Fact Sheets on Community Choice
California’s Community Choice Law, signed by Governor Davis in September 2002 following Massachusetts (1997) and Ohio (1999), allows California municipalities to aggregate their communities to be served by Electric Service Providers (ESPs). AB117, or Chapter 838 of 2002, reopens the opportunity for ESPs to break into California’s electricity market to serve whole cities and regions with not only bulk power services, but energy efficiency programs, conservation, and even new generation capacity. By giving City Councils decision-making power over resource planning and rate-setting, Community Choice is creating a major new business development opportunity not only for ESPs but also for renewable energy, energy efficiency, conservation, and distributed generation vendors, integrators, service companies and developers. With the secure, regional long–term contracting environment created by this law, energy innovators face a major, even historic opportunity in California.
Community Choice is not just about cheaper power. In fact, most California cities leading the call for AB117 are interested not only in reducing electric bills but addressing the many environmental crises caused by the electricity industry, protecting residents, businesses and public agencies against energy and fuel price volatility, and improving local energy security. To eliminate peak load waste and lower the cost of serving its communities, San Francisco will issue revenue bonds - H Bonds - with its Community Choice contract and require qualifying ESPs to build 360 Megawatts of new renewable energy, conservation and energy efficiency in its Community Choice Request for Proposals - taking a quarter of the entire community off-grid with new technologies in just a few years. Throughout the state, municipalities view Community Choice not merely as a vehicle for finding cheaper supply, but as an opportunity to invest in the long-term reliability, stability, and sustainability of their energy supply. This represents both an unprecedented opportunity for new business development in new energy technologies and distributed generation, and a challenge for ESPs, vendors, integrators, service companies, and financial institutions to form new consortia, subcontracting relationships and partnerships to answer this opportunity.
Electric Service Providers are now preparing their business development and marketing departments to pursue Community Choice contracts throughout California. With Community Choice taking firm hold in other states like Ohio, Massachusetts and New Jersey, and instantly breaking direct access records in terms of both clean power contracts and customer participation levels, understanding the peculiar nature of Community Choice as it applies to your business model would be a very good idea indeed. Whether an Electric Service Provider, a renewable energy, energy efficiency or conservation technology company, an energy service company, a systems integrator, or a solar installer, Community Choice represents a huge new market opportunity. With San Francisco proposing not only to build a solar photovoltaic utility that is several times larger than the world’s largest but a dramatic program for other renewable resources as well as conservation and energy efficiency, and dozens of California municipalities and counties developing their own Community Choice or H Bond plans, Community Choice may offer energy innovators what California’s failed deregulation law only promised: a new era for the energy industry.
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Founder and Director of Local Power, Paul Fenn is author of California's Community Choice law, AB117 or Chapter 838 of 2002 (Migden), which allows municipalities to switch their communities to alternative energy providers - as well as author of San Francisco's 2001 voter-approved "Solar Bond" or "H Bond" authority (Ammiano), as well as San Francisco's 2004 Energy Independence ordinance - a plan to use Community Choice Aggregation with H Bonds to build the world's largest urban green power infrastructure in San Francisco starting next year. Mr. Fenn is also author of new state "Solar Networking" legislation, Senate 697, sponsored by Pomona Senator Nell Soto. Local Power is based in Oakland, California and may be found at www.local.org
Copyright 2004 by Local Power.