Woodland Joins Community Choice Energy Program

Davis’ Community Choice Energy program is gaining momentum, after officials announced last week that Woodland will join the partnership between the city of Davis and Yolo County.

Last Tuesday, the Davis City Council unanimously approved Woodland’s request to join the program. Final approval is pending a vote by the Yolo County Board of Supervisors at its next meeting.

The program — now dubbed the Valley Clean Energy Alliance — was originally approved in March 2016, and aims to bring locally controlled, sustainable energy to the region. Customers will have the option to purchase more of their electricity from renewable sources.

Davis is part of an increasing pool of cities across the state that are starting their own energy programs. Over the next 10 years, California could see more than 50 programs established across the state, said Mitch Sears, sustainability manager for Davis and staff liaison for the program.

“There’s a real groundswell of these programs across the state because of the value that they deliver,” Sears said.

Seeing Woodland join the Valley Clean Energy Alliance will increase the total number of customers by roughly one-third, with users in Davis and unincorporated Yolo County comprising similar portions of the customer base.

Increasing the alliance’s size will spread out the overhead costs among more customers, thereby improving the revenue returns expected for local communities.

Adding an estimated 23,000 customers from Woodland would spread costs over more customers, decreasing overhead from $9.49 million to $6.88 million per megawatt-hour. The cost to supply extra amounts of green energy to the larger customer base, meanwhile, would see a slight uptick.

Woodland’s entrance into the alliance also is expected to see revenues rise from $7.6 million — for a Davis and Yolo County CCE program — to  approximately $14.7 million for all three jurisdictions, according to financial models.

Currently, Woodland is the only other city in Yolo County mobilizing to join the partnership, though the framework is in place to allow West Sacramento or Winters to join at a future time, Sears explained.
“There’s other programs like Marin Clean Energy in the Bay Area that have gone through this process of growing and adding new jurisdictions. … We’re following that lead,” Sears said.

Woodland has committed $500,000 toward the program’s startup costs. The city of Davis and Yolo County approved identical amounts of funding when the program was first approved. As it currently stands, “very little” of those funds have been spent yet, as the program awaits hiring a CEO and other costs.

“It is important … that those initial startup costs funded by local jurisdictions are reimbursable,” Sears said.

Woodland also will add two members to the VCEA board as well as three residents to the program’s advisory committee. The board currently includes Davis Mayor Robb Davis and City Councilman Lucas Frerichs and Supervisors Don Saylor and Duane Chamberlain.

The Valley Clean Energy Alliance is expected to see its largest boost once a CEO is selected. The decision is expected the next month, Sears said.

“The search is winding down,” he said. “Once the CEO is chosen they’ll move more into deciding where the energy will be procured from and what personnel will be added to the team.”

The latest timeline for the program anticipates that electricity deliveries will begin by spring 2018. All residents will be automatically enrolled in the program, but will have ample opportunity to opt out and remain with PG&E.

PG&E will continue to transmit and distribute the electricity, provide natural gas, and handle the billing and maintenance of the grid.

Woodland Joins Community Choice Energy Program, by Felicia Alvarez, The Davis Enterprise, May 21, 2017.

Woodland Closer to Fusing with Valley Clean Energy Alliance

A little more energy — and a lot more money — by the city of Woodland could see a drop in energy costs.

The Woodland City Council is on the verge of finishing an arc of study on becoming a member of the Valley Clean Energy Alliance with Yolo County and the city of Davis, an effort of which could give power customers more choice in where their power originates.

Acting last Thursday, the council gave what could be its last informal blessing with preparing the paperwork and moving ahead with formal linkage to the Energy Alliance. All that’s needed now apparently is some paperwork and $500,000 toward startup costs, according to the city’s Environmental Sustainability Manager Roberta Childers.

The city has been studying the issue for the last six months or more and now seems ready to make the investment. About two weeks ago, the council received a report from Tom Flynn, chairman of the city’s Community Choice Energy Technical Advisory Committee, recommended onto the program after months of research and study.

If implemented, it is estimated city energy users could see rates drop between 4 percent and 8 percent compared to those of PG&E. For the city of Woodland — which also buys its power from PG&E — the savings could be reinvested back into additional energy conservation programs or used for other purposes.

Action is need now so Woodland could secure at least two seats on the board of the Energy Alliance in order to have a say where power is purchased and for how much. The switchover to the Energy Alliance might still not occur until February 2018.

The Energy Alliance was developed under a statewide Community Choice system, which allows local governments to buy develop power on behalf of their public facilities, residents, and businesses. The aims are to increase local choice in energy supply and provide electricity with high renewable energy content at electric rates that are competitive with those of the incumbent investor-owned utility, such as PG&E.

PG&E would still continue to provide power as well as maintain power-transmission systems, but the decision on where the power comes from falls to individual entities. Some county’s, such as Marin, already have Community Power systems in place.

Initially, the City Council had some reservations on linking up with the Energy Alliance, based mainly on cost, but those fears seem to have subsided. The $500,000 initial investment, Childers told the council, does represent a financial risk. But it could also easily be made up in terms of overall energy savings by both the city itself and PG&E customers.

