No Planet, No Profits*
For Profit Service Providers
Some Not-For-Profit Service Providers
To Profit or Not in the Service of California Community Choice Energy Programs?
We are in an era where capitalism is both the villain and the solution to a clean energy future. Indeed, the goal of clean capitalism is a planet on which to prosper, not founder.
Without profits, there would be no choice and innovation in the marketplace, because there would no marketplace. There would be no reward for assuming risk and no risk would be undertaken.
An unregulated marketplace without a level playing field socializes losses. Most fossil fuel companies today do not pay a pollution fee for mining and supplying carbon-based fuels, though it is now a part of their internal cost model. Shell Energy has for years had an internal carbon cost on all fossil fuel extractions. The risks of mining and burning fossil fuels is well understood by the oil industry.
For-profit companies like Direct Energy, Exelon, Constellation Energy, Shell Energy North America, Noble Americas Energy Solutions, and California Clean Energy profit as service providers to Community Choice Energy programs.
What for-profit companies do well is calculate and then accept risk in exchange for reward.
On the other hand, cities and government are and should be risk-adverse because they have a public and fiduciary duty to their constituents when it comes to the use of public funds.
Therefore, it appears logical that a small city or county in California without the knowledge or the experience in energy company operations would be receptive to outsourcing a Community Choice Energy program. In California, two companies provide formation and operational services:
Al Weinrub, a respected California energy activist, has critiqued the approach of California Clean Power. He makes some points that private companies do well to incorporate into their business models. Read his critique HERE.
Clean and transparent capitalism is the largest single driver of a clean economy responding to policy and regulation incentives and disincentives for burning fossil fuels.
Getting a business model to work as the partner to a city or county government is tremendously difficult. This is because the ecology of a public-private partnership includes by definition both the public on the one-hand and private owners on the other. Getting the model right takes time. Patience is in order for private companies as they correct course in order to help small California jurisdictions get Community Energy programs up and running with environmental, fiscal and operational responsibility in place. With only three CCAs up and running in California, formation is no easy task. Get it right the first time.
* The San Diego Energy District obtains membership dues from many for-profit entities including Shell Energy North America, Noble Americas Energy Solutions, California Clean Power, and others. The views of this article and all SDED content reflects our independent advocacy for Community Choice Energy.