EBCE Signs New Power Contracts

At meetings in June, the EBCE board approved a string of new contracts for solar power, wind power, and battery storage that will help EBCE continue the transition to clean energy. Two of the projects are in Alameda County, and will deliver local jobs and economic benefits as well as clean energy.

The awards are the result of competitive solicitations, and are the first of several to be announced over coming months.  The contracts were signed at a ceremony on June 24 at Jack London Square in downtown Oakland.

The contracts include:

OAKLAND BATTERIES:  The first contract will fund a 20 MW / 80-megawatt-hour (MWh) battery installation that will partly replace an aging, jet fuel-fired power plant located in the heart of Oakland, near Jack London Square. The batteries are a major step in a joint effort by EBCE and Pacific Gas & Electric (PG&E), dubbed the Oakland Clean Energy Initiative (OCEI), which aims to replace the decades-old plant, which was acquired by Vistra in 2018, with clean energy resources. 

The storage project will provide EBCE with local resource adequacy (RA) – electricity capacity that is available to serve demand even under stressful system conditions – and is contingent on approval of a transmission-related reliability contract with PG&E. The project is expected to be online by January 2022 and the contract with Vistra Energy covers a 10-year period. 

ALAMEDA COUNTY WIND:  A new wind project will be built in Altamont Pass, in eastern Alameda County, near Livermore. The 20-year contract with Salka LLC, a San Diego-based company, buys the output of a 57.5 MW wind farm, including energy, RECs, and RA, starting in December 2020.  Construction is anticipated to begin this December and will bring well over $250 million of capital investment into Alameda County.

Altamont is the birthplace of the global wind energy industry, with thousands of small turbines built in the 1980s. This project is part of the ongoing effort to replace those many small turbines with a few much larger, much more efficient turbines, thereby increasing energy output and reducing impacts on birds.

TULARE SOLAR:  A 56 megawatt (MW) solar system to be built in Tulare County, scheduled to come online by December 2021. Solar Frontier Americas will develop and operate the plant, delivering over 150,000 MWh of energy per year, plus renewable energy credits (RECs) and resource adequacy (RA) under a 15 year contract.  Solar Frontier will also contribute to a local investment fund, to be distributed with some EBCE guidance.  

FRESNO COUNTY SOLAR+STORAGE:  This 20-year contract covers a combined 100 MW solar plus 30 MW storage project located in the city of Tranquility, Fresno County, starting in December 2022. EDP Renewables, the American renewables division of Energias de Portugal, is the developer. This is EBCE’s first Solar+Storage contract, and there are very limited examples of such projects currently in operation. EBCE is partnering closely with EDPR to properly configure the system to optimize the RA value and match our usage. 

All projects are committed to using union labor and include funds to be allocated towards community investment.

The four contracts are the result of two solicitations.  One was for the Oakland battery project and the other was EBCE’s first long-term (10+year) renewable energy solicitation, issued in June 2018.  The solicitation asked for in-state projects with a preference for new construction, including at least 20 MW in Alameda County. 

EBCE received over 568 unique offers associated with 75 projects, representing approximately 20,000 megawatts of nameplate capacity.  

EBCE plans to announce additional contracts from this solicitation over the coming months.  Twenty projects were shortlisted in the process, and additional projects are currently in active negotiations.

The final portfolio is expected to include five to seven projects totaling approximately 500-600 MW in project capacity and up to two million MWhs per year.  Storage projects are expected to total between 40-60 MW of capacity with a four-hour duration.

Community Innovation Grant Winners

EBCE awarded its first round of Community Innovation Grants in June, giving out $240,000 to six local non-profit and community-based organizations. The winning groups proposed projects designed to deliver energy-related social and environmental benefits to residents of Alameda County.

Altogether EBCE received twenty-six applications and chose six local groups to get awards.  Because the applications were so strong, EBCE funded two more — and $80,000 more — than originally intended.  Applications were scored based on community benefits, innovation and collaboration, scalability, feasibility, local impacts, and other criteria.

The winners, approved by the EBCE board at the June 19 board meeting, were:

West Oakland Environmental Indicators Project 

In the West Oakland Renewable Power project, WOEIP will work with the Port of Oakland to deploy a large scale community solar project that will deliver profits from energy sales to income qualified residents. This will demonstrate a model for partnership between local communities and commercial property owners/developers.

