Fresh Energy to Start an Exciting New Year

A new year offers a clean slate — a chance to celebrate achievements, assess the challenges of the past and start the new year with fresh energy.

Our biggest achievement in 2018 was the launch of Valley Clean Energy (VCE), our local public electricity program. With years of planning and lots of community support, we officially started serving the cities of Woodland and Davis and unincorporated Yolo County last June. Over the past six months, VCE has been providing greener energy, customer choice, local control and reinvestment in the community.

VCE’s standard portfolio of electricity includes 42 percent renewable energy, compared to 33 percent provided by PG&E. This allows VCE customers to help our region and our state take a big step toward changing our fossil fuel-based economy.

Another notable achievement in 2018 was the VCE partnership with Davis, Woodland and Yolo County to apply for a $2.9 million grant from the Sacramento Area Council of Governments (SACOG), which we ultimately received. The grant will provide dozens of new, publicly available electric vehicle chargers and will lay the foundation for electric vehicle charging and lower-carbon transportation options in the region.

 

Although 2018 was a banner year for the effort to bring local energy control to Yolo County, we also faced significant headwinds from state regulators. Due to decisions by the California Public Utilities Commission that favored investor-owned utilities like PG&E, as well as requirements from the California Energy Commission, VCE took a $4.7 million hit to our young program’s budget, leaving us with many difficult choices — one of which was the decision to delay the enrollment of existing solar customers.

Since both of us are solar customers, we were disappointed that we could not sign up right away for the local energy program we help run. But as board members we understand that this delay is simply a bump in the road on a long journey toward completely renewable, more affordable electricity. We also understand why some folks may be unhappy about the delay of enrolling solar customers, but the VCE board’s difficult decision was made with the long-term good of the program in mind.

Despite these challenges, we are reminded that our communities launched Valley Clean Energy last summer to bring cleaner energy at competitive rates to local residents and businesses while reinvesting earnings into our economy by creating local green energy programs and projects.

We have been successful in taking the important first steps toward these goals because VCE is accountable to the communities it serves, not to shareholders. VCE offers choice, local governance and transparency — everything local energy customers have sought for years.

One of the tangible, immediate impacts of our local energy program is the fact that VCE customers are reducing greenhouse-gas emissions by automatically receiving a higher percentage of renewable electricity than that provided by PG&E, and they can up the ante, at a small premium, by choosing that 100 percent of their power come from renewables.

We are proud that VCE customers are each doing their small part to help California avoid the growing consequences of climate change like the tragic wildfires of 2017 and 2018 that devastated our sister communities in Northern California.

VCE’s customers are joined in these efforts by the 18 other CCE programs that are already serving 8 million-plus customers in more than 160 communities across California. Dozens more communities are recognizing the benefits of taking local control of their energy futures and are lining up to form or join CCE programs. We encourage and welcome them to this energy renaissance that is challenging the old ideas that clearly no longer serve the best interests of our communities.

With Valley Clean Energy, we’ve taken a big step toward a more sustainable future. As solar customers ourselves, we’re willing to wait another year to join the program, knowing we’re already doing our part for renewable energy.

Because VCE is in the business of delivering value to the customers and communities we serve instead of shareholders and Wall Street, we have the advantage of being able to take the long view. As we reflect on 2018, we are reminded that the success of our community choice energy program is our higher priority because it is poised to deliver decades of value to our communities.

—Tom Stallard is a Woodland City Council member and board chair of Valley Clean Energy. Don Saylor is a Yolo County supervisor and a member of the VCE board. To learn more about Valley Clean Energy, visit www.valleycleanenergy.org or email customerservice@valleycleanenergy.org.

 

Guest Commentary: Fresh Energy to Start an Exciting New Year, by Tom Stallard and Don Saylor, The Davis Vanguard, January 16, 2019.

River City Bank partners with SMUD to help grow the local economy

As one of three local banks involved in the Responsible Investments for a Stronger Economy program, also known as RISE, River City Bank received a $5 million deposit from SMUD which will be used to provide loans to local businesses. RISE was developed by Region Finance, a local non-profit that advocates for local economic development and job creation. As Sacramento’s premier business bank, River City Bank has committed to loan at least 50 percent of the designated funds to qualified applicants in the SMUD service area and will provide periodic updates to SMUD regarding the number of loans made and the projected number of jobs created.

“We are committed to investing in the growth of locally owned businesses and securing additional jobs as Sacramento’s stature grows on the national stage,” said Steve Fleming, President and CEO of River City Bank. “As a founding member of Region Finance and a firm supporter of the RISE program, River City Bank is excited to partner with SMUD to ensure the growth of our local economy, and our bankers look forward to leveraging this investment for the benefit of our entire region.”

River City Bank has been headquartered in Sacramento for more than 45 years and is heavily involved in the local community through its banking services and philanthropy. The bank recently announced that it is providing the loan financing for the new Fort Sutter Hotel in support of the Sacramento-based Paragary family. The 105-room boutique hotel is part of the Hilton Tapestry Collection and will open in Midtown Sacramento in 2020. With the recent launch of its Clean Energy Division, River City Bank also has taken the lead in servicing clients in this fast-growing space and is dedicated to expanding relationships with Community Choice Aggregation businesses such as Yolo County-based Valley Clean Energy and other players.

To learn more about River City Bank, visit RiverCityBank.com.

About Region Finance
Region Finance is a new trade association of Region Business for community banks and related institutions focused on advancing regional economic growth by improving access to capital for businesses in the Sacramento region. Region Finance advocates for government entities and regional corporations to keep money local through the use of local community banks whose business leadership, staff and customers are all located in the Sacramento area. Its mission is to catalyze success for the local business community by keeping and expanding the capital available in local banks that allow for a larger investment into the region. For additional information, please visit RegionBusiness.org/Region-Finance.

About SMUD
As the nation’s sixth-largest community-owned electric service provider, SMUD has been providing low-cost, reliable electricity for more than 70 years to Sacramento County (and small adjoining portions of Placer and Yolo Counties). SMUD is a recognized industry leader and award winner for its innovative energy efficiency programs, renewable power technologies, and for its sustainable solutions for a healthier environment. SMUD’s power mix is about 50 percent non-carbon emitting. For more information, visit SMUD.org.

