AB 2145: The Monopoly Protection Bill

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1 AB 2145: The Monopoly Protection Bill Assembly Bill 2145 (Bradford D), aims to smother local clean energy initiatives to favor monopoly utility corporations that should be focusing on energy distribution and safety. Dubbed by businesses and environmentalists alike as the Monopoly Protection Bill, AB 2145 seeks to lock in the status quo of the State s three largest, private energy corporations Pacific Gas & Electric (PG&E); Southern California Edison (SCE); and San Diego Gas & Electric (SDG&E) as monopoly energy providers even in communities that have taken action to form local, public power agencies that offer renewable energy alternatives, lower rates, and new jobs. AB 117: Community Choice Aggregation Under existing State law, AB 117, California cities, counties, and special districts can pool their constituents demand for energy, and buy energy wholesale from resources outside the control of the private monopolies. These small, public power agencies known as community choice aggregators (CCAs) supply their own, individually-sourced energy to the existing distribution lines on behalf of their customers. An active CCA becomes the default providers of service, meaning that customers automatically start service with CCAs unless they choose to opt out. Customers are notified of the new choice for a local service provider through four legally required mailers. Historically, investor-owned utilities (IOUs) have been the default service provider to customers in their jurisdictions. However, this default status was transferred from the IOUs to the local CCA, if a CCA exists in the community. The original CCA legislation, seeing the wisdom of collective community action, mandated that the customers residing in the service area would automatically be enrolled, unless they chose not to participate by opting out. AB 2145 Proposes to Eliminate Competition & Consumer Choice AB 2145 proposes to steal the default service from CCAs and place it with the IOUs, protecting their monopoly status and destroying any opportunity for competition. Placing the default status with IOUs would prevent new CCA programs from forming and consequently prevent opportunities for consumer choice, decrease clean energy investments, and limit options for competitive rates and new job creation.

2 AB 2145 would result in enormous increases in marketing expenses for nascent agencies. The only collateral a CCA has is the customer base created by the opt-out mechanism. Without collateral, power cannot be purchased, and without a power purchase agreement, rates cannot be developed or advertised, meaning that CCAs could not offer service. AB 2145 would shift the default service from a lower greenhouse gas emission option to a higher greenhouse emission option, running contrary to local and state environmental policies. AB 2145 would terminate opportunities for customer cost savings offered by CCA programs, including low income residents and small business owners. AB 2145 Proposes Unrealistic Forecasting AB 2145 proposes that the CCA provide all customers with rate and greenhouse gas emission information for five years of service into the future. No such requirements are imposed on the IOUs and due to the real-time nature of IOU rate approvals, a forecast of rates is not available. Due to the time-lag associated with usage calculations and greenhouse gas emissions verification, forecasted greenhouse gas emissions are not available to customers. Accurately forecasting future power sources to determine greenhouse gas emissions and rates, is unreasonable because of the fluctuating nature of the electricity market. For example, if an electricity provider had projected getting 20% of its power from hydroelectricity, that provider would fall dramatically short this year due to the lack of rainfall. CCAs and IOUs continuously solicit bids for new power purchases. There is no way to know in advance what types of power those bids will contain and what the rates will be. MCE supports customer disclosures and frequently exceeds requirements for discloses. IOUs and CCAs are already legally required to send mailers to all customers in a CCA service area once a year which includes direct comparisons of current rates and electric power generation mixes. The only currently operational CCA programs, Marin Clean Energy and Sonoma Clean Power, both also include comparisons of greenhouse gas emissions on this mailer. IOUs and CCAs should be treated equally when it comes to rate and greenhouse gas emissions forecasting to ensure a competitively fair landscape. Opposing AB 2145 Protects Jobs, Cost Savings, Renewable Energy, and Community Choice Ultimately, CCAs give our communities the option to choose alternative sources of power and create competition in business. CCAs create demand for new renewable power sources resulting in new local jobs, greenhouse gas emissions reductions, and quite often, lower rates for customers. The future of who has the power in California

3 corporate monopolies or local communities will depend on what happens next to the Monopoly Protection Bill, which would be detrimental to community choice. Nearly 100 (and counting) local governments, organizations, and businesses have opposed AB 2145 The Cities of: Benicia, Cupertino, Fairfax, Hayward, Lancaster, Menlo Park, Mountain View, Richmond, San Carlos, San Pablo, Santa Cruz, and Sunnyvale; The Counties of: Alameda, Los Angeles, Marin, Monterey, San Benito, Santa Cruz, and Sonoma; 350 Santa Barbara; Alliance for Retail Energy Markets; Asian Pacific Environmental Network; Bay Area Air Quality Management District (BAAQMD); California State Association of Counties; Communities for a Better Environment; Greenlining Institute; Kyoto USA; League of California Cities; Office of Ratepayer Advocates (CPUC); Pacific Energy Advisors; Panasonic Eco Solutions North America (PESNA); Regional Climate Protection Authority; Retail Energy Supply Association (RESA); Richmond BUILD; San Diego Energy District Foundation; San Francisco Local Agency Formation Commission; San Luis Obispo Clean Energy; School Project for Utility Rate Reduction; Shell Energy of North America; Sierra Club of California; Solar Energy Industries Association (SEIA); South San Joaquin Irrigation District; The Utility Reform Network (TURN); Westcoast Solar Energy; Western Power Trading Forum; World Wildlife Fund US.