Ecology Action 

In their “Innovation in Electric Vehicle Charging for Affordable, DAC and Market Rate Multi-Unit Dwellings” project, Ecology Action will design a scalable multi-unit dwelling EV charging program delivery model for low- and moderate-income residents within EBCE. This is a proof of concept initiative that will result in a fully-tested and vetted program design that will be ready to be implemented by EBCE within one year.

Rising Sun Center for Opportunity

 Rising Sun will use their “Climate Careers: Launching Green Jobs and Delivering Community Energy Savings” workforce training program to hire 26 Alameda County youth from low-income households or other disadvantaging circumstances to conduct no-cost Green House Calls in up to 950 hard-to-reach Alameda County households.

People Power Solar Cooperative

People Power Solar Cooperative will organize its second community-owned solar project to provide a critical model for community investment and ownership of renewable energy in California and other states that lack shared solar laws.

Community Impact LAB

The 10-month Community Energy Conservation Initiative will empower and educate Alameda County families and businesses to tackle climate change through energy conservation and literacy. The project includes two conservation challenges to reduce usage, a Clean Energy Mini-Conference and Business/Career Fair, a three-part workshop series, and an online educational campaign.

Re-Volv

Using a unique community empowerment model, RE-volv will bring solar installations to at least four East Bay nonprofits that serve underserved communities while raising awareness about the benefits of clean energy, and creating dramatic electricity bill savings to benefit the community.

Faces of EBCE: Howard Chang

After a five year stint on Wall Street doing investment banking for JP Morgan, EBCE’s chief operating officer Howard Chang came to a crossroads.  “I learned a lot on Wall Street but I didn’t feel personally fulfilled,” he recalls. The booming renewable energy industry offered a chance to align his professional analytical background with a personal commitment to environmental issues.

He merged these two areas at Yale, where he got a dual master’s degree in business administration and environmental studies.

Out of grad school, he moved to San Francisco to work for solar company Sun Edison, doing project finance and operations for utility-scale and commercial rooftop projects.  When Sun Edison shut down in 2016, he moved over to Sol Systems, leading utility development and project acquisitions nationwide.  

When the EBCE post came up in 2017, he was intrigued.  “The federal election results had shut down climate progress at the national level, so making a tangible impact at the local level seemed like a good idea,” he says.  

Plus as operations chief he would have a chance to build the organization from the ground up.  EBCE was a startup in the rapidly emerging field of community choice aggregation (CCA).

“When I joined I didn’t foresee how expansive CCA would become and the level of impact it would have,” he admits. “The last year and a half has been very rewarding.”

Howard’s primary role as COO has been procurement, developing power supplies for EBCE’s 550,000 customers, about six terawatt-hours per year (or six billion kilowatt-hours). Since EBCE is a startup, the task has been uniquely satisfying.

“Historically you join an investor-owned or a municipal utility and they would have a long legacy of procurement, decades of contracts and investments,” he says. “Your role would be to add one small sliver.”

“What’s unique about EBCE is that we are building a book from scratch,” he says. “We can be thoughtful about it, and very efficient. It’s both exciting and daunting.”

RISK MANAGEMENT

Risk management is the most important part of such a high-stakes undertaking.  

“We have to be really careful since we are buying a lot of energy at once,” he explains. “We can actually move the market in the process, and affect our own prices.”

To manage the risk, Howard is developing a mix of short-term and long-term contracts, from a variety of technologies, locations, and buyers, with a judicious dose of hedging to act as insurance.

While solar power is affordable and plentiful — and easy to develop — just relying on the sun for EBCE’s needs is risky.  California already has enough solar to meet much of the state’s demand in some early afternoons, but then it fades with the sunset, leaving other power sources scrambling to pick up the load.  The daily chart of net demand has become known as the “duck curve,” since it looks like a swimming duck in profile — falling to the belly in the day, rising to the head in the evening.

“Solar will be a major source of renewable energy, especially as we look at long term targets,” says Howard. “But we have to be careful we are diversifying with technology and mitigating the ‘duck’ risk with storage.”

EBCE has just started rolling out new contracts for renewable energy and storage, with more on the way.  (See article here.)

