City Council — 2020-08-25

Mayor Johnston?

Here.

Mayor Pro Tem Blatz?

Here.

Council Member Francina? Here. Council Member Haney?

Here

Council Member Weirich?

Here

And we'll fix this reverb one moment.

Sounds like a scary

movie.

folks who have certain electrically powered devices like ventilators for example or oxygen machines in their home and they have a certain amount of electricity must use you can get on medical baseline and that gives you a discount on what you pay for energy. So you do...

Excuse me, are these programs ran through you? It looks like they're run through Southern California Edison.

They're run for... You can stand outside. They're run through Southern California Edison. We do like to promote those programs though because they're available to our customers as well and they're a really great benefit. They're paid for by everybody and people who are eligible on these programs especially in tough times with everything that's going on with COVID and the economy we really want people to be aware of those Something we kind of jointly promote with SCE. So I want to highlight that. Another thing I'll mention, that's an important part of the 100% green program that Ohio has defaulted onto is that for customers who are in one of these programs they continue to pay the same price they paid before so they'll pay the same rate that they would pay if they were on Edison's basic product or our clean product So that parity pricing rate, but you still get their 100% green energy.

So that's a program we've added. We didn't want to put cities in a position where they had a trade-off between going green and putting an extra burden on their disadvantaged customers. And so we have this program built in where essentially you're able to get that 100% green product without paying the extra premium if you're in one of these programs. Next slide, please.

So let me talk about some of the accomplishments over the last couple of years. We've really done a lot for a new entity serving a million customers across the state and it would have been a lot I think just to get off the ground but we've gone a lot further than just getting started. Right now we're on track to meet California's mandates for renewable energy in 2020 10 years ahead of schedule. So essentially the state's requiring 60% renewables by 2030, we're going to have 60% renewables as a whole portfolio. Ojai is going to have 100%, but as a whole portfolio will be at or above 60% this year, 10 years ahead of schedule. Like I mentioned, we have about a quarter million customers receiving 100% green power that makes us the largest provider of 100% clean energy ≫ Thank you, Mr.

Chair. I want to start by saying that we are the largest producer of renewable energy in the country. We have signed 750 megawatts of new renewable energy and 288 megawatts of battery storage under long-term contracts with more coming. We will bring some more to our board for consideration next week but that is a lot of new construction We've also adopted a five-year local program strategic plan aimed at investing $200 million in community needs and priorities.

storage at people's homes and in businesses, and in communities. And those are things that we were piloting already. And some of those pilots were actually able to be deployed last week and the week before when we've had some strain on the grid just due to the heat and resource availability. We're already able to make a contribution by activating those programs.

We've also launched $150,000 community college STEM scholarship program So those are just a couple highlights of what we're doing. But you can see that, you know, couple of the big themes here are cleaner energy making a big impact for the environment through greening the grid and then also a big focus on community. And so there's a lot opportunities for customers to get involved and obviously as the council here, you have your own voice on our board because every member has a seat on the Clean Power Alliance Board of Directors.

Next slide, please. So let me talk a little bit about the impact of Ojai's 100% green power. So last year's Ojai residents and businesses purchased 23 million kilowatt hours of electricity from Clean Power Alliance. 95% of this was 100% green. That's all renewable energy carbon free with zero greenhouse gas emissions. The reason it's not 100% is because everyone who enrolls in Clean Power Alliance is defaulted into a certain rate, but can choose to opt to a different rate. So if the 100% green rate and the premium price that comes with it isn't right for particular customer, they can choose either our clean or lean product, the product that matches their individual values and choices and budget and all of those considerations.

But that's still huge percentage of community receiving 100% green power. By choosing 100% green power, Ojai has reduced its GHG emissions by more than 5,000 metric tons in less than one year. So it's pretty impressive. I know Ojai is a small community but it's a pretty big difference you've been able to make by not just being part of Clean Power Alliance but choosing to be at 100% green. This is equivalent to taking almost 1,100 passenger cars off the road for one year Eliminating electricity is consumed by 857 homes in one year. We're planting almost 84,000 trees and growing them for 10 years.

So if you think about like all the effort that could go into a lot of other ways to mitigate GHG emissions and I'm sure Ojai's focused on a lot of other things as well not just what we're doing with Clean Power Alliance but it's a pretty great way to make a big difference with one action.

Matt, can I ask you one question?

Yeah absolutely.

On that last bullet point where you had the three are those when it says equivalent to are those additive or are those passenger cars or 857 homes or planting 83 000 trees? Karen can

correct me if i'm wrong is I think it's either or any one of those things okay yeah just whatever resonates most with you

That's right, this is based on the EPA calculator.

