{"id":531,"date":"2022-11-02T18:45:11","date_gmt":"2022-11-03T00:45:11","guid":{"rendered":"https:\/\/celj.cu.law\/?p=531"},"modified":"2022-11-02T18:45:11","modified_gmt":"2022-11-03T00:45:11","slug":"community-choice-aggregators-biomass-energy-and-californias-just-transition-a-case-study-of-ab-843-and-responsible-biomass-procurement-principles","status":"publish","type":"post","link":"https:\/\/celj.cu.law\/?p=531","title":{"rendered":"Community Choice Aggregators, Biomass Energy, and California\u2019s Just Transition: A Case Study of AB 843 and Responsible Biomass Procurement Principles"},"content":{"rendered":"

<\/a> Introduction<\/strong><\/p>\n

On September 23, 2021, California Governor Gavin Newsom signed twenty-four historic bills focused on climate and clean energy efforts, drought, and wildfire preparedness.[3]<\/a><\/sup> Included within that slate of bills was Assembly Bill (\u201cAB\u201d) 843, which allows Community Choice Aggregators (\u201cCCAs\u201d) to submit eligible bioenergy projects to the California Public Utilities Commission (\u201cCPUC\u201d) for cost recovery.[4]<\/a><\/sup> This article explores the potential benefits and issues that could impact California\u2019s energy market as CCAs begin to develop biomass energy projects under AB 843. It also details background information on the development of CCAs in California, the regulatory framework that prompted the passage of AB 843, and it provides an explanation of Marin Clean Energy\u2019s (\u201cMCE\u2019s\u201d) Principles of Responsible Biomass Electricity Development<\/em>, which have been designed to support a just transition away from fossil fuels and toward renewable energy sources.<\/p>\n

<\/a> I. California Community Choice Aggregators\u2014Governance, Engagement, and Benefits<\/strong><\/p>\n

\"Logo, After California\u2019s energy crisis of the early 2000s, CCAs were created by AB 117 (2002), which allowed towns, cities, and counties to aggregate their electric load and select the generation sources of electricity that best serve their communities\u2019 needs.[5]<\/a><\/sup> Historically in California, electricity customers received their generation, transmission, and distribution services all from the same vertically integrated utility\u2014either an investor-owned utility (\u201cIOU\u201d) or a municipally-owned utility (such as the Los Angeles Department of Water and Power).<\/p>\n

Figure : HOW MCE WORKS<\/p>\n

In contrast to IOUs, which are regulated by the CPUC and have a for-profit, investor-owned model and a guaranteed profit,[6]<\/a><\/sup> CCAs are not-for-profit government agencies, and their operations are overseen by local elected officials who are appointed to serve on CCA boards of directors.[7]<\/a><\/sup> Regarding generation services, CCAs undoubtedly compete with the incumbent IOU.[8]<\/a><\/sup> However, for transmission, distribution, meter reading, customer service, and some programs, the IOUs and the CCAs are partners in providing services to their shared customers. In this way, CCA customers still have the transmission and distribution line items of their bill subject to CPUC regulation because they are still directly paying the IOU.<\/p>\n

CCA formation is governed by a complicated legal, regulatory, and community engagement framework. Pursuant to AB 117, CCAs are only allowed to form within an IOU service area.[9]<\/a><\/sup> AB 117 and CPUC Resolution E-4907 establish the process for a city or jurisdiction to register and implement a CCA and outline CPUC regulatory requirements related to submission of an Implementation Plan, Resource Adequacy requirements, bond payments, and customer notifications.[10]<\/a><\/sup> If a municipality wishes to offer a CCA option to its residents and businesses, its city council or board of supervisors must have a majority vote in a public meeting.[11]<\/a><\/sup> The months leading up to this vote regularly include a period of intensive community engagement, such as sending out mailers to inform residents of the upcoming vote and presenting to important community groups such as local farm bureaus, nonprofits, or Chambers of Commerce. If a majority of elected officials vote to move forward with community choice, then an even deeper community engagement process begins.<\/p>\n

