At the Nov. 18 city council meeting, there was a discussion and vote about the city of Albany joining Marin Clean Energy (MCE), what is known as a community choice aggregator (CCA) for electricity.
The council voted in favor of exploring becoming a member of MCE. I was the only council member to vote against. I have real misgivings about the CCA model, which I think has become outmoded, is not a good fit for Albany and may expose the city to downside financial risks.
The staff report has a good discussion of the CCA model (here), and MCE’s website is here. MCE has been controversial from the very start. See these three articles from the Marin Independent Journal (here, here and here).
I am concerned if Albany joins MCE, and if MCE goes belly up at some point in the future, Albany residents could be liable for at least part of any debts. I am not aware of any California CCA ventures failing yet, so there is no record of how the legal issues might play out.
Here is another problem: In the telecommunications world, it’s is illegal to practice “slamming,” or switching a consumer from one long-distance rate plan to another without their permission. If Albany joins MCE, all residents will automatically be switched from PGE to MCE, unless they opt out. This strikes me as being a legalized form of slamming our electricity bills. I plan to opt out. However, those of us who opt out may still be liable for any MCE debts if the organization goes bankrupt.
The downside risks of joining MCE might be worth it for Albany if there was an upside. But in my opinion, there is no upside. MCE doesn’t deliver anything that we can’t get by sticking with PGE. For example, PGE now offers similar green energy programs to MCE
MCE basically buys PGE electricity in bulk and sells it to consumers at roughly the same retail rate. The allegedly good news is that MCE makes the electricity “greener,” mostly through buying renewable energy certificates (RECs), which act something like buying stock market shares. But in this case you are buying shares of renewable energy production, production which can be anywhere in the U.S. Then you can apply these RECs to your non-renewable electricity and count it as renewable electricity.
The idea is that if you buy enough RECs, you can make your energy up to 100 percent renewable, although in reality, the electrons are still coming from the same PGE sources, where are primarily hydro, nuclear and natural gas generation plants. This is similar to the way you can purchase carbon offsets to cancel the greenhouse gases from taking an airplane trip. MCE does also try to encourage the development of local renewable energy, but this has not panned out as well as expected.
California already has low-carbon electricity because there are no coal-burning plants in the state. We get our electricity from clean Pacific NW hydro, PGE’s Diablo Canyon nuclear plant and efficient combined-cycle natural gas generating plants. A small but growing percentage comes from renewables. The carbon intensity of PGE and CCA electricity is similar, but MCE buys enough RECs to offset the nuclear power electrons, so it claims to be nuclear-free.
Going forward, PGE electricity will get greener and greener due to the state’s renewable portfolio standards (see here and here for more), AB32 climate change legislation, and executive orders from state governors. Basically, top-down government legislation is driving carbon reduction so hard that MCE’s bottom up model is now almost irrelevant. The state is on track to hit its renewable 2020 targets, but we will have difficulty with the 2050 target.
Renewable electricity sources are intermittent because the sun doesn’t shine at night, and the wind sometimes doesn’t blow. This makes renewables difficult to integrate into the existing electrical grid. This problem is beyond the scope of a small CCA like MCE. Nor could a small CCA have built out PGE’s smart meter system–it takes a big operation to create a network of smart meters and devise software to share the data in a way to help consumers maximize efficiency.
Germany provides a painful example of the problems that accompany an infatuation with renewables. That country went overboard with its subsidies of renewables and decided to shut down its nuclear power plants. But the renewables couldn’t fill the gap left by the lost nuclear power, so Germany switched to burning more coal. As a consequence, Germany has the highest electricity costs in Europe, and because it has switched back to coal, it now produces more carbon than it used to.
In general, given our older housing stock, I think the problem in Albany is on the demand side, not the supply side, and I think the problem is natural gas usage, not electricity usage. So the MCE proposal misses our problem. I’d rather see more emphasis put on reducing our heating bills with weatherizing and better insulation, along with efficient LED lighting and more energy-efficient refrigerators (available at Albany’s own Galvin Appliance). We also need to teach people, especially young people, to put all their electric devices on power strips and turn them off at night.
To give you an example, last week, during the most frigid week in years, my house used 20.8 therms of natural gas, but only 34 kilowatt hours of electricity. Accord to the information here, my natural gas usage produced almost 16 times as much carbon dioxide as my electricity usage.
An extreme case you say? Well, in the middle of the summer, when the furnace doesn’t even run, my house still uses more than three therms per week, which means that my gas stove and hot water heater alone produce about twice as much carbon dioxide as my electricity use (interestingly, that two-to-one ratio also applies to the average household in California).
Actually, since I have solar panels, my net electricity use is negative. Because of my frugality with electricity, on an annual basis I produce way more electricity than I use. Nice, but that also means my solar panels will never pay for themselves. It would have made more sense to put the money instead into better windows and more insulation.
So to reduce Albany’s residential carbon footprint, I think we need to work on reducing natural gas usage. In comparison, electricity usage is not so much a problem. It’s relatively easy to solve. Hence joining MCE is barking up the wrong tree–even if it is an appealing tree at first glance.