Part 3: AB 2145, Amend, End or Send?

California  Assembly Bill 2145 makes various amendments to the rules of forming and running a Community Choice Aggregator (CCA) which is a local, public power utility that serves as an alternative electricity supply to monopoly power companies. AB 2145 was introduced to committee in February but obtained recent infamy after it passed the Assembly floor in late May.  While AB 2145 has gone through many modifications some of the proposed amendments include limiting the size of CCAs, increasing their reporting requirements and the most controversial, removing CCA’s status as the default provider for municipality electricity once approved. Proponents of the bill claim that CCA reforms are fair and necessary to ensure transparency while those in opposition say the “reforms” will cripple CCAs in order to protect existing monopolies. Whatever you’re opinion, the bill’s transformation through the legislature is worth a closer look. Its path may have critical implications about where the power truly lies in legislation. Spoiler alert: it might not be where you think!

In my three part piece I will examine what the bill might have done, the factors that effected its creation and how what’s left will affect community choice for years to come. Stay tuned!

Part 3: Amend, End or Send

When the Senate Utilities and Commerce Commission amended Ab 2145, dubbed the Monopoly Protection Bill, removing the CCA kill provision (a change from “opt out” to “opt in”), supporters of community choice everywhere celebrated a battle won. The war, however, is not over.

At least that’s according to the Climate Protection Campaign through no2145.org. The campaign, which was essential in attracting public opposition to the Monopoly Protection Bill, released a position paper following the senate committee vote. It offers 3 reasons to still vote NO on Ab2145.

First is a provision that requires CCA’s to provide NOW their rates for the next 5 years of service. Not project them, but report them NOW with perhaps little chance for future adjustment. This choice of words appears innocuous until compared to the reporting requirements of the utilities, who “shall provide its projected electric supply rate”.

Notice the difference?   The CCA is required to know its rates for 5 years in the future while the utility can get away with a rough estimate. In other words, this provision opens up CCAs to lawsuits that it doesn’t for utilities. No2145.org says it’s simply not realistic to know what the energy market will be 5 years into the future and asking CCAs to report them is like requesting a crystal ball.  Seems a little unfair to us here at OCR.

Second, when the kill provision was amended out there was an addition to the bill that places a 3 county limit on CCAs. No2145 complains that this designation is arbitrary and may prevent smaller counties from forming a CCA.   Even after pooling their populations, smaller counties may not have enough buying power to compete with the utility monopoly due to the arbitrary county partnership limit.

No2145.org mentions 4 counties, Arcata, San Luis Obispo, Santa Barbara and Napa County that say the 3 county limit would interfere with their efforts to form a CCA.  On the one hand if you limit expansion you guarantee CCAs will not become what they are designed to challenge: monopolies.  Right now, nothing is necessarily stopping Marin Clean Energy or Sonoma Clean Power from becoming the next PG&E. However that logic places a great deal of expectation on the snow balling effect of expansion, especially since instituting a CCA is still a difficult process.  Still, it is my opinion that CCA’s maintain a uniquely benevolent and flexible role when they are run locally. I’d hate to see that challenged by the muse of unlimited expansion.

On the county partnership limitation Senator Alex Padilla puts it this way, “when you are establishing a credit union you are asked to define the community of interest, so if community choice aggregation is indeed community aggregation, how do we begin to define the community? Is it small, is it big, is it statewide, [or] is it somewhere in between?”

While Padilla agreed with putting boundaries on CCAs, he also conceded that “not all counties are created equal” but they are instead “varying in terms of population size… geographic area… and rural vs urban.” He supported the bill’s county limit amendment in order to start the conversation on “what ought to be the right number” of counties in a CCA knowing full well that “there is still a lot to be discussed and probably negotiated.”

With the bill set to vote in early August, the time for discussion is now. Is a three county limit reasonable or is it damaging? Is it too arbitrary?  Is county the wrong aspect to look at altogether? Should CCAs be limited by something else, for example, population size? Or perhaps the increased utilization of renewable energy worth the eventual loss of small locally governed CCAS?

The final debatable provision in Ab2145 requires the California Public Utilities Commission (CPUC) deal with complaints against CCA’s. According to opposition, this provision interferes with “sound local accountability and management, runs contrary to existing local oversight” and “would add a costly, lengthy, and unnecessary bureaucratic burden.” Opposition foresees utility attorney-armies filing an onslaught of pointless lawsuits, financially crippling CCAs with hostile litigation.

While I can certainly see the danger, I am not convinced of its degree. Just as it’s unlikely that an unchecked CCA will suddenly snowball into a PG&E like monopoly, a new CPU complaint process is unlikely to bury live CCA’s in legal fees.  Then again, crazier things have happened.

So what’s the take away from all this debate?  This author believes utilities and CCAs should have the same reporting requirements.  Concerning CCA expansion limits and CPUC regulations, my jury is still out.

In the end, it will be left to you, the California voter, to decide.  What do you think? Comment on our Facebook page here, write your senator, sign a petition or spread the word on social media by going here or support the amended bill, but remember, no choice is a choice. Community voice overcame monopoly power once and if we want to see it happen again, we have to act.

