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Should Sonoma County create a local power agency?

The City of Healdsburg has been its own electrical energy supplier for 100 years, a model that the rest of Sonoma County is considering. Here, lineman Jorge Hernandez walks through the Healdsburg Electric Department Badger Substation on Thursday afternoon. (CHRISTOPHER CHUNG/PD)

By JEREMY HAY
THE PRESS DEMOCRAT

Voter rejection Tuesday of the PG&E-sponsored Prop. 16 has lent new fuel to a Sonoma County effort to create an electrical power authority that would emphasize renewable energy.

“The overwhelming defeat of Prop. 16 shows that people want to leave the door open to community-owned power,” Sonoma County Supervisor Shirlee Zane said on Thursday.

The ballot measure called for two-thirds majority support from voters before local governments could form or expand utility districts. Critics said it would have effectively blocked the creation of such local agencies.

Now advocates for both public power and renewable energy sources say the path is clear to asserting greater control over the sources of energy and the prices charged for it.

Zane and others see the mechanism to do this in what is called Community Choice Aggregation, or CCA, which allows local jurisdictions such as counties and cities to form public power consortiums that have control over how money is spent on energy resources and what resources are used to generate electricity.

The state legislature in 2002 gave local governments the authority to procure power for customers within their jurisdiction under CCA programs.

“Now that it’s (Proposition 16) been defeated, this has certainly galvanized the strong supporters of this in Sonoma County,” said Jake Mackenzie, chairman of the Sonoma County Regional Climate Protection Authority.

The concept is embraced by advocates of renewable energy supplies.

“The attraction for me is that there’s a possibility of creating a local, 100 percent renewable utility and doing that at competitive prices with PG&E’s current rates,” said Geof Syphers, chief of sustainability at Codding Enterprises, a company that focuses on environmentally sensitive development.

Alternately, he said, a CCA could create the competitive incentives to prod PG&E into providing more renewable energy.

“I’m open to the community or PG&E doing this but the important thing is having that option,” Syphers said. “If they don’t do it, we can do it as as a community.”

There are models of CCAs nearby. Marin County in May launched its own public energy district providing power to about 6,000 customers, making it the first CCA in California. And Healdsburg has for about a century run its own electricity utility district for residents and now is part of the larger Northern California Power Agency.

“Healdsburg has cheaper rates and more renewable energy than PG&E,” said Renata Brillinger, project manager at the Climate Protection Campaign, a coalition of Sonoma County groups that lobbies for policies that lower greenhouse gas emissions that contribute toward climate change.

Local advocates of a CCA say it would enable the county to harness its sources of renewable energy — sun, wind and geothermal — while increasing the amount produced for local use while setting its own rates. That would also make it easier to meet ambitious local targets for reducing greenhouse gas emissions, they say.

Under a CCA arrangement, PG&E retains power transmission lines and the responsibility for maintaining them and for billing customers.

The CCA, made up of local governments, would set rates and decide what percentage of renewable energy it provides, and how its revenues are spent. It would also determine where to buy the energy.

“The key advantage of building renewables at a community level is we would be able to reduce greenhouse gases at the local level, we could create energies and we could stimulate the local economy,” said Brillinger.

She said that governments could issue bonds against the revenue stream from ratepayers — money that currently goes to PG&E — and use the bond revenue to “build renewable energy assets or resources, that’s the goal.”

“We’re talking about a massive public works project,” she said, “billions of dollars potentially of local economic stimulus” through construction of facilities to tap renewable energy sources.

A three-year study — now in its second year — involving the Climate Protection Campaign, the Sonoma County Water Agency and Los Alamos National Laboratory is intended to identify the extent and viability of renewable energy sources in Sonoma County.

Forming a CCA would have been far more difficult had voters approved Proposition 16, with its two-thirds majority rule. Advocates of community power have expressed delight at the voters’ decision.

“It’s a tool we need in our tool box,” said Dick Dowd, vice president of Santa Rosa-based Pinnacle Homes, which specializes in building energy efficient homes. “I’m really proud of the electorate.”

The 2002 law that allows for community choice aggregation says that investor-owned utilities such as PG&E must cooperate “with the investigation and formation of any CCA,” Brillinger said.

But such cooperation may not be easily achieved. PG&E fiercely opposed efforts in Marin County to establish the Marin Energy Authority, offering cities money if the declined to participate and at one point threatening to cut off power deliveries to the authority.

PG&E made “a concerted effort to squash this, to kill it,” said Leslie Alden, an aide to Supervisor McGlashan, chairman of the authority’s Board of Directors. She said the authority will start providing energy to about 80,000 customers next year.

On Thursday a PG&E spokseman said the utility supported the “concept” of CCAs but has not seen a model that works. “We have found that the programs proposed to date are not economically viable and would create serious financial risks to our customers, to local governments and to local taxpayers,” said Andrew Souvall.

Mackenzie said there are lessons to be learned from Marin County’s eight-year effort. “We have an opportunity to study what happened in Marin and do it in the best possible way we could in Sonoma County,” he said.

Brillinger said, “I think that what it’s going to take on a CCA is a few key leaders really championing this vision, in local government, both staff and elected officials, and from business leadership, and of course from the environmental community.”