4 MCE Fact Sheet Proponents of AB2145 have used misinformation to influence the decision-making process. This document provides detailed, fact-based information about MCE, a California Community Choice Aggregation (CCA) program. The contents reflect information filed with, and where applicable, verified by, operational and regulatory bodies in the state including the California Public Utilities Commission (for public noticing, public disclosures, and Renewable Portfolio Standard compliance), the California Energy Commission (for Resource Adequacy compliance), the California Independent System Operator (for procurement, load and usage verification), and the Center for Resource Solutions/Green-E (for reporting of voluntary renewable purchases). In just 4 years of operations, MCE has received many awards for its success in building California based renewable power, reducing greenhouse gas emissions, and passing costsavings along to customers. MCE rates are lower than the monopoly utility. MCE customers are expected to save $5.9 million in MCE s greenhouse gas emissions rate is 19% lower than the monopoly utility. The emissions rate for both parties uses a methodology approved by The Climate-Registry, and using most recent 2012 data for both parties, measured in lbs CO2e/MWh: PG&E 19% Renewable MCE Light Green 50% Renewable MCE Deep Green 100% Renewable MCE exceeds compliance with the CA Renewable Portfolio Standard. This is confirmed by data filed with the CPUC for 2012 for both parties: PG&E RPS MCE RPS 19% 29% Note: MCE exceeds State mandates for California certified renewable purchases by 9%. In addition to exceeding these State requirements, MCE voluntarily purchases unbundled

5 Renewable Energy Credits. This stimulates additional renewable growth, beyond the RPS metric. MCE Creates Jobs in California MCE currently employs 20 individuals from in and around the communities we serve. MCE also contracts with services from local providers in accounting services, information technology, legal services, catering services and energy efficiency. MCE currently has contracts with 34 local vendors and 20 non-local vendors. MCE has worked with RichmondBUILD and the Marin City Community Development Corporation to identify candidates for job openings. MCE is joining with RichmondWorks on a new solar installation that will employ local residents under the Richmond Local Hire Ordinance. Through power purchase agreements, MCE is creating jobs for solar installations throughout California. A 30 megawatt solar project from MCE is being built in Kings County under a project labor agreement that will employ many unionized workers. MCE will purchase power from this project under a 20 year long-term agreement. For MCE s first local Feed-In Tariff project, over 20 people were employed for a three month period to build the solar installation. Many of the individuals employed were from the job training program of the Marin City Community Development Corporation, a local job training program for low-income individuals. MCE is working on 7 specific local renewable projects, and three broad-based programs that grow local distributed renewable energy within our service territory: 1 MW - 3 MW Solar installation at the Richmond Port (phase one will be 1 MW, with future phases growing the project to 3 MW) land lease being finalized with the City of Richmond. Expected completion: Q3, MW Solar Carport shade structure at a large non-profit organization in Novato. This project is already under contract under a 20-year PPA, and will be on-line in 12 months. Expected completion: Q2, MW Solar Installation at a brownfield site in Richmond land lease being finalized. Expected completion: Q2, MW Landfill Waste to Energy project a local landfill in Marin County. Power Purchase Agreement in process Q1, MWs of capacity are left in MCE s Feed-in Tariff for additional renewable installations beyond those listed above. Three project developers have requested a place on the reservation list and are finalizing documents for their projects which are in three separate locations in MCE service territory. After applications are complete, these projects would become part of MCE s portfolio under a 20 year PPA. Expected completion: 1 MW per year in 2014, 2015, 2016, etc.

6 MCE has over 2,000 net-energy metering customers producing solar on their own homes and businesses. MCE pays them $0.01 per kwh for any over generation the customer creates. Expected completion: ongoing MCE recently issued $20,000 in solar rebates but set aside 50% for Richmond customers only, and also reserved any rebate request for low income (CARE-qualifying) customers only for the first four months of the solar rebate program. MCE partnered with Grid Alternatives to help ensure low income installations were used, and achieved strong success with multiple low income installations. Expected completion: complete MCE exceeds the state mandates for public disclosures and allows customer to opt out of service at any time. MCE has held hundreds of public meetings and participates in community based events on an ongoing basis to share information with customers. MCE contacts new customers by mail multiple times with letters and enrollment notices addressed directly to the customer. For existing customers, a power content label is distributed annually and a joint cost comparison and power content comparison is also published jointly on an annual basis by PG&E and MCE, and mailed to all customers in MCE s service territory.