[Sustain] Important Article On Local Clean Energy Efforts

[Eric Brooks]

Though this article highlights East Bay clean energy efforts, it has 
important information on the progress of San Francisco's CleanPowerSF 
program!

http://www.eastbayexpress.com/gyrobase/when-will-we-go-green/Content?oid=3213842&showFullText=true

When Will We Go Green?

Some Bay Area communities are forming public-power networks to buy and 
build renewable energy, but East Bay cities have been slow to join the 
green revolution. Is that about to change?

By Darwin BondGraham

The Bay Area's economy has the potential to undergo a radical 
transformation. In fact, some communities are already creating their own 
public-power networks, buying renewable energy, and trying to build 
their own green-energy economies. But East Bay cities have been slow to 
embrace this new economic model, even though it would not only shift the 
literal sources of power for homes and businesses, but also potentially 
shift political power away from large energy corporations and into the 
hands of local governments, residents, and small businesses.

Since 2002, a little-known but potentially revolutionary law has been on 
the books in California. The passage of Assembly Bill 117 came in 
response to the energy crisis and the ensuing bankruptcy of Pacific Gas 
and Electric Company, which darkened much of the state and sucked 
billions of dollars from the economy into the coffers of Texas energy 
corporations. AB 117 was a strategic shift in a decades-old campaign to 
wrest economic power away from giant corporate utilities like PG&E and 
Southern California Edison and the big energy companies that supply them 
with electricity. AB 117 enabled a new model of energy provisioning, 
called Community Choice Aggregation, or CCA. Many have never heard of 
CCA, but few existing laws have as much potential to completely 
transform our economy from the bottom up.

Don't let the boring acronym fool you. In theory, CCA allows local 
communities to take control of their power-purchasing needs, while still 
using the distribution networks owned and operated by corporate 
utilities. The old model of obtaining community control over energy, 
whereby cities bought the entire system — poles, lines, transformers, 
and all — from the corporate utility and staffed a new public agency 
from scratch, had, by the 1990s, become an impossible task for numerous 
political and financial reasons. At the top of the list were the fiscal 
problems of local governments, devastated by decades of corporate tax cuts.

AB 117 eliminated the need to own the energy grid. It was a 
game-changing idea. Under the new rules, once a local government decides 
to become an aggregator (by automatically pooling the accounts of 
ratepayers within its jurisdiction to create a kind of energy-purchasing 
cooperative), or joins an existing CCA provider, it can choose what 
energy it will buy for its residential and commercial ratepayers. 
Communities can then decide to purchase renewable energy like 
geothermal, solar, small hydroelectric, and biogas — and no longer have 
to hope that the executives of their corporate utility, or state 
bureaucrats, will make the right choices for the environment and local 
economy.

Not only does CCA put decision-making power in the hands of local 
governments, but communities can theoretically go one step further by 
supporting the development of renewable energy sources either through 
the stimulation of private development (for where there is a demand 
there will arise a supplier) or by building publicly owned resources.

Most importantly, CCA also shifts the all-important financial power away 
from corporate utilities and the California Public Utilities Commission 
(which many activists characterize as suffering from "regulatory 
capture" by the companies it is tasked with overseeing) and places the 
power of the purse in the hands of local officials. With this ability 
comes the potential for reinvesting in conservation and efficiency 
programs, which according to most experts is the real opportunity for 
greening the grid, creating thousands of new local jobs, and lowering 
consumers' energy bills. If done right, many advocates say, Community 
Choice Aggregation would be nothing less than a revolution in power, 
both in the energy sense and the political sense.

But change is hard to make. Those Bay Area governments that have moved 
ahead with aggregation have been criticized by many activists and energy 
experts as pursuing CCA in name only, abandoning the three goals of 
cheaper bills, new jobs, and truly green energy. Worse still are the 
governments that have done little to nothing to explore and advance CCA, 
a long list that includes the East Bay's biggest energy user, Oakland.

But in spite of several years of lost opportunity, big changes may be on 
the horizon.

