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HomeMy WebLinkAboutCouncil Provided Information - 4/21/2026CITY COUNCIL OF SALT LAKE CITY 451 SOUTH STATE STREET, ROOM 304 P.O. BOX 145476, SALT LAKE CITY, UTAH 84114-5476 SLCCOUNCIL.COM TEL 801-535-7600 FAX 801-535-7651 COUNCIL STAFF REPORT CITY COUNCIL of SALT LAKE CITY TO:City Council Members FROM: Michael Sanders Budget & Policy Analyst DATE:April 21, 2026 RE:ORDINANCE – COMMUNITY CLEAN ENERGY PROGRAM New information obtained since the 12/09/2025 briefing has been added in blue. The Council is being asked to consider an ordinance to formally enroll Salt Lake City as a participating community in the Community Clean Energy Program. This step isrequired under state law and the recently released Public Service Commission (PSC) approval order when the Community Clean Energy Program was approved. The March 4, 2026 approval started a 90-day clock for communities to adopt program participation ordinances. Salt Lake City must decide by June 2, 2026 whether to adopt an ordinance to participate in the Community Clean Energy program, informally known as Utah Renewable Communities. This would automatically enroll most residents and businesses in a new renewable energy program on an opt-out basis, costing about $4/month for residential customers. If the Council does not take action, the City would be removed from the program and it would not be available locally. (Due to the size of the City, it would also negatively affect the program in other cities.) A Public Hearing for this item has been scheduled for 04/21/2026 prior to the Council’s vote to enroll. Once the sixteen cities take action on whether to enroll, several system changes will be initiated by Rocky Mountain Power. Additionally, the program requires budget support in two ways: Reimbursable upfront “startup costs” (estimated at approximately $820,000, plus contingency) are required to enable Rocky Mountain Power’s billing and customer systems. Rocky Mountain Power will initially fund these costs but requires at least one participating community to backstop the expenses through a contractual agreement in the event that program revenues do not fully reimburse the utility after launch. o The City proposes to allocate funds to the Department of Sustainability to serve as this backstop, allowing the program to move forward for the benefit of all participating Schedule: st Briefing: 12/09/2025 nd Briefing: 04/14/2026 Page | 2 communities. These funds would be held and only used if necessary. Based on participation estimates, Sustainability anticipates that startup costs will be fully recovered through ratepayer revenues within the first few months of operation (early 2027) and this City holding account will not be needed. If those estimates and Rocky Mountain Power’s costs are recovered, the City’s contractual obligation would end and the funds would no longer be needed. Mailing expenses of about $156,000 that would be paid to Rocky Mountain Power. This would not be reimbursed. (These funds have already been budgeted throughout the years by Sustainability.) POLICY QUESTIONS ADDITIONAL & BACKGROUND INFORMATION What the Ordinance Does The ordinance outlines the main rules and structure of the program, including: Salt Lake City officially joining the program as a participating community. Allowing most electricity customers within current and future city boundaries to participate. Defining when the program starts, including the “Implementation Date” when customer notices are first sent. Explaining that customers will be automatically enrolled unless they opt out by the deadline in the notices. Allowing customers who are not enrolled to opt in later if they choose. Setting rules for termination fees if customers leave the program after the initial no-fee period, and identifying cases where fees would not apply. Describing how new clean energy resources will be selected and approved. Confirming that the PSC sets and adjusts program rates, and that Rocky Mountain Power is responsible for billing customers and notifying them of any changes. Continuing to work with other communities on decisions about clean energy projects and program operations. Following through on the Utility Agreement with Rocky Mountain Power, which is required to operate the program. Reimbursing Rocky Mountain Power for the cost of sending required customer notices. Page | 3 o This is estimated to cost $156,000. Sustainability has budgeted for this expense over several years and it will be included in their FY27 budget Recognizing that the City along with all other participating communities have already contributed funding to reimburse state agencies for third-party expertise to help develop the program. o SLC appropriated funds totaling $385,966.47 in Fiscal Years 2022 and 2023 to the Agency’s budget. Onetime SLC budget impact Before the program can begin, Rocky Mountain Power must complete several required “startup” activities. These include upgrading billing systems so the new program charge can appear on customer bills, setting up customer service support (such as a call line), and creating systems that allow customers to opt out and apply any required fees. These steps are necessary to launch the program, but they must be completed before any program revenue can be collected. The total estimated cost for these startup activities is about $820,000, plus a 10% contingency. Because the program cannot collect revenue until it is fully set up, these costs must be