“The financial projections by Yolo County and subsequent projections for Woodland’s efforts,” Childers explained, “showed the likelihood of substantial economic benefits that would benefit the entire community. Davis and Yolo County would not have decided to go forward with a VECA recommendation if there weren’t the expectation of good customer rate savings or at least competitiveness with PG&E rates and healthy rate savings.”

Childers said the $500,000 could be reimbursed within one or two years after the Energy Alliance was formed.

Council members were supportive with Skip Davies — who said he liked the concept about nine months ago although he had questions about cost — now “fully supports the project.” Davis in the past has noted that some businesses in town already purchase their power independently of PG&E.

One other risk is for customers, noted Childers and City Manager Paul Navazio. Those who did not want to participate in the Energy Alliance would have to “opt out” of the program and pay a fee of an as yet undetermined amount.

Childers said there is a “lot of discussion” underway between PG&E, Public Utilities Commission and other investor-owned utilities on how to “better calculate the exit costs of customers and how to make those fees more predictable.”

Nonetheless, Councilman Tom Stallard — a longtime supporter of renewable energy — said it was “important (to note) there’s no stated position from PG&E on this. I’ve read that many as 40 percent of customers and perhaps as many as 80 percent” are making this switch. “So this is a trend. PG&E will continue to provide power … they’ll still be installing lines and installing pipe … (but) we gain control of their sources of energy and we can continue to emphasize renewals which is important to meet our climate action plan.”

Childers said that typically power customers are given an option of deciding whether their want their power to be coming from 50 percent renewable energy sources, 75 percent or 100 percent, with rate structures reflected in their choices. The specific types of energy sources were not specified, although utilities have been moving more heavily toward solar, wind and other alternative methods rather than hydroelectric, for example.

Councilman Enrique Fernandez had a series of questions about the proposal, but also said he supported membership in the Energy Alliance “200 percent” for the both decreasing costs and cleaner energy production.

And Mayor Angel Barajas said he supported it as well, noting it would help small businesses and give them an opportunity to use their savings elsewhere.

Woodland Closer to Fusing with Valley Clean Energy Alliance, by Jim Smith, Woodland Daily Democrat, May 7, 2017.

Woodland Moving Ahead to Team up with ‘Energy Alliance’

In science circles, an erg is a unit of energy and work that by some definitions is the equivalent of one house fly performing one “push up.”

JIM SMITH-DAILY DEMOCRATCommunity Choice Advisory Committee Chairman Tom Flynn briefs the Woodland City Council on the advantages of joining the Valley Clean Energy Alliance recently.

Community Choice Advisory Committee Chairman Tom Flynn briefs the Woodland City Council on the advantages of joining the Valley Clean Energy Alliance recently. (JIM SMITH-DAILY DEMOCRAT)

By that standard, perhaps millions of ergs have been expended to prepare a report that recommends Woodland join the Valley Clean Energy Alliance to purchase power more cheaply and without going through Pacific Gas & Electric.

If all goes according to plan, the City Council was told this past week, Woodland could team up with the city of Davis and Yolo County within the next several months in preparation of for the February 2018 launch of the combined agency.

Last Tuesday, the council received a report from its Tom Flynn, chairman of the city’s Community Choice Energy Technical Advisory Committee, that made the recommendation after months of research and study.

If implemented, city energy users could see rates drop between 4 percent and 8 percent compared to those of PG&E. For the city of Woodland — which also buys its power from PG&E — the savings could be reinvested back into additional energy conservation programs or used for other purposes.

Flynn, a storage and distributed energy resource policy manager for the state’s Independent System Operator with nearly 30 years of experience in California electricity policy, updated the council which took no formal action but is expected to do so in early May.

Roberta Childers, the city’s environmental sustainability manager, has indicated that if the city acts quickly it could have one or more seats on the board of directors for the Energy Alliance.

If the council decides to participate in a energy program, the City would need to commit funds toward program administrative costs and energy contracts. The City’s initial start-up investment is estimated to be in the range of $500,000, with the expectation of recovering those expenses over time through the customers’ payments for electricity. General Fund reserves represent the most likely funding source.

Under a Community Choice system local governments can buy develop power on behalf of their public facilities, residents, and businesses. The aims are to increase local choice in energy supply and provide electricity with high renewable energy content at electric rates that are competitive with those of the incumbent investor-owned utility, such as PG&E.

While a Community Choice system determines the sources of its power supply, sets customer rates, and develops programs and incentives, the utility continues to deliver the energy, maintain infrastructure, read meters, and bill the customers. Individual customers would have the ability to “opt out” of the program.

Participation has the potential to provide substantial economic benefits through the provision of favorable electricity rates and incentive programs tailored to local needs and could accelerate progress toward the Woodland’s Climate Action Plan targets for greenhouse gas emission reductions.

If the Council agrees joining the Energy Alliance it would need to complete a number of administrative steps by July 2017. Specifically, by May the city would need to notify Davis and Yolo County of its desire to be on the agency so those groups could grant approval.

Woodland Moving Ahead to Team up with ‘Energy Alliance’, by Jim Smith, Woodland Daily Democrat, April 23, 2017.

Council Unanimously Votes to Approve Sterling Apartment Project

As the hour approached midnight and the council listed to dozens of citizens on both sides, including a relatively large number of students, the council – citing a desperate need for student housing while being somewhat wary of this proposal – unanimously approved the project, asking staff to come back with a number of conditions for the development agreement.

