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Power brokers: Sonoma County plan imminent

Rate comparison chart: County power vs. PG&E

Rate comparison chart: County power vs. PG&E

By BRETT WILKISON
THE PRESS DEMOCRAT

Five months from now, Sonoma County intends to launch its program to become the power supplier to 220,000 local homes and businesses, displacing Pacific Gas and Electric Co. from its position of energy dominance.

At stake in the short term is up to $170 million in annual revenue.

County supervisors this week begin a series of rapid decisions to implement a program that assumes customers — who can opt out — prefer a program designed to rely more heavily on renewable energy and shrink the county’s carbon footprint.

 Operator Tech Mike Taylor stands next to a spare steam turbine used to produce power at the Socrates geothermal plant at the Calpine facility in the Geysers. Calpine is one of several companies bidding to become part of a partnership with Sonoma County's new power agency. (JOHN BURGESS / The Press Democrat)


Operator Tech Mike Taylor stands next to a spare steam turbine used to produce power at the Socrates geothermal plant at the Calpine facility in the Geysers. Calpine is one of several companies bidding to become part of a partnership with Sonoma County’s new power agency. (JOHN BURGESS / The Press Democrat)

Questions remain about the proportion of actual renewable energy supplied — and the amount generated locally — versus its purchase through energy credits. But the cost of the program to customers will be the focus for decision makers.

“It’s rates, rates, rates,” said David Rabbitt, the county Board of Supervisors chairman. “For me, it’s always the amount of the check you write to PG&E, that’s what I want to know.”

As part of their campaign, county officials last week unveiled potential customer rates they said would make their electricity prices competitive with, if not cheaper than, PG&E rates.

Monthly bills in the first year could range from $1.73 less to $1.02 more — or 1.8 percent less to 1.1 percent more — than a PG&E bill for a 2,000-square-foot single-family home, according to county projections. For a mid-sized commercial customer such as a restaurant, large convenience or retail store, the monthly bill could be $80 less to $13 more — 3.1 percent less to 0.5 percent more.

The rate comparison drew an immediate challenge from PG&E officials, who called the county’s calculation of their rates inaccurate. Program supporters voiced hope the data would lend further momentum to the effort.

On its face, the public power immediately would be 65 percent greener than PG&E’s. It would be drawn from a portfolio with a third of its sources in renewable power — wind, solar, geothermal, biomass and small hydroelectric projects — versus the roughly 20 percent renewable share that would come next year from PG&E.

But critics question that comparison.

About half of the county’s renewable supply would come from energy credits that some critics say amount to greenwashing, allowing a user to claim renewable sources while actually getting standard-sourced power from the grid.

The public power agency has been on the drawing board of advocates for years and under consideration by the county since March 2011. The rate disclosure sets the stage for decisions that would culminate with the award of a power-supply contract by September and delivery to customers starting Jan. 1.

County officials said they base their projected rates on the most promising five or six of 11 bids submitted by entities seeking to sell electricity to the so-called Sonoma Clean Power program.

Most bidders are large national and multinational energy suppliers, including the operator of The Geysers geothermal field along the Sonoma-Lake county border. The county has refused to publicly disclose the contents of the bids, contending it could undermine their negotiation with an eventual winning bidder.

The Board of Supervisors on Tuesday is set to approve work that would lead to selection of that bidder, and seek to enlist cities in the program. Municipalities are being asked to decide by June 30 whether they’ll join for next year and allow the program to serve their residents. Healdsburg is not part of the mix, because it has its own municipal utility.

The county proposes a three-year rollout to capture 80 percent of PG&E’s customers. Customers would be automatically enrolled in the new power agency, but could opt out. Billing, metering and transmission would remain with PG&E.

County representatives said creation of the power agency is not a certainty, but the proposal appears to have solid majority support on the Board of Supervisors, now the lone governing entity. And Supervisor Efren Carrillo, a strong supporter, echoed advocates’ growing confidence in public power.

“We’re not in this to fail,” Carrillo said. “I want to find a way to make it work. If it’s rates, if it’s education, if it’s the advocacy. There is a way to make it work.”

