Sonoma County's startup public power agency is set to make some of its biggest business moves yet Thursday.
They include decisions to authorize a $7.5 million line of credit to assist with power purchases and approval of a $9.7 million contract for data management and call center operations.
Sonoma Clean Power's board of directors is also set to give staff a go-ahead to enter into a power supply contract, a step that could come as soon as next week if any of the competing bids meet the agency's price target and other terms.
Combined, the business moves represent a significant shift as the agency gears up to begin serving its first customers by May.
"It's a big deal," said Geof Syphers, interim CEO of Sonoma Clean Power, though he added that other future steps, including setting of customer rates, could draw more public attention.
"There's a lot of interest in what comes next," he said.
Still, after more than two years of planning and preliminary development, the power venture has arrived at decisions that will account for most of its ongoing costs and weigh the heaviest in determining customer rates.
The effort has been touted by supporters as a greener alternative to Pacific Gas and Electric Co., offering a higher share of energy from renewable sources and intended to spur demand for local clean energy projects.
Customer rates, however, have long been seen as the key factor affecting the venture's longterm viability.
Now comes the critical period where Sonoma Clean Power officials will begin to wrestle with how to balance those two objectives — greener power and customer costs.
Thursday, directors are set to discuss and approve a price cap to be used in final negotiations with four competing power suppliers. Agency staff hope the cap and last-minute bidding will result in a contract that allows for cheaper customer rates than PG&E.
"We think it keeps it competitive right up until the very end and that we're going to get some benefits out of that," said Syphers.
The proposed price cap, reflected as an average maximum retail rate, is 8.60 cents per kilowatt hour. Combined with a 1.12 cent surcharge that Sonoma Clean Power customers would pay to PG&E to support the utility's infrastructure costs, the agency's capped price figure would be equal to PG&E's proposed 2014 generation rate of 9.72 cents per kilowatt hour.
"What we're saying is we think we can beat PG&E's rate," Syphers said. Actual rate setting would be done weeks later, with a final board decision scheduled for January, he added.
"What we're doing is just capping things for the purpose of contracting," he said.
Even for Sonoma Clean Power customers, PG&E would continue to handle transmission, billing, metering and grid repair.
The initial three-year electricity contract for Sonoma Clean Power could be worth up to $130 million annually by 2017, based on current enrollment from the county and five participating cities and assuming a 20 percent opt-out rate by customers who prefer to stay with PG&E.
Of the 11 companies and organizations that put in initial bids, the final candidates competing for the deal are:
NRG Energy, based in Houston and Princeton, N.J., one of the country's largest power producers and retailers.
Direct Energy, an energy retailer based in Canada and the U.S., a subsidiary of the British multinational Centrica.