SOLAR ENERGY advocate Dan Berman has sent me news of a development for electricity consumers in Davis that millions of households may find of interest during these times of energy deregulation.
A group of citizens are moving toward a referendum in Davis to establish the town’s own municipal utility district. If the voters pass this proposal next year, the town will own its own electric company, will be able to bargain with suppliers for lower prices for its citizens, and will be able to enter into agreements with other communities that have their own utility districts, such as one covering much of the greater Sacramento area. With states passing laws restructuring the electric utility industry in ways that bail out the utilities’ costlier projects — such as decomissioning nuclear power plants — in return for their accepting competition, towns and cities across the country are thinking about purchasing their own energy systems. For years, about 1,000 electric co-ops serving some 30 million people in 46 states have already aggregated consumer bargaining power.
The NorCal Electric Authority that serves Del Norte, Siskiyou, and portions of Modoc and Shasta Counties will begin providing more than electricity to its 41,000 ratepayers next year. This co-op is considering offering Internet, satellite, television, solar equipment, and other energy services in its territory. Just what is driving the citizens of Davis? Besides lower prices, they want “to control their own destiny.” Right now the big California utility, Pacific Gas and Electric, charges Davis residents $56 for 500 kilowatt-hours of electricity. The same amount costs $39 in Sacramento, a public power city.
The people of Davis want to be able to choose the type of power they buy. The Sacramento Municipal Utility District (SMUD) covers all of Sacramento County and a tiny portion of nearby Placer County, is governed by an independently elected seven-person board. SMUD let the voters decide to shut down its Rancho Seco nuclear power plant and to explore the feasibility of solar energy.
Other complaints the citizens of Davis have against PG&E involved ongoing reliability problems year after year and the absurdly low fees that the giant utility has paid the city for erecting utility poles and stringing wires on city streets.
A Davis ordinance passed in 1959 gives PG&E the “indeterminate” franchise to, for example, only pay Davis about $269,000 for selling $26.9 million worth of electricity sales in 1997. This is a little-noticed giveaway by municipalities to the electric company monopolies that has been going on for decades all over the country. Talk about a cheap rent! In short, the city government has been willing to require PG&E to pay one penny for every dollar of sales by this corporate distribution monopoly.
Under the California constitution, cities can buy out the local private utility and the Davis citizens’ proposal intends to do just that. If passed, the city will take out bonds to pay for the buyout.
With 20 states already passing laws that deregulate electric utilities — presumably hoping that significant competition would be able to challenge these behemoths — how can individual, unorganized consumers be protected? The answers have to be either a local public power district or, in lieu of that, a vigorous city effort to represent citizens’ interests during an aggressive bidding process among utilities.
If you live in a city or town and want to consider what those in and around Sacramento did years ago — or what Davis and other municipalities are thinking of doing — contact the Coalition for Local Power at 645 C Street, Davis, CA, 95616 or call (530) 753-5959. If you wish to learn about the differences between electric rates under public power as compared with corporate electricity, look at the Web site of the NorCal Electric Authority, www.norcalelectric.com.
Finally, a nationwide coalition of consumer and environmental groups has formed, called Ratepayers for Affordable Green Electricity (or RAGE for short) and will be pleased to send you much good information. Write to them at RAGE, 215 Pennsylvania Ave. SE, Washington, DC 20003.
Now is the time to organize and forestall a serious decline in consumer protection, especially for low income and rural consumers.