Local News

City exploring publicly owned utility at cost of $1 million

By From page A1 | January 30, 2014

It may cost the city a pretty penny to save you money on your electric bill.

At a time when the City Council is mulling whether to ask for more taxes to cover a $5.1 million structural deficit and pay for improvements, it plans to spend more than $1 million to pursue creation of a publicly owned utility for Davis.

The city’s general fund doesn’t have the cash, so it can’t pay that money without help. On Tuesday, the City Council authorized a loan of more than $600,000 from the wastewater fund to cover the cost. The cost will be paid incrementally, and Tuesday’s item was to wrap up the incremental costs into one promissory note. The city has spent more than $400,000 thus far to explore a publicly owned utility.

The motivation for a move away from PG&E isn’t purely financial. The city has strict greenhouse gas emission goals it believes will have better outcomes under a publicly owned utility. According to a Dec. 10 city staff report on the potential project, the city believes it will have local control, see better costs for ratepayers and realize a more diverse “energy portfolio” — in other words more renewable energy.

But to get to the point where the city can become a publicly owned utility, it has to have utility infrastructure, and for more than 100 years Pacific Gas & Electric Co. has maintained that infrastructure.

PG&E representatives met with city representatives last week, according to a Jan. 28 city staff report, following up on a vote the council made on Dec. 10 to explore a publicly owned utility for Davis.

“While PG&E expressed a desire for joint partnership to achieve results similar to the city’s desire goals … PG&E reiterated that their assets were not for sale,” the report reads. “Nevertheless, PG&E indicated a willingness to engage in further dialogue.”

In a public hearing on the issue Tuesday, Alisa Okelo-Odongo, manager for PG&E’s government relations division, repeated in public that the utility’s assets are not for sale.

Brandi Ehlers, a PG&E spokeswoman, said in an interview that the city’s estimates for the cost of PG&E assets, the cost of power and the cost to condemn the power lines would be far more than it realizes, although she did not mention a figure.

Similarly, the city staff report does not outline exact costs for the endeavor, which is part of the purpose of Tuesday’s approval to keep exploring.

Davis has been down this road before. In November 2006, Davis voters approved a move from PG&E to the Sacramento Municipal Utility District, but voters in Sacramento overwhelmingly rejected the annexation.

Mayor Joe Krovoza said Tuesday the city is not acting hastily with the vote to move forward because it is only exploring the issue.

Members of the public, including Kemble Pope, executive director of the Davis Chamber of Commerce, criticized the city for not making the process more well known, and for spending money it seemingly doesn’t have.

“The public is not educated on this,” he said. “Perhaps we are trying to put the frosting on the cake without the money to buy the eggs and flour to bake the cake.”

Krovoza countered later that the City Council is moving cautiously.

“In no way is this a quick decision of the Davis City Council,” he said. “Studies indicate so far that Davis could save 20 percent over the prices of PG&E.”

Councilman Brett Lee said he wants to hear from cities who have created publicly owned utilities before the council makes a decision.

Krovoza ordered city staff to create a dedicated web page on the issue, as it has done for other major projects.

— Reach Dave Ryan at [email protected] or 530-747-8057. Follow him on Twitter at @davewritesnews 

Dave Ryan

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