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LA County Seeks Vendors as Power Co-Op Gears Up

In an interview Monday with Techwire, Los Angeles County’s chief sustainability officer had some good news — and some more good news: Many county residents will be eligible to join a utility cooperative that’s expected to save them 4-5 percent on their electric bills; and opportunities will abound for vendors as the Community Choice program gears up over the next 15 months or so.

In an interview Monday with Techwire, Los Angeles County’s chief sustainability officer had some good news — and some more good news:

— Many county residents will be eligible to join a utility cooperative that’s expected to save them 4-5 percent on their electric bills; and

— Opportunities will abound for vendors as the Community Choice program gears up over the next 15 months or so.

Gary Gero, who was named chief sustainability officer for the sprawling county less than a year ago, explained that giving ratepayers — individuals as well as businesses — the ability to jump ship from Southern California Edison will save them money and provide a boost to the county’s economic development.

“People were skeptical that we could get this done,” Gero said in a phone interview. “We brought the cities together very quickly and negotiated what could have been a very complex negotiation. ... We had up to 50 cities talking from the start.”

As it stands, the unincorporated part of Los Angeles County has so far joined with the cities of Calabasas, West Hollywood, South Pasadena and Rolling Hills Estates to form the Community Choice program, which essentially replaces SCE as their electric provider. Similar programs exist or are being explored up and down the state. 

The Los Angeles County Board of Supervisors put up $10 million in seed money to fund the switch. The cooperative, similar to plans growing in popularity in other parts of the country, is a joint-powers authority comprising the county and the four member cities. It’s in the first of three phases, which are expected to be complete by the end of 2018.

For vendors, opportunities abound:

“We’ll have RFPs for power supply products in Phase 1,” Gero said. “We’ll have an RFP for a scheduling coordinator and a portfolio manager. We’ll have RFPs for legal services, communications and outreach,” as well as for back office and data support personnel.

The first-year spend is anticipated to total around $10 million, Gero said — an amount that could grow to $50 million over time and as more cities come on board with the co-op.

“We’re going to be a new entry in the market around November,” he said, and will be “actively soliciting for power procurement — two-, five- and 10-year contracts.”

The utilities themselves had voiced opposition to the creation of the Community Choice cooperative, he noted.

“Initially, the utilities did actively oppose the formation of (the cooperatives). But the Legislature said, ‘Time out. We want these things to occur and to flourish.’”

In addition, he said, the California Public Utilities Commission also expressed concern about its loss of control over rates (which are set by the cooperative), and some political groups also complained about government coming between the individual and the utility.

Gero said SCE will maintain responsibility for transmission and distribution of power, and consumers might not even notice subtle changes in their bills — other than a 4-5 percent savings.

“On Jan. 18, we start delivering electricity,” Gero said.

The first phase will include 2,000 county entities. Once the bugs are ironed out, Phase 2 will kick off, with 25,000 commercial and industrial accounts. Finally, by the time Phase 3 is up and running, the cooperative expects to have 250,000 individual accounts added to the rolls.

Another advantage that Community Choice touts is the control that members cities will have over how much of their ratepayers’ power comes from renewable sources. He said 28 percent of Edison’s power comes from renewable sources, while LA County’s percentage will be around 33 percent. Individual consumers can also choose to pay a little more on their bill to have a higher percentage of renewable energy  all the way up to 100 percent.

The benefits, he said, are twofold: “This puts more money in consumers’ pockets, and we anticipate building new renewable-energy plants locally.”

The program is actively recruiting not only new member cities, but also vendors. Details about the program, with information for vendors and contractors as well as consumers, is available on the program’s website. An overview of which cities, counties and school districts are involved in the CCA (Community Choice Aggregation) program is available here.

 

 

Dennis Noone is Executive Editor of Industry Insider. He is a career journalist, having worked at small-town newspapers and major metropolitan dailies including USA Today in Washington, D.C.