Costs and Benefits of POU’s

solar-2by Michelle Millet

At last Tuesday’s council meeting members unanimously voted on a resolution approving a loan not to exceed $600,000 from the Wastewater Capital Replacement Fund to the General Fund to pay for the implementation of Resolution 13-169, which authorizes the City Manager and the City Attorney to initiate actions necessary to provide municipal electrical utility service to Davis residents.

The move from PG&E-an investor owned utility- to a Public Owned Utility (POU), would means that the city would acquire PG&E’s distribution network of pole, wires, transformers, and meters, allowing it to assume responsibility for it’s own electricity supply mix and the ability design its own tariffs and cost allocations.

This concept is not a new one in Davis.

An Enterprise article yesturday stated, “The yearning for local control over public power started Davis as far back as the late 1990′s, with grassroots groups trying to gain legitimacy and get the city moving on local control of utilities.”

In 2006 an effort by the Sacramento Municipal Utility District  to annex parts of Yolo county, was approved in Davis by 63%,  but Sacramento, Woodland and West Sacramento voted against it.

In June 2012 the Natural Resources Commission recommended that the Council further evaluate its energy resources and find ways to gain more local control over electric service options.

In October 2012, an Energy Assessment Report, a report outlining policy options available to the community was accepted by the City Council.

In June 2013 the City Council approved the retention of the legal firm Nixon Peabody LLP and Pacific Economics Group (PEG) to conduct an economic feasibility study.

On December 10, 2013,  after a presentation of the feasibility study,  the Davis City Council approved Resolution 13-169 which authorizes the City Manager and the City Attorney to initiate actions necessary to provide municipal electrical utility service to Davis residents.

Bringing us back to the decision made last Tuesday.

The Energy Feasibilty Report presented to council in December describes how 3 options-Continuation of the Status Quo with PG&E providing the electric energy supply, forming a Community Choice Aggregation (CCA),  and forming a Publicly-Owned Utility (POU)would address a comprehensive list of community objectives.

These community objectives include:

  • Expand the availability of renewable energy, local distributed generation, and energy efficiency.
  • Reduce Greenhouse (GHG) emissions and move to a carbon-neutral footprint.
  • Reduce resource consumption, including energy use.
  • Foster a healthy and vibrant economic climate based on green technologies, and create a people-centric urban design environment.
  • Obtain reliable electric service.
  • Stabilize or reduce energy cost for the City, it’s residents, and businesses.
  • Gain more community control over energy decisions.

The report reached very clear conclusions that the formation of a POU is the best way for the city to meet these objectives and that the Status Quo-staying with PG&E-is the worst option for the community.

It concludes that a POU would significantly reduce the cost of electric service, stating, “The expected cost savings, taking into account the cost of acquiring the electric distribution system, are likely to result in electric rates that are approximately 20% less the the Status Quo”.

The report examines in detail the ways in which a move to POU can deliver these cost savings.

To begin, PG&E electricity prices are among the highest in both California and the nation and exceed the prices of mid-sized POUs. The report points out that Davis’ retail prices for electricity are significantly greater then PG&E system average. (The system average  is 14.06 cent per KWH, Davis residents pay about 16.41 cents per KWH.) The report predicts thats PG&E’s rates will continue to increase, as they have in the past, well in excess of inflation.

The cost of acquiring PG&E’s distribution network of poles, wires, transformers, and meters is estimated to be about $20 million.

In an interview with local the CBS news station aired Saturday night, council member Lucas Frerichs stated, ” The city can get bonds to buy the equipment and then pay the money back as the electricity bills are paid at a lower cost than what PG&E is charging.”

The report states that a POU can option lower financing costs because, “it would not use expensive equity capital, which requires the return of profit to investors” and “it would use long-term debt at lower interest rates.”

