Letter: Bob Dunning Gets Choice on VCEA Wrong

By Vanguard AdministratorAugust 10, 201870 comments

By Richard McCann

Electricity customers in Davis and Yolo County are in the midst of choosing between the current incumbent electricity utility Pacific Gas & Electric (PG&E) and the new community choice aggregator (CCA) Valley Clean Energy Alliance (VCE). VCE is a joint powers authority (JPA) of the governments of the Yolo County, and the Cities of Davis and Woodland. (The Cities of Winters and West Sacramento have expressed interest in joining VCE as well.) By state law, customers are initially defaulted to the CCA at the outset before being given multiple chances over a six month period to choose to stay with the incumbent investor-owned utility–PG&E in this case.

Bob Dunning in his Davis Enterprise column August 8 confuses a lack of choice with just changing the starting point of the choice. Regardless of whether VCE or PG&E is the default provider, local customers still have exactly the same choice. But by having VCE start as the default provider, we level the playing field with the long-time giant monopoly utility, PG&E. (And customers can return to PG&E after 12 months if they are dissatisfied.) Why should we continue to give the big guy a continued advantage at the outset?

PG&E has all sorts of shareholder money to spend on improving its image and retaining customers. The utility’s biggest problem is that it is spending an additional 3.3 cents per kilowatt-hour to mismanage risk in its portfolio based on calculations I made in the power cost indifference adjustment (PCIA) rulemaking proceedings. Why stay with a company that has such a poor management record?

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70 comments

  1. I noticed that like do many articles David couldn’t be bothered to ask for even a one line bio so I wondering is Richard will let us know if he is getting paid by VCE.

    I’m also wondering if Richard thinks it would be fine to “level the playing field” if locals wanted to make money by changing the garbage, cable, and insurance providers of everyone in Davis if they didn’t “opt out”?

    1. Richard McCann is a co-founder and principal with M.CUBED, a policy analysis consultancy specializing in energy, climate change, environmental and water issues. He also serves on the Utility Rate Advisory Committee.

        2. Ken A

          You have no idea of how this City works, do you? Based  on that question, you have no idea that the City has 17 commissions stocked with unpaid citizen volunteers that keep track of the things that you apparently are unable to. Stop being so libelous and accusing everyone else of stealing–that makes me suspicious of your motives.

    2. Ken A

      No, I’m NOT getting paid by VCEA! I’ve put in HUNDREDS of volunteer hours (which apparently you can’t be bothered to give to your community) to get this started and running. And several others also have volunteered substantial time with NO remuneration to bring community control over our energy situation.

      And yes, I believe that ALL of those franchise holders of waste and cable providers can have their franchises pulled and reissued by the City under the appropriate legal circumstances. That was central issue on the sale of Davis Waste Removal to Recology. (I sit on the URAC, again as an unpaid volunteer, which reviewed the deal.)

      I have no idea why you brought up insurance–that is not a City franchised activity as is the case with electricity, cable and waste. Get your example straight.

  2. Funny post on Nextdoor in response to this same piece

    “blasting Bob Dunning here wreaks of the petty personal type attacks that are on The Davis Vanguard where folks enjoy that sort of thing ad nauseam”

    I resisted the urge to correct “wreaks” to “reeks”.

    1. The reason is to allow politically connected locals (who supported the people that pushed the law through)  to make money.  Most people will still be using PG&E (VCE will not be running new wires to homes or buying a fleet of trucks) only now VCE is able to skim some cash from every user every month (even more cash from the people that actually ask to pay more for “greener” power and actually believe that by paying more will change where the power to “their” home comes from)…

      2. “The reason is to allow politically connected locals (who supported the people that pushed the law through)  to make money.”

        I disagree.

        There was a push to end our association with PG&E a decade ago.  It failed because of archaic laws regarding how we would join SMUD and PG&E’s $10 million campaign against it.

        There are a number of considerations here:

        1. Cost of electricty

        2. The perception of PG&E as regressive/ big business

        3. The desire for cleaner burning energy

        That’s where this drive is coming from.

        Seriously don’t understand why if people had these concerns they didn’t raise them in the last four years.  I found an article by Gerald Bruan and Richard McCann on this subject from November 2014 – they laid out all of this stuff at that time.

        1. Ha, you just stated yesterday that the average Davis voter doesn’t have the level of detail and are not familiar with details so why does it surprise you that they might feel blindsided by this new utility arrangement?

