SR 12-05-2017 7C
City Council Report
City Council Meeting: December 5, 2017
Agenda Item: 7.C
1 of 28
To: Mayor and City Council
From: Susan Cline, Director, Public Works, Office of Sustainability & the
Environment
Subject: Introduction and first reading of an ordinance to Join Los Angeles Community
Choice Energy (LACCE), Appoint a Director and Alternate to LACCE Board,
and Request Regular Updates From Staff
Recommended Action
Staff recommends that the City Council:
1. Introduce for first reading the attached ordinance (Attachment A) approving the
Los Angeles Community Choice Energy Joint Powers Agreement (Attachment
D).
2. Authorize the City Manager to negotiate and execute the necessary documents
to join the Los Angeles Community Choice Energy (LACCE) program.
3. Designate one representative and two alternates to serve as a director of the
Board of the Los Angeles Community Choice Energy.
4. Direct staff to provide regular updates to Council on the most recent
developments and provide recommendations on future action.
Executive Summary
Community Choice Aggregation or Community Choice Energy (CCA/CCE) offers a
unique opportunity for local governments to procure renewable electricity on behalf of
their communities. This mechanism has the potential to significantly reduce greenhouse
gas emissions and create value for communities through lowered utility costs and
investment in local energy projects and programs.
Staff has evaluated potential options to implement CCA and recommends Council
authorize moving forward with the most viable program to allow further evaluation,
without limiting the City’s options in the future. This would involve joining the Los
Angeles Community Choice Energy (LACCE) which offers the opportunity for Santa
Monica to be part of a county-wide energy consortium. Becoming a member of LACCE
would allow Santa Monica to participate in critical initial decisions regarding the
2 of 28
structure and operation of the program and evaluate if it will meet the City’s needs. At
the same time staff would continue to evaluate a second option, creation of a Santa
Monica-specific CCA, which could be administered by California Choice Energy
Authority (CCEA) or by a third-party vendor.
In April 2017, Los Angeles County approved the Joint Powers Agreement to launch Los
Angeles Community Choice Energy (LACCE). Three cities joined initially, setting off a
180-day period in which cities are invited to join as initial members at no cost. New
members joining after the December 2017 deadline to adopt an ordinance will likely be
financially responsible for the initial procurement of their own community’s power.
In November 2017, staff and stakeholders received analysis from California Choice
Energy Authority (CCEA) to implement a Santa Monica-specific CCA. CCEA could
provide the administrative and regulatory services necessary to launch and operate a
CCA in Santa Monica. If the City decided in the future to move forward with that option
instead of LACCE Council would retain authority to establish renewable energy targets,
utility rates and local energy programs that could be funded by ratepayer revenue.
The two plans are detailed in comparison below:
Table 1. Comparison of CCA Options for Santa Monica
Los Angeles
Community Choice
Energy
Santa Monica Community Choice Authority,
served by:
California Choice
Energy Authority
(City of Lancaster)
Third-Party Vendor
Overview
-LA County (LAC) +
eligible cities (up to 88)
-LAC to anchor JPA,
seed start-up costs
($10M)
-Receive Lancaster’s
services through CCEA
-Retain local control and
revenue
-Service fees remitted to
-City to bid services for
startup and operation
-Operate like Water
Resources
3 of 28
-Seeking $50M loan Lancaster
Start Up
-Board member to
participate in strategic
planning
-Council sets procurement
& environmental goals,
rates
-CCEA to procure on
behalf of SM
-Council sets
procurement &
environmental goals,
rates
-Vendor to procure on
behalf of SM
Governance
-One city, one vote
-Weighted vote option
(SM is third largest)
City Council/Staff –
procurement goals, rates,
programs
CCEA Board – contracts,
procurement
City Council/Staff –
procurement goals,
rates, programs
Cost to City
-Start up: none (LAC to
seed $10M)
-Operating: unknown
-$2.4M for startup -none, vendor could
work ‘at risk’
Advantages
-No upfront cost
-Operational
-Purchasing power &
lower cost of admin
-Limits liability and
operational burden
-Timing/Speed
-Control over rates,
renewable content
- Opportunity for
centralized utility
-Revenue to City
-Ability to achieve carbon
reduction goals
-No upfront cost
-Timing/Speed
-Direct control &
autonomy
- Opportunity for
centralized utility
-Revenue to City
-Ability to achieve
carbon reduction goals
Disadvantages
-Timing/Speed
-Influence
-Revenue sharing
unknown
-Recent structural and
procurement decisions
are disconcerting
-Enhanced diligence &
advocacy
-Not yet operational
-Upfront cost
-No control over contracts
& procurement
-Admin/Finance
integration
-Ongoing fee
-Requires staffing
-Not structured to advance
energy projects &
-Not yet operational
-Requires staffing
-Integration into existing
operations
-Steep learning curve
4 of 28
programs
Staff recommends that Council introduce for first reading the attached ordinance
(Attachment A) to join LACCE now to allow for continued evaluation of both options
without incurring costs for joining after the December 2017 deadline. As LACCE is
currently in a formative stage, Santa Monica’s representative to the LACCE Board will
be able to help shape the environmental goals, financial management and program
design. Should the City determine that LACCE is not serving its interests, Santa Monica
would be able to withdraw from the LACCE JPA without penalty provided the City gives
180 days advance notice and if the CCA has not purchased power on Santa Monica’s
behalf.
Staff recommends that Council appoint a Director and two alternates to represent the
City in LACCE. Staff recommend that the appointed Director participates earnestly to
ensure LACCE is prepared to meet Santa Monica’s needs and is managed according to
best practices.
On a parallel path staff will continue to evaluate the option to implement a single-city
CCA, so that the City may choose to proceed with that option if LACCE proves not to be
beneficial to Santa Monica.
The two CCA models (LACCE and CCEA) are not mutually exclusive, and both
programs can be evaluated concurrently. Staff is assessing the opportunities and
limitations of components of each CCA option for supporting the City’s goals of
achieving carbon neutrality by 2050 or sooner, maintaining a low-cost for
implementation, and providing community benefits and reinvestment opportunities for
local programs.
Background
On January 13, 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), to assess the feasibility of a sub-regional CCA (Attachment G). After securing
5 of 28
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 feasibility 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.
On February 14, 2017, staff provided an update to Council on the Los Angeles
Community Choice Energy (LACCE), the South Bay Clean Power initiative, and the
single-city option (Attachment H). Council directed staff to continue exploring all three
implementation options and adopted a set of goals and objectives when considering the
merits of each. Council appointed Councilmember McKeown to represent the Council
on this issue.
On April 18, 2017, the LACBOS adopted the Joint Powers Agreement document, which
interested cities could adopt in order to join LACCE.
On May 25, 2017, the City of Calabasas became the first city to adopt the enabling
ordinance to join LACCE. This moment initiated a 180-day window by which initial
members may join, without a bar of entry that may be imposed after the initial 180 days.
Since then, a total of nine cities have also joined LACCE (at the time of writing).
On August 4, 2017, the LACCE Board of Directors held its first meeting. The agenda
covered chair and secretary appointments, interim Executive Director approval, budget
approval, and authorization to issue RFPs for power supply, scheduling, communication
and legal services. LACCE indicated its intent to begin operation in January 2018 to
initially provide electricity to County municipal accounts.
6 of 28
On October 2, 2017, the City Manager entered into a professional services agreement
with California Choice Energy Authority (CCEA), a Joint Powers Authority administered
by the City of Lancaster, to prepare a pro forma analysis and implementation plan for a
single-city CCA option for Santa Monica.
On October 4, 2017, the LACCE Board of Directors held its third meeting. During this
meeting, results from an RFP to provide electricity to County municipal accounts
included power from nuclear and coal sources, which are not sustainable or
environmentally friendly. The Board directed staff to negotiate with the top three bidders
to ensure that procured power will not include nuclear and coal.
7 of 28
Figure 1. Overview of CCA Activity
Discussion
Community Choice Aggregation or Community Choice Energy (CCA or CCE) allows
local governments to purchase and sell electricity to customers in their jurisdictions as
an alternative to traditional investor owned utility (IOU) power procurement (California
IOUs are Pacific Gas and Electric Company, San Diego Gas & Electric, Southern
California Edison and Southern California Gas Company).
8 of 28
Figure 2. How CCA/CCE Works
Local governments ‘aggregate’ the electrical demand of their community and procure
power on their behalf. The incumbent investor-owned utility still conveys that power to
all customers and provides one utility bill to all customers (Southern California Edison is
Santa Monica’s incumbent investor-owned utility). The relationship between the CCA
and the IOU is shown in Figures 2 and 3.
Figure 3. Comparison of Roles of IOU, CCA and Municipal Utility
9 of 28
The portion of the utility bill that is associated with energy generation is remitted back to
the local government. CCAs are established by a local ordinance voted on by the
governing body of a county, city or special district (e.g. local water agency or public
utility district). No public vote or referendum is required. CCA’s are opt-out programs,
which means that utility customers are defaulted into becoming a CCA customer and
must actively opt-out to remain with the incumbent IOU.
Community Choice Aggregation (CCA) offers a unique opportunity for jurisdictions to
provide lower cost energy from renewable resources, reduce greenhouse gas
emissions (GHG) and promote local economic development through local energy
projects and programs. CCA in California has primarily been implemented through Joint
Powers Authorities (JPAs) in order to increase purchasing power, reduce administrative
and regulatory burden and to increase GHG reductions and community benefits.
With any CCA, the governance structure, finance model, risk profile, oversight authority,
administration, and other costs and benefits are critically important to consider. These
factors become increasingly more complex when more stakeholders are involved with
different interests. However, many successful CCAs have worked across many
jurisdictions to provide clean power, green jobs and valuable energy programs to their
constituents.
CCAs should achieve at least cost parity, if not lower rates, compared to the incumbent
IOU to be successful. This is particularly challenging when the IOUs impose exit fees
(also known as PCIA for Power Customer Indifference Adjustment) on CCA customers
who leave the IOU, potentially stranding long-term contracts and expenses. CCAs have
had little to no control or insight into the formula that determines these fees and fees are
set annually typically within months of being assessed. The California Public Utilities
Commission is presiding over this subject and will make a ruling in the near future.
Advocating for CCAs at proceedings that govern utility rules at the California Public
Utilities Commission (CPUC) is necessary to limit the assessment of impact fees or
increase transparency over them. A CCA must establish a strong reserve fund, from
successfully providing energy service, to help absorb the impacts of exit fees.
10 of 28
Ultimately, CCAs are vehicles that can provide long-term value to communities through
locally tailored programs and investments that support:
Energy efficiency;
Renewable energy;
Energy resilience through battery storage and demand response (reducing peak
energy demand when the cost of energy is high);
Electrification of transportation (private, transit and commercial); and
Smart grid applications (appliances, energy loads and stored energy that can be
controlled remotely to lower utility grid energy demand)
These types of programs and investments are possible when a CCA has successfully
launched and is governed by members that are aligned in vision and goals.
Evaluation of Options
Staff is evaluating three options to implement Community Choice Aggregation (CCA):
1) South Bay Clean Power (SBCP);
2) Los Angeles Community Choice Energy (LACCE); and
3) Single-city option
Over the course of the year, staff and Councilmember McKeown have:
met repeatedly with representatives from each CCA to learn about their
proposals and ask questions;
met regularly with counterparts in the Westside and South Bay cities to share
updates and monitor changes;
explored a single-city option by way of a pro forma analysis and implementation
plan;
included the Task Force on the Environment and its CCA subcommittee to
explore the issues in greater detail; and
commissioned the UCLA Luskin Center for Policy Innovation (UCLA) to provide
an unbiased analysis of the City’s options.
South Bay Clean Power
11 of 28
South Bay Clean Power (SBCP) had convened the original working group of cities to
explore CCA two years ago. SBCP provided to its cities a business plan on February
15, 2017, and later a financial strategy and risk analysis on July 18, 2017.
SBCP’s business plan models its approach based on the most recent and most
successful CCA launches in California. It advocates for hiring a third-party to perform at-
risk, taking no upfront payment until the program launches successfully.
SBCP also advocates for utilizing portfolio managers, which are companies and
nonprofits (the latter are typically owned by other public power entities) that provide an
integrated suite of power sector services: planning, origination, contract management,
buying and selling power and settlement (when procured power is different from
consumed power). Contracting with these companies allows CCAs to diversify their
energy portfolios by subsequently contracting with multiple suppliers and apply industry-
standard energy risk management analytics and practices. This practice was utilized by
Silicon Valley Clean Energy, a CCA program recently established in northern California,
which enabled it to achieve an $18 million line of credit without a municipal guarantee.
The SBCP financial strategy recommends a $2.5 million start-up loan that would
primarily be used as collateral deposits to Southern California Edison (SCE) and
regulatory authorities and to fund nominal staff expenses. An additional $5 million loan
would be required to provide collateral requirements for purchasing power. Both of
these loans would require up to a $5 million municipal guarantee from one or two
member cities.
The financial strategy offers four scenarios: base case (least green option), cheaper
power, greener power and full decarbonization. Under all scenarios, SBCP would be
able to remain competitive with SCE’s rates, including the exit fees. Figure 4 shows
SBCP’s financial model for utility rates that provide a base case and full
decarbonization.
Figure 4. SBCP Financial Model CCA Revenue & Rate Comparison
12 of 28
SBCP’s proposal utilizes the best practices of California CCA’s in initiation, financing
and operations to ensure a fast and lean program launch, maximize deployment of local
energy resources, and manage regulatory and market risk. The challenge for cities of
this model is the initial up-front costs and financial guarantees that would be required of
the founding members.
UCLA’s analysis of SBCP found that:
Because a number of other cities have already joined LACCE, if Santa Monica
were to join SBCP, it would likely be the largest City, in terms of energy load; and
the prospective member cities are more similar to Santa Monica in terms of
median income and demographics, which could imply that the participating
communities have similar environmental goals and are less constrained by
financial hardship; and
the prospective member cities are more similar to Santa Monica in terms of
climate zone, which is coastal, cooler and cheaper to serve power to due to the
13 of 28
relatively stable electrical demand; and
SBCP’s conceptual non-energy operating costs are significantly lower than most
operating CCAs.
While most Westside and South Bay cities agree that SBCP’s proposal was more
aligned with their goals and was more financially and structurally sound than the LACCE
proposal, many expressed hesitance over the barriers to providing a financial guarantee
and contributing staff time to initiating a new JPA. To date, no city has committed or
expressed firm interest in launching a SBCP JPA. Staff concurs with these concerns
and does not recommend any further action with regard to joining SBCP.
Los Angeles Community Choice Energy
From December 2016 to March 2017, the County worked with relevant stakeholders
and interested cities to negotiate a JPA to govern the LACCE program. On April 18,
2017, the Los Angeles County Board of Supervisors unanimously approved a motion to
begin the implementation of LACCE, including the creation of the JPA and allocation of
$10 million in funding needed to begin pre-operation and start-up activities.
Cities that execute the LACCE JPA within 180 days of LACCE’s formation will become
Initial Participants of the program. Initial Participants will benefit from the $10 million
loan from Los Angeles County and will not have to commit any funds of their own.
Furthermore, Initial Participants will have the opportunity to make important foundational
decisions at the inception of LACCE. These include establishing committees to ensure
sound governance and hiring an Executive Director to oversee LACCE operations.
County staff and consultants retained by the County are currently directing the majority
of LACCE actions. LACCE will start Phase I for County facilities in January 2018,
Phase II (commercial accounts in the unincorporated county and in cities) by mid-2018
and Phase III (residential customers) by the end of 2018.
On August 4, 2017, the LACCE Board of Directors held its first meeting. The agenda
covered chair and secretary appointments, interim Executive Director approval, budget
14 of 28
approval, and authorization to issue RFPs for power supply, scheduling, communication
and legal services. The second meeting on September 7, 2017 addressed several
administrative and start-up issues and began the process for recruiting a permanent
Executive Director. LACCE currently has RFPs out for a wide range of services
including power supply products and services for Phase I (only County municipal
accounts to be serviced), power schedule coordination, legal services, and
communication services (such as website and branding).
LACCE’s approach is outlined in its business plan, which demonstrates that a County
CCA program is financially viable and would provide significant benefits for the County’s
residents and businesses (Attachment C). LACCE’s electric portfolio will be managed
by a third-party electric supplier, at least during the initial implementation period.
Through a power services agreement, LACCE will obtain full service requirements
electricity for its customers, including providing for all electric, ancillary services and the
scheduling arrangements necessary to provide delivered electricity. The business plan
predicts electricity rates would be between 5.4 percent lower to 6.3 percent higher
compared to SCE rates depending on the percentage of renewable energy that is
provided.
LACCE’s business plan indicates that utilizing standard industry risk management
techniques will be employed to reduce exposure to the volatility of energy markets and
insulate customer rates from sudden changes in wholesale market prices.
LACCE is the first and largest CCA JPA in Southern California and has committed
funding from LA County, which eliminates the need for financial guarantees from
members.
LACCE prepared an implementation plan and business plan in August 2017 which
includes a financial analysis (Attachments B & C). The financial analysis shows that:
LACCE’s program relies on a $50 million loan, which would be used to repay the
County’s $10M startup loan and be paid off in 10 years; and
15 of 28
LACCE could earn approximately $6.7 million in program surplus over 10 years.
At this point staff cannot determine what procurement goals LACCE will achieve, what,
if any, local return Santa Monica would receive, or what kinds of sustainable energy
programs would be created that could benefit Santa Monica residents if Santa Monica
were to join. These are decisions that would have to be made by LACCE Board
members once LACCE is successfully operating and has sufficient reserves.
UCLA’s analysis of LACCE found that:
in a high membership scenario, Santa Monica would be the third largest member
in terms of energy load, after Carson and the Unincorporated County; and
median income is more varied across current and prospective member cities,
which could imply that some communities will be more concerned with reducing
costs rather than achieving environmental goals; and
climate zones are more varied, which means that Santa Monica’s coastal zone,
which is cheaper to serve power to, could subsidize climate zones that are more
expensive to serve power to; and
LACCE’s conceptual non-energy operating costs are significantly lower than
most operating CCAs.
LACCE offers a politically and financially expedient option for cities to bring CCA to their
communities. LACCE has political and financial backing from the LA County Board of
Supervisors. LACCE requires minimal involvement from member city staff and no
financial commitment.
Staff and the Task Force on the Environment are concerned that LACCE may
oversimplify the needs of its members and that Santa Monica’s sustainability goals may
be limited by less progressive members if it joins. Joining LACCE would require
vigilance and advocacy from the appointed Board member, staff and community
stakeholders to ensure that Santa Monica’s needs and goals are not diminished by the
larger group of members. As a Board member, the appointed Director and staff could
16 of 28
work in concert with other like-minded cities to form a voting bloc that would advance
shared interests in high renewable content and innovative distributed energy resource
programs that support local solar energy and electric vehicles. This would require a
high-level of coordination with the Task Force on the Environment, City Council and
like-minded cities, but it is feasible within existing resources.
The Task Force on the Environment adopted a motion to declare a list of requirements
for Santa Monica’s membership to LACCE, including procurement goals, programmatic
goals and structural changes. The full list of requirements is presented later in this
report.
Single-City CCA
Staff is also evaluating an alternative option to become its own CCA. As a single-city
CCA, Council would establish procurement goals for renewable energy, set utility rates
and develop projects and programs funded by ratepayer revenues but would also likely
require a significant initial financial commitment from the City, ongoing implementation
and staffing costs, and an increased level of financial risk relative to the other CCA
options.
On October 2, 2017, the City Manager entered into a professional services agreement
with California Choice Energy Authority (CCEA). CCEA is a JPA created by the City of
Lancaster, the state’s only active single-city CCA, and the City of San Jacinto, to
provide other cities the opportunity to implement a CCA within their own community. Per
the agreement, CCEA has provided to the City a pro forma analysis and implementation
plan that describes what a potential Santa Monica CCA would look like and how it could
operate. As part of the agreement CCEA will also work with the City to submit the
implementation plan with a statement of intent to the California Public Utilities
Commission (CPUC) to receive certification, which would allow the City to launch its
own CCA, if Council chose to do so at a future date.
Santa Monica’s CCA launch and operating services could be provided by city staff and
supplemented by a third-party selected by competitive bid, or by CCEA.
17 of 28
Under CCEA, the City would become an associate member of the JPA and that
membership would be governed by a corresponding agreement which lays out each
member’s responsibilities, costs, and obligations. Each associate member contract
would have unique qualities that allow each City to tailor its relationship to be most
beneficial and most appropriate for that City.
The City of Lancaster’s City Council serves as the CCEA Board of Directors providing
the legislative and operational oversight of the corresponding contractual relationships
with associate member agencies. This structure would allow each member agency to
benefit from the knowledge and experience Lancaster has gained without ceding control
to the JPA. This model would allow the City to determine a rate structure based on the
cost of procuring renewable energy and directly receive revenue that could be used to
finance energy projects and programs for Santa Monica.
Table 2. Distribution of Powers between Santa Monica and the CCEA Board
City of Santa Monica CCEA
Local governance and
oversight
Rate setting
Back office operations as
desired
Community outreach
Marketing
Regulatory and legal affairs
Rate analysis
Financial projections
Project scheduling
Load forecasting
Electronic data exchange
Power procurement
Investor-Owned Utility (IOU)
relations
Marketing assistance
Guidance to city council and
management
Call center
Banking and accounting functions
18 of 28
CCEA would contract with the City of Lancaster to perform an agreed upon scope of
work for the associate member. Being that each contract is unique, each City may
choose which services are important, which can be done in-house, and which should be
performed under the CCEA.
The pro forma analysis and implementation plan was developed utilizing current energy
market and rate conditions, estimating the level of capital required for the City to move
through the CCA start-up and phase-in periods, identifies specific duties, addresses
how the City would interface with consultants and other third parties, and develops
organizational structures that outline the operational functions and duties.
The current pro forma and implementation plan assumes that Santa Monica joins CCEA
for administrative and energy procurement services, however this does not explicitly
require the City to utilize CCEA for any services. The results of the study are
summarized below and are included in the implementation plan (Attachment E):
Santa Monica must offer electricity rates between 4.3 and 6.8 cents/kWh in order
to be competitive with SCE’s rates, plus additional fees and charges (Table 3)
Santa Monica would need to provide an estimated $2.4 million to launch the first
6 months of operation (Tables 4 & 5)
The City’s program could become self-sufficient within 16 months, depending on
the type of power procured, and generate $53 million in cumulative net surplus
over the 10-year forecast timeline (Table 6)
Table 3. Comparison of Rates & Fees
SCE 2018 Rate & Fee Forecast SM CCA
Customer Class
Generation
Rate
(cents/kWh)
Surcharges,
including
Exit Fee
(cents/kWh)
Franchise
Fee
(cents/kWh)
Competitive
Rate
(cents/kWh)
Residential 8.329 1.88 0.076 6.373
19 of 28
Small Commercial 8.08 1.206 0.073 6.801
Medium
Commercial 7.694 1.568 0.070 6.056
Large Commercial 7.355 1.299 0.067 5.989
Industrial 6.837 1.062 0.062 5.713
Ag and Pumping 6.400 0.963 0.058 5.379
Street Lighting 4.425 0.002 0.040 4.383
Traffic Control 6.367 0.854 0.058 5.455
Table 4. Estimated Startup Costs
20 of 28
Table 5. Total Financing Requirements
Start-Up Cost Category Cost ($)
1) Implementation Costs $600,000
2) CPUC Deposit $100,000
3) Lockbox Reserve $500,000
4) Additional Cash Flow
Needs $1,200,000
TOTAL $2,400,000
1) Implementation costs (detailed in previous table); 2) CPUC deposit required if Santa
Monica initiates process to form a CCA; 3) Lockbox Reserve offers externalized collateral for
power supplier, all ratepayer revenue will pass through the lockbox and be paid to the power
supplier before net revenue is remitted to the City, shielding the General Fund; 4) Additional
Cash Flow Needs help to provide funds necessary to procure power before revenue service
is initiated.
Table 6. Cash Flow Analysis
21 of 28
The study anticipates that the startup costs can be repaid and a rate stabilization
reserve be established within the first five full years of operation. These estimates are
preliminary and would be refined if the City pursues further implementation.
If Council determined at a future date that it wanted to operate as a single-city CCA,
Council would need to approve the implementation plan and adopt an ordinance in
order to proceed with certification by the California Public Utilities Commission (CPUC).
Implementing a single-city CCA would be an ambitious endeavor at a time when
Council has identified a litany of ambitious Strategic Goals and initiatives on behalf of
the community. It would require the need for additional staff and technical consultants
and would require that the City bear financial risk and obligation. The City of Lancaster
currently employs 4.5 FTE staff to manage power procurement, regulatory engagement,
community programs, customer service, contracts and accounting for Lancaster Choice
Energy. At this juncture staff recommends that, due to the major financial start-up costs
and staffing costs, establishing a single-city CCA should not be the City’s first priority.
UCLA Comparative Study & Analysis
Staff commissioned the UCLA Luskin Center for Innovation (UCLA) to conduct a
comparative analysis of all three options (Attachment F). Researchers reviewed all
official documents available and interviewed the key stakeholders and representatives
of the three CCA options, as well as their consultants. They compared their
recommendations, financial strategies and business plans, and discussed key elements
with CEOs and staff of existing CCAs, as well as industry experts specialized in energy
procurement, regulatory and legal affairs, data management and billing.
All three CCA options were evaluated seeking to answer the following key questions
and criteria that reflect the City’s goals:
1) Which CCA structure best provides Santa Monica with decision making autonomy
toward local programs to achieve its environmental goals?
2) Which option best protects the City against financial risk and provides the most
resilient structure to future legislative, regulatory and competition risks?
22 of 28
3) Which option offers the greatest economies of scale that would support future
opportunities?
The UCLA study doesn’t make a specific recommendation with regard to which option
Santa Monica should choose, however its thorough evaluation of the benefits and risks
of each option have helped to inform staff’s recommendations. Below is a summary of
the findings of the UCLA study:
CCA Size, Viability, Voting and Economy of Scale
SBCP is the least operationally ready of the options. As there are no current members,
and some of the cities included in its feasibility study have joined LACCE, SBCP would
likely be smaller than LACCE if it is established. This means that Santa Monica would
have greater influence in decisions made by this CCA as one of the leading cities if it
were to join (or take the lead on establishing a SBCP JPA). However, forming SBCP
would require additional time and resources which would increase the financial
exposure of the initiating city, and delay the CCA launch considerably. UCLA confirmed
that the business plan and financial strategy of SBCP provides innovative
recommendations on how to address energy procurement and become an advanced
CCA. The ideas in the SBCP Plan could be used by Santa Monica and other cities as a
model to advocate for revision of some of LACCE’s early decisions if it were to join the
LACCE Board, in an effort to improve the viability of the LACCE CCA and better align it
with Santa Monica’s stated goals.
LACCE is operationally ready and will likely have the largest membership of the three
CCA options evaluated. This may mean less influence for Santa Monica, in terms of its
direct vote. However, as the potentially largest CCA in California, this option could also
provide the city with greater financial stability, greater economies of scale, and a
stronger voice for the future legislative and regulatory discussion that lay ahead. Given
that a CCA’s success must precede its ability to provide environmental benefits,
LACCE’s large size probably best positions Santa Monica to provide environmental
benefits in the long term. Its county-wide membership also offers member cities the
opportunity to collaborate, share resources, and potentially amplify their regional impact
23 of 28
at many other levels.
Members of large CCAs in northern California established in the past decade have
tended to reach a consensus before voting, which also demonstrates that cities which
join a CCA usually tend to work collaboratively rather than antagonistically and tend to
share similar goals and ambitions. Even though the Los Angeles County unincorporated
area represents an important share of the load, the LA County LACCE Board Director
still only has one vote, unless a weighted vote is called. Based on existing CCAs’
experience so far, weighted votes tend to be infrequent and, in many cases, have yet to
occur at all.
One benefit associated with greater membership is that LACCE expects energy rates to
become even cheaper with each additional joining member. The LACCE Business Plan
(Attachment C) notes, “As additional Cities are added, it is expected that LACCE rates
will be reduced even more when compared to SCE's.”
Moreover, economies of scale and autonomy are not necessarily mutually exclusive, as
they depend on the design and policies set by the CCA. Even large CCAs can empower
their member cities when it comes to local decisions and investments. Finally,
participation in a larger CCA would offer Santa Monica the ability to form coalitions with
other like-minded cities and influence the strategy and direction of the entire CCA.
California Choice Energy Authority’s single-city option would offer Santa Monica full
autonomy over rates, power mixes, and programs. However, Santa Monica would not
have a vote in decisions made by the CCEA’s JPA Board, including entering into power
contracts. Because of this it is even more important that the values underlying the
power procurement of CCEA align with Santa Monica’s values. Additionally, Santa
Monica would likely not benefit from the economies of scale offered by a larger CCA if it
were to join CCEA. CCEA uses a restricted bank account to reduce member cities’
financial risk called a “lockbox”, which seems to be an idea appreciated by energy
providers and some of the financial institutions, and should be studied further by the city
or the forming CCA.
24 of 28
Renewable Energy and Local Programs
All options have the potential for Santa Monica to immediately achieve 100% renewable
electricity. LACCE plans to offer a 100% renewable energy product and allows
individual cities to default their customers into that product. As no decisions have been
finalized for SBCP, if and when it is established the joining cities could vote to decide to
offer a 100% renewable option and could vote to decide if cities have the option to
default enroll their customers. As Santa Monica would have full autonomy over product
with CCEA, they could choose to also offer a 100% renewable energy product.
Joining CCEA would provide Santa Monica with complete autonomy over the financing
and implementation of local programs. While a portion of revenues would be used to
pay CCEA for their services, Santa Monica would have full control over the remaining
revenues for local programs.
LACCE and SBCP’s JPAs will determine how to allocate budgets for local programs.
Although Santa Monica would not have full autonomy over the use of CCA revenues for
programs, the economies of scale offered by larger CCAs could mean that more
revenues per MWh are available to finance programs.
With LACCE, revenues will be collected through the JPA. Some of the revenues will be
used for operational costs and some will be used for JPA-wide programs. While it is up
to the JPA Board how to distribute revenues, it is likely that a portion of the revenues
will be allocated to member governments. The portion that is returned to member
governments can be used in line with local preferences. Additionally, LACCE noted that
not every program will be desirable for each member, so members can pick and choose
their participation in some JPA-wide programs.
As a single-city CCA, Santa Monica would have guaranteed autonomy over revenues
not needed for CCEA, any vendors or other operating costs and could decide to use
those revenues to support programs.
25 of 28
UCLA’s study makes clear that the current most feasible option for the City to pursue at
this point is to join LACCE and once on the Board attempt to influence the
establishment and operation of the CCA so that it closely aligns with Council’s stated
goals. The single city/CCEA option is the next feasible option because it would provide
the City with a significant amount of autonomy to pursue and meet its renewable energy
goals, however it would also involve a significant financial and staff commitment to
establish and operate it. The SBCP model is the least operationally ready option.
While it has a strong conceptual business plan it doesn’t currently have a sponsor to
fund its creation and therefore it isn’t likely to be established in the near future.
Task Force on the Environment
On November 20, the Task Force voted unanimously to declare the following points as
requirements for Santa Monica’s continued membership in LACCE:
1) None of the energy procured will come from coal.
2) 100% of the energy procured will be renewable by 2030. (Southern California Edison
has a goal of 50% by 2030).
3) The CCA will comply with state energy goals. (i.e.50% energy efficiency by 2030)
4) The structure of CCA procurement should take a portfolio management approach to
properly account for the value of distributed energy resources including demand
response and energy efficiency. The JPA should integrate Portfolio Management
Services such as analysis and planning, contract origination and management,
operations, and settlements. The services will allow multiple energy suppliers such
as individual power plants, fuel suppliers and local Distributed Energy Resources.
This will also diversify risk.
5) 20% of the energy generated will come from local sources by 2030.
6) Profits generated will assist Santa Monica to install 1,000 Electric Vehicle chargers
total by 2025 in Santa Monica
7) None of energy procured will be nuclear by 2030 for the entire county
8) Public education programs focusing on energy efficiency and conservation will be
implemented
9) LACCE Customers will be provided with smart meters and user interface by 2025
10) The City will have control over revenue surpluses generated by Santa Monica
26 of 28
customers and all of these revenues must be directed toward sustainable energy
projects
11) The JPA will integrate a Distributed Energy Resources Aggregator to provide virtual
power plant services
12) The JPA will hire data and billing services that support Distributed Energy
Resources to collect interval data as opposed to monthly averages
13) The JPA will form a Community Advisory Committee as soon as possible
14) LACCE must invest in new renewable energy generation from the Southern
California region
Also on November 20, 2017 the Task Force adopted the following motion: The Task
Force strongly recommends Task Force member David Pettit be appointed by Council
as a second alternate to the LACCE Board.
Recommendations
Staff recommends that Council introduce for first reading the attached enabling
ordinance to join LACCE and appoint a Board Director and two alternate
representatives to participate in the formative decision-making process that will guide
LACCE for years to come.
According to the terms of the LACCE JPA: “The governing body of each Party shall
appoint and designate in writing one regular Director who shall be authorized to act for
and on behalf of the Party on matters within the powers of the Authority. The governing
body of each Party shall appoint and designate in writing up to two alternate Directors
who may vote on matters when the regular Director is absent from a Board meeting.
The person appointed and designated as the regular Director shall be an elected or
appointed member of the governing body of the Party. The persons appointed and
designated as the alternate Directors may be an elected or appointed member of the
governing body of the Party, an appointed member of an advisory body of the Party, a
staff member of the Party or a member of the public who meets the following criteria:
Any alternate Director that is a member of the public must have demonstrated
knowledge in energy-related matters through significant experience in either: 1)
27 of 28
an electric utility or company, agency, or nonprofit providing services to a utility,
2) a regulatory agency or local government body overseeing an electric utility or
a company, agency, or nonprofit providing services to such an agency, 3) an
academic or nonprofit organization engaged in research and/or advocacy related
to the electric sector.”
The events that take place over the next four months will be crucial to determine if
LACCE is a viable option for Santa Monica to implement CCA. Summer is an optimal
period to initiate electrical service as summer rates are the highest and most lucrative in
terms of revenue.
During the January and February 2018 meetings, the LACCE Board will cover: 1) the
hiring of an Executive Director; 2) the formation of a Community Advisory Committee; 3)
procurement and environmental goals. In March, LACCE will initiate an RFP process to
procure power for commercial, industrial and municipal accounts in member cities, with
an intent to serve by June. The Director to be appointed will need to work with city staff,
the Task Force on the Environment, like-minded cities and LACCE staff to ensure that
the goals, objectives and organizational structure of LACCE are such that they serve
Santa Monica’s interests within this short period of critical decision-making.
Should the City determine that LACCE does not serve its interests, Santa Monica may
indicate its intent to terminate its membership 180 days in advance of doing so. This
advance notice will limit the liability and obligation that the City might bear if LACCE
were to procure power on Santa Monica’s behalf.
Staff will continue to evaluate the single-city CCA options and the financial feasibility
and risk associated with pursuing those options in the coming months and will be
prepared to make a recommendation to Council regarding the ultimate viability and
benefit of one of those options if it becomes necessary. If in the future the Council
decides that continued participation in LACCE is not within the City’s best interest, staff
would return to Council with a recommendation to approve the initial mandatory steps
and move forward in a timely manner to establish a single-city CCA. As a single-city
28 of 28
CCA, the City could elect to work with CCEA, with another JPA or any third-party
contractor that provides CCA services. Third-party contractors offer the option to
provide CCA services ‘at-risk’, receiving no payment until the CCA has successfully
launched.
Financial Impacts and Budget Actions
There is no financial impact associated with any of the recommended actions. Should
the appointed Director determine that the City should opt out of LACCE in the future,
staff will return to Council with any recommendations for future action along with any
financial impacts and budget actions related to those recommendations at that time.
Prepared By: Garrett Wong, Senior Sustainability Analyst
Approved
Forwarded to Council
Attachments:
A. Ordinance
B. LACCE Implementation Plan
C. LACCE Business Plan
D. LACCE Joint Powers Authority Agreement
E. Santa Monica CCA Implementation Plan (Prepared by CCEA)
F. DRAFT UCLA REPORT Evaluating CCA Alternatives for SM
G. Jan 13, 2015 Staff Report
H. Feb 14, 2017 Staff Report
I. Written Comments
J. Powerpoint Presentation
Los Angeles Community Choice Energy
(LACCE)
COMMUNITY CHOICE AGGREGATION
IMPLEMENTATION PLAN AND
STATEMENT OF INTENT
[August 14, 2017]
i
LACCE Implementation Plan
1 – Introduction ......................................................................................................................... 1
2 – Aggregation Process ............................................................................................................. 4
3 – Organizational Structure ...................................................................................................... 7
4 – Start-Up Plan & Funding ..................................................................................................... 12
5 – Program Phase-In ............................................................................................................... 15
6 – Load Forecast & Resource Plan ........................................................................................... 17
7 – Financial Plan ..................................................................................................................... 29
8 – Rate Setting, Program Terms and Conditions ...................................................................... 34
9 – Customer Rights and Responsibilities ................................................................................. 40
10 – Procurement Process........................................................................................................ 41
11 – Contingency Plan for Program Termination ...................................................................... 44
12 – Appendices ..................................................................................................................... 47
Table of Contents
CHAPTER 1 – Introduction 1
LACCE Implementation Plan
The Los Angeles Community Choice Energy (“LACCE”) Authority is a public agency located within
Los Angeles County, formed for the purpose of implementing a community choice aggregation
program (“CCA”, or “Community Choice Energy” – “CCE” – which has been recently used as an
alternative identifying term for the CCA service model), which has been named Los Angeles
Community Choice Energy (the “Program” or “LACCE”). Member Agencies of the LACCE Authority
include two (2) municipalities located within the County of Los Angeles (“County”) as well as the
unincorporated areas of the County itself (together, the “Members” or “Member Agencies”),
which have elected to allow the LACCE Authority to provide electric generation service within their
respective jurisdictions. Currently, the following Members Agencies comprise the LACCE Authority:
Los Angeles County (unincorporated)
Rolling Hills Estates
City of South Pasadena
This Implementation Plan and Statement of Intent (“Implementation Plan”) describes the LACCE
Authority’s plans to implement a voluntary CCA program for electric customers within the
jurisdictional boundaries of the County that currently take bundled electric service from Southern
California Edison (“SCE”). The LACCE Program will provide electricity customers the opportunity to
join together to procure electricity from competitive suppliers, with such electricity being
delivered over SCE’s transmission and distribution system. The planned start date for the Program
is January 15, 2018. All current SCE customers within the LACCE Authority’s service area will receive
information describing the LACCE Program and will have multiple opportunities to choose to
remain full requirement (“bundled”) customers of SCE, in which case they will not be enrolled.
Thus, participation in the LACCE Program is completely voluntary; however, customers, as
provided by law, will be automatically enrolled according to the anticipated phase-in schedule later
described in Chapter 5 unless they affirmatively elect to opt-out.
Implementation of LACCE will enable customers within the LACCE Authority’s service area to take
advantage of the opportunities granted by Assembly Bill 117 (“AB 117”), the Community Choice
Aggregation Law. The LACCE Authority’s primary objectives in implementing this Program are to
provide cost competitive electric services; reduce electric sector greenhouse gas emissions
(“GHGs”) within the County; stimulate renewable energy development; implement distributed
energy resources; promote energy efficiency and demand reduction programs; and sustain long-
term rate stability for residents and businesses through local control. The prospective benefits to
consumers include increased renewable and other low-GHG emitting energy supplies, stable and
competitive electric rates, and the opportunity for public participation in determining which
technologies are utilized to meet local electricity needs.
CHAPTER 1 – Introduction
CHAPTER 1 – Introduction 2
LACCE Implementation Plan
To ensure successful operation of the Program, the LACCE Authority is currently soliciting energy
suppliers and marketers through a competitive process and will negotiate with one or more
qualified suppliers throughout the summer and fall of 2017. Final selection of the LACCE
Authority’s initial energy supplier(s) will be made by the LACCE Authority following administration
of the aforementioned solicitation process and related contract negotiations. Information
regarding the anticipated solicitation process for the LACCE Authority’s initial energy services
provider(s) is contained in Chapter 10.
The California Public Utilities Code provides the relevant legal Authority for the LACCE Authority
to become a Community Choice Aggregator and invests the California Public Utilities Commission
(“CPUC” or “Commission”) with the responsibility for establishing the cost recovery mechanism
that must be in place before customers can begin receiving electrical service through the LACCE
Program. The CPUC also has responsibility for registering the LACCE Authority as a Community
Choice Aggregator and ensuring compliance with basic consumer protection rules. The Public
Utilities Code requires that an Implementation Plan be adopted at a duly noticed public hearing
and that it be filed with the Commission in order for the Commission to determine the cost
recovery mechanism to be paid by customers of the Program in order to prevent shifting of costs
to bundled customers of the incumbent utility.
On August 4, 2017, the LACCE Authority, at a duly noticed public hearing, considered and adopted
this Implementation Plan, through Resolution 17-002 (a copy of which is included as part of
Appendix A). The Commission has established the methodology that will be used to determine the
cost recovery mechanism, and SCE has approved tariffs for imposition of the cost recovery
mechanism. Finally, each of the LACCE Authority’s Members has adopted an ordinance to
implement a CCA program through its participation in the LACCE Authority, and each of the
Members has adopted a resolution permitting the LACCE Authority to provide service within its
jurisdiction1. With each of these milestones having been accomplished, the LACCE Authority
submits this Implementation Plan to the CPUC. Following the CPUC’s certification of its receipt of
this Implementation Plan and resolution of any outstanding issues, the LACCE Authority will take
the final steps needed to register as a CCA prior to initiating the customer notification and
enrollment process.
Organization of this Implementation Plan
The content of this Implementation Plan complies with the statutory requirements of AB 117. As
required by Public Utilities Code Section 366.2(c)(3), this Implementation Plan details the process
and consequences of aggregation and provides the LACCE Authority’s statement of intent for
implementing a CCA program that includes all of the following:
Universal access;
Reliability;
Equitable treatment of all customer classes; and
Any requirements established by state law or by the CPUC concerning aggregated service.
1 Copies of individual ordinances adopted by the LACCE Authority’s Members are included within Appendix A.
CHAPTER 1 – Introduction 3
LACCE Implementation Plan
The remainder of this Implementation Plan is organized as follows:
Chapter 2: Aggregation Process
Chapter 3: Organizational Structure
Chapter 4: Startup Plan & Funding
Chapter 5: Program Phase-In
Chapter 6: Load Forecast & Resource Plan
Chapter 7: Financial Plan
Chapter 8: Rate setting
Chapter 9: Customer Rights and Responsibilities
Chapter 10: Procurement Process
Chapter 11: Contingency Plan for Program Termination
Appendix A: the LACCE Authority Resolution No. 17-002(Adopting Implementation
Plan)
Appendix B: the LACCE Authority Joint Powers Agreement
The requirements of AB 117 are cross-referenced to Chapters of this Implementation Plan in the
following table.
AB 117 Cross References
AB 117 REQUIREMENT IMPLEMENTATION PLAN CHAPTER
Statement of Intent Chapter 1: Introduction
Process and consequences of aggregation Chapter 2: Aggregation Process
Organizational structure of the program, its
operations and funding
Chapter 3: Organizational Structure Chapter 4:
Startup Plan & Funding Chapter 7: Financial
Plan
Disclosure and due process in setting rates and
allocating costs among participants
Chapter 8: Rate setting
Rate setting and other costs to participants Chapter 8: Rate setting Chapter 9:
Customer Rights and Responsibilities
Participant rights and responsibilities Chapter 9: Customer Rights and
Responsibilities
Methods for entering and terminating
agreements with other entities
Chapter 10: Procurement Process
Description of third parties that will be supplying
electricity under the program, including
information about financial, technical and
operational capabilities
Chapter 10: Procurement Process
Termination of the program Chapter 11: Contingency Plan for Program
Termination
CHAPTER 2 – Aggregation Process 4
LACCE Implementation Plan
Introduction
This chapter describes the background leading to the development of this Implementation Plan
and describes the process and consequences of aggregation, consistent with the requirements
of AB 117.
Beginning in 2015, Los Angeles County began investigating formation of a CCA Program in the
County, pursuant to California state law, with the following objectives: 1) provide cost-competitive
electric services; 2) reduce greenhouse gas emissions related to the use of electric power within
the County; and 3) increase the use of renewable energy resources relative to the incumbent
utility. A technical feasibility study for a CCA Program serving the County was completed for the
LACCE Authority Partnership in July 28, 2016.
After nearly 2 years of collaborative work by representatives of the Los Angeles County, city
governments, independent consultants, local experts and stakeholders, the LACCE Authority was
formed in July 2017 for purposes of implementing the LACCE Program. Subsequently, the LACCE
Authority approved this Implementation Plan through a duly-noted public hearing, complying
with the standards stated in California Public Utilities Code Section 366.2. The LACCE Authority is
continuing discussions with additional Cities regarding membership in the JPA. This
Implementation Plan will be updated as additional Cities become partners in the LACCE Authority.
The LACCE Program represents a culmination of planning efforts that are responsive to the
expressed needs and priorities of the citizenry and business community within the Member
Agencies. The LACCE Authority plans to offer choices to eligible customers through creation of
innovative programs for voluntary purchases of renewable energy, net energy metering to
promote customer-owned renewable generation, energy efficiency, demand responsiveness to
promote reductions in peak demand, distributed energy generation, customized pricing options
for large energy users, and support of local renewable energy projects through offering of a
standardized power purchasing agreement or Feed-In Tariff. Commercial direct access customers are
not included as it is assumed that customers taking direct access service from a competitive
electricity provider will continue to remain with their current supplier.
Process of Aggregation
Before they are enrolled in the Program, prospective LACCE customers will receive two written
notices in the mail from the LACCE Authority that will provide information needed to understand
the Program’s terms and conditions of service and explain how customers can opt-out of the
Program, if desired. All customers that do not follow the opt-out process specified in the customer
notices will be automatically enrolled, and service will begin at their next regularly scheduled
meter read date no later than thirty days following the date of automatic enrollment, subject to
the service phase-in plan described in Chapter 5. The initial enrollment notices will be provided
to the first phase of customers in November 2017. Initial enrollment notices will be provided to
CHAPTER 2 – Aggregation Process
CHAPTER 2 – Aggregation Process 5
LACCE Implementation Plan
subsequent customer phases consistent with statutory requirements and based on schedule(s)
determined by the LACCE Authority. These notices will be sent to customers in subsequent phases
twice within 60 days of automatic enrollment.
Customers enrolled in the LACCE Program will continue to have their electric meters read and to
be billed for electric service by the distribution utility (SCE). The electric bill for Program customers
will show separate charges for generation procured by the LACCE Authority as well as other
charges related to electricity delivery and other utility charges assessed by SCE.
After service cutover, customers will have approximately 60 days (two billing cycles) to opt-out of
the LACCE Program without penalty and return to the distribution utility (SCE). LACCE customers
will be advised of these opportunities via the distribution of two additional enrollment notices
provided within the first two months of service. Customers that opt-out between the initial
cutover date and the close of the post enrollment opt-out period will be responsible for program
charges for the time they were served by the LACCE Authority but will not otherwise be subject
to any penalty for leaving the program. Customers that have not opted-out within thirty days of
the fourth enrollment notice will be deemed to have elected to become a participant in the LACCE
Program and to have agreed to the LACCE Program’s terms and conditions, including those
pertaining to requests for termination of service, as further described in Chapter 8.
Consequences of Aggregation
Rate Impacts
LACCE Customers will pay the generation charges set by the LACCE Authority and no longer pay
the costs of SCE generation. Customers enrolled in the Program will be subject to the Program’s
terms and conditions, including responsibility for payment of all Program charges as described in
Chapter 9.
The LACCE Authority’s rate setting policies described in Chapter 7 establish a goal of providing
rates that are competitive with the projected generation rates offered by the incumbent
distribution utility (SCE). The LACCE Authority will establish rates sufficient to recover all costs
related to operation of the Program, and actual rates will be adopted by the LACCE Authority’s
Board.
Initial LACCE Program rates will be established following approval of LACCE’s inaugural program
budget, reflecting final costs from the LACCE Program’s energy supplier(s). The LACCE Authority’s
rate policies and procedures are detailed in Chapter 7. Information regarding final LACCE Program
rates will be disclosed along with other terms and conditions of service in the pre‑ enrollment and
post‑enrollment notices sent to potential customers.
Once the LACCE Authority gives definitive notice to SCE that it will commence service, LACCE
customers will generally not be responsible for costs associated with SCE’s future electricity
procurement contracts or power plant investments. Certain pre‑existing generation costs and
CHAPTER 2 – Aggregation Process 6
LACCE Implementation Plan
new generation costs that are deemed to provide system‑wide benefits will continue to be
charged by SCE to CCA customers through separate rate components, called the Cost
Responsibility Surcharge and the New System Generation Charge. These charges are shown in
SCE’s electric service tariffs, which can be accessed from the utility’s website, and the costs are
included in charges paid by both SCE bundled customers as well as CCA and Direct Access
customers2.
Renewable Energy Impacts
A second consequence of the Program will be an increase in the proportion of energy generated
and supplied by renewable resources. The resource plan includes procurement of renewable
energy sufficient to meet California’s prevailing renewable energy procurement mandate for all
enrolled customers. LACCE customers will also have the opportunity to participate in a 50 percent
or 100 percent renewable supply option. To the extent that customers choose the LACCE
Authority’s 50 percent or 100 percent renewable energy option, the renewable content of the
LACCE Authority’s aggregate supply portfolio will further increase. Initially, requisite renewable
energy supply will be sourced through one or more power purchase agreements. Over time,
however, the LACCE Authority will consider independent development of new local renewable
generation resources. The LACCE Authority seeks to establish a resource portfolio that
encourages the use and development of cost-effective local renewable and distributed energy
resources.
Energy Efficiency Impacts
A third consequence of the Program will be an anticipated increase in energy efficiency program
investments and activities. The existing energy efficiency programs administered by the
distribution utility are not expected to change as a result of LACCE Program implementation.
LACCE customers will continue to pay the public benefits surcharges to the distribution utility,
which will fund energy efficiency programs for all customers, regardless of generation supplier.
The energy efficiency investments ultimately planned for the LACCE Program, as described in
Chapter 6, will follow the LACCE Authority’s successful application for and administration of
requisite program funding (from the CPUC) to independently administer energy efficiency
programs within its jurisdiction. Such programs will be in addition to the level of investment that
would continue in the absence of the LACCE Authority-administered energy efficiency programs.
Thus, the LACCE Program has the potential for increased energy savings and a further reduction in
emissions due to expanded energy efficiency programs.
2 For SCE bundled service customers, the Power Charge Indifference Adjustment element of the Cost Responsibility Surcharge is
contained within the tariffed Generation rate. Other elements of the Cost Responsibility Surcharge are set forth in SCE’s tariffs as separate
rates/charges paid by all customers (with limited exceptions).
CHAPTER 3 – Organizational Structure 7
LACCE Implementation Plan
This section provides an overview of the organizational structure of the LACCE Authority and its
proposed implementation of the CCA program. Specifically, the key agreements, governance,
management, and organizational functions of the LACCE Authority are outlined and discussed
below.
Organizational Overview
On August 4, 2017, the LACCE Authority formed its Board of Directors to serve as its Governing
Board. The Board is responsible for establishing LACCE Program policies and objectives and
overseeing the LACCE Authority’s operation. Also on August 4, 2017, the Board appointed an
Interim Executive Director executive director to manage the operation of the LACCE Authority in
accordance with policies adopted by the Board. When the LACCE Authority receives CPUC
certification, the executive director will proceed to appoint staff and contractors to manage the
LACCE Authority’s activities. These activities include support services (administration, finance and
IT), marketing and public affairs (community outreach, key account management and customer
advocacy), Supply acquisition (energy trading, contract negotiation and system development) and
Legal and government affairs.
