Archive for PG&E

PG&E Imposes Customer Fees for Choosing Cleaner Electricity Service and Calls for Increase, Despite Having $1 Billion to Cover Fees

PG&E argues that Community Choice customers need to pay their “fair share”

 

San Rafael, CA – PG&E recently proposed that Marin Clean Energy (MCE) and Sonoma Clean Power customers should pay even more “exit” fees than they already do to the Pacific Gas and Electric Company (PG&E) every month. The proposed increase ranges from 44% to 127% depending upon customer class, and forces residential customers, including low-income, to pay the highest rates associated with these fees.

 

The California Public Utilities Commission (CPUC) currently authorizes PG&E to impose exit fees on customers who choose to buy their electric generation from local providers like MCE or Sonoma Clean Power. Although these fees are always included in cost comparisons, they reduce the savings that MCE and Sonoma Clean Power customers receive and increase the cost of choosing a local provider.

 

PG&E’s exit fee, called the Power Charge Indifference Adjustment (PCIA), is billed monthly, based on usage, and charged to customers who choose to buy energy from another provider. When a customer makes this choice, PG&E sells the excess electricity that they bought for that customer. Depending on the market conditions, PG&E may earn or lose money when they sell the power. PG&E has accumulated more than $1 billion from earning money on the market when selling this excess power. However, if PG&E doesn’t earn money through the sale of the excess power, the PCIA fee is applied. This covers any losses incurred by PG&E, forcing the customer to bear this burden and pay for energy that they will never use.

 

Along with their request to increase the exit fees, PG&E also requested to close the account with over $1 billion. When asked how the money would be used, PG&E indicated that it “simply goes away.”

 

“What PG&E is proposing is outrageous. They’ve collected $1 billion from selling excess power on the market but when they aren’t able to make a profit, they collect from our customers to avoid pulling funds from their billion dollar stockpile,” said Dawn Weisz, CEO of Marin Clean Energy. “Those profits should be applied against any losses, so that the homes, schools, non-profits and businesses in our communities are not burdened further.”

 

This year, MCE estimates that its customers will be forced to pay PG&E $19.3 million in PCIA fees. Should the CPUC approve PG&E’s proposed increase, MCE customers are projected to pay $30.6 million to PG&E, in 2016 alone, and residential customers, including low or fixed-income customers, will be forced to pay more than half of it ($16.3 million). PG&E is the only California utility to impose these fees on low-income customers.

 

MCE is protesting the proposed surge in the PCIA fee and calling attention to PG&E’s attempt to close the $1 billion account of ratepayer funds. The CPUC is scheduled to make its determination on the PCIA increase in December 2015.

 

Jamie Tuckey

MCE Director of Public Affairs

415.464.6024 | jtuckey@mcecleanenergy.org

mceCleanEnergy.org

 

GREENWASH GRIPES

 

aa

 

 

 

 

 

 

 

 

 

Roy Phillips is owner of REP Energy of San Rafael, which is building a 1.5-megawatt solar project at the abandoned Cooley Quarry near Novato. The project is among several local energy projects benefiting from long-term energy purchase agreements with Marin Clean Energy. Frankie Frost — Marin Independent Journal

Workers for Synapse Electric of Mill Valley install solar panels at the San Rafael Airport in 2012 for Marin Clean Energy, which has contracted to purchase electricity produced by the 1-megawatt project for 20 years. Robert tong — Marin Independent Journal

Marin clean energy: What is it?

Marin Clean Energy was created five years ago with the objective of making it possible for every person in the county who pays an electric bill to also help in the monumental battle against global climate change.

It was the first successful attempt in California to launch a public model for providing electricity to residents.

The joint power authority’s birth was made possible by a “community choice aggregation” law passed in 2002, which allows local governments to aggregate (or cluster) electricity demand within their jurisdictions to buy and sell renewable energy while maintaining the existing electricity provider for transmission and distribution services.

When Marin Clean Energy flipped the switch in May 2010, it had 6,000 customers. Today, it has some 170,000 customers and its membership spans all of Marin County, unincorporated Napa County and the cities of Benicia, El Cerrito, Richmond and San Pablo.

