In a display of unity, the Hollister City Council and the San Benito County Board of Supervisors adopted resolutions to approve the Joint Powers Agreement. In doing so, they joined Santa Cruz and Monterey counties as members of the Monterey Bay Community Power (MBCP) Authority, a nonprofit government entity that will compete against PG&E to purchase wholesale electrical power through a Community Choice Energy (CCE) model, now comprised of 21 local government entities.
According to MBCP, the CCE model was established in 2002 by a state law, AB 117 that enables communities to choose clean-source power at a cost equivalent to PG&E while retaining the utility's role in maintaining power lines and providing customer service. It helps ensure local economic vitality, supporters say, because money from rates paid by local customers stays local, which helps to fund renewable energy projects, create jobs and stimulate the economy.
Hollister City Manager Bill Avera told the council on Feb. 6 that the goal of the nonprofit is to reduce greenhouse gas emissions while providing competitive prices.
“In addition, the program seeks to reduce energy consumption, stimulate the local economy by creating local jobs, and promote long-term rate stability and reliability in the tri-county area,” he said. “It establishes a governance committee of 11 chairs in which the cities within San Benito County will receive one chair, and the county receives a permanent chair.”
Virginia Johnson, county supervisor analyst for Santa Cruz County Supervisor Bruce McPherson, previously spoke to the Hollister City Council during a Jan. 9 study session. She returned Monday to answer any lingering questions before the council voted. Councilman Karson Klauer asked her to clarify that representation on the committee and the credit guarantee burden are related, and how it would work between Hollister and San Juan Bautista.
Johnson said there are five permanent seats going to cities based on populations over 50,000, plus San Benito County because of its sheer size. Four seats would be shared between cities in Monterey County, one shared seat for Santa Cruz County, one for San Benito County, and a shared seat for Hollister and San Juan Bautista.
“Your two cities would decide between who would sit in the seat in a particular two-year term,” she said. “The makeup of the board would be five votes for citizens of Monterey County, four for the citizens of Santa Cruz County, and two for those in San Benito County. It’s not exactly by population, but we felt it was very representative and appropriate.”
Klauer told Johnson that she only answered half of his question and wondered if each seat represented 1/11th of the credit guarantee if there were a mechanism for determining how much Hollister has to take on for the credit rating compared to San Juan Bautista, while taking into consideration that representation might switch every two years.
She told him that the guarantee is for a start-up loan of between $2 million and $3 million to establish a staff and organizational capacity until the agency is up and running and generating revenues. She anticipated this would happen within 60 days after launch.
“As soon as the start-up loan is paid off, which it will be within six months to a year, or less, then your credit guarantee goes away and would be retired,” Johnson said. She added that by joining the Joint Powers Association (JPA), the city would be agreeing to bear some of the burden, the amount being determined at the negotiating table with its partners.
When Klauer said that she didn’t have an answer, she described the situation as a “chicken-and-egg” kind of thing in which banks want to do business with the JPA, but the JPA needs to be formed in order to do business with the banks. She said the intent is for the JPA to take up that issue at its first meeting in April.
City Councilman Raymond Friend asked if the loan will still be paid off as hoped even if county residents don’t want to take part in the program. Johnson assured him that enough people have shown an interest in being onboard to assure a timely payoff even if the enrollment rate is lower.
“Region-wide we’ll be able to generate enough revenue to pay off that loan within the first year,” she said confidently.
Friend went on to ask if people will be able to opt out of the program and stay with PG&E from the beginning and not automatically be added and have to turn around and opt out. She said he was correct and that state law requires that money from the loan be used to send letters four times to inform each PG&E customer that they can opt out and explain their options. Councilwoman Mickie Luna asked if the JPA board decided when people could opt out. Johnson said the board would approve an outreach and marketing plan to do so. She said the board needed to tell customers what their options would be prior to providing electricity, and that they couldn’t do that until bids for providers were submitted sometime in the early summer. After determining who the provider is, the JPA board would then send out information concerning rates and products. Power would not be provided, however, until April 2018.
Hollister Mayor Ignacio Velazquez asked whether Hollister would take the county's seat if the city's population exceeds 50,000 in a few years. Johnson said that would not be the case, but the city could petition the JPA board for a permanent seat.
When the hearing was opened to the public, 20 people came up to speak. All but one were in favor of the program, some to the point of having walked throughout Hollister knocking on doors, explaining the program to residents, and even collecting more than 1,000 signatures on a petition. Margaret Rebecchi said presentations were given at St. Benedict Catholic Church where 770 people signed the petition. She said local architect David Huboi had made two presentations on Community Media Access Project (CMAP) TV promoting the program.
