Choosing Renewability
Written by Cecily O’Connor Friday, 01 February 2013 07:05
 The number of Bay Area customers purchasing renewable energy through community choice aggregation (CCA) programs could more than double by the fall as cities advance greenhouse gas reduction goals.
In 2002, Assembly Bill 117 (Migden) authorized cities and counties to establish CCAs for procuring and/or developing their own clean energy sources like wind and solar, rather than purchasing power from Pacific Gas & Electric Co. Through CCAs, consumers can buy between 50 to 100 percent renewable energy.
In October, between 70,000 to 90,000 San Francisco residents will purchase 100 percent renewable energy when CleanPowerSF rolls out, said Charles Sheehan, spokesperson at the San Francisco Public Utilities Commission, which is overseeing the city’s CCA. It has a five-year contract with Shell North America and long-term plans to provide clean energy through resources it owns and operates.
The nearly three-year-old Marin Clean Energy program, run by the not-for-profit Marin Energy Authority, served 90,000 residential and commercial customers in Marin County at the end of 2012. By July, it plans to integrate another 30,000 customers in the Contra Costa County city of Richmond, said Jamie Tuckey, communications director for the Marin Energy Authority. The program, which also contracts with Shell, could increase its purchasing power with the addition of Richmond.
“Marin does provide a good example of how a CCA can be established and successful,” said Tom Kelly, executive director at Berkeley-based Kyoto USA, a grassroots group helping communities reduce greenhouse gas emissions.
Another North Bay CCA, Sonoma Clean Power, is undergoing investigation and development through the Sonoma County Water Agency. The plan is to provide service as early as next winter to an initial 10,000 to 14,000 customers, said Cordel Stillman, the agency’s deputy chief engineer. There’s also lots of interest in the East Bay to launch a community choice aggregation program, although challenges exist.
“We are really excited to have company so we are not the only CCA in California,” Tuckey said.
Cities are interested because CCAs help reduce greenhouse gas emissions and address climate change. They also provide a revenue stream to pursue local energy development, and subsequent job creation. For example, the Marin Energy Authority recently inked a power purchase deal with the San Rafael Airport for rooftop solar – a move that created 20 jobs.
A city or county with a CCA has greater control in setting electricity rates, thereby offering competitive bills to consumers seeking choice in energy providers.
“Right now, there is no competition in the power industry,” Stillman said. “We’re offering constituents a choice in how they are served electric power.”
Historically, investor-owned utilities like PG&E were the default service provider until the 2002 law shifted default status to local CCA programs. State law mandates all CCAs operate as opt-out programs.
Those who opt out can keep PG&E’s 19 percent renewable energy service. PG&E also expects to launch a 100 percent “green option” program with a $6 monthly price tag. Under this program, PG&E would purchase renewable energy certificates to match the portion of a customer’s energy use that is not already delivered from an eligible renewable source.
This program is not intended to “undercut existing” CCAs, said Joe Molica, PG&E spokesperson.
“We heard through customers … and elected leaders that they wanted us to provide this option,” Molica said. “Many residential customers don’t own and don’t have the financial means to put solar on their roof.”
But from a city or county perspective, PG&E’s forthcoming program does not offer local control the way CCAs do.
That said, establishing a CCA is a big undertaking. There are risks related to participation, development and implementation costs, and potential utility opposition. While there is the promise electricity revenues will flow back into the community, start-up costs such as feasibility studies, consulting fees, and staffing add up quickly. Funding can be hard to come by, too.
For example, the Sonoma County Water Agency estimates it will cost $2.5 million to get Sonoma Clean Power ready for service next year. The agency is putting up $1 million, an investment that will be restructured as a loan to Sonoma Clean Power and paid back after it’s been in operation for a year. It’s investigating several options — loans and bonds — for the remaining $1.5 million.
“We are scratching around trying to determine where that’s going to come from,” Stillman said.
Sonoma isn’t the only area facing headwinds. The board of the East Bay Municipal Utility District voted against further CCA study in December. Board members suggested the cities expressing interest — Berkeley, Oakland, Albany, and Emeryville — form a joint powers authority for the establishment of their own CCA.
“We have to take more responsibility for doing this ourselves,” said Al Weinrub, coordinator at the Local Clean Energy Alliance, which supports the idea of an East Bay CCA that develops and relies on local renewable energy sources.
Others are watching Marin to see if there’s potential to expand into other cities beyond Richmond.
“The advantage of going with an existing entity is they have a credit rating and existing operation,” said Neal DeSnoo, the City of Berkeley’s energy program manager.
Berkeley has not had formal discussions with the Marin Energy Authority, DeSnoo said.
The Marin Energy Authority has no current plans to add additional cities, Tuckey said. Further expansion would “ultimately become a policy decision by our board.”
In the meantime, providing renewable energy that’s competitive and affordable is a priority. But consumers might have trouble determining whether their local CCA is more cost-effective than PG&E, and vice versa. Electric utility rates are dynamic in nature, and vary based on monthly usage.
Keep in mind, the CCA replaces PG&E’s charge for the procurement of electricity, listed on the customer’s bill as “generation.” The remainder of services — billing, electricity delivery, power line repair, and maintenance — is still provided by PG&E.
The typical residential user of the Marin Clean Energy “Light Green” (50 percent renewable) product pays $1.70 less than they would with PG&E’s regular rates, based on PG&E’s rate changes effective January 1, according to the Marin Clean Energy website.
“The comparison is a snapshot in time,” Tuckey said. “Last month we were a little more expensive.”
When CleanPowerSF launches, the majority of customers will see a $10 to $11 increase in their monthly electricity bill for the program’s 100 percent renewable product, Sheehan said.
“It’s significantly more green and renewable, and as a result, it will cost a little more,” Sheehan said.
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