by Richard Lieberman
The Ventura City Council, at the June 24th meeting has voted to move Ventura’s high usage electricity accounts back to Southern California Edison. The majority of city accounts will remain with the Clean Power Alliance. Council members responding to a sudden and unexpected substantial increase in high electricity usage categories remained firm in their commitment to move the city to 100% renewable energy with the exception of those high usage categories. The city will not be able to switch from SCE to CPA for 12 months after the decision to switch back to SCE.
On June 6, this year CPA’s board set significant rate increases to close a gap in projected revenues. The rate hikes would have affected 1,800 high-user accounts, about 1% of all customers. The high energy users faced rate hikes of 37% to 47%. The accounts affected relate to street and highway lighting, outdoor area lighting, pumping, and agriculture. CPA’s residential customers faced no increase in rates. They will continue to pay based on the tier set by elected officials in their jurisdictions. For city government and large accounts, the costs amounted to between tens and hundreds of thousands of dollars extra per year.
In a 4-3 vote at Monday’s council meeting, it was decided to move the city’s biggest accounts (those related to street lighting) to Southern California Edison. Several other city accounts while still impacted like pumping and large facilities like City Hall will remain with the CPA, but will change to a 36% renewables energy mix, reducing the original plan that called for use of 100% renewables which the council had previously adopted.
Based on early estimates, it will cost the city $100,000 to $160,000 more, Finance and Technology Director Michael Coon said. Exact amounts, however, remain unknown at this early stage. The city only had weeks notice to prepare for the rate increases, he added. Coon said the city planned to work with CPA to “narrow down the exact impact.”
CPA said the unexpected rate increases were associated with a series of rate changes and a sharp spike in exit fees, which Edison charges to customers who leave the investor-owned utility for the power it purchased on their behalf. Colin Cushnie, vice president of power supply, said a main driver of the streetlight increase was peak pricing, which used to be noon to 6 p.m. So just as streetlights are turning on, power rates are at their highest. Rates in the past were highest during midday when demand was at its highest said Cushnie. But there is so much solar energy being produced it isn’t until the sun sets that usage really goes up.
CPA officials have stated that the exit fees were increased to make up for Edisons $825 million under collection in 2018, which is being charged as part of a 12-month rate hike that went into effect in April. CPA protested that decision to the Public Utilities Commission but lost the appeal.
The city council was split on paying more for the same amount of usage. Mayor Matt LaVere and members Jim Friedman and Erik Nasarenko voted no, partially because moving all impacted accounts to Edison, the city would have saved money and ended with the same mix of renewable energy (Edisons base rate includes 36% renewable energy. The council also voted 6-1 to keep just under 400 accounts not affected by the rate hikes with CPA at the 100% tier, which means they will pay 9% more than Edisons base rate on those accounts. Friedman voted no. He supports staff’s recommendation of returning all the city’s electricity back to Edison. He wanted a pause to give the city time to better analyze the financial implications and said Ventura had too many “obligations and responsibilities” to consider spending more when the true costs were unknown.
The city committed to CPA when costs were going to increase around 9% above Edison, said Friedman, not over 20%. Council member Christy Weir, the city’s representative on the 32-member board that oversees the Clean Power alliance. Weir had hoped to keep all accounts with CPA. She said she wanted to “stick with CPA because they are our future here”.
“The city made a commitment to the CPA.” She and others said. Council member Cheryl Heitman said the city had made a pledge to use more renewable energy. “I’m not in favor of going back to Southern California Edison in any way.”
Though he supports staying with CPA, Nasarenko voted against moving tiers for its high use accounts because he was concerned the money to cover the difference would need to come from money being set aside for infrastructure and other city improvements from a half-cent sales tax approved by voters in 2016.
Mayor LaVere said keeping the unaffected accounts with CPA but moving the others to Edison accomplished three goals: sup[poting CPA, committing to a future of renewable energy and showing fiduciary responsibility to taxpayers. He also said Edison’s base rate still provided 36%renewable energy, the same as CPA but without the cost.
The Clean Power Alliance was founded in 2017 with a $10 million loan from the County of Los Angeles. The city council voted in February 2018 to join CPA, that now has 31 governments in Ventura and Los Angeles County. CPA procures renewable energy and Edison distributes its existing power lines. All residents and businesses located in CPA’s jurisdiction are automatically enrolled in CPA unless they opt out.