By BRETT WILKISON
THE PRESS DEMOCRAT
Sonoma County government this week could take its most significant step yet toward becoming a power provider for homes and businesses.
The Board of Supervisors on Tuesday is set to consider creation of a separate agency, known as a joint-powers authority, to administer the power program.
That step is needed, officials say, to get estimates from power companies on the rates they might provide to the county for the program. Those rates, which the county expects to be initially higher than those offered by PG&E, will ultimately factor into the most pivotal future decision on whether the program goes forward.
That decision, which faces scrutiny especially from the business community, could be months away, after the county and cities have evaluated the potential energy rates they would charge customers.
Still, county officials acknowledged that after several years of study and intermediate decisions to advance the power proposal, Tuesday’s decision represents a watershed.
“It’s the most significant step so far,” said Cordel Stillman, deputy chief engineer for the Sonoma County Water Agency, which has overseen the proposal.
Supporters see it as a key way to boost investment in clean, renewable energy sources, create jobs and cut greenhouse gas emissions.
Critics are worried about the rates it might offer customers — they would nevertheless retain the right to opt out — as well as the costs and liabilities it could pass on to taxpayers.
To date, the cost of studies, staff time and consulting contracts totals $520,000. A new pair of consulting contracts valued at $150,000 are also up for a board decision Tuesday.
The county has acknowledged that its approach to the next step might seem backward to some, or arouse critics’ suspicions that the proposal was being advanced beyond the point of no return.
Stillman, however, said there were good reasons to establish an administrative home for the program before any decision to launch it.
The main reason is power suppliers want some evidence the county is serious before they respond to competitive bids on the rates they might offer.
“We feel this step sends that message,” Stillman said.
Another reason is that energy prices are at historic lows because of cheap natural gas. Many suppliers urged swift action to take advantage of those prices, Stillman said.
The county also needs to show some progress on the proposal in order to compete for startup funding from the state. The program’s estimated startup costs are $2 million to $6 million — money that is likely to come from bond financing.
As it stands, however, the county would be the only local government immediately involved in the joint-powers agency. That’s because the eight local cities being recruited for the program have been unwilling to sign up without knowing what the eventual power rates might be.
That question might be answered with the return of prospective rates from would-be suppliers, Stillman said. The county has identified at least five, including Consolidated Edison, Constellation Energy, Shell North America, Direct Energy and NRG Energy.
The county has not changed its rate estimates from a 2011 study, which found the typical customer could pay $4 to $10 more a month over a 20-year period for county-supplied power. After 20 years, the rates are projected to be nearly equal, with PG&E rates exceeding those for public power thereafter.
The additional costs could be a problem in any final sales pitch to customers. A county-paid survey this year found a solid majority of residential and commercial customers were either unwilling to pay much more, or any more, for renewable power from a local provider.
Supporters, including trade unions and environmental groups, have touted other results from the survey, showing 79 percent of those polled supported a locally controlled electricity portfolio, with more than 80 percent supporting greenhouse gas cuts and having a choice in how their electricity is generated.
“Competition is good,” Stillman said, echoing those points. “We hope to give customers a chance to shop their power needs.”
But the county must also convince cities that they will not incur any liabilities by attaching themselves to the program.
Water Agency officials have insisted the joint-powers authority provides that assurance, in the form of a financial firewall that shields county and city general funds from any debt obligations should the program shut down. That liability would fall to power suppliers under contract, Stillman said
Financial watchdogs are not so convinced.
“The marketplace is beating the drum to have some sort of guarantee from the county. That’s what I’ve heard,” said Bob Williamson, a retired Santa Rosa finance executive who has followed the proposal closely.
“I would want to make sure that the joint powers authority is very clear that ultimately the county would not be on the hook,” he said.
The supervisors’ hearing on the proposal is set for 10:30 a.m. Tuesday.
You can reach Staff Writer Brett Wilkison at 521-5295 or firstname.lastname@example.org.