San Jose Clean Energy – The New Electric Utility

There is a new electricity provider serving customers in the city of San Jose: San Jose Clean Energy (SJCE). Technically they are not a utility since PG&E still provides distribution services: maintaining local wires and transformers, as well as providing billing. SJCE’s electricity is cleaner (almost all from renewables) and slightly cheaper.

Some people wonder why we need another utility or electricity provider. The reason is simple: investor owned utilities (IOUs) like PG&E charge more for electricity than municipally owned utilities. These new electricity providers, called Community Choice Aggregation (CCA) utilities, are managed by the cities and/or counties they serve, operate with low overheads, and buy power from inexpensive wind and solar farms.

The utility industry is going through a massive transformation. Old fashioned coal, nuclear and gas power plants are more expensive than wind and solar. In fact, business and residential customers can install solar on their rooftops for much less than it costs their local utility to delivery power. Prices for battery storage are dropping, making it cost effective for customers to install a battery system both for time-shifting energy use as well as backup power. As a result of these “behind the meter” electricity technologies, the economics of centrally generated power sold by an investor-owned utility no longer make sense in many locations.

In addition to San Jose Clean Energy, Northern California is already served by CCAs in Marin (Marin Clean Energy), San Mateo (Peninsula Clean Energy), Santa Clara County (Silicon Valley Clean Energy), with about a dozen more CCAs in operation or in formation. To learn more about CCAs and how they are taking off in communities across the U.S., listen up to this week’s Energy Show.