Sonoma Clean Power moving ahead on contract
Officials with Sonoma County's startup public power agency are taking final steps geared toward entering into a primary power supply contract.
The move, which could come as soon as next week and would make for Sonoma Clean Power's biggest business decision yet, was authorized Thursday by the agency's board of directors.
The board gave its staff and Chairwoman Susan Gorin the go-ahead to execute a deal if any of the final bids meet an approved price target and fulfill other terms.
Several directors called the step a "milestone" in the agency's 32-month development and its planned rollout to customers in May.
Gorin, a Sonoma County supervisor, said a signed deal "is going to be a significant reason to have a big hoot and holler."
If none of the final bids equal or come under the agency's price target, the board would meet again to discuss a different approach, including possibly a higher price cap that could push customer rates above those proposed by PG&E for 2014.
Supervisor Shirlee Zane, the other county representative on the power board, stressed that beating the utility giant was crucial to the venture's launch.
"To be at or lower than (the rates for) PG&E is, I believe, the real incentive for the public initially to make sure that they don't opt out," Zane said. "I do want the greener energy, absolutely. But we've got to build our business and we've got to convince people that this is a better deal than PG&E."
The public power program is designed to offer a higher share of energy from renewable sources than PG&E, both to reduce greenhouse gas emissions and as a way to spur demand for local clean energy projects.
So far, only one other effort like it exists, in Marin County, where about 80 percent of customers once served by PG&E now get their electricity from a public agency. A similar venture in San Francisco has become bogged down in controversy.
At Thursday's meeting, Sonoma Clean Power representatives revealed that one of the four large energy companies in contention for the primary power contract apparently has dropped out.
Officials from ConEdison Solutions, a New York-based subsidiary of Consolidated Edison, have not responded in the past several months of correspondence, said Geof Syphers, interim CEO of Sonoma Clean Power.
"We're interpreting the tea leaves that they're not interested," Syphers told the board.
The other final bidders are: NRG Energy, based in Houston and Princeton, N.J.; Direct Energy, a Canada and U.S.-based subsidiary of the British multinational Centrica; and Constellation, a subsidiary of the Chicago-based energy producer and distributor Exelon.
The proposed three-year deal could be worth up to $130 million annually by 2017, based on current enrollment from the county and five participating cities and a 20 percent customer opt-out rate.
Unlike the Marin program, where officials first selected their supplier — Shell Energy North America — and then negotiated a final price, Sonoma Clean Power officials have sought to keep competition going among the companies until the last minute in hopes of achieving the best deal.
Michael Kyes, Sebastopol's mayor and representative on the power board, asked probing questions about that process but in the end joined others in voicing his support.