Governance
The LACCE Program will be governed by the LACCE Authority’s Board, which shall include one
appointed designee from each of the Members. The LACCE Authority will be a joint powers
agency formed under California law created on June 27, 2017. The Members of the LACCE
Authority include two (2) municipalities located within the County as well as the unincorporated
areas of the County, all of which have elected to allow the LACCE Authority to provide electric
generation service within their respective jurisdictions. The LACCE Authority’s Board will be
comprised of representatives appointed by each of the Members in accordance with the JPA
agreement. The LACCE Program will be operated under the direction of an executive director
appointed by the Board, with legal and regulatory support provided by a Board appointed
General Counsel.
The Board’s primary duties are to establish program policies, approve rates and provide policy
direction to the Executive Director, who has general responsibility for program operations,
consistent with the policies established by the Board. The Board will elect a Chairman and Vice
Chairman and will establish an Executive Committee, Finance Committee, and Community
Advisory Committee. In the future, the Board may also establish other committees and sub-
committees, as needed, to address issues that require greater expertise in particular areas. The
LACCE Authority may also form various standing and ad hoc committees, as appropriate, which
would have responsibility for evaluating various issues that may affect the LACCE Authority and
its customers and would provide analytical support and recommendations to the Board in these
regards.
CHAPTER 3 – Organizational Structure
CHAPTER 3 – Organizational Structure 8
LACCE Implementation Plan
Management
The LACCE Authority Board of Directors has appointed an Interim Executive Director, who has
management responsibilities over functional areas of Administration & Finance, Marketing &
Public Affairs, Power Resources & Energy Programs, and Government Affairs as well as the LACCE
Authority’s General Counsel. In performing his obligations to the LACCE Authority, the Executive
Director may utilize a combination of internal staff and/or contractors. Certain specialized
functions needed for program operations, namely the electric supply and customer account
management functions described below, may be performed initially by third‑party contractors.
Major functions of the LACCE Authority that will be managed by the Executive Director are
summarized below.
Administration
The LACCE Authority’s Executive Director is responsible for managing the organization’s human
resources and administrative functions and will coordinate with the LACCE Board, as necessary,
with regard to these functions. The functional area of administration will include oversight of
employee hiring and termination, compensation and benefits management, identification and
procurement of requisite office space and various other issues.
Finance
The Executive Director is also responsible for managing the financial affairs of the LACCE
Authority, including the development of an annual budget, revenue requirement and rates;
managing and maintaining cash flow requirements; arranging potential bridge loans as necessary;
and other financial tools.
Revenues via rates and other funding sources (such as a rate stabilization fund, when necessary)
must, at a minimum, meet the annual budgetary revenue requirement, including recovery of all
expenses and any reserves or coverage requirements set forth in bond covenants or other
agreements. The LACCE Authority will have the flexibility to consider rate adjustments within
certain ranges, administer a standardized set of electric rates, and may offer optional rates to
encourage policy goals such as economic development or low income subsidy programs, provided
that the overall revenue requirement is achieved.
The LACCE Authority may also offer customized pricing options such as dynamic pricing or
contract-based pricing for energy intensive customers to help these customers gain greater
control over their energy costs. This would provide such customers – mostly larger energy users
within the commercial sector – with greater rate-related flexibility than is currently available.
The LACCE Authority’s finance function will be responsible for arranging financing necessary for
any capital projects, preparing financial reports, and ensuring sufficient cash flow for successful
operation of the LACCE Program. The finance function will play an important role in risk
management by monitoring the credit of energy suppliers so that credit risk is properly
understood and mitigated. In the event that changes in a supplier’s financial condition and/or
CHAPTER 3 – Organizational Structure 9
LACCE Implementation Plan
credit rating are identified, the LACCE Authority will be able to take appropriate action, as would
be provided for in the electric supply agreement(s).
Marketing & Public Affairs
The marketing and public affairs functions include general program marketing and
communications as well as direct customer interface ranging from management of key account
relationships to call center and billing operations. The LACCE Authority will conduct program
marketing to raise consumer awareness of the LACCE Program and to establish the LACCE “brand”
in the minds of the public, with the goal of retaining and attracting as many customers as possible
into the LACCE Program. Outgoing communications will also promote LACCE’s customer
programs. Additionally, LACCE will communicate with key policy-makers at the state and local
level, community business and opinion leaders, and the media.
In addition to general program communications and marketing, a significant focus on customer
service, particularly representation for key accounts, will enhance the LACCE Authority’s ability to
differentiate itself as a highly customer‑focused organization that is responsive to the needs of
the community. The LACCE Authority will also establish a customer call center designed to field
customer inquiries and routine interaction with customer accounts.
The customer service function also encompasses management of customer data. Customer data
management services include retail settlements/billing‑related activities and management of a
customer database. This function processes customer service requests and administers customer
enrollments and departures from the LACCE Program, maintaining a current database of enrolled
customers. This function coordinates the issuance of monthly bills through the distribution
utility’s billing process and tracks customer payments. Activities include the electronic exchange
of usage, billing, and payments data with the distribution utility and the LACCE Authority, tracking
of customer payments and accounts receivable, issuance of late payment and/or service
termination notices (which would return affected customers to bundled service), and
administration of customer deposits in accordance with credit policies of the LACCE Authority.
The customer data management services function also manages billing-related communications
with customers, customer call centers, and routine customer notices. The LACCE Authority will
initially contract with a third party, who has demonstrated the necessary experience and
administers an appropriate customer information system to perform the customer account and
billing services functions.
Power Resources & Energy Programs
The LACCE Authority must plan for meeting the electricity needs of its customers utilizing
resources consistent with its policy goals and objectives as well as applicable legislative and/or
regulatory mandates. The LACCE Authority’s long term resource plans (addressing the 10-20 year
planning horizon) will comply with California Law and other pertinent requirements of California
regulatory bodies. The LACCE Authority may develop and administer complementary energy
programs that may be offered to LACCE customers, including green pricing, energy efficiency, net
CHAPTER 3 – Organizational Structure 10
LACCE Implementation Plan
energy metering and various other programs that may be identified to support the overarching
goals and objectives of the LACCE Authority.
The LACCE Authority will develop integrated resource plans that meet program supply objectives
and balance cost, risk and environmental considerations. Such integrated resource plans will also
conform to applicable requirements imposed by the State of California. Integrated resource
planning efforts of the LACCE Authority will make maximum use of demand side energy efficiency,
distributed generation and demand response programs as well as traditional supply options,
which rely on structured wholesale transactions to meet customer energy requirements.
Integrated resource plans will be updated and adopted by the LACCE Authority on an annual basis.
Electric Supply Operations
Electric supply operations encompass the activities necessary for wholesale procurement of
electricity to serve end use customers. These highly specialized activities include the following:
Electricity Procurement – assemble a portfolio of electricity resources to supply the electric
needs of Program customers.
Risk Management – application of standard industry techniques to reduce exposure to the
volatility of energy and credit markets and insulate customer rates from sudden changes in
wholesale market prices.
Load Forecasting – develop load forecasts, both long-term for resource planning and short-
term for the electricity purchases and sales needed to maintain a balance between hourly
resources and loads.
Scheduling Coordination – scheduling and settling electric supply transactions with the
CAISO.
The LACCE Authority will initially contract with one or more experienced and financially sound
third party energy services providers to perform all of the electric supply operations for the LACCE
Program. These requirements include the procurement of energy, capacity and ancillary services,
scheduling coordinator services, short-term load forecasting and day-ahead and real- time
electricity trading.
Local Energy Programs
A key focus of the LACCE Program will be the development and implementation of local energy
programs, including energy efficiency programs, distributed generation programs and other
energy programs responsive to community interests. These programs are likely to be phased in
during the first several years of operations. The implementation of such programs will follow the
identification of requisite funding sources.
The LACCE Authority will eventually administer energy efficiency, demand response and
distributed generation programs that can be used as cost-effective alternatives to procurement
of supply- resources. The LACCE Authority will attempt to consolidate existing demand side
programs into this organization and leverage the structure to expand energy efficiency offerings
CHAPTER 3 – Organizational Structure 11
LACCE Implementation Plan
to customers throughout its service territory, including the CPUC application process for third
party administration of energy efficiency programs and use of funds collected through the existing
public benefits surcharges paid by LACCE customers.
Governmental Affairs & General Counsel
The LACCE Program will require ongoing regulatory and legislative representation to manage
various regulatory compliance filings related to resource plans, resource adequacy, compliance
with California’s Renewables Portfolio Standard (“RPS”), and overall representation on issues that
will impact the LACCE Authority, its Members and customers. The LACCE Authority will maintain
an active role at the CPUC, the California Energy Commission, the California Independent System
Operator, the California legislature and, as necessary, the Federal Energy Regulatory Commission.
Under the direction of its General Counsel, the LACCE Authority may retain outside legal services,
as necessary, to administer the LACCE Authority, review contracts, and provide overall legal
support related to activities of the LACCE Program.
CHAPTER 4 – Startup Plan & Funding 12
LACCE Implementation Plan
This Chapter presents the LACCE Authority’s plans for the start-up period, including necessary
expenses and capital outlays. As described in the previous Chapter, the LACCE Authority may
utilize a mix of staff and contractors in its CCA Program implementation.
Startup Activities
The initial program startup activities include the following:
Hire staff and/or contractors to manage implementation
Identify qualified suppliers (of requisite energy products and related services) and
negotiate supplier contracts
Electric supplier and scheduling coordinator
Data management provider (if separate from energy supply)
Define and execute communications plan
Customer research/information gathering
Media campaign
Key customer/stakeholder outreach
Informational materials and customer notices
Customer call center
Post CCA bond and complete requisite registration requirements
Pay utility service initiation, notification and switching fees
Perform customer notification, opt-out and transfers
Conduct load forecasting
Establish rates
Legal and regulatory support
Financial management and reporting
Other costs related to starting up the LACCE Program will be the responsibility of the LACCE
Program’s contractors (and are assumed to be covered by any fees/charges imposed by such
contractors). These may include capital requirements needed for collateral/credit support for
electric supply expenses, customer information system costs, electronic data exchange system
costs, call center costs, and billing administration/settlements systems costs.
Staffing and Contract Services
Personnel in the form of LACCE staff or contractors will be added incrementally to match
workloads involved in forming the new organization, managing contracts, and initiating
customer outreach/marketing during the pre-operations period. During the startup period,
minimal personnel requirements would include an Executive Director, a General Counsel, and
CHAPTER 4 – Startup Plan & Funding
CHAPTER 4 – Startup Plan & Funding 13
LACCE Implementation Plan
other personnel needed to support regulatory, procurement, finance, and communications
activities.
For budgetary purposes, it is assumed that 5 to 10 full‑time equivalents (staff or contracted
professional services) supporting the above listed activities would be engaged during the initial
start‑up period. Following this period, additional staff and/or contractors will be retained, as
needed, to support the roll‑out of additional value‑added services (e.g., efficiency projects) and
local generation projects and programs.
Capital Requirements
The Start‑up of the CCA Program will require capital for three major functions: (1) staffing and
contractor costs; (2) deposits and reserves; and (3) working capital. Based on the LACCE
Authority’s anticipated start-up activities and phase-in schedule, a total need of nearly $50
million has been identified to support the aforementioned functions. The finance plan in Chapter
7 provides some additional detail regarding the LACCE Authority’s expected capital requirements
and general Program finances.
Related to the LACCE Authority’s initial capital requirement, this amount is expected to cover
staffing and contractor costs during startup and pre‑startup activities, including direct costs
related to public relations support, technical support, and customer communications. Requisite
deposits and operating reserves are also reflected in the initial capital requirement, including the
following items: 1) operating reserves to address anticipated cash flow variations (as well as
operating reserve deposits that will likely be required by the LACCE Authority’s power
supplier(s)); 2) requisite deposit with the California Independent System Operator prior to
commencing market operations; 3) CCA bond (posted with the CPUC); and 4) SCE service fee
deposit.
Operating revenues from sales of electricity will be remitted to the LACCE Authority beginning
approximately sixty days after the initial customer enrollments. This lag is due to the distribution
utility’s standard meter reading cycle of 30 days and a 30-day payment/collections cycle. The
LACCE Authority will need working capital to support electricity procurement and costs related
to program management, which is included in the LACCE Authority’s initial capital requirements.
Financing Plan
The LACCE Authority’s initial capital requirement will be provided via a $10 million loan from Los
Angeles County and conventional financing methods (e.g., bank loans and/or lines of credit);
subsumed in the initial capital requirement is the LACCE Authority’s initial start‑up funding ($10
million), which has been provided by LA County in accordance with the LACCE Authority’s JPA
Agreement – these amounts are to be repaid by the LACCE Authority no later than June 30, 2018.
For all other amounts borrowed, the LACCE Authority will make repayments (including any
interest, as applicable). The LACCE Authority will recover the principal and interest costs
associated with the start‑up funding via retail generation rates charged LACCE customers. It is
CHAPTER 4 – Startup Plan & Funding 14
LACCE Implementation Plan
anticipated that the start-up costs will be fully recovered through such customer generation rates
within the first several years of operations.
CHAPTER 5 – Program Phase-In 15
LACCE Implementation Plan
The LACCE Authority will roll out its service offering to customers over the course of three or more
phases:
Phase 1. LA County Municipal accounts
Phase 2. Municipal, Commercial and Industrial Customers in JPA service area
Phase 3. All Remaining Customers in JPA service area
This approach provides the LACCE Authority with the ability to initiate its program with sufficient
economic scale before building to full program integration for an expected customer base of
approximately 285,000 accounts, post customer opt-out. The LACCE Authority will offer service to
all customers on a phased basis, which is expected to be completed within 12 months of initial
service to Phase 1 customers.
Phase 1 of the Program is targeted to begin on or about January 15, 2018, subject to a decision to
proceed by the LACCE Authority. During Phase 1, the LACCE Authority anticipates serving
approximately 1,700 accounts, comprised of all LA County municipal accounts, totaling nearly 170
GWh of annual energy sales. Specific accounts to be included in Phase 1 will be approximately five
(5) percent of the LACCE Authority’s total customer load and will be specifically defined after
further analysis and consideration by the LACCE Authority.
Phase 2 of the Program will commence following successful operation of the LACCE Program over
an approximate six-month term, which corresponds with an expected Phase 2 service
commencement date occurring no later than June 2018. It is anticipated that approximately 25,000
additional customers, comprised of commercial and industrial customers, will be included in Phase
2, with annual energy consumption approximating 1,950 GWh, or fifty-five (55) percent of the
LACCE Authority’s total prospective customer load, inclusive of Phase 1. The LACCE Authority is
currently refining the potential composition of Phase 2 accounts in consideration of cost of service
and customer load characteristics as well as other operational considerations.
Following the successful completion of Phase 1 and Phase 2 customer enrollments, the LACCE
Authority will complete roll out to all remaining customers in Phase 3, which is currently expected
to occur no later than December 2018, subject to roll-out success of previous phases. This phase
is expected to include residential accounts within LACCE’s service territory as well as all agricultural
and street lighting accounts. Phase 3 will total approximately 285,000 accounts with annual energy
consumption of approximately 3,470 GWh, or one hundred (100) percent of LACCE’s current
prospective customer load, inclusive of Phases 1 and 2.
To the extent that additional customers require enrollment after the completion of Phase 3, the
LACCE Authority will evaluate a subsequent phase of CCA enrollment.
CHAPTER 5 – Program Phase‑In
CHAPTER 5 – Program Phase-In 16
LACCE Implementation Plan
The LACCE Authority may also evaluate other phase‑in options based on current market
conditions, statutory requirements and regulatory considerations as well as other factors
potentially affecting the integration of additional customer accounts.
CHAPTER 6 -- Load Forecast & Resource Plan 17
LACCE Implementation Plan
Introduction
This Chapter describes the planned mix of electric resources that will meet the energy demands
of the LACCE Authority customers using a diversified portfolio of electricity supplies. Several
overarching policies govern the resource plan and the ensuing resource procurement activities
that will be conducted in accordance with the plan. These key polices are as follows:
The LACCE Authority will seek to increase use of renewable energy resources and
distributed energy resources in order to reduce reliance on fossil‑fueled electric
generation for purposes of reducing electric sector GHG emissions.
The LACCE Authority will manage a diverse resource portfolio to increase control over
energy costs and maintain competitive and stable electric rates.
The LACCE Authority will apply for the administration of energy efficiency program
funding to help customers reduce energy costs through administration of enhanced
customer energy efficiency, distributed generation, and other demand reducing
programs.
The LACCE Authority will benefit the area’s economy through investment in local
infrastructure, energy projects and energy programs.
The LACCE Authority’s initial resource mix will include a proportion of renewable energy meeting
California’s prevailing RPS procurement mandate. As the LACCE Program moves forward,
incremental renewable supply additions will be made based on resource availability as well as
economic goals of the LACCE Program to achieve increased renewable energy content over time.
The LACCE Authority’s aggressive commitment to renewable generation adoption may involve
both direct investment in new renewable generating resources, partnerships with experienced
public power developers/operators and purchases of renewable energy from third party
suppliers.
The plan described in this section would accomplish the following:
Procure energy through one or more contracts with experienced, financially stable energy
suppliers sufficient to offer three distinct generation rate tariffs: 1) 100 percent renewable
energy; 2) 50 percent renewable energy; and 3) a LACCE service option that includes a
proportion of renewable energy meeting California’s prevailing renewable energy
procurement mandate.
Member agencies will choose the default option into which their customers will be enrolled
when service begins. After enrollment, customers will be allowed to participate in any of
the three available energy supply options.
CHAPTER 6 – Load Forecast & Resource Plan
CHAPTER 6 -- Load Forecast & Resource Plan 18
LACCE Implementation Plan
Continue increasing renewable energy supplies over time to meet or exceed state
mandates, subject to resource availability and economic viability.
Actively pursue energy efficiency projects and programs using program revenues, in
collaboration with the other efficiency program administrators in the region.
Additionally, if LACCE is successful in applying for administration of public funding to
support locally administered efficiency programs, it will even more robustly work to
reduce net electricity purchases within the region.
Encourage distributed renewable generation in the local area through the offering of a net energy
metering tariff; a standardized power purchase agreement or “Feed‑In Tariff”; and other creative,
customer‑focused programs targeting increased access to local renewable energy sources.
The LACCE Authority will comply with regulatory rules applicable to California load serving
entities. The LACCE Authority will arrange for the scheduling of sufficient electric supplies to meet
the demands of its customers. The LACCE Authority will adhere to capacity reserve requirements
established by the CPUC and the CAISO designed to address uncertainty in load forecasts and
potential supply disruptions caused by generator outages and/or transmission contingencies.
These rules also ensure that physical generation capacity is in place to serve LACCE’s customers,
even if there were a need for the LACCE Program to cease operations and return customers to
SCE. In addition, the LACCE Authority will be responsible for ensuring that its resource mix
contains sufficient production from renewable energy resources needed to comply with the
statewide RPS (33 percent renewable energy by 2020, increasing to 50 percent by 2030). The
resource plan will meet or exceed all of the applicable regulatory requirements related to
resource adequacy and the RPS.
Resource Plan Overview
To meet the aforementioned objectives and satisfy the applicable regulatory requirements
pertaining to the LACCE Authority’s status as a California load serving entity, the LACCE Authority’s
resource plan includes a diverse mix of power purchases, renewable energy, distributed energy,
new energy efficiency programs, demand response, and distributed generation. A diversified
resource plan minimizes risk and volatility that can occur from over‑reliance on a single resource
type or fuel source, and thus increases the likelihood of rate stability. The ultimate goal of the
LACCE Authority’s resource plan is to reduce electric sector GHG emissions while offering
competitive generation rates to participating customers. The planned power supply is initially
comprised of power purchases from third party electric suppliers and, in the longer‑term, may
also include renewable generation assets owned and/or controlled by the LACCE Authority.
Once the LACCE Program demonstrates it can operate successfully, the LACCE Authority may
begin evaluating opportunities for investment in renewable generating assets, subject to then‑
current market conditions, statutory requirements and regulatory considerations. Any renewable
CHAPTER 6 -- Load Forecast & Resource Plan 19
LACCE Implementation Plan
generation owned by the LACCE Authority or controlled under long‑term power purchase
agreement with a proven public power developer, could provide a portion of the LACCE
Authority’s electricity requirements on a cost‑of‑service basis. Depending upon market
conditions and, importantly, the applicability of tax incentives for renewable energy
development, electricity purchased under a cost‑of‑service arrangement can be more cost‑
effective than purchasing renewable energy from third party developers, which will allow the
LACCE Program to pass on cost savings to its customers through competitive generation rates.
Any investment decisions will be made following thorough environmental reviews and in
consultation with qualified financial and legal advisors.
As an alternative to direct investment, the LACCE Authority may consider partnering with an
experienced public power developer and could enter into a long‑term (20‑to‑30 year) power
purchase agreement that would support the development of new renewable generating capacity.
Such an arrangement could be structured to reduce the LACCE Program’s operational risk
associated with capacity ownership while providing its customers with all renewable energy
generated by the facility under contract. This option may be preferable to the LACCE Authority as
it works to achieve increasing levels of renewable energy supply to its customers.
The LACCE Authority’s resource plan will integrate supply-side resources with programs that will
help customers reduce their energy costs through improved energy efficiency and other demand-
side measures. As part of its integrated resource plan, the LACCE Authority will actively pursue,
promote and ultimately administer a variety of customer energy efficiency programs that can
cost- effectively displace supply‑side resources.
The LACCE Authority’s indicative resource plan for the years 2018 through 2027 is summarized in
the following table. Note that the LACCE Authority’s projections reflect a portfolio mix of 60%
renewable resources and 40% conventional resources for Phase 1. Subject to the availability of
funds, a sizable percentage of the conventional resources reflected in the following table will be
replaced with GHG‑free resources.
CHAPTER 6 -- Load Forecast & Resource Plan 20
LACCE Implementation Plan
Table 1
Los Angeles Community Choice Energy
Proposed Resource Plan (GWh)
2018 to 2027
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
LACCE Demand
Retail Demand 1,419 3,465 3,472 3,479 3,486 3,493 3,500 3,507 3,514 3,521
Dist. Gen 0 0 0 0 0 0 0 0 0 0
Energy Efficiency 0 0 0 0 0 0 0 0 0 0
Losses and UFE 92 225 226 226 226 227 227 228 228 229
TOTAL DEMAND 1,511 3,690 3,698 3,705 3,712 3,720 3,727 3,735 3,742 3,750
LACCE Supply
Total Renewable Resources 907 1,845 1,849 1,853 1,856 1,860 1,864 1,868 1,871 1,875
Total Conventional Resources 604 1,845 1,849 1,853 1,856 1,860 1,864 1,868 1,871 1,875
TOTAL SUPPLY 1,511 3,690 3,698 3,705 3,712 3,720 3,727 3,735 3,742 3,750
Energy Open Position 0 0 0 0 0 0 0 0 0 0
Supply Requirements
The starting point for the LACCE Authority’s resource plan is a projection of participating
customers and associated electric consumption. Projected electric consumption is evaluated on
an hourly basis, and matched with resources best suited to serving the aggregate of hourly
demands or the program’s “load profile”. The electric sales forecast and load profile will be
affected by the LACCE Authority’s plan to introduce the LACCE Program to customers in phases
and the degree to which customers choose to remain with SCE during the customer enrollment
and opt-out periods. The LACCE Authority’s phased roll-out plan and assumptions regarding
customer participation rates are discussed below.
Customer Participation Rates
Customers will be automatically enrolled in the LACCE Program unless they opt-out during the
customer notification process conducted during the 60-day period prior to enrollment and
continuing through the 60-day period following commencement of service. For the first phase, LA
County municipal accounts, the LACCE Authority anticipates a 100% participation rate. For
subsequent phases, the LACCE Authority anticipates an overall customer participation rate of
approximately 90 percent of SCE bundled service customers, based on reported opt-out rates for
the Marin Clean Energy, Sonoma Clean Power and Lancaster Choice Energy CCA programs. It is
assumed that customers taking direct access service from a competitive electricity provider will
continue to remain with their current supplier.
CHAPTER 6 -- Load Forecast & Resource Plan 21
LACCE Implementation Plan
The participation rate is not expected to vary significantly among customer classes, in part due to
the fact that the LACCE Authority will offer three distinct rate tariffs that will address the needs
of cost- sensitive customers as well as the needs of both residential and business customers that
prefer a highly renewable energy product. The assumed participation rates will be refined as the
LACCE Authority’s public outreach and market research efforts continue to develop.
Customer Forecast
Once customers enroll in each phase, they will be switched over to service by the LACCE Authority
on their regularly scheduled meter read date over an approximately thirty-day period.
Approximately 58 service accounts per day will be switched over during the first month of service.
For Phase 2, the number of accounts switched over to LACCE service will increase to about 820
accounts per day. For Phase 3, the number of accounts switched over to LACCE service will
increase again to about 8,400 accounts per day. The number of accounts served by the LACCE
Authority at the end of each phase is shown in the table below.
Table 2
Los Angeles Community Choice Energy
Enrolled Retail Service Accounts
Phase-In Period (End of Month)
Jan-18 Jun-18 Dec-18
LACCE Customers Eligible Accounts Phase 1 Phase 2 Phase 3
Residential 289,205 43 43 252,369
Small Commercial 23,865 746 20,163 20,746
Medium Commercial 4,165 167 3,612 3,612
Large Commercial 305 17 261 267
Industrial 136 10 115 118
Street Lighting & Traffic 1,276 690 1,255 1,276
Agricultural & Pumping 972 64 852 852
Total 319,925 1,738 26,302 279,241
The LACCE Authority assumes that customer growth will generally offset customer attrition (opt-
outs) over time, resulting in a relatively stable customer base (0.2% annual growth) over the noted
planning horizon. While the successful operating track record of California CCA programs
continues to grow, there is a relatively short history with regard to CCA operations in SCE service
area, which makes it fairly difficult to anticipate the actual levels of customer participation within
the LACCE Program. The LACCE Authority believes that its assumptions regarding the offsetting
effects of growth and attrition are reasonable in consideration of the historical customer growth
within Los Angeles County and the potential for continuing customer opt‑outs following
mandatory customer notification periods. The forecast of service accounts (customers) served by
LACCE for each of the next ten years is shown in the following table:
CHAPTER 6 -- Load Forecast & Resource Plan 22
LACCE Implementation Plan
Table 3
Los Angeles Community Choice Energy
Retail Service Accounts (End of Year)
2018 to 2027
LACCE Customers
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Residential 252,369 258,820 259,337 259,856 260,376 260,896 261,418 261,941 262,465 262,990
Small Commercial 20,746 21,235 21,278 21,320 21,363 21,406 21,449 21,491 21,534 21,578
Medium Commercial 3,612 3,619 3,627 3,634 3,641 3,649 3,656 3,663 3,670 3,678
Large Commercial 267 269 270 270 271 271 272 272 273 273
Industrial 118 125 125 125 126 126 126 126 127 127
Street Lighting & Traffic 1,276 1,277 1,280 1,282 1,285 1,287 1,290 1,293 1,295 1,298
Agricultural & Pumping 852 860 861 863 865 867 868 870 872 873
Total 279,241 286,205 286,778 287,351 287,926 288,502 289,079 289,657 290,236 290,817
Sales Forecast
The LACCE Authority’s forecast of kWh sales reflects the roll-out and customer enrollment schedule
shown above. Annual energy requirements are shown below.
Table 4
Los Angeles Community Choice Energy
Annual Energy Requirements (GWh)
2018 to 2027
LACCE Energy Req.
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Retail Energy 1,419 3,465 3,472 3,479 3,486 3,493 3,500 3,507 3,514 3,521
Losses and UFE 92 225 226 226 226 227 227 228 228 229
Total Load Requirement 1,511 3,690 3,698 3,705 3,712 3,720 3,727 3,735 3,742 3,750
Capacity Requirements
The CPUC’s resource adequacy standards applicable to the LACCE Program require a demonstration
one year in advance that LACCE has secured physical capacity for 90 percent of its projected peak
loads for each of the five months May through September, plus a minimum 15 percent reserve
margin. On a month-ahead basis, LACCE must demonstrate 100 percent of the peak load plus a
minimum 15 percent reserve margin.
A portion of the LACCE Authority’s capacity requirements must be procured locally, from the Greater
LA area as defined by the CAISO and another portion must be procured from local reliability areas
outside the Greater LA Area. The LACCE Authority would be required to demonstrate its local
CHAPTER 6 -- Load Forecast & Resource Plan 23
LACCE Implementation Plan
capacity requirement for each month of the following calendar year. The local capacity requirement
is a percentage of the total (SCE service area) local capacity requirements adopted by the CPUC
based on the LACCE Authority’s forecasted peak load. The LACCE Authority must demonstrate
compliance or request a waiver from the CPUC requirement as provided for in cases where local
capacity is not available.
The LACCE Authority is also required to demonstrate that a specified portion of its capacity meets
certain operational flexibility requirements under the CPUC and CAISO’s flexible resource adequacy
framework. The estimated forward resource adequacy requirements for 2018 through 2020 are
shown in the following tables3:
Table 5
Los Angeles Community Choice Energy
Forward Capacity and Reserve Requirements (MW)
2018 to 2020
Month 2018 2019 2020
January 33 676 678
February 35 535 509
March 35 645 646
April 38 717 719
May 37 610 611
June 39 750 752
July 831 837 838
August 868 875 876
September 973 982 984
October 892 893 895
November 543 544 545
December 696 698 699
The LACCE Authority’s plan ensures that sufficient reserves will be procured to meet its peak load
at all times. The LACCE Authority’s projected annual capacity requirements are shown in the
following table:
3 The figures shown are estimates. The LACCE Authority’s resource adequacy requirements will be subject to modification due to
application of certain coincidence adjustments and resource allocations relating to utility demand response and energy efficiency programs, as well as generation capacity allocated through the Cost Allocation Mechanism. These adjustments are addressed through
the CPUC’s resource adequacy compliance process.
CHAPTER 6 -- Load Forecast & Resource Plan 24
LACCE Implementation Plan
Table 6
Los Angeles Community Choice Energy
Capacity Requirements (MW)
2018 to 2027
Demand (MW) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Retail Demand 973 982 984 984 986 987 989 991 993 995
Losses and UFE 0 0 0 0 0 0 0 0 0 0
Total Net Peak Demand 973 982 984 984 986 987 989 991 993 995
Reserve Requirement (%) 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
Capacity Reserve Requirement 146 147 148 148 148 148 148 149 149 149
Capacity Requirement Including Reserve 1,119 1,129 1,131 1,131 1,133 1,136 1,138 1,140 1,142 1,145
Local capacity requirements are a function of the SCE area resource adequacy requirements and the
LACCE Authority’s projected peak demand. The LACCE Authority will need to work with the CPUC’s
Energy Division and staff at the California Energy Commission to obtain the data necessary to
calculate its monthly local capacity requirement. A preliminary estimate of the LACCE Authority’s
annual local capacity requirement for the ten-year planning period ranges from approximately 399
MW to 409 MW as shown in the following table:
Table 7
Los Angeles Community Choice Energy
Local Capacity Requirements (MW)
2018 to 2027
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
LACE Peak 973 982 984 984 986 987 989 991 993 995
Local Capacity Req. (% of Peak) 41% 41% 41% 41% 41% 41% 41% 41% 41% 41%
LA Basin Share of Local Capacity 76% 76% 76% 76% 76% 76% 76% 76% 76% 76%
Other SCE Areas (Big Creek/Ventura)
Share of Local Capacity 24% 24% 24% 24% 24% 24% 24% 24% 24% 24%
LACCE Local Capacity Req., LA Basin 305 308 308 308 309 309 310 311 311 312
LACCE Local Capacity Req., Other SCE 94 95 95 95 95 95 96 96 96 96
LACCE Local Capacity Req., Total 399 402 403 403 404 405 406 406 407 408
The CPUC assigns local capacity requirements during the year prior to the compliance period;
thereafter, the CPUC provides local capacity requirement true-ups for the second half of each
compliance year.
CHAPTER 6 -- Load Forecast & Resource Plan 25
LACCE Implementation Plan
The LACCE Authority will coordinate with SCE and appropriate state agencies to manage the
transition of responsibility for resource adequacy from SCE to the LACCE Authority during CCA
program phase-in. For system resource adequacy requirements, the LACCE Authority will make
month-ahead showings for each month that the LACCE Authority plans to serve load, and load
migration issues would be addressed through the CPUC’s approved procedures. The LACCE
Authority will work with the California Energy Commission and CPUC prior to commencing service
to customers to ensure it meets its local and system resource adequacy obligations through its
agreement(s) with its chosen electric supplier(s).
Renewables Portfolio Standards Energy Requirements
Basic RPS Requirements
As a CCA, the LACCE Authority will be required by law and ensuing CPUC regulations to procure a
certain minimum percentage of its retail electricity sales from qualified renewable energy resources.
For purposes of determining the LACCE Authority’s renewable energy requirements, the same
standards for RPS compliance that are applicable to the distribution utilities are assumed to apply
to the LACCE Authority.
California’s RPS program is currently undergoing reform. On October 7, 2015, Governor Brown
signed Senate Bill 350 (“SB 350”; De Leon and Leno), the Clean Energy and Pollution Reduction Act
of 2015, which increased California’s RPS procurement target from 33 percent by 2020 to 50 percent
by 2030 amongst other clean-energy initiatives. Many details related to SB 350 implementation will
be developed over time with oversight by designated regulatory agencies. However, it is reasonable
to assume that interim annual renewable energy procurement targets will be imposed on CCAs and
other retail electricity sellers to facilitate progress towards the 50 percent procurement mandate –
for planning purposes, the LACCE Authority has assumed straight-line annual increases (1.7 percent
per year) to the RPS procurement target beginning in 2021, as the state advances on the 50 percent
RPS. The LACCE Authority will also adopt an integrated resource plan in compliance with SB 350 –
the LACCE Authority understands that various details related to this planning requirement have yet
to be developed, and the LACCE Authority intends to monitor and participate, as appropriate, in
pertinent proceedings to promote the preparation and submittal of a responsive planning
document. Furthermore, the LACCE Authority will ensure that all long-term renewable energy
contracting requirements, as imposed by SB 350, will be satisfied through appropriate transactions
with qualified suppliers and will also reflect this intent in ongoing resource planning and
procurement efforts.
The LACCE Authority’s Renewables Portfolio Standards Requirement
The LACCE Authority’s annual RPS procurement requirements, as specified under California’s RPS
program, are shown in the table below. When reviewing this table, it is important to note that the
LACCE Authority projects increases in energy efficiency savings as well as increases in locally situated
CHAPTER 6 -- Load Forecast & Resource Plan 26
LACCE Implementation Plan
distributed generation capacity, resulting in only a slight upward trend in projected retail electricity
sales.
Table 8
Los Angeles Community Choice Energy
RPS Requirements (GWh)
2018 to 2027
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Retail Sales 1,419 3,465 3,472 3,479 3,486 3,493 3,500 3,507 3,514 3,521
Baseline 355 1,005 1,146 1,209 1,272 1,336 1,400 1,461 1,523 1,584
% of Current Year Retail Sales* 25% 29% 33% 35% 37% 38% 40% 42% 43% 45%
*Note: Specific details related to SB 350 implementation have yet to be identified. For purposes of this table, the LACCE Authority
assumed a straight-line increase from California’s 33 percent RPS procurement mandate in 2020 to California’s new, 50 percent RPS
procurement mandate in 2030. The LACCE Authority may choose to accelerate this schedule in the future.
Purchased Power
Power purchased from power marketers, public agencies, generators, and/or utilities will be a
significant source of supply during the first several years of LACCE Program operation. The LACCE
Authority will initially contract to obtain all of its electricity from one or more third party electric
providers under one or more power supply agreements, and the supplier(s) will be responsible for
procuring the specified resource mix, including the LACCE Authority’s desired quantities of
renewable energy, to provide a stable and cost-effective resource portfolio for the Program.
Renewable Resources
the LACCE Authority will initially secure necessary renewable power supply from its third party
electric supplier(s). The LACCE Authority may supplement the renewable energy provided under
the initial power supply contract(s) with direct purchases of renewable energy from renewable
energy facilities or from renewable generation developed and owned by the LACCE Authority. At
this point in time, it is not possible to predict what projects might be proposed in response to future
renewable energy solicitations administered by the LACCE Authority, unsolicited proposals or
discussions with other agencies. Renewable projects that are located virtually anywhere in the
Western Interconnection can be considered as long as the electricity is deliverable to the CAISO
control area, as required to meet the Commission’s RPS rules and any additional guidelines
ultimately adopted by the LACCE Authority. The costs of transmission access and the risk of
transmission congestion costs would need to be considered in the bid evaluation process if the
delivery point is outside of the LACCE Authority’s load zone, as defined by the CAISO.
Energy Efficiency
The LACCE Authority’s energy efficiency goals will reflect a strong commitment to increasing energy
efficiency within the County, expanding beyond the savings achieved by SCE’s programs. To promote
the achievement of this goal, the LACCE Authority plans to complete the CPUC application process
CHAPTER 6 -- Load Forecast & Resource Plan 27
LACCE Implementation Plan
for third party administration of energy efficiency programs and use of funds collected through the
existing public benefits surcharges paid by LACCE customers. To the extent that the LACCE Authority
is successful in this application process, receiving funding to administer additional energy efficiency
programs within the region, it will seek to maximize end-use customer energy efficiency by
facilitating customer participation in existing utility programs as well as by forming new programs
that will displace the LACCE Authority’s need for traditional electric procurement activities.
Additional details related to the LACCE Authority’s energy efficiency plan will be developed once
LACCE Program phase-in is underway.
Demand Response
Demand response programs provide incentives to customers to reduce demand upon request by
the load serving entity (i.e., the LACCE Authority), reducing the amount of generation capacity that
must be maintained as infrequently used reserves. Demand response programs can be cost effective
alternatives to procured capacity that would otherwise be needed to comply with California’s
resource adequacy requirements. The programs also provide rate benefits to customers who have
the flexibility to reduce or shift consumption for relatively short periods of time when generation
capacity is most scarce. Like energy efficiency, demand response can be a win/win proposition,
providing economic benefits to the electric supplier as well as customer service benefits.
In its ruling on local resource adequacy, the CPUC found that dispatchable demand response
resources as well as distributed generation resources should be counted for local capacity
requirements. This resource plan anticipates that the LACCE Authority’s demand response programs
would partially offset its local capacity requirements beginning in 2020.
SCE offers several demand response programs to its customers, and the LACCE Authority intends to
recruit those customers that have shown a willingness to participate in utility programs into similar
programs offered by the LACCE Authority. The LACCE Authority may also adopt a demand response
program that enables it to request customer demand reductions during times when capacity is in
short supply or spot market energy costs are exceptionally high.
Appropriate limits on customer curtailments, both in terms of the length of individual curtailments
and the total number of curtailment hours that can be called should be included in the LACCE
Authority’s demand response program design. It will also be important to establish a reasonable
measurement protocol for customer performance of its curtailment obligations and deploy
technology to automate customer notifications and responses. Performance measurement should
include establishing a customer specific baseline of usage prior to the curtailment request from
which demand reductions can be measured. The LACCE Authority may utilize experienced third
party contractors to design, implement and administer its demand response programs.
Distributed Generation
Consistent with the LACCE Authority’s policies and the state’s Energy Action Plan, clean distributed
generation is a component of the integrated resource plan. The LACCE Authority will work to
promote deployment of photovoltaic (PV) systems within the LACCE Authority’s service territory,
CHAPTER 6 -- Load Forecast & Resource Plan 28
LACCE Implementation Plan
with the goal of optimizing the use of the available incentives that are funded through current utility
distribution rates and public benefits surcharges. The LACCE Authority also plans to implement a
net energy metering program and a feed-in-tariff to promote local investment in distributed
generation.
There are clear environmental benefits and strong customer interest in distributed PV systems. To
support such systems, the LACCE Authority may provide direct financial incentives from revenues
funded by customer rates to further support use of solar power and/or other renewable resources
within the local area. With regard to the LACCE Authority’s prospective net energy metering
program, it is anticipated that the LACCE Authority would eventually adopt a program that would
allow participating customers to sell excess energy produced by customer-sited renewable
generating sources to the LACCE Authority. Such a program would be generally consistent with
principles identified in Assembly Bill 920 (“AB 920”), which directed the CPUC to establish and
implement a compensation methodology for surplus renewable generation produced by net energy
metered facilities located within the service territories of California’s large investor owned utilities,
including SCE. However, the LACCE Authority may choose to offer enhanced compensation
structures, relative to those implemented as a result of AB 920, as part of the direct incentives that
may be established to promote distributed generation development within LA County. To the extent
that incentives offered by the LACCE Authority improve project economics for its customers, it is
reasonable to assume that the penetration of distributed generation within the County would
increase.
CHAPTER 7 – Financial Plan 29
LACCE Implementation Plan
This Chapter examines the monthly cash flows expected during the startup and customer phase-
in period of the LACCE Program and identifies the anticipated financing requirements. It includes
estimates of program startup costs, including necessary expenses and capital outlays. It also
describes the requirements for working capital and long-term financing for the potential
investment in renewable generation, consistent with the resource plan contained in Chapter 6.
Description of Cash Flow Analysis
The LACCE Authority’s cash flow analysis estimates the level of capital that will be required during
the startup and phase-in period. The analysis focuses on the LACCE Program’s monthly costs and
revenues and specifically accounts for the phased enrollment of LACCE Program customers
described in Chapter 5.
Cost of CCA Program Operations
The first category of the cash flow analysis is the Cost of CCA Program Operations. To estimate the
overall costs associated with CCA Program Operations, the following components were taken into
consideration:
Electricity Procurement;
Ancillary Service Requirements;
Grid Management and other CAISO Charges;
Scheduling Coordination;
Exit Fees;
Staffing and Professional Services;
Data Management Costs;
Administrative Overhead;
Billing Costs;
CCA Bond and Security Deposit;
Pre-Startup Cost; and
Debt Service.
Revenues from CCA Program Operations
The cash flow analysis also provides estimates for revenues generated from CCA operations or
from electricity sales to customers. In determining the level of revenues, the analysis assumes the
customer phase-in schedule described herein, and assumes that the LACCE Authority charges a
standard, default electricity tariff similar to the generation rates of SCE for each customer class, an
optional 50% renewable energy tariff, and an optional 100% renewable energy tariff, both at a
CHAPTER 7 – Financial Plan
CHAPTER 7 – Financial Plan 30
LACCE Implementation Plan
premium reflective of incremental renewable power costs. More detail on LACCE Program rates
can be found in Chapter 8.
Cash Flow Analysis Results
The results of the cash flow analysis provide an estimate of the level of capital required for the
LACCE Authority to move through the CCA startup and phase-in periods. This estimated level of
capital is determined by examining the monthly cumulative net cash flows (revenues from CCA
operations minus cost of CCA operations) based on assumptions for payment of costs or other cash
requirements (e.g., deposits) by the LACCE Authority, along with estimates for when customer
payments will be received. This identifies, on a monthly basis, what level of cash flow is available
in terms of a surplus or deficit.
The cash flow analysis identifies funding requirements in recognition of the potential lag between
revenues received and payments made during the phase-in period. The estimated financing
requirements for the startup and phase-in period, including working capital needs associated with
all three phases of customer enrollments, was determined to be $50 million. Working capital
requirements peak soon after enrollment of the Phase 3 customers.
CCA Program Implementation Pro Forma
In addition to developing a cash flow analysis which estimates the level of working capital required
to move the LACCE Authority through full CCA phase-in, a summary pro forma analysis that
evaluates the financial performance of the CCA program during the phase-in period is shown
below. The difference between the cash flow analysis and the CCA pro forma analysis is that the
pro forma analysis does not include a lag associated with payment streams. In essence, costs and
revenues are reflected in the month in which service is provided. All other items, such as costs
associated with CCA Program operations and rates charged to customers remain the same. Cash
provided by financing activities are not shown in the pro forma analysis, although payments for
debt service are included as a cost item.
The results of the pro forma analysis are shown in the following tables. In particular, the summary
of CCA program startup and phase-in addresses projected LACCE Program operations for the
period beginning January 2018 through December 20274. The LACCE Authority has also included
a summary of Program reserves, which are expected to accrue over this same period of time.
4 Costs projected for staffing & professional services and other administrative & general relate to energy procurement, administration of energy
efficiency and other local programs, generation development, customer service, marketing, accounting, finance, legal and regulatory activities
necessary for program operation.
31
LACCE Implementation Plan
Table 9
Los Angeles Community Choice Energy
Summary of CCA Program Start-Up and Phase-In
2018 to 2027
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total
Revenue from Operations ($)
Electric Sales Rev $92,221,765 $241,139,907 $250,468,101 $255,504,930 $261,959,532 $248,317,287 $252,171,999 $255,098,549 $258,137,112 $261,649,544 $2,376,668,726
Less Uncollected Accounts $313,493 $780,022 $794,019 $808,982 $823,767 $840,351 $856,868 $873,511 $890,743 $908,919 $7,890,675
Total Revenues $91,908,272 $240,359,885 $249,674,082 $254,695,948 $261,135,765 $247,476,936 $251,315,132 $254,225,037 $257,246,369 $260,740,624 $2,368,778,051
Cost of Operations ($)
Cost of Energy $58,998,601 $141,702,746 $144,477,974 $147,395,157 $150,275,362 $153,514,114 $156,737,900 $159,985,849 $163,349,876 $166,901,511 $1,443,339,091
PCIA $25,429,976 $64,949,044 $89,025,139 $87,930,395 $86,876,842 $66,506,721 $64,870,294 $63,881,825 $62,873,862 $61,719,692 $674,063,791
Operating & Administrative
Billing & Data Management $600,172 $4,357,019 $4,365,733 $4,374,465 $4,383,214 $4,391,980 $4,400,764 $4,409,566 $4,418,385 $4,427,222 $40,128,519
SCE Fees $784,730 $1,429,214 $1,432,072 $1,434,936 $1,437,805 $1,440,681 $1,443,562 $1,446,449 $1,449,341 $1,452,240 $13,751,029
Tech. Services $580,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 $10,930,000
Staffing $1,135,000 $2,825,400 $2,881,908 $2,939,546 $2,998,337 $3,058,304 $3,119,470 $3,181,859 $3,245,496 $3,310,406 $28,695,727
G&A Exp. $600,000 $356,000 $312,120 $318,362 $324,730 $331,224 $337,849 $344,606 $351,498 $358,528 $3,634,916
Debt Service $0 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $37,655,699
Total O&A Costs $3,699,902 $14,301,599 $14,325,800 $14,401,276 $14,478,052 $14,556,155 $14,635,611 $14,716,446 $14,798,687 $14,882,362 $134,795,890
Operating Reserves $3,761,910 $10,920,304 $11,116,264 $11,325,750 $11,532,739 $11,764,919 $11,996,146 $12,229,161 $12,470,399 $12,724,871 $109,842,464
New Programs Funding $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost & Reserves $91,890,390 $231,873,694 $258,945,177 $261,052,578 $263,162,995 $246,341,910 $248,239,951 $250,813,281 $253,492,825 $256,228,436 $2,362,041,236
CCA Program Surplus/(Deficit) $17,882 $8,486,191 ($9,271,095) ($6,356,629) ($2,027,230) $1,135,026 $3,075,181 $3,411,757 $3,753,545 $4,512,188 $6,736,816
32
LACCE Implementation Plan
Table 10
Los Angeles Community Choice Energy
Reserves Summary
2018 to 2027
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total
Reserve Additions
Operating Reserve Contr. $3,779,793 $19,406,495 $1,845,170 $4,969,121 $9,505,509 $12,899,945 $15,071,327 $15,640,918 $16,223,944 $17,237,059 $116,579,279
Cash from Financing $50,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $50,000,000
Total Additions $53,779,793 $19,406,495 $1,845,170 $4,969,121 $9,505,509 $12,899,945 $15,071,327 $15,640,918 $16,223,944 $17,237,059 $166,579,279
Reserves Outlays
Start-Up Funding Payments $10,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000,000
Working Capital Repayment $0 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $37,655,699
New Programs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Reserve Outlays $10,000,000 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $4,183,967 $47,655,699
Rate Stabilization Reserve Balance $43,779,793 $59,002,321 $56,663,524 $57,448,679 $62,770,221 $71,486,199 $82,373,559 $93,830,510 $105,870,488 $118,923,581
CHAPTER 7 – Financial Plan 33
LACCE Implementation Plan
The surpluses achieved during the phase-in period serve to build the LACCE Authority’s net
financial position and credit profile and to provide operating reserves for the LACCE Authority in
the event that operating costs (such as power purchase costs) exceed collected revenues for short
periods of time. In addition, financial surpluses could be used to increase renewable and GHG-free
resources within the LACCE Authority’s resource mix.
The LACCE Authority Financings
It is anticipated that one or more financings, inclusive of prospective direct term loans between
the LACCE Authority and its Member Agencies, will be necessary to support LACCE Program
implementation. Subsequent capital requirements will be self-funded from the LACCE Authority’s
accrued financial reserves. The anticipated financing approach is described below.
CCA Program Start-up and Working Capital
As previously discussed, the anticipated start-up and working capital requirements for the LACCE
Program are $50 million. This amount is dependent upon the electric load served by the LACCE
Authority, actual energy prices, payment terms established with the third-party supplier, and
program rates. This figure would be refined during the startup period as these variables become
known. Once the LACCE Program is up and running, these costs would be recovered from
customers through retail rates.
LA County will provide $10 million in initial funding for start-up and phase 1 costs. LACCE currently
projects repaying this interest free loan within the first year of operations, subject to change
based on final power prices. It is assumed that the remaining financing will be primarily secured
via a short-term loan or letter of credit, which would allow the LACCE Authority to draw cash as
required. It is assumed that the remaining financing will be primarily secured via a short-term
loan or letter of credit, which would allow the LACCE Authority to draw cash as required. Requisite
financing would need to be arranged no later than the fourth quarter of 2017.
Renewable Resource Project Financing
The LACCE Authority may consider project financings for renewable resources, likely local wind,
solar, biomass and/or geothermal as well as energy efficiency projects. These financings would
only occur after a sustained period of successful LACCE Program operation and after appropriate
project opportunities are identified and subjected to appropriate environmental review. The
LACCE Authority’s ability to directly finance projects will likely require a track record of five to ten
years of successful program operations demonstrating strong underlying credit to support the
financing; direct financing undertaken by the LACCE Authority would not be expected to occur
sooner than 2023.
In the event that such financing occurs, funds would include any short-term financing for the
renewable resource project development costs, and would likely extend over a 20- to 30-year
term. The security for such bonds would be the revenue from sales to the retail customers of
LACCE.
CHAPTER 8 – Rate Setting, Program Terms and Conditions 34
LACCE Implementation Plan
Introduction
This Chapter describes the initial policies proposed for the LACCE Authority in setting its rates for
electric aggregation services. These include policies regarding rate design, rate objectives, and
provision for due process in setting Program rates. Program rates are ultimately approved by the
LACCE Authority’s Board. The LACCE Authority would retain Authority to modify program policies
from time to time at its discretion.
Rate Policies
The LACCE Authority will establish rates sufficient to recover all costs related to operation of the
LACCE Program, including any reserves that may be required as a condition of financing and other
discretionary reserve funds that may be approved by the LACCE Authority. As a general policy,
rates will be uniform for all similarly situated customers enrolled in the LACCE Program throughout
the service area of the LACCE Authority.
The primary objectives of the rate setting plan are to set rates that achieve the following:
Rate competitive tariff option including a proportionate quantity of renewable energy
meeting California’s prevailing renewable energy procurement mandate;
50 percent renewable energy supply option
100 percent renewable energy supply option
Allow individual member agencies to choose the default energy supply option into
which their customers will be enrolled
Allow customers to participate in any of the three energy supply options after
enrollment
Rate stability;
Equity among customers in each tariff;
Customer understanding; and
Revenue sufficiency.