Among the conditions placed were an agreement on the provision of pool passes for the low-income residents to city pools, an exit fee for those parking their cars onsite as storage, a look at water conservation incentives, and commitments to green sustainability as well as participation in the community choice energy arrangement.

The council, led by Mayor Pro Tem Brett Lee, wants to come back with some sort of statement of support, committing to preserving Rancho Yolo.  The mayor pro tem felt that the residents of that mobile home park, who own their homes but not the land, feel especially vulnerable.

Mayor Robb Davis mentioned that he and Lucas Frerichs have been in talks with the Yolo County Supervisors about a potential conversion ordinance that would make it more difficult to convert mobile homes to other uses.

There was also talk about the need to look into construction impact fees at a future point.

Josh Vasbinder, representing the Dinerstein Corporation, noted that after meeting with residents they agreed to reduce the density of housing.  Mr. Dinerstein and others attempted to dispel the belief that this project was effectively proposed with the idea of a compromise in mind.

At the same time, he laid out the clear need for student rental housing.  He noted that, according to the 2016 Vacancy Report prepared by the UC Davis Student Housing Department, there is a 0.3 apartment vacancy rate to go along with an overall 0.2 vacancy rate.

Students came out in numbers to support the project

He noted that they surveyed around 9,969 units, accounting for 83 percent of all the multifamily housing stock in the Davis community.

Those findings mean that there are less than 30 units vacant and available to renters in the entire city.

Mr. Vasbinder presented the following: “According to the City’s 2016 Residential Report, of the 266 residential permits issued, Zero (0) were issued for market-rate/student apartments.”  Furthermore, “While the city is meeting the targets for all residential categories, they are not meeting targets for market rate/student apartments.”  And finally, “The majority of the apartments developed over the last several years have been dedicated affordable units.”

He also told the council they are committed to LEED Gold and photovoltaic, stating, “We’re certainly committed to being as green as we can.”

One of the concerns was the enforceability of the single-occupancy per bedroom lease.  Mr. Vasbinder explained that everything goes into a software program – when anyone leases bed space, that bed space is taken off the software.  “We have the ability through the program to almost block out or x-out bed space so that it stays the 540,” he said.

Everyone will sign an individual lease, and they have ways to manage guests to avoid freeloaders.  He also explained that they will be over-staffed to address these issues, plus there will be quarterly reviews and audits.  At other sites they have effectively managed these issues with no problems.

During public comment, there was a split in the community view on housing.  One resident noted, “I am really concerned that the city of Davis is building dorms in the city.”  Another said that, while she was concerned about the students’ access to housing, she was worried about the affordability of the units.

From the student perspective, many expressed concerns about the scarcity of housing and the possibility of some students going homeless.

The neighborhood was still strongly opposed

Councilmember Rochelle Swanson said that “this started out as a land use issue, but at the end of the day, it’s becoming a social justice issue.”  She said, “We want everything and we want nothing.  We want small affordable housing and yet we want Platinum LEED Perfection.”

“I hear the concerns about the General Plan and Great Planning,” she said.  “It’s a long process.  How many students are going to stay homeless on our watch while we struggle for perfection.  It is true that the perfection is the death of the good.”

She said the thinking by some is “let’s just shove this off one more time” as we try to make the project better.  But she said, “I just can’t because it starts to feel wrong, it starts to feel like hypocrisy.”

Councilmember Swanson noted, “It’s been called dorms.  I’ll be honest at first, I was a little uncomfortable with that.  Then I stepped back and thought, how many mini-dorms do we have in this town – unofficial mini-dorms.”

She noted pulling kids out of single-family homes “allows a place for a young family to come in.  We are a zero sum game right now, when we are at 2 percent vacancy.”

Like her colleagues, she pushed back at the university as well, saying, “It’s true we want the university to pick up their piece and that part of it is doing our piece and not waiting till the next one.”

Councilmember Will Arnold noted, “This is the most difficult issue that we as a council have had to deal with since I’ve been on the council.”  What he realized is that there is a legitimate fear of potential displacement in the Rancho Yolo residents, and that “must not be ignored.”

He said plainly, “As long as I am on the city council, I will fight to support Rancho Yolo, period.”

But he also noted that a lot has to happen for those fears to materialize and he said that that is not the case in many other places in Davis where displacement is happening now.  He gave several examples including the student who spoke saying that she was mentally preparing herself for homelessness.

“These stories are so common now that they’re almost cliché,” Mr. Arnold explained.  “This is not a possibility or a long-from-now threat of potentially being displaced that may or may not manifest.  This is the current reality for a number of our neighbors.

“UC Davis is not doing enough to house its students on campus, that’s not just my opinion it’s a fact based on their own previous commitments to the city,” he said.  “But even in the best case scenario in which UCD tomorrow agrees to our request which they’ve given no indication that they plan to do, and then they keep their word on that promise which they’ve never done before, the best case scenario is that the current dismal state of housing stays exactly the same for the next ten years and beyond.  That is unacceptable.”

Sending the message to UC Davis, he said that “should we approve this proposal tonight, we are stepping up to the challenge you have created.  It’s time for you to do the same.”

