MCE board approves rate cuts starting in April

The MCE board of directors voted Thursday to reduce its portion of monthly electricity charges for typical households by $11 a month starting in April.

Typical residential customers of the public renewable power agency formerly known as Marin Clean Energy would pay about $250 more in 2026 for electricity than from a comparable plan from Pacific Gas & Electric Co., according to MCE staff reports. PG&E is expected to raise rates in 2027, offsetting recent rate cuts that triggered MCE’s response.

The last time MCE lowered residential rates was in 2017 “to keep costs slightly below PG&E’s,” a handout said. In 2020, it reduced rates in unincorporated Solano County.

“We’re going to spend most of our time tonight on rate setting with the goal of incorporating a rate adjustment into the proposed budget that will be coming to you in March,” Dawn Weisz, the chief executive officer, said at the board meeting.

The rate cut will take effect in April, when MCE’s next fiscal year starts. As of Jan. 1, MCE’s most common residential plan was $29, or 16% a month more than PG&E.

In January, MCE management gave staff raises and promotions. Its draft budget for its next fiscal year envisions a 14.7% increase in personnel costs.

MCE staff presented six options for rate cuts. The final motion that passed was a two-part reduction proposed by staff shortly before the meeting Thursday. MCE would lower its portion of the most widely used plan by $8 a month starting in April. For the rest of 2026, it would apply a temporary credit of $3.

Almost all Marin directors except for Fairfax Councilmember Barbara Coler and San Rafael Councilmember Maika Llorens Gulati voted for slightly larger reductions than the option eventually passed by the board majority.

Neither Coler nor Llorens Gulati responded to requests to comment on Friday.

A bloc led by East Bay and North Bay directors followed management’s urging to not dip into $487 million in current reserves for fear it would lower the agency’s credit rating and raise energy procurement costs. MCE serves 1.5 million residents in Marin, Napa, Solano and Contra Costa counties.

Instead, the approved rate cut comes from two other sources. The first is an estimated $89 million drop in wholesale energy costs during MCE’s current fiscal year, which creates “rate reduction headroom,” a staff report said. The second is taking $62 million from a $70 million rainy day fund, which is expecting a $30 million infusion after April, said Maira Strauss, the chief financial officer.

The rate reduction also allocated $10 million to subsidize the lowest-income households and businesses with a $20 a month credit. Currently, only 5,200 of MCE’s 603,000 customer accounts, less than 1%, are enrolled.

More than 85% of Marin households get their electricity from MCE.

During public comment, advocates urged MCE to look at every expense to give customers more relief.

“I am concerned about the affordability issue for a lot of people,” said Jody Timms of 350Marin, a climate activism group.

The Marin Conservation League noted that MCE spent $350 million on energy credits in the past two years to boost its reported green content.

“Choosing an option without these attributes could have little environmental impact but could save money,” said Robert Miller, a member of the organization.

MCE accounts for a third of monthly electricity charges. The remaining charges are from PG&E, which delivers the power over its infrastructure.

Several Marin directors said management and many East Bay peers seemed more concerned about MCE’s credit rating than cutting prices or defections to PG&E.

“There’s two types of risk that I’m grappling with,” said Corte Madera Councilmember Eli Beckman. “One is the risk of losing customers and the other is the risk of losing our credit rating.”

“It’s clear that the folks in this room don’t see eye-to-eye on where those risks fall,” he said.

The biggest factors in MCE’s credit rating are its reserves and cash-on-hand liquidity — or how many days it can operate without additional revenue, staff said.

“In 2024-25 we were at 218 days of cash on hand,” said Larkspur Mayor Stephanie Andre, a member of the board. That was below management’s 240-day target and its credit rating was not hurt.

“At the end of this year, fiscal 25-26, it’s going to be 274 (days) projected,” she said. “So there is room in our cash and investments to supplement any rate relief.”

Walnut Creek City Council member Cindy Darling, the board vice chair, did not want to use any of MCE’s reserves. Nor did she discuss cutting energy or staff expenses.

“If the cost of energy comes back up again next year, how do we deal with that?” she said, urging caution.