On June 5, the EBCE board approved a contract for 55MW of solar in Tulare County, plus battery storage in Jack London Square, as part of the Oakland Clean Energy Initiative.  On June 19 the board approved another 100 MW of solar plus 30 MW of storage in Fresno County, plus a contract for power from a new 57.5 MW wind farm in Alameda County.  

The new wind turbines will be a far cry from the old machines that have been slowly getting removed from Altamont Pass. Altamont was the birth of the world wind industry in the 1980s.  New turbines are much larger, with slower spinning blades, and much more efficient.

“Altogether we anticipate signing contracts for 500-600 MW of new renewable projects in California by the end of July, plus 40-60 MW of storage,” Howard says. That should be enough for 25 to 30 percent of EBCE’s annual energy needs.

THE WHOLE PICTURE

In the long run, state law (SB100) requires the whole power system to transition to be 100 percent clean by 2045.  EBCE is already 5 percent ahead of state requirements.

But Howard says that is only part of the question.

“It’s not just how do we increase our renewable supply, but how do we drive electrification in transportation and buildings,” he says. “Those are the major sources of carbon in our economy.  SB100 lays out a plan for the power sector, but we have to go beyond. Many EBCE goals are about transitioning other sectors away from gas and oil.”

Those plans are partly embodied in the Local Development Business Plan, but others are evolving as opportunities and technologies change.

EBCE’s long term procurement will be guided by the Integrated Resource Plan (IRP), a thorough 10 year plan to be filed with state regulators.  

“We want to see as much local development as possible, like solar owned by our customers,” Howard says. “The challenge is to balance that with affordability and reliability.  Those pillars are just as important as local.” 

EBCE plans to complete its 2020 IRP over the next 11 months, through a public consultation with the Board and the community, along with a feasibility analysis.  

“We would love to get to 100 percent carbon-free sooner than 2045 but we have to approach it carefully, and look at the whole picture.”

Myth of the Month: How can CCA rates be lower than Investor Owned Utilities?

By Nick Chaset, CEO

As EBCE rolled out service to 500,000 residential and 50,000 commercial, industrial, and public customers, some wondered how it was possible that we could offer lower rates than PG&E.  

Surely PG&E’s great size means it can offer economies of scale?  Surely after 100 years of service PG&E would have streamlined operations and found every efficiency gain?

Yet it’s true — EBCE’s Bright Choice product is pegged at 1.5 percent below PG&E’s standard rate.  In 2019 alone, EBCE expects to deliver nearly $8 million in bill savings to customers.

To understand how that’s possible we need to first explain the difference between EBCE, a community-owned energy provider, and PG&E, an investor-owned utility.

STRUCTURAL ADVANTAGES OF PUBLIC OWNERSHIP

The American Public Power Association (APPA) reports that public power customers have paid lower rates on average than investor-owned utilities for decades.  As of 2014, overall rates were 6.9 percent higher for IOUs, mostly due to residential rates that were 14 percent higher.

A big part of the benefit is that public power can finance projects with tax-exempt municipal bonds, which cost around 4-5 percent, depending on the length and the financial rating of the borrower.  The rate of return for California IOUs, which is set by the state utility commission, has been around 11 percent recently, although they are requesting much higher returns to cover the risk of catastrophic wildfires.

Municipal bonds are more commonly bought by individual investors as a low-risk, low-return option. In 2012, 70 percent of municipal bonds were sold to individuals, and almost half of the interest paid to individuals went to households with incomes of less than $250,000.  Nearly 60 percent of this household tax-exempt interest is earned by taxpayers older than 65 years. All in all, municipal bonds can save public utilities 25 percent over the 30-year life of a project compared to corporate bond rates.  As EBCE continues to contract for new clean energy projects, we expect to start utilizing tax-exempt municipal financing to further lower our cost energy and be even less expensive as compared to PG&E.

LOCAL ACCOUNTABILITY

EBCE is governed by twelve local elected officials who represent each of our member communities. These mayors, councilmembers and supervisors are elected every four years and are directly accountable to their constituents through the ballot box. This is significant in the context of EBCE because it focuses our organization of delivering the lowest cost of service energy possible, while also meeting our environmental and community commitments. If EBCE does not deliver, customers can not only opt out of EBCE service, but they can take action to replace EBCE Board Members through their local elections.

