Green Power Goes Local in California

Marin Energy Authority
Marin Energy Authority

The first week in May the electricity coursing through the wires of my house in Mill Valley, California become somewhat greener. That's because Marin County consummated its drive to become the first county in California to set up its own energy authority.

Marin Energy Authority (MEA) is now buying energy from Shell America, a subsidiary of Royal Dutch Shell (RDS.A)). MEA turned on the juice after a long quest for financing and a legal and public relations battle with the incumbent utility Pacific Gas & Electric. The green energy is going to residents of seven Marin cities who voted to support the MEA. The case will likely be viewed as a critical test for the viability of community power authorities and also a key yardstick for what green power actually means.

Here's the backstory. Marin has long been a bastion of green power with a combination of individualist conservatives and progressive liberals. After chaos hit the California utility markets in the fateful summer of 2001 courtesy of poorly designed deregulation, the California State Legislature passed laws that allowed communities to create their own power authorities and better control the price and delivery of their power. Marin County's independence streak kicked in and top county leaders started pushing for a county-controlled energy authority.

PG&E argued that Marin lacked expertise to run its own utility and that this could saddle Marin residents with huge risks due to volatility and complexity in energy markets. For its part, the Marin Energy Authority countered that buying green energy would only cost a few dollars more per month and could end up costing considerably less than energy from PG&E over time.

What Is Green Energy, Really?

On a personal level, I felt a tinge of pride knowing that Marin was taking an active stance to promote green energy. But even though I cover green tech, I was left confused by what the term green energy really means. In February 2010 after lengthy discussions, the Marin Energy Authority's Board of Directors unanimously voted for a five-year contract with Shell Energy North America to supply energy to the host of small towns that serve the wealthy, rural county's 200,000-odd residents.

Under the contract, the Royal Dutch Shell subsidiary would send power to the MEA that would be delivered over wires still owned and maintained by PG&E. At least 25% of this electricity would come from carbon-free sources. That number would go to 50% within the next five years. For a small monthly surcharge of less than $10, Marin residents in the areas served could purchase energy that is 100% renewable. This looks pretty good considering that 12% of the energy delivered by PG&E on average to Californians comes from renewable sources. (The utility has failed to meet its mandate for generating 20% of its power from renewable sources by 2010).

But the devil is in the green details. PG&E's representatives argued that 22% of its power came from nuclear sources and 14% from hydroelectric. Neither source was considered as green under the state mandate. Combined with the 12% renewables that PG&E produces, this would push the percentage of renewable energy power coming from PG&E well over legal targets. What's more, PG&E argued, the remainder of its power comes primarily from natural gas-fired power plants. In contrast, PG&G argued, the Shell would be buying surplus power to make up the additional 24% of the total power supplied to Marin from spot markets that are dominated by coal-fired power plants.

The Marin Energy Authority has countered those claims by explaining that additional power could well be purchased from zero emissions sources such as the massive hydroelectric dams of the Pacific Northwest and in California itself. Further, by taking control of its energy future Marin County will be able to more easily roll out local energy initiatives around solar panels, small-scale windmills, geothermal and other forms of conservation and power generation that could make Marin less susceptible to the wild swings of commodity prices. Besides, says the MEA, consumers can choose to continue receiving power from PG&E if they want. All they have to do is ask for it.

Which energy is more green? It almost takes an energy expert even to understand this debate. And therein lies the problem in the green debate. Namely, the definition of green depends very much on your point of view. True, PG&E is protecting its business and the Marin Energy Authority has its own very good reasons to turn to what it believes to be a greener source of power. But defining green will likely be a defining issue for California and the country as the second Green Revolution continues to move forward.