City Council hears about energy options, advantages, drawbacks
A panel of state and local experts described the operations of community choice aggregation agencies Tuesday night during a workshop before Benicia City Council.
Interim Community Development Director Dan Marks described the way local governments work with the third-party agencies to obtain or develop renewable power that gets transmitted into the energy grid and to customers through the same lines used by investor-owned utilities, such as Pacific Gas and Electric.
He said the term “community choice aggregation” is a “meaningless three words” that sometimes obscures the goal of the agencies, such as Marin Clean Energy (MCE), that have been formed to bring cleaner energy into the grid.
But the goal of those agencies, to reduce greenhouse gas emissions, is the same as that of the Climate Action Plan Benicia adopted in 2009. Now the city is undertaking a study to determine whether it may become a partner in the nonprofit Marin Clean Energy.
“Right now, Marin is the only community choice aggregation Benicia could join,” Climate Action Coordinator Alex Porteshawver said. But Benicia is not the only city that has shown interest in joining MCE.
Napa County has joined; El Cerrito has asked for consideration and has approved its own study; and San Pablo’s government will take a final vote Monday on its decision to join, Porteshawver said.
Though Benicia’s City Council won’t see the results of its study until next month, MCE Executive Officer Dawn Weisz, who has seen a draft of the study’s report, hinted that it “looks very positive.”
Should the Council and MCE agree that the two should be partners, the Council then would take the two steps to pass an ordinance to that effect.
Customers could be enrolled as early as May, with outreach measures taken before then to inform PG&E customers about the incipient change. If they do nothing, they would be enrolled in MCE; however, if they object to the change, they may stay with PG&E, an investor-owned utility.
Either way, electricity would come through the same transmission lines, and bills would appear the same, except for minor additional breakdowns that note the customer’s affiliation with the aggregate energy organization.
Will Maguire, regulatory analyst for the California Public Utilities Commission, said he was taking no sides in the matter as he gave the Council background on the move to CCA power sources.
He said laws in Massachusetts, Ohio, New Jersey, Rhode Island and Illinois as well as California let local governments team up to unite the buying power of customers so they can get their power through alternative energy suppliers.
This method originally was authorized in California in 2001 and was expanded and regulated by new legislation in 2011, Maguire said.
The California Public Utilities Commission regulates CCAs, he said, though it uses what he described as “a light touch.” It also handles disputes with investor-owned utilities and mediates disagreements between investor utilities and CCAs.
Currently, MCE and Sonoma Clean Power Authority are the two aggregate agencies operating in California. None has failed, but two approved agencies, one in San Joaquin and the other in San Francisco, never got off the ground. Lancaster’s application for a CCA is being reviewed, and would be the first agency in Southern California, Maguire said.
Thomas Delaney, a former power administrator, markets and transaction director who is the vice president of Southern California Telephone and Energy, described the role of the Independent System Operator (ISO), who makes sure electricity is transmitted safely and reliably on the power grid, which he described as the “electron superhighway.”
“We manage the electrons,” he said.
Those electrons aren’t color-coded, he said. Renewable power purchased by customers of a CCA isn’t transmitted directly to customers’ homes or businesses. Instead, it’s added to electricity from other sources that are transmitted along existing utility lines.
However, the increase in cleaner power purchases reduces carbon footprints and displaces the power bought from less clean sources, he said.
Delaney said the California ISO “is the largest of about 38 balancing authorities in the western interconnection,” managing electrical flow for about 80 percent of California, as well as part of Nevada. It is one of nine independent system operators in North America.
Studies have shown that organized competitive energy markets, such as CCAs, improve grid reliability and transmission line use, lower wholesale prices, improve power plant availability and reduce barriers for clean energy purchases, he said.
California ISO operators in two control centers, one in Folsom and another in Alhambra, monitor the power transmission system around the clock, he said.
Sephra Ninow, regulatory affairs manager of the Center for Sustainable Energy, Oakland, has studied community choice energy options, and said she seeks to encourage obtaining electricity from cleaner and renewable sources, goals that align with California’s own priorities.
She said such agencies and MCE open energy markets cut costs and buffer customers from market price swings. “Communities form CCAs to procure renewables,” she said.
“Utilities won’t go away,” she said. Instead, she said, they can “coexist with CCAs.”
Joe Horak, supervisor of energy solutions and service for PG&E, said Northern California energy users have three choices: remain as PG&E customers, join a CCA or generate their own electricity, such as with photovoltaic arrays.
No matter which option a customer chooses, PG&E would continue to deliver the electricity, maintain the power infrastructure, respond to outages and bill the customer, Horak said.
Its 20,000 employees provide electricity and natural gas to about 15 million Californians in 49 counties and 243 cities. It is the distributor of electricity to 5.1 million customers and of natural gas to 4.3 million.
Horak reminded the Council that PG&E’s energy saving programs have saved 23,000 megawatt hours of electricity and 3.5 million therms of natural gas.
