Obamacare isn’t the only new government program suffering problems. San Francisco is getting jolted by its new Community Choice Aggregation program, which the U.S. Department of Energy defines in general as, “a state policy that enables local governments to aggregate electricity demand within their jurisdictions in order to procure alternative energy supplies while maintaining the existing electricity provider for transmission and distribution services.”

CCAs allows cities or counties to opt out of electric service from their local monopoly utility and form a cooperative to buy cheap green power in the market. In California, the monopolies are Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. (California also has municipal utilities, such as the Los Angeles Department of Water and Power. But they are not involved in these CCAs because the government-run utility itself is the monopoly.)

Under a CCA, the community controls the price, the fuel mix and the source of energy, while the existing electric utility merely delivers electricity and services accounts. CCAs can also get into the power-generating business themselves.

However, the rollout of a CCA in the City and County of San Francisco has been badly mishandled. Thanks to Allysia Finley of the Wall Street Journal in her “Fifty Shades of Green in San Francisco,” the situation can be better understood.

SF finds out green power costs 5 times as much

The California Legislature passed Assembly Bill 117 in 2002 after the state energy crisis of 2001. It allowed local communities to form cooperatives to buy cheap power.

In 2007, San Francisco County’s Board of Supervisors authorized CleanPowerSF as a “community choice aggregator” to provide a cleaner, cheaper price alternative to PG&E electric rates that are set by the California Public Utilities Commission.  Like Obamacare, CleanPowerSF spent three years in planning, only to result in a botched rollout, which began for CleanPowerSF in 2010.

In 2010, the City of San Francisco solicited bids for renewable energy for 90,000 residents.  Ratepayers would be automatically enrolled in the system unless they requested to be allowed to opt out and continue with PG&E.  The problem: Only one provider, Shell Energy, submitted a bid, which was approved by the City.  In turn, the City delegated the crucial task of setting caps on electricity rates to San Francisco’s Public Utilities Commission, whose members are appointed by the mayor.

However, Shell’s green power from sources inside California would cost more than five times PG&E’s power rates.  Typical San Francisco electric bills would climb from about $73 per month to $300 per month, according to Finley.

Renewable Energy Certificates

So San Francisco and Shell came up with another green scheme to replace the one that failed. The scheme involve what are called Renewable Energy Certificates. REC’s allow an energy provider to sell “dirty” power, provided the provider bought offsetting pollution permits from wind farms and re-forestation projects.

Environmental groups charged that this was nothing but “green washing” electricity generated from dirty fossil fuel.  The dirty power would still come through natural gas pipelines from Shell’s facilities in Texas. This brought about union opposition into the picture.

All of CleanPowerSF’s power must come from in-state sources, asserted the San Francisco Labor Council and the International Brotherhood of Electrical Workers.  The City PUC found out that cheap power is non-union imported power.  The unions claimed that RECs would out-source their jobs.

Shell devised a possible solution. It would buy or generate clean hydropower from sources inside the state.  But California’s tough Green Law, Assembly Bill 32, the Global Warming Solutions Act of 2006, specifically forbade hydropower being considered as green power, even though it emitted no pollution.

San Francisco requested that the PUC merely cap electric rates so the city could finalize its agreement with Shell.  The PUC short-circuited the city’s request by refusing to cap the rates.

Green Power is “Dirty” 

Where this game of King of the Hill has ended up is that the San Francisco County Board of Supervisors is now trying to end-run San Francisco’s PUC and mayor, Edwin M. Lee, by proposing the city join Marin County’s CCA, the first in the state.

Under Marin’s CCA program, ratepayer’s have a choice of two plans: 1) 100 percent green power; 2) 50 percent green power mixed with power from wind and burning landfill gas and wood.  Finley points out the paradox that biomass- and wood-powered electricity would produce more C02 emissions than so-called “dirty” coal-fired and natural gas-fired power.

The preference of going with a CCA rather than a conventional electric utility is being made as a cultural choice, not a rational economic or environmental decision.

This is seen in the Marin County CCA’s Mission Statement: “The purpose of the Marin Energy Authority is to address climate change by reducing energy related greenhouse gas emissions and securing energy supply, price stability, energy efficiencies and local economic and workforce benefits. It is the intent of MEA to promote the development and use of a wide range of renewable energy sources and energy efficiency programs, including but not limited to solar and wind energy production at competitive rates for customers.”

Berkeley and San Diego also are planning CCA’s. Citizens in these cities need to closely examine what has been going on with CCAs in both San Francisco and Marin County.

During California Gov. Jerry Brown’s first term in office, 1975 to 1983, one of the central planks of his political platform was “small is beautiful.” Brown borrowed his platform from economist E.F. Schumacher’s 1973 book, “Small is Beautiful: Economics as if People Mattered.”

As the publisher’s blurb now describes it:

“A landmark statement against ‘bigger is better’ industrialism, Schumacher’s Small Is Beautiful paved the way for twenty-first century books on environmentalism and economics, like Jeffrey Sachs’s The End of Poverty, Paul Hawken’s Natural Capitalism, Mohammad Yunis’s Banker to the Poor, and Bill McKibben’s Deep Economy. This timely reissue offers a crucial message for the modern world struggling to balance economic growth with the human costs of globalization.”

