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San Joaquin Valley Power Authority is Formed
A critical milestone has been reached for 13 municipalities and the Kings River
Conservation District (KRCD) with the formation of the San Joaquin Valley Power Authority
(Authority), a governing body that will develop and conduct electricity-related programs for
the region. During the months of October and November all 13 of the municipalities governing
boards took action to pass ordinances and join the Authority.
On the heels of the energy crisis in 2001, the Kings River Conservation District and
13 municipalities — Kings County and the cities of Clovis, Corcoran, Dinuba, Fresno, Kerman,
Kingsburg, Lemoore, Hanford, Parlier, Reedley, Selma, and Sanger — have been working
together to develop an innovative energy program, Community Choice, that will reduce costs,
increase energy reliability and bring additional renewable energy resources to valley residents
and businesses. "It is a testimony to the vision of our region's leaders and to the hard
work and planning by staff over the last four years that we have reached this milestone," stated
Dave Orth, General Manager of KRCD. "Community
Choice is an opportunity for this region to take control over the planning and development
of its future energy resources."
Tulare County's Board of Supervisors took action at their
December 5 meeting to investigate the financial feasibility of implementing a Community Choice
program in their jurisdiction. Once the feasibility analysis is completed in early 2007,
it is anticipated that the Authority will consider Tulare County's request to join
the Authority making them the fourteenth member.
The Authority will oversee the implementation and
management of the Community Choice program including the setting of electrical generation rates
for customers. Transmission and distribution rates will still be set by the local utilities,
PG&E and SCE, with oversight from the California Public Utility Commission (CPUC).
The Authority's rates have been conservatively estimated to save customers 5 percent
on their generation costs. "This equates to over $780 million over a 20-year period,"
stated Orth. "This is a huge economic benefit for our Valley."
The first order of business
for the Authority will be to submit the Community Choice Implementation Plan to the CPUC for
review and certification. This is anticipated to occur in January 2007, and is anticipated to
be the first plan in the State submitted for a Community Choice program. The implementation
plan will address all of the requirements set forth by the CPUC and
Assembly Bill 117, the law enacting Community Choice Aggregation, including San Joaquin Valley
Power Authority organizational structure, program implementation, resource plan, rate setting
and participant rights and responsibilities. Once the plan is certified, the governing bodies
of the 13 municipalities will have one more opportunity to decline participation in the program
before implementation.
There will be four phases to program implementation. During Phase I, the
Community Choice program will serve the participating municipalities' own electrical loads.
Phase II will incorporate large commercial and industrial customers. Phase III will add medium
commercial accounts, and Phase IV will include all remaining accounts including residents and
small businesses. It is anticipated that all customers will be phased into the program by late
2008.
To meet the energy requirements of the residents, businesses and municipal facilities
of the 13 municipalities, the Authority will enter into an agreement with KRCD as
the energy service provider for the program. KRCD is
proposing to develop, construct and operate a 500-megawatt, base-load, natural gas-fired power
plant. "The cornerstone of
the Community Choice program is KRCD's
proposed Community Power Plant," stated Orth.
"As a pubic agency without a profit motive, we can build the power plant with tax exempt
financing and pass that savings onto the customer." KRCD is
currently conducting pre-permitting activities for the Community Power Plant. The plant is being
sited south of the Parlier Wastewater Treatment Plant on Bethel Avenue between Manning and Dinuba
Avenues.
In order to meet the energy requirements prior to KRCD's
Community Power Plant coming online, contracts will be entered into with third-party energy
suppliers. Ultimately, upon construction of the plant, the energy supply for the program will
be a combination of KRCD resources
(Community Power Plant and Malaga Peaking Plant) supplemented by third-party agreements and market
purchases.
California Assembly Bill 117, passed in 2002, allows cities and counties to combine
the electrical loads of their constituents for bulk electricity purchases. An opt-out
structure is provided for customers that choose to continue buying power directly
from the investor-owned utility. For customers participating in a Community Choice program,
the local utility company will continue to deliver the electricity purchased by the regional
Community Choice program through its wires and will also continue to provide meter reading,
billing and maintenance services. For more information about the Authority's program, visit
www.communitychoice.info.
The Kings River Conservation District is a public agency that serves
agricultural, business, and community residents within 1.2 million acres in portions of Fresno,
Kings and Tulare counties since 1951. KRCD is
a leading resource management agency in the areas of water, power and the environment
for the Kings River service area. For more information about KRCD,
visit their web site (www.krcd.org).
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