By Matthew Batista
I. Community Choice Aggregation Comes to San Diego
What is Community Choice Aggregation? Community Choice Aggregation (CCA) are programs that allow individual or collective municipal governments to purchase energy on behalf of their residents. Local governments assume the procurement role of investor owned utilities (IOU), like SDG&E locally, while continuing to rely on IOU’s existing infrastructure to distribute the energy. The two main advantages to these CCA programs are: (1) the ability to choose the energy source (generally from renewable sources like solar and wind) and (2) aggregating demand in order to negotiate better purchase prices, and thus a lower cost to the consumer.
A Growing Energy Procurement Strategy. The ability to form and operate CCA’s must be enacted within state legislatures. To date, eight states: California, Illinois, Massachusetts, New Jersey, New York, Rhode Island, and Virginia have enacted CCA legislation. Additionally, five other states, Connecticut, Maryland, New Hampshire, New Mexico, and Oregon, have introduced such legislation.
In California, CCA’s are authorized under Assembly Bill 117 (2002) and strengthened under Senate Bill 790 (2011). Under these statutes, customers are automatically enrolled in the program where CCA’s are formed but retain the right to opt-out and opt-back-in to IOU’s like SDG&E. Regardless of what consumers choose to do, bills, customer service, and distribution of the energy will all continue as normal through SDG&E. The only difference will be the source and rate of the energy.
CCA in SD. On Tuesday, September 17th, the San Diego City Council approved, by a 7-2 vote, the formation of a San Diego Regional Community Choice Aggregation Program. Joining in the CCA are the cities of Chula Vista, La Mesa, Encinitas, and Imperial Beach. The five cities will operate under a joint powers agreement (JPA), where representatives from each of the cities will govern the program. The newly established CCA will becomes the second largest amongst the state’s 19 CCA’s, trailing only the Clean Power Alliance CCA, located in Los Angeles. The program is expected to be operational very quickly, by 2021.
Advancing State and Local Renewable Energy Goals. Programs like the CCA are not only economically and environmentally beneficial, they are crucial to reaching renewable energy milestones. With the passing of Senate Bill 100 (2018), known as “The 100 Percent Clean Energy Act of 2018,” the State of California is mandated to run on 100% renewable energy by 2045. San Diego, being one of the most environmentally conscious major cities in the country and in California, has set the 100% renewable goal by 2035 under the city’s binding Climate Action Plan.
Lower Rates, Revenue Reinvestment, and Low-Income Programs. A common assumption with any pro-environmental policy change are increased costs. However, CCA’s have thus far proven to be equal with or below traditional IOU’s. In a 2017 study by UCLA’s Luskin Center for Innovation, when there were just eight CCA’s in operation in California, it was estimated that CCA operation directly led to a reduction of 590,000 metric tons of carbon dioxide. Given the carbon tax structure of California, this resulted in a $7.5 million dollar reduction in electric bills for California consumers. Projections forecast that the San Diego CCA is expected to produce a 5% rate reduction for customers within San Diego and generate $110 million in annual revenue. This revenue, which is distinct and separate from the City’s general fund, can then be used to implement more environmental programs or development renewable energy projects around the San Diego region. Additionally, the low-income and public benefit programs offered by IOU’s are also offered under the CCA’s. So if you qualify for reduced rates or other benefits through SDG&E now, you need not worry about taking advantage of such programs under the CCA.
The Takeaway. The move is a strong one by the JPA City Governments serving the San Diego region. The program is a concrete step forward for both the city of San Diego and the State of California to reach their respective, aggressive renewable energy goals. Customers will benefit directly from the reduced rates and indirectly from the avoidance of negative fossil fuel externalities, like pollution.
The United Nations held a Climate Action Summit in New York, New York on September 23 to bring together world leaders to detail tangible next steps forward on the road to renewables and climate action, focusing in part on actions of cities and local entities. The aggressive plans and actions of the State of California and the City of San Diego certainly support this UN target.
