Marin supervisors are telling cities and towns the county will cover start-up costs for creating a Marin energy authority, the first step in the road toward Marin Clean Energy.

Cities and towns are getting ready to vote on whether to join an energy authority, a requirement before submitting an application to the California Public Utilities Commission and soliciting proposals from energy suppliers. Starting next month, cities and towns, as well as the supervisors on behalf of the county, will take formal votes on whether to join a joint powers authority.

The supervisors sent a letter to the cities and counties stating the county's intentions to cover start-up and administrative costs for an energy authority "until a final decision is made, subject to reimbursement from the JPA should [Marin Clean Energy] go forward."

The county will front $155,000 in a first phase of creation for the energy agency, and then review the results. If all goes well, it will put up another $175,000. Eventually an additional $170,000 will be necessary. On Sept. 30, supervisors agreed to commit the county to the first two rounds of funding.

The assurance from supervisors should be an incentive to cities and towns that might have hesitated to consider the Marin Clean Energy proposal if it would have meant throwing some up-front money on the table. The supervisors are making it clear that the county will put the money down. When Marin Clean Energy gets up and running, the county will expect to be reimbursed from electricity rates.

If Marin Clean Energy is a bust, if not enough municipal entities sign on to the plan to make it feasible, the county will be the only entity to have lost a financial stake. In times of tight city budgets and uncertain economies, that incentive means something. It takes off the table the argument that cities must gamble on an uncertain outcome for Marin Clean Energy in its earliest phase.

"We put up a chunk of money," says Supervisor Hal Brown, "and the cities aren't putting up any money at this time, so why not get in it?" Fairfax is so far the only city to formally vote its support for Marin Clean Energy.

Considering the supervisors' letter urging cities and towns to join the energy plan, it's a fairly sure bet, they will cast their formal vote next month for the county to join. That means the Marin Clean Energy plan could become reality if, at the least, either Novato or San Rafael vote to join. That would give the entity enough participation to proceed.

Even after joining the joint powers authority, the county, as well as the cities and towns, will have several opportunities to take what are being called "off ramps." The first of those off ramps would come after the JPA forms and solicits proposals and bids for renewable energy. The stated goal of Marin Clean Energy is to provide electricity generated from 50-percent renewable sources at or below the price PG&E charges.

Customers could receive electricity from 100-percent renewable sources for a higher fee, which Marin Clean Energy advocates estimate at 10 percent above the 50-percent tier. The exact costs for electricity from renewable sources will be determined after the JPA forms and sends out requests for proposals.

If the numbers don't look good, any city or town—-and the county—-that has joined the JPA to proceed with Marin Clean Energy can withdraw. If the process continues, customers will have several opportunities to opt out of the Marin Clean Energy system and stick with PG&E.

"We're hopeful" the cities and towns will join the county in its mission to form Marin Clean Energy, says Brown. "We're trying to work very closely with the cities, so we are sharing all the information we have [in the hope] they will look at it the way we do: This could be a huge benefit for the people and the municipalities."

One of the main benefits for the municipalities Marin Clean Energy would deliver is a boost to meet AB 32 mandates. That law requires the California Air Resources Board to develop regulations and market mechanisms that will ultimately reduce California's greenhouse gas emissions by 25 percent by 2020.

Mandatory caps will begin in 2012 for significant sources. The onus is on cities and counties to get moving toward that goal, and Marin Clean Energy could represent the biggest single step the county and local cities can take toward meeting the state mandate.

If the joint powers authority is formed, and then the prospects of actually purchasing clean power fail to pan out, the members of the joint powers authority could still use the new agency to tackle energy-issues related to reducing greenhouse gas emissions and meeting AB 32 targets. But the agency would lack a revenue stream.

PG&E has been far from a passive player in the move many counties and municipalities across the state are taking to consider forming energy authorities. The impetus for the movement comes from AB 117, a law sponsored by former Assemblywoman Carole Migden. It passed in 2002 and allows "community choice aggregation," which allows communities to buy power from whatever provider they choose. The law gives California the chance to join other states already at the community choice destination or on the road there.

While the county and the local municipalities have been investigating community choice and hosting information meetings about Marin Clean Energy, PG&E has made its voice heard. The utility company argued that Marin Clean Energy could never meet its stated business-plan goal of providing electricity from renewable sources at or below the PG&E price. The utility's pushback against community choice in Marin echoes a PG&E tactic it has employed elsewhere.

The San Joaquin Valley Power Authority actually is ahead of Marin on the road to community choice. The goal there is to provide customers with electricity at a rate 5 percent less than PG&E.

David Orth, general manager of the San Joaquin Authority was on hand Sept. 30 when Marin supervisors discussed the next steps in forming Marin Clean Energy. Orth and San Joaquin know PG&E plays hardball. When his agency was spreading the word about community choice, PG&E mounted a blistering and aggressive campaign to convince municipalities there to back off from the power-authority proposal. San Joaquin believed the campaign was unfair enough to file a complaint with the sate Public Utilities Commission in June 2007, alleging that utility's tactics were unfair.

