In the Wake of Wildfires, California Community Chooses Local Power — Episode 99 of Local Energy Rules Podcast

Matthew Marshall

The folks that are going to have a less good deal and kind of be left behind are more likely going to be residential customers, low income customers, small businesses that don’t have the capacity and or are going to be sort of appealing customers from a competitive standpoint. And so I think that aggregation model left you say, Hey, let’s do good things on behalf of all customers and share whatever benefits we’re able to achieve, not just make it where big guys can get a good deal and the little guys pay equal or more than what they would have otherwise.

John Farrell

How can communities make their economies stronger and more resilient? Thanks to a policy called community choice energy, communities across the country are taking charge of their energy supply and incorporating this new power into their plans to boost the local economy. I’m joined by Matthew Marshall, Redwood Coast Energy Authority Executive Director, to talk about how his public energy agency is tapping local renewable energy resources to support this coastal California community. I’m John Farrell, director of the Energy Democracy initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a podcast sharing powerful stories about local renewable energy. Matthew, welcome to the program.

Matthew Marshall

Yeah, thanks for having me on.

John Farrell

So I sent you a full list of questions. I wanted to ask so many detailed questions about things that you’re doing as part of your work, but I was actually hoping to start by just letting you describe where is the Redwood coast energy authority, where are the communities that you serve so people could maybe think about this on a map.

Matthew Marshall

Yeah, we, we serve the County of Humboldt in Northern California and all the incorporated cities within the County and so we’re kind of in the far north of California on the coast, about five or so hours north of San Francisco.

John Farrell

Perfect. That’s very helpful. One of the questions I had thought of ahead of time was really around how California is really diving into community choices. There are already dozens of communities across the state, as many as half of California electric customers are going to be served by community choice agencies, by communities that have made the choice to make their own energy procurement decisions. What do you think motivated the communities that are part of the Redwood Coast Energy Authority? What motivated folks in Humboldt County to say, we want to have this authority to do a community choice program and to choose where our energy comes from?

Matthew Marshall

No, really, I think there’s a couple of elements to it. There’s been a lot of interest in developing local renewable resources within our community, both for the environmental benefits as well as the economic development opportunities that they create and really looking at, well, how do we move that forward? You know, we developed a strategic plan called Re-power Humboldt that really looked at the opportunity and the potential and then we kind of said, well, how do we implement this and not just have it be a plan on a shelf? And really community choice aggregation was the vehicle that would give us local control to actually pursue those objectives, invest in those kinds of projects and programs that we wanted to see happen. And so basically, you know, it gave us the ability to take of our own destiny and move things forward on behalf of the community.

John Farrell

The basic feature of community choice aggregation is the power of bulk buying. But in reading about some of the initiatives that the Redwood coast energy authority is working on, it seems to really be leaping past some of that kind of basic stuff. So I’ve heard about a micro grid for the County airport. I’ve heard about offshore wind and electric vehicle charging corridor along the coastal highway and even purchasing local biomass for power generation to take advantage of the local forestry industry. Could you maybe just tell us a little bit more about a couple of these things? The micro grid project and then that integration with the local forestry industry.

