A Response to Misleading Information About Marin Clean Energy

While we appreciate interest in MCE, we find Mr. Phelps’ recent criticism of our upcoming rate change to be misleading and inaccurate. We're writing to address these claims.

While we appreciate interest in MCE, we find Mr. Phelps’ recent criticism of MCE’s upcoming rate change to be remarkably inaccurate, misleading to readers, and not reflective of information that has been provided to him.  Therefore, we would like to provide the following response to his misleading claims:

1. Rate Changes and Impacts

MCE has proposed a rate increase of about 7%, bringing our rates closer to PG&E’s current generation rates. This increase – which is smaller in both percentage and actual dollar amount than PG&E’s increase in January 2013 – is needed to reflect the rising cost of our contracted energy commitments, such as the solar we now purchase from the San Rafael Airport. It is not related to our expansion into Richmond. As proposed, we expect that the typical residential customer after April will pay about 90 cents more per month for MCE’s 50% renewable energy than they would for PG&E 20% renewable energy, while commercial customers should continue to see a small savings. The MCE Board will be voting on whether to accept or adjust these proposed rates in April.

2. Rate Setting Process

MCE sets its rates annually based on the fiscal year budget adopted by our Board. In 2012, due to a number of changes in revenue and customer costs, MCE was faced with what would have been a revenue surplus for the year. Because MCE is a not-for-profit agency, we were able to pass these savings directly to our customers by lowering rates for residential, large commercial, industrial and street lighting customers.

In 2013, rates will increase for all customers due primarily to higher power supply costs associated with serving all MCE customers. We look forward to any additional customer input on rate design as we move towards implementation of these proposed rates.

3. Market Costs of Electricity

MCE’s rate increase is not due to deficits or hidden costs. The contract prices for MCE’s non-renewable energy costs generally increase on an annual basis, and this cost increase is the primary cause of the FY 2014 rate increase.  The terms “fixed” and “fully hedged” mean that MCE’s power supply costs are not subject to market price volatility during the term of the contract.  For example, if market prices spike due to a heat wave or some other event, MCE’s power supply costs would not be materially impacted because of the price hedges that MCE has put into place to control power costs.

5. Misreprestation of the University of California

Mr. Phelps makes a number of misrepresentations regarding renewable energy certificates (RECs), including misattributing an op-ed from a UCSC professor as somehow representing the position of the University of California as a whole. This is remarkably misleading given that the subject of the paper is that UCSC utilizes and purchases RECs to support renewable energy generation equivalent to its own electric usage. Claiming the editorial represents the University of California is patently false and intentionally misleading.

5. Conflicting Viewpoints Regarding RECs

Mr. Phelps’ comments regarding RECs are particularly disingenuous and intended to mislead readers as he himself has been a strong proponent of RECs, and has strongly urged the local cities and towns in Marin County to purchase RECs to green their energy supply.  For example, in the minutes of the Town of Ross City Council meeting on September 15, 2011, Mr. Phelps is quoted as stating, “…Ross can purchase a Renewable Energy Certificate (REC).  It is a green attribute paid for from a wind farm.”  Mr. Phelps then went on to say, “RECs allow everyone to be green.”

6. Understanding RECs

RECs are part of MCE’s energy portfolio, in addition to local and in-state renewable energy generation and third-party suppliers. RECs are the energy industry’s means of accounting for renewable energy: noting credit when renewable electricity is generated, and then ensuring that nobody can take credit for renewable energy more than once. All grid-tied renewable energy projects generate RECs. The solar project at the San Rafael Airport – which most would agree is ideal as far as local renewable energy generation is concerned – produces RECs. This is how energy suppliers keep track of renewable energy.

7. Identifying MCE on Bills

RECs are an important tool to help support the development of new renewable energy facilities and reduce greenhouse gas emissions in the western U.S., while keeping rates competitive for customers. Each REC that MCE purchases is tied directly to a certified renewable energy facility supplying electricity to the western region electric grid. MCE REC purchases are independently certified and verified by Green-e Energy.