covered upfront. Rocky Mountain Power will pay for these upfront, but requires at least one community to backstop the expenses by signing a contract in the case that RMP is not fully reimbursed through program revenues after the program begins. The City is proposing to act as this backstop so the program can move forward and meet required timelines. Program revenues are expected to begin in early 2027 and are expected to generate significant monthly revenue. Based on current estimates, the full startup cost could be recovered by RMP within the first month or shortly after the program begins collecting revenue. The City is currently in discussions with other participating communities about sharing in these costs if needed. Overall, while the City would take on short-term financial responsibility to launch the program, the long-term financial risk is expected to be low, and funds may only need to be held temporarily rather than be paid to RMP in the case the startup cost contract is triggered. How will this impact residents The Community Clean Energy Program is set up as an opt-out program, which means most customers will be automatically enrolled until they choose to leave. After customers are notified, there will be a period when they can opt out for free. After that period ends, a fee will apply if they decide to leave the program. Based on current participation assumptions, the program is expected to cost approximately $4 per month for most residential customers. Income-qualified residents will not pay this cost, as they will receive a credit that fully offsets the monthly charge. The program is expected to begin sending customer notices in late 2026, with billing starting in early 2027 once implementation is complete. Current planning assumes that about 40% of eligible Rocky Mountain Power customers will participate. If participation is lower than projected, the program is designed to adjust by building out resources more gradually or by starting with a lower-cost renewable project, rather than by increasing customer rates. These conservative assumptions are already reflected in the program’s initial procurement approach. If participation exceeds projections, the program will be able to build more resources and do so more quickly. Noticing and timeline Customers will be notified about the program before it begins. The first notice is expected to be sent in November or December 2026. This notice will be mailed and will inform customers that the program is being implemented and that they will be enrolled unless they choose to opt out. A second notice will be sent about 15 days after the first notice. This follow-up notice may be mailed or sent digitally, depending on the customer’s pre-existing communication preferences. These notices are meant to give customers clear information about the program and time to decide whether they want to participate. Page | 4 The City is required to cover the cost of sending these notices. The Sustainability Department has budgeted about $156,000 to reimburse Rocky Mountain Power for this work. Page | 4 An estimated timeline is below. Page | 5 The following information was provided for the December 9, 2025 briefing. Utah Renewable Communities (URC) is a partnership of 19 Utah cities and counties working together to offer residents and businesses access to net-100% clean electricity by 2030. Formed under the state’s Community Clean Energy Act, URC collaborates with Rocky Mountain Power to design and implement a voluntary clean- energy program that matches participants’ annual electricity use with an equivalent amount of renewable energy. The clean power used for the program will come from a mix of existing renewable resources on the PacifiCorp grid and new projects built specifically for URC customers. Participating customers will remain Rocky Mountain Power customers, and the utility will continue to provide reliable service regardless of whether a customer joins the program. The City has been supportive of this program since 2019 through the passing of various resolutions and contributing financially to the URC budget for program development and implementation costs. The next step for program implementation is for the Public Services Commission (PSC) to review the Program Application at a hearing. This hearing is scheduled for December 16, 2025, after which a decision is anticipated as early as January 2026. If approved, eligible communities will have 90 days after the PSC’s approval to adopt the participation program ordinance. Currently, if timelines continue to unfold as expected, URC could begin collecting ratepayer revenue as soon as November of 2026. If Salt Lake City adopts a participation program ordinance, customers will be automatically enrolled, with the option to opt out at no cost during an initial cancellation period. If a customer opts out at a later period, a termination fee would apply. The URC’s goal is to limit the average household bill increase to no more than $3– $4 per month. To protect low-income customers, the program offers a monthly bill credit of up to $7 and will waive termination fees for those enrolled in Rocky Mountain Power’s Schedule 3 HELP program, with the credit funded by a charge up to $0.70 per month on other participating customers. Goal of the briefing: This briefing is informational only. Following the PSC hearing, if the PSC adopts the Program Application, the Administration will prepare a transmittal for the Council to consider a participation program ordinance. 