        2. ” end our association with PG&E”. VCE does not do that, it justs puts it in a different wrapper with “gluten free” logo. The infrastructure is all PG&E. 

          Seems similar to Mobile virtual network operators where you buy Cricket instead of AT&T. Maybe it will end up like the “CREDO Mobile Cell Phone Company Powering Progressive Change” scam where they overcharge you 100% and then give 1% to “the resistance”.

        3. Like “Credo Mobile” there is also a company targeting right wingers (that just resells service from big companies):

          https://www.youtube.com/watch?v=6-zqUIN3JeQ

          I don’t have a problem with anyone that wants to switch and pay more, I just don’t like that the law allows companies to switch people without getting their OK.

          P.S. I’m actually a little jealous that I don’t have the political connections to switch everyone (who didn’t opt out) to “Ken’s Clean Trash” where I would be the CEO and I would skim a few dollars from every person in town paying Recology to keep picking up their trash every week.  I would pay all my employees well and since (like with VCE) another company did all the actual work we would have plenty of time for executive retreats and rate setting meetings in Carmel and the Napa Valley…

      3. Again, Ken A, that’s BS. VCE isn’t skimming money although it will retain some operational costs. However, its overhead costs will be substantially less than PG&E’s. (I review PG&E’s rate filings at the CPUC for various clients.)

    2. There are several reasons. The first is that the City owns the franchise, and therefore the customers, not PG&E. So it’s within the rights of the City to choose another provider and make that provider the default. If you want to choose to go back to PG&E, you have that option. Second, there is substantial research showing biased choices based on opt-in vs opt-out. PG&E already has a substantial advantage in both incumbency and financial resources. Giving the CCA the opt-in bias best balances the choice dynamic.

      If you have a problem with that, then its your personal preference against the preferences of many others. There’s so basis in principle for your preference over others’ preferences in this case.

    1. If Davis is still using PG&E for delivery and buying green energy on the open market with the extra layer added for VCE bureaucracy I have to believe that rates would be higher.

      Am I wrong here?

      1. you are.  there’s no “extra layer” of bureaucracy here.  VCE sources the energy instead of pg&e.  it’s just one org doing what the other used to (at cheaper and greener standards)  pg&e still delivers, but it’s not like they’re playing exactly the same role.  instead of being the entire process, they’re just the last mile

      2. Keith, I do not have the numbers readily at hand, but will chase them down for you.  Bottom-line, based on what I heard at the numerous public hearings that were conducted on this subject over three years, the default rates you are paying now under VCE are lower than the same rates under PG&E.  The explanation provided for that is that the employee and overhead cost of VCE’s “power acquisition” bureaucracy is no greater, nor less than PGE’s costs for performing the power acquisition tasks. So, level playing field at that point. The California Public Utility Commission (CPUC) allows PG&E to take its costs and add on a “reasonable” return on equity (i.e. profit).  I don’t know the exact percentage, but I believe it is around 10%.  So each kilowatt hour of electricity delivered to you by PG&E is billed at cost plus 10%.  That same kilowatt hour is delivered to you by VCE at cost.

        In my July 31st bill 71% of the total electric charges were from PG&E and 29% of the total electric charges were from VCE.  If 10% is the correct “reasonable” profit for PG&E then the my calculation of the impact of the elimination of the PG&E profit on the 29% is that yours and my rates are 3% lower than they would have be if we opted out and stayed with PG&E.

        There are other CPUC factors other than profit margin that benefit VCE financially, and it is my understanding that VCE uses those financial benefits to make the power delivered to you and me “greener” than what PG&E delivers.

        One other significant benefit to consumers like you and me is that under PG&E if you have solar production on your house, any excess power that you do not actually use is “given” to PG&E for free.  Under VCE a consumer who “produces” more than he/sher consumes will be paid by VCE for that excess power.

         

    2. Early on since some people want to pay extra for “clean” energy they will have the money to “slightly” lower rates, but after people stop paying attention they can push them higher (to give raises to their friends “working” as a the middlemen between the end user and PG&E).

    3. VCE’s rates are lower than PG&Es.  For one thing, VCE doesn’t have shareholder profits to maximize.  They are focused on lower rates and as Don points out below, their board is locally elected officials who are accountable to the public.  The rates for 2018 are 2.5% below PG&E and expected to improve from there.

  5. This whole discussion must absolutely drive the public officials and citizens who have spent thousands of hours in public hearings and public meetings on this topic absolutely nuts.

