I opted out of Marin Clean Energy, California’s first CCA because I understood the grift. They were partnered with Shell energy trading who ran a Enron like scheme to enrich themselves and share the crumbs with the county government. Here’s how it worked. The utilities had been forced by regulators to sign high priced contracts with wind and solar producers, for as much as 20 cents per kWh, which resulted in a huge oversupply, and caused prices in the short term markets to drop to near zero on sunny days. MCE/Shell would buy exclusively in the short term market at ridiculously low prices then sell to retail customers at a slight discount. They’d buy for 1 cent and resell for 19 cents and claim a 1 cent discount over PG&E’s price. I do t know where the money went, and it was hundreds of millions. I suspect Shell did OK, the county government made some money, and the people who got screwed were, well, everybody else.
Word spread quickly to other politicians, probably with the help of Shell’s sales people, and CCAs formed everywhere. The rush probably killed the golden goose, but it was too late. Can’t put it back in the box.
California now has dozens of unregulated utilities that can charge whatever they want and disregard grid operating rules. The regulators have tried to compensate PG&E for their losses, to head off a third bankruptcy. I’m betting on #3 within 18 months.
We know landfill gas-to-electricity (LFGTE) owner/operators who sold to MCE. LFGTE was sold as "renewable" "clean" energy. The CH4 molecules coming from the rotting tofu chicken parm and poopy diapers aren't different than the fracked nat gas as far as earth's atmosphere is concerned. (Worse from an operator O&M standpoint in that they are filled with siloxanes from garbage impurities that burn out the converted Cat generators earlier than produced nat gas).
Those same LFGTE operators are now being courted by "renewable natural gas" developers. This all relates to RINs in the transport market. So, after 25 years of producing "renewable" electricity, many are now looking at feeding "renewable nat gas" into systems that fuel alternative vehicles, mostly commercial.
All of this is to say that Charlie Munger had it right: "show me the incentives and I'll show you the outcome".
We got a flyer from NRG and United Airlines offering us three months of electrical generation for 5% less than our vertically integrated supplier (The Illuminating Company) in northeast Ohio. Either NRG or United messed up as their offer (which included 10 thousand free miles) didn't cover our zip code! Glad we didn't sign up with the CCA that was available when we moved out of CA-
Mark - Be careful of these limited time discount deals. After the time limit they put you in the "market price" category which only they understand, and they aren't very transparent. Like it Texas, the market price can go sky high and you are contracted to take it. You probably need an energy lawyer to figure out the contract. Your 5% premium for staying on system supply is money well spent.
Wow. I knew purchasing energy by utilities when renewables aren’t generating power was expensive and potentially unreliable, but rent-seeking CCA’s would seem to capture all the green they want without concern for either. Great racket. Thank you for digging-in here and eloquently sharing.
They really aren't green. They supply you exactly the grid mix of power and purchase Renewable Energy Credits, probably from people planting trees in South America, to fool you into thinking it is 100% green. It is 100%.... bullshit.
All of these CCAs offer a 100% green option at a premium. If everybody signed up for 100% green we would no longer need gas or coal and the planet would be saved! Right? Such a simple solution and how selfish of people not to pay the premium.
Veteran energy analyst Jim Phelps has been exposing the shady business dealings of OCPA. A google query of both phrases "Jim Phelps" and "Orange County Power Authority" returns 18 results on January 18, 2024. Take a look to learn some of the information he has uncovered.
A rational person would conclude that this is another scam to trick the virtue-signaler into thinking they are 'saving Mother Gaia' as they flip on the light switch.
While there are no utopian places to live, this state seems to actively try and make things as unlivable as they can. The stock answer I get when I would ask why certain things are the way they are is "Welcome to California!" I always point out that response is a statement, not an explanation.
It is unsettling when some proclaim that the California way is a model for the rest of the US.
