Recommendation to receive and file a report on the feasibility of a Long Beach Community Choice Aggregation.  (Citywide)
Motion is carried. Thank you. I'm 39. Please. Report from Energy Resources recommendation to receive and file a report on the feasibility of a Long Beach community choice aggregation citywide. He will turn this over to staff. Thank you, Mayor, and members of the city council. We do have a brief staff report. You asked us to come back within a year. We were here last year and had a really in-depth discussion on CCS. I think it took several hours. That is not our plan tonight. But we do want to give you the update that you asked for. And I will turn it over to Chris Garner and Tony Foster and Bob Dow to give our report. Good evening, honorable members of the City Council. As Tom just said, last year, staff requested at a city council meeting on community choice aggregation that we report back on some actions. And that's what we're going to present tonight. We'll get a status report on those actions. And to start off with. I'll turn over to Tony Foster, the manager of business operations for Interview Resources. Thank you and good evening. So a quick refresher on case a Long Beach, CA would replace the incumbent electric utility, in our case, Southern California Edison, as the default buyer of electricity for all Long Beach residents and businesses. The idea was that a CA might procure lower priced and cleaner power. Then see. Yet, Edison would continue the transmission of power over its existing poles and wires. The Long Beach CA concept has been discussed in various aspects several times with the City Council and the Sustainability Commission. We have completed our due diligence. Staff has continually urged caution on the forming of a ceasefire. Council directed staff to conduct four tests as shown on the screen. Number one Monitor Sica's relative to current and emerging markets and related regulations. Number two, evolve the partnership between the city and city to promote awareness of existing and emerging programs focused on increased energy efficiency and greater utilization of renewable energy sources. Number three, facilitate community outreach regarding the CCAR concept along with potential risks and benefits to customers. And number four, undertake a study that analyzes CCAR governance options. Green Power Alliance S.p.a. Is the primary school in Southern California Edison's service territory the largest in California? CPA has presented to both the City Council and the Sustainability Commission in the recent past. Orange County Power Authority, a newly launched DCA in FCC territory, will not begin service to residents until late next year and therefore cannot be used as a benchmark. If you donate, if you recall, one of the main selling points of A to a city is the potential for cost savings for customers, SDF costs. And last year the reality is that the rate margins for cars has been shrinking over the past few years to the point where now several cars now have rates higher than those charged by the private utility for Long Beach. The best comparative example is the rates of Clean Power Alliance, which is shown on the screen currently. If Long Beach had joined CPA, a typical Long Beach resident would pay about 6 to 7% higher than they do today as a customer of Southern California Edison. Importantly, for our most vulnerable low income residents, they would have seen a 2 to 8% increase in their monthly electric bills. Something that's often heard is that customers of some of the company s and do not have a choice for green power and a CCAR would offer that. That's not exactly correct. If you look at the screen, a customer of Southern California Edison today has the same three options that they do with a Clean Power Alliance. They have the base option. They have a 50% minimum green power, and then they have 100% renewable. So any Long Beach resident that desires to have their electricity met with greener power mix has two options available. Today, with Southern California Edison, with each option at a lower cost than those doing so with S.p.a. On a completely voluntary basis of their own choosing and with no involvement or taking on risk by the city. Another thing you hear about is there's a proven track record for cars in that there's very little financial risk. That's far from the truth. There isn't much of a track record in Southern California for cars since we last updated the city council. California has experienced its first CTA bankruptcy, and now four cars have decertified due to market factors and financial realities. The Riverside County okay filed bankruptcy due to financial shortfalls in its first year of operation. All those customers returned back to Southern California. Edison and Edison is now going over the after the Joint Power Authority or JPA to cover the cost for this transition. If SCC does not get full cost recovery from JPA, these former KIA customers may be on the hook for these costs. So a JPA may protect the city, but customers may not have the same protection if it fails. The relationship with Southern California Edison is critical. We want to make sure that we point out that it's not necessary for the city to form to realize the city's environmental goals. It's important to realize that Edison and CCAS are subject to the very same clean energy targets by the state as independent provider of electricity in Long Beach for over 100 years. And Long Beach is the largest city served by Southern California Edison. Additionally, Long Beach's climate action and Adaptation Plan is heavily reliant upon the success of Edison meeting its own environmental goals. As such, it's both critical and logical for the city to take advantage of the long term relationship and maximize the cleaner benefits that can best be achieved by