Silicon Valley Energy Summit: Spotlight on Community Energy Choice
More than 400 cross-sector leaders from Silicon Valley and beyond gathered at the Precourt Energy Efficiency Center’s (sold-out) annual event at Stanford to talk about how to make their organizations and communities more sustainable. And Silicon Valley Energy Summit (SVES) co-presenter, Sustainable Silicon Valley, complemented its own Net Positive Bay Area initiative by organizing a solutions showcase of organizations and inventors working to shift the way we produce and store energy, transform transportation and mobility, and use water more efficiently.
Former U.S. Secretary of State, Treasury and Labor George Shultz and DOE National Renewable Energy Lab’s Dan Arvizu kicked off the summit with their insights about the state of our energy system and the near-term outlook for clean energy. Both stressed our urgent need to address climate change and energy security – by mobilizing capital, investing in R&D, and putting a price on carbon. Shultz advocated for a revenue-neutral carbon tax-and-dividend policy “to remove fiscal drag and return money to the economy”. Arvizu focused on why techno-analysis should inform our policy and business decisions, and why we need to invest in the game-changing “4D’s” of Disruptive new technologies, Differentiated energy services, Distributed resources to replace aging infrastructure, and Disintermediation of the value chain (or, “cutting out the middleman” to leverage the efficiencies of the IT revolution).
Breakout sessions included in-depth conversations about where we go next with innovative and disruptive technologies like electric vehicles and associated infrastructure, distributed storage, energy efficiency programs, net positive energy models, project financing, energy analytics, and more. Particularly fascinating was a lively conversation about whether Silicon Valley is ready for Community Choice Energy, with Joe Como from the Public Utilities Commission, Executive Director Ann Hancock of Center for Climate Protection, CEO Dawn Weisz of Marin Clean Energy, and Jan Pepper, the Mayor of City of Los Altos and Electric Division Manager of Silicon Valley Power.
Initially, Marin Clean Energy took a leadership role – over 7 years ago – to pilot a program which has paved the way for other cities and counties to purchase and/or generate electricity for their residents and businesses. Subsequently, the California market has evolved to provide new models for cities and communities to choose from, mainly: 1) launching a single-city program using existing staff and associated operational efficiencies (e.g., the City of Lancaster’s May launch), 2) joining together with other cities and counties within a joint power authority program like Marin Clean Energy or Sonoma Clean Power, or 3) creating a public-private partnership where communities can contract for “QuickStart” services. The brand new CA Clean Power plan is an example of this newest, emerging model, which is essentially a business-for-hire that provides technical assistance, financing, and energy procurement, while the community decides upon and negotiates for rates, GHG reductions, and terms of commitment.
No matter which model is chosen, Joe Como, whose job is to represent customers for the PUC’s Office of Ratepayer Advocates, underscored how crucial it is for local elected officials to be accountable to their local constituents “in pushing to a future state”, as well as for ensuring transparency in governance. “There always is the natural mistrust of government, we can all identify with it. Communities need to identify this up front with the public.”
Ultimately, the goal of community energy choice is to most effectively mobilize capital to bring innovative new technologies to the market faster, while enabling small communities to influence joint decision-making. Although some risk and a steep learning curve come along with any new program – e.g., calculating load correctly, or meeting procurement collateral or legal compliance requirements – the good news is that they can be addressed using best practices and experienced technical advisors within the maturing market. Ann Hancock is confident that as these “disruptive” models continue to evolve “we will move forward and work out any glitches, to get from 0 to 60 much faster.” While rates from municipal power authorities in California are estimated to be 25%-30% lower than utilities, Dawn Weisz cautioned that “rates can be lower, but it’s not a given, so be careful not to promise lower rates forever.” Better to focus on rate stability, innovative programs, an open bidding process to provide competition for monopolies, and more renewables in the portfolio. She adds that because local government agencies can borrow money at lower rates, they are “well-poised to continue achieving efficiencies, long-term rate stability, and competitive rates”.
The next big challenge is to scale up to incrementally reduce GHGs. By opening these programs to other communities, they will achieve more impact.
Ann Hancock sums it up like this. “The dynamism of this field, the emergence of new models, the new partners and players in the market are a very exciting thing. It allows for agile experimentation at the local level that wouldn’t be possible otherwise; we can push the future the way we want to go. This is a huge, game-changing opportunity for Silicon Valley.”
George Shultz is a bit more direct. “Let’s stop saying what we’ll do by 2050. We have a lot to do. We’re Do-ers … let’s just do it!”