As PG&E faces uncertainty, Sonoma Clean Power sees a bright future in green energy
The troubling saga of PG&E has been well chronicled along its path that led to a bankruptcy filing in January. Massive liabilities from wildfires caused by transmission lines. A push to increase already high energy prices to ratepayers. Public outrage over bonuses paid by executives during a period of turmoil.
Yet during the same time, the fortunes of Santa Rosa-based Sonoma Clean Power could not be more different while much less heralded.
Five years since first providing electric service to customers, the nonprofit public agency now has 87% of its eligible customers in both Sonoma and Mendocino counties, totaling 224,000 accounts. It claims to have saved approximately $80 million for its customers in reduced rates compared to the investor-owned PG&E, which still provides natural gas locally.
The local company - which has only about 25 employees - also has made tremendous strides in curbing carbon emissions. It sources green energy with a standard service that now provides 91% carbon-free power and has almost 2,000 customers enrolled in its premium EverGreen service, which offers 100% renewable energy sourced locally from solar panels and geothermal plants at The Geysers. Two years ago, it got into the production side by breaking ground on two solar-panel projects in rural areas located in Petaluma, and it is on a course to have a total of six such projects in the region. It also purchases power from a wind farm in the Altamont Pass.
“We’re undergoing something remarkable right now,” said Mark Landman, the board chairman of Sonoma Clean Power who also is a city councilman in Cotati. “This is a huge change. I think bullishness is an understatement.”
Indeed, Sonoma Clean Power officials said they believe their agency is nicely positioned to play a leading role in curbing carbon emissions at the local level while also serving as a role model for other Golden State communities to accomplish that same goal. In fact, the company more resembles a small tech firm trying out various research-and-development pilot projects to determine what can take hold rather than acting like a traditional staid utility. Its next ambitious idea? A downtown storefront that will open next year to display the latest household products that can dramatically reduce energy usage.
This activity is occurring at the same time of tremendous uncertainty over the future of PG&E. Meanwhile in Sacramento, policymakers continue to grapple over a major debate on the role of utilities, the state’s power grid, and efforts to further address climate change.
Sonoma Clean Power wants to help fill the void.
“There is a lot at stake. PG&E will probably be restructured. They will probably sell off their gas division. They will probably make other major changes. Some of those changes may be positive for the state. Some of those may not be. We need to be actively involved,” said Geof Syphers, the CEO who has led Sonoma Clean Power since 2013.
Sourcing clean energy
Sonoma Clean Power is a so-called community choice aggregator that was created by the state Legislature in the aftermath of the energy crisis in the early 2000s. The law allowed communities to create alternatives to source clean energy in areas that are under the jurisdiction of investor-owned utilities - like PG&E, Southern California Edison and San Diego Gas & Electric.
CCAs procure the energy for their customers, while the investor-owned utilities handle the maintenance of the transmission lines, meter-reading and billing services.
Both business structures are different than municipal-owned utilities such as ones in Healdsburg and Ukiah and Los Angeles Department of Water and Power, the largest one in the country.
Sonoma Clean Power was the second CCA formed in California after Marin Clean Energy was created in 2010. However, their popularity has taken off in recent years and there are now 19 such public agencies in the state serving 10 million customers. When a new CCA emerges, it becomes the default energy provider in the local area; homeowners that want to stay with the investor-owned utility must opt-out from the new agency.
The UCLA Luskin Center for Innovation estimates that these CCAs are likely to have at least 16% of the overall energy load in California by next year. At the same time, the energy load carried by investor-owned utilities should decrease from 78% in 2010 to 57% in 2020. Those numbers, in turn, have created some conflict between the two systems.
Kelly Trumbull, project manager at Luskin Center, said the PG&E bankruptcy has raised a lot of questions in the industry and around the future role of CCAs and IOUs.