Marin Clean Energy’s standard Light Green energy was 56 percent renewable in 2014 compared with Pacific Gas and Electric’s electricity, which was 27 percent renewable.

Marin Clean Energy customers paid slightly less than PG&E’s. The average monthly bill for a typical residential customer using about 473 kilowatt-hours was $99.45 for Light Green customers and $100.92 for PG&E customers. The Marin agency’s Deep Green residential customers, who get 100 percent renewable electricity, paid an average of $104.18 per month in 2014.

Half of the premium that Deep Green customers pay goes into Marin Clean Energy’s fund for developing local energy projects.

The agency’s operating budget for the 2015-16 fiscal year is $145.9 million and it has 30 employees.

— Richard Halstead

A union representing Pacific Gas and Electric Co. workers and a San Francisco consumer group are taking aim at the common use of energy credits by groups including Marin Clean Energy.

They’re pushing an initiative in San Francisco and new state legislation designed to curb such practices.

Their contention: Marin Clean Energy and other purchasers of those credits, such as the city of Palo Alto, Cisco Systems Inc. and the Sacramento Municipal Utility District, are using paper certificates to “greenwash” their energy.

What’s a rec?

A renewable energy certificate (REC) is a tradable environmental commodity used in North America to represent proof that 1 megawatt-hour of electricity was generated by an eligible renewable energy resource such as solar, wind, geothermal, biomass, hydroelectric and tidal power.

During the 1990s, states began requiring that utilities acquire a specific percentage of their electricity from renewable sources. To facilitate the sale of renewable electricity nationally, a system was developed that separates renewable electricity generation into two parts: the electrical energy produced by the renewable generator and the renewable “attributes” of that generation.

The electricity associated with a REC may be sold separately and used by another party or it may remain bundled with the REC. If the energy is sold separately it is no longer considered renewable and cannot be used by utilities to meet their state-mandated goals for renewable energy use. The unbundled REC now carries all of the renewable attributes and can be sold separately.

For example, electricity generated at the Mountain Air Projects in Idaho, 60 wind turbines with a capacity of 138 megawatts, is sold to Idaho Power, the investor-owned state utility. Idaho does not require Idaho Power to buy any minimum amount of renewable energy, so the utility has no incentive to pay the extra cost associated with renewable energy. Idaho Power pays about the same price for the electricity as it would for power generated using natural gas. The owners of the project sell the unbundled RECs to Marin Clean Energy and other entities, who then take possession of the “renewable attributes” associated with the power.

— Richard Halstead

At issue is something known as an “unbundled, renewable energy certificate” — a credit that, when purchased, allows the buyer to legally claim ownership of 1 megawatt hour of renewable electricity. It has been “unbundled” from the actual renewable electricity that was generated.

The International Brotherhood of Electrical Workers, Local 1245, which represents PG&E’s electrical workers, is collecting signatures for a ballot measure that would bar San Francisco from promoting its electricity as clean or green if it uses unbundled RECs.

“RECs have been dismissed by many experts as an accounting gimmick that do nothing to reduce greenhouse gas emissions or create more clean power,” said Hunter Stern, a spokesman for Local 1245. “We introduced this measure to require that San Francisco disclose the sources of the power they sell, so they cannot sell brown power as green.”

But Dawn Weisz, Marin Clean Energy’s executive officer, said Local 1245’s ballot initiative is attempting to rewrite the definition of renewable energy so that no out-of-state supply would qualify as renewable. Most unbundled RECs come from projects outside California.

“The IBEW wishes to promote California sources of renewable energy because it wishes to promote jobs for its members,” Weisz said. “While this is valuable, it should be presented in a clear way, not by relying on confusing information about RECs, and should be considered together with the other goals of a power portfolio.”

A second offensive is being mounted against the use of unbundled RECs in the state Legislature.

Assemblyman Phil Ting, D-San Francisco, has introduced AB 1110, which would prohibit an adjustment in the calculation of emissions of greenhouse gases through the application of unbundled RECs. The legislation was sponsored by The Utility Reform Network, a consumer advocacy organization based in San Francisco.

