MEMORANDUM

TO:

Matt Perry, County Administrative Officer, County of Lake

FROM:

Kelly Foley, General Counsel, California Clean Power

RE:

Request for Response to Community Choice Questions

DATE:

May 25 2015

Mr. Perry,
You requested that I respond to a list of questions regarding Community Choice. Below please
find the questions in bold italics, with my responses, on behalf of California Clean Power, in
regular font.
Sincerely,
Kelly Foley

1)

The level of customer rates (including the PCIA impacts) and how they may be
changed, if at all.
Pursuant to the draft Agreement for Community Choice Aggregation Services
(Agreement) between the County of Lake (County) and California Clean Power (CCP),
Exhibit A, Section 4, County Community Choice Aggregation (CCA) customers shall
receive an average of 2% off of total electric bills. The statement total electric bills
requires CCP to adjust generation charges low enough to render a customers total
electric bill such that the discount is 2%. Total electric bills include all charges related
to the procurement and delivery of electricity, including generation, distribution,
transmission, PCIA, etc. Accordingly, while County CCA customers will actually
receive considerably more than 2% off of their generation charges (the only charges over
which the CCA has control), because the Agreement calculates the discount on the total
electric bills, the impact to the overall bill is smaller. CCP states the discount as an
amount off of the total electric bill because customers perceive rate discounts in terms of
total bills rather than just off of the cost of generation.

2)

The revenues to be provided to the county for local programs and the process/timing
for getting them.
The Agreement specifies in Exhibit A, Section 5 that the County shall receive $2
million annually, in equal quarterly payments. Section 1.0 of the Agreement, including
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the four related subsections, broadly commits CCP to providing all CCA related
services. To the extent the County seeks CCA related local programming, the County
may at any time, and at no additional charge, utilize the in-house expertise of CCP for
programming assistance, and utilize the Exhibit A, Section 5 funds to pay for direct
expenses. The County may also utilize CCPs partner bank for borrowing to fund CCA
related local programming. The County may elect to do this at any time.
3) Treatment

of "CARE" low income customers with respect to rates.

Exhibit A, Section 4 of the Agreement states that County CCA customers shall be
offered electric rate schedules consistent with the electric rate schedules offered by
PG&E. Provided PG&E continues to offer CARE rate schedules, CCP will provide
all of the same schedules to County CCA CARE eligible customers. CARE customers
will also receive an additional 2% off of total electric bills.
4) Provisions

for non-performance.

If CCP breaches any particular element of the Agreement, the County retains all
essential rights and remedies under California law. If CCP is rendered incapable of
performing under the contract due to complete dissolution of CCP as a going concern,
the County can join another CCA, administer the CCA in house, or forfeit the CCA
bond and seamlessly return customers to PG&E service. Because CCP covers the cost
of the bond for the return to PG&E service, the return to PG&E service would occur at
no expense to the County.
5)

Design of the procurement portfolio -- minimum RPS or other?

As required by the Agreement, Exhibit A, Section 3, CCP is proud to be the only
organization that provides 33% Category 1 renewable power to all CCA clients. For
2015, the State only requires that 65% of 23.3% (or 15.2% of total electric usage) be
from Category 1 renewable power, resulting in all CCP clients achieving more than
double the current state standard (i.e. CCP provides 33% of total electric usage as
Category 1 renewable power while the State only requires 15.2% of total electric
usage be Category 1 renewable power).
Furthermore, CCP does not use unbundled renewable energy certificates (RECs)
or unbundled carbon-free products, ever, for any purpose. Because of these
policies, the County can be certain that renewable and other environmental claims such
as greenhouse gas reduction attributable to the County CCA are transparent, durable
and supported by Californias environmentalists, ratepayer advocates, utilities and
other relevant organizations.

6)

Relative responsibilities/rights of the parties if the County wants to expand the

program.

