Richard Halstead
Posted: 12/07/2009 05:55:25 PM PST
Updated: 12/07/2009 10:37:00 PM PST
In a new report unambiguously titled "Pull the Plug," the Marin County Civil Grand Jury on Monday recommended the Marin Energy Authority abandon its effort to reduce greenhouse gases by competing with Pacific Gas and Electric Co.
While acknowledging that "protecting the environment is in everyone's best interest," the grand jury wrote, "In these economically challenged and difficult times, we question the decision to put the county into the business of operating commercial power generation facilities, a function not usually associated with the government of a small county."
If the Marin Clean Energy initiative fails, the county of Marin will not recover the $540,000 it provided to the organization as seed money, the report said.
The Marin Energy Authority board of directors convened in a special meeting Monday to review its initial response to the report.
"In my opinion, this report is a blatant hit piece against Marin Clean Energy," said Marin County Supervisor Charles McGlashan, chairman of the authority's board.
Board member Lew Tremaine, a member of the Fairfax Town Council, said the "Pull the Plug" title "sets a really unobjective tone to the report right out of the gate."
The authority, which consists of the county of Marin and all of Marin's cities with the exception of Novato, Corte Madera and Larkspur, believes it can do considerably better than PG&E. The investor-owned utility has said it will fail to meet the state-mandated goal of getting 20 percent of its electricity from renewable sources by 2010.
The authority's Marin Clean Energy program would initially purchase electricity from a wholesaler and resell it to Marin customers. Soon, however, the authority hopes to develop its own renewable energy sources. It could sign a contract with a wholesaler by Feb. 4.
Authority managers say the contract will be executed only if the wholesale provider can guarantee Marin customers that at least 25 percent of their electricity will come from renewable sources while at least matching PG&E prices. Customers who are willing to pay a premium would also have the option of assuring that 100 percent of their electricity comes from renewable sources.
The grand jury asserts that the clean energy plan presents too many risks to both ratepayers and taxpayers who live in the jurisdictions that make up the authority. Once the authority signs a contract with a wholesaler, Marin residents who live in a jurisdiction belonging to the authority will automatically become customers of the authority, unless they choose to opt out.
"Marin Clean Energy could present unforeseen legal and financial risks to the participating cities, the county of Marin, and the citizens as taxpayers," the report stated.
The grand jury noted that in October the Marin County Board of Supervisors discussed the possibility that the county might be asked to guarantee a $2 million loan to ensure that Marin Clean Energy had sufficient start-up capital. During that meeting, two supervisors said they thought other members of the authority should also shoulder some of the financial responsibility. The report said that the Marin Clean Energy business plan calls for borrowing $6.4 million to provide working capital during its initial year.
McGlashan, however, said talk of any jurisdiction needing to co-sign for a loan is premature.
"We don't know if a bank is going to require that. We don't know if we're going to borrow it from a bank. We don't know where we're going to get that start-up capital or even if we can find it, thanks to PG&E's litigious behavior," McGlashan said.
McGlashan said the rest of the working capital needed during the first year could be borrowed using ratepayer revenue as collateral.
The grand jury noted that the authority's decision not to submit the Marin Clean Energy plan to a vote of the public "runs contrary to transparent governance and consumer protection standards." The criticism echoes a ballot initiative by PG&E to require local governments to obtain the approval of two-thirds of the voters in affected jurisdictions before using public funds, borrowing or issuing bonds to mount efforts such as Marin Clean Energy.
The grand jury said key questions affecting ratepayers remain. The authority has said it plans to notify ratepayers four times before automatically switching them from PG&E. The grand jury wanted to know how ratepayers would be contacted and asked how much ratepayers would have to pay in penalties if they decided to opt out after the initial 120-day decision period.
McGlashan said penalties, if necessary, would be nominal. If natural gas prices remain constant or rise, ratepayers switched to Marin Clean Energy would likely see their energy costs decline, he said.
McGlashan said Marin Clean Energy would actually reduce financial risk to Marin taxpayers because it would result in a 17 percent reduction in overall county greenhouse gas emissions, approximately two-thirds of the reduction that state law requires by 2020. McGlashan has estimated the savings in government penalties for the county and Marin municipalities could amount to $262 million.
http://www.contracostatimes.com/news/ci_13946713?nclick_check=1
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