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Home My WebLink About14353 City Clerk’s Office Item # Q-1 Background Paper for Proposed Resolution COUNCIL MEETING DATE: January 13, 2020 TO: President Dennis E. Flores and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Brenda Armijo, City Clerk FROM: Larry Atencio, City Council Member SUBJECT: A RESOLUTION OF SUPPORT FOR STUDYING COMMUNITY CHOICE ENERGY AS AN OPTION FOR LOCAL GOVERNMENTS IN THE STATE OF COLORADO SUMMARY: Attached is a Resolution declaring the City’s support for studying Community Choice Energy (CCE) as an option for local governments in the State of Colorado. PREVIOUS COUNCIL ACTION: On February 13, 2017, by Resolution No. 13612, the City Council declared the City of Pueblo’s intent to obtain 100% of the community’s electric energy through renewable energy resources and associated technologies by 2035. On January 8, 2018, by Resolution No. 13874, the City Council authorized the City’s membership in the Compact of Colorado Communities (“Compact”). The mission of the Compact is to develop and implement aggressive climate change and clean energy initiatives in the State of Colorado. On January 8, 2018, by Resolution No. 13875, the City Council authorized payment of the City’s membership fee in the Compact. BACKGROUND: A local energy model called Community Choice Energy (CCE) also commonly known as Community Choice Aggregation or CCA, is a proven strategy to expand consumer choice, lower electricity rates, the introduction of competition into the wholesale electricity market in order to meet state and local environmental goals. A "CCE Study Bill" has been introduced in the Colorado state legislature that would authorize two independent studies – a Financial and Technical Feasibility Study conducted by a third-party and overseen by the Public Utilities Commission (PUC), and a PUC informational docket with broad stakeholder input and invited expert presenters – which would provide the information needed to determine whether the apparent promise of CCE for Colorado's energy and economic future does indeed have merit. The attached Resolution expresses the City of Pueblo’s support for the CCE Study Bill. FINANCIAL IMPLICATIONS: This Resolution has no immediate financial implications for the City. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Members of the public are the primary stakeholders affected by the proposed Resolution. The issue of electric utility service to the community has been discussed at various public City Council meetings and work sessions for the past three (3) years. ALTERNATIVES: If this Resolution is not approved, the City of Pueblo will not voice its support for the CCE Study Bill. RECOMMENDATION: Approve the Resolution. Attachments: Proposed Resolution. RESOLUTION NO. 14353 A RESOLUTION OF SUPPORT FOR STUDYING COMMUNITY CHOICE ENERGY AS AN OPTION FOR LOCAL GOVERNMENTS IN THE STATE OF COLORADO WHEREAS, the City of Pueblo is one of a dozen communities in Colorado, known as the "Ready for 100" cities, which have committed to obtaining one hundred percent renewable energy by 2025 to 2035, and the City is also one of over two dozen communities, known as "Colorado Communities for Climate Action" (CC4CA), which have organized to advocate for climate change solutions; and WHEREAS, these communities, which represent more than one million Coloradans, cannot reach their energy and climate goals within their desired timeframes unless they acquire greater choice and control over the energy sources comprising their wholesale electricity supply; and WHEREAS, the Governor's policy initiative, entitled "Roadmap to 100% Renewable Energy by 2040 and Bold Climate Action" supports local commitments to one hundred percent renewable energy; and WHEREAS, the ability of a community to achieve ambitious energy goals is currently limited by the energy supply and decarbonization timeline of the electric utility that serves that community, and the option to procure electricity from alternative wholesale suppliers may enable communities to achieve their energy goals substantially faster and more cost-effectively; and WHEREAS, a local energy model called Community Choice Energy (CCE), also commonly known as Community Choice Aggregation or CCA, is a proven strategy to expand consumer choice, lower electricity rates, introduce some competition into the wholesale electricity sector, and meet state and local environmental goals; and WHEREAS, the formal study of CCE would answer key questions and illuminate the potential benefits and challenges of adapting the CCE model for use in Colorado; and WHEREAS, under CCE, communities may choose competitive wholesale electricity suppliers while the electricity continues to be delivered by the incumbent utility which continues to own and operate its transmission and distribution system and manage customer service and billing, thereby allowing communities to choose among wholesale power suppliers without interfering with non-procurement-related utility operations; and WHEREAS, in the wholesale, opt-out model of CCE, individual customers retain the right to opt out of their community's CCE offerings and receive electricity supplied by the utility under its traditional "bundled service"; and WHEREAS, a well-designed CCE program, by introducing an element of wholesale competition and community-level choice into the supply of electricity, would likely drive lower rates and cleaner energy, while maintaining the viability and strength of Colorado's investor-owned electric utilities without imposing additional costs on the utility or its bundled-service customers; and WHEREAS, while CCE shows the potential to allow Colorado communities to make local energy decisions, meet their energy goals, reduce energy costs, foster local economic development, and keep more energy dollars circulating locally by virtue of more local employment, fewer energy dollars flowing to distant utility employees, executives and shareholders, and by providing communities with the freedom to require a local or in- state purchasing preference if they wish, it is nonetheless prudent to study the economic and technical feasibility and the regulatory implications and legal impacts of CCE before considering CCE-enabling legislation; and WHEREAS, CCE is an innovative concept, which other states have already successfully implemented, thereby giving Colorado the opportunity to identify best practices and lessons learned from their experiences; and WHEREAS, a "CCE Study Bill" has been introduced in the Colorado state legislature that would authorize two independent studies – a Financial and Technical Feasibility Study conducted by a third-party and overseen by the Public Utilities Commission (PUC), and a PUC informational docket with broad stakeholder input and invited expert presenters – which would provide the information needed to determine whether the apparent promise of CCE for Colorado's energy and economic future does indeed have merit; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The above recitals are incorporated by reference into this Resolution. SECTION 2. The City of Pueblo finds and concludes that it is in the public interest to better understand the potential benefits and challenges of Community Choice Energy in the State of Colorado, and the City does hereby indicate its support for the CCE Study Bill now pending before the state legislature, and the City does urge its representatives, and all Colorado legislators, to pass the CCE Study Bill so that the State of Colorado may obtain the information needed to determine whether the apparent promise of CCE for Colorado's and for the City of Pueblo’s energy and economic future has merit and is worthy of being debated for implementation in the future. SECTION 3. Adoption of this Resolution in no way obligates the City of Pueblo to participate in Community Choice Energy, if and when the CCE studies demonstrate net benefits to Colorado and CCE is subsequently enabled by passage of enabling legislation in a future legislative session. SECTION 4. This Resolution shall become effective immediately upon final passage. INTRODUCED January 13, 2020 BY: Larry Atencio MEMBER OF CITY COUNCIL APPROVED: PRESIDENT OF CITY COUNCIL ATTESTED BY: CITY CLERK