of  Sustainability  Gary  Gero )  held  the  first  public  workshop  to   co mmence  this  renewed  effort .  The  “JPA  of  CCAs”  proposed  by  SBCP  was  discussed  as  an  option.  A   workshop  for  interested  cities  to  discuss  further  JPA  issues  was  held  on  January  10,  2017 .   Item 8-A 02/14/17 14 Item 8-A 02/14/17 Community Choice Aggregation Update Electricity in Santa Monica Today Santa Monica’s Electric Load •48,000 residential accounts •9 -10 ,000 commer cial accounts •Re presents ~20% of total GHG •Annual Load –900,000 MWh •Gr oss re venue value –$55M Renewable 25% Large Hydro 2%Natural Gas 26% Nuclear 6% Unspecified 41% SCE’s Current Power Mix What is Community Choice A ggregation? •CCA (CCE) allows local go ve rnments t o pur chase and sell electricity to cust omers in their jurisdictions inst ead of in ve st or owned utility (IOU) power pr ocurement. Why Community Choice Aggregation? •Allows f or communities t o ha ve a higher per centage of rene wables at pot entially lower cost •Sour cing electricity fr om rene wable sour ces is an essential strat egy f or reducing emissions and reaching carbon neutrality Jan 30,20 15 •Council adopts a non -binding resolution to join South Ba y Clean Power feasibility study •SBCP approaches LA County to tak e the lead in financing the f easibility study fo r a countywide CCA . June 20, 20 16 •LA County publishes the fe asibility study in the f orm of a Business Plan . Sept 2 7, 20 16 •LA CBOS authorizes LA C CEO to engage stak eholders, determine gov ernance structure and begin negotiations with eligible and interested cities. Oct/Dec 20 16 •SBCP and LA County hold stak eholder meetings to update members on the process •Interest ed cities are in vited to par ticipate in JP A ‘negotiations’ star ting Jan 20 17 Background LA County Business Plan findings The Business Plan det ermined that a CCA is f easible and could yield in cost - sa vings fo r residential and commercial electricity cust omer s . Rat e Class SCE Bundled Rat e LA CCE 50% Green Bundled Rat e LA CCE 10 0% Green Bundled Rat e Re sidential 17 .1 16 .4 18.2 Small Commercial 16 .6 15.9 17 .7 Large Commercial 15.8 15.2 16 .9 Industrial 14 .5 13.9 15.5 To tal LA CCE Rat e Sa vings 4.1%(6.3%) CCA Options for Santa Monica 1.Engage the Los Angeles Community Choice Energy pr ogram, and par ticipat e in Joint P owe rs A uthority f ormation 2.Engage the South Ba y Clean P ower sub regional CCA pr ogram, and par ticipat e in Joint P owe rs A uthority f ormation 3.Explore initiating a CCA as a single -city entity , and contract ser vices f or initiation fr om Lancast er Choice Energy , or a privat e thir d par ty . Los Angeles Community Choice Energy (LACCE) •City w ould ent er a JP A with County and other int erest ed LA County cities and establish a regional CCA •Each par ticipating city w ould be represent ed with a seat on the JP A Boar d of Direct ors •LA CCE wo uld issue a R equest f or Ser vices that includes all CCA funding and de ve lopment costs with no cost t o an y individual city •Vo ting: one city -one v ot e; W eight ed V oting (pr oposed): electric load South Bay Clean Power (SBCP) •City w ould f orm a JP A with other int erest ed South Ba y & W estside cities and establish a sub -regional CCA •Each par ticipating city w ould be represent ed with a seat on the JP A Boar d of Direct ors •SBCP w ould issue a R equest f or Ser vices that includes all CCA funding and de ve lopment costs with no cost t o an y individual city •Vo ting : one city -one v ot e; W eight ed V oting (pr oposed): electric load Lancaster Choice Energy (LCE) •Pa y L CE $7 7,000 fo r its ser vices •Pr oduce load f orecasting, data analysis, and pr o -fo rma de velopment based on the City’s energy data •P repare an Ordinance of Intent to F orm a CCA and Implementation Plan Document f or the City •Once the CCA is operating, the City would pa y a monthly f ee f or L CE ser vices •Council would set rat es, det ermine rene wable mix, set policy and pr ogram elements, do outreach & mark eting, and maintain local go ve rnance o ve rsight •City would be free t o use an y re ve nue fr om the pr ogram f or an y purpose Private Third Party Service Providers •The City hire a thir d par ty ser vice pr ov ider t o de ve lop and implement a CCA •Ser vice pr ov ider w ould conduct a f easibility study , de ve lop a business plan, and initiat e CCA ser vices on behalf of the City , with no star tup costs LA CCE SBCP Lancast er 3 rd Par ty Star t -Up Fo rm JP A Hire staf f Fo rm JP A Hire staf f Contract ser vices $7 7,000 Contract ser vices Fe asibility study Business plan Gov ernance Board member Boardmember City Council/Staf f City Council/Staf f Administration JP A JP A Lancaster/City Staf f City Staf f/Contractor Benefits -No upfront cost -Purchasing po wer -No upfront cost -Interest/Influence -Purchasing po wer -Timing/Speed -Interest/Influence -Centralized utility -Reve nue to City -No upfront cost -Timing/Speed -Interest/Influence -Centralized utility -Reve nue to City Disadvantages -Timing/Speed -Interest/Influence -No re ve nue -Timing/Speed -Interest/Influence -No re ve nue -Upfront cost -Ongoing f ee -Admin/Finance -Steep learning cur ve Proposed CCA Resolution Goals: •Eliminat e carbon emissions •Achie ve high rat e of cost -competitive rene wa bles •Increase energy ser vices , local solar , EV charging and clean t echnologies Objectiv es: •Implement/par ticipat e in a CCA with similar goals and objectiv es •Achie ve high le vel of par ticipation in the community •Ensure vot ing representation reflects energy achie vements, or population, instead of total electrical load •Ensure a sustainable and equitable source of funds to suppor t local pr ojects •Ensure that all Santa Monicans will ha ve equitable and af fo rdable access to clean energy and energy ser vices Recommended Actions •Pr ov ide direction t o staf f t o pursue one or more Community Choice Ag gregation (CCA) implementation pathw ay s: opt to join either the LA County or the South Ba y Clean P owe r JP A,ex plore initiating a CCA on its own, or choose not t o par ticipat e in a CCA; and •Adopt a resolution that establishes a platf orm of goals and objectiv es f or negotiation and appoints one Council representativ e, one staf f liaison and one staf f alt ernat e t o f ormally par ticipat e in Community Choice A ggregation Joint P owe rs A uthority negotiations. Thank you Reference:       Resolution  No. 11023   (CCS)