Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: DISCUSS AND PROVIDE DIRECTION TO THE CITY'S
REPRESENTATIVE ON THE SONOMA CLEAN POWER
BOARD OF DIRECTORS REGARDING SONOMA CLEAN
POWER EXPANSION TO LAKE COUNTY
Date: July 8, 2025
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council provide direction to the City’s representative on the Sonoma Clean Power (SCP) Board of Directors to authorize expansion of SCP service to Lake County and the associated cities, including direction (if any) on the key considerations discussed in the staff report.
Background
On June 5, 2025, the Sonoma Clean Power (SCP) Board of Directors voted to start the process of offering service to Lake County. If approved later this year, Lake would become the third county served by SCP, joining Sonoma and Mendocino.
At the Board’s request, SCP completed a detailed study and found that adding Lake County would likely lower overall costs and help reduce greenhouse gas emissions. The study is attached. Lake County shares SCP’s goals of lowering energy bills, cutting pollution, growing the local economy, and developing more geothermal energy.
Analysis/Discussion
In the feasibility report, the key considerations for the SCP Directors are the following:
• Should an offer of service to Lake County and the Cities of Clearlake and Lakeport be made at this time?
• Does the Board agree to staff’s recommendation for starting service between April and June 2027?
• Does the Board wish to use the same practice as in Mendocino County by offering one Board seat to the County of Lake Supervisors and one shared seat for the two incorporated cities of Clearlake and Lakeport?
• Does the Board wish to stress the importance of the Geothermal Opportunity Zone (GeoZone) and seek to confirm that Lake County is aligned and wishes to join the GeoZone?
Other findings of the feasibility report are as follows:
• Expanding service to all of Lake County appears to be financially beneficial to both Lake County customers and existing SCP customers in a majority of years. • Expansion to Lake County appears to be well aligned with the criteria established in SCP’s Policy for New Customer Communities D.4.
• SCP’s current portfolio of long-term renewable contracts is sufficient to accommodate expansion to Lake County without requiring additional long-term procurement to maintain compliance.
• Startup costs for an expansion to Lake County are estimated to be $578,000, which forecasts indicate would be recouped through rates in the first year of service. • In the base market scenario used for evaluation, Lake County customers see total bill savings of 4% or more, however, it is important to note that there is a clear possibility that total bills will be higher with SCP some of the time due to changing PG&E fees outside SCP’s control and energy market conditions.
• An expansion to Lake County will increase SCP’s target for reserves by $42.7 million (using 2030 costs), which would have the effect of reducing SCP’s ability to provide savings until that higher balance is achieved. The time estimated to accumulate the additional reserves while sustaining competitive rates is difficult to estimate, but likely could be completed by 2032.
• Lake County’s participation in the GeoZone is mutually beneficial and it is strongly recommended that Lake County join the GeoZone concurrently with SCP’s electric service.
• Expansion to Lake County offers additional benefits such as more cost-effective building electrification opportunities, increased portfolio flexibility, improved advocacy, and additional phone and web support for customers in Lake County. • Risks that should be considered before proceeding with an expansion include the impacts of a jurisdiction withdrawing from SCP service, high customer opt-outs, possible impacts to SCP’s credit rating, and the inability to guarantee rates that are lower than PG&E. • The feasibility plan outlines steps leading up to an April to June 2027 start date, including approvals from SCP’s Board and Lake County jurisdictions, as well as filings with the CPUC, customer noticing, and outreach.
Since inception, a core value of SCP has been supporting the construction of local energy resources that provide economic development opportunities to the communities it serves. SCP has contracted with the Geysers, built six 1 MW local solar projects, and is currently building a 4 MW solar with storage project in Mendocino County.
Geozone
SCP has created the GeoZone in partnership with Sonoma and Mendocino counties with the aim of building 600 MW of new geothermal capacity. SCP’s GeoZone is structured as a publicprivate partnership to promote local geothermal development. The motivation of GeoZone is to leverage SCP’s community relationships, power offtake, and political and regulatory advocacy to build geothermal capacity that is cost-competitive at scale-up and that generates significant local economic benefits. In expanding to Lake County, SCP may find new opportunities for partnership in resource development and use its leverage as a large power customer and regulatory advocate to steer development towards positive outcomes for the region.
Next Steps
The next Board vote on this issue is scheduled for August 7, 2025. If the SCP Board approves, Lake County and its two cities—Lakeport and Clearlake—will then decide whether to accept the offer. If all goes forward, service could begin as soon as May 2027.
Financial Considerations
SCP would fund the initial startup costs for an expansion to Lake County, which is estimated to be $578,000. Forecasts indicate that this would be recouped through rates in the first year of service. Longer term, the expansion is expected to result positive benefits to the region, including clean power jobs, continued electricity rates lower than PG&E (not withstanding some unexpected legislative or regulatory change), and greater leverage with regulatory advocacy at the State.
Environmental Issues
Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review.
This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.