One last thing before I leave you all: if this debate seems far away, note that nearby San Diego and Santa Barbara counties already started the CCA implementation process. How these rules play out will soon affect Southern California and likely Orange County. It’s time to decide in what way. This concludes my 3 part exploration of AB2145.  Thanks for sticking with me!

Part 2: AB 2145, What it is Now

California Assembly Bill 2145 makes various amendments to the rules of forming and running a Community Choice Aggregator (CCA) which is a local, public power utility that serves as an alternative electricity supply to monopoly power companies. AB 2145 was introduced to committee in February but obtained recent infamy after it passed the Assembly floor in late May.  While AB 2145 has gone through many modifications some of the proposed amendments include limiting the size of CCAs, increasing their reporting requirements and the most controversial, removing CCA’s status as the default provider for municipality electricity once approved. Proponents of the bill claim that CCA reforms are fair and necessary to ensure transparency while those in opposition say the “reforms” will cripple CCAs in order to protect existing monopolies. Whatever you’re opinion, the bill’s transformation through the legislature is worth a closer look. Its path may have critical implications about where the power truly lies in legislation. Spoiler alert: it might not be where you think!

In my three part piece I will examine what the bill might have done, the factors that effected its creation and how what’s left will affect community choice for years to come. Stay tuned!

Part 2: The Fans and Foes of AB 2145

In my last post, we saw how the “opt in” provision in California AB 2145 threatened to kill the future of Community Choice Aggregators (CCA’s) across the state. The bill, with this hazardous provision, sped through the legislature without controversy until abruptly amended in the Senate. There, the “opt in” provision was removed and it seemed the worst was over. Yet, for those monitoring the path of AB 2145s through the legislature, the confusion certainly wasn’t.

Why is it that a bill with such obvious consequence should fly through one legislative body and then completely reform in another?

For the answer, look no further than the list of the bill’s few original supporters: PG&E and 3 prominent labor unions.   PG&E already proved their determination to stop CCA’s at all costs, when they spent $46 million in 2010 on a ballot measure that would have made CCA formation near impossible. With their economic clout, the power of their influence comes as no surprise. Labor union opposition is also unsurprising as CCA’s are frequently framed as a threat to the traditional utility employer despite the fact that CCA’s have so far been shown to increase jobs, not lose them.

Interestingly, in a blog post published by the Labor Union International Brotherhood of Electricity Workers (IBEW), jobs were not mentioned.   Criticisms instead centered on the issue of transparency and complaints that Marin Clean Energy, the first California CCA, over reported its benefits.  Whether or not these complaints have merit, a call for increased transparency seems reasonable at first. However, at the end of this post is a link to sign a petition with the title, “Support AB 2145: Stop Shell Oil from Automatically Enrolling Thousands of Californians in their Dirty Energy Program.” This accusation came out of left field following this moderate post, nowhere in the article was Shell Oil even mentioned.

Comments following the petition link included the likes of, “I believe that clean energy is the only way to go“ and “I want to stop our collective planetary suicide,” feedback you'd expect to find at NO2145.org, a site run by the Climate Protection Campaign not a petition in support of the monopoly protection bill. It goes without saying; the petition was misleading the public into signing something with dire consequences for community choice, local power and clean energy under false pretenses of environmental protection.

In the Assembly as well, AB 2145 rode through under false pretenses. Supporters again called for transparency. Assemblyman Bradford repeated the mantra: “community choice, not community force”. Almost all of the supporters of AB 2145 claimed they supported CCAs provided they were reformed. Yet, none of the supporters realistically addressed the detriment that the “opt in” provision would have on future CCAs (essentially stopping them before they start) nor the fact that rate payers already have no choice in regards to their energy without CCAs. Opposition brought to light these and other problems with AB 2145 but it fell on deaf ears in the Assembly, which passed the bill 41 to 12 on May 28^th. CCAs were dying while the Assembly was pretending to protect “community choice.”

Woody Hastings, from the Climate Protection Campaign, asserts that misinformation about CCAs pushed forward by the PG&E and its labor union IBEW was rampant in the Assembly. It was these lies and Assemblyman Bradford’s political clout as Chair of the Utilities and Commerce committee that enabled the bill’s smooth ride through the Assembly.

In regards to transparency, Hastings said that despite PG&E’s unfounded attack on CCAs, he supported a provision in the original bill that required a uniform accounting system for greenhouse gas emissions. Uniform emission reporting would ensure data was accurate and comparable. Unfortunately, in another show of Sacramento politics, that provision was amended out early in the process, to avoid the Senate Environmental Quality Committee where the bill would likely have died.

