President's Letter

        As SCPPA celebrates our 35th Anniversary, I thought it would be fitting to look back at where we've come from, as well as ahead to what the future may hold. Formed in 1980, SCPPA's original purpose was to provide opportunities for joint financing, construction and operation of transmission and generation projects. The ten founding members were the municipal utilities of Anaheim, Azusa, Banning, Burbank, Colton, Glendale, Los Angeles, Pasadena, Riverside, and the Imperial Irrigation District. The city of Vernon joined the group the following year, and the City of Cerritos completed the current roster when it joined SCPPA in 2001.

        The initial project undertaken by SCPPA was the Palo Verde Project, which was consummated when the Authority purchased a 5.91% interest in the nuclear-fueled generating station in August 1981, for the benefit of ten of its member. One of the advantages of SCPPA is its "cafeteria style" approach to participation - members decide individually which projects they want to participate in, and at what level. Over the next decade SCPPA entered into a total of three generation and three transmission projects on behalf of its members. 

        In 1996 the Electric Utility Industry Restructuring Act (Assembly Bill 1890) was passed, which delegated the electric utility industry in California. This Bill initiated many changes in the industry (creation of the CAISO and Power Exchange, Direct Access, and establishment of Public Benefit funding to name just a few) and while AB1890 was supposed to result in an "open market" which would provide lower electric rates, it turned out to be the proverbial Pandora's Box. SCPPA responded to the resulting chaos with increased services and support for its members to deal with the multitude of transformations the industry would go through as a result of deregulation. 

Fred Mason, City of Banning

        SCPPA has supported its members' needs by creating committees and working groups to respond to issues facing the members. The Finance Committee was the first one, and was formed to handle the issues associated with bonds and project finances. The Public Benefit Committee and Resource Planning Working Group were formed in response to AB1890, and have been a tremendous resource to the members for joint projects, programs and services, as well as assistance with the multitude of regulatory reporting requirements. In addition to those, SCPPA currently has a total of 17 committees and working groups that cover a wide variety of areas including Customer Services, Legislative, Regulatory, T&D and E&O just to name a few. These groups provide a forum for members to share ideas, work collectively on joint issues, as well as take advantage of economies of scale. One of the significant values of SCPPA membership is that all members have access to the same benefits, regardless of the size of the individual utility. 

        We all know that California tends to be ahead of the curve on many issues (sometimes waaay ahead of the curve) and legislation over the past 20 years has reflected that "cutting edge" mentality. This has been especially evident in the State's approach to renewable energy and emissions reductions. Starting in 2002 with the passage of SB1078, which set a Renewable Portfolio Standard (RPS) target of 20% by 2017, through 2006 with the far reaching AB32, to the Governor's recent signing of SB350, which increased the RPS to 50% by 2030 and doubled the energy efficiency requirements for existing buildings, the State has passed a plethora of legislative bills, as well as regulatory policy, which have had a direct impact on every aspect of electric utility operations. SCPPA responded in 2001 by creating a Governmental Affairs position, based in Sacramento, to represent the members' interests to the legislative and regulatory bodies. This has been extremely beneficial in keeping the members apprised of developing legislation and policy, and allows them to have a collective voice in the process through participation in the Legislative and Regulatory Committee meetings. 

        Although SCPPA only acquired three generation projects between 1980 and 2005, that changed with the implementation of the State's RPS mandates. In 2003 SCPPA issued its first RFP for renewable generation projects, which produced nearly 50 responses for a variety of wind, geothermal, landfill gas, and solar projects. Since that time SCPPA has regularly gone out to bid for renewables, as well as other types of resources, based on the members' needs. To date SCPPA has secured interest in 29 projects, either through ownership agreements or long-term contracts. These include three transmission projects, three natural gas projects, five non-renewable projects, and 18 renewable energy projects. This has resulted in a total debt issuance of $14.7 billion, with $3.3 billion outstanding. Quite an accomplishment for a "small" Southern California JPA.  

        In 2010 SCPPA decided to put down roots and purchase a building to house its operations, which were rapidly expanding. After significant research and discussion, the SCPPA Board chose a site in Glendora, which was easily accessible from six different freeways, and centrally located for the members. The building was renovated to meet SCPPA's needs, and also attained the Leadership in Energy and Environmental Design (LEED) Gold certification. We are all very proud of our new facility. 

Speaking of new facilities - SCPPA recently had a very unique opportunity, which after thorough research and evaluation, the Board decided to take advantage of. The office building located directly adjacent to SCPPA's current building became available for purchase, and considering our current needs, as well as anticipated future growth, it was determined that this was an ideal opportunity for SCPPA. The new building will allow us to expand our current training program, as well as provide additional office space for future growth. 

        As for the future - SCPPA continues to work with its members to provide the resources and services needed to meet the rapidly changing legislative and regulatory landscape of the electric utility industry. These changes have a direct impact on the members' daily operations, and it is SCPPA's goal to assist the members in minimizing these impacts. The benefits of joint action are numerous and are enjoyed by all members, regardless of size. As SCPPA looks back on its past 35 years, it takes pride in knowing that it has had a significant role in helping its members provide safe, reliable and low cost electricity to the more than 2 million customers they serve, and will continue to do so for the next 35 years. 

Fred Mason, 2015