On Tuesday, the Oakley City Council took steps to move all Oakley residents off PG&E and join a Community Choice Energy network with Marin Clean Energy (MCE).
Should the council approve this letter of intent at its next council meeting, within a 6-month period all Oakley homes would be automatically enrolled in MCE. PG&E would then only handle the delivery of power and billing.
Although residents would have a choice between both companies, staying under MCE would cost residents a $13 monthly exit fee from PG&E. If residents want to go back to PG&E, they would have to call MCE or submit a form online to opt out–if residents wait to long, they could face a $5 fee.
During Tuesdays meeting, the council debated if leaving PG&E for MCE would benefit residents which came down to cost. The council was provided with sample bills from September 2015 which showed them to be lower than PG&E.
However, prior to December, the average Marin Clean Energy customer paid an exit fee of $6.70 per month. But with the California Public Utilities Commission December decision, that fee doubled to $13 for the average Marin Clean Energy customer.
For the first time in several years, Marin Clean Energy customers are paying more for their electricity than PG&E customers which was not reflected in the staff report.
According to a Press Release from the City of Oakley on Thursday:
Most residents wouldn’t even notice any real change in how power is delivered to their homes: PG&E will still handle the delivery and the billing, but MCE would be the provider of the actual power. MCE has historically been somewhat cheaper that the PG&E sources of power, but residents could opt to stay with PG&E for all components the provision of electrical power.
However, during the City Council Meeting, Dawn Weisz, CEO of MCE, confirmed Tuesday that because of the PG&E exit fee each month, they were not cheaper than PG&E. Meanwhile Councilwoman Sue Higgins believed residents with solar on their homes would be paying more.
On Tuesday, the Council decided to move forward with the Letter of Intent in a 4-1 vote (Higgins voted no) but will bring back the Ordinance as an agenda item versus placing it in the Consent Calendar.
Recap of the Discussion from the Tuesday Council meeting:
Josh McMurray, Oakley Planning Manager, highlighted that MCE has an open inclusion period which expires in March 31, 2016. For the city to take advantage to waive the fee for the membership analysis Oakley would have to get all documents to them. If council approves the move, Oakley could get before the deadline and not pay a fee.
McMurray further highlighted that Contra Costa County is interested in the Community Choice Energy and are looking into forming a community choice aggregator or joint powers authority similar to MCE. McMurray noted that the county is in the very beginning stages of the process with community outreach and had three community meetings and some outreach—it could take 18-24 months to see if it’s even feasible.
On Tuesday,Oakley had the choice of moving forward with MCE, sit back and not join anything and watch how things play, or join in with other cities in the county and join a Contra Costa county power movement—which is unknown what the total cost would be or timing.
“MCE is a proven entity with a track record to provide competitive rates and a clear implementation strategy for Oakley to follow. In doing so, if we were to go with MCE, they would waive the $15,000 membership analysis which we would otherwise have to pay at some other point,” explained McMurray. “Its not clear if MCE will allow membership in the future, so while they are allowing membership now, this may not be an option a year or two down the road.”
McMurray further highlighted what this really was about was giving residents a choice to who produces or procures renewable power percentages over and beyond what PG&E offers. Staff did recommend approval of the ordinance.
Councilwoman Vanessa Perry asked the representative of Marin Clean Energy if the city does choose to join, how would it work as far as the residents and businesses in the city who will be opted in. She asked about bills and what residents could expect.
Dawn Weisz, CEO of MCE, explained that they would provide outreach into the community to spread word about the program before service would begin along with advertising. She highlighted mailers are sent out letting the community know they now have a choice for energy generation.
“When we do begin serving in your community, customers generation would be defaulted to us. We would then begin supplying the generation. They would still get their bills from PG&E and they would continue to charge customers for the transmission distribution of energy,” explained Weisz. “So we are really partnering with PG&E to determine where the power is coming from and getting it into the grid. We are taking care of the generation piece; PG&E still gets to do the transmission, distribution and billing.”
