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Study Says Santa Barbara’s Community Choice Energy Proposals Not Economically Feasible

The Santa Barbara County Board of Supervisors isn't ready to throw in the towel on its Community Choice Energy proposal to partner with other jurisdictions and use more renewable energy sources, despite a recent study showing the move wouldn't prove economically feasible.

"I am disappointed like many of you are," said Second District Supervisor Janet Wolf during Tuesday's supervisors' meeting, where the board received a lengthy report on the Community Choice Energy Study. 

"We wanted to make this work … but I am not ready to throw in the towel," she added. "I don't want us to stop the movement. CCE is good thing. It's great for the community and the environment."

Santa Barbara County customers get electricity from Southern California Edison in the South County and Pacific Gas and Electric Co. in the North County, which also has the largest consumers of energy in all of the unincorporated areas of the county. The county's number of energy customers is fairly equally split between the two geographical areas, according to county staff.

Community Choice Energy allows the state's cities and counties to choose their sources of electrical power and to set their own rates. The goal of the program is to give consumers a more competitive rate than the large utility companies offer and also provide greener electricity. 

Local governments can purchase electricity from renewable sources such as solar or wind, which are then delivered to customers through existing utilities transmission lines. There are nine Community Choice Energy programs operating in the state, including one in nearby Monterey County, and Los Angeles County is expected to start a program by 2028.

"It would actually be the CCE that would go out and source the energy to the customer," Jen Cregar, a project supervisor with the county's Division of Energy and Sustainability Initiatives, told the supervisors. "Effectively, there would be no change (to service)."

Santa Barbara, San Luis Obispo and Ventura counties, as well as several cities including Simi Valley and Thousand Oaks, funded a study in 2015 to look at the formation of a Tri-County Community Choice Energy program.

The 2,000-page study presented at Tuesday's meeting looked at 24 different scenarios for forming a CCE program, including a stand-alone program for the just the county, and none of the scenarios make economic sense to implement, Cregar said.

She said the rates under each of the scenarios proved to be higher than both PG&E and Edison rates, but greenhouse gas emissions would be lower.

On average, using 50 percent renewable energy with a CCE program, PG&E customers would see their bills increase by almost $19 a month and Edison customers would see a monthly increase of more than $23, according to the study.

"Power costs are by far the biggest driver of a CCE program," Cregar said. "It just doesn't show that we can be a financially viable CCE program."

Every other CCE study across the state has shown different results than the county's, with outcomes pointing toward formation of alternative energy programs, Cregar said. But she also noted Santa Barbara County is different, in part, because of its large geographical size and also for having two different utility companies providing electricity to residents and businesses.

She said Edison's low rates are having a negative effect on the proposed program and because such a large amount of power would be needed, securing it would most likely have to be done through debt financing, such as issuing a bond. Additionally, the county couldn't operate two separate programs for different areas.

"We can't operate a CCE program solely in PG&E North County," Cregar said. "We'd also have to offer in Edison South County."

About a dozen speakers commented during Tuesday's meeting and they urged supervisors to give more time for public review of the study.

"Please don't stop now," said Ken Hough, Santa Barbara County Action Network executive director. "Give us the opportunity to have a voice and a choice in community energy. Dig into the potential flaws in the study."

Some suggested the study was off in its pricing for renewable energy, and they pointed to CCE programs proving successful in communities across California.

"This is happening," said Katie Davis, Sierra Club chair. "This is happening everywhere, and we shouldn't be left behind because of one faulty study."

Cregar told the supervisors the county has the option of joining an existing CCE program, which wasn't evaluated in the study. Such moves could cost anywhere from nothing up to $4 million, she said.

The study did find it would be feasible to develop a unincorporated county CCE program, which would cost between $40 million and $60 million to get started, as well as a regional program at a cost of more than $175 million.

The board ultimately voted 3-2 to direct staff to continue exploring options for a CCE program, such as defining details of joining another county's program.

Supervisors Wolf, Joan Hartmann and Das Williams supported the motion while Supervisors Peter Adam and Steve Lavagnino voted against. 

"We see now in Puerto Rico exactly what happens when the power goes out," Hartmann said. "Reliability is critical in terms of emergency planning and emergency management. We have to think about reliability in the long term. We live at the end of two frayed extension cords."

Lavagnino said he had serious concerns moving forward when the study clearly says to do the opposite.

"My door isn't getting beat down for higher (electric) bills," he said. "At this point, I am out."

Noozhawk contributing writer April Charlton can be reached at [email protected]. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkSociety, @NoozhawkNews and @NoozhawkBiz. Become a fan of Noozhawk on Facebook.

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