A Fragile Energy Revolution: Green

A New Local Energy Provider

In November, most residents in Alameda county will join the growing number of Californians receiving their electricity from a not-for-profit, governmental agency rather than a corporate power provider.  The change will be seamless, noticeable only as a change in the billing statement.

The new energy provider is called East Bay Community Energy (EBCE) and represents more than a decade of work by environmental and social justice activists working hand-in-hand with legislators and government agencies to provide East Bay residents with more control over the generation of their power and how the money spent on that power is invested in the community.

Customers will be automatically enrolled in Bright Choice service which will provide electricity with a higher renewable generation content at a slightly lower price than electricity currently from PG&E.  Customers can also opt up to cleaner power at a slightly higher price or opt out and switch back to the corporate power supplier, PG&E.

Opt Up to 100

Opting up is one of the cheapest significant steps that anyone can take toward going fossil fuel free.  Both higher cost options are 100% fossil fuel free generated power:

• Renewable 100 is generated entirely from renewable energy sources, mostly solar and wind, and costs 1 cent per kWh more than PGE’s electricity.
• Brilliant 100, which includes power from large hydroelectric dams, is still 100% fossil fuel-free and is virtually the same price as PG&E’s electricity.

The EBCE was initiated under a state law passed in 2002 that allowed government jurisdictions to create agencies (called Community Choice Aggregators or CCAs) to purchase power on their residents’ behalf as a way to provide energy options to Californians.

In 2010 Marin County was the first community in the state to create a CCA: Marin Clean Energy.  It was quickly followed by Sonoma and others.  There are now close to two million Californians served by CCAs and more joining each month.  A 2016 UCLA study predicted that up to 80% of electric accounts will be served by CCAs by 2030.

Why is Community Choice Energy so Popular?

One major appeal of CCA is that they are not-for-profit.  Any financial surpluses are invested in new power generation, rather than going to pay shareholders profits, and this generally means cleaner and cheaper electricity.  The UCLA study found that CCAs in California offered 25% more renewable energy compared to the investor-owned utility (IOU) in the same area resulting in an estimated reduction of 600,000 metric tons of CO2 in 2016.

As local government agencies, CCAs also are entirely devoted to their community.  Even before EBCE was providing electricity, it was developing a plan to invest locally in energy development.  In July, the Board of EBCE adopted a groundbreaking Local Development Business Plan which spells out strategies for local clean energy, energy efficiency, and energy storage projects specifically to help address the environmental, economic, and social justice needs of the East Bay community.

A Fragile Future

The rapid increase in CCAs and their predicted dominance is causing seismic shifts in the California regulatory landscape.  One of the biggest debates is who should be responsible for paying the long term obligations the three IOUs made on behalf of customers that are no longer be supplied with power. A recent LA Times article reports these fees are significant and depending how they are allocated, have the potential to crush the nascent CCA movement.

The IOUs are pressing that the CCAs be responsible for many of their debts.  The IOUs argue that they are tightly regulated and entered many contracts because of legal requirements.   Renewable Portfolio Standards, for example, required them to enter contracts for solar and wind power at prices much higher than they are today.  Others argue that the IOUs should have foreseen the decline in demand for their energy but  that the regulatory structure also guarantees IOUs a robust return on their investments, which could incentivize them to invest in surplus energy development.

A 2017 LA Times article outlines the buildup of the current surplus in electricity generation capacity. For example in 2010, as Marin Clean Energy was being established, PG&E secured approval for the Colusa natural gas power plant, an investment that will cost its customers more than $700 million over the plant’s lifespan and has operated “far below capacity” since launching.  Some may recall, this was also a time when PG&E spent millions in advertising trying to sabotage Marin Clean Energy’s start.

While many questions, including who pays for past contracts, still need to be worked out the data thus far indicate that CCAs are helping to accelerate generation of cleaner, cheaper, and locally generated electricity.  With the right regulations in place, this competition can only help us meet our ambitious greenhouse gas reduction goals while also supporting good local jobs for Californians.