Why would office building not use cheaper, greener energy?
October 17, 2024 3:38 PM Subscribe
I'm renting a small office in Alameda County, California, in a city where residents and businesses have to actively opt out of the local Community Choice Aggregator. I asked my landlord which of the plans - 100% renewable or just cleaner and cheaper than PG&E - the building is signed up for, and they told me they're just with PG&E. My question: what reasons - good ones, or somewhat reasonable bad ones - would a business not sign up for a Community Choice Aggregator?
The local CCA is Ava Energy. They advertise 2 business rates: a 100% renewable plan that's 1/4 cent per kWh higher than PG&E, or a plan that's 5% cheaper than PG&E with more renewable energy in the mix. I was surprised when my landlord said they're still using PG&E despite the existence of a cheaper, cleaner alternative.
I'm wondering if there's something I'm missing, besides the possibility that it's a strictly political decision.
Bonus question: do you know of any buildings with small offices in the East Bay (Oakland, Berkeley) that are with Ava Energy? (It's not something that shows up in craigslist searches.)
The local CCA is Ava Energy. They advertise 2 business rates: a 100% renewable plan that's 1/4 cent per kWh higher than PG&E, or a plan that's 5% cheaper than PG&E with more renewable energy in the mix. I was surprised when my landlord said they're still using PG&E despite the existence of a cheaper, cleaner alternative.
I'm wondering if there's something I'm missing, besides the possibility that it's a strictly political decision.
Bonus question: do you know of any buildings with small offices in the East Bay (Oakland, Berkeley) that are with Ava Energy? (It's not something that shows up in craigslist searches.)
There's a political angle to it. Community Choice Aggregators can be seen as a way that local governments put private power distributors (e.g. PG&E) out of business by taking their profits while still requiring them to support the power network.
The regulatory framework around PG&E both constrains it and protects it. CCAs dodge around that.
posted by Tell Me No Lies at 4:06 PM on October 17, 2024 [1 favorite]
The regulatory framework around PG&E both constrains it and protects it. CCAs dodge around that.
posted by Tell Me No Lies at 4:06 PM on October 17, 2024 [1 favorite]
They pass on the cost to their tenants anyway, so why do something which might end up being a headache?
posted by metasarah at 4:20 PM on October 17, 2024 [2 favorites]
posted by metasarah at 4:20 PM on October 17, 2024 [2 favorites]
Oh, and of course the other political reason to not use cheaper, greener energy is that global warming is a hoax and "green" energy is a communist plot to make us all wimps who don't consume manly fossil fuels.
posted by Tell Me No Lies at 4:23 PM on October 17, 2024 [2 favorites]
posted by Tell Me No Lies at 4:23 PM on October 17, 2024 [2 favorites]
Yeah, in my experience these alternative providers are pretty fly-by-night. I had a terrible time getting my mother-in-law out of a contract that was costing her a lot more than she should have been paying through the regular utility company. I don't trust them.
posted by mr_roboto at 4:34 PM on October 17, 2024 [1 favorite]
posted by mr_roboto at 4:34 PM on October 17, 2024 [1 favorite]
ESCOs are well-known scams. I'm not sure if they're less dodgy in CA, but they're awful on the East Coast.
posted by praemunire at 4:42 PM on October 17, 2024 [1 favorite]
posted by praemunire at 4:42 PM on October 17, 2024 [1 favorite]
I looked into using one in NY and it was common for them to be cheaper in the first year and then hike rates silently after the end of that contract.
posted by A Blue Moon at 4:44 PM on October 17, 2024 [2 favorites]
posted by A Blue Moon at 4:44 PM on October 17, 2024 [2 favorites]
Best answer: [just for the record a CCA is not an energy company]
posted by Tell Me No Lies at 4:47 PM on October 17, 2024 [2 favorites]
posted by Tell Me No Lies at 4:47 PM on October 17, 2024 [2 favorites]
Response by poster: I can't speak for California or your landlord's personal motivations, but energy scammers are big again right now, at least all over the Midwest.
Point taken. But FYI, local residents and businesses were automatically enrolled back in 2018 unless they actively chose not to be enrolled; and it's pretty much the official alternative energy provider, not fly-by-night at all. But I can see it's possible someone local still might not know anything about them.
They pass on the cost to their tenants anyway, so why do something which might end up being a headache?
In this building, the landlord pays for power; it's included in rent.
posted by mistersix at 4:47 PM on October 17, 2024
Point taken. But FYI, local residents and businesses were automatically enrolled back in 2018 unless they actively chose not to be enrolled; and it's pretty much the official alternative energy provider, not fly-by-night at all. But I can see it's possible someone local still might not know anything about them.
They pass on the cost to their tenants anyway, so why do something which might end up being a headache?
