Davis, Yolo County Working to Create Competitive Electricity Market

Davis and Yolo County are working to create a competitive electricity market for residents and businesses.

The city and county have approved the formation of Valley Clean Energy Alliance, which will be a nonprofit joint powers authority local energy provider.

Yolo County approved it this week. Davis approved the idea in March.

The formation of the Valley Clean Energy Alliance means that customers can decide what kind of electric generation they prefer, and they can potentially shop for price. The alliance still needs to be organized and assembled, and it could begin delivering power by fall of next year.

Electricity in Yolo County, Davis and much of Northern California is currently provided by San Francisco-based investor-owned utility Pacific Gas & Electric Co.

Under Valley Clean Energy Alliance, customers could choose to continue to use their PG&E service as it is, or to allow the alliance to procure the electricity, which would then be delivered using PG&E transmission stations and power lines, and PG&E would continue handling the billing.

These so-called Community Choice Energy programs are authorized by California law to allow customers to make electricity purchasing decisions. They can offer less costly options than buying power from the utility itself. Marin and Sonoma counties and PG&E’s home of San Francisco all have successful Community Choice Energy programs for electricity, said Regina Espinoza, climate action and sustainability manager with Yolo County.

Using low-cost wholesale electricity, the Valley Clean Energy Alliance could offer customers access to competitive electricity prices, that would meet other goals such as greater use of renewable energy or climate protection, Espinoza said.

In early 2014, Davis began to study the possibility of creating a municipal electric utility to provide electricity to city residents. That effort ended when PG&E said its electric grid and substations in Davis were not for sale. The city had estimated the fair market value of PG&E’s assets in Davis at $18 million to $27 million. PG&E, however, estimated the value of its electric infrastructure in the city at more than $140 million.

Davis was interested in municipal power because rates tend to be lower in municipal districts than they are in PG&E territory. That tends to be the case locally in the Sacramento Municipal Utility District and Roseville Electric.

In the case of Community Choice Energy programs, PG&E is willing to cooperate with local governments, said Brandi Merlo, PG&E spokeswoman. She said the utility has “served its customers for more than 100 years, and it expects to serve them for another 100 years.”

So far, the Valley Clean Energy Alliance includes only Yolo County and Davis, but Woodland is interested and observing, Espinoza said. Davis and Yolo County account for about 50,000 electricity customers.

It does not include the campus of the University of California Davis, which buys its own power from wholesale markets.

“The estimates on customer rate savings are encouraging, as well as the opportunity for unique rates and rate structures designed for specialized users such as agriculture and energy conservation,” said Yolo County Supervisor Duane Chamberlain, in a news release.

Davis, Yolo County Working to Create Competitive Electricity Market, by Mark Anderson, Sacramento Business Journal, November 10, 2016.

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