Mayor Pro Tem Brett Lee, clearly the most skeptical of this proposal, nevertheless said he would support it as long as his colleagues agree to make assurances to the Rancho Yolo residents, recognizing that they feel vulnerable and that no one knows where these zoning changes will stop.

At the same time, he recognized the need for housing, as he put it, “You can sense the desperation.”

He said, when he was approached about a conflict resolution process, he was skeptical, believing that this was a losing proposal.  He said that when Sterling came forward, he believed it was appropriate in size and configuration.

Mayor Pro Tem Lee said, “I did sit down with those groups and the discussion was productive. My biggest issue is that it really was a mini-dorm.  It still is a big issue for me.”

He suggested it should be a normal configuration apartment that allows for other people than just students to reside there.  At the same time, he said that “this was caused by the university not housing enough students on campus.”  However, he said, that argument doesn’t make any sense, as housing students at Sterling will free up other spots on campus.

Councilmember Lucas Frerichs said, “The need for housing in Davis, I think, is imperative right now.”  He noted, that the city and the city council “have been very strong and forceful with UC Davis regarding their lack of responsibility or lack of action for building adequate amounts of housing for students on campus.”

He said that will continue but “we cannot force them to build housing on campus.”

Mr. Frerichs noted, “I’m pretty saddened that there are so many folks struggling to live in this community regardless of age.  Many people in my own peers are choosing to leave Davis because they can’t afford to be here any longer.”

Finally, Mayor Robb Davis was appreciative of the thoughtfulness of the discussion and noted that they really do as a council wrestle with these issues and try to take stock and account of them.

He said,  “I believe that this council is taking a holistic approach to housing in this community – in fact I reject the notion that we’re not”

The mayor noted that when he looked at the now nearly decade-old Housing Element, he said that “priority properties have been systematically developed.”  At the same time, he cautioned, “Opportunities don’t come when we command them to come.”

He called Sterling “an opportunity that comes at a time when we have a need.”

The mayor said that “when you bring people within two miles of the university, the vast majority, probably 90 percent in a property within two miles of the university are going to go there by means other than an automobile.  So that our traffic estimates are probably overstated.”

He said, “We have given input into the LRDP, we have been as aggressive as we can.”

He said, “I bridle at the idea that (we are) not taking a holistic view.  Look, infill by definition (is a) messy and leapfroggish proposition.”  He said they sit up there with constrained choice sets.

He closed, stating, “Just because we are reacting, doesn’t mean that we are reactionary.”

Council Unanimously Votes to Approve Sterling Apartment Project, by David M. Greenwald, The Davis Vanguard, April 19, 2017.

Public to Get First Look at Community Choice Energy Proposal

A public information session has been scheduled for Woodland’s planned participation in a Community Choice Energy program.

The 6:30 p.m., Wednesday, meeting at the Woodland Community & Senior Center is designed to explain how Community Choice Energy works, why local governments are forming their own CCE’s, and how residents and businesses will be affected.

Members of the city’s Community Choice Energy Advisory Committee are inviting all interested residents to this informational meeting and hear about the options being considered by the city as a means of not only reducing power bills but also the dependence on Pacific Gas & Electric.

It was only this past Tuesday that Committee Chairman Tom Flynn, briefed the City Council on the progress made toward having the city link up with Yolo County and the city of Davis as part of their Valley Clean Energy Alliance program.

In his briefing, Flynn said the concept behind “community choice energy” is basically that local groups buy and supply power independently of PG&E, and then PG&E delivers that power to customers.

This permits the local group to negotiate for so-called “cleaner” energy, which in turn can reduce the carbon footprint of a community. As well, any profits made through the purchase and sale of the energy stays in the community. It’s been estimated that Woodland residents could see a drop in their power rates ranging from 4 to 8 percent under a Community Choice Energy system.

PG&E, meanwhile, partners with a CCE to operate and maintain the distribution and transmission system, read meters, bill the customers, and provide outage response.

“The aims of CCEs are to increase local decision-making in energy supply and programs while providing electricity with a high percentage of renewable energy content at electric rates that are competitive with those of the utility,” according to city officials.

At the public meeting, members of the City Council-appointed CCE Advisory Committee will provide an overview of CCEs and discuss the committee’s ongoing efforts to evaluate the pros and cons of joining Valley Clean Energy Alliance.

Following the presentation, committee members, city staff, and City Council members will be available for informal question and answer session. Attendees are encouraged to bring questions and ideas to help ensure that the committee is considering all issues of relevance to the community before presenting its report and recommendation to the council on April 18.

Concerning Valley Clean Energy Alliance, Flynn told the council the group is planning a 2018 launch and has welcomed Woodland’s inclusion. Woodland has until April 18 to get its report ready so a final decision can be made by the end of June. Woodland would need to submit a final implementation plan by August to link up with the Energy Alliance.

At present, Flynn said the choices narrow to three:

•Retain the status quo with no change in how Woodlanders receive their power.

•Join the Valley Energy Alliance and be included in its February 2018 launch.

•Join the Valley Energy Alliance after its February 2018 launch.

The city created the ad hoc advisory committee in November 2016. Among its 14 members are Woodland Mayor Angel Barajas and Councilman Tom Stallard.

