City’s local power program will be greener, but not so local, at first

The San Francisco Public Utilities Commission (SFPUC) is in negotiations with Shell Energy North America to purchase power for a new version the city’s community-choice aggregation (CCA) program that will be smaller — but greener — than what city officials had originally envisioned.

While the forward momentum and the prospect of offering 100 percent renewable energy seems to have ushered in a rare moment of harmony among the players in City Hall who are crafting the program, not all the grassroots advocates were fully sold on the idea, saying they were still waiting to see how committed the city was to moving ahead with a plan to build municipal green energy facilities which could ultimately bolster the local economy and create jobs.

The new plan for CleanPower SF was unveiled by the SFPUC at a May 6 meeting of the Local Agency Formation Commission (LAFCo), which has been working with the city’s utility commission for half a decade to implement CleanPower SF. Emerging after a false start last year, the new plan would target 75,000 electricity customers at the outset – far less than under the original idea of enrolling all of San Francisco’s Pacific Gas & Electric Co. customers while providing the chance to opt out.

The CCA would offer 100 percent renewable power right off the bat, instead of the 51 percent renewable target that was previously envisioned. That fully green product offering is possible because the city would hire a contractor, most likely Shell, to purchase the green energy on the open market. The energy mix could be derived from sources within California or out of state.

“We’re having productive discussions,” noted Mike Campbell, who directs the CCA program for the SFPUC, but noted that it would be awhile yet before all the terms of the deal were cemented. Shell also contracts with the Marin Energy Authority for its CCA program, which San Francisco is looking to as a model.

The new scheme abandons a prior goal of meeting or beating PG&E electricity rates, but the SFPUC justified this switch by pointing to market research suggesting that the higher price would not necessarily subvert the program’s success.

Campbell said the new model came to fruition after poll results identified a core segment of San Franciscans who would be willing to stick with the green power program even if the price was slightly higher. “There’s such a strong segment of folks who are eager to do something about global climate change,” he said.

Campbell added that estimated generation fees could climb from around 7 cents to 13.5 cents per kilowatt-hour, amounting to a roughly $10 monthly utility bill increase on average. Since PG&E is expected to increase rates for customers who use less energy, “it’s going to help make it more attractive,” Campbell noted.

The new plan seemed to sit well with Ross Mirkarimi, a longtime advocate for community choice who chairs the Local Agency Formation Commission, which is tasked with overseeing the SFPUC’s implementation of the program. “The new program has great potential and goes where PG&E can’t or won’t,” Mirkarimi told the Guardian. “Carving out a customer niche that delivers a true green load is strategically more beneficial to the longevity of CCA in San Francisco. Once we establish an economic foundation for CCA, we then are positioned to build a renewable energy infrastructure as originally envisioned.”

Mirkarimi noted that the forward momentum had changed the dynamic in a historically fractious process, since, after years of being at loggerheads, the SFPUC and LAFCo finally seemed to be on the same page.

Both Campbell and Mirkarimi acknowledged that they expected PG&E to put up a fight, as it did when Marin County rolled out its CCA using a similar model to the one San Fransico now plans to adopt. Since PG&E will still be in charge of customer billing, it could employ tactics such as artificial spikes as it did in Marin to try and scare off CCA customers. “We do expect PG&E to do everything it can think of to try and encourage customers not to participate,” Campbell said.

Meanwhile, organizers from the San Francisco Green Party and the Local Clean Energy Alliance, who have closely tracked the process and held meetings with the SFPUC, say they’re supportive of the general concept but are still waiting to see whether the city is fully dedicated to laying the groundwork for building city-owned energy generating facilities.

Over time, this aspect of the program — which has been part of the plan all along — could supply green energy locally, gradually replacing the energy supply that Shell would be purchasing from elsewhere. San Francisco Green Party organizer Eric Brooks also pointed out that over time, city-owned generating facilities and local energy-efficiency upgrades could enable the SFPUC to bring down the cost of the green power to make it competitive with PG&E.

Campbell noted that the city would move ahead with the build-out, but “it certainly won’t be in the first year.”

Unless the build-out aspect of CCA moves ahead with a strong level of commitment, said Al Weinrub of the Local Clean Energy Alliance, the social-justice goals of creating new jobs and bringing generation costs down to make green power accessible to everyone may not be realized.

“We have a commitment from staff that they will pursue studies” to move ahead with the build-out, noted Weinrub. “The problem … is that they’re really dragging their feet.” He added, “We’ll have a lot of trouble supporting CleanPower SF is there’s no local build-out.”

Organizers also voiced concerns that without moving forward with this second element, the CCA could end up catering exclusively to an upper-middle class, predominately white customer base.

At the LAFCo meeting, the SFPUC delivered a presentation explaining the results of the poll that had been conducted to determine who would purchase green electricity from CleanPower SF. A longer version of that presentation, delivered to grassroots advocates in a separate meeting and provided to the Guardian by Brooks, showed that on average, CleanPower SF customers were expected to have higher levels of education and higher income levels — individuals making more than $100,000 per year had the greatest enthusiasm for the program. Those results also showed that 67 percent of survey respondents representing African American, Asian / Pacific Islander, or other communities of color indicated that they would not be interested in enrolling in CCA when they were given information about the program and the estimated rates.

Weinrub said this demographic profile of the initial CCA customer base would be problematic if it represented the only customers who would ever subscribe, because the whole notion of CCA from the start had been to create an accessible, community-owned power source that benefited San Franciscans across the board and offered an alternative to PG&E. But he said he believed the program could have more widespread appeal and grow its customer base if there was a sound strategy to bring down rates over time by employing local energy generation and energy-efficiency projects. “Our whole pitch is, what about everybody else?” he said. “We feel pretty strongly that with a well designed build-out program, you can offer very competitive services.”