Officials with Sonoma County's startup public power agency kicked off the next phase in its rollout Thursday, approving a secondary energy supply deal for local geothermal power and discussing the upcoming rate-setting process and enrollment of customers.
The 10-year contract for electricity from The Geysers on the Sonoma-Lake county border secures a long-term supply from a clean, renewable source at a competitive fixed rate, officials said.
"And it's right here in our backyard, and that is a very rare thing to find," said Geof Syphers, interim CEO of Sonoma Clean Power.
The deal with a subsidiary of Houston-based Calpine Corp., the main Geysers operator, earned unanimous support from the agency's board.
With its two initial contracts for electricity now in hand, Sonoma Clean Power's anticipated service launch next year is no longer just a target, Syphers told directors.
"We're starting service May 1. What that means is we need to have (customer) rates by Feb. 1 that are in the mailboxes for those first customers," he said.
Agency directors marked the transition Thursday as a milestone before discussing their next steps. The public venture, including the county and five cities so far, and touted as a greener, competitively priced alternative to PG&E, is seeking to be just the second of its kind in California.
It has evolved under fire from critics concerned about the risks for ratepayers and taxpayers in the uncharted world — for most local governments, at least — of power procurement.
But Cotati Mayor Mark Landman, vice chairman of Sonoma Clean Power, cited key terms of the program's two energy deals and said those achievements and others beat expectations and should serve to quell the doubts of "naysayers."
"We did all these things, and, I'll say it again — I said it last week and its worth repeating — so far while being under budget," Landman said. "I think that's a good way to start the morning."
The agency's largest test looms in the months ahead with customers, who will have a choice to opt out and remain with PG&E for their electricity supply. The first wave of customers will be largely commercial. Most households will be incorporated in 2015 and 2016.
The public venture aims to attract customers with rates that officials say should be lower than those proposed by PG&E for 2014.
Pricing in the Calpine deal and a primary energy supply contract signed this week with Constellation, a Baltimore-based subsidiary of Chicago energy giant Exelon, should allow for lower rates, officials said. The agency's public rate-setting process begins next month.
"We can't say that we will definitely be below PG&E's price in 2014," Syphers said. "The odds are good. But PG&E gets to set its rates, and between now and 2014 PG&E could cut its rates."
Agency officials again refused to disclose wholesale pricing for the energy supply secured so far. They said they would release figures for the Constellation contract next week. The delay is meant to put some time between the disclosure and market conditions on the date the deal was executed.
"It's so that our counter party doesn't feel like we've revealed anything proprietary about their business, so that we can do business with them again in the future and feel good about that," Syphers said. He said the approach would pay off for ratepayers.