J.R. DeShazo, director of the UCLA Luskin Center for Innovation (LCI), is featured in a Comstock’s article assessing publicly owned electric-power-purchasing organizations in a transient energy market. The growth of so-called Community Choice Aggregators (CCAs) as an alternative to municipal and investor-owned utilities is transforming the energy market. CCAs offer cheaper and cleaner power, but their future hinges on their ability to navigate regulatory and market changes. DeShazo, who is also chair of Public Policy at UCLA Luskin, is cautious about predicting the long-term success of CCAs, citing past bankruptcies of large utilities as a result of “wrong conditions and bad policy by the legislature.” Climate change and the resulting shifts in environmental policy make electricity and the energy market as a whole competitive arenas. If they are able to overcome the obstacles in their path, “CCAs may serve the majority of the state’s consumers now served by the big three investor-owned utilities within 10 years,” the article stated, citing a July report from LCI.
By Colleen Callahan MA UP ’10
Los Angeles County is set to launch its own electricity provider in 2018, giving customers another option besides longtime power company Southern California Edison. Called Los Angeles Community Choice Energy, the county’s venture is part of a wave across California of new community choice aggregators.
Community choice aggregators (CCAs) enable cities or counties to make decisions about what kinds of energy resources and local clean energy programs in which to invest, such as local renewable energy. Since 2010, California communities have established nine CCAs, with over a dozen municipalities actively exploring forming a CCA and many others considering joining one. Multiple CCA models have arisen out of this rapid growth. Now cities such as Santa Monica have multiple CCA options.
A new study by the UCLA Luskin Center for Innovation analyzed three CCA options to inform Santa Monica’s decision whether to form or join a CCA.
“This study commissioned by the City of Santa Monica is garnering wide attention from cities across the region that are faced with a similar set of options, because it is an important decision,” said J.R. DeShazo, director of the UCLA Luskin Center for Innovation. The decision could affect electricity rates for local customers, the amount of renewable energy procured and how much money could be available for local energy programs, among other consequences.
The study assessed the strengths and potential challenges of Santa Monica’s three CCA options:
- Los Angeles Community Choice Energy (LACCE), a large, soon-to-launch CCA with member cities across Los Angeles County. This regional option may dilute influence for Santa Monica, in terms of its direct vote on the governing board. However, it could also provide Santa Monica with the greatest economies of scale, which would well position the city to meet its ambitious renewable energy and other environmental goals while avoiding long-term risks.
- South Bay Clean Power (SBCP), a CCA designed for a group of cities in the South Bay and Westside subregion. SBCP is more a set of recommendations than an operationally ready option at this time. SBCP’s business plan includes innovative, sophisticated strategies for a next generation CCA, which others outside of SBCP could adopt. With no other currently committed members, Santa Monica would likely have to take the lead in its development and it would likely benefit from fewer economies of scale than LACCE.
- A single-city CCA through the services of California Choice Energy Authority (CCEA), which pools services for multiple single-city CCAs. The business model for CCEA allows for member cities to have a significant amount of autonomy to pursue and meet renewable energy and other goals. However, it would also involve an initial financial and staff commitment.
Relying in part on UCLA’s research findings, the Santa Monica City Council recently voted unanimously to join LACCE as the first step in a two-step approval process.
The associated Santa Monica staff report states, “The UCLA study helped to inform staff’s recommendations. … LACCE is operationally ready and could provide the City with a variety of economies of scale and a stronger voice for the legislative and regulatory discussions that lay ahead.” By collaborating with other cities through this new regional energy partnership, Santa Monica hopes to be a powerful voice pushing for clean energy strategies that advance the City’s progressive environmental goals, according to the report.
By Cynthia Lee
Green power. Solar energy incentives. Renewable energy. Smart water systems. Planning for climate change. Clean tech in L.A. For the next three years, the UCLA Luskin Center for Innovation has set an ambitious goal to produce research that will help Los Angeles and state and federal agencies reach the Holy Grail of environmental sustainability.
