King City Backs out of Monterey Bay CCE

A hugely popular renewable energy program sounds like nothing but fun in the sun to most government leaders, but a couple communities are now signaling they may pass on the chance to join the party.

King City and Del Rey Oaks are the only two municipalities out of 21 that have voted not to join Monterey Bay Community Power (MBCP), a green alternative to Pacific Gas & Electric (PG&E) that will begin auto-enrolling customers this summer.

While grassroots efforts have convinced Del Rey Oaks council members to re-agendize the matter later this month, King City’s majority sounds like a much firmer no. That isn’t stopping King City Mayor Pro-Tem Carlos Victoria, one of the two votes in favor of joining MBCP last month, from trying to get it back on the agenda.

“MBCP is already established, and will be productive,” says Victoria. “Everyone’s doing it, and there has to be a reason for that.”

Seventeen municipalities, including Santa Cruz, have voted to sign on so far, and their residents should be receiving cheaper and greener electricity by spring of 2018, proponents of community choice energy (CCE) say. Two other outstanding municipalities, Carmel and Pacific Grove, have votes coming up.

While he researched alternatives to MBCP, King City Mayor Mike LeBarre came across Lancaster’s single-city CCE model in Southern California and suddenly felt inspired enough to create the state’s smallest CCE program. “Even though we’re a small little town, we are trying to reduce our costs and address environmental issues,” says LeBarre.

Virginia Johnson, project manager for MBCP, says the group formed to reduce costs of electricity, while addressing reducing greenhouse gas emissions. Compared to MBCP, King City’s CCE program will be more expensive for ratepayers and offer significantly less renewables.

While MBCP plans to start its program at least 3 percent cheaper than PG&E, King City will be only 1.5 percent cheaper, according to government reports. And while MBCP plans to offer ratepayers renewable options of 50-60 percent and 100 percent during its first year, King City would offer just a 35 percent renewable package—the same as PG&E. King City would also shoulder massive administrative costs, instead of sharing them with MBCP, a nonprofit.

The company that would likely set up King City’s CCE, Pilot Power, has never run such a program, and got sued for breach of contract in March 2015. During a Feb. 28 presentation to the King City Council, even Pilot Power indicated that the size of King City is smaller than optimal, and that the city should partner with other jurisdictions to save on costs.

If it were to join MBCP, LeBarre says King City’s influence and bargaining power in the group would be tiny, especially because the Monterey County town has a population of just 13,000 people.

The other—and perhaps primary—reason for splitting off is that the city could use a portion of surplus revenue for unrelated projects, like installing LED or solar street lights, whereas all of MBCP’s surplus revenue will go toward reducing rates and expanding its renewable portfolio.

Daniel Nelson, director of government affairs for Santa Cruz-based GreenPower, questions LeBarre’s motives, and equates King City’s justification to a tax levied on citizens without asking.

“They want to have a pot of money that doesn’t benefit the ratepayer and is effectively a tax on residents,” says Nelson. “They’re thinking of CCE as a way to generate money for things besides benefiting ratepayers.”

King City Backs out of Monterey Bay CCE, by Ardy Raghian, Good Times, April 19, 2017.

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