About River City Bank
Named one of Sacramento Business Journal’s “50 Fastest Growing Companies” for each of the past two years, River City Bank is the Sacramento region’s premier business bank with assets over $2.1 billion. River City Bank offers a comprehensive suite of banking services, including loans, deposits and cash management tools to the business, consumer and commercial real estate sectors. With tailored, executive-level service and a Five Star “Superior” financial rating from the nation’s leading independent bank-rating firm, Bauer Financial, River City Bank redefines the banking experience and every touch point that surrounds it. River City Bank is the largest, independent, locally-owned bank in the Sacramento region with an office in the San Francisco Bay Area and a growing presence in Southern California. For additional information, please visit RiverCityBank.com or call (916) 567-2600. Member FDIC. Equal Housing Lender.

 

River City Bank partners with SMUD to help grow the local economy, Press Release, PR Web, December 18, 2018.

$2.9M grant approved for county ‘energy’ agency

The Sacramento Area Council of Governments board of directors has approved a $2.9 million grant to Valley Clean Energy that will lay the foundation for increased electric vehicle charging opportunities and multi-modal transportation hubs in Yolo County.

The cities of Davis, Woodland and Yolo County joined forces with VCE to submit a joint application for grant funds.

Valley Clean Energy is a nonprofit public agency formed to provide electrical generation service to customers within Davis, Woodland and unincorporated areas of Yolo County.  The so-called “community power” concept is to deliver cost-competitive clean electricity, product choice, price stability, energy efficiency, greenhouse gas emission reductions and reinvestment in the community beyond that provided by public utilities such as Pacific Gas & Electric.

“We are excited about this grant and believe it lays a strong foundation for the future growth of electric vehicles and charging infrastructure in the City of Davis and throughout the region,” said Lucas Frerichs, Davis city councilman and chairman of the Valley Clean Energy board of directors. “This is one of the benefits that community choice energy providers like VCE offer — to partner with local government agencies and support infrastructure development.”

Last week’s action by SACOG will result in larger numbers of publicly available, networked electric vehicle charging stations throughout Davis, Woodland, and Yolo County. The charging infrastructure will include up to sixty 240-volt, level 2 chargers, along with two to five fast chargers near highway corridors such as Interstates 5, 80 and 505 and Highway 113.

These chargers will also be located to encourage “active transportation” (walking, biking, and transit) and enhance downtown economic vitality as co-benefits of EV charging. The grant also provides for up to 10 mobile electric vehicle chargers and an electric bus serving downtown Davis and the UC Davis campus.

“This is one way to reduce the ‘range anxiety’ associated with electric vehicle ownership,” said Tom Stallard, Woodland city councilman and vice chairman of the Valley Clean Energy board of directors.  “As more publicly available charging infrastructure is installed, more people will feel comfortable purchasing electric vehicles. This provides a great benefit to the people of Woodland and across Yolo County.”

The grant is provided through SACOG’s newest competitive program, the Green Region Program. The Green Region Program is intended to help the Sacramento region’s transportation system reduce emissions while continuing to function effectively and efficiently.

Green Region focuses on bringing together both public and private partners who are working toward the same goals of reducing vehicle miles traveled and improving air quality in their respective regions. Four grants of approximately $3 million each were awarded in the region. The VCE grant was the only award for the full requested amount.

“This is an example of cooperation between public agencies that will have wide-ranging, positive impacts on the community,” said Don Saylor, Yolo County supervisor and member of the Valley Clean Energy board of directors. “Through this grant, we will be able to install publicly available electric vehicle charging infrastructure in many new locations in Yolo County.”

The grant partners have four years to complete the project.

 

$2.9M grant approved for county ‘energy’ agency, by The Daily Democrat Staff, Daily Democrat, December 12, 2018.

PG&E Exit Fees? OK, But Let’s Be Fair

In a disappointing decision, the California Public Utilities Commission (CPUC) recently voted to approve increases to the “exit fees” charged to Valley Clean Energy (VCE) customers by PG&E.  Valley Clean Energy is our official locally governed electricity provider, bringing cleaner energy at competitive rates to Davis, Woodland, and unincorporated Yolo County. It began serving 55,000 customer accounts this past June.

The decision by the CPUC to raise the exit fee affects all 19 community choice aggregation (CCA) programs in the state, including VCE.

The exit fee is called the Power Charge Indifference Adjustment, and if you are a VCE customer, you will see it on your PG&E bill. This fee is charged by each of the utilities to all CCA customers to compensate for electricity generation they built or contracted for in past years.

Valley Clean Energy believes a reasonable exit fee is fair as long as these costs are shared equitably by all PG&E and CCA generation customers.  Unfortunately, we don’t find this recent ruling by the CPUC to be fair. It over-compensates PG&E for past investments and leaves out reasonable cost-control measures that would hold the utility accountable for its past business decisions.

Not only did the CPUC allow the utilities to include these costs in the exit fee, it did so before even considering whether these costs were reasonable.  What is even more puzzling is why the CPUC took this action against the advice of its own expert administrative law judge, who had studied the issue for a year and held extensive hearings where evidence was provided by all sides—including representatives for VCE.

The end result of the CPUC ruling is an exit-fee formula that will increase the amount of money PG&E will get from CCA customers by tens of millions of dollars in 2019 alone.  The scale of the new fees and the lack of effort by the CPUC to mitigate costs mean that CCAs are facing significant financial challenges—with parallel threats to California’s renewable energy goals—despite having lower overhead costs than the investor-owned utilities.

Valley Clean Energy’s share of the additional exit-fee costs in 2019 is about $3.5 million. This financial hit has forced your VCE board of directors to make some challenging decisions to help manage program costs wisely while meeting VCE’s long-term goals of service to the communities it serves. Those difficult decisions include reducing staffing costs, delaying enrollment of solar customers, and adjusting electricity rates to be at parity with PG&E’s prices.

It’s disappointing to make these program adjustments so early in the game, but take heart — there are experienced industry organizations, lobbying groups, and 19 CCA programs across the state representing more than 160 cities and counties that are fighting hard to reverse this decision. Should we succeed, VCE will act quickly to reinstate the customer advantages that were offered originally.