Matthew Marshall

Yeah. So we really kind of have set the priority of not just kind of saying, hey, we want to do, you know, renewable energy procurement and hit the state targets early. I mean I think that’s a, an important goal, but we want to kind of look at ways to both achieve that while also providing broader benefits to the local community in the way that we move that forward. And you know, I should note that we launched our community choice aggregation program in 2017 but we’ve been around as an agency working on sustainable energy initiatives since 2003 and so we have a long history of doing energy efficiency programs. We own and operate an electric vehicle charging network in the County. And I’ve done a lot of energy planning work and so we’re building on that past focus on really kind of local programs and deploying local projects here in the community and using CCA to do that. And I think, you know, a couple elements of that. You know, you mentioned the biomass power piece. You know, we’re, I think still the number one forest products producing County in the state of California and there’s still a strong part of our economy that really depends on our forest and working lands. And then, you know, a piece of that puzzle is local biomass facilities that utilize mill waste and other wood waste to generate electricity. And that’s a community resource. But if you don’t have a way to locally process, it becomes a huge liability cause we’re just talking thousands of tons of material that has to go somewhere. And so without local processing that really could have potentially catastrophic impacts to the ability of, of local mills to be successful and financially viable. And so in the past it hasn’t been an issue with when renewable prices were much higher, the biomass plants, which it’s sort of a labor intensive operation, you know, we’re able to be competitive in the renewable field and you know, and we’re plugging along. And then a good problem to have the cost of renewables has just come down so dramatically with, with solar and wind prices dropping that the biospace has had a hard time quite, you know, making it an under the wire to be cost competitive in just a, you know, a completely open playing field, you know, trying to get contracts and competing against solar. I think where the community really wanted to, to focus on the use of local renewables, those are existing facilities and so we could afford to initially pay a little bit more to basically provide that power locally. And it started out as sort of a, a way to keep local jobs and local generation going. And I think as actually been seeing the energy market’s changing even, you know, just the last couple of years, the ability to have base-load renewables and AB local generation as we’re looking at things like public safety, power shutoffs and the technical potential to keep local generation powering our community. Having those local plants. It’s starting to seem like a good investment, not just on the front of keeping the jobs and supporting the forest product sector but a good investment from an energy reliability and getting to the goal of 100% renewable electricity generation in the County. Those facilities can play a key role.

You also asked about that, we’re working with the Humboldt State University, Schatz research center, the County of Humboldt, PGE the local investor-owned utility and a number of other partners on developing a microgrid project at our County airport and this is not the first local microgrid who’s actually been a number of projects that Blue Lake Rancheria working with the folks at the Schatz center. We’re sort of groundbreaking in their efforts there and they’re building on that with additional facilities. And we recently had a public safety power shutoff that affected our entire County and the Blue Lake Rancheria microgrid proved the value and relevance of that kind of a system by them being able to stay operational, continue to provide services to a lot of people that went there specifically because they were up and running. They actually made rooms available at their hotel for folks on medical equipment that needs electricity. And so people’s medical needs were being met during the outage. They made that space available to relocate those people on, you know, life supporting equipment that needs electricity. And so I think that really showed the value of this kind of system. The project we’re working on at the County airport is sort of taking it to the next level and in the sense that it’s going to be a multi customer micro grid with the primary generation and storage elements actually being owned and operated by RCA. So it’ll be on the utility side of the meter and it’ll be providing power and services to our customers. Just broadly through our CCA program on typical blue sky, good conditions, but then in a situation where the broader grid goes down, we’ll be able to actually island a whole branch of the PG&E distribution grid that has multiple customers on it.

And so that will basically allow us to then switch from those wholesale assets, the solar and the storage. And there’s also some other generation within the, some behind the meter solar as well. All those resources will be able to switch over and we’ll have the controls in place to be able to power that whole cul-de-sac off the grid, if you will on those resources. And so that includes the County airport, includes a number of sort of adjacent associated facilities, includes our coast guard air station, which is obviously a extremely critical facility for our County. It’s a really being able to power all of those facilities. It basically for an indefinite period of time because the solar and storage is utility scale size. It’s oversized for the onsite loads and so when it goes into the Island mode, it’ll be a lot of power available. And so we’ll, we’ll basically be able to power those facilities and definitely on solar and storage for any period of time necessary. We’ll still have obviously backup generators as a second line of defense and so on its own, it’s a key project because the airport and the coast guard are extremely important facilities in the County in any kind of situation or emergency. But one of the things that’s very exciting about this, and we’ve gotten a lot of support and funding for this project from the California Energy Commission, is the opportunity to do this kind of a multi customer micro grid setup really opens up the opportunity to look at neighborhoods or areas where maybe there’s multiple hospitals or other kinds of situations where it isn’t sort of like what you might say typical microgrid where it’s a single customer in their own kind of campus that they can island and isolate from the grid but be able to operate a whole section of the grid that includes multiple customers really will hopefully broaden the range of opportunities where you could deploy micro grids to provide resiliency and emergency response capabilities.

