Amid PG&E bankruptcy, San Jose rolls out community choice energy program

Days after the state’s largest utility provider filed bankruptcy, the capital of Silicon Valley turned the lights on San Jose Clean Energy, a new community choice plan that environmentalist Ruth Merino has been fighting for the last three years.

“No one has to change anything,” Merino said. “You just pay your bill just like you always have. When I talk to people in the other parts of the county that have already been in the program, they don’t even know they’re on it.”

The program, which was approved by the San Jose City Council in 2017, is one of nearly two dozen community choice energy programs in the state. San Jose Clean Energy will source the renewable and carbon-free energy, while PG&E will deliver the energy, provide customer service and take care of the billing.

All San Jose residents will automatically be enrolled in San Jose Clean Energy, unless they opt out and choose to stay with PG&E.

“It’s an unobtrusive way to make a big change collectively in a given community,” said Zachary Stuyk, a deputy director at San Jose Clean Energy.

Stuyk said that all residents are automatically opted in with a one percent discount from PG&E’s prices that includes a 3 cents per kilowatt “exit fee” that’s mandated by law for those departing PG&E. Other community choice aggregators, like Silicon Valley Clean Energy, have been operating in cities around the county since 2017.

One of the big draws to the program, Stuyk said, is the renewable energy aspect.

San Jose Clean Energy’s baseline program sources energy that is 45 percent renewable and 35 percent hydroelectric. It also offers a 100 percent renewable product. That’s compared to PG&E’s mix, which in 2017 was reported as 33 percent renewable, 27 percent nuclear, 20 percent natural gas and 18 percent large hydro.

“The whole goal is to reduce greenhouse gas emissions,” Merino said. “Climate change is the biggest problem of our time and we have to work on solutions at the local level because the federal government is not.”

But in the weeks leading up to Friday’s launch, San Jose Clean Energy staff monitored PG&E’s future very closely. Talk of bankruptcy loomed around the utility after it was held liable for damages from fires in 2017 and 2018, including the deadly Camp Fire. PG&E on Tuesday filed for Chapter 11 protection with $51.7 billion in debt and $30 million in wildfire liabilities.

Despite the news, there was no disruption for San Jose Clean Energy because a bankruptcy judge ordered PG&E to continue payments to community choice aggregators. According to Stuyk, there had been a pause in the payments, but they were expected to resume within days.

Stuyk also added that they’re monitoring what a possible public takeover of PG&E would mean for San Jose Clean Energy.

“Some jurisdictions that operate CCA programs may investigate municipalization, while others may want to remain focused on providing generation services only,” he said. “Here in San Jose we are exploring all options that improve energy, affordability, safety, reliability and transparency. We also remain focused on protecting the general fund, increasing clean energy options and expanding local benefits.”

But while everyone is automatically opted into the new program, a handful of residents leaving the Almaden Boulevard PG&E office on Friday morning said they’d never heard of San Jose Clean Energy.

Dan Carpenter, who saw the flyer in his PG&E envelope recently, said he thinks most people probably don’t notice the information attached to their bills. He said he’s guilty of that himself.

“We should be using the natural energies we have now and I thought PG&E was using hydroelectric as well as other forms of energy,” Carpenter said. “I didn’t think they were high on burning fuels to provide energy. I don’t know why we have such a big change happening.”

Contact Grace Hase at [email protected] or follow her @grace_hase on Twitter.