As business people we want to do the right thing, and ideally the right thing will make economic sense. Sonoma Clean Power, the local program to buy and generate electricity, promises to be a way to do the right thing while benefiting everyone's bottom line.
In 2011, BoDean Co. installed a one-megawatt solar array at its Mark West facility, becoming the first quarry in the world to fully operate under solar power. BoDean learned firsthand how the current rate structure under PG&E actually de-incentivizes large power consumers such as BoDean from installing solar.
The problem exists because in 2011 the California Public Utilities Commission discontinued its solar pilot program. This program was an experiment meant to see if rate structures could be used to incentivize the building of large solar arrays by businesses that have large demand loads. Although the program succeeded, it was discontinued. As a result, rate structures within PG&E now provide a disincentive to businesses considering solar.
PG&E is a regulated monopoly that must return a profit to its shareholders. There is nothing inherently wrong with that. But by creating Sonoma Clean Power, the community will be able to design rate structures meant to incentivize the construction of renewable power by businesses. The "profits" of the authority will then be returned to ratepayers and those that construct such systems, not to shareholders.
As a result, Sonoma Clean Power would create new local business opportunities. Rooftops, parking lots and other underutilized spaces would become assets. They would generate energy and revenue as surplus solar power is sold to the grid. This would change the calculation made by businesses for their return on investment for energy projects.
Soiland Co. Inc. is another company that uses a lot of power to produce its products including rock, soil and compost. Striving to be sustainable, the company wants to install solar. However, Soiland's plans are now stalled. The present economics of switching to solar do not work because PG&E underpays for excess power generation. Sonoma Clean Power should incentivize companies such as BoDean and Soiland to produce excess power for this community.
Community choice aggregation programs similar to Sonoma Clean Power operate in Ohio, Massachusetts and Illinois with lower rates than their utility counterparts. Marin County launched Marin Clean Energy nearly three years ago. It now serves more than 90,000 customers with a power mix that is 50 percent renewable with competitive rates.
Currently, about $200 million leaves Sonoma County every year to pay for electricity generated for our use. Imagine the impact if we capture a significant portion of that and invest it locally. As more power is produced locally, Sonoma County's energy system would become increasingly resilient. Rates would stabilize because renewable energy has no long-term fuel costs. Furthermore, we would be much less vulnerable to volatile national and international energy markets.
Sonoma Clean Power will have significant challenges. For example how will it ensure adequate infrastructure capacity to accommodate increasing amounts of local power? How will it design a rate structure that is fair, maintains competitive rates while rewarding local renewable energy generation? These are good problems. With Sonoma Clean Power we can tackle them locally. Otherwise we remain at the mercy of PG&E.
The current large-scale utility model is antiquated and does not support innovation. Sonoma Clean Power would be able to react to local needs and create the incentives to move aggressively. From our view, Sonoma Clean Power provides the platform for this community to energize our economy and reduce greenhouse gas emissions at the same time.