Weisz further highlighted the generation line item currently on one’s bill would switch MCE.
“When we reach out to the community we will be letting people know they have a choice to stay with MCE or opt out to 100% renewable, which is our deep green option. That one costs a little more which is why we do not automatically put people on that program but they can easily choose it. They can also choose to opt out all together and choose to continue to get their generation from PG&E.”
Perry then asked about solar and how does that work.
Weisz stated those customers continue to have their credits applied for their solar and that there really is no change but noted as an incentive to come to MCE they pay a little more than PG&E.
Perry then asked if they move forward and the community is opted in, if PG&E charges a monthly opt out fee.
Weisz stated PG&E does charge a fee which is currently at a $13 per month average.
“That is the highest we have expected to see it go, we expect it to come down from there,” explained Weisz. “It’s reset every year as last year it was $6 and before that it was lower.”
Perry followed up by asking if customers are charged that fee every month as long as they are with MCE.
Weisz highlighted that they were but the cost diminishes over time noting the purpose of the fee was to cover PG&E for any purchases they made on your behalf before you departed noting that eventually it could go away but would take many years.
Councilman Doug Hardcastle asked when and if MCE comes to Oakley, are they opting into MCE or are they opting out of MCE.
“Customers would be given the choice to opt out of MCE,” said Weisz.
Hardcastle stated so we (Oakley) are automatically opted into MCE.
“I don’t particularly like that. If I want to sign up for something, I want to sign up for it as opposed to hear now you have to try and get out of it,” said Hardcastle.
Weisz noted that challenge and how it’s a concern, but stated its how state law was written up which enabled community choice. The thought behind it was right now there is no choice and only one monopoly provider which is a private company.
“Customers now have a choice which they never had before,” stated Weisz.
Hardcastle disagreed.
“You kind of take away the choice when you are forced into MCE and then you have to take the time to get out of MCE,” said Hardcastle.
Weisz noted the counter argument was “nobody ever voted to be in PG&E.”
Councilwoman Sue Higgins asked if Oakley notified everybody today that if they voted for this we were going to put you in MCE and you have to get yourself out or if that education would come later.
McMurray noted the public education really comes after a decision by the council but said they do have a period where if Oakley wanted to do its own outreach, while MCE only requires a second reading of the Ordinance and Adoption. He further highlighted that there was time for the city to do some community outreach to gauge interest.
“We do have some time for public outreach to gauge community interest if you would like for that to happen, otherwise, we did not engage the community prior to this meeting,” said McMurray.
Higgins disagreed with staff.
“I don’t see that I would have my choice like I would with Comcast, Dish Network, I feel like I am being put in this and now I got to get myself out of it. I also see Solar as 100% renewable and I have solar so that means it would cost me more. I may or may not get more back but it would cost me just because I have solar,” said Higgins.
Weisz stated that if someone already had solar, that is different than choosing the Deep Green Program—which is for customers who do not have solar or have very little usage.
“I think on of the things that communities really like about community choice is that up until now getting solar on your roof is not easy if you do not have the means to do it or up front cash, You don’t have a roof in good condition or own a home. You are not going to have the Solar Cities knocking on your door. A lot of low income and renters do not have access to solar energy to the same degree as homeowners do and Deep Green is an option for folks are wanting to get solar on their roof,” explained Weisz.
Councilman Randy Pope asked about the fees phasing away and if there was a sunset.
“The formula that is used has been a black box and now that a lot of community choice programs are happening around the state, there is a lot of talk and more attention on this particular charge. We did a data request with PG&E for December and asked how long the PCI fee would last for our earliest customers in 2010 and they said the likely sunset would be 2043,” explained Weisz. “That really didn’t fit with the input that should be going into the calculation. We are not sure if that was an error and hope to find out more at an upcoming workshop.”