Projected savings also come in part from the fact that a POU pays no state or federal income taxes, and a POU would not pay any equity returns to shareholders. The report estimates this will save ratepayers about 1.5 million per year. It goes on to say, “The expected generation savings, based on statewide existing POU performance, could be up to about $5 million per year. “

The report points out that Davis’ electricity system is about 0.3% of PG&E’s electricity system. The number of electric customers in Davis has only increased 2.8% between 2004 and 2011, averaging about .4% a year. Given Davis’ established boarders and slow growth policies there will not likely be much growth in the number of electric customers over the next 10 years.

PG&E, on the other hand, has had, in general, significantly higher customer growth rates, requiring them, “to spend significant amounts of money to meet the demands of its growing customer base system wide. The costs for the additional system build-out were charged to all customers, including customers in Davis, which grew much less. From 2004 through 2012, PG&E added 319,168 customers, or a 6.4% growth. This is more then twice the rate of customer growth in Davis.”

If PG&E continues to grow faster then Davis, which the report finds likely, then, because system distribution cost are passed on to all electric distribution customers the report concludes that, “Davis will subsidize the customer-related distribution system expansion and replacement in other parts of PG&E system.”

The saving from avoiding these costs could be used to help finance the acquisition of PG&E assets.

Highlighted several times in the report is that fact that a POU would allow the city to take control over the state mandated $4.3 million dollars consumers in Davis pay to PG&E  to fund Public Purpose Programs (PPP). These are programs that are considered by law to benefit social programs and include renewable resource energy technologies; energy efficiency; research, development and demonstration; and low-income programs.

There is no legal requirement that PG&E invest PPP funds generated by Davis residents into programs that directly benefit our community. By moving to a POU the city would gain control over PPP funds and could use these, instead of city funds, to promote the use of “green” power in Davis helping it reach it’s environmental goal.

Note that PPP funds were not included in the estimated savings projected by the report, because as it states, “it is likely that Davis will continue to spend these same amounts within Davis to achieve is various policy objectives” but ,”Davis, not PG&E would control where and how the public purpose amounts collected in Davis would be spent.

The concluding paragraph of the Energy Feasibilty Report states:

“This Report concludes that the POU achieves all of the City’s policy objectives. The City would likely improve reliability. The city will control the expenditure of public purpose charges residents currently pay PG&E to perform across its entire system. The expected cost savings, after paying to secure PG&E’s assets in Davis, are likely to result in electric rates that are approximately 20% less that the Status Quo. Even with some extreme worse case sensitivity assumptions, the POU will save money compared to PG&E. Implementing the POU option to acquire the distribution system will require the City to undertake a major effort. The potential Net Benefits are very significant. The combination of control and lower cost make the POU option the best result.”

As council members stated on Tuesday, we have not committed to transferring our electric utility to a POU, and a lot more research needs to be done before we will be ready to do so.

But if the results of the Energy Feasibility Study are accurate, a POU will clearly benefit our community economically while allowing us to reach our aggressive clean energy goals.

About The Author

Michelle Millet is a 25-year resident of Davis. She currently serves as the Chair of the Natural Resource Commission.

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81 Comments

  1. Day Man

    Question 1 of 2: This go ’round, have there been focused talks about the possibility of joining SMUD? They seem to have similar values, and I can see how an alliance with SMUD would both avoid the investor profit costs that PG&E brings to the table while still achieving some economies of scale.

    1. Matt Williams

      Really good question Day Man. Th SMUD question boils down to a manipulation of the electoral process issue. A substantial proportion of electoral questions boil down to a “What’s In It For Me?” bottom-line. PG&E’s political operatives in 2006 recognized that the best way to block the Yolo annexation by SMUD was to concentrate their efforts on the Sacrtamento/Placer communities rather than the Davis community. Their strategy was to sow FUD (Fear, Uncertainty and Doubt) with those ratepayers who had the very least to gain.

      With that in mind we need to focus our immediate attention on the viability of moving away from PG&E. Once that makes sense fiscally and practically, then we can worry about the possibilities of a future alliance with SMUD.

