ALERT: How to Opt Out of the “Clean Power Alliance” Which Will Otherwise be Forced Upon You Shortly

 

By George Miller

 

Californians: chances are your electric bill will go up- way up- in the future, not just because fuel prices, regulatory and other costs are going up, but because government has enacted still another program.

What Is It?

I had heard of the Clean Power Alliance (CPA) a while back. Authorized under CA AB117, it is a separate corporation invented by greens to increase the amount of “carbon-free renewable” electric power used. It has the ability to contract with suppliers, set rates, even do bond issues and may be less accountable than current utilities. My city first joined it, then later opted to set default amounts in a little over a week’s time from when we were informed of a council meeting agenda. Participation had been discussed and approved at a previous meeting a while back, very sketchily. There was little opposition to the measure at the meeting, which had little affect at all on the outcome of voting for it 4-1. In fact the Council was emboldened to increase it from a 50% to 100% clean power default. The Mayor then immediately appointed the farthest left “green” council member as the local director.

More info- One city’s approach: Document: K-3 Staff Report & Presentation

How Does it Work?

In many (31)  jurisdictions in LA and Ventura County, legislatures voted to AUTOMATICALLY enroll you in CPA, mostly with default amounts of 50-100% of your power to be potentially “carbon-free.” Other jurisdictions throughout the state have created/selected other “Community Choice Aggregation” (CCA) options, as they call them. It may be more expensive than you now pay, although this is complicated. How much more expensive, we really won’t know until it is fully implemented down the road.  But, you can opt-out.

In SoCal, you would still be billed by SCE, which would pass through the CPA billings for your share of what they provide. If you change your mind, it will cost you to switch back to SCE. If you don’t opt out before the program starts, it will cost you to switch back to SCE. How much, we don’t know.

One wonders why all this is being done, since there is already a mandate in place for power companies to do all this. Keep in mind that the power companies already have an upcoming  state mandate under CA AB117:

33% by Dec. 31, 2020
40% by Dec. 31, 2024
45% by Dec. 31, 2027
50% by Dec. 31, 2030
100% by Dec. 31, 2045

So, is this just “virtue signalling” or does it add some value and would it make it happen sooner? It does make the CPA directors into power brokers, in more than one sense of the word.

Interestingly enough, CPA is claiming that they can offer slightly better rates (p. 439) than SCE for equivalent green percentage options- temporarily, anyway, at least for 2019, for the lower tier of options- 36% and 50%.  But it will initially be 9% higher for the 100% option. When we asked SCE how a newer, smaller group could do that, they responded that SCE clean power contracts are older and have older technology. But, newer contracts will not.

As far as we know, the sole notification local power customers in Oxnard received of impending AUTOMATIC ENROLLMENT IN CPA is a single folded sheet from CPA with rather vague information, which most people we have talked to either didn’t even notice or didn’t understand that it affects their electric bill. Really – it was news to nearly every one of dozens of people I talked to except a few very involved folks. No wonder CPA is bragging that there is only a 1% opt-out rate. CPA shows four different notices on their web site. None would look anything like a power bill when you received it in the mail, so either people are overlooking them or they haven’t been sent.

At the council meeting, we were told we would receive four notifications and an enrollment form.  My wife, who does the utility bills, doesn’t remember this happening, except for one mailer (below) and the deadline’s now less than a month off. We have opted out.

Here’s all we received (see what I mean?)

Page 1

Here’s a better IMAGE
SCE Views
We contacted SCE to get their take on some of our questions:

Q: How can SCE, or whomever is responsible, ensure that the power purchased by CPA and other CCA’s is in spec and reliable? 

A: There are numerous standards and requirements that exist on the generation and sale of electricity.  Among the many standards and requirements, the California Public Utilities Commission is responsible for ensuring that CCAs procure sufficient resources to meet their respective reliability requirements (referred to as Resource Adequacy).

Q: Is it efficient to have many smaller, newer, less experienced CCA’s with less leverage negotiate and manage contracts? 