    Everything they’ve deliberated about is available here: 
    https://valleycleanenergy.org/meetings/

    The public officials who make up the board of VCE are your elected representatives.

    These are the board members as of July:

    Board Members: Lucas Frerichs
    (Chair/City of Davis), Tom Stallard (Vice Chair/City of Woodland), Angel
    Barajas (City of Woodland), Duane Chamberlain (Yolo County), Don Saylor (Yolo
    County), Vacant (City of Davis)

    The vacant seat was held by Robb Davis and will presumably be filled shortly.

    Here is the citizens advisory committee:

    Committee
    Members:  Gerry Braun
    (Chair), Christine Shewmaker (Vice-Chair), Marsha Baird (Secretary), Mark
    Aulman, Tom Flynn, Yvonne Hunter, Lorenzo Kristov, David Springer

    Please, Ken, tell us which of these “politically connected locals” are going “to make money” off of all this? I don’t know, if I was looking for a way to skim money off of a public project, this wouldn’t be the one.

    There were articles about this change. It was not sprung on the public. Bob Dunning likes to poke fun at things and often has his tongue firmly in his cheek. Sometimes not. But whatever the case, if you all have some suggestions for how this public agency could have better informed the public about the coming option to go to VCE, I’m sure Lucas and Don Saylor and the others are open to your input.

    1. I can’t tell you which of the politically connected people on Don’s list are going to be making money off this since VCE is hiding the pay and benefits in their public multi million dollar budget.

      I’m wondering if Don is one of the few guys that actually reads each flyer that comes in every bill (where a 20 page document is shrunk to one page) or actually spends an hour reading the “terms & conditions” of every piece of software before checking the “I agree” box, but 90%+ of the people in Davis have no idea that VCE will be getting between them and PG&E.

      It sounds like Don may have some inside info so maybe he can tell me the people on his list that are not doing this for money and/or political power and influence.

      P.S. Still no answer to my question “Is the Utility Rate Advisory Committee” is paid by VCE?”…

       

        1. It is good to hear the the (shrinking) number of people that still get the Enterprise in town (who still have good enough vision to actually read it) have been kept up to date on VCE, but most people in Davis are not aware of the switch.

          1. If they don’t read the newspaper, don’t read the local blog, don’t watch DMA (they did at least one interview on it), don’t see the tables at Farmer’s Market, don’t read the inserts in their bills, and don’t read the flyers in their mail, how would you suggest people get informed about something like this?

        2. They also sent out mailers Ken.  Four years of meetings and hearings.  At some point people are responsible for knowing what’s going on in their community or they don’t get to complain when change happens.  And btw, PG&E is imposed for years with no choice at all, why is this suddenly an issue?

        3. From Ross’ 2:36 post’s second cite:

          VCEA rates, included as Attachment 1, which are set at a 2% discount from PG&E’s generation rates placed into effect March 1, 2018, NET OF PCIA and Franchise Fees.

          So, what is PCIA fees, and now much extra is that?

          Will VCE pay franchise fees?  Will that decrease the City’s net franchise fees from PG&E?  If VCE pays franchise fees what will be the additional cost to the customer?

      3. things are always hidden if you don’t look.  Don gave you link.  I gave specific links in a previous thread.  you’re just trolling.

        nothing’s hidden.  you can get their entire itemized budget from their website.

        and asking if the citizen volunteer davis utility advisory committee is being “paid” be a nonprofit entity is either a silly attempt at misdirection or bald attempt at slander.  either of those is still trolling.

        if you have opinions, share them.  if you have nothing but cheap, weird innuendo, please just stop.

        1. The VCE budget I saw says they are paying people, but it does not say who they are paying or how much.  If they are not “hiding” who is getting paid please post a link.

          Other than energy what other services do you think that politically connected insiders should be able to take over without getting an OK from the consumer?

          How about Valley Clean Cable where we are switched to Valley Clean Cable and they pay Comcast to keep sending a signal and taking care of the actual cable?

          Maybe they can take over swim lessons in town and make all parents that don’t “opt out” pay Valley Swimming they can hire more friends and let AquaMonstersn and AquaDarts keep teaching the kids.

