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Sonoma Clean Power officials say new deal will beat PG&E's rates

Officials with Sonoma County's startup public power agency on Tuesday signed a primary energy contract with Constellation, touting the deal with the large national power producer and retailer as one that would allow them to beat customer rates proposed for 2014 by PG&E, the region's dominant utility.

The three-year contract with the subsidiary of Chicago energy giant Exelon Corp. is likely to be one of the biggest short-term business deals ever struck by a locally based government entity.

The contract, which is designed to provide the bulk of the public venture's initial energy supply, is worth under $70 million just for the first wave of 20,000 largely commercial customers. By 2017, when up to 120,000 mostly residential accounts are on board, total wholesale energy expenditures for the power agency, including the main contract and secondary deals, are projected at $115 million annually.

Sonoma County Supervisor Susan Gorin, the agency's chairwoman, said the contract was a linchpin in the venture's efforts to be competitive and provide a greater share of electricity derived from renewable and carbon-free sources.

“It just confirms that the promises that we made to the community were not made in haste,” Gorin said of the deal. “It really means that Sonoma Clean Power is going to be successful in moving forward.”

But agency officials would not disclose the energy price secured in the Constellation contract, saying only that the wholesale price fell below the cap approved by board members in advance of final negotiations. That cap reflects an average maximum retail rate that would, with PG&E surcharges, equal the utility's proposed 2014 generation rate of 9.72 cents per kilowatt hour.

Geof Syphers, interim CEO of Sonoma Clean Power, said he was withholding the price figure partly because the agency remains in negotiations for a secondary supply contract with the operator of The Geysers geothermal field on the Sonoma-Lake county border.

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