MCE staff aligns with critics on climate progress claims

At a workshop on energy supplies and contracts, MCE management acknowledged that concerns about overstated climate progress are valid.

“Our goal is to create space for informed, thoughtful discussion so that when the board is considering decisions down the road we are all starting from a common foundation,” said Vicken Kasarjian, acting chief executive of the renewable power provider. “The end goal for these exercises is to support open, honest and fact-based discussions, build mutual trust, and find ways to help us advance.”

The workshop on June 24 was the first of three scheduled as the organization goes through a leadership transition. The agency, formerly known as Marin Clean Energy, procures electricity for 1.8 million consumers in Marin, Napa, Solano and Contra Costa counties.

MCE’s longtime chief executive Dawn Weisz stepped down amid mounting criticism of the management and board. The Marin County Civil Grand Jury issued a detailed report saying the MCE board failed to govern, Weisz failed to follow internal controls and critics’ environmental and fiscal concerns were legitimate. The MCE board has launched a governance review.

Climate activists have been concerned that MCE has understated its energy supply’s carbon emissions that contribute to atmospheric warming.

They and fiscal watchdogs have also criticized MCE for spending hundreds of millions in recent years for energy market credits that allow it to claim “zero-carbon” emissions in state reports — without providing additional clean power. The state reports are the basis for MCE’s marketing, and the cost of the energy credits adds to monthly utility bills.

“Conservatively, tens of millions of dollars each year are spent to make fossil-free product claims rather than on the things that create durable value: new clean generation, innovative customer programs, high road workforce development, and bill affordability,” CCA Workforce and EJ Alliance, a coalition of 40 labor, climate and justice groups, said in a letter to the MCE board on June 23.

C.B. Hall, MCE power resources director, validated the criticisms as he discussed the energy sources and contracts used to meet state supply quotas and MCE marketing goals.

But he also said the MCE board approved of the spending decisions and said some arcane energy contracts have brought investment to the renewable energy sector.

Hall broke down MCE’s overall energy supply. Half of what is procured fulfills MCE’s mission of new renewable generation: solar, wind, small-scale hydro and, soon, geothermal power, he said.

Twenty percent of MCE’s supply comes from nuclear power plants and large hydroelectric dams owned by Pacific Gas and Electric Co., he said. The remaining 30% is wholesale bulk power purchased from the state’s electricity grid system when demand peaks in late afternoons and nights.

“You’re relying on uncontracted energy, which, to me, is gas,” Hall said of the electricity supplies mostly feeding the grid when demand spikes.

MCE’s energy purchases and strategy come against a backdrop of two state agencies with different energy programs. The utility first must satisfy a California Public Utilities Commission supply quota to ensure the public always has enough electricity.

MCE also goes beyond that quota and buys clean energy credits that influence its climate report card overseen by the California Energy Commission.

The commission’s report card, its “power content label,” is an annual compilation that counts what it classifies as renewable power — which doesn’t include nuclear plants and large hydroelectric dams due to other environmental impacts.

The power content label also does not count emissions from power procured from the state grid, which Hall said is 30% of MCE’s supply.

But the California Energy Commission does include and count MCE’s purchase of clean credits, which, technically, are called “attribute” or “index-plus” contracts.

In its fiscal year ending March 30, MCE spent $131 million, or 17% of its energy budget, on attributes. Its current budget projects spending $33 million, or 5%, on these contracts.

MCE cites the state’s “power content label” as the basis for its advertising, which touts electricity plans that are virtually greenhouse gas emission free.

“That allows you to get a claim on the power content label that you’re 100% greenhouse gas-free,” said Dan Segedin of the Marin Conservation League.

Environmentalists have said attribute contracts are “resource shuffling” and a marketing charade.

But MCE executives said at the workshop that the contracts have pros and cons.

Spending on attributes by MCE and peer agencies has drawn investment into the renewable energy sector, Hall said.

But Kasarjian pointed out energy trading was a “seller’s market,” where board directives to have high numbers on state report cards increased MCE energy costs.

“It’s not a seller’s market if we don’t have to buy; we could buy less,” Segedin said, referring to the attribute contracts. “That’s kind of the proposal on the table.”

Hall said MCE could now meet the state supply quotas and clean energy targets without these contracts.

“Where we are right now … gives us almost exactly what we need to meet the renewable portfolio standard,” he said. “And we already have under contract, not yet online but under contract, more renewables coming that will get us above the RPS mandate.”

Kasarjian and Hall said the reason MCE has spent hundreds of millions in recent years on attributes is because the board wanted the agency to be seen as a climate leader.

“Correct me,” said Nick Pappas, a San Anselmo energy consultant. “The entirety of the index-plus purchases are voluntary and serve no compliance function and have no relationship to anything the CPUC is asking you to do.”

“We are in a position today where that is correct,” Hall said. “But it wasn’t too long ago where we still needed the index-plus contracts.”

As the workshop closed, Hall said the board could consider restructuring some of its retail products and emissions targets.

“How much clean energy?” he said, raising policy questions. “What are our emissions targets?”

Hall noted the California Energy Commission’s power content label was transitioning from annual to hourly emissions accounting.

That transition, starting in 2028, will likely reveal many communities are not making as much climate progress as they believe, he said.

The workshop closed with Belvedere Mayor Sally Wilkinson saying “ratepayer value” has to be part of the ongoing discussion and praising MCE management for the forum.

“I just wanted to really thank C.B. and Vicken and everybody else really sincerely for their transparency here,” she said. “It’s been really refreshing and as board members it finally allows us to make some policy decisions that will be useful for the climate and the community.”

Wilkinson was among nine members of the 34-member MCE board who attended the workshop. Marin County Supervisor Mary Sackett and Larkspur Mayor Stephanie Andre also attended.

Most supporters of Weisz were absent. The Marin County Civil Grand Jury report noted that board absenteeism was among the obstacles to better governance.