"Don’t judge each day by the harvest you reap but by the seeds you plant." —Robert Louis Stevenson
Former Governor Gray Davis signed California’s Community Choice Aggregation law, AB117, into law in September 2002. It let municipalities band together to form Joint Powers Authorities to purchase power for the energy grid on behalf of residents, businesses and public entities. The intent was that a JPA would work in partnership with its local utility provider, which would deliver the power and services to consumers and maintain the infrastructure while the JPA would determine the source of the power. The legislation’s goals were to provide consumer choice and competition in business, make an aggressive transition to clean energy and boost local economies by creating jobs.
Eight years later, Marin Clean Energy (MCE) became the state’s first community choice aggregator. First, though, it had to overcome some big challenges. “No one had done this before in California,” says Jamie Tuckey, MCE’s director of public affairs, “so it meant figuring out how to start a CCA from scratch. Funding also was an issue, because without a precedent or track record, MCE was considered a risky investment, and banks were apprehensive about extending loans. However, Tuckey points out, it had to have money to sign contracts to acquire power, and the time lag between delivering power to customers and receiving payment meant it needed to cover start-up costs. The California Utilities Commission approved MCE’s Implementation Plan in 2009, and three private individuals and the county of Marin extended unsecured loans, which have since been repaid. MCE also received grants from the California Energy Commission, Marin Municipal Water District and the Bay Area Air Quality Management District. In April 2010, with guarantees from the county of Marin and the city of Fairfax—the first community to sign on—MCE borrowed $1,450,000 from River City Bank in Sacramento, and service began the following month. (The county and Fairfax were collectively paid out more than $56,000 through interest of their guarantees.)
In the beginning, MCE’s member communities were all of Marin’s municipalities except Corte Madera, Larkspur, Novato and Ross, all of which came on board later, and the unincorporated areas of the county. Shawn Marshall, executive director of the nonprofit organization Lean Energy US and a founding director of the MCE board, was a member of the Mill Valley City Council when it was contemplating membership, and she recalls years of discussions and community meetings before the council made its decision. The opportunity to reduce greenhouse gases drove interest but, “There were many things to balance and figure out,” she says, such as how the program would work, the environmental goals it would achieve, the parameters of government and competition with Pacific Gas & Electric Company, which had been the sole provider of power to Marin and Sonoma counties for decades.
Once local governments signed on, MCE became the default power supplier (PG&E continued to provide services) so consumers in member communities were automatically enrolled and had to take steps to opt out if they wanted to stick with PG&E. Not only did AB117 let California join the growing number of states allowing CCAs, it mandated automatic customer enrollment with an opt-out option.“This mandate was instrumental to the successful launch of MCE,” says Tuckey. “It helped level the playing field between us and a 100-year-old monopoly utility and redefine the local energy landscape.”
“The opt-out model isn’t unique to California. It’s the way community choice aggregation is done across the country,” says Marshall, explaining that history shows an opt-in model doesn’t work well and doesn’t establish enough sales to meet an agency’s initial goals.
Tuckey further points out that elected officials made the choice to join MCE on behalf of their constituents, and being part of a JPA allows for local control so that member communities can determine rates, power sources and investments. “They’re able to shape our programs to reflect community values,” she observes. It also means they can put returns on investments into local projects and programs rather than directing it to shareholders.
Because people tend to stay in rather than opt out, however, investor-owned PG&E faced losing a substantial portion of its power supply business, so it mounted aggressive opposition, spending more than $40 million in 2010 to back Proposition 16, which would have imposed limits on CCAs. The measure required a two-thirds supermajority to pass and lost. In 2014, the International Brotherhood of Electrical Workers tried to change the opt-out model to opt-in through Assembly Bill 2145, which eventually failed because it couldn’t get a sponsor in the senate.
The path toward clean energy and local control was set, and the goal was to have CCAs purchase as much energy from clean, renewable sources as possible while also keeping it affordable. Thus, a percentage of the rate customers pay at the default or basic level—Light Green at MCE and CleanStart at SCP—goes to purchase renewable energy, while in the highest category—Deep Green at MCE and EverGreen at SCP—the entire amount is used for renewables. The power goes onto the grid, and “It’s sort of like water,” says Tuckey. “It all goes into the same pool, and everybody sticks their straw in.” In the case of Deep Green, “We’re putting 100 percent renewable energy onto the grid on behalf of those consumers,” she explains. “The benefit is global.”
Sonoma Clean Power followed, beginning with a steering committee in 2011. A JPA formed in 2012, and SCP launched operations in 2014 with all Sonoma municipalities (except Healdsburg) included. “Healdsburg already has a municipal utility,” explains CEO Geof Syphers.
One of SCP’s initial goals was to provide 33 percent renewable energy for CleanStart at a competitive price, and it reached that milestone at the outset. “We rolled out with substantially lower-cost energy. We’ve saved customers $50 million since our launch on their bills,” Syphers says. “We use clean electricity to reduce climate emissions and save customers money. That’s why we exist.” Syphers adds that SCP experienced fewer opt-outs than expected.
