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energy, similar to the existing CCAs in California. Consumers may be able to opt up, out <br />of PCE’s default option into a higher percentage renewable option, through a process <br />established by the JPA (e.g., online registration, email request, or marking an opt-up <br />option indicated on a paper bill). Some jurisdictions have expressed a desire to make <br />only the 100% renewable option available in their communities. However, the options <br />offered will ultimately be determined by the JPA. <br />With respect to the City’s Climate Action Plan goals, PCE has the potential to achieve a <br />deep, rapid reduction in GHG emissions. The City’s goal is to reduce community wide <br />GHG emissions to 15% below 2005 levels by 2020. As of 2013, the City has been able <br />to reduce emissions 4.7% below 2005 levels. Extrapolating from the technical study, <br />PCE has the potential to help the City reduce its emissions an additional 7% or more at <br />start up, allowing the City to achieve 80% of its 2020 goal within a year. <br />PCE will operate as a non-profit. Revenues in excess of costs will go back into the <br />community through reduced rates, energy efficiency programs, and local renewable <br />development projects. Local control offers the potential to increase the renewable <br />content of the energy portfolio beyond what PG&E provides, to concentrate on <br />developing local energy projects, and to create local jobs. Local control also provides <br />opportunities to create energy efficiency and renewable energy programs that are <br />customized for local businesses and residents. <br /> <br />Risks <br />The risks associated with CCAs include: <br />· Rate risk – the risk that rates will be higher under PCE than PG&E <br />· Procurement risk – the risk that PCE will not be able to procure enough <br />renewable energy <br />· Opt-out risk – the risk that customer opt-outs are so high that the program <br />becomes economically infeasible <br />· Operational risk – the risks associated with commodity fluctuations, credit, <br />vendor default, and poor management and oversight <br />· Legislative/regulatory risk – the risks associated with unfavorable state legislation <br />or regulation that could threaten or harm the program <br /> <br />Rate risk is associated with deviations between actual energy use and contracted <br />energy purchases. Deviations between actual energy use and contracted purchases are <br />inherent in the energy market. This risk is managed by structured (laddered) energy <br />purchases and avoiding over-procurement. Laddering refers to entering into multiple <br />contracts with energy providers with different effective dates and for different lengths of <br />time. Rate risk may also involve PCE pricing becoming higher than PG&E’s as PG&E <br />7.A - Page 3