In the meantime, remember that VCE is a not-for-profit public energy program that has been created by our communities to benefit all of us. VCE and the other CCA programs operating successfully across California are already saving their customers millions of dollars a year, reducing greenhouse-gas production by tens of millions of tons, and creating jobs as they contract for and build renewable energy facilities in California.

California CCAs are buying and building renewable energy faster than any other type of electric provider in the state. But changing the status quo in a fossil fuel-based economy is a pretty big deal—nobody said it was going to be easy. And even though our growing pains have set in earlier than we would have liked, VCE’s dedication to comprehensive community benefits remains, including:

  • Local control: The VCE board — composed of elected officials from Davis, Yolo County and Woodland — makes decisions with the benefit of constituents in mind as opposed to Wall Street. We welcome your opinions at our public meetings. Consider joining us when you can.
  • Energy choice: VCE ends the electricity monopoly, offering a choice of electricity-generation providers and an option to opt up to 100% renewable energy, or to opt out.
  • Sustainability: VCE provides higher levels of renewable energy. Our current portfolio is 42% renewable compared to 33% for PG&E. We will strive to go higher in the years ahead.
  • Reinvestment in the community: Net revenues will be reinvested in the community in the form of energy projects and programs, including local renewable generation, energy storage, electric vehicle infrastructure, and/or energy efficiency.
  • Competitive rates: We strive to be competitive with the electricity-generation rates offered by PG&E.

The latest update on PG&E’s exit fee will be discussed at Valley Clean Energy’s next Board meeting, at 5:30 p.m. Thursday, Dec. 13, in the Community Chambers at Davis City Hall, 23 Russell Blvd. Unlike the investor-owned utilities, our board meetings are public; you’re welcome to attend.

Regular board meetings are on the second Thursday of the month from 5:30 to 7:30 p.m. The meeting location alternates between Davis City Hall and the Woodland City Council Chambers, 300 First St. in Woodland.

Please visit our website for additional information at valleycleanenergy.org.

—Lucas Frerichs is a Davis City Council member and the Valley Clean Energy board chair. Tom Stallard is a Woodland City Council member and the board vice chair.

About Valley Clean Energy: Valley Clean Energy is a not-for-profit public agency formed to provide electrical generation service to customers within the cities of Woodland, Davis and unincorporated areas of Yolo County. Its mission is to deliver cost-competitive clean electricity, product choice, price stability, energy efficiency, greenhouse gas emission reductions, and reinvestment in the community.

 

PG&E Exit Fees? OK, But Let’s Be Fair, by Lucas Frerichs and Tom Stallard, The Davis Vanguard, December 8, 2018.

The murky future of Valley Clean Energy

A curious thing happened in late September as Winters city officials were putting the finishing touches on a mid-October city council agenda: An unsolicited offer came from a community energy group that was looking to add more customers. The group, called Valley Clean Energy, had been distributing greener, cheaper electricity to several Yolo County communities compared to what PG&E had to offer, and they wanted to expand out to Winters to offer that same cheap, green energy to more residents and businesses. Was the city council interested in hearing them out?

City officials were surprised by the unsolicited offer — Valley Clean Energy had launched just a few months earlier, and they weren’t expecting to be on the group’s radar. But they decided to go for it, and at the last minute, a modified version of the city council’s agenda was published and sent to the Express that included time set aside for a presentation by Valley Clean Energy.

That presentation was delivered at the Oct. 14 meeting by Mitch Sears, a Valley Clean Energy executive who could have easily blended in with anyone he was speaking in front of. Sears carries himself like a city official in large part because he is one: On top of his duties as the interim general manager of Valley Clean Energy, he works for the City of Davis as a sustainability program manager, a role that requires him to explore ways to strike a balance between the city’s energy and environmental initiatives and the costs associated with them. As a city official, he knows all the right notes to hit when pitching a project like Valley Clean Energy to his peers: Here’s all the good things we do, here’s all the ways we can save you money.

Right off the bat, Sears focused on all the good things: Valley Clean Energy offers customers a higher mixture of green and carbon-zero energy in their electricity portfolio compared to PG&E. That could help a local government meet some of their climate goals and also give communities certain bragging rights: Who wouldn’t want to live and work in a town that could honestly say it was part of the solution instead of part of the problem? On top of that, as a community organization, there are few closed doors at Valley Clean Energy: Their key meetings are open to the public, and materials associated with those meetings are available online.

But Sears knew the biggest selling point of the night would be how Valley Clean Energy could save Winters residents and businesses money: Valley Clean Energy customers paid 2.5 percent less for their electricity compared to PG&E. That rate discount was not locked in, Sears warned — it might go up, it could go down — but the allure of the discount was repeated over and over again to the point where it became clear that it was the carrot used to convince cities to join.

If city officials were interested, Valley Clean Energy said it could bring Winters online sometime between 2020 and 2021. All it would take to get the ball rolling was a check for $25,000 and an authorization to pull current residential and business data held by PG&E.

City officials were interested.

“I think, with the depth of what you’re looking at, $25,000 to get a release of all our customer data to go and crunch those numbers, it doesn’t sound like an unreasonable amount,” City Manager John Donlevy said at the end of the presentation. He noted that other communities had poured between $500,000 and $1 million just to get Valley Clean Energy off the ground. By comparison, $25,000 up front to save money over time was a drop in the bucket.

“I would absolutely recommend it,” Donlevy said. “We’ll try to figure out where we can come up with the $25,000.”

But before the city cut a check, it needed to strongly weigh its options. Donlevy said there was a due diligence process involved, and a decision on whether or not to start the exploration process of joining Valley Clean Energy was not going to be made at that evening’s meeting.

Council Members Jesse Loren and Philip Neu also said they liked the idea, but agreed that the plan needed more consideration before they could make a formal decision.

“I’m not sure the community would like us to jump into it instantly,” Neu said. “But I think that the community will back it once they know what it’s all about — so I can support this, certainly.”

It was probably not the answer Sears and Yolo County Supervisor Don Saylor, who was also at the meeting, wanted to hear: What they knew that no one else did in the room was that Valley Clean Energy was already exploring the possibility of reducing the amount of green energy in their portfolio or reducing the rate discount that saved electricity customers money. Several weeks later, Valley Clean Energy would indeed decide to do one of those two things.

