City officials seek more information in county power deal
Published: Thursday, April 25, 2013 at 12:42 p.m.
Last Modified: Thursday, April 25, 2013 at 12:42 p.m.
As Sonoma County swiftly pushes forward its plan to create a separate, cleaner power company meant to rival PG&E as the region's main utility provider, Petaluma officials remain cautious, citing a need for more transparency before offering their support — something that is vital to the success of the county's plan.
The program, which the County Board of Supervisors voted 4-1 to move forward with on Tuesday, will consist of all Sonoma County cities — minus Healdsburg, which already has its own independent power utility — creating a joint power agency called the Sonoma Clean Power Authority. City councils would vote on whether they want to participate. Those that decide to join the new county power company would automatically sign up all their customers, who would then have the option to opt out and leave the program to re-join PG&E.
One of the draws of this plan is the county's contention that it could provide a higher supply of renewable power than PG&E and open the power grid up to more energy from community sources like rooftop solar panels. Sonoma Clean Power Authority claims it would offer 65 percent greener power than PG&E's, drawn from different renewable sources, such as wind, solar and hydroelectric projects. But critics have said that about half the county's renewable supply would come from energy credits that are not always from green energy sources.
The success of the county's program ultimately lies with the cities participating — something that Petaluma officials say they cannot agree to until they receive more information.
“My concern is that right now this plan has been held close to the vest and it instead needs to be out there in the open so that people can really digest what's being proposed,” said Mayor David Glass. “You only get one chance to do a fundamental shift like this, so it really needs to be well-vetted and thought-out.”
David Rabbitt, Petaluma's representative on the county Board of Supervisors, voiced concern over the speed with which plans are moving forward,and on Tuesday voted against moving forward with the proposal until more information was available. He pointed out that other major decisions have had much longer to be thoroughly investigated — like the Mecham Road landfill deal which took three years and 13 open hearings before moving forward — and said he hopes his fellow supervisors will slow down the process.
Glass also said he is concerned that citizens would be forced to “opt out” of the program if they didn't want to participate, instead of being given the chance to “opt in.”
“People wind up involved in something they didn't know was happening because they are busy with their lives,” said Glass, pointing out that the customer rates are still largely unknown. “People are extremely cost-sensitive and I have a hard time swallowing the idea that we may be putting them into a program that might have higher rates, without them knowing it. So we need to proceed cautiously and slowly and have time to digest everything.”
Councilmember Teresa Barrett, who said she is completely in favor of clean power, is also concerned with how quickly the county is pressing forward with the program. “I think there needs to be all kinds of public hearings and I'd like to see the applications (bids) that have been sent in,” she said.
Currently, the county has received 11 bids from power suppliers, which they are reviewing. The companies vying for the potentially lucrative contract are: Shell Energy North America; Iberdrola; Calpine Corp.; Noble Americas Energy Solutions; NRG Energy; Greensparc Energy Advisors; Direct Energy; Promet Energy Partners; ConEdison Solutions; Constellation; and Plumas Rural Services. The county has refused to release the bids from each company, claiming that making the information public will undermine negotiations with the eventual winning bidder.
The Board of Supervisors has decided to implement its new power plan in just five months from its April 23 meeting, although many details still remain unknown, including customer rates. Initial data released by the county shows it will be on track to offer rates they say are competitive with PG&E — ranging from $1.73 less to $1.02 more than a PG&E bill for a 2,000-square-foot single-family home per month. Monthly mid-size commercial customer rates could be around $80 less to $13 more. But PG&E challenges the county's rate assumptions, saying their rates are actually much lower than the county has presented them to be. The county agency would pay a tax fee to PG&E for several years to offset the customers PG&E would be losing through the new program, which will keep rates as-is for anyone choosing to stick with PG&E. PG&E has also begun exploring several options to provide more clean power to its current customers.
Rate projections are contingent on several factors, including the winning contract bid, the price of power and the level of participation throughout the county. The Clean Power agency would borrow up to $23 million over a three-year rollout period — $2.5 million for startup costs and up to $20.5 million to purchase ample power to guarantee a steady supply. Currently, the county said it is negotiating with First Community Bank to borrow the funds. The program could eventually generate as much as $170 million in annual revenue, according to county projections.
But it could also go belly-up, if not carefully planned. According to Cordel Stillman, deputy chief engineer of the Sonoma County Water Agency, risk is common in the power industry. “But, if the company went bankrupt, general funds of cities would be protected and the customers would protected,” Stillman said at a September Petaluma City Council Meeting. “The creditors of the JPA (joint power authority) would be harmed and the other remaining Sonoma Clean Power customers would have higher rates for about a month or two until they could get back into the PG&E system.”
County representatives Cordell Stillman and Supervisor Effren Carrillo will be giving a full presentation on the utility to the Petaluma City Council on May 20.
(Contact Janelle Wetzstein at Janelle.firstname.lastname@example.org)
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