Public to Get First Look at Community Choice Energy Proposal, by Jim Smith, Woodland Daily Democrat, March 23, 2017.

More Power Applied to Community Choice Energy Program

Woodland is stepping up its effort toward providing cheaper power for the people.

Now under the chairmanship of Tom Flynn, the city’s Community Choice Energy Advisory Committee is working to finish a report with recommendations that will most likely lead to linking with an agency under development by Yolo County and the city of Davis.

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Woodland’s Community Choice Energy Advisory Committee Chairman Tom Flynn updated the City Council Tuesday night on progress made toward joining a local energy cooperative between Yolo County and the city of Davis. Jim Smith — Daily Democrat

If implemented over the next year, city energy users could see rates drop between 4 percent and 8 percent compared to those of PG&E.

Flynn, a storage and distributed energy resource policy manager for the state’s Independent System Operator with nearly 30 years of experience in California electricity policy, updated the council Tuesday on progress made toward linking up with the Valley Clean Energy Alliance, the county-Davis consortium.

No action was required of the council, which has previously expressed a willingness to consider joining the Energy Alliance, as long as it had sufficient information before making a final commitment.

In his briefing, Flynn said the concept behind “community choice energy” is that a local entity procures and supplies the power which is then delivered by PG&E.

Flynn said “CCEs provide more competitive rates and allow communities the opportunity to have more local control over energy supply and their energy future.” For example, that could mean buying more solar power than hydroelectric power, thereby lessening the city’s overall carbon footprint.

This, Flynn implied allows cities such as Woodland to help meet conservation goals such as has been developed for Woodland’s 2035 General Plan under its Climate Action Plan, which calls for increasing conservation measures.

Further, said Flynn, any surplus revenues that originate from conservation can be reinvested in the community rather than lost to PG&E.

“With or without Woodland, Community Choice Energy is growing by leaps and bounds throughout California,” he told the council, citing operations that exist — or will soon exist — in Marin County and elsewhere.

Concerning Valley Clean Energy Alliance, Flynn said the group is planning a 2018 launch and has welcomed Woodland’s inclusion. But that puts a strain on the city to get the paperwork in place to meet an April 18 deadline for a presentation to the council in hopes it can render a decision by the end of June.

Woodland would need to submit a final implementation plan by August to link up with the Energy Alliance.

At present, Flynn said the choices narrow down to three:

•Retain the status quo with no change in how Woodlanders receive their power.

•Join the Valley Energy Alliance and be included in its February 2018 launch.

•Join the Valley Energy Alliance after its February 2018 launch.

The only other option looked at was to join a similar cooperative based elsewhere such as Marin County. However, that idea was rejected because it was felt those groups were too geographically distant.

The city created the ad hoc advisory committee in November 2016. Among its 14 members are Woodland Mayor Angel Barajas and Councilman Skip Davies. However, acting Tuesday night, Davies stepped down from the panel and was replaced by Councilman Tom Stallard, who has previously pushed for more sustainable energy sources within the city.

Stallard has put a number of solar panels on property he owns in downtown Woodland and as the former mayor pushed for creating the Woodland Tree Campaign as a way of increasing the city’s urban forest to provide shade and cut back on energy use.

More Power Applied to Community Choice Energy Program, by Jim Smith, Woodland Daily Democrat, March 22, 2017.

Woodland Community Choice Energy Technical Advisory Committee Meeting

The city of Woodland continues to evaluate Community Choice Energy and will hold a meeting of their Technical Advisory Committee on Wednesday, March 29. The city of Davis and Yolo County currently form the Valley Clean Energy Alliance, Woodland would be the third jurisdiction to join the Joint Powers Authority.

Wednesday, March 29: 6:30 p.m. The city of Woodland and Community Choice Energy Technical Advisory Committee invite community members to attend a presentation and Q&A opportunity at a public meeting on CCE and the ongoing evaluation of Woodland’s potential participation in a CCE program. The meeting will be held in Meeting Room 2, Woodland Community & Senior Center, 2001 East Street. For more information, please contact Reyna Piñon at 661-2063 or visit www.cityofwoodland.org/cce.

Environmental update: April brings Greener Davis workshops

April 22 marks the 47th anniversary of the first Earth Day! In celebration of this occasion, please join us for a series of environmental classes that promise to be nothing short of literary masterpieces (or at least educational and entertaining).

All classes will begin at 6:30 p.m. in the Game Room at the Veterans Memorial Center, 203 E. 14th St., and will last an hour to 90 minutes.

April 5: CCE Spot Run!
The city is looking at Community Choice Energy as a practical way — without forming a public utility — to localize energy decisions, deliver cleaner electricity at competitive rates, and give consumers more choices about the price of their electricity and how it’s produced. Join Sustainability Manager Mitch Sears to learn about CCE and participate in this Q&A focused presentation.

Click the link below to find the rest of the events happening in Davis throughout the month of April.

Environmental update: April brings Greener Davis workshops, by Jennifer Gilbert, The Davis Enterprise, March 8, 2017.

California Public Utilities Commission will meet at UC Davis

The California Public Utilities Commission will hold its March 2 voting meeting at UC Davis, beginning at 9:30 a.m. in King Hall’s Appellate Courtroom, 400 Mrak Hall Drive.