Weisz further highlighted there is pressure against PG&E to fix these fees and they were hopeful it would be addressed.
Mayor Kevin Romick asked what were the advantages for Oakley homeowners to stay with MCE versus opting out and returning to PG&E.
“I think there are quite a few, I think number one we are getting a lot of renewable energy built across the state. There could be renewal development in this community or around it in the county,” said Weisz. “The other thing we are bringing is transparency to the process where folks energy comes from. If you were to join, you would have a member on our board. Our Board sets rates in public session. We have a 30-day review process on any proposed rates before they are approved by our board. We set rates one time per year unlike what they do at PG&E where they could change multiple times per year. We also set our budgets in public and we approve all our power supply contracts in public session… it allows the public to be a part of the process. The last thing is choice. Having a choice is something we think is very important.”
She also added energy efficient programs to help people reduce the amount of money they spend on energy on a monthly basis as well as rebates and a low income solar program. Lastly, MCE participated in the climate talks.
Mayor Romick stated that when most people think of competition and choice, they think about price.
“Is there going to be any noticeable price difference if I stay with the 50% renewable MCE or will I see any price reduction,” explained Romick. “When we talk choice and competition, that is where people are going to look at, that is the bottom line.”
Weisz stated there was one thing that MCE could guarantee which is people will always have a choice to go with the lowest price noting that right now there is only one choice.
“For the last 18-months, across the board, our rates have been lower than PG&E and low enough that they have been absorbing that exit fee (PCI). We have had our rates so low, people were still paying less even after paying that exit fee,” said Weisz. “As of January, our rates are still lower, but that exit fee makes it a little bit more expensive with us. Public agencies over the last 5 years tend to have lower costs for power—such as SMUD which is 25% below… over time, we have shown to have more stability with our rates and tend to be lower.”
Mayor Romick further asked about choices such as if down the road the county or another entity becomes available if Oakley could have those options as well.
Weisz noted that because of how the law was crafted its really tied to local government choosing one option and could not have multiple options in one area.
“We can’t have temporary members. When members join, it’s a joining for the long-haul so that we can procure cost effectively for your customers,” said Weisz.
Mayor Romick asked about the process and if they voted yes today, MCE doesn’t take over tomorrow, but it takes a 6-month process giving the city time to educate the community.
Weisz noted that the first thing that MCE would do is an economic analysis to ensure the load in the community would be an okay fit—a 3-4 week process. The next step is procurement. Then outreach would occur to the community. The enrollment would then occur in the late summer or early fall.
Mayor Romick then asked about opting out of MCE to stay with PG&E.
Weisz stated they begin sending out notices 3-months prior to the switch over. Opting out to stay with PG&E is a 2-minute phone call or on the internet. She admitted there is a 5-10% opt out rate. If you do not opt out within 6-months, it’s free. After, it’s a $5 fee.
City manager Bryan Montgomery interjected saying that the community will not see a difference and if they do hopefully it’s at a lower cost because that historically had been the case with MCE.
“My prediction is every city will select some sort of community choice partner, we had just been stuck with a monopoly for 60,70, 80 years,” said Montgomery. “So for the decision for the city council is when and with whom. So this is an option we have researched and feel most comfortable with.”
Councilwoman Perry asked if it was possible that people would have a higher bill with MCE over PG&E because of the fee.
Weisz replied that right now they are higher but noted PG&E changes their rates 3-4 times per year.
During public comments, it was asked if the CARE Program under PG&E would continue and it was stated it would and there is no change—35% of their customers in Richmond are CARE customers.
Councilman Pope encouraged the public to read the staff report which highlights 10 pages of PG&E rates which shows examples.
“Every single example I am seeing it cheaper by a couple dollars,” said Pope. “I am not a big fan of government guaranteed monopolies which is what PG&E has. They are guaranteed a certain amount of profit that they extract from the rate payers and that is guaranteed by the state so any type of form of competition generally I would be in favor of.”
