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Consumer Choice Has Revolutionized Electricity Business in California, DeShazo Says

JR DeShazo is quoted in a recent column in the Los Angeles Times on the rise of community choice aggregators (CCAs) and their effects on California’s major electric utilities. “The pressure they’ve placed on the [investor-owned utilities] has produced a focus on competition that did not exist before,” said DeShazo, director of the Luskin Center for Innovation and co-author of a 2016 study on CCAs. “So a competitive dynamic already has emerged that has been beneficial to customers.” Only a small number of states have legalized these government-affiliated, non-traditional utilities, which now serve almost 2 million Californians.


 

A New Tool to Help Plan for Expected Growth in Electric Vehicles Luskin Center’s Plug-in Electric Vehicle Readiness Atlas informs investments, policies and plans to meet consumer demand

More than 82,000 electric vehicles were registered in Southern California between 2011 and 2015. The number of new plug-in electric vehicles registered there during 2015 increased a whopping 992 percent from 2011.

Now, a report produced by the UCLA Luskin Center for Innovation forecasts continued exponential growth in the electric vehicle market, with more than 700,000 plug-in electric vehicles expected to hit Southern California roads by the end of 2025.

This forecast assumes that over time more residents of apartments and other multi-unit dwellings will be able to charge at home. The report, the Southern California Plug-In Electric Vehicle Readiness Atlas, can help make that happen, according to J.R. DeShazo, director of the Luskin Center for Innovation.

“We wanted to provide a tool that decision-makers can use to accommodate forecasted consumer demand for electric vehicles and charging infrastructure,” DeShazo said. For example, the atlas provides planners with critical spatial information for meeting charging demand in multi-unit residences and other places. It can also help utilities identify where utility upgrades may be needed to accommodate additional electricity loads.

The atlas documents the concentration of plug-in electric vehicles (PEVs) in a given neighborhood, visualizes how that concentration varies over the course of a day, and projects PEV growth over the next 10 years for each of the 15 sub-regional councils of government within Southern California.

With support from the Southern California Association of Governments (SCAG) and the California Energy Commission, the 2017 atlas is an update to the first Southern California PEV Readiness Plan and Atlas created by the Luskin Center for Innovation in 2013. Recognizing that the plug-in electric vehicle market has changed considerably in the last five years, the updated atlas helps decision-makers plan for future changes.

“Like the region’s first PEV plan and atlas, the 2017 update can help open people’s eyes to the promises and challenges posed by electric charging stations,” said Marco Anderson, a senior regional planner with SCAG. As a liaison to cities in the region, he has seen how many cities used the first atlas to find local partners for charging station sites.

The new maps include the following spatial information:

  • the locations and sizes of workplaces, multiunit residences and retail establishments that could potentially host PEV charging
  • the locations of existing charging infrastructure, including the number of charging units/cords and level of service
  • and the locations of publicly accessible parking facilities to fill in gaps in PEV charging, particularly in older urban cores.

 

Unlocking Millions of Dollars in State Incentives for Solar Power New research by GRID Alternatives and UCLA Luskin Center for Innovation quantifies the opportunities and potential benefits of solar power on affordable housing units in L.A. County

By Colleen Callahan MA UP ’10

Karina Guzman is both property manager and resident of a low-income housing complex for working families in Southern California. Even with the job and relatively affordable rent, Guzman worries about paying her electricity bills. But relief is coming from what she found to be a surprising source: solar panels recently installed on 17 of the 27 buildings in her complex.

The solar panel system will offset the cost of powering lights and other needs in common areas as well as help residents lower their electricity bills. “I can’t wait for the solar panel to help me pay a credit card bill, and maybe even save for a vacation,” Guzman said.

Low-income households typically spend higher percentages of their incomes on energy costs and thus stand to benefit most from utility bill savings due to solar power generated on their homes. Yet, while Los Angeles County is a national leader in the adoption of residential solar, the homes of low-income households account for less than 1 percent of residential solar capacity across the county, according to new research by the UCLA Luskin Center for Innovation and the nonprofit organization GRID Alternatives. This may change.

The study found that cities in Los Angeles County could soon unlock millions of dollars annually in state incentives for residential solar on affordable housing.

Starting in 2018, California will offer a solar rebate program targeted at putting solar panels on the roofs of affordable housing developments. With an annual budget of up to $100 million, the Solar on Multifamily Affordable Housing program “could make a big difference toward reversing the current inequity in the distribution of residential solar systems,” said Michael Kadish, executive director of GRID Alternatives Los Angeles, which makes renewable energy technology and job training accessible to underserved communities.

The program, along with smaller existing state solar rebate programs such as the Low-Income Weatherization Program available for large multifamily residences located in disadvantaged communities across the state, will encourage the installation of solar systems that help affordable housing residents’ reduce their utility bills.

But there is a catch.

