Empowered by state laws that allow communities to choose the energy that powers their homes and businesses, cities and counties throughout California are taking charge of their energy future and boldly pushing renewable energy forward, while securing financial savings, creating jobs and cycling revenue back into their local and regional economies.
Community Choice energy programs now determine mix of power for 3.2 million Californians in the Bay Area and northern California, along with the city of Lancaster in the western Mojave desert. These energy choice communities are the first movers in a rapidly expanding statewide effort by localities to determine the sources of electricity used within their jurisdictions – independent of California’s three regional utility monopolies.
Passed in 2002, California Assembly Bill 177 allows for a non-profit agency to act as the “electricity service provider”. This agency takes the authority from the regional utility to buy, sell and generate energy, set electricity rates and create incentive programs. This is the extent of the agency’s power, however, and so the regional utility is still relied upon for use of the grid, transmission and distribution of electricity, metering, grid maintenance, outage repair and customer billing.
Community Choice programs improve areas where the utility companies often struggle, by:
- Providing greater transparency and accountability.
- Exclusively serving customers – rather than shareholders and then customers.
- Creating innovative new revenue models.
- Encouraging distributed generation, energy efficiency and local power procurement.
Additionally, Community Choice offers a form of competition to utilities, which allows for negotiation with the utility concerning the fees it charges for grid services, and leads to reduced rates for homeowners and businesses. This has allowed Community Choice agencies to offer their customers lower electricity rates and cleaner energy, compared with the regional utility.
Sonoma Clean Power, for example, offers up to 4-5% savings per month (depending on the customer’s usage tier) for electricity emitting 48% less carbon pollution versus Pacific Gas & Electric (PG&E), northern California’s regional utility. Two other Community Choice agencies, Lancaster Choice Energy and Marin Clean Energy, also provide slightly lower rates while delivering cleaner power.
Besides delivering cleaner and cheaper power, Community Choice programs also offer incentives for homes and businesses to generate clean electricity for the grid. Through net-metering and feed-in tariff programs, customers who feed energy into the grid with small to medium size renewable energy projects (e.g. rooftop solar panels or an on-site wind turbine) can reduce or offset their electricity bill. In the case where a customer generates more power than they use, Sonoma Clean Power will actually send the customer a check for the extra power – at the retail electricity rate, rather than the lower wholesale rate that PG&E offers for its own net-metering program.
On a larger scale, energy choice programs benefit the local economy by creating jobs and reinvesting revenue from ratepayers back into region, rather than sending these funds to the utility monopoly and its shareholders.
For example, since beginning service in 2014, Sonoma Clean Power (SCP) has already shifted $35 million back into Sonoma County by increasing expenditures within the county to 25%, compared with 3% expenditures previously by PG&E. In terms of jobs, Marin Clean Energy (MCE), which launched in 2010 as the first Community Choice program within California, now supports 2,787 jobs in California through its clean energy portfolio.
Furthermore, both SCP and MCE leverage premium, 100% renewable power services to push forward new, localized renewable generation projects. For its Deep Green program, MCE uses half of the money generated from the program to fund local solar projects. SCP relies on a local geothermal power facility to supply its Evergreen customers with 100% renewable power, and is using funds from the Evergreen program to develop new solar plants within Sonoma County.
These local projects look like MCE’s 49-acre Solar One project in Richmond, a publicly-owned, 10.5 megawatt solar farm that is being constructed on a brownfield site owned by Chevron. Solar One will support over 340 jobs, half of which will be Richmond residents, through a partnership with RichmondBUILD. RichmondBUILD provides green job training for mostly low-income youth of color, many of whom have records from the criminal justice system, which makes employment more difficult and reinforces recidivism.
MCE is also funding the development of Marin County’s largest solar project on an abandoned quarry site, and has contracted with a nearby dump to generate energy from the landfill waste gases, which would otherwise be emitted as potent, heat-trapping methane pollution.
For its part, SCP gets 50 megawatts of clean geothermal energy from the nearby Geysers facility, which is notable for its reuse of treated wastewater to create steam within the plant. In addition to contracting power from standard, ground-mounted solar farms, SCP has also procured floating solar farms on six wastewater treatment ponds within the county. Floating solar arrays are cheaper because they make use of unused space, and help to reduce evaporation and algal blooms, while also realizing greater efficiencies due to the ambient, cooling effect of the water.
The expansion of community choice programs into rural, less populated parts of the state can unlock latent renewable resources, create new opportunity and generate additional tax revenue. To examine this point in closer detail, let us consider my home county of Mendocino.
In June 2017, Mendocino will join the burgeoning movement for energy choice through a partnership with Sonoma Clean Power (SCP), which is extending its service area to include most of Mendocino County. Residents will have access to SCP’s net-metering and feed-in tariff programs, and will be eligible for programs like SCP’s generous electric vehicle rebate (assuming this initiative is continued in the future).
