Frequently Asked Questions
1. EBCE will be a new, greener, choice for the source of electricity that powers our homes and businesses.
- EBCE will provide much of its electricity from renewable sources such as solar, wind and geothermal—which do not pollute or produce greenhouse gases.
- A recent independent analysis concluded that EBCE could offer electricity with a higher renewable content and fewer greenhouse gases than PG&E at rates comparable to PG&E’s basic product of 30% renewables.
- Choosing a power provider that places a high priority on renewable, zero-carbon energy is an easy, economical way to reduce your home or business carbon footprint and help create a healthier environment.
- Switching from conventional energy sources to renewable energy is the single most effective way to accomplish our communities’ climate action goals.
A recent independent analysis concluded that EBCE could offer 100% renewable energy for about the same cost as PG&E’s basic product of 30% renewables. We’ll know more about whether this option is possible as EBCE develops its range of products.
Our technical study analyzed several possible structures and developed a sense of what each would cost in comparison with PG&E:
33% renewable power sources
7% lower rates on average
50% renewable power sources
6.5% lower rates on average
50% renewable power sources, ramping up to 80% within five years
3% lower rates on average
50% renewable power sources with 25% of that renewable power generated in or near Alameda County.
1% lower rates on average
PG&E currently provides electricity sourced from about 30% renewables. California law requires that all electricty providers achieve 33% renewables by 2020 and 50% renewables by 2030.
What do similar programs offer in other counties?
MCE Clean Energy and Sonoma Clean Power both offer a higher percentage of renewable energy at lower rates than PG&E:
MCE Clean Energy in Marin now offers 52% renewable sources at prices just below PG&E's rates for 30% renewable.
Sonoma Clean power now offers 37% renewables at prices 6-14% below PG&E and is ramping up to 50% renewable by 2020.
Both MCE Clean Energy and Sonoma Clean Power offer a 100% renewable option for a small premium.
Both CCEs are financially stable, building reserves and reinvesting in local renewable energy projects.
Currently PG&E owns some electricity generation facilities such as natural gas-burning plants, large hydroelectric dams, and one nuclear plant. It also buys electricity on the open market.
EBCE would buy electricity generated from a higher percentage of renewable sources, also on the open market. EBCE can also invest in and build local renewable energy projects, as MCE Clean Energy and Sonoma Clean Power are now doing.
Not any more. During the past 30 years the costs of fossil fuels have been rising, although natural gas and oil prices have come down recently. During the same time, the cost of renewable sources has dropped dramatically. In fact, in California, renewable energy is often cheaper than fossil fuel because after the initial construction costs, the fuels—wind and sun—are free. And new resources like tidal energy are now being developed.
The power portfolio will be devoped once the program is formed, but its intent will be to purchase as much electrcity as possible from sources located in California at prices that remain competitive with PG&E.
EBCE will buy the same amount of electricity that customers use, and feed it into California’s electric grid. When the electrons hit the grid, no one can really determine where each individual electron goes. EBCE will provide cleaner electricity to the grid (with higher renewable content and fewer greenhouse gases), displacing what PG&E had been providing
It’s like when you deposit $100 into one ATM and later take it out of another ATM. It’s not the same $100, but it is your money. The advantage of EBCE is that the electricity we put into the grid will be more carbon-free and renewably sourced and than what PG&E is putting into the grid.
Electricity generated from solar, wind, geothermal and small hydroelectric plants is renewable because those sources are never depleted. They do not create greenhouse gases so they are also GHG-free or carbon-free.
Other sources of electricity include nuclear facilities and large hydroelectric dams. They don’t create greenhouse gases so they are considered to be carbon-free. However, the CPUC does not recognize those two sources as renewable.
Initially, there may be natural gas or carbon-free hydroelectric components. However, EBCE, like its counterparts in Marin, Sonoma, and San Mateo will reduce its reliance on carbon-producing sources over time.
There is likely to be a mix of small (renewable) and large (not renewable) hydroelectric power in the fuel mix in order to minimize carbon emissions.
