San Diego Community Power is Offering New Energy Alternative
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Summary
Special BoD Meeting
1. Power100 Green Plus: A 100% renewable and carbon-free Green-e certified service for commercial and industrial customers, priced at a 2 cent per kWh premium over the standard Power On rate. This product is expected to generate $3.2 million in annual revenue and will be capped at 5% of total load unless modified by the Board.
2. PowerBase: A more affordable power option designed to be cost-competitive with SDG&E rates, featuring rates 2.5% lower than SDG&E's. This product is aimed at price-sensitive customers and supports SDCP's goal of reaching 100% renewable energy by 2035 through customer retention. Enrollment will be capped at 15% of total load.
Both items were moved by Director Parent, seconded by Director Mosca, and passed unanimously by roll call vote.
However, a Voice of San Diego article raises concerns about the PowerBase offering, noting that it is a "dirtier" energy mix compared to SDCP's current offerings. The article questions the move, given SDCP's primary purpose of transitioning its member cities to 100% renewable energy by 2035 or sooner. SDCP's spokesperson defends the decision, stating that PowerBase is a transitional product designed to keep price-sensitive customers with SDCP while the organization works towards its renewable energy goals.
Why San Diego Community Power is Offering Dirtier Energy | Voice of San Diego
San Diego Community Power is now offering a new power mix that’s dirtier – but cheaper – than those it currently offers.
That’s a curious move for the government-run power company created in 2019 for the main purpose of getting its member cities to run on 100 percent renewable energy by at least 2045 (for San Diego and others the goal is a full decade earlier).
Jen Lebron, a spokesperson for Community Power, says the new power mix and price is to offer a choice to customers who might be struggling to pay energy bills.
“It supports our mission to get to 100 percent renewable by keeping people in San Diego Community Power service without going to the competition,” Lebron said.
The clock is ticking. San Diego has 11 years to meet its goal, and each year, the warming planet breaks temperature records due to fossil fuel use.
The new power mix, called PowerBase, is 45 percent renewable energy for 2.5 percent less than SDG&E’s average summer price per kilowatt hour (the unit by which energy use is measured), according to a press release.
SDG&E’s base power in 2022 (the earliest date available) is 44.8 percent renewable, according to the California Energy Commission’s power content label, which acts like a nutrition facts label for the mix of energy a company provides its customers. The company’s power mix is still majority natural gas, at 54.4 percent.
Lebron called PowerBase a “transitional” product as Community Power marches toward that 100 percent renewable goal. Eventually, as the company contracts out and builds more of its own green energy, products like PowerBase will be phased-out — and moved onto a 100 percent power plan.
But right now, the cost and time it takes to build renewable energy, especially in California, is very high and long right now, Lebron said. So products like PowerBase help keep customers interested in Community Power because the product is virtually the same as SDG&E but costs less, the thought goes.
Customers that live in Community Power’s territory automatically switch over from SDG&E – that’s how state legislators designed these public power companies to work. Those customers are automatically enrolled onto what’s called the PowerOn plan, which in 2022 was 54.2 percent renewable, or opt up to 100 percent renewable power at a higher price.
Customers can leave Community Power and return to SDG&E, but that typically process can take six months to complete. SDG&E has reported that around 85 percent of their customers now buy power from a public power company like Community Power or Clean Energy Alliance in North County.
“This major change on the energy landscape has enabled SDG&E to primarily focus on developing and operating best-in-class energy delivery infrastructure for its 3.7 million customers. We are committed to our partnership with the local CCAs which provides our collective customer a positive experience,” wrote Anthony Wagner, an SDG&E spokesman, in an email.
Summary of SDCP BoD Special Meeting:
The San Diego Community Power Board of Directors held a special meeting on May 30th, 2024. The meeting was chaired by Joel Laava, the representative for the City of San Diego. The meeting was called to order, roll call was taken, and a quorum was established.