By comparison, PG&E is governed by a Board of Directors who are appointed by shareholders not customers. These Board Members have a legal obligation to ensure that PG&E operates in a manner to maximize shareholder value. This emphasis on shareholders demotes critical customer considerations, like energy costs, to secondary status. This is not to say that PG&E is not concerned or focused on ensuring affordable rates, I believe they are. Rather, it’s a feature of the investor owned utility model. The company, and its Board, must first deliver on its shareholders’ priorities.

In contrast, EBCE and our Board are directly accountability to our customers, which ensures that EBCE focuses on delivering on community priorities above all else. 

REINVESTING IN OUR COMMUNITY

For fiscal year 2020 (starting July 1) we anticipate total energy operating costs of $397 million — almost entirely for energy and resource adequacy contracts — plus total overhead operating costs of $19 million and total interest payments of $1.2 million.  (Our financials are here, toward the end of the long board document.)

Meanwhile, total revenue and other sources are forecast at $485,146,000, leaving EBCE a positive net position of about $68 million dollars. 

While some of this will be absorbed by our rapidly growing operations and contributions to reserves, the balance can be directed to programs that return benefits to EBCE customers and communities.  

For example, the Local Development program will have an FY 2020 budget of $6 million, which will pay for incentives for building electrification, electric vehicle charging stations, Community Investment Grants (like those recently awarded), and higher net metering rates to encourage low income and municipal customers to go solar.

The budget can also cover the higher cost of developing wind and solar generation projects in Alameda County — helping create local jobs and economic development.  The Local Development Capital Set Aside budget is designed to let EBCE pay for expected above-market energy costs from local projects like the Oakland Clean Energy Initiative (in Jack London Square) and Summit Wind (near Livermore).

In short, EBCE is designed to be a lean, clean, power procurement machine, delivering greener and cheaper power that puts our community first.  We return the savings to our customers in the form of bill savings and community investments, guided by their very own elected officials.

News Clips

California has too much solar power. That might be good for ratepayers  By Sammy Roth, LA Times, June 5, 2019

In the spring California can have too much power generation, so solar power generators are being curtailed.  But research suggests that throwing away some solar power is cheaper than investing in enough batteries to capture it all.

Agency’s effort to retire Oakland power plant moves forward  By J.D. Morris, SF Chronicle, June 5, 2019

The EBCE board approved a contract to replace a polluting power plant near Jack London Square with an 80-megawatt-hour battery installation.  EBCE signed a 10-year storage contract with Vistra, which acquired the Oakland plant in 2018 as part of its merger with the facility’s prior owner, Dynegy.

Wholesale power sales to California’s Community Choice Aggregators up 114% in Q1  By Jeffrey Ryser, S&P, June 17, 2019

Wholesale power sales in California in the first quarter of 2019 revealed the strengthening shift in sales to Community Choice Aggregators.  EBCE was the #2 buyer, with 1.77 million MWh, trailing only the Clean Power Alliance of Los Angeles and Ventura Counties.

More Wind & Solar Electricity Coming to East Bay Power Customers  By Matt Bigler, KCBS Radio, June 24, 2019

One of the dirtiest power plants in the Bay Area will soon be replaced with a clean, energy storage facility at Jack London Square. As KCBS Radio’s Matt Bigler reports from Oakland it’s all part of East Bay Community Energy’s Plan to deliver 200 megawatts of renewable energy to local power customers.

Oakland to Swap Jet Fuel-Burning Peaker Plant for Urban Battery  By Julian Spector, Green Tech Media, June 26, 2019

The deal with Vistra will be the largest standalone storage facility contracted for a community choice aggregator in California.

What Comes Next After Batteries Replace Gas Peakers?  By Julian Spector, Green Tech Media, July 1, 2019

Peaker replacement by battery storage has begun in California.  Building out conventional storage, standalone or paired with solar plants, during the coming decade should get the state to its interim target of 60 percent renewable power by 2030.  The 2030 to 2040 timeframe is a little bit more challenging and we don’t necessarily have the right solution identified just yet. As such, power providers have to keep assessing the state of long duration storage technologies that could work for their portfolios, and making lots of smaller bets over time to ride the wave of technological improvement.