SB 350 is a great law. Yet we don’t see any reason to wait until 2030 to reach that level of renewable energy content. We can do it now. That level has already been achieved in Marin and San Mateo and will soon be achieved in Sonoma and San Francisco.
The goal is that EBCE’s baseline energy product will have as large a portion of renewable energy sources as possible. Whatever level we start with, that’s just the beginning. MCE Clean Energy intends to be 85% GHG-free by 2025. There’s no reason we can’t do that—or more—as well.
2. With EBCE, participating communities will have a new electricity provider, which will increase competition and result in more renewable energy sources at lower rates.
- EBCE will pool electricity demand across residential and commercial customers and buy electricity for them.
- Currently there’s only one provider—PG&E—in most of Alameda County.
- The County of Alameda and 11 of its cities have formed the East Bay Community Energy Authority (EBCEA).
- The City of Alameda already owns its municipal utility so will not join EBCEA.
- This type of program is already working in Marin, San Francisco, San Mateo, and Sonoma Counties.
What makes EBCE so powerful is that it supports clean energy market competition in three ways:
- EBCE buys power through a competitive process that encourages private energy companies to compete to provide more clean, renewable power at lower costs.
- This competition also leads PG&E to improve its offering both in terms of cost and level of renewables. As a monopoly, PG&E doesn’t have as much incentive to provide cleaner energy or lower rates.
- Because there are no shareholder investors expecting dividends, EBCE can reinvest net revenue and keep rates low.
Most other Bay Area counties are moving forward with similar programs. In total, 16 other California counties plus the City of San José are also exploring starting their own programs.
That’s the way the law governing the formation of Community Choice Energy programs like EBCE was written. When a city or county decides to participate, all their residents and businesses are automatically enrolled.
Nevertheless, if you wish to remain with PG&E, you may do so by opting out of the EBCE program.
During the EBCE launch period you will receive at least four enrollment notices about how to remain with PG&E. You’ll be able to do that by mail, phone, or on our website. For two months before launch and two months launch after there’s no charge to elect to remain with PG&E. After the initial launch, you can still return to PG&E, but it's possible that a small fee may be charged.
The County and participating cities will govern EBCE under a new Joint Powers Agreement. The Board of Directors will be composed of elected officials representing each of the participating communities. The Board sets rates and determines the mix of power sources.
There will be a small staff to run day-to-day operations and provide customer support. The entire process is completely transparent, with all Board meetings open to the public.
The Joint Power Agreement authorizes EBCE to form a Community Advisory Committee. Members will be selected by the EBCEA Board of Direcors after an application process is completed.
Applications for the Community Advisory Committee have been received. Selections will take place in May/June 2017.
Before starting service, EBCE will submit an Implementation Plan to the California Public Utilities Commission (CPUC), the entity that regulates all California energy providers. The Plan will discuss rate design, how we will buy electricity, and how we will carry out all the functions the CPUC requires.
Before launch, EBCE will negotiate the price of electricity on the open market and adhere to all CPUC rules and tariffs.
3. PG&E will remain an essential partner.
- While EBCE will buy electricity from power providers, PG&E will continue to deliver the electricity to homes and businesses over its existing power lines and maintain the lines, just as it always has.
- PG&E will also send bills and provide customer service.
- The difference will be that your bill shows that your electricity is coming from East Bay Community Energy.
- The transition will be seamless; you’ll receive the same electric service and reliability as before, with no interruption.
- Those who prefer to have PG&E continue to buy their electricity can choose that option.
Yes, absolutely. PG&E crews in their distinctive blue trucks will maintain the lines and repair them as needed, just as they do today.
Yes. The Sonoma Clean Power and MCE Clean Energy partnerships with PG&E have worked very well. PG&E provides essential customer service and maintains the transmission system in communities served by both programs.
That’s the Power Charge Indifference Adjustment or PCIA, sometimes called an “exit fee.” It will appear on your bill as a separate line item.
