SDC Power Comes to Town
Last updated 3/16/2023 at 10:35am
Borrego Springs residents and businesses will soon be receiving fliers announcing that as of April 1, 2023, the community will be buying power from San Diego Community Power (SDCP), rather than San Diego Gas & Electric (SDG&E). By law, all residents must be given 60-day and 30-day notices.
SDCP is one of 25 community choice aggregators, or CCAs, that have sprung up across the state in recent years. The programs were created by the Legislature in 2002 to encourage the growth of renewable energy and offer competition to traditional investor-owned utilities like SDG&E.
In 2021, the San Diego County Board of Supervisors, as Borrego’s local government, committed its unincorporated communities to using SDCP to provide electricity. SDCP is a not-for-profit, public agency, governed by elected officials of local governments that are members, with the purpose of supplying more green energy, purchased from Solar, wind, geothermal and hydroelectricity sources. It describes itself as,“The green competitor to SDG&E.”
SDG&E is not going away. It will still perform every other duty outside of power purchases – such as maintaining poles, wires and power lines in their respective transmission and distribution systems, plus handling customer services, such as billing. The SDG&E bill will show SDCP’s electric generation charge, replacing SDG&E’s generation charge, which shows as a credit. For those who use natural gas, there will be no changes, as the CCA does not provide natural gas.
Borregans who do not wish to buy power from SDCP, have the choice of staying with SDG&E. For 60 days, an individual can opt-out of SDCP and remain with SDG&E, without a charge. The caveat is that folks who decide to stay with SDG&E, cannot change their minds and opt back into SDCP for a year.
“SDCP is the second largest CCA in the state, and purchases renewable power, like Solar and wind, and feeds it into the electricity grid, working with SDG&E to deliver electricity at competitive rates,” stated Jen Lebron, director of public affairs.
“We provide renewable electricity service to over 700,000 customer accounts in the cities of Chula Vista, Encinitas, Imperial Beach, La Mesa and San Diego, and now with the unincorporated communities of the County of San Diego and the City of National City joining in April 2023, we will be delivering service to nearly a million consumers.”
Adding, “San Diego Community Power buys and builds cleaner electricity sources.”
The electricity provided by SDCP is fed onto the statewide shared electric grid and then moves down the path of least resistance to customers. This is why accounting is important. Clean energy is accounted for through contracts and renewable energy certificates that confer the “renewable attributes” of that energy. It needs to work this way because individual electrons can’t be routed from a wind turbine to a particular house that just signed up for green power without building a new transmission line directly from the source to the home. SDCP, just like SDG&E, reports power purchases to the California Energy Commission and the California Public Utilities Commission.
Under the CCA model, the decisions to buy power contracts from sources such as Solar, geothermal, battery and wind energy become the responsibility of local government officials from each jurisdiction, who comprise the board of directors. Supervisor Tara Lawson-Remer currently represents the County on the SDCP Board.
As a publicly-owned non-profit, unlike the investor-owned SDG&E, the Board is directly accountable to SDCP ratepayers; and hosts monthly meetings, where they establish policy, set rates, determine power options and maintain fiscal oversight. All meetings are open to the public.
“There are no closed investor board meetings. As a public provider of electricity, transparency is a notable asset,” according to Lebron.
“If you’re a Solar customer, you’ll transition to SDCP’s net energy metering (NEM) program at the time of your annual true-up with SDG&E. If you produce excess electricity, San Diego Community Power’s compensation rate is based on SDG&E’s true monthly rate, plus three quarters of a penny per kilowatt hour,” Lebron said.
According to the SDCP’s website, “The majority of NEM customers end up being net consumers, where they use more electricity than they produce over the course of their 12-month relevant true up period; and owe large sums at the time of the annual true up. This is why SDCP defaults NEM customers enrolled in our service to monthly billing. Monthly billing allows customers to pay smaller values for any consumed electricity each month. Since this billing option entails a monthly account balancing, monthly billing avoids a big surprise true up bill at the end of the relevant period for electric generation services.”
