MARIN CLEAN ENERGY. introducing. MCE How It Started 1/24/2011. Community Choice Aggregation. Policy. Grassroots. Public Surveys*

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1 introducing MARIN CLEAN ENERGY MCE How It Started Community Choice Aggregation Policy AB 117, 2002 Enabled cities and counties to procure electricity Automatic enrollment, opt out feature Grassroots Opportunity for greener energy Combat GHG emissions Pushed idea forward to local political bodies Public Surveys* 90% value greenhouse gas reduction 74% support local government becoming a provider of greener energy sources 69% willing to pay up to 5% more for a greener option 58% willing to pay up to 10% more for a greener option *2007 Countywide Survey Godbe Research 2 1

2 CCA A Hybrid Approach IOU Investor Owned Utility (PG&E) PG&E Purchases Power PG&E Maintains Transmission Lines PG&E Provides Customer Service CCA Community Choice Aggregation (Marin Clean Energy) MCE Purchases Power PG&E Maintains Transmission Lines PG&E Provides Customer Service Public Utility Municipality (SMUD, Palo Alto) Muni Purchases Power Muni Maintains Transmission Lines Muni Provides Customer Service MCE How It Started Community Choice Aggregation Marin Energy Authority Policy AB 32, 2006 Global Warming Solutions Act 30% GHG reduction by 2020; 80% reduction by 2050 Plans & Studies Feasibility Studies Risk Analysis Business Plan Peer Reviews Formation Formed in Dec County of Marin Belvedere Fairfax Mill Valley San Anselmo San Rafael Sausalito Tiburon 4 2

3 MCE How It Started Community Choice Aggregation Marin Energy Authority Marin Clean Energy Launch May 7, ,000 customers Municipal, Residential, Commercial Operation Customer Feasibility Service Plans Energy & Studies Efficiency Studies Community Risk Involvement Analysis Business Plan Peer Reviews Growth May 7, 2010 Launch January ,000 9,000 Marin customers at full enrollment Municipal, expansion Residential, Commercial Phase 2 expected in Possible geographic 5 MCE How It Works The Basics 6 3

4 MCE The Customer Experience What Changes? MEA procures electricity through energy producer (SENA) Higher renewable and carbon free content than PG&E Improved net metering program and new local programs New page in customer s bill; electric generation charges only What Stays the Same? PG&E continues to deliver power and provide customer service, billing, and power line maintenance Senior, disabled, low income programs Tiered pricing structure 7 MCE The Customer Experience Third Party Energy Charges 8 4

5 MCE Why It Matters Consumer Choice & Rate Competition Expanded market leads to better rates Higher % green power Localize energy supply; price stability Financial & Community Advantages Modest up front investment for long term economic benefits Ratepayer dollars stay in local community Workforce development Local rate setting, supply mix, and accountability U.S. Environmental Protection Agency Greenhouse Gas Equivalencies Calculator Environmental Benefits Tremendous impacts on GHG reduction Wean from fossil fuels and expand renewable energy production Environmental compliance 9 MCE Why It Matters GHG Reduction Sample Measures for Marin GHG Reduction Goal: 797,130 tons CO2e CO2 Reduction (tons per year) 800, , , , , , , ,000 Marin GHG Reduction Target Green Building Standards Marin Energy Watch Partnership Install Solar Panels on Municipal Facilities AB811 Marin Clean Energy 10 5

6 CCA Is it New? CCA legislation in 6 states The Cape Light Compact (MA) 200,000 customers operating since 2001 Northeast OH Public Energy Council 126 communities in nine counties Serving more than 2M customers Start ups in IL and possibly NJ Numerous others in the works in CA San Francisco, Sonoma County, San Joaquin, East Bay 11 Energy Options Light Green Light Green Initially 25% renewable, increasing to 50% within 5 years Competitive Costs 78% Fossil Free 12 6

7 Energy Options Light Green Renewable Energy Content MCE Light Green versus PG&E 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 25% 100% 100% 100% 50% 20 33% 33% 33% 12% 15% 20% Year PG&E MCE 13 Energy Options Deep Green Deep Green 100% renewable $0.01 premium for kilowatt hour Additional $10 monthly fee for early membership 14 7

8 Renewable Energy 30% Renewables Portfolio Standard Projected Procurement % 20% California RPS Mandate 20% 15% 10% 5% 0% MEA PG&E SCE SDG&E SPPC PacCorp 15 Renewable Energy MCE Renewable Energy Sources May October 2010 Fuel Type County State Wind Benton Washington Solar Stanislaus California Biogas Gilliam Oregon Hydro Bonner Idaho Other energy sources include the CA System Power mix and Hydro electric. 16 8