6. The Council may wish to discuss how they may want to customize the Program Ordinance recitals to reflect Salt Lake City’s energy commitments and policy direction. 7. The Council may wish to ask the administration how many participants are needed to maintain the projected average bill increase of $3–$4 per month for participating households. o What would happen to rates if there are not enough participants? o Should the City advocate for additional mitigation measures if actual costs exceed projections? 8. If a resident currently participates in the BlueSky program, is it anticipated they would leave that to participate in the URC program? 9. The Council may wish to discuss with the Administration what engagement and education efforts they might be planning to ensure Salt Lake City residents have as much notice as possible before a potential RMP fee increase, including the reasoning for that increase, and the timeline. Below is an annotated history of legislative actions taken by the City Council regarding URC: The Council adopted a joint resolution adopting two renewable energy goals.: 1. 50% renewable energy for municipal operations by 2020 2. 100% renewable energy for both municipal operations and the community by 2032 Page | 6 2019 The Council adopted a joint resolution advancing its community goal to 100% net renewable electricity by 2030 which qualified the City to participate in URC. The Council approved a total of $550,000 over FY22 and FY23 to cover the City's share of program developments costs as required by state statute. The actual expense over FY22 and FY23 was approximately $386,000. The Council approved a resolution endorsing the continued participation in the development of the URC program and authorized the Mayor to sign the Utility Agreement with other participating communities. Once the program launches, all Rocky Mountain Power customers located in jurisdictions that adopt Program Ordinances will be automatically enrolled, consistent with provisions in state law allowing customers to opt out at any time. The Agency’s target is to limit the average household bill increase to no more than $3–$4 per month. Customers may opt out at no cost during an initial 100-day cancellation period, which begins when the URC charges first appear on their bills. After that window closes, a termination fee will apply for those who choose to leave the program. The cancelation fee is currently proposed to be $30 for residential customers. To protect households with limited financial resources, the program includes the below low-income customer provisions: Proactive outreach and engagement, Monthly bill credit of up to $7, and Waived termination fees for those who decide to opt out after the initial cancellation period. These protections apply to customers enrolled in Rocky Mountain Power’s Schedule 3 Home Electric Lifeline Plan (HELP). To qualify for the HELP program, customers must be at or below the 150% of Federal Poverty Levels. The low-income bill credit is funded by customers participating in the clean energy program who are not enrolled in Schedule 3. These non-HELP customers will contribute up to $0.70 per month to support income- qualified households. The program ordinance may be modified to tailor certain components to better reflect local priorities and align with City Code. We are prohibited from modifying the overarching parameters of the statewide Program Ordinance without coordination with other URC communities and PSC review/approval. The draft Program Ordinance filed with the PSC consists of two parts: (1) a recitals section and (2) the ordinance itself. Of these, the recitals section provides the greatest flexibility for customization. The recitals can be expanded to incorporate additional “whereas” statements that highlight Salt Lake City’s climate and energy commitments, articulate the City’s rationale for participating in the URC program, and reinforce the City’s long-standing pursuit of clean energy goals. Although state law no longer requires participating communities to adopt a resolution stating a goal of achieving 100% renewable electricity by 2030, the Administration has noted that continuing to include such language would emphasize the City’s enduring commitment to renewable energy. Page | 7 Modifications to the ordinance section itself should be limited to changes necessary to conform with Salt Lake City’s code conventions, such as numbering and formatting. The Administration is evaluating potential adjustments to Sections 7.3 - 7.5 of the draft ordinance to clarify that the City is responsible for paying noticing costs for all customers within Salt Lake City, while removing references to fund appropriations since appropriations are handled through the City’s budget process. Council Participation in the PSC Hearing Next Steps Outline 1 During this time period, they may opt out at no cost. After this period concludes, customers may still opt-out of the program but would be subject to a termination fee currently proposed at $30 for residential accounts. ATTACHMENTS 1 In its testimony in the Program Application docket, URC proposed an even longer no-fee cancelation window of 6 months to the PSC to help ensure that participants have ample time to consider opting out after program-related bill impacts begin. The PSC will ultimately decide the actual duration of the cancelation period as per R746-314-101(3) and subject to statutory requirements. Page | 8 ATTACHMENT 1 Estimated 2026 URC Timeline