 Back to Davis Media Access. We are here for another episode of The City Considerers. And today we're catching up with Valley Clean Energy, about 18 months after the Community Choice Energy provider launched. And my guests today are Lucas Farrics, who is a Davis City Council member and a member of the Board of Valley Clean Energy. And Don Saylor, also a board member and our Yolo County Supervisor. So welcome to you both. Thanks so much. So our conversation today about Valley Clean Energy is happening in the context of our giant utility provider, PG&E, having filed for Chapter 11 bankruptcy. And leading up to that, just having a lot of issues and consumers having a lot of issue with PG&E. And in the midst of that, 18 months ago, comes a Community Choice Energy provider, Valley Clean Energy. So let's talk about, I know a lot of work went into launching it. I know a lot has happened over its first 18 months of existence. So let's start there. And whichever of you wants to start first is fine. Sure. Supervisor, you want to go ahead? I'll just start by just mentioning what Valley Clean Energy is. It's one of 19 Community Choice Energy programs that are operating now in California. Together, those CCEs serve about 10 million of California's 39 million people. So each of the CCEs are partnerships of local jurisdictions. In our case, it started out with Woodland, Davis, and the unincorporated areas of Yolo County forming a partnership. We purchase electrical energy and provide it to ratepayers through the infrastructure of Pacific gas and electric, our local investor-owned utility. So the PG&E still owns the poles and the wires. But the electrical energy supply is provided by Valley Clean Energy. We have a unique partnership with the Sacramento Municipal Utility District. SMUD provides the backroom operations, the call center. They really do all of the professional technical work. And we're governed by a board that is made up of two members of the Davis City Council, Lucas and Dan, two members of the Woodland City Council, Dan Carson, that is, two members of the Woodland City Council, Tom Stallard and Angel Barajas, and two members of the Board of Supervisors, Gary Sandy and myself. We, West Sacramento is considering potential joining in the future. And Winters has made a decision to join, and they'll be starting up as associate members this next meeting. Yeah, this month, yeah. So there are some clear differences between community choice energy and PG&E, for example. And that has to do with the way we choose where the power comes from, and then the rate structure. Can you speak to those? Oh, absolutely. Yeah, I think it's also one of the other major issues that separates community choice energy providers from the investor utilities is also the ability of local control too. So I think one of the things that we were most excited about is that instead of today, before Valley Clean Energy as it existed, you had to go down to San Francisco if you had issues. There was ever any sort of meetings at PG&E or at the Public Utilities Commission that's based in San Francisco. But here in Yolo County, our meetings rotate between Davis and Woodland in very soon Winters. And so we have our regular monthly board meetings, and so people are able to actually really participate locally. And then, of course, they see us in the supermarket and the groceries out in the community farmers market and other places. Everywhere. And so they have that ability too. The other thing that one of the real reasons for doing a community choice energy program was to actually provide more renewable energy, higher amounts of renewable energy to our community. All of our communities have a lot of goals as related to climate change and how to prepare and adapt for climate change and the consequences of that. And one of the things that we have both in the city of Davis but also Yolo County are doing is that we have realized that we can actually really help meet our climate change goals by having better choices in terms of renewable energy. So what are some of those renewable sources that Valley Clean Energy is purchasing and then passing on to consumers? So certainly solar is a very typical one regardless of where the energy is coming from, but also large hydropower. So from water, from coming from dams, particularly in the Pacific Northwest and then also increasingly wind power as well. I think the thing that's really interesting, actually one thing that we find was pretty cool for us to do is be able to also repurchasing the power that's generated by a very small dam up in Lake County in Indian Valley Reservoir that is actually owned by the Yolo County Flood Control and Water Conservation District. And so that's about four, it's how large is it, or how small is that? Four megawatts, I think it's pretty small, but PG&E actually chose to no longer buy that power that was being generated locally. And so Valley Clean Energy actually negotiated that contract so we are actually generating power a little bit more locally. Interesting. So we're transparent. Our rate structures are set in open public meetings. There's no money going to high priced board members or executive bonuses or shareholders. Investors, shareholders, yeah. Exactly. So all the money comes back into it. This first year of operation we started, we launched in June 2018 for the first set of customers. And that first year we were able to generate, first of all, we set rates at 2 and 1 half percent lower than PG&E's rates for every rate category. We generated about $51 million in rate payer revenue with that lower rate. We have an $8 million fund balance that first year. And we were able to repay the startup loans to Woodland, Davis, and Yolo County, each of those three, each started out with $500,000 in a loan. We paid that back. And so we wanted this first year to be financially stable and show rate payers that we could deliver on the commitment. And that kind of return doesn't happen when you're paying shareholders, as you said. Yeah, so another thing I think is interesting is doing a little bit of research. Most of the CCEs are in considerably more dense areas. But Yolo County, being Yolo County, I imagine it took a lot of energy to not intend it, but to push this through, especially in an area where you don't have the population base and the voting base of, say, San Francisco or even Marin County. So what I'm hearing is 18 months in, we've done well on the money front. We've done well on, I know there was a lot of confusion about the opt out, how you're a customer unless you opt out. And if you follow Nextdoor and other sources, there was a lot of chatter in those early days about that, a lot of confusion. So it seems like we've kind of sorted through all of that. The other interesting thing that happened is that Valley Clean Energy, as you know, made a bid, a $3 million bid to purchase PG&E's