9 Renewable Energy MCE Renewable Energy Sources May October 2010 Fuel Type County State Facility Wind Benton Washington Nine Canyon Wind Solar Stanislaus California Tri Dam RECs Biogas Gilliam Oregon Burlington Biomas Columbia Ridge Landfill Gas Hydro electric Bonner Idaho Tri Dam Hydro Other energy sources include the CA System Power mix. Renewable Energy Renewable Energy Procurement Detail Megawatt hours (MWh) May October ,224 Nine Canyon Wind 7,081 Burlington Biomass 3,216 Tri Dam RECs 9,238 Columbia Ridge Landfill Gas 36,000 Tri Dam Hydro 34,241 System Purchases 18 9

10 Energy Options Our Goal Procure 100% renewable energy for all MCE customers by 2020 at competitive rates MCE The Economics Comparison of U.S. Electric Rates (2006) 20 10

11 MCE The Economics Public Agencies CAN Compete California s 39 public utilities have 20% lower rates on average 25% of Californians receive their power from municipal utilities 2008 Average US Retail Electric Rates Cents/kWh Publicly Owned Investor Owned 0 Residential Commercial American Public Power Association, Annual Directory & Statistical Report 21 MCE The Economics How Can MEA Remain Cost Competitive? 5 year contract with SENA Other long term power contracts Low overhead and non profit status No shareholder profits; no power plants or bankruptcies to pay off Low borrowing costs Discounts on prepayment of energy Tax exempt financing 22 11

12 MCE The Economics How Can MEA Remain Cost Competitive? 11,487,000 Cost of Energy Staffing Costs Legal Counsel Technical Consultants Communications 2,049,946 Data Manager Audit and Accounting 1,114,054 1,153,400 Office Expenses 355, , ,000 Energy Efficiency Programs Debt Service 15, ,100 93, , ,000 Deposits Build Reserves 23 MCE The Economics The CCA Business Cycle From Pragmatic to Visionary PHASE TIME FRAME FINANCING START UP 1 5 years Solidify operations and customer Grants, term loans, working capital base Energy wholesaler/data Working cap; ratepayer revenue management Launch local energy programs Operations revenue MID TERM Market/customer expansion PPAs and co investments LONG TERM DBO local energy projects (solar, wind, geothermal, biomass) Sell excess power 5 10 years 10+ years Operations revenue Tax exempt project bonds Operations reserves; operations revenue; tax exempt bonds; term loans Income back to operations 12

13 MCE Risk Mitigation Extensive technical, legal and public review No recourse to MEA members joint and several liability not permitted firewall in all energy and vendor contracts No risk to taxpayers credit exposure limited to revenues Funds budgeted for legal and regulatory support Investor owned utility opposition on going, but quieter now CPUC has taken actions that support MCE efforts State legislative hearing on 11/10 to strengthen law and close loopholes 25 Energy Efficiency and Beyond We believe in the power of energy efficiency. The power for homeowners and renters to save money, the power to live better, and the power to help the earth by reducing energy use in our homes and businesses. MCE customers are eligible for a $500 rebate for participating in Energy Upgrade California MCE is providing funding for installation of 5 electric vehicle charging stations in Marin that will be powered by our green energy. 13

14 Net Energy Metering Marin Clean Energy empowers customers with access to one of the best Net Energy Metering programs in California. Premium rates (base rate plus $0.01 per kilowatt hour) paid for the excess electricity that customers produce Excess generation credits roll over month after month Credits are paid out on an annual basis if they are $100 or more Credits never zero out $4 bonus credit each month customers generate excess power. 27 Feed In Tariff Marin residents, property owners, project developers can sell energy from renewable projects directly to MCE Available January 1, 2011 Projects of 1 MW or less 2 MW program capacity Ability to increase 10, 15, or 20 year term 14

15 Coming Soon More local renewables 2010 RFP Community Solar Program making solar energy accessible when on site generation is not Demand Response Programs encouraging customers to reduce demand, thereby reducing the peak demand for electricity 29 MCE Early Success 1 st Community Choice Aggregation program to go live in California #13 on Environmental Protection Agency s list of Top 20 Power Purchasers in the US Marin will be the 2 nd community in the US to reduce GHG emissions so drastically. 15

16 MCE Early Support More than 50 businesses signed up for Deep Green Reducing greenhouse gas emissions by 2,070 tons each year Equivalent of removing 396 cars or eliminating electricity from 251 homes Approximately 9,000 customers 5% enrolled in Deep Green 225 Businesses have pledged their support of Marin Clean Energy 31 Questions? Comments?