SF will be largest municipality in state to offer program with renewable energy

San Francisco is planning to make a number of moves in the next week to help spur the launch of its long-anticipated energy program to compete with PG&E.

CleanPowerSF, the community-choice aggregation program that’s been in the making for more than a decade, is slated to begin Jan. 26 after years of delays due to bitter politics and opposition from the utility monopoly. Now, with a launch date set, details of the renewable-energy program are coming into focus.

Marin and Sonoma counties and the city of Lancaster have already set up their own energy programs. The programs were made possible through a 2002 state law that allowed municipalities to purchase energy at wholesale to offer to customers of traditional utilities.

In San Francisco — which would become the largest municipality in the state to offer such a program — CleanPowerSF got back on track after Mayor Ed Lee signaled his support for the effort earlier this year, after previously opposing it.

To make the program work, the San Francisco Public Utilities Commission needs greater leeway to purchase renewable energy to deliver the most affordable product.

Currently, city contracts of more than five years or valued at more than $10 million require Board of Supervisors approval under the City Charter. They also come with various local contract provisions, like requirements to hire local residents or disclosure of subcontractors to combat sweatshops.

On Tuesday, the board is expected to approve legislation authorizing the SFPUC to enter into contracts to purchase renewable energy in California that could extend for 25 years and have a value of up to $125 million without requiring approval by the board. It would also waive the sundry local contract provisions. The purchase contracts will instead use an industry standard.

“That’s what we are lacking today, that flexibility and the ability to operate at a commercial speed and put this portfolio together at the most cost-effective price point,” said Barbara Hale, assistant general manager of the SFPUC’s Power Enterprise.

The purchase of power by the SFPUC is not a new function for the department, which currently buys electricity when the hydropower produced by the Hetch Hetchy Reservoir is not adequate enough to meet the demand of its customers, such as public buildings and Muni. These purchases, which are made under the existing contract rules, are about 8 percent of the total energy, a 150-megawatt load.

The need to purchase more energy isn’t just for CleanPowerSF. The SFPUC is also gaining more customers. Those include homes built in the former Hunters Point Naval Shipyard, where service began in April, and anticipated future service on Treasure and Yerba Buena islands, where new housing is planned. And energy service to the new Transbay Transit Center is expected to begin next year.

After the contract legislation is approved, the SFPUC would issue requests for offers to renewable-energy providers.

That would advance The City on a path to start automatically enrolling CleanPowerSF customers Jan. 26 by switching them over from their current PG&E service. Customers, who could opt out and return to PG&E, would be enrolled in CleanPowerSF’s standard energy product consisting of 33 to 50 percent renewable energy. Customers could also elect the more expensive premium product of 100 percent renewable energy.

Last month, the Rate Fairness Board approved the maximum rates for the program, which were set at PG&E rates for cost per kilowatt-hour (kWh) — $0.086 for residential customers and $0.092 for small commercial customers. The 100 percent renewable energy service would not exceed PG&E’s planned green tariff program at $0.107 per kWh for residential and $0.112 per kWh for small commercial.

On Tuesday, the same day as the Board of Supervisors’ contracting vote, the SFPUC is expected to vote on these maximum rates for the program. In August 2013, the commission derailed the program when it refused to adopt the maximum rates, setting off a wave of political outrage.

A recent report showed CleanPowerSF would generate 9,232 construction jobs with local renewable-energy projects and 196 permanent operational jobs. Local projects that could be part of the program include Oceanside wind turbines and solar arrays in Hunters Point, University Mound-North Basin, Sutro Reservoir and Piers 90-94.

Launching CleanPowerSF

Key dates in the coming months:

May 12: Present proposed not-to-exceed rates to SFPUC

June 23: Seek SFPUC approval to file updated CCA implementation plan

June 30: Receive Board of Supervisors’ and mayor’s approval for power contracting legislation

Aug 3: Issue request for offers for program’s electric resource supplies

July-August: Approval to execute back office and customer care contract

Sept. 29: Approval to execute Phase 1 supply contract(s)

Oct. 27: Present final rates to SFPUC

Late November: Commence pre-enrollment notification process

Jan. 26: Phase 1 program launch

Source: SFPUC

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