Renewable power

The plan is based on the proposition that the county could immediately supply a higher share of renewable power, quickly open up the electrical grid to more excess energy from community sources such as rooftop solar panels and plow money from customer bills into local projects that generate clean electricity and provide jobs.

The county projects an annual net income of about $10 million by 2017. Instead of that money going to PG&E shareholder dividends, it could support local generation, help stabilize customer rates and enable wider energy efficiency efforts, advocates say.

Supporters, including environmental, business and labor interests, see the program as transformational.

“There are so many players in this county that want to localize our energy resources,” said Ann Hancock, executive director of the Santa Rosa-based Climate Protection Campaign. She cited vendors, contractors, building and property owners. “It’s a game-changing platform,” she said.

But critics have noted that the prospects for local large-scale power generation are still uncharted and potentially costly, with risks that could expose ratepayers and taxpayers to a long-term financial burden.

The county has struggled to maintain core services, including roads and parks, and has outsourced a number of services to the private sector in recent years. So why, fiscal watchdogs ask, should it go toe-to-toe with a utility that is in its second century in the energy supply business and has more than $15 billion in annual revenue?

“Why should we have confidence the county management and supervisors can pull this off and compete with PG&E when they can’t solve our pension and roads problems?” the advocacy group New Sonoma asked in a recent questionnaire to the Board of Supervisors. One of its founders is Ken Churchill, a Santa Rosa winemaker and former solar energy firm owner who has been a vocal critic of the county on pension and power issues.

Allowed by 2002 law

The debate reflects the high stakes involved in the public power proposal. It stems from a 2002 state law that grants local governments the ability to buy or develop power for sale to homes and businesses. The programs are most prevalent in Illinois, Ohio and Massachusetts.

So far the only active program in California is in Marin County. San Francisco’s controversial effort remains on the launch pad, while at least four other local governments consider their own programs.

PG&E has battled the programs in the past, sinking $46 million into a failed 2010 ballot measure that would have limited them. Top utility officials have since pledged their cooperation, though recent steps suggest PG&E could launch a more active marketing role in areas where public power programs are surfacing.

In Marin County, PG&E has lost three-quarters of the power-generation business to the upstart county agency.

“We do support local governments that are trying to develop the community choice aggregation option,” said PG&E spokeswoman Brittany McKannay. “We also want to make sure that our customers have the information they need to decide on their energy options.”

For the county, the financial investment already is significant. By fall, the county Water Agency, which is spearheading the proposal, expects to have spent roughly $1.2 million on studies, surveys, staff time and consultants. That includes a $250,000 contract for marketing and public outreach that the Board of Supervisors is set to approve Tuesday.

The completed studies have three main findings:

A typical customer under a county program could pay on average $4 to $10 more per month over a 20-year period for power provided by the county versus power supplied by PG&E.

Three-quarters or more of the 4,344 county residents and 990 businesses polled supported a locally controlled electricity portfolio, efforts to cut greenhouse-gas emissions and having a choice in how their electricity is generated.

Nearly 60 percent of residents and two-thirds of businesses surveyed said they were either unwilling to pay much more, or anything additional, for renewable power supplied by a local provider.

The results led to further outreach to businesses, especially. It also spurred public pledges by county supervisors to make any final decision with rates foremost in mind. Supervisor Mike McGuire last year called them the “elephant in the room.”

Projections await deal

County representatives have conceded that they will not have longer-range projections beyond the first-year rate estimates until a contract is reached.

“As this moves forward, there probably will be some projections as to what future rates would be, but not at this time,” said John Dalessi, a consultant for both the Sonoma and Marin power programs.

After three years of operation, the Marin County agency’s rates, on average, are slightly higher than PG&E’s for residential customers and slightly lower for commercial users.

Since 2005, the annual average increase in power generation rates for PG&E has been 3.5 percent, utility filings show. County consultants said they were confident a public program could compete with that track record.

Fiscal watchdogs remain concerned about liabilities the county or cities could face as partners in the joint-powers agency that would oversee the program.

The agency, the Sonoma Clean Power Authority, would borrow up to $22 million over the three-year rollout: a $2.5 million line of credit for startup costs and $19.5 million in bridge financing for power purchases. County officials said they are negotiating with First Community Bank.

But what if the bank or the eventual power supplier requires taxpayers to back up the borrowing or the contract through general fund money, fiscal watchdogs have asked.

