LAKEPORT >> A plan to save big on electricity bills was disclosed by Sonoma Clean Power, an alternative power company that could produce 14% savings for typical customers, indicated by a study completed this summer, according to Geof Syphers, CEO of SCP, as he illustrated in a slide show before the Lakeport City Council Tuesday.
Sonoma Clean Power, of Santa Rosa is known as community choice aggregation—programs that allow local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider, PG&E. CCAs are an attractive option for communities that want more local control over their electricity sources, more green power (solar, wind, geothermal) than is offered by an investor-owned utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources. CCAs are currently authorized in California, Illinois, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Rhode Island, and Virginia. In 2022, about 5.7 million customers procured about 14.6 billion kWh of electricity through CCAs.
SCP launched operations in 2014 and in all but two of last 10years, saved customers more than they could with PG&E, pointed out Geof Syphers SCP’s Chief Executive Officer. He said the savings ranged from 2 up to 7%. Of the electrical power sources in California, 40% come from natural gas, while alternatives, solar is 14%, hydro at 12% and geothermal 5%. While SCP sources comprise of geothermal at 88% and solar at 12%. SCP is committed to increasing local access to geothermal power and lowering long-range energy costs Syphers noted. California has already ordered 2,000 megawatts of new geothermal construction.
Using similar architecture as PG&E, SCP purchases energy sources from much larger utility companies. PG&E buys electricity from Calpine, so does SCP. As PG&E buys electricity from Mansehra, so does SCP. “What we do is, take the profit out of it,” Syphers said. “We have a clear interest in advocating lower profit over fire risk or emission leaks. We don’t have pressure from shareholders.”
City Manager Kevin Ingram noted he was very excited about Sypher’s presentation and about the opportunity. “My first introduction was the feasibility study six years ago,” Ingram recalled. “In regards to adding Lake County to SCP’s consortium, back in 2019 it didn’t pan out, so we put it on the shelf, but we all agreed we wanted to continue to look forward to this opportunity; if it continued to look like a benefit to our citizens in Lakeport, we wanted to look at it again.”
Syphers explained the CCA agreement will allow Lakeport to secure alternative energy sources, focusing on clean energy, geothermal and solar. Geothermal energy is heat energy from the Earth, which can be captured and harnessed for various applications, including electricity generation and heating. It is derived from the Earth’s internal heat, which is produced from the planet’s formation and radioactive decay. Geothermal energy is considered a renewable energy source because it is continuously produced within the Earth. There are already 25 CCA contracts operating around California. “We’re generating electricity for customers, but PG&E is doing the wires and utility poles.”
He noted the CCA business model grew out of the Enron scandal. The Enron scandal was a series of events that resulted in the bankruptcy of the U.S. energy, commodities, and services company Enron Corporation in 2001 and the dissolution of Arthur Andersen LLP, which had been one of the largest auditing and accounting companies in the world. The collapse of Enron, which held more than $60 billion in assets, involved one of the biggest bankruptcy filings in the history of the United States. “Enron was basically scamming California, “Syphers recalled. “The state legislature wanted more oversight over energy- have more open meetings in public forums and supervising the energy market. But SCP won’t replace the utility infrastructure. We still rely on PG&E to take care of the electrical grid and all the billing.”
What SCP does, is offer PG&E customers an option, so when SCP offers service in a region and the state’s Public Utilities Commission concurs, customers can agree to go with the default generator, which in this case is SCP, as legislated by law, or can opt out and return to PG&E if preferred. Currently SCP provides for practically all electrical customers in Sonoma and Mendocino Counties and only 13% have opted out and returned to PG&E during the prior 10 years.
Yet once in a while SCP does engage in building large projects. They have a 46-megawatt wind project in Livermore, as well as a smaller solar project in Petaluma. They build locally when the project is affordable. Some benefits of joining SCP would be a choice for a new power provider and an opportunity to cut air pollution.
As new technologies emerge, SCP will expand its opportunities beyond its current geologic, land and water constraints. Yet there are some risks in joining SCP, which require a long-term commitment. In some instances, paying the costs on power contracts to ensure other customers do not experience rate increases.
On August 1, SCP expects their board will vote to extend a formal offer to Lakeport, Clearlake and the County of Lake to provide utility services. From August through October, Lake County and their cities will consider passing ordinances to satisfy CPUC requirements and agree to; abide by a Joint Powers Authority. This is a legal framework that allows two or more public agencies to jointly exercise common powers. This Act enables these agencies to collaborate on shared services or projects, often creating a new legal entity known as a Joint Powers Authority (JPA). JPAs can operate independently, holding legal rights and responsibilities, and are governed by specific agreements that outline the powers and procedures for their operation. The Act is particularly significant in California, where it has been used to enhance public service delivery and address complex challenges. Then in November, SCP shall file an Implementation Plan with the CPUC, for a start date of May 2027 for service.