Community Choice Aggregation

For decades, there were only two options for signing up for electrical service: Build your own power plant and transmission grid — which most people don’t know how to do — or sign up for service through a for-profit, investor-owned utility (IOU) company like PG&E. Before the 1990s, the federal government imposed restrictions on how states could regulate the production and sale of energy. In the mid-1990s, the energy market opened up a bit with federal and state de-regulation efforts, but those efforts had unforeseen consequences: Market manipulations by out-of-state companies like Enron coupled with stringent caps on the price of electricity led to a catastrophic state energy crisis in the early 2000s, the bankruptcy of PG&E in 2001, the recall of Republican Gov. Gray Davis in 2003 and the collapse of Enron (which just a decade earlier had been one of the biggest backers of the de-regulation efforts that, through its own greed, would ultimately lead to its demise).

During that turbulent time, a Massachusetts regulator-turned-power activist named Paul Fenn had an idea: What if local communities could supplant monopolistic utility companies by arming themselves with the power to choose where their energy came from? If they didn’t like where a company like PG&E was buying their electricity — because, for example, that energy came from non-renewable resources like coal or oil — they could simply choose to buy that energy from somewhere else.

Fenn helped draft the legislation passed by California lawmakers in 2002 that established Community Choice Aggregation (CCA), a system that allows local governments to form non-profit energy organizations that decide where residents and businesses in a given area get their energy. CCAs don’t completely replace utility the companies that are already in a community — for example, if PG&E is the electrical company for a city, it continues to transmit, meter and bill customers in that city. But CCAs get to decide where that electricity comes from — they can choose to buy from the same suppliers as a company like PG&E, or they can get their electricity somewhere else where the energy might be cheaper, come from greener sources or both. In Marin County, anywhere from 50 to 100 percent of the energy supplied to customers comes from green sources — higher than PG&E’s portfolio of just under 40 percent. California law requires all customers in an area served by a CCA to be automatically enrolled when the CCA launches or expands to a new community, though customers can opt-out if they want.

In 2017, Sears led an initiative within the City of Davis to explore the idea of creating an alliance with Yolo County to form a CCA. Through that effort, the Valley Clean Energy Alliance was formed. Backed in part by a $11 million line of credit through River City Bank, Valley Clean Energy reached an agreement with the Sacramento Municipal Utility District (SMUD) to provide energy and technical services to customers served by the CCA. In June, the gently-renamed Valley Clean Energy formally launched in Davis, Woodland and certain areas of unincorporated Yolo County.

Under California law, CCAs have to conduct a certain amount of public outreach both before and after it takes over energy purchasing powers. Valley Clean Energy fulfilled this obligation in part by contracting through a Sacramento-based publisher that employed real journalists to write content for a newspaper supplement touting the benefits of the newly-formed CCA over PG&E: At launch, Valley Clean Energy would provide customers a lower rate on electricity that came from a higher percentage of green sources compared to PG&E. That 2.5 percent discount was estimated to save customers well over $1 million every year. After covering operational expenses, anything left over would be invested right back into the community.  And unlike PG&E, where highly-paid executives make decisions behind closed doors, Valley Clean Energy had a six-member board of directors comprised of local representatives that set rates and made other decisions in open, public forums.

“As a locally-based energy provider, VCE is accountable to the communities it serves, not shareholders,” Lucas Frerichs, a Davis city council member who serves as the chairman for Valley Clean Energy, said in the supplement.

The supplement contained a number of stories from people who endorsed what Valley Clean Energy stood for: Yolo County Superintendent Jesse Ortiz said the 2.5 percent rate discount offered by the CCA would help shave some of the $200,000 his office spent on electrical costs every year. Woodland resident Mary Kimball said local control of the CCA meant it would “always have the needs of the community it serves first.” Paul Muller, the operator of Full Belly Farm in Capay Valley, said Valley Clean Energy could be trusted to make “better energy choices” that sent “a message to energy providers and policy makers that renewable energy is what people want.”

Needless to say, private energy providers aren’t crazy about CCAs. For the last 10 years, PG&E and other IOUs have organized efforts to try to undermine the ability of local governments to launch CCAs in their communities. In 2010, PG&E spent $46 million in an attempt to convince voters to pass Proposition 16, a ballot initiative that would have required two-thirds of voters to approve a CCA before it formed. Four years later, at the urging of several IOUs, a state lawmaker wrote legislation that would have changed how customers are enrolled in a CCA: Instead of being automatically enrolled, as the 2002 law required, customers would have to opt-in when a CCA entered their community.

Ultimately, voters turned down Proposition 16, and the lawmaker’s efforts to undo customer enrollment by default stalled in the state senate. But a short time later, PG&E and other IOUs figured out a way to make CCAs seem like a less-attractive option by increasing a state-mandated fee on the bills of CCA customers.

That fee, called the Power Charge Indifference Adjustment (PCIA), is imposed on customers who leave a for-profit utility like PG&E for a CCA like Valley Clean Energy. When PG&E purchases power only to have customers depart for a CCA, it’s left over with power that it can’t sell. Instead of writing off that power as a loss or charging customers who stay with PG&E the difference, a fee is passed on to CCA customers.

PG&E and other IOUs say the PCIA is needed to make sure customers who stay with them aren’t on the hook for certain operational expenses. CCAs have disputed this, saying the PCIA is an “exit fee” that penalizes residents and businesses who opt for local energy purchasing control.

In 2016, PG&E and two other IOUs petitioned the California Public Utilities Commission (CPUC) with a request to reconfigure the formula used to calculate the PCIA fee. CCAs were on board with this idea, agreeing with the IOUs that the PCIA formula needed to be reconfigured. The IOUs wanted a formula that allowed them to charge more through the fee; the CCAs, naturally, wanted a formula that charged less.

In August, an administrative law judge issued a proposal that some CCAs said resolved a lot of uncertainty regarding the updated PCIA formula and would help keep costs low. One month later, the head of the CPUC issued an alternative proposal that reconfigured the formula in a way that allowed IOUs like PG&E to charge more through the PCIA.

Both plans were put up to a vote. In October, just one week before Valley Clean Energy was set to meet with the Winters city council, the CPUC unanimously approved the alternative proposal.

When the Express asked if the CPUC felt the PCIA fee was fair, a spokesperson responded with links to press releases and blogs, including one written by CPUC Commission Member Carla Peterson for Express media partner CALmatters.

