Sacramento Municipal Utility District has been selected to negotiate a services agreement to provide Valley Clean Energy Alliance with technical and energy services, data management/call center services, wholesale energy services, credit support services and up to five years of business operations support.
VCEA–a new community choice aggregation joint powers agency–is set to begin serving electricity customers located within the cities of Davis and Woodland and unincorporated areas of Yolo County in the summer of 2018. VCEA’s mission is to deliver cost-competitive clean electricity, price stability, energy efficiency and greenhouse gas reductions.
This is SMUD’s first services agreement in the fast-growing CCA market.
“We’re excited that VCEA has chosen SMUD to help launch and operate the first CCA in our region,” said SMUD CEO and General Manager Arlen Orchard. “We have the operational knowledge and technical expertise to help VCEA hit the ground running on day one and be successful over the long term.”
“VCEA was fortunate to have a number of very capable service providers to choose from,” said Don Saylor, Yolo County Supervisor and VCEA Board Chair. “However, with their depth of expertise, cost competitive proposal, and close alignment with VCEA’s Mission, the exceptional value of SMUD’s proposal was clear. We’re eager to get started.”
CCAs are a means for cities, counties and some special districts to buy power for their communities. Also known as Community Choice Energy, the ability to form them was created with state legislation in 2002.
They can be formed only in the service territories of Investor Owned Utilities (IOUs) such as Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. By the end of 2017, approximately 13 CCAs will be operating in California. More than 20 additional communities are considering CCAs.
All customers are enrolled in their CCA unless they opt-out. The CCA purchases the power for their customers and typically offers renewable energy choices such as solar and wind power. The IOU still delivers the power over its transmission and distribution systems and is responsible for providing customers with a single electric bill.
CCAs typically contract with third parties to handle most of the activities required to launch and operate.
SMUD is entering the CCA services market because it wants to support organizations with values closely aligned with its own. These values include local decision making, affordable rates, greenhouse gas reduction, energy efficiency and a not-for-profit, public-power business model, among others.
The revenue SMUD earns from providing services to VCEA will help SMUD invest in building out a modern energy grid that can successfully integrate more distributed and renewable energy sources and meet evolving customer needs, as well as improve the technology that SMUD customers use to monitor and manage their energy use.