GUEST OPINION: Why Sonoma Clean Power ratepayers need not worry
Today in Sonoma County PG&E has a monopoly over electric utility service. With no alternative, customers cannot easily leave PG&E. Also, unless you're a major shareholder, you cannot easily influence PG&E's activities.
Any private company with a legal monopoly has little incentive to keep rates as low as they can and provide good quality service. Instead, such a company will tend to maximize profits and minimize service. To counter this tendency, the state Public Utilities Commission regulates PG&E and companies like it.
The job of my unit, the Division of Ratepayer Advocates, is to be a watchdog for residential and small commercial customers' rights and to examine PG&E's rates and services. We provide the necessary voice for utility customers at the California Public Utilities Commission.
As Sonoma County prepares to launch Sonoma Clean Power, one prevalent question is, do customers here need a ratepayer advocate like the Division of Ratepayer Advocates to protect them from the potential evils that befall monopoly utility service?
Let's examine the facts. Sonoma Clean Power as a community choice aggregation program will choose its own electricity provider and offer an alternative to PG&E. Effectively, Sonoma Clean Power customers will have the best weapon against rising utility prices, competition with private utility service. And just by being able to choose between PG&E and Sonoma Clean Power, customers can exercise the most powerful ratepayer protection tool they have: choice. PG&E will still send the bills and will still own and service the wires, but with competition will come a level of natural consumer protection that even the Division of Ratepayer Advocates can't provide to PG&E customers.
Customer choice provides a built-in guarantee of cost and service competition between PG&E and Sonoma Clean Power. Once competition is introduced, residents and business customers enjoy greater benefits. They can always exercise their right to choose PG&E or Sonoma Clean Power. (Please note that for those customers opting out of Sonoma Clean Power during the original enrollment period, PG&E imposes a significant waiting period before they may opt back to Sonoma Clean Power.)
Furthermore, the board, composed of local elected officials, will have to answer to constituents if Sonoma Clean Power is not cost competitive or if service is not good. That isn't the case with PG&E where the highest value is increasing shareholder value.
Another point to keep in mind is that electric utilities run by local government in California have lower rates and better service on average than do investor-owned utilities.
Sonoma Clean Power goes one step further for ratepayer protection than is required by law by establishing a ratepayer advisory committee as a watchdog for customers. This is admirable.
Along with the ratepayer protection benefits of Sonoma Clean Power should come other opportunities and efficiencies. One opportunity is access to energy efficiency funds that are already collected by PG&E from its customers. Sonoma County will benefit by being able to tailor these funds to the specific needs of Sonoma County customers, considering its specific climate and energy uses. These substantial funds can be used to leverage private investment, thereby creating local business and jobs. The county should be able to manage the efficiency program for less money than PG&E.
The opportunity afforded by Sonoma Clean Power and the competition it provides to PG&E will benefit electricity customers in Sonoma County. As a Sonoma County resident myself, I plan to choose Sonoma Clean Power. It provides a way to plot a greener energy future for Sonoma County, and it gives me a way to help keep electricity rates low in the long run for my family.
Joseph P. Como is acting director of Division of Ratepayer Advocates at the California Public Utilities Commission. He lives in Sebastopol.