In Episode 68 of The Wendel Forum (originally aired on June 30, 2012, on 960 KNEW AM radio), show moderator Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Councilmember Damon Connolly of San Rafael and Councilmember Tom Butt of Richmond.

 

Damon City Hall Photo

San Rafael City Councilmember Damon Connolly serves as Chairman of the Board for the Marin Energy Authority

Connolly is the Chairman of the Board of Directors for the Marin Energy Authority (MEA). The MEA is the not-for-profit public agency formed by the County of Marin and several Marin cities and towns in 2008.  MEA administers the Marin Clean Energy program.

MEA is the first operational example of a Community Choice Aggregation (CCA) program in the state of California.  In California, Community Choice Aggregation was developed through legislation (AB 117) in 2002 as a response to the rolling blackouts of several years ago (remember Enron?).  It’s a system that allows cities and counties to aggregate the buying power of individual customers within a defined jurisdiction in order to secure alternative energy supply contracts.

MEA’s program is a hybrid to traditional utility models, which might include a municipal utility or privately-owned utility (such as PG&E in Northern California).  In MEA’s model, the public agency purchases or produces the energy, but a third-party energy company handles distribution and maintenance of the energy transmission infrastructure.

In 2002, California addressed base renewable energy goals through SB 1078, which set the Renewables Portfolio Standard (RPS).  These goals were expanded in 2011 under SB 2.  California, under the RPS program, requires investor-owned utilities, electric service providers and CCAs to increase procurement from eligible renewable energy resource to 33% of total procurement by 2020.

MEA’s plan is considerably more ambitious than the state requirement.  They plan to get to 100% renewable procurement in the next 10 years. Today they are at 28% (8% more than the current RPS requirement).  The program is getting a tremendous response from new renewable energy suppliers, and MEA has initiated an “Open Season” procurement process to manage proposals.  

So, how does it work?

When a community joins, all of the residents are included in the CCA program.  If they do not want to participate in it, however, they are free to opt out.  If they choose to participate, the MEA offers two plan levels – a “Light Green” and a “Dark Green” option.  The first delivers energy to customers with 50% coming from renewable energy sources.  The latter offers energy to customers that is 100% sourced from renewable energy.  The dark green plan costs the average customer $5-10 more per month and currently includes 8% of their customer base.

The City of Richmond is one of the latest cities to join the MEA.  So how did a city in Contra Costa County get involved in a program from Marin?  City Councilmember Tom Butt explains that Richmond’s General Plan 2030 includes multiple environmental goals, including offering a CCA toRichmond residents and businesses. When analyzing how best to go about implementing a CCA, the City decided it just didn’t make sense to reinvent the wheel, according to Butt.  MEA, as a clear leader in the space, was a logical partner.  As Richmond comes online, the MEA expects to add about 30,000 new customers – a significant influx of new customers, which will give MEA even more purchasing power with energy producers going forward.

Would you pay $10 more on your energy bill each month to know that the energy was made up of 100% renewable sources such as solar, wind, geothermal and biomass? 

Post Links:

Listen to the interview with Councilmembers Connolly and Butt: Episode 68 of The Wendel Forum (27:18 mins; mp3)

Marin Energy Authority: http://www.marinenergyauthority.org/

960 KNEW AM Radio website: http://www.960KNEW.com

Bill Acevedo’s online profile: http://www.wendel.com/wacevedo

Having talked about the success to date of the Renewable Portfolio Standard (RPS) (the requirement that utility companies purchase a portion of their power from renewable energy sources) on February 12, I was gratified to see that the California Public Utilities Commission (CPUC) Division of Ratepayer Advocates (DRA) took notice and released a report in response on February 18.  Given the depth of the report, I admit that they must have been working on it before I spoke. However, rumor has it that the release date was accelerated after I addressed the subject.

Seriously, the DRA makes important points about the effect of the RPS on California’s move to renewable sources of power. In order to meet the 20% threshold by 2010 (with a flexible extension to 2013), California’s utilities put a premium on certainty of project completion over price. Thus, when evaluating two renewable power projects, the utility has an incentive to select the project with the higher cost of power, but the greater likelihood of coming on line. The report, citing information supplied by utilities, lists three factors that are most likely to account for a project’s failure to come on line: inability to get financing, inability to get permits, and lack of transmission capacity.

Compare the obstacles facing renewable power projects with a new natural gas turbine power plant. The natural gas power generator is a type of generator with a long history of successful operation (easier to finance), will probably be located near existing similar generators (lower permit costs) and will be at the nexus of existing transmission lines (lower transmission risk). These differences give the natural gas plant a significant advantage because, putting aside differences in generation costs, the transaction costs and risks are much lower than with most renewable power projects. However, this creates a negative feedback loop we should not build renewable power projects until the cost comes down and the cost cannot come down until we build renewable power projects. Thus, California and other states must break the feedback loop by continuing the drive to renewable power sources until renewable power achieves parity with fossil fuel. 

 

View the DRA report,

In Episode 2 of The Wendel Forum, Dick Lyons shares a brief history of California’s Renewable Portfolio Standards (RPS), or the amount of energy that a public utility must produce via renewable energy sources.  California’s three major utilities were required to produce at least 20% of their energy from renewable sources by the end of 2010.  Tune in to hear how close they got and how California stacks up against the RPS goals of other states.  Now we’ve got new goals to reach.

What are your thoughts on how California can best achieve these goals?

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