HomeMy WebLinkAbout08. Authorize purchase of electrical generation from Community Choice Aggregation, MCE Page 1 of 3
Item 8.
CENTRAL SAN CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: JULY5, 2018
SUBJECT: AUTHORIZE THE GENERAL MANAGER TO PURCHASE ELECTRICAL
GENERATION FROM COMMUNITY CHOICE AGGREGATION, MCE, AT MCE
LIGHT GREEN 50 PERCENT RENEWABLE SERVICE LEVEL
SUBMITTED BY: INITIATING DEPARTMENT:
CLI NTSHIMA, SENIOR ENGINEER OPERATIONS-RELIABILITYENG INEERING
REVIEWED BY: NEIL MEYER, PLANT MAINTENANCE DIVISION MANAGER
ANN K. SASAKI, DEPUTY GENERAL MANAGER
9
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Roger S. Bailey
General Manager
ISSUE
The generation component of Central San's Pacific Gas and Electric (PG&E) electrical service accounts
have defaulted to Community Choice Aggregation, MCE. Board authorization is requested for the
General Manager to purchase electrical generation at the MCE Light Green 50 percent renewable service
level.
BACKGROUND
I n 2002, California State Assembly Bill 117 passed and was signed into law. This law allowed for the
formation of Community Choice Aggregation programs as an alternative to investor owned utility energy
service supply systems in which local entities aggregate the buying power of individual customers within a
defined jurisdiction to secure alternative energy supply contracts. The law mandates that customers be
automatically enrolled in their local Community Choice Aggregation with an option to opt out. Last year the
Contra Costa County Board of Supervisors voted to join MCE, which has led to Central San's electricity
accounts defaulting to MCE Light Green. This affects the generation component of the treatment plant
July 5, 2018 Regular Board Meeting Agenda Packet- Page 82 of 195
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and nearly all pumping station accounts. Customers can opt out and return to PG&E for the generation
component or continue with MCE. Electrical transmission and distribution costs are still paid to PG&E.
MCE was established in 2010. It is a not-for-profit public agency based in San Rafael, California, currently
serving over 470,000 customers in Contra Costa, Marin, and Napa Counties, and the City of Benicia. The
MCE Board of Directors consists of elected officials representing the member communities. The MCE
Board of Directors vote annually on its rates with one of their core missions being to provide stable and
competitive pricing. I n the two previous years, rates were reduced an average of 9 percent and 3.9
percent. This year, MCE's rates were unchanged and are currently about three percent less than PG&E
rates.
Another benefit of MCE is their renewable energy portfolio. MCE provides two energy choices: MCE
Light Green service consists of at least 50 percent renewable energy, and MCE Deep Green service is
100 percent renewable. For comparison, PG&E's generation portfolio stands at about 33 percent
renewable energy. MCE sources renewable electricity mainly from wind and solar. A portion of the
premium cost for MCE Deep Green service funds development of local renewable energy projects like
MCE Solar One in Richmond, California. Central San would be eligible for Renewable Energy Credits
through bundled renewable electricity, but this would only become beneficial if participating in the Cap and
Trade Program. Net Energy Metering will be unaffected, and we expect to experience the same reliable
electricity service with PG&E delivering power, maintaining the wires, and providing billing and gas
services.
The FY 2018-19 electrical budget for all accounts is approximately$1,350,000. If the average MCE Light
Green rate is about three percent less than PG&E's rates, Central San's savings would be approximately
$40,000.
ALTERNATIVES/CONSIDERATIONS
The Board could opt out of purchasing electrical generation from MCE, which will cost up to $25 per
account in administrative fees. If Central San chooses to opt out, it will be prohibited by PG&E from
returning to MCE for one year. The Board could direct staff to purchase the 100 percent renewable MCE
Deep Green level, which will cost an additional one to two percent premium.
FINANCIAL IMPACTS
MCE Light Green electricity rates currently costs about three percent less than PG&E rates, which will
save Central San approximately$40,000 in FY 2018-19.
COMMITTEE RECOMMENDATION
The Real Estate, Environmental and Planning Committee reviewed this position paper on June 20, 2018
and recommended authorizing the General Manager to purchase electrical generation from Community
Choice Aggregation, MCE, at MCE Light Green 50 percent renewable service level.
RECOMMENDED BOARD ACTION
Staff recommends that the Board authorize the General Manager to continue purchasing electrical
generation from Community Choice Aggregation, MCE, at the MCE Light Green 50 percent renewable
service level.
Strategic Plan re-In
July 5, 2018 Regular Board Meeting Agenda Packet- Page 83 of 195
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GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility
Strategy 2- Manage costs
GOAL SIX: Embrace Technology, Innovation and Environmental Sustainability
Strategy 2- Reduce reliance on non-renewable energy
July 5, 2018 Regular Board Meeting Agenda Packet- Page 84 of 195