What if the revolution came, and we missed it because we tossed out the announcement? Seems like that’s what happened last month, when PG&E customers in Mendocino County got word that the utility no longer has a monopoly on selling us electricity.
Most people I talked to don’t remember getting the letter, didn’t read it, or didn’t realize what it meant. The reality is, this change matters to you for three reasons: your democracy, your climate, and your money. I don’t know about you, but those three are pretty high on my list of concerns these days.
You’d think the folks bringing us this change would have prepared us a little better, but hey, we’re the ones who decided to live in the deep countryside. So the best we can do is catch up with the story and make good choices about it. Let’s start with what the letter explains (which is not much). Then we’ll look at what’s behind it.
On June 1st, an outfit called Sonoma Clean Power will take over generating and sourcing the electricity that comes into our homes and businesses. PG&E will still deliver that electricity, take care of all the power lines, send us the monthly bill, and take our calls if power goes out. Unlike PG&E, which charges us enough to earn generous profits for the investors who own it, Sonoma Clean Power (SCP) is a non-profit aiming to save us money.
The other big difference is that we now get to choose how much renewable electricity we receive. With PG&E, less than 30% of the electricity we get comes from renewables such as solar, wind, geothermal, and hydroelectric. With SCP, that immediately goes up to 36% for the base service called “CleanStart.” You’ll get this base service automatically if you do nothing.
You can also choose a higher tier, called “EverGreen,” that gives you 100% renewable electricity. This is a good deal if you’re into climate protection, because you pay 11% more (less than $10 for most people) to get 177% more renewable electricity, and the carbon emissions associated with your electricity drop to nearly nothing. SCP says it is sourcing this green energy in its “local territory,” including geothermal power from The Geysers near Cloverdale.
The third option available is to “opt out” of SCP and stay with PG&E for everything. (If you’re wondering why anyone would do that, keep reading.)
There’s almost nothing in the letter from SCP power about what we will actually pay. It mentions “great rates” that are “competitively priced,” but you won’t find a figure. More on that in a moment.
Whatever we choose, the transition is going to be pretty much seamless. If you get discounts from PG&E now, you’ll get those with SCP. If you’re already generating solar energy that goes into the PG&E grid, you will still get credit for that (and it will be more advantageous). There will be a small change for people using the “Balanced Payment Plan” from PG&E, which averages out electricity usage through the year so people can pay the same amount every month. The charges for delivery from PG&E will still be averaged in the Balanced Payment Plan, but the charges for the electricity from SCP will vary from month to month depending on your usage.
Okay, that’s the news, at least according to what SCP wrote us in the letter. Now we get to democracy, the climate, and your wallet.
Hardly anyone remembers, or ever knew, that California passed a law back in 2002 to create a competitive market for electricity. This legally broke the regulated monopoly enjoyed by PG&E and other investor-owned utilities in the state. It happened because PG&E had laughably failed in its obligations to customers in the years before that, getting famously screwed by Enron and others who were manipulating the energy market. So state legislators had a window of political opportunity to inject democracy into the state’s electricity market, against the wishes of big, wealthy utilities with decades of entrenched political power.
PG&E used that influence to keep democracy from actually happening until 2008, when communities in Marin County banded together to create Marin Clean Energy (MCE). This was the first “community choice aggregation” organization, or CCA, meaning that communities were using the law to pool their purchasing of electricity and then choosing to buy it from someone other than the monopoly utility. In Marin’s case, that meant PG&E.
Back in 2002, state legislators had recognized that the big utilities were not going to like this, so they wrote the law in a way that allowed communities with elected local governments (city councils and boards of supervisors) to choose the CCA route. No special elections would be required, because the elected leaders would be acting on behalf of their constituents. Furthermore, the change would be automatic for customers – they would not have to do anything to benefit from the CCA once it was established.
PG&E really hated that part. It responded by putting a misleading proposition on a state ballot in 2010 and spending $46 million on advertising for it. The proposition would have changed the 2002 law to require elections won by a super-majority of more than 60% of voters before communities could escape PG&E’s clutches. This sick move backfired – voters figured out whose wallets that $46 million came from – and the proposition failed. MCE was able to go ahead and pioneer the CCA approach, and it’s already grown beyond Marin County to include communities in Contra Costa, Napa and Solano Counties.