“What we’re looking for here is an apples-to-apples comparison and full disclosure by all about exactly what the product is they’re selling to customers,” said Mindy Spatt, a TURN spokeswoman. “Customers want to know whether it is actual clean energy or RECs.”

RECS ARE ‘VALUABLE’

But James Critchfield, director of the U.S. Environmental Protection Agency’s Green Power Partnership, said unbundled RECs are an important part of the national system that developed after many states began requiring utilities to get a certain percentage of their electrical power from renewable sources: solar, wind, geothermal, biogas, biomass and low-impact small hydroelectric resources.

“The EPA, the Federal Trade Commission, and the National Association of Attorneys General have all recognized the REC as the instrument through which renewable energy usage claims are substantiated,” Critchfield said. “It’s a market-based approach that is valuable to growing the market.”

Local 1245 began raising the issue of Marin Clean Energy’s use of unbundled, renewable energy certificates about a year ago. It was the Oakland-based Local Clean Energy Alliance, however, that first questioned their efficacy with a report it issued in October 2013.

‘WHAT THE HECK IS A REC’

Al Weinrub, co-author of the report, “What the Heck is a REC,” and coordinator of the alliance, said the concern at the time was a PG&E proposal for using RECs.

“PG&E said they were going to offer a 100 percent green option. It turned out the way they were going to do that was to buy the cheapest unbundled RECs they could find on the market,” Weinrub said.

He said PG&E dropped the plan after meeting opposition.

In the paper, Weinrub and co-author Dan Pinkel wrote that the short-term purchase of unbundled RECs “while generally making renewable generation more profitable, makes only a questionable contribution to increasing renewable energy generating capacity.”

The paper went on to say that “unless the purchase transaction actually enables the development of new renewable generation that would not otherwise have occurred, there is scant legitimacy to the claim of displacing fossil fuels or reducing greenhouse gas emissions.”

Weinrub said the two major problems with unbundled RECs is that they are underpriced and typically not purchased under long-term contracts.

Weisz said Marin Clean Energy pays $1 to $2 for its unbundled RECs, about a tenth of what it pays for RECs that come bundled with their original electricity.

According to a 2011 report by the National Renewable Energy Laboratory, long-term contracts for RECs need to be encouraged because they “can offer the security and certainty that many projects need to obtain financing.” Most of Marin Clean Energy’s unbundled REC contracts are for a single year, although some are for two or three years.

RELYING ON RECS

Beginning in 2012, unbundled RECs have accounted for nearly a third of Marin Clean Energy’s total electricity purchases. In calendar year 2012 unbundled RECs made up more than 35 percent of the agency’s power purchases; in 2013 the number dropped to 31 percent, and in 2014 it inched down to 30 percent. Weisz said that this year the number will be cut in half to 15 percent as more California generation projects come online.

Local 1245 asserts that Marin Clean Energy uses unbundled RECs to make it seem that its electricity is cleaner than it really is.

Marin Clean Energy computes the greenhouse gas emission rate of the electricity it sells per megawatt hour by dividing its estimated emissions by the total amount of electricity it buys and sells. Using this method, Marin Clean Energy calculated its 2013 emissions rate as 364 pounds per megawatt hour, 17 percent lower than PG&E’s reported 2013 emission factor of 427 pounds per megawatt hour.

Local 1245 says that procedure is unfair because 345,000 megawatt hours of Marin Clean Energy’s 1.1 million megawatt total in 2013 came through the purchase of unbundled RECs.

Brittany McKannay, a spokeswoman for PG&E, said unbundled RECs accounted for 0.13 percent of PG&E’s total electricity purchases in 2013, which amounts to about 106,000 megawatt hours. In 2013, more than half of PG&E’s electricity came from sources that emit no greenhouse gases; but 32 percent of them — nuclear, 22 percent and large hydroelectric, 10 percent — don’t qualify as being renewable.

Weisz said using unbundled RECs to calculate Marin Clean Energy’s emission factor “conforms to every regulation and voluntary reporting paradigm that exists.”

