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City of Carlsbad

Oceanside City Council To Explore Community Choice Energy

OCEANSIDE, CA — The Oceanside City Council workshop on Wednesday will discuss establishing a Community Choice Energy with other interested cities in North County.

A report provided by Cari Dale, the Water Utilities Director for the City of Oceanside recommends that the city council direct staff to explore the implementation of Community Choice Energy (CCE) by establishing a working group of interested cities in north San Diego County, including Vista, Escondido, and San Marcos.

Community Choice Aggregation (CCE) is an alternative to traditional Investor Owned Utilities (IOUs) that procure electrical power for customers within a service area such as San Diego Gas & Electric (SDGE). Under state law, CCEs can be formed by local communities to aggregate their electrical purchasing power to offer a cost-competitive choice of clean energy sources, support the local economy and satisfy local development priorities. Different than IOUs, CCEs operate as public entities that are meant to improve the transparency of energy source decision-making and stimulate market competition for competitively priced renewable energy.

The City of Oceanside previously explored CCEs with other local cities. In 2018, the City partnered with the cities of Carlsbad, Encinitas, and Del Mar to conduct a Feasibility Study for a CCE program. In May 2019, the City Council held a workshop to discuss the study findings. At that time, the study consultant (EES Consulting Inc.) concluded the City could achieve economies of scale, a cleaner energy mix and an estimated 2 percent customer electric bill savings over SDGE by forming a CCE with the partner cities. Per that study, estimated startup costs for Oceanside were $8.7 million, regardless of whether the City established its own enterprise CCE or through a JPA.

At the workshop, staff received direction from Council to explore potential partnerships with the cities of Vista and Escondido. Since that time, the cities of Vista, San Marcos and Escondido have conducted CCE Feasibility studies. Oceanside staff have monitored these efforts and have engaged in information sharing and progress meetings with staff from those cities regarding their Feasibility Study results. Staff has also monitored efforts by other agencies in San Diego County to complete the start-up of two CCEs and have evaluated the pros and cons of joining each.

In early 2021, City staff tasked its previous consultant (EES Consulting Inc.) with updating the financial analysis in the 2019 Feasibility Study under an enterprise CCE scenario. Updates were necessary due to changes in the regulatory environment and power supply market since 2019. Staff received the updated analysis for this scenario in July 2021. The update assesses the financial feasibility of Oceanside launching its own enterprise CCE and includes a qualitative assessment of other CCE options.

As of 2021, the cities of Carlsbad, Encinitas, and Del Mar have each become members of an operational CCE. Encinitas joined the cities of San Diego, Chula Vista, La Mesa, and Imperial Beach to form San Diego Community Power (SDCP), a JPA that commenced CCE operations in spring 2021. The County of San Diego also elected to join SDCP on August 31, 2021. The cities of Carlsbad and Del Mar partnered with the city of Solana Beach to form a new JPA, Clean Energy Alliance (CEA), which also launched in 2021. In August 2021, City staff solicited information from both of these operational CCEs to analyze the benefits and risks of membership.

In May 2021, the Highway 78 Corridor cities of Vista, San Marcos, and Escondido finished their own CCE Feasibility Study. The City of Vista City Council received and filed the Technical Feasibility Study on June 1 and provided direction to staff to explore governance options. The City of Escondido City Council received and filed the Study on June 16 with no specific direction to staff. The City of San Marcos Climate Action Plan Working Group is reviewing the feasibility study.

In August 2021, staff reassessed the CCE options available to the City and concluded that the CCE advantage of a higher renewable energy mix substantially supports progress toward meeting the City’s Climate Action Plan (CAP) goal of 75 percent renewable energy procurement by 2030, which, in turn, conforms to the state’s renewable portfolio standard (RPS) of 60 percent renewable energy procurement by the same date.

Throughout 2021, staff have studied multiple CCE scenarios for Oceanside. These options include a new CCE program with interested cities along the Highway 78 Corridor, creating an Oceanside enterprise CCE, joining one of the operational CCEs in the region, or not pursuing CCE. Based on the available information, staff recommends forming a working group with Vista, San Marcos and Escondido to further explore implementation of CCE in north San Diego County.

Should Oceanside choose to join into a new JPA with the Highway 78 Corridor, the City would need to conduct further analysis to determine how the economics of a new CCE would be impacted. Establishing a new partnership CCE with these cities will require drafting a Joint Powers Agreement, adopting governing documents, and for each City Council to appoint a representative as a JPA Board Director. Under this scenario, the work would likely be completed in 2022 with a target launch of 2024 at the earliest. Staff have also engaged with the City of Santee due to their interest in potentially joining a new CCE JPA with the North County agencies.

The workshop will be held in council chambers on September 29, at 2:00 p.m. Get complete details of the Mayor and Council Workshop Agenda.