Okay. I had one other question on this page too is so you're stating that we've reduced our emissions by 5,000 metric tons. Do you know what we started out with as far as our usage and how much tonnage we'd use in a year?

That's a great question but so I think just Karen, if you have some notes on this. But I mean because you went from Edison's base product to zero like if we just ignore the 5% of people who are on something else basically it's like saying your total electric related emissions were about 5000 metric tons and now they're close to zero

I would just, why I'm asking that is I just wonder how that would correlate into our air quality board. Our recess board and the numbers and the calculations that they use to predict what we're, what our air quality is on a annual basis. And I would just think this is just additional information that might be used or applied. That's all.

Yeah. And we'd be happy to follow up with any more detailed information you need or anything that would help you with that. This is just isolating you know, when I'm talking about it which is electric sector electricity consumption related emissions. Obviously there's a lot of other emissions that happen in any community. That's

not necessarily just Bill Warrick. Matthew have a question? Can I ask a question Matthew?

Yeah by all means

yeah these are savings for the This is an emissions overall as opposed to where the electricity is generated one way or another, correct?

It

could be a power plant that was substituted for solar farm out in the Mojave Desert, for example.

Right, right. It's not necessarily that there is a power plant in Ojai that we shut down.

Can I add just real quick to what I was thinking? I wanted to give some credit to the city and the City Council on this because I think from being part of the early discussions, Ohio was one of the first that did go 100% green power So I think the true impact is actually that we got some other cities that are much larger than us to also do the 100% clean power, which is exponential.

Well- Yeah. Matthew, on top of this, there's a discussion going on right now in the community regarding looking at Greenhouse gas emissions as a countywide issue. And again, if we have six cities out of 10, if we can go back to any of those other cities or communities and clearly demonstrate the benefits of what we've done and what a lot of other cities are doing.

And we start looking at our communities and climate change, and all of this In a broader range and a broader spectrum, I think it's gonna be beneficial. Again we have as a county, we always have, I think there's a tendency just to protect our own rather than creating an environment where we're all in it. All 10 cities are in this together. And imagine the air quality changes that we could have if we all participated in this. And imagine all of the additional savings that we might have If we all participated in this. So there's a lot to be said about starting out and where we are, but where we need to go is important also. So I appreciate the facts and the information.

I have a question for Matthew too, another one. Matthew, since we're talking about discussion in the community, I've gotten a lot of questions after what appears to be Edison's attempt counter your success with their publicity. And so now they're talking about 100% Renewable Edison as well in some of their publicity, and I might as well just ask you what is the difference between your 100% Renewable program and what Edison is calling its 100% Renewable program?

Well, I'm glad you asked and I'll assure everyone else that question wasn't a plant If you want to go to the next slide. Okay, I'm sorry. That's the next slide. Great question thanks for asking. So yeah let me talk about that SC has something called the Green Rate Program and it's a bit different it's a little bit of an apples-and-oranges comparison with CPAs rate products but but I'll just acknowledge I know there's been a number of questions about this because we do an annual joint mailer with Southern California Edison And it's meant to be a comparison between our rate products and their rate products. And that's evolved over time, and it's a regulatory requirement that we have to do. In some ways it's informative to customers but in other ways it can be a little bit confusing.

So that's why we have this slide here to talk about that. And so I think just at a high level before I even jump into the slide, we have just a totally different model than what Edison is doing. All of its customers on the same default rate, regardless of what city they're in. And then they have these other, what I would describe as boutique rate offerings that are regulatory mandated programs that require them to buy renewable energy from certain sources and make those available to customers at a separate rate.

So that's one kind of way of doing things. What we're doing is, we're building our whole organization around providing greater levels of renewable energy to whole communities and then entire communities are moving on mass to our product. We're still offering choices so people can move amongst those products. People can also move back to Southern California Edison if that's what they prefer but it's just a different thing. Our rate offerings are available to all customers. You can move in and out of those programs Excuse me, in and out of those right products at any time.

And we're sourcing those from a diverse portfolio of resources that's really built to last. It's who we are. So that's just kind of a high level description of what the two programs are. So I'll talk a little bit about availability. So the way Edison's program is structured is they're buying solar power and they're selling you solar power for 50 or 100% of your usage But it's a limited program. They only procure, they're only allowed to procure up to 269 megawatts of solar energy for this program so once that program is subscribed it's done no one else can join.

