The Marin Energy Authority has proposed reducing the bills of Marin Clean Energy rate payers by 14 percent effective April 7, but in its ongoing battle with Pacific Gas & Electric to win over customers, the agency faces an uphill battle.
Marin Clean Energy, an alternative energy provider that launched in May 2010 as nonprofit joint powers authority composed of Marin County and several cities in Marin, only competes with PG&E on electricity generation costs, as PG&E controls transmission and distribution.
As a result, it can only directly control part of the costs passed onto its customers.
The California Public Utilities Commission approved a 17 percent rate decrease for energy generation for PG&E on Jan. 1, but its rates for transmission and distribution are expected to go up March 1 if approved by the state PUC.
Those higher rates would mean that Marin Energy Authority customers who use large amounts of electricity would face higher transmission and distribution costs, potentially canceling out the benefit of MEA's proposed rate decrease.
That likelihood concerns Mill Valley City Councilwoman and MEA board member Shawn Marshall.
"I’m quite worried that MEA being slightly higher than PG&E is going to be problematic for us," Marshall said Monday night about the rate of customers opting out of Marin Clean Energy.
Further complicating matters for MEA is its stance of only adjusting rates annually, while PG&E does so more frequently. PG&E said its rate cut was made possible by lower energy costs.
"We have made a decision not to chase rates," Marshall said.
Despite the concern, MEA's ability to offer up a rate decrease is an indication that the agency continues to get its financial house in order, acording to Damon Connolly, chairman of the agency's technical committee.
“Marin Clean Energy has been financially prudent and successful in 2010 and, as a result, we are pleased to be able to offer this rate decrease to our customers," said Damon Connolly, chairman of the agency's technical committee. "It is another reminder that MCE is working — for our customers and our community. We provide a better product at comparable rates.”
Marin Clean Energy consolidated its start-up costs in January with a $2.3 million loan with River City Bank of Sacramento, allowing it to repay $540,000 that was approved by the Marin County Board of Supervisors in 2008. In addition, the loan relieves the county of a $950,000 loan guarantee along with a $100,000 guarantee by the town of Fairfax.
"We took out any obligation on the taxpayer," Marshall said of the move to repay the county and consolidate its debt with River City. "It's just ratepayer debt now."
Marin Clean Energy is comprised of Marin County and the cities of San Rafael, Mill Valley, Fairfax, Sausalito, San Anselmo, Tiburon and Belvedere. Novato decided on a wait-and-see approach in early 2010 before Marin Clean Energy got under way.
In addition to the rate decrease, the authority is eliminating an early membership fee of $10 a month for customers of its premium Deep Green program, which draws electricity from 100 percent renewable sources. Marin Clean Energy customers can sign up for Deep Green 100 percent renewable energy for just a penny more per kilowatt-hour, the agency said.
The larger rate reduction will go into effect April 7 if it is approved.
In addition to the 14 percent reduction in rates and elimination of the early Deep Green enrollment fee, MEA is also proposing that its rates be rounded to three decimal places instead of five to help simplify the bill and make it easier for customers to understand the rates they pay.
The rate reduction is one of three critical milestones set to assure financial health for Marin Clean Energy, according to MEA chairman and a Marin County Supervisor Charles McGlashan. He said priority has been given to paying back individual and public loans, operating with a $2 million surplus in its first year and launching new generation soures.
"We owe it to our ratepayers to share this health via lower rates whenever we can," McGlashan said.
The agency serves about 9,000 customers and hopes to increase the base to 70,000 rate payers in its second phase of operations next year, according to Dawn Wiesz, who was named MEA's executive officer earlier this month after serving in an interim position since its inception in 2008.
Currently, 26.5 percent of the electricity that the Marin Energy Authority supplies to its customers comes from renewable sources, while PG&E estimated that approximately 16 percent of its electricity came from renewable sources in 2010.
Weisz said she has researched legislation and industry data in the process of forming Marin Clean Energy since 2003. The agency hired Weisz earlier this month after its recruiters told the board that “you’re basically describing your current interim director,” Marshall said.
McGlashan said Weisz "has exceeded every operational and executive challenge we’ve asked of her, from negotiating with the energy pros and dealing with the CPUC, to managing relations with the public and our eight member jurisdictions. No one in the country has her specific knowledge of the intricacies of this program, and we would not be where we are now without her exceptional leadership.”
Weisz' $198,000 salary has drawn some criticism, however.
Mill Valley resident and residential developer Bruce Dorfman asked the Mill Valley City Council Monday to take a firm stand against what he called “irresponsible behavior.“
“A pay package of this size and provided in the manner of this one implies favoritism and lack of accountability,” Dorfman said.
Marshall defended the pay package, saying that it was more in line with the private sector with lowers benefits costs and higher salary.
"And Dawn is highly marketable right now," she said. "She is a unique talent right now because there aren’t many of her."