Tuesday, July 22, 2014
YOLO COUNTY NEWS
99 CENTS

Council pulls back on public power

By
From page A1 | May 14, 2014 |

The City Council decided 4-1 to pull the plug on moving ahead with public power Tuesday night, rebuffing a staff recommendation to pay $85,000 to move further with an inquiry into establishing a public electric utility in Davis. A new council may take the issue up again this summer following the June 3 election.

Supporting council members said the move was motivated by discussions with local residents who believe the council’s previously spent $400,000 on studies and authorization of a further $600,000 — which could be spent only with each disbursement approved by the council — is a bad idea in a year when the city faces a $4.99 million deficit and is asking for a sales tax increase.

“In almost every conversation I have with people about the city, this issue of the (publicly owned utility) comes up,” said Councilman Lucas Frerichs.

“This is also the beauty of representative democracy,” City Councilwoman Rochelle Swanson said later. “…We have to be flexible.”

The benefits to creating a public utility are still fresh in the minds of all five council members Tuesday night, including a potential 20 percent savings for residents on their power bills and the city’s power bill — something that could save tens or hundreds of millions of dollars depending on how it’s calculated. Other benefits include local control over energy sources.

But city staff told the council they expect a fight with Pacific Gas & Electric Co. The investor-owned utility has repeatedly said its facilities are not for sale, and although that is no absolute impediment to the city being able to condemn PG&E facilities and buy them, it indicates a court and/or regulatory fight.

City utilities general manager Herb Niederberger said the process of setting up the utility could take three to five years and an estimated $1 million in legal expenses.

Interim City Manager Gene Rogers was able to establish a public utility for part of the city of Moreno Valley in Southern California when he was the city manager there.

While it was a wholly different circumstance and process, Rogers said Moreno Valley had to contend with an unfriendly ballot measure put up by Southern California Edison, an investor-owned utility there.

“It’s certainly a worthwhile endeavor when it’s completed,” he said of public power.

City Councilman Brett Lee introduced the motion to pull back on spending money on the public power inquiry.

He expressed frustration with community members who are asking the city to start a publicly owned utility, but are not stepping up to volunteer their services when the city is cash-strapped.

Lee also said the $600,000 enterprise fund cap is not “magic money” and it must be paid back to the wastewater fund from which it was borrowed.

The already-spent $400,000 also was borrowed from the city’s water and wastewater funds.

He said he supports the idea of a publicly owned utility, but he needs examples of cities like Davis who have gone through the process with investor-owned utilities, preferably with PG&E.

The city has tried unsuccessfully to get representatives from Winter Park, Florida, to explain their recent transition from investor-owned utility to publicly owned utility.

“The question before us is how do we move from investor-owned to publicly owned?” Lee asked, adding that the city could have an intern call up publicly owned utilities and get their experiences.

“Help us to the point we can get basic information,” he said.

Niederberger disagreed.

“This is not intern work,” he said, adding that the city needs a report that is worth the paper it’s printed on.

But Lee found four votes on the council that sided with his eventual motion to table the issue until the new council convenes after the election — two seats on the council are up for grabs — not spend any money now and rescind the $600,000 authorization to borrow from the wastewater fund.

 

Mayor Joe Krovoza was the lone dissenting vote.

Plus, Lee’s motion called for him to round up volunteers to find out the information he wants about recently created public utilities, with an emphasis on California utilities.

— Reach Dave Ryan at dryan@davisenterprise.net or 530-747-8057. Follow him on Twitter at @davewritesnews

 

 

 

 

 

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Discussion | 6 comments

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  • Jim LeonardMay 14, 2014 - 11:32 am

    I wouldn't be surprised if the council's "pull-back" is the result of the "No on O" campaign. Vote "No on O" and "Yes on P". Together the City's books will get the examination they need and we deserve.

    Reply | Report abusive comment
  • Rich RifkinMay 14, 2014 - 4:05 pm

    "The already-spent $400,000 also was borrowed from the city’s water and wastewater funds." .............. Dave, you need to explain this. You quote Brett Lee saying that the money needs to be paid back. However, no mention is made of where that money to pay back the funds will come from. (If you reported that and I missed it, I apologize.) My guess is that the repayment money will come from the general fund, the very same general fund which is operationally bankrupt (and hence the need for Measure O). But maybe it won't be from the GF. Mr. Niederberger must know the answer to this question.

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  • May 14, 2014 - 4:36 pm

    “This is also the beauty of representative democracy,” City Councilwoman Rochelle Swanson said later. “…We have to be flexible.” Swanson cracks me up. The candidate who claims she makes the right choices when it comes to finances is up for re-election decides to flaunt her flimsy credentials. She probably got an earful and realized that she wouldn't be back to cast the next vote if she said yes on this one. Does anyone else find it ironic that the only person who voted to go forward with the plan is the one who is NOT on a ballot in June? This vote was nothing more than the opportunity to provide political cover for their campaign.

    Reply | Report abusive comment
  • May 14, 2014 - 5:02 pm

    Joe Krovoza is definitely on a ballot in June.

    Reply | Report abusive comment
  • May 14, 2014 - 6:39 pm

    The Assembly will benefit tremendously from Joe's leadership, though as this issue makes clear, he will be sorely missed on the council.

    Reply | Report abusive comment
  • bobby1122May 14, 2014 - 10:33 pm

    But doesn't a sales tax hurt the low income people more?? Is there no waste in Davis govt.? that can be cut to save money??

    Reply | Report abusive comment
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