To give you an idea I mentioned earlier we have about 250,000 customers in our 100% green program and we have no participation cap. So if everyone continued to, like we have some cities this year that are actually moving up to a hundred percent green in the fall, Sierra Madre and Malibu. If everyone eventually wanted to move to a hundred percent green, we would make that happen. Edison's limited in their program participation but the folks that we already have on our 100% green product line So if everyone just went back to Edison and wanted to stay 100% green, they'd break Edison's program. There wouldn't be enough power to supply that demand.

So current participation levels I mentioned that we have about a quarter million customers on 100% green. We also have another half a million or so on the clean power 50% renewable energy product. Between Edison's 50 and 100% rate they have 500 to 1,000 customers. So when I say it's a boutique program, you're talking about out of 6 million people they have maybe 1,000 people participating in those rates. So that's helpful to understand.

Can I ask a question?

Yeah, absolutely.

Am I unmuted? I guess so. So Edison is a private company. You are Clean Power Alliance is a public company, correct?

That's right.

Okay, now can Edison, it almost seems like Edison's trying to confuse us with their rate. Can they legally change their rates and what appears to be more affordable? Can they change it to something else without notifying the customers that sign up for their green program? Can they change the rates of their Green Rate Program?

They can change the rates and they do change the rates from time to time. And I'll talk a little bit about some of how that works, but I will say Edison's also heavily regulated by the Public Utilities Commission so I don't wanna imply anything sinister in what they do but it's very different than what we do and it's frankly pretty arcane. When we have a rate change, it's on the agenda at our board meeting Anyone these days can call into the board meeting or when we're not in COVID times, we have remote locations in Ventura County that people can come and participate in our public meetings. And these rates are discussed and we try to make them understandable and transparent.

The Edison's process kind of works through some complicated formulas and then it also goes through approval processes at the Public Utilities Commission in San Francisco It was just harder for people to participate. And if you go to the Public Utilities Commission, they're dealing with railroads and hot air balloons and all sorts of stuff. So it's a little bit different. But let me address the cost a little bit, and that might help answer your question as well.

So Edison has a formula for how they calculate the cost of their green rates. And it's based on procurement costs and marketing costs and a number of different things. That formula spits out rates, essentially. It's essentially cost-based for them and then they also pay the PCIA which you may have heard of if you've followed anything with Clean Power Alliance and CCAs over the last couple years but that's the exit fee for customers who leave the utility.

So interestingly if you stay with Edison but join their green rate, you pay the exit fee like you left Edison. And as we've experienced there's a lot of volatility in the PCIA So what happens with Edison's rates is you take your exit fee and you take your renewable rate, which varies a lot based on these inputs that Edison has in their procurement. And you end up with a rate.

Now, Edison doesn't make any promise or warranty as to how that rate is going to compare to their base rate. If you saw the mailer, one of the things for some of the rates that people got in the mailer it actually showed that their 100% green rate was less expensive than their regular rate. Which was I think confusing to some

people.

We've since then looked at the rates and that exit fee changed and now it's more expensive than their base rate. So it moves around they're not aiming for a particular price they're just turning the crank on a formula and a bunch of inputs What we're doing is, you know I talked about on our rate slide. We're offering 100% green energy at a seven to 9% premium over Edison's base rate.

So we're looking at if the exit fee goes up then we actually lower our prices a little bit so that we can maintain ourselves within that range that we talk about. So we're trying to give our customers some predictability about what those rates are gonna be What those rates are going to be in any given year and the rates are going to have some logical connection. So your 36% rate is a little less expensive than your 50% rate, and then you're 100% rate is the most expensive. And I think people like generally get why that makes sense.

We would like to see those premiums for like the premium 400% green come down over time but Right now, the fact of the matter is it costs more money to have 100% clean energy than to have dirtier energy.

Matthew? Yeah. Another question is because you're using Southern California Edison's transmission lines for your energy, is it the state that's mandated a fixed cost on the use of those transmission lines or is that something that you had to negotiate and is that something that's not in the predictable cost methodology because of the uncertainty of that, or are you locked into a true rate for a long period of time?

So basically the way it works is if you look at your bill, your Edison bill when you're a Clean Power Alliance customer. You'll have a page of your bill that's dedicated to what they call delivery charges. So that's the wires and poles and transformers and the workers who maintain all that stuff. Everyone pays the same rates for that, regardless of whether or not you're a CPA customer or an Edison customer. And so that is all right to your question. That is all regulated by this, by the public utilities commission and people are on equal footing when it comes to those transmission and distribution rates.

So we didn't have to negotiate anything special. It's all set up to kind of be plug and play from that perspective.

Okay.

