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?”