“That’s our concern, and we don’t know that answer yet,” said Dan Drummond, a Santa Rosa attorney and executive director of the Sonoma County Taxpayers’ Association.

County officials said only the $2.5 million line of credit would need a guarantee, and for that they most likely would look to the $1.76 billion county treasury, shared by most public entities in the county, including schools and service districts.

Revenue from customer bills would serve as collateral for the power-purchase bridge financing.

And the risk of the program failing would be borne by the power supplier, said Cordel Stillman, deputy chief engineer for the county Water Agency and the lead staff member on the proposal. No guarantees would be made outside of the joint-powers agency, which acts as a financial firewall, Stillman said.

“We’re confident we’re insulated from that risk,” he said. “We’re getting the rates, which look really good, with them getting the understanding that they’re taking the risk.”

100% renewable option

The county plans to ramp up the renewable share of its energy portfolio from 33 percent to 50 percent in 2017, if the rate structure allows — renewable energy is generally more expensive than conventional sources. It also would offer a voluntary 100 percent renewable portfolio at a higher monthly premium; a similar proposal by PG&E is pending before the California Public Utilities Commission.

For the first several years under the county program, about half of the renewable energy would be “delivered” or “bundled” energy — electricity purchased from a renewable source and delivered to the county’s customers. Until a final contract is signed, county officials said they won’t know where that power will come from.

The purchase of offsets, called renewable energy credits or certificates, would allow the county to claim green status for the other half of its renewable power while actually getting it off the grid from standard sources, including fossil-fuel-based suppliers.

The credits are purchased by companies and governments, through brokers, from energy producers that have unsold green power. Some critics have called the credits “empty bragging rights” that don’t spur investment in renewable energy like contracts for actual delivered power.

Advocates for local energy generation have not objected to the credits, which would be used in about the same proportion as the Marin County program.

Hancock, the Climate Protection Campaign director, called the credits a “transitional tool.” But her group and others have voiced concerns that a short-term focus on cheaper out-of-county sources leaves local generation projects in the lurch.

“I understand that the first thing they need to do is get a power supply and make that competitive,” said Marlene Soiland, a representative of Sonoma County Alliance, the business coalition, and president of Soiland Management Co., the Santa Rosa firm that oversees various development and real estate businesses in the Soiland family.

“I’d like to see the local supply be a higher priority. That’s what I’ve heard from the business community,” Soiland said.

Aside from a 20-megawatt, $100 million solar-panel system planned for 50 acres at Charles M. Schulz-Sonoma County Airport, county officials were not able to specify last week what other projects they had on the drawing board. They cited the opportunity to purchase power from household and commercial projects, known as a “distributed” or community-scale energy grid.

The higher potential costs for customers of that power and the risk of taking on too much debt in an overly ambitious startup remain a crucial financial and political concern, county officials conceded.

“We can’t just go up willy-nilly from 33 percent,” Stillman said.

But with an estimated 355 megawatts needed at full rollout, and endorsements from some business, environmental and labor interests hanging in the balance, advocates said they will continue to push for a quicker transition.

“How are we planning, in a methodical way, to increase the use of renewable local resources?” said Woody Hastings, renewable energy implementation manager for the Climate Protection Campaign. “We’ve heard some of the elected officials asking for the same thing. We don’t have the details on that.”

11 companies submit bids for Sonoma County power project

Sonoma County has received bids from 11 firms vying to be the electricity supplier for the proposed county power agency. It has refused to publicly reveal the bids, but said it has identified a “core group” of five or six.

Calpine Corp., the Houston-based operator of The Geysers geothermal field.

Shell Energy North America, which has the contract for the Marin County power agency.

Iberdrola, a multi-national electric utility company based in Spain, with operations throughout New England and New York state.

Noble Americas Energy Solutions, a large U.S. energy retailer based in San Diego.

NRG Energy, based in Houston and Princeton, N.J., one of the country’s largest power producers and retailers.

Greensparc Energy Advisors, a San Ramon- and Sacramento-based power development and management firm.

Direct Energy, an energy retailer based in Canada and the U.S., a subsidiary of the British multinational corporation Centrica.

