Budget Challenges in East Bay Community Energy for 2020-2021!

(07/2020) On June 17, East Bay Community Energy (EBCE) Board of Directors voted on a proposed budget for the 2020-2021 fiscal year. They had to choose from several scenarios that EBCE staff proposed. The EBCE Board of Directors were faced with a difficult decision due to an increase in the Power Charge Indifference Adjustment (PCIA) rate and the economic impacts of COVID-19.

 

 

Unlike previous years, EBCE expects a shortfall in their budget in the 2020-2021 fiscal year. Unfortunately, California Public Utility Commission’s (CPUC) latest decision to change the PCIA methodology has resulted in higher PCIA rates and has left many CCAs in a difficult financial position, including EBCE. PCIA is an ongoing fee that PG&E charges EBCE customers every month. PG&E makes EBCE customers pay this fee to cover the alleged revenue loss due to their customers leaving to join EBCE. Expected increases in the PCIA rates is one of the main reasons for EBCE’s estimated budget shortfall.

 

Despite the increases to the PCIA, EBCE still manages to undercut PG&E’s rates. For the Bright Choice product, which is EBCE’s default product, EBCE’s overall rate is currently 1.5% cheaper than PG&E’s rate. In order to address the shortfall, EBCE proposed to the Board a reduction in the Bright Choice discount. The non-COVID scenario, which assumes COVID-19 will have no material impact on load, proposed reducing the Bright Choice discount from 1.5% to 1%. The second main scenario, i.e. the COVID scenario, which assumes COVID-19 will cause a moderate reduction in load, proposed to reduce the Bright Choice discount from 1.5% to 0.5%. The EBCE Staff presented an example of how the proposed rate changes will affect a typical Bright Choice residential customer’s bill. The COVID scenario is expected to increase a typical residential customer’s monthly bill by $0.44, while the non-COVID scenario is expected to increase it by $0.22. 

 

Although the COVID and non-COVID scenarios were the two main scenarios presented to the Board, the EBCE Staff presented alternative scenarios as well. One of those alternative scenarios proposed reducing the Local Development Business Plan (LDBP) budget by $2.7M which would leave LDBP’s budget at slightly less than $4M. LDBP, also referred to as Alameda County’s Green New Deal, is a roadmap for providing local clean energy benefits in the East Bay by investing in the development of local renewable energy resources. It was adopted by the EBCE Board in 2018 after a more-than-a-year-long effort by LCEA to support and assure its completion. 

 

The long presentation by the EBCE Staff was followed by public comments. Many people who submitted written comments or commented during the meeting echoed the demands of East Bay Clean Power Alliance. Most important demand was to reject any cuts to the LDBP budget because 70% of that budget is already allocated to an electric vehicle charging infrastructure project which leaves only 30% of the budget to significantly benefit low income communities. One common solution proposed by the public was to take the amount that is necessary to mitigate the risk and make up the budget shortfall out of the $73 million in EBCE reserve accounts, established for times of crisis. Another public demand was that EBCE ally with community organizations to fight against PCIA. 

 

The Board voted to accept the non-COVID scenario which means reducing the Bright Choice discount from 1.5% to 1%. According to that scenario, there won’t be any cuts to the LDBP budget. However, there will be changes to the Brilliant 100 product as well. Brilliant 100 is pitched as 100% carbon-free electricity with a rate that matches PG&E’s similar product. EBCE adopted a 3-step potential phase out plan for Brilliant 100. First, EBCE will reduce the renewable content from 40% to 33% while keeping it 100% carbon-free. Second, they won’t allow new participants in Brilliant 100. Lastly, they will reconsider Brilliant 100 in December 2020 and possibly terminate the product. 

 

Alameda County representative Scott Heggarty and Hayward representative Al Mendall voted against the motion. Scott Heggarty argued against decreasing the Bright Choice discount as his bottomline was to offer lower rates. Al Mendall on the other hand supported the COVID scenario, which proposed decreasing the Bright Choice discount to 0.5%.