San Francisco, CA Energy Independence Initiative

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San Francisco, CA, US

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Type: Ordinance

Status: Adopted in May 2004

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In May 2004, San Francisco adopted an Energy Independence Ordinance using California's Community Choice Aggregation law (Laws of California 2002 Chapter 838) as a purchasing and rate setting authority, and will issue revenue bonds, called H Bonds, to finance a 360 MW public works project. The energy projects would be equivalent to more than a third of the city's electrical capacity needs and on average would supply about 14 percent of the city's electric consumption (MWhs) without a rate increase. The new energy projects are expected to be a combination of energy efficiency, solar photovoltaics, wind energy and other distributed generation technologies.

Oakland-based Local Power, which has worked with the San Francisco Board of Supervisors since 1998, is now preparing an implementation plan in parallel with city agencies. The plan is expected to be submitted to the CA Public Utilities Commission in May 2005 with competitive bidding to follow later in the summer of 2005.

According to Paul Fenn, author of the Energy Independence ordinance and the community aggregation state law, there are another 22 California cities and counties that have agreed to similar goals to develop a 40 percent renewable power portfolio, double the levels required by California's Renewable Portfolio Standard law, a 28% increase over current statewide levels of renewable energy as opposed to a required 8% increase.

Local Power is providing assistance and encouraging the California cities to complete their community aggregation and self-generation implementation plans in time to ward off a massive push for power plant construction by California's bailed out electric utilities, PG&E, Southern California Edison and Sempra (San Diego Gas & Electric). Local Power is also suggesting that the cities move quickly so that they can lock-in the current exit fee levels for any departing loads - set at around 2.5 cents per kilowatt-hour.

On a separate but related track, The San Francisco Board of Supervisors unanimously adopted a resolution endorsing Local Power's Community Choice Bill of Rights on March 12, 2005, asking state Senator Carole Migden and Assembly member Mark Leno, to sponsor the legislation this year.

The Community Choice Aggregation Bill of Rights, developed by Local Power over the past two years since community aggregation became law, includes a solar wheeling provision that would change the existing transmission tariff regime in California to accommodate solar networking by Community Choice Aggregators.

The proposal also contains further mandates to bring energy efficiency funds under local control by communities that take stewardship over their energy use, adds limits to monopoly utility electric power contracts, and creates a methodology for utility exit fees and charges imposed on such communities to be credited for benefits associated with their superior efficiency and use of renewable resources. Benefits include a reduced need for transmission infrastructure, less fossil fuel imports and increased grid reliability.