PG&E can’t un­plug agen­cies Reg­u­la­tors tell util­ity to halt tough tac­tics, threats

San Francisco Chronicle - - FRONT PAGE - By David R. Baker

Cal­i­for­nia en­ergy reg­u­la­tors de­liv­ered a rare re­buke to Pa­cific Gas and Elec­tric Co. on Thurs­day, ban­ning some of the hard­ball tac­tics the util­ity has used in its ef­forts to de­rail Marin County’s new pub­lic power agency.

Al­though the move by the Cal­i­for­nia Pub­lic Util­i­ties Com­mis­sion didn’t go as far as some PG&E crit­ics wanted, it could have great sig­nif­i­cance as other com­mu­ni­ties — most notably, San Fran­cisco — try to en­ter the elec­tric­ity busi­ness.

“It’s re­ally just a slap on the wrist, but it’s a very im­por­tant slap,” said San Fran­cisco Su­per­vi­sor Ross Mirkarimi, one of the key pro­po­nents of a pub­lic power agency in the city.

Com­mis­sion­ers adopted a res­o­lu­tion telling PG&E and the state’s other util­i­ties that they can­not refuse to sup­ply elec­tric­ity to “com­mu­nity

choice ag­gre­ga­tors,” a new type of pub­lic power agency be­ing set up in Marin County and San Fran­cisco. Marin’s agency will start de­liv­er­ing elec­tric­ity to its first cus­tomers on May 7, and San Fran­cisco of­fi­cials hope to fol­low suit soon af­ter.

The util­i­ties also won’t be al­lowed to of­fer spe­cial pro­grams or ser­vices as in­cen­tives not to form a CCA, and they will have to fol­low stricter guide­lines about ask­ing in­di­vid­ual cus­tomers to opt out of any new sys­tem that is formed.

Of­fi­cial com­plaints

The res­o­lu­tion comes in re­sponse to com­plaints from pub­lic of­fi­cials in Marin and San Fran­cisco, who say PG&E’s cam­paign to stop com­mu­nity choice pro­grams has bro­ken state law. It also comes as de­bate heats up over a PG&E-spon­sored bal­lot mea­sure — Propo­si­tion 16 — that would make form­ing a CCA much harder, re­quir­ing a two-thirds vote of ap­proval from the pub­lic.

Ear­lier this year, PG&E threat­ened not to sup­ply elec­tric­ity to the fledg­ling Marin En­ergy Au­thor­ity. But the 2002 state law that cre­ated com­mu­nity choice ag­gre­ga­tion specif­i­cally re­quired Cal­i­for­nia’s ex­ist­ing util­i­ties to coop- er­ate with the new pub­lic power agen­cies. Un­der com­mu­nity choice ag­gre­ga­tion, cities or coun­ties buy elec­tric­ity for their res­i­dents while tra­di­tional util­ity com­pa­nies, such as PG&E, con­tinue to own and op­er­ate the elec­tri­cal grid.

PG&E, based in San Fran­cisco, even­tu­ally backed down and signed a ser­vice agree­ment with the Marin En­ergy Au­thor­ity. Nev­er­the­less, the res­o­lu­tion ap­proved Thurs­day by the com­mis­sion states that util­i­ties can’t refuse to sell elec­tric­ity to CCAs.

The res­o­lu­tion takes a sim­i­lar ap­proach to an in­ci­dent last year in which PG&E ap­peared to of­fer the city of No­vato in­cen­tives not to join the Marin En­ergy Au­thor­ity.

No­vato let­ter

In a June 30 let­ter to the city man­ager, a PG&E pub­lic af­fairs man­ager pro­posed col­lab­o­rat­ing with the city on ex­panded en­ergy-ef­fi­ciency pro­grams, in­clud­ing par­tial fund­ing for a staff po­si­tion.

“We be­lieve that our Col­lab­o­ra­tion Pro­posal pro­vides a path­way for No­vato to meet its cli­mate change ob­jec­tives faster, cheaper and with bet­ter re­sults without ex­pos­ing it­self, the City, our cus­tomers and tax­pay­ers to the un­cer­tainty and risk of a Com­mu­nity Choice Ag­gre­ga­tion scheme,” the let­ter read.

