The CleanPowerSF program offers energy from a larger proportion of renewable sources including the O'Shaughnessy Dam at the Hetch Hetchy reservoir. (Courtesy photo)

PG&E fee hike to cost CleanPowerSF $20M in one year, ‘slow down’ renewable energy projects

A fee hike from PG&E will cost San Francisco’s renewable energy program an additional $20 million over the next year and “slow down” construction of local green energy projects.

The impacts to CleanPowerSF, a community choice aggregation program allowed under state law, comes after the the California Public Utilities Commission voted last month to allow PG & E to increase the fee it charges their customers who leave to enroll in the renewable energy program.

To offset the fee increase and ensure existing and future CleanPowerSF customers have bills that “meet or beat” what PG&E charges, the San Francisco Public Utilities Commission plans to use the program’s reserve funds to provide a credit.

Barbara Hale, the San Francisco’s Public Utilities Commission’s assistant general manager for power, told the San Francisco Examiner that plan will cost $20 million over the next 12 months, beginning in January.

There are other impacts.

One of the hopes in launching CleanPowerSF was that it would help fund the construction of renewable energy projects within San Francisco, creating jobs and boost assets producing green energy.

Hale warned that the credit means “we won’t have as much money to do the more local creative build like we’ve been talking about.”

“We’re going to have to slow that down,” Hale said.

Hale will present a more detailed financing plan to offset the costs and the impacts it will have on CleanPowerSF to the SPFUC on Dec. 11. The program’s current budget is $155 million. The exact PG&E exit fee and generation rates won’t be known until January.

Despite the fee increase and impact to the program, the agency still intends to enroll 280,000 mostly residential accounts in April 2019.

The program, which provides energy from 43 percent renewable sources, currently serves 109,000 accounts since it launched in 2016 and has had an opt-out rate of 3.2 percent. That’s about 30 percent of electricity accounts citywide, comprising an average demand of 230 megawatts.

About 4,800 businesses and households have chosen to pay a higher rate to obtain the program’s 100 percent renewable energy service called SuperGreen. PG&E’s electricity comes from 33 percent renewable energy sources.

With April’s enrollment, CleanPowerSF is expected to expand to around 365,000 accounts with an average demand of 340 to 350 megawatts.

The City will continue to discuss the program with several larger commercial accounts such as server farms, in an effort to interest them in the program.

On Friday, the San Francisco Local Agency Formation Commission, on which members of the Board of Supervisors sit, will hear a briefing on ClearPowerSF.

Meanwhile, San Francisco and a group of other municipalities have filed an appeal with the CPUC seeking to overturn its decision.

Among the arguments made in the appeal of CPUC’s decision on the exit fee, known as the Power Charge Indifference Adjustment (PCIA), is that PG&E should have planned ahead and avoided cost impacts of departing customers. The fee is meant to cover the impacts on utilities like PG&E that have invested in the procurement of energy for customers.

“The utilities have, from the outset of CCA formation, continued to procure on behalf of CCA customers until the last possible moment such customers remain with bundled service, even when the utilities know or should have known that such customers were soon departing,” the appeal said, “The result is costs that could have been avoided and that cannot be attributed to CCA departing load.”

The CPUC has 90-days to decide whether to act, otherwise the vote stands. Afterwards, San Francisco could file a lawsuit.

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