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.
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.