With SCP expanding its service area and aiming to increase its share of renewable energy to 50% by 2020, the agency will require new renewable generation capacity. Mendocino County could benefit from harnessing its own existing solar, wind and biomass resources to supply SCP. Developing these resources would require mindfulness about the impacts on residents, ecology and tourism, yet local renewable generation would also create new jobs, infuse money into the County, benefit local businesses and increase tax revenue to support schools and public services.
Mendocino has long relied upon marijuana as the mainstay of its regional economy. With the impending legalization, it is unclear how the County will be effected and it is possible that the marijuana industry will not be as lucrative. Thus, it would be wise to consider prospects for creating new opportunities in the area, especially those that are ecologically-friendly, make use of existing resources and minimize the impact of new economic development.
Mendocino’s sunny interior along Highway 101 is a prime area for rooftop solar on homes or large retail spaces, as well as floating arrays on municipal wastewater ponds and the numerous small pond reservoirs of wineries within the area. On the coast, stretches along Highway 1, such as the Point Arena-Manchester-Irish Beach area, have rich wind resources that are amongst the best on California’s coast.
Lastly, Mendocino could utilize already-existing waste products from its extensive forests to generate bio-power. Bio-power creates clean, low or carbon-neutral electricity that is available as valuable base load energy. Base load power can be used by the grid operator anytime, and is an important compliment to solar and wind energy, when output wanes from these intermittent sources. Given SCP’s expanding portfolio of wind and solar, it is likely they would place premium value on renewable, locally-produced base load power.
For Mendocino, biomass generation could be sourced from small diameter timber and waste wood products like bark, sawdust and wood shavings.
Due to land disturbances from a history of logging, many areas in Mendocino are overpopulated with small trees and thick undergrowth.
Overcrowding impacts forest health, stunts tree growth and poses a wildfire hazard, leading property owners and large timberland managers to clear out thick undergrowth on their land. These small trees hold no economic value, and it would be costly to transport them offsite, so they are either burned, sprayed with herbicides as saplings or simply piled up in clearings.
With biomass energy facilities, these small trees and waste products could be processed more efficiently and profitably, while yielding ecological and economic gains. Lets consider a specific case example.
Fort Bragg, Mendocino’s second largest town, is considering the prospect of building a biomass facility on the old Georgia-Pacific mill site outside of town. The economic impact of a medium-sized, 15 megawatt biomass plant, according to a consulting group, would:
- Create 40 temporary construction jobs and 46 permanent jobs gathering fuel, running and maintaining the plant.
- Bring $5 million in contracts for wood resources from landowners, annually.
- Add $1 million to local businesses from Operations and Maintenance purchases, annually.
- Provide $1 million in payroll and benefits to local workers each year.
- Generate $500,000 in yearly property taxes.
The Mendocino County Woody Biomass Working Group has identified 5-10 more potential sites for small to medium size plants suitable for generating power, as well as bio-oil or biochar products from small diameter timber or mill waste products.
With the legalization of marijuana set to occur statewide, Mendocino farmers and land-owners could turn to cultivating industrial hemp – a robust, non-psychoactive variety of Cannabis Sativa. Hemp needs few inputs, grows rapidly and has a multitude of uses, including as energy feedstock for biomass plants. While the best land in Mendocino would continue to be used to grow the most profitable crops like wine or marijuana, industrial hemp would provide a viable option to cultivate on marginal areas and plots of land throughout the County.
If there were several medium-scale biomass facilities within Mendocino, farmers and landowners would have an immediate outlet for this new crop, which would reduce the risks of starting out and help jumpstart widespread cultivation by providing initial demand. As farmers became more familiar with industrial hemp and invested further in harvesting and processing, they could take full advantage of this lucrative crop, which can earn up to $250 per acre, compared with $72 for soy and even less for corn.
In summary, energy choice programs create a virtuous circle of investment, by channeling the collective purchasing power of electricity customers into projects that unlock latent regional renewable resources, and keep more revenue circulating in the local economy.
These projects create jobs, increase funding for local governments via property taxes and help landowners realize new forms of income that are environmentally beneficial. Incentive programs for small renewable generation, such as net-metering and feed-in tariffs, help homeowners and businesses reduce their energy costs in order to save more money, pay off debt and stay competitive.
The benefits of energy choice programs are appealing for immediate financial and economic reasons, yet community choice programs are also a rapid and effective means to reduce the significant risks posed by climate change and help clean our air and water.
In California, community choice has been made possible by supportive state policies, engaged communities, continually improving renewable energy technologies, pioneering local agencies and the dual motivation of unlocking opportunity in clean energy while reducing the risks from climate change.
We will see many more community choice programs in the coming years, as a groundswell of interest sweeps across the state. If all localities now exploring similar programs were to enact these measures, including San Diego and Los Angeles Counties, by 2020 17.6 million Californians will receive cleaner and more affordable power via Community Choice.
With proven success and clear benefits over time, California can serve as a model for other U.S. states to create supportive structures for harnessing untapped local resources, which can help revive ailing regions via the emerging renewable energy transformation.