21 Responses to “Should Sonoma County create a local power agency?”

  1. The Big Dog says:

    And as to those who continue to pontificate about the coming “climate meltdown”…. you might be interested to know that your ‘Profit’ Al Gore is getting fabulously wealthy off your hysteria. And, to quote our president, energy costs are going to “necessarily skyrocket” under his (and Gore’s) dream of cap and trade.

    There is no man made “climate meltdown”, but if you want to believe in it to make yourselves feel better and destroy economies, jobs and lives in pursuit of “green technology” then go right ahead.

    You’ll just pardon me if I don’t.

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  2. The Big Dog says:

    Should SoCo create it’s own electrical utility? Good question, but easily answered….

    No, unless someone waves a magic wand and makes government do things less expensively than the private sector.

    Forcing a large utility like P G& E to “compete” with government is tantamount to being oxymoronic. Government won’t be able to do it cheaper, and would (presumably) transmit it’s power over P G & E infrastructure already in place just as phone companies have been doing for ages using AT&T historic infrastructure. To do that, government would have to pay… gasp… P G & E.

    As noted in earlier responses, LA DWP is a disaster that continues to unfold. Healdsburg’s lower rates are, I believe, largely conditional and somewhat artificial.

    In short, and with almost no exception, government can not provide a better service than the private sector at lower cost to consumers.

    Bad idea… but more of the socialist pie in the sky that has become the life blood of SoCo.

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  3. Steve says:

    I don’t know Lionel Gambill, having SMART plugged into Marin Energy Authority sounds like it might be just another one of your clever subsidies for this train to nowhere.

    But more to the point, Sonoma County can’t even keep their dump open, Santa Rosa, at great expense, tertiary treats their waste water, only to pump it over hill and dale to be injected into a 2,000 degree steam field.

    Do you really think the guys running the Sonoma County Water Agency are up to the task running an electric company?

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  4. Voice of Reason says:

    L Kramer brings up a valid point regarding rural electricity customers. Since it’s cheaper to deliver power in cities, allowing them to set up CCAs would leave PG&E the job of serving the widely dispersed county residents that will probably have to pay higher rates. Besides this, it costs much more to generate power with solar panels than with natural gas generation. Instead of concentrating on solar, the use of natural gas for transportation instead of using gasoline seems like the best way to reduce pollution and use of imported oil. Besides having vast reserves in our country, we can capture methane from landfills, sewage treatment plants, and a variety of other sources. Solar panels are being built in China instead of in the U.S. now. Large amounts of fossil fuels are used in the production and delivery of solar panels.

    If we are to develop a new green economy, we must avoid doing things in which there are winners and losers. Those pushing for this represent special interests that are mostly interested in short term financial gain. They just want to rush forward without looking at the ultimate results which will be that energy costs more and our country is even less competitive on the world market. Any changes made now need to be well thought out and not rammed through by a group of special interests who may not have our best interests at heart.

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  5. btinc says:

    Actually, the question here is why are we paying PG&E enough money to be so profitable that they can pay nearly $50 million for this campaign, and still profit enough to move those profits to their parent company for distribution to shareholders, many of whom live outside of the state?

    Wouldn’t those profits be better spent in providing better service?

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  6. Fred says:

    Despite the overreaching of PG&E with their proposed 2/3 vote requirement, we should insist on letting the voters decide whether Sonoma County needs a CCA. There are persuasive arguments on both sides, but this is too important a decision to let it play out before the Board of Supervisors as it did in Marin.

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  7. Beef King says:

    From Noah…..
    “Not only should we create our own power agency, but we should tear out half the grapes and plant a variety of foods.”
    Visionary? Yes. Doable? Not unilaterally. These are the kinds of ideas that make some people uncomfortable, but in fact are where good government begins.
    Perhaps the county could look into contracting it’s power needs to a conglomerate of private energy producers, creating efficiency in cost and delivery along with greater reliability.
    As for local crops, I was raised on a farm on the prairie, and I have seen first-hand the devastation that occurs when an area is too dependent on one crop. The effects are devastating and long lasting.
    Our supervisors could work with the chamber of commerce, our legislature, and of course local producers to encourage the re-development of some of the crops that used to be plentiful in Sonoma county, but were run out by the grape. We used to be known for the best hops crops, and certainly we could be known as a great place to visit for beer as well as wine.
    Noah, keep those ideas coming!

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  8. MS says:

    I’m very optimistic and excited that CCA’s will be the economic model needed to finally change the much-needed demand for the cleaner sources of energy. Let’s do it, Sonoma County!

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  9. Lionel Gambill says:

    Palo Alto has been its own electric utility since 1896 and the sky hasn’t fallen. Some months the PG&E rate is higher; some months Palo Alto’s is. CCAs protect our right to choose, which the monopolists will do their damndest to destroy.

    As for SMART, I have urged them to consider zero-emission rail technology, which already has a working prototype, NS999, a 1350-hp battery-powered locomotive that runs 24 hours on one charge and could plug into Marin Energy Authority (or someday Sonoma Energy Authority). The zero-emission locomotive does away with engines, engine noise, fuel tanks, fuel, exhaust, and all the systems and components diesel involves. Thus far they’re not interested.