Pope highlighted that he liked that MCE was free right now whereas the county has a fee, around $30,000 to get started with no guarantee where the price will end up.
Councilwoman Higgins stated she liked competition and choice also, but she wanted more choices than just MCE.
“I would like a full deck to choose from like we do with AT&T, Sprint, Verizon, Mobile, I want to wait until we get more choice because if we go into this now, we have to pay a penalty to get out if we see a choice we like better,” explained Higgins. “This is starting now to help this company come on ground and build their energy plan. They have great stuff, but it sounds like it’s the beginning.
Councilman Hardcastle stated he agreed that less is better and options were good noting they get both with this idea and he liked it.
Councilwoman Perry stated she loved the idea of going green and is not a fan of PG&E.
“My only concern with this is if we vote yes, we have 10,000 rooftops so all these people besides for the people in this room have no idea this decision is being made so they could either stay with MCE, get this fee, their rate may be lower, and they get the benfit of being greener but they have this fee for 30-years. If they opt out of MCI after 60-days they get a $5 fee. Either way, its not really giving people an option,” said Perry. “I just don’t like the idea of us making a decision that is going to affect everyone on whether or now they have to opt out or go with this new thing and get an increased fee from PG&E without any of them knowing about it.”
Mayor Romick stated once again he is all for competition and he is not a PG&E fan.
“I think there will be ample time to let the public know and give them plenty of opportunity to opt out in a 6-month period for free of charge with no fee,” said Romick. “To me, this is bringing in competition, possibly lower rates in the future for people its always a good thing to mix it up and provide some options.”
Councilman Hardcastle encouraged the item not be placed in consent and place it as an agenda item during the second reading.
Motion carries 4-1 with Higgins voting no.
18 comments
Why were Oakley residents not notified about this? I live on a budget. I can’t afford to pay more and now they have a fee when I didn’t do anything? This is wrong.
I would like to point out that it is not a choice when you are automatically enrolled in something and then you have to opt out. The residents should have a choice to instead opt in if they are confident they are cheaper. Shame on this council.
Oakley city staff screwing over residents yet again. Can’t wait to leave this town. Good job Sue in voting no.
Another Brian Mongomery fiasco. Demand the city get rid of him folks.
If I wanted Government to opt me into something without me even knowing about it I would move to China. I really cannot help but think our council is worthless if they think this is a great idea. Anyone supporting this will not be getting my vote and I will make sure to tell all my family and friends not to support them either. Whatever staff worked on this should be fired and I agree with Julio, Montgomery needs to go. The city has gone to hell and Montgomery is ensuring our failure.
Yeah, if only they had some kind of public forum where our city leaders discussed these matters, open to comment, and the voted on them. Ugh, if only.
When you read the whole article, you realize that MCE is using the same high pressure sales tactic many gyms use. It is only free to join until a certain date…. Why is that ? Because it creates a sense of panic in the buyer. They want to get you signed up before another business offers a better deal. MCE set the due date…. But why would that even be necessary ? If they are as great as they proclaim to be, the business will sell itself without NEEDING to use high pressure tactics. So my question here is: Why are our council members so foolish they are falling for it ?!?!?!
Gas has been deregulated for years, without the entire city being switched. I used to get my gas from ACN because at the time their rates were cheaper. It was billed in small print on my pg&e bill. Almost unnoticeable but I knew it was there because I CHOSE to sign up for it. There were other companies I could go through as well…..ALL WITHOUT THE CITY SIGNING ONE CONTRACT. We DON’T have to join MCE as a city. If individuals can sign up for alternative electricity all on our own. The deregulation of electricity has been in the works for many years and there will soon be an open market. Why is Oakley jumping the gun and committing us to a CONTRACT ? They are going to make it so difficult for us to choose the power we want because they have us locked in. The question is… What is in it for them ? Be smart people. Learn more about this.