Just a couple more points on this slide just comparing the two programs. Talk about financial viability for CPA, you know our 100% green power product is priced effectively so that we recover our costs and bring everybody what we've promised them according to Edison's filings and I can't answer many questions about this because I don't know all the details behind it but they said in their filings that Green rate programs are not recovering their costs.

So probably not a sustainable plan for the future if they're not recovering their costs for that program. And then as far as the future of the program, like I

said- Before you leave the last one, did I understand you to say that Edison says they're not recovering their costs for 100% green? Is that correct? That's

what they said in their,

in their file. And so when most businesses do that is that sometimes classified as a loss leader?

It is although I'll say when I talk about the program future, I say it's uncertain. Edison has said it not in the context of we want to run or a loss leader to complete compete with Clean Power Alliance. This program is essentially a regulatory mandate. They have to do it and they've They've at different times made the argument that maybe they shouldn't have to run these programs in their current form because, you know, they might be shifting costs to other customers or not recovering their cost. So yeah, you could call it a loss leader but I'll say that their perspective on this is a little different where they're going.

Maybe not by design but in effect selling for less than it costs them as a pretty poor for profit business strategy. Not a bad one to get people in the door okay?

Yeah, well and but I guess it hasn't got that many people in the door because they have.

Right? But it raises the question that we have to compare to what 500 to 1000 customers and we've got 800,000. That's very educational. Thank you.

Yeah, absolutely. So just finishing up this slide, whereas the future of Edison's program is uncertain, like I said before 100% green energy and our other rate products, they are who we are. They're why we exist. They're not going anywhere. I think if anything, you know, we're seeing a trend towards more people on 100% green product or people on that clean product.

And as the state moves to cleaner and cleaner over time at 50%, right? Someday is gonna go above 50% and be cleaner and cleaner there.

So onto the last slide. Okay, well thank you for the presentation. I guess now we'll go to the council and we'll start. Randy would you like to start? Do you have any questions you haven't had a chance to ask yet?

No, thank you Mayor for putting this on the agenda though. But remember the reason that I brought it up was the fact that everyone in the community had received that flyer from Southern California Edison stating that they were equal to or better than Green Power. So it was great to bring Green Power on and let them explain away the differences. I come away with a lot more knowledge and a lot more insight As to the benefits of this. And again, I just would like to think about how we can share this county wide and let other entities realize that this is a win and it's just short term and long term win.

Thank you Bill.

You're muted bill. In terms of the cost per whatever capacity unit is appropriate to state for battery storage, is that cost stable following going up? And are the economies of scale so pronounced for that you really can't distribute it. It has to be in large-scale installations?

So the question's around just the cost of renewables and battery storage?

Yeah, I mean there's obviously a fully amortized cost per capacity unit to battery life. There is installation costs. Is that cost going down per capacity unit for battery storage? Or is it stable? And also are the economies of scale so pronounced that it only makes sense in really large-scale operations as opposed to distributed operations where there'd be less transmission losses for using battery storage?

Yeah, great question. So a couple of points on that. So first of all on the price we've seen over the last 10 years, the cost of renewables both wind and solar in particular but especially solar come down really dramatically 90-95%. We're also seeing the cost of... But I would say at this point it's somewhat more stable. At this point we're seeing trends of declining costs for energy storage as well but at least So far not quite as dramatically as what we saw for a few years with solar. So costs are coming down, it's definitely becoming more cost effective at the large scale.

There's also a place for local generation and storage both behind the customer meters so at people's homes and businesses and then just also built closer to load. And there are differences in costs and there's definitely economies of scale for the larger facilities, but that doesn't mean that it never makes sense to do the local stuff. And in fact we're really encouraging it because there can be a lot of value and In that case you're providing sometimes direct value to customers in terms of saving on their electric bill by having self-generation But then also benefits to the grid and benefits to other customers by having that generation so there's definitely a place for for both the distributed customer owned generation and storage alongside the larger scale generation that we procure.

And that's sort of a developing story, okay?

Okay, Susan do you have any questions? You're muted, you're muted.

I'm trying to keep my dogs quiet.

Okay, you did a good job. Oh, you're muted again.

That's because I have nothing to say.

Okay, good. Thank you. Ryan, are you out there? Ryan,

I was not trying to say anything.

Oh, okay. Well thank you. Okay well Matt I only have one question for you and it's I don't know if it's timely anymore but one of the big questions and criticisms that some people made going to the Clean Power Program versus a public nonprofit versus the utility privately owned was we as a utility pay dividends to our stockholders, we as the utility pay taxes and you guys don't. So if you're gonna do this, you should do it much cheaper but being on the board of the CPA I have learned that there are a lot of unforeseen upfront costs in transition.