  2. Day Man

    Question 2 of 2: I haven’t heard the CC discussions on this, so apologies if this has been covered in other forums, but your article doesn’t say anything about how a POU would affect employment in Davis. I would think it would lead to quite a few new jobs, wouldn’t it? SMUD is certainly a major employer in Sacramento. Maybe PG&E’s in-the-field workers are already local, so maybe not much change there, but at least on the administrative, management, and executive side? Have there been discussions or estimates about this?

      1. Michelle Millet

        I’ll check the report and see if I can get answer for you.

        FYI-my good friend’s husband repairs lines for PG&E and they live in Davis, I get a sense his co-workers are local, maybe not Davis, but definitely close by.

        1. Day Man

          Thanks. It seems like there are already environmental and financial arguments in favor of a POU, and if there’s also an honest argument to be made about bringing utility jobs to Davis, that could help attract broader support.

          1. Michelle Millet

            Below is a link to the report I referenced in the piece. (It’s long so takes a little while to download, at least on my computer;-)

            Appendix K lists the employment requirements for other POU’s and Investor Owned Utilities, and well as Irrigation Districts.

            Quoting from the report: “Appendix K shows the employment requirements for electric utilities in California. The data sometimes include non-electricity employees and thus may be overstated”

            “The expected number of employees would conservatively fall in the range of 60-70.”

            http://city-council.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20131210/08-Energy-Service-Options.pdf

  3. J.R.

    PG&E is extremely efficient compared to Davis City Employees. Do we really want one more group of city employees asking ratepayers to subsidize their retirement after 20 years of work? I don’t buy that the city can
    effectively run a utility.

      1. SouthofDavis

        Michelle wrote:

        > Does not seem PG&E is running an effective utility.
        > They have one of the worst power reliability records
        > and charge some the highest prices.

        I don’t know about you, but I can only think of a few times in the past 5 years that PG&E was not sending power to my house.

        Do you have a actual study with the price of electricity and gas showing PG&E charging “some the highest prices”?

        1. Michelle Millet

          I don’t know about you, but I can only think of a few times in the past 5 years that PG&E was not sending power to my house.

          Do you have a actual study with the price of electricity and gas showing PG&E charging “some the highest prices”?

          Yes the study I referenced goes into both issue in detail.

          http://city-council.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20131210/08-Energy-Service-Options.pdf

          Here is excerpt on reliability, I quoted price information in my piece, so I won’t retype it.

          “PG&E’s electric distribution system has very poor reliability. It’s outages exceed other California IOU’s. PG&E admits to the CPUC that is has poor distribute reliability compared with other IOU’s. PG&E posts on the Internet that is ranks in the third and forth quartile for North America utilities. Measured by well-establish outage metrics. California’s other IOU’s have higher levels of reliability than PG&E.

          Chart 6 shows that PG&E’s system average duration time has been well above two hours, or 120 minutes. San Diego Gas and Electric (SDG&E) and Soutehrn California Edison (SCE) have performed much better then PG&E every year for the past decade.

          Chart 7 shows that PG&E has more sustained outages per customer than either SCE or SDG&E.

          Chart 8 shows the number of momentary outages on the PG&E system has been relatively frequent.

    1. Michelle Millet

      Sadly I was one of those people in 2006, I had a 2 year old and was pregnant with my son, so my mind was on other things, making me an ideal target for PG&E’s scare tactic campaign. Glad to see that so many of my Davis residents were not so easily duped.

  4. Rich Rifkin

    Regardless of whether a POU has merit or not, I am getting the sense from A LOT OF PEOPLE I have spoken with recently that floating this POU right now is turning them off to the idea of a tax increase of any sort. They are essentially saying, “The city has enough money for this? If so, it’s not getting any more from me in higher taxes.”

    That is a huge danger. Davis desperately needs to increase its sales tax rate to cover the massive general fund deficit. It probably needs to raise other tax rates to cover other mounting debts. Yet, if the City is pursuing a POU–even if a POU is a good idea–I suspect a lot of voters are going to reject a tax increase as a consequence of the timing.

