REGIONAL — The East Bay’s public power agency recently green-lighted a plan to accept nuclear power from Pacific Gas & Electric Co. next year, and attempt to flip it to a third party for a profit.
The board of directors for East Bay Community Energy (EBCE), voted 12-2 in favor of the yearlong nuclear monetization plan. Albany and Hayward representatives voted no.
The board also includes elected representatives from Livermore, Dublin and Pleasanton. Mayor Melissa Hernandez represents Dublin, Vice Mayor Trish Munro represents Livermore, outgoing Councilmember Jerry Pentin represents Pleasanton and District 1 Supervisor Scott Haggerty, who spearheaded the creation of EBCE, represents customers in unincorporated Alameda County.
While the Dec. 16 decision to accept the power came with some criticism, those in favor of reselling it through a wholesale energy marketer say the move was a means to raise revenue while forcing PG&E to more accurately report its greenhouse gas emissions.
“The choice to me is between not accepting this allocation, or accepting it, selling it and pushing PG&E to report their actual effect on greenhouse gasses through their entire procurement portfolio,” said Diane Martinez, board vice chair who represents Emeryville.
The power is generated at PG&E’s Diablo Canyon station — the state’s last remaining nuclear-power plant, scheduled to close in 2025.
Livermore and Dublin as well as unincorporated areas of the county, including Sunol, were among the first communities to join the public power agency when it launched in 2018. Pleasanton opted out initially, but has since decided to join and has a directors seat on the board. Enrollment of Pleasanton customers will begin in 2021. The board sets rates and determines the mix of power sources.
EBCE has no shareholders and funnels excess revenue to run local programs. The agency claims it provides greener power at low rates, saving customers a combined $10 million annually compared with what they would have paid PG&E.
The plan is the third nuclear power sales proposal presented to the board this year, and the first to gain approval.
Prior proposals contemplated selling nuclear to EBCE customers. It boiled down to a trade-off between having nuclear and lower greenhouse gas emissions, or being nuclear-free and accepting higher greenhouse gas emissions. The board ultimately chose to remain nuclear-free, avoiding the controversy and marketing complications it would bring.
But this left PG&E with all of the benefits of the carbon-free nuclear energy for which its customers paid, including the ability to report a reduced carbon footprint.
PG&E produces more energy than it sells to retail customers. If there were sufficient carbon-free generation in its portfolio, PG&E could avoid disclosing emissions from its gas-fired power plants.
The approved plan avoids this by taking the nuclear generation out of PG&E’s hands. The argument goes: the less carbon-free energy it can claim, the more carbon-emitting sources of energy it must disclose.
The new plan also steers clear of slapping a nuclear label on EBCE’s power content label — the energy mix disclosure it must share with customers — because the energy will be sold wholesale and the source reporting requirements will shift to a third party.
The plan calls for accepting the nuclear power and immediately transferring the allocation to an energy marketer, which would retain it or attempt to resell it to a third party. EBCE would receive half of the net revenue from any sale.
Such a profit-sharing arrangement is projected to generate between $500,000 and $1 million in revenue next year, based on EBCE staff estimates. Proceeds could be considerably higher or lower based on actual sales. The board directed that any proceeds be earmarked for local development projects, procurement or renewable energy content.
EBCE and other community choice entities have been engaged in ongoing efforts through the California Public Utilities Commission (CPUC) to reduce fees that the state’s investor-owned utilities like PG&E charge to recover costs.
The Power Charge Indifference Adjustment (PCIA), also called an exit fee, is levied by PG&E against customers who leave for community choice energy providers. The monthly fees are supposed to ensure departing customers pay their fair share of procurement costs incurred on their behalf.
Advocates for community choice argue the fees are artificially inflated in order to limit the ability of community choice energy programs to compete with the large investor-owned utilities. The fees have increased 600% since 2013 and nearly doubled since 2018.
As part of the CPUC proceedings to justify the charges, PG&E last December offered to begin providing EBCE, and other load-serving entities that pay the PCIA, proportional annual shares of carbon-free hydroelectric and nuclear sources. Any rejected allocations would revert back to PG&E to use or dispose at it saw fit. Accepting allocations also requires accepting certain conditions that provide a measure of protection for PG&E from regulatory and legislative challenges.
Renewable energy advocates oppose accepting nuclear power from PG&E regardless of the mechanics of the transfer, arguing nuclear energy is dirty and dangerous and in conflict with EBCE’s green-energy mission. More than a dozen people spoke against the latest plan during the public comment period of the directors meeting held remotely via Zoom.
“You’ve heard from your constituents multiple times — once in April and again in November. We don’t want nuclear in any shape or form,” said Igor Tregub, a Sierra Club SF Bay Chapter representative. “...We don’t understand why this item continues to come up, over and over.”