assets in Yolo County after PG&E filed for Chapter 11. And I understand they declined that bid, but I also understand that the powers that be are not considering that this is a done deal. So can you speak to that? Yeah, I just give a little bit of perspective on this. I think, firstly, there's been a long history in Yolo of wanting to have additional options when it comes to energy in the electricity market. I mean, folks will remember 15 or so years ago, an attempt to be an, a vote was taken, of course, and both here in Yolo County, but also in Sacramento, an attempt to be annexed into the Sacramento Municipal Utility District territory that unfortunately failed. But a lot of folks have wanted to still see something like that happen over time, municipalization of the utility. So Valley Clean Energy, it's in and of itself is not that. I mean, it's really, we were procuring, we were, yes, locally governed and such, but we're really about procuring the energy, buying the energy, but I think there's a real opportunity now that with PG&E being in bankruptcy, we are not also, I think it's important to note, we're not alone in this. A variety of local governments around the state are also very interested in the same option. They think there's a different potential for their sort of electricity future, and so they are really Nevada County, San Francisco, San Jose, South San Joaquin Irrigation District, and then as well as Yolo County have all put in specific bids to try to acquire the infrastructure of PG&E to basically create municipal utilities. So ultimately, I assume that will be decided in bankruptcy court. If they've declined the bid, then it gets punted down the road, correct? Ultimately it'll become a decision by the judge involved in the bankruptcy court. Our offer is for, it was carefully crafted based on assessments of the value of the facilities. There's been a tremendous amount of uproar around the public safety power outages. There's concern by many people in California who are customers of the investor-owned utility about the diversion of the resources into profits and into shareholder dividends. So what this is about is finding a way to have the utilities actually serve the public to have, we have the capacity as a public agency to finance some of the, to finance the investment, to purchase the infrastructure, and then to finance the necessary repairs at a much lower cost than a private profit-oriented company. So we have some opportunities here that we're pursuing. And it's only one of the things that we're doing because we're at the same time that we are participating in this bankruptcy proceeding through making this offer, we are also ramping up to take on new customers. And some of the new customers for the first time, if many people who have been early adapters of rooftop solar on their own homes or businesses, they've not been included yet because there's a cash flow problem when they first come in. But starting in January, we're talking now in early December, but starting in January 2020, those customers will have the opportunity to be served by Valley Clean Energy also. That's probably game-changing for both them and Valley Clean Energy because that is the future. And in addition to all the other things that you mentioned, I think we all have a mandate too to really pursue those cleaner sources and to lower the carbon footprint around our energy consumption and our sources. So this case aside, this bankruptcy proceedings aside and bringing on new customers, when you look a year down the road, what else can we expect to see from Valley Clean Energy? I think one of the things that's really interesting is that we've heard from certainly a lot of citizens here throughout Yolo County and our constituents of some of the types of things they'd like to see. Valley Clean Energy, the types of programming that they like to see us take on. And a lot of the other CCE programs and other parts of the state are doing a lot. I think you can, and very much so, one thing that's very exciting actually, you'll see this very soon, is Valley Clean Energy received about a $3 million grant just a couple of months ago from the Sacramento Area Council of Governments for electrification, transportation, electrification. So to install chargers around parts of Yolo County, so additional car chargers, electric car chargers. I think those are the types of things and those types of programs are gonna start to see more and more of as a result of the investments that Valley Clean Energy makes. So our first year, first couple of years, the idea is to make sure we can do the job that we're financially stable. We are very interested in generating power locally, finding ways of having greater energy efficiencies and paying back into the community. This is a transparent operation and we do respond to what folks bring to us. Local governments have for a long time done very sophisticated operations. There are many electrical companies operated by local governments. We currently operate wastewater treatment systems water delivery systems, landfill operations, they're very sophisticated. So we can operate an electrical supply and infrastructure system when we bring in the right experts to do it for us and have it be governed by people elected by their own community. And I imagine the success of the wastewater treatment facility, for example, has been a real boon in terms of pursuing these efforts because as you said, okay, here's an example of how this works. And now let's create other examples of how that works. Absolutely. We're winding down our time here. So any last thoughts, Lucas? We are, it's been a real pleasure and an honor to be able to be participating in this process from the very beginning and we actually have come a long way over the course of this past year and a half and we're really excited to see what the next few years holds for valet clean energy. I want to thank you both for joining. I know you're both busy. So I always appreciate you coming in here. And I want to let you at home know that you can find out more about valet clean energy by going to valetcleanenergy.org for as long as that dot org domain exists. I don't know if you heard the news. I know, not yet. It's been, it's a topic for another show but it's been basically taken over by a private owner now and it kind of puts nonprofits and government organizations at risk. Oh, I'll fill you in off camera. So we have been talking today about valet clean energy and discussing some of its successes in its first 18 months of operation with a little look toward the future and I think we'll bring you back down the line and we'll maybe after the bankruptcy hearings and kind of see what's going on with valet clean energy. Thanks so much for tuning in. Be sure to check out our archive of all these programs on DCTV.Davismedia.org. I'm Autumn LaBeirano. See you next time.