Electricity Deregulation Blog

With California’s energy deregulation fiasco still fresh in minds, the warnings are troubling.

FOR THE NEXT six weeks local politics will be dominated by the Marin Energy Authority. That’s the joint powers agency assembling a program allowing county government and eight participating towns to assume PG&E’s role of purchasing electric power.

Novato, Larkspur and Corte Madera have voted not to participate.

The plan calls for MEA to initially purchase renewable energy (nuclear or hydro doesn’t qualify) from existing providers. They would do it in such bulk that the mix delivered to home-owners will be more renewable than what PG&E’s currently delivers at a cost the same or slightly higher than at present. Everyone in unincorporated Marin and the eight participating cities will be MEA customers unless they affirmatively opt out.

Stripped to its basics, MEA is an effort to address state legislation mandating a 20 percent reduction of California’s greenhouse gas emissions by 2020. That’s a huge and expensive hurdle. Major motivation behind MEA is that its implementation satisfies two-thirds of Assembly Bill 32’s Marin compliance requirement.

The agency, chaired by Supervisor Charles McGlashan, is preparing for a final vote in January that will ultimately commit big money to purchase renewable electricity contracts.

Now, as the plan is up for final review, Marin’s civil grand jury issued a blockbuster report, “Marin Clean Energy: Pull The Plug.”

Its 26-page analysis advocates abandoning the complex concept. It concludes that MEA is based on over-optimistic assumptions and that governments and ratepayers will incur major financial exposure if things go wrong. With California’s energy deregulation fiasco still fresh in minds, the warnings are troubling.

One of Marin’s most credible Marin watchdogs is the grand jury and its tough-love report can’t be blown off. That’s not to say it can’t be rebutted, but MEA’s initial response was cursory and didn’t do the job.

The agency also faces understandable criticism that during its first few years the agency will not produce or even buy any new clean energy. That’s because the agency’s contractor will just purchase existing green electricity. If MEA didn’t buy that power, someone else would. Remember, electricity is fungible. In the real world a household that contracts for 100 percent clean energy gets precisely the same juice as their neighbor who opts out of the program. The improvement is that the overall mix is greener.

Proponents reply that long-term, MEA will indirectly encourage additional renewable energy production by sparking increased market demand.

Incongruously, the apparent winner of the competition to provide that clean green power is the American subsidiary of the epitome of “Big Oil,” Royal Dutch Shell, a fact troubling to environmental purists.

Before MEA is plugged in or out, the agency must explain why Marin is the only one of California’s 58 counties to address AB 32 compliance by entering the energy business. What alternatives are other counties pursuing?

The energy board needs a more thoughtful reply to the grand jury’s analysis, including whatever hard data is behind currently vague denials.

Don’t be green Pollyannas. Tell Marinites the worst-case scenario – something never done when Sacramento bungled energy deregulation.

PG&E must also stand up straight. It claims a willingness to provide alternatives, but ratepayers hear blather. To be taken seriously, PG&E must promptly provide specific green alternatives that meet AB’s 32 tough but necessary requirements.

By Dick Spotswood

Technorati Tags: California, electricity deregulation