Marin County is leading the way to local power, a path that Sonoma County could follow if we are able to defeat PG&E's nefarious Proposition 16.

Pioneer public power program launches in Marin

David R. Baker, Chronicle Staff Writer

Friday, May 7, 2010

Today a new kind of public power agency will begin delivering electricity to 6,000 homes, businesses and government offices in Marin County.

And communities throughout California will be watching to see if the agency - the first of its kind in the state - succeeds.

The Marin Clean Energy program, run by the new Marin Energy Authority, is California's first experiment with "community choice aggregation," a system under which cities or counties buy electricity on behalf of their citizens and set their own rates. San Francisco is trying to launch its own community choice program, and cities scattered across the state have explored the idea.

But California has a long history of bitter battles over public power, and the Marin agency's birth has been no different.

Pacific Gas and Electric Co., the state's biggest utility, fought hard against Marin's fledgling power authority, at one point even threatening to cut off electricity deliveries to it. Many civic leaders elsewhere who are interested in community choice have been willing to watch Marin fight its way through the utility's opposition, hoping the county would blaze a trail they could follow.

"They really are out there on the bleeding edge, making it safer for all of us," said Ann Hancock, executive director of the Sonoma County Climate Protection Campaign. Her organization works with city and county officials on policies to combat global warming and is studying community choice, which lets communities pick where their power comes from.

Marin Energy Authority officials understand their role as the guinea pigs of community choice. They say they have created a workable model that other communities can emulate, buying more than 75 percent of their electricity from carbon-free sources while charging most customers the same amount, month by month, as does PG&E.

"At the end of the day, with the greenhouse gas reductions we'll get, the misery will be worth it," said Marin County Supervisor Charles McGlashan, who serves as the energy authority's chairman. "But it has been a miserable experience."

Financial risk

PG&E, based in San Francisco, insists that community choice programs pose a financial risk to the communities that try them, exposing customers to the whims of a complex and volatile energy market. A Marin County Grand Jury report last year agreed, advising county officials to "pull the plug" on the energy authority.

And financial concerns have helped scuttle - or at least suspend - other community choice projects. Berkeley, Emeryville and Oakland explored creating a system together but held off after a 2008 consultant's report found that their electricity rates could be as much as 6 percent higher than PG&E's.

"We have found that the programs proposed to date are not economically viable and would create serious financial risks to our customers, to local governments and to local taxpayers," said PG&E spokeswoman Katie Romans.

Changing the rules

PG&E also has poured $30 million into passing Proposition 16, a ballot measure that would force local governments to win the approval of two-thirds of their voters before establishing or expanding a public power system. Community choice advocates say that if Prop. 16 passes in June, most cities interested in these systems will simply give up. The kind of campaign necessary to win a supermajority vote over PG&E's objections, they say, would cost too much.

"The bar becomes so high that it becomes impossible to spend the money to do this," said David Orth, general manager of the San Joaquin Valley Power Authority.

His organization, a collaboration of Kings County and eight Central Valley cities, tried to form a community choice system before Marin. But the authority suspended its efforts because of the credit crisis - and a fierce public relations campaign from PG&E. Orth said the authority may try again in the next six to 12 months, but not if Prop. 16 passes.

"When you look at the PG&E campaign machine, no one's going to go against that," he said. "We'd be done."

Community choice aggregation systems are not the same as municipal utilities, such as those serving Los Angeles or Sacramento. Under community choice, local governments buy electricity for their citizens and businesses, but traditional utilities such as PG&E continue to own, operate and maintain the electrical grid.

Like Orth, some Berkeley and Oakland officials want to give community choice another try. Economic conditions have changed since 2008, perhaps improving a community choice program's chances of success.

"We're being careful and cautious and watching Marin and San Francisco," said Oakland City Councilwoman Nancy Nadel. "At least we can see how it's working and then see if we can create something that works for us."

Opting in or out

The new Marin Energy Authority serves the cities of Belvedere, Fairfax, Mill Valley, San Anselmo, San Rafael, Sausalito and Tiburon, as well as the county of Marin. Residents of those communities automatically become customers of the authority unless they choose to opt out and stick with PG&E.

But the opt-out process has proved confusing to many residents. Here's a quick guide to leaving - or joining - the new authority.

To opt out, you must either call (866) 743-0335 or go to Community Choice Aggregation.

PG&E had been phoning customers, asking them to opt out and then transferring them to a phone bank to remove them from the Marin agency's customer list. But state energy regulators have decided that any opt-outs the utility obtained through those calls are invalid. So are any opt-out requests that use a printed form from a PG&E mailer or newspaper ad. If you want to stay with PG&E, you must call the number above or go to that Web page.

If you received one of those phone calls, opted out and later changed your mind, call (888) 632-3674 to be placed back on the Marin agency's customer list.

The energy authority will switch customers from PG&E service to its own in three phases, with the first phase starting today. To find out which phase you are in, call (888) 632-3674.

- David R. Baker