Katherine Foster, a San Benito High School teacher and organic farmer along with her husband, Phil, described their experience with solar power. She said that since 2007, solar has provided 100 percent of the electricity at their home, saving them about $4,000 a year. Solar is also providing up to 50 percent of the power for their ranches.
“It’s a great feeling knowing I’m doing the right thing for our community, for our future, trying to be as sustainable as possible so that the great lifestyle that we have enjoyed will continue for generations,” she said, urging the council to support the resolution.
Eight-grader Angel Frias spoke with passion about her beliefs on climate change, reminding the council that “problems only get worse as time goes by and only get harder to solve.” She said if the council decided to join the program, it would create green jobs. The crowd showed its appreciation for her youthful enthusiasm by applauding. Velazquez grinned and said they would make an exception to the rule against applause in her case.
Ann Vasquez, a Life Skills teacher at San Benito High School and a “mom of five,” said when she heard about the program her first question was how it would affect her budget. She found after comparing rates that she could save considerably because she belongs to what she described as a “multi-generation family,” who all live in the same house. She said they were shocked when they got their first electric bill.
“We were used to paying $100 to $150,” she said. “The bill was $400. Our bill is big because we have nine people living in our home. PG&E is rate-structured for multi-generational families. They only care that you’re in a single home. I don’t know how a JPA determines the rates, but I know I get to have input and I can appear in front of that JPA and tell them that we’re in a county where a lot of families have more people in the house than in the past.”
Dan Nelson said he was speaking for Romero Institute, a nonprofit, faith-based organization that is in partnership with the Catholic diocese in Monterey. He said the diocese, as well as St. Benedict's Church, was committed to seeing the project move forward to the point of making announcements during services.
“The bishop is behind this and will issue another letter within the next week affirming this program, asking the cities and county to join now that the final voting is starting to happen,” he said. “There are about 200,000 Catholics in the tri-county area, just to remind you how large the constituency is that is backing this measure.”
Hollister resident Marty Richman reminded everyone that in Nov. 2015 the country imported 6.2 million barrels of oil every day and that “a lot of it did not come from our friends.” At the same time, he said the trade deficit was $23 billion. He said oil is a national security matter for him because oil producers in the Middle East can boycott anytime they wish.
“We’re an oil-importing nation and we don’t have to be if we get enough renewable energy,” he said, “and there’s more than the consumer end of this. There’s the production end of this and I hope that those in favor of this program remember that. To use this energy you’re going to have to produce it. To do that you’re going to have to build home- and industrial-sized renewable energy plants. So you can’t oppose the industrial-sized energy plants and expect to have renewable energy.”
The only dissenting opinion came from Paul Gutierrez, a union representative, who commented that he keeps hearing about the creation of local, green jobs. He said the foundation documents do not describe any commitment to local jobs.
“A foundation document should have a commitment to the local economy,” he said. “We’d like to see a plan in place to develop these projects. We hear from residents their plans to bring solar onto their houses and putting it (electricity) back onto the grid, but there’s no plan to get there. There’s nothing in the document that tells how we get there once we form this JPA. I’ve heard the talk that we’ll get there later, but I’d like to get there now.”
Councilman Roy Sims said he wanted to hear from PG&E about possible job losses and economic impacts. Johnson said that there have been no jobs lost in areas where CCEs have been established because PG&E will continue to provide all physical services. Councilman Friend, who is a retired energy employee, told Sims that distribution of power will remain the same.
“There are no new power plants being built in California,” Friend said. “Twenty years ago, when they deregulated PG&E, that’s when they had the job losses, not now.”
The Jan. 7 county supervisor meeting was a repeat performance for Johnson as she stood before the board. Supervisor Jerry Muenzer said he was initially concerned about educating the public, but since learning that four mailings will be sent out prior to the rollout of the program, he is more confident in supporting it. Supervisor Robert Rivas said he appreciated the fact that there would be transparency with the public. Then he stepped up on his soap box — his words — when he quoted an author who wrote that global warming will have a greater impact than the Internet.
“Governor Brown and our policy makers have taken aggressive steps to make our state the leader in climate change,” Rivas said. “This is not in our country. Our state has taken a leadership role in the world.”
Supervisor Jaime De La Cruz recalled how in 2006 he talked to a couple of investors about solar.
“At that time people thought I was crazy and today we’re actually talking about it,” he said. “I’m excited that we’re actually moving forward.”
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