A: Southern California Edison does not take a position on the benefits of CCA formation, but notes that disaggregating the procurement responsibility for energy procurement complicates the planning process for ensuring the right balance of generation resources are contracted for in an affordable manner for all customers.

Q: SCE says that CCA’s will have no impact on SCE’s profits, but if SCE is contracting for less as a result, couldn’t that mean it will have less leverage to control prices, terms and service? 

A: Southern California Edison is required by state regulation to resell the power it purchases for customers at actual cost with no profit.  For the customers that SCE continues to be responsible for procuring their energy, SCE will continue to have control over the purchases it makes, subject to California Public Utilities Commission oversight.  SCE does not have control over the direct energy procurement costs that CCAs incur to serve their communities’ customers.

Q: Since power companies already have a mandate, with milestones to reduce carbon-based power to zero, why are CCA’s even needed, especially since SCE is already the greenest power company? 

A: Southern California Edison does not take a position on the benefits of CCA formation, but confirms that all electricity providers have the same state requirements to procure renewable energy and reduce carbon emissions associated with electricity generation.

Q: CPA claims that they will charge less than SCE for carbon-free power for the lower tier options. Is that true, sustainable and how is such a new organization able to so easily undercut your rates? See below:

A: Southern California Edison does not have control over the rates that CCAs elect to charge their customers.  SCE’s rates are approved by the California Public Utilities Commission CPUC) and are designed to recover SCE’s actual purchased power costs without a profit mark-up.

SCE’s purchased power comes from hundreds of generation resources, many of them are renewable wind, solar, and geothermal sources that were contracted and approved by the CPUC years ago, at prices higher than currently available with today’s technology.  To ensure that all customers pay for their share of these historical power purchases, the CPUC has established a “departing load charge” (referred to as the PCIA) that is intended to recover the excess costs associated with the historical energy purchases.  If the PCIA charge does not fully recover the excess costs associated with SCE’s historical energy procurement contracts, it will provide an opportunity for CCAs to set energy sales rates lower than SCE’s energy sales rates.

Q: Interesting that AB 117 exempted government-owned utilities from AB 117. Any idea what the rationale for that is?

This was a legislative decision- so we would not be able to respond to this.

SCE’s Background and Q&A (requested and received from SCE 1-2-19):
Retail electricity service in California involves two parts: the buying and selling of electricity (or power procurement) for retail customers, and the delivery of that power to customers. The majority of electricity customers in California continue to rely on their utility for both the purchase and delivery of their power.
Customers that receive both services from their investor-owned utility are called “bundled service” customers. Under certain circumstances, customers can receive their power procurement from other authorized service providers. One of these options is Community Choice Aggregation (CCA).
In 2002, the California Legislature enacted Assembly Bill 117 to establish CCAs, which offer cities, counties or other authorized California public agencies the ability to buy and sell electricity on behalf of utility customers within their jurisdictions, as long as no costs are shifted to the remaining bundled service customers who continue to purchase their power from the utility. This prohibition on cost shifting is an important consideration of the customer choice authorized by AB 117.
Interest in CCAs has been increasing in the last five years and a few are now operating throughout the state. And there are a large number of communities considering CCA formation. SCE supports customers’ right to purchase power from a CCA as long as there are no costs shifted to customers who continue to purchase their power from the utility.
Q: The state has seen a great deal of interest in CCAs and now has more than a handful operating in various parts of the state. What is a CCA and how does it work?
A: CCAs enter the buying and selling side of the electricity business for retail customers in their community while existing investor-owned utilities continue to own and operate the transmission and distribution grid infrastructure and transport and deliver the power to customers. Utilities also continue to provide customer services, such as metering and billing, for CCA customers, and offer public purpose programs, such as energy-efficiency and low-income programs, to customers served by CCAs.
Once a city, county or public agency forms a CCA and becomes operational, that CCA will be the default provider of power for the retail electricity customers in that CCA’s jurisdiction. Customers can continue to receive service from the investor-owned utility, but must affirmatively opt out of the CCA program to do so. Failure of any customer to opt out means they will receive their power from the CCA entity.
Customers of a CCA continue to have an SCE meter and receive a bill from SCE, and the power charge from the CCA will be on that same SCE bill. The SCE bill will be separated into energy charges from the CCA for the energy a customer uses, and for the distribution, transmission and customer services they receive from SCE.
Q: If the CCAs are now providing a service that utilities used to provide, are the two of you in competition?
A:  No. SCE supports our customers’ right to purchase power from a CCA as long as there are no costs shifted to customers who continue to purchase their power from the utility. CCAs and investor-owned utilities, such as SCE, are not in competition for customers. When CCAs enter the market, they enter the buying and selling side of the business, creating a system somewhat like Texas, where customers have a choice in who sells them electricity.
The formation or growth of CCAs does not impact the number of customers SCE serves. When a CCA forms or expands, SCE continues to provide transmission and distribution service (poles, wires, transformers) and other services, such as public purpose programs, and reliability procurement for all the customers in its service area, including all CCA customers.
Q: Will the growth of CCAs hurt SCE’s business and profits?
A: SCE purchases most of the power we provide to our customers without any mark-up, so CCAs should have no impact on our business or profits. This does not mean, however, that a bundled customer (not in a local government territory that becomes a CCA) is not impacted. It is critical for customers that the provisions outlined in AB 117 intended to prevent cost shifting are followed to ensure that customers who remain with the utility, including those who may be low-income, do not subsidize the costs of those who take service from a CCA or other provider.
By law, SCE doesn’t make money for procuring energy on behalf of its customers. SCE is permitted to earn a regulated profit for the delivery portion of its business.
SCE strives to safely provide reliable and affordable service to all of its customers throughout Southern California, including those participating in a CCA.

