Marin Clean Energy recently announced a price increase. MCE says it’s “because the market cost of power is going up” and because of “growing pains” associated with expanding into the City of Richmond. MCE says it provides “a better product” than PG&E (note 1).
But there are problems with MCE’s claims:
Problem 1 – increased cost of power?
Last April, when MCE (MEA) was on the brink of its massive countywide enrollment of all Marin residential consumers, known as Phase 2b, MCE Executive Officer Dawn Weisz hosted a televised Community Meeting in Novato. When asked about MCE’s future prices Ms. Weisz said they were “fixed” and “locked-in” until after 2015, plus about 1-1/2% annual escalation (note 2).
MCE’s fixed prices representation is confirmed by MEA staff consultant John Dalessi who reported to MEA’s Board six months before Weisz’s Novato presentation that MCE is “fully hedged” against price changes until after 2015 (note 3).
How does “locked-in” and “fixed” and “fully hedged” and “after 2015” produce a 7% price increase now?
Problem 2 – unexpected “growing pain” costs due to City of Richmond?
The following Richmond Expansion milestone table illustrates when MCE (MEA) was aware of costs associated with its expansion into Richmond:
Jul '11 Richmond approves sole-source consulting contract w/ MEA (Dalessi) Jul '11 MEA approves pilot contract to determine impact of adding Richmond Oct '11 MEA Board mid-year retreat -- unveils Richmond Expansion Timeline Oct '11 MEA Special Meeting minutes: "prices are fully hedged" through 2015 Oct '11 MEA Special Meeting minutes: Richmond load & cost analysis complete Apr '12 Weisz's televised Novato presentation: "locked-in prices until after 2015." Jun '12 MEA approves membership Resolution 2012-13 adding Richmond Jun '12 MEA completes Implementation Plan revision (July filing w/ CPUC) to reflect Richmond. This 90 page document shows costs for staffing, billing, procurement, electric load, finance, etc. Feb '13 MCE claims "growing pain" costs for Richmond contribute to (previously unknown) need for 7% price increase.Costs associated with bringing Richmond into MCE were not known by MCE in April when broadcasting to consumers that MCE prices were “fixed” until after 2015?
Problem 3 – Marin subsidizes Richmond?
MCE’s “growing pains” into Richmond trigger higher prices for Marin consumers. Thus, Marin’s price hike subsidizes the costs Richmond would have incurred if forming its own Community Choice Aggregation energy company.
Why do Marin consumers pay Richmond’s costs when Marin paid for its own "growing pains" when MCE launched in 2010? Those costs were in the form of $540,00 County of Marin loans, $950,000 County of Marin co-sign loan, and several private loans from Marin citizens totaling $750,000.
Problem 4 – “a better product” that’s loaded with RECs?
RECs (renewable energy certificates) are a poor man’s version of green energy, giving the illusion without the reality. The air is as dirty as ever -- see attached diagram. RECs constitute about half of MCE’s Light Green and about seventy-five percent of its Deep Green renewable energy.
The University of California says this about RECs:
- feel-good scam
- fleeces consumers
- spin & gimmickry
- Federal Agencies are in on the act... handing out awards for REC-based “green” (note 4).
MCE cites State and Federal Agencies when pressed about its reliance on RECs.
Problem 5 – last year’s price cut. Gaming?
A year ago MCE cut it prices, resulting in a $9 million loss of revenue. It allocated $8 million of this cut to reducing Residential prices (note 5,6). MCE allocated zero cut to nearly all commercial and municipal customers. MCE did this when there was heightened Residential awareness of MCE prices -- when 82,000 Marin households were receiving multiple “Welcome to Marin Clean Energy” notices that included Opt Out text.
Today, almost of year after 82,000 mandatory Opt Out mailers have ceased alerting households throughout Marin that they are part of MCE, and as “Marin Clean Energy” is buried in PG&E utility bills, MCE will increase its generation prices 7%... which covers much of last year’s “loss of revenue.”
MCE proponents may legitimately cite current PG&E prices. But this disregards MCE’s representations made to consumers. Shouldn’t “Marin” households receive the lowest (locked-in) energy prices through 2015 from our local energy company, particularly when MCE claims to behave differently than PG&E?
Additionally, why must Marin ratepayers subsidize costs associated with Richmond’s joining MCE? Why isn’t Richmond paying its own “growing pains,” just as Marin did in 2010 when MCE initially launched?
If you are troubled by MCE’s behavior you can Opt Out at (888) 632-3674 for a nominal fee. Take telephone notes and be prepared for a sales pitch.
Notes:
(1) “Authority to Raise Rates in April” Marin Independent Journal, dated February 9, 2013. http://www.marinij.com/novato/ci_22552345/marin-energy-authority-moves-raise-rates-april-remains
(2) See highlights in attached transcript of MCE Community Meeting in Novato on April 12, 2012. Only applicable pages are included here. The Question & Answer session at the end of the meeting is not included in the video version of the meeting that MCE posts on its website.
(3) October 3, 2011 MEA mid-year Retreat, Special Meeting minutes, Item #7, page 14.
“Mr. Dalessi (staff consultant) says MEA is fully hedged due to fixed prices until 2015. After 2015, this model will change.” http://www.marinenergyauthority.com/PDF/10.3.11_Board_Retreat_Minutes.pdf
(4) http://www.mercurynews.com/opinion/ci_12049267
(5) Page 27 of 188 (page 3 of Agenda Item #8).
http://www.marinenergyauthority.com/PDF/4.5.12_Board_Packet.pdf
(6) MEA Board mid-year Retreat minutes, October 3, 2011, page 13.
“MEA Director Collins (Richard Collins, Tiburon Councilmember) was concerned that, because of the new people joining MEA, if this huge (price) differential is seen between PG&E and MEA’s rates, it could potentially have a big impact on MEA’s opt out rate.”
http://www.marinenergyauthority.com/PDF/10.3.11_Board_Retreat_Minutes.pdf
As of February 12, 2013, Richard Collins is no longer listed on MEA’s letterhead as a Board member.
