Sonoma Clean Power, PG&E face off over surplus power fees

Sonoma Clean Power and Pacific Gas & Electric Co. are facing off over how their customers should pay for a growing amount of surplus power now that more local power providers have emerged as an alternative source.

The outcome of the dispute likely will affect energy bills for customers of regular utilities and for those of local providers like Sonoma Clean Power, commonly referred to as Community Choice Aggregation (CCA) providers. These publicly operated providers typically offer customers the chance to purchase varying levels of renewable energy while still relying on existing utilities to distribute the power over their grid systems.

On Tuesday, PG&E, Southern California Edison and San Diego Gas and Electric formally asked the state for a new method of calculating how they are reimbursed for the electricity they contracted for but no longer need because of the exodus of their customers to providers like Sonoma Clean Power. The power contracts can extend up to 20 years.

Both sides agree that CCA customers are obliged to pay their portion of costs from such contracts, which are part of the effort to make sure Californians have a reliable supply of energy. But the players disagree on a fair method to assign the costs, even as utilities report their surplus power is growing.

In a press release Tuesday, PG&E maintained that the current division of expenses is “distorted and unbalanced,” with CCA customers now paying only 65 percent of these surplus costs.

When the current cost-sharing formula was developed a few years ago, CCA providers served less than 1 percent of the state’s homes and businesses, the utility said. But by year’s end, providers like Sonoma Clean Power will serve 13 percent of PG&E’s service area. By 2020 that figure will rise to 38 percent.

As a result, PG&E claimed its customers this year will pay $180 million for surplus power costs that should be charged to CCA customers. That amount is estimated to rise to $500 million in roughly three years.

“That ends up becoming a pretty significant burden for fewer and fewer people,” said PG&E spokesman Donald Cutler.

Sonoma Clean Power GEO Geof Syphers said the utilities’ proposal serves their interests but not those of any ratepayers.

“It proposes to pass on all of PG&E’s high cost to our customers without any obligation for PG&E to minimize those costs,” Syphers said.

Syphers maintained that PG&E could take steps to lessen the surplus power costs to all ratepayers and that a third party should be hired to analyze the utility’s operations and to make sure it keeps such costs down.

Syphers agreed the number of CCA providers is growing, with eight such operations now in the state, compared to three a year ago.

The proposal by the three utilities was under review Wednesday by the state Office of Ratepayer Advocates, which reports to the governor, and The Utility Reform Network, or TURN, a consumer advocacy group. Both organizations said they had no immediate comment.