Marin Clean Energy — con: Plan carries far too many risks
By Joe Nation, Marin Common Sense Coalition
The financial crisis is forcing Marin residents and businesses to spend less and work more. The regional unemployment rate has doubled in two years to 10 percent. Every day, another Marin family is losing their home to foreclosure.
Government isn’t immune to these forces. Marin County government – facing a $20 million budget shortfall this year and $50 million next year – is preparing to cut staff and services, particularly health services for children and the disabled. Marin cities, courts and schools are announcing layoffs.
Despite these tough economic times, Marin County has committed more than $1.5 million to fund an energy start-up – the Marin Energy Authority – that would replace the local energy company, Pacific Gas and Electric Co., as the provider of electric power for those customers who do not choose to proactively opt out. While PG&E would continue to deliver and bill for the power, MEA would purchase power for customers who are automatically enrolled in the plan.
And the $1.5 million is just the beginning. In the long-term MEA plans to borrow $375 million that would have to be paid for with public funds, creating as much as $5,000 in debt per Marin household in the participating towns and cities.
Amazingly, the MEA is moving forward with this costly energy plan without allowing Marin residents the right to vote on it.
The Marin Common Sense Coalition believes the program is fraught with risks for both Marin County governments and residents. And we are not alone.
- Novato, Corte Madera, Larkspur and Ross opted not to join due to financial risks.
- Marin County’s Civil Grand Jury, a court-appointed government watchdog, warned that MEA “could present unforeseen legal and financial risks to the participating cities, the county of Marin and the citizens as taxpayers.”
- Marin’s independent treasurer, Michael Smith, whose primary responsibility is the county’s fiscal and financial health, says that MEA does not have the “expertise to buy, own and operate commercial power/facilities.”
- The North Bay Leadership Council concluded that MEA puts “ratepayers, taxpayers and county constituents in jeopardy by pressing forward with a program that adds a new bureaucracy.”
- Recently, 11 former Mill Valley mayors sent a letter urging their council to withdraw from the MEA, saying it “poses unprecedented and potentially major financial hazards.”
Under the plan, MEA will automatically enroll you as a customer unless you proactively opt out and choose to stay with PG&E. And if you don’t opt out within the first 60 days of the program, MEA can charge you unspecified exit fees.
When the plan first takes effect, MEA promises to offer initial prices that are the same as PG&E’s prices to those customers who do not opt out. But that rate is only an “initial rate” and could be raised at any time by MEA without independent review. Prices could rise – a lot. And at that point, it could cost a lot to go back to PG&E.
Unlike PG&E, the MEA will not be regulated by the California Public Utilities Commission, and therefore politicians will be responsible for determining how much MEA customers will be charged through the program.
Under the MEA’s five-year, $300 million contract with Shell, Marin County residents can expect uncertain prices, uncertain environmental benefits (if any) and inexperienced politicians trying to navigate the energy market.
And there are much larger risks for both city and county taxpayers in the future. Marin County’s $1.5 million commitment pales in comparison to the financial risk to MEA member cities and to the county if MEA’s ever-changing business plans don’t actually work. In the long-term, MEA’s plans to borrow up to $375 million could expose its member cities, the county and all its customers to large financial obligations that have not properly and seriously been addressed to date.
Rather than continuing down this road, the Marin Common Sense Coalition urges local leaders to opt out of this plan and instead work with PG&E to reduce Marin’s greenhouse gas emissions and to bolster its clean-energy portfolio for local customers.
It is not too late to reject this financially risky proposal. Marin cities and residents can say “no” to the uncertainty and risk by simply opting out of the MEA’s plan.
As the Marin Civil Grand Jury concluded, “Citizens of Marin are being led down a costly and extremely risky path not yet traveled by any other community in California.”
We hope you’ll send a message in response to MEA’s risky energy plan. Urge your city council and Board of Supervisors to reject MEA. And then opt out by calling 1-866-743-0335 or visiting www.pge.com/ccaoptout.
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Marin County resident and former California Assembly candidate Joe Nation represents the Marin Common Sense Coalition, which opposes the Marin Energy Authority plan. For more information, visit www.commonsensemarin.com.
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As a California Professional Engineer licensed in both Mechanical Engineering and Control Systems Engineering and with an MBA that includes courses in finance, I cannot believe that there are this many stupid and ignorant people in Marin County. What other conclusion can one draw that would account for those that believe what is coming from mouths of the promoters of this insane idea.
We do not have more solar in Marin because it is too expensive even with the tax credits. What “magic” is MEA going to perform to achieve the level of solar they are claiming and where will they put it? It is the capital cost of solar, not the fuel cost that make it uneconomical for many applications. As a reverse example, it is more economical to use solar in remote locations because of the cost of running power lines to the location. In that case the total capital cost would justify solar in many instances. However, that is not the case for most homes in Marin.
Not all “renewable” power is carbon free; biomass burns the gas and makes CO2, a gas some believe causes global warming. Geothermal is renewable power, but steam contains gases that are admitted to the atmosphere when the steam is condensed. One of the treatment processes to remove the hydrogen sulfide (H2S) produces CO2 and the steam also contains some CO2.
My knowledge of geothermal power is based on my work on PG&E’s geothermal units at the Geysers. I was responsible for the design of the control systems for the mechanical equipment on the majority of PG&E’s units. During the period from 1979 to 1982 I was also responsible for the design of systems to remove the H2S from the steam before it entered the steam turbine.
The design of power generations systems involves much more than financing projects with tax free bonds and supplying “renewable” energy. Based on the “MEA Plan” that I have heard promoted, we will not be seeing any new solar or wind power for five years. That would make sense because of the economics cited above. Also, while wind may work at night, solar does not work without an even more expensive battery and inverter system.
So from a stand point of “Carbon Free Power” we would all do better to stay with PG&E until MEA is producing power that is 50% carbon free, as I believe slightly over 50% of the power we get from PG&E comes from carbon free sources. The logic is simple; not only is the renewable power MEA proposes to supply “loaded with CO2,” but why not wait and see what the real cost is once they start producing the CO2 free power. That way MEA and their true supporters take the risk, not you or me. But PLEASE do not use my tax dollars for any aspect of MEA.
by Terry V. Molloy, PE