Local News

City to consider spending more money on public power inquiry

By From page A1 | May 11, 2014

Learn more
What: Davis City Council meeting
When: 6:30 p.m. Tuesday
Where: Community Chambers, City Hall, 23 Russell Blvd.

Watch it: Live on Comcast Channel 16 or AT&T U-Verse Channel 99, or as streaming video at www.cityofdavis.org/media

The City Council will consider spending $85,000 Tuesday night on a plan to break away from Pacific Gas & Electric Co.

The money would pay for hiring consultants to manage the program of preparing plans and case studies geared toward forming a public electric utility and performing public relations tasks. City staff also would be directed to continue to work with PG&E regarding Davis’ energy goals and objectives.

The city already has spent $400,000 on an inquiry into breaking away from PG&E and authorized a cap of $600,000 more. Now it’s considering spending $85,000 as part of that cap toward a work program that would get it further down the path toward breaking away.

The City Council’s deliberation comes at the same time it is asking voters to approve a half-percent sales tax increase on the June 3 ballot, which would generate $3.6 million annually for city coffers. The city is facing a $4.99 million structural deficit and plans to cut $1.1 million worth of programs and jobs even if the tax, called Measure O, passes.

The council’s inquiry into public power so far yielded a consultant’s study that showed Davis residents could save 20 percent on their electric bills while giving the city control over using more renewable sources of energy than is currently used.

PG&E representatives repeatedly have said their power lines and facilities are not for sale, setting up the city for a fight in the courts or through regulatory agencies. While most public utilities in the state have enjoyed public status since the early part of the last century, more contemporary attempts to break away from an investor-owned utility like PG&E have been met with a years-long legal struggle.

According to the American Public Power Association, no city in California has taken on an investor-owned utility since 2003. However, at least two cities challenged investor-owned utilities by pledging to serve portions or future portions of their cities. The cities of Hercules and Moreno Valley offer differing examples.

In Hercules, the city established the Hercules Municipal Utility in 2001 to serve new developments and public buildings, eventually gaining 800 customers, according to a joint news release from the city of Hercules and PG&E.

By April 10 of this year PG&E once again served those customers after Hercules voters passed a measure in 2012 requiring the sale of the public utility to a buyer that could provide more reliable service. PG&E estimated most former public utility customers’ rates would drop under PG&E’s stewardship, and Hercules would be able to retire the public utility’s debt with the proceeds from the sale.

In Moreno Valley, the city’s still-functioning public utility has special significance for Davis — the man who helped establish the public utility there is Davis’ interim city manager, Gene Rogers.

In an interview, Rogers said the city took on investor-owned Southern California Edison, but avoided trying to condemn its facilities as Davis would have to do to PG&E. Instead, Moreno Valley established a zone in the fast-developing city that covered areas yet to be developed. When a commercial, industrial or housing development went in, developers paid for and built all new electrical infrastructure.

Rogers said the move was made to be competitive in attracting industrial businesses. Nearby Riverside has a long-standing public utility.

He admitted that Edison did not put up the fight it could have, because he believed the utility did not understand how serious Moreno Valley was at the time (2004). The public utility now serves 4,300 customers.

If Davis pursues public power, Rogers said it may take years.

“One could expect a fairly long gestation period,” he said.

Still, the benefits of lower bills, greener energy and local control may be worth it, Rogers said.

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

Dave Ryan

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