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CITY of LARKSPUR Staff Report May 21, 2014 Council Meeting DATE: May 16, 2014 TO: Honorable Mayor Morrison and Members Of

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CITY of LARKSPUR Staff Report May 21, 2014 Council Meeting DATE: May 16, 2014 TO: Honorable Mayor Morrison and Members Of CITY OF LARKSPUR Staff Report May 21, 2014 Council Meeting DATE: May 16, 2014 TO: Honorable Mayor Morrison and Members of the City Council FROM: Dan Schwarz, City Manager SUBJECT: CONSIDERATION OF POSITIONS ON LEGISLATION ACTION REQUESTED Authorize Vice-Mayor Chu to sign and send the attached letters. SUMMARY AND ANALYSIS It is the policy of the City Council only to take positions on legislation that affect Larkspur and its interests. Further, it is the general practice of the City Council to rely upon the Legislative Committee of the Marin County Council of Mayors and Councilmembers to take positions on legislation. From time-to-time, staff and Councilmembers identify legislation that is of significant enough concern for the City Council to consider taking positions. Two such bills are presented to the Council for positions of opposition. AB 2145 As a member of Marin Clean Energy, Larkspur has a vested interest in the success of this joint powers authority. The primary effect of this bill is to make it more difficult for new Community Choice Aggregation (CCA) entities to form and operate. The bill would also impose new requirements and burdens on existing CCAs – requirements that would increase the cost of operation relative to those of PG&E (on which such requirements would not be imposed). It is for this reason that Larkspur should oppose this bill. AB 2188 This bill would impose new costs on Larkspur by requiring expediting processing for all solar permits. Further, this bill would eliminate the current review process for solar installations, potentially increasing risks to public health and safety by allowing for less secure installation. It is recommended that the Council oppose this bill. CONSIDERATION OF POSITIONS ON LEGISLATION Page 2 RECOMMENDATION Authorize Vice-Mayor Chu to sign and send the attached letters. Respectfully Submitted, Dan Schwarz, City Manager Attachments 1. Info Sheet on AB2145 and MCE sheet about AB2145 2. Draft Letter of Opposition to AB2145 3. Info Sheet on AB2188 4. Draft Letter of Opposition to AB2188 May 21, 2014 The Honorable Steven Bradford, Chair, Assembly Utilities and Commerce Committee State Capitol P.O. Box 942849 Sacramento, CA 94249-0062 RE: AB 2145 (Bradford): Electricity: community choice aggregation NOTICE OF OPPOSITION Dear Assembly Member Bradford: On behalf of the Larkspur City Council, I am writing to express opposition to your bill, AB 2145. Enclosed is a copy of the letter of opposition from the County of Marin, which we believe provides compelling arguments against AB2145 on the basis of its affects statewide. The Larkspur City Council opposes AB2145 because of its impacts on Marin Clean Energy (MCE), of which Larkspur is a member. Specifically, it is our understanding that AB2145 will impose reporting requirements on Community Choice Aggregation entities like MCE, including 5-year forecasts of rates and greenhouse gas emissions, without imposing the same requirements on investor-owned utilities. We are perplexed why the Legislature would wish to unlevel the playing field in such a manner. Further, we understand that AB2145 will reduce or eliminate the ability of CCAs to for many cost-saving programs for low-income residential customers and many small business customers. Eliminating such programs is detrimental to the customer and entirely unnecessary. If you have any questions regarding the City’s position on this bill, please do not hesitate to contact City Manager Dan Schwarz at (415) 927-5018. Sincerely, Larry Chu, Vice-Mayor encl: as stated c: DaVina Flemings, Principal Consultant, Assembly Utilities and Commerce Committee Daryl Thomas, Consultant, Assembly Republican Caucus Martha Guzman, Deputy Legislative Secretary, Governor’s Office April 15, 2014 The Honorable Steven Bradford Chair, Assembly Utilities and Commerce Committee State Capitol, P.O. Box 942849 Sacramento, CA 94249-0062 Re: AB 2145 (Bradford): Electricity: Community Choice Aggregation – OPPOSE On behalf of the County of Marin, I write to voice our strong opposition to the Monopoly Protection Bill, AB 2145. The proposed legislation limits community choice, violates the original intent of AB 117, thwarts California’s environmental goals, infringes upon local government decision-making, and is unnecessary. Today the County of Marin is releasing results of the Marin Climate Action Plan which show that the changes to electric supply in our community made possible by MCE service have allowed the county to achieve community GHG reduction targets for 2020 fully eigght years ahead of schedule. The MCE program will also save customers over $5 million this