Staff Report Item 5
Staff Report Item 5
To: Ava Community Energy Authority
From: Kelly Brezovec, Sr Director of Account Services
Subject:
Seeking feedback from the Executive Committee on a proposal to remove opt-out fees Date: December 3, 2025
__________________________________________________________________ Summary/Recommendation
Staff seeks feedback from the Executive Committee regarding a proposal to remove the customer opt-out fee of $5 for residential customer accounts and $25 for non-residential customer accounts. The opt-out fee is not a deterrent in a customer choosing to leave Ava’s service and appears to create customer confusion or distrust in the agency.
Financial Impact
Removing the opt-out fee will have a negligible impact on Ava’s finances.
Ava has a 95% participation rate, meaning few customers have left Ava service. Cumulatively, 60,000 customers have opted out. Of these customers that do depart, we have only collected opt out fees from 15,500 residential customers and 640 non-residential customers. The majority of opt outs happen during the first year of service to a new community, when Ava has historically not applied the opt-out fee during an initial grace period.
In the past seven years of service, Ava has collected less than $95,000 in opt-out fees, about $14,000 annually. As part of Ava's high level of customer service and to keep residents satisfied with the agency, Ava has also waived approximately $5,000 in opt out fees.
Staff Report Item 5
If fee removal is approved by the Board, staff will work with Ava’s billing agent, SMUD, to update the automated billing operations at a fee of less than $8,000. References to the fee will be removed in webforms, emails, and interactive voice recordings as part of regular work to maintain these services.
Analysis and Context
Since 2019, Ava has assessed customers an opt-out fee. The fee is charged only if the opt-out is requested after the first 60-days of service; the fee has also been waived for the first 12 months of service to a new community.
The opt-out fee assessment was common practice among CCAs when Ava implemented it in 2019, one year after Ava started providing service to customers. The opt-out fee is clearly stated in all methods of customer interaction (phone, automated voice, and webform) and in our Service Terms and Conditions on our website. The fee is applied to the final bill when a customer opts out of our service.
Based on customer interactions with Ava’s customer support center, there’s no clear evidence that an opt out fee of $5 to residential customers or $25 to non-residential customers (per meter) helps deter opt outs or aids customer retention. Instead, staff have concerns that customers’ distrust and frustration over opt-out fees harms customers’ perception of the agency and, in some cases, may encourage opt-outs.
During the April 2025 enrollment of Stockton and Lathrop, staff found multiple social media posts from residents that encouraged their peers to opt-out of Ava service, citing the opt-out fee both as a reason to leave Ava service early and as an indicator that Ava is a “scam.” Removing this fee removes the opportunity to be perceived as a bad actor in the energy industry.
Moreover, there are more effective and meaningful ways to retain customers than the opt-out fee. Ava’s customer service representatives provide the best means of deterring opt-outs. Since staff began tracking this figure in 2021, over 7,640 customers who had planned to opt-out have instead chosen to stay with Ava after having a conversation with a representative.
While staff does not have a means of verifying if the opt-out fee is a key factor in the decision to leave Ava service early, it is possible that removing the fee entirely may encourage customers to try Ava service for a number of months, during which time the customer may learn about Ava’s benefits and choose to stay.
Comparison to other CCAs
Staff reviewed the policies of 12 other agencies. CCA policy is split. Six CCAs do not assess an opt-out fee. Five CCAs follow the same policy as Ava. One Bay Area CCA does not assess a Staff Report Item 5
fee for the entire first year of service. Of the CCAs that do assess fees, the amounts are consistent with Ava’s current policy of $5 for residential and $25 per meter for non-residential customers.
Recommendation
Staff recommends removing the customer opt-out fee provision, with work to remove language about the fee and the automated billing operations set to begin following Board approval. Staff requests to implement the change in 2026 in advance of enrolling customers in unincorporated San Joaquin County to help provide a positive first customer experience with Ava.