Each of these objectives is described below.
Rate Competitiveness
The LACCE Authority’s primary goal is to offer its customers competitive rates for electric services
relative to the incumbent utility SCE. As planned, the value provided by the LACCE Program will
also include options for a higher proportion of renewable energy and reduced GHG emissions
relative to the incumbent utility, enhanced energy efficiency and customer programs, community
focus, local investment and control. The LACCE Authority currently plans to offer customers rates
matching SCE’s during Phase 1, and to target lower rates in subsequent phases, subject to final
power price bids.
CHAPTER 8 – Rate Setting, Program Terms and Conditions
CHAPTER 8 – Rate Setting, Program Terms and Conditions 35
LACCE Implementation Plan
As previously discussed, the LACCE Program will increase renewable energy supply to program
customers, relative to the incumbent utility, by offering three distinct rate tariffs. The initial
renewable energy content provided under the LACCE Authority’s base Tariff will meet California’s
prevailing renewable energy procurement mandate, and the LACCE Authority will endeavor to
increase this percentage on a going forward basis, subject to operational and economic
constraints. The LACCE Authority will also offer its customers a 50% and 100% renewable energy
Tariff, which will supply participating customers with either 50 percent or 100 percent renewable
energy at rates that reflect the LACCE Authority’s cost for procuring related energy supplies.
Participating qualified low- or fixed-income households, such as those currently enrolled in the
California Alternate Rates for Energy (CARE) program, will be automatically enrolled in the
standard Tariff and will continue to receive related discounts on monthly electricity bills through
SCE.
Rate Stability
The LACCE Authority will offer stable rates by hedging its supply costs over multiple time horizons
and by including renewable energy supplies that exhibit stable costs. Rate stability considerations
may prevent LACCE Program rates from directly tracking similar rates offered by the distribution
utility, SCE, and may result in differences from the general rate‑related targets initially established
for the LACCE Program. The LACCE Authority will attempt to maintain general rate parity with SCE
to ensure that LACCE Program rates are not drastically different from the competitive alternative.
Equity among Customer Classes
The LACCE Authority’s initial rates will be set at a discount to the rates offered by SCE, subject to
final power price bids. The level of the discount will depend upon the default product chosen by
the Member Agency. Rate differences among customer classes will reflect the rates charged by
the local distribution utility as well as differences in the costs of providing service to each class.
Rate benefits may also vary among customers within the major customer class categories,
depending upon the specific rate designs adopted by the LACCE Authority.
Customer Understanding
The goal of customer understanding involves rate designs that are relatively straightforward so
that customers can readily understand how their bills are calculated. This not only minimizes
customer confusion and dissatisfaction but will also result in fewer billing inquiries to the LACCE
Program’s customer service call center. Customer understanding also requires rate structures to
reflect rational rate design principles (i.e., there should not be differences in rates that are not
justified by costs or by other policies such as providing incentives for conservation).
Revenue Sufficiency
LACCE Program rates must collect sufficient revenue from participating customers to fully fund the
LACCE Authority’s annual budget. Rates will be set to collect the adopted budget based on a
forecast of electric sales for the budget year. Rates will be adjusted as necessary to maintain the
ability to fully recover all of costs of the LACCE Program, subject to the disclosure and due process
CHAPTER 8 – Rate Setting, Program Terms and Conditions 36
LACCE Implementation Plan
policies described later in this chapter. To ensure rate stability, funds available in the LACCE
Authority’s rate stabilization fund may be used from time to time to augment operating revenues.
Rate Design
The LACCE Authority will generally match the rate structures from the utilities’ standard rates to
avoid the possibility that customers would see significantly different bill impacts as a result of
changes in rate structures that would take effect following enrollment in the LACCE Program.
Custom Pricing Options
The LACCE Authority may work to develop specially‑tailored rate and electric service products that
meet the specific load characteristics or power market risk profiles of larger commercial and
industrial customers. This will allow such customers to have access to a wider range of products
than is currently available under the incumbent utility and potentially reduce the cost of power for
these customers. The LACCE Authority may provide large energy users with custom pricing options
to help these customers gain greater control over their energy costs. Some examples of potential
custom pricing options are rates that are based on an observable market index (e.g., CAISO prices)
or fixed priced contracts of various terms.
Net Energy Metering
As planned, customers with on‑site generation eligible for net metering from SCE will be offered
a net energy metering rate from the LACCE Authority. Net energy metering allows for customers
with certain qualified solar or wind distributed generation to be billed on the basis of their net
energy consumption. The SCE net metering tariff (NEM) requires the CCA to offer a net energy
metering tariff in order for the customer to continue to be eligible for service on Schedule NEM.
The objective is that the LACCE Authority’s net energy metering tariff will apply to the generation
component of the bill, and the SCE net energy metering tariff will apply to the utility’s portion of
the bill. The LACCE Authority plans to pay customers for excess power produced from net energy
metered generation systems in accordance with the rate designs adopted by the LACCE Authority.
Disclosure and Due Process in Setting Rates and Allocating Costs among Participants
Initial program rates will be adopted by the LACCE Authority following the establishment of the
first year’s operating budget prior to initiating the customer notification process. Subsequently,
the LACCE Authority will prepare an annual budget and corresponding customer rates. Any
proposed rate adjustment will be made to the Board of Directors and ample time will be given to
affected customers to provide comment on the proposed rate changes.
After proposing a rate adjustment, the LACCE Authority will furnish affected customers with a
notice of its intent to adjust rates, either by mailing such notices postage prepaid to affected
customers, by including such notices as an insert to the regular bill for charges transmitted to
affected customers, or by including a related message directly on the customer’s monthly
electricity bill (on the page addressing the LACCE Authority charges). The notice will provide a
summary of the proposed rate adjustment and will include a link to the LACCE Program website
where information will be posted regarding the amount of the proposed adjustment, a brief
statement of the reasons for the adjustment, and the mailing address of the LACCE Authority to
CHAPTER 8 – Rate Setting, Program Terms and Conditions 37
LACCE Implementation Plan
which any customer inquiries relative to the proposed adjustment, including a request by the
customer to receive notice of the date, time, and place of any hearing on the proposed adjustment,
may be directed.
CHAPTER 9 – Customer Rights and Responsibilities 40
LACCE Implementation Plan
This chapter discusses customer rights, including the right to opt‑out of the LACCE Program and
the right to privacy of customer usage information, as well as obligations customers undertake
upon agreement to enroll in the CCA Program. All customers that do not opt out within 30 days of
the fourth enrollment notice will have agreed to become full status program participants and must
adhere to the obligations set forth below, as may be modified and expanded by the LACCE Board
from time to time.
By adopting this Implementation Plan, the LACCE Authority will have approved the customer rights
and responsibilities policies contained herein to be effective at Program initiation. The LACCE
Authority retains Authority to modify program policies from time to time at its discretion.
Customer Notices
At the initiation of the customer enrollment process, a total of four notices will be provided to
customers describing the Program, informing them of their opt-out rights to remain with utility
bundled generation service, and containing a simple mechanism for exercising their opt-out rights.
The first notice will be mailed to customers approximately sixty days prior to the date of automatic
enrollment. A second notice will be sent approximately thirty days later. The LACCE Authority will
likely use its own mailing service for requisite enrollment notices rather than including the notices
in SCE’s monthly bills. This is intended to increase the likelihood that customers will read the
enrollment notices, which may otherwise be ignored if included as a bill insert. Customers may opt
out by notifying the LACCE Authority using the LACCE Program’s designated telephone- based or
internet opt‑out processing service. Should customers choose to initiate an opt‑out request by
contacting SCE, they would be transferred to the LACCE Program’s call center to complete the opt-
out request. Consistent with CPUC regulations, notices returned as undelivered mail would be
treated as a failure to opt out, and the customer would be automatically enrolled.
Following automatic enrollment, at least two notices will be mailed to customers within the first
two billing cycles (approximately sixty days) after LACCE service commences. Opt‑out requests
made on or before the sixtieth day following start of LACCE Program service will result in customer
transfer to bundled utility service with no penalty. Such customers will be obligated to pay charges
associated with the electric services provided by the LACCE Authority during the time the customer
took service from the LACCE Program, but will otherwise not be subject to any penalty or transfer
fee from the LACCE Authority.
Customers who establish new electric service accounts within the Program’s service area will be
automatically enrolled in the LACCE Program and will have sixty days from the start of service to
opt out if they so desire. Such customers will be provided with two enrollment notices within this
sixty-day post enrollment period. Such customers will also receive a notice detailing the LACCE
Authority’s privacy policy regarding customer usage information. The LACCE Authority will have
CHAPTER 9 – Customer Rights and Responsibilities
CHAPTER 9 – Customer Rights and Responsibilities 40
LACCE Implementation Plan
the Authority to implement entry fees for customers that initially opt out of the Program, but later
decide to participate. Entry fees, if deemed necessary, would aid in resource planning by providing
additional control over the LACCE Program’s customer base.
Termination Fee
Customers that are automatically enrolled in the LACCE Program can elect to transfer back to the
incumbent utility without penalty within the first two months of service. After this free opt-out
period, customers will be allowed to terminate their participation but may be subject to payment
of a Termination Fee, which the LACCE Authority reserves the right to impose, if deemed
necessary. Customers that relocate within the LACCE Authority’s service territory would have
LACCE service continued at their new address. If a customer relocating to an address within the
LACCE Authority’s service territory elected to cancel CCA service, the Termination Fee could be
applied. Program customers that move out of the LACCE Authority’s service territory would not be
subject to the Termination Fee. If deemed applicable by the LACCE Authority, SCE would collect
the Termination Fee from returning customers as part of the LACCE Authority’s final bill to the
customer.
For illustrative purposes, the LACCE Authority Termination Fee could vary by customer class as set
forth in the table below, subject to a final determination by the LACCE Authority.
Table 11
Los Angeles Community Choice Energy
Illustrative Schedule of Fees for Service Termination*
Customer Class Fee
Residential $5
Non-Residential $25
*Note that the LACCE Authority has yet to adopt a Schedule of Fees for Service Termination. The fees reflected in this table
are representative of similar charges adopted by California’s operating CCA programs.
If adopted, the Termination Fee would be clearly disclosed in the four enrollment notices sent to
customers during the sixty-day period before automatic enrollment and following commencement
of service. The fee could also be changed prospectively by the LACCE Authority subject to
applicable customer noticing requirements.
Customers electing to terminate service after the initial notification period would be transferred
to SCE on their next regularly scheduled meter read date if the termination notice is received a
minimum of fifteen days prior to that date. Such customers would also be liable for the nominal
reentry fees imposed by SCE and would be required to remain on bundled utility service for a
period of one year, as described in the utility CCA tariffs.
Customer Confidentiality
The LACCE Authority will establish policies covering confidentiality of customer data that are fully
compliant with the required privacy protection rules for CCA customer energy usage information,
as detailed within Decision 12‑08‑045. The LACCE Authority will maintain the confidentiality of
individual customers’ names, service addresses, billing addresses, telephone numbers, account
CHAPTER 9 – Customer Rights and Responsibilities 40
LACCE Implementation Plan
numbers, and electricity consumption, except where reasonably necessary to conduct business of
the LACCE Authority or to provide services to customers, including but not limited to where such
disclosure is necessary to (a) comply with the law or regulations; (b) enable the LACCE Authority
to provide service to its customers; (c) collect unpaid bills; (d) obtain and provide credit reporting
information; or (e) resolve customer disputes or inquiries. The LACCE Authority will not disclose
customer information for telemarketing, e‑mail, or direct mail solicitation. Aggregate data may be
released at the LACCE Authority’s discretion.
Responsibility for Payment
Customers will be obligated to pay LACCE Program charges for service provided through the date
of transfer including any applicable Termination Fees. Pursuant to current CPUC regulations, LACCE
will not be able to direct that electricity service be shut off for failure to pay the LACCE Authority
bills. However, SCE has the right to shut off electricity to customers for failure to pay electricity
bills, and SCE Electric Rule 23 mandates that partial payments are to be allocated pro rata between
SCE and the CCA. In most circumstances, customers would be returned to utility service for failure
to pay bills in full and customer deposits (if any) would be withheld in the case of unpaid bills. SCE
would attempt to collect any outstanding balance from customers in accordance with Rule 23 and
the related CCA Service Agreement. The proposed process is for two late payment notices to be
provided to the customer within 30 days of the original bill due date. If payment is not received
within 45 days from the original due date, service would be transferred to the utility on the next
regular meter read date, unless alternative payment arrangements have been made. Consistent
with the CCA tariffs, Rule 23, service cannot be discontinued to a residential customer for a
disputed amount if that customer has filed a complaint with the CPUC, and that customer has paid
the disputed amount into an escrow account.
Customer Deposits
Under certain circumstances, LACCE customers may be required to post a deposit equal to the
estimated charges for two months of CCA service prior to obtaining service from the LACCE
Program. A deposit would be required for an applicant who previously had been a customer of SCE
or LACCE and whose electric service has been discontinued by SCE or the LACCE Authority during
the last twelve months of that prior service arrangement as a result of bill nonpayment. Such
customers may be required to reestablish credit by depositing the prescribed amount.
Additionally, a customer who fails to pay bills before they become past due as defined in SCE
Electric Rule 11 (Discontinuance and Restoration of Service), and who further fails to pay such bills
within five days after presentation of a discontinuance of service notice for nonpayment of bills,
may be required to pay said bills and reestablish credit by depositing the prescribed amount. This
rule will apply regardless of whether or not service has been discontinued for such nonpayment5.
Failure to post deposit as required would cause the account service transfer request to be rejected,
and the account would remain with SCE.
5 A customer whose service is discontinued by the LACCE Authority is returned to SCE generation service.
CHAPTER 10 - Procurement Process 41
LACCE Implementation Plan
Introduction
This Chapter describes the LACCE Authority’s initial procurement policies and the key third party
service agreements by which the LACCE Authority will obtain operational services for the LACCE
Program. By adopting this Implementation Plan, the LACCE Authority will have approved the
general procurement policies contained herein to be effective at Program initiation. The LACCE
Authority retains Authority to modify Program policies from time to time at its discretion.
Procurement Methods
The LACCE Authority will enter into agreements for a variety of services needed to support
program development, operation and management. It is anticipated that the LACCE Authority will
generally utilize Competitive Procurement methods for services but may also utilize Direct
Procurement or Sole Source Procurement, depending on the nature of the services to be procured.
Direct Procurement is the purchase of goods or services without competition when multiple
sources of supply are available. Sole Source Procurement is generally to be performed only in the
case of emergency or when a competitive process would be an idle act.
The LACCE Authority will utilize a competitive solicitation process to enter into agreements with
entities providing electrical services for the program. Agreements with entities that provide
professional legal or consulting services, and agreements pertaining to unique or time sensitive
opportunities, may be entered into on a direct procurement or sole source basis at the LACCE
Authority’s discretion. Authority for terminating agreements will generally mirror the Authority for
entering into such agreements.
Key Contracts
Electric Supply Contract
The LACCE Authority will initiate service using supply contracts with one or more qualified
providers to supply sufficient electric energy resources to meet LACCE customer demand as well
as applicable resource adequacy requirements, ancillary and other necessary services. The LACCE
Authority may complete additional solicitations to supplement its energy supply and/or to replace
contract volumes provided under the original contract. The LACCE Authority would begin such
procurement sufficiently in advance of contract expiration so that the transition from the initial
supply contract occurs smoothly, avoiding dependence on market conditions existing at any single
point in time.
The LACCE Authority will solicit the services of a certified Scheduling Coordinator to schedule loads
and resources to meet LACCE customer demand. The LACCE Authority may designate the primary
supplier to be responsible for day‑to‑day energy supply operations of the LACCE Program and for
managing the predominant supply risks for the term of the contract. The primary supplier may also
CHAPTER 10 ---‑ Procurement Process
CHAPTER 10 - Procurement Process 42
LACCE Implementation Plan
contribute to meeting the Program’s renewable energy supply goals. However, additional
suppliers may be identified to supplement requisite renewable energy supplier of the LACCE
program. Finally, the primary supplier may be responsible for ensuring the LACCE Authority’s
compliance with all applicable resource adequacy and regulatory requirements imposed by the
CPUC or FERC.
As this point in time, the LACCE Authority has commenced the requisite competitive solicitation
process to identify its initial energy supplier(s). The LACCE Authority anticipates executing the
electric supply contract for Phase 1 loads in fall 2017. The contract for Phase 2 and Phase 3 loads
will be executed shortly thereafter.
Data Management Contract
A data manager will provide the retail customer services of billing and other customer account
services (electronic data interchange or EDI with SCE, billing, remittance processing, and account
management). Recognizing that some qualified wholesale energy suppliers do not typically
conduct retail customer services whereas others (i.e., direct access providers) do, the data
management contract may be separate from the electric supply contract. It is anticipated that a
single contractor will be selected to perform all of the data management functions6.
The data manager is responsible for the following services:
Data exchange with SCE;
Technical testing;
Customer information system;
Customer call center;
Billing administration/retail settlements;
Settlement quality meter data reporting; and
Reporting and audits of utility billing.
Utilizing a third party for account services eliminates a significant expense associated with
implementing a customer information system. Such systems can impose significant information
technology costs and take significant time to deploy. Separation of the data management contract
from the energy supply contract gives the LACCE Authority greater flexibility to change energy
suppliers, if desired, without facing an expensive data migration issue.
As this point in time, the LACCE Authority has commenced the requisite competitive solicitation
process to identify its data management services provider. It is anticipated that the LACCE
Authority will execute a contract for data management services in September.
6 The contractor providing data management may also be the same entity as the contractor supplying electricity for the program.
CHAPTER 10 - Procurement Process 43
LACCE Implementation Plan
Electric Supply Procurement Process
In the third quarter of 2017, the LACCE Authority plans to solicit proposals for shaped energy,
renewable energy, carbon free energy, and resource adequacy capacity, from a highly-qualified
pool of suppliers. The LACCE Authority will also solicit proposal for scheduling coordinator services
from a separate bidder. Contract negotiations will commence immediately following proposal
evaluation. Following the identification of short-listed energy services and scheduling coordinator
provider candidates, the LACCE Authority will update the Commission regarding its selection
process. It is anticipated that selection of the final suppliers will be made by the LACCE Authority
in the Fall of 2017.
Chapter 11 – Contingency Plan for Program Termination 44
LACCE Implementation Plan
Introduction
This Chapter describes the process to be followed in the case of LACCE Program termination. By
adopting the original Implementation Plan, the LACCE Authority will have approved the general
termination process contained herein to be effective at Program initiation. In the unexpected
event that the LACCE Authority would terminate the LACCE Program and return its customers to
SCE service, the proposed process is designed to minimize the impacts on its customers and on
SCE. The proposed termination plan follows the requirements set forth in SCE’s tariff Rule 23
governing service to CCAs. The LACCE Authority retains Authority to modify program policies from
time to time at its discretion.
Termination by the LACCE Authority
The LACCE Authority will offer services for the long term with no planned Program termination
date. In the unanticipated event that the LACCE Authority decides to terminate the Program, each
of its Member Agencies would be required to adopt a termination ordinance or resolution and
provide adequate notice to the LACCE Authority consistent with the terms set forth in the JPA
Agreement. Following such notice, the LACCE Authority’s Board would vote on Program
termination subject to voting provisions as described in the JPA Agreement. In the event that the
LACCE Authority affirmatively votes to proceed with JPA termination, the LACCE Authority would
disband under the provisions identified in its JPA Agreement.
After any applicable restrictions on such termination have been satisfied, notice would be provided
to customers six months in advance that they will be transferred back to SCE. A second notice
would be provided during the final sixty‑days in advance of the transfer. The notice would describe
the applicable distribution utility bundled service requirements for returning customers then in
effect, such as any transitional or bundled portfolio service rules.
At least one year advance notice would be provided to SCE and the CPUC before transferring
customers, and the LACCE Authority would coordinate the customer transfer process to minimize
impacts on customers and ensure no disruption in service. Once the customer notice period is
complete, customers would be transferred en masse on the date of their regularly scheduled
meter read date.
The LACCE Authority will post a bond or maintain funds held in reserve to pay for potential
transaction fees charged to the Program for switching customers back to distribution utility
service. Reserves would be maintained against the fees imposed for processing customer transfers
(CCASRs). The Public Utilities Code requires demonstration of insurance or posting of a bond
sufficient to cover reentry fees imposed on customers that are involuntarily returned to
distribution utility service under certain circumstances. The cost of re-entry fees is the
responsibility of the energy services provider or the community choice aggregator, except in the
case of a customer returned for default or because its contract has expired. The LACCE Authority
CHAPTER 11 – Contingency Plan for Program Termination
Chapter 11 – Contingency Plan for Program Termination 45
LACCE Implementation Plan
will post financial security in the appropriate amount as part of its registration materials and will
maintain the financial security in the required amount, as necessary.
Termination by Members
The JPA Agreement defines the terms and conditions under which Members may terminate their
participation in the program.
CHAPTER 12 – Appendices 47
LACCE Implementation Plan
Appendix A: LACCE Authority Resolution No. 17-002 to Adopt the Implementation Plan
Appendix B: LACCE Authority Joint Powers Agreement
CHAPTER 12 – Appendices
County of Los Angeles
Prepared by:
A registered professional engineering and
management consulting firm
www.eesconsulting.com
570 Kirkland Way, Suite 100
Kirkland, WA 98033
Telephone: (425) 889-2700
Los Angeles Community Choice Energy
Business Plan Update
April 17, 2017
LACCE BUSINESS PLAN UPDATE I
Contents
Background ............................................................................................................................... 1
Updated Findings ...................................................................................................................... 1
Phase-In Assumptions ............................................................................................................... 1
Load Forecast ............................................................................................................................ 2
SCE Rate Forecast ...................................................................................................................... 2
Power Supply ............................................................................................................................ 3
Proforma Analysis ................................................................................................................... 11
Administrative Costs ............................................................................................................... 12
Financing................................................................................................................................. 13
Rates ....................................................................................................................................... 13
Risks ....................................................................................................................................... 15
Summary ................................................................................................................................ 19
LACCE BUSINESS PLAN UPDATE 1
Background
On September 15, 2015, the Board of Supervisors (“Board”) of the County of Los Angeles (“County”)
instructed the County’s Internal Services Department (ISD) and the Chief Executive Officer (CEO) to
assess the feasibility of establishing a Community Choice Aggregation (CCA) for County
unincorporated areas, with the potential to expand to other public agencies within the County. The
County fulfilled that directive by issuing the County of Los Angeles Community Choice Energy
Business Plan (“Business Plan”) on July 28, 2016.
On September 27, 2016, the Board directed the CEO, Chief Sustainability Officer, County Counsel,
and ISD to form a Joint Powers Authority (JPA) with other interested public agencies, negotiate a
governance structure, and determine an operations plan. As part of those negotiations, the CEO
requested that the information in the Business Plan be updated to reflect current market prices,
regulatory fees, and operational plans to provide potential LACCE JPA member agencies with the
most accurate possible assessment of LACCE’s financial outlook. This document (“Business Plan
Update”) details the changed inputs, assumptions, and outcomes.
Updated Findings
● Power supply costs are approximately 21% lower than in the initial business plan due to
lower renewable and market price projections.
● It is assumed that LA County provides the initial working capital funding during FY 2018. LA
County is then reimbursed by the end of the fiscal year using funds obtained by LACCE once
financing has been obtained. This plan does not assume vendor funding; however, it is
estimated that cash working capital can be reduced by approximately 50% if LACCE can
negotiate a delayed payment contract with power supply vendors (i.e. vendors do not get
paid until revenues have been received).
● The residential PCIA increased from $0.00098 to $0.00776 per kWh and is projected to
continue to increase in the next few years. Non-residential PCIA rates increased by a similar
margin.
● There is no significant cost saving between a 75% residential/65% non-residential
participation scenario and a 95% residential/85% non-residential participation scenario
because the administrative costs are minor compared to the power supply costs and non-
bypassable charges vary based on load.
● Updated projected rates for two scenarios were developed: 75% residential/65% non-
residential participation scenario and a 95% residential/85% non-residential participation
scenario. The projected rates can be found in the tables below:
Phase-In Assumption
This Business Plan Update assumes LACCE will launch in January 2018 with the same phase-in
strategy that was used in the original Business Plan:
LACCE BUSINESS PLAN UPDATE 2
● Phase 1 include County-owned facilities within the unincorporated County areas
● Phase 2 serves all customers located in the unincorporated County
● Phase 3 serves all customers within LACCE
Exhibit 1 summarizes the potential load, demand, revenue, and account information for each
assumed phase.
Exhibit 1
Participation Schedule
Phase
Start
Eligibility
Customer
Accounts
Peak Load
(MW)
Average
Load
aMW
LACCE
Annual
Revenues
Phase 1 January 2018 LA County Facilities in
Unincorporated Area
1,728 40 20 $25M
Phase 2 July 2018 All Unincorporated
Customers
306,930 900 440 $180M
Phase 3 To Be Determined All Customers 1,497,747 7,000 3,000 $1,200M
Depending on the Cities joining LACCE, LACCE may launch a different combination of accounts for
Phase 2 such as commercial and industrial accounts operating within the unincorporated County
and in any other participating public agencies. Modeling those accounts for this Business Plan
Update would have presented two challenges. First, because it remains uncertain which cities will
participate in the LACCE JPA, it would be impossible to determine the load, demand, and number
of accounts. Second, the specific accounts to include in Phase 2 depends on the total load in LACCE
in order to ensure a smooth transition from SCE to LACCE. This Business Plan Update therefore
provides an update of LACCE’s rates based on the implementation plan listed in Exhibit 1.
Load Forecast
This business plan assumes launch in January 2018. The load forecast was updated to reflect
projected loads and participation rates. This Business Plan Update models two CCA participation
scenarios. The first scenario (“Conservative Participation Scenario”) modeled participation rates of
75 percent for residential customers and 65 percent for non-residential customers. The second
scenario (“Most Likely Participation Scenario”) assumed 95% participation for residential customers
and 85% for non-residential customers which is based on the average participation of all currently
operating CCAs in California.
SCE Rate Forecast
Southern California Edison’s (SCE) rates are updated based on the January 1, 2017 posted rates. In
addition, the Power Charge Indifference Adjustment (PCIA) is also updated as of January 1, 2017.
An updated PCIA forecast was also developed to reflect expected changes in renewable resource
benchmarking costs. Exhibit 2 shows the updated PCIA rate forecast used.
LACCE BUSINESS PLAN UPDATE 3
Exhibit 2
PCIA Rates by Rate Class and Year
Actual Forecast
2016 2017 2018 2019 2020
Domestic 0.00098 0.00776 0.01009 0.01160 0.01117
TC-1 0.00048 0.00348 0.00452 0.00520 0.00501
TOU-GS-1 0.00071 0.00635 0.00826 0.00949 0.00914
TOU-GS-2 0.00079 0.00590 0.00767 0.00882 0.00850
TOU-GS-3 0.00070 0.00524 0.00681 0.00783 0.00754
TOU-PA-2 0.00055 0.00533 0.00693 0.00797 0.00767
TOU-PA-3 0.00042 0.00399 0.00519 0.00597 0.00575
TOU-8-PRI 0.00061 0.00395 0.00514 0.00591 0.00569
TOU-8-SEC 0.00052 0.00457 0.00594 0.00683 0.00658
TOU-8-SUB 0.00045 0.00339 0.00441 0.00507 0.00488
In addition to the PCIA, SCE’s generation and distribution rates were updated for each rate class.
Power Supply
The forecast cost of power was updated to reflect the most recent trends in the power market.
Natural gas-fired power plants define the base power price in southern California and throughout
the Western Energy Coordinating Council (WECC) footprint as they serve as the marginal resource.
As the market price of electricity is usually set by the cost of the marginal unit, EES developed a
wholesale market price forecast using a forecast of natural gas prices and projected market-implied
heat rates or spark spreads.
The projected market-implied heat rates reflect the average efficiency of gas-fired power plants in
California. The projected heat rates are based on historic market-implied heat rates calculated by
dividing historic southern California (SP15) wholesale market prices by historic southern California
natural gas prices. EES developed a natural gas price forecast based on NYMEX forward gas prices
for the Henry Hub trading hub and southern California basis differentials. Projected market heat
rates were then applied to the southern California natural gas price forecast to calculate a wholesale
electric market price forecast for southern California.
The following steps were taken to produce the wholesale electric market price forecast:
1. Forward prices for natural gas at Henry Hub are available through December 2029.
2. The southern California basis differential is used to adjust the Henry Hub forward prices to
southern California prices. Southern California forward natural gas prices are equal to NYMEX
forward prices (Henry Hub) plus the southern California basis. The southern California basis
forward curve is available through December 2022. After December 2022, the monthly
southern California basis differentials are assumed to escalate at the same escalation rate at
which Henry Hub forward prices escalate or near 2.3 percent on average.
3. Projected monthly market-implied heat rates are multiplied by forecast southern California
natural gas prices to calculate forecast southern California wholesale market prices.
4. Projected heat rates are based on historic heat rates (southern California wholesale electricity
prices divided by SoCal natural gas prices).
LACCE BUSINESS PLAN UPDATE 4
5. Monthly market-implied heat rates are held constant in all years.
6. Forecast southern California prices are benchmarked against other market price forecasts.
7. Forecast market prices are escalated 3.8 percent annually beginning in 2030.
Based on the methodology detailed above, southern California wholesale market prices are
projected to escalate annually at an average rate of 3.3 percent over the 20-year period from 2018
through 2037.
Exhibit 3 below shows the forecast southern California natural gas prices included in the calculation
of forecast southern California market prices. Projected 2018-25 gas prices are approximately 21
percent lower than those included in the first draft of the business plan.
Exhibit 3
Forecast SoCal Natural Gas Price ($/MMBtu)
Exhibit 4 shows the resulting monthly southern California wholesale market price forecast. The
levelized value of market prices over the study period is $34.6/MWh assuming a 4 percent discount
rate. This is a decrease of nearly $5/MWh and 12 percent from the levelized value of $39.5/MWh
included in the first draft of the business plan.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Ja
n
-
1
8
Ju
n
-
1
8
No
v
-
1
8
Ap
r
-
1
9
Se
p
-
1
9
Fe
b
-
2
0
Ju
l
-
2
0
De
c
-
2
0
Ma
y
-
2
1
Oc
t
-
2
1
Ma
r
-
2
2
Au
g
-
2
2
Ja
n
-
2
3
Ju
n
-
2
3
No
v
-
2
3
Ap
r
-
2
4
Se
p
-
2
4
Fe
b
-
2
5
Ju
l
-
2
5
De
c
-
2
5
Ma
y
-
2
6
Oc
t
-
2
6
Ma
r
-
2
7
Au
g
-
2
7
Ja
n
-
2
8
Ju
n
-
2
8
No
v
-
2
8
Ap
r
-
2
9
Se
p
-
2
9
LACCE BUSINESS PLAN UPDATE 5
Exhibit 4
Forecast Southern California Wholesale Market Prices ($/MWh)
Wholesale power prices were used to calculate balancing market purchases and sales. When the
LACCA’s loads are greater than its resource capabilities, the LACCA’s scheduling agent will schedule
balancing purchases and the LACCA will incur balancing market purchase costs. When the LACCA’s
loads are less than its resource capabilities, the LACCA’s scheduling agent will transact balancing
sales and the LACCA will receive market sales revenue. Balancing market purchases and sales can
be transacted on a monthly, daily and hourly pre-schedule basis.
Exhibit 5 shows the 20-year levelized resource costs included in the study. In the first draft of the
business plan the “spot market” and “market PPA” costs were $39.5/MWh and $41.5/MWh,
respectively, or 12 percent greater than those shown below. The costs shown below for “renewable
resource”, “brown resources” and “local renewables” are the same as those included in the first
draft of the business plan.
Energy Efficiency, Demand Response, and Distributed Energy Resources
The power supply forecast does not account for the extensive investment in local conservation and
resource programs that LACCE will make. This assumption was employed because of the uncertainty
around the timeframe, type, and scale of the programs that LACCE will deploy as these must be
voted on by the JPA board. However, these programs are expected to be extensive.
0
10
20
30
40
50
60
70
Ja
n
-
1
8
No
v
-
1
8
Se
p
-
1
9
Ju
l
-
2
0
Ma
y
-
2
1
Ma
r
-
2
2
Ja
n
-
2
3
No
v
-
2
3
Se
p
-
2
4
Ju
l
-
2
5
Ma
y
-
2
6
Ma
r
-
2
7
Ja
n
-
2
8
No
v
-
2
8
Se
p
-
2
9
Ju
l
-
3
0
Ma
y
-
3
1
Ma
r
-
3
2
Ja
n
-
3
3
No
v
-
3
3
Se
p
-
3
4
Ju
l
-
3
5
Ma
y
-
3
6
Ma
r
-
3
7
LACCE BUSINESS PLAN UPDATE 6
Exhibit 5
20-Year Levelized Cost
(2017 $/MWH)
Updated Resource Portfolios
An updated load forecast was input to the power supply cost calculations. As a result, the resource
portfolios and associated costs were updated. Below is a summary of the revised portfolios. There
was no change to the amount of renewable and non-renewable resource targets, only a change in
the amount of energy required to achieve those targets due to the change in the load forecast.
Portfolio 1: Meet Current RPS Requirements
In the first portfolio, the CCA would meet the state RPS requirements shown below:
2017-19: 25 percent
2020-23: 33 percent
2024-26: 40 percent
2027-29: 45 percent
2030 - 50 percent
Exhibit 6 shows the power supply portfolio used to serve load in Portfolio 1 with the revised load
forecast. In the first draft of the business plan total purchased power requirements were 436 aMW
in final year of the 20-year study period compared to the 479 aMW shown below in 2037.
34.6 36.6
42.0
60.0
65.0
0
10
20
30
40
50
60
70
Spot Market Market PPA Renewable Resources Brown Resources Local Renewables
$/
M
W
h
LACCE BUSINESS PLAN UPDATE 7
Exhibit 6
Portfolio 1: Meet RPS Requirements (aMW)
The green bars shown in Exhibit 6 above increase each year along with California’s RPS
requirements.
Portfolio 2: Serve 50% of Retail Load with Renewables Starting on Day 1
In this portfolio, the 50% renewable energy purchase requirement in the RPS is effectively moved
up from 2030 to October 2016. Exhibit 7 shows the breakdown of power purchases under portfolio
2 with the revised load forecast. The total power purchase requirements are the same as those
shown above in Exhibit 6, including a total purchase requirement of 479 aMW in 2037.
-
50
100
150
200
250
300
350
400
450
500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Market PPA Brown Resources Renewables Local Renewables Spot Market
LACCE BUSINESS PLAN UPDATE 8
Exhibit 7
Portfolio 2: Serve 50% of Retail Load with Renewables (aMW)
Portfolio 3: Serve 100% of Retail Load with Renewables Starting on Day 1
In this portfolio retail loads are served entirely with renewable energy purchases. Exhibit 8 below
shows the resource mix used to serve load in Portfolio 3 with the revised load forecast. The total
power purchase requirements are the same as those shown above in Exhibits 6 and 7, including a
total purchase requirement of 479 aMW in 2037.
-
50
100
150
200
250
300
350
400
450
500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Market PPA Brown Resources Renewables Local Renewables Spot Market
LACCE BUSINESS PLAN UPDATE 9
Exhibit 8
Portfolio 3: Serve 100% of Retail Load with Renewables (aMW)
As shown above, there is a small amount of market PPA and brown resource power included in
Portfolio 3 due to distribution and transmission system losses. The renewable energy requirements
in the state’s RPS are based on retail energy sales. To be consistent it was assumed that the 100%
renewable energy target would only apply to retail energy sales, not total power purchase
requirements.
20-Year Levelized Portfolio Costs
20-year levelized costs were calculated for the three resource portfolios described above using base
case resource costs and the revised load forecast. Exhibit 9 below shows a breakdown of power,
ancillary service and scheduling costs associated with each portfolio.
-
50
100
150
200
250
300
350
400
450
500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Market PPA Brown Resources Renewables Local Renewables Spot Market
LACCE BUSINESS PLAN UPDATE 10
Exhibit 9
20-year Levelized Base Case Portfolio Costs ($/MWh)
The 20-year levelized cost shown above for portfolio 1 (“RPS”) is $2/MWh less than the cost
included in the first draft of the business plan. The 20-year levelized cost shown above for portfolio
2 (“50% Renewables”) is $1/MWh less than the cost included in the first draft of the business plan.
The 20-year levelized cost shown above for portfolio 3 (“100% Renewables”) is $1/MWh greater
than the cost included in the first draft of the business plan.
Since wholesale market prices decreased in the revised power supply cost calculations one would
expect the 20-year levelized costs shown above to have decreased in all cases, including the “100%
Renewables” case, compared to the first draft of the business plan. Power purchase costs,
excluding capacity purchase costs, did in fact decrease in all cases. However, capacity purchase
costs increased in all cases due to a reduction in the average monthly load factor in the revised load
forecast. Monthly load factors are calculated by dividing average monthly energy consumption by
monthly peak demands. The average monthly load factor in the revised load forecast is 56 percent.
The average monthly load factor in the load forecast used in the first draft of the business plan was
66 percent. The decrease in the average monthly load factor result in higher monthly peak
demands. Increased monthly peak demands result in increases in capacity purchase costs
associated with meeting the 115 percent resource adequacy standard. On a 20-year levelized cost
basis the capacity purchase costs associated with meeting resource adequacy requirements
increased by near $1.5/MWh in all three portfolios.
Exhibit 9 above shows the base case 20-year levelized cost of each portfolio. Since resource costs
are based on forecast renewable and brown resource market prices and updated forecast natural
gas and wholesale market prices, it is prudent to look at the sensitivity of the 20-year levelized cost
44.8 45.6
54.6
5.7 6.2
12.4
1.9 1.9
1.9
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
RPS 50% Renewables 100% Renewables
Power Anciallary Services Scheduling
$52/MWh $54/MWh
$69/MWh
LACCE BUSINESS PLAN UPDATE 11
calculation to fluctuations in these projections. Exhibit 10 below shows a summary of low, base
and high resource costs. Only the “market PPA” costs differ from the first draft of the business plan.
Exhibit 10
Low, Base and High 20-year Levelized Resource Costs ($/MWh)
Case Market PPA
Portfolio 1 and 2
Renewables
Portfolio 3
Renewables Brown Resources
Local
Renewables
Low Case 24.9 32 40 45 45
Base Case 36.6 42 52 60 65
High Case 69.2 62 76 80 85
The 20-year levelized costs of each portfolio were calculated using the range of resource costs
shown above. Exhibit 11 shows the resulting range of 20-year levelized costs of each resource
portfolio. The base case costs are depicted by the black dots in Exhibit 11.
Exhibit 11
Sensitivity of Portfolio 20-year Levelized Costs
The range of costs shown above is slightly ($1/MWh) greater than the range of costs included in the
first draft of the business plan. As in the first draft of the business plan, Portfolio 3, which relies on
renewable energy purchases to serve all retail loads, has the highest projected costs. The low case
for Portfolio 3 ($57/MWh) is greater than the base case for both Portfolios 2 and 3.
Proforma Analysis
The first category of the pro forma analysis is the cost of service for LACCE program operations. To
estimate the overall costs associated with LACCE operations, the following components were
included in the development of the financial pro forma:
0
10
20
30
40
50
60
70
80
90
100
Portfolio 1 Portfolio 2 Portfolio 3
LACCE BUSINESS PLAN UPDATE 12
Power Supply Costs
Non-Power Supply Costs:
Start-up costs
LACCE staffing and administration costs
Consulting Support
SCE and regulatory charges
Financing costs
Pass-Through Charges to SCE:
Transmission and distribution charges
Power Cost Indifference Adjustment (PICA) Charge
Other SCE non-bypassable charges
Once the costs of the LACCE operations have been determined, the total costs and resulting revenue
needs were compared to SCE’s projected rates and revenues for the potential LACCE customers.
Administrative Costs
The administrative costs were updated based on the most recent LACCE budget. At this time, it is
assumed that $10 million in initial funding will be provided by LA County as part of the FY2018
budget to support the start-up of the LACCE Authority. This funding includes $8 million for power
procurement to support Phase I of the program and up to $2 million for administrative costs.
In addition to administrative costs, expenses such as power supply costs, non-bypassable charges,
data management costs, utility fees, and estimated uncollectibles are included in the proforma.
The LACCE budget assumes only the Executive Director and one administrative staff will be hired
prior to Phase 2 as LACCE will rely on consultant help initially. However, LACCE could hire additional
staff earlier and reduce the cost of consultants to remain within budget. Exhibit 12 lists the assumed
expenses.
LACCE BUSINESS PLAN UPDATE 13
Exhibit 12
Administrative Costs
FY17 FY18
EXPENSES
Consultants
Financial $30,000 $120,000
Legal $0 $200,000
Executive Support $50,000 $180,000
Technical & Regulatory $40,000 $460,000
Communication & Outreach $0 $80,000
County Staff (borrowed)
Chief Sustainability Officer $20,000 $40,000
ISD Staff $40,000 $80,000
County Counsel $30,000 $30,000
Administrative Support $10,000 $20,000
New JPA Staff
Executive Director $0 $150,000
Assistant $0 $50,000
General & Admin $0 $295,000
Contingency $0 $50,000
Budgeted Expenses Off-set ($220,000) ($630,000)
Total Administrative Cost $0 $1,125,000
Financing
The $10 million provided by LA County as part of the FY2018 budget will need to be repaid to LA
County by the end of June 2018. For ongoing cash flow needs, this Business Plan Update assumes
that LACCE must provide sufficient working capital to cover 60 days of lag between when expenses
occur and when revenues are received. LACCE will therefore need to finance approximately $50
million by June 2018 either with a loan or a line of credit. A more likely scenario, would be that the
power supply and data management consultants will not get paid until revenues have been
collected from customers. This methodology has become more common with recent CCAs and
would reduce LACCE’s financing needs by approximately 50%. This option will be explored during
the RFP process for power supply and data management services.
Rates
Exhibits 13 and 14 compare the revised LACCE rates with those of the comparable SCE product for
each rate class under the Conservative Participation Scenario and the Most Likely Participation
Scenario.
LACCE BUSINESS PLAN UPDATE 14
Exhibit 13
Conservative Scenario – Bundled Rates
Rate Class
Customer
Type SCE Basic* LACCE RPS
SCE 50%
Renewable
LACCE 50%
Renewable
SCE 100%
Renewable
LACCE 100%
Renewable
Residential Domestic 17.2 16.3 18.9 16.5 20.7 18.3
GS-1 Commercial 16.6 15.7 18.2 15.9 19.8 17.7
GS-2 Commercial 15.7 14.9 17.8 15.1 19.8 16.7
GS-3 Industrial 14.2 13.4 16.5 13.6 18.7 15.1
PA-2 Public
Authority
12.4 11.7 14.6 11.9 16.7 13.2
PA-3 Public
Authority
10.8 10.2 13.6 10.4 16.3 11.5
TOU-8
Secondary
Commercial 12.6 11.9 14.9 12.1 17.1 13.4
TOU-8
Primary
Commercial 11.5 10.9 13.9 11.0 16.2 12.2
TOU-8
Substation
Industrial 7.5 7.1 10.3 7.2 13.2 8.0
LACCE
Savings vs.
SCE Basic
5.3% 4.1% -6.3%
LACCE
Savings vs.
SCE
Equivalent
5.3% -13.7% -12.9%
*SCE bundled average rate based on Table 3 in Advice 3515-E-A.
Exhibit 14
Most Likely Scenario – Bundled Rates
Rate Class
Customer
Type SCE Basic* LACCE RPS
SCE 50%
Renewable
LACCE 50%
Renewable
SCE 100%
Renewable
LACCE 100%
Renewable
Residential Domestic 17.2 16.3 18.9 16.5 20.7 18.3
GS-1 Commercial 16.6 15.7 18.2 15.9 19.8 17.6
GS-2 Commercial 15.7 14.9 17.8 15.0 19.8 16.7
GS-3 Industrial 14.2 13.4 16.5 13.6 18.7 15.1
PA-2 Public
Authority
12.4 11.7 14.6 11.9 16.7 13.2
PA-3 Public
Authority
10.8 10.2 13.6 10.3 16.3 11.5
TOU-8
Secondary
Domestic 12.6 11.9 14.9 12.1 17.1 13.4
TOU-8
Primary
Commercial 11.5 10.9 13.9 11.0 16.2 12.2
TOU-8
Substation
Industrial 7.5 7.1 10.3 7.2 13.2 8.0
LACCE
Savings vs.
SCE Basic
5.3% 4.2% -6.3%
LACCE
Savings vs.
SCE
Equivalent
5.3% -13.7% -13.0%
*SCE bundled average rate based on Table 3 in Advice 3515-E-A.
LACCE BUSINESS PLAN UPDATE 15
LACCE customers are likely to see rates that on average are 5.3% lower than SCE in the portfolio
meeting RPS standards, 4.1% to 4.2% lower than SCE with 50% renewable power supply and 6.3%
higher than SCE with 100% renewable power supply.
Risks
The results of this Business Plan Update are subject to uncertainties. The list below provides a
summary discussion of the key uncertainties of this Plan. These have not changed since the Initial
Business Plan. A comparative table of risks to CCA viability is also provided in Exhibit 15.
Market Price Forecasts – Market prices (and forecasts) are continually changing. The market
price forecasts for electricity and natural gas utilized in this Plan are based on the best currently
available information regarding future natural gas and electricity prices, and have been
confirmed by recent wholesale power transactions in southern California. However, these types
of forecasts vary over time.
Retail Rate Forecasts – The Plan forecasts retail rates for both LACCE and SCE over the study
period. These forecasts are based on current information regarding inflation, RPS requirement
and other cost drivers.
Forecast Load and Customer Growth – The Plan bases the load forecasts on customer growth
and participation. Both variables are inherently uncertainty.
Regulatory Risks – Unforeseen changes in legislation (California Public Utility Commission, state
legislation and federal legislation) may impact the results of this Plan.
This sensitivity analysis from the initial Business Plan show that the LACCE rates could be greater
than SCE rates if:
The Power Charge Indifference Adjustment (PCIA) increases significantly without an offsetting
power supply cost reduction.
LACCE loads are much less than forecast. For example, if LACCE only achieves Phase 1
participation, it would be difficult to operate LACCE at lower rates than SCE.
Wholesale market prices drop to 25% lower than present levels. As power costs to both SCE
and LACCE are decreased, the PCIA would increase. This causes additional risks to LACCE even
though power procurement costs could be lower.
Each of these three scenarios can be managed if they occur (see Exhibit 15). LACCE can mitigate
risk from PCIA increases or from wholesale market price drops by investing in a power portfolio that
is balanced between long and short-term contracts and by maintaining a healthy reserve fund to
cushion rates through periods of high PCIA rates (as Marin Clean Energy and Sonoma Clean Power
have done repeatedly). If LACCE’s load becomes significantly lower than expected due to poor
customer participation, LACCE could expand its service territory, merge with another existing CCA,
or reduce overhead expenses.
In the long-term, the PCIA is expected to decline as contracts expire and market prices increase. In
addition, SCE is now taking into account the potential loss of load to CCAs and is not purchasing
purchase power on behalf of CCA customers, thus not incurring additional stranded costs on behalf
of CCA customers.
LACCE BUSINESS PLAN UPDATE 16
Finally, the extremely low levels of participation needed to undermine the financial viability of
LACCE is extremely unlikely given the increasing precedent set by other CCAs in California and their
success in retaining customers. The results of this update demonstrate that there is sufficient load
in LA County such that participation as low as 75% residential and 65% non-residential will not have
an impact of the feasibility of LACCE.
LACCE BUSINESS PLAN UPDATE 17
Exhibit 15
Comparison of Risks, Mitigation Strategies, and Risk Severity
Risk Description Problem Mitigation Strategy Likelihood of Problem Severity of Problem Potential to
“break” LACCE
1 SCE Rates
and
Surcharges
SCE's generation
rates decrease
or its non-
bypassable
charges increase
• LACCE rates
exceed SCE
• Increased
customer
opt-out rate
• Establish Rate
Stabilization Fund
• Invest in a balanced
portfolio to remain agile in
power market
•Emphasize the value of
programs, local control, and
environmental impact in
marketing
High – most operating
CCAs in California
have undergone short
periods of rate
competition from the
incumbent IOU.
Medium - CCAs have
always been able to
buffer rate impacts
using financial
reserves, then adjust
power supply to
regain rate advantage.
Low – only in
the event of
very poor
contract
management
by LACCE and
unprecedented
changes in IOU
rates.
2 Regulatory
Risks
Energy policy is
enacted that
compromises
CCA
competitiveness
or
independence
New costs
incurred
Reduced
authority
Coordination with CCA
community on regulatory
involvement
Hire lobbyists and
regulatory
representatives
Low – existing
regulatory precedent
makes the likelihood
of state policies that
severely disadvantage
CCAs low.
High – a worst case
scenario regulatory
legislative decision
limiting CCA
autonomy or
enforcing additional
costs could hinder
CCA viability.
Low – energy
policy severe
enough to
make LACCE
infeasible is
very unlikely.
3 Power
Supply Costs
Power prices
increase at
crucial time for
LACCE
• LACCE rates
exceed SCE
• Increased
customer
opt-out rate
• Long-term contracts
• Draw on LACCE reserves
to stabilize rates through
price spike
Low – market prices
are unlikely to spike
enough to make
LACCE financially
infeasible prior to
LACCE launch. From
that point on, LACCE
can limit its exposure
through contract
selection.
Medium – a poorly
timed price spike
combined with poor
power supply contract
management could
require LACCE to dig
into reserves or delay
launch.
Very low
4 SCE RPS
Share
SCE's RPS or
GHG-free power
portfolio grows
Increased
customer
opt-out rate
• Increase renewable
power portfolio
• Emphasize rates and local
programs in marketing
Medium – SCE’s
power portfolio is
dynamic and could
change rapidly as a
Low – LACCE will have
capability to increase
renewable energy
purchases to match or
Very Low –
LACCE is highly
likely to
respond
LACCE BUSINESS PLAN UPDATE 18
to match or
exceed LACCE's
result of other CCA
departures.
exceed SCE if the
event occurs. In
addition, LACCE will
promote other
benefits of its service
to customers.
effectively if
this occurs.
5 Availability
of RPS/GHG-
free power
Unexpectedly
high market
demand or loss
of supply of
renewable
resources
LACCE
unable to
provide
target
power
products
Shift emphasis to GHG-
free or RPS resources
depending on availability
Secure long-term
contracts
Invest in local renewable
resources
Low – power
procurement
providers report a
plethora of RPS and
GHG-free bids
available on the
market.
Medium – if LACCE
were unexpectedly
unable to procure
enough RPS or GHG-
free power, it could
emphasize other
program strengths to
retain customers until
new resources came
online.
Very Low –
negligible
chance of
occurring.
6 Financial
Risks
LACCE is unable
to acquire
desired
financing or
credit
Slower or
delayed
program
launch
Unable to
build
generation
projects
Adopt gradual program
roll-out
Establish Rate
Stabilization Fund
Minimize overhead costs
Low – CCAs have
become sufficiently
established in
California that
financing is almost
certainly available.
Medium – in the
event LACCE is limited
in financing options, it
can adopt a more
conservative program
design and gradual
roll-out.
Very Low
7 Loads and
customer
participation
Unprecedented
opt-out rate
reduces
competitiveness
Excess
power
contracts
Poor
margins
Increase marketing
Reduce overhead
Expand to new customer
markets
Consider merging with
existing CCA
Low – as CCAs have
become more
common in California,
and CCA marketing
firms more
experienced, opt-out
rates have gone lower
and lower.
