Sonoma Clean Power's rates to beat PG-E

Cleaner power and competitive rates.

Those two goals have driven the development of Sonoma County's startup public power agency since it was proposed years ago by local climate activists and business interests.

Now supporters of the venture say they will deliver on both counts, after officials overseeing Sonoma Clean Power on Thursday formally approved retail rates that will beat those set for PG-amp;E for power generation this year.

County Supervisor Susan Gorin, the power agency's chairwoman, called it a "significant milestone" reached seven months after the joint county-city program was formed and about two months after it secured its initial power supply.

For at least the first wave of Sonoma Clean Power customers starting in May, the savings are expected to equal a 2 to 3 percent reduction on the overall electrical bill for businesses and homes. Most of the initial accounts will be commercial customers, with the bulk of residential customers joining next year and in 2016.

The rates may hold until then, power agency staff said.

Board members said the lower retail rates provide a major selling point and resolve a key concern about cost -- long seen as the biggest factor affecting how many customers choose to stick with the public venture or opt out and remain with PG-amp;E.

"That's the kind of thing that people understand," Jake Ours, a Santa Rosa city councilman and agency board member, said about public venture's lower cost. "You can stop a lot of people right there by saying that it's a better deal for you."

When that is combined with the venture's claim to an overall greener supply -- with a higher percentage of renewable power and 30 percent less greenhouse gas emissions on their basic product than PG-amp;E -- the result is what happened Thursday: officials touting a successful pending launch.

"I think it's impressive that we're here today talking about a program with lower rates and with cleaner energy," said Santa Rosa Councilwoman Robin Swinth.

Throughout its rollout, the venture has faced strong skepticism from critics questioning its purpose, viability and claims to a greener overall power supply than PG-amp;E.

Government watchdogs also have voiced concerns about potential financial risks to taxpayers.

The lower retail rates may serve to quiet some of those cries and win over undecided customers, speakers said at Thursday's meeting.

"There's many folks out there that I hear that think this is just scamming," said Duane DeWitt, who is active on local government issues. "If you can show them, 'No, as a matter of fact, you're going to pay less for your power than you pay PG-amp;E,' even if it's just 5 cents, then you have a talking point. . . . Most folks like me are going to be like, 'I'm down there, man, give me that nickel.' "

The agency's final rates are slightly lower than preliminary figures disclosed last month. The change was prompted by a shift in PG-amp;E's final rates, approved in late December by utility regulators. They were lower than those the utility originally had proposed.

The effective discount for Sonoma Clean Power customers remains about the same.

Under the agency's basic "CleanStart" program envisioned for most accounts, an average residential customer using 500 kilowatt hours during a summer month would save $2.18, reducing the bill to $103.10, including surcharges PG-amp;E is allowed to impose on former customers.

For a commercial customer using 775,000 kilowatt hours per month, the savings would be $4,084, bringing that monthly bill to $113,378, according to the agency.

Sonoma Clean Power staff cautioned that they could not guarantee such discounts in the years ahead, with market fluctuations in wholesale power and PG-amp;E's own rate-setting process being the two main variables.

But they suggested the rates set Thursday could hold for the second wave of customers set to join next January, including 60,000 residential accounts, and perhaps for the third phase in 2016, with an additional 60,000 household accounts.

"So this isn't just about who is in the club of phase one," said Geof Syphers, CEO of Sonoma Clean Power.

The first wave this May includes 14,000 commercial customers and 6,000 randomly selected residential accounts in the participating jurisdictions, now limited to the cities of Santa Rosa, Sebastopol, Cotati, Sonoma, Windsor and the unincorporated county. The first of four planned notices to those customers are set to go out in the mail next month.

Altogether, the venture aims to serve about 220,000 accounts, or about 80 percent of PG-amp;E's electricity customers in the county.

PG-amp;E's latest stance on the new competition remains the great unknown. Sonoma Clean Power is set to become just the second program of its kind to launch in California. The first community-choice aggregation program was formed in Marin County.