MCE is a CCA that currently serves over 1 million people in thirty-seven communities throughout Marin County, Napa County, Contra Costa County, and Solano County.[12]<\/a><\/sup> In the case of MCE, a robust community engagement process included the formation of a Community Leader Advisory Group composed of local leaders and representatives from significant businesses and organizations identified by town, city, or county staff. These advisory group members are educated about the CCA structure, energy options, and related customer programs. They are asked to spread the word about the upcoming change in electric service to their networks and are given the tools to do so, such as program pamphlets and language to include in their newsletters and social media. In parallel, MCE staff will attend various events, schedule many presentations, and make themselves available to answer community questions. At least four additional mailers (often in multiple languages) are sent out to all electric account holders, informing them of their electric options and how they can learn more about the forthcoming changes to their electric bills.<\/p>\n

Once a jurisdiction votes to form or join a CCA, customers are automatically opted-in to receive electricity generation services from the CCA, essentially changing the community\u2019s default supply from the IOU\u2019s existing generation portfolio to the CCA\u2019s portfolio. Customers have the option to opt out and return back to their traditional bundled service, which means that they will return to the local IOU to continue receiving generation as well as transmission and distribution services.[13]<\/a><\/sup><\/p>\n

The first California CCA was formed in 2006 in the San Joaquin Valley. Often referred to as the \u201cCentral Valley,\u201d this region of California is typically associated with large-scale farming and working-class families.[14]<\/a><\/sup> The Central Valley is where Cesar Chavez and Dolores Huerta organized Latino farmworkers into a union, creating the National Farmworkers Association (a predecessor to the United Farm Workers) and gaining national attention to improve their working conditions.[15]<\/a><\/sup> The San Joaquin Valley Power Authority was the first CCA to be certified by the CPUC,[16]<\/a><\/sup> encompassing parts of Fresno County, Kings County, and Tulare County.[17]<\/a><\/sup> These counties consistently rank among the lowest in per capita income, median household income, and median family income in California.[18]<\/a><\/sup> Unfortunately, despite being the first CCA to have its implementation plan certified by the CPUC, the nascent program was shuttered due to aggressive IOU opposition.[19]<\/a><\/sup><\/p>\n

California\u2019s next CCA, MCE, was formed in Marin County in 2010.[20]<\/a><\/sup> Marin County is considered one of the wealthiest counties in the United States\u2014the unemployment rate in Marin County stands at around 2.1 percent,[21]<\/a><\/sup> which is lower than the national average that currently sits at around 3.6 percent.[22]<\/a><\/sup> The median household income in Marin County is $115,246,[23]<\/a><\/sup> which is significantly more than the national median annual income of $67,521.[24]<\/a><\/sup><\/p>\n

In 2013, MCE expanded beyond Marin County with the addition of the city of Richmond.[25]<\/a><\/sup> Geographically, Richmond is very close to Marin\u2014only five miles away, separated by the San Francisco Bay. However, it is very distant from Marin economically, with a median income of $68,472, and roughly 14.7 percent of the population lives in poverty.[26]<\/a><\/sup> Since its first expansion, MCE has continued to grow, and by spring 2022, the MCE service territory will include thirty-seven jurisdictions across four Bay Area counties\u2014Marin, Napa, Solano, and Contra Costa\u2014encompassing a population of over 1 million people in the San Francisco Bay Area.[27]<\/a><\/sup><\/p>\n

What began in the Central Valley and was fostered by Marin has swiftly grown into a bona fide movement in California. Today, more than twenty CCAs serve over 10 million people, or a quarter of the population of the state.[28]<\/a><\/sup> These CCAs serve several community goals, from developing renewable electricity and lowering the cost of electricity, to fostering electric bus fleets and installing self-sufficient microgrids in remote areas.[29]<\/a><\/sup><\/p>\n

In California, CCAs have typically selected sources of electricity that are more renewable than the incumbent utility. A 2020 University of California, Los Angeles study indicated that CCAs reduce electricity-related greenhouse gas (\u201cGHG\u201d) emissions compared to the forecasted decarbonization scenario without CCAs.[30]<\/a><\/sup> As not-for-profit agencies, CCAs are also well-positioned to reinvest net revenues in local energy programs that are tailored to the needs of their communities, such as energy efficiency incentives or electric vehicle rebate and charging programs.[31]<\/a><\/sup> These programs reduce GHG emissions and customers\u2019 energy bills, and support California jobs.[32]<\/a><\/sup><\/p>\n

For example, MCE has:<\/p>\n