Tuesday, January 27, 2015

The new push for public power: roots and reasons

From page A1 | February 02, 2014 |

Welcome to Team Davis. Today we have blue skies with no rain, plenty of time to play some good football. There’s just this one thing: There’s a scrum ahead. Again.

It’s made of figures and valuations, of deep pockets paying for public surveys and propaganda, of a public needing to weigh the issues and a city moving to get a handle on what might be possible. Again.

Welcome back to the public power debate.

The yearning for local control over public power started in Davis as far back as the late 1990s, with grassroots groups trying to gain legitimacy and get the city moving on local control of utilities.

The benefits supposedly were cheaper prices, and with local control, a say about the mix of energy sources, as opposed to the sole use of fossil fuel plants belching greenhouse gases into the sky.

Fast-forward a decade when their efforts resulted in a major political campaign.

The year was 2006, when it seemed to public power advocates that the Sacramento Municipal Utility District’s proposed annexation of parts of Yolo County would save money in the long term and give more local control over the mix of energy.

But the SMUD annexation failed due in part to shrewd political maneuvering by Pacific Gas & Electric Co., which spent at least $11.1 million in attack ads, so-called “push” surveys and an avalanche of mailers to keep Yolo County in its service territory.

But Davis voters alone narrowly approved the deal. That gave public power advocates in town hope that someday public power might become a reality here.

Fast-forward again to last week, when the City Council borrowed money from a wastewater fund to continue future incremental payments that could push the tab spent on exploring public power to the $1 million authorized so far.

This is no small chunk of change in a city with a $5.1 million structural budget deficit. Voters likely will be asked to pass a combination of sales and parcel taxes on ballots this year.

But is that $1 million worth it in the long run?

According to a Dec. 10 presentation to City Council, if the city sticks with PG&E, Davis would have no control over how the investor-owned utility spends the money local residents pay PG&E each year for both power generation and public purposes. It also claims PG&E’s reliability is “poor” compared to other investor-owned utilities, like Southern Californian Edison or San Diego Gas & Electric.

What’s more, the presentation said, PG&E’s financial difficulties and need to invest more money in its infrastructure stemming from the deadly 2010 San Bruno pipeline explosion may adversely impact the residents of Davis.

On Dec. 10, the City Council chose to pursue information about a publicly owned utility, especially after the presentation showed that Davis residents might save a collective $4.96 million per year if the city could buy electricity at 6.4 cents a kilowatt hour.

The presentation showed a Davis publicly owned utility would be about the same size as most others in California, excluding ones like SMUD. It would have about 26,000 customers, just a little bit larger than the Palo Alto Electric Utility at 25,710.

If Davis decides to go forward with a publicly owned utility, it would lose $550,000 in franchise fees and property taxes that PG&E pays the city, but save about 20 percent compared to PG&E, partly by reducing the administrative overhead and operating expenses.

City staff will come back to the council with more information sometime in late March, at which point the council may make more concrete decisions about whether it wants to pursue a publicly owned utility under state law, called Resolution 13-196.

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



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