Promet Energy Partners, a natural gas and electricity supplier based in the Midwest.

ConEdison Solutions, based in Valhalla, N.Y., a subsidiary of Consolidated Edison.

Constellation, a power and natural gas supplier and subsidiary of Exelon, the Chicago energy producer, trader and distributor.

Plumas Rural Services, a nonprofit organization in northeastern California.

Source: County of Sonoma

Sonoma County, PG&E at odds over rate calculations

The launch of Sonoma County’s public power plan has long hinged on how its rates would compete with PG&E.

The county now says it has an idea of what an average residential and commercial customer would pay per month under its program. But its analysis of how those costs would stack up against PG&E already has triggered a dispute.

PG&E officials say the county gave an inaccurate average calculation of the utility’s 2013 rates, resulting in a higher PG&E bill than what they said a typical customer might pay.

“We know what our rates are,” said Jonathan Marshall, a PG&E spokesman. “Unfortunately, they don’t understand our rate structure, apparently.”

County officials and consultants with decades in the energy business defended their figures, which are based on annual rate estimates submitted by PG&E to the California Public Utilities Commission.

“We’re comparing apples to apples according to their submissions to the CPUC,” said Cordel Stillman, deputy chief engineer with the county’s Water Agency, which is spearheading the proposal.

The difference boils down to alternate ways of computing an average customer’s bill, composed mainly of electricity generation charges and delivery charges.

The county used a base rate on the delivery side that is an average for all the different price tiers that apply based on the amount of power used.

PG&E says its rate is more accurate because it factors in energy use at each of the different tiers.

While the county says an average residential PG&E bill for 2013 is $95.17, PG&E says it is $91.60.

The difference skews the rate comparison, PG&E officials said.

However, the point may be moot because PG&E still would be responsible for electricity delivery under a county program. If those costs are $3.50 less under PG&E they would also be so under the county program, county officials noted.

“In terms of the competitive comparison, it’s irrelevant,” said John Dalessi, an energy consultant to the Sonoma and Marin county power programs and a former manager at Southern California Edison. “It (the delivery charge) is going to be the same whether Sonoma Clean Power is serving the customer or PG&E is doing it. Hopefully people understand that.”

KEY DECISIONS ON POWER

Tuesday: Board of Supervisors considers potential rates, financing plan, work to enlist cities, $250,000 marketing contract, payback plan for $1.2 million in Water Agency expenses
May-June: County staff narrows field of potential power suppliers to two to four companies
June 30: Deadline for cities to decide on participation for first year
July: Receive final offers from top power supply candidates
August: Negotiations with top candidate
September: Present final contract to Sonoma Clean Power Authority (currently the Board of Supervisors) for approval; submit it to state Public Utilities Commission
November: Begin opt-out notices to customers
January: Start of three-year rollout to homes and businesses
Source: County of Sonoma

You can reach Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com.





19 Responses to “Power brokers: Sonoma County plan imminent”

  1. Sonoma Dirty Power says:

    Sonoma Clean Power has little to do with serving the people and much to do with serving individual BOS political ambitions. Not a coincidence that three of those voting in favor are trying to make names for themselves as they vie for higher offices.

    Thumb up 10 Thumb down 0

  2. R.B. Fish says:

    It shows that SoCo politicans are corrupt and in the money grab under the useless “green” phenomena and that most of people believe them. Leave PGE alone.

    This county is going to be so expensive and so crowded taxes will go through the roof! Quality of life not to mention the public education system is going down.

    Thumb up 19 Thumb down 1

  3. Elephant says:

    Fiscal Conservative – You refer to the Board Of Supervisors as a “train wreck of mostly progressive idiots.” And you also state that you don’t read the PD much. I just wonder where you get your information. You (and most of our citizens) really need to learn the truth about our elected politicians

    Susan Gorin is the only member of the BoS that I would call Progressive. To the best of my knowledge, she is the first person in maybe 20 years to be elected there WITHOUT a Press Democrat endorsement. (That is a hint as to the real problem in all levels of Sonoma County politics). Ms. Gorin is the first progressive on the BoS since Mike Reilly. The rest of the current board consists of two fence sitters and two who call themselves Democrats yet are very conservative Republicans in their politics.

