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Marin Clean Energy’s Manipulated Customers?

Marin Clean Energy is now delivering what it rejects from corporate power companies -- broken promises and sleight of hand. And now you'll subsidize Richmond for its “Marin” clean energy.

Marin Clean Energy recently announced a price increase.  MCE says it’s “because the market cost of power is going up” and because of “growing pains” associated with expanding into the City of Richmond.  MCE  says it provides “a better product” than PG&E (note 1).  

But there are problems with MCE’s claims:

Problem 1 – increased cost of power?

Last April, when MCE (MEA) was on the brink of its massive countywide enrollment of all Marin residential consumers, known as Phase 2b, MCE Executive Officer Dawn Weisz hosted a televised Community Meeting in Novato.  When asked about MCE’s future prices Ms. Weisz said they were “fixed” and “locked-in” until after 2015, plus about 1-1/2% annual escalation (note 2). 

MCE’s fixed prices representation is confirmed by MEA staff consultant John Dalessi who reported to MEA’s Board six months before Weisz’s Novato presentation that MCE is “fully hedged” against price changes until after 2015 (note 3). 

How does “locked-in” and “fixed” and “fully hedged” and “after 2015” produce a 7% price increase now?

Problem 2 – unexpected “growing pain” costs due to City of Richmond?

The following Richmond Expansion milestone table illustrates when MCE (MEA) was aware of costs associated with its expansion into Richmond:

Jul '11 Richmond approves sole-source consulting contract w/ MEA (Dalessi) Jul '11 MEA approves pilot contract to determine impact of adding Richmond Oct '11 MEA Board mid-year retreat -- unveils Richmond Expansion Timeline Oct '11 MEA  Special Meeting minutes: "prices are fully hedged" through 2015 Oct '11 MEA  Special Meeting minutes: Richmond load & cost analysis complete Apr '12 Weisz's televised Novato  presentation: "locked-in prices until after 2015." Jun '12 MEA approves membership Resolution 2012-13 adding Richmond Jun '12 MEA completes Implementation Plan revision (July filing w/ CPUC) to reflect Richmond.  This 90 page document shows costs for staffing, billing, procurement, electric load, finance, etc. Feb '13 MCE claims "growing pain" costs for Richmond contribute to (previously unknown) need for 7% price increase.

Costs associated with bringing Richmond into MCE were not known by MCE in April when broadcasting to consumers that MCE prices were “fixed” until after 2015?

Problem 3 – Marin subsidizes Richmond?

MCE’s “growing pains” into Richmond trigger higher prices for Marin consumers.  Thus, Marin’s price hike subsidizes the costs Richmond would have incurred if forming its own Community Choice Aggregation energy company. 

Why do Marin consumers pay Richmond’s costs when Marin paid for its own "growing pains" when MCE launched in 2010?  Those costs were in the form of  $540,00 County of Marin loans, $950,000 County of Marin co-sign loan, and several private loans from Marin citizens totaling $750,000.     

Problem 4 – “a better product” that’s loaded with RECs?  

RECs (renewable energy certificates) are a poor man’s version of green energy, giving the illusion without the reality.  The air is as dirty as ever -- see attached diagram.  RECs constitute about half of MCE’s Light Green and about seventy-five percent of its Deep Green renewable energy.

The University of California says this about RECs:

  • feel-good scam
  • fleeces consumers
  • spin & gimmickry
  • Federal Agencies are in on the act... handing out awards for REC-based “green” (note 4). 

MCE cites State and Federal Agencies when pressed about its reliance on RECs. 

Problem 5 – last year’s price cut.  Gaming? 

A year ago MCE cut it prices, resulting in a $9 million loss of revenue.  It allocated $8 million of this cut to reducing Residential prices (note 5,6).  MCE allocated zero cut to nearly all commercial and municipal customers.  MCE did this when there was heightened Residential awareness of MCE prices -- when 82,000 Marin households were receiving multiple “Welcome to Marin Clean Energy” notices that included Opt Out text.

Today, almost of year after 82,000 mandatory Opt Out mailers have ceased alerting households throughout Marin that they are part of MCE, and as “Marin Clean Energy” is buried in PG&E utility bills, MCE will increase its generation prices 7%... which covers much of last year’s “loss of revenue.”     

MCE proponents may legitimately cite current PG&E prices.  But this disregards MCE’s representations made to consumers.  Shouldn’t “Marin” households receive the lowest (locked-in) energy prices through 2015 from our local energy company, particularly when MCE claims to behave differently than PG&E? 

Additionally, why must Marin ratepayers subsidize costs associated with Richmond’s joining MCE?  Why isn’t Richmond paying its own “growing pains,” just as Marin did in 2010 when MCE initially launched? 

If you are troubled by MCE’s behavior you can Opt Out at (888) 632-3674 for a nominal fee.  Take telephone notes and be prepared for a sales pitch.

Notes:

(1) “Authority to Raise Rates in April”   Marin Independent Journal, dated February 9, 2013.  http://www.marinij.com/novato/ci_22552345/marin-energy-authority-moves-raise-rates-april-remains   

(2) See highlights in attached transcript of MCE Community Meeting in Novato  on April 12, 2012.  Only applicable pages are included here.  The Question & Answer session at the end of the meeting is not included in the video version of the meeting that MCE posts on its website.