year alone. We believe residential customers in Caalifornia should have the opportunity to choose an alternate utility provider. AB 117, which authorized Community Choice Aggregation in California, intentionally structured CCAs as an opt-out program with the goal of leveling the playing field for CCAs who might atttempt to enter a monopoly market so there could be a viable choice for customers. AB 2145 restricts choice. A CCA opt-in program would not allow ffor the dramatic increase in renewable energy purchases and greenhouse gas emission reductions that are present throughout the planning and implementation stages of CCAs throughout California. Marin Clean Energy provides more than twice as much renewable energy as PG&E, and MCE’s most recent published emissions rate is 19% lower tthan PG&E. Defaulting customers to a utility provider with a higher emissions rate runs counter to AB 32 goals and would undermine California’s climate change prevention iinitiatives. AB 2145 also infringes upon local government decision-making, representing a repeat attack on CCAs similar tto that of Proposition 16, a PG&E-funded initiative that failed in 2010. Finally, the Monopoly Protection Bill is unnecessary since customers can easily make a choice when a CCA begins offering service in a new community. There is a four month public noticing process with a state requuirement of at least four opt-out notices served upon every customer. Customers can easily opt out during or after the public noticing process. There is no such requirement for customers of for-profit utility companies. We urge you to oppose AB 2145 and to support community choice. Respectfully Submitted, Kathrin Sears, President Marin County Board of Supervisors cc: Honorable Assembly Member Marc Levine Members, Assembly Utilities and Commerce Committee AB 2145: The Monopoly Protection Bill’s Impact on Community Choice Assembly Bill 2145 (Bradford – D), aims to smother local clean energy initiatives to favor monopoly utility corporations that should be focusing on energy distribution and safety. Dubbed by businesses and environmentalists alike as the ‘Monopoly Protection Bill’, AB 2145 seeks to lock in the status quo of the State’s three largest, private energy corporations—Pacific Gas & Electric (PG&E); Southern California Edison (SCE); and San Diego Gas & Electric (SDG&E)—as monopoly energy providers even in communities that have taken action to form local, public power agencies that offer renewable energy alternatives, lower rates, and new jobs. AB 117: Community Choice Aggregation Under existing State law, AB 117, California cities, counties, and special districts can pool their constituents’ demand for energy, and buy energy wholesale from resources outside the control of the private monopolies. These small, public power agencies—known as community choice aggregators (CCAs)—supply their own, individually-sourced energy to the existing distribution lines on behalf of their customers. An active CCA becomes the default providers of service, meaning that customers automatically start service with CCAs unless they choose to opt out. Customers are notified of the new choice for a local service provider through four legally required mailers. Historically, investor-owned utilities (IOUs) have been the default service provider to customers in their jurisdictions. However, this default status was transferred from the IOUs to the local CCA, if a CCA exists in the community. The original CCA legislation, seeing the wisdom of collective community action, mandated that the customers residing in the service area would automatically be enrolled, unless they chose not to participate by opting out. AB 2145 Proposes to Eliminate Competition & Consumer Choice AB 2145 proposes to steal the default service from CCAs and place it with the IOUs, protecting their monopoly status and destroying any opportunity for competition. Placing the default status with IOUs would prevent new CCA programs from forming and consequently prevent opportunities for consumer choice, decrease clean energy investments, and limit options for competitive rates and new job creation. AB 2145 would result in enormous increases in marketing expenses for nascent agencies. The only collateral a CCA has is the customer base created by the opt-out mechanism. Without collateral, power cannot be purchased, and without a power purchase agreement, rates cannot be developed or advertised, meaning that CCAs could not offer service. AB 2145 would shift the default service from a lower greenhouse gas emission option to a higher greenhouse emission option, running contrary to local and state environmental policies. AB 2145 would terminate opportunities for customer cost savings offered by CCA programs, including low income residents and small business owners. AB 2145 Proposes Unrealistic Forecasting AB 2145 proposes that the CCA provide all customers with rate and greenhouse
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