working closely with Southern California Edison. At City Council Directions. City staff has worked for the past year with Edison to create a new Clean Pathway Community Partnership. This partnership with Edison was discussed in detail last month in a presentation to City Council, explaining how it is focused on the transition to clean energy, utilizing and promoting technology innovations and expanding the electrification of transportation . Also, as mentioned earlier, Edison currently provides two options to Long Beach residents who desire greener power. The city is committed to working with Southern California Edison to get that information out to residents to try to increase the number of customers taking advantage of those greener options. This will help the city in its efforts to reach the CAP goals. I'll turn back over to Bob Del. As staff has mentioned before, there are still major regulatory issues that are currently and will continue to impact the financial competitiveness of cars listed on this slide or three of those issues. Exit fees known as PCI charges along with. Except he's known as CIA charges a charge by the CCAR customers every month. Resource adequacy requirements that increase supply reliability, which will significantly impact costs paid by CCAR beginning in 2023. And the requirements under SB 350 that we require that 65% of a six energy contracts be terms of ten years or more. This alone would equate to a Long Beach CCAR incurring hundreds of millions or even billions of financial obligations. In any event, the city council still wanted to pursue a CPA. Staff was asked to have a governance study prepared that evaluated the three options. Those three options discussed in detail on the staff report and the actual governance study is attached to the staff report. I'll just highlight these very quickly. There was a stand alone enterprise that we were asked to evaluate. The city maintains the full flexibility, responsibility for delivering all policies and procedures, and the CCAR would be tailored to the response of the city stakeholders and constituents. And those are the cons. The city assumes all risks, liability and cost, including a significant startup costs of 15 million associated with operating a CPA. And there's no protection for the financial assets of the city under this option. Creating a joint power authority proves the city shares responsibility with other agencies, protects the assets of the city, and distributes the risks and costs with the participating agencies. Industry in the GTA. Under the Cons with two or more parties, as you would assume the decision making is allocated among the agencies, management independence is diminished and many times the objectives of the participating agencies may not be aligned in setting priorities for local generation economic development and programs. Supporting programs. Adjoining a CETA or in this case we evaluated joining the Clean Power Lines. Obviously, a shared responsibility among participating municipalities is one of the pros, protects the financial assets of the cities. It's quicker to implement all of the cons. We would be just one of 33 participating municipalities with only one vote. Little to no ability to direct any priorities for rate setting as well as local generation, economic development and support programs. And that should the city ever decide to exit from that JPA or from CPA, we would likely be responsible for any future power commitments that the CPA purchased on behalf of the city of Long Beach. Our community outreach is critical. It is a critical component in the formation of a CCE. The COVID 19 pandemic restrictions on gatherings have made it problematic to have any meaningful community outreach events. As such, this outreach has been deferred for the time being. One of the recommended actions that staff will present this evening is for them. Do not take any action at this time to initiate the creation of a CCE in any form for Long Beach. City staff will continue to monitor the California energy market and regulatory environment as they relate to case. If any substantive CCR developments occur. Staff will report back to City Council with those developments to reevaluate the creation of a CAA for Long Beach and then the fourth continue the partnership partnership efforts with FCC to increase efforts to better promote green energy options that are currently available for residents and businesses. This concludes our presentation and we're available for any questions. Thank you. Come to me, Ringo. If a motion received file. Yesterday when I think it's time for a. Thorough report. On this, I think that obviously we are that the jury is still out on the benefits of jury. Okay. So I think that we need more opportunity to study it further. And I move that we receive a part of this report. Kathryn Austin. A second emotion. I think, again, we were asked for a feasibility study. The feasibility study has come back and it's pretty clear to me that at this point it is not prudent or feasible or wise for our city to move forward in this regard. I do say that our feasibility study and the work done by our staff, I'm encouraged because we heard a pretty comprehensive report from from Southern California Edison just a few weeks ago that I believe that had we not move forward with this, we may not have seen the type of advancements in clean energy from from from Edison in that regard. And so our actions are actually moving the needle. And so I think the council should be applauded for that. And I want to thank staff for their work on this important item. Perhaps it comes back in the future to see as, as as advancements with CCS are worked out. But it doesn't look like this would be in the interest of our or our residents as ratepayers. And for me, I'm really concerned about those who