CCP is capable of providing turnkey CCA services to any local government with a
population of 4,000 or greater. In fact, CCP is currently exploring options with a
community that has a population only slightly above 4,000 people.
Because the Countys only two cities not included in the County unincorporated area,
Lakeport and Clearlake, have populations in excess of 4,000 people, CCP did not
include a provision in the Agreement for these two cities to subsequently join the
County CCA. CCP made this decision under the assumption that local governments
with the ability to establish and control their own CCA programs will want to consider
this option before deciding to join another jurisdictions CCA program.
CCP is willing, however, to include a provision in the Agreement allowing either or
both cities to subsequently join the County CCA program. CCP has included these
types of provisions in other draft Agreements with other local governments, but for
areas with populations less than 4,000.
7)

Obligations/rights of the county if it wants to "layer in" energy from local power
projects.
The Agreement in Exhibit A, Section 3, already commits CCP to procuring from local
resources. Furthermore, the Agreement specifies in Exhibit A, Section 5 that the
County shall receive $2 million annually, in equal quarterly payments. Section 1.0,
including the four related subsections, broadly commits CCP to providing all CCA
related services. To the extent the County seeks to layer in energy from local
projects, the County may at any time, and at no additional charge, utilize the in-house
expertise of CCP for local power project assistance, and utilize the Exhibit A, Section 5
funds to pay for direct expenses. The County may also utilize CCPs partner bank for
borrowing to fund CCA related local power projects. The County may elect to do this
at any time.

8)

Obligations/rights of each party with respect to CPUC funds for energy efficiency
programs.
The Agreement specifies in Exhibit A, Section 5 that the County shall receive $2
million annually, in equal quarterly payments. Section 1.0, including the four related
subsections, broadly commits CCP to providing all CCA related services. To the
extent the County seeks to access CPUC funds for energy efficiency programs, the
County may at any time, and at no additional charge, utilize the in-house expertise of
CCP to apply for the CPUC funding and establish an energy efficiency program, and, if
needed, utilize the Exhibit A, Section 5 funds to pay for direct expenses. The County
may also utilize CCPs partner bank for borrowing to fund energy efficiency programs.
The County may elect to do this at any time.

9)

Obligations to provide specific customer services, e.g., "FiT" and NEM tariffs,
electric vehicle charging.
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Exhibit A, Section 4 of the Agreement states that County CCA customers shall be
offered electric rate schedules consistent with the electric rate schedules offered by
PG&E. Provided PG&E continues to offer net energy metering (NEM) rate
schedules, CCP will provide all of the same schedules to County CCA NEM eligible
customers.
Should the County seek to roll out a Feed in Tariff (FiT) to procure local renewable
resources, CCP will provide the in-house expertise of CCP at no cost to develop a FiT,
and the County can utilize the Exhibit A, Section 5 funds to pay for direct expenses.
The County may also utilize CCPs partner bank for borrowing to fund a FiT. The
County may elect to do this at any time.
Understanding that Electric Vehicle Charging (EVC) regulations are evolving and
changing and therefore involve considerable uncertainty, should the County seek to roll
out an EVC program, CCP will provide the in-house expertise of CCP at no cost to
develop an EVC program, and the County can utilize the Exhibit A, Section 5 funds to
pay for direct expenses. The County may also utilize CCPs partner bank for borrowing
to fund an EVC program. The County may elect to do this at any time.
10)

Specifics on collateralization -- no industry standard for a CCA manager with

delegated authority.
With virtually no exception, all sellers of electricity require buyers such as CCP, other
CCAs, and utilities to demonstrate creditworthiness through a variety of measures.
Among other mechanisms, CCP demonstrates creditworthiness with $15 million in
funding to secure power purchases for up to 200,000 people. CCP will not exceed
service to 200,000 until or unless CCP proportionately increases the $15 million
amount.

11)

Marketing/customer outreach responsibilities, including design of materials -- e.g.

references to County.
As specified in the Agreement Sections 1.2 and 1.3, CCP covers all legally required
CA noticing, as well as providing a call center and website, for the County CCA and
assistance with any additional CCA related outreach and communication desired by the
County.

12)

Schedule for cut-over to all residential customers (as required by statute).

Exhibit A, Section 2 of the Agreement indicates that service to all County CCA
customers will be launched between December 1, 2015 and April 1, 2016.
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13)

Obligations to serve commercial and industrial customers.

Section 1.0, including the four related subsections, broadly commits CCP to providing
all CCA related services, which includes commercial and industrial customers.

14)

The rights and obligations of the parties at the end of the contract period -- cut-over,
information, etc.
Well prior to the expiration of the Agreement, CCP will inquire as to whether the
County seeks to renew the Agreement and under what terms and conditions. Due to
the 10 year Agreement term, as it does for 5 year terms, CCP did not include a specific
reference to initiating subsequent agreements, but can certainly include such a
provision.