Tuesday, September 16, 2014

Davis’ path to public power is not like others’


PG&E crews begin replacing 2,000 feet of natural gas distribution line in Stonegate in this March 2, 2012, photo. Sue Cockrell/Enterprise file photo

From page A1 | April 01, 2014 |

Last Tuesday, the Davis City Council was all set to move forward with pursuit of information crucial to eventually providing electric power to residents at what is thought to be a 20 percent discount from Pacific Gas & Electric Co. rates.

The city also would have control over what energy sources it could use for that power in order to meet city greenhouse gas goals. So far, Davis has spent $400,000 and the council authorized city staff to come back with incremental approvals for spending up to a $600,000 cap.

City staff brought up a representative from Palo Alto, which has operated its own electric utility since 1900, before outlining a host of modern separation issues Davis faces if it chooses to dump PG&E.

Yet City Councilman Brett Lee managed to convince his fellow council members last week that, among other pieces of information, they needed to hear from a government entity that has gone through what they were contemplating: the change from being part of the territory of an investor-owned utility like PG&E to a locally controlled, city-operated electric utility.

The council unanimously voted to put off its deliberations until April 15, when city staff could unveil the information Lee is looking for.

But an Enterprise survey of California municipal utilities — using information from the American Public Power Association, a public utility lobbying group in Washington, D.C. — indicates that Lee’s request would uncover no situation in California that is like what Davis faces.

The municipal utilities in California are usually much like Palo Alto, Alameda, Burbank and Glendale. They are long-serving utilities incorporated in the late 1800s or the early 20th century without the controversy of having a high-profile court fight or regulatory battle with an investor-owned utility.

Other nearby entities, like Sonoma Clean Power, which serves the unincorporated area of Sonoma County, have community choice aggregation-type power agencies. MCE Clean Energy, which operates in Marin County and Richmond, is in this category as well.

A community choice aggregation model allows PG&E to maintain its grid, but there is local control in choosing what kind of power sources it uses. The downside is that that model saves customers only a fraction of the 20 percent consultants estimated Davis residents would save with a publicly owned utility.

According to a Dec. 13, 2013, article in the North Bay Business Journal titled “Sonoma Clean Power eyes first customers in 2014,” the Sonoma agency is expected to save its customers between 2 and 3 percent over PG&E rates.

The state’s Central Valley irrigation districts offer a more modern take on trying to get PG&E’s assets. The Modesto Irrigation District, which supplies electrical power as well as water, fought PG&E in the late 1990s over contentious negotiations to buy part of its infrastructure in the Ripon, Escalon, Riverbank and Oakdale areas. A regulatory ruling in PG&E’s favor didn’t help matters.

Eventually, the Legislature stepped in and established zones in which the irrigation district could operate, but they are competitive.

“We basically go head-to-head competition as we expand by customer,” spokeswoman Melissa Williams wrote in an email.

That’s a world better than what the South San Joaquin Irrigation District has been through. In 2005, it began an effort to purchase PG&E facilities to offer electricity to customers at a projected 15 percent discount. PG&E proved hostile to the effort at every turn and maintains control of its facilities to this day.

The irrigation district’s efforts were rejected by a county agency formation commission in 2006. The district re-applied for another hearing in 2009, but has yet to hear a peep after 54 months of waiting.

The American Public Power Association serves a portion of 2,000 public utilities across the country, according to Ursula Schryver, the association’s head of education and customer programs.

“We’ve had one form every year in the last couple of years,” she said, adding that of the 15 to 20 communities that are interested in public power and contact the association each year, renewable energy is a hot topic.

This year and last, national attention in the public utility sphere is focused on a city that may yet bear resemblance to what Davis might go through if it continues with its investigation: Boulder, Colo.

“If the community wants it, that’s really the driving force,” Schryver said.

Boulder — which is bigger than Davis, with 100,000 residents — has sparred with Xcel Energy, Colorado’s version of PG&E. Negotiations have been contentious and it’s uncertain what will happen. Xcel has valued its assets at $500 million, while the city has set a cap of $214 million to acquire them.

A joint task force to look at alternatives to what they call municipalization of the utility assets dissolved recently, according to the Boulder Daily Camera.

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









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