Some customers opting out of Sonoma Clean Power

About 5 percent of eligible business and residential customers so far have opted out of Sonoma County's start-up public power agency, some over concerns the service won't be as reliable as PG&E.

Sonoma Clean Power projects about 20 percent of eligible customers ultimately will opt out of the service, which launches May 1. About 24,000 potential customers — most of them businesses — are part of the first wave of service.

Geof Syphers, CEO of the power startup, said a "handful" of potential customers who received letters detailing the program cited reliability concerns as their reason for declining the service.

Under Sonoma Clean Power, PG&E would continue to provide services such as billing, metering and grid maintenance. Syphers said the "reality" is that "all aspects of reliability will be handled by PG&E in exactly the same way they are handling them now."

He characterized that message as a marketing challenge for the agency, saying "it would be terrific for us to get the word out that reliability cannot change under this program."

Those opting out of Sonoma Clean Power so far include one of its largest eligible customers. Syphers declined to identify the customer, citing the agency's customer confidentiality policy.

The agency has identified about 100large commercial customers across the county that it wants to serve, a list that presumably includes manufacturers, grocery stores, hotels and other heavy power users. The group collectively represents about 20 percent of the agency's projected overall load.

Commercial users made up 80 percent of the accounts declining the service so far. The other 20 percent were residential accounts. Together, the opt-outs translate into 3.6 percent of the agency's first-phase power load.

A spokeswoman for Agilent Technologies in Santa Rosa said the company is still evaluating whether to go with Sonoma Clean Power or stay with PG&E.

Other businesses said they'd yet to hear from the public agency.

Martijn Sax, general manager of the Hyatt Vineyard Creek Hotel and Spa in Santa Rosa, said he was not aware of the hotel receiving any correspondence regarding the new power program.

"I haven't heard anything about clean power and energy," he said this week.

By 2016, Sonoma Clean Power aims to serve about 220,000 accounts, or about 80 percent of PG&E's electricity customers in the county. Customers will have the option to opt out and return to PG&E for no charge up to two months after joining. After that, customers can opt out for a $5 fee.

The initial 24,552 customers are of outsized importance to the agency because they collectively represent an estimated 40 percent of the agency's overall load.

The first wave includes 18,144 commercial customers and 6,408 randomly selected residential accounts in the participating jurisdictions, now limited to the cities of Santa Rosa, Sebastopol, Cotati, Sonoma, Windsor and the unincorporated county.

The power agency mailed the second of four notices to those customers on March 13.

Syphers interpreted the opt-out rate so far as a positive sign for Sonoma Clean Power, saying it's below what he thought it would be at this time.

"I'm thrilled that we're popular," he said.

The opt-out numbers are up for discussion at Sonoma Clean Power's board of directors meeting at 8:45 a.m. Thursday at the county Board of Supervisors chambers in Santa Rosa.

Thursday's agenda also includes a resolution inviting the cities of Petaluma, Rohnert Park and Cloverdale to join the agency. All three balked initially from signing on. Healdsburg is not eligible because it owns and operates an electrical municipal utility.

The addition of the other three cities would increase the power delivered by Sonoma Clean Power by an estimated 27 percent and strengthen the program by spreading the agency's fixed costs over an increased number of customers, according to a staff report.

The proposed resolution originally stated that the remaining cities would not have to pay any portion of administrative fees estimated to be $85,000 if they joined the program by Aug. 31. The agency on Wednesday amended that so that the cities now have until Jan. 31 to sign up. Syphers said in email to the agency's board that the city of Petaluma requested the extension.

Cities that join also would be "pre-approved" to appoint a director to the agency.

Syphers said the power agency wanted to wait until after the program was operational before approaching the cities again.

"If they waited another four years, they wouldn't have any more data to make their decision on than they will have by this summer," he said.

Rohnert Park Councilwoman Gina Belforte, who was among the skeptics, said she's been "impressed" with how the power agency is ramping up the program.

She said she would "strongly consider" the city being part of the program.

Petaluma Councilwoman Kathy Miller, however, expressed misgivings about the program and said she supports the city sticking to its plan to re-evaluate the energy program in the fall.

"I think we're going to stick with that schedule," she said.

Sonoma Clean Power initially projected its customers would see a 2 to 3 percent savings on their overall electrical bill compared with PG&E. That could increase to 4 to 5 percent if PG&E's request for a rate increase is approved by the California Public Utilities Commission.

On March 1, the PUC granted PG&E's request for a 1 percent rate increase to take effect May 1, contingent upon a public comment period that expires Thursday. The utility had cited a need for additional revenues tied to California's greenhouse gas cap-and-trade program.

Syphers in January predicted that rates for Sonoma Clean Power customers could hold steady through the third phase of the program in 2016. But he said this week those rates may increase as early as 2015 because of the rising cost of hydroelectric power, caused by the drought.

Rate increases would apply to all of the agency's customers, not just to those who sign up next year or after. Syphers said there may be times when the agency's rates could go higher than PG&E's. But he predicted those instances would be short-lived.

"I think we are in very good shape for providing the twin benefits of much cleaner power and always being competitive on price, and probably always being nearly cheaper," he said.

"I just don't want to over-promise to the public that we will always be cheaper," he added.

Syphers said the agency is setting aside $3 million for reserves and to help stabilize rates.

You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.