Valley Clean Energy before City Council again

Representatives from Valley Clean Energy came before the City Council to answer questions and address concerns.

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Nearly a year after they first came to the Winters City Council, representatives from Valley Clean Energy once again stood before the councilmembers and answered their questions. By the end of the presentation the council agreed to move forward in the process of joining Valley Clean Energy, and will be revisiting the subject in October. If an agreement is reached, Winters residents might see Valley Clean Energy (VCE) as a line item on their electricity bill as early as January 2021.

Councilmembers Jesse Loren and Pierre Neu expressed that they felt positively about the proposed change. Loren, because it would be a way for people to have more choice in their energy providers, and Neu because he believes that people won’t notice any difference in their service.

Mayor Bill Biasi and Mayor Pro tempore Wade Cowan both brought several questions and concerns before VCE’s Interim General Manager Mitch Sears.

Biasi asked Sears to explain how green VCE’s services were in comparison to PG&E’s, considering that PG&E’s website states that they produce 85 percent green energy. Sears broke PG&E’s numbers down as 33 percent renewable energy, which is then matched with nuclear energy.

He explained that this year VCE set a goal for 42 percent renewable content and reached 48 percent. Their energy was also 78 percent carbon free.

“We’re in the same range as PG&E without using nuclear electricity,” Sears said.

Biasi asked Sears if Winters residents would see an increase in their electricity bill should the city join the VCE network. He showed special concern for those who cannot afford any increase in utility bills.

Sears’ answer was a nuanced “no.” The full answer is slightly more complicated.

VCE is only responsible for the generation cost, which makes up 40 percent of the customer’s power bill. The other 60 percent of the bill is produced by the cost of delivery. If Winters joins with VCE, PG&E will still be responsible for the delivery cost.

So when Sears says that customers would not see their rates go up because of VCE, he makes it clear that he does not mean their rates will never go up. As he pointed out, VCE is only responsible for less than 50 percent of a customer’s bill. PG&E could raise their rates for the cost of delivery, and VCE would have no control over that.

PG&E will also charge VCE customers a power charge indifference adjustment, or a PCIA fee. This fee covers the generation cost required to serve the customers who get their energy from a non-PG&E source.

Jim Parks, VCE’s director of customer care and marketing, told the Express in a phone interview that even with this PCIA fee Winters residents would not see an increase in their monthly bill. He said that as VCE’s base rate is lower than PG&E’s, the bill will remain equal even with the addition of the PCIA fee.

At the council meeting Sears argued that VCE’s customer dividends program could actually provide better incentives than a neutral rate. The board instituted program has additional revenue at the end of the fiscal year funneled into, “basically three buckets,” Sears said. Funds in those buckets go to building reserves, local programming and a customer dividend program. If customers receive a dividend it would be in the form of a bill credit.

Later in the meeting Cown asked Sears to again confirm that Winters’ customers would see their rates remain equal to what they had been when PG&E covered 100 percent of the bill. Sears pointed out that VCE has a “baked-in” control for keeping their rates equitable: VCE’s customers can leave.

He told the council that while he cannot make a guarantee that VCE’s rates would always be less than or equal to the rates they had seen with PG&E alone, VCE’s board of directors is aware that, should the rates rise above what customers expect, those customers have the opportunity to opt out of the program.

And VCE will only function effectively if a majority of the customers in their service area remain in the program. Due to a state statute meant to diversify California’s energy profile, CCAs operate on an “opt-out” program instead of an “opt-in” model.

This means that,  should the partnership between Winters and VCE move forward, Winters customers would be automatically enrolled in the program in 2021. Customers would then be able to opt-out of the program should they so choose.

“What percent of people would have to opt out before it didn’t work for you?” Cowan asked.

Sears said that they have performed a “stress test” to see if they could find an answer to that very question. They found that they were still able to operate at an opt-out rate of higher than 20 percent, which is beyond their assumed opt-out rate.

The city, on the other hand, would not have an opt-out option should they choose to join VCE. Biasi asked Sears if Winters would be committed to VCE for a set period of time should the partnership move forward.

“Winters would be committed to continuing on with the program as long as the program is operational,” Sears said. He explained that while there is an exit provision within the joint powers agreement, it would involve paying an exit fee.

Joining VCE involves the City of Winters paying a $25,000 membership fee, which would be reimbursed once VCE began serving Winters customers in 2021.

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