The board of directors of Sonoma Clean Power, a community choice aggregator for California’s Sonoma and Mendocino counties, plans to begin exploring the possibility of taking over all or some of Pacific Gas and Electric’s infrastructure for the Northern California counties.
The board took a straw vote to gauge support for providing staff direction on “exploring municipalization, co-op or other forms of customer ownership of distribution grid infrastructure, either locally or across all of PG&E’s territory,” according to an excerpt of the audio recording of the board meeting provided by Sonoma Clean Power. The board unanimously approved the measure.
In the meeting, the utility’s CEO, Geof Sypher, also expressed concerns about PG&E’s solvency and its reliability, given its bankruptcy, its role in deadly wildfires and its response to the threat of wildfires, which has been to imposed Public Safety Power Shutoffs (PSPS).
Sypher said what he called PG&E’s 20 or 30 years of improper maintenance of its physical grid and the fact that the utility’s bankruptcy proceeding has resulted in PG&E’s shares and bonds in the control of hedge funds whose business model is to provide annualized returns on investment of 30%, a goal, he said, that collides with the goals of a utility that is supposed to serve the public. “I am nervous from the outset about who is competing to control PG&E,” he said.
The major benefit of replacing PG&E with “a mutual benefit corporation or a cooperative model would be that it would allow for the spreading out of costs of improving the grid,” so that some of the upgrade costs in rural areas would be borne by wealthy areas like San Francisco, Sypher said.
San Francisco is in the process of exploring municipalization and has made a $2.5 billion offer to PG&E, which the utility rejected in October.
In addition, in a Nov. 4 letter, a group of California mayors and county officials argued to state regulatory authorities that there are compelling reasons to transform PG&E into a customer-owned utility. The letter was signed by the mayors of San Jose, Sacramento, Oakland, Stockton, Modesto, Elk Grove, Hayward, Sunnyvale, Berkeley, Richmond, Clovis, Chico, Redding, Redwood, Davis and Santa Cruz, as well as by country officials from San Mateo, Santa Cruz, Marin, Yolo, and San Benito.
In February, community choice aggregators in Northern California, including Sonoma Clean Power, petitioned the California Public Utilities Commission to look at turning PG&E into a wires only company.
Sonoma Clean Power’s concerns have grown since it signed the February petition because of PG&E’s role in the recent Kincaid fire and the “rash of power shutoffs,” SCP spokeswoman Kate Kelly said. Sonoma County was bracing for another PSPS this week, she said.
The vote directed Sonoma Clean Power’s staff to research the utility’s options, Kelly said, adding, “we are not in the process of municipalization.” There is a lot of information that has to be gathered on liabilities and costs, she said.
“We are aware of proposals by various government agencies to acquire PG&E assets or to convert parts of the company to what is being described as a mutualized entity,” PG&E spokeswoman Kristi Jourdan said via email. “We study and analyze each proposal. However, PG&E’s facilities are not for sale, and changing the structure of the company would not create a safer operation.”
We remain firmly convinced that a government or customer takeover is not the optimal solution that will address the challenges and serve the long-run interests of all customers in the communities we serve,” Jourdan said.
She said PG&E remains focused on fairly resolving wildfire claims and exiting the Chapter 11 process as quickly as possible.
Sonoma Clean Power has served Sonoma County since May 2014 and Mendocino County since June 2017. The utility now has 600,000 people, which is 87% of eligible customers in those two counties.
Valley Clean Energy board makes $300 mil offer for PG&E assets
The board of Valley Clean Energy, a California community choice aggregator, recently submitted a $300 million bid to purchase Pacific Gas & Electric’s lines, poles and other electricity distribution assets within Yolo County, Calif.
The purchase would enable the creation of a locally owned and operated public utility that the board has concluded would result in a more successful, efficient and safe electricity system, Valley Clean Energy said on Oct. 19.
Following the announcement this summer of its intent to examine the purchase of local PG&E assets, and after months of study and review with expert consultants, the Valley Clean Energy board of directors submitted a non-binding offer on Oct. 18 to purchase PG&E’s assets.
Valley Clean Energy’s offer would ultimately be subject to approval by the federal court handling the PG&E bankruptcy case.
