In a move initiated by Mayor Gavin Newsom, organizations interested in providing The City with environmentally friendly energy will be solicited with a notice this week, pushing forward San Francisco’s plan to provide city-sponsored energy to residents and businesses.
While expressing concerns in a letter to the Board of Supervisors that the program might cost ratepayers more, Newsom quietly signed legislation June 28 authorizing the notice, which will be sent out by the San Francisco Public Utilities Commission.
If all goes according to plan, by next year, San Francisco residents and businesses could be asked to make a choice: stay with Pacific Gas and Electric Co., or go with the new energy program, called Community Choice Aggregation, that is focused on renewable sources such as sun and wind. CCA will also be backed by The City.
The alternative energy program — which has a goal of making The City’s energy supply 51 percent renewable by 2017 — was put in motion by legislation co-authored by supervisors Tom Ammiano and Ross Mirkarimi.
In his letter, Newsom pointed out a “troubling aspect” of the plan, a provision guaranteeing that rates under CCA must “meet or beat” PG&E’s rates for the first 60 days of the program.
“This time frame happens to coincide with the 60-day window that ratepayers have to decide whether they will ‘opt-out’ of the CCA program,” Newsom wrote. “This appears to mean a customer’s rates could increase right after the opt-out period ends.”
The ordinance notes that, “thereafter, the CCA supplier shall commit to a structured long-term rate intended to meet or beat PG&E’s electric rates.”
SFPUC Assistant General Manager Laura Spanjian said The City would “obviously work to extend the meet-or-beat provision” with any contractor chosen to supply San Francisco with alternative energy.
Under the plan, The City would select an energy supplier to build 360 megawatts of local renewable power. The energy program would be financed through investing $1.2 billion of revenue bonds and interest payments, a plan supported through the passing of Proposition H.
The proposition, passed in 2001, amended the City Charter to allow the Board of Supervisors to authorize revenue bonds for renewable energy and conservation projects.
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