Low – LACCE will have
numerous viable
options in the event
they suffer
unexpectedly low
participation.
Very Low
LACCE BUSINESS PLAN UPDATE 19
Summary
This updated Business Plan supports the initial findings that the formation of a CCA in Los Angeles
County is financially viable and will yield considerable benefits for the County’s residents and
businesses. These benefits include competitive rates for electricity and increased renewable
resource deployment. With the achievement of Phase 2 operations, LACCE could reduce GHG
emissions by as much as 500,000 tons of CO2e per year, add hundreds of jobs, generate over $24
million in additional GDP, and give the County and its residents local control over their power supply
and distributed energy resource programs.
LA
Co
u
n
t
y
Co
m
m
u
n
i
t
y
Ch
o
i
c
e
Ag
g
r
e
g
a
t
i
o
n
Fi
n
a
n
c
i
a
l
Op
e
r
a
t
i
n
g
Mo
d
e
l
‐
RP
S
Mo
s
t
Li
k
e
l
y
Lo
a
d
Sc
e
n
a
r
i
o
Ap
r
i
l
17
,
20
1
7
20
1
8
2
0
1
8
CC
E
Op
e
r
a
t
i
n
g
Co
s
t
s
J
a
n
‐
Ju
n
e
J
u
l
y
‐
De
c
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
Po
w
e
r
Su
p
p
l
y
$
3
,
6
8
6
,
3
3
1
$
6
5
,
7
9
0
,
2
7
1
$
1
2
4
,
4
0
2
,
9
5
2
$
1
3
1
,
0
8
4
,
9
7
2
$
1
3
5
,
2
0
6
,
21
3
$
1
3
9
,
3
1
1
,
1
1
9
$
1
4
3
,
8
7
6
,
2
6
7
$
1
4
9
,
9
3
9
,
1
1
2
$
1
5
4
,
4
5
6
,
3
1
0
$
1
5
9
,
1
6
0
,
2
3
2
$
1
6
4
,565,198 $169,481,295
Bi
l
l
i
n
g
& Da
t
a
Ma
n
a
g
e
m
e
n
t
$
1
2
,
9
6
0
$
2
,
3
7
7
,
2
4
8
$
4
,
7
7
0
,
9
0
4
$
4
,
8
1
5
,
9
1
3
$
4
,
8
8
1
,
1
7
3
$
4
,
95
6
,
3
5
8
$
5
,
0
5
7
,
8
3
4
$
5
,
1
6
9
,
4
1
5
$
5
,
2
8
5
,
11
8
$
5
,
4
0
8
,
7
4
7
$
5
,
5
2
6
,
0
1
7
$
5
,
6
1
4
,
9
2
5
SC
E
Fe
e
s
$
1
,
1
3
2
,
8
9
2
$
1
,
9
9
2
,
0
5
9
$
1
,
5
6
4
,
9
6
4
$
1
,
5
7
9
,
72
7
$
1
,
6
0
1
,
1
3
3
$
1
,
6
2
5
,
7
9
3
$
1
,
6
5
9
,
0
7
7
$
1
,
6
9
5
,
6
7
6
$1
,
7
3
3
,
6
2
7
$
1
,
7
7
4
,
1
7
7
$
1
,
8
1
2
,
6
4
1
$
1
,
8
4
1
,
8
0
3
Te
c
h
n
i
c
a
l
Se
r
v
i
c
e
s
$
6
6
5
,
0
0
0
$
6
6
5
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
00
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
St
a
f
f
i
n
g
$
2
0
0
,
0
0
0
$
9
3
5
,
0
0
0
$
2
,
8
2
5
,
4
0
0
$
2
,
8
8
1
,
9
0
8
$
2
,
9
3
9
,
5
4
6
$
2
,
9
9
8
,
33
7
$
3
,
0
5
8
,
3
0
4
$
3
,
1
1
9
,
4
7
0
$
3
,
1
8
1
,
8
5
9
$3
,
2
4
5
,
4
9
6
$
3
,
3
1
0
,
4
0
6
$
3
,
3
7
6
,
6
1
5
Ge
n
e
r
a
l
& Ad
m
i
n
i
s
t
r
a
t
i
v
e
ex
p
e
n
s
e
s
$
1
7
0
,
0
0
0
$
2
3
0
,
0
0
0
$
3
5
6
,
0
0
0
$
3
1
2
,
1
2
0
$
3
1
8
,
3
6
2
$3
2
4
,
7
3
0
$
3
3
1
,
2
2
4
$
3
3
7
,
8
4
9
$
3
4
4
,
6
0
6
$
3
5
1
,
4
9
8
$
3
5
8
,
5
2
8
$
3
6
5
,
6
9
8
Co
n
t
r
i
b
u
t
i
o
n
to
An
n
u
a
l
Re
s
e
r
v
e
s
$
0
$
1
2
,
5
0
0
,
1
3
2
$
1
1
,
8
5
9
,
7
3
1
$
1
4
,
2
1
1
,
5
9
6
$
1
7
,
2
2
2
,
4
5
8
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Ne
w
Pr
o
g
r
a
m
s
$
0
$
0
$
0
$
0
$
0
$
1
7
,
2
2
2
,
4
5
8
$
1
9
,
0
0
6
,
5
1
5
$1
9
,
7
3
1
,
0
2
0
$
2
0
,
3
4
5
,
0
3
4
$
2
1
,
0
1
6
,
6
5
5
$
2
1
,
6
9
7
,
0
6
1
$
2
2
,
3
9
2
,
3
5
9
De
b
t
Se
r
v
i
c
e
(C
C
E
Bo
n
d
s
& St
a
r
t
‐up
Co
s
t
s
)
$
0
$
2
,
0
9
1
,
9
8
3
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
St
a
r
t
‐Up
Ca
p
i
t
a
l
(
$
5
,
7
9
5
,
0
7
9
)
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Un
c
o
l
l
e
c
t
i
b
l
e
s
$
3
5
,
2
3
8
$
4
7
5
,
7
3
4
$
9
1
7
,
2
7
2
$
9
5
2
,
2
2
0
$
9
7
3
,
4
5
2
$9
9
4
,
6
5
9
$
9
3
6
,
1
3
2
$
9
6
5
,
4
3
3
$
9
8
8
,
3
7
1
$
1
,
0
1
2
,
1
9
1
$
1
,
0
3
9
,
1
5
7
$
1
,
0
6
3
,
9
5
6
To
t
a
l
Op
e
r
a
t
i
n
g
Co
s
t
s
$1
0
7
,
3
4
1
$
8
7
,
0
5
7
,
4
2
7
$
1
5
2
,
1
8
1
,
1
9
1
$
1
6
1
,
3
2
2
,
4
2
2
$
1
6
8
,
6
2
6
,
3
0
4
$
1
7
2
,
9
1
7
,
42
0
$
1
7
9
,
4
0
9
,
3
2
1
$
1
8
6
,
4
4
1
,
9
4
0
$
1
9
1
,
8
1
8
,
8
9
2
$
1
9
7
,
4
5
2
,
9
6
3
$
2
0
3
,
7
9
2
,
9
7
5
$209,620,618
Ot
h
e
r
Re
v
e
n
u
e
s
$0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
To
t
a
l
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$1
0
7
,
3
4
1
$
8
7
,
0
5
7
,
4
2
7
$
1
5
2
,
1
8
1
,
1
9
1
$
1
6
1
,
3
2
2
,
4
2
2
$
1
6
8
,
6
2
6
,
3
0
4
$
1
7
2
,
9
1
7
,
42
0
$
1
7
9
,
4
0
9
,
3
2
1
$
1
8
6
,
4
4
1
,
9
4
0
$
1
9
1
,
8
1
8
,
8
9
2
$
1
9
7
,
4
5
2
,
9
6
3
$
2
0
3
,
7
9
2
,
9
7
5
$209,620,618
Av
e
r
a
g
e
CC
E
Ra
t
e
($
/
k
W
h
)
$0
.
0
3
0
4
$
0
.
0
5
2
5
$
0
.
0
5
5
1
$
0
.
0
5
7
0
$
0
.
0
5
7
9
$
0
.
0
5
9
5
$
0
.
0
6
1
2
$
0
.
0
6
2
3
$
0
.
0
6
3
5
$
0
.
0
6
4
9
#
D
I
V
/
0
!
Av
e
r
a
g
e
SC
E
Ge
n
e
r
a
t
i
o
n
Ra
t
e
($
/
k
W
h
)
$0
.
0
7
0
8
$
0
.
0
7
2
1
$
0
.
0
7
4
8
$
0
.
0
7
6
3
$
0
.
0
7
7
7
$
0
.
0
7
9
4
$
0
.
0
8
1
6
$
0
.
0
8
3
1
$
0
.
0
8
4
7
$
0
.
0
8
6
6
$
0
.
0
8
8
2
To
t
a
l
CC
E
Ch
a
r
g
e
s
SC
E
No
n
‐by
p
a
s
s
a
b
l
e
Ch
a
r
g
e
s
$
1
,
1
8
0
,
3
1
7
$
2
1
,
0
6
5
,
2
2
1
$
4
4
,
0
5
0
,
2
9
4
$
4
4
,
2
8
5
,
3
3
4
$
4
4
,
2
6
0
,
0
7
5
$4
4
,
2
3
1
,
5
4
7
$
2
7
,
7
5
9
,
8
1
6
$
2
7
,
3
4
1
,
1
4
6
$2
7
,
1
8
8
,
7
6
3
$
2
7
,
0
1
4
,
0
0
3
$
2
6
,
7
7
4
,
6
5
6
$26,626,898
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$
1
0
7
,
3
4
1
$
8
7
,
0
5
7
,
4
2
7
$
1
5
2
,
1
8
1
,
1
9
1
$
1
6
1
,
3
2
2
,
4
2
2
$
1
6
8
,
6
2
6
,
30
4
$
1
7
2
,
9
1
7
,
4
2
0
$
1
7
9
,
4
0
9
,
3
2
1
$
1
8
6
,
4
4
1
,
9
4
0
$
1
9
1
,
8
1
8
,
8
9
2
$
1
9
7
,
4
5
2
,
9
6
3
$
203,792,975 $209,620,618
To
t
a
l
CC
E
Ge
n
e
r
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$1
,
2
8
7
,
6
5
8
$
1
0
8
,
1
2
2
,
6
4
9
$
1
9
6
,
2
3
1
,
4
8
5
$
2
0
5
,
6
0
7
,
7
5
6
$
2
1
2
,
8
8
6
,
3
7
9
$
2
1
7
,
14
8
,
9
6
8
$
2
0
7
,
1
6
9
,
1
3
7
$
2
1
3
,
7
8
3
,
0
8
6
$
2
1
9
,
0
0
7
,
6
5
5
$
2
2
4
,
4
6
6
,
9
6
5
$
2
3
0
,
5
6
7
,
631 $236,247,516
Bu
n
d
l
e
d
SC
E
Re
v
e
n
u
e
s
$
1
4
,
6
4
5
,
6
7
1
$
2
6
1
,
3
8
2
,
5
8
3
$
4
9
6
,
1
2
3
,
0
0
3
$
5
1
4
,
6
3
5
,
0
0
4
$
5
3
0
,
14
3
,
5
6
4
$
5
4
5
,
9
3
3
,
1
1
5
$
5
6
2
,
6
2
6
,
0
3
6
$
5
8
1
,
56
7
,
4
5
7
$
5
9
8
,
8
4
8
,
5
1
7
$
6
1
6
,
7
0
9
,
5
8
7
$635,822,737 $654,666,595
To
t
a
l
CC
E
Cu
s
t
o
m
e
r
Bil
l
Re
v
e
n
u
e
s
(P
o
w
e
r
Su
p
p
l
y
an
d
De
l
i
v
e
r
y
)
$
1
3
,
8
5
0
,
0
8
9
$
2
4
7
,
1
8
3
,
7
7
3
$
4
6
9
,
5
4
7
,
5
6
5
$
4
8
7
,
4
9
6
,
2
8
7
$
5
0
3
,
60
9
,
4
3
2
$
5
1
8
,
7
6
0
,
6
1
7
$
5
3
3
,
5
0
1
,
4
8
6
$
5
4
9
,
83
8
,
3
0
2
$
5
6
5
,
2
5
0
,
8
0
3
$
5
8
1
,
1
5
5
,
1
5
7 $598,022,149 $614,853,993
Sa
v
i
n
g
s
$
7
9
5
,
5
8
1
$
1
4
,
1
9
8
,
8
1
1
$
2
6
,
5
7
5
,
4
3
9
$
2
7
,
1
3
8
,
7
1
7
$
2
6
,
5
3
4
,
1
3
2
$
2
7
,
1
7
2
,
4
9
8
$
2
9
,
1
2
4
,
5
5
0
$
3
1
,
7
2
9
,
1
5
5
$
3
3
,
5
9
7
,
7
1
5
$
3
5
,
5
5
4
,
4
3
0
$
3
7
,
8
0
0
,
5
8
8
$
3
9,812,601
Pe
r
c
e
n
t
Sa
v
i
n
g
s
5
.
4
%
5
.
4
%
5
.
4
%
5
.
3
%
5
.
0
%
5
.
0
%
5
.
2
%
5
.
5
%
5
.
6
%
5
.
8
%
5
.
9
%
6
.
1
%
LA
Co
u
n
t
y
Co
m
m
u
n
i
t
y
Ch
o
i
c
e
Ag
g
r
e
g
a
t
i
o
n
Fi
n
a
n
c
i
a
l
Op
e
r
a
t
i
n
g
Mo
d
e
l
‐
50
%
Mo
s
t
Li
k
e
l
y
Lo
a
d
Sc
e
n
a
r
i
o
Ap
r
i
l
17
,
20
1
7
20
1
8
2
0
1
8
CC
E
Op
e
r
a
t
i
n
g
Co
s
t
s
J
a
n
‐
Ju
n
e
J
u
l
y
‐
De
c
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
Po
w
e
r
Su
p
p
l
y
$
4
,
0
1
5
,
1
6
9
$
7
1
,
6
5
9
,
0
7
6
$
1
3
5
,
1
8
3
,
8
0
2
$
1
3
8
,
6
9
3
,
4
6
2
$
1
4
2
,
3
8
8
,
02
5
$
1
4
6
,
0
4
3
,
9
1
6
$
1
5
0
,
1
4
0
,
6
5
1
$
1
5
4
,
2
3
3
,
1
8
8
$
1
5
8
,
3
9
5
,
6
1
3
$
1
6
2
,
7
9
5
,
7
0
8
$
1
6
7
,274,678 $171,908,752
Bi
l
l
i
n
g
& Da
t
a
Ma
n
a
g
e
m
e
n
t
$
1
2
,
9
6
0
$
2
,
3
7
7
,
2
4
8
$
4
,
7
7
0
,
9
0
4
$
4
,
8
1
5
,
9
1
3
$
4
,
8
8
1
,
1
7
3
$
4
,
95
6
,
3
5
8
$
5
,
0
5
7
,
8
3
4
$
5
,
1
6
9
,
4
1
5
$
5
,
2
8
5
,
11
8
$
5
,
4
0
8
,
7
4
7
$
5
,
5
2
6
,
0
1
7
$
5
,
6
1
4
,
9
2
5
SC
E
Fe
e
s
$
1
,
1
3
2
,
8
9
2
$
1
,
9
9
2
,
0
5
9
$
1
,
5
6
4
,
9
6
4
$
1
,
5
7
9
,
72
7
$
1
,
6
0
1
,
1
3
3
$
1
,
6
2
5
,
7
9
3
$
1
,
6
5
9
,
0
7
7
$
1
,
6
9
5
,
6
7
6
$1
,
7
3
3
,
6
2
7
$
1
,
7
7
4
,
1
7
7
$
1
,
8
1
2
,
6
4
1
$
1
,
8
4
1
,
8
0
3
Te
c
h
n
i
c
a
l
Se
r
v
i
c
e
s
$
6
6
5
,
0
0
0
$
6
6
5
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
00
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
St
a
f
f
i
n
g
$
2
0
0
,
0
0
0
$
9
3
5
,
0
0
0
$
2
,
8
2
5
,
4
0
0
$
2
,
8
8
1
,
9
0
8
$
2
,
9
3
9
,
5
4
6
$
2
,
9
9
8
,
33
7
$
3
,
0
5
8
,
3
0
4
$
3
,
1
1
9
,
4
7
0
$
3
,
1
8
1
,
8
5
9
$3
,
2
4
5
,
4
9
6
$
3
,
3
1
0
,
4
0
6
$
3
,
3
7
6
,
6
1
5
Ge
n
e
r
a
l
& Ad
m
i
n
i
s
t
r
a
t
i
v
e
ex
p
e
n
s
e
s
$
1
7
0
,
0
0
0
$
2
3
0
,
0
0
0
$
3
5
6
,
0
0
0
$
3
1
2
,
1
2
0
$
3
1
8
,
3
6
2
$3
2
4
,
7
3
0
$
3
3
1
,
2
2
4
$
3
3
7
,
8
4
9
$
3
4
4
,
6
0
6
$
3
5
1
,
4
9
8
$
3
5
8
,
5
2
8
$
3
6
5
,
6
9
8
Co
n
t
r
i
b
u
t
i
o
n
to
An
n
u
a
l
Re
s
e
r
v
e
s
$
0
$
1
0
,
3
1
2
,
2
5
2
$
6
,
8
2
2
,
3
5
6
$
1
2
,
2
0
2
,
6
7
5
$
1
5
,
5
8
8
,
3
8
9
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Ne
w
Pr
o
g
r
a
m
s
$
0
$
0
$
0
$
0
$
0
$
1
5
,
5
8
8
,
3
8
9
$
1
6
,
8
3
7
,
4
6
1
$1
8
,
1
7
5
,
6
7
8
$
2
0
,
9
5
2
,
0
1
2
$
2
2
,
1
2
3
,
1
9
5
$
2
3
,
2
5
7
,
4
4
5
$
2
5
,
0
5
0
,
6
0
1
De
b
t
Se
r
v
i
c
e
(C
C
E
Bo
n
d
s
& St
a
r
t
‐up
Co
s
t
s
)
$
0
$
2
,
0
9
1
,
9
8
3
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
St
a
r
t
‐Up
Ca
p
i
t
a
l
(
$
5
,
7
9
5
,
0
7
9
)
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Un
c
o
l
l
e
c
t
i
b
l
e
s
$
3
6
,
8
8
2
$
5
0
5
,
0
7
8
$
9
7
1
,
1
7
7
$
9
9
0
,
2
6
2
$
1
,
0
0
9
,
3
6
1
$
1
,
02
8
,
3
2
3
$
9
6
7
,
4
5
4
$
9
8
6
,
9
0
4
$
1
,
0
0
8
,
0
6
8
$1
,
0
3
0
,
3
6
8
$
1
,
0
5
2
,
7
0
4
$
1
,
0
7
6
,
0
9
3
To
t
a
l
Op
e
r
a
t
i
n
g
Co
s
t
s
$4
3
7
,
8
2
4
$
9
0
,
7
6
7
,
6
9
6
$
1
5
7
,
9
7
8
,
5
7
0
$
1
6
6
,
9
6
0
,
0
3
4
$
1
7
4
,
2
0
9
,
9
5
6
$
1
7
8
,
0
4
9
,
81
3
$
1
8
3
,
5
3
5
,
9
7
2
$
1
8
9
,
2
0
2
,
1
4
6
$
1
9
6
,
3
8
4
,
8
7
0
$
2
0
2
,
2
1
3
,
1
5
6
$
2
0
8
,
0
7
6
,
3
8
6
$214,718,454
Ot
h
e
r
Re
v
e
n
u
e
s
$0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
To
t
a
l
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$4
3
7
,
8
2
4
$
9
0
,
7
6
7
,
6
9
6
$
1
5
7
,
9
7
8
,
5
7
0
$
1
6
6
,
9
6
0
,
0
3
4
$
1
7
4
,
2
0
9
,
9
5
6
$
1
7
8
,
0
4
9
,
81
3
$
1
8
3
,
5
3
5
,
9
7
2
$
1
8
9
,
2
0
2
,
1
4
6
$
1
9
6
,
3
8
4
,
8
7
0
$
2
0
2
,
2
1
3
,
1
5
6
$
2
0
8
,
0
7
6
,
3
8
6
$214,718,454
Av
e
r
a
g
e
CC
E
Ra
t
e
($
/
k
W
h
)
$0
.
0
3
1
8
$
0
.
0
5
4
5
$
0
.
0
5
7
0
$
0
.
0
5
8
9
$
0
.
0
5
9
6
$
0
.
0
6
0
8
$
0
.
0
6
2
1
$
0
.
0
6
3
8
$
0
.
0
6
5
1
$
0
.
0
6
6
3
#
D
I
V
/
0
!
Av
e
r
a
g
e
SC
E
Ge
n
e
r
a
t
i
o
n
Ra
t
e
($
/
k
W
h
)
$0
.
0
7
0
8
$
0
.
0
7
2
1
$
0
.
0
7
4
8
$
0
.
0
7
6
3
$
0
.
0
7
7
7
$
0
.
0
7
9
4
$
0
.
0
8
1
6
$
0
.
0
8
3
1
$
0
.
0
8
4
7
$
0
.
0
8
6
6
$
0
.
0
8
8
2
To
t
a
l
CC
E
Ch
a
r
g
e
s
SC
E
No
n
‐by
p
a
s
s
a
b
l
e
Ch
a
r
g
e
s
$
1
,
1
8
0
,
3
1
7
$
2
1
,
0
6
5
,
2
2
1
$
4
4
,
0
5
0
,
2
9
4
$
4
4
,
2
8
5
,
3
3
4
$
4
4
,
2
6
0
,
0
7
5
$4
4
,
2
3
1
,
5
4
7
$
2
7
,
7
5
9
,
8
1
6
$
2
7
,
3
4
1
,
1
4
6
$2
7
,
1
8
8
,
7
6
3
$
2
7
,
0
1
4
,
0
0
3
$
2
6
,
7
7
4
,
6
5
6
$26,626,898
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$
4
3
7
,
8
2
4
$
9
0
,
7
6
7
,
6
9
6
$
1
5
7
,
9
7
8
,
5
7
0
$
1
6
6
,
9
6
0
,
0
3
4
$
1
7
4
,
2
0
9
,
95
6
$
1
7
8
,
0
4
9
,
8
1
3
$
1
8
3
,
5
3
5
,
9
7
2
$
1
8
9
,
2
0
2
,
1
4
6
$
1
9
6
,
3
8
4
,
8
7
0
$
2
0
2
,
2
1
3
,
1
5
6
$
208,076,386 $214,718,454
To
t
a
l
CC
E
Ge
n
e
r
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$1
,
6
1
8
,
1
4
1
$
1
1
1
,
8
3
2
,
9
1
7
$
2
0
2
,
0
2
8
,
8
6
3
$
2
1
1
,
2
4
5
,
3
6
7
$
2
1
8
,
4
7
0
,
0
3
2
$
2
2
2
,
28
1
,
3
6
0
$
2
1
1
,
2
9
5
,
7
8
8
$
2
1
6
,
5
4
3
,
2
9
2
$
2
2
3
,
5
7
3
,
6
3
3
$
2
2
9
,
2
2
7
,
1
5
8
$
2
3
4
,
8
5
1
,
042 $241,345,352
Bu
n
d
l
e
d
SC
E
Re
v
e
n
u
e
s
$
1
4
,
6
4
5
,
6
7
1
$
2
6
1
,
3
8
2
,
5
8
3
$
4
9
6
,
1
2
3
,
0
0
3
$
5
1
4
,
6
3
5
,
0
0
4
$
5
3
0
,
14
3
,
5
6
4
$
5
4
5
,
9
3
3
,
1
1
5
$
5
6
2
,
6
2
6
,
0
3
6
$
5
8
1
,
56
7
,
4
5
7
$
5
9
8
,
8
4
8
,
5
1
7
$
6
1
6
,
7
0
9
,
5
8
7
$635,822,737 $654,666,595
To
t
a
l
CC
E
Cu
s
t
o
m
e
r
Bil
l
Re
v
e
n
u
e
s
(P
o
w
e
r
Su
p
p
l
y
an
d
De
l
i
v
e
r
y
)
$
1
4
,
0
6
4
,
4
8
6
$
2
5
1
,
0
1
0
,
1
2
7
$
4
7
5
,
3
4
4
,
9
4
3
$
4
9
3
,
1
3
3
,
8
9
8
$
5
0
9
,
19
3
,
0
8
4
$
5
2
3
,
3
5
8
,
0
2
5
$
5
3
8
,
2
4
1
,
8
5
0
$
5
5
4
,
76
0
,
8
2
7
$
5
7
0
,
3
1
6
,
3
4
3
$
5
8
6
,
3
6
9
,
1
9
3 $603,403,419 $620,390,618
Sa
v
i
n
g
s
$
5
8
1
,
1
8
5
$
1
0
,
3
7
2
,
4
5
6
$
2
0
,
7
7
8
,
0
6
0
$
2
1
,
5
0
1
,
1
0
6
$
2
0
,
9
5
0
,
4
7
9
$
2
2
,
5
7
5
,
0
9
1
$
2
4
,
3
8
4
,
1
8
6
$
2
6
,
8
0
6
,
6
3
0
$
2
8
,
5
3
2
,
1
7
5
$
3
0
,
3
4
0
,
3
9
4
$
3
2
,
4
1
9
,
3
1
8
$
3
4,275,976
Pe
r
c
e
n
t
Sa
v
i
n
g
s
4
.
0
%
4
.
0
%
4
.
2
%
4
.
2
%
4
.
0
%
4
.
1
%
4
.
3
%
4
.
6
%
4
.
8
%
4
.
9
%
5
.
1
%
5
.
2
%
LA
Co
u
n
t
y
Co
m
m
u
n
i
t
y
Ch
o
i
c
e
Ag
g
r
e
g
a
t
i
o
n
Fi
n
a
n
c
i
a
l
Op
e
r
a
t
i
n
g
Mo
d
e
l
‐
10
0
%
Mo
s
t
Li
k
e
l
y
Lo
a
d
Sc
e
n
a
r
i
o
Ap
r
i
l
17
,
20
1
7
20
1
8
2
0
1
8
CC
E
Op
e
r
a
t
i
n
g
Co
s
t
s
J
a
n
‐
Ju
n
e
J
u
l
y
‐
De
c
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
Po
w
e
r
Su
p
p
l
y
$
5
,
5
4
8
,
1
7
8
$
9
9
,
0
1
8
,
8
3
0
$
1
8
6
,
0
7
9
,
8
7
6
$
1
8
8
,
6
3
6
,
5
4
1
$
1
9
2
,
6
7
8
,
97
4
$
1
9
6
,
0
3
1
,
7
4
6
$
1
9
9
,
5
7
2
,
4
7
0
$
2
0
3
,
1
6
7
,
0
2
2
$
2
0
6
,
7
1
6
,
1
1
9
$
2
1
0
,
5
5
7
,
0
2
8
$
2
1
4
,410,606 $218,369,553
Bi
l
l
i
n
g
& Da
t
a
Ma
n
a
g
e
m
e
n
t
$
1
2
,
9
6
0
$
2
,
3
7
7
,
2
4
8
$
4
,
7
7
0
,
9
0
4
$
4
,
8
1
5
,
9
1
3
$
4
,
8
8
1
,
1
7
3
$
4
,
95
6
,
3
5
8
$
5
,
0
5
7
,
8
3
4
$
5
,
1
6
9
,
4
1
5
$
5
,
2
8
5
,
11
8
$
5
,
4
0
8
,
7
4
7
$
5
,
5
2
6
,
0
1
7
$
5
,
6
1
4
,
9
2
5
SC
E
Fe
e
s
$
1
,
1
3
2
,
8
9
2
$
1
,
9
9
2
,
0
5
9
$
1
,
5
6
4
,
9
6
4
$
1
,
5
7
9
,
72
7
$
1
,
6
0
1
,
1
3
3
$
1
,
6
2
5
,
7
9
3
$
1
,
6
5
9
,
0
7
7
$
1
,
6
9
5
,
6
7
6
$1
,
7
3
3
,
6
2
7
$
1
,
7
7
4
,
1
7
7
$
1
,
8
1
2
,
6
4
1
$
1
,
8
4
1
,
8
0
3
Te
c
h
n
i
c
a
l
Se
r
v
i
c
e
s
$
6
6
5
,
0
0
0
$
6
6
5
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
00
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
$
1
,
3
0
0
,
0
0
0
St
a
f
f
i
n
g
$
2
0
0
,
0
0
0
$
9
3
5
,
0
0
0
$
2
,
8
2
5
,
4
0
0
$
2
,
8
8
1
,
9
0
8
$
2
,
9
3
9
,
5
4
6
$
2
,
9
9
8
,
33
7
$
3
,
0
5
8
,
3
0
4
$
3
,
1
1
9
,
4
7
0
$
3
,
1
8
1
,
8
5
9
$3
,
2
4
5
,
4
9
6
$
3
,
3
1
0
,
4
0
6
$
3
,
3
7
6
,
6
1
5
Ge
n
e
r
a
l
& Ad
m
i
n
i
s
t
r
a
t
i
v
e
ex
p
e
n
s
e
s
$
1
7
0
,
0
0
0
$
2
3
0
,
0
0
0
$
3
5
6
,
0
0
0
$
3
1
2
,
1
2
0
$
3
1
8
,
3
6
2
$3
2
4
,
7
3
0
$
3
3
1
,
2
2
4
$
3
3
7
,
8
4
9
$
3
4
4
,
6
0
6
$
3
5
1
,
4
9
8
$
3
5
8
,
5
2
8
$
3
6
5
,
6
9
8
Co
n
t
r
i
b
u
t
i
o
n
to
An
n
u
a
l
Re
s
e
r
v
e
s
$
0
$
8
,
9
8
3
,
0
3
0
$
7
,
4
3
4
,
1
1
2
$
1
8
,
3
8
5
,
9
9
6
$
2
0
,
8
8
2
,
5
0
9
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Ne
w
Pr
o
g
r
a
m
s
$
0
$
0
$
0
$
0
$
0
$
2
0
,
8
8
2
,
5
0
9
$
2
4
,
0
6
7
,
2
8
3
$2
7
,
7
5
1
,
2
4
8
$
3
3
,
3
0
5
,
0
7
3
$
3
6
,
8
8
0
,
3
3
5
$
4
0
,
4
3
2
,
7
6
8
$
4
4
,
9
4
4
,
8
7
3
De
b
t
Se
r
v
i
c
e
(C
C
E
Bo
n
d
s
& St
a
r
t
‐up
Co
s
t
s
)
$
0
$
2
,
0
9
1
,
9
8
3
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
St
a
r
t
‐Up
Ca
p
i
t
a
l
(
$
5
,
7
9
5
,
0
7
9
)
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Un
c
o
l
l
e
c
t
i
b
l
e
s
$
4
4
,
5
4
7
$
6
4
1
,
8
7
7
$
1
,
2
2
5
,
6
5
7
$
1
,
2
3
9
,
9
7
8
$
1
,
2
6
0
,
8
1
6
$
1
,
27
8
,
2
6
2
$
1
,
2
1
4
,
6
1
3
$
1
,
2
3
1
,
5
7
3
$
1
,
2
4
9
,
67
0
$
1
,
2
6
9
,
1
7
5
$
1
,
2
8
8
,
3
8
4
$
1
,
3
0
8
,
3
97
To
t
a
l
Op
e
r
a
t
i
n
g
Co
s
t
s
$1
,
9
7
8
,
4
9
8
$
1
1
6
,
9
3
5
,
0
2
7
$
2
0
9
,
7
4
0
,
8
7
9
$
2
2
3
,
3
3
6
,
1
4
9
$
2
3
0
,
0
4
6
,
4
8
0
$
2
3
3
,
58
1
,
7
0
3
$
2
4
0
,
4
4
4
,
7
7
2
$
2
4
7
,
9
5
6
,
2
1
9
$
2
5
7
,
3
0
0
,
0
3
9
$
2
6
4
,
9
7
0
,
4
2
2
$
2
7
2
,
6
2
3
,
317 $281,305,832
Ot
h
e
r
Re
v
e
n
u
e
s
$0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
To
t
a
l
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$1
,
9
7
8
,
4
9
8
$
1
1
6
,
9
3
5
,
0
2
7
$
2
0
9
,
7
4
0
,
8
7
9
$
2
2
3
,
3
3
6
,
1
4
9
$
2
3
0
,
0
4
6
,
4
8
0
$
2
3
3
,
58
1
,
7
0
3
$
2
4
0
,
4
4
4
,
7
7
2
$
2
4
7
,
9
5
6
,
2
1
9
$
2
5
7
,
3
0
0
,
0
3
9
$
2
6
4
,
9
7
0
,
4
2
2
$
2
7
2
,
6
2
3
,
317 $281,305,832
Av
e
r
a
g
e
CC
E
Ra
t
e
($
/
k
W
h
)
$0
.
0
4
1
4
$
0
.
0
7
2
4
$
0
.
0
7
6
3
$
0
.
0
7
7
8
$
0
.
0
7
8
2
$
0
.
0
7
9
7
$
0
.
0
8
1
4
$
0
.
0
8
3
6
$
0
.
0
8
5
3
$
0
.
0
8
6
8
#
D
I
V
/
0
!
Av
e
r
a
g
e
SC
E
Ge
n
e
r
a
t
i
o
n
Ra
t
e
($
/
k
W
h
)
$0
.
0
7
0
8
$
0
.
0
7
2
1
$
0
.
0
7
4
8
$
0
.
0
7
6
3
$
0
.
0
7
7
7
$
0
.
0
7
9
4
$
0
.
0
8
1
6
$
0
.
0
8
3
1
$
0
.
0
8
4
7
$
0
.
0
8
6
6
$
0
.
0
8
8
2
To
t
a
l
CC
E
Ch
a
r
g
e
s
SC
E
No
n
‐by
p
a
s
s
a
b
l
e
Ch
a
r
g
e
s
$
1
,
1
8
0
,
3
1
7
$
2
1
,
0
6
5
,
2
2
1
$
4
4
,
0
5
0
,
2
9
4
$
4
4
,
2
8
5
,
3
3
4
$
4
4
,
2
6
0
,
0
7
5
$4
4
,
2
3
1
,
5
4
7
$
2
7
,
7
5
9
,
8
1
6
$
2
7
,
3
4
1
,
1
4
6
$2
7
,
1
8
8
,
7
6
3
$
2
7
,
0
1
4
,
0
0
3
$
2
6
,
7
7
4
,
6
5
6
$26,626,898
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$
1
,
9
7
8
,
4
9
8
$
1
1
6
,
9
3
5
,
0
2
7
$
2
0
9
,
7
4
0
,
8
7
9
$
2
2
3
,
3
3
6
,
1
4
9
$
2
3
0
,
04
6
,
4
8
0
$
2
3
3
,
5
8
1
,
7
0
3
$
2
4
0
,
4
4
4
,
7
7
2
$
2
4
7
,
95
6
,
2
1
9
$
2
5
7
,
3
0
0
,
0
3
9
$
2
6
4
,
9
7
0
,
4
22 $272,623,317 $281,305,832
To
t
a
l
CC
E
Ge
n
e
r
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
$3
,
1
5
8
,
8
1
5
$
1
3
8
,
0
0
0
,
2
4
8
$
2
5
3
,
7
9
1
,
1
7
3
$
2
6
7
,
6
2
1
,
4
8
3
$
2
7
4
,
3
0
6
,
5
5
6
$
2
7
7
,
81
3
,
2
5
0
$
2
6
8
,
2
0
4
,
5
8
8
$
2
7
5
,
2
9
7
,
3
6
5
$
2
8
4
,
4
8
8
,
8
0
2
$
2
9
1
,
9
8
4
,
4
2
5
$
2
9
9
,
3
9
7
,
972 $307,932,729
Bu
n
d
l
e
d
SC
E
Re
v
e
n
u
e
s
$
1
4
,
6
4
5
,
6
7
1
$
2
6
1
,
3
8
2
,
5
8
3
$
4
9
6
,
1
2
3
,
0
0
3
$
5
1
4
,
6
3
5
,
0
0
4
$
5
3
0
,
14
3
,
5
6
4
$
5
4
5
,
9
3
3
,
1
1
5
$
5
6
2
,
6
2
6
,
0
3
6
$
5
8
1
,
56
7
,
4
5
7
$
5
9
8
,
8
4
8
,
5
1
7
$
6
1
6
,
7
0
9
,
5
8
7
$635,822,737 $654,666,595
To
t
a
l
CC
E
Cu
s
t
o
m
e
r
Bil
l
Re
v
e
n
u
e
s
(P
o
w
e
r
Su
p
p
l
y
an
d
De
l
i
v
e
r
y
)
$
1
5
,
5
3
4
,
6
3
4
$
2
7
7
,
2
4
7
,
9
8
5
$
5
2
7
,
1
0
7
,
2
5
3
$
5
4
9
,
5
1
0
,
0
1
3
$
5
6
5
,
02
9
,
6
0
9
$
5
8
0
,
8
2
5
,
6
1
6
$
5
9
7
,
4
9
6
,
3
9
8
$
6
1
6
,
29
2
,
3
9
1
$
6
3
3
,
6
3
5
,
5
9
0
$
6
5
1
,
5
4
4
,
6
4
4 $670,669,298 $689,598,429
Sa
v
i
n
g
s
(
$
8
8
8
,
9
6
3
)
(
$
1
5
,
8
6
5
,
4
0
2
)
(
$
3
0
,
9
8
4
,
2
5
0
)
(
$
3
4
,
8
7
5
,
0
0
9
)
(
$
3
4
,
8
8
6
,
0
4
5
)
(
$
3
4
,
8
9
2
,
5
0
1
)
(
$
3
4
,
8
7
0
,
3
6
2
)
(
$
3
4
,
7
2
4
,
9
3
4
)
(
$
3
4
,
7
8
7
,
0
7
3
)
(
$
3
4
,
8
35,057) ($34,846,561) ($34,931,835)
Pe
r
c
e
n
t
Sa
v
i
n
g
s
‐6.
1
%
‐6.
1
%
‐6.
2
%
‐6.8
%
‐6.
6
%
‐6.
4
%
‐6.2
%
‐6.
0
%
‐5.8
%
‐5.6%‐5.5%‐5.3%
LA
Co
u
n
t
y
Co
m
m
u
n
i
t
y
Ch
o
i
c
e
Ag
g
r
e
g
a
t
i
o
n
Fi
n
a
n
c
i
a
l
Op
e
r
a
t
i
n
g
Mo
d
e
l
‐
RP
S
Co
n
s
e
r
v
a
t
i
v
e
Lo
a
d
Sc
e
n
a
r
i
o
Ap
r
i
l
17
,
20
1
7
20
1
8
2
0
1
8
CC
E
Op
e
r
a
t
i
n
g
Co
s
t
s
J
a
n
‐
Ju
n
e
J
u
l
y
‐
De
c
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
Po
w
e
r
Su
p
p
l
y
$
3
,
6
8
6
,
3
3
1
$
5
9
,
2
1
1
,
2
4
4
$
1
1
1
,
9
6
2
,
6
5
7
$
1
1
7
,
9
7
6
,
4
7
5
$
1
2
1
,
6
8
5
,
59
1
$
1
2
5
,
3
8
0
,
0
0
7
$
1
2
9
,
4
8
8
,
6
4
1
$
1
3
4
,
9
4
5
,
2
0
0
$
1
3
9
,
0
1
0
,
6
7
9
$
1
4
3
,
2
4
4
,
2
0
9
$
1
4
8
,108,678 $152,533,166
Bi
l
l
i
n
g
& Da
t
a
Ma
n
a
g
e
m
e
n
t
$
1
2
,
9
6
0
$
2
,
1
3
9
,
5
2
3
$
4
,
7
7
0
,
9
0
4
$
4
,
3
3
4
,
3
2
2
$
4
,
3
9
3
,
0
5
6
$
4
,
46
0
,
7
2
2
$
4
,
5
5
2
,
0
5
0
$
4
,
6
5
2
,
4
7
3
$
4
,
7
5
6
,
60
7
$
4
,
8
6
7
,
8
7
2
$
4
,
9
7
3
,
4
1
5
$
5
,
0
5
3
,
4
3
3
SC
E
Fe
e
s
$
1
,
0
2
1
,
0
0
3
$
1
,
7
9
3
,
1
6
3
$
1
,
4
0
8
,
4
7
9
$
1
,
4
2
1
,
76
6
$
1
,
4
4
1
,
0
3
0
$
1
,
4
6
3
,
2
2
5
$
1
,
4
9
3
,
1
8
1
$
1
,
5
2
6
,
1
1
9
$1
,
5
6
0
,
2
7
5
$
1
,
5
9
6
,
7
7
0
$
1
,
6
3
1
,
3
8
8
$
1
,
6
5
7
,
6
3
4
Te
c
h
n
i
c
a
l
Se
r
v
i
c
e
s
$
6
6
5
,
0
0
0
$
6
6
5
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
00
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
St
a
f
f
i
n
g
$
2
0
0
,
0
0
0
$
9
3
5
,
0
0
0
$
2
,
8
2
5
,
4
0
0
$
2
,
8
8
1
,
9
0
8
$
2
,
9
3
9
,
5
4
6
$
2
,
9
9
8
,
33
7
$
3
,
0
5
8
,
3
0
4
$
3
,
1
1
9
,
4
7
0
$
3
,
1
8
1
,
8
5
9
$3
,
2
4
5
,
4
9
6
$
3
,
3
1
0
,
4
0
6
$
3
,
3
7
6
,
6
1
5
Ge
n
e
r
a
l
& Ad
m
i
n
i
s
t
r
a
t
i
v
e
ex
p
e
n
s
e
s
$
1
7
0
,
0
0
0
$
2
3
0
,
0
0
0
$
3
5
6
,
0
0
0
$
3
1
2
,
1
2
0
$
3
1
8
,
3
6
2
$3
2
4
,
7
3
0
$
3
3
1
,
2
2
4
$
3
3
7
,
8
4
9
$
3
4
4
,
6
0
6
$
3
5
1
,
4
9
8
$
3
5
8
,
5
2
8
$
3
6
5
,
6
9
8
Co
n
t
r
i
b
u
t
i
o
n
to
An
n
u
a
l
Re
s
e
r
v
e
s
$
0
$
1
4
,
4
5
7
,
3
6
3
$
9
,
4
0
9
,
2
4
7
$
1
1
,
8
1
7
,
7
8
7
$
1
4
,
5
2
1
,
1
4
3
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Ne
w
Pr
o
g
r
a
m
s
$
0
$
0
$
0
$
0
$
0
$
1
4
,
5
2
1
,
1
4
3
$
1
6
,
1
2
0
,
2
4
6
$1
6
,
7
6
5
,
6
2
1
$
1
7
,
3
1
1
,
4
2
0
$
1
7
,
9
0
8
,
9
3
1
$
1
8
,
5
1
4
,
2
0
8
$
1
9
,
1
3
2
,
7
4
6
De
b
t
Se
r
v
i
c
e
(C
C
E
Bo
n
d
s
& St
a
r
t
‐up
Co
s
t
s
)
$
0
$
2
,
0
9
1
,
9
8
3
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
St
a
r
t
‐Up
Ca
p
i
t
a
l
(
$
9
,
2
9
5
,
0
7
9
)
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Un
c
o
l
l
e
c
t
i
b
l
e
s
$
3
4
,
6
7
8
$
4
3
0
,
1
2
3
$
8
3
2
,
7
6
3
$
8
6
1
,
8
3
7
$
8
8
0
,
97
8
$
9
0
0
,
0
9
7
$
8
4
7
,
4
5
6
$
8
7
3
,
8
6
1
$
8
9
4
,
5
3
9
$
9
1
6
,
0
1
2
$
9
4
0
,
3
1
8
$
9
6
2
,
6
7
4
To
t
a
l
Op
e
r
a
t
i
n
g
Co
s
t
s
‐$3
,
5
0
5
,
1
0
7
$
8
1
,
9
5
3
,
3
9
9
$
1
3
7
,
1
4
9
,
4
1
6
$
1
4
5
,
1
9
0
,
18
0
$
1
5
1
,
7
6
3
,
6
7
3
$
1
5
5
,
6
3
2
,
2
2
7
$
1
6
1
,
4
7
5
,
0
6
8
$
1
6
7
,
80
4
,
5
5
9
$
1
7
2
,
6
4
3
,
9
5
2
$
1
7
7
,
7
1
4
,
7
5
5
$
1
8
3
,
4
2
0
,
9
07 $188,665,931
Ot
h
e
r
Re
v
e
n
u
e
s
$0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
To
t
a
l
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$3
,
5
0
5
,
1
0
7
$
8
1
,
9
5
3
,
3
9
9
$
1
3
7
,
1
4
9
,
4
1
6
$
1
4
5
,
1
9
0
,
18
0
$
1
5
1
,
7
6
3
,
6
7
3
$
1
5
5
,
6
3
2
,
2
2
7
$
1
6
1
,
4
7
5
,
0
6
8
$
1
6
7
,
80
4
,
5
5
9
$
1
7
2
,
6
4
3
,
9
5
2
$
1
7
7
,
7
1
4
,
7
5
5
$
1
8
3
,
4
2
0
,
9
07 $188,665,931
Av
e
r
a
g
e
CC
E
Ra
t
e
($
/
k
W
h
)
$0
.
0
3
0
4
$
0
.
0
5
2
6
$
0
.
0
5
5
1
$
0
.
0
5
7
0
$
0
.
0
5
7
9
$
0
.
0
5
9
5
$
0
.
0
6
1
2
$
0
.
0
6
2
3
$
0
.
0
6
3
5
$
0
.
0
6
4
9
#
D
I
V
/
0
!
Av
e
r
a
g
e
SC
E
Ge
n
e
r
a
t
i
o
n
Ra
t
e
($
/
k
W
h
)
$0
.
0
7
0
8
$
0
.
0
7
2
1
$
0
.
0
7
4
8
$
0
.
0
7
6
3
$
0
.
0
7
7
7
$
0
.
0
7
9
4
$
0
.
0
8
1
6
$
0
.
0
8
3
1
$
0
.
0
8
4
7
$
0
.
0
8
6
6
$
0
.
0
8
8
2
To
t
a
l
CC
E
Ch
a
r
g
e
s
SC
E
No
n
‐by
p
a
s
s
a
b
l
e
Ch
a
r
g
e
s
$
1
,
1
8
0
,
3
1
7
$
1
8
,
9
5
8
,
6
9
9
$
3
9
,
6
4
5
,
2
6
4
$
3
9
,
8
5
6
,
8
0
0
$
3
9
,
8
3
4
,
0
6
8
$3
9
,
8
0
8
,
3
9
3
$
2
4
,
9
8
3
,
8
3
4
$
2
4
,
6
0
7
,
0
3
1
$2
4
,
4
6
9
,
8
8
7
$
2
4
,
3
1
2
,
6
0
2
$
2
4
,
0
9
7
,
1
9
0
$23,964,208
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$3
,
5
0
5
,
1
0
7
$
8
1
,
9
5
3
,
3
9
9
$
1
3
7
,
1
4
9
,
4
1
6
$
1
4
5
,
1
9
0
,
18
0
$
1
5
1
,
7
6
3
,
6
7
3
$
1
5
5
,
6
3
2
,
2
2
7
$
1
6
1
,
4
7
5
,
0
6
8
$
1
6
7
,
80
4
,
5
5
9
$
1
7
2
,
6
4
3
,
9
5
2
$
1
7
7
,
7
1
4
,
7
5
5
$
1
8
3
,
4
2
0
,
9
07 $188,665,931
To
t
a
l
CC
E
Ge
n
e
r
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$2
,
3
2
4
,
7
9
0
$
1
0
0
,
9
1
2
,
0
9
8
$
1
7
6
,
7
9
4
,
6
8
1
$
1
8
5
,
0
4
6
,
9
8
0
$
1
9
1
,
5
9
7
,
7
4
1
$
1
9
5
,
44
0
,
6
1
9
$
1
8
6
,
4
5
8
,
9
0
2
$
1
9
2
,
4
1
1
,
5
9
1
$
1
9
7
,
1
1
3
,
8
3
9
$
2
0
2
,
0
2
7
,
3
5
7
$
2
0
7
,
5
1
8
,
097 $212,630,139
Bu
n
d
l
e
d
SC
E
Re
v
e
n
u
e
s
$
1
4
,
6
4
5
,
6
7
1
$
2
3
5
,
2
4
4
,
3
2
5
$
4
4
6
,
5
1
0
,
7
0
3
$
4
6
3
,
1
7
1
,
5
0
4
$
4
7
7
,
12
9
,
2
0
7
$
4
9
1
,
3
3
9
,
8
0
4
$
5
0
6
,
3
6
3
,
4
3
2
$
5
2
3
,
41
0
,
7
1
1
$
5
3
8
,
9
6
3
,
6
6
6
$
5
5
5
,
0
3
8
,
6
2
8
$572,240,464 $589,199,935
To
t
a
l
CC
E
Cu
s
t
o
m
e
r
Bil
l
Re
v
e
n
u
e
s
(P
o
w
e
r
Su
p
p
l
y
an
d
De
l
i
v
e
r
y
)
$
1
3
,
8
5
0
,
0
8
9
$
2
2
2
,
4
6
5
,
3
9
5
$
4
2
2
,
7
7
9
,
1
5
3
$
4
3
8
,
7
4
6
,
6
5
8
$
4
5
3
,
24
8
,
4
8
9
$
4
6
6
,
8
8
4
,
5
5
6
$
4
8
0
,
1
5
1
,
3
3
7
$
4
9
4
,
85
4
,
4
7
1
$
5
0
8
,
7
2
5
,
7
2
2
$
5
2
3
,
0
3
9
,
6
4
2 $538,219,934 $553,368,594
Sa
v
i
n
g
s
$
7
9
5
,
5
8
1
$
1
2
,
7
7
8
,
9
2
9
$
2
3
,
7
3
1
,
5
5
0
$
2
4
,
4
2
4
,
8
4
6
$
2
3
,
8
8
0
,
7
1
9
$
2
4
,
4
5
5
,
2
4
8
$
2
6
,
2
1
2
,
0
9
5
$
2
8
,
5
5
6
,
2
4
0
$
3
0
,
2
3
7
,
9
4
3
$
3
1
,
9
9
8
,
9
8
7
$
3
4
,
0
2
0
,
5
3
0
$
3
5,831,341
Pe
r
c
e
n
t
Sa
v
i
n
g
s
5
.
4
%
5
.
4
%
5
.
3
%
5
.
3
%
5
.
0
%
5
.
0
%
5
.
2
%
5
.
5
%
5
.
6
%
5
.
8
%
5
.
9
%
6
.
