Marin, Sonoma clean power providers gearing up for rate hikes in 2023
The North Bay’s two primary sources of clean energy plan to raise rates starting next year.
On Dec. 1, Sonoma Clean Power approved a rate increase that is expected to take effect Feb. 1. CEO Geof Syphers said he was unable to estimate the amount, but said it the company wants to set rates 5% below PG&E’s.
Marin Clean Energy, or MCE, is proposing to increase rates by 8%, or 4 cents per kilowatt-hour, Jan. 1. Its board intends to consider the increase, which is 1% below PG&E’s estimated rates, on Dec. 15.
The two firms are community choice aggregation providers, a designation by which cities, counties and other qualifying governmental entities in the service areas of investor-owned utilities like PG&E are allowed to purchase or generate electricity for their residents and businesses.
Customers in CCA service areas are automatically enrolled unless they opt out, but PG&E bills for the transmission and delivery of the power.
“Commodity rates have been skyrocketing,” Sonoma Clean Power’s Syphers said, referring to the need for the increase. The accounts in his energy firm number 230,656, which includes more than 30,000 non-residential customers.
“We are estimating that most SCP customer generation rates will increase on Feb. 1,” he said. But he added that it’s hard to say how much the rates will change because the clean energy provider sets its rates based on the moves PG&E makes.
“We cannot know for certain because PG&E has not published their rates yet, but we are estimating that SCP rates will rise, even while providing a 5% discount on total costs relative to PG&E,” Syphers said.
The combination of power fluctuations and rate adjustments is a routine part of life in the complex energy market.
PG&E may entertain rate changes three to five times year to offset costs, Syphers said.
But PG&E officials point out the utility company must apply for approvals through the Federal Energy Regulatory Commission and California Public Utilities Commission.
PG&E has had two rate increases this year and is seeking a 2.1% increase in full-service customers effective Jan. 1.
PG&E has also filed another letter of intent to raise rates by 19% in 2023.
Syphers, whose company purchases a third of its power from hydro sources in the Pacific Northwest, said 1- to 20-year contracts “insulate” the company from much of the cost volatility. The remaining two-thirds of the company’s power generation comes from wind, solar and geothermal sources.