It has paid $5.4 million in incentives to customers, he said, the equivalent of taking 6,000 cars off the highway.
And its electrical generation mix is getting greener, he said. By 2013, 22 percent of the utility’s power came from renewable sources and 22 percent from nuclear generation. This year, he said, 27 percent was coming from green sources, and by 2020 at least 33 percent will be from renewable energy.
In addition, his company is encouraging solar power, including arrays installed by its own customers, Horak said.
Before the California Public Utilities Commission is PG&E’s proposed “Green Option,” a voluntary program that would enable all PG&E bundled electric customers to buy up to 100 percent of their electricity from PG&E-procured solar projects within the company’s service territory, he said, either through a pool of projects or from a nearby community solar option.
Weisz said MCE gives its customers a choice of “light green” electricity, of which half comes from renewable sources, currently priced slightly less than what PG&E charges for power, even with PG&E’s exit fees that MCE customers must pay when they leave the utility.
It also has a “deep green” option, which is 100-percent renewably sourced electricity for which customers pay a penny premium each hour, or about $5 a month.
Its newest option is “Sol Shares,” 100-percent local solar sourced, she said.
The agency purchases its power based on its customer base and usage, which is why it performs the studies before accepting a new partner, she said.
MCE is developing projects that will produce 177 megawatts of new California renewable energy for its customers, including 20 megawatts of local solar projects, she said. It can produce enough clean energy to power about 85,000 homes annually, and projects cost less because as a nonprofit, MCE can get better financing.
Weisz said more than 33 megawatts of its energy is produced by solar arrays in Marin, Richmond and Napa County.
It also offers no-cost energy assessments for multifamily homes and businesses, cash rebates to customers for specific projects, no-cost direct installations for multifamily residential tenants and on-bill financing for what she called “deep” clean energy projects.
Through MCE, customers who have solar panels can get net energy metering and can get credits for their energy production. Those whose panels generate $100 or more of energy the customer can’t use get paid in cash, she said.
Most of the public comments expressed support for the proposed partnership. About 20 attended the workshop, though not everyone spoke.
Andres Soto, who recently moved to Benicia from Richmond, an MCE partner, said, “It’s a good relationship,” adding that customers were “very satisfied.”
He said the agency “spent a lot of time” on reaching out to residents to explain its operations. He told how a portion of Richmond’s port is to have solar panels in its parking lot that will produce some of the agency’s electricity.
He reminded the Council that membership in MCE would give Benicia “a seat at the table,” unlike with investor-owned utilities.
Constance Beutel, chairperson of the Community Sustainability Commission but speaking as a retiree who had a 30-year career with Pacific Bell, said she expected PG&E would survive the growth in aggregate energy agencies.
Beutel asked if Benicia’s 10 solar array sites could be tied in with MCE should the city become its partner. Weisz said they could.
Kathy Kerridge, also a sustainability commissioner but speaking as a resident, also favored the partnership. “For the first time in years, I have a choice,” she said.
Jon Van Landschoot said joining MCE would be a proactive step in countering climate change, saying mining and drilling for carbon-based products need to stop so the carbon doesn’t become an air pollutant later.
Bob Livesay said he felt like “a lone wolf” in challenging the proposed partnership. “I’m not agenda-driven. I’m more concerned about the consumer in this city.” He said he was worried that consumers don’t actively enroll, but instead are considered enrolled unless they request to be excluded.
Livesay said a survey of Richmond residents indicated 75 percent don’t realize they are MCE, not PG&E, customers.
He also was concerned that the clean energy customers expect to be buying may not go directly to their homes. “We buy on your behalf,” he said, but the agency can’t track clean energy electrons directly to a customer’s home.
Jamie Mauldin, of the legal firm Adams Broadwell Joseph and Cardozo, San Francisco, wrote the Council that his clients, the International Brotherhood of Electrical Workers Local 1245, believe the change, which he called a “project,” needs an environmental impact review under the California Environmental Quality Act.
He wrote that changing from PG&E to MCE could increase rather than decrease air-polluting emissions because of changes in power plant operations, because MCE would need to buy more power from such sources as Shell Energy North America.
“MCE will use fossil fuel generation for the majority of their power supply,” he wrote. He cited the aggregate agency’s own November 2013 Integrated Resource Plan Annual Update, which he said noted that by this year, “more than 75 percent of MCE’s electricity is expected to come from conventional generation.”
MCE’s construction would alter the environment, he wrote, and operating new renewable energy plants might increase consumption of water and use up valuable farmland.
“Before the city takes any action to join a CCA program, it must comply with CEQA,” he wrote. His letter received no comments from either the Council or the panelists.
Delaney said the aggregate energy agency “is not a new theory,” but that it brought control, through the agency’s board, closer to its customer base.
“You never elect the CEO of PG&E,” he said. “The board does that. With municipalities, accountability is closer.”
He reminded the audience that local voters select the Council and mayor, among other officials. “The solutions are more meaningful.”