PG&E has various long-term contracts for buying electricity for its customers; some are as long as 20 years. It bought power based on the number of customers it serves. The price is locked in, which is good when the cost of generating electricity is rising as one might expect over a long time period. Recently, however, the cost of natural gas, which is most of PG&E’s non-renewable portfolio, has been going down.
When customers switch to EBCE, PG&E needs to provide less electricity but still has to pay for the amount of power in its long-term contracts. So PG&E sells the excess power on the open market. Right now, contracted electricity generated by natural gas is selling for less than what PG&E paid for it. That difference is charged to EBCE customers under the guidance of the CPUC. If the price of natural gas rises again, the PCIA could go down.
What’s most important to know is that EBCE’s rates—including the PCIA charge—will still be competitive with PG&E’s rates.
The vast majority of PG&E employees provide transmission and distribution system maintenance and upgrades, billing and customer service—all of which PG&E will continue to provide. There have not been any noticeable job losses in communities that have a second electricity provider—in fact new jobs have been created constructing and operating local energy generation facilities. The EBCE Technical Study also anticipates a net increase in good paying jobs as the result of the EBCE program.
4. East Bay Community Energy will be a locally controlled nonprofit public agency, benefiting Alameda County residents and businesses.
- Net revenue (after buying power and administrative expenses) can be used to maintain stable, competitive electricity rates.
- It can also be used to provide larger incentives for more solar installations, to support energy efficiency programs, and to develop more local renewable energy sources in and near Alameda County.
- And it can be used to invest in innovative clean technologies and energy-related job training.
While PG&E rates change several times a year, existing local programs in Marin and Sonoma have generally changed only once a year. That stability makes it easier to determine household or business electricity expenses.
No. By law, EBCE, as a joint powers authority, can only be funded through program revenues—revenue returns to the program and is passed on to customers in the form of reduced rates, incentives, local renewable projects and customized programs such as energy efficiency services and rebates. Its budget is completely separate from the general funds of participating local governments.
MCE Clean Energy has already invested over $500 million in in-state and local renewable energy projects that have created over 2,400 construction and vendor jobs, with more coming soon. Sonoma Clean Power has found that developing local renewable energy projects within Sonoma County will result in lower rates by 2020, compared with buying electricity elsewhere.
Alameda County has budgeted about $3.7 million to launch EBCE, which it will begin to recoup once the program begins delivering electricity and generating revenue. EBCE will seek bank financing to fund power purchases, which must be in place when the program launches and before any revenue has been generated. MCE Clean Energy and Sonoma Clean Power also initially used bank financing to launch their programs.
EBCE will definitely look at ways to increase the value of local solar to the owners of PV systems. For example, both MCE Clean Energy and SCP have successfully developed programs that offer greater incentives than PG&E provides in order to encourage residents and businesses to install solar. EBCE will develop similar offerings.
EBCE is also likely to design programs like Feed-in-Tariffs to encourage the construction of larger local solar projects.
As with any business enterprise, there are risks. The primary risks are customer opt-outs, energy price fluctuations and changing state regulations.
A successful Community Choice program requires that a significant majority of residential and commercial customers obtain their electricity from the program. This is one reason why Community Choice programs strive to maintain competitive pricing, while lowering greenhouse gas emissions and providing higher renewable content than what you can get from the local utility.
California’s energy markets have been stable for several years and prices for electricity from both renewable and conventional energy sources (natural gas) are relatively low. Markets could become more volatile. EBCE would hedge risks by developing a diverse portfolio that includes a mix of long-term and short-term contracts and direct investments in power projects.
The regulatory risk is difficult to predict. A 2002 State law allows cities and counties to develop programs like this—the State is supportive. Both MCE Clean Energy and Sonoma Clean Power have been very active in the California Public Utilitiies Commission's regulatory proceedings and have established a strong network. As more local programs are developed, we will have an even stronger presence—it will be essential to actively participate in ongoing regulatory proceedings.