[Sustain] Chronicle Attacks Community Choice Energy On Front Page

[Eric Brooks]

Hi all,

This piece starts off looking balanced, but then goes after Community 
Choice with subtle deceptive attacks.

This screams for letters to the editor from us.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/16/MN1K105A81.DTL


  Local communities reach for power over energy

Kelly Zito, Chronicle Staff Writer <mailto:kzito at sfchronicle.com>

Wednesday, April 16, 2008

Marin County residents want more solar and wind power. San Francisco 
officials think they might be able to strike better energy deals. Some 
cities in the San Joaquin Valley want to build their own power plants.

 From the North Bay to Hollywood, California communities are trying to 
exert more power over, well, their power.

Marin County officials will open a public relations campaign today for 
"Marin Clean Energy." The plan, called "community choice aggregation" or 
CCA, would pool the energy needs of all residents and businesses, 
allowing a local board to negotiate not only for energy rates but energy 
sources. Similar efforts are under way in San Francisco, Berkeley, 
Beverly Hills and other cities.

However, the player that stands to lose the most - Pacific Gas and 
Electric Co. - isn't likely to let Marin or any other community 
considering similar programs go without a fight. PG&E, which both 
supplies and distributes energy throughout Northern California, stands 
to lose the lucrative supply side of its business in communities that 
choose to go their own way. The company has a long history of 
successfully staving off public power efforts in San Francisco and 
elsewhere. This week, the utility settled a dispute with a Central 
Valley power authority over the company's marketing tactics, which 
appear to have helped persuade Tulare County and the city of Fresno to 
stop pursuing local control of their power. Marin officials expect the 
same onslaught.

"They're throwing up regulatory, legal, political roadblocks," said Tim 
Rosenfeld, project director for the Marin Energy Management Team.

The Marin effort has roots in the California energy debacle of 2000 and 
2001. In 2002, in response to the crisis, the state passed a law 
allowing local governments to participate in the open power market. 
Today, the worries driving the movement are local and global: climate 
change, dependence on foreign oil, record oil industry profits.

"It's probably the quickest and most powerful thing we can do to reduce 
Marin's carbon footprint," said Ed Mainland, a Novato supporter of 
Marin's plan and co-chair of the energy-climate committee of the Sierra 
Club. "And it's also more democratic decision-making; it's trying to 
take care of our own energy futures and getting it out of the boardrooms 
of the corporations and bureaucratic state agencies."

But big questions loom. Can local governments play in the complex and 
competitive energy market? More importantly, is cheap green power a 
reality? Severin Borenstein, director of the University of California 
Energy Institute, says the answer to both questions is a resounding no.

Even factoring in municipalities' favorable tax status and their ability 
to borrow money at rates lower than private businesses, he said, the 
cost of renewables is steep.

"The basic fact is, renewables cost more. I hope that won't be the case 
for long, but it's the case for now," Borenstein said. "So the idea that 
you're going to save a bundle of money with a CCA is not well founded."


      Marin wants sun power

Marin County, with its liberal sensibility and fondness for all things 
earthy, seems a likely spot for a community drive toward renewable 
energy. The county wants more power from sun, wind, hot springs, biomass 
and other natural sources. And officials say they can offer that at 
costs initially on par with or possibly higher than PG&E's generating 
costs. Eventually, they say, those costs would fall below the utility's.

"What this constituency is saying repeatedly is, 'Cut greenhouse gases 
now. Do it in a financially responsible way, but do it,' " said Charles 
McGlashan, supervisor for southern Marin County.

Economist William Marcus says Marin is taking a gamble. Marcus, whose 
JBS Energy Inc. evaluated PG&E's response to Marin's program, said the 
company's early March analysis of the plan forecasts that natural gas 
prices will drop by an "improbable" 14 percent between now and 2020.

"Marin is trying to hedge natural gas price risk by buying renewables," 
Marcus said. "If natural gas ends up really cheap, Marin's prices are 
going to be expensive; but if they bounce up and down, Marin's will look 
pretty good.

"We'll all know who's right in 12 years, but (a CCA) is a perfectly good 
choice to consider from a public policy standpoint."

Under Marin's plan, five years in the making, a joint power authority 
composed of representatives of all 11 Marin County towns would oversee 
the program. Officials expect to submit the plan to the California 
Public Utilities Commission for approval next year.