1
%
LA
Co
u
n
t
y
Co
m
m
u
n
i
t
y
Ch
o
i
c
e
Ag
g
r
e
g
a
t
i
o
n
Fi
n
a
n
c
i
a
l
Op
e
r
a
t
i
n
g
Mo
d
e
l
‐
50
%
Co
n
s
e
r
v
a
t
i
v
e
Lo
a
d
Sc
e
n
a
r
i
o
Ap
r
i
l
17
,
20
1
7
20
1
8
2
0
1
8
CC
E
Op
e
r
a
t
i
n
g
Co
s
t
s
J
a
n
‐
Ju
n
e
J
u
l
y
‐
De
c
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
Po
w
e
r
Su
p
p
l
y
$
4
,
0
1
5
,
1
6
9
$
6
4
,
4
9
3
,
1
6
8
$
1
2
1
,
6
6
5
,
4
2
2
$
1
2
4
,
8
2
4
,
1
1
6
$
1
2
8
,
1
4
9
,
22
2
$
1
3
1
,
4
3
9
,
5
2
5
$
1
3
5
,
1
2
6
,
5
8
6
$
1
3
8
,
8
0
9
,
8
6
9
$
1
4
2
,
5
5
6
,
0
5
2
$
1
4
6
,
5
1
6
,
1
3
7
$
1
5
0
,547,210 $154,717,876
Bi
l
l
i
n
g
& Da
t
a
Ma
n
a
g
e
m
e
n
t
$
1
2
,
9
6
0
$
2
,
1
3
9
,
5
2
3
$
4
,
7
7
0
,
9
0
4
$
4
,
3
3
4
,
3
2
2
$
4
,
3
9
3
,
0
5
6
$
4
,
46
0
,
7
2
2
$
4
,
5
5
2
,
0
5
0
$
4
,
6
5
2
,
4
7
3
$
4
,
7
5
6
,
60
7
$
4
,
8
6
7
,
8
7
2
$
4
,
9
7
3
,
4
1
5
$
5
,
0
5
3
,
4
3
3
SC
E
Fe
e
s
$
1
,
0
2
1
,
0
0
3
$
1
,
7
9
3
,
1
6
3
$
1
,
4
0
8
,
4
7
9
$
1
,
4
2
1
,
76
6
$
1
,
4
4
1
,
0
3
0
$
1
,
4
6
3
,
2
2
5
$
1
,
4
9
3
,
1
8
1
$
1
,
5
2
6
,
1
1
9
$1
,
5
6
0
,
2
7
5
$
1
,
5
9
6
,
7
7
0
$
1
,
6
3
1
,
3
8
8
$
1
,
6
5
7
,
6
3
4
Te
c
h
n
i
c
a
l
Se
r
v
i
c
e
s
$
6
6
5
,
0
0
0
$
6
6
5
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
00
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
St
a
f
f
i
n
g
$
2
0
0
,
0
0
0
$
9
3
5
,
0
0
0
$
2
,
8
2
5
,
4
0
0
$
2
,
8
8
1
,
9
0
8
$
2
,
9
3
9
,
5
4
6
$
2
,
9
9
8
,
33
7
$
3
,
0
5
8
,
3
0
4
$
3
,
1
1
9
,
4
7
0
$
3
,
1
8
1
,
8
5
9
$3
,
2
4
5
,
4
9
6
$
3
,
3
1
0
,
4
0
6
$
3
,
3
7
6
,
6
1
5
Ge
n
e
r
a
l
& Ad
m
i
n
i
s
t
r
a
t
i
v
e
ex
p
e
n
s
e
s
$
1
7
0
,
0
0
0
$
2
3
0
,
0
0
0
$
3
5
6
,
0
0
0
$
3
1
2
,
1
2
0
$
3
1
8
,
3
6
2
$3
2
4
,
7
3
0
$
3
3
1
,
2
2
4
$
3
3
7
,
8
4
9
$
3
4
4
,
6
0
6
$
3
5
1
,
4
9
8
$
3
5
8
,
5
2
8
$
3
6
5
,
6
9
8
Co
n
t
r
i
b
u
t
i
o
n
to
An
n
u
a
l
Re
s
e
r
v
e
s
$
0
$
1
2
,
4
5
5
,
2
2
2
$
5
,
0
6
1
,
9
5
3
$
1
0
,
0
0
9
,
7
5
8
$
1
3
,
0
5
0
,
4
8
1
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Ne
w
Pr
o
g
r
a
m
s
$
0
$
0
$
0
$
0
$
0
$
1
3
,
0
5
0
,
4
8
1
$
1
4
,
1
6
8
,
0
9
7
$1
5
,
3
6
5
,
8
1
3
$
1
7
,
8
5
7
,
7
0
0
$
1
8
,
9
0
4
,
8
1
7
$
1
9
,
9
1
8
,
5
5
3
$
2
1
,
5
2
5
,
1
6
4
De
b
t
Se
r
v
i
c
e
(C
C
E
Bo
n
d
s
& St
a
r
t
‐up
Co
s
t
s
)
$
0
$
2
,
0
9
1
,
9
8
3
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
St
a
r
t
‐Up
Ca
p
i
t
a
l
(
$
9
,
2
9
5
,
0
7
9
)
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Un
c
o
l
l
e
c
t
i
b
l
e
s
$
3
6
,
3
2
2
$
4
5
6
,
5
3
3
$
8
8
1
,
2
7
7
$
8
9
6
,
0
7
5
$
9
1
3
,
29
6
$
9
3
0
,
3
9
4
$
8
7
5
,
6
4
6
$
8
9
3
,
1
8
4
$
9
1
2
,
2
6
6
$
9
3
2
,
3
7
2
$
9
5
2
,
5
1
1
$
9
7
3
,
5
9
7
To
t
a
l
Op
e
r
a
t
i
n
g
Co
s
t
s
‐$3
,
1
7
4
,
6
2
5
$
8
5
,
2
5
9
,
5
9
2
$
1
4
2
,
5
5
3
,
4
0
1
$
1
5
0
,
2
6
4
,
03
0
$
1
5
6
,
7
8
8
,
9
6
0
$
1
6
0
,
2
5
1
,
3
8
0
$
1
6
5
,
1
8
9
,
0
5
4
$
1
7
0
,
28
8
,
7
4
4
$
1
7
6
,
7
5
3
,
3
3
2
$
1
8
1
,
9
9
8
,
9
2
8
$
1
8
7
,
2
7
5
,
9
77 $193,253,983
Ot
h
e
r
Re
v
e
n
u
e
s
$0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
To
t
a
l
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$3
,
1
7
4
,
6
2
5
$
8
5
,
2
5
9
,
5
9
2
$
1
4
2
,
5
5
3
,
4
0
1
$
1
5
0
,
2
6
4
,
03
0
$
1
5
6
,
7
8
8
,
9
6
0
$
1
6
0
,
2
5
1
,
3
8
0
$
1
6
5
,
1
8
9
,
0
5
4
$
1
7
0
,
28
8
,
7
4
4
$
1
7
6
,
7
5
3
,
3
3
2
$
1
8
1
,
9
9
8
,
9
2
8
$
1
8
7
,
2
7
5
,
9
77 $193,253,983
Av
e
r
a
g
e
CC
E
Ra
t
e
($
/
k
W
h
)
$0
.
0
3
1
8
$
0
.
0
5
4
6
$
0
.
0
5
7
0
$
0
.
0
5
8
9
$
0
.
0
5
9
6
$
0
.
0
6
0
8
$
0
.
0
6
2
1
$
0
.
0
6
3
8
$
0
.
0
6
5
1
$
0
.
0
6
6
3
#
D
I
V
/
0
!
Av
e
r
a
g
e
SC
E
Ge
n
e
r
a
t
i
o
n
Ra
t
e
($
/
k
W
h
)
$0
.
0
7
0
8
$
0
.
0
7
2
1
$
0
.
0
7
4
8
$
0
.
0
7
6
3
$
0
.
0
7
7
7
$
0
.
0
7
9
4
$
0
.
0
8
1
6
$
0
.
0
8
3
1
$
0
.
0
8
4
7
$
0
.
0
8
6
6
$
0
.
0
8
8
2
To
t
a
l
CC
E
Ch
a
r
g
e
s
SC
E
No
n
‐by
p
a
s
s
a
b
l
e
Ch
a
r
g
e
s
$
1
,
1
8
0
,
3
1
7
$
1
8
,
9
5
8
,
6
9
9
$
3
9
,
6
4
5
,
2
6
4
$
3
9
,
8
5
6
,
8
0
0
$
3
9
,
8
3
4
,
0
6
8
$3
9
,
8
0
8
,
3
9
3
$
2
4
,
9
8
3
,
8
3
4
$
2
4
,
6
0
7
,
0
3
1
$2
4
,
4
6
9
,
8
8
7
$
2
4
,
3
1
2
,
6
0
2
$
2
4
,
0
9
7
,
1
9
0
$23,964,208
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$3
,
1
7
4
,
6
2
5
$
8
5
,
2
5
9
,
5
9
2
$
1
4
2
,
5
5
3
,
4
0
1
$
1
5
0
,
2
6
4
,
03
0
$
1
5
6
,
7
8
8
,
9
6
0
$
1
6
0
,
2
5
1
,
3
8
0
$
1
6
5
,
1
8
9
,
0
5
4
$
1
7
0
,
28
8
,
7
4
4
$
1
7
6
,
7
5
3
,
3
3
2
$
1
8
1
,
9
9
8
,
9
2
8
$
1
8
7
,
2
7
5
,
9
77 $193,253,983
To
t
a
l
CC
E
Ge
n
e
r
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$1
,
9
9
4
,
3
0
8
$
1
0
4
,
2
1
8
,
2
9
1
$
1
8
2
,
1
9
8
,
6
6
6
$
1
9
0
,
1
2
0
,
8
3
1
$
1
9
6
,
6
2
3
,
0
2
8
$
2
0
0
,
05
9
,
7
7
3
$
1
9
0
,
1
7
2
,
8
8
8
$
1
9
4
,
8
9
5
,
7
7
6
$
2
0
1
,
2
2
3
,
2
1
9
$
2
0
6
,
3
1
1
,
5
3
1
$
2
1
1
,
3
7
3
,
167 $217,218,191
Bu
n
d
l
e
d
SC
E
Re
v
e
n
u
e
s
$
1
4
,
6
4
5
,
6
7
1
$
2
3
5
,
2
4
4
,
3
2
5
$
4
4
6
,
5
1
0
,
7
0
3
$
4
6
3
,
1
7
1
,
5
0
4
$
4
7
7
,
12
9
,
2
0
7
$
4
9
1
,
3
3
9
,
8
0
4
$
5
0
6
,
3
6
3
,
4
3
2
$
5
2
3
,
41
0
,
7
1
1
$
5
3
8
,
9
6
3
,
6
6
6
$
5
5
5
,
0
3
8
,
6
2
8
$572,240,464 $589,199,935
To
t
a
l
CC
E
Cu
s
t
o
m
e
r
Bil
l
Re
v
e
n
u
e
s
(P
o
w
e
r
Su
p
p
l
y
an
d
De
l
i
v
e
r
y
)
$
1
4
,
0
6
4
,
4
8
6
$
2
2
5
,
9
0
9
,
1
1
4
$
4
2
8
,
1
8
3
,
1
3
8
$
4
4
3
,
8
2
0
,
5
0
8
$
4
5
8
,
27
3
,
7
7
6
$
4
7
1
,
0
2
2
,
2
2
2
$
4
8
4
,
4
1
7
,
6
6
5
$
4
9
9
,
28
4
,
7
4
4
$
5
1
3
,
2
8
4
,
7
0
8
$
5
2
7
,
7
3
2
,
2
7
4 $543,063,077 $558,351,556
Sa
v
i
n
g
s
$
5
8
1
,
1
8
5
$
9
,
3
3
5
,
2
1
1
$
1
8
,
3
2
7
,
5
6
5
$
1
9
,
3
5
0
,
9
9
5
$
1
8
,
8
5
5
,
4
3
2
$
2
0
,
3
1
7
,
5
8
2
$
2
1
,
9
4
5
,
7
6
8
$
2
4
,
1
2
5
,
9
6
7
$
2
5
,
6
7
8
,
9
5
7
$
2
7
,
3
0
6
,
3
5
4
$
2
9
,
1
7
7
,
3
8
6
$
3
0
,848,379
Pe
r
c
e
n
t
Sa
v
i
n
g
s
4
.
0
%
4
.
0
%
4
.
1
%
4
.
2
%
4
.
0
%
4
.
1
%
4
.
3
%
4
.
6
%
4
.
8
%
4
.
9
%
5
.
1
%
5
.
2
%
LA
Co
u
n
t
y
Co
m
m
u
n
i
t
y
Ch
o
i
c
e
Ag
g
r
e
g
a
t
i
o
n
Fi
n
a
n
c
i
a
l
Op
e
r
a
t
i
n
g
Mo
d
e
l
‐
10
0
%
Co
n
s
e
r
v
a
t
i
v
e
Lo
a
d
Sc
e
n
a
r
i
o
Ap
r
i
l
17
,
20
1
7
20
1
8
2
0
1
8
CC
E
Op
e
r
a
t
i
n
g
Co
s
t
s
J
a
n
‐
Ju
n
e
J
u
l
y
‐
De
c
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
Po
w
e
r
Su
p
p
l
y
$
5
,
5
4
8
,
1
7
8
$
8
9
,
1
1
6
,
9
4
7
$
1
6
7
,
4
7
1
,
8
8
8
$
1
6
9
,
7
7
2
,
8
8
6
$
1
7
3
,
4
1
1
,
07
6
$
1
7
6
,
4
2
8
,
5
7
2
$
1
7
9
,
6
1
5
,
2
2
3
$
1
8
2
,
8
5
0
,
3
2
0
$
1
8
6
,
0
4
4
,
5
0
7
$
1
8
9
,
5
0
1
,
3
2
5
$
1
9
2
,969,546 $196,532,598
Bi
l
l
i
n
g
& Da
t
a
Ma
n
a
g
e
m
e
n
t
$
1
2
,
9
6
0
$
2
,
1
3
9
,
5
2
3
$
4
,
7
7
0
,
9
0
4
$
4
,
3
3
4
,
3
2
2
$
4
,
3
9
3
,
0
5
6
$
4
,
46
0
,
7
2
2
$
4
,
5
5
2
,
0
5
0
$
4
,
6
5
2
,
4
7
3
$
4
,
7
5
6
,
60
7
$
4
,
8
6
7
,
8
7
2
$
4
,
9
7
3
,
4
1
5
$
5
,
0
5
3
,
4
3
3
SC
E
Fe
e
s
$
1
,
0
2
1
,
0
0
3
$
1
,
7
9
3
,
1
6
3
$
1
,
4
0
8
,
4
7
9
$
1
,
4
2
1
,
76
6
$
1
,
4
4
1
,
0
3
0
$
1
,
4
6
3
,
2
2
5
$
1
,
4
9
3
,
1
8
1
$
1
,
5
2
6
,
1
1
9
$1
,
5
6
0
,
2
7
5
$
1
,
5
9
6
,
7
7
0
$
1
,
6
3
1
,
3
8
8
$
1
,
6
5
7
,
6
3
4
Te
c
h
n
i
c
a
l
Se
r
v
i
c
e
s
$
6
6
5
,
0
0
0
$
6
6
5
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
00
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
$
1
,
4
0
0
,
0
0
0
St
a
f
f
i
n
g
$
2
0
0
,
0
0
0
$
9
3
5
,
0
0
0
$
2
,
8
2
5
,
4
0
0
$
2
,
8
8
1
,
9
0
8
$
2
,
9
3
9
,
5
4
6
$
2
,
9
9
8
,
33
7
$
3
,
0
5
8
,
3
0
4
$
3
,
1
1
9
,
4
7
0
$
3
,
1
8
1
,
8
5
9
$3
,
2
4
5
,
4
9
6
$
3
,
3
1
0
,
4
0
6
$
3
,
3
7
6
,
6
1
5
Ge
n
e
r
a
l
& Ad
m
i
n
i
s
t
r
a
t
i
v
e
ex
p
e
n
s
e
s
$
1
7
0
,
0
0
0
$
2
3
0
,
0
0
0
$
3
5
6
,
0
0
0
$
3
1
2
,
1
2
0
$
3
1
8
,
3
6
2
$3
2
4
,
7
3
0
$
3
3
1
,
2
2
4
$
3
3
7
,
8
4
9
$
3
4
4
,
6
0
6
$
3
5
1
,
4
9
8
$
3
5
8
,
5
2
8
$
3
6
5
,
6
9
8
Co
n
t
r
i
b
u
t
i
o
n
to
An
n
u
a
l
Re
s
e
r
v
e
s
$
0
$
1
1
,
1
0
4
,
8
5
5
$
5
,
6
1
2
,
5
3
3
$
1
5
,
5
7
4
,
7
4
7
$
1
7
,
8
1
5
,
1
8
9
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Ne
w
Pr
o
g
r
a
m
s
$
0
$
0
$
0
$
0
$
0
$
1
7
,
8
1
5
,
1
8
9
$
2
0
,
6
7
4
,
9
3
7
$2
3
,
9
8
3
,
8
2
6
$
2
8
,
9
7
5
,
4
5
5
$
3
2
,
1
8
6
,
2
4
2
$
3
5
,
3
7
6
,
3
4
4
$
3
9
,
4
3
0
,
0
0
8
De
b
t
Se
r
v
i
c
e
(C
C
E
Bo
n
d
s
& St
a
r
t
‐up
Co
s
t
s
)
$
0
$
2
,
0
9
1
,
9
8
3
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
$
4
,
1
8
3
,
9
6
7
St
a
r
t
‐Up
Ca
p
i
t
a
l
(
$
9
,
2
9
5
,
0
7
9
)
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Un
c
o
l
l
e
c
t
i
b
l
e
s
$
4
3
,
9
8
7
$
5
7
9
,
6
5
2
$
1
,
1
1
0
,
3
1
0
$
1
,
1
2
0
,
8
1
9
$
1
,
1
3
9
,
6
0
6
$
1
,
15
5
,
3
4
0
$
1
,
0
9
8
,
0
8
9
$
1
,
1
1
3
,
3
8
6
$
1
,
1
2
9
,
70
9
$
1
,
1
4
7
,
2
9
8
$
1
,
1
6
4
,
6
2
2
$
1
,
1
8
2
,
6
71
To
t
a
l
Op
e
r
a
t
i
n
g
Co
s
t
s
‐$1
,
6
3
3
,
9
5
0
$
1
0
8
,
6
5
6
,
1
2
3
$
1
8
9
,
1
3
9
,
4
8
0
$
2
0
1
,
0
0
2
,
5
3
4
$
2
0
7
,
0
4
1
,
8
3
2
$
2
1
0
,
23
0
,
0
8
1
$
2
1
6
,
4
0
6
,
9
7
4
$
2
2
3
,
1
6
7
,
4
1
0
$
2
3
1
,
5
7
6
,
9
8
4
$
2
3
8
,
4
8
0
,
4
6
8
$
2
4
5
,
3
6
8
,
215 $253,182,623
Ot
h
e
r
Re
v
e
n
u
e
s
$0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
To
t
a
l
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$1
,
6
3
3
,
9
5
0
$
1
0
8
,
6
5
6
,
1
2
3
$
1
8
9
,
1
3
9
,
4
8
0
$
2
0
1
,
0
0
2
,
5
3
4
$
2
0
7
,
0
4
1
,
8
3
2
$
2
1
0
,
23
0
,
0
8
1
$
2
1
6
,
4
0
6
,
9
7
4
$
2
2
3
,
1
6
7
,
4
1
0
$
2
3
1
,
5
7
6
,
9
8
4
$
2
3
8
,
4
8
0
,
4
6
8
$
2
4
5
,
3
6
8
,
215 $253,182,623
Av
e
r
a
g
e
CC
E
Ra
t
e
($
/
k
W
h
)
$0
.
0
4
1
4
$
0
.
0
7
2
5
$
0
.
0
7
6
3
$
0
.
0
7
7
8
$
0
.
0
7
8
2
$
0
.
0
7
9
7
$
0
.
0
8
1
4
$
0
.
0
8
3
6
$
0
.
0
8
5
3
$
0
.
0
8
6
8
#
D
I
V
/
0
!
Av
e
r
a
g
e
SC
E
Ge
n
e
r
a
t
i
o
n
Ra
t
e
($
/
k
W
h
)
$0
.
0
7
0
8
$
0
.
0
7
2
1
$
0
.
0
7
4
8
$
0
.
0
7
6
3
$
0
.
0
7
7
7
$
0
.
0
7
9
4
$
0
.
0
8
1
6
$
0
.
0
8
3
1
$
0
.
0
8
4
7
$
0
.
0
8
6
6
$
0
.
0
8
8
2
To
t
a
l
CC
E
Ch
a
r
g
e
s
SC
E
No
n
‐by
p
a
s
s
a
b
l
e
Ch
a
r
g
e
s
$
1
,
1
8
0
,
3
1
7
$
1
8
,
9
5
8
,
6
9
9
$
3
9
,
6
4
5
,
2
6
4
$
3
9
,
8
5
6
,
8
0
0
$
3
9
,
8
3
4
,
0
6
8
$3
9
,
8
0
8
,
3
9
3
$
2
4
,
9
8
3
,
8
3
4
$
2
4
,
6
0
7
,
0
3
1
$2
4
,
4
6
9
,
8
8
7
$
2
4
,
3
1
2
,
6
0
2
$
2
4
,
0
9
7
,
1
9
0
$23,964,208
CC
E
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$1
,
6
3
3
,
9
5
0
$
1
0
8
,
6
5
6
,
1
2
3
$
1
8
9
,
1
3
9
,
4
8
0
$
2
0
1
,
0
0
2
,
5
3
4
$
2
0
7
,
0
4
1
,
8
3
2
$
2
1
0
,
23
0
,
0
8
1
$
2
1
6
,
4
0
6
,
9
7
4
$
2
2
3
,
1
6
7
,
4
1
0
$
2
3
1
,
5
7
6
,
9
8
4
$
2
3
8
,
4
8
0
,
4
6
8
$
2
4
5
,
3
6
8
,
215 $253,182,623
To
t
a
l
CC
E
Ge
n
e
r
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
‐$4
5
3
,
6
3
3
$
1
2
7
,
6
1
4
,
8
2
2
$
2
2
8
,
7
8
4
,
7
4
5
$
2
4
0
,
8
5
9
,
3
3
4
$
2
4
6
,
8
7
5
,
9
0
0
$
2
5
0
,
0
3
8
,
47
4
$
2
4
1
,
3
9
0
,
8
0
9
$
2
4
7
,
7
7
4
,
4
4
1
$
2
5
6
,
0
4
6
,
8
7
1
$
2
6
2
,
7
9
3
,
0
7
0
$
2
6
9
,
4
6
5
,
4
0
5 $277,146,831
Bu
n
d
l
e
d
SC
E
Re
v
e
n
u
e
s
$
1
4
,
6
4
5
,
6
7
1
$
2
3
5
,
2
4
4
,
3
2
5
$
4
4
6
,
5
1
0
,
7
0
3
$
4
6
3
,
1
7
1
,
5
0
4
$
4
7
7
,
12
9
,
2
0
7
$
4
9
1
,
3
3
9
,
8
0
4
$
5
0
6
,
3
6
3
,
4
3
2
$
5
2
3
,
41
0
,
7
1
1
$
5
3
8
,
9
6
3
,
6
6
6
$
5
5
5
,
0
3
8
,
6
2
8
$572,240,464 $589,199,935
To
t
a
l
CC
E
Cu
s
t
o
m
e
r
Bil
l
Re
v
e
n
u
e
s
(P
o
w
e
r
Su
p
p
l
y
an
d
De
l
i
v
e
r
y
)
$
1
5
,
5
3
4
,
6
3
4
$
2
4
9
,
5
2
3
,
1
8
6
$
4
7
4
,
7
6
9
,
2
1
7
$
4
9
4
,
5
5
9
,
0
1
2
$
5
0
8
,
52
6
,
6
4
8
$
5
2
2
,
7
4
3
,
0
5
4
$
5
3
7
,
7
4
6
,
7
5
8
$
5
5
4
,
66
3
,
1
5
2
$
5
7
0
,
2
7
2
,
0
3
1
$
5
8
6
,
3
9
0
,
1
7
9 $603,602,368 $620,638,586
Sa
v
i
n
g
s
(
$
8
8
8
,
9
6
3
)
(
$
1
4
,
2
7
8
,
8
6
2
)
(
$
2
8
,
2
5
8
,
5
1
4
)
(
$
3
1
,
3
8
7
,
5
0
8
)
(
$
3
1
,
3
9
7
,
4
4
0
)
(
$
3
1
,
4
0
3
,
2
5
1
)
(
$
3
1
,
3
8
3
,
3
2
5
)
(
$
3
1
,
2
5
2
,
4
4
0
)
(
$
3
1
,
3
0
8
,
3
6
6
)
(
$
3
1
,
3
51,551) ($31,361,905) ($31,438,651)
Pe
r
c
e
n
t
Sa
v
i
n
g
s
‐6.
1
%
‐6.
1
%
‐6.
3
%
‐6.8
%
‐6.
6
%
‐6.
4
%
‐6.2
%
‐6.
0
%
‐5.8
%
‐5.6%‐5.5%‐5.3%
LOS ANGELES COMMUNITY CHOICE ENERGY AUTHORITY
JOINT POWERS AGREEMENT
This Joint Powers Agreement (the “Agreement”), effective as of ___________, is made and
entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500
et seq.) of the California Government Code relating to the joint exercise of powers among the
public agencies set forth in Exhibit A.
RECITALS
1. The Parties are public agencies sharing various powers under California laws, including
but not limited to the power to purchase supply, and aggregate electricity for themselves and
their inhabitants.
2. In 2006, the State Legislature adopted AB 32, the Global Warming Solutions Act, which
mandates a reduction in greenhouse gas emissions in 2020 to 1990 levels. The California Air
Resources Board is promulgating regulations to implement AB 32 which will require local
government to develop programs to reduce greenhouse emissions.
3. The purposes for the Initial Participants (as such term is defined in Section 2.3 below)
entering into this Agreement include addressing climate change by reducing energy related
greenhouse gas emissions and securing energy supply and price stability; energy efficiencies and
local economic benefits, such as jobs creation, community energy programs; and local power
development. It is the intent of this Agreement to promote the development and use of a wide
range of renewable energy sources and energy efficiency programs, including but not limited to
solar and wind energy production.
4. The Parties desire to establish a separate public agency, known as the Los Angeles
Community Choice Energy Authority ("Authority"), under the provisions of the Joint Exercise of
Powers Act of the State of California (Government Code Section 6500 et seq.) ("Act") in order
to collectively study, promote, develop, conduct, operate, and manage energy programs.
5. The Initial Participants have each adopted an ordinance electing to implement through the
Authority a Community Choice Aggregation program pursuant to California Public Utilities
Code Section 366.2 ("CCA Program"). The first priority of the Authority will be the
consideration of those actions necessary to implement the CCA Program.
6. By establishing the Authority, the Parties seek to:
(a) Develop an electric supply portfolio with overall lower greenhouse gas intensity
and lower greenhouse gas (GHG) emissions than Southern California Edison (“SCE”), and one
that supports the achievement of the parties' greenhouse gas reduction goals and the comparable
goals of all participating jurisdictions;
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-2 -
(b) Establish an energy portfolio that encourages the use and development of cost-
effective local renewable and distributed energy resources and that discourages the use
unbundled renewable energy credits;
(c) Promote an energy portfolio that incorporates energy efficiency and demand
response programs and pursues ambitious energy consumption reduction goals;
(d) Provide electricity rates that are lower or at worst competitive with those offered
by SCE for similar products;
(e) Offer differentiated energy options (e.g. 33% or 50% qualified renewable) for
default service, and a 100% renewable content option in which customers may "opt-up" and
voluntarily participate;
(f) Achieve quantifiable economic benefits to the region;
(g) Recognize the value of current workers in existing jobs that support the energy
infrastructure of Los Angeles County and Southern California (e.g. union and prevailing wage
jobs, local workforce development, apprenticeship programs, and local hire). The Authority, as a
leader in the shift to clean energy, commits to ensuring it will take steps to minimize any adverse
impacts to these workers to ensure a "just transition" to the new clean energy economy;
(h) Support a stable, skilled workforce through such mechanisms as project labor
agreements, collective bargaining agreements, or community benefit agreements, or other
workforce programs that are designed to avoid work stoppages, ensure quality, and benefit local
residents by delivering cost-effective clean energy programs and projects (e.g. new energy
programs and increased local energy investments);
(i) Promote supplier and workforce diversity, including returning veterans and those
from disadvantaged and under-represented communities, to better reflect the diversity of the
region;
(j) Promote personal and community ownership of renewable resources, spurring
equitable economic development and increased resilience, especially in low income
communities;
(k) Provide and manage its energy portfolio and products in a manner that provides
cost savings to customers and promotes public health in areas impacted by energy production;
(l) Ensure that low-income households and communities are provided with
affordable and flexible energy options, including the provision of energy discounted rates to
eligible low-income households;
(m) Recognize and address the importance of healthy communities, including those
disproportionately affected by air pollution and climate change;
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-3 -
(n) Use program revenues to provide energy-related programs and services; and
(o) Create an administering Authority that is financially sustainable, responsive to
regional priorities, well-managed, and a leader in fair and equitable treatment of employees.
1. DEFINITIONS
1.1 "AB 117" means Assembly Bill 117 (Stat. 2002, Ch. 838, codified at Public
Utilities Code Section 366.2), which created Community Choice Aggregation.
1.2 "Act" means the Joint Exercise of Powers Act of the State of California
(Chapter 5, Division 7, Title 1 of the Government Code commencing with
Section 6500).
1.3 "Agreement" means this Joint Powers Agreement.
1.4 "Authority" means Los Angeles Community Choice Energy Authority.
1.5 "Authority Document(s)" means document(s) duly adopted by the Board by
resolution or motion implementing the powers, functions and activities of the
Authority, including but not limited to the Operating Policies and Procedures, the
annual budget, and plans and policies.
1.6 "Board" means the Board of Directors of the Authority.
1.7 "Community Choice Aggregation" or "CCA" means an electric service option
available to cities, counties, and other public agencies pursuant to Public Utilities
Code Section 366.2.
1.8 "CCA Program" means the Authority's program relating to CCA that is
principally described in Section 2.4 (Purpose) of this Agreement.
1.9 "Days" shall mean calendar days unless otherwise specified by this Agreement.
1.10 "Director" means a member of the Board representing a Party, including up to two
alternate Directors appointed in accordance with Sections 4.1 (Board of Directors)
and 4.2 (Appointment and Removal of Directors) of this Agreement.
1.11 "Effective Date" means the date on which the Agreement shall become effective
and the Authority shall exist as a separate public agency, as further described in
Section 2.1 (Effective Date and Term) of this Agreement.
1.12 "Initial Costs" means all costs incurred by the Authority relating to the
establishment and initial operation of the Authority, such as the hiring of the
executive, technical, and any administrative staff, any required accounting,
administrative, technical and legal services in support of the Authority's initial
formation activities or in support of the negotiation, preparation and approval of
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-4 -
power purchase agreements. The Board shall determine the termination date for
the Initial Costs.
1.13 "Initial Participants" means, for purpose of this Agreement, the County of
Los Angeles, and the cities of ______________________________, and any
other Parties joining in accordance with Section 2.3 (Initial Participants) of this
Agreement.
1.14 "Operating Policies and Procedures" means the rules, regulations, policies, bylaws
and procedures governing the operation of the Authority.
1.15 "Parties" means, collectively, the signatories to this Agreement that have satisfied
the conditions in Sections 2.3 (Initial Participants) or 2.5 (Addition of Parties) of
this Agreement, such that they are considered members of the Authority.
1.16 "Party" means, singularly, a signatory to this Agreement that has satisfied the
conditions in Sections 2.3 (Initial Participants) or 2.5 (Addition of Parties) of this
Agreement, such that it is considered a member of the Authority.
1.17 "Public Agency" as defined in the Act includes, but is not limited to, the federal
government or any federal department or agency, this state, another state or any
state department or agency, a county, a county board of education, county
superintendent of schools, city, public corporation, public district, regional
transportation commission of this state or another state, a federally recognized
Indian tribe, or any joint powers authority formed pursuant to the Act.
2. FORMATION OF LOS ANGELES COMMUNITY CHOICE ENERGY
AUTHORITY
2.1 Effective Date and Term. This Agreement shall become effective and the
Authority shall exist as a separate public agency on the date this Agreement is
executed by the County of Los Angeles and at least one other public agency after
the adoption of the ordinances required by Public Utilities Code
Section 366.2(c)(12). The Authority shall provide notice to the Parties of the
Effective Date. The Authority shall continue to exist, and this Agreement shall be
effective, until the Agreement is terminated in accordance with Section 8.3
(Mutual Termination) of this Agreement, subject to the rights of the Parties to
withdraw from the Authority.
2.2 Formation of the Authority. Under the Act, the Parties hereby create a separate
joint exercise of power agency which is named Los Angeles Community Choice
Energy Authority. Pursuant to Sections 6506 and 6507 of the Act, the Authority
is a public agency separate from the Parties. The debts, liabilities or obligations
of the Authority shall not be debts, liabilities or obligations of the individual
Parties unless the governing body of a Party agrees in writing to assume any of
the debts, liabilities or obligations of the Authority. The jurisdiction of the
Authority shall be all territory within the geographic boundaries of the Parties;
however the Authority may, as authorized under applicable law, undertake any
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-5 -
action outside such geographic boundaries as is necessary and incidental to the
accomplishment of its purpose.
2.3 Initial Participants. In addition to Parties executing this Agreement on or prior
to the Effective Date, any incorporated municipality, county, or other eligible
public agency may become a Party and recognized as an Initial Participant
provided during the first 180 days after the Effective Date it executes this
Agreement and delivers an executed copy of this Agreement and a copy of the
adopted ordinance required by Public Utilities Code Section 366.2(c)(12) to the
Authority. All Initial Participants to this Agreement shall be required to
commence electric service as soon as practicable, as determined by the Board.
2.4 Purpose. The purpose and objectives of this Agreement are to establish the
Authority, to provide for its governance and administration, and to define the
rights and obligations of the Parties. This Agreement authorizes the Authority to
provide a means by which the Parties can more effectively develop and
implement sustainable energy initiatives that reduce energy demand, increase
energy efficiency, and advance the use of clean, efficient, and renewable
resources in the region for the benefit of the Parties and their constituents,
including, but not limited to, establishing and operating a Community Choice
Aggregation program.
2.5 Addition of Parties. After 180 days from the Effective Date any incorporated
municipality, county, or other public agency may become a Party to this
Agreement if all of the following conditions are met:
2.5.1 The adoption of a resolution of the Board admitting the public agency to
the Authority;
2.5.2 The adoption by an affirmative vote of the Board satisfying the
requirements described in Section 4.10 (Board Voting) of this Agreement,
of a resolution authorizing membership into the Authority and establishing
its pro rata share of organizational, planning and other pre-existing
expenditures, and describing additional conditions, if any, associated with
membership;
2.5.3 The adoption by the public agency of an ordinance required by Public
Utilities Code Section 366.2(c)(12) and approval and execution of this
Agreement and other necessary program agreements by the public agency;
2.5.4 Payment of the membership payment, if any; and
2.5.5 Satisfaction of any reasonable conditions established by the Board.
Pursuant to this Section 2.5 (Addition of Parties), all parties shall be required to
commence electric service as soon as is practicable, as determined by the Board,
as a condition to becoming a Party to this Agreement.
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-6 -
2.6 Continuing Participation. The Parties acknowledge that membership in the
Authority may change by the addition, withdrawal and/or termination of Parties.
The Parties agree to participate with such other Parties as may later be added, as
described in Section 2.5 (Addition of Parties) of this Agreement. The Parties also
agree that the withdrawal or termination of a Party shall not affect this Agreement
or the remaining Parties' continuing obligations under this Agreement.
3. POWERS
3.1 General Powers. The Authority shall have the powers common to the Parties
and which are necessary or convenient to the accomplishment of the purposes of
this Agreement, subject to the restrictions set forth in Section 3.4 (Limitation on
Powers) of this Agreement. As provided in the Act, the Authority shall be a
public agency separate and apart from the Parties.
3.2 Specific Powers. The Authority shall have all powers common to the Parties and
such additional powers accorded to it by law. The Authority is authorized, in its
own name, to exercise all powers and do all acts necessary and proper to carry out
the provisions of this Agreement and fulfill its purposes, including, but not limited
to, each of the following:
3.2.1 make and enter into contracts;
3.2.2 employ agents and employees, including but not limited to an Executive
Director;
3.2.3 acquire, contract, manage, maintain, and operate any buildings, works or
improvements;
3.2.4 acquire property by eminent domain, or otherwise, except as limited under
Section 6508 of the Act, and to hold or dispose of any property;
3.2.5 lease any property;
3.2.6 sue and be sued in its own name;
3.2.7 incur debts, liabilities, and obligations, including but not limited to loans
from private lending sources pursuant to its temporary borrowing powers
authorized by law pursuant to Government Code Section 53850 et seq. and
authority under the Act;
3.2.8 issue revenue bonds and other forms of indebtedness;
3.2.9 apply for, accept, and receive all licenses, permits, grants, loans or other
aids from any federal, state or local public agency;
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-7 -
3.2.10 form independent corporations or entities, if necessary to carry out energy
supply and energy conservation programs at the lowest possible cost or to
take advantage of legislative or regulatory changes;
3.2.11 submit documentation and notices, register, and comply with orders,
tariffs and agreements for the establishment and implementation of the
CCA Program and other energy programs;
3.2.12 adopt rules, regulations, policies, bylaws and procedures governing the
operation of the Authority ("Operating Policies and Procedures"); and
3.2.13 make and enter into service agreements relating to the provision of
services necessary to plan, implement, operate and administer the CCA
Program and other energy programs, including the acquisition of electric
power supply and the provision of retail and regulatory support services.
3.3 Additional Powers to be Exercised. In addition to those powers common to
each of the Parties, the Authority shall have those powers that may be conferred
upon it as a matter of law and by subsequently enacted legislation.
3.4 Limitation on Powers. As required by Section 6509 of the Act, the powers of
the Authority are subject to the restrictions upon the manner of exercising power
possessed by the County of Los Angeles.
3.5 Obligations of the Authority. The debts, liabilities, and obligations of the
Authority shall not be the debts, liabilities, and obligations of the Parties unless
the governing body of a Party agrees in writing to assume any of the debts,
liabilities, and obligations of the Authority. In addition, pursuant to the Act, no
Director shall be personally liable on the bonds or subject to any personal liability
or accountability by reason of the issuance of bonds.
3.6 Compliance with the Political Reform Act and Government Code
Section 1090. The Authority and its officers and employees shall comply with
the Political Reform Act (Government Code Section 81000 et seq.) and
Government Code Section 1090 et seq. The Board shall adopt a Conflict of
Interest Code pursuant to Government Code Section 87300. The Board may
adopt additional conflict of interest regulations in the Operating Policies and
Procedures.
4. GOVERNANCE
4.1 Board of Directors. The governing body of the Authority shall be a Board of
Directors ("Board") consisting of one director for each Party appointed in
accordance with Section 4.2 (Appointment and Removal of Directors) of this
Agreement. The Board, in consultation with the Executive Director, may
determine at any time to consider options to reduce the size of the Board if it
determines that the efficient functioning and operation of the Board would be
improved by having a smaller number of Directors. Any such change to the size
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-8 -
of the Board would require amendment of this Joint Powers Agreement in
accordance with Section 4.11 (Special Voting).
4.2 Appointment and Removal of Directors. The Directors shall be appointed and
may be removed as follows:
4.2.1 The governing body of each Party shall appoint and designate in writing
one regular Director who shall be authorized to act for and on behalf of the
Party on matters within the powers of the Authority. The governing body
of each Party shall appoint and designate in writing up to two alternate
Directors who may vote on matters when the regular Director is absent
from a Board meeting. The person appointed and designated as the
regular Director shall be an elected or appointed member of the governing
body of the Party. The persons appointed and designated as the alternate
Directors may be an elected or appointed member of the governing body
of the Party, an appointed member of an advisory body of the Party, a staff
member of the Party or a member of the public who meets the criteria
below. All Directors and alternates shall be subject to the Board's adopted
Conflict of Interest Code.
(a) Any alternate Director that is a member of the public must have
demonstrated knowledge in energy-related matters through
significant experience in either: 1) an electric utility or company,
agency, or nonprofit providing services to a utility, 2) a regulatory
agency or local government body overseeing an electric utility or a
company, agency, or nonprofit providing services to such an
agency, 3) an academic or nonprofit organization engaged in
research and/or advocacy related to the electric sector.
4.2.2 The Operating Policies and Procedures, to be developed and approved by
the Board in accordance with Section 3.2.12 (Specific Powers), shall
specify the reasons for and process associated with the removal of an
individual Director for cause. Notwithstanding the foregoing, no Party
shall be deprived of its right to seat a Director on the Board and any such
Party for which its Director and/or alternate Directors have been removed
may appoint a replacement.
4.3 Terms of Office. Each regular and alternate Director shall serve at the pleasure
of the governing body of the Party that the Director represents, and may be
removed as Director by such governing body at any time. If at any time a
vacancy occurs on the Board, the affected Party shall appoint to fill the position of
the previous Director within 90 days of the date that such position becomes
vacant.
4.4 Purpose of Board. The general purpose of the Board is to:
4.4.1 Provide structure for administrative and fiscal oversight;
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-9 -
4.4.2 Retain an Executive Director to oversee day-to-day operations;
4.4.3 Retain legal counsel;
4.4.4 Identify and pursue funding sources;
4.4.5 Set policy;
4.4.6 Maximize the utilization of available resources; and
4.4.7 Oversee all Committee activities.
4.5 Specific Responsibilities of the Board. The specific responsibilities of the
Board shall be as follows:
4.5.1 Identify Party needs and requirements;
4.5.2 Formulate and adopt the budget prior to the commencement of the fiscal
year;
4.5.3 Develop and implement a financing and/or funding plan for ongoing
Authority operations;
4.5.4 Retain necessary and sufficient staff and adopt personnel and
compensation policies, rules and regulations;
4.5.5 Adopt rules for procuring supplies, equipment, and services;
4.5.6 Adopt rules for the disposal of surplus property;
4.5.7 Establish standing and ad hoc committees as necessary to ensure that the
interests and concerns of each Party are represented and to ensure
operational, technical, and financial issues are thoroughly researched and
analyzed;
4.5.8 The setting of retail rates for power sold by the Authority and the setting
of charges for any other category of retail service provided by the
Authority;
4.5.9 Termination of the CCA Program;
4.5.10 Address any concerns of consumers and customers;
4.5.11 Conduct and oversee Authority audits at intervals not to exceed three
years;
4.5.12 Arrange for an annual independent fiscal audit;
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-10 -
4.5.13 Adopt such bylaws, rules and regulations as are necessary or desirable for
the purposes hereof; provided that nothing in the bylaws, rules and
regulations shall be inconsistent with this Agreement;
4.5.14 Exercise the Specific Powers identified in Sections 3.2 and 4.6 except as
the Board may elect to delegate to the Executive Director; and
4.5.15 Discharge other duties as appropriate or required by statute.
4.6 Startup Responsibilities. The Authority shall have the duty to do the following
within one year of the Effective Date of the Agreement:
4.6.1 To adopt an implementation plan prepared by the County of Los Angeles,
pursuant to Public Utilities Code Section 366.2(c)(3), for electrical load
aggregation;
4.6.2 To prepare a statement of intent, pursuant to Public Utilities Code
Section 366.2(c)(4), for electrical load aggregation;
4.6.3 To encourage other qualified public agencies to participate in the
Authority;
4.6.4 To obtain financing and/or funding as is necessary or desirable;
4.6.5 To evaluate the need for, acquire, and maintain insurance.
4.7 Meetings and Special Meetings of the Board. The Board shall hold at least one
regular meetings per year but the Board may provide for the holding of regular
meetings at more frequent intervals. The date, hour and place of each regular
meeting shall be fixed by resolution or ordinance of the Board. Regular meetings
may be adjourned to another meeting time. Special meetings of the Board may be
called in accordance with the provisions of Government Code Section 54956.
Directors may participate in meetings telephonically, with full voting rights, only
to the extent permitted by law.
4.8 Brown Act Applicable. All meetings of the Board shall be conducted in
accordance with the provisions of the Ralph M. Brown Act (Government Code
Section 54950, et seq.).
4.9 Quorum; Approvals. A majority of the Directors shall constitute a quorum,
except that less than a quorum may adjourn from time to time in accordance with
law. The affirmative votes of a majority of the Directors who are present at the
subject meeting shall be required to take any action by the Board.
4.10 Board Voting.
4.10.1 Percentage Vote. Each Director shall have one vote. Action of the Board
on all matters shall require an affirmative vote of a majority of all
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-11 -
Directors who are present at the subject meeting, except when a
supermajority vote is expressly required by this Agreement. When a
supermajority vote is required under Section 4.11 (Special Voting), action
of the Board shall require an affirmative vote of the specified
supermajority of all Directors who are present at the subject meeting. All
votes taken pursuant to this Section 4.10.1 shall be referred to as a
percentage vote. Notwithstanding the foregoing, in the event of a tie in a
percentage vote, the Board can break the tie and act upon an affirmative
voting shares vote as described in section 4.10.2 (Voting Shares Vote).
4.10.2 Voting Shares Vote. In addition to and immediately after an affirmative
percentage vote three or more Directors may request that a vote of the
voting shares shall be held. In such event, the corresponding voting
shares, as described in section 4.10.3, of all Directors voting in order to
take an action shall exceed 50%, or such other higher voting shares
percentage expressly required by this Agreement or the Operating Policies
and Procedures of all Directors who are present at the subject meeting.
All votes taken pursuant to this Section 4.10.2 shall be referred to as a
voting shares vote. In the event that any one Director has a voting share
that equals or exceeds that which is necessary to disapprove the matter
being voted on by the Board, at least one other Director shall be required
to vote in the negative in order to disapprove such matter. When a voting
shares vote is held, action by the Board requires both an affirmative
percentage vote and an affirmative voting shares vote.
4.10.3 Voting Shares Formula. When a voting shares vote is requested by
three or more Directors, voting shares of the Directors shall be determined
by the following formula:
(Annual Energy Use/Total Annual Energy) multiplied by 100, where (a)
"Annual Energy Use" means (i) with respect to the first two years
following the Effective Date, the annual electricity usage, expressed in
kilowatt hours ("kWh"), within the Party's respective jurisdiction and (ii)
with respect to the period after the second anniversary of the Effective
Date, the annual electricity usage, expressed in kWh, of accounts within a
Party's respective jurisdiction that are served by the Authority and (b)
"Total Annual Energy" means the sum of all Parties' Annual Energy Use.
4.11 Special Voting.
4.11.1 Except as provided below, matters that require Special Voting as
described in this Section shall require 72 hours prior notice to any Brown
Act meeting or special meeting. Two-thirds vote (or such greater vote as
required by state law) of the appointed Directors shall be required to take
any action on the following:
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-12 -
(a) Change the designation of Treasurer or Auditor of the Authority;
(b) Issue bonds or other forms of debt;
(c) Exercise the power of eminent domain, subject to prior approval
by the passage of an authorizing ordinance or other legally
sufficient action by the affected Party; and
(d) Amend this Agreement or adopt or amend the bylaws of the
Authority. At least 30 days advance notice shall be provided for
such actions. The Authority shall also provide prompt written
notice to all Parties of the action taken and enclose the adopted or
modified documents.
5. INTERNAL ORGANIZATION
5.1 Chair and Vice Chair. For each fiscal year, the Board shall elect a Chair and
Vice Chair from among the Directors. The term of office of the Chair and Vice
Chair shall continue for one year, but there shall be no limit on the number of
terms held by either the Chair or Vice Chair. The Chair shall be the presiding
officer of all Board meetings, and the Vice Chair shall serve in the absence of the
Chair. The Chair shall sign all contracts on behalf of the Authority, and shall
perform such other duties as may be imposed by the Board. In the absence of the
Chair, the Vice-Chair shall sign contracts and perform all of the Chair’s duties.
The office of the Chair or Vice Chair shall be declared vacant and a new selection
shall be made if: (a) the person serving dies, resigns, or the Party that the person
represents removes the person as its representative on the Board, or (b) the Party
that he or she represents withdraws from the Authority pursuant to the provisions
of this Agreement. Upon a vacancy, the position shall be filled at the next
regular meeting of the Board held after such vacancy occurs or as soon as
practicable thereafter. Succeeding officers shall perform the duties normal to said
offices.
5.2 Secretary. The Board shall appoint a Secretary, who need not be a member of
the Board, who shall be responsible for keeping the minutes of all meetings of the
Board and all other office records of the Authority.
5.3 Treasurer. The Board shall appoint a qualified person to act as the Treasurer,
who need not be a member of the Board. Unless otherwise exempted from such
requirement, the Authority shall cause an independent audit to be made by a
certified public accountant, or public accountant, in compliance with Section 6506
of the Act. The Treasurer shall act as the depositary of the Authority and have
custody of all the money of the Authority, from whatever source, and as such,
shall have all of the duties and responsibilities specified in Section 6505.5 of the
Act. The Board may require the Treasurer to file with the Authority an official
bond in an amount to be fixed by the Board, and if so requested the Authority
shall pay the cost of premiums associated with the bond. The Treasurer shall
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-13 -
report directly to the Board and shall comply with the requirements of treasurers
of incorporated municipalities. The Board may transfer the responsibilities of
Treasurer to any person or entity as the law may provide at the time.
5.4 Auditor. The Board shall appoint a qualified person to act as the Auditor, who
shall not be a member of the Board. The Board may require the Auditor to file
with the Authority an official bond in an amount to be fixed by the Board, and if
so requested the Authority shall pay the cost of premiums associated with the
bond.
5.5 Executive Director. The Board shall appoint an Executive Director for the
Authority, who shall be responsible for the day-to-day operation and management
of the Authority and the CCA Program. The Executive Director may exercise all
powers of the Authority, except those powers specifically reserved to the Board
including but not limited to those set forth in Section 4.5 (Specific
Responsibilities of the Board) of this Agreement or the Operating Policies and
Procedures, or those powers which by law must be exercised by the Board. The
Executive Director may enter into and execute any Energy Contract, in
accordance with criteria and policies established by the Board.
5.6 Bonding of Persons Having Access to Property. Pursuant to the Act, the Board
shall designate the public officer or officers or person or persons who have charge
of, handle, or have access to any property of the Authority exceeding a value as
established by the Board, and shall require such public officer or officers or
person or persons to file an official bond in an amount to be fixed by the Board.
5.7 Other Employees/Agents. The Board shall have the power by resolution to hire
employees or appoint or retain such other agents, including officers, loan-out
employees, or independent contractors, as may be necessary or desirable to carry-
out the purpose of this Agreement.
5.8 Privileges and Immunities from Liability. All of the privileges and immunities
from liability, exemption from laws, ordinances and rules, all pension, relief,
disability, workers’ compensation and other benefits which apply to the activities
of officers, agents or employees of a public agency when performing their
respective functions shall apply to the officers, agents or employees of the
Authority to the same degree and extent while engaged in the performance of any
of the functions and other duties of such officers, agents or employees under this
Agreement. None of the officers, agents or employees directly employed by the
Board shall be deemed, by reason of their employment by the Authority to be
employed by the Parties or by reason of their employment by the Authority, to be
subject to any of the requirements of the Parties.
5.9 Commissions, Boards and Committees. The Board may establish any advisory
commissions, boards and committees as the Board deems appropriate to assist the
Board in carrying outs its functions and implementing the CCA Program, other
energy programs and the provisions of this Agreement. The Board may establish
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-14 -
rules, regulations, policies, bylaws or procedures to govern any such
commissions, boards, or committees and shall determine whether members shall
be compensated or entitled to reimbursement for expenses.
5.9.1 The Board shall establish the following Advisory Committees:
(a) Executive Committee. The Board shall establish an executive
committee consisting of a smaller number of Directors. The Board
may delegate to the Executive Committee's such authority as the
Board might otherwise exercise, except that the Board may not
delegate authority regarding certain essential functions, including
but not limited to, approving the fiscal year budget or hiring or
firing the Executive Director, and other functions as provided in
the Operating Policies and Procedures. The Board may not
delegate to the Executive Committee or any other committee its
authority under Section 3.2.12 to adopt and amend the Operating
Policies and Procedures.
(b) Finance Committee. The Board shall establish a finance
committee consisting of a smaller number of Directors. The
primary purpose of the Finance Committee is to review and
recommend to the Board:
(1) A funding plan;
(2) A fiscal year budget;
(3) Financial policies and procedures to ensure equitable
contributions by Parties;
(4) Such other responsibilities as provided in the Operating
Policies and Procedures, including but not limited to
policies, rules and regulations governing investment of
surplus funds, and selection and designation of financial
institutions for deposit of Authority funds.