    Unlike perhaps others there, Ms. Gorin is not an idiot. But you are right that the Board of Supervisors on the whole is a train wreck and has been for decades and cannot be trusted to do something this important in a manner that benefits the people. Their track record (if you can actually find it because you won’t read it here) proves this. And the sad truth is that the bottom line of blame goes to the people of Sonoma County for electing these people to office.

    Thumb up 17 Thumb down 5

  4. MOCKINGBIRD says:

    Andy-you didn’t specify which “wingnuts” you are tired of?

    I hear you, but maybe we don’t agree. I’m pretty annoyed by the tin hat brigade myself. Like I’m spitting in the wind.

    Thumb up 10 Thumb down 5

  5. Kathy Robler says:

    Another government power grab. If you like the Obamba sequester, the DMV, the post office, you will love county government electric power.

    I cannot think of any agency more suited to own, run and maintain our electric power grid than that model of efficiency and effectiveness, the Sonoma County Board of Supervisors. They have clearly demonstrated their indepth knowledge of how to run things and keep costs low.

    This is just another big step toward the new soviet style Sonoma socialist system we all seem to love and desire.

    Thumb up 28 Thumb down 5

  6. Fiscal Conservative says:

    I don’t read the PD much, but I do enjoy Brett’s writing.

    The answer to why the County is doing this is somewhat obvious to me. Look no further than the restrictions of UN 21 and the States AB 32. The County is looking to regulate and profit on carbon Al Gore style.

    My prediction, like others have posted, will be total and complete FUBAR.

    It’s time for some honest CITIZENS as members of the County Board Of Supervisors, not this train wreck of mostly progressive idiots.

    Thumb up 22 Thumb down 6

  7. Andy says:

    I just listed all of my Sonoma County real estate and am leaving, I can’t take the wing nuts in this county any longer. I’ve lived here for 65 years and it is getting wackier and wackier all the time. We are looking at options for relocation but it will be out of California. I can’t wait to move back to America.

    Thumb up 28 Thumb down 4

  8. The Hammer says:

    We don’t need more government control of our lives. They have F__-ed our lives up enough.

    And Steveguy is correct about the water agency. A group of criminals in my mind. Always finding an excuse for raise the rates and spend our monies. Time for us rate payers to wake up!

    Thumb up 30 Thumb down 4

  9. John Pendergast says:

    The problem with this plan is not the county providing power, it’s the county’s politicians siphoning money from this honey pot. Ideally, the money collected from power rates would go back to costs, infrastructure, employee salaries, fuel, etc. In reality the county will get it’s cut first and leave infrastructure to suffer.

    Look no further than LA. The LADWP eventually replaces transformers when they blow up, the money that should have gone to new transformers years prior goes to the pet projects of the city counsel. Do you want your electric bill going to fund a Cesar Chavez mural somewhere?

    Thumb up 26 Thumb down 2

  10. R.B. Fish says:

    This is part of the Bay Area Plan. Read about “Deep ecology” and you will the pieces fall together.

    Thumb up 19 Thumb down 3

  11. Phil Maher says:

    Maybe sending opt-out notices would be the wiser first step in determining whether this is something the broader swath of ratepayers are even interested in.

    The SCWA is corrupt and inept. So is the BOS. I like electricity. I want it available, delivered and billed by a company that has it’s act together and is actually in the power business and regulated by the CPUC. We’ve watched the SCWA and BOS both fail miserably in their care for our infrastructure and raise rates and taxes to make up for that failure. Why would this be any different? Opt me out.

    Thumb up 26 Thumb down 3

  12. If the words “government-controlled,” “higher share of renewable power,” “higher share of renewable power,” and “cheaper than PG&E” don’t IMMEDIATELY set off alarm-bells in your mind, I’ve got a bridge to sell you.

    Thumb up 24 Thumb down 2

  13. Dan Drummond Sr says:

    Future rate communications need to tell me the cost per kilowatt hour ($/kwh) on all rate tiers, because that’s what I need for comparison. An average $/kwh will not do it for me, because I signed up for the PG&E SmartRate program two years ago and I need the details to compare.

    The PG&E SmartRate program can designate up to 15 hot summer afternoons per year as SmartRate days. On those days, you are encouraged by high rates to reduce usage between 2 – 7 pm. The rest of the time, June – September, you get lower rates.