No­vato’s City Coun­cil, in the end, de­cided not to join the au­thor­ity, al­though PG&E in­sisted there had been no quid pro quo. Still, the CPUC on Thurs­day barred util­i­ties from of­fer­ing goods, ser­vices or pro­grams in re­turn for a com­mu­nity’s agree­ment not to form or join a CCA.

Some pub­lic of­fi­cials crit­i­cal of PG&E wel­comed the res­o­lu­tion but said it wasn’t strong enough.

“I ap­plaud the CPUC for tak­ing a nec­es­sary first step,” said state Sen. Mark Leno, D-San Fran­cisco. “The de­cep­tive prac­tices of PG&E as iden­ti­fied by the CPUC are not in com­pli­ance with state law. It is the CPUC’s re­spon­si­bil­ity to en­force the law.”

‘Full com­pli­ance’

A PG&E spokes­woman on Thurs­day re­jected that char­ac­ter­i­za­tion, say­ing the util­ity — Cal­i­for­nia’s largest — had fol­lowed all ap­pro­pri­ate rules.

“We think we have been in full com­pli­ance with state law and CPUC reg­u­la­tions,” said Katie Ro­mans.

Thurs­day’s res­o­lu­tion from the util­i­ties com­mis­sion also set ex­plicit rules de­tail­ing when the util­i­ties can ask in­di­vid­ual home­own­ers and other cus­tomers not to join a CCA.

Un­der state law, res­i­dents of a city or county that forms a CCA au­to­mat­i­cally re­ceive their elec­tric­ity from the new pub­lic power agency un­less they choose to opt out.

Opt­ing out

But Marin and San Fran­cisco of­fi­cials have com­plained that PG&E started ask­ing res­i­dents to opt out be­fore their sys­tems were ready to be­gin op­er­at­ing. As a re­sult, home­own­ers and busi­nesses couldn’t com­pare elec­tric­ity rates and ser­vice terms of­fered by PG&E with those of the new pub­lic power agen­cies.

So the com­mis­sion banned that prac­tice as well. The util­i­ties must now wait un­til a CCA be­gins its of­fi­cial opt-out pe­riod and pub­lishes its rates and ser­vice terms. Any opt-out re­quest filed by a cus­tomer be­fore then will be nul­li­fied. In Marin’s case, that means optout re­quests filed be­fore Feb. 5.

The change pleased Marin En­ergy Au­thor­ity of­fi­cials. But they said it did not ad­dress a more press­ing prob­lem — a re­cent bar­rage of PG&E fly­ers and phone calls that they con- sider highly mis­lead­ing.

Dawn Weisz, the au­thor­ity’s in­terim di­rec­tor, said res­i­dents have re­ceived phone calls im­ply­ing that if they don’t opt out, they’ll lose elec­tric­ity ser­vice.

Mail­ers to res­i­dents

They also have re­ceived mail­ers say­ing the au­thor­ity’s power prices are higher than PG&E’s, even though un­der the au­thor­ity’s rates, most res­i­dents will pay the same amount for elec­tric­ity, month by month, as they do with PG&E.

“Folks are opt­ing out due to mis­in­for­ma­tion and false pre­tenses,” Weisz said. She did not know how many Marin res­i­dents have opted out.

PG&E has stead­fastly de­fended its ads as ac­cu­rate, say­ing the new CCA pro­gram is so fraught with po­ten­tial prob­lems that it could lead to higher en­ergy prices in the fu­ture. Ro­mans said Thurs­day that the util­ity would con­tinue press­ing its case, try­ing to keep its cur­rent cus­tomers.

“I think our cus­tomers in Marin are just beginning to learn about their en­ergy sup­ply choices,” she said. “We’re go­ing to con­tinue to com­mu­ni­cate with cus­tomers in ac­cor­dance with CPUC rules.”

State Sen. Mark Leno said the move to ban some PG&E tac­tics is a nec­es­sary first step.

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