(Editor’s note: I had originally put my thoughts on two subjects together as per my usual Monday Morning Thoughts Column, but after some reflection, decided that the topics were diverse enough that I would separate them)
When we last saw the issue of public power, the Davis City Council had voted 4-1 on a motion by Councilmember Brett Lee and seconded by Lucas Frerichs to rescind the previous authorization to spend up to $600,000 on a study of a Publicly Owned Utility (POU), and only then-Mayor Joe Krovoza opposed it.
The issue had become toxic in the days prior to the council election and a public vote on the sales tax and, even if spending around $1 million in $66,000 increments over ten years would not break the budget, the council feared it could undermine a vote.
However, the city projected potential savings of $600,000 to $1.2 million by going to a POU, where the city could have contracted with SMUD (Sacramento Municipal Utility District) or another agency to run its own utility.
This weekend, the Vanguard reported that the council has an item on CONSENT to form an Advisory Committee on Community Choice Energy (CCE). While the article drew no comments, I received several inquiries as to who made the decision to go to a CCE (formerly a Community Choice Aggregation, or CCA) and why this is being placed on consent when the original issue was so contentious.
A CCE is kind of seen as a halfway point. It allows PG&E to still own the infrastructure while the CCE, i.e. the city, would “choose where to purchase power from, and to create a mix that meets the goals of the program, providing clean energy while ensuring customers a stable and competitive price.”
But the savings would be far less, we would still rely on PG&E to generate our power and transmit it, and so, while the risk may be lower, so too will be the reward.
The CCEA (Community Choice Energy Advisory Committee) would develop an analysis of the advantages and disadvantages of joining an existing CCE or forming a new CCE.
But I think this begs the first question, the why – why only consider a CCE? My understanding is that, prior to Davis looking at a POU, the county was looking into a CCA.
The proposal to even study the POU received a tremendous amount of push back from the community, the local newspaper, and, of course, PG&E.
The city believed it could both save the city and community 20% on its electricity bills, as well allow the city enhanced flexibility in the $4.3 million in funding generated by the community for the Public Purpose program that PG&E currently uses elsewhere.
A city study found that PG&E had poor system reliability compared to other utility operators, and PG&E has a worse outage duration with more sustained outages per customer than comparable groups.
The study found that their per KWH price was high, but Davis pays more per KWH than the average PG&E customer. Each 1 cent per KWH costs Davis about $2.64 million per year.
All of which begs the question – why would we want to remain with PG&E through a CCE? If we are going to study the issue, let us have the Advisory Committee study both a POU and a CCE, and then we can weigh the positives and negatives and make a fully informed decision.
By looking only at a CCE, the decision seems to have been made before we study the issues.
—David M. Greenwald reporting