          P.S. I’m wondering how Ross knows his “bill this month was 15% lower than it would have been under pg&e” ?  Without a link to a source that VCE has been lowballing everyone on their savings for years I’ll just assume that the 15% number is “cheap, weird innuendo”…

        2. Ken A:

          org chart: 
          https://valleycleanenergy.org/wp-content/uploads/Item-12-Staffing-and-Org-Chart.pdf

          budget: 
          https://valleycleanenergy.org/wp-content/uploads/Item-11-Energy-Rates-Power-Mix-Budgets-3-12-18.pdf

          if you want more detail, ask.  as a non-profit, they’re required to give it to you.  Why is it my job to do the work when you’re the one with the issue?

          I know how much I saved on my bill this month because it’s broken out very clearly on the bill what would have been spent with pg&e and what was spent with VCE.  I did the math, instead of complaining about some anti-consumer conspiracy or throwing shade at city volunteers.

          In terms of supply and use of monopoly infrastructure (pipes, generators, copper cable, fiber), this is an incredibly common way for utilities and smaller suppliers to act. it happens all over the country, particularly for telecom. just because it doesn’t happen in Davis doesn’t mean that your parochial paranoia is justified

        3. Ken A: They have four staff persons at this time and stated at a public meeting two or three weeks ago that they are working hard to maintain lean staffing.  As the program ramps up they may need to add positions, but none of them are making over $200K and probably a lot less.  And, while we’re on that topic, what salary does the president of PG&E make?  Why isn’t that a concern for you?  I guarantee you that his salary alone is far greater than the entire budget for VCE.  So, what’s your point?

          2. Dave Hart’s point is the one really baffling to me. We are micro-scrutinizing VCE when PG&E gives us no choice – zero – zilch – nada – and their people are compensated a whole lot more.

          1. Except that the purposes here are a bit different than a simple comparison. There are several points made here. One of the lower overhead and lack of a 10 percent profit by PG&E for VCE. The other is that while people are microanalyzing the VCE board for possible money grabs, the corporate structure which gives us no choice, has a far bigger pot of money that no one seems to mind.

          1. It’s not a comparison, it’s an analysis of the complaints about the VCE when PG&E is VCE to the 100th power.

      4. Ken A

        Your question about whether the URAC members are paid has been answered already. Please acknowledge that you have failed to go to the City website to look up the information that is readily available on the matter.

  6. I don’t think Bob got this wrong.

    In fact, I only know of one time that Bob got it wrong… when he recently defended the fake news and rejected the President’s claim that that modern media was doing great harm to the American people.

    1. Jeff M

      Why didn’t Bob get this wrong? Do you mean that you do NOT have a choice to leave VCE and go back to PG&E? If you believe that, you’r wrong also.

  7. A similar community utility came to the area where we own a vacation rental in the last year. We have solar on both this house and our Davis house.  We’ve never received a check from PG&E for the excess electricity we have generated for either house but this year received one for $160 from the community electric group.

    Just sayin.

  8. > yours and my rates are 3% lower than they would have be if we opted out and stayed with PG&E.

    > My bill this month was 15% lower than it would have been under pg&e

    So Mr. Ross Peabody’s bill is 15% lower, and everyone else’s is 3% lower.  What makes Mr. Peabody so special?

    1. thanks for the fine tuned nitpicking Alan. Really appreciate your opinions here.

      However, you’re not wrong. When I did the initial calculation, I didn’t realize that I should account for the indifference adjustment fee on the bill, representing the time on pg&e before the switch. Turns out the full savings is more like 2.8%. My bad. Doesn’t really change the point though. Service is the same, cheaper, with more upside.

      1. thanks for the fine tuned nitpicking Alan.

        You are welcome!

        Really appreciate your opinions here.

        You must have me mixed up with someone else.  I have no opinions, I just pick nits finely.

        I do appreciate the admission of err.

  9. It bears repeating:  Bob Dunning is not an analyst.  He is in the entertainment business poking fun at anyone and everyone (except of course for anyone in sports or part of the Catholic Church organization) for the entertainment of readers.  His specialty is rendering a cartoon version of public policy issues without any attempt at nuance.  He does not do nuance or statistics or science because he know it’s boring for his style of writing.  Sure, he gets print space in the Enterprise, but his readers are increasingly senior citizens and a dwindling percentage of voters.  No reason to worry about Bob.  That said, VCE could have done a better job of posting articles like this one six months ago on the Vanguard and on the Enterprise editorial page and ruined Bob’s fun.  You can’t blame termites for eating dead wood.

