LAKEPORT, Calif. – At the urging of the county's new administrative officer and with input from a former board member, the Board of Supervisors on Tuesday reached consensus to put off pursuing a community choice aggregation power program at least until after the county's preparation of the new fiscal year budget is complete.
At its March 22 meeting, the board had given staff direction to create a modified selection committee to vet several highly technical proposals from companies regarding the creation of a community choice aggregation program.
Such a program would be led by the county government and was intended to lower energy costs while allowing the community to create its own portfolio of green energy sources.
Carol Huchingson, who took over the county administrative officer's job April 2, said she's been studying community choice aggregation since taking the job and, in her assessment, the advantages to the county have been reduced.
She said no small jurisdictions have done what is being contemplated for Lake County, and due to the fact that she's in the middle of producing the county's new budget – which she'll be presenting soon – she suggested holding off on the project.
There is a North Coast counties group led by Humboldt that is coming together on such a program and Huchingson said Lake County may want to join that at some point.
“To take on a project of this magnitude on our own is just not something that I think we can step into at this time,” she said.
The county's wildfire recovery continues to be county staff's priority, and as a result of that recovery effort, “I think we're facing the most challenging fiscal year we've faced in many,” Huchingson said.
Other key considerations Huchingson mentioned during her request included the need to pay as much as $40,000 for consulting support to vet proposals and the need to hire qualified staff to manage the program.
Supervisor Anthony Farrington, who had brought the proposal to the board last year, said he was disappointed by the request, pointing to the large amount of time and energy expended to get the matter to this point.
While he said he didn't disagree with a lot of Huchingson's statements, he said the county needs to focus on more than just rebuilding. “I think it would be a disservice not to move forward with community choice aggregation,” he said.
He noted that California Clean Power, the first company to propose community choice aggregation to the county, offered a turnkey program.
Other pluses important to Farrington included the ability to choose sources of energy, be less reliant on fossil fuels and the opportunity to become a net exporter of green energy. “I think it would be shortsighted to just close the door on this.”
Board Chair Rob Brown said the county isn't in the financial position to pursue the program now because of the Valley fire, which remains his priority – not community choice aggregation.
He suggested it would be prudent to put the matter off at least until they get through the annual budget process.
Supervisors Jim Comstock and Jim Steele also indicated they supported holding off, with Comstock saying he was not opposed to looking at it down the road and Steele adding that he wanted to keep the door open.
At Brown's invitation, former District 3 Supervisor Denise Rushing – a longtime veteran of the energy industry, having previously worked for Pacific Gas and Electric as well as an independent consultant – attended the meeting to speak on the matter.
Rushing said she agreed with Huchingson's recommendation and her concerns with timing, and went a step further and suggested that the board wait at least a year before taking any action.
“Some things seem to be too good to be true,” she said, adding that she was in a unique position to provide “some perspective the board might not otherwise hear.”
Rushing explained that when PG&E went bankrupt it was because the corporation banked on the marketplace continuing to behave in a way it anticipated, which it didn't do. While measures have been put in place since then to stop the energy market's volatility, “The reality is, it is still a spot market, on the margin.”
As such, Rushing said the board needed to make sure to be prepared for how the market would behave when it's volatile and under stress, which it isn't right now.
Rushing said she was involved in smart metering for some time, and for many years the utilities weren't interested in it until they suddenly realized they could transfer market risk to their customers.
She said PG&E and Southern California Edison were the deep pockets in the energy industry and yet they went bankrupt when the markets went wrong. “You want to know that you're not the deepest pocket when you move forward with this.”
At the same time, she said she wasn't saying aggregation was bad or that the county shouldn't go forward with it, but was urging caution. “The risks are greater that they may appear on the surface.”
The county will want to aggregate with the best of the best on the market, said Rushing, reminding them that, at one time, Enron was the best of the best in the energy market place, “and they went bankrupt, too.”
If the county waits a year, it will know more about the markets, she said.
Farrington said he still believed there is an opportunity for the county, and Steele said he had no trouble waiting, adding he believes there's going to be “another game” that will be played later.
“Our risk is always going to be high,” Steele said.
Brown said he wanted to suspend it for now and discuss it again after the budget cycle.
The discussion ended with Steele asking county staff to find out if the companies that had submitted proposals would extend the deadlines included in the documents.
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Supervisors agree to hold off on pursuing community choice aggregation
- Elizabeth Larson
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