SCP got rolling in 2014, to serve cities and unincorporated areas of Sonoma County. The cities include Cloverdale, Cotati, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, and Windsor. Healdsburg has its own electrical utility, as does Ukiah, and they’re staying independent. The cities and counties operate under a “joint powers authority” that allows them to operate collectively with regard to electricity, and the board of directors of SCP is made up of elected officials from participating communities.
Starting in 2015, Mendocino County entertained proposals from a number of CCAs and other groups proposing to become Mendo’s alternative to PG&E for electricity (not transmission). Last summer the county’s Board of Supervisors accepted a proposal from Sonoma Clean Power. Our own 5th District supervisor, Dan Hamburg, was instrumental in getting Mendocino to study SCP’s success – a third-party study showed that it has saved Sonoma residents and businesses $70 million in its first few years of operation – and he now represents Mendocino County on SCP’s board of directors.
“The Board of Supervisors looked at this opportunity carefully from multiple perspectives, including creating a separate CCA for Mendocino,” he says. “In the end, we chose Sonoma Clean Power because they were so committed to the big benefits of lower electricity rates, lower greenhouse gas emissions, and more local investment in clean power. There was no hard sell. They just wanted to help, even if we took another route.”
Time and money were also big factors in the decision. It would have taken at least two years and could have cost up to a million dollars to establish a separate CCA, and our County has a spotty record on big projects with long timelines. Turns out even our Supervisor knows this. “Playing in the competitive market for electricity is the kind of big, long-term decision we really need to get right,” Hamburg says, “and I think we checked all the boxes by choosing Sonoma Clean Power.”
There were five operational CCAs in California in 2016, with four more set to go live this year. Another five are expected to follow in 2018, and at least 15 additional cities and counties are in the early stages. Six states besides California have passed CCA legislation in recent years: Illinois, Massachusetts, New Jersey, New York, Ohio and Rhode Island. Cities and counties in those states are pushing the movement as hard or harder than those in California. For example, the Local Energy Aggregation Network (LEAN), an industry association, reports that more than 700 communities in Illinois were looking at CCA options as of last month.
This is democracy in action: giving us a choice, at the community level, about who provides our electricity, how clean it is, and how much we pay for it. It’s also a great way to slow the growth of carbon emissions.
“Until Mendocino provided this option [SCP], the only way to get cleaner power was to put solar on your property,” says the company’s CEO, Geof Syphers. “That is still an excellent option, but SCP makes it possible for everyone to get cleaner power, even if they can’t install solar. It also makes it possible for Mendocino County to receive renewable power day and night with EverGreen, which solar by itself can’t provide.”
He doesn’t mention fighting climate change, but he doesn’t have to. If you follow the news about environmental sustainability at all, you know that government is rarely the solution (even before the current crowd took over in Washington, D.C.) Take organic foods. The government provides some complicated, often opaque or inexplicable regulations on organic food labeling, and that’s it. Thanks a lot.
It’s when consumers vote with their dollars that things change. Say what you want about Whole Foods, but it was customers of “Whole Paycheck,” willing to pay top dollar for organics, that woke up the sleepyheads at Safeway and Walmart. Now those companies sell so much organic food that Whole Foods has to lower its prices. Organic farmers are expanding nationwide to keep up with the demand.
CCAs, including SCP, give us the same process with electricity. If enough of us vote with our dollars for clean energy, our capitalist economy is going to give us more clean energy, at lower prices than before. The more CCAs there are, the more robust this process gets. Yes, investor-owned utilities around the country are tugging against it. But the genie is not going back in the bottle, because no matter who is in the White House or Congress, this country follows the money.
And that’s the third reason to care about SCP: it wants to save you money. It’s a non-profit public agency, run by our communities, for us. It’s not owned by institutional investors that collect the profits. We’re the investors in a sense, because we invested in living here and elected supervisors who got us a CCA.
