Communities going into power business to cut cost, carbon footprint
Sonoma County, which enticed Americans to forsake factory-made food for artisan wines and farmers market produce, now wants consumers to reconsider another everyday commodity.
New on the menu: locally curated energy.
The county is at the forefront among eco-minded communities plunging into the power business nationwide.
Impatient with the pace at which states and the federal government are confronting climate change, communities from the coast of Massachusetts, Cincinnati, Chicago and Boulder, Colo., have begun taking steps to elbow aside big electricity companies and find green power themselves.
Sonoma County now offers tens of thousands of ratepayers energy that is significantly greener — and slightly cheaper — than that sold by the region’s utility, Pacific Gas & Electric Co. Customers who want 100% local renewable power can pay extra and get every kilowatt they use from a geothermal plant in the region’s hills.
“This follows on the heels of the whole local food movement,” said Chris Mann, chief executive of Guayaki, a maker of yerba mate teas. The company’s headquarters — complete with indoor skate park — is in the bohemian town of Sebastopol, which has designated itself nuclear free. Guayaki opted to go 100% geothermal.
“It is part of re-localization,” Mann said. “We are taking back power.”
Supporters hope the new energy model will help drive the local economy as it strikes a blow against climate change.
The fledgling county electricity agency, Sonoma Clean Power, wants to partner with innovators developing small-scale, local clean-energy projects. One of those innovators is a firm that markets solar panels that float atop winery irrigation ponds.
In Boulder, local officials and advocates are so dissatisfied with the mix of energy offered by their utility that they are attempting what amounts to a hostile takeover. With voter approval, the city is moving to use eminent domain to acquire as much as $214 million worth of Xcel Energy Inc.'s transmission lines and substations.
In Chicago, city officials last year negotiated a deal that cut coal out of the mix of energy that the city buys on behalf of residents. The contract would reduce the city’s greenhouse gas emissions 16%, Mayor Rahm Emanuel said at the time.
On Cape Cod, in Massachusetts, officials are using their control of energy contracts to fund a network of solar farms that might not have fit within the business model of a conventional utility.
But the hub of the movement is in California, where a state law requires local electric companies to work with counties and cities that want to offer a greener energy mix. The communities secure the energy, which is then transmitted to consumers through the utility-controlled power grid.
Marin County took the plunge a while ago, but stood alone until Sonoma County got up and running recently. Lancaster will join them next year, and a dozen other communities, including San Diego and San Francisco, are laying the groundwork.
“If you are an environmentally focused community, this is something big you can do,” said Shawn Marshall, executive director of the Local Energy Aggregation Network, based in the San Francisco Bay Area town of Mill Valley.
Critics say the local power agreements are hyped. The ability of local agencies to save money while fetching greener power, they say, is less about low overhead and deft negotiating than lucky timing: Many utilities had the bad fortune of negotiating long-term power contracts before cheap natural gas drove down prices.
Local communities that negotiate seemingly good deals now may face higher costs when the markets change, the critics warn.
Some communities in the Midwest — that started the power companies with the promise of bringing rates down — already have abandoned local power agencies after initial contracts expired and they found they could no longer beat the price offered by the regional utility company.
Not surprisingly, big power companies are working hard to slow the spread of local power agencies. After Marin County launched its program a few years ago, PG&E spent tens of millions of dollars trying to keep others from going in the same direction. Most of the money went to a failed statewide ballot measure in 2010.
The local programs are under constant assault in Sacramento.
This year, a union representing PG&E workers lobbied fiercely for rule changes that would have undermined creation of more Community Choice Aggregators, as local power agencies are called. The sponsors of the bill backed down amid intense opposition from cities and counties.
A similarly intense fight has developed in Boulder, the first American city with a carbon tax and a place that has pledged to meet the greenhouse-gas reduction goals laid out in the Kyoto Protocol, which Congress refused to adopt.
But Colorado does not have laws like those in California and Illinois that require utilities to work with local agencies.
Faced with opposition from the utility, city officials decided the only way to achieve their goal was to take it over.
“Xcel has one of the most carbon-intensive energy supplies in the country,” said city spokeswoman Sarah Huntley, citing figures showing more than half the electricity the utility produces in Colorado comes from coal.
“We realized that if we did not address that problem, we probably were not going to make the kind of progress on climate we as a community want to make,” she said.
Company officials said the city is acting irrationally. They have gone to court arguing that Boulder cannot possibly provide green energy at the price it has promised. The city’s plan leaves the community vulnerable to outages, the company said.
A spokeswoman for Xcel said the company offered Boulder a deal through which it could get the bulk of its energy from a wind farm, but the city rejected it. City officials said the proposal was unworkable.
“They are locked into investments in coal generation facilities that are going to take a number of years to pay off,” Huntley said. “They are a for-profit company that has to return money to shareholders. We would not have to do that.
“We believe this is the only way to provide choice for customers,” she said, “and give them voice in what their choices will be.”
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