Sonoma Clean Power becomes county's dominant energy supplier

Sonoma Clean Power, the year-old public agency, is rolling out service Monday to three additional cities and in doing so is set to become the main electricity supplier within Sonoma County, dislodging PG&E from a business it has long dominated in the region.

The expansion makes Sonoma Clean Power the new default provider for homes and businesses in Petaluma, Rohnert Park and Cloverdale, as well as Santa Rosa, Windsor, Cotati, Sonoma and Sebastopol, where the agency is already purchasing power for most residential and commercial customers.

Including accounts in the trio of newly added cities, the public provider now serves as the electricity supplier for about 90 percent, or nearly 204,000 of the county’s roughly 226,000 residential and commercial customers. Less then 10 percent of accounts have opted out and chosen to remain with PG&E, said Geof Syphers, Sonoma Clean Power’s chief executive officer.

“The fact that we’ve got most of the county’s electricity customers signed on has created a fantastic challenge - we’re looking to buy more power,” Syphers said.

As it looks to expand, through electricity contracts with a stable of renewable and conventional power suppliers, Sonoma Clean Power has for the last year held a price advantage over PG&E, delivering a supply that the agency touts as greener and cheaper for customers.

Sonoma Clean Power customers are saving between 6 and 9 percent on their electricity bills compared to PG&E’s rates, according a monthly pricing report published by PG&E.

“We saved homeowners and businesses $6 million last year, and that’s all being pumped back into the local economy, so to me, this is an environmental and economic investment,” said Sonoma Clean Power Chairman Mark Landman, a Cotati city councilman, who added that he expects the savings to continue.

The agency has secured longterm contracts for geothermal power produced at The Geysers, on the Sonoma-Lake county border, and has deals with two large solar panel arrays under development, one in Sonoma County and the other in the Central Valley.

The agency also has built up $9 million in reserves, money that officials said they plan to grow to $50 million in the next five to seven years. Syphers said establishing stronger finances will enable Sonoma Clean Power to continue operating and investing in more local renewable power contracts, though there is some tension over what to do with this money: stabilize customer rates or increase the agency’s standard green energy portfolio beyond 33 percent and subsidize more local projects.

“Look at where we are compared to last year, when we had no money in reserves and now we’re in the black,” Landman said. “It’s huge.”

The agency has secured broad support among customers in the business community, with early buy-in coming from giants in the wine industry, such as Jackson Family Wines, and addition support from locally based technology firms, the county’s burgeoning health care sector and other high-energy users such as grocery stores.

Getting the backing of Oliver’s Markets, which has two stores in Santa Rosa, one in Cotati and another opening in Windsor later this year, was seen as a huge win for Sonoma Clean Power, officials said. Olivers’ founder and president Steve Maass appears in a newly purchased television ad this month endorsing the program.

“Sonoma Clean Power is a locally controlled mix of renewable energy and it complements Olivers’ sustainability mission,” Maass says in the advertisement. “By making the switch ... we’re saving money while increasing our use of renewable energy.”

The expansion into Petaluma, Rohnert Park and Cloverdale represents an addition of roughly 41,600 commercial and residential electricity accounts. It pushed Sonoma Clean Power to last year ink deals for energy contracts from CalPine, the main operator at The Geysers, as well as Maryland-based Constellation Energy, which supplies the bulk of the agency’s electricity needs - most of it from conventional sources including hydropower and natural gas plants.

The agency’s standard supply to customers is 33 percent renewable - mainly from solar and geothermal projects. Less than a quarter of the supply for PG&E comes from renewable sources.

In the venture’s rollout last year, officials expected the opt-out rate to be around 20 percent countywide, but it has hovered at about half that, according to Syphers.

“I do expect a few more customers will opt out, but it’s lower than we expected,” he said.

So far, of the 41,600 commercial and residential accounts in the three newest cities to sign on, nearly 8 percent, or 3,281, have opted out. Healdsburg is not eligible for the program because it owns and operates its own electrical municipal utility.

Sonoma Clean Power has faced political opposition and customer skepticism from its earliest days as a county-driven concept through its rollout last year as only the second public electricity supplier of its kind to launch in California. The first was in Marin County.

The key questions for opponents and critics remain those about the carbon savings achieved through the agency’s power supply versus PG&E. The use of tradeable credits to account for some of that green power also muddied the picture, leading some cities, including those coming into the fold Monday, to sit out at the start.

“In a way, this whole thing hinged on a blind leap of faith ... so we saw no downside to sitting back and watching if they’d be able to scale fast enough,” said Petaluma Mayor David Glass, who along with others on the City Council balked at signing up in the beginning. “Ultimately, I believe it’s about giving people in Petaluma the freedom to choose who will supply their energy, and that competition is going to drive more innovation. In the end, that is going to be beneficial for ratepayers and for the atmosphere.”

The agency accommodated some critics last year when it dropped the use of energy credits to fulfill a portion of its renewable power portfolio. Still, it has been challenged to answer other nagging questions about how it fits into the power supply picture. Sonoma Clean Power has not taken over transmission, grid maintenance or billing - services all handled by PG&E. It also does not supply natural gas.

Rohnert Park Councilwoman Pam Stafford, who was one of two votes against Sonoma Clean Power when the city voted in favor of joining last year, remains steadfast in her opinion that the power agency has not properly explained to people that they are being automatically enrolled.

“So many people still don’t know what’s going on - they see PG&E out there fixing the lines, and they’re still getting their bills from PG&E,” Stafford said. “And I really don’t agree that it’s a choice. A choice is giving people an option, and so many are just being enrolled without knowing that they have to call to opt out. Then a few months later, I get questions from people saying “Wait, what?”

But Rohnert Park Councilman Jake Mackenzie, an early and strong proponent of Sonoma Clean Power, said the agency has met expectations so far.

“The benefits have already been realized in the first year of operation,” Makcenzie said. “Rates are lower for our citizens, and it’s cleaner power coming from renewable sources.”

Julie Jehly of Rohnert Park, who urged city officials to join the effort, said what’s most important to her is being allowed to choose between PG&E and a startup that can offer cleaner, cheaper energy.

“Even if you don’t want Sonoma Clean Power, at least you’re given a choice,” Jehly said. “Why wouldn’t you offer it? It’s a no-brainer.”

But Serge Zimberoff, also of Rohnert Park, says he is not convinced that the public provider’s supply is actually greener than PG&E’s.

“Their goal is to make this whole process of where the energy is coming from cloudy,” Zimberoff contended. “And these rates they’re offering are low right now, but they could go in any direction.”

Syphers acknowledged that he can’t guarantee lower rates than PG&E over the long run, but the agency’s recent ability to secure longterm renewable power contracts, and increasingly invest in local renewable sources, has kept rates lower than the competition. He said Sonoma Clean Power is also proposing at its monthly board meeting this week to have no rate increase for the upcoming year.

“Energy costs are going to go up and down, but we’re trying to purchase longer-term contracts to insulate those costs for our customers, so they don’t see those spikes,” Syphers said. “We’re doing floating solar now, and we’ve got geothermal from The Geysers, and wind is big in the mix. We’re using the greatest diversity of sources so if one cost goes up, we can buffer that increase with our other contracts.”

You can reach Staff Writer Angela Hart at 526-8503 or angela.hart@pressdemocrat.com. On Twitter @ahartreports.