TRI-VALLEY — The cost of electricity generation will fall in 2026, lowering customer bills by about 11%, according to Tri-Valley electricity provider Ava Community Energy. But the reduced electricity revenues prompted Ava budget actions last month, including the cancellation of a previously approved bill credit for lower-income customers.
The lower costs come in part from a number of wildfire-safety and emergency-response projects recently completed by Pacific Gas & Electric (PG&E). The projects had previously added to the cost of electricity, and those costs have now been removed, driving rates down.
But the financial stresses on customers act in reverse for Ava. The nonprofit energy supplier buys power on behalf of its customers to negotiate cleaner, cheaper power sources. When prices fall, Ava revenues fall with them, squeezing Ava’s operating headroom, CEO Howard Chang said.
“The last few years, we’ve been contributing a lot to reserves — the rate stabilization fund — and obviously operating in a very healthy environment,” Chang said. “Unfortunately, that’s also when our customers have experienced really high rates, given our indexing structure to PG&E.”
Ava pegs its rates to fixed premiums or savings above or below PG&E rates, depending on the renewable-energy content of the Ava service plan. The supplier currently serves all of Alameda County and the cities of Lathrop, Stockton and Tracy. Ava plans to add unincorporated San Joaquin County this year.
To meet a projected $246.8 million deficit in 2026, the Ava Board of Directors at its Dec. 17 meeting approved the authorization to cancel a planned bill credit for its lower-income customers. The credit, which would have cost Ava $13 million, would have returned about $80 per customer to those enrolled in either the California Alternate Rates for Energy or the Family Electric Rate Assistance programs at the beginning of this year.
The authorization will also increase the premium for its Renewable 100 plan from 0.25 cents per kilowatt-hour to 1.75 cents per kilowatt-hour over PG&E rates.
Customers will still see a reduction in their overall electric bills because of the lower generation costs.
Ava staff had originally proposed drawing $15.5 million from its reserves and reducing its renewable-energy procurement targets by $10 million. Representative Jack Balch of Pleasanton, the city’s mayor, proposed using the $13 million previously earmarked for the bill credit to help address the projected deficit, reducing the draw from the reserves.
“I cannot in good faith use reserves to support the on-bill credit,” Balch said.
Balch’s substitute motion also added $5 million back to Ava’s renewable-energy procurement targets, allowing for cleaner energy contents.
Board members representing Dublin, Livermore, Pleasanton, Albany, Piedmont, San Leandro, Union City and San Joaquin County voted in favor of the changes. Representatives from Alameda County, Emeryville, Hayward, Newark, Oakland and Tracy voted against the changes, while board members from Fremont, Lathrop and Stockton were absent.
Councilmembers John Morada and Ben Barrientos represented Dublin and Livermore, respectively.
Hayward representative and councilmember Julie Roche, who opposed reneging on the bill credit, said, “The customers paid this excess, basically, and we’re saying for this cycle, they paid this excess. So, I think the pattern (and) practice is paying them back, especially our lower income customers, for what we saw as surplus.”
Berkeley representative and councilmember Igor Tregub, who remained undecided on the bill- credit issue until the very end, abstained from the vote.
“We did make a commitment several months ago on bill credits,” Tregub said before the vote. “At the same time, we are in a much more precarious financial position than what we knew about that number of months ago.”