Answers to Questions About Sonoma Clean Power

The Chamber’s Advocacy Council has been working hard to ensure that important questions about Sonoma Clean Power are being asked so that we have the best possible information before a decision is made about moving forward with it in Santa Rosa. That decision will likely be made on July 9th by the City Council.

For more information about this important issue, we present both the questions that the Advocacy Council has posed and responses to them by Sonoma Clean Power.

What will the cost structure be for different levels of monthly commercial and residential usage (Customer classes)?

The extra charges for higher usage in the residential rate are for transmission and distribution and will continue to be charged by PG&E. Sonoma Clean Power does not expect to charge extra fees for “tiered” rates.

SCP will generally have similar customer classes and rate types as PG&E.

Commercial, industrial and agricultural rates will be established generally with the same structure as PG&E’s existing rates. The difference is that the ratesetting process will be open to comment by the public in case there are ways to improve the way those rates are designed.

What will the fees be for i) those who delay joining Sonoma Clean Power or ii) those who decide to return to PGE bundled service at a later date? For item ii) what will be both the Administrative Fee and the SCP equivalent of the CRS?

Any fees that charged to cities joining Sonoma Clean Power later would be strictly limited to an amount that ensures other customers do not have to pay more to cover the cost of negotiating for the new city’s additional power. Marin’s program set a fee of between $20,000 and $40,000, but was able to offer an amnesty period in which all of the remaining cities joined later. The new board will set those fees, if any.

Staff are recommending that the fee for customers returning to PG&E be set at the same level used in the Marin program: $5 for residential customers and $25 for non-residential customers. There is four-month grace period in the beginning where customers can choose PG&E at no cost.

At this point there is no plan to institute an equivalent to the CRS for customers who leave Sonoma Clean Power.

How much tax revenue will the cities and county lose?

Several cities, including Santa Rosa, have utility taxes that apply to electric service. Nothing in the community choice aggregation law prohibits cities from continuing to collect utility taxes on power delivered by Sonoma Clean Power. As for other types of taxes, we think that tax revenues will increase (rather than decrease) as a result of Sonoma Clean Power. There are no changes proposed that would cause any loss of local jobs at PG&E or any loss of investment. Instead, a new stream of investment is created that will result in additional local jobs and significant project activity. The net income starts fairly small, but grows quickly to between $9 and $10 million per year after 5 years. An additional $3-4 million will come from an existing surcharge for efficiency program. That money will be used to run local efficiency retrofit programs, incentivize businesses and homeowners to install solar power, and generally add to the energy programs available today. All of PG&E’s programs will continue.

What is the capacity of our infrastructure (power lines) to take “feed in” power?

The legal limitation for “feed-in” power is currently set at 15% of the winter peak demand. Throughout most of Sonoma County, the current level is below 1%, so there is considerable spare capacity today. In addition, there are efforts to increase that legal limitation to a more appropriate higher level based on engineering limitations.

How will the Net Metering and Feed In Tariffs be calculated and implemented? What will feed in producers be paid? Are there any means by which Santa Rosa businesses can participate in developing local efficiency and renewable resources in addition to Feed-In-Tariffs?

All of these questions require the input of the public and city board members before final proposals are submitted. That process will begin immediately after the cities decide about participating. We think it unwise to make these decisions – which may have an impact on rates – without the input of city representatives.

Customers will have full rate information before they are enrolled and need to decide about choosing to stay or leave.

The public will have many opportunities to design programs starting this year, but also continuing on into the future. The initial programs offered in 2014 will be relatively simple, and Sonoma Clean Power will add to these over time as more input and more income are available.

What happens if solar tax incentives are eliminated?

The federal solar tax credit is scheduled to sunset at the end of 2016, and this has already been factored into the planning for Sonoma Clean Power.

What will be the estimated impacts of the proposed PG&E Green Energy Program on SCP economic viability? Marin County has an elective 100% clean energy program for those who wish to pay more to get it. Can such a program be used in Sonoma Clean Power to develop local resources?

Sonoma Clean Power will offer a 100 percent renewable power option, much like Marin’s. It is terrific to see that the threat of competition has already convinced PG&E to propose offering a greener product.

We would like to see a comprehensive and detailed plan as soon as possible for how the mix of energy provided by Sonoma Clean Power (ie, grid purchases, RECs, and local renewables) will be developed, year by year. When can we expect that?

This plan needs to be developed with full input from the public and the participating cities, and will be developed starting in November. Much like the plan for efficiency programs and renewable energy incentives, this plan will not be developed all at once. Instead, a solid plan for the next two to three years will be developed and then additional details and goals will be added as the program proceeds. As noted earlier, because this plan has implications for SCP rates, we think it important that city representatives and the public have a say in the plan.

If Sonoma Clean Power should fail, who will be responsible for the costs associated with its closure?

In the event of major or total financial failure, there is no cost to customers or participating cities. Customers are simply returned to PG&E. As a condition to beginning service, Sonoma Clean Power must post a CPUC-required bond to cover the costs of transferring customers back to PG&E if the program terminates.

The financial risks of failure are borne primarily by the energy supplier and the private bank lender. 25 percent of the start-up money will carry a county guaranty to the private bank, limited to $2.5 million.