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Bidders for Sonoma County public power agency narrowed to 4

Published: Friday, May 3, 2013 at 4:54 p.m.
Last Modified: Friday, May 3, 2013 at 4:54 p.m.

Four energy companies have emerged from a group of 11 competing to become the main electricity supplier to Sonoma County's planned public power agency.

The short list of candidates, released Friday by the county, does not include Shell Energy North America, a subsidiary of the Dutch fossil fuel giant and the controversial main supplier to both Marin County's public power program and the proposed agency in San Francisco.

It also does not include Calpine Corp., the Houston-based operator of The Geysers, the geothermal field on the Sonoma-Lake county border that supplies about a quarter of California's renewable energy.

The four final candidates are:

• NRG Energy, based in Houston and Princeton, New Jersey, one of the country's largest power producers and retailers.

• Direct Energy, an energy retailer based in Canada and the U.S., a subsidiary of the British multinational Centrica.

• ConEdison Solutions, based in Valhalla, New York, a subsidiary of Consolidated Edison.

• Constellation, a power and natural gas supplier and subsidiary of Exelon, the Chicago energy producer, trader and distributor.

The list was disclosed four days before the county begins a series of public presentations before local city councils urging them to join the power agency. County officials have said they intend to award a power-supply contract by September and begin delivery to homes and businesses Jan. 1.

The county power plan has been under study since 2011 and was tentatively approved for the unincorporated areas of the county last week by the Board of Supervisors. It is built on the assumption that customers — who can opt out of the proposed system — prefer an alternative to Pacific Gas and Electric designed to rely more heavily on renewable energy, shrink the county's carbon footprint and promote local generation projects that provide jobs.

Billing, metering, transmission, grid repair and customer service would remain with PG&E regardless of any county program.

Ten companies and one nonprofit agency submitted bids for the initial contract to provide electricity to the program. The proposed contract term is three years, with an estimated worth of about $340 million.

The responses, received early last month, came mostly from large national and multi-national energy suppliers.

Cordel Stillman, deputy chief engineer for the county Water Agency and the lead staff member on the proposal, said Friday that the final list of companies was selected based on four main criteria: power prices; start-up assistance to the county program, including financial assistance; bond ratings; and programs to promote energy efficiency and power usage that lower customer bills.

Strong political opposition to Shell Energy North America, voiced especially by labor and environmental representatives, did not factor in the decision, Stillman said.

Calpine was not selected, he said, because its proposal was partly tied to future expansion at The Geysers. The company has approvals for two planned plants, worth an estimated $700 million and capable of generating about 100 megawatts, or just under a third of the peak demand the county would need to serve its targeted 220,000 meters — about 80 percent of PG&E's customer base in the county.

But with the rollout set to begin in January, Stillman said Calpine “wasn't a good fit for right now.”

“We intend to talk to them about what we can do in the future,” he said.

Calpine representatives could not be immediately reached Friday for comment.

Proponents of the public power agency expressed surprise that Shell and Calpine did not make the short list.

Shell's elimination erases a potential liability, they said. “I'm not necessarily sad that Shell is not on the list because politically it's a problem,” said Ann Hancock, executive director of Santa Rosa-based Climate Protection Campaign, an advocacy group supporting the proposal.

Representatives of Shell Energy North America could not be reached immediately for comment Friday.

Hancock withheld further reaction about the short list, saying she had not yet studied the selected companies.

Jack Buckhorn, a local labor leader and business manager for 750 North Bay electricians in Local 551 of the International Brotherhood of Electrical Workers said he was “cautiously optimistic” about the final list of companies.

News of the short list triggered a flurry of email messages Friday afternoon among people and groups who've provided input on the county power plan, Buckhorn said.

While the list doesn't raise any alarms, he said, little is known about the companies' bids. The county has refused to publicly disclose any of the 11 responses, contending they could undermine negotiations with an eventual winning bidder.

“There are a lot of factors that we need to look at before we say this is a good deal for the taxpayers and the ratepayers,” Buckhorn said.

(You can reach Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com.)

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