Wednesday Jul 04 2018
Another View: Pioneer Community Energy and its role in providing electricity in Placer CountyBy: Randi Swisley / Guest Columnist
Who and what is Pioneer Community Energy? If you are confused about the benefits, risks, and program goals of Pioneer, and about their automatic enrollment process, you are in good company. I will explain what I understand and share with you the questions that are still in my mind.
Discussion about how to accelerate economic development in this area began several years ago between our county treasurer and our Board of Supervisors. As a result, last year the Board of Supervisors and the city councils of Loomis, Colfax, Lincoln, and Auburn each appointed one of its members to serve on a Joint Power Authority (JPA) governing Placer Community Energy. They also appointed the Placer County Treasurer to serve as acting executive director of the JPA.
Pioneer is known as a community choice aggregator (CCA). CCAs are formed for a variety of reasons. Sonoma, San Francisco and Marin counties, for example, each created a CCA to promote clean energy for subscribers willing to pay a premium for environmental benefits gained from renewable energy.
Pioneer was formed for the purpose of promoting economic development. The JPA wants to retain business throughout the service area and to promote future development in places like the Sunset Industrial Area. (Sunset encompasses thousands of acres west of Highway 65, surrounded by Lincoln, Rocklin, and Roseville.)
Sunset seeks to provide new business development with all necessary infrastructure, including competitively priced electricity.
With Pioneer acting as the supplier of electricity, the JPA hopes that it can better control rates and that doing so will make Placer County more attractive to business. For business interested in this region, the Pioneer service area competes with those of SMUD and Roseville Electric. Unlike Pioneer, both SMUD and Roseville Electric are full-service utilities with full control over their pricing and rates.
Both SMUD and Roseville provide electricity at rates about 30 percent lower than PG&E.
Because Pioneer will not provide service beyond the purchase of electricity for its customers, it will rely on PG&E to maintain the poles, power lines and meters. PG&E also provides the billing service including charges from both Pioneer and PG&E. This shared responsibility limits Pioneer’s control over ratepayer pricing compared to SMUD and Roseville.
Pioneer recently estimated its rates would be about 9 percent less than PG&E. According to rate tables on the Pioneer website, residential rates would average about 7.5 percent lower than PG&E, implying that commercial and industrial customers would save about 11 percent.
This tradeoff between residential and commercial rates supports the stated purpose of promoting economic development. Pioneer is free to adjust rates in the future at their discretion.
To date, Pioneer’s expenses have been about $15 million and the county treasurer has issued, with the supervisors’ approval, a $40M bond to be held by Placer County. The plan is for Pioneer ratepayers to pay off the bond as the new program is fully implemented. If Pioneer were to fail, it is not stipulated how the bond would be paid off. One option is the Placer County taxpayer. Another is the Pioneer ratepayers.
Pioneer’s rates are directly affected by the wholesale electricity market, something beyond Pioneer’s control. The long-term stability of that market is uncertain. Volatility of fuel prices, inconsistent rainfall, and regulatory uncertainty all affect market prices. For example, all new homes constructed after 2019 are mandated by the California Energy Commission to include solar panels.
This will increase electric energy production during the day, but meeting non-daylight electric needs is already a pricing and supply issue that will likely become more problematic.
If you ask PG&E a question about Pioneer, they refer you to Pioneer. An outside company under contract with Pioneer answers their phones. Of course, you can direct your questions to the Board of Supervisors, and the various city councils. It appears the public is largely unaware of the decisions being made by and about Pioneer. Notices of its meetings are posted 72 hours in advance on its website: pioneercommunityenergy.ca.gov. The Pioneer website also contains some useful information about JPA members and meeting minutes.
If you are interested in participating in an impartial, free public forum that will include questions from the public to be answered by a panel of experts from Pioneer, SMUD, and others, please contact the League of Women Voters at firstname.lastname@example.org. Let them know the best days and times for attending a forum.
Information and analysis for this article was gathered from experts, including the acting Pioneer executive director, Pioneer staff and consultants, Pioneer JPA members, and a retired member and former president of the SMUD Board of Directors.
Randi Swisley was born in Auburn, attended local schools and attended CSU Chico. She currently serves on Auburn’s Transient-Homeless Task force and Auburn Oversight Committee. She is past president of the Placer County League of Women Voters, past chairman of the WAC Municipal Advisory Council, past executive committee member of the Placer County Juvenile Justice Commission, and served on the Auburn Technology Commission. Swisley is a happy member of Auburn’s Sugar Plump Fairies promoting local art and music.