John Farrell

So you mentioned already that Pacific Gas and Electric is helping with this micro grid, so they are incumbent distribution utility serving Humboldt County who mentioned the public safety power shutoffs, which of course are making the news, the fact that they’re turning off the grid in response to weather conditions that could spark wildfires by blowing the power lines into trees. I’m guess I’m just kind of curious about how it’s bankruptcy and whether or not that financial proceeding has an impact on Redwood Coast and other community choice agencies in its service territory and it also like with the wildfires, it sounds like Humboldt County was one of those communities that had the power shut off entirely. Is that changing the way that you think about how the community choice agency is going to serve the community? Are there more things like micro grids in your future to deal with that?

Matthew Marshall

I’ll say just briefly on the bankruptcy. Thankfully that has not yet impacted our relationship and our work with PG&E. You know, we’ve been able to continue on this project and it hasn’t had any subsidy impacts on our overall work. And partnering with PG&E to operate the CCA program through them as the structure requires, obviously that’s still ongoing. And so what the final outcomes there will be and how things may or may not change is still very much an unresolved question and to be determined. So we’ll, we’ll see how that story plays out. But we’ve been relieved and glad that the PG&E team that we’re working with on like the microgrid project has not diverted from that. And I think they see the potential, you know, not to speak for PG&E, but you know, as they’re looking at how to build the grid of the future, I think they really are interested in projects like this.

And that’s why we’re excited to have them as a committed partner. You know, they’re not sort of just a passive observer to this. They’re critical to be at the table because again, we were using their distribution grid and our generation resources to operate in the micro grid. And so, you know, it has to be a very close integrated partnership to make it successful. And so I think the fact that they’re committed to this shows that they see the value of it to them, as the grid operator, in improving the way that they’re able to provide services and particularly in these kinds of situations. You know, I think as far as this most recent power shut off, you know, I think it was kind of a wake-up call both for the, the challenge of, of managing the grid that way our County was entirely shut off and we’re two counties away from where the primary issues were. So we were sort of an indirect casualty due to the nature of how the transmission system is configured and the, and the, the power flows in and out of the County. And so I think at an overall level that really kind of highlighted the need to look at how do we have local generation resources that can meet our needs broadly as a County and configuring the grid to be able to do that, which is again, easier said than done in many ways. But so that we’re not, again, being dependent on transmission in and out of the County and then having, you know, two counties away, a substation or a transmission line and having to be de-energized and that causing our power to go out when we could have the resources and the grid capabilities to continue to operate if there isn’t fire danger here. So that’s kind of the big picture.

The other piece that I think really highlighted was the need to address energy security for not just these sort of planned outages, but for in the case of a, an emergency or a natural disaster that could be an extended outage, have a resilient facilities and particularly ones that are powered by renewables that can operate for extended periods of time. This even just one day of the entire County being without power kind of highlighted, Oh well if you’ve only got so much fuel available, do you put that in your police cars? Did you put it in your generator? And if you put any generators, which generators, you know, what’s the priority, where do you kind of deploy those resources? And so the more facilities and critical infrastructure that can be supplied with renewable backup that takes the pressure off of your fuel supplies and dependence on, you know, only having a certain number of days of fuel for, you know, your, your diesel generator backup or having to make tough choices of where to use that fuel and where not to if it lasts multiple day kind of outage or emergency.

So I think there’s a silver lining to this recent power safety shutoff for our County is, it was a fairly short, you know, one day it was long enough to see what the challenges would be. And so it was a good practice run to say, okay, you know, this helps identify really how we can work to better prepare ourselves. So if the big earthquake comes or flooding or any kind of a situation where we really have to be self-sufficient for an extended period of time, we need to kind of prepare now so that we have those capabilities. And again, doing that in a way that actually improves our environmental performance, that our climate objectives, you know, I think these things can actually go hand in hand if we do it right.

