PG&E customers in American Canyon will soon be getting notices from their new energy provider, Marin Clean Energy, about a switch approved last year by the City Council. But it remains to be seen if the change to MCE will be cheaper for local ratepayers or those in the rest of the Napa Valley.
On Tuesday, an MCE representative appeared at City Hall to discuss the coming outreach program that the nonprofit is launching now that American Canyon was formally approved last month to join MCE.
The city asked last year to join MCE, which offers renewable energy options in place of PG&E’s energy sources. The cities of Napa, St. Helena and Calistoga, plus the town of Yountville also applied to join MCE, which approved all five municipalities for membership. Napa County was already an MCE member.
Alex DiGiorgio, community development coordinator for MCE, told the City Council that the first of five notices will be delivered to American Canyon customers next week. Those in Napa, Yountville, St. Helena and Calistoga will receive their notices in the next 4-6 weeks.
The notices will inform residents that they have the option of doing nothing and automatically becoming a customer of MCE’s “light green” plan that promises 50 percent of their electricity will come from renewable energy sources, such as solar, wind or geothermal.
They can also “opt up” to MCE’s “deep green” plan that uses 100 percent renewable energy, at an average cost of about $5 more a month than “light green,” according to DiGiorgio.
Residents will have to opt out if they prefer to stay with PG&E as their energy supplier.
Regardless of their choice, ratepayers will continue to get billed by PG&E, which still will handle all billing and electrical services to homes. MCE is not a utility like PG&E. It merely partners with PG&E to offer an alternative for energy sourcing.
When the City Council voted in 2015 to apply for MCE membership, it was told by the clean energy provider that their rates were competitive with PG&E’s, and at times were even cheaper.
But a decision in Sacramento at the beginning of this year made MCE’s mission of offering competitive, renewable energy more challenging, DiGiorgio said.
The rise of community-choice aggregation organizations like MCE, CleanPowerSF, Sonoma Clean Power and others has cut into PG&E’s market share, causing the utility to lose money.
To help PG&E recover some of its lost revenues, the California Public Utilities Commission approved PCIA (Power Charge Indifference Adjustment) rates that PG&E is allowed to charge to customers who switch to MCE and others like it.
“Some people think [PCIA] stands for ‘Protecting Corporate Interests and Assets,” said DiGiorgio, “which it doesn’t.”
In January, the CPUC approved a significant increase in PCIA, or exit rates, which has upped the bills of MCE customers and reduced the promised cost savings that came with switching from PG&E.
“Right now MCE’s generation rates are 14 percent lower than PG&E’s generation rates,” DiGiorgio told the council. “The wrinkle is there is an exit fee that is charged to all community-choice customers and that exit fee was increased by 95 percent at the beginning of this year.”
He added, “At this time our customers at the bottom line are paying slightly more on average,” which ranged from $6 to $11 more for most residential accounts.
Councilmember Joan Bennett expressed concern about the rates American Canyon residents will pay under MCE, and whether they will be competitive with PG&E. If they aren’t the same as or lower than the utility’s, she said, ratepayers may get angry and let the council know about it.
To mitigate the effect of the higher exit rates, DiGiorgio said MCE’s board of directors is considering a rate reduction. He said a decision may come next month.
If the rate adjustment is approved, it would take effect in September, when American Canyon customers are officially switched over to MCE unless they opt out. Napa, St. Helena, Calistoga and Yountville are also scheduled to switch to MCE in September.
“Even though our generation rates are 14 percent lower, we would like to absorb as much of those exit fees as possible so that the bill can be on par with PG&E at least for the time of the enrollment,” he said.
“We can’t guarantee our rates will always be cheaper,” said DiGiorgio. “We know if our rates are more, it will result in more people opting out.”
MCE customers paid $13 million in exit fees in 2014, according to MCE data.
Councilmember Mark Joseph noted that even with a rate reduction by MCE, the exit rates could become a problem again if PG&E keeps going back to the CPUC for help.
“The more successful you are or other nonprofits like MCE are,” said Joseph, “the more that fee will be adjusted up to compensate for what’s going on.”
“Presumably,” DiGiorgio responded. He said it also depends on the complexity of long-term energy contracts that PG&E has with its energy suppliers.
He said lawyers for MCE and other community-choice providers are lobbying regulators in Sacramento about exit rates.
“Our legal teams and their legal teams are having friendly conversations with the Public Utilities Commission about this issue,” he said.