Deadline looms for San Francisco’s green power program

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Is there renewable power in S.F.'s future, or more of the same?

Negotiations between city government and Power Choice LLC, a contractor selected to implement San Francisco’s Community Choice Aggregation (CCA) program, began Feb. 9. Almost seven weeks later, there’s still no end in sight -- but if a deal isn’t secured soon, San Francisco could risk losing an opportunity to implement a cutting-edge green power program that would significantly reduce the city’s reliance on fossil fuels and give customers an alternative electricity provider.

About a half-decade of studies, debate, public meetings, and input from all sides have brought San Francisco’s CCA to the threshold of finally becoming a reality. The program would offer an energy mix comprised of 51 percent renewable power by 2017 for those who opted in.  

Assuming the program can operate successfully without an adverse impact to customers’ wallets, San Francisco could become a shining example of how to transition to a more sustainable energy model. It could represent giant step -- rather than an inch-by-inch crawl -- toward carbon-free power generation serving the needs of a major U.S. city.

As the negations drag on and a serious deadline looms closer and closer, some observers are growing anxious. No one can tell for sure what’s happening behind closed doors, but one thing is certain: PG&E is spending millions to try and torpedo CCA through a sophisticated public relations campaign, and it would have a much easier time derailing the project if it met with delays. PG&E would lose some of its customer base if the CCA program were a success.

PG&E has, intentionally or not, imposed a critical deadline on San Francisco’s CCA program implementation by introducing Proposition 16 -- a ballot initiative that could slam shut this window of opportunity. Prop 16 would require a two-thirds majority vote before any CCA statewide could get off the ground, making it almost impossible to move forward.

If San Francisco’s CCA program hasn’t gotten underway by June, when Californians will vote on Prop 16, years of effort could be rendered futile if the initiative passes.

As SFPUC General Manager Ed Harrington told the Guardian, “We will get a contract as soon as we can possibly get a contract -- but I can’t tell you the date.”

Several things would have to happen before the June deadline in order to guarantee that the city’s CCA would not be affected by the outcome of Prop 16. The program contract would have to be approved by the SFPUC, signed off on by the Board of Supervisors, and a 60-day opt-out period would need to be initiated before the start of service.

With so much to do in such little time, some observers are worried that the whole thing could fall apart. “Something seems to be awry,” noted John Rizzo of the Sierra Club, noting, “The PUC has historically fought and delayed CCA.”

The program is the product the joint efforts of two city bodies, the SFPUC and the Local Agency Formation Commission (LAFCo), which is chaired by Sup. Ross Mirkarimi. Historically, LAFCo and the SFPUC have not worked well together, with Mirkarimi trying to prod the power-and-water agency forward, and publicly bemoaning its recalcitrance.

Mayor Gavin Newsom -- who has forged partnerships with PG&E in the past, received several campaign contributions from high-ranking PG&E employees, and traveled to Mexico on the utility’s dime -- appoints commissioners to the SFPUC. The mayor’s apparent alliance with PG&E combined with his sway over the SFPUC has led program advocates to voice suspicion over the years that its progress was being hampered by something more than ordinary bureaucracy.

Harrington, who heads up the SFPUC, said everyone sitting at the negotiating table is well aware of the Prop 16 deadline.

“The hope is to do it, obviously, as fast as possible,” he said. “I think that we are doing well in terms of rate discussion [and] renewable discussion, they’re very much with us in terms of getting renewables as fast as possible, and meeting the goals that the Board [of Supervisors] and everybody else has set for years now.”

“But the real discussion at this point is risk,” he said. “And trying to figure out how that risk is done in a way that protects our customers and the city is a big deal.” A key program goal since the beginning has been to meet or beat PG&E rates, which will climb by some 30 percent in the next few years if its current rate-hike proposals are approved by state regulatory bodies.

“The other part is just how do you implement this?” Harrington continued. “You’re going to have to contract with people who will in turn contract with generators. What if one of them went under, what if there are price hikes? How do we step in for them?”

At the same time, Harrington acknowledged that in the long-term, this program has the capacity to shift the city’s electric and economic outlook by offering more stability, and minimizing risk.

“In general, the kinds of renewable power that we’re talking about are much, much more stable than natural gas, oil, those kinds of things,” he said. “And so while at the very first day of this we’re not going to own anything … as you start to have ownership interest in power supplies that are sustainable, renewable power, that price fluctuation should be a whole lot less, and our customers should be exposed to a whole lot less price fluctuation and risk than people who still have big things that are in natural gas and those areas.”

Harrington said he believed the CCA program would be attractive to San Franciscans because of its environmental edge. “I think people here want to take care of the world, they want to do things that are right. They probably don’t want to spend a lot of money to do it -- and I don’t think they have to,” he said. “That’s the part that makes me crazy: If we can provide greener power for equal to or less than PG&E … why wouldn’t we try to do that for the city?”

Comments

What do you expect when you have San Francisco pols deep in the pocket of the local corporate energy provider. Newsom. Leno, Pelosi, Boxer,..........

