[caption id="attachment_91831" align="alignnone" width="512"] Gary Wysocky, Geof Syphers, Susan Gorin and Mark Landman celebrate the beginning of service from Sonoma Clean Power on May 1. (credit: Eric Gneckow)[/caption]
SANTA ROSA -- After three years of planning, Sonoma County's new renewable energy-focused electricity provider, Sonoma Clean Power, on Thursday officially began serving its first group of more than 20,000 customers.
It marks the second launch of service in California for a community choice aggregation--type power agency, a model that purchases power on behalf of its customers and delivers it over the power grid largely maintained by Pacific Gas & Electric Co. The start of Marin Clean Energy in Marin County in May 2010 was the first.
Officials in the Sonoma County effort celebrated a higher-than-expected rate of enrollment during a regularly scheduled meeting of the governing Sonoma Clean Power Authority on May 1.
"Today's the day," said Susan Gorin, chair of the agency's board of directors and a Sonoma County supervisor. "It's going to be a day of celebration."
The agency on Thursday began service to 23,070 accounts -- 16,845 commercial and 6,225 residential -- spread evenly around participating municipalities in Sonoma County.Less-than-expected opt-out
Enrollment has so far exceeded projections. Around 7 percent of potential accounts and 5.2 percent of potential customers have opted to remain with PG&E, compared with a 22 percent to 25 percent projected rate by the end of 2014 based on data from the launch of Marin Clean Energy.
Geof Syphers, agency CEO, cautioned that the ultimate opt-out rate for customers is still anticipated to grow to around 18 percent. Yet Sonoma Clean Power has been able to launch with an attractive incentive for customers: while individual rates for homes and businesses will vary, the agency's prior negotiations with power wholesalers and a recently approved rate increase for PG&E customers will mean a comparative savings of 4 percent to 5 percent for ratepayers.
"People are generally very excited about this," Mr. Syphers said. "We have very low opt-out rates. I think that reflects the fact that we're doing two things -- we're delivering significantly cleaner power at a significant rate savings compared to PG&E."
He noted the overall cost savings across all ratepayers.
"This is the single largest step that Sonoma County has taken so far to address climate change, and were doing it at a cost of negative $6 million," Mr. Syphers said.
Those savings are expected to extend to customers in the upcoming two enrollment phases as well. While Sonoma Clean Power officials have cited competitiveness concerns in declining to share their own profit margin after wholesale power purchases, that agreement has allowed the agency to hold some of its previously budgeted funds for power purchase in reserve for the benefit of future ratepayers, officials have said.Projections of power purchases
A proposed budget for the fiscal year starting June 30 -- Sonoma Clean Power's first full year of serving customers -- includes $64.8 million for power purchases. Revenue is budgeted at $77.6 million.
The agency entered into its two current power purchase contracts in November, with $5.2 million budgeted for power purchases in its current fiscal year.The agency expects to break even in revenue and expenditures by June 30.
A three-year supply contract with Constellation Energy, a subsidiary of Chicago-based Exelon, will supply the majority of the agency's power needs during launch. A smaller contract with Houston-based Calpine Corp., the largest operator at The Geysers geothermal field in the Mayacamas Mountains, will provide for a premium 100 percent renewable product offered as an option for customers.
Power purchasing will ramp up along with customer enrollment to an estimated $114.8 million projected by 2017.
While recent negotiations have allowed for favorable rates, the startup agency has long cautioned that those rates are not guaranteed to beat PG&E. Goals include a power mix that beats the incumbent utility in renewable-energy attributes, rate stability and the potential to promote new renewable energy project development within Sonoma County.
Still, Marin Clean Energy -- now operating as MCE Clean Energy -- has provided rates that in many cases beat PG&E for both residential and commercial customers.
Subsequent groups of customers will be enrolled in two phases through 2016. Nearly 80 percent of Sonoma County ratepayers are ultimately eligible for service -- elected officials in Petaluma, Rohnert Park and Cloverdale have previously voted to not allow service to their municipality in the agency's first year.