Officials with Sonoma County’s startup public power provider said legislation recently introduced in Sacramento poses a major threat to the agency and others like it seeking to launch across the state.
The bill would fundamentally change how community-based power providers enroll new customers.
Critics of the bill say it could halt those power ventures from getting off ground, stalling local efforts to boost renewable energy use and cut greenhouse gases. Supporters, however, say the change would provide a truer consumer choice between the emergent government-backed electricity suppliers and the utilities that now serve most households and businesses in California.
The change would not kill Sonoma Clean Power, but would make it significantly more difficult and costly to attract customers, agency officials said. The venture is launching electricity service to its first group of homes and businesses May 1.
The legislation, Assembly Bill 2145, would require new customers to opt in to service from such public power agencies. Under current law, households and businesses within the jurisdiction of Sonoma Clean Power and other agencies like it are automatically enrolled, requiring customers to opt out if they wish to remain with their present electricity supplier.
Opponents of the bill, including environmental and business interests who’ve backed Sonoma Clean Power, say the move is an attempt by large electric utilities to wipe out community choice aggregators – the power providers created by local governments as an alternative to for-profit utilities. Opponents have begun a lobbying campaign to defeat the legislation.
“It’s a setback for the environment and for competition and it protects the utilities’ monopoly,” said Geof Syphers, chief executive officer of Sonoma Clean Power.
PG&E, the dominant electricity provider in Northern and Central California, has thrown its support behind the bill.
It would reverse a statute that makes any new community choice aggregator, or CCA, the default power provider, putting utilities at a disadvantage, said Kent Kauss, senior director for state government relations for PG&E.
AB 2145 “provides customer choice by allowing such customers to elect to participate in the (CCA) program,” Kauss wrote in a letter supporting the legislation. “We believe our customers want to have an affirmative voice in who provides their commodity service and AB2145 simply provides that.”
The legislation was introduced last week by Assemblyman Steven Bradford, D-Gardena. It has publicly revived the political standoff between private utilities, PG&E foremost among them, and public ventures seeking to usurp their power supply business by promising a greener, competitively priced product.
In 2010, PG&E poured $46 million into an unsuccessful ballot measure that would have limited such public programs, requiring their approval by two-thirds of voters.
Since then, under state law, utilities have been prevented from directly marketing against the ventures.
Opponents of Bradford’s bill said it was a clear attempt to undermine the programs through legislative action.
“For a nascent CCA like Sonoma Clean Power, this is very troubling,” said Assemblyman Marc Levine. The San Rafael Democrat’s district includes the jurisdictions of Sonoma Clean Power and Marin Clean Energy, the neighboring public power provider.
“I’m strongly against this bill. It would strike at the heart of CCAs,” Levine said, adding that he was trying to rally lawmakers to his side.
The state authorized the CCA system in 2002, in the wake of California’s energy crisis. The opt-out provision was built in to the original legislation, mirroring rules in five other states with CCAs – Ohio, Massachusetts, Rhode Island, New Jersey and Illinois.
Bradford’s bill would make California the first state with an opt-in system.
Sonoma Clean Power, the second active CCA in the state behind Marin’s program, aims to serve about 220,000 accounts, or about 80 percent of PG&E’s electricity customers in the county, by 2016.
If passed this year, the bill would apply to customers starting in 2015 and would not affect the first wave of prospective Sonoma Clean Power customers, which include more than 18,000 commercial accounts and more than 6,000 randomly selected residential accounts in Santa Rosa, Cotati, Sonoma, Sebastopol, Windsor and the unincorporated parts of Sonoma County.
If the bill did pass, Sonoma Clean Power would have to spend more on marketing to solicit new customers, including those in the holdout cities of Petaluma, Rohnert Park and Cloverdale, should those cities join the program, Syphers said. He did not provide an estimate of additional costs.
“It certainly won’t kill Sonoma Clean Power,” he said. “We are up and running. We’re going to be fine.”
Others involved in the power authority were not as confident. Mark Landman, vice chairman of Sonoma Clean Power, said the bill was an attempt to shut down CCAs.
“If you had to get every customer to opt in, you could never compete with PG&E,” said Landman, a Cotati city councilman. “It appears that this is PG&E trying to squash CCAs.”
Sonoma County Supervisor Susan Gorin said the bill would stall the statewide push for locally produced, greener power.
“California would lose as a result of AB 2145 passing because it would significantly delay the financial and environmental benefits that community choice programs provide,” said Gorin, chairwoman of Sonoma Clean Power.
Bradford, the chairman of the Assembly Committee on Utilities and Commerce, is a former executive at Southern California Edison, the second largest utility in the state. He has received $80,000 in campaign contributions from electric utilities since 2006, according to campaign finance reports.
A spokesman for Bradford’s office said he was unavailable for an interview this week.
“I support electricity competition and customer choice,” he said in a written statement to The Press Democrat. “Consumers deserve greater choice and transparency in determining where to buy their electricity.”
But Sonoma County Supervisor Efren Carrillo said the bill would harm transparency built into the CCA system, including a local rate-setting process that is entirely public.
“The proposed legislation’s clear intent is to obstruct customer choice, not to promote it,” said Carrillo, a Sonoma Clean Power board member. “It limits local energy choice and it turns its back on California’s environmental goals as well as infringing upon local government’s decision-making ability.”
Bradford has scheduled an April 21 hearing on the legislation at the utilities and commerce committee. If it makes it out of that committee and passes the appropriations committee, then it would come up for a vote in the full Assembly before going to the Senate.
On Monday, the Sonoma County Regional Climate Protection Authority, composed of representatives from the county and its cities, sent a letter to Bradford opposing the legislation. The agency said the proposal protected utility “shareholders rather than California residents.”
Dawn Weisz, CEO of Marin Clean Energy, said the proposed legislation extends a fight that was escalated especially in the campaign over Proposition 16, the 2010 measure bankrolled by PG&E.
“We’re not surprised by it,” she said of the bill. “The utilities are not interested in letting go of their monopoly status.”
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