Hopes were high in the early 2000s for creating an East Bay CCA. 
Oakland, Berkeley, and Emeryville were part of a joint demonstration 
project funded by the California Energy Commission to explore 
aggregation. Each city committed tens of thousands of dollars to the 
effort and hired Navigant Consulting, an independent firm, to conduct a 
feasibility study and prepare an implementation plan. Fittingly, 
Oakland's money for the feasibility study came from a settlement reached 
with Williams Energy, and funds for the implementation plan from Duke 
Energy, two of the companies that gamed the energy crisis to gouge 
Oakland residents.

However, by 2008 this investment of time and hard-won money hit a wall. 
Navigant's studies came back with bad news for Oakland's leaders. Citing 
energy bills that could jump by more than 6 percent, potential city 
liability for CCA debts, and uncertain and possibly expensive 
regulations, the city administrator reported to the city council that, 
"although CCA appeared promising in the preliminary analyses, after a 
comprehensive review, the Business Plan does not support a 
recommendation to move forward at this time."

Oakland Councilwoman Nancy Nadel briefly put up a fight to save CCA. 
"Emeryville dropped their interest. Berkeley had some remaining 
interest," she said in an interview. "I wanted to call a joint meeting 
with Berkeley to educate ourselves about how well Marin was doing, and 
other efforts from other cities and counties doing CCA, but couldn't get 
the votes on the council to schedule it." According to Nadel, the Great 
Recession and the avalanche of problems it dumped upon Oakland quickly 
extinguished the council's ability to focus on CCA — an irony, given 
aggregation's potential to spur the local economy and build resiliency. 
Instead the city council was sucked into a vicious cycle of budget cuts, 
layoffs, and program eliminations, further dampening the region's 
economic outlook.

PG&E also had a hand in killing CCA in the East Bay. "The council was 
lobbied heavily by PG&E against CCA, and that had some success in 
stifling interest," Nadel said. Her efforts to revive talks and clear up 
misconceptions failed, as did the pleas of activists with the Local 
Clean Energy Alliance, a coalition of green energy and labor advocates 
that includes some of the most knowledgeable experts on CCA. By 2010, 
Community Choice Aggregation was dead in Oakland, and set back 
considerably in Berkeley, Emeryville, and Richmond.

Paul Fenn of Local Power Inc., a consulting group that helps local 
governments establish CCAs, said that the Navigant study also harmed 
East Bay efforts to create a regional energy aggregator. "Navigant kind 
of poisoned CCA in the East Bay," he said. "The key problem is that they 
used these pre-existing rate models, but CCA is a new structure." And by 
using old models, and assuming other risks faced by traditional 
municipal utilities, Navigant's study ended up confusing Oakland, 
Emeryville, and Berkeley officials, causing them to think the risks were 
enormous while the savings were minimal, or even negative, Fenn said.

While most East Bay cities had given up, something else was brewing that 
would eventually revive the potential for renewable energy to kickstart 
the local economy. The East Bay Municipal Utility District was busy 
conducting its own in-house studies to figure out how it could replace 
PG&E as the supplier of energy for its massive water service area. 
Meanwhile, officials in Richmond weren't quite ready to throw in the 
towel, even after their assumed partners dropped out. Eager to erase 
their city's image as an oil company town, Richmond officials closely 
tracked CCA in Marin County, where it was succeeding. At the same time, 
efforts in San Francisco were advancing, propelled largely by activists 
who confronted both PG&E's attempts to kill the nascent CleanPowerSF, 
and city officials who were trying to gut the CCA of its jobs-generating 
potential. Up in Sonoma County, another CCA was beginning to take shape.

Marin Energy Authority, California's first operational CCA, launched in 
2009 despite PG&E's efforts to snuff it out with an aggressive marketing 
campaign. In its short existence, Marin Energy Authority has proven that 
CCA works, and that the fears of Oakland's City Council, and other East 
Bay officials were unfounded. Energy rates paid by Marin County 
residents are just slightly higher than what PG&E charges, and the mix 
of power delivered is the greenest in the state, far exceeding what is 
delivered by corporate utilities. Come this July, the Marin Energy 
Authority will be serving 95,000 customers, nearly all of Marin County.

Shawn Marshall, the founder and director of LEAN Energy US, a San 
Rafael-based company that helps local governments transition from 
corporate utilities to CCAs, calls Marin Energy Authority "an 
economically and environmentally robust agency." Despite the obstacles, 
and lack of understanding for what CCA requires of local governments, 
"MEA is doing a great job of demonstrating the operational viability and 
local benefits of CCA. It's always hard to be the first," Marshall said.