Maybe because this isn't my home state I have somewhere to compare conditions, and it is a form of mass psychosis for most life-long residents that they can't see that things are not normal here?
Hoping to move home as soon as the kids finish school.
And is that same Mike Carroll with same City of Irvine that’s not investigating their massive bribery scandal?
——-
“Councilman Mike Carroll, who also serves as the chair on the board of directors for the power authority, responded quickly, saying the agency was run by “actual professionals,” and “dare I say a competent board.”
“If you’re worried, I urge you to vote no, and you will be on the record as having voted against 100% renewable power,” Carroll said. “All this stuff about money, the councilman doesn’t know what he’s really talking about.”
______
Is there some sort of competition in OC to see whose the most corrupt city? Irvine? Anaheim?
The location where I live in California has a commercial account. Each residence is submetered. I provided compelling information to the location's Board so they opted out of the CCA. I believe we are saving money by sticking with the incumbent power provider, Pacific Gas & Electric. One of my colleagues sat in on discussions as Peninsula Clean Energy was being formed. He learned their markup is 10%. While these CCAs tout the purchase of solar and wind power, the laws of physics dictate the Sun doesn't always shine. The wind rarely blows with sufficient force to generate full power from the wind turbines. Reliable, dispatchable power is required. One of the vendors for the reliable power is the incumbent investor-owned-utility. The CPUC is beginning to fine CCAs that fail to purchase sufficient reliable power generation. There is only one power grid in a location. My summary is that CCAs fail to add value - and they charge more.
I opted out of Marin Clean Energy, California’s first CCA because I understood the grift. They were partnered with Shell energy trading who ran a Enron like scheme to enrich themselves and share the crumbs with the county government. Here’s how it worked. The utilities had been forced by regulators to sign high priced contracts with wind and solar producers, for as much as 20 cents per kWh, which resulted in a huge oversupply, and caused prices in the short term markets to drop to near zero on sunny days. MCE/Shell would buy exclusively in the short term market at ridiculously low prices then sell to retail customers at a slight discount. They’d buy for 1 cent and resell for 19 cents and claim a 1 cent discount over PG&E’s price. I do t know where the money went, and it was hundreds of millions. I suspect Shell did OK, the county government made some money, and the people who got screwed were, well, everybody else.
Word spread quickly to other politicians, probably with the help of Shell’s sales people, and CCAs formed everywhere. The rush probably killed the golden goose, but it was too late. Can’t put it back in the box.
California now has dozens of unregulated utilities that can charge whatever they want and disregard grid operating rules. The regulators have tried to compensate PG&E for their losses, to head off a third bankruptcy. I’m betting on #3 within 18 months.
We know landfill gas-to-electricity (LFGTE) owner/operators who sold to MCE. LFGTE was sold as "renewable" "clean" energy. The CH4 molecules coming from the rotting tofu chicken parm and poopy diapers aren't different than the fracked nat gas as far as earth's atmosphere is concerned. (Worse from an operator O&M standpoint in that they are filled with siloxanes from garbage impurities that burn out the converted Cat generators earlier than produced nat gas).
Those same LFGTE operators are now being courted by "renewable natural gas" developers. This all relates to RINs in the transport market. So, after 25 years of producing "renewable" electricity, many are now looking at feeding "renewable nat gas" into systems that fuel alternative vehicles, mostly commercial.
All of this is to say that Charlie Munger had it right: "show me the incentives and I'll show you the outcome".
We got a flyer from NRG and United Airlines offering us three months of electrical generation for 5% less than our vertically integrated supplier (The Illuminating Company) in northeast Ohio. Either NRG or United messed up as their offer (which included 10 thousand free miles) didn't cover our zip code! Glad we didn't sign up with the CCA that was available when we moved out of CA-
https://fox8.com/news/explainer-why-are-electric-bills-so-high-and-what-is-nopec/
It sounds like your energy costs are going through the roof this winter-
A Very Expensive Winter – Energy Institute Blog (wordpress.com)
Mark - Be careful of these limited time discount deals. After the time limit they put you in the "market price" category which only they understand, and they aren't very transparent. Like it Texas, the market price can go sky high and you are contracted to take it. You probably need an energy lawyer to figure out the contract. Your 5% premium for staying on system supply is money well spent.