are. Always, always. Concerned about those who are on fixed incomes. I do not want to add to the cost of their their utilities, but by taking a risk at this point. And so I support this item to receive involved. Thanks. Thank you, Councilwoman Allen. Awesome. And thank you. I also want to thank staff for their hard work on this. And I also think all of the advocates that have been pushing us to get greener, I love that. And we can clearly see from the last few years that there is a burning desire for faster climate action in our community and local control is a motivating factor. But there are concerns as well given the Riverside CCAR bankruptcy and lingering unpaid balances by utility customers statewide. While I do not believe that the city's fiscal position at this time is strong enough to assume the risk of creating SCCA or JPA, this may not be the case and years from now. So staff, please continue to monitor the health of other CCS and the AC territory. The PC, the PUC actions, including any adjustments to the CIA and the green energy ratios and the CS portfolio. That's a lot of acronyms. Additionally, I think that continual monitoring is proper decision tonight and we need s c to come to the table and be, you know, a bolder, more active partner. Long Beach is is definitely important to see. And if we're going to delay considerations of a CC at this time, then we need to come to the table to come to the table in a more serious, a serious way. Let's make Long Beach, you know, a model community for electrification and zero emission, industrial, commercial and residential and transportation technologies. I look forward to working with my colleagues and SC and to step up our game in a new year and going forward. So for city staff and I just have a couple of questions for you. Can you share what the timeline looks like for getting city accounts into 100% green energy? Excuse me. So you're asking if we took all 20 city accounts? We actually did that back in late nineties. We purchased electricity for all 3000 city accounts on the open market. It was when deregulation first happened in the electric industry. We turned those back on workers, on the companies, and because that failed, not with us, but with the state, and we could look into that again. There's obviously a cost to go green power. It is increase. I know we looked at just for the water treatment plant it was we transferred to 100% green power, I believe it was about $300,000 a year increase in costs just for that one account. So it's quite expensive, but we can look into that. And just add on to that question. We have included that in our cap. I believe that was one of our long term goals through our cap, it was a several million dollar budget hit. So if I remember it was in the probably 3 to $5 million range and it was going to be phased in over the next several years. We can work to get you an actual date of when those go into the financial projections. And then can I kindly request with any future updates? With regards to SB 350, I was recently informed that the Clean Energy Project Revenue bonds in Northern California successfully generated like 1.5 billion and proceeds for three participating CCAS. So can you also look into that and how they work and include that in any future updates as well, please? Yes, absolutely. Okay. And then if it's okay with a member of the motion, there's just a couple of things that I like to add. So first, I continue to monitor the landscape of CCS and AC service territory and then report back next year, you know, similar to what you did at tonight's presentation and then bring back as part of the Clean Pathways Partnership with Southern California Edison Edison. The following clear goals and I'm happy to work on this, you know, and in committee or I can work at work here in the full diocese. But clear annual signup goals for S's Green Rate Program based on a robust Southern California Edison marketing and Long Beach. And then to direct identification of our largest and worse to use energy users from Etsy so that we can work with them and SC to reduce the energy usage in line with our cap. Okay. And then three increase generation and use of renewable on city and institutional sites, including Lobby, City College, Long Beach State and Long Beach Unified School District. And then last. Any innovative pilot projects for local EV charging at all income levels and grid resiliency solar generation in ways that could help reduce the urban heat island effects. Early and we're already working on quite a few of those with Southern California Edison as we speak. And so we'll be able to do that. Okay. And so what to make of the motion except those friendlies. Well, yeah. Also unclear because we're not really taking any action on this report that they received on file. But I think that you're giving instructions, I think, to staff to do some additional. Back. Study of this whole thing. Is that correct? From Council. Member Your Honor, you're correct that the friendlies would add. Additional requirement to receive and follow this motion. And I'd like to bring back a report in a year, along with the other items that she'd asked them to look at. So I would. Okay. Yeah. Thank you. Thank you, Councilman Mongo. Thank you. I want to comment on a couple of quick things. I am really impressed with the way in which our city staff have really worked hard to ensure that our residents have options within the system that we're in today through Edison that give them the option to use 100% renewable energy. When I read the report, one of the things that's of concern is that as the excitement around cars was growing. The new creation of CCS and the demand for renewable energy completely exceeds the ability to produce the renewable energy. And so to give those Long Beach residents the ability to get that