With participation higher than expected at 89 percent and having accomplished its goals early, SCP started looking at new ways to reduce greenhouse gas emissions. At a meeting of the Business Operations Committee in February 2016, Syphers suggested a new concept to encourage consumers to use more clean energy: Drive EverGreen, which would encourage more drivers to use electric vehicles. In May, the Board of Directors approved the overall programs budget for the upcoming fiscal year ($3.5 million total), however specific detail by program, such as Drive EverGreen, need to be revisited before approval.
“The big change was that we were focused on clean energy, but we need to be more focused on greenhouse emissions and costs,” says Syphers, who says SCP is expanding the conversation, beginning with electric cars, because greenhouse gas emissions from transportation in Sonoma County are enormous. “Electric cars are one of the ideal solutions,” he says, because they will run on solar and geothermal power, thus reducing GHG emissions.
SCP plans to install charging stations in places where people park their cars during the day, at locations such as workplaces, park-and-ride lots, SMART stations and schools, so they’ll be convenient for drivers, including low/moderate income drivers who may not have the ability to install a home charging station. And the power will come from nearby sources—geothermal energy from Calpine, which operates The Geysers in Sonoma and Lake counties, and Sonoma-produced solar power—so cars will run on locally produced renewable energy.
Also in the works is floating solar, with photovoltaic panels on treated irrigation water storage ponds. This is an ideal (though experimental) technology; the solar panels, which are obscured from view by burms, prevent water evaporation. “The Sonoma County Water Agency asked us to purchase the energy produced from the floating solar projects. That’s the energy that will power electric cars—that, plus geothermal,” says Syphers. “We need a reason to build more solar, and daytime electric-vehicle charging is a way to do that.”
Generating excitement
While Marin Clean Energy is building its own power-production facility, Solar One in Richmond, Sonoma Clean Power has no such plans. Instead, it has 20- to 25-year contracts with suppliers, as well as three feed-in tariff (FIT) projects—one outside Cloverdale and two outside Petaluma—that pay customers for generating power from renewable sources and can supply the needs of 1,000 homes for 20 years. “We’re causing a lot of renewable energy to be built,” says Syphers.
MCE also relies on solar FITs, which are small (1 megawatt or less) and have 20-year contracts. FITs are capped at a capacity of 1 megawatt, and each generates approximately 1,800 megawatt hours per year. (A 1-megawatt landfill gas project, in contrast, would generate closer to 7,500 megawatt hours per year.) The first was at San Rafael Airport in 2012 and involved installing nearly 5,000 solar panels on the roofs of the 48 aircraft hangars. Muir Beach Synapse Electric partnered to build it, and the Marin City Community Development Project provided workers in an example of public partnerships. In May 2016, a ribbon-cutting ceremony took place for another 1 megawatt project that installed solar panels over a parking lot at the Buck Institute for Research on Aging in Novato and, as well as creating local renewable energy, it gives the Buck Institute a discount on its energy bill, provides shade for vehicles in the carport and created jobs. “We express a preference for union labor and project labor agreements in all of our long-term procurement,” says Tuckey. A third solar project currently under way at Cooley Quarry, an abandoned rock quarry in Novato, is slated to go into operation in late 2016. MCE Solar One, a 10.5-megawatt project, will be the largest publicly owned solar project in the Bay Area and is slated to begin construction in Richmond later this year.
The North Bay’s CCAs are meeting targets and proving to be a powerful force in increasing the use of clean, renewable energy. Although, Marin Clean Energy had no plans to expand, the cities of Richmond, San Pablo, El Cerrito and Benicia, as well as the county of Napa, asked to become member communities; Lafayette, Walnut Creek and the five communities within Napa County will also become part of MCE’s service area this September.
With clean power a must in today’s world, PG&E is also providing a substantial amount of clean electric power. “About 60 percent of the electricity we provide to our customers comes from carbon-free resources,” says Corporate Relations Representative Brandi Ehlers Merlo, explaining that much of it comes from hydroelectric generation. She reports that the utility is well on its way to providing 33 percent renewable energy by 2020, which California requires, and she adds that PG&E plans to increase the amount to 50 percent to meet the state’s 2030 deadline. Meanwhile, it must also maintain grid reliability and build a renewables portfolio that includes a variety of technology.
Because PG&E provides and services the system that delivers all the region’s power, it must work with the CCAs, and “We respect the energy choices that are available to our customers and are cooperating with CCA programs,” says Merlo.
“Our relationship is a productive one,” says Tuckey. “We couldn’t do what we do with out them.”
Syphers believes that PG&E’s strength is in maintaining the infrastructure and ensuring grid reliability. “It has good linemen who do good work and keep it running,” he says, predicting a future with the utility companies maintaining the lines and the CCAs providing all the power for the grid.