II. United Nations Climate Summit
Goals of the Summit. The United Nations (UN) Climate Summit on September 23rd in New York City followed a week of climate activism which included a global climate strike, with representation across around 150 countries. António Guterres, the UN Secretary General, stated that the goal for the summit was for individual nations to announce significant, tangible domestic policy strengthening in response to climate change and not merely eloquent public prose and far-off promises.
Bring Plans, Not Promises: Secretary Guterres made it clear to governmental leaders that this summit is about action, not promises. To emphasize Secretary Guterres’ commitment to action at the summit, only countries who: (a) committed to being carbon neutral by 2050; (b) significantly increased their already agreed upon “national determined contributions” ((NDCs) –the reduction in greenhouse gas emissions already intended); or (c) who make a meaningful contribution to the Green Climate Fund ((GCF) – funded by developed countries to help undeveloped countries reach sustainable goals and minimize climate disruptions).
Around 65 countries spoke at the summit, with some notable absences. Countries who are signatories to the Paris Agreement but who continue to rely on or intend to increase their use of coal were not allowed to present at the summit. This included Australia, South Africa, and Japan. The United States (U.S.) did not speak since the Trump Administration had previously announced their intentions to withdraw from the treaty in 2017. Recently, both Brazil and Saudi Arabia announced plans to withdraw from the Paris Agreement and thus did not speak at the summit.
Mixed Reaction. The summit yielded a mix of encouraging and troubling news. On the positive side, 16 countries pledged to be carbon neutral by 2050. An additional 47 countries pledged to strengthen their NDCs in 2020. A few relatively wealthy countries including South Korea, the UK, and Germany announced plans to double their contributions to the GCF. A variety of pension funds, who combined manage $2.3 trillion, announced divestments from fossil fuels by roughly 2050 and Bill Gates announced a near $800 fund to help farmers adapt to climate change.
On the negative side, however, the additional 47 countries who pledged to strengthen their NDCs represent just 6.8% of total greenhouse gas emissions. Top emitters, including the US, China, and India failed to take any bold, leading step forward. As referenced above, the U.S. made no presentation at the summit under President Trump. China announced increases in renewable energy and increased forestation initiatives, but their actions still fall below the 2-degree Celsius rise baseline target of the Paris Agreement. India is doing slightly better. Prime Minister Modi announced a substantial leap forward in renewable energy production and the country is in line to meet the 2-degree baseline, though no aggressive plans were laid out to attempt to meet the emissions cuts that would be in line with the aggressive 1.5 degree Celsius rise target.
Trump Tweets. Amid another scandal, for which a formal impeachment inquiry was just announced, President Trump found the time to show up to the summit and then promptly leave after 15 minutes. Later that evening, the President found the time to mock 16-year-old Swedish climate activist, Greta Thunberg, who spoke at the summit. In a tweet, the President mocked Thunberg’s speech at the summit:
“She seems like a very happy young girl looking forward to a bright and wonderful future. So nice to see!”
Additionally, Thunberg has Asperger’s, a high-functioning form of autism, though she says the affliction only strengthens her focus and resolve to combat global climate change.
I refuse to entertain the idea that global climate change is a hoax, or that any mildly intellectual person who in good faith examines the issue could disagree with even the most basic climactic and economic forecasts or refute the current observations that are a result of endlessly dumping greenhouse gases into the air. Regrettably, many do not share my impression. What should unite us all at the absolute least is agreeing that the President of the United States of America should not be mocking a 16-year-old on twitter, ever. This should especially apply to a teenager who is standing up for the only planet we have and which is the only foundation for any future economic prosperity.
Next Steps. The next major international gathering regarding climate change will be in December of this year in Santiago, Chile at the UN’s Conference of the Parties (COP) 25. At the conference, countries will be discussing concrete steps to meet their respective NDCs and pledges. It’s fitting that COP25 will be held in Chile, where earlier this year the currently coal dependent country announced it will shut down all coal power plants by 2040 and be carbon neutral by 2050, in line with the Paris Agreement. The conference will give world powers yet another chance to take the necessary steps towards responding to the global climate threat.
To see Greta Thunberg’s full speech at the UN (approx. 4 minutes), click here: https://youtu.be/TMrtLsQbaok