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Customers enrolled next year with Sonoma County's startup public power agency could see some savings on their electricity compared to rates proposed by PG&E for 2014.

The lower cost for customers would amount to a 5 percent reduction on rates for power generation, resulting in a projected 2 to 3 percent savings on the overall electrical bill for businesses and homes, officials with Sonoma Clean Power said this week. The smaller total savings reflects delivery charges that would still be controlled by PG&E.

For an average residential customer during a summer month the net monthly savings would come to $2.38, reducing their bill to $105.32, including surcharges PG&E is allowed to impose on former customers.

The proposed retail rates were unveiled Thursday in a meeting of Sonoma Clean Power's board of directors, where officials gave their preliminary support, voicing confidence the new venture will be competitive with PG&E.

They hedged, however, in declaring any clear retail advantage. PG&E will not have its final rates approved until late this month and Sonoma Clean Power isn't set to approve its customer rates until early January.

"We're going to have to be very careful in what we're saying to the public and what our rates actually are compared to PG&E," said county Supervisor Susan Gorin, chairwoman of Sonoma Clean Power.

The agency is scheduled to begin service in May to its first wave of 20,000 customers, including mostly commercial accounts. Most residential customers would be enrolled in 2015 and 2016. Those wishing to remain with PG&E can opt out.

The public venture is seeking to displace Pacific Gas and Electric Co. as the county's main power provider by offering what supporters tout as a greener energy supply at a comparable price.

Two wholesale energy contracts reached last month should allow the agency to meet those goals, officials said Thursday. They also credited quick decisions by city officials earlier this year to join the effort, a fast-paced formation they said allowed the agency to take advantage of cheap energy prices. Fiscal watchdogs and others had criticized the city decisions as unnecessarily rushed.

"We wouldn't be in this position if the cities had waited a long time because the wholesale market is at its low," said Geof Syphers, interim CEO of Sonoma Clean Power.

The board's first review of proposed rates covered three initial power supply plans and programs for customers.

The main package, dubbed "CleanStart" and projected to offer the 5 percent savings on power generation for initial customers, would be made up of sources that are 70 percent carbon-free, with a 33 percent mix coming from sources that qualify as renewable in California.

By comparison, PG&E's carbon-free power amounts to 51 percent of its supply; about 19 percent of the utility's current supply comes from state-qualifying renewable sources, including solar, wind, geothermal, biomass and small hydroelectric projects.

Officials said they hoped to extend the rate savings under the "CleanStart" program to customers that would join in 2015 and 2016. The venture aims to serve about 220,000 accounts, or about 80 percent of PG&E's electricity customers in the county.

The other power plan introduced Thursday would allow customers to choose a more costly 100 percent renewable mix drawn from the secondary contract with CalPine Corp., the operator of the The Geysers geothermal field on the Sonoma—Lake county border.

Read all of the PD's fire coverage here

That supply would come at a premium of 3.5 cents per kilowatt hour, or about 20 percent on the total electrical bill, depending on the customer, according to the agency.

For a typical residential customer, the so-called "EverGreen" offering would be about $17.50 per month more relative to the standard "CleanStart" package, officials said.

"It is not for everyone," Syphers said. "It's a significant premium."

Several speakers voiced support for the concept, which is aimed at those willing to pay extra in order to have a greater impact on greenhouse gas reductions and renewable energy development. Marin County's public power agency has a similar plan and PG&E is expected to introduce its own version next year.

But members of several environmental groups also called for a change in the premium program, saying it should directly support building new local sources, especially small-scale solar projects.

"I'm well aware that you need to exist as a strong economic entity. I don't want to hurt that," said Henry Denicola, a retired Sebastopol building contractor active with the advocacy group 350 Sonoma County. "But we have other things to accomplish as well."

The call hinted at the near-constant tug-of-war in recent months between those pulling for a rollout with ambitious local energy goals and those urging a more conservative approach that limits customer costs.

Board members, conscious of their pledge to spur local projects and create jobs, appeared open to considering a special arrangement for dollars from EverGreen customers. They are allowed to join the first phase next year.

"I think it's important that it's very clear what we're going to do with that money before we ask people to sign up," said Sebastopol Councilman Michael Kyes. "If we can say we're going to build solar or get more geothermal and that's what you're getting for your money, it will be a much easier sell for people."

The board also reviewed a proposed program that would offer greater incentives for customers with solar projects that can feed surplus energy back to the grid.

Under Sonoma Clean Power, those customers would be credited for surplus power at a retail rate greater than the market-based calculation used by PG&E. Their credits would also accrue without being erased, and those with more than $100 accrued after a year can request a check.

"Nothing is lost; nothing is forfeited," said Sonoma Clean Power consultant Kirby Dusel.

Supporters said they saw the program as another a big selling point for the agency. But board members said they would need details on what the subsidy meant for the venture's bottom line before signing off next month.

"I'm looking for that information the next time we meet," said Santa Rosa Vice Mayor Robin Swinth.

The proposed rates would cover a total of $51.2 million in expenses for the first year of operations, through mid-2015. Power purchases would make up $37.9 million of the budget, with most of the energy business going to the agency's main supplier, a subsidiary of the Chicago energy giant Exelon Corp.

Agency officials propose to pay off $5 million in startup debt, erasing about half of the total accrued by next summer.

A reserve fund would start out at $3.5 million. How the agency uses that funding — and how it sets rates to provide for the revenue cushion — is a subject likely to dominate future meetings, officials acknowledged.

"There's a lot of questions in there that do get to local build-out of solar, support and financing for (energy) efficiency programs, leveraging money to build our own systems some day," Syphers told the board. "All of those questions are ultimately related to the cash that we can develop."

You can reach Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com.

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