Sonoma Clean Power can be a huge boost to the county's economy, a path to steadily declining energy costs and the route off of fossil fuels - but only if we move past the century-old thinking of the fossil-fuel-based, traditional utility model.
Clean power, created locally in an open market, is cheaper than fossil power. There is no fuel cost. There are no transmission costs, and intelligent grids can take advantage of modern information technology and high-speed communication systems.
I was a group vice president at Hewlett Packard and then at Agilent where we faced constant competition and an ever-present need to innovate and improve just to stay in business, much less stay profitable. That included complete industry paradigm shifts, such as the telecommunications revolution created by the transition from wired to wireless, the advent of the Internet, the computing revolution that occurred when personal computers knocked off mainframes and now as tablets are knocking off PCs.
For electric utilities, however, it has been a different story. Faced with no competition and guaranteed profits, they have spent almost nothing on research and development. And it shows, as Hurricane Sandy made painfully clear, not only in the antiquated types of equipment but also in the near total lack of innovative business models.
And therein lies the risk for Sonoma Clean Power. If this new agency tries to simply push cleaner power through the same old business model as PG&E, it will go the same way as the fossil-based utilities it was created to replace. On the other hand, if it understands the vast potential for local clean power, and it engages local commercial and residential properties in a competitive open market to harvest and store clean energy, and move it around on intelligent, real-time micro grids, then it can lead the state into sustainability. Fortunately, the community choice aggregation law
under which Sonoma Clean Power was created
provides a structure under which Sonoma Clean Power can smoothly migrate out of the old and into the new.
The local business and technology communities are ready and able to respond by delivering clean power at ever-decreasing prices. And Sonoma County has already shown the foresight to embrace innovative private financing mechanisms to support those communities' efforts with private capital that is poised to invest.
The big international technology companies are ready to help because they see Sonoma County as a test bed for the new energy world. That's why there were so many bidders in response to Sonoma Clean Power's request for proposals. With so much interest in the opportunity to replace PG&E, the county doesn't have to invent the new business models; nor does it have to pick the best technologies. It simply needs to avoid thinking like a green version of PG&E.
The key strategic driver is that the quantity of incoming solar energy is just enormous, about 10,000 times current demand. The cost of harvesting that energy has been falling for decades and will continue falling. But for the traditional utilities, cheaper renewables mean fewer customers. As soon as homes can operate with panels on the roof and batteries in the garage, financed over their performance lives, there's no reason for them to stay connected to PG&E at all, or to Sonoma Clean Power for that matter, unless Sonoma Clean Power offers what PG&E doesn't - namely an intelligent, efficient, communicating grid built by an open market of distributed clean-energy supplies.
With an open market inviting local properties to sell both power and efficiency, Sonoma Clean Power can have local renewable resources supplying 100 percent of the county's energy needs at prices well below what the fossil utilities can achieve. It's time to support Sonoma Clean Power and update our thinking about clean energy versus fossil utilities.
Duane Hartley has lived in Sonoma County since helping start the Hewlett Packard/Agilent facilities in 1972. He retired from Agilent and is now CEO of Global Legacy.
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