renewable energy today is great as we look at supply chain issues and our ability to build out green energy. I think that five years down the road, things might change. But where we are today, to be able to give our residents the option to opt into a green energy plan without the risks associated with the KIA model I think is a great step forward. I think that we as a city can do a better job advertising that rate so that we can encourage residents to move in that direction. But at the end of the day, with the cost of inflation and gas prices literally at $6 a gallon in some places in Southern California, people are choosing between. Filling their gas tank or feeding their family. And so I recognize that this is a very, very difficult time to make the noble choices of green energy. And I think that that's appropriate, that we still give, especially those on fixed incomes, the option to maintain their current rate plan. I am concerned generally at the cost of utility increases overall that received my notice in the mail about my rate change and my options of what plan to stay on with Edison. And I know that so did my Nana and so did my mom. And each of them came to me and asked, What does this mean? What are we talking about? And I thought Edison did an excellent job of outlining. If you stay on this plan, your annual cost is a if you go to that plan, your annual cost is B, I think that there's a lot of estimated annual cost , I should say. There's a lot of opportunity for education. And I appreciate all the work that the staff continue to do to give the community members options. Thank you. Thank you. We have a motion in a second. We also have public comment, I think, with two members of the public. Please come forward. Mr. Shukla. And I believe this is deeply, deeply. Okay. Good evening, Giovanni. Dating. Let's begin strong opposition of this item. I ask. No. I want to plead with you to consider the following factors and not suspend any further CC feasibility efforts as advised by staff. The staff cover letter preceding the MRA report missing informs of the contents of the report. While sitting city staff failed to conduct community outreach due to the pandemic and health orders. Since this item was answered, city staff were not hindered as various departments conducted outreach regarding a variety of issues. It is foster misinformed further that the MSW report recommends the city not move forward with the city at this time. That statement can't be found anywhere in the report in its entirety. Staff report states maintain competitive ranges of utmost importance to many customers. I ask which customers and to whom does the burden of inaction towards climate action adaptation shift? I hear sacrifice zones. I hear frontline communities. Are here. Small island developing nations such as ones my family are from threatened by inaction here. In conclusion, I urge you to read the Adobe report and deliberate on a few facts from the report. Some things left out were the ability for us to prepare our own energy and have power over that process as the market changes, as we get left behind. As the market changes. Remaining with us, he would deprive Long Beach of the opportunity, quote, to influence energy procurement or policy to satisfy the needs of its community. Now to meet the greatest challenges of our time. Bold action is required. It's not status quo. It's going to be uncomfortable. Relationships we've had for a century might change. They don't have to end. We all have to work together. When that bill comes due on climate change and it's an action. Is that going to just be paid here? Do you expect the police? Next week, the police. Network. No. Both work. But you got it from keeping together. Police giving. Good. So it's really. Uh, rarely in human history. As the fates of so many people in the hands of so few. We can here. Just put up a little louder. Please continue. Thank you. Jodie Foster I have a great deal of respect for you, but I don't think the city has completed the due diligence. The model that I had proposed that. I wasn't allowed to give. Even information on another working group so called is the most obvious model. You create a JPA with the port and you will do the outreach in Signal Hill Avalon, like with. Everything in the Lumby School District. Certain accounts want to leave. I see. He wants to lead. I have done. Research on how the state can reabsorption back. There's other ways to do things. But, you know, if you want to optimize around requests, that's that's not hard. Um, but, you know, we we need the data. We need the new. Data, we need the smart meter data. The state needs a lot of these things that he's not been providing. How much time do I have got? So I'd like to specifically take issue with the idea that it's not necessary to have to meet the cap. We don't know that. We don't know what the grand plan for the cap is yet. We have to wait till the review. One thing you should. Note, council members as a result of this body's decision. In August of last year. Southern California Edison went and picked off every single vulnerable seeker in their service territory in the region. The scare tactics. About Western clean energy especially need to be examined very, very closely. Especially with his role in a lot of those activities. This is a receiving file. I think when we have the camp draft, we will see the necessity for this much more. I'm not. Prepared to say that. We absolutely need one. But in this city, based on what I know of it. Being a Southern. California Edison. Ratepayer for 24 years. I don't think you have the time. I think you've made too many bad contracts. And the Asplin was one of them. Thank you. Thank you. There's a motion, the second to receive and file the report from staff members. Please go ahead and cast your vote. Motion is scary.