We understand that electricity bills are complex and can be difficult to understand. MCE’s charges are clearly marked on PG&E electric bills on the front page and on the Third Party Electric Detail page. Visit www.mceCleanEnergy.com/bill-explanation to view a sample bill.

For more information on MCE’s current and proposed rates, or any other questions, please contact us at info@mceCleanEnergy.com.

Jamie Tuckey
Communications Director, MCE

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Jim Phelps February 28, 2013 at 07:58 PM
Eleanor, you write “MEA is a catalyst for PGE’s solar and wind energy production.” This requires a new definition of catalyst. The California Air Resources Board implementation of AB32 drove PG&E, and others to which AB32 mandates apply, to renewables well before MEA showed up. MEA was not the catalyst for solar or wind, AB32 was and now Cap & Trade is. Current renewables include Ivanpah solar thermal plant will soon go live -- development began 3 years before MEA arrived in Marin. Earlier this month, PG&E began receiving energy from a 66 MW PV plant, about the same as MEA’s combined PPA (and single FIT) renewables. Many others. PG&E was into renewables well before most IPPs showed up. This included small hydro, Geysers geothermal, and Altamont wind farm where engineers conducted R&D experiments with axial fans and egg beaters. PG&E tried to develop ocean wave technology but abandoned the concept. MEA leaders were in grade school when many of these renewables were in design & development.
Doug Karpa March 09, 2013 at 02:09 AM
Sadly, it seems many here have no idea how the grid actually works. When you buy electrictity, that power is dumped onto a grid that stretches from Mexico into Canada and east to the Rockies. When you use power, someone has to generate it and push it into a common pool. Since you can't track individual electrons on the grid what happens instead is that you contract with a renewable energy producer to generate the same amount of power as you use. It is ALWAYS just an accounting system to show that the amount of green power used equals the amount generated. What this means is that at best is you can contract with a renewable energy generator to generate an equivalent amount of power equal to the energy you used and then keep track of that generation so it can't be sold twice. Guess what you call that accounting system that says a renewable generator produced that much power: a REC. That's what a REC is: a contract to generate a certain amount of renewable power. It isn't a scam or an illusion or anything else that folks who don't understand the grid misapprehend. The notion of "greening" a "brown" supply is a fallacy. If you buy a REC, that means a renewable generator somewhere produced power for you. As a former renewable energy entrepreneur, I can tell you that RECS let the renewable energy generator get paid a premium for their renewable power. So, yes, a REC means that green power was produced, and buy RECs DEFINITELY supports the renewable power industry!
Doug Karpa March 09, 2013 at 02:12 AM
Apparently Professor Press has never run a power company to understand that offsetting some of the extra costs still helps the bottom line, even if it isn't all of it. Also, he seems to not understand what "buying electricity" means.
Doug Karpa March 09, 2013 at 02:14 AM
Um. Is it bad to point out that renewable power generated in Oregon does just as much to slow climate change and reduce the demand for coal fired power as power generated in Marin as long as people are buying it?
Tina McMillan March 09, 2013 at 04:37 AM
Doug I disagree. MEA was formed because the public were told that it would be a cleaner, greener, cheaper source of energy from local companies. In reality it is none of these. It is essentially a holding company for REC's and other contracts. PGE can do the same things that MEA does, on a larger scale and can and does build actual solar and wind facilities in California. While it doesn't matter to you where the energy comes from and you see the grid as if there are no local jobs involved, the employees at PGE may have a different opinion. These are well paid local jobs with benefits that support our entire community. MEA has few jobs but highly paid consultants that purchase energy from the grid and that do nothing to supply, maintain, and otherwise work with the grid of which you speak. Since they have so little to lose why should they be paid so much? https://marincleanenergy.info/our-team As I said earlier if MEA was a private, Opt In company that didn't attempt to undermine its competitors with misleading and false propaganda, it would not be a problem. To compare MEA with PGE is ludicrous but it is what MEA has done to sell it's contracts with huge corporations like Electricite Francaise and Royal Dutch Shell as somehow, local, green and clean. It doesn't pass the smell test.


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