“We are buying those volumes,” Weisz said, “so they are part of our mix.”

RECS ARE ‘VALID’

The Climate Registry, a nonprofit registry of greenhouse gas emissions for North America that certifies PG&E’s emission factor, sanctions the use of unbundled RECs in calculating emission factors.

Peggy Kelley, director of policy at The Climate Registry, said, “Our position is that RECs represent the environmental attributes of green power whether they are bundled or unbundled. It’s as valid a claim to the greenhouse gas totals as anything else.”

Weinrub and Pinkel concluded their paper with a caveat. They said that because nascent community choice programs — such as Marin Clean Energy — must compete for survival against investor-owned utilities, procurement of unbundled RECs may be justified if it makes it possible for the community choice program to invest in the development of new local renewable energy resources.

Marin Clean Energy has committed nearly $516 million to 195 megawatts of new California renewable energy projects. Those include a 10.5-megawatt solar project in Richmond, a 4-megawatt landfill waste-to-energy project in Novato, a 1.5-megawatt solar project in Novato’s Cooley Quarry, a 1-megawatt solar project at San Rafael Airport and a 1-megawatt project at the Buck Institute for Research on Aging in Novato.

Weisz said Marin Clean Energy had no idea how many customers would stick with its program in the early years, and the unbundled, short-term RECs gave it the flexibility it needed.

SONOMA NOT BUYING RECS

Sonoma Clean Power, a community choice aggregator like Marin Clean Energy that began serving about 6,000 residential customers in the North Bay last year, has ceased its purchase of unbundled RECs.

“Back in 2013, before we started serving customers, we did make some purchases of unbundled RECs, thinking we would use them more than we did,” said Geof Syphers, CEO of Sonoma Clean Power. “We haven’t sold any of those, but we haven’t bought any more.

“Our decision was made based on a concern that RECs might be double-counted in their value, but we have subsequently been unable to find any evidence that has occurred in California,” Syphers said.

Marin Clean Energy’s REC purchases are certified by Green-e, a program of the Center for Resource Solutions in San Francisco, which ensures that unbundled RECs aren’t double-counted.

“California has robust systems in place to prevent double-counting from happening,” said Jennifer Martin, the Center for Resource Solutions’ executive director. “For years now, California has been using RECs as the sole basis to demonstrate ownership of renewable energy attributes. It’s enforced by regulation and the California Public Utilities Commission.”

GROUP BACKS AB 1110

Kelly Foley, who has worked as legal counsel to both PG&E and Sonoma Clean Power and now serves as director of regulatory affairs at California Clean Power, said community choice programs should avoid using unbundled RECs in their marketing.

“You can’t say your paper certificates are sucking carbon out of the air, because they’re not,” Foley said.

California Clean Power, a Santa Rosa-based startup that is substituting a for-profit business model for the nonprofit, public power approach pioneered by Marin Clean Energy, is an active supporter of Assemblyman Ting’s AB 1110.

Foley said that often unbundled RECs come from renewable energy projects that were created long ago or that required no special financial incentive to get built. She said the sale of the unbundled RECs from such projects is just gravy for builders.

A report on the role of RECs in developing new renewable energy projects written in June 2011 by the National Renewable Energy Laboratory stated, “there are situations in which REC revenues are essential to project economics, as well as some where REC revenues may have little impact.”

DEPENDS ON PERSPECTIVE

The report added that the importance of RECs often depends on one’s perspective.

“Project developers and owners welcome all revenue, large or small, because they wish to maximize profit, and they may not know for sure how profitable the project will be until its useful life is at an end,” the report stated.

“Certainly from our perspective as a renewable energy project developer, we’re counting on those revenues from REC sales going forward,” said Bill Eddie, president of One Energy Inc., which also buys and sells RECs.

One Energy has assisted Marin Clean Energy with some of its REC purchases. Eddie said prices for unbundled RECs fluctuate with demand.

“I’ve seen prices for unbundled RECs in California go as high as $20, although not for long,” Eddie said.