We asked the following additional questions and received answers from SCE:

– Interesting that AB 117 exempted government-owned utilities from AB 117. Any idea what the rationale for that is?

This was a legislative decision- so we would not be able to respond to this.

– The CPA people say that there is an opt-out fee. How much is that and what is the justification?

CCA Exit Fee  (PCIA)

In order to keep clean energy costs stable over time for all Californians, a commitment was made to enter into long-term energy contracts, which are paid primarily over 20-year periods.  These long-term contracts were reviewed and approved by the CPUC (California Public Utilities Commission) and helped to develop a robust and competitive market for renewable power in California, lower prices for renewable power, and allow California energy to become cleaner and greener.

The California Legislature passed a law in 2002 to establish Community Choice Aggregation (CCA) which offers cities, counties or other authorized California government agencies the ability to take over the buying and selling of electricity on behalf of utility customers within their jurisdictions — as long as CCA and utility customers pay for their own share of the cost of electricity bought to serve their needs.

The laws that authorize CCAs and other customer choice programs require that costs are not shifted to remaining bundled service customers when customers depart the utility’s procurement service for other options. The CPUC adopted a methodology intended to keep bundled service customers “indifferent” to departing load customers, and it involves departing load customers (like CCA customers) paying a Power Charge Indifference Adjustment (PCIA) and/or a Competitive Transition Charge (CTC) in their rates. These charges were intended to ensure that departing load customers continue to pay their equitable share of costs of the utility’s power procurement and utility resources that were procured on their behalf before their departure.

The fee structure is set by the CPUC and ensures that one set of customers does not have to pay more than another set of customers for the cost of power that was purchased for the benefit of all and which has helped California achieve its environmental goals.

In terms of individual customers opting out of CCA service-

Once a city, county or public agency forms a CCA and becomes operational, that CCA will be the default provider of power for the retail electricity customers in that CCA’s jurisdiction. Customers can continue to receive service from the investor-owned utility, but must affirmatively opt out of the CCA program to do so. Failure of any customer to opt out means they will receive their power from the CCA entity.

Impact
 The power companies SCE and Public Service have for years been restricted to just power distribution/billing and contracting for power generation. They already have mandates for green power percentages, eventually reaching 100%, The CCA’s allow some regional autonomy in the selection/deployment of power sources and could potentially hasten the switch-over to green power, but so could changing the mandate.  There is potential for abuse with the CCA system, which could result in many organizations, parochialism, corruption and likely higher administrative costs and bureaucracy. Cost could be higher.

