As Monterey Bay Community Power (MBCP) humbly begins to become the primary electric-generation service provider in the cities of San Luis Obispo and Morro Bay in January 2020, we are excited to continue the dialogue around local issues affecting the communities we currently serve along with those we will be serving in the near future. More importantly, it is our responsibility to address inaccurate information about MBCP such as was shared in the recent opinion piece, "The real existential threat" by Mr. Al Fonzi (Oct. 10).
Currently, 11 jurisdictions across San Luis Obispo and Santa Barbara counties elected to pass resolutions and ordinances to request membership in MBCP this year, and we are moving forward to approve their membership and start service in early 2021. The remaining jurisdictions that elected not to act in San Luis Obispo County at this time are Atascadero and the county of San Luis Obispo.
Regarding the "accountant-prepared" report that the county commissioned, it is worth noting that its contents were deemed unsatisfactory by most supervisors, hence the call for yet another feasibility study. The formation of any community choice energy agency—of which there are 19 successfully operating in California—is always prefaced by exhaustive investigation and feasibility studies, and MBCP is no exception. If the county wishes to pursue another study, we respect its decision. We do also acknowledge the frustrations of some constituents who will now have to wait until early 2022 at best to receive the benefits that MBCP is delivering to more than 96 percent of electricity customers in its current service area.
Mr. Fonzi references, "financial obligations incurred" by members of MBCP. All financial liabilities associated with MBCP are the sole responsibility of MBCP, a joint powers authority and public agency that operates entirely separate from the individual cities or counties it serves. Other than a $5,000 to $7,500 administrative fee to cover costs associated with updating all of the legal documents required by the state of California and the California Public Utilities Commission, there is no cost to join MBCP.
The only possible financial liability that could arise would be when and if a city or county chose to remove itself from MBCP. And that cost would simply be paying MBCP back for its share of electricity that MBCP procured on its behalf, if and only if MBCP had to sell that electricity at a loss. In such a case, MBCP would be seeking the difference in cost from original purchase price to final selling price, nothing more. To date, no current city or county participating in MBCP has expressed any interest in removing itself. To the contrary, member agencies are applauding MBCP for making good on its promise to deliver significant economic and environmental benefit to the communities it serves.
On the subject of a city or county wishing to leave MBCP, yes it would require MBCP board approval, but neither of MBCP's two governing boards is interested in forcing a city or county to stay on if they have fiscal, environmental, or even philosophical reasons why they would choose not to participate any longer. MBCP has and always will be an example of shared values and collaboration. And to be perfectly clear, if one city or county ever left MBCP, it would not place any added financial liability on the remaining cities.
Like many contentious topics, this is not simply a two-sided issue, so there are more than "two categories of holdouts." We would respectfully like to identify a third, and that is a category made up of opinions that are based on assumptions and inaccurate information. We welcome any opportunity to be a balanced reference for those seeking accurate information.
The most glaring piece of inaccurate information is Fonzi's claim about "more expensive alternative energy." The fact that carbon-free and renewable energy sources such as hydroelectric, wind, and solar are now available for less than the cost of electricity generated from fossil fuels is one of the primary reasons why MBCP is able to provide electricity at a cost savings when compared with the regional investor-owned utility.
MBCP charges less than PG&E does for electric generation—period. For customers who feel they may be paying more, there are two likely scenarios. The first and most common is the perception that the new page on customers' PG&E bill, which outlines MBCP electric generation charges, is a new charge. The reality is, PG&E has always charged its customers for electric generation, but this cost was rolled into a bundled services charge that includes transmission and delivery charges, as well as electric generation charges.
Now that MBCP oversees where and how electricity is generated for its customers, the electric generation charge has been broken out from the bundled services charge. While MBCP agrees this can be confusing at first glance, we are committed to helping people understand this small change on their bills, and we encourage all businesses and residents to share this important detail with their neighbors.
The other instance that may give the perception of higher costs is the unfortunate incidence of higher natural gas prices, which may induce a level of sticker shock when customers view their total amount due. Natural gas prices have risen drastically over the past 12 months, especially in the winter months. In 2019, MBCP will deliver a cost savings in the form of a 5 percent rebate on MBCP electric generation charges, equivalent to approximately a 3 percent savings over PG&E.
Indeed, MBCP does not generate its own electricity, it procures electricity on the wholesale market just as every utility does on some level. With the goal of developing new renewable resources at competitive pricing, MBCP is under contract with generation facilities—creating opportunities for jobs, energy resiliency and efficiency, and additional cost savings to be passed on to customers.
MBCP offers significant economic and environmental benefits. We consider this value proposition a win-win because while there is still much debate about how important climate change is and what its true cause and effects are, everyone seems to agree that economic benefits are a good thing. By the end of 2019, MBCP will have delivered $17 million in combined cost savings to its current customers and will have made more than $8 million available to the communities it serves through local energy programs. MBCP estimates saving its customer base close to $20 million in 2020 and specifically, $1.6 million for customers in San Luis Obispo and Morro Bay.
MBCP is the result of thoughtful conversation about creating choice and opportunity around electricity service. Let us remember that before MBCP existed, businesses and residents in our service area did not have a choice when it came to electricity provider, now they do. We respect all customers' decisions, whatever they may be, but we have a duty to ensure that each customer has accurate information and full understanding of who MBCP is, how community choice energy (CCE) works, and what it means for them.
The fact that this dialogue is happening is a win. Before CCEs, folks just took electric service for granted. Today, CCEs have become a topic of discourse that will empower people to have a voice at the table, especially since MBCP is a public agency. Δ
J.R. Killigrew is the director of communications and external affairs for Monterey Bay Community Power. Send a response for publication to email@example.com.