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Fosterra Study Projects $1.25 Billion Economic Boost with Community Choice Energy

-September 22, 2016-

A study just released by the Center for Climate Protection and Fosterra finds that the City of San Jose could reap significant local economic benefits by switching to Community Choice Energy, a local program that purchases electricity for residents. The City could expect to see the addition of approximately 12,000 jobs and $1.25 billion in economic activity over six years if it were to use Community Choice to provide 33 percent of the City’s electricity needs from local solar by 2023. The study examines three scenarios, with 33 percent representing the most ambitious option.  The full report can be downloaded here.

The City of San Jose has been studying Community Choice Energy for ten months. This June the City Council approved $300,000 for a technical study, and in August the City announced that they selected two consultants, BKI and EES, to conduct the study. On October 28 the Council will hold a study session on Community Choice, and in December it is scheduled to decide whether to proceed with developing the program.

The new study, “Community Choice Energy: What is the Local Economic Impact?” is intended to support San Jose policymakers as they consider goals and benefits for their Community Choice Energy program. The study was vetted by numerous experts, including City of San Jose staff. “ This new study contributes another important dimension to our conversation about the potential benefits of Community Choice Energy for San Jose.” Said Kerrie Romanow, Director of Environmental Services, who is managing the investigation of this program for the city.

Community Choice Energy is a local program that buys and can generate electricity for residents and businesses. Created by state law in 2002, a Community Choice Energy agency has authority to set rates, develop energy assets, and offer energy efficiency programs, along with other services. PG&E continues to provide transmission, distribution, maintenance, metering, and billing for customers. Community Choice Energy introduces choice to customers by bringing competition to a market currently controlled by a regulated monopoly. Community Choice agencies assume control over the expenditure of millions of dollars from an existing revenue stream.  Recommendations for CCE leaders and policy makers are provided here.

Currently four operational Community Choice agencies exist in California – in Marin and Sonoma counties, Lancaster, and San Francisco. A fifth in San Mateo County will begin service on October 3. These agencies are governed by local elected officials, and are staffed by energy professionals. Community Choice Energy programs offer electricity rates that are competitive with investor-owned utilities. In fact, Community Choice rates offered by the Northern California agencies run about two to three percent lower than PG&E’s rates. In the first two years of operation, Sonoma Clean Power customers saved a total of $50 million. California’s four Community Choice programs also provide greener electricity than their investor-owned competitors. Marin Clean Energy supplies 50 percent of its electricity from renewable sources. And for Sonoma Clean Power and Lancaster Choice Energy, it is 36 percent, and for PG&E it is 29.2 percent.

The economic benefits projected in the new study do not happen automatically with the adoption of a Community Choice program. Achieving them requires commitment, planning, public-private partnerships, and focused implementation. In commenting on the report Ann Hancock, Executive Director of the Center for Climate Protection said, “What is exciting about this approach to Community Choice is that by deploying local solar at scale the city can reduce its carbon emissions, while creating jobs and economic activity.”

About the Center for Climate Protection:
Founded in 2001, the Center for Climate Protection works with business, government, youth, and the broader community to advance practical, science-based solutions for significant greenhouse gas emission reductions. The Center’s mission is to inspire, align, and mobilize action in response to the climate crisis.