Sonoma County government this week could take its most significant step yet toward becoming a power provider for homes and businesses.
The Board of Supervisors on Tuesday is set to consider creation of a separate agency, known as a joint-powers authority, to administer the power program.
That step is needed, officials say, to get estimates from power companies on the rates they might provide to the county for the program. Those rates, which the county expects to be initially higher than those offered by PG&E, will ultimately factor into the most pivotal future decision on whether the program goes forward.
That decision, which faces scrutiny especially from the business community, could be months away, after the county and cities have evaluated the potential energy rates they would charge customers.
Still, county officials acknowledged that after several years of study and intermediate decisions to advance the power proposal, Tuesday's decision represents a watershed.
<CS8.8>"It's the most significant step so far," said Cordel Stillman, deputy chief engineer for the Sonoma County Water Agency, which has overseen the proposal.
</CS>Supporters see it as a key way to boost investment in clean, renewable energy sources, create jobs and cut greenhouse gas emissions.
Critics are worried about the rates it might offer customers — they would nevertheless retain the right to opt out — as well as the costs and liabilities it could pass on to taxpayers.
To date, the cost of studies, staff time and consulting contracts totals $520,000. A new pair of consulting contracts valued at $150,000 are also up for a board decision Tuesday.
The county has acknowledged that its approach to the next step might seem backward to some, or arouse critics' suspicions that the proposal was being advanced beyond the point of no return.
Stillman, however, said there were good reasons to establish an administrative home for the program before any decision to launch it.
<CS8.8>The main reason is power suppliers want some evidence the county is serious before they respond to competitive bids on the rates they might offer.</CS>
"We feel this step sends that message," Stillman said.
Another reason is that energy prices are at historic lows because of cheap natural gas. Many suppliers urged swift action to take advantage of those prices, Stillman said.
The county also needs to show some progress on the proposal in order to compete for startup funding from the state. The program's estimated startup costs are $2 million to $6 million — money that is likely to come from bond financing.
As it stands, however, the county would be the only local government immediately involved in the joint-powers agency. That's because the eight local cities being recruited for the program have been unwilling to sign up without knowing what the eventual power rates might be.
<CS8.8>That question might be answered with the return of prospective rates from would-be suppliers, Stillman said. The county has identified at least five, including Consolidated Edison, Constellation Energy, Shell North America, Direct Energy and NRG Energy.</CS>
The county has not changed its rate estimates from a 2011 study, which found the typical customer could pay $4 to $10 more a month over a 20-year period for county-supplied power. After 20 years, the rates are projected to be nearly equal, with PG&E rates exceeding those for public power thereafter.
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