    1. growth issue

      Fully agree Rich. The council is trying to push through new tax measures and crying how bad things are and at the same time they’re pouring $1 million into a POU which the public is just now learning about? It just doesn’t smell right.

      What has me concerned too is that the NRC is involved. If the city were to take over the electrical service will the NRC try to use it for social engineering?

      1. David Greenwald

        Let’s be clear as to what they are doing. First, they are not pouring $1 million in. They have already spent $400,000. That’s now a sunk cost. That came from the Enterprise fund. Second, they have approved a $600,000 additional expenditure which amounts to $66,000 per year over ten. The projected savings is about 20% of the electric bill per year. I’d say that’s worth it.

        As far as I understand, this was Pinkerton and Niederberger who put this together and laid it out very carefully.

        1. SouthofDavis

          David wrote:

          > Let’s be clear as to what they are doing. First, they are not
          > pouring $1 million in. They have already spent $400,000.
          > That’s now a sunk cost. That came from the Enterprise fund.
          > Second, they have approved a $600,000 additional expenditure

          Correct me if I am wrong but I think spending $400K and giving the OK for another $600K sure sounds like they are blowing $1 million on a “nice to have” item just before they ask everyone to pay more in sales and property taxes…

          1. Rich Rifkin

            David, I may be wrong. It’s possible the people who have told me this POU business has them thinking the city does not need a tax increase are unrepresentative of the electorate. But if I am not incorrect, it really does not matter how good of an idea the POU is or is not. It looks like it is horrible timing.

            Also, don’t get so caught up in Enterprise fund or General fund. It’s the people’s money, either way. As you know, a lot of employee expenses in the last 10 years which used to come out of the GF now come out of the Enterprise fund. The Enterprise fund’s revenues are slightly more restricted. But ultimately, this is all just accounting. Money is money, no matter which fund we are talking about. The Enterprise fund could just as well go bankrupt, at some point, too.

          2. growth issue

            As I said earlier, there’s money being taken out of left pocket, and moneyfrom the right pocket, but it ALL comes out of the same pair of pants.

          3. David Greenwald

            Not really. There are different revenue streams that cannot be intermixed. It’s why Harrington was making the big deal about the city owing the rate payers on water.

          4. David Greenwald

            I guess I don’t get why doing something that could save the city 20% on power, which is a large amount of money, means they don’t need a tax increase.

          5. Matt Williams

            Fair enough question SoD. let me try and engage your concern with four questions of my own:

            1) How much do you think the 65,000 residents of Davis spend (in aggrgate) each year on electrical power?

            2) given your answer to 1) above, how much money would the Davis economy “save” on electrical energy costs if prices went down by 15%?

            3) When is the next PG&E rate increase expected to hit Davis consumers, and how much will that rate increase be?

            4) What would happen to that 15% savings if it were realized by Davis consumers?

        1. growth issue

          Like I stated previously, I would say that I’m better informed than your average Davisite when it comes to city dealings. I had no idea of the POU until I read it here on the Vanguard about two weeks ago. I would have to believe that most of the populace are just hearing of this.

          1. Matt Williams

            G.I., let’s for the moment agree with your premise above, that this is a new issue for most Davis residents. The fact that you now know about it, now, well in advance of any decision whether to proceed with the POU, says that 1) the Vanguard is doing its job as a public “dialogue space,” and 2) the the City is doing its job in informing its constituents about possible future decisions.

            Do you agree?

          2. Michelle Millet

            Again all I can tell you is that is has been on at least 5 publicly posted agenda’s since 2012.

            A very long and in depth presentation was given to council on Dec 10.

            While a lot of people were present at that meeting for a discussion on the bathroom at Central Park, apparently the room cleared out for the presentation on electric utility options.

        2. growth issue

          Yes. Just recomendations. That’s why we won’t have any plastic bags come July and we now have neighbor turning in neighbor because some poor dope decided to throw a log on the fire. I don’t want the NRC’s hands on the POU.