We will be automatically enrolled in MCE and will have to jump through the hoops to Opt out. Not everyone reads what looks like junk mail from the city nor do they look at their pg&e bill with a microscope to notice they have been switched. The billing will continue to come from pg&e as always. Elderly especially may fall victim. They have been used to the same bills for so many years they may not realize they are getting hit with the $13 monthly surcharge!!! My 75 year old mom lives in Oakley and is on a very very tight fixed income. Her pg&e runs about $18 a month for her tiny apartment, a $13 surcharge would nearly double her bill !!!
Shame on you City Council for falling for their tactics. I say no to this. They would be charging people with Solar Panels more too which is not a savings for me. I don’t like having to be forced to opt out of anything. I would rather have a choice presented to me up front, not made for me.
Shame on the City Council and Josh McMurray in trying to sneak this boondoggle through. It smacks as a sweetheart deal between MCE and the City. Is Dawn Weisz related to someone in town? Why wasn’t a representative from PG&E at this meeting to express their side of the story? I would whole thing would be ripe for litigation.
This is a boondoggle the Council raced by a busy, disconnected and unsuspecting public that has blind trust in its elected officials to do the right and moral thing. Shame on all of them and the Josh McMurray, the City Planner. My hope is that Bryan Montgomery, our City Manager, will rethink this dangerous course and stop it in its tracks. That said, this smacks of a sweetheart deal. Is Dawn Weizs related to someone in our town? Why wasn’t a PG&E representative at this open meeting to present its side of this debacle? I sense there will be litigation in the future of a potential MCE takeover of Oakley’s energy needs. Thank you Council member Sue Higgins for your stand-alone, clear-headed position against this issue.
PGE is already purchasing green energy from renewable generators and selling that power to their customers at the same rates we already pay. I wish I could articulate how ridiculous MCE and the idea of paying more money for the same energy really and truly is. All I can say is please do an adequate amount of research before you make up your minds. No matter what you ultimately decide just be sure you know what you’re signing up for. I’ve been in power generation for 12 years. I know the industry well and the things I could share with you would only add frustration to your opinion of big business whether it be small green energy business or other wise. Best of luck folks!
Disappointed with this Council action. Have to agree with Hardcastle on this one.
I should have a choice whether or not to opt into MCE. Don’t take my choice away and then charge me a fee to opt out. Other cities and the county are taking time to look at this item. Why is Oakley rushing? The cost analysis does not compare apples to apples. PGE, as already mentioned, is moving towards renewable energy. What is in it for the city?
We watched the Brentwood Council Meeting on this topic from Jan…. this is what the Brentwood council said on the issue and chose not to rush it.
Bob Taylor – We are here to represent the residents, not the city. For us to do something of this nature, yes its the wave of the future but I would opt with the county for exploratory and not tied on the dotted line that we are with someone for eternity.
Erick Stonebarger – highlighted if you tell me we need to make a decision quickly, I am not going to carry your water and will go the other way.
Steve Barr – agreed they represent the residents, not the city. Stated they needed to have a workshop to invite the public to have an opportunity to hear the presentation and discuss it before they get a line item showing up on their bill. Did not like the fact residents had to opt out versus opt in.
Gene Clare – by going to the county, they have time to research it more and get community input.
Thank You Councilmber Higgins for your no vote on this item.
City councils (all cities) want what’s best for the city, not the residents. Anybody who doesn’t think (or understand) this is doesn’t understand city councils. It took me a LONG TIME to realize this. They PRETEND to care about the residents. They want what’s best for the city… PERIOD!
Right you are Nick. City Council members need votes. Tried an true formula with a disinterested voter base is to please the city unions and the city workers and secretly work for the big money donors. When you follow the money it always leads to the resident pockets.
What portion of the fee gets kicked into city coffers? Sounds like a tax in disguise. I see litigation on the horizon. You shouldn’t be able to force a few on a non participant of free trade energy. Staying with PG&E should not get a tax fee.
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