How Edison's customers might get power from a new utility

Southern California Edison customers in Los Angeles County will have the option to buy power from a newly-formed utility within the next year or so.

The Los Angeles County Board of Supervisors voted Tuesday to form a nonprofit joint powers authority called Los Angeles Community Choice Energy or LACCE. So far the county is the only member, but as many as 60 cities within Edison's power grid in Los Angeles County could become members.

LACCE's mission is to buy power on the open market and sell it to Southern California Edison customers at a lower price than what they pay now. State law changed in 2002 to allow cities and counties to form utilities known as Community Choice Aggregators to sell energy to customers of large investor-owned utilities like Southern California Edison.

Here are some of the basic things to know about this new energy selling model.

It sounds like they’d be buying power from the same places Edison does. How can LACCE sell it cheaper?

According to LA County’s Chief Sustainability Officer Gary Gero, Edison’s power is more expensive because the company’s contracts with electricity producers were signed back when power was more expensive. He says there’s a glut of power right now, so a new entrant in the market can capture a lot of savings.

Where will we see this rolled out and what’s the timing?

The county will start out under the radar, enrolling about 2,000 to 5,000 county buildings. Once that appears to have the kinks worked out, the program will spread to about 200,000 commercial customers of Edison, and then, by the middle of next year, to a half-million residents of unincorporated L.A. County.

As additional cities join the organization,  the customer base and buying power of the new utility will grow. The county projects that by 2019, some 1.5 million customers will be getting their power from this new utility rather than Edison.

What will this be like for individual Edison customers?

Some might not even realize things have changed.

First of all, all customers in all jurisdictions that participate will automatically be opted-in after getting several notices from the county that the change is coming. Customers must opt out to stay with Edison.

However, customers will still receive a bill from Edison because it will still be in charge of – and compensated for – reading meters, billing, maintaining power lines and getting the power out to you.

The LACCE plan is to buy energy from more renewable sources, and that has a smaller pollution footprint than Edison’s energy.

LACCE customers will be able to buy their power from a couple of different tiers. They could get one that has 5 percent more renewable sources than Edison’s for the basic price. Or if they wanted energy from 100 percent renewable sources, they could pay more. Edison has a similar plan, but the LACE plan would be designed to cost less, Gero said.

But this is only for Edison customers? What about DWP customers in L.A.?

Cities that already have their own utilities won’t be part of it --  L.A., Glendale, Pasadena, Burbank and Vernon that have their own utilities.

How is this all going to work?

The LACCE board will set power rates and make decisions on what kind of power they want to provide. The idea is for this utility to buy more power from renewable and possibly local sources, so a customer can choose a power provider who is making more green, sustainable choices. LACCE could even raise the money to build local power generation, like putting solar panels on warehouses.

Promoters of the plan say it will increase the sustainability of the power we use.

It’s also expected to produce local jobs. An example – the utility could go to a ware house district and install solar cells on lots of rooftops. That’s a new, local, renewable, green source of power that employs some construction people for a while.

What does Southern California Edison say about this?

Not much. The company is officially neutral on the idea.

Is there a downside?

This plan does not solve kinds of gripes over the power grid that we’ve seen over the years.  For example, in Long Beach a couple of years ago, faulty underground power lines began blowing out, causing manhole covers to explode and triggering days long power outages. That made Long Beach officials long for some alternative to Edison. But even if that city decides to become part of the LACCE program, residents will still get their power over Edison lines, be dependent on Edison for maintenance, and their bills will still come from Edison.

Where is this already working?

L.A. County's Gary Gero said that in the places that are doing this on a large scale – San Francisco, San Mateo, Santa Clara, it’s giving customers lower rates and the opt-out numbers are fairly low – 7 percent or less.