Posted by Jerry Jarvis on Mar. 29, 2010 @ 6:06 pm

I figure I have supported PG&E to the tune of approximately $4,000 to $6,000/year for the last 20 years. A responsible utility company should have implemented full-blown photovoltaic solar panels E-V-E-R-Y-W-H-E-R-E some 40 years ago. The technology existed and the counter-culture at least was well aware of the urgency to live in greater harmony with our earth. The Whole Earth Access catalog and the Dome Book are just two examples of how eager people then were to detox from fossil fuels and switch to renewable, clean energy. PG&E and other conventional energy providers have contributed to the planet's devastation by stringing us all out on fossil fuels so they could continue to grow their profits, irregardless of how much destruction might be caused to our air, water, ozone layer, and personal health. I believe we all have the right, if not the obligation, to urge PG&E to meet a 6-month deadline to convert every home and commercial building to solar panels. It's time folks. If PG&E is unwilling or unable to make such a move we should open it up to bids. Just as we should not live at the mercy of insurance companies for our health care, nor should we live at the mercy of PG&E for our energy needs. If capitalism is supposed to be about "free market enterprise" why do we so readily accept or tolerate monopolies that do not serve our best interests?

Posted by Guest on Mar. 29, 2010 @ 10:29 pm

This is just another example of why the Board of Supervisors -- not the mayor -- should be appointing commissioners. The SFPUC has historically been a very anti-environmental agency. The Board would appoint much more environmentally friendly commissioners, who in turn would have gotten this done by now. Mayors are bought and paid for by downtown, big business interests like PG&E. Their commissioners are just more of the same "best government money can buy" problem.

Posted by Jeff Hoffman on Mar. 30, 2010 @ 7:40 am

The crucial unspoken problem in this entire crisis of being near the finish line, but with no crossing it in sight, 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). AB 117 is the enacting bill which 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 stable of attorneys advising program have completely ignored this advise and the advise of many other experts, public officials and organizers, and has bureaucratically slide-ruled 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 needs 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 advise the City in rapidly designing a governance and rate-setting solution that will allow a signed contract with Power Choice by April 5th; which 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 days before the June 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 set a new standard for the entire planet to shift the world's cities rapidly to clean energy.

Eric Brooks
Community Choice Energy Alliance

Posted by Eric Brooks on Mar. 30, 2010 @ 10:18 am

The idealism runs rampant. A major corporation makes a move to protect its customer base and the attacks on "big bad PG&E" come flowing out. The entitlement mentality is not on the PG&E side, it's on those who actually believe PG&E gets "guaranteed profits". Wow, if that were only true. These are the same people who believe that they shouldn't have to pay very much or nothing for their power and gas, yet they really have no idea where they are using their energy. If you are interested in facts, PG&E's profits are NOT guaranteed, never have been. Their profits are based on cost of service and whatever the CPUC allows to be collected from the capital that PG&E's shareholders invest in the pipes (natural gas) and wires (electric) and associated equipment built to serve you. Today, that's about 10.5 - 11%%. Take a look at some of the other Forutne 500 companies and compare that return to see if you agree that this is excessive. Additionally, PG&E's generation mix is among the cleanest in the U.S., made up of hydro, nuclear, some new gas-fired, and power purchases from natural gas-fired and renewable energy resources. If there were more renewable resources readily available today they would already be in PG&E the mix. Don't be fooled by the those who just see companies like PG&E as the boogie man out to screw you, so any profit is too much. The men and women of PG&E work 24/7, 365 days a year in good weather and bad keeping your lights on and the gas flowing

Posted by Fact Checker on Mar. 30, 2010 @ 11:51 am

Well 'Fact Checker', It's safe to say that since PG&E has somehow managed to come up with 35 million dollars of ratepayer money to spend on a political ballot measure to buy its own special monopoly protections in the California Constitution (and it has already spent over 28 million of it on the campaign) that PG&E seems to be running a bit of a profit.

Lets add to this the 23 million dollars plus that PG&E spent in San Francisco and Davis killing 100% clean energy mandates and community electricity initiatives, and that brings PG&E's total to at least 57 million. And that doesn't even include the other tens of millions that PG&E has spent in various California communities using blatantly false advertising attacking Community Choice.

So PG&E is now well into the 100 million dollar plus range on its various attacks against cleaner, lower cost, community based electricity.

Looks like PG&E is making a profit to me...

And the last time I checked, being a monopoly, those profits are 'guaranteed' since most of PG&E's customers cannot choose another provider.

Community Choice and other community based electricity efforts make real, healthy, free market competition possible.

But it looks like PG&E knows that any real competition would drive it out of business, and that's why it's spending so much of the guaranteed profits it got from us, to kill that competition by solely funding the absurdly anti-competitive Prop 16.

Vote NO on locked in anti-competitive monopolies
Vote NO on locked in multi-billion dollar rate hikes
Vote NO to perpetual polluting fossil fuel energy

Vote NO on Prop 16

Posted by Eric Brooks on Mar. 30, 2010 @ 1:33 pm