The voting meeting begins with public comment, and members of the public are welcome.

“We have scheduled a number of voting meetings around the state this year in order to get into the communities we serve,” said CPUC President Michael Picker. “Holding this meeting at UC Davis is of particular interest to me because it allows us to build a direct pipeline to students and let them know about the varied and important work that the CPUC does, how they can get involved, and how they can join our team when they graduate.”

Commissioners will discuss and vote on proposed policies, and staff will make a brief presentation on the implementation of an all-services area code overlay approved by the CPUC to resolve the shortage of numbers in the 916 area code region.

Those intending to make public comment can sign up to speak in person before the meeting starts, or can sign up online in advance at www.cpuc.ca.gov/Commission_Meeting. The CPUC’s rules for public comment, the voting meeting agenda, a list of items that will be held over to a different meeting, presentations, remote access and other information will be available on that web page.

The CPUC typically holds voting meetings twice a month at its headquarters in San Francisco, and also schedules them in other cities throughout the state. In addition, the CPUC holds many public-participation hearings and other events statewide in order to reach out to consumers.

To receive electronic updates on CPUC proceedings, sign up at http://subscribecpuc.cpuc.ca.gov.

The CPUC regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit and passenger transportation companies.

For more information, visit www.cpuc.ca.gov.

California Public Utilities Commission will meet at UC Davis, by Enterprise Staff, The Davis Enterprise, February 15, 2017.

Californians Pay a High Price for Electricity Glut

To cover the cost of new plants whose power isn’t needed, residents and businesses are paying billions more a year to switch on the lights

YUBA CITY, Calif. — The bucolic orchards of Sutter County north of Sacramento had never seen anything like it: a visiting governor and a media swarm — all to christen the first major natural gas power plant in California in more than a decade.

At its 2001 launch, the Sutter Energy Center was hailed as the nation’s cleanest power plant. It generated electricity while using less water and natural gas than older designs.

A year ago, however, the $300-million plant closed indefinitely, just 15 years into an expected 30- to 40-year lifespan. The power it produces is no longer needed — in large part because state regulators approved the construction of a plant just 40 miles away in Colusa that opened in 2010.

Two other large and efficient power plants in California also are facing closure decades ahead of schedule. Like Sutter, there is little need for their electricity.

California has a big — and growing — glut of power, an investigation by the Los Angeles Times has found. The state’s power plants are on track to be able to produce at least 21% more electricity than it needs by 2020, based on official estimates. And that doesn’t even count the soaring production of electricity by rooftop solar panels that has added to the surplus.

To cover the expense of new plants whose power isn’t needed — Colusa, for example, has operated far below capacity since opening — Californians are paying a higher premium to switch on lights or turn on electric stoves. In recent years, the gap between what Californians pay versus the rest of the country has nearly doubled, to about 50%.

This translates into a staggering bill. Although California uses 2.6% less electricity annually from the power grid now than in 2008, residential and business customers together pay $6.8 billion more for power than they did then. The added cost to customers will total many billions of dollars over the next two decades, because regulators have approved higher rates for years to come so utilities can recoup the expense of building and maintaining the new plants, transmission lines and related equipment, even if their power isn’t needed.

How this came about is a tale of what critics call misguided and inept decision-making by state utility regulators, who have ignored repeated warnings going back a decade about a looming power glut.

“In California, we’re blinding ourselves to the facts,” said Loretta Lynch, a former president of the California Public Utilities Commission, who along with consumer advocacy groups has fought to stop building plants. “We’re awash in power at a premium price.”

California regulators have for years allowed power companies to go on a building spree, vastly expanding the potential electricity supply in the state. Indeed, even as electricity demand has fallen since 2008, California’s new plants have boosted capacity enough to power all of the homes in a city the size of Los Angeles — six times over. Additional plants approved by regulators will begin producing more electricity in the next few years.

The missteps of regulators have been compounded by the self-interest of California utilities, Lynch and other critics contend. Utilities are typically guaranteed a rate of return of about 10.5% for the cost of each new plant, regardless of need. This creates a major incentive to keep construction going: Utilities can make more money building new plants than by buying and reselling readily available electricity from existing plants run by competitors.

Regulators acknowledge the state has too much power but say they are being prudent. The investment, they maintain, is needed in case of an emergency — like a power plant going down unexpectedly, a heat wave blanketing the region or a wildfire taking down part of the transmission network.

“We overbuilt the system because that was the way we provided that degree of reliability,” explained Michael Picker, president of the California Public Utilities Commission. “Redundancy is important to reliability.”

Some of the excess capacity, he noted, is in preparation for the retirement of older, inefficient power plants over the next several years. The state is building many new plants to try to meet California’s environmental standards requiring 50% clean energy by 2030, he said.

In addition, he said, some municipalities — such as the Los Angeles Department of Water and Power — want to maintain their own separate systems, which leads to inefficiencies and redundancies. “These are all issues that people are willing to pay for,” Picker said.

Critics agree that some excess capacity is needed. And, in fact, state regulations require a 15% cushion. California surpasses that mark and is on pace to exceed it by 6 percentage points in the next three years, according to the Western Electricity Coordinating Council, which tracks capacity and reliability. In the past, the group has estimated the surplus would be even higher.