Five Luskin scholars are working on initiatives that could change how residents, businesses, industries and government meet the challenge of living more sustainably. The Luskin center is carrying out a mission that was broadly outlined by Chancellor Gene Block in his inaugural address on May 13, 2008: to marshal the university’s intellectual resources campuswide and work toward intense civic engagement to solve vexing local and regional problems. “I believe that UCLA can have its greatest impact by focusing its expertise from across the campus to comprehensively address problems that plague Los Angeles,” the chancellor told an audience in Royce Hall.
With an agenda packed with six hefty research initiatives, the center is diving into that task under the leadership of its new director, J.R. DeShazo, an environmental economist and associate professor of public policy who also heads the Lewis Center for Regional Policy Studies. DeShazo took the reins in October when the center moved from the Chancellor’s Office to the School of Public Affairs, a move that took advantage of the school’s outward orientation. “It’s focused on policy solutions, so this is a natural place for us to grow,” DeShazo said. “But even though the center is located here, we’re very cross-disciplinary. We have researchers from chemistry, public health, engineering, the Anderson management school, the Institute of the Environment (IoE) and public policy.”
The five scholars working on the six initiatives are DeShazo; Yoram Cohen, an engineering professor and director of the Water Technology Research Center; Magali Delmas, professor of management and the IoE; Hilary Godwin, professor of environmental health sciences; and Matt Kahn, professor of economics in the departments of Economics and Public Policy and IoE. “We started off by identifying problems that our community is facing and that it can’t solve,” DeShazo said. Then, they asked two questions: “Does UCLA have the research capacity to address this deficit? And can we find a civic partner who can make use of this new knowledge?” Proposals were prioritized by a 16-member advisory board with a broad representation of business and nonprofit executives, elected officials and a media expert. Among the high-profile board members are State Senators Carol Liu and Fran Pavley; Mary Nichols, chairman of the California Air Resources Board; Los Angeles Council President Eric Garcetti and Controller Wendy Greuel; Assemblymember Mike Feuer; John Mack, chairman of the Police Commission; and William Ouchi, professor of the Anderson School and chairman of the Riordan Programs.
“We take our research ideas and develop real-world solutions that can be passed on to a civic partner with whom we can engage and support,” DeShazo said. “We let them carry through with the politics of policy reform as well as the implementation. We don’t get involved in advocacy.” An array of local green research DeShazo recently completed Luskin’s first initiative with his research on designing a solar energy program for L.A. that would minimize costs to ratepayers. His research – the basis of Mayor Antonio Villaraigosa’s new energy policy – proposes a solar feed-in tariff that would help everyone from homeowners and nonprofits to commercial property owners buy solar panels and be able to sell their solar energy to utility companies for a small profit.
Other Luskin research initiatives involve creating smart water systems for Southern California with water reclamation, treatment and reuse (UCLA researcher Cohen will work in partnership with the Metropolitan Water District); helping local governments plan for climate change (DeShazo with the California Air Resources Board and the Southern California Association of Governments); and reducing toxic exposures to nanomaterials in California (Godwin with the National Institute of Occupational Safety and Health.) In another initiative in partnership with the Mayor’s Office and the California Air Resources Board, researchers are compiling a database of jobs created by clean tech activities in L.A. County and will document best practices that other cities have used to attract and support clean tech development. Luskin’s Kahn is working with the Sacramento Municipal Utility District to pinpoint what determines how much electricity is used by residential and commercial consumers and how the district can market its major green energy programs to increase participation.
Finally, Delmas is looking into whether the Green Business Certification Program approved recently by the City Council will reduce the overall carbon footprint of small businesses. The program offers incentives and assistance to small business owners in L.A. to become more efficient and less wasteful in their everyday practices. Those businesses that meet certain “green” criteria will be certified as being environmentally friendly. Her partner in this venture is the Los Angeles Department of Water and Power.
