In November, the Alameda city utility will ink two new deals for energy produced at landfills and boost the agency's percentage of renewables from 55 percent to almost 70. A deal for more hydropower is also in the works.
Hangar said the utility was able to purchase more renewables without raising rates "because we're tight-fisted. We don't have a lot of solar because it's so expensive. But if the price came down we'd look at it."
Even though public power agencies aren't under the same state mandate of 20 percent renewable by 2010 that investor-owned utilities like PG&E are required to meet, the Sacramento Municipal Utility District set its own renewable power goal and has already surpassed it. "Being a utility with a board of directors elected by the public, there's more pressure there to get renewable energy in the mix," said SMUD spokesperson Chris Capra. "The voters here told us they want more solar and green energy." SMUD recently started offering customers solar power from a 1 MW array owned by a private company that sells the power to SMUD. Because the sun is an infinite resource, unlike natural gas, oil, and coal, the utility was able to lock in a long-term affordable rate for the power. "Now we can get solar power to customers who can't do solar on their own," Capra said.
For calcuutf8g the cost of renewables, we used figures from the city's Community Choice Aggregation plan. If Prop. H passes, the CCA plan would be implemented as the first step toward the overall goal of 100 percent renewables by 2040.
According to the plan, over the first three years the city would phase in 360 MW of renewable energy, greening 50 percent of our grid. The Board of Supervisors already authorized the use of revenue bonds to finance 150 MW of new wind generation, 31 MW of photovoltaic cells, 72 MW of distributed generation, and 107 MW of enhanced conservation measures. The CCA plan calls for a three-year investment of $129 million for solar and $170 million for wind.
The supervisors have already passed the CCA plan, and it's been signed by Mayor Gavin Newsom. That legislation authorized $1.2 billion in bonds to finance the plan more than enough to get the renewable energy ball rolling.
Other financing possibilities exist. For example, PG&E's energy efficiencies are paid for by a public goods charge levied by the California Public Utilities Commission, which for San Franciscan ratepayers totals $7 million per year. The city-owned system would manage that money instead and that surcharge is already included in the average rate we calculated.
Furthermore, there are state and federal subsidies that can be applied to renewable energy purchases these would be given to customers to purchase rooftop solar panels, wind turbines, and other distributed generation that could contribute up to 72 MW of the initial 50 percent in the first phase of the CCA plan. The city already gives $3 million in solar incentives to residents, and this program could be expanded with additional revenue generated from the power business.
We assumed the city could generate a substantial portion of the power it needs from renewables. For the first few years, power would still need to be bought on the spot market; we included those figures in the expense column.
The total costs for operating the system including operations and maintenance, power purchases, and replacing the taxes that PG&E currently pays to the city: $524.45 million.
THE REVENUE SIDE
But after all the expenses are added up, selling electricity is still a lucrative business. If the city kept power rates at the same level PG&E currently charges that is, if nobody's electric bill went up or down at all the city would clear $214 million a year in surplus revenue from the system.