EBCE Repays $4.7 Million Startup Loan from Alameda County

Left to right: EBCE CEO – Nick Chaset; Director of Community Development Agency – Chris Bazar; County Senior Planner – Bruce Jensen; and EBCE COO – Howard Chang

After only eight months of operation, EBCE fully repaid its advance of start-up funding from Alameda County in the amount of $4.7 million.

County Supervisor and EBCE Board Chair, Scott Haggerty, a champion of EBCE since its inception, says “We’ve worked for many years on this effort to provide cleaner power to our local communities. This milestone shows the effectiveness of EBCE’s management and marks the start of an exciting transition to clean power.”

EBCE needed start-up resources in order to begin operations, and the County provided both start-up funding and staff support. The County Board of Supervisors originally approved the Community Choice Energy program in November 2016 and entered an agreement with EBCE in April 2017 to lend up to $5.5 million to the new agency.

EBCE is now operational, has a staff of 21, and is supplying power to over 550,000 residential and commercial customers throughout the County. To date, EBCE estimates it has saved customers over $5 million in electricity costs by offering lower rates for cleaner power. EBCE operates through revenue it receives from sales of electricity; it does not rely on any taxpayer funding.

At a meeting on February 26, several members of the EBCE Board of Directors and Chief Executive Officer, Nick Chaset, presented the repayment and thanked the Board of Supervisors, the County Administrator, the Community Development Agency, and the Auditor’s office for their coordinated efforts and forward thinking in making community choice a reality in Alameda County.

Also in attendance were EBCE Directors Dianne Martinez (Emeryville Council Member), Lily Mei (Mayor of Fremont), Ed Hernandez (San Leandro Council Member), and Anne Olivia Eldred (EBCE Community Advisory Committee Chair).

Faces of EBCE: Dianne Martinez

Dianne Martinez has come a long way in her career.  Recently re-elected to the Emeryville City Council, she served as mayor in 2016 and sits on the boards of East Bay Community Energy and StopWaste, which fights solid waste, food waste, and energy waste in Alameda County.

But not so long ago she was a reality TV producer in Los Angeles, filming pop star Jessica Simpson at Cancun spring break. Other big hits were the MTV dating shows Date My Mom, Dismissed, and Exposed, which used lie detectors to winnow out dating partners.

When her husband got accepted to law school at UC Berkeley in 2008, they moved to the East Bay, where she got interested in local politics. When she learned that Jennifer West was leaving her seat on the Emeryville City Council, she was inspired to run, to make sure the Council continued to have a progressive voice, a woman, and a parent of young children.

It was on the Council that she got involved in the steering committee to explore creating a community choice energy program.  “I was not an energy expert but I saw the steering committee as an educational opportunity,” she recalls. Learning about the electricity business got her hooked.  She joined the EBCE board when it launched.

“What got me excited was the environmental impacts it would have,” she says. “Renewable energy just passed coal for the first time in the US. Local public officials are part of that solution.”

She has found strong support from constituents for the move to community energy.  “It’s kind of a no brainer for most people. People want renewable energy.”

Voters also want local development, like rooftop solar and energy efficiency jobs, but Martinez says that requires EBCE to get on solid financial footing first.

“It’s a question of timing,” she says. “Do we make a robust plan to execute in the future when we are more established, or spread ourselves too thin in early stages?  I’d like to be well rooted first, and create the capacity to move the needle when the time comes.”

“In the long term we can position ourselves financially to make big investments in Alameda County,” she says. “Then we can make local projects happen that excite the community and help them understand what EBCE does.”

She also hears complaints from residents that their bills are going up, even though EBCE has lower rates than PG&E.  “There is a lot of misinformation on social media,” she says. “People say ‘I want to believe you but I don’t!’ I just tell them to look at the rate comparison chart.”

Still, she is heartened by the high level of community involvement she sees.  “People are involved in a way they could never be with an investor-owned utility,” she says.  

She thinks the time is right for EBCE. “This is the right time to shift focus away from investor-owned utilities, for community choice aggregators to come to the front and do the work people are asking for.”

“We’re at the very beginning of an agency that will do so much good.”

The table shows a standard residential rate schedule (E-1) and average use of 400 kWh/month, as of May 2019. See https://ebce.org/residents for changes.

Going Local

Photo: Mt. Eden Little League.