(c) Community Advisory Committee. The Board shall establish a
community advisory committee comprised of members of the
public representing key stakeholder communities. The primary
purpose of the Community Advisory Committee shall be to
provide a venue for ongoing citizen support and engagement in the
operations of the Authority.
(d) Meetings of the Advisory Committees. All meetings of the
Advisory Committees shall be held in accordance with the Ralph
M. Brown Act. For the purposes of convening meetings and
conducting business, unless otherwise provided in the bylaws, a
majority of the members of the Advisory Committee shall
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-15 -
constitute a quorum for the transaction of business, except that less
than a quorum or the secretary of each Advisory Committee may
adjourn meetings from time-to-time. As soon as practicable, but no
later than the time of posting, the Secretary of the Advisory
Committee shall provide notice and the agenda to each Party,
Director and Alternate Directors.
(e) Officers of Advisory Committees. Unless otherwise determined
by the Board, each Advisory Committee shall choose its officers,
comprised of a Chairperson, a Vice-Chairperson and a Secretary.
6. IMPLEMENTATION ACTION AND AUTHORITY DOCUMENTS
6.1 Preliminary Implementation of the CCA Program.
6.1.1 Enabling Ordinance. In addition to the execution of this Agreement,
each Party shall adopt an ordinance in accordance with Public Utilities
Code Section 366.2(c)(12) for the purpose of specifying that the Party
intends to implement a CCA Program by and through its participation in
the Authority.
6.1.2 Implementation Plan. The Authority shall cause to be prepared and
secure Board approval of an Implementation Plan meeting the
requirements of Public Utilities Code Section 366.2 and any applicable
Public Utilities Commission regulations as soon after the Effective Date as
reasonably practicable. .
6.1.3 Termination of CCA Program. Nothing contained in this Section 6 or
this Agreement shall be construed to limit the discretion of the Authority
to terminate the implementation or operation of the CCA Program at any
time in accordance with any applicable requirements of state law.
6.2 Authority Documents. The Parties acknowledge and agree that the affairs of the
Authority will be implemented through various documents duly adopted by the
Board through Board resolution or minute action, including but not necessarily
limited to the Operating Policies and Procedures, the annual budget, and specified
plans and policies defined as the Authority Documents by this Agreement. The
Parties agree to abide by and comply with the terms and conditions of all such
Authority Documents that may be adopted by the Board, subject to the Parties'
right to withdraw from the Authority as described in Section 8 (Withdrawal and
Termination) of this Agreement.
7. FINANCIAL PROVISIONS
7.1 Fiscal Year. The Authority's fiscal year shall be 12 months commencing July 1
and ending June 30. The fiscal year may be changed by Board resolution.
7.2 Depository.
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-16 -
7.2.1 All funds of the Authority shall be held in separate accounts in the name
of the Authority and not commingled with funds of any Party or any other
person or entity.
7.2.2 All funds of the Authority shall be strictly and separately accounted for,
and regular reports shall be rendered of all receipts and disbursements, at
least quarterly during the fiscal year. The books and records of the
Authority shall be open to inspection and duplication by the Parties at all
reasonable times. The Board shall contract with a certified public
accountant or public accountant to make an annual audit of the accounts
and records of the Authority, which shall be conducted in accordance with
the requirements of Section 6506 of the Act.
7.2.3 All expenditures shall be made in accordance with the approved budget
and upon the approval of any officer so authorized by the Board in
accordance with its Operating Policies and Procedures. The Treasurer
shall draw checks or warrants or make payments by other means for
claims or disbursements not within an applicable budget only upon the
prior approval of the Board.
7.3 Budget and Recovery Costs.
7.3.1 Budget. The initial budget shall be approved by the Board. The Board
may revise the budget from time to time as may be reasonably necessary
to address contingencies and unexpected expenses. All subsequent
budgets of the Authority shall be prepared and approved by the Board in
accordance with the Operating Policies and Procedures.
7.3.2 Funding of Initial Costs. Subject to the approval of the Board of
Supervisors, the County of Los Angeles has agreed to provide up to $10
million for funding Initial Costs in establishing the Authority and
implementing the CCA Program. In the event that the CCA Program
becomes operational, the County of Los Angeles shall be reimbursed for
the Initial Costs. The County and the Authority will execute an agreement
specifying the terms and conditions of the Initial Costs provided by the
County, including but not limited to: (a) Repayment of this amount,
which shall be first priority in relation to all other indebtedness of the
Authority; and (b) authorization for the County Auditor-Controller to
conduct an audit of the Authority's books and records (including personnel
records, as necessary) and/or investigation, following reasonable advance
notice from the County, to ensure compliance with the terms and
conditions of the agreement. The Authority may establish a reasonable
time period over which such costs are recovered. In the event that the
CCA Program does not become operational, the County shall not be
entitled to any reimbursement of the Initial Costs they have paid from the
Authority or any other Party.
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-17 -
7.3.3 Program Costs. The Parties desire that, to the extent reasonably
practicable, all costs incurred by the Authority that are directly or
indirectly attributable to the provision of electric services under the CCA
Program, including the establishment and maintenance of various reserve
and performance funds, shall be recovered through charges to CCA
customers receiving such electric services.
7.3.4 General Costs. Costs that are not directly or indirectly attributable to the
provision of electric services under the CCA Program, as determined by
the Board, shall be defined as general costs. General costs shall be shared
among the Parties on such bases as the Board shall determine pursuant to
the Authority documents.
7.4 Contributions. Parties are not required under this Agreement to make any
financial contributions. Consumers may subscribe as customers of the Authority
pursuant to the Act and outside of this Agreement and through their on-bill
selections.
7.4.1 A Party may, in the appropriate circumstance, and when agreed-to:
(a) Make contributions from its treasury for the purposes set forth in
this Agreement;
(b) Make payments of public funds to defray the cost of the purposes
of the Agreement and Authority;
(c) Make advances of public funds for such purposes, such advances
to be repaid as provided by written agreement; or
(d) Use its personnel, equipment or property in lieu of other
contributions or advances.
(e) No Party shall be required to adopt any tax, assessment, fee or
charge under any circumstances.
7.5 Accounts and Reports. The Treasurer shall establish and maintain such funds
and accounts as may be required by good accounting practice or by any provision
of any trust agreement entered into with respect to the proceeds of any bonds
issued by the Authority. The books and records of the Authority in the hands of
the Treasurer shall be open to inspection and duplication at all reasonable times
by duly appointed representatives of the Parties. The Treasurer, within 180 days
after the close of each fiscal year, shall give a complete written report of all
financial activities for such fiscal year to the Parties.
7.6 Funds. The Treasurer shall receive, have custody of and/or disburse Authority
funds in accordance with the laws applicable to public agencies and generally
accepted accounting practices, and shall make the disbursements required by this
Agreement in order to carry out any of the purposes of this Agreement.
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-18 -
8. WITHDRAWAL AND TERMINATION
8.1 Withdrawal
8.1.1 Withdrawal by Parties. Any Party may withdraw its membership in the
Authority, effective as of the beginning of the Authority's fiscal year, by
giving no less than 180 days advance written notice of its election to do
so, which notice shall be given to the Authority and each Party.
Withdrawal of a Party shall require an affirmative vote of the Party's
governing board.
8.1.2 Amendment. Notwithstanding Section 8.1.1 (Withdrawal by Parties) of
this Agreement, a Party may withdraw its membership in the Authority
upon approval and execution of an amendment to this Agreement provided
that the requirements of this Section 8.1.2 are strictly followed. A Party
shall be deemed to have withdrawn its membership in the Authority
effective 180 days after the Board approves an amendment to this
Agreement if the Director representing such Party has provided notice to
the other Directors immediately preceding the Board's vote of the Party's
intention to withdraw its membership in the Authority should the
amendment be approved by the Board.
8.1.3 Continuing Liability; Further Assurances. A Party that withdraws its
membership in the Authority may be subject to certain continuing
liabilities, as described in Section 8.4 (Continuing Liability; Refund) of
this Agreement, including, but not limited to, Power Purchase
Agreements. The withdrawing Party and the Authority shall execute and
deliver all further instruments and documents, and take any further action
that may be reasonably necessary, as determined by the Board, to
effectuate the orderly withdrawal of such Party from membership in the
Authority. The Operating Policies and Procedures shall prescribe the
rights if any of a withdrawn Party to continue to participate in those Board
discussions and decisions affecting customers of the CCA Program that
reside or do business within the jurisdiction of the Party.
8.2 Involuntary Termination. This Agreement may be terminated with respect to a
Party for material non-compliance with provisions of this Agreement or the
Authority Documents upon an affirmative vote of the Board in which the
minimum percentage vote and percentage voting shares, as described in
Section 4.10 (Board Voting) of this Agreement, shall be no less than 67%
excluding the vote and voting shares of the Party subject to possible termination.
Prior to any vote to terminate this Agreement with respect to a Party, written
notice of the proposed termination and the reason(s) for such termination shall be
delivered to the Party whose termination is proposed at least 30 days prior to the
regular Board meeting at which such matter shall first be discussed as an agenda
item. The written notice of proposed termination shall specify the particular
provisions of this Agreement or the Authority Documents that the Party has
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-19 -
allegedly violated. The Party subject to possible termination shall have the
opportunity at the next regular Board meeting to respond to any reasons and
allegations that may be cited as a basis for termination prior to a vote regarding
termination. A Party that has had its membership in the Authority terminated may
be subject to certain continuing liabilities, as described in Section 8.4 (Continuing
Liability; Refund) of this Agreement. In the event that the Authority decides to
not implement the CCA Program, the minimum percentage vote of 67% shall be
conducted in accordance with Section 4.10 (Board Voting) of this Agreement.
8.3 Mutual Termination. This Agreement may be terminated by mutual agreement
of all the Parties; provided, however, the foregoing shall not be construed as
limiting the rights of a Party to withdraw its membership in the Authority, and
thus terminate this Agreement with respect to such withdrawing Party, as
described in Section 8.1 (Withdrawal) of this Agreement.
8.4 Continuing Liability; Refund. Upon a withdrawal or involuntary termination of
a Party, the Party shall remain responsible for any claims, demands, damages, or
liabilities arising from the Party’s membership in the Authority through the date
of its withdrawal or involuntary termination, it being agreed that the Party shall
not be responsible for any claims, demands, damages, or liabilities arising after
the date of the Party’s withdrawal or involuntary termination. In addition, such
Party also shall be responsible for any costs or obligations associated with the
Party’s participation in any program in accordance with the provisions of any
agreements relating to such program provided such costs or obligations were
incurred prior to the withdrawal of the Party. The Authority may withhold funds
otherwise owing to the Party or may require the Party to deposit sufficient funds
with the Authority, as reasonably determined by the Authority, to cover the
Party’s liability for the costs described above. Any amount of the Party’s funds
held on deposit with the Authority above that which is required to pay any
liabilities or obligations shall be returned to the Party.
8.5 Disposition of Authority Assets. Upon termination of this Agreement and
dissolution of the Authority by all Parties, and after payment of all obligations of
the Authority, the Board:
8.5.1 May sell or liquidate Authority property; and
8.5.2 Shall distribute assets to Parties in proportion to the contributions made by
the existing Parties.
Any assets provided by a Party to the Authority shall remain the asset of that
Party and shall not be subject to distribution under this section.
9. MISCELLANEOUS PROVISIONS
9.1 Dispute Resolution. The Parties and the Authority shall make reasonable efforts
to settle all disputes arising out of or in connection with this Agreement. Before
exercising any remedy provided by law, a Party or the Parties and the Authority
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-20 -
shall engage in nonbinding mediation or arbitration in the manner agreed upon by
the Party or Parties and the Authority. The Parties agree that each Party may
specifically enforce this section 9.1 (Dispute Resolution). In the event that
nonbinding mediation or arbitration is not initiated or does not result in the
settlement of a dispute within 60 days after the demand for mediation or
arbitration is made, any Party and the Authority may pursue any remedies
provided by law.
9.2 Liability of Directors, Officers, and Employees. The Directors, officers, and
employees of the Authority shall use ordinary care and reasonable diligence in the
exercise of their powers and in the performance of their duties pursuant to this
Agreement. No current or former Director, officer, or employee will be
responsible for any act or omission by another Director, officer, or employee.
The Authority shall defend, indemnify and hold harmless the individual current
and former Directors, officers, and employees for any acts or omissions in the
scope of their employment or duties in the manner provided by Government Code
Section 995 et seq. Nothing in this section shall be construed to limit the defenses
available under the law, to the Parties, the Authority, or its Directors, officers, or
employees.
9.3 Indemnification of Parties. The Authority shall acquire such insurance coverage
as is necessary to protect the interests of the Authority, the Parties and the public.
The Authority shall defend, indemnify and hold harmless the Parties and each of
their respective governing board members, officers, agents and employees, from
any and all claims, losses, damages, costs, injuries and liabilities of every kind
arising directly or indirectly from the conduct, activities, operations, acts and
omissions of the Authority under this Agreement.
9.4 Notices. Any notice required or permitted to be made hereunder shall be in
writing and shall be delivered in the manner prescribed herein at the principal
place of business of each Party. The Parties may give notice by (1) personal
delivery; (2) e-mail; (3) U.S. Mail, first class postage prepaid, or a faster delivery
method; or (3) by any other method deemed appropriate by the Board.
Upon providing written notice to all Parties, any Party may change the designated
address or e-mail for receiving notice.
All written notices or correspondence sent in the described manner will be
deemed given to a party on whichever date occurs earliest: (1) the date of personal
delivery; (2) the third business day following deposit in the U.S. mail, when sent
by “first class” mail; or (3) the date of transmission, when sent by e-mail or
facsimile.
9.5 Successors. This Agreement shall be binding upon and shall inure to the benefit
of the successors of each Party.
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-21 -
9.6 Assignment. Except as otherwise expressly provided in this Agreement, the
rights and duties of the Parties may not be assigned or delegated without the
advance written consent of all of the other Parties, and any attempt to assign or
delegate such rights or duties in contravention of this Section 9.6 shall be null and
void. This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of the Parties. This Section 9.6 does not prohibit a Party
from entering into an independent agreement with another agency, person, or
entity regarding the financing of that Party's contributions to the Authority, or the
disposition of the proceeds which that Party receives under this Agreement, so
long as such independent agreement does not affect, or purport to affect, the rights
and duties of the Authority or the Parties under this Agreement.
9.7 Severability. If any one or more of the terms, provisions, promises, covenants, or
conditions of this Agreement were adjudged invalid or void by a court of
competent jurisdiction, each and all of the remaining terms, provisions, promises,
covenants, and conditions of this Agreement shall not be affected thereby and
shall remain in full force and effect to the maximum extent permitted by law.
9.8 Governing Law. This Agreement is made and to be performed in the State of
California, and as such California substantive and procedural law shall apply.
9.9 Headings. The section headings herein are for convenience only and are not to
be construed as modifying or governing the language of this Agreement.
9.10 Counterparts. This Agreement may be executed in any number of counterparts,
and upon execution by all Parties, each executed counterpart shall have the same
force and effect as an original instrument and as if all Parties had signed the same
instrument. Any signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal effect of any signatures
thereon, and may be attached to another counterpart of this Agreement identical in
form hereto but having attached to it one or more signature pages.
LOS ANGELES COMMUNITY CHOICE ENERGY – JOINT POWERS AGREEMENT
_____________________________________________________________________________________________________________________
-22 -
[THIS PAGE INTENTIONALY LEFT BLANK]
City of Santa Monica
DRAFT
COMMUNITY CHOICE
AGGREGATION
IMPLEMENTATION PLAN AND
STATEMENT OF INTENT
November 2017
SMCCA Draft Implementation Plan
i November 2017
Table of Contents
CHAPTER 1 – Introduction ....................................................................................................................................... 3
Statement of Intent ................................................................................................................................................. 4
Organization of this Implementation Plan ......................................................................................................... 4
CHAPTER 2 – Aggregation Process ......................................................................................................................... 6
Introduction ............................................................................................................................................................ 6
Process of Aggregation .......................................................................................................................................... 6
Consequences of Aggregation .............................................................................................................................. 7
Rate Impacts ................................................................................................................................................. 7
Renewable Energy Impacts ........................................................................................................................ 8
Energy Efficiency Impacts .......................................................................................................................... 8
CHAPTER 3 – Organizational Structure.................................................................................................................. 9
Organizational Overview...................................................................................................................................... 9
Governance ............................................................................................................................................................. 9
Management ........................................................................................................................................................... 9
Administration ..................................................................................................................................................... 10
Finance ................................................................................................................................................................... 10
Marketing & Public Affairs ................................................................................................................................. 10
Power Resources & Energy Programs .............................................................................................................. 11
Electric Supply Operations ....................................................................................................................... 11
Governmental Affairs & Legal Support ............................................................................................................ 12
CHAPTER 4 – Startup Plan & Funding ................................................................................................................. 13
Startup Activities .................................................................................................................................................. 13
Staffing and Contract Services ........................................................................................................................... 13
Capital Requirements .......................................................................................................................................... 14
Financing Plan ...................................................................................................................................................... 14
CHAPTER 5 – Program Phase-In ............................................................................................................................ 15
CHAPTER 6 - Load Forecast & Resource Plan ..................................................................................................... 16
Introduction .......................................................................................................................................................... 16
Resource Plan Overview ..................................................................................................................................... 17
Supply Requirements .......................................................................................................................................... 18
Customer Participation Rates ............................................................................................................................. 18
Customer Forecast ................................................................................................................................................ 18
Sales Forecast ........................................................................................................................................................ 19
Capacity Requirements ....................................................................................................................................... 20
Renewables Portfolio Standards Energy Requirements ................................................................................. 22
Basic RPS Requirements ........................................................................................................................... 22
Santa Monica’s Renewables Portfolio Standards Requirement .......................................................... 23
Purchased Power .................................................................................................................................................. 23
Renewable Resources .......................................................................................................................................... 23
Energy Efficiency.................................................................................................................................................. 24
CHAPTER 7 – Financial Plan .................................................................................................................................. 25
SMCCA Draft Implementation Plan
ii November 2017
Description of Cash Flow Analysis ................................................................................................................... 25
Cost of CCA Program Operations ..................................................................................................................... 25
Revenues from CCA Program Operations ....................................................................................................... 25
Cash Flow Analysis Results ................................................................................................................................ 26
CCA Program Implementation Pro Forma ...................................................................................................... 26
SMCCA Financings .............................................................................................................................................. 27
CCA Program Start-up and Working Capital .................................................................................................. 28
Renewable Resource Project Financing ............................................................................................................ 28
CHAPTER 8 – Rate Setting, Program Terms and Conditions ............................................................................ 29
Introduction .......................................................................................................................................................... 29
Rate Policies .......................................................................................................................................................... 29
Rate Competitiveness .......................................................................................................................................... 29
Rate Stability ......................................................................................................................................................... 30
Equity among Customer Classes ....................................................................................................................... 30
Customer Understanding ................................................................................................................................... 30
Revenue Sufficiency ............................................................................................................................................. 31
Rate Design ........................................................................................................................................................... 31
Custom Pricing Options ...................................................................................................................................... 31
Net Energy Metering ........................................................................................................................................... 31
Disclosure and Due Process in Setting Rates and Allocating Costs among Participants .......................... 31
CHAPTER 9 – Customer Rights and Responsibilities ......................................................................................... 33
Customer Notices ................................................................................................................................................. 33
Termination Fee .................................................................................................................................................... 34
Customer Confidentiality ................................................................................................................................... 34
Responsibility for Payment ................................................................................................................................. 35
Customer Deposits ............................................................................................................................................... 35
CHAPTER 10 - Procurement Process ..................................................................................................................... 36
Introduction .......................................................................................................................................................... 36
Procurement Methods ......................................................................................................................................... 36
Key Contracts ........................................................................................................................................................ 36
Electric Supply Contract ........................................................................................................................... 36
Data Management Contract ..................................................................................................................... 37
CHAPTER 11 – Contingency Plan for Program Termination ............................................................................ 39
Introduction .......................................................................................................................................................... 39
Termination by SMCCA ...................................................................................................................................... 39
CHAPTER 12 – Appendices .................................................................................................................................... 40
Appendix A: City of Santa Monica Ordinance No. XX-XX (Adopting Implementation Plan) ................ 40
SMCCA Draft Implementation Plan
CHAPTER 1 – Introduction 3 November 2017
CHAPTER 1 – Introduction
The City of Santa Monica (“City” or “Santa Monica”), located within Los Angeles County, is
pursuing the implementation of a community choice aggregation program (“CCA”), which has
been named Santa Monica CCA (the “Program” or “SMCCA”). SMCCA is structured to offer
service to all customers within the City’s geographic boundaries.
This Implementation Plan and Statement of Intent (“Implementation Plan”) describes the City’s
plans to implement a voluntary CCA program for electric customers (excluding non-residential
direct access customers) within the jurisdictional boundaries of Santa Monica that currently take
bundled electric service from Southern California Edison (“SCE”). The SMCCA Program will
provide electricity customers the opportunity to join together to procure electricity from
competitive suppliers, with such electricity being delivered over SCE’s transmission and
distribution system. The planned start date for the Program is July 1, 2018. All current SCE
customers (excluding non-residential direct access customers) within the City’s service area will
receive information describing the SMCCA Program and will have multiple opportunities to opt
out and choose to remain full requirement (“bundled”) customers of SCE, in which case they will
not be enrolled. Thus, participation in the SMCCA Program is completely voluntary; however,
customers, as provided by law, will be automatically enrolled according to the anticipated
schedule later described in Chapter 5 unless they affirmatively elect to opt-out.
Implementation of SMCCA will enable customers within Santa Monica’s service area to take
advantage of the opportunities granted by Assembly Bill 117 (“AB 117”), the Community Choice
Aggregation Law. Santa Monica’s primary objectives in implementing this Program are to
achieve the goals of Santa Monica’s Sustainable City Plan; provide competitive rates for electric
generation services; support local economic development; and sustain long-term rate stability for
residents and businesses through local control. The prospective benefits to consumers include
increased renewable supply product options, stable and competitive electric rates, and the
opportunity for public participation in determining which technologies are utilized to meet local
electricity needs.
To ensure successful operation of the program, the City will solicit energy suppliers and
marketers through a competitive process and will negotiate with one or more qualified suppliers
throughout early 2018. Final selection of SMCCA’s initial energy supplier(s) will be made by
Santa Monica following administration of the aforementioned solicitation process and related
contract negotiations. Information regarding the anticipated solicitation process for SMCCA’s
initial energy services provider(s) is contained in Chapter 10.
The California Public Utilities Code provides the relevant legal authority for the City to become
a Community Choice Aggregator and invests the California Public Utilities Commission
(“CPUC” or “Commission”) with the responsibility for establishing the cost recovery mechanism
that must be in place before customers can begin receiving electrical service through the SMCCA
SMCCA Draft Implementation Plan
CHAPTER 1 – Introduction 4 November 2017
Program. The CPUC also has responsibility for registering the City as a Community Choice
Aggregator and ensuring compliance with basic consumer protection rules. The Public Utilities
Code requires that an Implementation Plan be adopted at a duly noticed public hearing and that
it be filed with the Commission in order for the Commission to determine the cost recovery
mechanism to be paid by customers of the Program in order to prevent shifting of costs to
bundled customers of the incumbent utility.
On December 5, 2017, the City, at a duly noticed public hearing, introduced this Implementation
Plan, through Ordinance No. XX-XX (a copy of which is included as part of Appendix A) and
subsequently adopted on at a duly noticed regular meeting on January 9, 2018.
The Commission has established the methodology that will be used to determine the cost
recovery mechanism, and SCE has approved tariffs for imposition of the cost recovery
mechanism. With this milestone having been accomplished, the City submits this
Implementation Plan to the CPUC. Following the CPUC’s certification of this Implementation
Plan and statement of intent, the City will take the final steps needed to register as a CCA prior
to initiating the customer notification and enrollment process.
Statement of Intent
The content of this Implementation Plan complies with the statutory requirements of AB 117. As
required by Public Utilities Code Section 366.2(c)(3), this Implementation Plan details the process
and consequences of aggregation and provides the City’s statement of intent for implementing a
CCA program that includes all of the following:
➢ Universal access;
➢ Reliability;
➢ Equitable treatment of all customer classes; and
➢ Any requirements established by state law or by the CPUC concerning aggregated service.
Organization of this Implementation Plan
The remainder of this Implementation Plan is organized as follows:
Chapter 2: Aggregation Process
Chapter 3: Organizational Structure
Chapter 4: Startup Plan & Funding
Chapter 5: Program Phase-In
Chapter 6: Load Forecast & Resource Plan
Chapter 7: Financial Plan
Chapter 8: Rate setting
Chapter 9: Customer Rights and Responsibilities
Chapter 10: Procurement Process
Chapter 11: Contingency Plan for Program Termination
Appendix A: City of Santa Monica Ordinance No. XX-XX (Adopting Implementation Plan)
SMCCA Draft Implementation Plan
CHAPTER 1 – Introduction 5 November 2017
The requirements of AB 117 are cross-referenced to Chapters of this Implementation Plan in the
following table.
AB 117 Cross References
AB 117 REQUIREMENT IMPLEMENTATION PLAN CHAPTER
Statement of Intent Chapter 1: Introduction
Process and consequences of aggregation Chapter 2: Aggregation Process
Organizational structure of the program,
its operations and funding
Chapter 3: Organizational Structure
Chapter 4: Startup Plan & Funding
Chapter 7: Financial Plan
Disclosure and due process in setting rates
and allocating costs among participants
Chapter 8: Rate setting
Rate setting and other costs to participants Chapter 8: Rate setting
Chapter 9: Customer Rights and
Responsibilities
Participant rights and responsibilities Chapter 9: Customer Rights and
Responsibilities
Methods for entering and terminating
agreements with other entities
Chapter 10: Procurement Process
Description of third parties that will be
supplying electricity under the program,
including information about financial,
technical and operational capabilities
Chapter 10: Procurement Process
Termination of the program Chapter 11: Contingency Plan for Program
Termination
SMCCA Draft Implementation Plan
Chapter 2 – Aggregation Process 6 November 2017
CHAPTER 2 – Aggregation Process
Introduction
This chapter describes the background leading to the development of this Implementation Plan
and describes the process and consequences of aggregation, consistent with the requirements of
AB 117.
In mid-2017 Santa Monica engaged the assistance of the California Choice Energy Authority
(CCEA) to complete a technical study evaluating the results of Santa Monica operating a CCA
program. The initial study revealed that a CCA program was viable, offering customers rates
competitive with SCE, and benefits are further enhanced by partnering with CCEA on operations
such as procurement, regulatory compliance and monitoring, and data management.
The City created SMCCA with the following objectives: 1) achieve the goals of Santa Monica’s
Sustainable City Plan; 2) provide cost-competitive electric services; 3) support economic
development within Santa Monica; 3) and gain local control of the City’s energy procurement
process.
The City released a draft Implementation Plan in December 2017, which described the planned
organization, governance and operation of the CCA Program. Following consideration of
comments related to the draft document, a final Implementation Plan was prepared and duly
adopted by the Santa Monica City Council.
The SMCCA Program represents a culmination of planning efforts that are responsive to the
expressed needs and priorities of the citizenry and business community within Santa Monica.
The City plans to expand the energy choices available to eligible customers through creation of
innovative new programs for voluntary purchases of renewable energy, net energy metering to
promote customer-owned renewable generation, and customized pricing options for large energy
users.
Process of Aggregation
Before they are enrolled in the Program, prospective SMCCA customers will receive two written
notices in the mail, from Santa Monica, that will provide information needed to understand the
Program’s terms and conditions of service and explain how customers can opt-out of the
Program, if desired. All customers that do not follow the opt-out process specified in the
customer notices will be automatically enrolled, and service will begin at their next regularly
scheduled meter read date following the date of automatic enrollment, subject to the service
enrollment plan described in Chapter 5. The initial enrollment notices will be provided to
customers in May 2018, with a second notice being provided in June 2018.
Customers enrolled in the SMCCA Program will continue to have their electric meters read and
to be billed for electric service by the distribution utility (SCE). The electric bill for Program
SMCCA Draft Implementation Plan
Chapter 2 – Aggregation Process 7 November 2017
customers will show separate charges for generation procured by the City as well as other charges
related to electricity delivery and other utility charges assessed by SCE.
After service cutover, customers will have approximately 60 days (two billing cycles) to opt-out
of the SMCCA Program without penalty and return to the distribution utility (SCE). SMCCA
customers will be advised of these opportunities via the distribution of two additional enrollment
notices provided within the first two months of service. Customers that opt-out between the
initial cutover date and the close of the post enrollment opt-out period will be responsible for
Program charges for the time they were served by SMCCA but will not otherwise be subject to
any penalty for leaving the program. Customers that have not opted-out within the 60-day post
enrollment period will be deemed to have elected to become a participant in the SMCCA Program
and to have agreed to the SMCCA Program’s terms and conditions, including those pertaining to
requests for termination of service, as further described in Chapter 8.
Consequences of Aggregation
Rate Impacts
SMCCA Customers will pay the generation charges set by the City and no longer pay the costs of
SCE generation. Customers enrolled in the Program will be subject to the Program’s terms and
conditions, including responsibility for payment of all Program charges as described in Chapter
9.
The City’s rate setting policies described in Chapter 7 establish a goal of providing rates that are
competitive with the projected generation rates offered by the incumbent distribution utility
(SCE). The City will establish rates sufficient to recover all costs related to operation of the
Program, and actual rates will be adopted by the Santa Monica City Council.
Initial SMCCA Program rates will be established following approval of the City’s inaugural
program budget, reflecting final costs from the SMCCA Program’s energy supplier(s). The City’s
rate policies and procedures are detailed in Chapter 7. Information regarding final SMCCA
Program rates will be disclosed along with other terms and conditions of service in the pre-
enrollment and post-enrollment notices sent to potential customers.
Once Santa Monica gives definitive notice to SCE that it will commence service, SMCCA
customers will generally not be responsible for costs associated with SCE’s future electricity
procurement contracts or power plant investments. Certain pre-existing generation costs and
new generation costs that are deemed to provide system-wide benefits will continue to be
charged by SCE to CCA customers through separate rate components, called the Cost
Responsibility Surcharge. These charges are shown in SCE’s electric service tariffs, which can be
accessed from the utility’s website, and the costs are included in charges paid by both CCA and
Direct Access customers.1
1 For SCE CCA and Direct Access customers, the Power Charge Indifference Adjustment element of the Cost
Responsibility Surcharge is contained within the CCA-CRS rate tariff.
SMCCA Draft Implementation Plan
Chapter 2 – Aggregation Process 8 November 2017
Renewable Energy Impacts
A second consequence of the Program will be a potential increase in the proportion of energy
generated and supplied by renewable resources. The resource plan includes procurement of
renewable energy sufficient to exceed California’s prevailing renewable energy procurement
mandate for all enrolled customers. SMCCA customers may also voluntarily participate in a
100% renewable supply option. To the extent that customers choose SMCCA’s voluntary
renewable energy option, the renewable content of SMCCA’s aggregate supply portfolio will
further increase. Initially, requisite renewable energy supply will be sourced through one or more
power purchase agreements. Over time, however, the City may consider independent
development of new renewable generation resources.
Energy Efficiency Impacts
A third consequence of the Program will be an anticipated increase in energy efficiency program
investments and activities. The existing energy efficiency programs administered by the
distribution utility are not expected to change as a result of SMCCA Program implementation.
SMCCA customers will continue to pay the public benefits surcharges to the distribution utility,
which will fund energy efficiency programs for all customers, regardless of generation supplier.
The energy efficiency investments ultimately planned for the SMCCA Program, as described in
Chapter 6, will follow Santa Monica’s successful application for and administration of requisite
program funding (from the CPUC) to independently administer energy efficiency programs
within its jurisdiction. Such programs will be in addition to the level of investment that would
continue in the absence of City-administered energy efficiency programs. Thus, the SMCCA
Program has the potential for increased energy savings and a further reduction in emissions due
to expanded energy efficiency programs.
SMCCA Draft Implementation Plan
CHAPTER 3 – Organizational Structure 9 November 2017
CHAPTER 3 – Organizational Structure
This section provides an overview of the organizational structure of the City and its proposed
implementation of the CCA program. Specifically, the key agreements, governance,
management, and organizational functions of the City are outlined and discussed below.
Organizational Overview
The Santa Monica City Council is responsible for establishing SMCCA Program policies and
objectives and overseeing SMCCA’s operation. The Santa Monica City Manager (or designee)
with serve as the SMCCA Executive Director to manage the operations of SMCCA in accordance
with policies adopted by the City Council.
Governance
The SMCCA Program will be governed by the Santa Monica City Council. SMCCA is the CCA
entity that will register with the CPUC, and it is responsible for implementing and managing the
program pursuant to the City Council’s direction. The City Council is comprised of seven
councilmembers, one of which, the Mayor, serves as the presiding officer at all meetings. The
SMCCA Program will be operated under the direction of an Executive Director (City Manager or
designee) appointed by the City Council.
The City Council’s primary duties are to establish program policies, approve rates and provide
policy direction to the Executive Director, who has general responsibility for program operations,
consistent with the policies established by the City Council. The City may form various standing
and ad hoc committees, as appropriate, which would have responsibility for evaluating various
issues that may affect the City and its customers, including rate-related and power contracting
issues, and would provide analytical support and recommendations to the City Council in these
regards.
Management
The SMCCA Executive Director has management responsibilities over the functional areas of
Administration & Finance, Marketing & Public Affairs, Power Resources & Energy Programs,
and Government Affairs. In performing the defined obligations to SMCCA, the Executive
Director may utilize a combination of internal staff, partnerships with other CCA agencies, and/or
contractors. Certain specialized functions needed for program operations, namely the electric
supply and customer account management functions described below, will be performed by
experienced third-party contractors.
Major functions of SMCCA that will be managed by the Executive Director are summarized
below.
SMCCA Draft Implementation Plan
CHAPTER 3 – Organizational Structure 10 November 2017
Administration
SMCCA’s Executive Director will be responsible for managing the organization’s human
resources and administrative functions and will coordinate with the City Council, as necessary,
with regard to these functions. The functional area of administration will include oversight of
employee hiring and termination, compensation and benefits management, identification and
procurement of requisite office space and various other issues.
Finance
The Executive Director is also responsible for managing the financial affairs of SMCCA, including
the development of an annual budget, revenue requirement and rates; managing and maintaining
cash flow requirements; arranging potential bridge loans as necessary; and other financial tools.
Revenues via rates and other funding sources (such as a rate stabilization fund, when necessary)
must, at a minimum, meet the annual budgetary revenue requirement, including recovery of all
expenses and any reserves or coverage requirements set forth in bond covenants or other
agreements. The City will have the flexibility to consider rate adjustments within certain ranges,
administer a standardized set of electric rates, and may offer optional rates to encourage policy
goals such as economic development or low income subsidy programs, provided that the overall
revenue requirement is achieved.
SMCCA may also offer customized pricing options such as dynamic pricing or contract-based
pricing for energy intensive customers to help these customers gain greater control over their
energy costs. This would provide such customers – mostly larger energy users within the
commercial sector – with greater rate-related flexibility than is currently available.
In conjunction with the City’s finance department, SMCCA’s finance function will be responsible
for arranging financing necessary for operational needs, preparing financial reports, and ensuring
sufficient cash flow for successful operation of the SMCCA Program. The finance function will
play an important role in risk management by monitoring the credit of energy suppliers so that
credit risk is properly understood and mitigated. In the event that changes in a supplier’s
financial condition and/or credit rating are identified, the City will be able to take appropriate
action, as would be provided for in the electric supply agreement(s).
Marketing & Public Affairs
The marketing and public affairs functions include general program marketing and
communications as well as direct customer interface ranging from management of key account
relationships to call center and billing operations. The City will conduct program marketing to
raise consumer awareness of the SMCCA Program and to establish the SMCCA “brand” in the
minds of the public, with the goal of retaining and attracting as many customers as possible into
the SMCCA Program. Communications will also be directed at key policy-makers at the state
and local level, community business and opinion leaders, and the media.
SMCCA Draft Implementation Plan
CHAPTER 3 – Organizational Structure 11 November 2017
In addition to general program communications and marketing, a significant focus on customer
service, particularly representation for key accounts, will enhance the City’s ability to
differentiate itself as a highly customer-focused organization that is responsive to the needs of
the community. City will also establish a customer call center designed to field customer inquiries
and routine interaction with customer accounts.
The customer service function also encompasses management of customer data. Customer data
management services include retail settlements/billing-related activities and management of a
customer database. This function processes customer service requests and administers customer
enrollments and departures from the SMCCA Program, maintaining a current database of
enrolled customers. It coordinates the issuance of monthly bills through the distribution utility’s
billing process and tracks customer payments. Activities include the electronic exchange of
usage, billing, and payments data with the distribution utility and the City, tracking of customer
payments and accounts receivable, issuance of late payment and/or service termination notices
(which would return affected customers to bundled service), and administration of customer
deposits in accordance with credit policies of the City.
The customer data management services function also manages billing-related communications
with customers, customer call centers, and routine customer notices. The City will contract with
a third party, who has demonstrated the necessary experience and administers an appropriate
customer information system to perform the customer account and billing services functions.
Power Resources & Energy Programs
Santa Monica must plan for meeting the electricity needs of its customers utilizing resources
consistent with its policy goals and objectives as well as applicable legislative and/or regulatory
mandates. The City’s long-term resource plans (addressing the 10-20 year planning horizon) will
comply with California Law and other pertinent requirements of California regulatory bodies.
The City may develop and administer complementary energy programs that may be offered to
SMCCA customers, including green pricing, energy efficiency, net energy metering and various
other programs that may be identified to support the overarching goals and objectives of the City.
The City will develop integrated resource plans that meet program supply objectives and balance
cost, risk and environmental considerations. Such integrated resource plans will also conform to
applicable requirements imposed by the State of California. Integrated resource planning efforts
of the City will make use of demand side energy efficiency, distributed generation and demand
response programs as well as traditional supply options, which rely on structured wholesale
transactions to meet customer energy requirements. Integrated resource plans will be updated
and adopted by the City Council on an annual basis.
Electric Supply Operations
Electric supply operations encompass the activities necessary for wholesale procurement of
electricity to serve end use customers. These highly specialized activities include the following:
SMCCA Draft Implementation Plan
CHAPTER 3 – Organizational Structure 12 November 2017
➢ Electricity Procurement – assemble a portfolio of electricity resources to supply the electric
needs of Program customers.
➢ Risk Management – application of standard industry techniques to reduce exposure to the
volatility of energy and credit markets and insulate customer rates from sudden changes
in wholesale market prices.
➢ Load Forecasting – develop load forecasts, both long-term for resource planning, short-term
for the electricity purchases, and sales needed to maintain a balance between hourly
resources and loads.
➢ Scheduling Coordination – scheduling and settling electric supply transactions with the
California Independent System Operator (“CAISO”).
The City will initially contract with one or more experienced and financially sound third-party
energy services providers to perform most of the electric supply operations for the SMCCA
Program. These requirements include the procurement of energy, capacity and ancillary services,
scheduling coordinator services, short-term load forecasting and day-ahead and real-time
electricity trading.
Governmental Affairs & Legal Support
The SMCCA Program will require ongoing regulatory and legislative representation to manage
various regulatory compliance filings related to resource plans, resource adequacy, compliance
with California’s Renewables Portfolio Standard (“RPS”), and overall representation on issues
that will impact the City and SMCCA customers. The City, through a combination of internal
staff and partnerships, will maintain an active role at the CPUC, the California Energy
Commission, the California Independent System Operator, the California legislature and, as
necessary, the Federal Energy Regulatory Commission.
The City may retain outside legal services, as necessary, to administer SMCCA, review contracts,
and provide overall legal support related to activities of the SMCCA Program.
SMCCA Draft Implementation Plan
CHAPTER 4 – Startup Plan & Funding 13 November 2017
CHAPTER 4 – Startup Plan & Funding
This Chapter presents the City’s plans for the start-up period, including necessary expenses and
capital outlays. As described in the previous Chapter, Santa Monica may utilize a mix of internal
staff, partnerships with other CCA agencies (through CCEA), and contractors in its CCA Program
implementation and operation.
Startup Activities
The initial program startup activities include the following:
➢ Hire staff and/or contractors to manage implementation
➢ Identify qualified suppliers (of requisite energy products and related services) and
negotiate supplier contracts
• Electric supplier and scheduling coordinator
• Data management provider
➢ Define and execute communications plan
• Customer research/information gathering
• Media campaign
• Key customer/stakeholder outreach
• Informational materials and customer notices
• Customer call center
➢ Post CCA bond and complete requisite registration requirements
➢ Pay utility service initiation, notification and switching fees
➢ Perform customer notification, opt-out and transfers
➢ Conduct load forecasting
➢ Establish rates
➢ Legal and regulatory support
➢ Financial management and reporting
➢ Initial Joint Rate Comparison with SCE
Other costs related to starting up the SMCCA Program will be the responsibility of the SMCCA
Program’s contractors (and are assumed to be covered by any fees/charges imposed by such
contractors). These may include capital requirements needed for collateral/credit support for
electric supply expenses, customer information system costs, electronic data exchange system
costs, call center costs, and billing administration/settlements systems costs.
Staffing and Contract Services
Personnel in the form of City staff, partnerships, or contractors will be added incrementally to
match workloads involved in forming SMCCA, managing contracts, and initiating customer
outreach/marketing during the pre-operations period. During the startup period, minimal
personnel requirements may include an Executive Director, legal support, and other personnel
needed to support regulatory, procurement, finance, legal, and communications activities.
SMCCA Draft Implementation Plan
CHAPTER 4 – Startup Plan & Funding 14 November 2017
For budgetary purposes, it is assumed that one full-time equivalent (staff or contracted
professional services) supporting the above listed activities would be engaged during the initial
start-up period. This support may come from using existing city staff, or some combination of
new staff, existing staff, partnerships or contractors. Following this period, additional staff
and/or contractors may be retained, as needed, to support the rollout of additional value-added
services (e.g., efficiency projects) and local generation projects and programs.
Capital Requirements
The Start-up of the CCA Program will require capital for three major functions: (1) staffing and
contractor costs; (2) deposits and reserves; and (3) operating cash flow. Based on the City’s
anticipated start-up activities and implementation schedule, a total need of $2,400,000 has been
identified to support the aforementioned functions. Out of the $2.4 million in capital
requirements, $1.2 million is related to the implementation/startup efforts (i.e., rate setting, power
procurement and contract negotiations, marketing and communications, regulatory compliance,
CPUC bond, SCE security deposit, etc.) in order to serve customers by July 2018. The other $1.2
million is the “float” required for SMCCA to pay its monthly bills before the program generates
enough internal cash to self-fund its working capital needs as well as anticipated energy supply
reserve requirements. The finance plan in Chapter 7 provides additional detail regarding the
City’s expected capital requirements and general Program finances.
Related to the City’s initial capital requirement, this amount is expected to cover staffing and
contractor costs during startup and pre-startup activities, including direct costs related to public
relations support, technical support, and customer communications. Requisite deposits and
operating reserves are also reflected in the initial capital requirement, including the following
items: 1) operating reserves to address anticipated cash flow variations (as well as operating
reserve deposits that will likely be required by the City’s power supplier(s)); 2) requisite deposit
with the CAISO prior to commencing market operations2; 3) CCA bond (posted with the CPUC);
and 4) SCE service fee deposit (if required).
Operating revenues from sales of electricity will be remitted to the City beginning approximately
sixty days after the initial customer enrollments. This lag is due to the distribution utility’s
standard meter reading cycle of 30 days and a 30-day payment/collections cycle. The City will
need working capital to support electricity procurement and costs related to program
management, which is included in the City’s initial $2.4 million capital requirement.
Financing Plan
The City’s initial capital requirement will be provided via terms of a loan from the City’s General
Fund, or other eligible sources; subsumed in the initial capital requirement is the City’s estimated
initial start-up funding. For all amounts borrowed, the City will make repayments (including
any interest, as applicable) over an assumed 5-year term, commencing in July 2018. Santa Monica
2 The City may not be required to make a deposit with the CAISO depending upon CAISO’s review of the City’s
financial position.
SMCCA Draft Implementation Plan
CHAPTER 5 – Program Phase-In 15 November 2017
will recover the principal and interest costs associated with the start-up funding via retail
generation rates charged to SMCCA customers. It is anticipated that the start-up costs will be
fully recovered through such customer generation rates within the first two years of operations.
CHAPTER 5 – Program Phase-In
Santa Monica will roll out its service offering to all eligible customers, excluding non-residential
Direct Access customers, over the course of just one phase. Given that there are only about 57,000
eligible customer accounts within the City’s boundaries, a single phase roll-out is reasonable and
the most efficient way for SMCCA to serve customers in July 2018. This approach also provides
the City with the ability to initiate its program with sufficient economic scale.
Non-residential Direct Access customers will not initially be offered service during the mass
enrollment phase, however, may be offered service at a later date.
The City may also evaluate other phase-in options based on then-current market conditions,
statutory requirements and regulatory considerations as well as other factors potentially affecting
the integration of additional customer accounts.
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 16 November 2017
CHAPTER 6 - Load Forecast & Resource Plan
Introduction
This Chapter describes the planned mix of electric resources that will meet the energy demands
of SMCCA customers using a diversified portfolio of electricity supplies. Several overarching
policies govern the resource plan and the ensuing resource procurement activities that will be
conducted in accordance with the plan. These key policies are as follows:
• The City will manage a diverse resource portfolio to increase control over energy costs and
maintain competitive and stable electric rates.
• The City will benefit the area’s economy through investment in local infrastructure, projects
and energy programs.
• The City will procure electricity supply consistent with the Sustainable City Plan.
The plan described in this section would accomplish the following:
➢ Procure energy through one or more contracts with experienced, financially stable energy
suppliers sufficient to offer two distinct generation rate tariffs: 1) a voluntary renewable
energy product with a 100% renewable content, offered to SMCCA customers on a price
premium basis relative to the SMCCA default retail option; and 2) a default SMCCA
service option that includes a proportion of renewable energy that exceeds California’s
prevailing renewable energy procurement mandate by at least ten percent on an annual
basis.
➢ To the extent that the City is successful in applying for administration of public funding
to support locally administered efficiency programs, it will attempt to reduce net
electricity purchases within the region.
➢ Encourage distributed renewable generation in the local area through the offering of a net
energy metering tariff.
The City will comply with regulatory rules applicable to California load serving entities. The
City will arrange for the scheduling of sufficient electric supplies to meet the demands of its
customers. Santa Monica will adhere to capacity reserve requirements established by the CPUC
and the CAISO designed to address uncertainty in load forecasts and potential supply
disruptions caused by generator outages and/or transmission contingencies. These rules also
ensure that physical generation capacity is in place to serve the City’s customers, even if there
were a need for the SMCCA Program to cease operations and return customers to SCE. In
addition, the City will be responsible for ensuring that its resource mix contains sufficient
production from renewable energy resources needed to comply with the statewide RPS mandate
(33 percent renewable energy by 2020, increasing to 50 percent by 2030). The resource plan will
meet or exceed all of the applicable regulatory requirements related to resource adequacy and the
RPS.
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 17 November 2017
Resource Plan Overview
To meet the aforementioned objectives and satisfy the applicable regulatory requirements
pertaining to the City’s status as a California load serving entity, Santa Monica’s resource plan
will include a diverse mix of power purchases, renewable energy, and potentially, new energy
efficiency programs, demand response, and distributed generation. A diversified resource plan
minimizes risk and volatility that can occur from over-reliance on a single resource type or fuel
source, and thus increases the likelihood of rate stability. The planned power supply is initially
comprised of power purchases from third party electric suppliers and, in the longer-term, may
include renewable generation assets owned and/or controlled by the City.
Once the SMCCA Program demonstrates it can operate successfully, Santa Monica may begin
evaluating opportunities for investment in renewable generating assets, subject to then-current
market conditions, statutory requirements and regulatory considerations. Any renewable
generation owned by the City or controlled under long-term power purchase agreement with a
proven public power developer, could provide a portion of Santa Monica’s electricity
requirements on a cost-of-service basis. Depending upon market conditions and, importantly,
the applicability of tax incentives for renewable energy development, electricity purchased under
a cost-of-service arrangement can be more cost-effective than purchasing renewable energy from
third party developers, which will allow the SMCCA Program to pass on cost savings to its
customers through competitive generation rates. Any investment decisions will be made
following thorough environmental reviews and in consultation with qualified financial and legal
advisors.
As an alternative to direct investment, Santa Monica may consider partnering with an
experienced public power developer and could enter into a long-term (15-to-30 year) power
purchase agreement that would support the development of new renewable generating capacity.
Such an arrangement could be structured to reduce the SMCCA Program’s operational risk
associated with capacity ownership while providing its customers with all renewable energy
generated by the facility under contract.
Santa Monica’s indicative resource plan for the years 2018 through 2027 is summarized in the
following table. Note that SMCCA’s projections reflect a portfolio mix of renewable energy that
exceeds the annual RPS requirement by at least ten percent and all other supply coming in the
form of conventional resources or CAISO system power.
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 18 November 2017
Supply Requirements
The starting point for Santa Monica’s resource plan is a projection of participating customers and
associated electric consumption. Projected electric consumption is evaluated on an hourly basis,
and matched with resources best suited to serving the aggregate of hourly demands or the
program’s “load profile”. The electric sales forecast and load profile will be affected by Santa
Monica’s plan to introduce the SMCCA Program to customers in one single phases and the degree
to which customers choose to remain with SCE during the customer enrollment and opt-out
period. The City’s rollout plan and assumptions regarding customer participation rates are
discussed below.
Customer Participation Rates
Customers will be automatically enrolled in the SMCCA Program unless they opt-out during the
customer notification process conducted during the 60-day period prior to enrollment and
continuing through the 60-day period following commencement of service. The City anticipates
an overall customer participation rate of approximately 90 percent of eligible SCE bundled service
customers, based on reported opt-out rates for the other operating CCA programs. It is assumed
that customers taking direct access service from a competitive electricity provider will continue
to remain with their current supplier.
The participation rate is not expected to vary significantly among customer classes, in part
because the City will offer two distinct rate tariffs that will address the needs of cost-sensitive
customers as well as the needs of both residential and business customers that prefer a higher
renewable energy product. The assumed participation rates will be refined as Santa Monica’s
public outreach and market research efforts continue to develop.
Customer Forecast
Once customers enroll during July 2018, they will be switched over to service by the City on their
regularly scheduled meter read date over an approximately thirty-one day period.
Approximately 2,700 service accounts per day will be switched over during the first month of
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Santa Monica Demand (GWh)
Retail Demand (328) (683) (686) (690) (693) (697) (700) (704) (707) (711)
Losses and UFE (17) (36) (36) (37) (37) (37) (37) (37) (37) (38)
Total Demand (345) (719) (723) (726) (730) (734) (737) (741) (745) (748)
Santa Monica Supply (GWh)
Renewable Resources
Total Renewable Resources 128 280 295 308 322 335 349 362 376 390
Conventional Resources
Total Conventional Resources 217 439 428 418 408 398 389 379 368 358
Total Supply 345 719 723 726 730 734 737 741 745 748
Energy Open Position (GWh)- - - - - - - - - -
City of Santa Monica
(GWH)
Proposed Resource Plan
2018 to 2027
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 19 November 2017
service. The number of accounts anticipated to be served by Santa Monica at the end of July 2018
is shown in the table below.
