Sonoma County kick starts a public power agency
Published: Wednesday, April 24, 2013 at 10:28 a.m.
Last Modified: Wednesday, April 24, 2013 at 10:28 a.m.
The Sonoma County Board of Supervisors Tuesday voted to implement a public power program for all homes and businesses outside city limits with plans to expand countywide.
The effort seeks to eventually displace Pacific Gas and Electric Co. in the electricity supply business for 220,000 homes and businesses. About 100,000 of those metered customers are in the county's unincorporated area.
The 4-1 vote sets in motion a series of decisions geared to roll out the power plan in January.
Unless customers formally opt out, they would receive power from the public agency. PG&E would continue to handle transmission, billing, metering, customer service and grid repair.
Supervisor Efren Carrillo, who pushed for the launch, called it “the county's moment.”
“We have done our due diligence,” he said. “I believe we have to send a message about this: We are ready to play.”
Supervisor David Rabbitt cast the lone no vote on implementation — a formal step he said he did not oppose but was not ready to approve.
He said the vote was premature, coming just a week after potential rates were unveiled and with several crucial decisions still to be made.
“There's a lot of angst in the community about selling this project,” he said.
The go-ahead comes months before the agency has a power supply contract or final electricity rates for customers. The county is set to narrow a field of 11 power-supply bidders — said to include a core group of five or six energy companies — and begin final contract talks this summer.
Cities also have yet to say whether they'll sign up and allow their residents to be served. Their deadline to do so for next year is June 30.
A final sign-off by the state Public Utilities Commission and the agency's administrative entity, the Sonoma Clean Power Authority — for now governed only by the Board of Supervisors — also is needed before roll out.
Supervisor Mike McGuire said Tuesday's vote set up “the bones of an initiative.”
“Until we have a final rate that we're ready to hit the street with, we don't have a viable program,” McGuire said.
Supporters, including environmental and business interests who packed the board room Tuesday, touted benefits they said would bolster the local economy and reduce the county's carbon footprint. The proposal has been under consideration since an initial county study in March 2011.
The program proposes to immediately offer a higher share of renewable power — 33 percent, versus the roughly 19 percent now provided by PG&E. Renewable sources include wind, geothermal, solar, biomass and small hydroelectric projects.
Business leaders said it would encourage them to invest in renewable energy projects with greater opportunities to sell their excess power back to the grid.
“It's inviting you to do something that's potentially profitable for your business,” said Christopher Silva, president of St. Francis Winery and Vineyards.
Others from the local wine and building industry, retail and food manufacturing businesses also spoke in support. They included representatives of Amy's Kitchen, the natural frozen foods maker, Oliver's Market grocery chain and BoDean Company, the Santa Rosa asphalt producer. The hearing took place over four hours, with about 20 speakers and a lengthy period of board questions and deliberation.
The program is built on the proposition that customers prefer an alternative to PG&E that is designed to supply a greater share of renewable energy, provide revenue to support local power projects and reduce greenhouse gas emissions tied to the county's power needs.
But opponents and others skeptical of the program said the details on how the county will add new local energy projects are not spelled out and that the promise of local jobs could be illusory.
They said similar project and job promises have not been kept in Marin County, which pioneered the use of a 2002 state law that allows local governments to buy and develop wholesale power to homes and businesses. Marin's main power supplier is Shell Energy North America. San Francisco also is considering a contract with the fossil fuel giant for its program.
“We don't want to partner with Shell,” said Lisa Maldonado, executive director of the North Bay Labor Council, a coalition of labor groups.
Opponents also highlighted risks to ratepayers of getting into a complicated, often-volatile business, and to taxpayers from what could be up to $23 million in start-up costs supported by government borrowing.
“We need to see those pie charts to see that what's proposed is greener than what PG&E has,” said Rich Harkness, a Santa Rosa resident. “It could be that we're doing the wrong thing for the very right reason.”
About half of the renewable power would be obtained through the purchase of offsets, called renewable energy credits, that one critic called a “feel-good scam.” They would allow the county to claim green status while getting the power off the grid from standard sources, including fossil-fuel-based suppliers.
The credits can help reduce the overall cost of renewable power, which generally is more expensive than conventional sources. But some critics have called them “empty bragging rights” that don't spur investment in renewable energy as do contracts for delivered power.
Supervisor Susan Gorin pressed county staff for further details on just how heavily those credits would be relied upon in the short term and how the power program would ultimately trigger local power generation.
“We want to make sure we are producing projects and jobs,” said Gorin.
County staff said further details would be available as the program evolves over the next six months and over the three-year rollout.
The board discussion came after the county last week unveiled potential customer rates they said would make its electricity prices competitive with, if not cheaper than, PG&E rates.
Monthly bills in the first year could range from $1.73 less to $1.02 more — or 1.8 percent less to 1.1 percent more — than a PG&E bill for a 2,000-square-foot single-family home, according to county projections. For a mid-sized commercial customer such as a restaurant, large convenience or retail store, the monthly bill could be $80 less to $13 more — 3.1 percent less to 0.5 percent more.
Zane, who joined Carrillo in pushing for Tuesday's vote, said she was comfortable that the recent county rate analysis and prior county studies justify advancing the program. Her comments and those of Carrillo were tinged with strong criticism of PG&E, the dominant power supplier in northern and central California.
“We have debated this quite frankly to death. I think it's time to implement it and move forward,” Zane said. “The question is can we compete with PG&E? That has been answered. And matter of fact, we're going to beat them.”
No representatives from PG&E spoke at the meeting.
The board vote authorized talks with First Community Bank on the start-up financing, including a $2.5 million line of credit and up to $20.5 million in bridge financing to support power purchases over the first three years.
It approved a $258,000 contract with the Berkeley-based consulting firm MIG for marketing and public outreach.
It also approved a payback plan to the county Water Agency, which expects to have spent about $1.2 million this fall on studies, staff time and consultants for the power proposal.
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