Fast forward to 2013, and Brown is poised to push through his more than $50 billion package of big water projects: a Delta Twin Tunnels Plan, a Delta Conservation Plan, a Delta Levee improvement project, and a downsized statewide water bond requiring voter approval. One of the surprising changes in public opinion that may present an obstacle with voters to Brown’s water plan is the “small is beautiful” movement that paradoxically he made popular with many Californians.

Some writers have called Brown’s “small is beautiful” philosophy “prescient,” indicating insight about the future. A recent study by UCLA’s Center of the Environment and Sustainability seems to have fulfilled Brown’s prophecy. The study has captivated the public with the idea that solar photovoltaic panels on just 5 percent of Southern California’s buildings could produce half the electricity needed statewide.

The study goes so far as to list the precise building addresses that would generate the highest electricity output. Certainly those property owners will now look to the potential revenues from lucrative solar farms on their rooftops as part of their entitlement of property rights. Many upper-middle-class homeowners in California have already bought into the notion of their right to subsidized rooftop solar power.  This is despite California’s “One Million Roofs” program being overhyped and underperforming and costing other electric ratepayers $1.1 billion in extra costs.

Ad campaign by solar power industry

This burgeoning “small is beautiful” movement cuts across the political spectrum. It has excited those on the politically left Occupy Movement who disdain big utilities and big banks.  It also lured conservative Republicans and Tea Partiers into endorsing rooftop solar projects, even though the devices require huge subsidies and add to the national debt.

Conservative Republican Barry Goldwater Jr. has founded a lobbying group in Arizona called Tell Utilities Solar Won’t Be Killed — T.U.S.K.  The former chairperson of the Republican Party in Arizona, Robert Morrissey, has joined the group. In California, this campaign has tried to co-opt the Tea Party into an alliance with the Sierra Club.

PR campaigns portray green power as patriotic, Biblical and as American as apple pie, the American flag and Mom.

The Obama administration’s scandals with big solar panel manufacturers like Solyndra in California have caused some in Congress to threaten cutting solar-energy tax credits.  To counter the threat, the solar industry is trying to gain public legitimacy by portraying itself as small, beautiful and uncorrupted.

But what does all this “small is beautiful” marketing effort by the solar and wind energy industries have to do with Jerry Brown’s water plan?  Plenty.

Small Water vs. Big Ag and Big Tunnels

The UCLA study goes so far as to propose cutting Los Angeles off of dependence of imported water from the huge California State Water Project and the even larger federal Central Valley Project.  Under preliminary plans being floated by the UCLA Luskin Center, Los Angeles instead would rely on ocean water desalting plants, the recharging of local groundwater basins with recycled water and rainwater harvesting.  To get the public to cut its dependence on imported water, big corporate agriculture and Brown’s Big Tunnels project would have to be demonized.

Forget the reality of  8 to 10 year droughts that sometimes hit Southern California.  Forget the reality that two-thirds of its allotment of Colorado River Aqueduct water has been curtailed to Southern Californians in recent years.  Forget that 65 percent of Southern California’s allocation of water from the California Aqueduct has been curtailed due to lawsuits to protect fish. Forget the consequences to California’s agricultural industry. Big is bad and small is beautiful is the message being successfully implanted in the receptive minds of the public fed up with the failures of big banks, big crony capitalist companies and now Big Obamacare.

Some of the most recent polling results show Brown’s proposed water bond on the 2014 ballot would “go down pretty dramatically,” according to the Northern California water advocacy group, “Restore the Delta.” Of course, the culprit named as the basis for the failure of the water bond is Brown’s Big Tunnels project.

Representing the little people in California’s water wars are the small Delta farmers, advocates for Delta small towns, small fisherman, protectors of small groundwater basins; and Delta restoration groups, which seek to take the Delta back 150 years before humans changed it.

Also opposing Brown’s water bond are big recreational, tourism and commercial fishing interests. Well-funded environmental advocacy organizations like the National Resources Defense Council, with a staff of more than 400 lawyers and scientists and a budget of $119 million, also oppose the Twin Tunnels project. The NRDC is the organization that filed the infamous lawsuit to protect the Delta smelt fish that was based on bogus science. This lawsuit, later thrown out of court, curtailed water deliveries to California Central Valley farmers and Southern California cities to a dribble for three years.

There is no small and beautiful California water war

There is no small is beautiful when it comes to California’s water wars.  There are big water agencies, big corporate agriculture, and big water projects. But there are no real small water or Delta restoration interests that aren’t well funded and supported by big commercial, union, and environmental interest groups. The saying “water runs uphill toward money” was invented in California.

Even UCLA is in the process of raising big bucks — $150 million — from the Bill and Melinda Gates Foundation, the X PRIXE Foundation, the U.S. Department of Energy and the National Aeronautic and Space Administration to fund further research into small and local water projects to replace large water infrastructure projects and regional aqueduct systems.

So, irony of ironies, a “small is beautiful” policy that has worked politically to decentralize expensive green energy and phase out cheap centralized power plants is backfiring when it comes to Brown’s water policy.