MCE plans workshops on energy supplies and strategies

MCE will hold two public workshops to discuss and gather feedback on the utility’s energy contracts.

“Both will be based on facts, options and implications,” Vicken Kasarjian, the chief operating officer, said at a meeting Monday. “These topics are fundamental to start rebuilding mutual trust and eventually take the necessary steps for bringing to the board core policy decisions on energy and finances for our collective future,”

Kasarjian has been the agency’s acting chief executive officer while Dawn Weisz is on leave.

The workshops come as the $800 million-a-year renewable energy agency is planning its generation and acquisition strategy for the next several years.

The organization has been facing criticism from environmentalists and some board members that it has overstated its clean energy content; has spent hundreds of millions of dollars on market credits to boost its carbon-free credentials; and has been hiding its reliance on gas generation to meet state supply quotas.

“We are looking forward to a transparent, fact-based, interactive discussion,” said Dan Segedin of the Marin Conservation League. “We hope to get an assessment of MCE’s true emissions profile and the policy choices they can make to reduce them.”

“I’m delighted to see MCE is scheduling two public workshops to dive more deeply into procurement practices and policies,” said Jody Timms, chair of 350Marin, a climate activism group. “350Marin is hopeful these workshops will involve an open and honest dialogue with board and community members and lay the groundwork for better strategic decisions into the future.”

MCE has six categories of energy contracts. Some are specifically for long-term clean generation from solar panels, wind turbines and geothermal. Others are shorter in duration and come from wholesale energy markets where different attributes of power generation are parsed, priced and reported — or not currently reported — to state climate policy regulators.

The first workshop will discuss so-called “index-plus” and hedge contracts, Kasarjian said.

Index-plus contracts are short term for up to several years. They have been criticized by environmentalists for boosting the carbon-free percentages on MCE’s state-regulated “power content label” without adding new clean power to the system. In the MCE fiscal year ending March 31, $131 million of the $766 million energy budget was for short-term contracts, which mostly are “index-plus” contracts.

Hedge contracts are a different contract category. They lock in a set price for bulk wholesale power. California’s power content label does not include emissions from these supplies. That’s because their generation source is not easily traced once its electrons have been added to, and distributed from, the grid, which is like a reservoir fed by different streams. Regulators say “unspecified power” is mostly from gas plants.

In the last fiscal year, $225 million of the $766 million budget was allocated for hedges. Index-plus contracts are often used to offset the carbon content in hedge contracts.

“Sierra Club is … concerned that MCE’s ‘energy hedges’ are simply gas transactions which are structured to evade state reporting requirements for gas energy purchases,” Julia Dowell, a campaign organizer, wrote to the MCE board on April 15. “We are further concerned that MCE spends significant ratepayer funds on environmental attributes — often of questionable impact — to offset these purchases on its Power Content Label.”

The second workshop will focus on “resource adequacy” contracts. These are state-required bulk purchases to ensure the grid has enough power in extreme weather for heating or cooling. In its last fiscal year, MCE budgeted $106 million for these contracts. The most recent California Public Utility Commission resource adequacy report, from 2023, said 16% of MCE’s RA contracts were from “zero-emitting resources.”

In its last fiscal year, MCE budgeted $137 million for long-term clean and carbon-free supplies. In its current fiscal year, which started April 1, $180 million of the $632 million energy budget, or 28.5%, is for this power.

“While MCE markets itself as a leader in decarbonizing RA, recent state reporting identifies MCE as the worst performer on clean RA among Bay Area CCAs,” Dowell said.

CCA stands for community choice aggregation, which is the name of the state program that created MCE and similar energy agencies across the state.

Kasarjian said MCE’s procurement strategy and policies will be discussed at the workshops.

“We are looking forward to creating a space to receive input on those core issues and to engaging in open dialogue,” he said. “A diversity of fact-based perspectives makes our work stronger and we’re committed to growing stronger together.”

The first workshop has tentatively been scheduled for 4:30 p.m. June 24. The second workshop is set for 4:30 p.m. July 1. They will be held at MCE offices in San Rafael and Concord and streamed online.