Ratepayers would have a choice: "light green" or "dark green." Light 
green customers would get 25 to 50 percent of their energy from 
"qualified" renewable sources - everything other than large hydropower. 
PG&E estimates 14 percent of its energy will come from renewable sources 
this year.

Dark green would offer 100 percent renewables. PG&E would still 
distribute power and maintain poles and lines; Marin would simply choose 
other energy generators. (Technically, electrons can't be tagged "green" 
or "brown" - advocates say demanding renewable sources forces more into 
the overall grid).


      Ratepayers to get mailers

Over the next several months, Marin ratepayers will get mailers about 
opting out of Marin's attempt to go local. During an initial period, 
consumers could opt out for free; at a later date, a fee might be charged.

PG&E argues that becoming part of the local program will open ratepayers 
to high costs and not necessarily more renewable sources. For one, PG&E 
says it's already in the renewable hunt. Although it won't meet a 
state-set deadline for 20 percent renewable power by 2010, the company 
expects to soon after. In addition to large-scale solar projects, the 
utility is working on buying power from more small alternative energy 
companies.

So far, PG&E has hit the same thorny issue - high costs.

"We're working hard to bring new renewable supplies into being ... but 
they don't come without a cost, so it's a balancing act," said David 
Rubin, director of service analysis for PG&E. "We don't think it's 
credible to get to those (renewable source) levels without much stiffer 
costs than are being represented in (CCA communities') business plans."

Put simply, the renewable energy goals aren't attainable at the prices 
advertised; and they will continue to track above PG&E rates, the 
company said.

The other main criticism of the aggregation system has less to do with 
money than management.

"A small town getting into the energy business is asking for trouble," 
Borenstein said. "If you don't know what you're doing, it's pretty easy 
to get your clock cleaned by a sophisticated company."

Depending on how the system is structured legally and financially, 
Borenstein also said cities could put basic services at risk. If, for 
instance, a local power authority were to lock into a long-term contract 
at rates that prove expensive. it could hurt a city's credit rating.

"If (a CCA) goes badly, other aspects of the city are going to go 
badly... you'll have budget cutting."

Marin officials say they've examined every angle and concluded the risks 
of the status quo are far higher; they also emphasize they're looking to 
hire experienced power brokers.


      Few programs tested

There are few test cases for aggregation programs in California. The San 
Joaquin Valley Power Authority is first out of the gate - the California 
Public Utilities Commission certified the plan this year. System 
administrators, who hope to power about 115,000 customers in the valley, 
are working out a contract with Citigroup Energy to handle its entire 
energy supply.

Eventually, the power authority expects to issue bonds to pay for some 
local energy plants. The current energy supply is largely a mix of 
hydroelectric - which they worry will become less reliable - and 
imported, which sometimes creates system bottlenecks.

Marin also hopes to invest in regional energy projects, particularly 
alternatives - a stepped-up variation on the "buy local" credo.

"Right now we're dependent on fossil fuels - the cost and supply is very 
uncertain," said Dawn Weisz, sustainable planner for the Marin Community 
Development Agency. "So getting unhooked from that dependence is good 
for rate stability, for economics, and it's good for self-sufficiency... 
and as a way to reduce our greenhouse gas emissions.

"We need to do as much as we can ... and then maybe we can step back 
from the tipping point. That's where Marin wants to be."


      How it works

Under a "community choice aggregation," a local government or a group of 
local governments buys power for customers within their communities. 
Although the CCA does not own the transmission wires, it may or may not 
own energy generating facilities.

*Proponents *say the system allows for more local control, the inclusion 
of more renewable energy sources and the possibility of negotiating for 
better electricity rates.

*Opponents* contend that renewable energy remains expensive and that 
local power authorities might not have the necessary expertise in the 
energy market.


      Online resources

-- Marin's CCA page: /links.sfgate.com/ZDAX <http://links.sfgate.com/ZDAX>/

-- The Web site of Assemblyman Paul Fenn, who wrote the bill allowing 
aggregations:/ www.local.org/fenn.html <http://www.local.org/fenn.html>./

/E-mail Kelly Zito at kzito at sfchronicle.com <mailto:kzito at sfchronicle.com>./

This article appeared on page *A - 1* of the San Francisco Chronicle

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