In April, San Joaquin and PG&E filed a settlement agreement with the PUC. That agreement, in the words of Orth, "establishes interim rules of conduct that must be followed going forward until longer-term rules are developed."

PG&E, although it has argued forcefully for its cause in Marin, has never taken the aggressive stance nor employed the tough tactics it presented in the case of the San Joaquin Power Authority. That difference was all the more evident recently when the utility company reached out to Marin and said it just might be able to provide renewable power at a competitive cost. That abrupt shift came after Marin Clean Energy proponents have for 18 months asked the utility to offer up what it could do with the Marin Clean Energy proposal. Only recently came the suggestion that perhaps the utility can make it pencil out and will present Marin with a concrete proposal that can satisfy Marin Clean Energy goals.

Supervisor Judy Arnold said at the Sept. 30 Board of Supervisors meeting she heard that PG&E was ready to present a concrete proposal in the next few weeks, or perhaps next month. That timeline is interesting, considering that cities and towns, as well as the county, will be voting next month on whether to join energy joint powers authority.

"I am very skeptical [PG&E can] come in with anything concrete enough in the next few weeks to amount to much," says Supervisor Charles McGlashan. "The more important timeline involves them talking to the new board of directors of the [new energy] agency come January. Nothing is going to convince anyone to divert their attention or set this aside in the near term. We'll form the new agency, and then I'll tell PG&E, as I have for the last couple of months, 'Bring those ideas to the new board.'"

PG&E could act as a broker for Marin Clean Energy and supply the new agency with renewable power in much the same way as any other power broker. Does PG&E really want in the Marin Clean Energy tent? Even if it does want entrée, the utility company still will find Marin Clean Energy setting rates, for customers, and that's a big distinction.

By controlling rates, Marin Clean Energy could, for example, provide help to targeted groups of low-income residents. And Marin Clean Energy could use tax benefits and rebate arrangements to benefit a local clean-energy industry, with direct control over the outcome.

Proponents say a locally controlled clean-energy authority could boost the clean-energy portfolio of the county, cities and towns while at the same time stimulating a new clean-energy economy. Marin Clean Energy could act as an enterprise agency. "That's a very powerful tool," says McGlashan.

Unlike Berkeley, which has a solar-financing program that uses revenue derived from a premium on property tax, a Marin Clean Energy plan could draw revenue from its rates to power financing districts and power-purchase agreements.

The concept of power-purchase agreements, while relatively new, holds promise for stimulating the solar-power market. One of the biggest drawbacks to creating a solar-power system, or even installing a solar array on an individual home, has been the relatively high cost of hardware. In a power-purchase agreement, a homeowner can slash the cost of installation and still receive major financial benefits.

A company that offers homeowners a power-purchase agreement can reduce the cost of installation by about half. In one example, a San Jose homeowner paid about $17,000 for installation, $30,000 less than original estimates from an installer. The power-purchase company owns and maintains the solar system, and then sells the power generated from the system to the homeowner at a greatly reduced rate than what PG&E charges.

Any power a homeowner needs above that generated from a solar power-purchase agreement, Marin Clean Energy could provide.

A glitch in the power-purchase agreement idea is that it's aimed at homeowners. Not everyone who wants to go down the clean-energy solar path owns a home. Proponents of community solar say linking solar arrays around a community, on public buildings as well as homes, can create what amounts to a mini-grid of renewable power that neighbors can access for their needs.

The problem currently is that laws and regulations restrict the opportunities of generating power in one location through solar or other renewable and then sending that power to other locations. The energy must enter the power grid, which has tight controls and incredibly complex rules.

A proliferation of community choice aggregators like Marin Clean Energy could stimulate calls for major changes in regulations that would allow true neighborhood solar grids, which in a blue-sky scenario could be linked in a series of interconnected but non-monolithic grids.

Some people remain skeptical that even with the creation of a clean-energy agency, they never could be certain they were purchasing renewable energy. Because all electricity gets transmitted over the same grid, they reason, the energy that enters their home could come from a dirty source, a plant that uses coal or natural gas. (Although natural gas is cleaner than coal, it's still a non-renewable fossil-based source of energy.)

Representatives from the California Independent System Operator, the entity that oversees the energy grid, say strict accounting procedures ensure that when an agency like Marin Clean Energy buys power from a renewable source, that energy goes into the grid and is tracked through the grid until it comes out at its destination. And the energy from renewable sources displaces electricity from non-renewable sources; it isn't just added to the overall energy on the grid.

"It's as if you pour the clean energy in at the start of the process, and you suck it out through a straw at the other side," says McGlashan. "For all intents and purposes, you are pulling out the electrons you put in there."

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