State Probing PG&E Safety Program After Concerns Raised About Potential Explosions

SAN FRANCISCO, CA - JULY 30:  A hard hat sits on the ground at a Pacific Gas and Electric (PG&E) work site on July 30, 2014 in San Francisco, California. A federal grand jury has added 27 new charges, including obstruction of justice, the criminal case against Pacific Gas and Electric for the 2010 fatal natural gas explosion in San Bruno, California. The new indictment charges PG&E with felonies and replaces a previous indictment of 12 charges related to the utility's safety practices.  (Photo by Justin Sullivan/Getty Images)

The state is investigating a Pacific Gas & Electric Co. safety program — a probe initiated after a member of Congress flagged a potential “safety threat that could lead to explosions,” KQED has learned.

The probe by the California Public Utilities Commission concerns “cross bores,” which occur when an underground natural gas line pierces another utility line — usually a sewer line — below the soil surface. Cross bores can result when work crews use an installation technique that doesn’t involve digging a trench, which means they can’t see whether pipeline damage has occurred.

These unintended pipe intersections might go undetected for years without causing a problem. But some Bay Area cities have recently partnered with utility companies to launch repair efforts out of concern that they are dangerous.

“There’s always the risk for gas explosions,” said Tyrone Jue, a spokesman for the San Francisco Public Utilities Commission, when asked about the safety hazard. “The [sewer] laterals would act like a vent, such that if there was a gas leak on that line, the gas could go up that lateral,” potentially traveling into a home or office space.

This could happen if a line was damaged, triggering a gas leak.

There have been 18 accidents resulting from cross-boring in the United States since 2002, according to the Gas Technology Institute. Mike Bruce, president of the Cross Bore Safety Association, said that’s likely “an understated number.”

But it’s impossible to know, because the Department of Transportation’sPipeline and Hazardous Materials Safety Administration does not specifically track cross-bore accidents.

“You should be concerned, but not irrationally concerned because this is a fixable problem,” said Bruce. “It’s going to take many years to get this done, because we’ve spent decades putting them in.”

Congresswoman Flags Safety Issue

In July 2014, Rep. Jackie Speier contacted the CPUC, flagging potential “deficiencies” in a PG&E program created to identify and repair cross bores. An email reference to her letter was buried among more than 65,000 emails included in some 123,000 documents PG&E was forced to release due to a lawsuit after the fatal 2010 pipeline explosion in San Bruno.

Performed by utility contractors, PG&E’s cross-bore safety program entailed reaching out to individual property owners and running cameras through underground pipes, to be followed by any needed repairs.

Speier (D-San Mateo) confirmed to KQED that she had contacted the CPUC Safety and Enforcement Division.

“Allegations were brought to my attention that testing was sometimes done by unqualified personnel, that test results from some addresses may have been falsified or addresses slated for testing were eliminated without supporting evidence,” Speier explained in an email to KQED. “These allegations suggested that deficiencies in the program were potentially a safety threat that could lead to explosions.”

Emails in July 2014 between a CPUC Safety and Enforcement Division official and PG&E — in response to Speier’s concerns –indicated that a CPUC investigator would be initiating contact with the utility. But the findings of this probe have yet to be disclosed.

Speier’s letter to the CPUC contained an excerpt from a June 17, 2013, email between apparent contractors that had been shared with her office.

“There are a large number of addresses with potential cross bores [that were] never inspected,” says the excerpted email cited in Speier’s letter.

The unnamed author requests PG&E involvement, noting, “I just don’t want to be asked the question of why an assigned address wasn’t inspected AFTER a cross bore in an uninspected address blows up. This is a very real and dangerous potential; in my humble perspective as an inspector in this program.”

The “large number of addresses” referenced in the June 2013 email provided by the whistleblower were slated for inspection in 2012.

CPUC spokeswoman Constance Gordon told KQED that the state investigation began in July 2014. “Whistleblower complaints are always screened for immediate safety concerns and then assigned to an investigator, in this case in our Safety and Enforcement Division,” she said. “The investigation includes fact-gathering, code compliance and sufficient corrective actions as warranted by the specific case.”

She added: “We cannot comment further until the investigation is completed.”