The City assumes that customer growth will generally offset customer attrition (opt-outs) over
time, resulting in a relatively stable customer base (0.5% annual growth) over the noted planning
horizon. While the successful operating track record of California CCA programs continues to
grow, there is a relatively short history with regard to CCA operations, which makes it difficult
to anticipate the actual levels of customer participation within the SMCCA Program. The City
believes that its assumptions regarding the offsetting effects of growth and attrition are
reasonable in consideration of the historical customer growth within the City and the potential
for continuing customer opt-outs following mandatory customer notification periods. The
forecast of service accounts (customers) served by Santa Monica for each of the next ten years is
shown in the following table:
Sales Forecast
The City’s forecast of GWh sales reflects the rollout and customer enrollment schedule shown
above. Annual energy requirements are shown below.
Jul-18
Santa Monica Customers
Residential 48,159
Commercial 8,677
Industrial 42
Street Lighting & Traffic 89
Agricultural & Pumping <15
Total (excluding Ag and Pumping)56,967
City of Santa Monica
Enrolled Retail Service Accounts
Phase-In Period (End of Month)
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Santa Monica Customers
Residential 48,159 48,159 48,400 48,642 48,885 49,129 49,375 49,622 49,870 50,119
Commercial 8,677 8,677 8,720 8,764 8,808 8,852 8,896 8,941 8,985 9,030
Industrial 42 42 42 42 43 43 43 43 43 44
Street Lighting & Traffic 89 89 89 90 90 91 91 92 92 93
Agricultural & Pumping <15 <15 <15 <15 <15 <15 <15 <15 <15 <15
Total (excluding Ag and Pumping)56,967 56,967 57,252 57,538 57,826 58,115 58,405 58,698 58,991 59,286
City of Santa Monica
Retail Service Accounts (End of Year)
2018 to 2027
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 20 November 2017
Capacity Requirements
The CPUC’s resource adequacy standards applicable to the SMCCA Program require a
demonstration one year in advance that the City has secured physical capacity for 90 percent of
its projected peak loads for each of the five months July through November, plus a minimum 15
percent reserve margin. On a month-ahead basis, Santa Monica must demonstrate 100 percent of
the peak load plus a minimum 15 percent reserve margin.
A portion of the City’s capacity requirements must be procured locally, from the LA Basin area
and Big Creek/Ventura as defined by the CAISO. The City would be required to demonstrate its
local capacity requirement for each month of the following calendar year. The local capacity
requirement is a percentage of the total (SCE service area) local capacity requirements adopted
by the CPUC based on Santa Monica’s forecasted peak load. Santa Monica must demonstrate
compliance or request a waiver from the CPUC requirement as provided for in cases where local
capacity is not available.
The City is also required to demonstrate that a specified portion of its capacity meets certain
operational flexibility requirements under the CPUC and CAISO’s flexible resource adequacy
framework.
The estimated forward resource adequacy requirements for 2018 through 2020 are shown in the
following tables3:
3 The figures shown in the table are estimates. Santa Monica’s resource adequacy requirements will be subject to
modification due to application of certain coincidence adjustments and resource allocations relating to utility demand
response and energy efficiency programs, as well as generation capacity allocated through the Cost Allocation
Mechanism. These adjustments are addressed through the CPUC’s resource adequacy compliance process.
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Santa Monica Energy Requirements (GWh)
Retail Demand 328 683 686 690 693 697 700 704 707 711
Losses and UFE 17 36 36 37 37 37 37 37 37 38
Total Load Requirement 345 719 723 726 730 734 737 741 745 748
2018 to 2027
(GWH)
Energy Requirements
City of Santa Monica
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 21 November 2017
Santa Monica’s plan ensures that sufficient reserves will be procured to meet its peak load at all
times. The projected SMCCA annual capacity requirements are shown in the following table:
Local capacity requirements are a function of the SCE area resource adequacy requirements and
Santa Monica’s projected peak demand. The City will need to work with the CPUC’s Energy
Division and staff at the California Energy Commission to obtain the data necessary to calculate
its monthly local capacity requirement. A preliminary estimate of the City’s annual local capacity
requirement for the ten-year planning period remains constant at 31 MW as shown in the
following table:
Month 2018 2019 2020
January - 124 125
February - 131 131
March - 122 122
April - 132 132
May - 130 131
June - 144 145
July 149 149 150
August 157 157 157
September 177 177 178
October 164 164 165
November 137 137 138
December 127 127 127
(MW)
2018 to 2020
City of Santa Monica
Forward Capacity and Reserve Requirements
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Demand (MW)
Retail Demand 146 146 147 147 148 149 150 150 151 152
Losses and UFE 8 8 8 8 8 8 8 8 8 8
Total Net Peak Demand 154 154 154 155 156 157 158 158 159 160
Reserve Requirement (%)15%15%15%15%15%15%15%15%15%15%
Capacity Reserve Requirement 23 23 23 23 23 24 24 24 24 24
Capacity Requirement Including Reserve 177 177 178 178 179 180 181 182 183 184
2018 to 2027
City of Santa Monica
Capacity Requirements
(MW)
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 22 November 2017
The CPUC assigns local capacity requirements during the year prior to the compliance period;
thereafter, the CPUC provides local capacity requirement true-ups for the second half of each
compliance year.
The City will coordinate with SCE and appropriate state agencies to manage the transition of
responsibility for resource adequacy from SCE to Santa Monica during CCA program phase-in.
For system resource adequacy requirements, the City will make month-ahead showings for each
month that the City plans to serve load, and load migration issues would be addressed through
the CPUC’s approved procedures. Santa Monica will work with the California Energy
Commission and CPUC prior to commencing service to customers to ensure it meets its local and
system resource adequacy obligations through its agreement(s) with its chosen electric
supplier(s).
Renewables Portfolio Standards Energy Requirements
Basic RPS Requirements
As a CCA, the City will be required by law and ensuing CPUC regulations to procure a certain
minimum percentage of its retail electricity sales from qualified renewable energy resources. For
purposes of determining Santa Monica’s renewable energy requirements, many of the same
standards for RPS compliance that are applicable to the distribution utilities will apply to
SMCCA.
California’s RPS program is currently undergoing reform. On October 7, 2015, Governor Brown
signed Senate Bill 350 (“SB 350”; De Leon and Leno), the Clean Energy and Pollution Reduction
Act of 2015, which increased California’s RPS procurement target from 33 percent by 2020 to 50
percent by 2030 amongst other clean-energy initiatives. Many details related to SB 350
implementation will be developed over time with oversight by designated regulatory agencies.
However, it is reasonable to assume that interim annual renewable energy procurement targets
will be imposed on CCAs and other retail electricity sellers to facilitate progress towards the 50
percent procurement mandate. For planning purposes, the City has assumed straight-line annual
increases (1.7 percent per year) to the RPS procurement target beginning in 2021, as the state
advances on the 50 percent RPS. The City will also adopt an integrated resource plan in
compliance with SB 350. Santa Monica understands that various details related to this planning
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Santa Monica Peak (MW)154 154 154 155 156 157 158 158 159 160
Local Capacity Requirement (% of Peak)20%20%20%20%20%20%20%20%20%20%
Big Creek / Ventura Area Share of Local Capacity Requirment (%)24%24%24%24%24%24%24%24%24%24%
LA Basin Area Share of Local Capacity Requirment (%)76%76%76%76%76%76%76%76%76%76%
Santa Monica Local Capacity Requirement Big Creek / Ventura (MW)7 7 7 7 7 8 8 8 8 8
Santa Monica Local Capacity Requirement LA Basin (MW)23 23 23 24 24 24 24 24 24 24
Santa Monica Local Capacity Requirement, Total (MW)31 31 31 31 31 31 32 32 32 32
City of Santa Monica
Local Capacity Requirements
(MW)
2018 to 2027
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 23 November 2017
requirement have yet to be developed, and Santa Monica intends to monitor and participate, as
appropriate, in pertinent proceedings to promote the preparation and submittal of a responsive
planning document. Furthermore, the City will ensure that all long-term renewable energy
contracting requirements, as imposed by SB 350, will be satisfied through appropriate
transactions with qualified suppliers and will also reflect this intent in ongoing resource planning
and procurement efforts.
Santa Monica’s Renewables Portfolio Standards Requirement
The City’s annual RPS procurement requirements, as specified under California’s RPS program,
are shown in the table below.
*Note: Specific details related to SB 350 implementation have yet to be identified. For purposes of this table, the City
assumed a straight-line increase from California’s 33 percent RPS procurement mandate in 2020 to California’s new,
50 percent RPS procurement mandate in 2030.
Purchased Power
Power purchased from power marketers, public agencies, generators, and/or utilities will be a
significant source of supply during the first several years of SMCCA Program operation. Santa
Monica will initially contract to obtain all its electricity from one or more third party electric
providers under one or more power supply agreements, and the supplier(s) will be responsible
for procuring the specified resource mix, including the City’s desired quantities of renewable
energy, to provide a stable and cost-effective resource portfolio for the SMCCA Program.
Renewable Resources
The City will initially secure necessary renewable power supply from its third party electric
supplier(s). Santa Monica may supplement the renewable energy provided under the initial
power supply contract(s) with direct purchases of renewable energy from renewable energy
facilities or from renewable generation developed and owned by the City. At this point in time,
it is not possible to predict what projects might be proposed in response to future renewable
energy solicitations administered by Santa Monica, unsolicited proposals or discussions with
other agencies. Renewable projects that are located virtually anywhere in the Western
Interconnection can be considered as long as the electricity is deliverable to the CAISO control
area, as required to meet the Commission’s RPS rules and any additional guidelines ultimately
adopted by the City. The costs of transmission access and the risk of transmission congestion
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Retail Sales 328 683 686 690 693 697 700 704 707 711
Annual Procurement Target 95 212 226 239 252 265 279 292 305 319
% of Current Year Retail Sales*29%31%33%35%36%38%40%42%43%45%
RPS Requirements
(GWH)
2018 to 2027
City of Santa Monica
SMCCA Draft Implementation Plan
CHAPTER 6 - Load Forecast & Resource Plan 24 November 2017
costs would need to be considered in the bid evaluation process if the delivery point is outside of
the City’s load zone, as defined by the CAISO.
Energy Efficiency
SMCCA’s energy efficiency goals will reflect a commitment to increasing energy efficiency within
the City, expanding beyond the savings achieved by SCE’s programs. To promote the
achievement of this goal, SMCCA plans to complete the CPUC application process for third party
administration of energy efficiency programs and use of funds collected through the existing
public benefits surcharges paid by SMCCA customers. To the extent that SMCCA is successful
in this application process, receiving funding to administer additional energy efficiency programs
within the region, it will seek to maximize end-use customer energy efficiency by facilitating
customer participation in existing utility programs as well as by forming new programs that will
displace SMCCA’s need for traditional electric procurement activities. Additional details related
to SMCCA’s energy efficiency plan will be developed once SMCCA Program phase-in is
underway.
With regard to SMCCA’s anticipated energy efficiency savings, a reasonable baseline assumption
for efficiency savings related to the demand-side portion of the SMCCA resource plan is steady
growth towards 0.5 percent of SMCCA’s projected energy sales by 2024. These savings would be
in addition to the savings achieved by SCE administered programs.
SMCCA Draft Implementation Plan
CHAPTER 7 – Financial Plan 25 November 2017
CHAPTER 7 – Financial Plan
This Chapter examines the monthly cash flows expected during the startup and customer phase-
in period of the SMCCA Program and identifies the anticipated financing requirements. It
includes estimates of program startup costs, including necessary expenses and capital outlays. It
also describes the requirements for working capital and long-term financing for the potential
investment in renewable generation, consistent with the resource plan contained in Chapter 6.
Description of Cash Flow Analysis
The City’s cash flow analysis estimates the level of capital that will be required during the startup
and phase-in period. The analysis focuses on the SMCCA Program’s monthly costs and revenues
and specifically accounts for the phased enrollment of SMCCA Program customers described in
Chapter 5.
Cost of CCA Program Operations
The first category of the cash flow analysis is the Cost of CCA Program Operations. To estimate
the overall costs associated with CCA Program Operations, the following components were taken
into consideration:
➢ Electricity Procurement;
➢ Ancillary Service Requirements;
➢ Exit Fees;
➢ Staffing and Professional Services;
➢ Data Management Costs;
➢ Administrative Overhead;
➢ Billing Costs;
➢ Scheduling Coordination;
➢ Grid Management and other CAISO Charges;
➢ CCA Bond and Security Deposit;
➢ Pre-Startup Cost Reimbursement; and
➢ Debt Service.
Revenues from CCA Program Operations
The cash flow analysis also provides estimates for revenues generated from CCA operations or
from electricity sales to customers. In determining the level of revenues, the analysis assumes the
customer phase-in schedule described herein, and assumes that Santa Monica charges a standard,
default electricity tariff similar to the generation rates of SCE for each customer class and an
optional renewable energy tariff (with a renewable energy content that exceeds the SMCCA
SMCCA Draft Implementation Plan
CHAPTER 7 – Financial Plan 26 November 2017
default retail option) at a premium reflective of incremental renewable power costs. More detail
on SMCCA Program rates can be found in Chapter 8.
Cash Flow Analysis Results
The results of the cash flow analysis provide an estimate of the level of capital required for the
City to move through the CCA startup and phase-in periods. This estimated level of capital is
determined by examining the monthly cumulative net cash flows (revenues from CCA operations
minus cost of CCA operations) based on assumptions for payment of costs or other cash
requirements (e.g., deposits) by Santa Monica, along with estimates for when customer payments
will be received. This identifies, on a monthly basis, what level of cash flow is available in terms
of a surplus or deficit.
The cash flow analysis identifies funding requirements in recognition of the potential lag between
revenues received and payments made during the phase-in period. The estimated financing
requirements for the startup and phase-in period, including working capital needs associated
with the customer enrollments, was determined to be $2.4 million. Out of the $2.4 million in
capital requirements, $1.2 million is related to the implementation/startup efforts (i.e., rate setting,
power procurement and contract negotiations, marketing and communications, regulatory
compliance, CPUC bond, SCE security deposit, etc.) in order to serve customers by July 2018. The
other $1.2 million is the “float” required for SMCCA to pay its monthly bills before the program
generates enough internal cash to self-fund its working capital needs as well as anticipated energy
supplier reserve requirements. Working capital requirements peak soon after enrollment of all
SMCCA customers in July 2018.
CCA Program Implementation Pro Forma
In addition to developing a cash flow analysis that estimates the level of working capital required
to move Santa Monica through full CCA phase-in, a summary pro forma analysis that evaluates
the financial performance of the CCA program during the phase-in period is shown below. The
difference between the cash flow analysis and the CCA pro forma analysis is that the pro forma
analysis does not include a lag associated with payment streams. In essence, costs and revenues
are reflected in the month in which service is provided. All other items, such as costs associated
with CCA Program operations and rates charged to customers remain the same. Cash provided
by financing activities are not shown in the pro forma analysis, although payments for debt
service are included as a cost item.
The results of the pro forma analysis are shown in the following tables. In particular, the
summary of CCA program startup and phase-in addresses projected SMCCA Program
SMCCA Draft Implementation Plan
CHAPTER 7 – Financial Plan 27 November 2017
operations for the period beginning January 20184 through June 20275. The City has also included
a summary of Program reserves, which are expected to accrue over this same period.
The surpluses achieved during the phase-in period serve to build SMCCA’s net financial position
and credit profile and to provide operating reserves for the City in the event that operating costs
(such as power purchase costs) exceed collected revenues for short periods of time.
SMCCA Financings
It is anticipated that a loan from the City will be necessary to support SMCCA Program
implementation. Subsequent capital requirements will be self-funded from the City’s accrued
SMCCA generated financial reserves. The anticipated financing approach is described below.
4 The results of the pro forma analysis are broken out by Santa Monica’s fiscal year, which spans July to June; therefore,
the financial results for FYE 2018 are only inclusive of January 2018 through June 2018); all other fiscal years span a
twelve month period.
5 Costs projected for staffing & professional services and other administrative & general relate to energy procurement,
administration of energy efficiency and other local programs, generation development, customer service, marketing,
accounting, finance, legal and regulatory activities necessary for program operation.
CATEGORY FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 TOTAL
I. REVENUES FROM OPERATIONS ($) ELECTRIC SALES REVENUE - 38,544,362 41,956,780 43,431,561 44,958,180 46,538,460 48,174,287 49,867,613 51,620,460 53,434,919 418,526,622
LESS UNCOLLECTIBLE ACCOUNTS - 167,269 177,750 185,010 192,068 198,899 205,245 211,816 218,618 225,660 1,782,335
TOTAL REVENUES - 38,377,093 41,779,030 43,246,550 44,766,112 46,339,561 47,969,042 49,655,797 51,401,842 53,209,259 416,744,287
II. COST OF OPERATIONS ($)
(A) OPERATIONS AND ADMINISTRATIVE (O&A)
STAFFING & PROFESSIONAL SERVICES 385,000 393,825 405,640 417,809 430,343 443,254 456,551 470,248 484,355 498,886 4,385,910
MARKETING 377,880 120,900 124,527 128,263 132,111 136,074 140,156 144,361 148,692 153,153 1,606,116
DATA MANAGEMENT SERVICES - 799,843 803,837 807,846 811,871 815,911 819,967 824,054 828,157 832,276 7,343,762
IOU FEES (INCLUDING BILLING)- 117,033 117,494 117,957 118,421 118,887 119,355 119,827 120,300 120,776 1,070,051
OTHER ADMINISTRATIVE & GENERAL 135,000 121,800 125,454 129,218 133,094 137,087 141,200 145,436 149,799 154,293 1,372,379
SUBTOTAL O&A 897,880 1,553,402 1,576,952 1,601,092 1,625,840 1,651,213 1,677,229 1,703,925 1,731,303 1,759,382 15,778,218
(B) COST OF ENERGY - 30,941,014 33,128,515 34,556,674 35,943,581 37,284,572 38,528,087 39,815,686 41,148,904 42,529,328 333,876,361
(C) OPERATING RESERVE - 1,156,331 1,258,703 1,302,947 1,348,745 1,396,154 1,445,229 1,496,028 1,548,614 1,603,048 12,555,799
TOTAL COST AND OPERATING RESERVE 897,880 33,650,746 35,964,170 37,460,713 38,918,167 40,331,939 41,650,545 43,015,640 44,428,821 45,891,757 362,210,378
CCA PROGRAM SURPLUS/(DEFICIT)(897,880) 4,726,347 5,814,860 5,785,837 5,847,946 6,007,622 6,318,497 6,640,157 6,973,021 7,317,502 54,533,909
City of Santa Monica
Summary of CCA Program Startup and Phase-In
(January 2018 through June 2027)
CATEGORY FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 TOTAL
I. RESERVE ADDITIONS
(A) OPERATING RESERVE CONTRIBUTION - 1,156,331 1,258,703 1,302,947 1,348,745 1,396,154 1,445,229 1,496,028 1,548,614 1,603,048 12,555,799
(B) CASH FROM FINANCING 1,200,000 - - - - - - - - - 1,200,000 SUBTOTAL RESERVE ADDITIONS 1,200,000 1,156,331 1,258,703 1,302,947 1,348,745 1,396,154 1,445,229 1,496,028 1,548,614 1,603,048 13,755,799
II. RESERVE SUBTRACTIONS
(A) TOTAL FINANCING REPAYMENT 65,744 134,480 138,570 142,785 147,128 75,234 - - - - 703,940
(B) INTEREST PAYMENTS 10,149 17,307 13,216 9,002 4,659 660 - - - - 54,993
SUBTOTAL RESERVE SUBTRACTIONS 75,893 151,787 151,787 151,787 151,787 75,893 - - - - 758,933
III. RATE STABILIZATION RESERVE BALANCE 1,124,107 2,128,651 3,235,568 4,386,728 5,583,687 6,903,947 8,349,176 9,845,204 11,393,818 12,996,866
(January 2018 through June 2027)
City of Santa Monica
Reserves Summary
SMCCA Draft Implementation Plan
CHAPTER 7 – Financial Plan 28 November 2017
CCA Program Start-up and Working Capital
As previously discussed, the anticipated start-up and working capital requirements for the
SMCCA Program are $2.4 million. This amount is dependent upon the electric load served by
the City, actual energy prices, payment terms established with the third-party supplier, and
program rates. This figure would be refined during the startup period, as these variables become
known. Once the SMCCA Program is up and running, these costs would be recovered from
customers through retail rates.
It is assumed that this financing will be primarily secured via one or more term loans from the
City. Requisite financing would need to be arranged no later than the first quarter of 2018.
Renewable Resource Project Financing
Santa Monica may consider project financings for renewable resources, likely local wind, solar,
and biomass projects. These financings would only occur after a sustained period of successful
SMCCA Program operation and after appropriate project opportunities are identified and
subjected to appropriate environmental review.
In the event that such financing occurs, funds would include any short-term financing for the
renewable resource project development costs, and would likely extend over a 20- to 30-year
term. The security for such bonds would be the revenue from sales to the retail customers of
Santa Monica.
SMCCA Draft Implementation Plan
CHAPTER 8 – Rate Setting, Program Terms and Conditions 29
November 2017
CHAPTER 8 – Rate Setting, Program Terms and Conditions
Introduction
This Chapter describes the initial policies proposed for Santa Monica in setting its rates for electric
aggregation services. These include policies regarding rate design, rate objectives, and provision
for due process in setting Program rates. Program rates are ultimately approved by the Santa
Monica City Council. The City would retain authority to modify program policies from time to
time at its discretion.
Rate Policies
The City will establish rates sufficient to recover all costs related to operation of the SMCCA
Program, including any reserves that may be required as a condition of financing and other
discretionary reserve funds that may be approved by Santa Monica. As a general policy, rates
will be uniform for all similarly situated customers enrolled in the SMCCA Program throughout
the City.
The primary objectives of the rate setting plan are to set rates that achieve the following:
➢ Rate competitive tariff option (default service offering), including a proportionate
quantity of renewable energy in excess of California’s prevailing renewable energy
procurement mandate;
➢ Voluntary renewable energy supply option (renewable content greater than the SMCCA
default retail service offering));
➢ Rate stability;
➢ Equity among customers in each tariff;
➢ Customer understanding; and
➢ Revenue sufficiency.
Each of these objectives is described below.
Rate Competitiveness
The primary goal is to offer competitive rates for electric services that the City would provide to
participating customers. For participants in the SMCCA default energy product offering, the goal
would be for SMCCA Program rates to be initially one to five percent below, subject to actual
energy product pricing and decisions of the City Council, similar generation rates offered by SCE.
For participants in the SMCCA Program’s voluntary 100% premium renewable energy product
offering, the goal would be to offer the lowest possible customer rates with an incremental
monthly cost premium reflective of the actual cost of additional renewable energy supply
required to serve such customers. Based on current estimates, the anticipated cost premium for
the SMCCA Program’s voluntary renewable supply option would be one to ten percent relative
to the default SMCCA rate.
SMCCA Draft Implementation Plan
CHAPTER 8 – Rate Setting, Program Terms and Conditions 30
November 2017
Competitive rates will be critical to attracting and retaining key customers. In order for the City
to be successful, the combination of price and value must be perceived as superior when
compared to the bundled utility service alternative. As planned, the value provided by the
SMCCA Program will include a community focus and local investment and control.
As previously discussed, the SMCCA Program will increase renewable energy supply to program
customers, relative to the incumbent utility, by offering two distinct energy products. The default
offering for SMCCA Program customers will be the standard product which will increase
renewable energy supply while maintaining generation rates that are generally comparable to
SCE’s. The initial renewable energy content provided under SMCCA’s standard product will at
a minimum meet, with a goal to exceed, California’s prevailing renewable energy procurement
mandate. The City will also offer its customers a voluntary 100% renewable energy product, at
rates that reflect SMCCA’s cost for procuring related energy supplies.
Participating qualified low- or fixed-income households, such as those currently enrolled in the
California Alternate Rates for Energy (“CARE”) program, will be automatically enrolled in the
standard product and will continue to receive related discounts on monthly electricity bills
through SCE.
Rate Stability
The City will offer stable rates by hedging its supply costs over multiple time horizons and by
including renewable energy supplies that exhibit stable costs. Rate stability considerations may
prevent SMCCA Program rates from directly tracking similar rates offered by the distribution
utility, SCE, and may result in differences from the general rate-related targets initially
established for the SMCCA Program. Santa Monica plans to offer the most competitive rates
possible after all Program operating costs are recovered and reserve targets are achieved.
Equity among Customer Classes
Initial rates of the SMCCA Program will be set based on cost-of-service considerations with
reference to the rates customers would otherwise pay to SCE. Rate differences among customer
classes will reflect the rates charged by the local distribution utility as well as differences in the
costs of providing service to each class. Rate benefits may also vary among customers within the
major customer class categories, depending upon the specific rate designs adopted by the City.
Customer Understanding
The goal of customer understanding involves rate designs that are relatively straightforward so
that customers can readily understand how their bills are calculated. This not only minimizes
customer confusion and dissatisfaction but will also result in fewer billing inquiries to the
SMCCA Program’s customer service call center. Customer understanding also requires rate
structures to reflect rational rate design principles (i.e., there should not be differences in rates
that are not justified by costs or by other policies such as providing incentives for conservation).
SMCCA Draft Implementation Plan
CHAPTER 8 – Rate Setting, Program Terms and Conditions 31
November 2017
Revenue Sufficiency
SMCCA Program rates must collect sufficient revenue from participating customers to fully fund
the City’s annual budget related to SMCCA operations. Rates will be set to collect the adopted
budget based on a forecast of electric sales for the budget year. Rates will be adjusted as necessary
to maintain the ability to fully recover all costs of the SMCCA Program, subject to the disclosure
and due process policies described later in this chapter. To ensure rate stability, funds available
in the City’s rate stabilization fund may be used from time to time to augment operating revenues.
Rate Design
The City will generally match the rate structures from the utilities’ standard rates to avoid the
possibility that customers would see significantly different bill impacts as a result of changes in
rate structures that would take effect following enrollment in the SMCCA Program.
Custom Pricing Options
The City may work to develop specially-tailored rate and electric service products that meet the
specific load characteristics or power market risk profiles of larger commercial and industrial
customers. This will allow such customers to have access to a wider range of products than is
currently available under the incumbent utility and potentially reduce the cost of power for these
customers. The City may provide large energy users with custom pricing options to help these
customers gain greater control over their energy costs. Some examples of potential custom
pricing options are rates that are based on an observable market index (e.g., CAISO prices) or
fixed priced contracts of various terms.
Net Energy Metering
As planned, customers with on-site generation eligible for net metering from SCE will be offered
a net energy metering rate from the City. Net energy metering allows for customers with certain
qualified solar or wind distributed generation to be billed on the basis of their net energy
consumption. The SCE net metering tariff (“NEM”) requires the CCA to offer a net energy
metering tariff in order for the customer to continue to be eligible for service on Schedule NEM.
The objective is that Santa Monica’s net energy metering tariff will apply to the generation
component of the bill, and the SCE net energy metering tariff will apply to the utility’s portion of
the bill. The City plans to pay customers for excess power produced from net energy metered
generation systems in accordance with the rate designs adopted by the City.
Disclosure and Due Process in Setting Rates and Allocating Costs among Participants
Initial program rates will be adopted by Santa Monica following the establishment of the first
year’s operating budget prior to initiating the customer notification process. Subsequently, the
City will prepare an annual budget and corresponding customer rates. Following the
commencement of service, any proposed rate adjustment will be made to the City Council and
ample time will be given to affected customers to provide comment on the proposed rate changes.
After proposing a rate adjustment, the City will furnish affected customers with a notice of its
intent to adjust rates, either by mailing such notices postage prepaid to affected customers, by
SMCCA Draft Implementation Plan
CHAPTER 8 – Rate Setting, Program Terms and Conditions 32
November 2017
including such notices as an insert to the regular bill for charges transmitted to affected
customers, or by including a related message directly on the customer’s monthly electricity bill
(on the page addressing SMCCA charges). The notice will provide a summary of the proposed
rate adjustment and will include a link to the SMCCA Program website where information will
be posted regarding the amount of the proposed adjustment, a brief statement of the reasons for
the adjustment, and the mailing address of the SMCCA Program to which any customer inquiries
relative to the proposed adjustment, including a request by the customer to receive notice of the
date, time, and place of any hearing on the proposed adjustment, may be directed.
SMCCA Draft Implementation Plan
CHAPTER 9 – Customer Rights and Responsibilities 33
November 2017
CHAPTER 9 – Customer Rights and Responsibilities
This chapter discusses customer rights, including the right to opt-out of the SMCCA Program
and the right to privacy of customer usage information, as well as obligations customers
undertake upon agreement to enroll in the CCA Program. All customers that do not opt out
within 30 days of the fourth enrollment notice will have agreed to become full status program
participants and must adhere to the obligations set forth below, as may be modified and
expanded by the SMCCA City Council from time to time.
By adopting this Implementation Plan, the City will have approved the customer rights and
responsibilities policies contained herein to be effective at Program initiation. The City retains
authority to modify program policies from time to time at its discretion.
Customer Notices
At the initiation of the customer enrollment process, four notices will be provided to customers
describing the Program, informing them of their opt-out rights to remain with utility bundled
generation service, and containing a simple mechanism for exercising their opt-out rights. The
first notice will be mailed to customers approximately sixty days prior to the date of automatic
enrollment. A second notice will be sent approximately thirty days later. The City will likely
use its own mailing service for requisite enrollment notices rather than including the notices in
SCE’s monthly bills. This is intended to increase the likelihood that customers will read the
enrollment notices, which may otherwise be ignored if included as a bill insert. Customers may
opt out by notifying the City using the SMCCA Program’s designated telephone-based or internet
opt-out processing service. Should customers choose to initiate an opt-out request by contacting
SCE, they would be transferred to the SMCCA Program’s call center to complete the opt-out
request. Consistent with CPUC regulations, notices returned as undelivered mail would be
treated as a failure to opt out, and the customer would be automatically enrolled.
Following automatic enrollment, at least two notices will be mailed to customers within the first
two billing cycles (approximately sixty days) after SMCCA service commences. Opt-out requests
made on or before the sixtieth day following start of SMCCA Program service will result in
customer transfer to bundled utility service with no penalty. Such customers will be obligated to
pay charges associated with the electric services provided by the City during the time the
customer took service from the SMCCA Program, but will otherwise not be subject to any penalty
or transfer fee from SMCCA.
Customers who establish new electric service accounts within the Program’s service area will be
automatically enrolled in the SMCCA Program and will have sixty days from the start of service
to opt out if they so desire. Such customers will be provided with two enrollment notices within
this sixty-day post enrollment period. Such customers will also receive a notice detailing the
City’s privacy policy regarding customer usage information. Santa Monica will have the
authority to implement entry fees for customers that initially opt out of the Program, but later
SMCCA Draft Implementation Plan
CHAPTER 9 – Customer Rights and Responsibilities 34
November 2017
decide to participate. Entry fees, if deemed necessary, would aid in resource planning by
providing additional control over the SMCCA Program’s customer base.
Termination Fee
Customers that are automatically enrolled in the SMCCA Program can elect to transfer back to
the incumbent utility without penalty within the first two months of service. After this free opt-
out period, customers will be allowed to terminate their participation but may be subject to
payment of a Termination Fee, which Santa Monica reserves the right to impose, if deemed
necessary. Customers that relocate within the City’s service territory would have SMCCA
service continued at their new address. If a customer relocating to an address within the City’s
service territory elected to cancel CCA service, the Termination Fee could be applied. Program
customers that move out of Santa Monica’s service territory would not be subject to the
Termination Fee. If deemed applicable by Santa Monica, SCE would collect the Termination Fee
from returning customers as part of SMCCA’s final bill to the customer.
For illustrative purposes, SMCCA’s Termination Fee could vary by customer class as set forth in
the table below, subject to a final determination by the City.
SMCCA Program: Illustrative Schedule of Fees for Service Termination*
Customer Class Fee
Residential $5
Non-Residential $25
*Note that Santa Monica has yet to adopt a Schedule of Fees for
Service Termination. The fees reflected in this table are
representative of similar charges adopted by California’s
operating CCA programs.
If adopted, the Termination Fee would be clearly disclosed in the four enrollment notices sent to
customers during the sixty-day period before automatic enrollment and following
commencement of service. The fee could also be changed prospectively by Santa Monica subject
to applicable customer noticing requirements.
Customers electing to terminate service after the initial notification period would be transferred
to SCE on their next regularly scheduled meter read date if the termination notice is received a
minimum of fifteen days prior to that date. Such customers would also be liable for the nominal
reentry fees imposed by SCE and would be required to remain on bundled utility service for a
period of one year, as described in the utility CCA tariffs.
Customer Confidentiality
Santa Monica will establish policies covering confidentiality of customer data that are fully
compliant with the required privacy protection rules for CCA customer energy usage
information, as detailed within Decision 12-08-045. The City will maintain the confidentiality of
individual customers’ names, service addresses, billing addresses, telephone numbers, account
SMCCA Draft Implementation Plan
CHAPTER 9 – Customer Rights and Responsibilities 35
November 2017
numbers, and electricity consumption, except where reasonably necessary to conduct business of
the SMCCA Program or to provide services to customers, including but not limited to where such
disclosure is necessary to (a) comply with the law or regulations; (b) enable Santa Monica to
provide service to its customers; (c) collect unpaid bills; (d) obtain and provide credit reporting
information; or (e) resolve customer disputes or inquiries. The City will not disclose customer
information for telemarketing, e‐mail, or direct mail solicitation. Aggregate data may be released
at Santa Monica’s discretion.
Responsibility for Payment
Customers will be obligated to pay SMCCA Program charges for service provided through the
date of transfer including any applicable Termination Fees. Pursuant to current CPUC
regulations, the City will not be able to direct that electricity service be shut off for failure to pay
SMCCA bills. However, SCE has the right to shut off electricity to customers for failure to pay
electricity bills, and SCE Electric Rule 23 mandates that partial payments are to be allocated pro
rata between SCE and the CCA. In most circumstances, customers would be returned to utility
service for failure to pay bills in full and customer deposits (if any) would be withheld in the case
of unpaid bills. SCE would attempt to collect any outstanding balance from customers in
accordance with Rule 23 and the related CCA Service Agreement. The proposed process is for
two late payment notices to be provided to the customer within 120 days of the original bill due
date. If payment is not received within 180 days from the original due date, service would be
transferred to the utility on the next regular meter read date, unless alternative payment
arrangements have been made. Consistent with the CCA tariffs, Rule 23, service cannot be
discontinued to a residential customer for a disputed amount if that customer has filed a
complaint with the CPUC, and that customer has paid the disputed amount into an escrow
account.
Customer Deposits
Under certain circumstances, SMCCA customers may be required to post a deposit equal to the
estimated charges for two months of CCA service prior to obtaining service from the SMCCA
Program. A deposit would be required for an applicant who previously had been a customer of
SCE or SMCCA and whose electric service has been discontinued by SCE or SMCCA during the
last twelve months of that prior service arrangement as a result of bill nonpayment. Such
customers may be required to reestablish credit by depositing the prescribed amount.
Additionally, a customer who fails to pay bills before they become past due as defined in SCE
Electric Rule 11 (Discontinuance and Restoration of Service), and who further fails to pay such
bills within five days after presentation of a discontinuance of service notice for nonpayment of
bills, may be required to pay said bills and reestablish credit by depositing the prescribed amount.
This rule will apply regardless of whether or not service has been discontinued for such
nonpayment6. Failure to post deposit as required would cause the account service transfer
request to be rejected, and the account would remain with SCE.
6 A customer whose service is discontinued by Santa Monica is returned to SCE generation service.
SMCCA Draft Implementation Plan
CHAPTER 10 - Procurement Process 36 November 2017
CHAPTER 10 - Procurement Process
Introduction
This Chapter describes Santa Monica’s initial procurement policies and the key third party service
agreements by which the City will obtain operational services for the SMCCA Program. By
adopting this Implementation Plan, the City will have approved the general procurement policies
contained herein to be effective at Program initiation. Santa Monica retains authority to modify
Program policies from time to time at its discretion.
Procurement Methods
Santa Monica will enter into agreements for a variety of services needed to support program
development, operation and management. It is anticipated that the City will generally utilize
Competitive Procurement methods for services but may also utilize Direct Procurement or Sole
Source Procurement, depending on the nature of the services to be procured. Direct Procurement
is the purchase of goods or services without competition when multiple sources of supply are
available. Sole Source Procurement is generally to be performed only in the case of emergency
or when a competitive process would be an idle act.
The City will utilize a competitive solicitation process to enter into agreements with entities
providing electrical services for the program. Agreements with entities that provide professional
legal or consulting services, and agreements pertaining to unique or time sensitive opportunities,
may be entered into on a Direct Procurement or Sole Source basis at Santa Monica’s discretion.
Authority for terminating agreements will generally mirror the authority for entering into such
agreements.
Key Contracts
Electric Supply Contract
Santa Monica will initiate service using supply contracts with one or more qualified providers to
supply sufficient electric energy resources to meet SMCCA customer demand as well as
applicable resource adequacy requirements, ancillary and other necessary services. It is
anticipated a Request for Proposals (“RFP”) for energy supply products and services including
shaped conventional energy, renewable energy, resource adequacy capacity, and scheduling
coordinator services will be issued in February 2018. The tentative RFP schedule and timeline is
broken out below:
Release RFP February 2018
Deadline for Question Submittal February 2018
Proposals Due March 2018
Notification of Short List March 2018
Begin Contract Negotiations April 2018
Best and Final Pricing April 2018
SMCCA Draft Implementation Plan
CHAPTER 10 - Procurement Process 37 November 2017
Contract Approval and Execution April 2018
As indicated in the above RFP timeline, the City plans to receive proposals, including indicative
pricing for all requested products and services, in March 2018. This would provide the City with
a sufficient amount of time to evaluate the proposals, develop a short-list, negotiate contracts,
and execute final agreements by the beginning of the 2nd quarter 2018.
The City may complete additional solicitations to supplement its energy supply and/or to replace
contract volumes provided under the original contract. Santa Monica would begin such
procurement sufficiently in advance of contract expiration so that the transition from the initial
supply contract occurs smoothly, avoiding dependence on market conditions existing at any
single point in time.
As part of the energy supply and services RFP released in February 2018, Santa Monica will solicit
the services of a certified scheduling coordinator to schedule loads and resources to meet SMCCA
customer demand. The City may designate the primary supplier to be responsible for day-to-day
energy supply operations of the SMCCA Program and for managing the predominant supply
risks for the term of the contract. The primary supplier may also contribute to meeting the
Program’s renewable energy supply goals. However, additional suppliers may be identified to
supplement requisite energy supplier of the SMCCA program. Finally, the primary supplier may
be responsible for ensuring Santa Monica’s compliance with all applicable resource adequacy and
regulatory requirements imposed by the CPUC or FERC.
Data Management Contract
A data manager will provide the retail customer services of billing and other customer account
services (electronic data interchange or EDI with SCE, billing, remittance processing, and account
management). Recognizing that some qualified wholesale energy suppliers do not typically
conduct retail customer services whereas others (i.e., direct access providers) do, the data
management contract may be separate from the electric supply contract. It is anticipated that a
single contractor will be selected to perform all of the data management functions.7
The data manager is responsible for the following services:
➢ Data exchange with SCE;
➢ Technical testing;
➢ Customer information system;
➢ Customer call center;
➢ Billing administration/retail settlements; and
➢ Settlement quality meter data reporting
7 The contractor providing data management may also be the same entity as the contractor supplying electricity for
the program.
SMCCA Draft Implementation Plan
CHAPTER 10 - Procurement Process 38 November 2017
➢ Reporting and audits of utility billing.
Utilizing a third party for account services eliminates a significant expense associated with
implementing a customer information system. Such systems can impose significant information
technology costs and take significant time to deploy. Separation of the data management contract
from the energy supply contract provides the City with greater flexibility to change energy
suppliers, if desired, without facing an expensive data migration issue.
Santa Monica is considering joining California Choice Energy Authority, a hybrid JPA program,
for various components of SMCCA’s operations, including data management and call center
functions. Should SMCCA decide not to partner for these services, an RFP process, similar to the
electric supply RFP described above, will be completed. The tentative RFP schedule and timeline
is broken out below:
Release RFP February 2018
Deadline for Question Submittal February 2018
Proposals Due March 2018
Notification of Short List March 2018
Short List Interviews April 2018
Begin Contract Negotiations April 2018
Contract Approval and Execution April 2018
The RFP timeline will allow the City to get a data manager under contract by late April 2018.
Even though SMCCA will not serve customers until July 2018, the data manager will need
sufficient time to setup and integrate the various data systems with Santa Monica, SCE, and
other third parties such as SMCCA’s scheduling coordinator.
SMCCA Draft Implementation Plan
Chapter 11 – Contingency Plan for Program Termination 39
November 2017
CHAPTER 11 – Contingency Plan for Program Termination
Introduction
This Chapter describes the process to be followed in the case of SMCCA Program termination.
By adopting the original Implementation Plan, the City will have approved the general
termination process contained herein to be effective at Program initiation. In the unexpected
event that the City would terminate the SMCCA Program and return its customers to SCE service,
the proposed process is designed to minimize the impacts on its customers and on SCE. The
proposed termination plan follows the requirements set forth in SCE’s tariff Rule 23 governing
service to CCAs. The City retains authority to modify program policies from time to time at its
discretion.
Termination by SMCCA
Santa Monica will offer services for the long term with no planned Program termination date. In
the unanticipated event that the City decides to terminate the Program, the City Council would
vote on Program termination.
After any applicable restrictions on such termination have been satisfied, notice would be
provided to customers six months in advance that they will be transferred back to SCE. A second
notice would be provided during the final sixty-days in advance of the transfer. The notice would
describe the applicable distribution utility bundled service requirements for returning customers
then in effect, such as any transitional or bundled portfolio service rules.
At least one year advance notice would be provided to SCE and the CPUC before transferring
customers, and the City would coordinate the customer transfer process to minimize impacts on
customers and ensure no disruption in service. Once the customer notice period is complete,
customers would be transferred en masse on the date of their regularly scheduled meter read date.
Santa Monica will post a bond or maintain funds held in reserve to pay for potential transaction
fees charged to the Program for switching customers back to distribution utility service. Reserves
would be maintained against the fees imposed for processing customer transfers (CCASRs). The
Public Utilities Code requires demonstration of insurance or posting of a bond sufficient to cover
reentry fees imposed on customers that are involuntarily returned to distribution utility service
under certain circumstances. The cost of reentry fees are the responsibility of the energy services
provider or the community choice aggregator, except in the case of a customer returned for
default or because its contract has expired. The City will post financial security in the appropriate
amount as part of its registration materials and will maintain the financial security in the required
amount, as necessary.
SMCCA Draft Implementation Plan
CHAPTER 12 – Appendices 40 November 2017
CHAPTER 12 – Appendices
Appendix A: City of Santa Monica Ordinance No. XX-XX (Adopting Implementation Plan)
November 2017
UCLA LUSKIN CENTER FOR INNOVATION
DRAFT REPORT
EVALUATING CCA
ALTERNATIVES FOR THE
CITY OF SANTA MONICA
Kelly Trumbull, co-author. Julien Gattaciecca, co-author. JR DeShazo, Principal Investigator.
1
Table of Contents
EXECUTIVE SUMMARY ............................................................................................................. 2
Evaluative Criteria Used to Assess Each CCA Option in Regard to Santa Monica’s Goals ... 2
Overarching Considerations ..................................................................................................... 2
An Assessment of the Options ................................................................................................. 4
CHAPTER 1: INTRODUCTION .................................................................................................... 5
CHAPTER 2: STATUS OF EACH OPTION ................................................................................. 6
2.1 Timelines and Operational Readiness .................................................................................... 6
2.2 Start and Termination Processes ............................................................................................ 7
CHAPTER 3: GOVERNANCE ...................................................................................................... 9
3.1 Decision-Making Process ...................................................................................................... 9
3.2 Reflecting Local Preferences ............................................................................................... 14
CHAPTER 4: ENERGY PROCUREMENT ................................................................................. 15
4.1 Power Content and Rate Comparison .................................................................................. 15
4.2 Use of Category 3 Renewable Energy Certificates .............................................................. 17
4.3 Exploring the 100% Renewable Option .............................................................................. 18
CHAPTER 5: ECONOMICS AND FINANCE ............................................................................ 19
5.1 Startup Costs ........................................................................................................................ 19
5.2 Economies of Scale in Operating Costs ............................................................................... 21
5.3 Local Program Financing ..................................................................................................... 23
CHAPTER 6: FUTURE CHALLENGES ..................................................................................... 25
6.1 Legislative Risks .................................................................................................................. 25
6.2 Regulatory Risks: PCIA ....................................................................................................... 28
6.3 Market Force Risks .............................................................................................................. 30
Appendix A: Voting Process for Existing CCAs .......................................................................... 34
Appendix B: Operating Costs per GWh Analysis ......................................................................... 35
2
EXECUTIVE SUMMARY
The City of Santa Monica (Santa Monica) is currently looking to form or join a Community
Choice Aggregator (CCA). In intent to find the most appropriate structure for the City, Santa
Monica is evaluating three options:
• Joining the Los Angeles Community Choice Energy (LACCE),
• Actively participating in the formation of the South Bay Clean Power (SBCP)
• Creating a single-city CCA through the California Choice Energy Authority (CCEA)
Evaluative Criteria Used to Assess Each CCA Option in Regard
to Santa Monica’s Goals
As a progressive community, Santa Monica has ambitious environmental goals, including to
procure its electricity with the highest percentage of renewables, accelerate the decarbonization
process of the city, and invest in local energy programs such as distributed clean electricity
generation, battery storage, electric vehicles, charging stations, energy efficiency, and demand
response programs.
With this in mind, the UCLA Luskin Center for Innovation compared all three CCA options
around the following key evaluative criteria that reflect the City’s goals:
• Which CCA structure best provides Santa Monica with decision-making autonomy
toward local programs to achieve its environmental goals?
• Which option best protects the City against financial risk and provides the most resilient
structure to future legislative, regulatory and competition risks?
• Which option offers the greatest economies of scale that would support future
opportunities?
The Luskin Center reviewed all official documents available and interviewed the key
stakeholders and representatives of the three CCA options, as well as their consultants. We
compared their recommendations, financial strategies and business plans, and discussed key
elements with existing CCAs’ CEOs and staff, as well as industry experts specialized in energy
procurement, regulatory and legal affairs, data management and billing.
Overarching Considerations
During the evaluation process of all options and through our various discussions with several
stakeholders and industry specialists, the Luskin Center identified the following set of major
considerations and tradeoffs to assist Santa Monica in its decision making process.
3
Operational Readiness.
An important practical consideration is the operational readiness associated with each option.
LACCE is operationally ready, has enrolled enough member cities, and is set to launch in
January 2018. SBCP remains at a conceptual stage where a lot of effort and resources would be
needed to become operational. CCEA just provided Santa Monica with its feasibility study and
the city could possibly launch its CCA in July 2018, provided some staff time and upfront costs
from Santa Monica.
Autonomy versus Economies of Scale.
Generally, the more members a CCA has, the more diluted each individual city’s vote share is.
Chapter 2 of this report presents a vote shares analysis that illustrates the dilution of Santa
Monica’s vote under different membership scenarios for LACCE and SBCP. Even though the
Los Angeles County unincorporated area represents an important share of the load, they still only
have one vote, unless a weighted vote is called. Based on existing CCAs’ experience so far,
weighted votes are unlikely as most decisions are collectively discussed before.
Alternatively, larger CCAs do benefit from economies of scale in operating costs, as illustrated
in Chapter 2. Therefore, one tradeoff that may arise for a larger CCA is between a lower amount
of direct influence an individual member city may have versus greater cost competitiveness.
Moreover, economies of scale and autonomy are not necessarily mutually exclusive, as they
depend on the design and policies set by the CCA. As it is the case with MCE, and as the
LACCE interim executive director suggested, even large CCAs can empower their member cities
when it comes to local decisions and investments. Finally, larger CCA options also offer Santa
Monica the ability to form coalitions with other likeminded initiating cities and influence the
strategy and direction of the entire CCA.
Market Competitiveness and Resiliency.
Chapter 3 of this report discusses specific regulatory, legislative, and market force risks that
CCAs may face in the future. We compare each option’s risk management strategies and
highlight the most appropriate approaches. General recommendations by each entity typically
include establishing rate stabilization funds, paying off loans quickly, and participating actively
with other CCAs in regulatory and legislative discussion at the state and CPUC level.
Planning ahead for these risks is crucial in an increasingly competitive electricity retail market.
Our discussions with industry experts have emphasized the importance of achieving financial
solvency as quickly as possible in order to remain cost competitive over time and to keep their
highest revenue generating customers as a prerequisite to achieving its environmental goals.
There are several potential benefits of being member of a larger CCA in this regard.
Given the likely continued proliferation of CCAs, we may see some increasing competition.
According to energy industry experts, being part of a larger CCA can offer competitive
advantages when it comes to RFPs, financing and long-term energy procurement.
4
Advanced Technical and Managerial Capacities
One concern raised by industry experts is regarding the technical and managerial capacities of
each option and which vendors to contract with for those services. Due to the increasingly
competitive market environments, developing advanced capacities with cutting edge
technologies, strategies, and partners could be something to consider when making policy
decisions within each option. Since these advanced capacities are a recent development among
CCAs, we have not yet been able to be evaluate their costs and benefits in practice.
An Assessment of the Options
The following section provides a summary assessment of Santa Monica’s three options.
Los Angeles Community Choice Energy will likely have the largest membership. This may
mean less influence for Santa Monica, in terms of its direct vote. However, as the potentially
largest CCA in California, this option could also provide the city with greater financial stability,
greater economies of scale, and a stronger voice for the future legislative and regulatory
discussion that lay ahead. Given that a CCA’s success must precede its ability to provide
environmental benefits, LACCE’s large size probably best positions Santa Monica to provide
environmental benefits in the long term. Its county-wide membership also offers member cities
the opportunity to collaborate, share resources, and potentially amplify their regional impact at
many other levels.
South Bay Clean Power is the least operationally ready of the options. As there are no current
members, and some of the cities included in its feasibility study have joined LACCE, SBCP
would be expected to be smaller than LACCE. This means that Santa Monica would have greater
influence in decisions made by this CCA as one of the leading cities. If the business plan and
financial strategy of SBCP provides innovative recommendations on how to address energy
procurement and become a CCA 2.0 (or 3.0), this does not preclude Santa Monica from revising
LACCE’s early decisions by joining the Board and pushing other progressive cities to adopt a
better CCA model. Moreover, forming SBCP would require additional time and resources which
will increase the financial exposure of the initiating city, and delay the CCA launch considerably.
California Choice Energy Authority’s single-city option does offer Santa Monica full
autonomy over rates, power mixes, and programs. However, Santa Monica does not have a vote
in decisions made by the CCEA’s JPA Board, including signing power contracts.
Because Santa Monica does not have a formal vote in executing power contracts, it is even more
important that the values underlying the power procurement of CCEA align with Santa Monica’s
values. Additionally, Santa Monica would likely not benefit from the economies of scale offered
by a greater CCA. CCEA uses a restricted bank account to reduce member cities’ financial risk
called a “lockbox”, which seems to be an idea appreciated by energy providers and some of the
financial institutions, and should be studied further by the city or the forming CCA.
5
CHAPTER 1: INTRODUCTION
The rapid expansion of Community Choice Aggregators (CCAs) across the state has resulted in a
situation where some cities now have several CCA alternatives to choose from. As each
community has unique local needs and preferences, there is no CCA design that is universally
ideal for every city and county across the state. With multiple proven cases of successful CCAs,
the City of Santa Monica is naturally questioning which option to pursue for the benefit of their
residents:
•The Los Angeles County CCA initiative, named Los Angeles Community Choice Energy
(LACCE);
•The South Bay cities CCA project initiative, named South Bay Clean Power (SBCP);
•A hybrid single-city option through the California Choice Energy Authority (CCEA).