The Board discussed and voted on two main agenda items:
1. Adopt a Power100 Green-e Certified product and approve its rate
2. Adopt a PowerBase service and approve its rate
For the first item, Power100 Green Plus, the staff presented details about the new 100% renewable and carbon-free Green-e certified service, which will be available to commercial and industrial customers starting July 1st, 2024. The service will have a premium of 2 cents per kWh added to the Power On rate and is expected to generate $3.2 million in annual revenue. The Board asked clarifying questions and discussed the proposal.
For the second item, PowerBase, staff introduced a new service designed to be cost-competitive with SDG&E rates, featuring rates 2.5% lower than SDG&E's. This service is aimed at price-sensitive customers and supports SDCP's goal of reaching 100% renewable energy by 2035 through customer retention. The Board discussed the proposal and asked questions about renewable content reporting and the reasoning behind the 15% enrollment cap.
Items Voted On and Results:
1. Adopt Power100 Green Plus and approve its rate
- Moved by Director Parent, seconded by Director Mosca
- Motion passed unanimously by roll call vote
2. Adopt PowerBase service and approve its rate
- Moved by Director Parent, seconded by Director Mosca
- Motion passed unanimously by roll call vote
The meeting was then adjourned until the next regular Board meeting on June 27th, 2024.
May 30th, 2024 special meeting of the Board of Directors of San Diego Community Power Meeting Transcript
Opening - Joel Laava, Chair of the Board
Good evening and welcome to the May 30th, 2024 special meeting of the San Diego Community Power Board of Directors. I am Joel Laava, Chair of the Board and the representative for the City of San Diego. We welcome the members of the public, the Community Power staff, and board members joining us in person today, and a special thank you for those attending this special meeting.
I will now call the May 30th, 2024 special meeting of the Board of Directors of San Diego Community Power to order. Mari, will you please call the roll?
· Director LeBeau - Present
· Director Acosta - Here
· Director Parent - Here
· Director Elo-Rivera - Here
· Director Mosca - Oh he just joined
· Director Heinze - Here
We have a quorum. Mr. Chair, did you call on me?
I apologize, I was being promoted. Yes, we do. Thank you very much.
Alright, and I believe Director Heinze needs to make a statement.
Director Heinze statement
Yes, I do. I am participating in today's meeting remotely under recent amendments to the Brown Act due to a caregiving need preventing me from participating in person, and there is not someone 18 or older in the room with me.
Alright, thank you. Thank you both for joining in remotely. So we do have the quorum. Let us, if you can please, stand, face the flag, hand over your heart. Ready, begin.
I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.
Again, a quorum is present. As this is a special meeting, there will be no general public comment. So we will go right to item one, which is: Adopt a Power100 Green-e Certified product and approve its rate. And I will turn it over to our CEO, Karin Burns.
CEO, Karin Burns
Thank you, Chair Laava, and good evening members of the Board. I want to take a moment to acknowledge why we are bringing this item to you today and to thank the team who have made both of these items possible.
San Diego Community Power was created to empower customers to choose electricity services that meet the needs of their families and businesses. This item, Power100 Green Plus, and the PowerBase item we will hear about in a moment, round out a suite of rate products that address a much wider range of our customers' needs, whether they want the cleanest, most renewable electricity available or seek a more economical option.
There are so many SDCP members to thank for their tremendous and tireless efforts to bring these options to you and to our customers. This was a true team effort. I would like to offer my sincere thanks to Lucas Uto, Aaron Louie, Byron Vosburg, Jen LeBron, Jack Clark, Tim Maga, Carly Newman, Lee Friedman, Jillian Rowland, Elaine Magat, Carly Mink, and many others on the Community Power team who have made it possible for San Diego electricity customers to have more electricity choices than they have ever had before.
Power100 Green Plus was developed after direct requests from our customers, and so I'll turn it over to Lucas Uto, Senior Director of Data Analytics and Customer Operations, and Aaron Louie, Senior Rates and Strategy Analyst, to present this item. Thank you.
Lucas Uto, Senior Director of Data Analytics and Customer Operations,
Thank you very much, Karin. Good evening, Chair Laava and members of the Board. My name is Lucas Uto, I'm the Senior Director of Analytics and Customer Operations. Alongside me is--
Good evening everyone, Board of Directors. My name is Aaron Louie, Senior Rates and Strategy Analyst. Super happy to be here tonight, and tonight it is our distinct privilege to be presenting this item. And with that, I'll pass it on over to Aaron to take us home.
