Earlier this month, Sonoma Clean Power, an alternative electrical energy provider, voted to offer Mendocino County and the incorporated cities of Fort Bragg, Point Arena and Willits participation in its program. If these cities and the Mendocino County Board of Supervisors pass resolutions and ordinances to accept Sonoma Clean Power’s invitation, we will have an alternative to PG&E as a source of electrical energy.
Estimates are that within the next five years, 50 percent of California counties will be served by alternative energy agencies — local agencies formed to provide electricity to homes and businesses at better rates and with more renewable energy options than PG&E.
It’s a movement. Sonoma Clean Power, not PG&E, has provided approximately 90 percent of residential and commercial customers in Sonoma County with electric power for the past two years.
In Marin County, about 85 percent of residential and commercial customers get electric power from Marin Clean Energy, not PG&E. San Francisco Clean Power just started serving customers, and in Lancaster, Lancaster Choice Energy has been serving customers for the past year. Not only are these agencies beating PG&E’s rates for electricity, they are mandated to provide plans offering increased use of renewable power with the intention of reducing greenhouse gas emissions. In April, the San Jose Mercury News announced, “Seven new municipalities are poised to join the Marin Clean Energy joint powers authority.” These include Lafayette, Walnut Creek, Napa, American Canyon, St. Helena, Calistoga and Yountville.
The rise of these alternative energy suppliers is the result of California’s passage of Assembly Bill 117 in 2002 to allow community choice aggregation, a wonky name for a relatively simple concept of group purchasing. This allows local agencies to pool, or aggregate, their electrical load in order to purchase or develop electricity on behalf of their residents, businesses and municipal accounts. Community choice aggregations is an energy supply model that works in partnership with the region’s existing utility, PG&E, which continues to deliver power, maintain the grid, provide consolidated billing, and other customer services.
PG&E is mostly in the energy delivery business — not the power generation business. It purchases power from other companies. New alternative energy companies, such as Sonoma Clean Power, negotiate their own contracts with power-generating companies and resell it to you at a lower rate than PG&E. And California law mandates that PG&E deliver that energy to you and bill you at Sonoma Clean Power’s rates.
Sonoma Clean Power is not the only option being considered by Mendocino County. The Board of Supervisors is looking at possibly forming its own joint power authority and its own Sonoma Clean Power-like agency. A joint powers authority runs the local “energy” agency on behalf of multiple jurisdictions.
There are several reasons to consider this approach including the ability of the joint powers authority to leverage financing for new programs and projects as well as the establishment of a legal firewall between the budget and assets of the community choice aggregation agency and the general funds of its member cities and towns.
Another option is for the county to form its own joint powers authority but to outsource the operation of our local “energy” agency to a management group or even to Sonoma Clean Power. The drawback of this and the previous option is that it would cost the county about $1.5 million to start its own autority.