    With the rate increase late last year, my January – May and October – December $/kwh rate on the baseline tier is $0.13-$0.14; second tier $0.15-$0.16; and third tier $0.30-$0.31. My SmartRate last June – September, on the baseline tier was $0.09-$0.10; second tier $0.11-$0.12; and during SmartRate hours on SmartRate days was blistering $0.72-$0.73!

    Bottom line, I save about $55 a year, which equates to about one summer month’s worth of electricity for free. Plus I free up power for others when demand is high. Kind of like a green energy credit for me.

    I may be willing switch to using more renewable energy, but it depends on the size of the “elephant in the room.” Maybe fuel cell technology will help in this effort someday.

    P.S. I am not the Dan Drummond quoted in this article. Nor have I ever tried to impersonate him, despite what he has written in past posts.

    Thumb up 9 Thumb down 7

  14. Ricardo Sorentino says:

    If you really think that the County can do a better job and at cheaper rates than PG and E, (private sector) then you should ask yourself why the BOS are getting ready to turn over the landfill to the private sector.

    Let’s face it: the County ran the landfill business into the ground and now is bailing out to let private companies to clean up their mess. And you want to give the ‘power’ keys to the BOS? Get real.

    Thumb up 27 Thumb down 1

  15. BigDogatPlay says:

    Name one program administered by county government that costs less to manage and operate that any comparable offering in the private sector anywhere. The only way that adding another layer between the rate payer and the ISO (which actually buys power from producers) is if that power production is subsidized by government. And since ‘green’ operations tend to be heavily subsidized, we’ll all be paying effectively the same rate, if not more, than we do with PG&E once the supporting tax / subsidy structure is added into the total cost.

    This going to be another boondoggle of government ineptitude and cost overrun. No thanks.

    Thumb up 26 Thumb down 3

  16. Reality Check says:

    While I don’t have particulars, given the tax subsidies green energy gets, and game-playing with the subsidies, it may be possible for the county to deliver electricity for less. But that’s less only for ratepayers, not less in what it actually costs. Taxpayers will be eating some of those so-called savings.

    In any case, we are undermining the regulated utility monopoly model. That’s OK by me. But then are we going to free PG&E from some of the regulations and obligations that impose higher costs on it?

    I read nothing about the county’s rate discount for the poor. Where is it?

    Thumb up 15 Thumb down 2

  17. andrew simpson says:

    Absent clean governance, can you have clean power?

    No.

    We don’t have clean governance.
    We have a County governance culture steeped in incompetence, payoffs and fraud.

    Leaving aside the crushing burdens of our unpaid-for pensions and roads—aggregating more than $2 billion—can we focus just on the sponsorship of Sonoma Clean Power(“SCP”)?

    SCP is a Water Agency promotion. SCP doesn’t lower electricity rates. It doesn’t lower CO2 emissions. It doesn’t increase jobs.

    SCP is a recycling program. As in, the recycling of cash. And the Supervisors are going along with it because the Supervisors’ real constituents—the 50 or entities and individuals who fund their campaigns and provide other favors—see SCP as a cash cow for rigged contracts and payoffs.

    If your reaction is, wait a minute, are you suggesting Shell would bribe local officials? No. That’s not the way it works. Shell is the brand name the Water Agency puts in front of this deal. Shell goes out and buys energy and remarkets it to SCP. For awhile. Meanwhile, the Water Agency starts cutting one-off hundred million dollar deals here and there—like the airport solar deal—with friends of the Supervisors.

