While planners for a new public power agency in Sonoma County have celebrated a number of milestones this year, 2014 will mark what could easily be the renewable energy-focused provider’s greatest milestone yet -- the onset of electricity service to its first group of 20,000 customers.
That agency, Sonoma Clean Power, is the second community choice aggregation--type power agency in California and is set to begin serving customers in May.
Like MCE Clean Energy, the state’s first CCA now operating in Marin County and Richmond, Sonoma Clean Power buys electricity for its customers and delivers it over the grid largely maintained by Pacific Gas & Electric Co.Aims for lower energy costs
The cost of that power -- which is meant to provide a more environmentally friendly alternative than PG&E -- will be known as soon as January, when the agency’s board of directors are scheduled to consider authorization of a pricing framework that is expected to beat PG&E’s retail costs by an average of 2 percent to 3 percent.
That favorable pricing has been a celebrated perk from securing long-term power supply contracts at a time when cheap natural gas has helped drive down the cost of other sources of wholesale electricity. Sonoma Clean Power finalized its first power supply contract with Baltimore, Md.-based Constellation Energy in November. Geof Syphers, chief executive officer of the agency, credited the participating municipalities for acting quickly to allow those negotiations to go forward.
"We consider this great news. We have a much greener product, at a lower price," said Geof Syphers, a longtime consultant to the project who transitioned from interim CEO in December.
The finalization of that pricing structure will provide a clear answer in a longstanding question for municipalities and ratepayers, a "bottom line" concern that until recently has only been addressed through various estimates. While the Sonoma County Water Agency has been investigating the feasibility of the program since March 2011, the constantly shifting pricing of electricity on the wholesale market has made retail pricing among the most difficult questions to answer.
Yet planners for the agency have long noted that providing a cheaper alternative to PG&E is not Sonoma Clean Power’s primary goal, but rather to provide a competitive option that promises a greater environmental focus and the goal of supporting job creation in Sonoma County.
"It’s not a massive discount -- that’s not the point," said Mr. Syphers, during a recent presentation on draft rates to the agency's board. "What these are competitive rates. We feel we provide a superior product and service."
The most recent pricing structure subject to discussion by the agency’s board of directors hinges on savings connected to the part of a customer’s electricity bill associated with power generation. Planners suggested generation pricing that is 5 percent lower than PG&E, stopping short of the full discount achieved through contract negotiation in order to pass those savings on to future phases of customer enrollment.Utility charges lessen discount
That savings is mitigated somewhat by PG&E’s levying of certain additional fees to CCA customers, a cost that Sonoma Clean Power board member and Sonoma County Supervisor Shirlee Zane said she’d like to see changed. Those charges add about 1.28 cents per kilowatt-hour for most residential customers and 1 cent to 1.13 cents for commercial customers.
"We need to look at the long-term goal of getting some of these surcharges removed through legislation," she said.
Around 80 percent of Sonoma County ratepayers will be eligible for service in the next three years, with the first year excluding residents in Cotati, Healdsburg and Petaluma. Potential customers will receive a number of notices reminding them of the option to opt out and remain with PG&E -- part of the law governing CCAs in California -- and can still return to PG&E at a later date for a small fee.
Those municipalities that chose not to participate in the agency’s launch could still join in the coming year or at a future date.
As that service rolls out, more attention is likely to shift to the various mechanisms that could allow the agency to incentivize renewable energy development within the county. Development of those local sources is among the long-term goals promising price stability and ratepayer savings through Sonoma Clean Power, highlighted recently by the decision to procure some of the agency’s power through a contract with the operator of a network of geothermal power plants at The Geysers, located on the Sonoma and Lake county border.'Net metering,' 'EverGreen' to promote renewables