John Farrell

We’re going to take a short break. When we come back, I ask Matthew whether Redwood coast wants to follow San Jose and other California cities into buying the grid from bankrupt Pacific Gas and Electric. I also ask whether the agency’s 100% renewable energy goal is achievable and what advice Matthew has for lawmakers considering community choice policies in other States.

John Farrell

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John Farrell

I’m curious, you know, I just saw in the news, I think it was yesterday that the city of San Jose and some other communities near it are talking about trying to buy the distribution grid from PG&E. I know you’re working with them kind of in partnership on some of these projects. Are there times when, and I’m not going to put you on the spot by saying do you want to buy their grid, but maybe just to ask, are there times when in doing some of these projects or doing some of the resiliency planning that it would be helpful to actually be the owner of the distribution grid system so that you could make your own decisions about it?

Matthew Marshall

Yeah, so you know, my board hasn’t, you know, taken any position or expressed any interest for us to pursue that. So to be clear or we’re not looking to take over the distribution system, I think there’s obviously a lot of discussion on that topic due to the bankruptcy and due to just the current situation of how things are being operated and how that works through the CPC and the regulatory process. I would say there are obviously pros and cons of we had, you know, local control over the distribution system. Obviously you have the capabilities to make local decisions. That doesn’t mean necessarily you have the same resources as a larger entity for PG&E that can potentially have a larger degree of capabilities to do R and D type work. I would say just in general, one of the things that comes up in the CCA model is just the fact that you know, as local government, you know, public agency or not for profit inherently, and we don’t have shareholders, you know, our meetings or our public meetings subject to transparency laws that were governed by elected officials that are accountable to the community. And so there’s actually less regulatory burden than when you have a situation where it’s an investor-owned utility that has a profit component built into their service model as you need to have all this regulatory oversight to ensure that there’s a balance between profits and the benefits that the communities are receiving. And so it’s an odd model, you know, in most sort of public services, water or wastewater at the basic service. And so the local government provides that. And electricity is kind of one where there’s this regulated monopoly model that’s a hybrid, which you know, in some ways it’s does advantageous just as a concept, we are where we are. And so we have to deal with the lay of the land that we have. But at a high level you kind of get the worst of both worlds in that you have something that’s a private sector entity that is making a profit from providing a key public service. But then you lose any sort of nimbleness of the private sector because of the lack of competition and the regulatory oversight required for the monopoly utility model to be appropriate. You kind of get state level bureaucracy and regulatory and then you get the disadvantages potentially of having a profit margin then, you know, as opposed to a not-for-profit entity. And so I think CCAs are an interesting model because it’s a, it’s one of the few times where governments actually the, the faster, more nimble, entity that can actually do things faster and be more innovative than the private sector just because they’re held to a high degree of regulatory compliance. And so anything they want to do has to go through a lengthy approval process. Whereas CCAs can go to their board and say, hey, this is the benefits to our constituents. This is why it’s a good idea. Do you think it’s a good idea? And they can act on that in a transparent fashion. And so we’re able to be innovative and nimble in comparison to the investor-owned utility model.

John Farrell

So I want to shift gears a little bit and just talk about sort of the big level goals that you have. So there were two ambitious goals that I saw in learning more about Redwood coast. One of them is 100% renewable electricity by 2025, which I just want to highlight is six years away, which is pretty cool. And then 100% local energy by 2030 and these are potentially in a little bit of tension. Although as you’ve outlined already, there are some complimentary benefits here of the more local you have, maybe the more resilient you can be in the face of some of these other issues. Are these goals, do they seem achievable from where you are right now?

