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Green Scheme 

The city's master plan for cleaner energy is fraught with risk. And, like it or not, you're already signed up.

Wednesday, Jan 14 2009

Page 4 of 5

However, both these programs were driven by goals different from, and in some ways antithetical to, those that launched CleanPowerSF. NOPEC and the Cape Light Compact set out to save consumers money, rather than promote aggressive renewable-energy standards. By contrast, the brand of CCA that has evolved in eco-friendly regions of California places a premium on greener power. "CCA is the closest thing to a silver bullet we have for jump-starting renewables at the local level," said Tam Hunt, energy program director for the Community Environmental Council in Santa Barbara.

But to promise cost savings in the same breath is unrealistic, according to Severin Borenstein, director of the University of California Energy Institute. CCAs, Borenstein said, are "generally being oversold. What they cannot do is both go to a much richer renewables mix and save money. Renewable energy costs more. There is no magic bullet here."

Solar energy, which ranges in price from 10 to 40 cents per kilowatt-hour, can cost up to ten times as much to produce as power from natural gas or coal, according to the National Resources Defense Council, an environmental group. (Wind power is more reasonable, selling at 4 to 6 cents per kilowatt-hour.)

San Francisco's customized version of Community Choice, with its seemingly incompatible goals of cost savings and more green power, can be understood as a product of the forces that invariably warp discussion of the city's energy policy. This arena of local politics has long been dominated by two factions: a cadre of left-wing activists inclined to lay all problems at the doorstep of PG&E, and a more moderate group that looks with suspicion on grand schemes for San Francisco to supplant the utility as the city's energy provider.

CCA's progress here — its ability to get traction where other ambitious overhauls of San Francisco's energy system have failed — is due in large part to its appeal as a compromise that most elected officials, activists, and bureaucrats can agree on, even if reluctantly. Who in this city can pragmatically seek to oppose a program with the words "Clean" and "Energy" side by side in its title?

CleanPowerSF has nevertheless been subject to a long-running bureaucratic turf war. The program is under the immediate control of the SFPUC, a city agency primarily responsible for providing water, whose governing commission is appointed by the mayor's office. But CCA also falls under the supervision of LAFCo, which is dominated by public-power advocates on the Board of Supervisors.

LAFCo is itself a bizarre appendage of the city's government. The commission first convened in 2000 to midwife a proposed municipal power agency. Voters rejected the idea, but the commission stuck around. For the past eight years, it has functioned as a sort of shadow public utilities commission, investigating various schemes for municipally controlled energy. Last year, LAFCo was granted $2.1 million to oversee and conduct public outreach for CleanPowerSF.

This arrangement has permitted the commission — which includes three seats for city supervisors on its five-member board — to lean on the generally more cautious SFPUC to push Community Choice forward. The program now known as CleanPowerSF began as two separate implementation plans, each hundreds of pages long: one produced by SFPUC staff, the other by Fenn's Local Power, which, according to city records, has billed the commission $43,681 for consulting services.

Eric Brooks, a local activist and supporter of CleanPowerSF who helped draft Proposition H, said resistance from the SFPUC delayed progress for years. "Quite frankly, we have had to drag them kicking and screaming into this project," he said.

According to former SFPUC general manager Dick Sklar, who also served as a commissioner, city staffers' anxiety about CCA stemmed from holes in the program's business plan — such as whether the city could hold on to enough customers to make CCA financially viable, and how the program's large portfolio of renewable energy could be kept affordable for residents and businesses. "I just couldn't get answers to the basic questions," Sklar said. "I think that a lot of folks become enamored of their game, rather than their objectives. It's become bureaucratic battles, mayor-Board battles, Paul Fenn advocacy battles."

This conflict has not abated as CleanPowerSF has moved closer to becoming reality. Some basic aspects of the program are still the subject of dispute between LAFCo's consultants and SFPUC staff. One lingering area of disagreement is how aggressively the city should pursue construction of its own municipally owned energy sources within the boundaries of San Francisco.

In the name of reduced dependence on the outside world, the current CleanPowerSF plan calls for rapid construction of solar panels, wind turbines, and other green-energy equipment within the city. (Fenn's tidal power facility falls into this category.) Fenn still supports that goal, while the SFPUC's Hale said one way to lower the program's cost could be to relax the timeline for such projects, relying during the interim on wholesale purchases from the energy market.

The facilities would be built using $1.2 billion in revenue bonds that San Francisco residents authorized for the construction of renewable-energy sources through a 2001 ballot initiative. This is another potential impact of CleanPowerSF, and one that could be felt by all of the city's taxpayers — even those who choose to opt out of the program.

Revenue bonds of the kind that officials plan to use to build the city's green-energy facilities are loans guaranteed by the promise of future income. If CleanPowerSF fails to generate a large enough stream of revenue — for instance, if large business customers abandon the program en masse — creditors could in theory attack the city's general fund, which is filled by tax dollars.

Fenn insists that the city would be legally shielded from this ominous outcome. The reality, given the ongoing freeze in the credit markets, is that the financiers who underwrite San Francisco's CCA infrastructure will be calling the shots. Analysts in Oakland actually believe lenders would require that loans for CCA facilities be backed up by other sources of cities' revenue, given the untested nature of the programs, said Susan Kattchee, environmental services manager at the Oakland Public Works Agency. This was one factor behind the East Bay recommendation to drop Community Choice.

About The Author

Peter Jamison


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