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SM County Moving Forward on Community Choice Energy Plan

July 2015

San Mateo County Supervisors Dave Pine and Carole Groom spoke about the County’s plans for Community Choice Energy (CCE) at the Labor Council’s delegates meeting June 8. County Supervisors voted earlier this year to study setting up a CCE agency, and recently appointed an advisory committee to help guide the process.

Supervisor Pine said the County and cities that support CCE would form a Joint Powers Authority to buy energy and potentially build new renewable energy producing facilities. The San Mateo County CCE would be similar to Community Choice Aggregation (CCA) agencies in Marin and Sonoma County. Pine highlighted some of the differences between the Marin and Sonoma models, which offer higher percentages of renewable energy—wind, solar, and geothermal—to customers than through PG&E. “Community Choice Aggregation is a proven model for providing clean electric power at competitive rates, reducing greenhouse gas emissions, and developing local renewable power sources,” Pine said. “We want to push for more renewable energy. The people in the county want it, and this proposal accelerates it.”

A County press release noted that CCA was established in California by Assembly Bill 117, “which allows a local government, or group of local governments, to pool the electricity demand of their residential, business, and municipal accounts in order to purchase or develop power on their behalf. Community Choice Aggregation is focused on power generation while power delivery, grid maintenance, customer metering/billing, and customer service functions remain with the existing utility—in our case, PG&E.”

CCE would become the default option in San Mateo County; customers would have to opt out of the plan if they want to stay with PG&E. Pine said the CCA model has been successful in Marin and Sonoma counties, and that only 11 percent of Sonoma Clean Power customers have opted out. Customers of Marin Clean Energy (MCE) and Sonoma Clean Power (SCP) can pay around the same as or slightly less than what PG&E charges and get a higher percentage of renewable energy, or can choose to pay more and get their electricity from 100 percent renewable sources. Marin offers 50 percent renewable energy in its basic plan, while Sonoma offers 33 percent.

Pine said SCP offers a lower percentage of renewables than Marin because it does not use Renewable Energy Credits (REC). The REC program is controversial because it allows agencies to purchase “credits” on the energy market similar to the “cap and trade” program. Pine said Sonoma County decided to avoid RECs and that, “We want to avoid RECs as much as possible” in San Mateo County. He said the County had hired a consulting firm to look at options for the base offerings and how to avoid RECs. Seth Baruch of the consulting firm, Carbonomics, also attended the Labor Council meeting. He explained that a CCA or CCE agency could. “buy renewable energy attributes from a wind farm in Montana and count it as a renewable energy credit; it’s a mechanism where you buy ‘qualities’ and count it” as part of the percentage of renewable energy in the local CCE.

Pine said as the cost of power generated by renewable sources goes down, customers could get cheaper energy, and “surplus funds are reinvested in the community to develop more renewable energy projects.” He said 11 projects have been built or are planned by the Marin agency, including 10 solar projects and one biomass/methane facility.

The Labor Council and Building Trades Council have called for project labor agreements and payment of prevailing wages on new renewable energy construction projects. Supervisor Pine said the new solar projects built by Marin Clean Energy created 750,000 hours of union work in one year. Baruch said MCE and SCP both have PLAs for their projects.

One risk of a CCE plan is market fluctuation and rate competition, Pine said, but, “The renewable energy market is big now and costs keep going down. CCE keeps that momentum going.” Baruch noted that, “The costs of solar and wind are going down fast.” He said in the last ten years, there were no instances of the kind of market manipulation perpetrated by Enron that caused the 2002 energy crisis. Pine said a well-crafted proposal for purchasing power through the CCE agency was essential to protect consumers and the County.

Several union members asked questions and raised concerns. Landis Martilla, Business Representative for IBEW 1245, said his union, which represents PG&E workers, “would like to see RECs eliminated completely.” He said through the REC program, “You pay money and then can claim dirty energy is clean energy—that’s our objection to what Marin is doing. The more real renewable energy you have, the more support we give.”

Seth Baruch said Martilla was correct, but added that, “If buying an REC leads to building a wind energy plant that otherwise wouldn’t be built, that would be a contribution to renewable energy.”

Marttila said he has heard these claims before and contends there is no evidence to substantiate that kind of speculation. “What really drives new renewable energy productions is the CPUC Renewable Portfolio Standard,” he said. “What drives the purchase of RECs is the purchase of cheap dirty energy.”

And while the plans offered in Sonoma and Marin counties offer a higher percentage of renewable energy than PG&E’s 28 percent, Martilla pointed out that, “PG&E’s non-greenhouse gas portfolio is actually 58 percent.” He said the additional 30 percent non-greenhouse gas generation at PG&E is comprised of large hydro-electric, which is totally green, and nuclear generation at Diablo Canyon.

San Mateo County Building Trades Council Business Manager James Ruigomez said that since public money would be used to subsidize new energy projects, they should be subject to prevailing wage laws. Mark Leach of IBEW 617 said as a public entity, the JPA should be able to mandate good union jobs.

“We will continue to meet with Labor about Labor’s priorities,” Pine said. “We have to do everything we can because of global warming to create more renewable energy.”

San Mateo County’s CCE now includes 20 cities that are engaged in the technical study for the plan. Pine said the feasibility study will coincide with community outreach efforts and workshops to provide information to local residents, businesses, civic organizations and policy makers about the potential benefits for San Mateo County of CCE. The advisory committee, which includes representatives from unions, meets monthly.

“I’m excited about how many cities want to join us,” said Supervisor Groom. “This is going to be a very collaborative effort. Getting more renewables in our energy mix is very important to our County.”

The Board of Supervisors will decide on how to move forward this Fall.

More information is online at: http://green.smcgov.org/

- Paul Burton

 

 

 

 

 

 

 

 

 

 
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