United States

United States

Local government waking up

The potential for constructing large wind projects by forming partnerships with local governments could be opening up in California. The City of San Jose has issued a Request For Proposals (RFP) for new power supply that requires bidders to include pricing and availability of renewable resources.

The RFP, which had a deadline in early September, is the first of its kind as California heads for deregulation of its energy market next year. The request could set a significant trend in a state that tends to lead the nation in policy matters. But market observers warn that this potential for wind and other renewables may disappear unless nurtured by both future project developers and environmentalists.

San Jose is looking for 42 MW of a 50 MW load in the RFP that also includes three other regional authorities, all customers of Pacific Gas & Electric. The RFP does not specify the proportion of new capacity expected from renewable power. Instead, bidders must indicate pricing of renewables and how they envision suppliers reducing any extra cost of clean power by accessing state funds. Last year's market restructuring law designated as much as $81 million in rebates for renewables consumers. The RFP asks bidders to describe how public agencies can benefit from such rebates and suggests bidders propose a scale of shared savings based on the "percentage of renewable resources in the supply portfolio."

San Jose is one of the few California local governments shopping for cleaner power even before the state opens its free energy market in January. Berkeley, Santa Monica and Chula Vista are also interested in buying renewables to power municipal buildings and other operations, but they are struggling with questions of franchise agreements and costs.

Meanwhile, an activist group, Coalition For Local Power, has persuaded the City of Davis to consider a new local utility and power plan based on "community access to electricity." Consumer advocate Eugene Coyle argues that this model -- rather than San Jose's -- is the key to renewables in a deregulated market. "If we let the big municipal load be cream skimmed, the political odds of getting a comprehensive deal really diminish," says Coyle. "We in the public interest community must discourage municipal governments from signing up for these deals, urging them instead to put together a comprehensive deal for the entire community." The city has yet to come up with a firm plan. The coalition has promised a detailed proposal of its concept by November.

Consumer co-operative

Yet another free market model for renewables comes from the Plumas Sierra Rural Electric Cooperative (PSREC), serving about 6000 customers in northeast California. The group is talking with the Sierra Club environmental lobby about creating a state wide green consumer co-operative. PSREC's Bob Marshall argues that green marketing to local governments will only work through non profit entities, since local governments get too "bogged down" in trivial matters. "Unfortunately, government entities end up acting like government entities," Marshall says. "Co-ops are controlled by members who can be as green as they want to be."

Ironically, the discussions with the Sierra Club have now bogged down themselves over definitions of green power and how power sources should be evaluated. The proposal has also been questioned for its ability to sign up enough members and raise the capital to support large scale developments or purchases.

Another route for renewables development is under investigation by the Local Government Commission. The group has gained tentative approval of a programme that would create "community energy authorities" in 20 cities, bodies authorised by legislation passed in the early 1980s but never used. These would have the power to develop renewable resource projects and issue tax exempt bonds.

To date, few wind developers, or environmental organisations for that matter, have explored creating such partnerships with local governments, a notable route to larger, more cost effective wind projects.

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