By Minne Ho
The UCLA Luskin Center for Innovation and the Los Angeles Business Council has publicly released the report, “Designing an Effective Feed-in Tariff for Greater Los Angeles.” The report was unveiled yesterday at the Los Angeles Business Council’s Sustainability Summit, attended by hundreds of the city’s elected officials and business, nonprofit, and civic leaders.
J.R. DeShazo, the director UCLA’s Luskin Center for Innovation, has long studied how governments can promote and help implement environmentally friendly energy policies. His recent research on solar energy incentive programs, conducted with Luskin Center research project manager Ryan Matulka and other colleagues at UCLA, has already become the basis for a new energy policy introduced by the city of Los Angeles.
On Monday, March 15, Los Angeles Mayor Antonio Villaraigosa announced an ambitious program to move the city’s energy grid toward renewable energy sources over the next decade. Included in the plan is a provision — based in large part on the Luskin Center research — for a “feed-in tariff,” which would encourage residents to install solar energy systems that are connected to the city’s power grid.
The overall plan would require ratepayers to pay 2.7 cents more per kilowatt hour of electricity consumed, with 0.7 cents of that — a so-called carbon surcharge — going to the city’s Renewable Energy and Efficiency Trust, a lockbox that will specifically fund two types of programs: energy efficiency and the solar power feed-in tariff.
Under the feed-in tariff system, homeowners, farmers, cooperatives and businesses in Los Angeles that install solar panels on homes or other properties could sell solar energy to public utility suppliers. The price paid for this renewable energy would be set at an above-market level that covers the cost of the electricity produced, plus a reasonable profit. “A feed-in tariff initiated in this city has the potential to change the landscape of Los Angeles,” said DeShazo, who is also an associate professor of public policy at the UCLA School of Public Affairs. “If incentivized appropriately, the program could prompt individual property owners and businesses to install solar panels on unused spaces including commercial and industrial rooftops, parking lots, and residential buildings. Our projections show that the end result would be more jobs and a significant move to renewable energy with no net cost burden to the city.”
Feed-in tariffs for solar energy have been implemented in Germany and several other European countries, as well as domestically in cities in Florida and Vermont. The programs have moved these regions to the forefront of clean energy. And while these programs have necessitated slight increases in ratepayers’ monthly electricity bills, they have also generated thousands of new jobs. The mayor estimated that under the program announced Monday, 18,000 new jobs would be generated over the next 10 years. “For Los Angeles to be the cleanest, greenest city, we need participation from every Angeleno,” Villaraigosa said. “We know that dirty fossil fuels will only become more scarce and more expensive in the years to come. This helps move us toward renewable energy while at the same time creating new jobs.”
The new program had its genesis last year, when Villaraigosa announced a long-term, comprehensive solar plan intended to help meet the city’s future clean energy needs. The plan included a proposal for a solar feed-in tariff program administered by the Los Angeles Department of Water and Power. In September 2009, the Los Angeles Business Council created a Solar Working Group consisting of leaders in the private, environmental and educational sectors in Los Angeles County to investigate the promise of the feed-in tariff for Los Angeles and commissioned the UCLA Luskin Center for Innovation to lead the investigation. In addition to DeShazo and Matulka, the working group also included Sean Hecht and Cara Horowitz from the UCLA School of Law’s Emmett Center on Climate Change and the Environment. The first phase of their research examined current models operating in Germany, Spain, Canada, Vermont and Florida to propose guidelines for a feed-in tariff design. The second phase looks at the potential participation rates in a large-scale solar feed-in tariff program in Los Angeles and its impact on clean energy in the Los Angeles basin.
The Luskin Center for Innovation at the UCLA School of Public Affairs unites the intellectual capital of UCLA with forward-looking civic leaders in Los Angeles to address urgent public issues and actively work toward solutions. The center’s current focus in on issues of environmental sustainability.