Even the 15% goal is “pretty rich,” said Robert McCullough of Oregon-based McCullough Research, who has studied California’s excess electric capacity for both utilities and regulators. “Traditionally, 10% is just fine. Below 7% is white knuckle. We are a long way from white-knuckle time” in California.

Contrary to Picker’s assertion, critics say, customers aren’t aware that too much capacity means higher rates. “The winners are the energy companies,” Lynch said. “The losers are businesses and families.”

The overabundance of electricity can be traced to poorly designed deregulation of the industry, which set the stage for blackouts during the energy crisis of 2000-2001.

Lawmakers opened the state’s power business to competition in 1998, so individual utilities would no longer enjoy a monopoly on producing and selling electricity. The goal was to keep prices lower while ensuring adequate supply. Utilities and their customers were allowed to buy electricity from new, unregulated operators called independent power producers.

The law created a new exchange where electricity could be bought and sold, like other commodities such as oil or wheat.

Everyone would benefit, or so the thinking went.

In reality, instead of lowering electricity costs and spurring innovation, market manipulation by Enron Corp. and other energy traders helped send electricity prices soaring.

That put utilities in a bind, because they had sold virtually all their natural gas plants. No longer able to produce as much of their own electricity, they ran up huge debts buying power that customers needed. Blackouts spread across the state.

State leaders, regulators and the utilities vowed never to be in that position again, prompting an all-out push to build more plants, both utility-owned and independent.

“They were not going to allow another energy crisis due to a lack of generation,” said Alex Makler, a senior vice president of Calpine, the independent power producer that owns the Sutter Energy plant not far from Sacramento.

But the landscape was starting to change. By the time new plants began generating electricity, usage had begun a decline, in part because of the economic slowdown caused by the recession but also because of greater energy efficiency.

The state went from having too little to having far too much power.

“California has this tradition of astonishingly bad decisions,” said McCullough, the energy consultant. “They build and charge the ratepayers. There’s nothing dishonest about it. There’s nothing complicated. It’s just bad planning.”

The saga of two plants — Sutter Energy and Colusa — helps explain in a microcosm how California came to have too much energy and is paying a high price for it.

Sutter was built in 2001 by Houston-based Calpine, which owns 81 power plants in 18 states.

Independents like Calpine don’t have a captive audience of residential customers like regulated utilities do. Instead, they sell their electricity under contract or into the electricity market, and make money only if they can find customers for their power.

Sutter had the capacity to produce enough electricity to power roughly 400,000 homes. Calpine operated Sutter at an average of 50% of capacity in its early years — enough to make a profit.

But then Pacific Gas & Electric Co., a regulated, investor-owned utility, came along with a proposal to build Colusa.

It was not long after a statewide heat wave, and PG&E argued in its 2007 request seeking PUC approval that it needed the ability to generate more power. Colusa — a plant almost identical in size and technology to Sutter — was the only large-scale project that could be finished quickly, PG&E said.

More than a half-dozen opponents, including representatives of independent power plants, a municipal utilities group and consumer advocates filed objections questioning the utility company. Wasn’t there a more economical alternative? Did California need the plant at all?

They expressed concern that Colusa could be very expensive long-term for customers if it turned out that its power wasn’t needed.

That’s because public utilities such as PG&E operate on a different model.

If electricity sales don’t cover the operating and construction costs of an independent power plant, it can’t continue to run for long. And if the independent plant closes, the owner — and not ratepayers — bears the burden of the cost.

In contrast, publicly regulated utilities such as PG&E operate under more accommodating rules. Most of their revenue comes from electric rates approved by regulators that are set at a level to guarantee the utility recovers all costs of operating the electric system as well as the cost of building or buying a power plant — plus their guaranteed profit.

Protesters argued that Colusa was unnecessary. The state’s excess production capacity by 2010, the year Colusa was slated to come online, was projected to be almost 25% — 10 percentage points higher than state regulatory requirements.

The looming oversupply, they asserted, meant that consumers would get stuck with much of the bill for Colusa no matter how little customers needed its power.

And the bill would be steep. Colusa would cost PG&E $673 million to build. To be paid off, the plant will have to operate until 2040. Over its lifetime, regulators calculated that PG&E will be allowed to charge more than $700 million to its customers to cover not just the construction cost but its operating costs and its profit.

The urgent push by PG&E “seems unwarranted and inappropriate, and potentially costly to ratepayers,” wrote Daniel Douglass, a lawyer for industry groups that represent independent power producers.

The California Municipal Utilities Assn. — whose members buy power from public utilities and then distribute that power to their customers — also complained in a filing that PG&E’s application appeared to avoid the issue of how Colusa’s cost would be shared if it ultimately sat idle. PG&E’s “application is confusing and contradicting as to whether or not PG&E proposes to have the issue of stranded cost recovery addressed,” wrote Scott Blaising, a lawyer representing the association. (“Stranded cost” is industry jargon for investment in an unneeded plant.)

The arguments over Colusa echoed warnings that had been made for years by Lynch, the former PUC commissioner.

A pro-consumer lawyer appointed PUC president in 2000 by Gov. Gray Davis, Lynch consistently argued as early as 2003 against building more power plants.

