1. Community Choice Aggregation A Local Government Tool to Green the Grid, Create Jobs and Boost the Local Economy City of Lafayette October 8, 2014

2. WHAT IS CCA? CCA leverages the market power of group purchasing, consumer choice, and local decision-making. It enables local governments to procure and/or develop power on behalf of their public facilities, residents and businesses. CCA creates a functional partnership between municipalities and existing utilities. It has the proven ability to lower electricity rates and rapidly green the grid.

3. IOU Procures Power Muni Procures Power IOU Maintains Transmission Lines JPA/Local Govts Procure Power IOU Provides Billing & Customer Service IOU Maintains Transmission Lines Muni Provides Billing & Customer Service Muni Maintains Transmission Lines IOU Provides Billing & Customer Service IOU Investor-Owned Utility CCA Community Choice Aggregation Municipal/ Public Utility (also Co-ops) A HYBRID APPROACH Roughly 70% of U.S. electricity is supplied by vertically integrated investor- owned utilities (IOUs), with much of the balance coming from publicly-owned municipal utilities and co-ops. CCA offers a third, hybrid option, where the supply and transmission functions are split between a public entity and the IOU.

4. WHY IS CCA SO POWERFUL? Responsive to Local Environmental and Economic Goals Offers Consumers a Choice, where none currently exists Revenue Supported, Not Taxpayer Subsidized Stable, Often Cheaper, Electricity Rates Allows for Rapid Switch to Cleaner Power Supply Leverages Public and Private Sector $$ and Opportunities New local programs, renewable generation, jobs creation, and economic development

5. City Climate Action Plans Key Yellow = Some progress Light Green = GHG complete Medium Green = Some progress on Climate Action Plan (CAP) Dark Green = CAP Complete

6. GHG Impacts

7. A CCA Can Help with CAPs

8. Jobs Impacts Jobs per Megawatt Source: National Renewable Energy Laboratory

9. CCA as Energy Integrator & Innovator Power Purchase Agreements (PPAs) w/ buy out provisions CCA-sponsored power projects Local Feed-in-Tariff, Net Energy Metering Community Solar and PACE EV charging stations Energy Efficiency programs(utility and state funding) On-bill repayment program Green Business Programs Organizational partnerships/local job training

10. Basic Program Features “CCA: The Biggest Change You’ll Never Notice” Enabled by law in 2002 (AB 117) and amended in 2011 (SB 790) – Utility code of Conduct JPA or special district can operate a CCA in CA; local governments participate by passing an ordinance Utility continues to provide billing, customer service, line maintenance and repair; relationship codified in Utility Service Agreement CCA electric generation charges appear as a new section of customer bill; all other charges are the same CCA is an opt-out program; Customers receive minimum 4 opt-out notices over 120 days and can return to PG&E service any time. CPUC certifies CCA Plan; oversees utility/ CCA partnership and other requirements such as State RPS and resource adequacy

11. CAN CCA BE COST COMPETITIVE? YES! 1. Diversified portfolio approach to energy supply Historic lows make current market favorable CCA is pushing the competitive market to deliver consumer savings and local benefits; Sonoma saving 6-11% Balanced portfolio of multiple sources and contract terms 2. Low overhead & public, non-profit status (JPA) 3.Low borrowing costs, tax exempt financing (i.e. revenue bonds) 4.No shareholder profit margins or $million salaries 5.Self-generation of power through local facilities Asset ownership over time is critical to lower/stabilize rates

12. WHAT ARE THE RISKS… And how are they mitigated ? Rate Competition: Market expertise and well crafted power RFPs are essential; Long vs. short term contracts; Diversified supply portfolio and integrated energy plan Customer Opt-Out: Competitive rates are a must; Articulate consumer value-add and community benefits; Opt-outs in CA typically in 12%-20% range Political: Align CCA to state and local policy objectives; Make the environmental AND business case; look to existing programs; Local education and advocacy is key Regulatory/Legislative: Track influencing statutes and State legislation; Participate in the CA regulatory process

13. GETTING STARTED: 3 LEGS OF THE STOOL 1. Political & Community Resolutions of support and participation (suggested) Community education/endorsements CCA-JPA Ordinance Marketing, customer outreach, opt-out notices 2.Technical Technical Study - load and rate analysis, economic impacts, environmental attributes and supply options JPA - legal formation, vendor contracts Implementation Plan, Utility Service Agreement, etc. 3. Financial Considerations Technical study CCA formation costs Bridge financing from 1 st contract to 1 st revenue Remember: All development and formation costs are reimbursable from early program revenue!

14. White Paper Analysis Generate about $865 million in net revenue over 10 years, money that stays in the local economy and could be re-invested Create more than 24,000 job-years over 10 years Reduce energy demand equal to a medium-sized power plant (1,790 GWH per year, or about 204 MW of combined baseload and peak capacity reductions. Provide about 10,000 GWH in local renewables over 10 years, with an emphasis on local solar and wind development (equivalent to a capacity of about 1,150 MW by 2025). Cut 6.3 million tons of GHG emissions by 2025, equal to taking almost 475,000 cars off the road during that period.

15. CA COMMUNITIES INVESTIGATING CCA In Process: Alameda County, Monterey Bay CCA (Tri-County), City of Lancaster Investigating: City of Arcata, Humboldt County Lake County Mendocino County Santa Clara County (Sunnyvale, Cupertino, Mountain View) San Mateo County Santa Barbara San Luis Obispo San Diego Yolo County Joining MCE: City of San Pablo, Contra Costa City of Benicia, Solano County Unincorporated Napa County

16. Thank you! www.LEANenergyus.org Now is the time to take control of your local energy future. CCA is the path forward.