Aaron Louie, Senior Rates and Strategy Analyst
Thank you. Next slide please.
So we'll start with a bit of background of SDCP's current offerings.
SDCP's current offerings
We are offering two levels of service. One is Power On, it's 54.2% renewable, it's our standard service offering with at least the minimum 50% renewable. And then the other offering available is Power100. It's a premium service with 100% renewable and carbon-free power at a $0.0075 per kilowatt-hour premium. And it will be adjusted to $0.01 per kilowatt-hour as of July 1st, 2024.
Customer Feedback And Needs
Next slide please. So we, as a team and as an organization, listen to customer feedback and needs and address those concerns. Commercial and industrial customers in particular desire a standalone 100% renewable and carbon-free Green-e certified service. It's really to cater to the Leadership in Energy and Environmental Design, or LEED, rating goals and their certification needs.
LEED is the world's most widely used green building rating system, and this new Power100 Green Plus service offering will allow for projects and buildings to earn LEED renewable energy points to count towards certification. In addition, this new product will also cater to the Securities and Exchange Commission's new rule to enhance and standardize climate-related disclosures.
LEED, rating goals and certification needs
Next slide. So a little bit more detail about this service offering. It will be effective as of July 1st, 2024. This new service will be called Power100 Green Plus, priced at a 2 cent per kilowatt-hour adder to Power On. It will be initially available to commercial and industrial customers only, and we expect 2% of the current load will enroll. Enrollment will be kept at 5% of load unless modified by the Board.
In terms of fiscal impact, it will bring in $3.2 million in net annual revenue, and the estimate is already factored into fiscal projections reviewed and approved by the Board in SDCP's 2024 rate schedules. The power will be primarily sourced from long-term contracts available to SDCP such as Duran Mesa, IP Oberon, and Vikings Energy Farm - a mix of wind and solar.
Discussion
Next slide please. So that concludes my presentation. Happy to take any questions.
Alright, thank you very much for the presentation. Karen, in your introduction--Mari, do we have any public comment on this item?
No, Mr. Chair.
Alright. Staff is looking for a recommendation, so I'll turn it over to the Board for comments and a motion. Councilmember Campbell?
Thank you, Mr. Chair. I have a couple of questions. Can we look at the slides back with the bullet points of the proposal?
When we say we are capping enrollment at 5% of load, what's the purpose of that cap?
Thank you for that question. Typically, the cap mechanism allows for us to pilot the new product and see how it's performing versus the intended target level. But what we're saying here is, if and when we do reach that level, we will definitely come back to the Board with recommendations to either expand the product or do something else so that we are effectively meeting the customer needs.
Okay.
then when we say $3.2 million in net annual revenue, does that mean that we're anticipating that by introducing this option, we will generate more revenue than we otherwise would?
That is correct. In terms of the Power100 set of service offerings, we have the non-Green-e certified Power100 product that Aaron spoke about, whose existing premium right now is $0.0075 per kilowatt-hour. And that will be adjusted to a penny per kilowatt-hour effective July 1st. And this new product that is Green-e certified, it's essentially the top-of-the-line premium product, and customers will pay the additional $0.02 more than they otherwise would for the regular Power100 product.
Okay.
And then do we--my understanding is that the reason they're paying a premium is because there are some additional costs associated for us to prove out the certification for their LEED certification purposes. Is that accurate?
That is very accurate, yes.
And is that extra premium that we're charging covering all of our additional costs associated with that?
It certainly is. We've taken into account not only the procurement but also the certification and audit required costs as well. And the net annual revenue that you see in front of you, that is all-inclusive of not only the cost but also the expected revenue.
Okay, great. Well, I appreciate all that. I just wanted to ask those questions to be clear and to put them on the record. I think it's great that we're being responsive to customer desires for a product like this.
