Marin Energy Authority gets $85,000 loan from county

The Marin Energy Authority received an $85,000 loan from the county of Marin on Tuesday, the final allotment of more than $500,000 previously promised to the authority by county supervisors.

The authority needs the money to follow through on a plan to compete with Pacific Gas and Electric Co. as a retailer of electricity in order to reduce Marin's greenhouse emissions. The county gave the authority a $210,000 loan last month.

County Administrator Matthew Hymel briefed supervisors on an independent evaluation of the Marin Energy Authority plan that was done by MRW & Associates, an energy consultant based in Oakland.

Hymel said MRW identified a number of potential concerns, and the authority has made several changes in its draft contract for a wholesale electricity supplier.

"There are no fatal flaws in the proposed agreement," Hymel said. "There are, however, inherent market risks to going forward."

Hymel said the main risk is that natural gas prices will go down. Because PG&E gets more of its electricity from burning natural gas than the authority expects to, if natural gas prices go down, the authority will find it difficult to offer prices that are competitive with PG&E's, Hymel said.

"Conversely, if natural gas prices increase, MEA would be in a better position and would be able to establish reserves and invest in its own renewable energy," Hymel said.

Hymel said it is difficult to predict what will happen because natural gas prices are so volatile.

When supervisors approved the loan in October, Dawn Weisz, the authority's interim director, told supervisors the authority might need to borrow about $2 million to cover start-up costs. Hymel said there had been some discussion about the county guaranteeing the loan. At that time, Supervisors Steve Kinsey and Susan Adams said they thought other members of the authority should also share some of the financial risk.

On Tuesday, Adams asked if the authority was still counting on the county guaranteeing the loan. Weisz said the authority is talking to a number of foundations and banks, and should have a better idea where it stands by January.

"We're looking at a lot of different options now," Weisz said.

Contact Richard Halstead via e-mail at rhalstead@marinij.com

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