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California Entering Decade of Disruption, as Power System Shifts Dramatically

Communities across California have formed Community Choice Aggregators (CCAs) at a rapid rate since 2010, with over half of them starting within the last two years. County and city governments administer CCAs as local alternatives to investor-owned utilities. “The Growth of Community Choice Aggregation: Impacts to California’s Grid,” a new report produced by Next 10 and written by JR DeShazo, Julien Gattaciecca and Kelly Trumbull MPP ’17 of UCLA’s Luskin Center for Innovation, finds that if current growth trends continue, CCAs may serve a majority of California’s power consumers within the next 10 years, transforming California’s retail electricity sector. According to the report, the rise of CCAs has both direct and indirect positive effects on overall renewable energy consumed in California, helping contribute to the state meeting its 2030 RPS targets approximately 10 years in advance. Even with such an important impact on the penetration of renewable energies, CCAs’ effects on the grid have been negligible so far. This is in part because when a CCA starts, it handles the needs of existing electric customers, and often gets power from existing power plants. In the long term, though, CCAs’ impact on the grid depends on their energy procurement strategies and their local investments. “The public and local nature of CCAs positions them to implement local energy programs that will help to reduce or shift energy consumption, benefiting the grid as well as their customers,” DeShazo said.

 

Photo by iStock / oveguli

 

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.

Luskin Center sets out to make L.A. a greener place to live, work The Luskin Center for Innovation has set a goal to produce research that will help Los Angeles become more environmentally sustainable

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.