PG&E responded to calls with a written statement saying that: “As part of our commitment to the safety of our customers and the communities we serve, PG&E has deployed a comprehensive program to prevent, identify and repair cross bores throughout our natural gas system. We hold our employees and contractors to high standards and maintain a rigorous quality control process for this work. We are committed to cooperating fully with any reviews by our regulators.”

PG&E is facing criminal negligence charges for violating pipeline safety laws and obstructing justice in the case of the San Bruno transmission pipeline explosion, which killed eight people and destroyed 38 homes in September 2010. And two related investigations, one federal and state, focus on  alleged improper communications with utility executives.

Cross-Bore Explosions Can Be Deadly

On Aug. 29, 1976, an explosion and fire destroyed a house in Kenosha, Wisconsin, killing Cletus Weston, 60, and his son, David, 26. Four other people were injured and two adjacent houses were also damaged.

Earlier that morning the Weston family had called a sewer cleaning company to remove a blockage. The cleaner inserted an auger into a 6-inch sewer lateral. But the auger struck and ruptured a 2-inch plastic gas main, even though the home was not served by natural gas. Quickly, gas flowed into the house through the sewer system and an explosion occurred.

Later, the National Transportation Safety Board disclosed that the gas main had been installed by boring through the sewer lateral — a cross bore. The explosion prompted the NTSB to issue a series of recommendations, including that “inspections [should be made] …. where gas mains and sewer laterals may be in proximity.”

But it took decades, and more explosions, for many municipalities and utilities to begin searching for cross bores.

Cross Bores Discovered In Bay Area

According to documents from PG&E, there have been five “near hits” in San Francisco and the Peninsula since 2012 in which cross bores were damaged and gas was released. But they were fixed before any property damage occurred.

Workers found 24 cross bores within four city blocks in Palo Alto, according to a document cited by PG&E and presented at the Northeast Gas Association. The City Council approved $3.8 million in 2011 to inspect sewer laterals and make repairs.

Example of a cross bore.
Example of a cross bore. (Courtesy Cross Bore Safety Association)

In San Francisco, Tyrone Jue noted that the SFPUC, the agency tasked with maintaining city sewer lines, was largely unaware of cross bores until its street crews uncovered them during routine maintenance.

“[PG&E] had been doing the trenchless pipeline installation for a while, prior to us finding out about it,” he said.

PG&E later provided data suggesting that there were about 1,000 locations in the city where cross bores had occurred.

But a complaint filed against PG&E by San Francisco City Attorney Dennis Herrera suggests that there could be even more. “PG&E has identified thousands of additional locations where PG&E’s cross-bores might have caused damage to city sewer laterals,” Herrera’s June 6, 2013, complaint noted.

Both Jue and Deputy City Attorney Theresa Mueller assured KQED that the problem was in the process of being addressed, both through a formal agreement between the city and the utility and through repairs, performed either by PG&E or SFPUC.

“A vast majority of them have already been fixed,” Jue explained. However, “There are some that are still remaining.” Meanwhile, cost recovery for damage to sewer lines is still the subject of litigation.

The city made repairs to nearly 100 locations where sewer pipes were damaged by gas lines, incurring more than $1.2 million in costs.

Efforts to Raise Awareness About Cross Bores

PG&E has issued tens of thousands of brochures to sewer districts, public works agencies, plumbers and equipment rental stores to raise awareness about cross-bore safety concerns.

Nationwide, public safety programs stress that property owners should be aware of the potential safety hazard caused by cross bores.

“OK, someone’s sewer or toilet is backing up. Normally they just call the plumber. Now they’re saying, call the gas company first to make sure there’s not a cross bore,” said Carl Weimer, executive director of the Pipeline Safety Trust.

Before you or your plumber perform a repair to a sewer line outside of your foundation, call 811.

Palo Alto’s Mayor Youth Video Corp made the video below about cross bores.

AUTHOR

REBECCA BOWE

Rebecca Bowe is a journalist based in San Francisco. She’s covered Bay Area news since 2009, and previously served as News Editor of the San Francisco Bay Guardian. Follow her on Twitter @ByRebeccaBowe.