    Good to see Daniel Solnit here, making sense as usual.

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  10. Walker says:

    The question here should be, what could government provide better? How would the County help the unincorporated parts of the county?
    There are a thousand questions, and it’s not immediately pressing, so let’s set it aside until after the speedy train.

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  11. Noah says:

    Yes, Sonoma County should create a local power agency. The plain fact that PG&E would falsely promote “the right to vote act” is proof that they are not interested in public service. They, like all other corporations, are interested only in profits. It’s in their charters!

    Certain things should be held by and for the people, and energy is one of them. So is taking care of the environment. Can you say BP? They proved that barenaked capitalism is a failure at public policy.

    Creation of local (green) energy generation as well as localized food sources is desperately needed. L.Cramer makes a good point about unintended fiscal consequences-we need to look carefully at non-served areas as well as the ones we will initially include. And Beef King, we are not Los Angeles. Yet.

    I am hoping our new BOS will have a wider point of view than our previously develop-at-all-costs board had. We need good development; local, small, green. No more empty promises about affordable housing. We need housing for the people who are already here, not just the ones we can draw here who have bigger bank accounts.

    Not only should we create our own power agency, but we should tear out half the grapes and plant a variety of foods.

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  12. Jim says:

    @@Steele

    A job is not a job. How do you propose Santa Rosa is going to pay for a public utility? It would be with a long term bond which you will be paying taxes on for 20 years or more.

    Taxes aside, government jobs do not create real wealth and prosperity. Is the utility service going to produce energy and sell it to other countries? All they can do is re-allocate money from produtive parts of the economy.

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  13. @Steele says:

    I couldn’t care less about private/public job tug of war. A job’s a job. And creating the infrastructure would require hard hat jobs, creating the management would require blue collar jobs. If those are filled by people moving over, so be it. They just vacated a position that is then open for another individual, more people employed. Hence, job creation.

    As far as SMART- have you been to any of the meetings?

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  14. Steele says:

    It would create NO net additional private sector local jobs. Some employees may change shirts but no additional jobs. Its just a shell game, the electricity all comes from the same place.

    As for SMART the leadership and management are inept.

    PS. drop the @ routine.

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  15. @Steele says:

    Uh…hi…that would create jobs. LOCAL jobs. And honestly, most of you don’t pay enough attention to SMART to be able to make any judgments on it. Would you rather they start building before they finish designing? No.

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  16. Steele says:

    Yeah…………..brought to you by the same folks that who are managing SMART so poorly. Do you really think the county could turn a buck on any business deal? It is ran by well intended professional small time politicians, go figure.

    It is about time to start focusing on maintaining and creating jobs in this county. How about spending time on that Shirley, Efren,?

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  17. L Cramer says:

    Beef King, we mostly agree, but you are being unfair to LA W&P. They are caught in a squeeze to reduce their dependence on coal to generate electricity (about 45%), yet continue the generous “dividends” LA has come expect.

    “Green” energy isn’t cheap, despite what you may read in the P-D. LA’s cheap electricity has more to do with its use of coal than that it’s publicly owned.

    Can Sonoma County administer a power company? Look around. How would anyone rate their their supervision of a landfill?

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  18. Beef King says:

    The real question is- Can Sonoma county government effectively administer such a project?
    Look at what is happening to the DWP in Los Angeles county right now- the mayor is trying to raid the finances of the power company to support his welfare programs, and is demanding a rate increase to taxpayers to make up what he steals from the DWP. Is this our future?
    Our county already struggles with the simplest of services, and for this reason I say we should be very careful before we charge down the same road as Marin or Los Angeles counties.

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  19. Daniel Solnit says:

    CCA is our best short-term strategy for solving climate change, and the defeat of prop 16 is an important victory for the planet. We need to reduce carbon emissions in the US by 80-90% within 20 years to avoid a climate meltdown. Transitioning to clean energy in transit and housing will take many years and millions of dollars in infrastructure, but clean electricity can be generated now, at no additional cost to consumers, through CCA. This buys us time to solve the more difficult, long-term challenges of creating a post-carbon economy.
    The voters did more than stop a deceptive power-grap by PG&E – they kept open our best option for solving the global climate crisis.

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  20. L Cramer says:

    Yes, Healdsburg enjoys lower electric rates than PG&E offers, so too would Santa Rosa if it went the CCA route. Both are cities that cost less to serve than the vast rural areas of California PG&E is obligated to provide electricity . . . for the same rates as cities.

    But, let the low cost service areas opt out of the regulated service pool PG&E serves and then what? Rates go sky high in rural California? Or, maybe we impose a telephone-style “universal service” tax on city consumers. Or maybe we ought to at least talk about it before the public power advocates get carried away and cause real harm.

    PG&E’s Prop 16 campaign was counterproductive, as well as dishonest. Still, letting the richer, more desirable service areas opt out will have some troublesome consequences.

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  21. Steve says:

    This should be a very high priority, right behind filling all the potholes and getting the little train running.

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