“Neither the judge’s proposal nor mine would increase overall costs or allow the utilities to increase their profits,” Peterson wrote. “My job is not to pick winners or losers. It’s to do what’s fair for all customers while providing stability for California’s electric grid and communities as they exercise their right to choose.”

But in a competing commentary piece for CALmatters, Efren Carillo of the Center for Climate Protection wrote that Peterson’s proposal handed IOUs a win that would lead to rate hikes for customers who departed for CCAs like Valley Clean Energy.

“Peterman’s plan puts the interests of corporate utilities over those of local ratepayers,” Carillo wrote. “Her fee proposal would shift costs to community choice aggregation customers, hampering efforts to expand their services and enroll more residents.”

Carillo would be proven right when Valley Clean Energy started deliberating a rate hike for customers just two days after pitching a rate discount to the Winters city council.

Tough Choices

Two days after the approach to Winters, Valley Clean Energy held a meeting to discusswhat they could do in response to the anticipated increase of the PCIA exit fee. It was a packed house inside a special wing of the Davis Public Library, with most of those in attendance either directly connected to or having a special interest in Valley Clean Energy. Few residents from Davis or Woodland showed up. No one from the City of Winters was there. The Express was the only media outlet in the room.

The meeting opened with a presentation from a financial auditor that largely spoke positively on how Valley Clean Energy was handling its money. The group had been spending money wisely and still had a good buffer in its line of credit with River City Bank.

It was a second presentation by a law firm representing public utilities where the frustrations started to set in: If Valley Clean Energy didn’t do something — reduce their green energy portfolio, eliminate the rate discount for customers, something — the group could be headed for disaster.

Documents presented at the meeting and later obtained by the Express showed that if Valley Clean Energy kept their green energy portfolio mix and the rate discount the same, the group would take in about $2.8 million in operating profit for 2018. But Valley Clean Energy would have an operating loss of $439,000 in 2019 with the operating loss nearly doubling in 2020.  If Valley Clean Energy eliminated the 2.5 percent rate discount, they argued, the numbers would go the other way: The company would generate the same amount of operating profit in 2018, plus a profit of $1.35 million in 2019 and $938,000 in 2020.

Essentially, the difference between the two was whether Valley Clean Energy wanted to be in the black or in the hole. Financial experts at the meeting warned if Valley Clean Energy leaned more toward the first option, they could be in default on certain agreements and loan covenants made with River City Bank and other investors.

Everyone in the room was frustrated for two reasons: First, while Winters had showed some interest in Valley Clean Energy, Sears and Saylor walked out of the council’s chambers two days earlier without so much as a handshake agreement, let alone that $25,000 check. Valley Clean Energy had made a similar approach to the City of West Sacramento that ended basically the same way.

That was a problem because Valley Clean Energy was in the process of negotiating long-term energy contracts beyond 2021. If they could have something more than a cursory interest from Winters and West Sacramento, the group could go to those power providers with some more leverage.

“As we gain even more members, that’s clout,” Sears said at the board meeting. “That’s our strategy going forward.”

The second source of frustration was that just two weeks earlier Gov. Jerry Brown had signed legislation that mandated all electrical energy come from renewable resources before a certain deadline.

“Here we are at this incredible moment,” started board member Dan Carson of Davis. “The governor has signed SB 100, a measure requiring a totally renewable electricity grid by 2025..and five appointees of this governor have taken action that I believe strikes a serious blow toward the long-term efforts of achieving those important environmental goals.”

The CPUC’s decision undermined the efforts of Valley Clean Energy and other groups from meeting those goals in an accelerated time frame — much quicker than anyone in the room felt PG&E would move.

The anger was palpable. But no one expressed it more than Carson: At the end of the meeting, he stood up from his chair, approached a meeting attendee and said: “Can you tell I’m pissed?”

The Other Shoe Drops

One month after the board meeting in Davis, Valley Clean Energy convened again — this time in Woodland —to announce its cost-cutting decision. The mood in the room had changed from frustration to indignant resignation. No one summed up how everyone was feeling better than Chairman Frerichs.

“It’s been hard to keep and stay chipper…in light of the continued ass-kicking from the Public Utilities Commission that all CCAs have been receiving,” Frerichs said at the Nov. 15 meeting.

In the meantime, the company would have to do what was necessary with what they already knew to be true: In their books, the CPUC had given PG&E and other IOUs a win with respect to the PCIA exit fee, and the company needed to do what it took to remain on good financial ground. That meant trimming operational costs and eliminating the rate discount.

The company was nowhere near out of the woods: Between the Davis and Woodland meetings, PG&E had come under intense public and legislative scrutiny after its transmission lines were suspected of igniting a 150,000-acre wildfire east of Chico. When the group met, the death toll from the Camp Fire was still climbing (as of this report, it stands at 88), the number of missing was over 1,000 (it is now around 200) and thousands of homes and businesses had been destroyed.

 

Express Investigates: The murky future of Valley Clean Energy, by Matthew Keys, Winters Express, December 6, 2018.

DNV Rolls Out Bifacial Solar Testbed In California

DNV has begun installing what it calls the largest bifacial solar panel test facility in the world, at Davis, California, with the goal of benchmarking brand variations in the market to facilitate widespread adoption. The $250,000 project recently won a $200,000 grant from the US Department of Energy.

The test site will house 1,500-volt bifacial panel arrays from as many manufacturers as are willing to cooperate, says Tara Doyle, the head of Business Development & Project Management at DNV GL, based in Berkeley. The tests will focus on 1,500 volt panels rather than lower voltage panels, since 1,500 volts is expected to become the norm in the solar industry soon.

The string arrays will include single-axis trackers as well as fixed-tilt mounting systems, placed over two different ground cover materials to measure the difference in energy yield provided by albedo, or reflected light.

The tests will include 50 kilowatts of four types of panels — Trina, Hanwha, Longi and Astronergy, and all types of panels will be tested on a NEXTracker tracker, initially. Once a second type of tracker is used, as is being considered, the size of the field bed could resemble a utility-scale test installation, DNV says.