I wouldn't be comfortable with having the rest of the ratepayers subsidize a special product like this for the marketing benefits that people get out of LEED certification. But if they want it and they're willing to pay the extra, and it doesn't cost anybody else anything, I think that's great and we should absolutely respond to that. I think that's reflective of a good ethos of the agency.
So I'll move the recommendation, but I'm sure we'll have additional conversations.
I'll second that. Oh, is that Councilmember Heinze?
Okay, sorry, I tried to recognize the voice and it didn't come across. Councilmembers Parent and Mosca often confuse us, so we'll stop talking.
Are there any other comments by the Board? Through the Chair, yes.
It says in the bullet points that this is going to be effective July 1st. Are we ready for it?
Thank you for that question. Yes, we are more than ready.
Thank you. Here's just a quick comment in general. We did review this at the Finance and Risk Management Committee, and I had actually that same question about making sure that we are able to cover our internal costs. And that was very clear when you guys gave the presentation and explained it to us. So I fully support the item as well.
Move The Staff Recommendation
Alright, so without any other comments, thank you to my colleagues for the questions, and thank you, as Karin highlighted, to everybody it took to actually come up with this new program in response to our customers. Thank you for that very good work. I know it seems like something pretty simple, but it took a lot of work to get here. So thank you for that work.
So we have a motion by Director Parent to move the staff recommendation, and a second by Director Mosca. All in favor say "aye".
[Multiple "ayes"]
All opposed?
[Silence]
That's right, nailing it today. So Mari, could you please do a roll call vote?
Chair Laava - Yes
Director Acosta - Yes
Director Parent - Yes
Director Elo-Rivera - Yes
Director Mosca - Aye
Director Heinze - Yes
Alright, thank you very much. I got a second chance now.
Item number two: Adopt a PowerBase service and approve its rate.
And again, I'll turn it over to our CEO Karin Burns.
CEO Karin Burns.
Thank you, Chair, and good evening again, Board members. The next item creates a product that is designed to be extremely cost-competitive with SDG&E rates. And again, before I start, a sincere thanks to all of the team members mentioned previously who helped to make this possible.
PowerBase, as we're calling it, gives customers the option to continue their investment in a locally-controlled, customer-driven, not-for-profit organization that is committed to creating an affordable clean energy future for everyone. We recognize that customers have different wants from their electricity provider. Some see the value of more renewable energy and have the means to pay a premium to support higher amounts of renewable content. For others, electricity is yet another necessary expense that they get anxious about each time a bill comes.
Over the past few months, our team has done an enormous amount of analysis to bring our customers a rate product that will provide more relief for our price-sensitive customers. This rate product supports our path to 100% renewable power for all by 2035 through a focus on customer retention. We appreciate your consideration of PowerBase and the option it creates for our customers.
Lucas Uto and Tim Maga will now provide additional details. Thank you.
Thank you, Karin. Again, good evening. So alongside me, I'll pass it on to Tim to introduce himself, and then we'll get on with it.
Timothy Magat, Senior Finance Technician.
Hi Board of Directors, Timothy Magat, Senior Finance Technician. Thanks.
So together we'll be presenting on staff's recommendation to have the Board adopt PowerBase, which is a new service offering, and approve its rates. Next slide please.
So, as with the previous service offering, for us we do believe that the customer is truly the cornerstone of what we do as an organization. And we strongly believe that PowerBase is a service that will continue to support our mission to achieve 100% renewable energy by 2035 or sooner through customer retention and providing competitive pricing.
Through this service offering, we are expanding choice for our customers to decide on what makes sense for themselves, for their families and their businesses. And we do believe that having choice is what SDCP is all about.
This new service offering features rates that are 2.5% lower than SDG&E's existing commodity rates that are effective as of March 1, 2024. And we do believe that PowerBase will essentially meet the needs of our more price-sensitive customers in the way that they have expressed their concerns around affordability. Next slide please.
So as we get into the finances here a little bit, I think it's helpful to just do a peer review of other CCAs. And there is precedent for a product like this. In particular, San Jose Clean Energy, depicted on the left in gray, they had a very similar product called GreenValue at a time when their rates were a little bit more expensive than Pacific Gas and Electric's up to the north.