(3) October 3, 2011 MEA mid-year Retreat, Special Meeting minutes, Item #7, page 14.

Mr. Dalessi (staff consultant) says MEA is fully hedged due to fixed prices until 2015.  After 2015, this model will change.”  http://www.marinenergyauthority.com/PDF/10.3.11_Board_Retreat_Minutes.pdf

(4) http://www.mercurynews.com/opinion/ci_12049267

(5)  Page 27 of 188 (page 3 of Agenda Item #8).

http://www.marinenergyauthority.com/PDF/4.5.12_Board_Packet.pdf

(6) MEA Board mid-year Retreat minutes, October 3, 2011, page 13.

MEA Director Collins (Richard Collins, Tiburon Councilmember) was concerned that, because of the new people joining MEA, if this huge (price) differential is seen between PG&E and MEA’s rates, it could potentially have a big impact on MEA’s opt out rate.” 

http://www.marinenergyauthority.com/PDF/10.3.11_Board_Retreat_Minutes.pdf

As of February 12, 2013, Richard Collins is no longer listed on MEA’s letterhead as a Board member.

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.

Steve Perry February 23, 2013 at 08:42 PM
I am curious why someone would go to all of the effort and expense of putting together this organization http://meatruth.org, which Jim Phelps is a member to attack MCE. Is it just true civic altruism, is this effort really there to alert us that there may be a flim flam involved with one of PG&E's competitors (PG&E who has never flim flammed anyone!). I know that the 'About Us' page on the site says they are are not funded by PG&E, but when you are PG&E, you don't have to look far for someone who will donate for you. No matter who we get our energy from, it is a dirty, environmentally and transactional business. But it irks me that either side takes some kind of high road.
Jim Phelps February 25, 2013 at 04:48 PM
Welcome to the Marin Clean Energy discussion, Steve. I have no affiliation with PG&E or any organizations representing it, but have spent a lifetime in the power business so know the operations and issues more intimately than most. Regarding flim flams, I’m more concerned with MEA’s behavior about this... ... first, because it’s MEA that has featured green energy as its high road and has done so based upon specious “clean” energy with which the Sierra Club and U.C. take exception. MCE’s done this via force-in Opt Out rather than electing to build its business with opt-in and most sensitively, they’ve done this while insulating their municipal members with a financial “firewall” that does nothing to protect residents’ financial exposure. How about guaranteeing a $5 exit fee for the next seven years – in writing? Am I for greener energy? You bet. I’m also for doing what MEA originally promised to Marin – but has failed. That’s what I’m calling out. BTW, if not me, then who? The State PUC has no oversight authority on MEA. If MEA did what they said to get their public backing in the form of 1) Green energy, developed via local full-time jobs and resources, 2) competitive prices based upon clean energy that doesn’t emit greenhouse gases and includes no RECs, then I would have nothing to say. As soon as MCE starts doing this, I’ll be a happy, green Marin resident.
Steve Perry February 26, 2013 at 09:12 PM
I hope that you or meatruth.org ar not affiliated with the PG&E and the "carbon industry", I am still surprised at the level of effort and expense meatruth.org spends. Also please explain the following from the Sierra Club website: "If you can’t afford to generate your own solar or wind power, consider purchasing it from someone else. To do that, first check with your local electric company. They may offer a green power options... ...When you buy green power you’re paying a small premium to support the utility’s renewable energy generation, but you’re not actually getting “green electrons” delivered to your home. Electrons are indistinguishable; those generated by renewable energy sources go into the grid and mix with electrons from all the utility’s other sources. If your utility company doesn’t offer green power, don’t despair. You can purchase “green tags” (they’re also called renewable energy certificates, RECs, or green energy certificates). It’s similar to buying green power from your local utility, except that when you buy a green tag, you may be supporting green power generation in other parts of the country, not necessarily in your region. When you buy a green tag, you’re rewarding power suppliers that offer green power, but you’re not necessarily funding the development of new renewable energy sources." http://www.sierraclubgreenhome.com/co2-carbon-dioxide-center/renewable-energy-for-your-home/
Jamie Tuckey February 26, 2013 at 09:46 PM
Hi John - Our rate increase is not related to our expansion to Richmond. 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: http://novato.patch.com/blog_posts/a-response-to-misleading-information-about-marin-clean-energy Jamie Tuckey, MCE Communications Director
Jim Phelps February 27, 2013 at 06:13 PM
MCE needs to get its story straight about Richmond’s affect on driving up MCE’s prices. The Marin IJ reports one thing, while Jamie Tuckey says the opposite: Marin IJ (Feb. 9): “The market cost of power is going up. There are also increased costs due to growing pains. The [Marin Energy] Authority (MCE) will begin marketing to residents of the city of Richmond in early April.” http://www.marinij.com/novato/ci_22552345/marin-energy-authority-moves-raise-rates-april-remains Tuckey (Feb 27): “Our rate increase is not related to our expansion to Richmond.”

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