Last July, you might’ve noticed a change on your monthly bill from Pacific Gas & Electric. Or maybe not. But unless you opted out, residents of Monterey, Santa Cruz and San Benito counties were automatically enrolled as customers of Monterey Bay Community Power, a new community choice aggregation model, or CCA, that buys electricity from renewable sources. PG&E buys that power from Monterey Bay Community Power, and transmits it through its existing power lines to your house, and remains the billing agency.
In California, there are now 19 CCAs serving millions of customers; 12 of those CCAs are in PG&E’s territory. In 2010, PG&E was responsible for procuring or generating 100 percent of the electricity for those customers. This year, the company is responsible for just 59 percent, with the other 41 percent taken care of by CCAs, which were responsible for 1,239 megawatts of power.
That means PG&E has a problem: long-term contracts the company entered into but now does not plan to fulfill. Last October, PG&E asked the California Public Utilities Commission to allow the utility to pass on some of those contractual liabilities to ratepayers. The CPUC gave PG&E its blessing, though the exact amounts of so-called “exit fees” remain to be determined, leaving Monterey Bay Community Power uncertain of how much they can build up reserves while delivering promised savings to customers.
“We don’t disagree investor-owned utilities should be compensated for contracts they entered into on our behalf,” says J.R. Killigrew, MBCP’s director of communications and energy programs. “But if [the fee] is a moving target, it limits our ability to reinvest in the community.”
(Monterey Bay Community Power officials pledged to make their power cheaper than PG&E’s, and in 2018, its first year of operation, delivered $4.4 million in rebates to 268,000 customers.)
It’s against this backdrop, with PG&E already looking for how to get out of long-term contracts, that the company saw an even bigger liability looming in connection to devastating wildfires. With that risk in mind, PG&E filed for Chapter 11 bankruptcy on Jan. 29.
Monterey Bay Community Power, along with the other 11 CCAs in PG&E’s service area, have already filed their first court papers in that bankruptcy case with a motion to make sure PG&E keeps paying CCAs for power as usual.
One of many decisions in the bankruptcy proceedings will be whether PG&E is obligated to pay some $42 billion in agreements to buy power from about 350 renewable energy suppliers – the type of suppliers many CCAs are now buying power from.
Killigrew emphasizes that as the bankruptcy case unfolds, local customers are unlikely to see any change.
“Customers’ lights will still be on,” he says. “At the end of the day, we are a partner with PG&E. They deliver electrons and do the billing. Our role is to supply that power onto the grid.”
The next hearing in PG&E’s bankruptcy case is set for Feb. 27 in San Francisco.
As PG&E begins bankruptcy proceedings, Monterey Bay Community Power gauges uncertainty, by Sara Rubin, Monterey County Weekly, February 14, 2019.