Explore the Bay Area Monitor
Energized by Renewables
By Leslie Stewart
The Bay Area may currently be witnessing a classic example of a tipping point. In 2002, the California legislature passed Assembly Bill 117 (Migden), allowing California communities to purchase and re-sell clean energy to residents and local businesses, a practice known as community choice aggregation. However, until recently only one such program existed in the Bay Area: Marin Clean Energy, which launched in 2010. Now, in the short time since the Bay Area Monitor last covered this issue in 2013, Sonoma Clean Power is up and running, CleanPowerSF in San Francisco announced a start date in May, and four additional counties — San Mateo (Peninsula Clean Energy), Santa Clara (Silicon Valley CCE Partnership), Alameda, and Contra Costa — are exploring the option.
For most consumers in California, clean energy use is limited to what is available through their utility, and perhaps what they generate through a rooftop solar system. If they depend solely on a utility like Pacific Gas and Electric Company (PG&E), the utility decides how much solar, wind, nuclear, or hydroelectric power goes into their wires. Community Choice Energy (CCE) programs are designed to give customers an alternative with more renewable energy, usually for a lower price, with an option to pay slightly more and get 100 percent renewable energy.
State regulations require all utilities, including CCEs, to provide 20 percent renewable energy now, and 33 percent by the year 2020. PG&E currently provides roughly 28 percent renewable energy to its customers. However, San Mateo County Sustainability Fellow Kirsten Pringle, who has been helping coordinate the formation of Peninsula Clean Energy, noted that some of PG&E’s renewables portfolio comes from nuclear power. “Peninsula Clean Energy is not going to have any nuclear,” she said.
Peninsula Clean Energy and other proposed CCEs are modeled on the successful programs in Marin and Sonoma. Program startup usually takes about two years, beginning with an exploratory group of jurisdictions — several cities plus the county to cover unincorporated areas — and a technical feasibility report. San Mateo is partway through the process; it began outreach in the fall of 2014 and completed its report in July 2015.
Based on this report, participating jurisdictions will vote on creating a new Joint Powers Authority (JPA) that will be responsible for administering the program by purchasing the energy from traditional and renewable sources to serve its customers. In December, Atherton voted to join the San Mateo County JPA, followed by the City of San Mateo. Pringle expects that between 11 and 15 cities will join, explaining that “most cities have Climate Action plans and for a lot of cities that’s the reason to join, because this will decrease greenhouse gases.” Another reason is to encourage “green jobs” generated by industries such as solar installation, particularly if the CCE makes a commitment to buy locally.
Once formed, the JPA submits a plan to the California Public Utilities Commission, starts purchasing power, and then sells that power to customers. Like any other utility, professionals experienced in the energy field actually run the program. Charles Sheehan, spokesperson for CleanPowerSF, noted that the program’s administrator, the San Francisco Public Utilities Commission, has already been operating as an energy utility “for almost 100 years.” Barbara Hale, an assistant general manager at SFPUC, added, “We have more expertise than other CCEs.”
The infrastructure — wires, poles, meters — remains with PG&E, but the consumer has the assurance that the energy going into the grid for their use comes from the mix of clean power sources they’ve been promised. PG&E charges CCE customers a delivery fee for the use of its infrastructure. The customer sees one bill covering charges from both PG&E and the CCE program.
By law, all CCEs are “opt-out” — when one is formed, all customers in the participating jurisdictions become CCE customers, unless they choose to opt-out at the beginning (or later, for a fee). In San Mateo, Pringle said, “We think the opt-out rate will be lower than 15 percent based on experience in Marin and Sonoma.” Even with recently increased grid-usage fees from PG&E, Pringle expects that Peninsula Clean Energy fees will be lower than PG&E, “at least for launch.”
The same is true in San Francisco, which postponed its start date from October 2013 to May 2016. In the meantime, according to Hale, “changes in the electric market have been favorable to the program.” San Francisco’s basic “Green” account is 35 percent renewable California-sourced power and will cost slightly less than PG&E’s rates. The 100 percent renewable “SuperGreen” level will cost up to two cents more per kilowatt than PG&E’s rates. Hale thinks it will compete well against Solar Choice, PG&E’s clean energy plan, promising, “It’s a better product and, for now, it’s cheaper!”
Unlike most CCEs, not all San Francisco customers will join CleanPowerSF at once; energy purchases will be made in stages, with some customers added in May and more in August. The first customers will be those who have already indicated they will waive their right to opt-out. “We are enrolling everyone who raises their hand,” said Hale, “but the typical San Francisco resident doesn’t know anything about this program.” CCEs can also include current customers doing net-metering — selling back surplus power to PG&E — but Hale said, “We will be more purposeful and strategic in enrolling those customers” to ensure that switching the contracts won’t cost them extra PG&E fees.
With interest in CCEs on the rise, Marin Clean Energy has already added some non-Marin jurisdictions to its JPA, including Richmond, Pinole, San Pablo, and El Cerrito (all in Contra Costa County), Benicia (Solano County), and the County of Napa. The City of Lafayette sent a letter of interest to Marin Clean Energy in August, even though Contra Costa County recently asked for participants in a study. “Our Environmental Task Force looked at CCEs for over a year. They prefer Marin Clean Energy because it’s already established. There would be no upfront cost, and there are known factors,” said Megan Canales, an assistant planner with Lafayette. “If we go with Contra Costa, we don’t know how long it will take.” On January 25, the city council voted to partner with Marin Clean Energy. Canales mentioned that although it is unlikely, MCE could choose not to accept an application from her city “if Lafayette joining would raise rates for MCE’s existing customers, or strain the supply of renewables so that the mix of renewables versus nonrenewables is affected.”
It might seem that straining the supply of renewable energy could be a real concern. However, Pringle noted, “There is a lot of renewable energy on the market because of the huge demand, from utilities because the state raised the requirements, as well as CCEs.”
San Francisco has seen the same growth in renewables. “There is definitely a lot being constructed, and part of what motivates a lot of people to participate is the emphasis on renewable electricity,” Hale reported. “When we went out to bid, we got 52 bids — quite robust. Some were from projects that said, ‘If you take our bid, this is what we will build for you.’”
If technical studies continue to confirm that supplies of renewable power will be available at or below current rates, it is possible that by the end of 2017 the majority of electricity customers in the Bay Area will be served by a CCE.
One benefit will be to the environment. Replacing other forms of energy use with greenhouse-gas-free electricity will likely improve Bay Area air quality (although no studies appear to have been done to confirm this, due to the difficulty in projecting amounts of locally-sourced clean power). Air quality regulators have taken notice of this upside. In fact, the Bay Area Air Quality Management District helped Marin Clean Energy get off the ground with an allocation of $75,000 from its climate protection grant program back in 2008.
Perhaps the major selling point, however, is embodied in the word “choice.” Pringle pointed out, “This program provides access to renewable energy for people who can’t afford solar, or are in multi-family housing where the owner can’t or won’t add it.”
“From the customer perspective, who’s making the decisions about your power supply?” Hale asked. “It’s your locally elected officials. The money you spend with us is money that will be reinvested in San Francisco — you’re ‘shopping locally’ for your electricity.”
Leslie Stewart covers air quality and energy for the Monitor.