On September 9, 2015, the County of Placer and the City of Colfax entered into a Joint Exercise of Powers Agreement (“JPA”) and formed a joint powers authority, the Sierra Valley Energy Authority. The Amended and Restated JPA effective February 22, 2017, added the Cities of Rocklin, Auburn, Lincoln and the Town of Loomis as voting members. The JPA established an independent public agency to provide a Community Choice Aggregation (“CCA”) Program pursuant to California Public Utilities Code sections 331.1 and 366.2. The primary purposes of the JPA was to provide electric power and other forms of energy to customers at a competitive cost, and to promote long-term electric rate stability, energy security and reliability for residents through local control of electric generation resources and the overall power supply portfolio. Over time, the CCA’s name changed from Sierra Valley Energy Authority to Pioneer Community Energy. The City of Rocklin is currently a Voting Member of Pioneer Community Energy, and has one seat on the seven member Pioneer Community Energy Board.
Recently, the County of El Dorado and the City of Placerville have indicated their interest in becoming members of the JPA. To add the County of El Dorado and the City of Placerville as members of Pioneer Community Energy, an amendment to the Amended and Restated Joint Exercise of Powers Agreement is necessary. The amendment proposed by Pioneer Community Energy is submitted to the City Council for consideration. The amendment modifies Section 5 “Governance and Internal Organization” of the Agreement, changing the composition of the Pioneer Community Energy Board from seven to nine members, and adds members from the County of El Dorado and the City of Placerville to the Board. The amendment also modifies Section 10 “Implementation Action and Authority Documents” of the Agreement, subsection “D,” to allow expansion outside of Placer County.
The City Council discussed this item at the November 10, 2020 City Council meeting. City Council members expressed concerns about the potential risks to Rocklin residents associated with allowing El Dorado County and Placerville to join the JPA, including the impacts to equity built up by existing JPA members over the years. The matter was continued to the December 8, 2020 meeting.
Based upon feedback received from the Rocklin City Council and other members of the JPA, Pioneer staff explored the feasibility of implementing a buy-in program for El Dorado County and Placerville to join the JPA. The Pioneer Board considered this concept at its meeting on November 19, 2020. For a variety of reasons explained in the Pioneer staff report attached hereto as SR Exhibit A, in lieu of a "buy-in" program, Pioneer staff proposed developing a baseline reserve policy whereby the amount of reserves available at the time the new members join would be held in reserve to protect the equity built up by existing members of the JPA. In the event the rates charged to El Dorado County and/or Placerville do not cover the cost of providing service, Pioneer would adjust their rates to a "cost of service" rate without dipping into the reserves accumulated by original Pioneer members. All Board members present at the meeting supported this approach and staff was directed to return to the Board at a future meeting with a reserve policy that identifies the equity amount built up by current members and protects those reserve funds for the benefit of Placer County residents.