          1. Matt Williams

            G.I., no disrespect intended, but sometimes when I read your posts, I can’t help but believe that all you are interested in is blowing chunks.

          2. Michelle Millet

            Again the NRC made a recommendation to council. The reason that we won’t have “any plastic bags” is that council voted 5-0 to approve an ordinance presented to them, and written, by city staff.

            I will repeat the NRC, like all city commissions, make recommendations to council. Council decides.

          3. growth issue

            Yes, and what the council decides on originates from these commissions which many times are full of zealots with agendas.

          4. Michelle Millet

            Council is under no obligation to approve any recommendation that come from these “zealots with agendas”.

            Sounds like your frustration is misplaced. I’m sure your council members would love to get an email from you expressing your concerns.

          5. David Greenwald

            Last summer, Steve Pinkerton told me about this for the first time. He saw it as a way to save the city a lot of money. The initiative came entirely from him, not from NRC.

  5. Frankly

    I don’t have a problem with a POU in concept. I am a bit worried about it becoming the sled for a snow-ride to a more expensive green agenda, but not enough to dismiss the idea.

    My bigger problem is that I think we are knocking on the door of information and initiative overload.

    First, I don’t think staff has the capacity to deal with this and tax measures and economic development and cost cutting, outsourcing, labor contract negotiations… etc.

    I see that the catalyst for action is budget-related.

    But I think voters tend to revolt and vote no when they feel like they are being pushed too many ways. We have certainly seen this with some of the state initiatives.

    If a POU is not part of the solution to our economic crisis, then I propose we drop it for now and pick it up again after we solve the crisis.

    1. Michelle Millet

      Not taking advantage of the economic benefits of this move seems fiscally irresponsible to me.

      If not just for the 20% savings for the PPP money. Why should we keep paying PG&E 4.3 million dollars a year so that they can spending it in other communities, when we could use it to directly benefit us.

      As far staff being able to deal, we are not inventing the wheel here, we have plenty of examples of other similar size city’s successfully running POU’s.

      1. Rich Rifkin

        If not just for the 20% savings for the PPP money.

        What percent chance do you believe that 20% savings is? In other words, are you presuming there is a 100% chance that Davis will save 20%? Or do you think there is a 75% chance it will happen? Or maybe a 10% chance of it happening? And what percent chance do you believe there is that instead of a 20% savings, it turns out to be a 20% increase in costs?

        It seems to me naive to not be a bit skeptical of the promised savings without knowing a lot more how they will be achieved. For example, we have no idea what the cost of gas and oil will be in 10 years. If Davis puts all of its eggs in the solar and wind baskets and the Monterey Shale is developed, we may be paying 100% more than we would without the POU.

        I am not saying I am against a POU. I just think it unwise to be so sure about future savings at this point.

        1. Rich Rifkin

          I should add that I was strongly for the merger with SMUD, in large part because I knew what SMUD’s electricity rates had been compared with PG&E’s over the long haul, and I knew that SMUD’s cost structure was. Both gave us great advantages to joining SMUD. The Davis POU is a lot more unknowable in advance.

        2. Michelle Millet

          As I understand it, a POU would allow the city to determine it’s own energy mix, so if gas or oil is cheaper in 10 years then we can use that.

          I see no reason why would have to put all our eggs in one basket.

          Of coarse the 4.3 million a year we are paying PG&E right now could be used to develop green energy here, in case that option ends up being the cheaper one in the future.

          Seems like a win win.

        3. growth issue

          Rich, exactly my point. Here’s some excerpts from the staff report to the NRC on 11/18/2013.

          Driving factor:
          “3. Achieve environment objectives through direct influence and management of the community’s energy portfolio.”

          Primary energy options:
          “3. POU: Purchase green energy sources and operate the distribution system within the city.”

          So is this about getting us the cheapest energy, oil, gas and green mix or about going green?

