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<div class="headlines">Hi all,<br>
<br>
This piece starts off looking balanced, but then goes after Community
Choice with subtle deceptive attacks.<br>
<br>
This screams for letters to the editor from us.<br>
<span id="bodytext" class="georgia md"><br>
<a
href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/16/MN1K105A81.DTL">http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/16/MN1K105A81.DTL</a><br>
</span>
<h1>Local communities reach for power over energy</h1>
</div>
<p class="byline"><a href="mailto:kzito@sfchronicle.com">Kelly Zito,
Chronicle Staff Writer</a></p>
<p class="date">Wednesday, April 16, 2008</p>
<span id="bodytext" class="georgia md">
<p>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.</p>
<p>From the North Bay to Hollywood, California communities are trying
to exert more power over, well, their power.</p>
<p>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. </p>
<p>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.</p>
<p>"They're throwing up regulatory, legal, political roadblocks," said
Tim Rosenfeld, project director for the Marin Energy Management Team.</p>
<p>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.</p>
<p>"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."</p>
<p>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.</p>
<p>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.</p>
<p>"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."</p>
<h3 style="" class="subhead">Marin wants sun power</h3>
<p>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.</p>
<p>"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.</p>
<p>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.</p>
<p>"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.</p>
<p>"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."</p>
<p>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. </p>
<p>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.</p>
<p> 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).</p>
<h3 style="" class="subhead">Ratepayers to get mailers</h3>
<p>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.</p>
<p>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.</p>
<p>So far, PG&E has hit the same thorny issue - high costs.</p>
<p>"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."</p>
<p>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.</p>
<p>The other main criticism of the aggregation system has less to do
with money than management.</p>
<p>"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."</p>
<p>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.</p>
<p>"If (a CCA) goes badly, other aspects of the city are going to go
badly... you'll have budget cutting."</p>
<p>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.</p>
<h3 style="" class="subhead">Few programs tested</h3>
<p>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.</p>
<p>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.</p>
<p>Marin also hopes to invest in regional energy projects, particularly
alternatives - a stepped-up variation on the "buy local" credo.</p>
<p>"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.</p>
<p>"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."</p>
<div class="infobox">
<h3 style="">How it works </h3>
<p>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.</p>
<p><b>Proponents </b>say the system allows for more local
control, the inclusion of more renewable energy sources and the
possibility of negotiating for better electricity rates.</p>
<p><b>Opponents</b> contend that renewable energy remains
expensive and that local power authorities might not have the necessary
expertise in the energy market.</p>
<h3 style="">Online resources </h3>
<p>-- Marin's CCA page: <i><a target="_BLANK"
href="http://links.sfgate.com/ZDAX">links.sfgate.com/ZDAX</a></i></p>
<p>-- The Web site of Assemblyman Paul Fenn, who wrote the bill
allowing aggregations:<i> <a href="http://www.local.org/fenn.html">www.local.org/fenn.html</a>.</i></p>
</div>
<p><i>E-mail Kelly Zito at <a href="mailto:kzito@sfchronicle.com">kzito@sfchronicle.com</a>.</i></p>
</span>
<p id="pageno">This article appeared on page <b>A - 1</b> of the
San Francisco Chronicle</p>
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