Community Choice Energy Will Help San Jose Chart A More Sustainable Future

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All too often, calls for environmental sustainability resemble a doctor’s prescription, urging that we indulge less, sweat more, and take bad-tasting medicine.

Fortunately, life sometimes gives us happier options. On May 16, the San Jose City Council voted to establish a Community Choice Energy (CCE) program, which will enable our residents and businesses to choose the source of their electricity. By becoming the largest U.S. city to do so, we will save consumers money, boost our renewable energy supply, and invest in energy efficiency projects.

For decades, San Jose consumers have purchased their electricity from an investor-owned utility, Pacific Gas & Electric (PG&E). CCE programs offer our residents a choice, by providing an alternative source of wholesale energy purchases, while PG&E continues distributing the electricity through its own power lines, and handling all billing. Residents can then choose to purchase their electricity from the local CCE, or “opt out” to PG&E, after comparing rates, environmental benefits, rebates, and other criteria.

Several CCE programs have emerged in a handful of Bay Area counties in recent years, and with promising results.

CCEs routinely offer lower rates than PG&E, in part because they face lower borrowing costs and lack the obligation of investor-owned utilities to distribute profits to shareholders. Even when accounting for the state-mandated fees charged to customers leaving PG&E service, the declining cost of solar and wind energy has enabled CCEs to find cheaper renewables in the open market and deliver better prices to customers. For example, Peninsula Clean Energy’s standard rate package costs residents 2 percent less than PG&E’s, while also deriving its electricity from greener, 75 percent GHG-free sources.

Environmental benefits have also driven several communities to choose CCEs, because they provide consumers the flexibility to purchase electricity from a higher share of renewable sources than PG&E. Several Bay Area CCEs already enable consumers to buy their power from 100 percent non-GHG-emitting sources, at prices competitive to PG&E. By offering consumers a choice for greener electricity, we will reduce our community’s carbon footprint and drive demand for local investments like solar arrays and energy storage.

Some might argue that the environmental benefits of CCEs appear limited since half of GHG emissions today come from automobiles. Yet in the words of Yogi Berra, “the future ain’t what it used to be” – particularly as the electrification of our transportation infrastructure accelerates. U.S. sales of plug-in vehicles have increased tenfold since 2012, and local transit agencies, like VTA, have begun to transform public transportation through investments in plug-in bus fleets and the electrification of CalTrain. As a result, the battle against climate change will increasingly move to our electric grid, with CCEs serving as a potent weapon.

CCEs can also help support greener investments, particularly where costs pose a barrier to many of our low-income residents. By investing net revenues from the CCE into local projects – such as rebates for multi-family apartments to install energy-efficient appliances or solar panels — CCEs broaden access and impact, while keeping ratepayer dollars, jobs, and energy savings within our own community.

Community Choice Energy is the single most powerful measure San Jose can take to lower our GHG emissions and chart a more sustainable future – but it’s just the first of several initiatives we’ll undertake in the years ahead. With San Jose’s public sustainability planning process now underway, we look to engage our residents in creating a plan that will enable broad participation and impact. Learn more about this ambitious initiative at http://www.sjenvironment.org/esp, and please join our efforts to make San Jose a model of sustainability for the rest of the world.

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