SONOMA CLEAN POWER: GEOF SYPHERS UPDATE
BY STAS MARGARONIS, RBTUS.COM
On April 2nd, Geof Syphers, chief executive officer of the Sonoma Clean Power Authority (SCP) provided Sebastopol Rotarians with descriptions of consumer programs and economic development possibilities.
SCP is one of only two organizations to successfully launch electric power service to customers under California’s Community Choice Aggregation (CCA) laws.
Through CCA, local government agencies can, without using tax funds, compete with a major utility such as Pacific Gas and Electric Company (PG&E) to provide customers with more renewable energy at competitive prices.
Syphers told the Rotarians that SCP is kicking off with two programs to promote more local economic development and clean energy generation in Sonoma County:
1) Net energy metering (NEM). The California Public Utilities Commission describes NEM as follows: “Customers who install small solar, wind, biogas, and fuel cell generation facilities (1 MW or less) to serve all or a portion of onsite electricity needs are eligible for the state’s net metering program. NEM allows a customer-generator to receive a financial credit for power generated by their onsite system and fed back to the utility. The credit is used to offset the customer’s electricity bill. NEM is an important element of the policy framework supporting direct customer investment in grid-tied distributed renewable energy generation, including customer-sited solar PV systems.” Syphers said that Sonoma County homeowners who have installed or will install solar panels on their roofs will receive an additional 1 cent bonus when they sell more electricity back to SCP than they use. Also, unlike PG&E, under SCP’s NEM program, “the credits will never zero out and they can be credited in the next year.”
2) Feed-In Tariffs (FIT). SCP’s FIT program will provide a mechanism for developers to build moderately sized renewable generation projects in Sonoma County for direct sale to SCP. This contrasts with net metering which uses most or all of the renewable power for onsite use. By providing standard terms and conditions, including price and length of contract, developers can plan and build moderately sized renewable projects without the considerable added expense of lengthy negotiations and the financial impact of contract uncertainty. The FIT will also contain bonus payments for developers who can demonstrate robust and verifiable local benefits. SCP will cap the FIT program at a dollar amount consistent with fiscal prudency. Because of the high price of land in Sonoma County, Syphers urged developers to look at pre-disturbed sites, such as land that is not productive, parking lots, rock quarries, landfills and large rooftops. He also urged would-be producers to check with the Sonoma County Permit Resource Management District (PRMD) to ensure that the proposed project can be permitted. To avoid County permit restrictions, Syphers advises developers to plan on solar farms of 5 acres or less.
Syphers explained the three options SCP offers to Sonoma County customers:
1) CleanStart. SCP’s basic, default program, CleanStart, delivers 33% renewable energy with rates that are currently 4 – 5% lower than PG&E. “We don’t have shareholders so we return that money to you, our customers, in the form of lower rates.” Syphers said PG&E includes nuclear power as part of its clean power portfolio because it is a low carbon source, SCP does not. Despite not utilizing any nuclear power, SCP’s current portfolio is over 30% lower in greenhouse gas emissions than PG&E.
2) EverGreen. A premium, 100% renewable energy service from 100% local energy sources, EverGreen is a first of its kind service: “We are providing this at the true cost to us which for an additional 3.5 cents per kilowatt hour will cost a typical single family home $10 – $25 extra per month. You can sign up for the EverGreen Program today by going on our website or calling the 800 number and using your account number from your PG&E bill.” SCP requires EverGreen registrants to be enrolled in the program for 12 months to provide sufficient revenue to sustain local, renewable energy procurement. Syphers noted that the Geysers geothermal facility in northern Sonoma County will be a major provider of renewable energy to Sonoma County customers and employs 200 people. He explained that “when you flush your toilet in Santa Rosa or in Windsor, the waste water is treated and pumped onto a dormant volcano turning the water into steam which powers a turbine that generates electricity.” Syphers also noted that the Geysers provides renewable energy when the sun is not shining and the wind is not blowing.
3) Opting out. SCP provides a clearly stated option for customers who do not want to participate in the program and wish to stay with PG&E: “We want to have your trust rather than your business,” he said.
After his presentation, RBTUS asked Syphers several questions and he provided the following responses:
RBTUS: In your presentation, you made reference to $5 million in revenues this year and $6 million next year. Where does that come from and what will the funds be allocated to?
SYPHERS: “These savings are from reductions in billed amounts and go to our customers.”
RBTUS: Can you compare PG&E’s net energy metering (NEM) program to SCP’s? Please explain how the carryover of credits for NEM works for SCP and the contrast with zeroing out by PG&E.
SYPHERS: “PG&E’s program does not allow carryover of credits from year to year, while SCP’s does. SCP also pays a 1 cent per kilowatt hour premium on production.”
RBTUS: How much is available for Feed-In Tariff (FIT) investment in the calendar year beginning in July 2014?
SYPHERS: “That amount has not been determined yet, but will be presented first to the committees and board starting in April and May.”
RBTUS: How much energy does PG&E source from renewable sources versus SCP?
SYPHERS: “PG&E reports that they source 22% from renewable sources. SCP has contracted for 33%.”
RBTUS: You said that SCP helps PGE’s bottom line, can you explain how?
SYPHERS: “PG&E has reported that distribution is a higher margin portion of their business, and that they do not make very much money off of generation. By reducing the expenses from generation, the company’s return on invested capital should, therefore, increase.”
RBTUS: You said 5 acres of land would generate a 1 MW solar farm. How many full time jobs might this generate and won’t the power costs be higher than from what you would pay from a bigger energy provider such as Calpine, the geothermal company?
SYPHERS: “We do not have any estimates for the number of jobs solar projects might create, and prefer to report dollars spent because that is verifiable. Yes, power costs for in-county solar will likely be significantly higher than geothermal, which is why we need to have a diverse set of sources that are not all in-county solar.”
RBTUS: Will you allocate any funds for education in Sonoma County schools and will any of this be directed toward job training?
SYPHERS: “We have received this recommendation from a couple of people and are seriously considering this opportunity, but no decision has been made yet.”
In his presentation, Syphers told the Rotarians that PG&E supported statewide Proposition 16 (2010), which would have required a 2/3 majority, rather than a simple majority, vote by local government agencies to adopt CCA. The initiative was defeated, with Sonoma County voting 70% against Proposition 16: “This was a sign that there was support for clean power in Sonoma County,” Syphers said, and this encouraged Sonoma public officials to move forward with the creation of a CCA in Sonoma County.
Today, the relationship with PG&E has improved. Syphers said: “we are in a partnership with PG&E and we go out and speak together at public meetings.” Through this partnership, PG&E will continue to deliver power to customers, bill customers, maintain reliability, address power outages, and maintain existing PG&E programs.
SCP’s role is to procure electricity sources for delivery over PG&E’s wires that are cleaner than those provided by PG&E. SCP can do so at rates that are competitive with PG&E. “It’s not the electricity that’s the problem. It’s the dirty power sources that feed the grid,” Syphers explained.
In Sonoma County, three cities have not joined SCP. They are Cloverdale, Petaluma and Rohnert Park. As SCP’s benefits to customers become even clearer, Syphers is hopeful that these cities will vote to join in the next year. The city of Healdsburg, however “doesn’t need” SCP because it has its own electric utility.