Matthew Marshall

Yes. Is the short answer and I think, I don’t want to dismiss it, but you know from a general standpoint it’s quite feasible to be able to get to 100% in a non-fossil fuel power mix in the near future. You know, I think doing that in a way that’s affordable to ratepayers and is a good balanced portfolio of resources is not easy, but it is very much achievable. And then as you know, our goal around local resources, I think we’re fortunate to be a community that has a lot of potential and a fairly small population. You are a very rural community. We’ve only got 135,000 people in the whole County. And so I think there’s an opportunity for us to actually be an exporter of renewable energy. You know, we’ve got the local biomass resources. Solar isn’t our strong point, you know, we’re not the sunniest place in the state. So that’s more of a, a local opportunity for distributed generation. Not necessarily something that we’re going to be exporting anytime soon, but there’s onshore wind resources that are currently being, we’re under negotiation for a power purchase agreement for an onshore wind project. And then the big sort of untapped potential that could be developed is offshore wind. We have one of the best offshore wind resources. Really, it’s a world-class resource off the Southern Oregon, Northern California coastline. And it’s historically not been something that could be accessed because of the deep waters off of our coast. But, um, as floating foundation technology has now really been proven out and is being now deployed in Europe, there’s that potential and the industry really kind of sees the technology as getting to cost competitive on the horizon and is really kind of excited about the opportunity. And so I think that’s, you know, down the road we’re very interested in that potential, especially cause offshore wind compliments solar very well. And you know, if the whole state is going to get to 100% renewable electricity, offshore wind could be a big untapped potential to help achieving that cost-effectively and technically. So that’s something that we’re very actively working on right now.

John Farrell

Do you have any in those sort of dual 100% goals, any thoughts about how the community choice program can do a good job serving residents that have sort of historically been left behind? We talk about energy equity sometimes in this space, folks that maybe have had to live with fossil fuel pollution, folks that are a low income, Native Americans. Are there any specific efforts that you make trying to identify ways to help these folks out that have maybe historically had harms in the fossil fuel economy and now could benefit from the renewable energy economy?

Matthew Marshall

Yeah. You know, it’s a, one of our sort of foundational goals as the CCA was to maximize the use of local renewable resources while also providing competitive affordable rates at or below what customers would otherwise pay if they weren’t participating in the CCA. And so, you know, I think from the beginning we realized as a lower income community, just in general, we want to see this not costing people more. Cause I think it would’ve been a tough sell if we said, Hey, we’re gonna do all this great stuff, but sorry, your bills are going to go up, people can opt out in the CCA model. And so I think for us, we really wanted to make sure that we’re providing not a focus on rate savings, but not an increase in rates over what otherwise would be available. And then I think the second tier of that is really looking for those ways that we can reinvest in the community and spend energy dollars locally because that’s where the benefits really kind of materialize.

And that relates to like we were talking about with biomass of making sure that we’ve got those blue collar jobs retained. The offshore wind sector has a tremendous potential to revitalize the port of Humboldt Bay, which is to put nicely, very under-utilized. They’re elected would be, you know, there’s a lot of facilities that are just from the old timber days, we’re, we’re bustling and now we’ve just got lots of coastal dependent industrial zone property that’s just sitting vacant and idle. And so the offshore wind industry interests in our region really has created a potentially exciting opportunity for blue collar jobs and folks to have an opportunity to work in that industry if it develops. And then we put a lot of effort into customer programs and figuring out how can we help residents and small businesses implement energy efficiency projects. You know, our board as part of the CCA program specifically set the target to allocate dollars to local programs to work with our community.

And we’re always looking to partner with tribes like the blue Lake Rancheria who we’ve done a lot with and other local tribes. I think as we’re doing all these things, just inherently our, you know, our whole community is, is a, is to some extent a disadvantaged community. If you look at, you know, where we rank on average income across the state and, and just being a, a rural community that’s historically been sort of resource dependent. I think having a, a thriving local renewable energy sector has a lot of potential to provide economic benefits which our community definitely needs.

John Farrell

What would you say to a lawmaker in a different state outside of California if they have been approached about enabling community choice aggregation? There have been some additional states now thinking about this that we’re going to be talking about in our report. What would you say to them if they were like, Hey, you know, is this a good idea? Should we allow communities to make this choice in our state?