    Consider a few facts about the Water Agency’s recent actions:
    • Payoffs: our erstwhile assemblyman got un-elected for taking a $95,000 bribe from the Water Agency in 2010. In 2011 and 2012 the Water Agency paid $115,000 to an associate of our x-assemblyman for a no-bid/no work contract on Sonoma Clean Power.
    • Fake Feasibility Study: The Water Agency organized a “citizen’s committee” to advise on Sonoma Clean Power from which the public was precluded. The feasibility study on Sonoma Clean Power included a joint venture opportunity with Marin, whose consultant also conducted the SCP study. The study did not include a joint venture opportunity with the only entity in Sonoma County with experience in public power management, Healdsburg/NCPA. The latter’s retail rates are 10% lower than PG&E’s.
    • $60 Million Pilot Project Failure and Fraud. The Water Agency sponsored a $60 million clean energy pilot project for SCP’s billion dollar effort. This project, called Sonoma County Energy Independence (“SCEIP”) failed spectacularly. The Water Agency covered up this failure with fraud. Short version of what happened: the County retirees’ pension fund gave the Water Agency $45 million in long term illiquid loans to start a solar equipment lending program. Pension fund policy prohibits such loans; the Water Agency made an informal promise to repay these loans quickly with bank refinancing. So the Board of Supervisors—seeing the patronage and graft golden goose in the succeeding billion dollar SCP effort for which SCEIP was the pilot– overrode pension fund policy. Which was unlucky: the federal government then declared the Water Agency loan portfolio toxic and ineligible for secondary market trading. The banks refused to refinance the pension fund loans to the Water Agency. This rRendered the pension fund a “stuckholder” in SCEIP’s un-refinanceable loan portfolio. Here was the fraud. The Water Agency realized that if the SCEIP loan project failed, then the billion dollar patronage and payoff opportunity in Sonoma Clean Power was in jeopardy. So with Board sanction, the Water Agency “recycled” $15 million of rate payer money to prop up the pensioners’ $45 million bad loan to the Water Agency for its SCEIP project. The Water Agency, with the complicity of the Board and County Counsel, then pressured the Auditor Controller to misrepresent the status of this bad $45 million loan portfolio to the loan’s owner, the County pension fund. The County failed to advise the lenders—the pension fund—that they had been stuck, against fund policy, with a long term illiquid loan declared toxic by the federal government. And more to the point, they breached their duty as trustee to the pension fund by NOT telling them these illiquid unmarketable loans were now worth less than face value Net result: the Water Agency took pensioners money for a purpose against pension policy, made a bad deal, and then covered up the millions in loss of value to County pensioners. This isn’t just six figure payoffs to friends of the Water Agency. This is fraud on a multimillion dollar scale.

    Adding insult to fraud, the Water Agency’s pilot project for clean energy generated near-zero greenhouse gas emission reduction; and near-zero job creation.

    These are the folks to whom the Board of Supervisors has now entrusted a billion dollar checkbook; even while our pensions and roads challenges remain unaddressed.

    Thumb up 21 Thumb down 1

  18. Steveguy says:

    Why can’t we vote on this ? This whole scheme smells.

    How is adding a middleman ( the County) going to help the public ?

    How does the Water Agency that is spiking prices yearly have any trust that they won’t do the same with our power ?

    How is the County going to buy Natural Gas cheaper than PG and E ? One part of the County “plan” is to do away with nat gas. Nat gas is 1/3 the cost to dry clothes, heat an oven, etc yet the COUNTY will want all electric in the near future. True

    If we had honest public servants I would be 100% behind the plan, but our public crooks have proven to be less than desirable by any measure.

    Thumb up 44 Thumb down 7

  19. Grapevines says:

    Another inept attempt by the BOS to secure funding for their pet projects. While they attempt to whitewash this by pledging that “rates will be less” and other political claims or as they should really be called, outright lies. What will really happen is this.

    Everything will start our appearing to be good for the county. However within a short time, (probably even less than what it took the schools to start asking for more funds even with Prop 30)things will start to slide downhill.

    The BOS infused with fresh cash will implement funding for bicycle lanes/bridges/round-a-bouts/whatever and the county coffers will “cough” it up. PG&E however will continue to generate, deliver, and bill the customer, us. And then bill the county for these services.

    The BOS (county) will shortly come up with a cash flow problem, and just like the unfunded liabilities facing us for county employee pensions etc promised by the BOS, we will see the same develop as to paying PG&E for delivering Sonoma Green and Clean Power.

    So what happens when there is the BOS overspending what they take in? The same that is happening now. They raise the rates. Higher and higher the price of power will climb. And more and more of it will go into “nowhere”. Being spent down the toilet by the BOS.

    Letting the county get into the power and energy business is just like shooting yourself in the foot. You’re certainly not going to end up enjoying it in the end.

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