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Community energy groups balk at Calif. decision to assert authority over them

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Workers install solar panels on a home in Glendale, Calif. More than 80 cities are either engaged in or considering community choice in California.

Source: Associated Press

California's effort to establish an overarching electric resource planning process to meet its aggressive greenhouse gas emissions target conflicts with the state's community choice aggregation movement, which aims at greater local control of power supplies, according to community choice leaders.

In a quest to ensure that regulated utilities and other electric service providers are on track to help the state achieve its 2030 emissions reduction target, while maintaining electric service reliability, the Public Utilities Commission on Feb. 8 decided to embark upon a new system-wide planning framework for the electricity sector with an "optimal mix" of resources in its "decision setting requirements for load serving entities filing integrated resource plans."

But the PUC's assertion of control over the resource choices of community choice aggregators is unlawful, according to community choice aggregation, or CCA, leaders.

In its decision, the commission said, "We absolutely intend to work cooperatively and collaboratively" to ensure the CCA's plans meet the requirements. But what will happen if the commission refuses to approve a CCA's resource plan, or orders the aggregator to purchase resources it does not want, remains unclear. If the CCA refuses to comply, the PUC said, under state law the commission "has the authority to order long-term procurement commitments, and to assign costs of non-performance."

Dueling statutes

Community choice advocates argue that only local governing board of directors have authority over planning and procurement decisions for the CCAs, and that the PUC's role is limited to informal review of an aggregator's plan.

State law makes it clear the CCAs' governing boards have authority for how the CCAs fulfill environmental goals, said Marin Clean Energy Deputy General Counsel Shalini Swaroop said in an interview. "Public Utilities Code 366.2(a)(5) indicates the governing board of directors has sole responsibility for our procurement," Swaroop said.

That 2002 statute provides the basic framework for establishing CCAs and authorizes cities and counties to operate them. Commissioners, however, cited two more recent statutory provisions, Sections 454.51 and 454.52, that they say give the PUC basic authority to require all load-serving entities, including CCAs, to submit their resource plans to the PUC for review and approval.

Swaroop declined to say how Marin Clean Energy will respond to the PUC's decision. Marin led the way as the first CCA, launching its service in 2010 after a fierce, years-long battle with incumbent utility PG&E Corp. subsidiary Pacific Gas and Electric Co.

Cooperation or confrontation

California Community Choice Association Executive Director Beth Vaughan said the role of the commission and CCA governing boards concerning resource planning and selection is a work in progress: "There is a lot of gray area in terms of how things are going to be executed."

The CCAs and the commission both want a reliable and cost-effective energy supply, Vaughan said: "We totally understand the PUC's role and importance of a reference plan." Local governing boards have to work together to ensure conformity and consistency for resource planning purposes, she added.

The emissions planning target recommended to the California Air Resources Board is 42 million tonnes by 2030 for the electricity sector. An optimal resource portfolio associated with this target will be used as the standard to gauge the resource plans of each load-serving entity. The model for 2030 calls for 73% new resources from utility-scale solar, 16.3% from battery storage, 9% from wind and 1.7% from geothermal.

Yet California's 2017 Climate Change Scoping Plan for greenhouse gas reductions calls for a reduction of 30 million tonnes to 53 million tonnes by 2030 in the electric sector, Vaughan noted. The California Energy Commission's planning process uses this broad range.

The CCAs will likely focus on negotiation rather than confrontation. "I'm convinced we are going to work this out," Vaughan said, despite her association's strong assertion in comments before the decision that the commission does not have jurisdiction over CCA procurement.

Support for community choice is growing. More than 80 cities are either engaged in or currently considering community choice in California. In April 2017, the Los Angeles County Board of Supervisors approved a countywide CCA program. Hundreds of local officials, many with state political connections, are involved in CCA efforts.

Woody Hastings, the renewable energy manager for the Center for Climate Protection, said the PUC is trying to take control of CCA procurement in the way it regulates investor-owned utilities. The PUC is trying to address what it sees as an erosion of their authority, he said, but the energy sector is decentralizing from big investor-owned utilities to smaller regional entities.

"The onus is on the CPUC to recognize this is a valid load serving entity model and part of that is autonomy over procurement," Hastings said. "The CPUC needs to make the accommodation and if they don't do that, some kind of legislative fix will be needed."

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