Wow. I knew purchasing energy by utilities when renewables aren’t generating power was expensive and potentially unreliable, but rent-seeking CCA’s would seem to capture all the green they want without concern for either. Great racket. Thank you for digging-in here and eloquently sharing.
They really aren't green. They supply you exactly the grid mix of power and purchase Renewable Energy Credits, probably from people planting trees in South America, to fool you into thinking it is 100% green. It is 100%.... bullshit.
All of these CCAs offer a 100% green option at a premium. If everybody signed up for 100% green we would no longer need gas or coal and the planet would be saved! Right? Such a simple solution and how selfish of people not to pay the premium.
Anyone who doesn’t jump on the 100% Renewable tier is a disappointment to His Climate Majesty Al Gore and Noble Child Martyr Greta.
I hope this doesn't come to the UK but I'm not holding my breath
Very insightful article.
Trojan Horse.
We need energy and food and shelter. They want all of it under control.
Corrupt
Yea OCPA might warrant some of your investigative attention. I’m sure everything is fine though. Lol
Veteran energy analyst Jim Phelps has been exposing the shady business dealings of OCPA. A google query of both phrases "Jim Phelps" and "Orange County Power Authority" returns 18 results on January 18, 2024. Take a look to learn some of the information he has uncovered.
A rational person would conclude that this is another scam to trick the virtue-signaler into thinking they are 'saving Mother Gaia' as they flip on the light switch.
And another grifting gravy train for the state’s political class who know all the right magic words to shut down anyone opposed.
While there are no utopian places to live, this state seems to actively try and make things as unlivable as they can. The stock answer I get when I would ask why certain things are the way they are is "Welcome to California!" I always point out that response is a statement, not an explanation.
It is unsettling when some proclaim that the California way is a model for the rest of the US.
Maybe because this isn't my home state I have somewhere to compare conditions, and it is a form of mass psychosis for most life-long residents that they can't see that things are not normal here?
Hoping to move home as soon as the kids finish school.
Great piece. Orange County Power Authority has been a total disaster. It's a total grift, with politicians on the Board.
https://voiceofoc.org/2022/02/oc-residents-face-electricity-rate-hike-as-new-clean-energy-agency-prepares-to-launch/
Damn. OCPA sounds like an entire post of its own.
And is that same Mike Carroll with same City of Irvine that’s not investigating their massive bribery scandal?
——-
“Councilman Mike Carroll, who also serves as the chair on the board of directors for the power authority, responded quickly, saying the agency was run by “actual professionals,” and “dare I say a competent board.”
“If you’re worried, I urge you to vote no, and you will be on the record as having voted against 100% renewable power,” Carroll said. “All this stuff about money, the councilman doesn’t know what he’s really talking about.”
______
Is there some sort of competition in OC to see whose the most corrupt city? Irvine? Anaheim?
The location where I live in California has a commercial account. Each residence is submetered. I provided compelling information to the location's Board so they opted out of the CCA. I believe we are saving money by sticking with the incumbent power provider, Pacific Gas & Electric. One of my colleagues sat in on discussions as Peninsula Clean Energy was being formed. He learned their markup is 10%. While these CCAs tout the purchase of solar and wind power, the laws of physics dictate the Sun doesn't always shine. The wind rarely blows with sufficient force to generate full power from the wind turbines. Reliable, dispatchable power is required. One of the vendors for the reliable power is the incumbent investor-owned-utility. The CPUC is beginning to fine CCAs that fail to purchase sufficient reliable power generation. There is only one power grid in a location. My summary is that CCAs fail to add value - and they charge more.