As of May 15, plans for the authority just got a lot bigger, too. In a 
widely anticipated decision, the Richmond City Council voted to fold the 
city into Marin Energy Authority, a move that will bring tens of 
thousands more ratepayers. "We've been at this a year," said Richmond 
City Manager Bill Lindsay about the effort to join the authority. 
Lindsay and Richmond's leaders believe that abandoning PG&E for the 
city's energy production and purchasing needs will not only advance its 
progressive climate goals, but can also serve to transform the local 
industrial base, and place Richmond among leaders in solar development. 
"We think that there is potential to have this be an economic boost for 
Richmond," Lindsay said. "The one thing we feel we have is our ability 
to sell power to MEA through the feed-in tariff. We have a lot of 
rooftops for solar. We think it provides good possibilities down the 
road." Lindsay pointed to the Port of Richmond as an ideal site for 
massive rooftop solar development.

The feed-in tariff, the process by which locally generated renewable 
energy — such as rooftop solar — is fed into a utility's electric grid, 
is another existing policy that could, if reasonably applied, enable the 
mass development of renewable energy sources. Conceptually, feed-in 
tariffs are perfect tools for a CCA program. However, just like CCA, the 
feed-in tariff has yet to live up to its promise, due mostly to the 
equivocation of state and local politicians who have sent confusing 
signals to potential developers. California's feed-in tariffs are poorly 
designed, according to Paul Gipe, an internationally recognized expert 
on the subject. At a recent energy conference in Oakland, Gipe 
characterized California's feed-in tariff laws as "timid" and "lacking 
vision."

Current state law seeks to promote the development of 480 megawatts of 
renewable energy sources statewide via feed-in tariffs. Within PG&E's 
service area, any customer may participate. Thus, anyone who builds a 
renewable energy generating source — like a backyard wind turbine — can 
sell the power generated to PG&E for a fixed price. But Gipe points out 
that 480 megawatts is a tiny commitment for an energy market as massive 
as California's, and that there's a cap on the size of a contributing 
power plant. The cap seriously undermines the incentive for developers 
because it effectively prohibits taking advantage of economies of scale. 
Currently, an independent energy developer using the feed-in tariff may 
not contribute more than 1.5 megawatts to the grid. Furthermore, PG&E's 
payments for electricity are relatively low compared to other buyers 
such as Marin Energy Authority. There is no single, simple, and fair 
feed-in tariff for Californians to benefit from. Instead, there is a 
complicated and half-hearted array of tariffs that apply in different 
services areas.

This fact and other limitations have caused California to fall far 
behind in renewable energy development. Gipe points to Europe and Japan 
— where thousands of megawatts have been added in just several years 
using broader, less restrictive feed-in tariffs — as clear leaders. Even 
foggy England has bested sunny California in solar, with 1,300 megawatts 
brought online in under two years thanks to better feed-in tariffs.

Marin Energy Authority, meanwhile, will also have to change its feed-in 
tariff policy to allow Richmond to use it for a local build-out of 
solar. Under the authority's current rules, only renewable projects 
built within Marin County are eligible to participate in the feed-in 
tariff program. "In order for Richmond to be included in our FIT 
territory, we will need to update our implementation plan and obtain 
approval from the California Public Utilities Commission," said Jamie 
Tuckey, a representative of the authority. "This will likely happen in 
August." Clearly, then, Richmond's bid to rebuild its economy with 
green, local energy will face piecemeal laws and confused half-measures 
currently limiting renewables. With an official unemployment rate of 16 
percent (more than twice the national average) Richmond is in desperate 
need of good local jobs, such as those that could be provided by a major 
solar installation program spurred by a feed-in tariff.

Some are also concerned that Richmond is too eager to join Marin Energy 
Authority, and that the authority serves as a poor model for what 
aggregation can actually deliver. By joining the authority, "Richmond 
residents will have to pay more than they are now," said Al Weinrub, 
coordinator of the Local Clean Energy Alliance. "The green portfolio 
benefit means getting energy through Shell Energy, probably from big 
central power plants out in the desert, and Renewable Portfolio Standard 
credits, which aren't green energy at all." These sorts of renewable 
energy credits are certificates traded in the market that represent the 
creation of "green" energy somewhere. A utility can claim to be 
stimulating the production of renewable energy, or even purchasing 
renewable energy for its customers, when it obtains such credits, even 
if the actual electricity fed to its customers comes from a gas, 
nuclear, or coal plant. Furthermore, these credits do nothing to 
stimulate the local development of renewable energy, and may even 
promote development of distant mega-solar projects that will have no 
local economic impacts.