Every day is Earth Day for EBCE. Or at least it feels that way, as the EBCE outreach team has been making the rounds for nearly every Earth Day event in the East Bay, plus the Oakland marathon, beach cleanups, and other events.  EBCE has even sponsored three Little League teams.

In April and early May EBCE staff set up the tent at 17 events in Alameda County, from the Piedmont Arbor Day festival to the Energy Resource Fair in Dublin.

“We’re getting a really positive response,” says Annie Henderson, VP of Marketing and Account Services at EBCE.  “People are excited to see how EBCE is engaging with and supporting our local communities.” EBCE is also getting the word out by sponsoring several little leagues, the Oakland Midnight Basketball League, the Albany Community Triathlon, UC Berkeley’s Human Powered Vehicle Team, the Piedmont Makers fair, and more.

GRANTS AVAILABLE

EBCE is also engaging the community through the first round of Community Innovation Grants.  

The funding will support projects by local community-based non-profit organizations that deliver social, environmental, and financial benefits to residents of Alameda County.

The grant program, with a budget of $160,000, is one of the early action items in EBCE’s Local Development Business Plan, which is a comprehensive framework to deliver benefits within Alameda County.

Applicants can request up to $40,000 for an energy-related project. Specifically, EBCE is looking for proposals that will deliver local benefits to targeted communities in areas such as job creation, workforce development, economic empowerment, and climate and social resilience, as well as projects that advance innovation and collaboration.

Programs such as community-shared solar, energy conservation retrofits, workforce development efforts engaging disadvantaged and/or displaced workers, and energy-related projects directly impacting disadvantaged communities in Alameda County can directly benefit from EBCE’s grant.

“Investing in our local communities while supporting innovative, energy-related projects that benefit our County is a priority for our organization,”  said Nick Chaset, CEO of EBCE.

Online applications were due on Friday, May 10, and grants will be awarded in June. More information on the Community Innovation Grant program can be found at ebce.org/communitygrants.

Myth of the Month: The Adequacy of “Resource Adequacy”

Oakland skyline. Photo by Daniel Parks, Flickr Creative Commons.

To ensure reliable operation of the grid, EBCE and other energy suppliers buy two main products: energy and resource adequacy, or RA. The energy is the kilowatt-hours that run your Instant Pot, while resource adequacy is the ability to provide reliable service at all times.

There is a myth that community choice aggregators like EBCE are falling short on RA.

Bill Her, Director of Power Resources for EBCE, says this is far from the truth.

“Some think we aren’t focused on reliability since we have ambitious renewable energy goals,” he says.

But EBCE and all electricity providers are under strict rules to ensure reliability under the state-mandated RA program.  

To understand how EBCE and other energy suppliers provide energy and RA, let’s take a look at the nuts and bolts of electricity commerce.

 

WHAT IS RA, AND WHY SHOULD YOU CARE?

Resource adequacy, or RA, ensures that there will be enough resources on the grid to serve customers at any given time. Each energy supplier is responsible for demonstrating that it has enough RA to serve its customers, and the ability to follow changes in demand.

Energy suppliers often buy RA separately from energy, so while a growing amount of energy comes from wind and solar power, most RA in California still comes from natural gas plants because of their ability to be dispatched and follow demand.

Here’s how the RA process works.  First, every energy supplier (including EBCE) submits a forecast for future demand. That is checked by the CPUC, and suppliers are required to buy enough RA to cover the forecast plus a 15 percent margin. Suppliers have to buy RA for the power system as a whole, RA in designated local areas across their distribution utility’s service area, and flexible RA that follows load up and down. RA plans are typically submitted for verification by October of the year before operations and then updated monthly.

The CPUC and CAISO tally up all the RA purchases to make sure there is enough RA to keep the lights on, and that energy suppliers aren’t double-counting the same supply.

EBCE develops demand forecasts up to a year in advance and shops for RA through competitive solicitations and by approaching potential suppliers directly. EBCE is required to buy over 1000 megawatts of RA for its peak months.

 

IMPROVEMENTS NEEDED

The RA process works, and the lights stay on, but Bill Her says the process could be improved.  Since there is no central market for RA like there is for electricity though the California Independent System Operator (ISO), all RA deals are bilateral, directly between the buyer and the seller. It can be hard for buyers and sellers to match up.

“It’s not a very liquid product and the different types of RA make it more complex,” Her says.