The solar panels will first undergo indoor characterization of the modules, including flash testing, which determines the maximum albedo value that the panels could yield under perfect field conditions. In the market today, bifacial panels are only yielding a 10% to 15% energy boost, despite the potential for up to about a 90% bifacial factor gain, as manufacturers report it.

This is because there are a large number of variables in the available positioning of the panels on different sorts of mounting equipment. Once the top three or four variables have been studied and optimized, the bifacial boost is expected to reach 25% or more, according to experts in Germany.

“What we are trying to do is correlate the bifacial factor to the module output in the field; then we can see if the bifacial factor from manufacturers can be a predictor of the bifacial gain in the field,” says Doyle. Data at the site will be recorded as soon as the panels go live, and DNV expects to produce an interim report by September 2019, followed by a more formal report after one year of data is collected. “We’re also aiming to compare expected energy output from energy simulation models to the field data we are collecting as part of our study. In a nutshell, we’re seeing which models predict bifacial gains most accurately,” she says.

The data from the DNV tests will be used not only to help design more efficient solar projects, but also secure financing at lower costs since risk will be reduced as a result of the performance benchmarking.

“One concern with bifacial panels is that there is a wide range of manufacturer claims for the bifacial factor, so bankers and other financiers don’t know which data to believe,” says Tristan Erion-Lorico, the head of PV Module Business, Laboratory Services for DNV. “Our aim is a large set of bankable data that can be reported anonymously,” he says.

Apart from peak performance testing, DNV also will consider panel reliability, looking at different design factors such as glass-on-glass which could have potential issues with damp heat and humidity freeze, Erion-Lorico notes.

“We do respect the other ongoing bifacial studies that might be looking at one manufacturer’s module and a number of different trackers, or one tracker manufacturer with a number of different modules,” says Erion-Lorico “There also are plans for testing over a number of different albedos, so all these studies will complement each other,” he says.

DNV will share the data publicly with anonymity for the panel manufacturers, unless the manufacturer chooses to have its name included with the data. With the presence of DOE funding in the DNV project, the public sharing of data is expected to be widespread. One of the problems solar project developers have in choosing which panels to use with which tracker is that data sets are generally proprietary, they are based on widely varying field variables, and they are not publicly shared.

“Once our data and other data is released next year, more bifacial installations will take place in the market. Then real field data from these installs will start coming in during 2019,” reckons Erion-Lorico.

NV GL delivers testing and advisory services to the energy value chain including renewables and energy management. Their expertise spans onshore and offshore wind power, solar, conventional generation, transmission and distribution, smart grids, and sustainable energy use, as well as energy markets and regulations.

 

DNV Rolls Out Bifacial Solar Testbed In California, by Charles W. Thurston, Clean Technica, November 27, 2018.

All-Electric Homes Are Becoming the Default for New Residential Construction in Sacramento

A combination of attractive incentives and utility engagement with developers is making all-electric homes the default for new residential construction in greater Sacramento.

This summer, national homebuilder DR Horton broke ground on two new all-electric projects in the Sacramento neighborhood of North Natomas.

DR Horton plans to build 104 homes complete with heat pump space heating and cooling, heat pump water heating, induction stoves, and no natural gas infrastructure in the new “Independence” and “Juniper” communities. Six model homes have been completed and construction is expected to continue throughout 2019.

Under its All-Electric Smart Home program, the Sacramento Municipal Utility District (SMUD), the regional community-owned utility, will provide rebates worth up to $466,000 to DR Horton for the installation of electric appliances and equipment at the two projects.

Electrification as a decarbonization strategy

“It’s the initial rollout of this kind of home, so we’re really interested in seeing how consumers react to it,” Ray Nalangan, a senior architect at SMUD, told Greentech Media in an interview. DR Horton did not respond to multiple interview requests for this story.

Nalangan said DR Horton had previously participated in SMUD’s legacy Smart Homes program, which offers rebates for insulation, duct sealing, high-efficiency windows, and other traditional energy efficiency improvements. Based on that prior relationship, he said, SMUD approached DR Horton to assess the homebuilder’s interest in going all-electric at the North Natomas projects.

“Once they heard about it,” Nalangan said, “they were intrigued enough and wanted to treat these two particular projects as a pilot. Their experience here will inform where they go with this method, or this design approach, going forward.”

For its part, SMUD views all-electric new construction and gas-to-electric retrofits as a means to achieve the utility’s ambitious climate goals. SMUD aims to reduce the greenhouse gas emissions required to serve its customers by 90 percent from 1990 levels by 2050.

According to SMUD, a little more than 50 percent of the utility’s power generation mix is carbon-free. As that portfolio gets cleaner, all-electric homes become an even more important instrument to reduce greenhouse gas emissions from buildings.

“The understanding is we have to hit emissions in the building sector,” said Nalangan. “It’s an indispensable tool in being able to get to those goals.”

“Electrification provides a magnitude of [greenhouse gas] reduction that cannot be matched by energy efficiency measures,” SMUD project manager Owen Howlett told the California Energy Commission at a June workshop.

All-electric homes becoming the default in Sacramento

SMUD is proactively reaching out to homebuilders to inform them of the availability of rebates for all-electric new homes. Thus far, developers in the region appear to be interested.

“There’s quite a bit of momentum going forward,” said Nalangan. He added that nine large developers are building 400 all-electric homes in SMUD territory over the next 24 months.

“We’ve had some really good interest,” said Nalangan. SMUD wasn’t ready to disclose all the homebuilders with which it is working on all-electric developments.

DR Horton’s projects in North Natomas are being built adjacent to mixed-fuel neighborhoods completed years earlier. The developer capped the gas infrastructure at the property lines and is proceeding to build the new all-electric homes as the final phase of a much larger project.

For future projects, Nalangan said, SMUD has approached developers “early enough in the project development process to where the next batch of all-electric homes will be much closer to the original intent of the program to realize some construction savings and site development savings because you’re not doing the gas infrastructure from the get-go.”

Nalangan noted that greenfield and infill developers in particular are eager to explore all-electric construction.

“They generally have tight sites, and so the fact they don’t have to accommodate the infrastructure set-asides for gas pipelines are a big value-add for those guys,” he said.

Asked if SMUD sees all-electric construction as trending toward becoming the default in its territory, Nalangan said, “That’s our hope.”