In this building, the landlord pays for power; it's included in rent.
posted by mistersix at 4:47 PM on October 17, 2024
Best answer: I'm in Oakland and use Ava for my residential electricity generation. Is it possible that your landlord means "I get a bill from PG&E and I pay PG&E" and hasn't looked very closely at their bill? They could be using the default Ava generation plan without realizing it.
For anyone not local, this page shows what I mean - it's pretty subtle unless you're looking for it.
posted by dreamyshade at 4:48 PM on October 17, 2024 [6 favorites]
For anyone not local, this page shows what I mean - it's pretty subtle unless you're looking for it.
posted by dreamyshade at 4:48 PM on October 17, 2024 [6 favorites]
Response by poster: Thanks for the answers. I had not realized that Community Choice Aggregators/ESCOs had such a bad reputation in some parts of the U.S. I'm under the impression that they're well-regulated and generally legit in California; but I see that hearing about bad things happening elsewhere, or not expecting the state government to regulate them well, might motivate someone not to trust them.
posted by mistersix at 6:16 PM on October 17, 2024
posted by mistersix at 6:16 PM on October 17, 2024
Best answer: So once again, a CCA is not an ESCO. However, since they are so easily confused, I’m going to go ahead and guess that people may believe that they are and respond accordingly.
posted by Tell Me No Lies at 7:20 PM on October 17, 2024 [1 favorite]
posted by Tell Me No Lies at 7:20 PM on October 17, 2024 [1 favorite]
Response by poster: Thanks, Tell Me No Lies. Relevant links: Wikipedia info on CCAs vs ESCOs.
(Seems notable that I specifically said CCA but several people referenced ESCOs. I was not aware of ESCOs as being a thing until this thread.)
posted by mistersix at 7:50 PM on October 17, 2024
(Seems notable that I specifically said CCA but several people referenced ESCOs. I was not aware of ESCOs as being a thing until this thread.)
posted by mistersix at 7:50 PM on October 17, 2024
I agree with dreamyshade. I suspect your landlord is using the Ava generation plan and just doesn’t realize it, since their bill still comes from PG&E. Unless you’re really scrutinizing your PG&E bill it’s easy to just forget that it’s happening behind the scenes.
posted by peperomia at 10:43 PM on October 17, 2024 [1 favorite]
posted by peperomia at 10:43 PM on October 17, 2024 [1 favorite]
Two ideas:
1. Back in the early 2000s in California I switched to a special "green energy" plan (from SDGE, not PGE) and within a few months the whole thing fell apart and the plan was scrapped - this was somehow related to the Enron scandal, but I never learned the details. It felt like a big waste of energy to me (haha).
2. From an economics perspective, it seems implausible that by adding a 1/4 cent surcharge you could actually have a 100% renewable mix. Given that PGE rates are often $0.30/kWh and higher, 1/4 cent is less than an 1% increase.
If all it takes for 100% renewable energy is a 1% increase in prices, why wouldn't PGE just do it? One answer: it's not possible to get 100% renewable with a 1% increase in prices, so there's something funny about this whole scheme.
In any case, perhaps your landlord remembers those events and has some skepticism for these or other reasons?
posted by soylent00FF00 at 7:42 AM on October 18, 2024
1. Back in the early 2000s in California I switched to a special "green energy" plan (from SDGE, not PGE) and within a few months the whole thing fell apart and the plan was scrapped - this was somehow related to the Enron scandal, but I never learned the details. It felt like a big waste of energy to me (haha).
2. From an economics perspective, it seems implausible that by adding a 1/4 cent surcharge you could actually have a 100% renewable mix. Given that PGE rates are often $0.30/kWh and higher, 1/4 cent is less than an 1% increase.
If all it takes for 100% renewable energy is a 1% increase in prices, why wouldn't PGE just do it? One answer: it's not possible to get 100% renewable with a 1% increase in prices, so there's something funny about this whole scheme.
In any case, perhaps your landlord remembers those events and has some skepticism for these or other reasons?
posted by soylent00FF00 at 7:42 AM on October 18, 2024
Unless you actually see the bill or conversation with the landlord makes it very clear that they fully understand how the CCA system works and affirmatively took action to opt out of it, I'd assume they have no idea what's going on and "they're just with PG&E" means they get the default electrical service: a bill and distribution from PG&E and generation from Ava's default plan.
posted by zachlipton at 11:44 AM on October 18, 2024
posted by zachlipton at 11:44 AM on October 18, 2024
Echoing others that the landlord is probably just not paying attention. I absolutely use my local CCA, Clean Power SF, and my bill is clearly from PG&E and I pay PG&E every month.
posted by gingerbeer at 1:24 PM on October 18, 2024 [1 favorite]
posted by gingerbeer at 1:24 PM on October 18, 2024 [1 favorite]
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