News Analysis: Berkeley Sees Promise in Controlling Own Energy By YOLANDA HUANG Special to the Planet

Tuesday January 10, 2006

Berkeley, along with other local governments such Oakland, Emeryville, San Francisco and Marin, wants to have local control over energy and how it affects our communities. 

Energy has regularly been in the headlines. And most of these headlines are generated by actors outside our community, including multi-national corporations such as ENRON, foreign countries such as Saudi Arabia, the United States government through its favoritism of energy companies, or local corporations such as PG&E. Now, local governments want to change this dynamic through a program called Community Choice Aggregation, which is being offered by the California Public Utilities Commission. 

Community Choice Aggregation allows local governments to get into the electricity business by developing their own supplies. For many local governments, it is not just the control issue, but it is also the opportunity to implement local policies of promoting renewal and alternative energy sources such as wind, solar, tidal power, or methane from solid waste. The electricity would still flow through PG&E’s transmission lines. Residents would have a choice of staying with PG&E or signing on with the city. 

By going the Community Choice Aggregation route, consultants in April estimated that once the power plant was built, there would be electricity savings of up to 6 percent over 20 years and an increase in renewable energy by 50 percent by 2017, double the renewable energy PG&E is required to develop. 

Currently, California as a state imports 20 percent of its energy from dirty, coal fired power plants in Nevada and Arizona, although PG&E says it only imports 3 percent of its electricity from coal fired power plants. Those coal fired plants do not meet California clean air standards. This is California’s “dirty little secret,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies. 

The San Francisco Chronicle recently reported that there are 22 new coal fired power plants being proposed for the West. California’s use of electricity from coal fired power plants produces carbon dioxide equal to 11 million cars. Locally built electrical plants using renewable resources such as solar, tidal or wind, would reduce the need for new coal fired power plants. 

The supporters of Community Choice Aggregation want local governments to build clean power plants because these new power plants would also contribute to greater electrical stability in California, where construction of new electricity power plants has stalled. Calpine, which had 26 power plants in California under construction or development in 2000, saw huge mounting losses in the last couple of years following the collapse of ENRON, and the easing of the energy crisis. 

Calpine’s power plants were designed to burn natural gas to generate electricity. But with the collapse of energy prices, Calpine has seen huge operating losses and the drop of the value of its shares of stock from a high of $85 in 2001, to 54 cents by the end of November 2005. The threat of bankruptcy faces Calpine. 

Berkeley’s feasibility study, prepared by Navigant Consulting, Inc. in April 2005, concluded that one of the advantages Berkeley would enjoy, along with all other government agencies, includes low cost financing, that will allow the city to produce energy at 40 percent below what an investor financed plant would cost. Navigant recommended that once Berkeley committed to a Community Choice Aggregation program, it could begin by purchasing power on the open market, while it proceeds to build a publicly financed, community owned power plant. 

Neal deSnoo, Berkeley’s energy officer, stated that the city is investigating a wind power plant, and that the idea at present is to work with Oakland and Emeryville to jointly finance and construct this plant. DeSnoo stated that Berkeley’s share of costs will depend upon the pro rata share of the city’s energy usage. Berkeley’s share of the construction costs is estimated to be around $130 million, with total costs at half a billion dollars. 

The City Council allocated $100,000 in this year’s budget to continue with the process of evaluating a Community Choice Aggregation Program.  

Berkeley’s Energy Commission, on Dec. 14 recommended that the City Council move onto the next step, which is the development of a business plan. Citing the benefits of an energy policy that is under local control, developed for “social good rather than the interests of corporation,” the commission is urging moving to the next step states: “… Berkeley could choose to emphasize renewable energy sources within its procurement portfolio and to purchase and ‘grow’ renewable energy sources.… that would allow Berkeley to control its energy resources and to chart a coherent and sustainable energy future.” 

Neal deSnoo stated that this action taken by the Energy Commission, may be the “most significant” action the Energy Commission has ever taken. DeSnoo also stated that Oakland Emeryville are in a parallel place in their process as well. This issue is expected to go to council this month.