CCA: Get it done by the deadline

If the mayor and his handpicked PUC director, Ed Harrington, and his handpicked commissioners dawdle and delay, they'll be giving a corrupt private utility exactly what it wants
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EDITORIAL San Francisco has been talking about creating a community-choice aggregation system to sell cleaner electricity for five years now. There have been hearings, studies, debates, discussions, and negotiations. And now it's coming down to the wire: to avoid the prospect of a Pacific Gas and Electric Company initiative on the June ballot that cuts the city's effort off at the knees, San Francisco officials need to get CCA up and running before June 8.

But the mayor and the Public Utilities Commission don't seem to have any sense of urgency. And the slow pace of negotiations with the contractor that would handle the electricity purchases is playing right into PG&E's hands. If the mayor and his handpicked PUC director, Ed Harrington, and his handpicked commissioners dawdle and delay, they'll be giving the corrupt private utility exactly what it wants.

It's particularly frustrating since Marin County — which, unlike San Francisco, has no federal mandate for public power — is far ahead of this city, has a CCA program ready to go, and most likely won't be affected by the PG&E initiative. What on earth is wrong with San Francisco?
CCA would allow the city to create the equivalent of an electricity buyer's co-op, so that San Francisco could purchase electricity in bulk from providers that offer a more renewable mix. PG&E gets only a tiny portion of its power from renewables. With the advantage of wholesale purchases and no corporate profit, the city ought to be able to offer lower rates.

The contractor that won the bid to put the co-op together, Power Choice LLC, is run by people with substantial experience in the electricity business. The city's been in talks with Power Choice about a contract since Feb. 9 — but progress is slow.

Harrington told us that he expects to have "a contract as soon as we can get a contract," but there's no deadline. That's crazy — there's a very real deadline looming, a time bomb planted by PG&E, and the city needs to take it seriously. PG&E has used vast sums of corporate money to place a measure on the June ballot that would make it almost impossible to create new public-power entities; Proposition 16 would mandate a two-thirds local vote for any public agency that wants to sell retail electricity. And the company is spending $35 million on a campaign to get it passed.

That election is barely two months away — and if Prop. 16 passes before San Francisco has a signed contract and a CCA program under way, five years of work, led by Sup. Ross Mirkarimi and the Local Agency Formation Commission, could be for nothing. The best chance the city has to fight global warming, promote renewable energy, take control of its own energy future, and offer more stable, cheaper rates to customers could be gone, forever.

What's the hang-up? Nobody's talking, since the negotiations are still ongoing, but from what we hear, Harrington, Newsom, and the PUC members are worried about "risk" — that is, the risk that the San Francisco CCA might have to raise rates above what PG&E is currently charging to make the numbers pencil out. (Part of the risk: PG&E will have 60 days to try to convince customers to "opt out" of the CCA and stay with the private utility. If a critical mass of residents and businesses doesn't stick with the CCA program, the economics could be dicey.)

But the risk discussions are missing a critical point: PG&E's rates are going to go up, dramatically, over the next few years. The company already has an application for a stiff rate hike this year, and it's inconceivable that the utility's prices will do anything but continue to climb. So meeting the current rates is a moot point.

Comments

The crucial unspoken problem in this entire crisis for San Francisco's Clean Power SF (Community Choice) energy project, is that City Attorney Dennis Herrera's staff attorneys who are advising the SFPUC and LAFCo are completely blocking the project's success.

For eight years, Theresa Mueller and other attorneys under Herrera have been giving City staff working on Clean Power SF a ridiculously myopic interpretation of the state law, AB 117, which is the enacting bill that made it possible for California communities to adopt Community Choice and compete with PG&E.

The law clearly puts the Board of Supervisors in the driver's seat of the program, giving them a huge amount of flexibility in how they set up a governing and rate-setting structure so that the project will be low risk and easy to get off the ground.

One of the most respected law firms in the country, Nixon Peabody, has specifically advised the LAFCo and SFPUC that this is so.

Yet, unfathomably, Herrera's staff attorneys advising the program have completely ignored this advice and the similar advice of many other experts, public officials, and organizers. Herrera's team has bureaucratically opined that under the City Charter only the SFPUC can perform the governance and rate-setting functions; an opinion totally contradicted by the text of AB 117, which explicitly trumps the Charter on this matter. These staff Attorneys, their faces buried in local City code, are simply behaving as if the state law doesn't exist.

As is so often true of the City Attorney office's staff on so many issues, their opinion is simply incredibly blindered and false, and is now singlehandedly blocking Clean Power SF from moving forward rapidly and strongly enough to beat PG&E's June ballot measure to the finish line.

All that need happen to end this crisis is for Herrera to go to his attorneys who are advising the City on the Clean Power SF program, and demand that they get their heads out of the narrow perceptual boxes that they are jammed in, and get off their asses immediately to creatively guide the City in rapidly designing a governance and rate-setting solution that will allow a signed contract with Power Choice by April 5th. This is the deadline for getting underway so that we can get the start-up of the program approved by enough customers within the first mandated 60 day transition period, before the June 8th election.

City Attorney Herrera, this is your defining moment. Go to your staff and demand immediate creative action on this, and you will leverage the most important municipal clean energy program in the world into success. A move which will ignite a new guiding light for the entire planet to shift its every city rapidly to clean energy.

You completed a good swing by suing to remove PG&E's Prop 16 from the ballot. Now knock the ball out of the park for a home run, by making certain that Clean Power SF gets securely off the ground, regardless of what happens on June 8th.

Eric Brooks
Community Choice Energy Alliance

Posted by Eric Brooks on Mar. 30, 2010 @ 10:15 pm