Matthew Marshall

Yeah, I mean, I would say it’s going well here. And so I think just that ability for local communities to have control over how they move things forward creates a lot of opportunities. And I think, you know, there’s different models. Obviously the California one is perhaps different than sort of the more just kind of creating a, a commercially focused rate-based objective strategy in the sense that the communities that are doing it in California and the way that it’s structured has a lot to do with, with trying to get these additional benefits. Not to say, well can we go out and get a better price for power? I mean not that there’s anything wrong with that, but um, I think really is where we see the value is, is not so much like commercial competition, you know, cause our power markets might be able to get a little bit lower rate through sort of a, a competitive process. But I think to some extent we don’t look at the, the choice part of community choice of saying, well you’ve got the choice for the utility or, or RCA for your power supply and you know, and if we want to opt out, that’s great. It’s more about the choice for local communities to make decisions and how they spend their energy dollars. And so if I was going to stay, I would look more at that than kind of creating, you know, the sort of retail competitive approach. You know, that’s something we also hear of like, well if choice is good and competition’s good, why not just open it up to full retail competition? And I think the challenge of that is twofold. One that you’re going to tend to have sort of potentially the tragedy of the commons of like, well if you’re trying to support economic development and environmental goals and community goals, but you know, everyone’s making their own individual choices. I would suspect you’re going to see a lot of folks kind of choose the low cost option. Whereas you know, having local governments working on behalf of all their constituents, that’s what like officials have to do is balance priorities and say, well here’s costs, but here’s also jobs. And trying to have every small business kind of make that decision independently isn’t really the model of that’s going to get us to the highest and best outcomes. And I think the other challenge of just kind of a more retail competitive approach is you brought up disadvantaged populations that really favors big customers that have capabilities to negotiate and can get a good deal because they’re a lucrative customer to serve. And the folks that are going to have a less good deal and kind of be left behind are more likely going to be residential customers, low income customers, small businesses that don’t kind of have the capacity and or are going to be sort of appealing customers from a competitive standpoint. And so I think that aggregation model lets you say, Hey, let’s do good things on behalf of all customers and share whatever benefits we’re able to achieve. Not just make it where big guys can get a good deal and the little guys pay equal or more than what they would have otherwise. So I think kind of being thoughtful of, of how it’s structured so that you’re setting it up to achieve what the outcomes are. And again, I would encourage those outcomes to look beyond just electricity rates, but how you can really leverage energy dollars into broader community benefits.

John Farrell

Matthew, is there anything that you’ve read or watched or listened to recently that inspires you in terms of the work that you’re doing in Humboldt County?

Matthew Marshall

You know, I think I just been excited to see there’s sort of a growing awareness of the need to address energy and the climate crisis. And I don’t know, we’re aware the kind of tipping point is, but I feel like it’s starting to be more about action and not just about, you know, we need to set goals or we need to kind of have a plan. I’m inspired by a lot of what the other CCAs in California are doing and what local communities are doing to really step up and try to address. And so I’m a little bit biased because I worked in local government and have for many years. And so I feel like the local level is really where like where your boots on the ground and the, you know, the rubber meets the road so to speak. And being able to implement community solutions and so I’m excited to see that becoming increasingly a venue for action and not kind of waiting for some policies from on high for us to make progress, but local communities really leading the way.

John Farrell

Well Matthew, thank you for your work on behalf of the residents of Humboldt County and I thank you for joining us today. I really appreciate it.

Matthew Marshall

Yeah, thank you very much for having me on.

John Farrell

This is John Farrell, director of ILSR’s Energy Democracy initiative. I was speaking with Redwood Coast Energy Authority Executive Director, Matthew Marshall, about his community’s ability to choose its energy supply and how it gives it a transparent and democratic way to boost the local economy. Check out the show page for links to more information about the Redwood coast authority, including its comprehensive plan to reinvest in Humboldt County as well as our recently released report about community choice energy. Learn more about how cities drive local climate action and clean energy with the interactive community power map and community power toolkit. Both available from the Institute for Local Self-Reliance at ilsr dot org that is I L S R. dot org. While you’re at our website, you can also find more than 80 past episodes of the Local Energy Rules podcast. Until next time, keep your energy local and thanks for listening.