San Francisco and Lancaster have launched CCAs, and more are in the planning stages, so community choice aggregation is growing. “It’s working, and dozens of communities are participating in these programs to make very positive impacts on our environment,” says Tuckey.
Moreover, much of the power is generated locally. “There’s a pride factor in being able to serve our own population,” says Syphers. “It’s exciting.”
Getting Credit
The United States Department of Agriculture designed Renewable Energy Credits to stimulate the development of renewable energy across the country. Bundled REC certificates are sold with units of energy, and unbundled REC certificates are sold separately from the power that was generated when the REC was created.
Unbundled RECS are often considered greenwashing, because they don’t provide actual clean energy to the agency that buys them. The certificate, however, is proof that an agency is responsible for creating renewable energy. “They’re a legitimate marketing tool, not a scam,” says Shawn Marshall of Lean Energy US, who points out that every certificate generates 1 megawatt of clean power somewhere, even if it’s not in the area a CCA serves. MCE has a policy that limits unbundled RECs to no more than 3 percent, and SCP doesn’t use them at all. “We found they weren’t terribly valuable. We don’t need them,” says Sonoma Clean Power CEO Geof Syphers.
By the Numbers
Marin Clean Energy
Number of customers: 171,000*
Percentage of consumers in area served: 90 percent
Percentage of clean energy per category: 52 percent renewable, 63 percent carbon-free for Light Green, 100 percent renewable and carbon-free for Deep Green, 100 percent solar and carbon-free for Local Sol
Reduction in greenhouse gas emissions (2010 to 2014): 122,102 metric tons, the equivalent of removing 13,365 cars from the road for one year
Major sources of renewable energy: solar, hydroelectric, wind, bioenergy and geothermal
*Projected to increase to approximately 250,000 in September 2016 with the enrollment of five municipalities in Napa County, plus Lafayette and Walnut Creek
Sonoma Clean Power
Number of customers: 450,000
Percentage of consumers: 89 percent
Percentage of clean energy per category: 37 percent for CleanStart and 100 percent for EverGreen
Reduction in greenhouse gas emissions (2014): 48 percent
Major sources: solar, wind, geothermal, bioenergy, hydroelectric
Going Solar
When the city of Sebastopol acted to require all new construction include solar energy systems in 2013, it was a bold move. City Councilor Patrick Slayter, a director of the Sonoma Clean Power Board of Directors and an author of the photovoltaic ordinance, reports the city hasn’t seen any significant downside. “The PV ordinance has functioned exactly as we envisioned with no controversy or other problems,” he says, attributing the positive results to forethought that included alternatives for building sites that aren’t appropriate for solar installations and giving building officials the ability to make climate-protecting determinations.
Sebastopol takes pride in being a leader in sustainable energy. “The fact that Sebastopol was the second municipality in the state to require solar, and the first with a comprehensive program to capture both commercial and individual residential projects, is something that’s brought positive attention to our community and has reinforced our position as a forward-thinking community that cares about the environment,” says Slayter.
Weighing the Options
Clear Blue Commercial
Clear Blue Commercial in Petaluma, which manages properties throughout the North Bay for numerous clients, opted to stay in when it had to make a choice between Sonoma Clean Power and PG&E, and the company recommends that its clients do the same. “We’re out to prove that sustainability more than pays for itself. It’s a fundamental building block of our new economy,” says Carolyn Pistone, president and managing director. “Smart resource use is just good business.”
She explains that commercial buildings are responsible for a huge amount of greenhouse gas emissions, and when hundreds of thousands of square feet are involved, choosing a power provider involves both the environment and economics. Clear Blue’s goal is to determine what’s best for a client’s bottom line while choosing the service with the most positive social and environmental impact. Pistone finds that Sonoma Clean Power easily meets those criteria. She points out that Clear Blue’s clients know the company is going to make the choice that’s most friendly to the environment, and “If it costs more money up front, I will show how it’s going to save them money in the long run,” she says. She also keeps a close eye on what SCP is doing. “It publishes an annual report that I read pretty closely,” she says. “I’m just thrilled that there are choices like these that consumers can make. The most effective way to vote is with our dollars.”
Homeward Bound of Marin
Homeward Bound of Marin, a nonprofit that provides housing services and job training for homeless families and adults, installed a solar system at its Novato campus in 2008, and it provides up to 25 percent of its energy. It’s also is in the midst of building Oma Village, a housing complex in Novato that will include rooftop solar panels.
Clean energy is part of the organization’s mindset, but when Marin Clean Energy launched in 2010, Homeward Bound opted out. PG&E’s rates were lower and, as a nonprofit, it couldn’t justify the extra expense to switch to Marin Clean Energy. “We make every effort to maximize our dollars to provide services,” says Deputy Executive Director Paul Fordham. “We participate in the CARE discount program with PG&E, so we haven’t looked at other options, as that provides significant savings.”