Weinrub said he doesn't think what Marin Energy Authority is offering 
Richmond is very compelling. "They get something that's called 'green 
energy' and they pay more." Weinrub thinks Richmond should be getting 
more assurances that its economic goals can be realized by joining the 
authority. A survey of the authority's current portfolio of energy 
providers shows that California's only currently operational CCA is in 
fact drawing the vast majority of its electricity from large biogas and 
wind projects in the Central Valley and farther away — meaning virtually 
no local jobs have been generated in Marin County. CCA advocates like 
Weinrub and Fenn say the main mechanisms by which a CCA can reduce 
consumer bills below PG&E's rates require the reinvestment of ratepayer 
revenues in local energy conservation and efficiency programs and local 
renewable sources, instead of buying energy from distant big green power 
plants and through credits. The latter variety of "green" power comes 
with a premium cost.

At a recent gathering of green-energy advocates, Fenn asked: "What's the 
goal?" He then answered: "The goal should be to determine what actually 
gets built, not just focusing on creating a CCA as if it was important 
in itself. Because it isn't."

Fenn is a guru for energy activists, a go-to guy on both minute 
technical questions, as well as the big-picture political vision. This 
is partly because Fenn was the main author of AB 117 and understands the 
radical potential of CCA like few others. His company, Local Power, 
Inc., also works in the trenches, and is currently helping to launch the 
most ambitious CCA yet: CleanPowerSF. According to Fenn, CCA only makes 
economic sense if the build-out of local renewable resources is adopted 
from the very start.

Like Marin Energy Authority, CleanPowerSF was met initially by PG&E with 
a full frontal assault aimed at destroying its viability. PG&E 
bankrolled Proposition 16 in 2010, a statewide measure that was largely 
about crushing CleanPowerSF and other CCAs being planned. And though 
Prop 16 failed to get the necessary votes to become law, it had a 
deleterious effect on San Francisco.

"Under the looming threat of Prop 16, an initiative that would put the 
kibosh on CCA, the San Francisco Public Utilities Commission hustled to 
get a program — any program — launched," Weinrub said. "They issued some 
requests for proposals to possible energy providers, and in the course 
of two years since then, they have negotiated a contract with Shell 
Energy for a 30-megawatt purchase of renewable power on the open market. 
... This is not the kind of deal CCA advocates were in favor of."

CleanPowerSF is therefore set to launch under a model much like Marin 
Energy Authority, purchasing dubious "green" power on the market through 
its prime contractor, which is better known for its oil business. At the 
same time, PG&E is pursuing more subtle tactics to wreck CleanPowerSF, 
such as rolling out its own boutique 100-percent green energy option, a 
move widely seen as an attempt to chip away at the ratepayer base of 
potential CCAs. Real change is hard to make, even when all the tools are 
available.

Advocates of truly green and locally generated electricity haven't given 
up, however, and the tide appears to be turning their way. After a 
protracted battle to pressure San Francisco's Public Utilities 
Commission, activists managed to get the city to commit to some 
localization from the start, along with the external power purchases. 
"The good news is San Francisco is going ahead with localization," said 
Charles Shultz, of Local Power, Inc.

CleanPowerSF is developing a financial model to pay for publicly owned 
solar and other renewable projects. When combined with efforts to 
conserve energy and reduce demand so as to lower customers' bills, 
Shultz said that CleanPowerSF could beat PG&E's rates. Shultz and his 
colleague Fenn have a mantra: "Own, don't rent, your power; and build, 
don't buy, your power." In this spirit San Francisco's CCA is empowered 
with the ability to build renewables through city-issued bonds.