Residents of affordable housing and other multifamily dwellings can only take advantage of state solar incentive programs if their utility offers a virtual net metering policy allowing residents to receive credits from the system. Virtual net metering is a common billing mechanism that allows multiple parties to share the financial benefits of a single solar power system.

Southern California Edison offers virtual net metering, but that’s not the case with municipally owned utilities in cities such as Los Angeles, Burbank, Glendale and others in the county. Without virtual net metering, there is no real mechanism for residents of multifamily dwellings, including affordable housing, to access the financial benefits of solar.

Now is a good time for the City of Los Angeles ― which we identified as having the largest share of rooftop solar potential (62 megawatts) and rebate-eligible rooftop solar potential in the region ― to consider removing the policy barrier that is currently preventing myriad residents of multifamily dwellings from realizing the benefits of residential solar,” said J.R. DeShazo, director of the UCLA Luskin Center for Innovation and chair of UCLA Public Policy.

Researchers calculated the potential of 115 MW of rooftop solar power throughout Los Angeles County on the more than 1,100 affordable housing properties that would qualify for a solar rebate. Researchers quantified the potential benefits if this physical capacity for solar on affordable housing was realized in Los Angeles County:

  • $11.6 million annually in utility bill savings for affordable housing residents
  • $4.9 million annually in savings for affordable housing property owners
  • $220.6 million in funding from state programs to spur local economic development
  • 1,800 job years (one year of full-time work or the equivalent) created
  • More than 3,800 job training opportunities and nearly 31,000 job training hours that can be strategically targeted to encourage an equitable clean energy workforce

The report includes recommendations for designing a virtual net metering tariff in Los Angeles to help maximize these types of benefits. Findings also highlight the opportunity to target solar workforce development benefits to residents of affordable housing who are more likely to live in communities with higher unemployment rates than the county at large.

The report can be found online.

 

Community Choice Is Transforming the California Energy Industry Report by UCLA Luskin Center for Innovation researchers finds that Community Choice Aggregators provide a competitive alternative for electricity consumers

By George Foulsham

J.R. DeShazo

After decades of dominance by electricity monopolies, California is experiencing the emergence of community choice aggregators, a new type of utility that provides cities and counties the opportunity to choose what kinds of energy to purchase for their needs.

Community choice aggregation allows cities and counties in California (and other states that have enacted it) to group individual customers’ purchasing power within a defined jurisdiction to buy energy. In California, community choice aggregators are legally defined by state law as electric service providers.

These aggregators, or CCAs, have introduced competition into historically protected, investor-owned utility territories. In doing so, they have given eligible California customers a choice of retail energy providers. Since 2010, California communities have established eight CCAs. More than a dozen additional communities are making strides toward switching to CCAs.

“California is headed toward transformation with this rapid development of community choice aggregation programs,” said J.R. DeShazo, principal investigator for a new report by the UCLA Luskin Center for Innovation, part of the UCLA Luskin School of Public Affairs. “Our report highlights the benefits of CCAs while identifying unresolved policy questions that must be addressed by state regulators.”

According to the report, CCAs in California generally offer a larger share of renewable energy — up to 25 percent more — compared to the investor-owned utility in the same area. “We estimate that these efforts resulted in a total reduction of approximately 600,000 metric tons of carbon dioxide in 2016 — the equivalent of $7.5 million in reductions at the 2016 carbon price of $12.73 per metric ton on the statewide carbon market,” DeShazo said.

CCAs offer greener energy at a competitive price, according to Julien Gattaciecca, Luskin Center researcher and lead author of the study.

“CCAs have recently entered the energy market, allowing them to benefit from a long decline of falling wholesale renewable energy costs,” Gattaciecca said. “Some CCAs also offer larger incentives than their local investor-owned utility to households and businesses that self-generate energy through rooftop solar programs, and some have made the commitment to source energy from local renewable facilities, and directly own local solar facilities.”

DeShazo, who is a professor of public policy at the Luskin School, added: “Community choice aggregation is currently the best policy tool available to cities and counties who want to tailor energy procurement to their community’s preferences. The stakes are high. Regulators are grappling with important policy decisions that could affect the future of the energy market as well as the pocketbooks of Californians.”

With investor-owned utilities facing increasing competition, the study concludes that more choices can only benefit consumers, with the right regulations in place.

“Currently, an important part of the load in California is looking at CCAs,” Gattaciecca said. “The three major investor-owned utilities could see between 50 and 80 percent of their load departing for CCAs or direct access providers by 2025 or 2030.”

The eight operational California CCAs are Marin Clean Energy, Sonoma Clean Power, Lancaster Choice Energy, CleanPower San Francisco, Peninsula Clean Energy in San Mateo County, Apple Valley Choice Energy, Silicon Valley Clean Energy and Redwood Coast Energy Authority. Other CCAs expected to launch this year are East Bay Community Energy in Alameda County, Los Angeles Community Choice Energy and Valley Clean Energy Alliance in Yolo County and Davis.