Rationale

The justification for doing all of this is that there is a worldwide Global Warming (now known as Climate Change) emergency, which requires immediate and drastic action to forestall its allegedly disastrous predicted effects and that going to renewable and non-“greenhouse gas” emitting fuels would forestall this. Most people have been stampeded by the Climate Change rhetoric pushed by almost every establishment figure/institution, even though there isn’t valid evidence to support the dire predictions, or even that going to all “green” power would have any significant effect if it was happening. Recommended programs, including this one, would impose huge costs and lifestyle changes.

How to opt out:

You have only to the February 2019 billing period to opt-out, or you will be automatically enrolled in the CPA program, so act now if you want out. It may cost you to get out later. In fact, it will even cost you to opt out, but CPA won’t tell  us how much.Even if you want in, you can also change your percentage allocation, too.

Have your electric bill handy, which has the needed information. Call: 888-585-3788. Follow the voice mail instructions to opt out, Save the confirmation number they give you.

 

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Read more on CPA:

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George Miller is Publisher/Co-Founder of CitizensJournal.us and a “retired” operations management consultant residing in Oxnard


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8 Responses to ALERT: How to Opt Out of the “Clean Power Alliance” Which Will Otherwise be Forced Upon You Shortly

  1. Mark Savalla January 23, 2019 at 2:43 pm

    Checked with SCE, Port Hueneme does not apply.

    Reply
  2. Greg January 20, 2019 at 4:47 pm

    They are pushing similar BS in Lancaster, CA (L. A. County), called “Lancaster Choice Energy”. Promising lower rates and praising you “for saving the environment”. In reality, at the end of the year, even with having solar, I paid more than a year before, without this program. Stay away from such BS and opt out.

    Reply
  3. Citizen January 8, 2019 at 9:42 am

    It’ll be cheaper, and there are 19 community choice energy agencies in the state all proiding cleaner energy at a savings, but yeah everyone rush to opt out. The auto-enroll is because CPA is the local primary provider for electricity generation while SCE will continue to deliver the power. The only thing that changes for you is an extra page on your bill, and you save money. We are conditioned to be skeptical and not like change, but do more research than just this biased anti-climate change article who interviewed SCE and not CPA.

    Reply
    • Citizen Reporter January 8, 2019 at 1:26 pm

      Wrong, you who provided us a phony email address. I have listened extensively to arguments from CPA reps and our brainwashed city council. I even included the Oxnard agenda item and past meeting article, as well as CPA links in this article.

      It cost 9% more at the 100% option. It is 1-2% at the 36 and 50% levels right now, mainly because SCE is working with older technology contracts. As those are replaced, the differential will go away. It is also possible the CPA customers will have to pay larger management fee to the power distribution companies (SCE here).

      In any case, it is absurd that another level of bureaucracy is being implemented when the power companies already have a green mandate. It is virtue signalling and power-mongering.

      Reply
  4. Debbie Inglis January 7, 2019 at 12:10 pm

    Can you please tell me if this is County wide or just Ventura. I just sent my Opt Out email to them for my Ventura request however I have a business in Oxnard so?

    Reply
  5. celes January 5, 2019 at 11:30 pm

    have sular

    Reply
  6. Teri Andre January 5, 2019 at 2:11 pm

    Thank you, Mr. Miller, for the very comprehensive email on this latest so-called green energy scheme that gets the superior elites gesticulating. I still see Solyndra in the rear-view mirror, however, and am less than thrilled, especially with this uninformative opt-out trick. Yes, “congratulations,” CPA, for the less than 1% opt-outs. What a sad, sick joke that is. The huge majority of the people are blissfully unaware that they are automatically signed up. I was at the neighborhood meeting when a person asked about those who had solar panels. She was greeted by, in my humble opinion, a deer-in-the-headlights look by the cheerful presenter of this latest scheme. Apparently there is no thought for those who invested thousands upon thousands of dollars in solar, at that time touted, also cheerfully, as the grand green power solution.

    Reply

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