by Paul Fenn
California’s Community Choice Law, signed by Governor Davis in September 2002 following Massachusetts (1997) and Ohio (1999), marked a great structural transition in the national debate on electricity deregulation. After nearly a decade of unquestioned promotion of the British Model of electric deregulation, otherwise known as the "California Model" after that state's fateful passage of Assembly Bill 1890 in 1996, and its termination in the state's largest single loss of wealth in its history, many states are now following Massachusetts, Ohio, California, and New Jersey in turning to a regionalization of electricity markets through Community Choice Aggregation.
California's new law allows 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 cities leading the call for Community Choice 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 100 Megawatts of new renewable energy capacity and 100 MW of conservation and energy efficiency in its Community Choice Request for Proposals. 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, Ohio, Massachusetts and New Jersey. already, they have broken Direct Access performance records in terms of both clean power contracts and customer participation levels, and have offered far greater benefits to consumers than the British Model has every proved able to accomplish.
Community Choice has also created a potentially huge new market for alternative energy technology companies. With San Francisco proposing to use Community Choice Aggregatikon not only to build a solar photovoltaic utility that is five times larger than the world’s largest but a dramatic program for other renewable resources as well as conservation and energy efficiency, and at least sixty 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 in energy services.
For more information or to sign up for Local Power News, please visit Local Power. .......................
Founder and Director of Local Power, Paul Fenn is author of California's Community Choice law, AB117 or Chapter 838 of 2002, 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, as well as a plan to use H Bonds and Community Choice aggregation to build the world's largest solar power plant 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 2003 by Local Power.