Sonoma Clean Power, the startup public electricity provider that will serve roughly 160,000 eligible customers in December, this week signed deals for all of its energy needs through 2016, including long-term geothermal and solar power contracts that will provide ratepayers with renewable energy for at least the next decade.
The renewable power contracts represent the largest deals so far for the agency that began serving 22,000 Sonoma County customers in May.
The new contracts will not increase rates in the short-term, said Sonoma Clean Power CEO Geof Syphers. Rates will remain 4 to 5 percent lower than those of PG&E, he said.
The new deals will provide enough long-term renewable power to cover a third of the agency’s overall electricity needs starting next year, Syphers said.
“What’s terrific about long-term contracts is that they give us price certainty and keep rates competitive for years to come,” he said.
The power agency inked a new 10-year deal with Calpine Corp. to provide up to 50 megawatts of geothermal power from The Geysers complex on the Sonoma-Lake county line. An existing deal with Calpine was limited to supply of up to 18 megawatts.
The agency also purchased an additional 40 megawatts of solar power from Recurrent Energy. The power agency has an existing contract with the San Francisco-based solar developer for 30 megawatts from a project in the Central Valley. The new contract is for 20 years.
The agency also this week extended by one year a contract with Exelon subsidiary Constellation Energy for a majority of its electricity supply. The agency in August expanded its original deal with Constellation to cover its growing customer base. The new deal, offering power from dams and natural gas plants, will provide two-thirds of Sonoma Clean Power customers’ needs through 2016, when the main contract will be put out to auction.
Syphers did not disclose the wholesale price of the contracts, citing state Public Utility Commission rules that allow public electric providers to keep pricing information confidential to protect their bargaining position. The original deal with Constellation was worth under $70 million just for the first wave of 20,000 largely commercial customers, Sonoma Clean Power officials said last year.
The additional supply will serve the current customers as well as 140,000 customers set to come online by the end of the year. Overall, the agency aims to serve about 220,000 accounts, or about 80 percent of PG&E’s electricity customers in the county.
Sonoma Clean Power is the default electricity provider for residents of Santa Rosa, Cloverdale, Windsor, Cotati, Sonoma, Sebastopol and the unincorporated county. Customers can opt out of the program and remain with PG&E. About 12 percent of eligible customers have opted out, according to the agency.
Petaluma and Rohnert Park are expected to vote on joining the venture later this year. Healdsburg, with its own electric utility, is not part of the program.
Syphers said the long-term renewable contracts allow the agency to free up revenue for a program called a feed in tariff, in which the agency purchases power at a higher rate from local businesses to encourage the development of renewable projects, largely solar installations.
“It’s exciting for me,” Syphers said. “These contracts give us more headroom in our rates to look at building local renewables.”