PG&E and AB 2145 political allies met their match however, when a list of local governments, businesses and nonprofits in opposition to AB 2145 quickly ballooned from 140 to 200. The opposition united and earned its own political influence. Senator Alex Padilla stated in late June, “for the last, literally weeks, my office has been in recite of phone calls, faxes, email, notes being dropped off, you name it, expressing concerns about the ‘opt in’ vs ‘opt out’ provision of the bill in print. That was sort of loud and clear.” What was loud and clear during the Senate Energy, Utilities and Communications committee meeting on June 23^rd was that organized, persistent and targeted action of a populous could not be ignored. There the “opt in” provision was finally pushed out of the bill.

With “opt in” dead, the question now becomes how much opposition towards AB 2145 is left and will it be strong enough to go head to head with continued PG&E support?

Interested in hearing more about the battle over AB 2145? Stay tuned for my third and final blog post as we look at what’s left in the bill and what it means for Orange County. Until then, feel free to learn more at http://www.no2145.org/

~Marla

A 3 Part Look at AB 2145: What it was, What it is Now and Why it Matters

California Assembly Bill 2145 makes various amendments to the rules of forming and running a Community Choice Aggregator (CCA) which is a local, public power utility that serves as an alternative electricity supply to monopoly power companies. AB 2145 was introduced to committee in February but obtained recent infamy after it passed the Assembly floor in late May.  While AB 2145 has gone through many modifications some of the proposed amendments include limiting the size of CCAs, increasing their reporting requirements and the most controversial, removing CCA’s status as the default provider for municipality electricity once approved. Proponents of the bill claim that CCA reforms are fair and necessary to ensure transparency while those in opposition say the “reforms” will cripple CCAs in order to protect existing monopolies. Whatever you’re opinion, the bill’s transformation through the legislature is worth a closer look. Its path may have critical implications about where the power truly lies in legislation. Spoiler alert: it might not be where you think!

In my three part piece I will examine what the bill might have done, the factors that effected its creation and how what’s left will affect community choice for years to come. Stay tuned!

Part 1: Bad Bill Defanged

Two weeks ago proponents of local jobs and clean energy across CA gave a collective cheer as AB 2145, dubbed the Monopoly Protection Bill, was robbed of its most threatening clause. The bill was viewed as an end to Community Choice Aggregators (CCAs) which are the beloved alternative to monopoly generated power.

As it stands right now, CCA serve as an alternative to monopoly produced, no-choice electricity. Instead of accepting power from the region’s mega-utility Pacific Gas & Electric (PG&E), Southern California Edison (SCE) or San Diego Gas & Electric (SDG&E) small governments have the opportunity to switch the provider of their constituent’s energy to a CCA, a small public agency that buys electricity from mostly local suppliers. CCA micro-utility generally have the mechanisms to provide electricity that is more locally produced, more renewable and more cost effective than the state regulated mega-utility.  Sound to good to be true?

Well, the secret to their success lies in 2 little words “opt out.” When a CCA is voted in, the surrounding community is automatically switched so the CCA becomes their default provider and rate payers are allowed to “opt out” if they want to return to the monopoly generated electricity. Having thousands of guaranteed customers gives CCA’s the economy of scale they need for their micro to compete against a larger, established competitor.

Since the opt-out provision came to CA in 2002 two successful CCA’s have launched, first in Marin County and second in Sonoma County.  Today, upwards of 6 more projects are on the table. While not without their controversy, CCA’s are viewed by many as a critical and innovative tool in the fight against climate change through competition.

Yet, if AB 2145 passed the senate in the form that it passed the Assembly, the magic of the CCA would have fizzled. 62nd district Assemblyman Steven Bradford sponsored the bill with an “opt in” clause that would have forced each member of the community with an approved CCA to send in notice that they wanted to opt into the CCA.  Imagine trying to get every person to not only pay attention to their mail, but to actively respond to it! Eric Brooks of the San Francisco Green Party speaks for the more than 200 organizations listed on the bill as opponents who say that this provision would kill any CCA before it even started.

Of course, Assemblyman Bradford doesn't see it like that. According to Bradford, this bill is entirely different than Prop 16, a failed CA ballot measure pushed forward by PG&E that would have required a super majority (2/3 vote) to form a CCA. Yet proposition 16 would have at least left CCAs in the hands of citizens responsible enough to vote, not to entire populations over-busy and overburdened with junk mail. Jamie Tuckey, communications director of the CCA Marin Clean Energy, says that expecting that type of initiative out of the populous is unrealistic, no matter how much “climate zeal” they have.

Even so, Bradford maintains that his 4 year stint in the Conservation Core outweighs his previous employment for Southern California Edison and proves that Ab 2145 was not about monopoly protection at all, but transparency and choice! This of course, assuming that Californians had a choice in the current system of power company monopolies.

Regardless of Bradford’s intentions, it’s pretty clear that AB 2145, as it passed through the Assembly, was a CCA-Kill Bill. Lucky for CCA supporters everywhere, the “opt in” clause is now off the table.  With that most controversial piece amended out, it’s anyone’s guess if the bill will pass the Senate or what it will mean for CCA’s if it does. But I am getting ahead of myself! Stay tuned for my next installment as I look at how that dangerous clause made it so far through the CA legislator and what eventually brought it down!

~Marla