Up in Sonoma County, a similar tack is being taken. County supervisors 
have embraced the concept of Sonoma Clean Energy, a CCA that would 
encompass the whole county, which has an electrical load twice as big as 
Marin's. Activists there are currently working closely with officials to 
figure out how to maximize the production of local renewables by 
providing incentives for private developers, and also by reinvesting 
ratepayer funds in publicly owned projects. The county's RESCO project 
(Renewable Energy for Secure Communities) is one of the most 
sophisticated efforts anywhere to study ways of transforming the 
region's grid by reducing demand, improving conservation and efficiency, 
and promoting the dispersion of energy generation among distributed, 
small power sources. It may sound like a wonky study in energy, but it's 
actually a map for a giant green jobs program.

Sonoma County's effort might also be a model with respect to the kinds 
of jobs it creates. "If you train someone for a $10-an-hour job to 
become a 'solar installer,' that's not okay," said Lisa Maldonado, 
executive director of the North Bay Labor Council. "It's not a real job. 
You're displacing a skilled electrician." Maldonado recalls that the 
launch of the Marin Energy Authority was harmed by a lack of outreach to 
labor, partly because some environmental activists there associated the 
International Brotherhood of Electrical Workers with PG&E, and assumed 
most unions would automatically oppose CCA.

Maldonado says things have changed a lot since then. In Sonoma County, 
the nonprofit advocates most responsible for advancing Sonoma Clean 
Power approached labor unions very early on to ensure that efforts to 
create local green jobs would be clearly grounded in the notion of 
high-paying, benefits-yielding careers. Those involved in building 
Sonoma Clean Power say that incorporating labor is key if a CCA is to 
have a positive impact on the local economy. The launch of Sonoma Clean 
Power is expected within a year.

As for Oakland, Berkeley, and Emeryville, they have been paralyzed, 
unable to take advantage of the laws and regulations that currently 
allow for bold economic initiatives like those being pursued in San 
Francisco, Sonoma, and Marin with Richmond. According to some, this 
might all soon change though.

Berkeley took an important, if small, step in January by formally 
declaring its intention to create or join a CCA, and requesting the 
necessary electrical load data from PG&E to study the viability of 
various CCA business plans. "This is one of the possible tools to 
actually make progress on greenhouse-gas reduction, so I am glad that 
the council voted to move forward with this," said Councilman Kriss 
Worthington, who introduced the resolution.

The city resolution is also written to "demonstrate support of clean, 
local energy," leaving little ambiguity about Berkeley's goals of 
spurring its local economy. Based on this resolution, Berkeley staff 
held talks with Richmond in hopes of establishing a joint effort. 
Although that might now be called off, Berkeley has also been talking 
with another entity whose entrance into the world of CCA could be a 
game-changer for the East Bay.

Back in the early 2000s, during the rolling blackouts and spiking 
electricity rates that were causing havoc in California, the East Bay 
Municipal Utility District's staff began to investigate means by which 
they could, as a pre-existing public water and sewage utility, enter the 
electricity market, thereby stabilizing things under local public 
control. East Bay MUD hired a consultant and put several staff members 
to work exploring options. One idea was to form a vertically integrated 
electrical utility — old-fashioned municipalization. This option was 
ruled out because of prohibitive costs and risks. Another option 
involved building renewables on East Bay MUD property so as to reduce 
the utility's own electrical consumption and dependence on markets 
distorted by speculators and the volatility of fossil fuel prices. It 
went with this option, and in ten years East Bay MUD has added several 
biogas and solar installations. But these efforts are small in the grand 
scheme of things.

The third option was for East Bay MUD to take the lead as a CCA with the 
cooperation of nearly all East Bay cities, serving 1.4 million 
customers. But it also was ruled out. In a bit of legislative oversight, 
the then-recently signed AB 117 failed to mention existing utilities and 
other special districts as eligible aggregators, along with cities and 
counties.

This prohibition changed last year with passage of Senate Bill 790, 
sponsored by San Francisco legislator Mark Leno. The law was primarily 
designed to check PG&E's vicious efforts to kill CCAs with cynical 
marketing and lobbying campaigns, but it also included a little-noticed 
redefinition, allowing existing public utilities like East Bay MUD to 
become aggregators. East Bay MUD's leaders have quickly picked up where 
they left off, exploring the case for a CCA in the East Bay.

