Energy Groups Urge Brown to Veto Aggregation Limits Bill

San Francisco, a California community with a fledgling CCA program | Photo: Thomas Hawk/Flickr/Creative Commons License

Renewable energy and environmental advocates are calling on California Governor Jerry Brown to veto Assembly Bill 976, which would restrict Community Choice Aggregation (CCA) programs from buying power from individuals or corporations with whom the CCA has previously engaged in consulting. Though the bill's proponents characterize it as a measure to prevent conflicts of interest, opponents say AB 976 would restrict competition and keep CCAs from getting off the ground.

CCA programs basically allow local communities to buy power on behalf of the energy consumers within their municipalities, sidestepping the local investor-owned utility. CCAs are generally used as a means to increase the percentage of renewable energy used by the municipalities' residents and businesses.

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Under AB 976, any entity that got a government contract to serve as an consultant to a municipality wanting to set up a CCA would be prevented from signing future contracts with that CCA. Arguing in favor of the bill, the Coalition of California Utility Employees told the State Senate:

Local governments exploring the feasibility of forming a CCA often seek the advice of third party energy consultants. But due to the extremely technical nature of energy policy, many local jurisdictions are ill-equipped to question the assumptions and findings of these private consultants. Not only do these large corporations and for-profit consulting firms often mislead local governments with rosy scenarios of cheap renewable power, often times their recommendations only serve to advantage themselves for future contracts. They often recommend that local governments embark on overly ambitious proposals that result in more work for them in the future.

But according to the Local Clean Energy Alliance (LCEA), a San Francisco Bay Area-based coalition of more than 90 local groups, CCAs are public agencies and are thus already subject to all state government transparency regulations, making the bill an unnecessary impediment to establishing Community Choice Aggregation programs. In a letter to Governor Brown co-signed by a number of other organizations, municipalities, and public agencies, LCEA states:

If enacted, AB 976 will create a huge impediment to the establishment of CCA programs. It does this by prohibiting a CCA program from procuring electricity or energy services from any entity with which it contracted for analysis, advice, consultation, or other services prior to program launch. This would prevent, for example, the pre-launch signing of a power purchase agreement with a power supplier to provide power to the new CCA when service commences. Clearly, it is not possible for a CCA to begin serving customers without having a power supply agreement in place in advance.

The bill reached the Governor's desk on September 5.

California's investor-owned utilities have a long history of opposition to CCAs. In 2010, PG&E spent $46 million to promote Proposition 16, which would have required a two-thirds supermajority vote by any local government wanting to establish a CCA. Despite the fact that Prop 16's opponents raised only $100,000 to oppose the proposition, it failed by a six percent margin in the election.

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