By Matthew Hirsch

Community choice aggregation, a program that could save San Franciscans $10-$35 million annually on their electric bills, was approved by the San Francisco Local Agency Formation Commission (LAFCo) Aug. 4, following months of cautious negotiations between the plan's two primary sponsors. The proposal now goes to the San Francisco Board of Supervisors.

Community choice aggregation (CCA), the next step in the long campaign toward public power, allows local governments to buy up wholesale electricity and resell it to residents, businesses, and municipal facilities. It has worked well in Massachusetts and Ohio (see "Aggregation Works!" 7/20/05), and proponents in San Francisco hope CCA will help supply the city with an alternative to Pacific Gas and Electric Co. that is less expensive, less toxic, and capable of reducing the likelihood of blackouts.

But first it has to clear a few more legislative hurdles. Next month the Board of Supervisors Budget and Finance Committee will hold hearings on CCA before making its recommendations to the full board. Then, if CCA wins support from a majority of supervisors, it will head across Van Ness Avenue to the California Public Utilities Commission (CPUC).

There, San Francisco's CCA proposal would likely emerge as a test case for how state regulators react to local governments wishing to enter California's volatile energy market. Several other cities have demonstrated interest, but none have advanced as far as San Francisco.

The unanimous LAFCo approval came after nine public meetings and countless hours of debate and compromise between CCA's two primary sponsors: the San Francisco Public Utilities Commission and community activist Paul Fenn.

"As labor intensive and laborious as the process was sometimes in LAFCo, [it] was worth it," LAFCo chair Ross Mirkarimi told the Bay Guardian. "We needed to reconcile the very disparate views on how to go about implementing community choice aggregation."

Much of the dispute boiled down to the SFPUC and Fenn's differing interpretations of the CPUC process and Assembly Bill 117, the 2002 state law that allowed for CCA. Crucially, the final CCA plan approved by LAFCo retains two key elements:

• It puts the city in line to develop 360 megawatts of renewable power, energy efficiency, and conservation measures.

• It demonstrates that the city can operate a public power agency, not just for municipal facilities but for all of San Francisco's residents and businesses.

In order to keep the proposal moving forward, LAFCo left the Board of Supervisors to further hammer out details of the CCA budget and its organizational structure, which were major sticking points in the talks between Fenn and the SFPUC.

"I just want to go forward," said Fenn, who had argued for months that the Board of Supervisors, not the SFPUC, should be in charge of CCA because of the SFPUC's checkered history with public power. Fenn has also said the delay in getting a plan to the CPUC could jeopardize CCA, but SFPUC officials disagreed.

As it now stands, CCA already seems to have majority support from the Board of Supervisors Budget and Finance Committee. Sup. Tom Ammiano, chair of the committee who first introduced CCA to the board, cast one of the three votes for CCA Aug. 4. Mirkarimi, who has shown unwavering support for CCA, also sits on budget and finance.

But the third committee member, Sup. Sean Elsbernd, told us he has yet to be convinced by the merits of CCA. "It's never been proven to me that this will save ratepayers money," he said.

During budget hearings in February, Elsbernd said LAFCo represents a waste of city money and should be dissolved. PG&E apparently picked up Elsbernd's line (see "PG&E's Sneak Attack," 7/20/05), but neither seems to have gotten traction with any of the other supervisors.

When we asked him about the CCA plan recently approved by LAFCo, Elsbernd said he was unfamiliar with the details.

San Francisco accounts for 5 percent of PG&E electric sales and 7 percent of its customers. If the city follows through on CCA and all those customers join in, that would potentially make San Francisco the largest single direct access buyer of electricity in California.

According to R.W. Beck, the Sacramento-based consulting firm LAFCo hired to study CCA back in 2003, this arrangement could save city ratepayers $10-35 million a year.

PS: Want to learn more about LAFCo or CCA? Go here to brush up on all things CCA. And if you have a question that's not already in our FAQ, send it to Matthew Hirsch.