CCA For Monterey Bay Powering your future through Community Choice Aggregation

WHAT IS CCA? Established by state law, CCA allows cities and counties to aggregate their residential, business and municipal electricity loads, and to purchase power (and/or generate power) on their behalf. All transmission, distribution, repair and customer service functions remain with the incumbent utility. CCA Responsible for buying and building energy supplies Responsible for delivering energy, repairing lines, and serving customers IOU Home or Business CCA

HOW DOES CCA FIT IN? Roughly 70% of U.S. electricity is supplied by investor-owned utilities (IOUs), with much of the balance coming from publicly-owned municipal utilities. Often called a hybrid model, CCA offers a third way, where key energy functions are handled by a public entity, while the pole and wire infrastructure remains with the IOU.

CCA ACROSS THE U.S. CCA IS CURRENTLY LAW IN 6 STATES California – Marin County; 8 cities + County (see below) Illinois – 15 cities issuing RFPs; 20+ voting 2012 Massachusetts – 21 towns; 200,000 customers served New Jersey – community based activity underway Ohio – 9 counties; 500,000 customers served; 2 million+ customers statewide Rhode Island – 36 cities & towns; municipal load only GROWING INTEREST IN CALIFORNIA Remaining Marin townsSan Joaquin County City/County of San FranciscoMonterey County Sonoma CountySanta Cruz County East Bay CitiesYolo County/City of Davis Humboldt County/ArcataSan Luis Obispo County

WHY DO COMMUNITIES PURSUE CCA? AGGREGATED PURCHASING TO REDUCE RATES Ohio’s NOPEC – saved $127 million for customers since 2000 Illinois cities – saving 25% with CCA negotiation Rhode Island – 36 cities have saved $18 million to date SUPPORTING THE LOCAL ECONOMY Redirected ratepayer revenue is substantial ($75 Million in Marin) Jobs creation through new renewable supply and local EE programs CCA as purchaser of in-county supply (e.g. SVWCA) New investments in local energy facilities Ability to administer feed in tariff, commercial PACE and tailored energy programs ACCELERATED GHG EMISSION REDUCTIONS Achieves State environmental compliance mandates Marin - 33% RPS, 78% GHG-free mix at competitive rates Oak Park, IL - exceeding state RPS; offering % green product Cape Light - led 18.2MW solar contract in 2011; heavy EE savings Sonoma & San Francisco - planning % renewable supply

WHY DO COMMUNITIES PURSUE CCA? (cont.) COMPETITION BENEFITS CONSUMERS & SUPPLIERS MA’s Cape Light CCA actively represents customer interests in regulatory proceedings, competes on price with IOU California’s Marin Clean Energy saw instant IOU rate drops; 16 x requested supply from last RFP; 3 MW landfill gas project – contract completed in 7 weeks not 7 months ADMINISTRATION OF REVENUE & PROGRAMS CCAs access to generation, and now public goods charge revenue, to administer energy efficiency, net metering, feed-in-tariff, PACE, and electric vehicle incentive programs. “CCA isn’t a conservative or a liberal thing – It’s a business tool that reflects the values of its region.” - D. Orth, Kings River Conservation District

MARIN’S CCA COVENANTS 1. Higher Renewable Content: meet/exceed state RPS mandates, 50% qualified renewable within 10 years; 100% green product 2. GHG Reduction: State (AB 32) & Local GHG reduction targets 3. Economic Development: redirection of ratepayer revenue, tailored programs, owned assets over time, job creation/retention 4. Competitive Stable Rates: compared to IOU (PG&E) 5. No recourse to JPA members or local taxpayers 6. Security: local energy independence with local renewables 7. Alternative Electricity Purchaser for local energy suppliers 8. Owned Electricity Generation Assets over time

GHG REDUCTION: COMPARISON BY PROGRAM Excerpt from the Town of San Anselmo’s Climate Action Brochure

CCA’S COMPETITIVE IMPACT

PG&E MARKET TRENDS

HOW CAN CCA BE COST COMPETITIVE? Diversified Portfolio Approach Low overhead & non-profit status No shareholder profit margins or $million salaries Low borrowing costs, tax exempt financing (i.e. revenue bonds) Self-generation of power through local facilities & distributed generation Discounts on prepayment of energy

THE CUSTOMER EXPERIENCE “ CCA: The Biggest Change You’ll Never Notice” CCA electricity charges appear as a new section of the utility bill Typically about 20-25% of the total; All other charges the same Customers receive 4 opt out notices spanning a 5-month period Customers are permitted to opt-out any time PG&E continues to provide billing, customer service, and line maintenance

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