Although it appears to be too late to convince Richmond to pause its 
entry into the Marin Energy Authority, East Bay MUD's re-entry plan may 
mean big things for Berkeley, Oakland, and Emeryville — and Piedmont, 
Albany, Kensington, El Cerrito, Hayward, Orinda, Walnut Creek, Danville, 
San Ramon, Pleasant Hill, Lafayette, Crockett, and other towns and vast 
unincorporated portions of Alameda and Contra Costa counties. East Bay 
MUD's service area is so large that it would easily become the largest 
CCA in California, perhaps the nation, if enough of the cities within 
its territory vote to join. This whole opportunity is just an idea at 
this point, stress many of the officials exploring it, and exactly what 
it would look like is anyone's guess.

"One of the most exciting opportunities with CCA is the ability to 
transform our local economy with new clean-energy jobs," said Andy Katz, 
an East Bay MUD board member representing Albany, Berkeley, Emeryville, 
El Cerrito, Kensington, and north Oakland. Along these lines, Katz said 
San Francisco is a good model to learn from, even if they've had trouble 
in some areas. "It's important to study, as San Francisco's Public 
Utilities Commission is, the local build-out of solar energy, and also 
investments in energy efficiency." Katz said it's too early to assess 
the results of CleanPowerSF, and that specific features of San 
Francisco's CCA could be improved, but that the focus on creating local 
clean-energy jobs is the right one.

Like the officials and activists developing Sonoma Clean Power, Katz 
said he is interested in bringing organized labor into the fold. "I'm 
very interested in addressing workers' concerns," he said. "I've already 
discussed this with reps from the electrical workers' union who 
represent Alameda County."

East Bay MUD's board has directed staff to step up talks with leaders of 
various cities to gauge their interest in constituting a region-wide 
CCA. A report on the feasibility of a joint East Bay MUD-East Bay cities 
CCA is due in November and will be public by December, said Michael 
Wallis, operations director for the district. Wallis said his staff has 
already had meetings with Berkeley, and that a sit-down is scheduled 
with Emeryville's leaders. The mayors of both cities have formally 
declared interest in an East Bay MUD-coordinated CCA in letters to the 
district.

Under East Bay MUD's lead, and with cities like Berkeley and Emeryville 
on board, a possible regional CCA would be viable, said those who are 
familiar with the model's economics. But without Oakland — the region's 
largest industrial and residential municipality — the potential to 
remake the East Bay's economy is much diminished. If united, an East Bay 
CCA comprising the major waterfront cities, and many surrounding cities 
and towns in the hills, could be a tipping point, clean energy advocates 
say. "The level of redirected revenues, if a significant number of East 
Bay cities formed a CCA, would reach into the billions of dollars," 
predicted Shawn Marshall. "This would have tremendous regional economic 
value and impact over time."

Perhaps the biggest reason why Oakland's leaders let CCA fall off their 
agenda two years ago was fear of financial liability. These anxieties 
were stoked by PG&E-friendly lobbyists such as the Oakland Metropolitan 
Chamber of Commerce (a PG&E representative sits on the chamber's board 
of directors). The chamber's executive director, Joseph Haraburda, 
claimed in a 2008 op-ed in the Oakland Tribune that launching an Oakland 
CCA would require $17 million in city funding. Furthermore, Haraburda 
implied that Oakland would financially be on the hook, concluding that 
"we have too much on our plate right now — public safety concerns, 
budget concerns, and business concerns — to take on such a risky venture."

"One thing to be clear about," Marshall explained recently, "is that 
ratepayer revenues generated by a CCA do not co-mingle or support a 
city's general fund. CCAs in California are operated as separate 
agencies and, by law, the balance sheets and associated liabilities are 
kept separate from those of individual member cities." According to 
Marshall, "now is the time" for CCA in the East Bay, precisely because 
the local economy is hurting.

"Because the industrial load is much bigger over here" in the East Bay, 
said Fenn during a recent talk to local energy activists, "a CCA would 
be able to redirect enormous revenues." An Oakland CCA alone would have 
a budget as large as the city's actual budget, and a large proportion of 
this could be directed to local projects.

Representatives in Mayor Jean Quan's office didn't respond to requests 
for comment about what Oakland plans to do with respect to CCA. 
Councilwoman Nadel said that city staff are consumed currently with 
drafting and issuing a new garbage franchise contract and finalizing 
state environmental studies related to Oakland's Climate Action Plan, 
but that the council will soon revisit CCA when staff time and resources 
are freed up.

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