Community Choice Aggregation Update

Electricity in Santa Monica Today Santa Monica’s Electric Load 48,000 residential accounts 9-10,000 commercial accounts Represents ~20% of total GHG Annual Load – 900,000 MWh Gross revenue value – $55M

What is Community Choice Aggregation? CCA (CCE) allows local governments to purchase and sell electricity to customers in their jurisdictions instead of investor owned utility (IOU) power procurement.

Why Community Choice Aggregation? Allows for communities to have a higher percentage of renewables at potentially lower cost Sourcing electricity from renewable sources is an essential strategy for reducing emissions and reaching carbon neutrality

Background Jan 30, 2015 June 20, 2016 Sept 27, 2016 Oct/Dec 2016 Council adopts a non-binding resolution to join South Bay Clean Power feasibility study SBCP approaches LA County to take the lead in financing the feasibility study for a countywide CCA. June 20, 2016 LA County publishes the feasibility study in the form of a Business Plan. Sept 27, 2016 LACBOS authorizes LAC CEO to engage stakeholders, determine governance structure and begin negotiations with eligible and interested cities. Oct/Dec 2016 SBCP and LA County hold stakeholder meetings to update members on the process Interested cities are invited to participate in JPA ‘negotiations’ starting Jan 2017

LA County Business Plan findings The Business Plan determined that a CCA is feasible and could yield in cost- savings for residential and commercial electricity customers. Rate Class SCE Bundled Rate LACCE 50% Green Bundled Rate LACCE 100% Green Bundled Rate Residential 17.1 16.4 18.2 Small Commercial 16.6 15.9 17.7 Large Commercial 15.8 15.2 16.9 Industrial 14.5 13.9 15.5 Total LACCE Rate Savings 4.1% (6.3%) Rate with 50% renewable energy could be 4% lower than the SCE base rate of 28% renewables. Rate with 100% renewable energy could be only 6% higher than SCE’s base rate. Emissions could be reduced by 7% at a 50% renewable content and 14% at a 100% renewable content. LAC could support local and regional energy projects, creating local jobs. The County and cities would have choices for retail and program offerings.

CCA Options for Santa Monica Engage the Los Angeles Community Choice Energy program, and participate in Joint Powers Authority formation Engage the South Bay Clean Power sub regional CCA program, and participate in Joint Powers Authority formation Explore initiating a CCA as a single-city entity, and contract services for initiation from Lancaster Choice Energy, or a private third party.

Los Angeles Community Choice Energy (LACCE) City would enter a JPA with County and other interested LA County cities and establish a regional CCA Each participating city would be represented with a seat on the JPA Board of Directors LACCE would issue a Request for Services that includes all CCA funding and development costs with no cost to any individual city Voting: one city-one vote; Weighted Voting (proposed): electric load

South Bay Clean Power (SBCP) City would form a JPA with other interested South Bay & Westside cities and establish a sub-regional CCA Each participating city would be represented with a seat on the JPA Board of Directors SBCP would issue a Request for Services that includes all CCA funding and development costs with no cost to any individual city Voting: one city-one vote; Weighted Voting (proposed): electric load

Lancaster Choice Energy (LCE) Pay LCE $77,000 for its services Produce load forecasting, data analysis, and pro-forma development based on the City’s energy data Prepare an Ordinance of Intent to Form a CCA and Implementation Plan Document for the City Once the CCA is operating, the City would pay a monthly fee for LCE services Council would set rates, determine renewable mix, set policy and program elements, do outreach & marketing, and maintain local governance oversight City would be free to use any revenue from the program for any purpose

Private Third Party Service Providers The City hire a third party service provider to develop and implement a CCA Service provider would conduct a feasibility study, develop a business plan, and initiate CCA services on behalf of the City, with no startup costs

LACCE SBCP Lancaster 3rd Party Start-Up Form JPA Hire staff Contract services $77,000 Feasibility study Business plan Governance Boardmember City Council/Staff Administration JPA Lancaster/City Staff City Staff/Contractor Benefits -No upfront cost -Purchasing power -Interest/Influence -Timing/Speed -Centralized utility -Revenue to City Disadvantages -No revenue -Upfront cost -Ongoing fee -Admin/Finance -Steep learning curve

Proposed CCA Resolution Goals: Eliminate carbon emissions Achieve high rate of cost-competitive renewables Increase energy services, local solar, EV charging and clean technologies Objectives: Implement/participate in a CCA with similar goals and objectives Achieve high level of participation in the community Ensure voting representation reflects energy achievements, or population, instead of total electrical load Ensure a sustainable and equitable source of funds to support local projects Ensure that all Santa Monicans will have equitable and affordable access to clean energy and energy services

Recommended Actions Provide direction to staff to pursue one or more Community Choice Aggregation (CCA) implementation pathways: opt to join either the LA County or the South Bay Clean Power JPA, explore initiating a CCA on its own, or choose not to participate in a CCA; and Adopt a resolution that establishes a platform of goals and objectives for negotiation and appoints one Council representative, one staff liaison and one staff alternate to formally participate in Community Choice Aggregation Joint Powers Authority negotiations.

Thank you