Newport Beach will consider joining an Irvine-led effort to bring government-run energy to Orange County, officials said Monday.
The Irvine City Council voted earlier this month to move toward establishing a community choice aggregation, also called community choice energy, and has invited Newport Beach, Costa Mesa, Huntington Beach, and Tustin to participate.
“Newport Beach is certainly open to discussing ways to reduce our residents’ and businesses’ energy expenses,” Mayor Will O’Neill wrote in a prepared statement. “A community choice aggregator has been prohibitive for Newport Beach to go it alone. So Irvine’s taking the first step is welcomed and appreciated.”
However, new CCA regulations from the California Public Utilities Commission are less favorable for local control as investor-owned utilities lobby for higher exit fees.
“As we hopefully get some more details from Irvine about what they’re thinking we would definitely look at it for consideration,” City Manager Grace Leung said. “We would definitely need a lot of community input.”
Leung added there is a big financial component to proposal and city officials will need more information about what energy rates will come out of this locally-controlled purchase of power.
Local officials can choose what kinds of energy to buy for their communities after forming a CCA. Under this structure, participating city and county governments have a voice in setting rates and offering incentives for clean energy technology.
Marin County started the state’s first community choice energy agency in 2010.
Community Choice agencies now service about 11 million consumers, representing about 154 cities and 20 counties in California, according to an Irvine staff report. They generally offer a higher percentage of renewable energy to ratepayers at rates lower than investor-owned utilities.
The start-up and working capital costs for such an initiative in Orange County are estimated at $10.05 million, assuming financing is obtained, according to the staff reports. These expenses could be fully recovered within the first three years of the CCA’s operation while also achieving a two percent discount compared to Southern California Edison’s existing rates.
Newport’s neighbors are split on the issue.
Costa Mesa Mayor Katrina Foley and Councilmember Andrea Marr wrote in a letter to the Irvine City Council that they support Irvine’s formation of a joint powers authority to establish Orange County’s first CCA.
Laguna Beach decided not to participate in the proposed clean energy authority, partly because of a recent ruling by the California Public Utilities Commissions that allows investor-owned utilities to recover costs from customers leaving their system, Shohreh Dupuis, assistant city manager and director of public works said in a statement to the Daily Pilot.
The city of Laguna Beach is not pursuing starting or joining a CCA at this time, a city spokesperson said Monday.
The Irvine City Council is tentatively scheduled to host a workshop on this matter in May 2020, according to city documents.