Move Over PG&E?

Community choice aggregation could be electrical balancing act



There's no omnipotent god of electricity, even in Pacific Gas & Electric territory. Ask your off-the-grid friends. But, the rest of us now tethered to the two- or three-pronged outlet in Arcata — and perhaps Humboldt County in its entirety — may have the opportunity to cut the PG&E umbilical cord for a smaller, cheaper and, perhaps, more renewable deity. It would not, though, be freedom from the grid. The cord would still be attached, just to an unconventional new pseudo-socket called community choice aggregation.

You, the electric consumer now paying bills to PG&E, could well have your electric provided by a contractor hired by the city of Arcata or Humboldt County. You'd be plugging into the same socket and the same poles and wires, but the source of your electricity wouldn't be PG&E.

Arcata mayor Michael Winkler is an energy analyst at Redwood Energy and a proselytizer for electricity sustainability.

"It's not only good for the environment, but also begins to keep the roughly $500 million per year that we spend on energy in Humboldt County in the county creating local jobs and circulating our energy dollars in our local economy," Winkler wrote in an email. He's been putting the moves on county supervisors and pushing potential non-governmental companies to make the plug alternative a reality for more than a year. This month, he's gained some traction.

Arcata and the county now have proposals from two private companies that are offering to whisk the agencies and their thousands of ratepayers away from PG&E.

If either is hired, it would be the first community choice aggregation program in the state to hand the reins to a private company. The only municipalities in the state operating community choice — Marin County and most of Sonoma County — have done so through their own governments. A third, Lancaster, is also setting up its own entity to run the program.

Arcata and Humboldt County are considering a more hands-off method through for-profit companies. Neither company with proposals for the governmental agencies — California Clean Power, out of Sonoma County, and Community Choice Partners from San Francisco — has operated a program for non-PG&E alternatives before.

Winkler's $500 million is not a potential refund headed to consumers; perish that thought.

To us, it might be more like a few cents off our monthly bill. Think of community choice aggregation like a local brew, in which the consumer/quaffer has a say where the hops and the barley come from, as well as who serves that beer to your table. Imagine the hops are wind- and solar-generated electricity, while the barley is fossil-fuels-powered electricity. And just like a beer can't be beer without hops and barley, state laws governing electricity production say community choice aggregation has to be a mix of energy sources.

While you could save a few cents on your monthly bill with community choice, more important, say proponents, is that — unlike your dealings with PG&E — your elected representatives could increase or decrease how much renewable and Humboldt-grown electricity is in the mix. Local governments could require more biomass fuel for electricity from Humboldt's forests, or require building new solar installations. Or they could tap into natural gas lines for fossil fuel to run generators. By playing with the mix, consumers/voters can determine the cost of their electricity, to a certain extent. Fossil-fuel-generated energy is generally cheaper at the moment, while renewable sources run at a higher price.

In a June 10 letter to California Clean Power, Arcata City Manager Karen Diemer asked the company's chief executive officer, Peter Rumble, to detail rate impacts for consumers if the price of the fossil fuels used to create the majority of the state's electricity were to rise above current wholesale rates. She also requested the cost of power under other options: a 33 percent renewables component (currently the state mandate), a 50 percent renewables goal, and a 100 percent feed of electricity fueled by solar, wind and other non-fossil energy. In all three scenarios, the city expects the price of power to be offered at a discount from PG&E rates, though Diemer notes that the 100-percent-renewables alternative is a long shot.

Humboldt County 3rd District Supervisor Mark Lovelace said there's a lot to balance. "What are the community benefits to achieve?" he asked. "Is it maximum savings? More renewable energy? [Incorporating] local biomass? Those could be at odds with each other."

Although Arcata could proceed on its own, it's possible for the entire county to switch away from PG&E. Unlike most California municipalities, Humboldt already has a joint powers agreement among governments through the Redwood Coast Energy Authority, which has been in preliminary discussions to implement community choice aggregation for more than a year.

This month, Winkler met with four of the five county supervisors on the issue. Politicians, and some others, are duly concerned that switching to a third party electricity provider may be trading in one disheartening utility for a different disheartening contractor. Lovelace said there's a need to move cautiously. "We want to look at reasonable fees for service without seeing a lot of profits going to third parties," he said.

Partners founder Samuel Golding said anyone who trades on the state grid has to put up a hefty sum of money to ensure viability, and, if chosen by Arcata or the county, a company would be dealing with a wholesale marketer to procure electricity for the county. In the case of Marin County (the state's first community choice adopter), it's Shell, a company that refuses to disclose its power sources. For parts of Sonoma County (the second to opt away from PG&E), it's Calpine for geothermal renewable energy, and Constellation for market-rate power. Golding says that while the credit details are being worked out he expects the bulk of electricity procurement will be outsourced to another entity like Constellation or Shell, although he did not name any specific marketer. PG&E is forbidden by law from trying to demoralize or thwart municipalities' community choice aggregation efforts. In the past, the utility's done exactly that, funding localized efforts and pouring $44 million into 2010's losing Proposition 16, which would have required two-thirds voter approval for local governments to expand public utilities. PG&E spokeswoman Brittany McKannay said the utility now works with aggregators like Marin and Sonoma. But Winkler isn't buying it.

"PG&E has repeatedly demonstrated that [it is] willing to spend large amounts of money and apply legislative muscle through their lobbyists and through [its] cozy relationship with the local chapter of the [International Brotherhood of Electrical Workers union] to try to eliminate community choice aggregators and any other competition," he wrote.

J.A. Savage is a freelance journalist living in Trinidad. Former editor of California Current, she's written for the San Francisco Chronicle, the Los Angeles Times and the S.F. Bay Guardian.

EDITOR'S NOTE: This post was changed to indicate the county of Sonoma uses community choice aggregation.

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