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(dailynews.com) In dozens of cities and unincorporated communities in Los Angeles and Ventura counties, businesses and residents will soon be paying lower electric bills for greener energy under a just-launched community choice aggregate utility, power officials said.

The Clean Power Alliance of Southern California began buying power on Feb. 1 for about 2,000 Los Angeles County buildings, including libraries, hospitals, firehouses, sheriff stations, parks and offices, supplying 60 percent from renewable energy sources — more than double what Southern California Edison provides, said Gary Gero, chief sustainability officer for the county.

The new power utility will phase in commercial and industrial businesses and government facilities from 27 member cities in June and expects to add residents by January, alliance board chair Diana Mahmud said Monday. In less than a year, the new power alliance will have more than 2.4 million residential customers and a quarter-million commercial accounts and estimates it will reduce greenhouse gas emissions that contribute to global climate change by up to 9 percent.

“No. 1, it gives their residents and businesses more choices for energy. Plus, we will be able to offer lower cost energy with a higher percentage of renewables,” said Mahmud, who is also a member of the South Pasadena City Council and a former energy attorney for both the Los Angeles Department of Water and Power and the Metropolitan Water District of Southern California.

The new utility applies only to SCE or other investor-owned utility customers. Customers served by municipal utilities are not allowed to participate. These include residents of the cities of Los Angeles, Burbank, Glendale, Pasadena and Azusa. Under the alliance, Edison would distribute the electricity using its power lines and carry out the billing. Mahmud said the community choice aggregate utility can buy power on the open market at cheaper rates.

Community choice utilities, authorized by a 2002 state law, have grown in Northern California for the past 10 years. There, five community choice power utilities are operating, the first in Marin County and later in counties of San Francisco, Humboldt, Sonoma and San Mateo. About 10 more are expected to launch in Northern California.

The local alliance was originally named the Los Angeles Community Choice Energy utility until it added Ventura County and changed its name. It began with a study launched in 2015 by L.A. County that concluded it would be feasible, provide cheaper and greener energy options that reduce greenhouse gas emissions and would eventually add 700 new jobs. The county gave the Clean Power Alliance a $10 million no-interest loan as seed money, Gero said.

Once the utility becomes fully operational, it will begin working with cities to build renewable energy plants, which most likely would be small-scale solar on rooftops, carports, hillsides or brownfields, contaminated areas not suited for building.

For example, South Pasadena is attempting to add photo voltaic panels atop two of its reservoirs but because the power would be generated in the city, it could not combine it with power from the Wilson Reservoir in San Gabriel. Edison rules do not allow two projects from different cities to be combined. So far, San Gabriel has not joined the alliance.

“I anticipate that we will develop more local, renewable generation. That is part of the reason why we were formed,” Mahmud said. “These communities want to see renewable energy being generated within their own communities. Also, with a local source, quite simply, less can go wrong.”

The Clean Power Alliance stumbled from the starting gate when the California Public Utilities Commission threw up a roadblock in December, saying the investor-owned utility needed to be compensated for lost power because “investor-owned utilities are saying they are losing money,” she said. The alliance is negotiating with Edison for the cost of short-term power contracts and a CPUC decision is expected in August, she said.

Mahmud said the alliance dodged a bullet and was able to move ahead. She doesn’t see anything that would stop the next two phases. “We don’t see any showstoppers,” she said.

The  community aggregate utilities can buy renewable energy and charge less for it, she said. Renewable energy under California law consists of: solar, wind, geo-thermal, biomass and small hydro-electric power. Large hydro-electric power, such as power generated from the Oroville Dam, is not certified renewable because large projects can damage fish and other wildlife, she explained.

Gero said in the next two phases, the 60 percent renewable energy amount may drop. That’s because businesses and residents can personalize their power portfolios. They get to choose from three tiers:

  • 36 percent renewables for 4 percent less than SCE
  • 50 percent renewables for 3 percent less (the default option for South Pasadena)
  • 100 percent renewables at 7 percent more

Besides the two counties, the alliance is made up of the following cities: Agoura Hills, Arcadia, Alhambra, Beverly Hills, Calabasas, Camarillo, Carson, Claremont, Culver City, Downey, Hawaiian Gardens, Hawthorne, Malibu, Manhattan Beach, Moorpark, Ojai, Paramount, Rolling Hills Estates, Santa Monica, Sierra Madre, Simi Valley, Temple City, Thousand Oaks, West Hollywood and Whittier.