From Co-ops to Irrigation Districts:
Potential Local Government Partners
In the brave, new world of electric restructuring, local governments
have not only power supply choices, but a wide array of potential
public and private sector partners to choose from. Many local governments
have already hired consultants to help them navigate through the
complexity of the new competitive electricity marketplace. Others
have turned to other agents of local governance such as irrigation
districts for help. Still others have created new institutions or
are contemplating the expansion of existing governmental structures
to pursue cheaper power or the encouragement of cleaner power sources.
There is no single cookie-cutter solution to the energy challenges
in any one community or region. The mix of existing institutions,
environmental issues in a region, and the nature of local economic
development plans, will all help shape how any one community addresses
the challenges and opportunities of restructuring.
Here are examples of how different agents of local government are
responding to unique restructuring opportunities:
The Plumas-Sierra Rural Electric Cooperative (PSREC), located in
sparsely populated northeastern California, is one of the few rural
co-ops to operate in California. PSREC serves 6,000 customers, all
of which reside in rural locations. Despite its isolation, PSREC
has been a pioneer in progressive energy management A solar ordinance
and a geothermal heat-pump program are a few of its accomplishments.
With the advent of restructuring, PSREC has been contemplating working
with other municipalities, non-profits and joint power agencies
to create a statewide "green" energy cooperative. A key argument
in favor of creating a co-op to aggregate customers, such as local
governments interested in purchasing green power, are the special
advantages afforded co-op structures, such as access to low-cost
financing. By virtue of being a co-op, local government members
can also control their own destiny instead of being dependent upon
the whims of private sector partners.
For more information about how to help create a green energy
co-op, contact:
Robert Marshall
PSREC
(530) 832-4261
FAX (530) 832-6070
e-mail: marshall@psln.com
The City and County of Merced, and the City of Livingston, have
an opportunity to reduce their electricity bills by 20 to 30 percent
by buying their power from the Merced Irrigation District.
A key benefit of buying power from irrigation districts, or locally
controlled entities that can supply water and power to rural areas,
is that several Districts, including Merced. were granted special
exemptions from the Competition Transition Charge (CTC). The CTC
is a temporary surcharge that all customers must pay over four years
to recoup past investments in power plants that cannot compete with
today's low market prices.
The Merced Irrigation District has operated hydroelectric facilities
since 1927, but only recently ventured out into the retail sales
business when it signed-up Foster Farms as its first power purchasing
customer in 1996. By the end of 1998, the District hopes to have
signed customers totaling 28 MW. Among those that have already signed
up are the water pumping facilities and school districts in the
City of Livingston, Castle Airport and large commercial and industrial
customers located on the outskirts of Atwater and Merced.
Merced Irrigation District can serve as much as 75 MW of customer
load at 20 to 30 percent discounts from incumbent utility rates
because of its special CTC exemptions. The district is currently
constructing distribution lines to extend its service. Like a power
marketer, the district must sign up customers one-by-one. However,
it can only serve customers that can connect with its distribution
system.
For more information, contact:
Garith Krause
(209) 722-5761
FAX (209) 722-6421
e-mail: garithk@mercedid.org.
The City of Anaheim's Public Utilities Department issued an RFP
for strategic alliances and/or partnerships, as well as merger/sell
options, that attracted 21 respondents from all across the country.
A decision is pending final interviews. Anaheim has also already
hired Austin, Texas-based Planergy, one of the nation's leading
Energy Service Companies (ESCOs), to implement 17 of 37 energy efficiency
programs that were developed after a community-based selection process.
Though Anaheim has a municipal utility, other local governments
not currently in the utility business could enter into similar arrangements
with an ESCO.
For more information, contact:
Mariann Long
Anaheim Public Utilities
(714) 765-4251
e-mail: mariann@anaheim.net.
The City of Pittsburg, in partnership with Enova Energy, a subsidiary
of the company that owns San Diego Gas & Electric, created a
new micro-utility called Island Energy in 1996. The city purchased
the electric and natural gas lines of the closed 5,460-acre Mare
Island Naval Shipyard, located in the Sacramento Delta region. That
move put Pittsburg in the wholesale power business. Island Energy
has been able to offer power at rates 30 percent cheaper than the
incumbent utility and is now selling electricity beyond its municipal
bordersthe first time a local government has engaged in such sales
transactions.
For more information, contact:
Roger Friend
Island Energy
(707) 562-5000
FAX (707) 562-5002
e-mail: rfriend@islandenergy.com.
The cities of Carson, Culver City, El Segundo, Gardena, Hawthorne,
Inglewood, Lawndale, Lomita, Redondo Beach and West Hollywood have
been working to develop a broad-based constituent aggregation program
in order to secure power supplies from sellers other than the incumbent
utility. This effort was initiated after investigating local government
electricity franchise rights. While this group of local governments,
operating under the umbrella of the Southern California Cities Consortium,
originally worked with New Energy Ventures, a private sector power
marketer, it is currently seeking a new supply partner.
For more information, contact:
Al Vera
Mayor of Culver City
(310) 391-1155
FAX (310) 398-7784.
The City and County of San Francisco has demonstrated that local
governments can play a role in reducing local air pollution when
it negotiated the closure of the controversial Hunters Point power
plant, operated by Pacific Gas & Electric (PG&E), in July
1998. PG&E was poised to sell Hunters Point and the nearby Potrero
power plant to highest bidders under a restructuring proposal before
the local governments stepped in to represent local residents and
environmentalists concerned about high cancer rates and respiratory
illnesses reported in communities surrounding the aging and polluting
fossil fuel plants. The City and County of San Francisco hopes to
replace the Hunters Point power plant with cleaner alternatives
and upgrade the Potrero plant through energy efficiency upgrades
before its new owners continue to generate electricity in the future.
For more information, contact:
Laurie Parks
City and County of San Francisco
(415) 554-3222
FAX (415) 554-0796.
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