 

All-Electric Homes Are Becoming the Default for New Residential Construction in Sacramento, by Justin Gerdes, Greentech Media, November 13, 2018.

Lighthouse BP Inks Western Solar PPAs

Solar owner and operator Lightsource BP has signed power purchase agreements (PPAs) totaling 25 MW in the Western U.S.

The PPAs were signed with California’s Sacramento Municipal Utility District (SMUD), one of the nation’s largest municipal utilities, and with Continental Divide Electric Cooperative (CDEC), a member-owned distribution cooperative in New Mexico. The deals will bring locally generated solar photovoltaic power to the utilities’ customers over 20-plus-year terms.

Wildflower Solar I, totaling roughly 16 MW, will be located within SMUD’s territory and will support SMUD’s community solar program, SolarShares. Additionally, SMUD and Lightsource BP are currently exploring the addition of energy storage to the PV system.

In New Mexico, Lightsource BP will develop and construct a project within CDEC’s territory. The co-op will serve clean energy to its members through its own distribution system.

“We’re excited to deliver affordable local solar to our utility partners and their customers,” says Katherine Ryzhaya, Lightsource BP’s U.S. chief commercial officer. “Our solar solutions will drive local economic development and job growth, increase utility customer satisfaction, and provide a cleaner, healthier environment for their communities.”

 

Lighthouse BP Inks Western Solar PPAs, by Betsy Lillian, Solar Industry, November 8, 2018.

Electrify America unveils e-car sharing initiative under Sac-to-Zero

Electrify America has partnered with Envoy Technologies to deploy hundreds of electric car-sharing vehicles in Sacramento.

The partnership is part of a $44 million investment made by Electrify America in Sacramento.

The Sac-to-Zero initiative will enable residents to rent electric cars on a per-minute, per-hour or daily basis with the aim to increase user awareness and citywide access to electric vehicles.

By early 2019, Envoy Technologies will be offering 142 Volkswagen e-Golf electric cars at 71 locations and “Level 2” charging stations.

Electrify America is also partnering with another firm, Gig, under the Sac-to-Zero initiative.

Gig will deploy 260 electric vehicles which customers can pick and drop within a 13 mile home zone.,

Residents can unlock the cars through the “Envoy There” mobile application for Android and iOS.

“The objective behind Sac-to-Zero is to provide widespread access and use of zero emissions-related transportation options for Sacramento-area residents, particularly those living in affordable housing communities where access to transportation can be limited and more difficult,” said Richard Steinberg, senior director of marketing, communications and Green City initiatives, Electrify America. “Envoy’s car sharing program is the first-step in our multi-pronged approach.”

“On the heels of the Legislature’s passing the groundbreaking 100% Clean Energy Bill that sets some of the nation’s strongest clean energy goals, Sacramento steps out to bring new and necessary non-carbon producing transportation options to the Capital City,” said Mayor Darrell Steinberg.

Technology firm, 3fold will execute the project and deploy all the communications technologies for the car-sharing initiative.

 

Electrify America unveils e-car sharing initiative under Sac-to-Zero, by Nicholas Nhede, Smart Energy International, November 6, 2018.

Power Politics: The growing number of publicly owned CCAs offer cheaper and cleaner electricity than for-profit utilities — so are they viable in the long-term?

David Baker has noticed a change in his energy bill. The president of RobbJack, a Lincoln-based manufacturer of carbide cutting tools, used to get his electricity from Pacific Gas & Electric, until this past February when Pioneer Community Energy launched in Placer County. Baker says representatives from Pioneer worked closely with him on a plan to cut electricity costs. RobbJack runs air conditioning and power for industrial machines in a 42,500 square-foot space, so Baker says even small savings make a big dent.

Pioneer’s entrance into the market has also been a win for Thunder Valley Casino Resort, another customer. It has seen rates drop by 2-3 percent, says Doug Elmets, a spokesman for the United Auburn Indian Community, which owns the casino. For a facility that’s open all day and all night, and cycles through 16,000 people every 24 hours, that’s a significant savings, he says. (Pioneer customers save 5-7 percent compared with PG&E, according to Pioneer’s data.)

“Currently, we know collectively we’re saving ratepayers here in Placer County $10 million a year,” says Placer County treasurer and tax collector Jenine Windeshausen of the switch to Pioneer. “And it’s highly likely that money is going to be spent here.”

Pioneer is just one of a large number of “community choice aggregators” — electric-power purchasing organizations run by a municipal or county government or some combination of the two — that have entered the state’s energy market in recent years. Valley Clean Energy, which launched June 1, serves Woodland, Davis and unincorporated Yolo County.

CCAs are quickly taking over from investor-owned utilities how electricity is bought in California. They’re the latest test of whether local, publicly run ventures can deliver cheaper and cleaner power. But electricity procurement can be a fickle industry, and time will tell how well they’ll navigate regulatory and market changes.

GAINING GROUND

The state’s electricity crisis in 2000 and 2001 helped pave the way for an influx of CCAs. The shortage of electrical power and resulting large-scale blackouts led policymakers to rethink the rules governing the industry. In 2001 and 2002, a package of bills was passed to ensure there wouldn’t be a repeat, including a 2002 law that authorized the formation of CCAs.

But setting up the technical and governance structures took time, and the first CCA — Marin Clean Energy — wasn’t launched until 2010. With MCE’s launch came a template for others to follow, and the number of CCAs is growing: Today there are 18, nine of which started this year. If current trends hold, within 10 years, CCAs may serve the majority of the state’s consumers now served by the big three investor-owned utilities, according to a July report from the UCLA Luskin Center for Innovation.

Lower energy rates are a fundamental aspect of the CCA promise: Valley Clean Energy set its rates 2.5 percent below PG&E’s, and Pioneer’s have come in an average of 9 percent lower. Their boards are made up of local elected officials who regularly face voters and are therefore, proponents say, incentivized to negotiate harder on contracts. And as nonprofits, they don’t need to build in returns for private shareholders or pay federal taxes, says Pioneer spokesperson Alexia Retallack.

CCAs also say they’re more accessible to customers and able to adapt to their needs. “People can walk into our office [on Second Street in Davis] and talk to the executives,” says VCE spokesperson Jim Parks.