“SDCP customers can also elect to change their NEM billing option to annual billing to mirror the same methodology as SDG&E’s existing billing and true-up process. NEM customers, who consistently end up being net generators where they produce more electricity than they use at the end of their relevant 12 month true-up period; and expect to receive a cash out each year for excess generation, may be interested in the Annual NEM billing option, as payment for any particular month of net consumption would likely be covered by subsequent months of net generation throughout the course of the 12-month true-up period.”
“Please note that if you wish to update your NEM billing to the annual option, you will need to do so at the time of your true up before you have been billed with SDCP charges. Once your NEM billing has been selected, you’ll not be able to change it until after the end of the applicable and pertinent 12- month true up period.”
“In both billing options, annual true up cash-outs are based on the total cumulative usage of your account over the course of your 12-month relevant true-up period. If you generated more than you consumed over the course of the year, SDCP will pay you for your excess electricity at the Net Surplus Compensation (NSC) rate offered by SDG&E + SDCP’s Bonus Incentive of $0.0075 per kWh.”
According to Lebron, SDG&E is delivering, at their base rate, about 45% renewables, “and we’re at 55% renewables. We also have a plan where we offer a 100% rate as well, where we will guarantee 100% renewable energy deliveries.”
The point of SDCP is, as the local power provider, it offers more renewable energy than SDG&E, at a lower rate. SDCP has two plans, assuring more green renewables are used than fossil fuels. There’s “PowerOn”, offering at least 50% of renewables will be included in the energy supplied; and the “Power100” plan.
Customers that want 100 percent (clean energy) renewables in the power they are buying, can enroll in SDCP’s Power100 plan, which is more expensive than PowerOn. With the rate changes adopted for 2023, choosing Power100 will cost almost the same as SDG&E’s base rate (0.3 percent, or 50 cents, more per month).
Just as SDG&E, SDCP offers time of use rates, which are listed on their website.
According to the San Diego Union-Tribune, “Last year, SDCP’s rate package offered a discount of roughly 2 percent compared to SDG&E. This year the board had a pair of options: Rates that had overall bill savings of 1.5 percent or 2.4 percent in relation to SDG&E. The board chose the smaller number to help further boost SDCP’s financial reserves. More robust financial numbers can help the organization obtain an investment-grade credit rating by November 2025, which would allow SDCP to enter into more renewable contracts.
“An overall bill that’s 1.5 percent cheaper than SDG&E would result in SDCP reaching $384.3 million in 180-day reserves by October of this year, while the option for 2.4 percent in savings would delay reaching the $384.3 million mark until July of 2024.
2023 bill comparison between SDCP and SDG&E:
Total monthly average cost
Residential time-of-use customer using 327 kWh
SDCP PowerOn $132.86
SDCP Power 100 $135.31
Source: San Diego Community Power.
“Under the 2023 rate plan, SDCP staff estimated a typical residential SDCP customer, using 327 kilowatt-hours of electricity in a month would pay a total monthly bill of $132.86, while a customer on SDG&E’s default rate would pay $134.81. That’s a difference of $1.95, or 1.5 percent less.”
“While a savings of two dollars doesn’t seem like a whooping savings or better rate that SDG&E, what’s most important to me is that value proposition,” said SDCP chair and San Diego City Council member Joe LaCava. “We’re delivering a better product at a lower cost.”
While the current goal of San Diego Community Power is to buy a higher percentage of electricity generated from renewable sources on the open market. Over time, SDCP will also invest in and build local renewable energy projects, as other more established CCA programs are now doing.
Lebron explained that “Companies that generate electricity are required by state law to identify their resources and file a detailed report on the content of their generated power.
“SDCP is also required to submit this information to state regulators to ensure compliance with the law. These reporting requirements allow us to be sure that our power procurement strategy supports clean and renewable energy. Moving forward, SDCP plans to procure steadily increasing amounts of renewable energy, including locally-generated power that develops our economy and provides jobs in our communities.
“Like us? There’s only three questions you need to ask yourself,” Lebron stated. “They are: Do you like clean air? Do you like having a choice in power providers? Do you want energy independence from foreign countries and fossil fuels?”
Note: Lebron urges Borrego residents to file an application to be on the advisory council, where there are two empty appointments representing the unincorporated communities. Contact Customer Service or go on the SDCP website for applications for seats that are now open.