The biggest savings over time should come from lower rates for electricity, because there will be more clean power generated to meet the demand. Not only that, CCAs can invest locally to create the power they need. “As a public agency, Sonoma Clean Power must use any net income from operations for the benefit of the public,” notes Syphers. For example, Marin Clean Energy built a solar installation at Marin’s local airport, which is paying for itself in a hurry. Last fall, SCP launched a $2.5 million venture to help people in Sonoma County purchase electric vehicles and install at-home charging stations.
It’s even possible to imagine shopping malls roofing their parking lots with solar panels to make their electricity costs disappear. You think a CCA county is going to complain? You think local SCP customers are going to complain? Okay, in this county we know that someone is going to complain, but a lot of other people are going to be watching happily for another reduction in their electricity bill – and another reduction in carbon emissions.
The bad news is that SCP and other CCAs in California are currently handcuffed in how much they can reduce electricity rates. Please don’t grind your teeth when you find out why. PG&E is so blindly opposed to the growing democracy in the electricity market that is has purchased way too much conventional electricity – and is legally allowed to make CCA customers pay for it.
CCAs now account for a big chunk of the state’s electricity needs, but PG&E continued entering into long-term contracts to purchase electricity for its whole territory anyway. Now it says it’s stuck with energy it can’t sell. So it’s charging SCP customers $13 dollars – every month – to pay for that bad management. It’s like making us pay the tobacco companies if we quit smoking, because (sob!) they’re losing customers.
The law allows this for now, but it’s under assault. California’s CCAs have their own lobbying association, CalCCA, and it is energetically active in Sacramento. The state legislature seems open to changing the rules. In a future article, we’ll bring you a lot more blow-by-blow on how the CCA movement is advancing both politically and economically.
For now, it’s pretty clear that SCP gets a big influence boost from signing up (most of) another whole county. According to Syphers, “Adding Mendocino County helps our advocacy for public interest at the state level in Sacramento. Each new community choice program that emerges helps add to the voice for public power, and Mendocino has a special place because of its long-standing support for solar energy and because many lawmakers have vacationed in the County and have good associations with the area.” SCP estimates that about 30% of California will be served by CCAs within the next five years.
Meanwhile, it’s finding other ways to cut rates. The best is paying more for the solar power we generate on our own panels than PG&E did. It can do this because getting power locally is cheaper than buying hydroelectric from a dam 500 miles away. SCP also says it will write us a check in May every year that we generate at least $100 more electricity than we use; below that, we still keep the credit against future electricity use. PG&E, in contrast, zeroes out our excess solar power generation every year and doesn’t pay us a dime.
What all this means is that we now have stronger and more direct economic incentives to use and generate clean power. This is absolutely vital to slowing the progress of climate change. The Paris Climate Agreement is a wonderful thing, but it’s not binding on the U.S. or any other country. For most of us individuals and families, electricity is binding. We’ve got to have it, and if enough of us use our purchasing power to make it cleaner, the climate will benefit.
I mentioned earlier that some people will decide to opt out of SCP. So-called “opt-out rates” were surprisingly high in the early days of CCAs – more than 10 percent – but they are coming down fast. The CCA in Santa Clara County that launched last month, for example, reports opt-out rates under 1%. This is probably the more likely figure long-term. Some people will resist anything new, even when it benefits them and pays for itself. But with every new CCA it becomes easier to cut loose from the past and embrace the future. As Hamburg puts it sardonically, “When did people ever fall in love with their investor-owned utility?”
Oddly enough, there are some people who oppose CCAs because they are not green enough. These are the folks who point to nuclear energy as the only source that can deliver enough carbon-free electricity to stop global warming. They believe that promoting any other form of clean power is a snare and a delusion that keeps us from the Promised Land. This is a respectable if extreme position, and I urge you to be gentle with those who espouse it. (For example, don’t mention Chernobyl, Three Mile Island and Fukushima right away.)
For now, go find that letter from Sonoma Clean Power if it’s still in your mail stack or recycling bin. Read it (again) carefully, and also the companion letter that came if you have your own grid-connected solar system. If you can’t find the letters, point your browser to sonomacleanpower.org. By opting in – which means doing nothing – you will help bring more clean power and a smaller carbon footprint to Anderson Valley and the Highlands. If you can afford it, opt for 100% renewable; the monthly cost should be about the same as for a nice cocktail at the Buckhorn, which you will richly deserve.
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