As VCE was planning its launch, there was a small uprising of rooftop-solar customers worried they’d pay more under VCE than PG&E. So VCE held public meetings that brought out standing-room-only crowds. The board took comments, and as of August was working on a new proposal. RepowerYolo, a Davis-based solar consulting company that runs an influential blog and was skeptical of the original plan, advised customers to stick with VCE after the hearings, writing on its blog that VCE “listened to our concerns, analyzed our recommended changes” and “is diligently doing the right thing.”

The timing is also ripe for CCAs: Electricity prices are far lower now than when investor-owned utilities were required under state law to invest millions in contracts for renewable energy from 2002 to 2012.

MORE RENEWABLE OPTIONS

Electricity will make or break California’s ambitious climate agenda. By 2030, state law requires greenhouse gas emissions to fall 40 percent below 1990 levels. Under a new law passed in September, 100 percent of the state’s electricity generation must be carbon free by 2045. That means ever-rising demands on the grid: more electric vehicles plugging in, electric heat pumps replacing gas boilers, induction stoves taking over from their gas-fired relatives.

The state’s electricity sector as a whole is getting cleaner: One-third of electricity procurement by all providers must be renewable by the end of 2020. The state’s investor-owned utilities are there already, generating 35 percent of their electricity from renewable sources on average.

But the CCAs are doing even better, while increasing the overall share of renewables on the grid: A May 2017 Luskin Center analysis concluded that all five of the state’s CCAs then in operation sourced a larger share of renewable energy than did their affiliated investor-owned utilities. Locally, 75 percent of VCE’s standard electricity package is made up of renewable or large hydro sources, compared with 51 percent for PG&E. Only 29 percent of Pioneer’s energy portfolio is from renewables, with the remainder from “unspecified sources of power.” Retallack says that’s because Pioneer has been running only six months and hasn’t secured all of its long-term contracts; with time, its renewable percentage will rise. “We’re very cognizant of renewables, but we’re also very cognizant of cost,” she says.

POWER STRUGGLE

You might not think control of the electrical grid could start a knife fight — but if you lived in Yolo County in 2006, you’d know that’s wrong. That year, local activists and elected officials got two measures put on the November ballot to expand the service territory of Sacramento Municipal Utility District — one of the 10 largest publicly owned utilities in the U.S. — into parts of the county. (PG&E had fought hard against SMUD’s formation, tying it up in the courts for almost 25 years, after voters first approved its formation in 1923.) Then and now, SMUD’s residential electricity rates beat PG&E’s by about 30 percent.

SMUD is not a CCA (and CCAs can’t legally operate in areas served by a municipally-owned utility) and so would have needed to buy PG&E’s poles and wires in Yolo County, paying back the cost over time. But PG&E had no plans to go quietly. It got mirror proposals put on the ballot in Sacramento and Placer counties’ SMUD territory, putting the decision to voters. And it launched an $11 million publicity blitz (with which SMUD, a public entity, could not compete) to convince them that the deal could raise their rates dramatically.

That turned public sentiment. Sacramento and Placer’s voters turned down the expansion by a wide margin, and even Yolo’s broke for and against the referendums in almost equal numbers.

But the proponents promised they wouldn’t abandon efforts in these communities to take control of their own power choices. Just over a decade later, Pioneer and VCE are aimed to make good on that promise.

In 2010, PG&E spent about $45 million on a ballot measure that would have made it tough for CCAs to launch by requiring two-thirds voter approval. That backfired. Not only did the measure fail, but the next year, legislators passed a law directing the California Public Utilities Commission to establish a code of conduct forbidding utilities from using ratepayer revenues to “market against” CCAs — which it did.

So today PG&E cooperates with CCAs. PG&E spokeswoman Ari Vanrenen said the company wouldn’t make anyone available for an interview. But she released a statement by email that read in part, “We respect the energy choices that are available to our customers and will continue to cooperate with local governments as they consider pursuing and/or developing a CCA program.”

VCE’s Parks says he has weekly calls with his PG&E counterpart, and they collaborate to publish rate mailers. “We’ve had coffee together. It’s a pretty friendly relationship,” he says.

Still, changes in state law and regulation or the market could in theory jeopardize CCAs’ success.

There is the issue of a potential increase to the exit fee paid by customers who depart for a CCA. Remember those bargain rates for clean energy that CCAs enjoy that IOUs didn’t? The mechanism for dealing with that market problem is the exit fee. Set by the CPUC, it is supposed to compensate customers who stay with the utilities for the difference between the utility’s higher, legacy cost of electricity and the current market price.

Now, the CPUC is in the middle of deciding on a new methodology for calculating it, and its choice could threaten the CCAs’ ability to beat utilities’ prices. One option on the table would make it “uneconomic for new CCAs to launch,” according to the California Community Choice Association, which represents CCAs and others.

There is another rising competitor in the power market: electric service providers, or ESPs — private companies that procure and sell electricity direct to business customers. By law, ESPs have been allowed to deliver about 13 percent of the state’s total utility load, a cap set after the 2000-2001 disaster. But a new bill signed in September raises that cap. That means more CCA business customers can leave for ESPs if they get better prices. Indeed, so high is the demand for cheap, tailored electricity plans that ESPs have a waiting list 1,700 commercial customers deep, says Scott Olson of Direct Energy, a Houston-based ESP that serves parts of California. (For more on the various players in California’s energy market, see “A Primer on the Changing Electricity Market” on page 42.)

In any case, CCAs’ long-term success is no guarantee, according to the Luskin Center’s J.R. DeShazo. “The idea that a big, even really safe utility could go bankrupt is not crazy,” he says. “It just takes the wrong set of conditions and bad policy by the legislature.” He points to  PG&E’s bankruptcy in 2001. Ratepayers are still footing the bill for that failure, he says.

Windeshausen acknowledges the risk that a CCA could fail but says it’s overstated. Pioneer was funded through a $16 million bond issued by the Placer County treasury.  Pioneer has already paid down $3 million and is on track to repay the full $16 million within about two years, she says.

Windeshausen is willing to put her reputation behind Pioneer’s success: She’s been re-elected multiple times since 1994. “I live here, I’ve raised my family here, and I’m very passionate about Placer County,” she says. “We have a history and a track record of really solid deals.”

 

Power Politics, by Steven Yoder, Comstock’s, October 30, 2018.