During that time, or after that time, San Jose Clean Energy, by focusing on the customer and the community, was able to not only retain their customers, but they certainly have the highest participation rate of all CCAs. And since then, they've also sunset that product. But it was a key product that they had for the customers in the community. Next slide.
So looking into the actual finances, the PowerBase product would lead to a negligible effect on net income. It shouldn't--we don't believe it'll affect actual net income. The participation rate, we believe, will be preserved by this product, kind of similar to San Jose Clean Energy. And so we do think it's a product that gives customers choice, preserves community, but at the same time, it provides a negligible net effect. Next slide please.
So what are some of the key highlights of PowerBase? One, and I think the biggest one is, it is going to be a 2.5% discount to SDG&E. It is definitely not eligible for a member agency-wide service or default service changes. We're capping the participation in the exact same manner that the previous service offering is, at 15% of participating load. And when we do get to 10% participation, we will definitely come back to the Board with recommendations.
And it's our mission, broadly, to provide an affordable option for our customers. It is no secret that affordability is top of mind in our region in particular, and it definitely helps support SDCP's mission to get to 100% renewable energy by 2035 or sooner through customer retention, especially for price-sensitive customers. Next slide please.
These three next slides essentially capture the bill impacts for customers who elect to opt down to PowerBase. You can clearly see on the right-hand side that the total generation-related charges discount there is 2.5%, as previously mentioned. And then in terms of the total bill impact, customers on PowerBase can expect to see a savings value proposition on their total bill of about 1%. And this is true not only for residential customers, which this slide depicts, it is also true in the next slide which captures small commercial customers. So please, next slide.
And it is also true for large commercial customers on the next slide. And please, next slide.
That actually wraps up our presentation for tonight. We're more than glad to take any questions or comments. That's it, thank you.
Discussion
Alright, thank you for the presentation. Do we have any public comment on this item?
No, Mr. Chair.
Again, staff is looking for support for their recommendation. I'll turn it over to the Board for comments and a motion. And I think I see Councilmember Heinze with her hand up.
Question Councilmember Heinze
Yeah, I just had a quick question of clarification from the staff report on page 10, in the bottom half of the third paragraph. It says, "In addition, staff intends for the renewable content of PowerBase to meet or exceed that of SDG&E whenever possible, given the complexity of our current energy market and associated delays in power content reporting."
So that means that we're establishing the floor for how much renewable would be in the portfolio, but there's the chance that we might see the renewables increase even for this option?
Thank you for the question. Yes, that is correct. I think the essence of that specific paragraph in the staff report is to highlight the fact that it is staff's recommendation and intention to, at the bare minimum, be at the renewable portfolio standards as mandated by the state of California. But we will try to beat the renewable content of SDG&E.
Now, the only challenge with that, and we try to capture that in the report by that paragraph, is that it's always a moving target. Because you won't know--you won't know the renewable content or the content label for SDG&E until it is finalized and approved, right? So it's always going to be a moving target. But it is the intent of staff to meet or exceed SDG&E's renewable content so that this service offering can compete not only from a price perspective but also the renewable energy content perspective.
Thank you. Would it be worthwhile for us to be receiving reports following these, for transparency, so that we know how we compare in the future?
Yeah, that's an excellent question and an excellent point. So in terms of the timelines, I think we have to come to the Board for our power source disclosure and additional details. I think Mari is here and he can fill in those questions, especially that power source disclosure. Once it's ratified by the Board, then it becomes part of our approved power content label, and that typically comes out every October 1st.
It's just that in this year there are some delays, and we wanted to capture those into the report mechanics so that the general public and the Board understood that there have been delays and we're working towards resolving those delays. But yes, I mean, that's something that we can definitely preview as part of the power source disclosure agreement that has to be ratified by the Board. And then we can certainly take a look at where the competition is, and we can report on that on a go-forward basis.
Okay, thank you. Thanks for the thorough answer. And that would be my recommendation. I think it would be helpful for the Board to be able to see how we're performing with this new rate option. And that's it, thank you.
