Sonoma Clean Power, utilities face battle over energy costs
The North Bay pioneered a new type of public energy program in California seven years ago that now appears poised to change who buys electricity for homes and businesses across large swaths of the state.
The programs, of which Sonoma Clean Power was an early leader, have expanded dramatically over the past several years.
Their growth is leading experts to examine how well the programs are boosting the use of renewable electricity compared to the private utilities that formerly served the same communities.
The growth is also prompting a face-off between the public programs and California's three biggest private utilities, including Pacific Gas & Electric. In the dispute, both sides have suggested their ratepayers are getting a bum deal in how the state has set the rules for this new era. For the public programs, the outcome has high-stakes implications because their customers could end up paying considerably more to offset the growing costs for excess power that the utilities contracted for but no longer need.
The public programs, typically known as Community Choice Aggregation, or CCA, agencies, have grown to control about 5 percent of the state's electricity market, a new study reports. But both utilities and other experts say that number will increase markedly as other communities join the trend.
“I think everyone who's watching this thinks that there is going to be very rapid growth in the coming years,” said Matthew Freedman, an attorney in San Francisco with the Utility Reform Network, a ratepayer advocacy group known as TURN. Some utilities, he said, have predicted that half their customers could switch to the public programs within a decade.
Even so, experts say the jury remains out on exactly how beneficial the public programs will prove in accelerating a drop in the state's greenhouse gas emissions. Some, including Freedman, suggested that in recent years a significant amount of renewable power has simply been shifted to the public programs from other electric utilities, which then make up any shortfall with fossil fuels, changing little.
“There is definitely some of that that has gone on,” said Severin Borenstein, a UC Berkeley business professor and energy researcher. “The question is how much.”
However, Geof Syphers, CEO for Sonoma Clean Power, maintained the public programs will prove a valuable tool in fighting climate change and in helping communities achieve local environmental and economic goals. Already the fledgling sector is gearing up to finance $2 billion in new renewable electricity production, he said, and a CCA program about 45 miles north of Los Angeles in the city of Lancaster has helped attract an electric bus and battery manufacturer to the community.
“We'll usually be cheaper,” Syphers said of his program's rates when compared to utilities. “We will always be cleaner and we will always be more responsive to local needs.”
His agency's board this summer is slated to consider once more offering incentives to customers who buy electric cars. A similar program last fall offered $2,500 per car - or $5,000 for low-income residents - and resulted in the sale of 206 vehicles.
Beginning of clean power
Sonoma Clean Power launched in May 2014 and reports saving customers $70 million in energy costs over the past three years. The program provides electricity to 196,000 homes and businesses, or about 88 percent of those formerly served by PG&E.
As with other such programs, customers are automatically enrolled and must take action to switch back to the private utility. The utilities continue to distribute the power to all customers. Sonoma Clean Power customers still get billed from PG&E, with various added fees tacked on to the rates for the CCA program's power.
The local program is overseen by a board of 11 elected city officials and county supervisors from both Sonoma and Mendocino County, where next month Sonoma Clean Power electricity will be offered to 38,000 more customers. Residents of Healdsburg and Ukiah have their own municipal power systems and are exempted from the CCA program's service area.
Sonoma Clean Power was the second CCA program to operate in the state. The first also was from the North Bay, Marin Clean Energy, now known simply as MCE. It began in Marin County in 2010 and since has expanded to serve 250,000 customers there and in parts of Napa, Solano and Contra Costa counties.
California currently has eight such public programs in operation, according to a study released this month by UCLA's Luskin School of Public Affairs. A ninth in Los Angeles County recently won approval from the Board of Supervisors there, with programs in Alameda and Yolo counties also expected to launch this year.