The Sonoma County Board of Supervisors on Tuesday approved a major piece of its plan to become a power supplier to homes and businesses, creating an administrative agency to oversee its proposed program.

The unanimous decision does not launch the public power venture, which would compete with PG&E, the region's main utility. That final step could come next year, pending the return of favorable rates from power suppliers.

But the board action, which came before a packed, largely supportive audience, is the most significant step forward for the effort after 20 months of studies, surveys and public meetings.

Supporters, including environmental groups, union officials and some business groups, see the effort as a key way to boost investment in renewable power, create jobs through the construction of local energy projects, and reduce greenhouse gas emissions.

"This will be a tremendous stimulus to our local businesses and our local economy," said Dick Dowd, a Santa Rosa developer who serves on the board of the Climate Protection Campaign, an advocacy group pushing for the public power program.

Supervisor Mike McGuire called Tuesday's action "a very important milestone." But he also quickly acknowledged the "elephant in the room" continues to be what the program would charge customers for power.

Those potential rates could be known as soon as next month, after the county solicits bids from power suppliers. A county study last year showed the average customer's rates might be $4 to $10 higher initially per month than those charged by PG&E but could level out and become cheaper over a 20-year period.

Competitive rates will be crucial to the program's success, supervisors said.

"We need to be able to sell it, like any business," said Supervisor David Rabbitt.

Customers would have the ability to opt-out of the county-run program, which aims to serve about 80 percent of ratepayers countywide, or about 250,000 metered customers. PG&E would retain responsibility over transmission and billing.

The county's move is authorized under a 2002 state law that lets local governments buy energy on the wholesale market and sell it to residents and businesses. Marin County has the only active program. San Francisco's has been launched but is not yet active.

As the board's self-described "skeptic" on the proposal, Rabbitt ran through a list of questions about the risks the county might assume in taking on the new venture.

What's to prevent PG&E, which currently gets about 19 percent of its power from renewable sources, from undercutting the program by offering a similar renewable portfolio to the county's proposal, on the initial level of 33 percent, Rabbitt asked.

That possibility cannot be ruled out, said Grant Davis, general manager of the Sonoma County Water Agency, which has overseen the proposal.

"This is a huge commitment, a generational commitment, and we need to make sure we take that into consideration," Rabbitt said.

Business representatives have been cautious in backing the proposal, but several came forward Tuesday to say they supported the board action and were looking forward to additional financial details in the months to come. City representatives, anxious about any liabilities they might shoulder in the arrangement, have taken much the same stance.

"You have a cautionary flag that goes up especially when it's a matter that's this big," said Keith Woods, chief executive officer of the North Coast Builders Exchange, a Santa Rosa trade group.

The independent entity created by the Board of Supervisors, dubbed the Sonoma Clean Power Authority, is a joint powers agency designed to shield the county and any participating cities from liabilities to their general funds, Water Agency staff said.

It will be overseen initially by just the Board of Supervisors and will continue to be staffed and supported by the Sonoma County Water Agency until any final decision is made to launch or kill the program. City representatives would join as directors if and when their councils consent to have customers in their jurisdiction served by the public power venture.

The board also authorized creation of two appointed committees, composed of ratepayers and business representatives, to guide the new agency.

As a final business item, the board authorized two new consulting contracts related to the program for a total of $150,000. Marin Energy Authority, the county's public power venture, will be paid $50,000 to help review Sonoma County's request for power rates and analyze returned bids, along with other services.

The board also authorized the Water Agency to extend its contract with consultant Geof Syphers for an additional $100,000. Syphers is assisting the search for start-up funding for the new agency. Up to $9 million is needed to cover the next eight months, including $2 million for the next six months of outreach and review of power rates and $7 million to cover the first two months of operation and power purchases.

To date, the Water Agency has spent about $520,000 in staff time, studies and consultants.

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