Alright, excellent suggestion there. Any other Board members?
Director Parent.
Yeah, thanks very much for this. You know, I guess just to--I wanted to express my appreciation for the staff for this proposal. You know, it would be--this is a tough time to be doing the mission of this agency. The cost to procure energy is higher, for big global reasons way outside of our control.
Our ambitious but attainable goal to get to 100% green energy is harder today than we imagined when we first set up the agency, and when I was among those of us who voted to join the JPA initially. So we're in--so it's a challenge. But I also think it's important for us to remember, as the staff proposal reflects, we have a dual mandate both to reach that 100% green energy goal and also to have a cost-competitive, and ideally a bargain, for ratepayers. And I think this proposal strikes that balance, gives--is faithful to that dual mandate.
And I think it's the right approach, and it preserves for us the breadth of a customer base that will allow us to do the things that we intend to do as an agency. So I'm supportive of it. I also want to recognize and express my appreciation for staff for thinking creatively about how to achieve that, to help set us up for continued success as an agency.
I'll move--oh, didn't want to take anything for granted.
I'll second.
Second, so this time I clearly heard Director Mosca second. I get that.
Any other comments by Board members?
I'll ask a couple of questions inspired by Director Parent's comments on the first one. So what I'll start by saying is, thank you very much. I know this was an especially challenging analysis to do and to figure out where the right spot to hit was. So thank you for all the good work, the number crunching, to figure this out and bring this forward. And as I think we've all kind of agreed, the sensitivity to our customer base is critically important, to be responsive to them while we pursue that dual objective, as Director Parent said, about both affordability and meeting our green energy goals.
So a couple of questions. On this one, we actually said we'll do this up to 15% of the load. What was the thinking about going that big as opposed to setting a lower threshold and then revisiting it if we're seeing additional pressure from our customer base?
Thank you for that question, Chair. So the 15% cap essentially is a function of multiple conversations that we've had with our peers in the state that have been in the exact same spot as we are. And through their learned experiences of where the customer base essentially elects to opt down to a similar product, and through those very robust discussions across all CCAs up and down the state, what we did hear from our peers is that 10-15% usually tends to be where participation levels essentially tend to peak.
And so, us not wanting to reinvent the wheel and us taking the lessons learned from our peers, we said, you know what, this is actually a good level based on some analysis that the internal staff team did. And that is why we are recommending the 15% cap for right now.
Okay, thank you for that again detailed analysis to kind of arrive at that number.
And then the last question that I'll ask, and I don't know if Byron wants to answer this one, but we've been approving a lot of power purchase agreements. And I think a lot of those, the sweet spot is like 2027, when those are expected to come online. And for the benefit of those remotely, I see a nodding head out there in the audience, that that is really--I believe we have a 75% renewable energy target by that time period. And all these--the good work that the power procurement folks are doing are really targeting 2027 for deliverability. So thank you for that good work. That helps, I think, kind of round out this conversation.
So I want to thank you. So we have a request that staff has agreed to, from Director Heinze, to report as frequently as appropriate for the actual renewable energy content of this PowerBase. Staff has also made a commitment that once this gets up to 10% of load, that you will report back to the Board in case we want to make any adjustments.
Motion to Approve PowerBase
And then we have a motion by Director Parent to move the recommendation to adopt the PowerBase product, available to no more than 15% of San Diego Community Power customer load, that will not be available as a member agency-wide default service product, and approve the PowerBase rates in Attachment A to begin effective on July 1st, 2024. And then there is a second by Director Mosca.
So with that, Mari, please call the vote.
· Chair Laava - Yes
· Director Acosta - Yes
· Director Parent - Yes
· Director Elo-Rivera - Yes
· Director Mosca - Aye
· Director Heinze - Yes
Alright, thank you very much. So for two very big items, we're done. Thank you again, everybody that participated in this special meeting.
This does bring us to the end of the agenda. We are adjourned until the next regular meeting of the Board of Directors of San Diego Community Power on June 27th, 2024. We are adjourned. Thank you again, everyone.
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