Generator owners prefer to sell their RA uniformly across the months, rather than in bits and pieces. Because buyers need different amounts of RA each month, they often end up with too much in some months, resulting in higher procurement costs.

Some suppliers hold back from offering all their RA to replace the amounts contracted in case there are outages. This means sometimes there may be a shortage of RA in the market but the power grid can still meet the reliability requirements.

A related issue is the long-term planning process, known as the Integrated Resource Plan. The CPUC recently tallied up the plans of all power sellers in the state and found that the collective plan “does not represent a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply and optimal integration of renewable energy in a cost-effective manner.”

Her chalks it up to the transition to renewable energy, and the move away from natural gas generators. “People are planning to buy renewables, not gas,” he says. “When you model that, it suggests less traditional reliability. So you need new forms of RA.”

EBCE is trying out alternatives in Oakland’s Jack London Square, where an old power plant that burns jet fuel is being retired in favor of clean energy storage which can include local solar, battery storage, and flexible demand. (See “Relief is on the Way for West Oakland Air Quality,” November 2018). The local RA benefits are a critical value in that project.

The PUC is opening a new “procurement track” that will look at creating a diverse mix of renewables to create “the 2030 optimal portfolio,” ensuring there are load following and integration options, what to do with existing natural gas resources, and the potential for long duration energy storage.

Her expects more reforms to help the transition to 100 percent clean energy.  The PUC is already switching to require local RA purchases of three years at a time, rather than the current one year.

“That longer lead time will give greater visibility and greater ability to make adjustments,” he says.  “You can’t just create RA overnight; you need a lead time to plan for it.”

For more on RA, see Resource Adequacy – What Is It And Why Should You Care? from Mike Florio at Gridworks.

EBCE Starts Service to Solar Customers

Solar Homes in Berkeley. Photo by Bentham Paulos

East Bay Community Energy aims to deliver clean, renewable energy to our customers at a competitive rate with a focus on local benefits.

Put those goals together and you get Net Energy Metering (NEM), the rate policy that encourages businesses and homeowners to generate their own power. Any form of renewable energy is eligible, though almost all NEM customers in our area use solar power.

Net metering allows customers to ship power out onto the grid when they are generating more than they are using, and buy it from the grid when they need more. They pay for the net, or the difference at the end of the billing period.

This simple accounting technique makes it easy for customers to invest in local clean energy, exactly what EBCE wants them to do.

While service to business, public, and residential customers launched in June and November of 2018, service for net metering customers had to wait until April. Net metering customers have an annual true up date, when the net for the year is calculated. EBCE service started in April for customers with annual true-up dates falling between January and April, and rolls in every two months until all customers are enrolled. Once everybody is on board, the annual true up will be in April for all solar customers.

EBCE held informational webinars for solar customers in March. A recording of the webinar is available at ebce.org/nem.

 

HOW EBCE COMPARES TO PG&E

While many of EBCE’s net metering program details are the same as PG&E’s, there are two important differences that make EBCE’s program better.

First, that annual true-up process.  Customers who go solar after June 2018 (EBCE’s launch date) will get paid for any annual surplus at the retail value of the generation rate, about 10¢ per kilowatt-hour.  PG&E pays a “Net Surplus Compensation” rate for surplus power that is tied to the wholesale cost of electricity, about 4¢ per kilowatt-hour.  

In other words, we invite our customers to go big.  While PG&E’s interconnection requirements limit the total system size to 110 percent of your previous year’s use, our higher payment rate for surplus power means getting close to that cap is more attractive. Under their lower surplus rate, PG&E encouraged customers to size for 80-85 percent of consumption.

We like customer-owned solar because generating more power on our rooftops means we can capture more local economic benefits.

The other improvement is that low-income and municipal customers that went solar after June 1, 2018, will get the retail value for all power generated, plus a bonus of 1¢ per kilowatt-hour. This will ensure that all customers can participate in the clean energy economy, and encourage local governments to be leaders.

The latest figures from the California PUC show that there were 27,578 solar customers in our service territory as of February 28, out of about 550,000 customers. The top areas are Oakland, Fremont, and Livermore, with over 4000 systems each. Livermore has the most generating capacity, with over 39 megawatts, out of 197 megawatts total, while Oakland has the most systems, with 5,819.

Clearly our customers share our values.