Santa Monica has goals to achieve the highest percentage of renewables as soon as possible and
to utilize the CCA’s position and funds to support decarbonization and local energy programs
such as distributed energy generation, battery storage systems, energy efficiency, demand
response programs, and the electrification of its transportation system. Santa Monica has already
specified a variety of environmental targets including:
•Installing 300 public electric vehicle charging stations by 2020
•Reducing energy use in existing buildings by 50% by 2030
•Achieving carbon neutrality by 2050 or sooner
This report aims to evaluate the risks and benefits of each CCA option, and how each will help
Santa Monica to achieve its stated goals, to maintain a leadership role in the governance of the
CCA, and to minimize financial risks. The report finishes with a comparison of each option’s
mitigation strategies for potential future legislative, regulatory and market force risks.
6
CHAPTER 2: STATUS OF EACH OPTION
2.1 Timelines and Operational Readiness
LACCE is the most operationally ready option as they have submitted its Implementation Plan to
the CPUC for certification on August 14, 2017 and is on track for its planned start date.1 LACCE
will begin serving all county municipal accounts in Phase 1 beginning January 15, 2018. All
municipal, commercial, and industrial customers will be enrolled in Phase 2 by June 2018 with
all remaining customers enrolled during Phase 3 by December 2018.2
SBCP originally targeted a June 2018 launch date with a three step phase in. Primarily
nonresidential customers (composing approximately 28% of the load) were to be enrolled in
Phase 1 in June 2018. Residential customers (21% of the load) would be enrolled in Phase 2 in
October 2018, with the remaining nonresidential customers (51% of the load) enrolled in Phase 3
in June of 2019.3 As no cities have initiated SBCP yet, it is unlikely that this CCA would be
ready by its original targeted launch date.
CCEA estimates that Santa Monica could launch a single-city CCA in July 2018.4 While the
CCEA’s hybrid JPA is established, Santa Monica would need to initiate the necessary start up
activities required to launch the CCA within the city.
The figure below illustrates the implementation timeline of each option.
1 LACCE Community Choice Aggregation Implementation Plan and Statement of Intent (August 2017). 1. 2 LACCE Community Choice Aggregation Implementation Plan and Statement of Intent (August 2017). 15.
3 SBCP Financial Strategy (July 2017). 20. 4 CCEA Community Choice Aggregation Technical Study: Summary of Results (November 2017). 14.
7
Figure 1. Implementation Timelines5
Source: UCLA Luskin Center for Innovation
2.2 Start and Termination Processes
Start Process
To officially join each CCA, Santa Monica would need to adopt an ordinance and execute the
respective JPA agreement.
If Santa Monica wishes to join LACCE, the city council needs to adopt an ordinance prior to the
deadline established by LACCE’s JPA, December 27, 2017. While joining the CCA after that
date is possible, the exact fees and timeline associated with joining after that date are uncertain,
as these policies will be set by the JPA. The formation of SBCP is contingent upon a city taking
the lead in initiating this CCA. SBCP’s Draft JPA Agreement states that “at least three Initial
Participants” need to adopt ordinance prior to the effective date of the JPA.6 As no cities to date
have expressed much interest in taking the lead on initiating SBCP or guaranteeing the startup
funding the responsibility would fall on Santa Monica.
5 Figure created by the Luskin Center for Innovation in November 2017. Timeline data from each entity’s business
plan or feasibility study. 6 SBCP Draft JPA. Section 2.1.
8
If Santa Monica wished to form a single-city CCA through the CCEA, they would need to follow
the implementation timeline for all necessary startup activities as advised by the feasibility study.
Termination Process
Both LACCE and SBCP offer the ability to withdraw from the JPA similarly by giving 180 days
and 6 month notice, respectively, and by amendment. Under both, in the event of withdrawal,
Santa Monica may be responsible for the cost of excess power generated by the shrinking
customer base. This is done in order to prevent the remaining customers from bearing the cost of
departing cities. If too many members terminate a JPA or if too many residents opt-out, the CCA
may need to mutually terminate and return customers to SCE.
Through CCEA, Santa Monica is not able to exit the JPA until the expiration of the longest
power contract.7
While unlikely, there could be future political or financial changes that impact a member city’s
ability or willingness to remain with the CCA. To date, no cities have left or terminated CCAs in
California.
7 First Amendment to the Joint Exercise of Powers Agreement Relating to the California Clean Energy Authority.
Section 12.
9
CHAPTER 3: GOVERNANCE
3.1 Decision-Making Process
Distribution of Power between Board Members and the JPA
Each option offers Santa Monica varying levels of autonomy and involvement in the decision-
making process. Each option is governed by a Joint Powers Authority (JPA) board. LACCE and
SBCP’s boards are composed of one voting director from each member city or county. CCEA
has a different approach where they delegate full autonomy to members for some decisions but
do not provide their joining members with a voting right on decisions made by the JPA Board as
it is solely composed of the Lancaster City Councilmembers.
The table below presents how decision-making power is distributed between the stakeholders
that compose each CCA, and can be divided in three categories:
• Decisions made by the individual members autonomously;
• Decisions made independently of member cities;
• Decisions made collectively through votes by member cities.
Table 1. Distribution of Decision Making Autonomy for each Option
LACCE SBCP CCEA SCE
Decisions made
by the individual
members
autonomously
· Default product
· TBD by Board · TBD by Board
· Rate setting
· Programs
· Power content
· Default product
· Marketing Strategy
· None
Decisions made
collectively
through votes by
member cities
· Rate setting
· CCA-wide Programs
· Power content
· Power procurement
· Approving additional
member cities
· Rate setting
· Programs
· Power content
· Power procurement
· Default product
· Approving additional
member cities
· None
(the board members
of the CCEA JPA are
solely composed of
the Lancaster City
Council members)
· None
Decisions made
independently of
member cities
· Never · Never
All the rest:
- · Power procurement
- · Contracts
- · Approving
additional member
cities
- · Administration and
financing of the JPA
All the rest:
· Rate setting
· Programs
· Power content
· Power
procurement
10
Veto and Weighted Vote
Most decisions made by the LACCE and SBCP Boards require the simple majority of board
members present during the meeting. However, if members disagree with an affirmative
decision, they have the right to call a weighted vote, where each member’s share of the vote is
based on their size. LACCE requires at least three members to call a weighted vote, which is
calculated based on each members’ load, while SBCP only requires one member to call a
weighted vote, which is calculated based on members’ revenues. Figure 2 illustrates the voting
process for LACCE and SBCP.
Figure 2. Decision Making Process Flow Chart
It is important to note that similar voting systems are also used by other existing CCAs.8
Discussions with existing CCAs have revealed that decisions are usually discussed at length
prior to a vote. While there is not always full consensus of members prior to a vote, weighted
votes have very rarely been called.
Reaching consensus would probably be easier for SBCP as its founding members are likely to
share the same vision and the same goals. On the other hand, with a county as large and
heterogeneous as the Los Angeles County, a consensus could potentially be harder to reach by
LACCE.
8 See Appendix A for a summary of the voting processes for existing CCAs.
11
The figure below illustrates the number of members for all existing and potential CCAs with a
JPA Board.
Figure 3. Number of Members on CCA JPA Boards9
Weight Depending on Membership Scenarios
We examine Santa Monica’s share of the weighted vote under different potential membership
scenarios to understand their influence in the event of an extreme case where a weighted vote is
called. Table 2 below shows that Santa Monica’s weighted vote share would potentially vary
between 7% and 11% if they decide to join LACCE. Table 3 below shows that Santa Monica’s
weighted vote share could potentially vary between 20% and 32% if they decide to join SBCP,
resulting in the city having a larger control over collegial decisions. Finally, if Santa Monica
decides to form its own CCA through CCEA, the city will have 100% of autonomy over most
decisions and 0% influence over decisions made by the JPA Board. Table 4 below shows the
distribution of powers between the city and the CCEA in this scenario.
9 Figure created by the UCLA Luskin Center for Innovation in November 2017. Membership data from each entity’s
website.
9 10 11 12
22
26 28
0
5
10
15
20
25
30
RCEA SBCP SCP SVCE PCE LACCE MCE
12
Table 2. Santa Monica’s Load Share within LACCE10
Scenario 1: Low Membership Scenario 2: Medium Membership Scenario 3: High Membership
LACCE Cities Load
Share LACCE Cities Load
Share LACCE Cities Load
Share
Unincorporated LA County 53.3% Unincorporated LA County 38.2% Unincorporated LA County 34.1%
Carson 12.5% Carson 8.9% Carson 8.0%
Santa Monica 11.0% Santa Monica 7.9% Santa Monica 7.1%
Downey 7.2% Beverly Hills 5.2% Beverly Hills 4.6%
Alhambra 4.7% Downey 5.2% Downey 4.6%
West Hollywood 4.2% West Covina 4.1% West Covina 3.6%
Calabasas 2.9% Manhattan Beach 3.6% Whittier 3.2%
Claremont 2.1% Hawthorne 3.4% Manhattan Beach 3.2%
South Pasadena 1.4% Culver City 3.4% Hawthorne 3.0%
Sierra Madre 0.6% Alhambra 3.3% Culver City 3.0%
Rolling Hills Estates 0.2% West Hollywood 3.0% Alhambra 3.0%
Redondo Beach 2.9% Arcadia 3.0%
Paramount 2.2% West Hollywood 2.7%
Calabasas 2.1% Redondo Beach 2.6%
Claremont 1.5% Covina 2.2%
Agoura Hills 1.5% Paramount 1.9%
Agoura Hills 1.5% Calabasas 1.8%
South Pasadena 1.0% Claremont 1.4%
Palos Verdes Estates 0.6% Malibu 1.3%
Sierra Madre 0.5% Agoura Hills 1.3%
Rolling Hills Estates 0.1% Agoura Hills 1.3%
La Puente 1.0%
South Pasadena 0.9%
Palos Verdes Estates 0.5%
Sierra Madre 0.4%
Rolling Hills Estates 0.1%
Table note: Scenario 1 includes cities that have officially joined LACCE as of November 28th. Scenario 2
also includes all cities that have scheduled a first or a second reading of the ordinance. Scenario 3
includes all cities currently considering LACCE.
10 Status of members provided by LACCE. Share of vote estimated based on load data provided by the LA Energy
Atlas. http://www.energyatlas.ucla.edu/
13
Table 3. Santa Monica’s Load Share within SBCP11
Scenario 1: Low Membership Scenario 2: Medium Membership Scenario 3: High Membership
SBCP Cities
Load
Share SBCP Cities
Load
Share SBCP Cities
Load
Share
Torrance 54% Torrance 46.3% Torrance 35.0%
Santa Monica 32% Santa Monica 27.0% Santa Monica 20.4%
Malibu 7% Redondo Beach 8.8% Beverly Hills 14.6%
Hermosa Beach 3% Malibu 6.2% Culver City 9.8%
Lomita 2% Manhattan Beach 5.9% Redondo Beach 6.7%
Palos Verdes Estates 2% Hermosa Beach 2.3% Malibu 4.7%
Lomita 1.8% Manhattan Beach 4.4%
Palos Verdes Estates 1.8% Hermosa Beach 1.8%
Lomita 1.3%
Palos Verdes Estates 1.3%
Table note: Scenario 1 includes all cities that were included in SBCP’s original Feasibility Study that
have not scheduled a reading of the ordinance to join LACCE. Scenario 2 includes all original SBCP
cities that have not scheduled a second reading of the ordinance. Scenario 3 includes all original SBCP
cities that have not officially joined LACCE.
Table 4. Distribution of Powers between Santa Monica and the CCEA Board12
The City of Santa Monica CCEA
• Local governance and oversight
• Rate setting
• Back office operations as desired
• Community outreach
• Marketing
• Regulatory and legal affairs
• Rate analysis
• Financial projections
• Project scheduling
• Load forecasting
• Electronic data exchange
• Power procurement
• Investor-Owned Utility (IOU) relations
• Marketing assistance
• Guidance to city council and management
• Call center
• Banking and accounting functions
11 Share of vote based on estimates from SBCP. https://southbaycleanpower.org/about-us/our-cities/
12 California Choice Energy Authority (2017). “Our Services.”
https://californiachoiceenergyauthority.com/our-services/
14
3.2 Reflecting Local Preferences
Because Los Angeles County is made of heterogeneous communities, it is likely to expect a
bigger CCA to have broader variety of energy policy priorities. Some communities might focus
on rates while some other are likely to focus on environmental goals and local programs. One of
the most important goals of forming a CCA is to reflect community preferences. It is therefore
important to understand how each option will allow the city of Santa Monica to appropriately
represent its residents’ interests.
LACCE offers Santa Monica the least power over collegial decision if a weighted vote is called.
However, if other likeminded cities join, it is likely to see some cities forming coalition and
influencing decisions made at the CCA level. This would substantially increasing Santa
Monica’s regional impact. Moreover, it is important to keep in mind that weighted votes have
rarely been used to date in California. LACCE plans to establish a Community Advisory
Committee. LACCE staff has recognized the desire for members to reflect local preferences.
Since those preferences may not always align with other members, Bill Carnahan, the interim
executive director of LACCE and former executive director of Southern California Public Power
Authority (SCPPA), has suggested a “cafeteria style” approach, where each member can decide
which programs they want to participate in, finance, and benefit from.
SBCP, if launched, could be formed by cities with similar vision, goals and energy policy
priorities, which would limit the risk of disagreement. Additionally, Santa Monica is likely to
have a more weight over collegial decisions in both the simple and the weighted vote due to the
likely smaller membership. Finally, SBCP recommends that a member of their Community
Advisory Committee have a non-voting seat on the JPA Board.
Finally, CCEA provides a hybrid JPA where Santa Monica would either have full autonomy and
discretion over decisions, or no right to vote at all. This could become an issue in the event
where Santa Monica disagrees with Lancaster Council members’ perspectives and approach of
running the power authority, particularly regarding energy procurement decisions.
15
CHAPTER 4: ENERGY PROCUREMENT
4.1 Power Content and Rate Comparison
Rates and power mixes will only be finalized once they have been approved by LACCE’s or
SBCP’s JPA Boards, or by the Santa Monica City Council if they opt for the single-city option.
This section compares the potential electricity products and rates that could be offered by each
option according to their published documents. However, it is important to remember that this
comparison only looks at each option’s forecasts and estimations. Each option uses different
methodologies and assumptions to forecast both the CCA’s and SCE’s rates. Ultimately, this
comparison is very hypothetical and does not bring a lot of clarity for the city of Santa Monica as
rates are dependent on each CCAs’ energy procurement strategy and portfolio, energy market
prices, and the general manager.
We believe that while competitive rates are a crucial element, most CCAs in California have
really been successful through their innovative approaches, greener electricity, and local-level
management.
LACCE suggests to offer customers three products to choose from: a base product, a 50%
renewable energy product, and a 100% renewable energy product. The base product will at
minimum always meet the state Renewables Portfolio Standard requirement (33% in 2020).
According to recent discussions with LACCE staff, their base product is likely going to be
greener than the base product originally described in their business plan in order to compete with
SCE’s aggressive 2020 procurement.13 LACCE’s business plan does not report the percent of
carbon free electricity. Santa Monica can determine which of the three products to enroll its
residents in by default (although customers can always opt up or opt down products).14
SBCP’s power mixes have not yet been determined. The JPA Board would have to design and
vote on the different products offered to ratepayers and whether or not a member can enroll by
default its residents into a greener product. In their financial strategy, SBCP presents four
illustrative scenarios of power mixes, which vary between 39 and 43% renewable energy and
between 9% and 27% additional carbon free electricity in 2020. It is important to note all but one
scenario have less renewable energy than SCE will have in 2020. SBCP estimates their rates to
13 California Public Utilities Commission (2017). California Renewables Portfolio Standard (RPS)
http://www.cpuc.ca.gov/RPS_Homepage/ 14 LACCE Community Choice Aggregation Implementation Plan and Statement of Intent (August 2017). 34.
16
be consistently cheaper through 2022 for each option, and use a conservative estimation of the
PCIA.
CCEA presented three scenarios to Santa Monica. Scenario 1 maintains 10% more renewable
energy than the RPS, and would have 43% renewable energy in 2020. Scenario 2 would have
33% renewable energy and an additional 67% carbon-free energy in 2020. Scenario 3 would
have 53% renewable energy in 2020 and an additional 30% carbon-free energy. CCEA estimates
that the CCA total rate would be less than 1% cheaper than SCE’s. However, it is important to
note that Santa Monica has full discretion regarding these power contents and rates and could
design each products as they want.
Figure 4. Estimated LACCE Products in 2020
Figure 5. SBCP Example Products in 202015
Figure 6. CCEA Example Products in 202016
15 SBCP Financial Strategy (July 2017). 16-17.
16 CCEA (November 2017). City of Santa Monica Community Choice Aggregation DraftTechnical Study
17
4.2 Category 3 Renewable Energy Certificates
According to the CPUC, “Renewable energy facilities can sell energy and/or renewable energy
credits (RECs) to a California retail seller of electricity to meet its RPS obligation.”17 The RPS
program distinguishes renewable procurement acquired from contracts into three portfolio
content category, also called REC categories, or buckets. The last bucket, also called RECs
category 3 or unbundled REC3 is when the energy provider only buys the certificate, without the
energy. And as the figure below shows, the State does not view REC3 as an appropriate long-
term solution to procuring renewable energy.
Figure 7. RPS Portfolio Content Category Requirement18
One of the main reasons load-serving entities use REC 3s is because they have been historically
cheaper than buying bundled renewable energy. As noted in the Luskin Center’s previous report
on CCAs, in 2016 Marin Clean Energy was still using up to 3% of RECs category 3, and
Lancaster Choice Energy was using up to the maximum amount allowed by the RPS program.
Other CCAs like Sonoma Clean Power or Peninsula Clean Energy do not use RECs category 3.
17 California Public Utilities Commission (2017). RPS Procurement Rule.
http://www.cpuc.ca.gov/RPS_Procurement_Rules_33/
18 California Public Utilities Commission (2017). RPS Procurement Rule.
http://www.cpuc.ca.gov/RPS_Procurement_Rules_33/
18
LACCE’s JPA states to “discourage the use of REC category 3”, however the JPA Board will
ultimately decide the policy regarding the use of REC 3s. According to discussions with LACCE
staff, their initial RFP specifically requested no use of REC 3s.
SBCP’s Draft Business Plan states that “no use of Category 3 unbundled Renewable Energy
Certificates (RECs) [will be purchased] to achieve [their] 100% renewables goal”19 as one of
their goals and objectives. However, the use of RECs category 3 to meet interim goals or the
implementation phase is not specified and would likely be determined by the JPA.
CCEA will procure power on behalf of Santa Monica with the single-city option. Santa Monica
can then specifically request that no REC 3s are used for electricity procurement. The Feasibility
Study presented to Santa Monica assumes the use of REC 3s up to the maximum of 10%.
4.3 Exploring the 100% Renewable Option
As per the previous section, each option could provide Santa Monica with the ability to
immediately provide 100% renewables. Because the 100% renewable electricity product is
always the most expensive option, the vast majority of CCAs enroll by default their customers
into the cheaper option in order to maximize their customer retention. The problem with this
strategy is that most CCAs only see a very small amount of “opt-ups” (when a customer
voluntarily choose to enroll in the greener product). The City of Portola Valley, a member of
Peninsula Clean Energy, a CCA in San Mateo County, is the only member so far to have default
enrolled all of their customer accounts into the 100% renewables product. A representative from
PCE confirmed that as of October 2017 only 4% of customers opted down to the cheaper product
and 5% opted out of the CCA to return to PG&E. It is important to note that the percentage of
opt-out for a CCA in California varies between approximately 2% and 10%. Consequently, we
consider this approach as setting a very successful precedent for the rest of the state. The Public
Policy Institute of California conducted a survey that revealed that the willingness to pay a more
for greener electricity procurement varies based on political affiliation: 68% of democrats and
38% of republicans were willing to pay more.20 The table below shows the socio-economic
comparison between the city of Portola Valley and Santa Monica.
Table 5. Comparison of Demographics of the Cities of Portola Valley and Santa Monica21
Portola Valley Santa Monica
Median Household Income $185,234 $76,580
Population 2016 4,597 92,478
Percent Registered Democrats 47% 54%
Percent Registered Republicans 25% 13%
19 SBCP Draft Business Plan (February 2017). Letter of Introduction.
20 Kordus, David. Public Policy Institute of California (January 2017). “Californians’ Views on Climate Change.” 21 United States Census Bureau and California Secretary of State “Voter Registration Statistics.”
19
CHAPTER 5: ECONOMICS AND FINANCE
However, there are several costs factors that need to be taken into consideration, including
startup costs and financing, energy procurement costs, non-energy operating costs, and the costs
and financing of local energy programs.
In this chapter, we compare the financial obligation that each option requires from Santa Monica
regarding start-up costs and operating costs. We do not analyze the cost of procurement between
each option as we neither have the experience nor the knowledge to assess and compare each
option’s methodologies for forecasts and cost estimates.
5.1 Startup Costs
The startup phase, also known as the pre-start phase, usually varies between six months and one
year. The associated costs usually include staff members, consultants, marketing, and
infrastructure.
Startup Costs Estimation
Back in 2016, LACCE’s business plan initially estimated startup costs to be $1,213,718, with a
launch in January 2017. Because the launch was postponed by one year, we estimated the total
costs incurred by the CCA this year to have been $1,355,000 (2017 total costs minus utility
transaction fees, but including the CPUC Bond), resulting in a total startup cost of $2,568,718 for
LACCE.22 Based on SBCP’s financial strategy, we estimate a startup cost of up to $912,376 (all
startup costs minus utility and CAISO fees). CCEA’s technical study estimates startup costs of
around $703,940 for the first six months.
LACCE and SBCP’s estimations provide the city with economies of scale, resulting in lower
startup costs than can be achieved through CCEA. Depending on the ultimate membership, Santa
Monica’s share of the load could represent between 7.1% and 11%, resulting in an indirect
financial contribution of between $182,379 and $282,559. Santa Monica’s share of these costs
would continually decrease as more cities join LACCE. For SBCP, Santa Monica’s share of the
load could represent between 20.4% and 32%, resulting in an indirect financial contribution of
between $186,124 and $291,960.
22 LACCE Business Plan (2016). Startup activities and costs. We excluded utility transaction fees for 2017. Page 36
20
Startup Costs Financing
LACCE received an interest rate free loan of $10 million from Los Angeles County, which
should be reimbursed next summer. SBCP suggests that the leading cities guarantee a $2.5
million startup loan to finance the launch of the CCA. Using cities as guarantors could
potentially help SBCP to obtain cheaper rates than if the brand new CCA was taking a loan itself,
without any credit history. CCEA suggests a small loan of $700,000 that could be covered by the
city’s general fund, resulting in lower interest rates, if any.
Table 6. Comparison of Startup Financing
LACCE SBCP CCEA
Startup Costs
Estimation $2,568,718 $912,376 $703,940
Startup Costs
Financing
$10 million from Los
Angeles County.
Interest free.
To be paid back in June
2018.
$2.5 million estimated
by SBCP business plan,
100% guaranteed by
initiating cities.
The City could secure
$700k through a loan
via general fund or
other source
Additional Financing
$40-50 million to start
energy procurement.
Could be a line of
credit, another County
Loan.
$10 million loan 50%
guaranteed by member
cities + $20 million line
of credit
$1,200,000 additional
cash flow needed
according to CCEA
technical study.
For comparison, LACCE’s business plan provides the table below, which illustrates the startup
funding amount and sources for exisitng CCAs.
Table 7. Startup Funding Requirements and Sources for Existing CCAs23
23 LACCE Business Plan (June 2016). 64.
21
5.2 Economies of Scale in Operating Costs
Frequently, all revenues generated through the sale of electricity “flow to the JPA” to cover
energy procurement costs and non-energy operating costs. Most of the time, non-energy
operating costs are similar to fixed costs, which means they do not exactly proportionally
increase or decrease based on the load to serve or the amount of members. Consequently, the
larger the CCA, the lower the non-energy operating costs per member should be. Operating costs
usually cover general and administration expenses, personnel, professional services and data
management, legal and regulatory staff or consultants, marketing and promotions, customer
service, and other utility or California Independent System Operator (CAISO) fees.
For LACCE and SBCP, the vast majority of the operating costs listed above should be covered
and paid by the CCA itself. This means that Santa Monica will have very minimal to no staffing
and operating costs on its side. However, if Santa Monica chooses to create a single-city CCA
through CCEA, the City will be solely responsible for hiring its own staff to run the CCA. The
City will also pay the CCEA service fees, estimated to be around $850,000. This fee is divided in
two: a flat annual fee of approximately $250,000 that Santa Monica would have to be pay to
CCEA no matter what; and a variable costs estimated at $600,000 for procurement, regulatory
and other services provided by CCEA. This latter fee will proportionally vary with the amount of
CCEA members and is consequently the only operating cost that could benefit from economies
of scale.
The UCLA Luskin Center for Innovation conducted an analysis based on existing CCAs in
California to compare each options’ estimation of their non-energy operating costs. We found a
statistically significant relationship between operating costs per MWh and load. We found that
for every 1% increase in load, a CCA could expect operating costs per MWh to decrease by
0.4% on average. This means that CCAs serving a larger load benefit from economies of scale in
operating costs, potentially resulting in more revenues per MWh available for programs or to
allow for reduced rates.
Figure 8 shows the cost of non-energy operating costs per MWh for existing CCAs. CCAs are
shown by annual load, with CCAs with the largest load on the left.
22
Figure 8. Non-Energy Operating Costs per MWh24
Notably, economies of scale were not found in the cost of energy per MWh. This is likely due to
the fact that the cost of energy is dependent upon several factors such as, but not limited to, the
portfolio content and procurement strategy, the balance between long term and short term
contracts, and the market conditions in which the power purchase agreements were signed.
Recent discussions with several industry specialists revealed that in a very competitive
environment, larger CCAs might have bargaining advantages over smaller CCAs when it comes
to long term energy procurement and other RFPs for third-party assistance. With a more
fragmented electricity retail market and increasingly stronger competition, Santa Monica could
possibly benefit more from economies of scale in energy procurement through a larger CCA.
24 Operating cost data from each entity’s respective publicly available 2017-2018 fiscal year budget. Load data from
each CCA’s most recently published Implementation Plan. See Appendix B for more detailed information.
$-
$2
$4
$6
$8
$10
$12
LACCE -
High
SBCP MCE LACCE -
Low
PCE SVCE SCP CCEA LCE AVCE
Operabng Costs per MWh
23
5.3 Local Program Financing
When CCAs administer local programs it comes with several benefits for their community.
Programs can be better implemented and communicated thanks to the community oriented nature
of CCAs. Funds collected through rates are reinjected locally, instead of being centralized by
utilities and state agencies to benefit the state more broadly. These local programs also allow the
community to create jobs and boost its local economy. Our previous report “The Promises and
Challenges of CCAs in California” estimates the amount of local jobs that were created in 2016
through the focus of existing CCAs on local energy generation.
CCAs can apply to the CPUC to administer their own energy efficiency programs by using funds
collected through public benefits surcharges. For example, MCE received $1,334,519 in public
purpose program revenue in 2017.25 CCAs can also take advantage of opportunities such as
California Energy Commission grants or partnering with other agencies or nonprofits. Several
implementation plans, including recently SVCE, PCE, and LACCE, state that they will
eventually administer energy efficiency, demand response and distributed generation programs.
CCAs can also use their own revenues to finance some local programs. The table below shows
the budget each existing CCAs has allocated toward these programs.
Table 8. Existing CCAs Fiscal Year 2017-2018 Budget for Energy Programs26
PCE MCE SVCE SCP LCE AVCE
Energy Programs Budget $250,000 $451,000 $4,780,000 $6,000,000 $40,000 $3,000
Energy Programs Budget per GWh $66 $119 $1,838 $2,353 $67 $13
LACCE’s implementation plan does not allocate any CCA funds toward local programs, but
highlights its intention to ask for public funding to finance and administer energy efficiency
programs. LACCE also mentions that demand response programs can be cost effective
alternatives to resource adequacy capacity required by the CPUC and that they will promote
local investment through net energy metering and feed-in tariff programs. LACCE’s interim
director also suggests a “cafeteria style” approach where each member pick which program they
want to finance and participate in. MCE’s JPA, as an example, stipulates that any member can
participate in the programs they approve and finance. Any member who votes against the
25 MCE (2017). “Financial Statements Years Ended March 31, 2017 & 2016 with Report of Independent
Auditors.”https://www.mcecleanenergy.org/wp-content/uploads/2017/08/MCE-Audited-Financial-Statements-2016-
2017.pdf 26 See Appendix B for more information on data sources and methodology.
24
approval of a program or activity will be taken out of this program without bearing any financial
obligation.27
SBCP specifies an annual budget for ‘Local Distributed Energy Resource Programs (DER)’ of
$2,000,000 in 2020. SBCP’s business plan mentions that DER needs to be fully integrated in
“power planning, load forecasting, power procurement … [which] necessitates contracting for a
specialized set of services”.28
With CCEA, Santa Monica will have complete autonomy over rates and the budget allocated
toward local program investment. In 2020, CCEA estimates that Santa Monica will have
$241,150 of “discretionary overhead”, which could be used for energy programs.
It is important to note that recent discussions with existing CCAs revealed recommendations to
focus on achieving financial solvency and establishing a rate stabilization fund prior to investing
in local programs, as remaining cost competitive and retaining customers should remain priority
number one.
27 Marin Energy Authority Joint Powers Agreement (December 2008). 28 SBCP Business Plan (2017). Page 26.
25
CHAPTER 6: FUTURE CHALLENGES
California is in the middle of an important energy revolution, with new players, new regulations,
and ambitious environmental goals. Greater competition in the retail electricity market is going
to increase pressure on prices resulting in more innovative energy procurement strategies.
Without strong financial stability, new CCAs must carefully identify and plan around potential
future challenges. In this section, we discuss potential regulatory, legislative, and market force
risks. At the end of each section, we provide the reader with the mitigation strategies suggested
by each option.29 30 31
6.1 Legislative Risks
Legislative pressure toward 100% renewables
A first attempt was made by Senator Kevin De León this year with California Senate Bill 100
(2017) that would have required 100% of electricity sales to come from renewable or carbon free
energy by 2045. Senate Bill 100 passed in the Senate, but was postponed to the next legislative
session. Even though it did not pass, it seems very likely that California will become 100% or
near 100% renewables in the coming decades. Such a regulation would reduce one of the main
marketing and competitive advantages of CCAs, who often claim to have a cleaner energy
portfolio than most IOUs.
Even without this regulatory pressure, it is important to note that the gap between IOUs and
CCAs renewable energy procurement is narrowing, as the main IOUs now have between 41%
and 45% of RPS procurement under contract for 2020.32 The more CCAs that become
operational, the more IOUs’ customer base shrinks, resulting in renewable energy contracts
composing a greater percentage of their sales.
29 LACCE Business Plan Update (2017). Page 17 and 18. LACCE proposes mitigation strategies for SCE rates and
surcharges, regulatory risks, power supply costs, SCE RPS share, availability of RPS/GHG-free power, financial
risks (related to financing and credit), and loads and customer participation.
30 SBCP Financial Strategy (2017). Page 33-46. SBCP proposes mitigation strategies for the PCIA, Direct Access
reopening, the risk that the CPUC pierces the veil of CCA JPA liability protection, and a general contingency plan. 31 CCEA Draft Feasibility Study for the City of SM (2017). CCEA proposes mitigation strategies for financial risk
related to CCA failure, financial risk related to procurement deviations, market volatility and price risk, availability
of renewable and carbon-free energy supplies, legislative and regulatory changes, and Power Charge Indifference
Adjustment (PCIA) rate risk.
32 California Public Utilities Commission (October 2017). “California Renewables Portfolio Standard (RPS)”.
http://www.cpuc.ca.gov/RPS_Homepage/
26
Phasing out legislative support
Another risk commonly identified by CCAs is a shortage of renewable energy sources, however
most industry specialists we talked to assure that a shortage of renewable energy is very unlikely.
However, a demand increase for renewable energy will lead to greater competition, which could
potentially impact the market in California, especially with the phase-out of the Investment Tax
Credit.
Table 9. Phase Out of ITC33
Year Commercial
Solar ITC
Residential Solar
ITC
2018 30% 30%
2019 30% 30%
2020 26% 26%
2021 22% 22%
2022 10% 0%
2023+ 10% 0%
Mitigation strategies suggested by each option
In the event where all load serving entities (LSE) have to procure 100% of their electricity from
renewables, CCAs will have to focus on their rates and emphasize local programs and
community work.
In the event of a risk pertaining to the availability of renewable power, LACCE proposes to:
“Shift emphasis to GHG-free… secure long-term contracts… invest in local renewable
resources.”34 In regard to power supply cost risks, LACCE proposes two main mitigation
strategies that focus on long term contracts and the stabilization rate reserve funds.35 According
to discussion with industry specialists, being part of a larger structure can present economies of
scale for long term energy procurement in a competitive market.
CCEA proposes the “use of ‘laddered’ procurement strategy as well as a diversified supply
portfolio that includes contracts with various term lengths and end dates” and the “participation
in the incumbent utility’s short-term RFO for renewable energy sales” in the event of a shortage
33 United States Energy Information Administration (August 2016). “Annual Energy Outlook 2016 with projections
to 2040”. LR-8. https://www.eia.gov/outlooks/archive/aeo16/pdf/0383(2016).pdf
34 LACCE Business Plan Update (2017). 17. 35 LACCE Business Plan Update (April 2017). 17.
27
A “laddered” procurement
strategy is based on “layered
purchases in which portions of the
energy spend are fixed at intervals
throughout the contract term,
rather than all at once.
Alternatively, the buyer might
form a set of “investment rules,”
buying at certain price levels to
both mitigate risk and seize
opportunities.”
of availability of renewable power.36 CCEA also proposes using a “laddered procurement
strategy and employing a good Scheduling Coordinator to mitigate changes in price.37
Figure 9. Laddered Procurement Strategy Illustration38
SBCP does not propose specific mitigation strategies for these risks. Their financial strategy does
provide a “Contingency Plan”, which focuses more on addressing the PCIA and Direct Access
risks and is discussed more in the next section.
36 CCEA (November 2017). “City of Santa Monica Community Choice Aggregation Technical Study:
Summary of Results Draft.” 37 CCEA (November 2017). “City of Santa Monica Community Choice Aggregation Technical Study:
Summary of Results Draft.” 38 Zenith Energy and Avendra (October 2017). “The Paradigm Shift in Energy Procurement: A Strategic Sourcing
How-To Guide.” https://www.avendra.com/wp-content/uploads/Zenith-Energy-Thought-Leadership-Article-
_10.13.2017.pdf
28
6.2 Regulatory Risks: PCIA
The PCIA is an exit fee charged per kWh to customers who depart from an investor owned
utility. While this fee is necessary to ensure that customers remaining with the IOU are
indifferent to the departing load (also known as bundled customer indifference), there are
concerns from both CCAs and IOUs about the PCIA in its current form. Moreover, with the
proliferation of CCAs in California, it is important to understand the long term effect of such a
price indifference mechanism in a more competitive environment. In the longer term, customers
might request the ability to change from one utility to another without paying any exit or entry
fees and without being required to compensate for the losses of another company, as it works in
all other sectors.
While the PCIA has long been a contentious issue, the rapid expansion of CCAs over the last few
years has increased the salience of this issue.
Figure 10. Timeline of CCA Launches
The CPUC currently has an open rulemaking that has established several guiding principles
regarding revising the PCIA in order to address these concerns.39 The new methodology aims to
maintain bundled customer indifference while using a methodology that provides transparency,
verifiability, flexibility, and stability that also maintains a balance between accessible data and
confidential information.40 Importantly, they note that this methodology “should not create
unreasonable obstacles for customers of non-IOU energy providers.” 41 Various stakeholders
have submitted comments to the CPUC regarding the rulemaking.
IOUs applied to have the Portfolio Allocation Mechanism (PAM) replace the PCIA. While the
CPUC dismissed the IOUs’ initial PAM application, the IOUs keep suggesting some ideas that
39 California Public Utilities Commission (July 2017). R.17-06-026. “Order Instituting Rulemaking to Review,
Revise, and Consider Alternatives To The Power Charge Indifference Adjustment.”
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M191/K426/191426539.PDF 40 California Public Utilities Commission (July 2017). R.17-06-026. “Order Instituting Rulemaking to Review,
Revise, and Consider Alternatives To The Power Charge Indifference Adjustment.”
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M191/K426/191426539.PDF 41 California Public Utilities Commission (July 2017). “Order Instituting Rulemaking to Review, Revise, and
Consider Alternatives To The Power Charge Indifference Adjustment.”
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M191/K426/191426539.PDF
29
were included in the PAM under this current rulemaking.42 CalCCA, which represents CCAs
across the state, recommended revisions and additions to the CPUC’s guiding principles
including to “recognize California policies to promote development of CCAs” and to “respect
CCAs’ responsibility to develop their own generation portfolios.”43
Mitigation Strategies
If “SCE’s generation rates decrease or its non-bypassable charges increase”, LACCE proposes to
establish a Rate Stabilization Fund, invest in both long and short term contracts, and “emphasize
the value of programs, local control, and environmental impact in marketing.”44
SBCP recommends ensuring lower direct municipal liabilities, which according to their financial
strategy can be achieved as a secondary benefit from the at-risk contracting.45 However,
municipalities may face liabilities from guaranteeing startup loans. Additionally, they propose
refraining from entering into long term contracts prior to the revision of the PCIA.46 SBCP also
proposes launching as quickly as possible to start building up reserve funds and to pay off loans
as quickly as possible so that they are paid off prior to the PCIA revision (this mitigation strategy
is impacted by their delayed launch timeline).47 SBCP also advises to hire a portfolio manager
for energy risk management and establish a Regional JPA of CCAs to benefit from economies of
scale.48 Additionally, SBCP proposes to “maintain financial reserves and power contract
obligations in a manner that affords notifying the CPUC and SCE of the intent to suspend CCA
operations one (1) year ahead of time …and then to do so without having to raise rates, otherwise
cause losses, fail to meet any extant debt service obligations, or breach any power contracts.”49
CCEA proposes a “laddered” procurement strategy, establishing a rate stability reserve, and
participating in the CPUC’s open rulemaking regarding the PCIA.50
Additionally, for legislative and regulatory change risks more broadly, each option recommends
some form of lobbying, working with other CCAs, and monitoring regulatory changes.
42 California Public Utilities Commission (July 2017). “Joint Comments of Southern California Edison Company (U
338-E), Pacific Gas And Electric Company (U 39-E), and San Diego Gas & Electric Company (U 902-E) on Order
Instituting Rulemaking To Review, Revise, And Consider Alternatives to the Power Charge Indifference
Adjustment.” http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M195/K146/195146326.PDF 43 California Public Utilities Commission (July 2017). “Comments of the
California Community Choice Association.”
http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M195/K910/195910761.PDF
44 LACCE Business Plan Update (April 2017). 17. 45 SBCP Financial Strategy (July 2017). 35. 46 SBCP Financial Strategy (July 2017). 35. 47 SBCP Financial Strategy (July 2017). 27.
48 SBCP Financial Strategy (July 2017). 35. 49 SBCP Financial Strategy (July 2017). 27.
50 CCEA (November 2017). “City of Santa Monica Community Choice Aggregation Technical Study:
Summary of Results Draft.”
30
6.3 Market Force Risks
When Assembly Bill 117 authorized the creation of “aggregators” in 2002, one of the main goals
was to introduce competition into the energy market, which seems to have succeeded in helping
drive down costs and support some of the state’s goals in regard to renewable energy and energy
efficiency. As the energy market sees a proliferation of CCAs, this will further increase the
competition between load serving entities. This section identifies some market force risks that
we view as potential challenges for CCAs, and how each option is planning to address those.
Increasing pressure on electricity bills: the 500% surge in transmission and delivery fees
Transmission and delivery fees are charged by IOUs on a per kWh basis to all customers,
including CCA customers within their territory. As seen in Figure 11, the cost of transmission
has strongly increased over time. For example, SCE transmission and distribution revenue
requirements increased by a factor of five over the past decade.
Figure 11. Transmission Revenue Requirements over Time51
Such an important increase in cost will attract the attention of end-users on their electricity bills,
making customers more sensitive to electricity prices. This could be a disadvantage for CCAs
that offer higher rates than IOUs in order to procure more renewables.
51 California Public Utilities Commission (April 2017). “California Electric and Gas Utility Cost Report”. 18.
31
Losing high revenue-generating customers: the threat of Direct Access (DA)
Direct Access (DA) customers have a similar relationship to IOUs as CCA customers: they keep
paying delivery and exit fees to their utility, but their electricity is procured by another load
serving entity. DA closed to new customers in 2001 and very successfully reopened temporarily
in 2013 for non-residential customers. According to the CPUC, “Currently, the DA program is at
capacity, as demand for DA service exceeded the load permitted under the adopted utility service
area caps.”52
If DA reopens again, and based on its past success, DA could be attractive enough to result in
non-residential customers leaving their IOU or CCA. Moreover, if a DA customer has to pay exit
fees (PCIA) to the IOU, there are currently no such regulatory mechanisms for CCAs to recover
the financial loss resulting from excess power procurement from departing customers.
Losing large residential customers: Self-Provisioning
Self-provisioning, or islanding, is when a customer can meet all of their electricity needs without
needing to import electricity from the grid. This is usually realized with distributed energy
generation, such as rooftop solar, is combined with battery storage. While this is currently not
possible in California, policy changes may occur the same way the Net Energy Metering (NEM)
Program was changed in Hawaii.
If transmission costs keep increasing by a factor of 2.5 to 5 every decade, self-provisioning
electricity could possibly become a cheaper option with the help of cheaper solar energy, energy
storage, and new technology such as bidirectional charging car batteries or smart appliances.
Moreover, energy storage seems to be currently supported by the state and the federal legislature.
For example, the Federal Senate Bill 1868 was introduced to offer federal tax credits to support
energy storage. There is also the risk to see some of the local programs change, as was the case
in Hawaii where the NEM program was modified. Since 2015, every new customer who applies
to the NEM program has to choose between two options: a less financially attractive option
(Customer Grid Supply) where the customer can sell electricity to the grid, but at a lower rate
than before, and with a flat fee of $25 to remain connected to the grid; and an off-grid option
(Customer Self-Supply) where the customer does not export electricity back to the grid. Self-
Supply customers also have the option to remain connected to the grid if they want to import
electricity for a flat fee of $25.53
52 California Public Utilities Commission (2017). “California Direct Access Program.”
http://www.cpuc.ca.gov/General.aspx?id=7881 53 Hawaiian Electric, Maui Electric, Hawai‘i Electric Light (2017). “Customer Self-Supply and Grid-Supply
Programs.” https://www.hawaiianelectric.com/clean-energy-hawaii/producing-clean-energy/customer-self-supply-
and-grid-supply-programs
32
As an example, research by the Rocky Mountain Institute found that the combination of solar
and storage may be cheaper than the utility within twenty years for commercial customers. The
figure below illustrates when some states may see self-provisioning become cheaper than their
affiliate utility.
Figure 12. Solar and Batter Levelized Cost of Electricity Compared to Utility Retail Price Projections54
Mitigation strategies suggested by each option
Retaining customers, especially high revenue generating customers, is critical to a CCA’s
financial success and ability to maintain operations.
LACCE proposes to “increase marketing…reduce overhead…expand to new customer
markets… [and] consider merging with existing CCA” if they start losing customers.55
SBCP has the most thought-out recommendations of all options when it comes to market risk
mitigation. The financial strategy recommends to “monitor the evolution of the Direct Access
54 The Rocky Mountain Institute. “The Economics of Grid Defection.” https://rmi.org/insights/reports/economics-
grid-defection/ 55 LACCE Business Plan Update (April 2017). 17.
33
debate at the CPUC and the Legislature”56 and “not engage in long-term contracts prior to…
further clarity on the risk Direct Access poses.”57 An additional risk mitigation recommendation,
although not specific to a decrease in customer base, includes contracting “with a portfolio
manager for power planning, contracting, and energy risk management” for resiliency
purposes.58
SBCP also suggests that CCA could stop replicating IOUs rate structure and utilize their rate-
setting authority in order to “offer individual customers a customized, and flexible, rate
structure.”59 Because CCAs do not need to seek CPUC’s approval for their rates, they could
specifically pay attention to the needs of their larger customers and provide them with special
services such as real-time pricing or tailored energy procurement.
56 SBCP Financial Strategy (July 2017). Page 42. 57 SBCP Financial Strategy (July 2017). Page 27.
58 SBCP Financial Strategy (July 2017). Page 27. 59 SBCP Financial Strategy (July 2017). Page 42.
34
Appendix A: Voting Process for Existing
CCAs
MCE SCP PCE SVCE RCEA
Vote Shares
Methodology
Annual
Energy Use
Annual
Energy Use
Annual
Energy Use
Annual
Energy Use
Number of
Customer Accounts
Number of Directors
Needed to Call
Weighted Vote
N/A 1 1 2 N/A
Initial Vote
Both Simple
Majority and
Weighted
Simple
Majority
Simple
Majority
Simple
Majority
Both Simple
Majority and
Weighted
(still requires
affirmative of
simple majority of
members to pass)
Second Vote N/A Weighted
Vote
Weighted
Vote
Weighted
Vote N/A
Number of Weighted
Votes called to date N/A 2 0 0 N/A
35
Appendix B: Operating Costs per GWh
Analysis
LACCE -
High SBCP LACCE - Low
CCEA
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Non-Energy Operabng Costs per GWh
1
Vernice Hankins
From:Clerk Mailbox
Sent:Monday, December 4, 2017 2:06 PM
To:councilmtgitems
Subject:FW: Global Green Support for LACCE
Attachments:SM - LACCE Support Letter (Global Green).docx
From: Eleni Petrow [mailto:epetrow@globalgreen.org]
Sent: Monday, December 4, 2017 1:53 PM
To: Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>
Cc: Walker Wells <wwells@globalgreen.org>
Subject: Global Green Support for LACCE
Hello Ms. Anderson-Warren,
I am writing on behalf of Global Green in support of Los Angeles Community Choice Energy (LACCE) in
Santa Monica.
Please find our support letter for the Council members attached.
Thank you and all the best,
Eleni
Eleni Petrow | Environmental Policy and Green Urbanism Associate
GLOBAL GREEN
1617 Broadway, 2nd Floor
Santa Monica, CA 90404
tel: 310.581.2700 ext. (116)
fax: 310.581.2702
www.globalgreen.org
Item 7-C 12/5/17
1 of 1 Item 7-C 12/5/17
Community Choice
Energy
City Council Dec 5, 2017
What is Community Choice
Energy/Aggregation?
u CCE (CCA) allows local
governments to
aggregate the electrical
demand of the
community
u Purchase and sell
electricity to customers
in their jurisdictions
instead of investor
owned utility (IOU)
power procurement.
City Council Dec 5, 2017
Why Community Choice Aggregation?
u Increases use of renewable
energy
u Potentially lowers cost
u Reduces carbon emissions
u Supports local economic
development
u Supports electrification in
buildings and
transportation
City Council Dec 5, 2017
Implementation Pathways
City Council Dec 5, 2017
LA County Choice
Energy (LACCE)
South Bay Clean Power
(SBCP)
Single City Option
Lancaster / CA Choice
Energy Authority (CCEA)3rd Party Service Provider
Overview
-JPA: LA County +
eligible cities (up to 88)
-LAC to seed start-up
costs ($10M)
-JPA:Westside & South Bay
cities
-Join CCEA as member
-Receive services from
CCEA/Lancaster
-Retain local control &
revenue
-Pay service fees to
CCEA/Lancaster
-City to bid services for
startup and operation
-Operate like Water
Resources
Start-Up -Form/join JPA
-Hire JPA staff
-Form/join JPA
-Hire JPA staff
-Hire 3rd party to initiate and
operate at-risk
-Implementation Plan
$63,000
-Startup costs
$2.4M
-Contract services
at-risk to initiate and
operate
Governance
-One city: one vote
-Weighted vote based
on electrical load
-One city: one vote
-Weighted vote based on
utility revenue
City Council –procurement
goals, rates, programs
CCEA –contracts,
procurement
City Council
Administration JPA staff & contractors JPA staff & contractors Lancaster staff &
contractors, City staff City staff, contractors
Costs
-Start up: none
(LAC to seed $10M)
-Operating: unknown
-Start up: unknown (JPA
staff)
-Operating: unknown
(shared & proportional
costs)
-Operating: $900k-1.7M +
procurement
-Start up: none
-Operating: unknown
2016
LACCE
Business
Plan
Implementation
Plan
2017 20192018
Phase 1 –LAC
Municipal
Accounts
Phase 2 –LAC
Unincorporated
+ Member Cities
Comm + Ind
Phase 3 –LAC
Unincorporated
+ Member Cities
Residential
Business
Plan
Financial
Analysis
Proposed
Phase 1
Launch
Proposed
Phase 2
Launch
SBCP
Feasibility
Study
Implementation
Plan
Proposed
Full
Launch
CCEA
UCLA Study
Timeline of Events
City Council Dec 5, 2017
South Bay Clean Power
(SBCP)
u Concern over financial liability & risk, staff burden
u No concerted effort amongst cities to launch
u Staff do not recommend any further action
City Council Dec 5, 2017
Single-City Option
u Prepared by CCEA/City of Lancaster
u Offers City option to launch, implement & control CCA locally
u Services could be provided by CCEA or other third-party
u Requires $2.4M startup; self-sufficient within 16 mos; potential $53M revenue over 10 years
u Significant resources and financial liability to launch
u UCLA finding:
u City would have no control over contracts & administration; would not contribute to local programs
u Staff do not recommend any further action at this time
City Council Dec 5, 2017
Los Angeles Community Choice Energy
(LACCE)
u Largest CCA in California
u Strategic decisions to be made Dec-Mar 2018
u Opportunities to collaborate with like-minded cities to drive environmental goals & decisions
u UCLA Findings:
u LACCE is operationally ready; size is important to hedge against regulatory and financial risk
u Weighted votes usually do not happen; decisions worked out in committee
u Cities may choose certain procurement & program elements that fit their needs
u Staff recommend joining LACCE and advocating for Santa Monica’s interests
City Council Dec 5, 2017
Ta sk Force Recommendations
regarding LACCE membership
1.No energy from coal
2.No energy from nuclear by 2030
3.100% renewable by 2030 (SCE to reach 50% by 2030).
4.20% local energy sources by 2030
5.Comply with State energy goals (i.e.50% energy
efficiency by 2030)
6.Structure should support advanced energy concepts
like distributed energy resources
7.Revenue should support electric vehicle charging in
Santa Monica
8.Implement energy efficiency and conservation programs
9.Utilize smart meters and smart user interface by 2025
10.City to control revenue surpluses generated by Santa
Monica customers and direct to sustainable energy projects
11.Utilize Distributed Energy Resources Aggregation to provide
virtual power plant services
12.Utilize data and billing services that support Distributed
Energy Resources
13.Form a Community Advisory Committee as soon as possible
14.Invest in new renewable energy in Southern California
City Council Dec 5, 2017
Recommendations continued…
Recommended Actions
u Introduce first reading of ordinance approving LACCE JPA
u Authorize City Manager to execute necessary documents to
join LACCE
u Designate one Board Director and two alternates
u Direct staff to provide regular updates
City Council Dec 5, 2017
LACCE Representation
u Board Director must be an elected representative
u Alternates may be:
u Elected representative
u Staff
u Community member with technical expertise
u Task Force recommends David Pettit of NRDC to serve as
alternate
City Council Dec 5, 2017
Next Steps
u Attend LACCE Dec 7 Board Meeting
u Direct LACCE staff to analyze SM’s requests
u Attend LACCE Jan/Feb Board Meetings
u Participate in strategic planning to ensure SM’s goals can
be achieved
u Determine if LACCE meets City’s needs
u Work with City staff to support LACCE outreach to community
for 2018 summer and fall launch
City Council Dec 5, 2017
Thank you
City Council Dec 5, 2017