      1. Everyone knew that the politically connected locals have wanted to sikm some of the utility money for years, but me and most others thought that they would never do it since PG&E has even more political power (and an even higher paid CEO).  I’m guessing that PG&E must be coming out ahead in some way if they are letting the locals make a little money pretending to run an actual utility while they still do most of the work.  I’m no fan of PG&E (and the crazy money they pay their CEO) I’m just upset at the way the locals pulled this off forcing people to “opt out” vs. “opt in” (especially avter most people voted to keep PG&E not that long ago)…

         

        1. (especially avter most people voted to keep PG&E not that long ago)…

          Inconvenient untruth… (ignoring the typo)… SMUD voters nixed the deal… Davis, and most if not all of Yolo County, were ready to go with SMUD…

          1. SMUD voters nixed the deal… Davis, and most if not all of Yolo, were ready to go with SMUD…

            Had to do some searching to find the actual results. Measure H passed with 51% of the vote. Measure I failed by 10 votes (per Davis Wiki). Less than 40% of the voters in Sacramento and Placer counties voted in favor of the annexation. All three had to be approved for the annexation to go forward.

        5. Who are these “politically connected locals” that have ya’ll so up in arms?  If you can’t or won’t name them, I’m calling BS on your argument.  If you can, I’d like to meet them.  They seem crazy powerful.

          Why are you so worried about PG&E “coming out ahead” somehow.  The community comes out ahead here.  There’s nothing unusual about this kind of utility agreement.  It’s SOP throughout the country for decades, in large part based on anti-trust law.

          Also, PG&E is still getting their $$ for the work they do, and VCE gets $$ for the work they do.  it’s a clearly delineated line.

          These “locals” as you refer to them didn’t “pull off” anything.  It’s state law that mandates the opt out process, not in small part in order to create a level playing field.

          But none of that seems to matter to the anonymous Ken’s and Keith’s of the world.  It’s easier to just complain about faceless greedy “locals” and live in fear of the mega corporations that must be so powerful that why not do anything but support them, right?

           

        6. It’s easier to just complain about faceless greedy “locals” and live in fear of the mega corporations that must be so powerful that why not do anything but support them, right?

          Wrong.  Ross, your reading comprehension is lacking.  Where have I said anything about greedy locals or that I live in fear of mega corporations?  Please don’t project on me things that I haven’t stated.

        7. yeah.  sorry about that, Keith.  I shouldn’t complain about people making broad stroke opinions and then do it myself.  point taken – I was more specifically responding to Ken’s assertions and my annoyance that some folks are anonymous on the comments, and shouldn’t have lumped you in to this particular opinion.

        8. Like Keith I have never said anything about “greedy” locals or that I live in “fear” of mega corporations.  I have pointed out the fact that some locals are making money off this (and mentioned that they are not making the “crazy money” that PG&E pays some people) and I did say I am “no fan of PG&E” but like Keith I don’t “live in fear” of them…

        9. yeah, Ken, I guess I’m sorry, too.  I know it’s tough when someone uses slightly different words than you did to make a connection between your words and the sentiment you’re experessing.  You constantly complain (several times just on this post) about “politically connected locals” that just want to somehow make money in what you imply to be nefarious, or at least dishonest ways, but refuse to say who they are.  Sorry I said “greedy locals” instead.  You do say that “you’re no fan of PG&E” but subsequently imply that the “locals” (I’m assuming VCE, or possibly state law, re: opt out) makes you upset.  what am  I supposed to believe, that you just don’t like any of it? Your attacks on VCE leave you in support of PG&E, despite your false claims that they must be “getting something out of it”  It feels like you’re incredibly skilled at making implications and broad assertions, but unwilling to actually state an opinion.  Oh, geez.  I did it again, didn’t I?

          maybe respond to the non-personal content of my post?

        10. Ken A

          Why didn’t you comment on the two VCE-related articles that I wrote in the Vanguard in the past? Why are you now coming out? Are you a member of the IBEW? Are you being paid by PG&E to instigate against VCE?

        11. Ken A

          I call you liar about not accusing “greedy locals” of trying to profit. You wrote here “Everyone knew that the politically connected locals have wanted to sikm some of the utility money for years, but me and most others thought that they would never do it since PG&E has even more political power (and an even higher paid CEO).” Please either retract this statement or stop lying.

    3. Dave Hart

      I’ll make the same point that I made on Nextdoor: Bob Dunning’s inability to fully understand and report on key policy issues has mucked up a number of key City matters because he failed to properly inform his readers. I’m trying to head off yet another mess created by Dunning’s seemingly intentional ignorance.

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