Could you touch on any of those as to where the money went to start with and You know, we didn't just suddenly slash rates to be more cost competitive.

Yeah great question and I'd say there's a lot of pieces to that but really yes getting started is a big undertaking building any new organization from scratch is going to have some upfront investment associated with it and one of the things that we have to do because we're operating in a commodity market for power is we need to build up reserves just like the city has reserves and really any other government agency, private entity in any operating entity.

And I didn't mention a thing on the chief operating officer at Clean Power Alliance inside. I worry about these things a lot getting our systems in place and all those different pieces. And one of the things we have to do is build up those reserves over time. And as we build up reserves it'll improve our credit worthiness And that will allow us access to lower price power. It'll free up money that we have posted in collateral for certain transactions and allow us to access more markets with even more cost effective power. I think we've done a great job of remaining competitive, but once we reach a certain point with our reserves and our financial position then we'll have that money that we've been plowing into reserves. We'll be able to either look at that for potential rate reduction, or we'll be able to invest that in our communities through energy-related programs in the future.

So those are some of the... That's probably the biggest top line consideration. But like I said, you know, I think we still managed to be competitive. We have our lean power product that is less costly than Edison for similar power content So we've been able to accomplish that so far, and 50% renewable energy product clean power where we're charging the same price as Edison but for more clean energy.

And certainly at this point there's a premium price for that 100% clean energy, but it's just been great to have that offering and it's been exciting to see a lot of customers and communities jump on board led by Ojai in a lot of ways. So those are a couple of the

considerations around. Okay, is there anything else you and Karen would like to add before we move on with our agenda?

Yeah just one more thing that I would be remiss to mention which is we have a COVID relief fund. Our board of directors voted to establish $1 million and we have an option approved by the board to increase that fund. And so customers who sign up for a payment plan or customers who join the care program that I mentioned I just want to make a quick point about the CAREFARA programs that I mentioned on previous slide. They're eligible for a credit on their bill, just for signing up. So if you want to participate in one of those programs, I have the information on those previous slides. Hopefully that can be made available to the public. But actually, you can just call up Edison's 800 number. You sign up through Edison. They provide that information to us and we apply the credits directly on the bill.

We know it's really difficult times for a lot of folks with everything that's happening with COVID. And we want to be doing our part to help the community with that, and so I want to really point out that that's another benefit that Clean Power Alliance is offering to residents of Ojai and Ventura and LA counties.

Well, thank you very much for your time and for all the information that's good to know more about what it is we're doing. And also just to dispel the rumors that crop up I'm sure during an election season some of our members of the council are happy to have this kind of information to help them. So thank you all and we'll now

for

having me appreciate it. Thank you Karen. Do we have, we don't have any people signed up on public communication but we've got several for some of the other items on the agenda. So let's go to the consent calendar. We have a motion to accept it or do you wish to pull anything from the consent? Move to approve. Second. Any objections? If not, so ordered. Okay let's go to discussion item number two presentation of the Lifetime Achievement Award from the Arts Council.

Is that Marcy?

And I'll just introduce. Yeah, Marcy Tosher the chair of the Arts Commission is going to be doing the presentation. I'll just quickly introduce we do our lifetime achievement in the arts award each year for the city the Arts Commission. Vets several candidates and then makes a recommendation to council, and council ratifies that. And we did that this year and ratified a few a couple months back. We were holding out to do the presentation when things opened up again but it's been challenging so we decided to try to do an electronic presentation or virtual presentation here.

And I believe Marcy is on in the meeting let me confirm that yep i see her. I'm here Do you want me to pull up the presentation?

I'll cue you when I want you to put it on.

Okay, got it. All right and with that I'm handing it over to Chair Tosher from the Arts Commission

Thank You James As James mentioned the Arts Commission voted unanimously selected Gaye Jones for the 2019 Lifetime Achievement in the Arts Award back in the good old days of 2019. We're finally able to officially present this award to Gaye, in the most unusual and unique way. And I want to personally thank Gaye for her utmost patience and understanding about the delay. Tonight, I am sorry that Gaye won't be able to experience all the smiles, congratulations, hugs, handshakes that she would have under normal circumstances But I urge all of Gay's friends, family and colleagues to reach out to her and offer congratulations as they deem appropriate. Here's a little bit about the Lifetime Achievement Award. The award was founded by the Arts Advisory Council now the Ojai Arts Commission in 1987 as an important tribute from the city council and citizens to Ojai artists who have enhanced our understanding and appreciation for the arts.