“I was like, ‘What the hell are we doing?’ ” recalled Lynch.

She often butted heads with other commissioners and utilities who pushed for more plants and more reserves. Midway though her term, the governor replaced her as president — with a former utility company executive.

One key battle was fought over how much reserve capacity was needed to guard against blackouts. Lynch sought to limit excess capacity to 9% of the state’s electricity needs. But in January 2004, over her objections, the PUC approved a gradual increase to 15% by 2008.

“We’ve created an extraordinarily complex system that gives you a carrot at every turn,” Lynch said. “I’m a harsh critic because this is intentionally complex to make money on the ratepayer’s back.”

With Lynch no longer on the PUC, the commissioners voted 5-0 in June 2008 to let PG&E build Colusa. The rationale: The plant was needed, notwithstanding arguments that there was a surplus of electricity being produced in the market.

PG&E began churning out power at Colusa in 2010. For the nearby Sutter plant, that marked the beginning of the end as its electricity sales plummeted.

In the years that followed, Sutter’s production slumped to about a quarter of its capacity, or just half the rate it had operated previously.

Calpine, Sutter’s owner, tried to drum up new business for the troubled plant, reaching out to shareholder-owned utilities such as PG&E and other potential buyers. Calpine even proposed spending $100 million to increase plant efficiency and output, according to a letter the company sent to the PUC in February 2012.

PG&E rejected the offer, Calpine said, “notwithstanding that Sutter may have been able to provide a lower cost.”

Asked for comment, PG&E said, “PG&E is dedicated to meeting the state’s clean energy goals in cost-effective ways for our customers. We use competitive bidding and negotiations to keep the cost and risk for our customers as low as possible.”

It declined to comment further about its decision to build Colusa or on its discussions with Calpine.

Without new contracts and with energy use overall on the decline, Calpine had little choice but to close Sutter.

During a 2012 hearing about Sutter’s distress, one PUC commissioner, Mike Florio, acknowledged that the plant’s troubles were “just the tip of the proverbial iceberg.”

He added, “Put simply, for the foreseeable future, we have more power plants than we need.”

Colusa, meanwhile, has operated at well below its generating capacity — just 47% in its first five years — much as its critics cautioned when PG&E sought approval to build it.

Sutter isn’t alone. Other natural gas plants once heralded as the saviors of California’s energy troubles have found themselves victims of the power glut. Independent power producers have announced plans to sell or close the 14-year-old Moss Landing power plant at Monterey Bay and the 13-year-old La Paloma facility in Kern County.

Robert Flexon, chief executive of independent power producer Dynegy Inc., which owns Moss Landing, said California energy policy makes it difficult for normal market competition. Independent plants are closing early, he said, because regulators favor utility companies over other power producers.

“It’s not a game we can win,” Flexon said.

Since 2008 alone — when consumption began falling — about 30 new power plants approved by California regulators have started producing electricity. These plants account for the vast majority of the 17% increase in the potential electricity supply in the state during that period.

Hundreds of other small power plants, with production capacities too low to require the same level of review by state regulators, have opened as well.

Most of the big new plants that regulators approved also operate at below 50% of their generating capacity.

So that California utilities can foot the bill for these plants, the amount they are allowed by regulators to charge ratepayers has increased to $40 billion annually from $33.5 billion, according to data from the U.S. Energy Information Administration. This has tacked on an additional $60 a year to the average residential power bill, adjusted for inflation.

Another way of looking at the impact on consumers: The average cost of electricity in the state is now 15.42 cents a kilowatt hour versus 10.41 cents for users in the rest of the U.S. The rate in California, adjusted for inflation, has increased 12% since 2008, while prices have declined nearly 3% elsewhere in the country.

California utilities are “constantly crying wolf that we’re always short of power and have all this need,” said Bill Powers, a San Diego-based engineer and consumer advocate who has filed repeated objections with regulators to try to stop the approval of new plants. They are needlessly trying to attain a level of reliability that is a worst-case “act of God standard,” he said.

Even with the growing glut of electricity, consumer critics have found that it is difficult to block the PUC from approving new ones.

In 2010, regulators considered a request by PG&E to build a $1.15-billion power plant in Contra Costa County east of San Francisco, over objections that there wasn’t sufficient demand for its power.

One skeptic was PUC commissioner Dian Grueneich. She warned that the plant wasn’t needed and its construction would lead to higher electricity rates for consumers — on top of the 28% increase the PUC had allowed for PG&E over the previous five years.

The PUC was caught in a “time warp,” she argued, in approving new plants as electricity use fell. “Our obligation is to ensure that our decisions have a legitimate factual basis and that ratepayers’ interest are protected.”

Her protests were ignored. By a 4-to-1 vote, with Grueneich the lone dissenter, the commissioners approved the building of the plant.

Consumer advocates then went to court to stop the project, resulting in a rare victory against the PUC. In February 2014, the California Court of Appeals overturned the commission, ruling there was no evidence the plant was needed.

Recent efforts to get courts to block several other PUC-approved plants have failed, however, so the projects are moving forward.

Californians Pay a High Price for Electricity Glut, by Ivan Penn and Ryan Menezes, Los Angeles Times, February 5, 2017.