          1. Michelle Millet

            Not sure how one precudes the other. The State mandates that 33% of power must come from renewable energy. PG&E is allowed to use 4.3 million of Davis generated revenue in other communities to acquire “green energy” sources to reach their system goal.

            Basically we are paying the cost of clean energy and not reaping the benefits.

            Sound like you are willing to pay 20% more for your electricity in order and continue to allow PG&E to spend 4,3 million dollars of our money in other communities because you are afraid of a commision made up of volunteers who meet for 2 hours 10 times a year.

          2. David Greenwald

            “because you are afraid of a commision made up of volunteers who meet for 2 hours 10 times a year.”

            And who had nothing to do with developing the policy.

          3. growth issue

            Did you read the Enterprise the morning? Here’s a few quotes:

            “Janet Thatcher, a retired electric utility consultant and Sacramento Municipal Utilities District distribution line manager, said Cicchetti’s analysis could be flawed because it’s from the perspective of an economist, not a utility operator. She said as much in an email to City Councilman Lucas Frerichs last Wednesday.

            In another email to the Enterprise, Thatcher said she is concerned that the city is rushing into the public power space.

            “My impression is that the mayor and council do see a public utility as a cash cow for the city,” she said. “If the utility is a city department, funds from the utility can be used in the general fund. I believe that the whole idea is being sold promising everything to everyone — lower electric costs, renewable energy, better reliability and a solution to the city’s financial woes.”

          4. growth issue

            Letter to the editor quote:

            “what makes anyone imagine it would be better or less expensive to own our own utility company? After a career in public works, I can guarantee that the feasibility study will look very promising and not come across as an unrealistic, pie-in-the-sky scenario. Why? Because the study will mirror the hoped-for outcome of the sponsors. The real costs and difficulties will escalate and ultimately it will cost much more.

            I’m horrified that we’ve already spent $400,000 on this and have borrowed $600,000 from the wastewater treatment fund.”

          5. David Greenwald

            I would suggest if you are going to do this, you investigate who the people are posting these claims. Why? How much did PG&E spend to defeat the SMUD initiative in 2006? Over $10 million.

          6. Matt Williams

            G.I., what do you know about Janet Thatcher? Have you ever met her? I never have, and know absolutely nothing about her beyond what the Enterprise article has said. As a result I am not going to become one of her apostles or disciples until I have been able to confirm the validity of the positions she presents. Similarly I am not going to become one of Charles Chicchetti’s apostles or disciples until I have been able to confirm the validity of the positions he presents. I am in the homework stage of this process. Are you saying we shouldn’t do our homework?

          7. Michelle Millet

            In another email to the Enterprise, Thatcher said she is concerned that the city is rushing into the public power space.

            I don’t mean this as a rhetorical question, I’m not understanding this sentiment that we are rushing into anything. Does anyone have a sense of where this is coming from ? Are we rushing? If feels like we are moving very slowly, but maybe I lack perspective to accurately judge.

          8. Matt Williams

            Rich and G.I., my own personal perspective is that we haven’t reached a binary decision point yet, and that both the points you make are framed from a distinctly binary/Manichean perspective.

            I liken the process we are engaged in to a Triple Crown horse race, with the finish line being the point where a POU actually begins delivering electrical power to Davis residents and the paddock by the grandstands that precedes the long walk of the horses to the starting gate being the point in the process where we are now. Further, the last race we ran has given us enough input to have made the decision to file an entry for this particular horse race. That prior race was the 2006 SMUD annexation process. The vote of the people in that prior race was 63% for leaving PG&E and only 37% for remaining with PG&E. 22,135 Davis voters placed their money down in that prior race, and 13,973 of them cast a “Yes” vote, and only 8,162 of them cast a “No” vote.

            Buoyed by that landslide vote (and all the comparative SMUD vs. PG&E data that informed the citizens who cast that vote) we decided it was appropriate to enter our horse in the next race. However, there was plenty of preparation that needed to be done prior to the point where the starting gate of that next race opened and the track announcer shouted into his microphone “And they’re off!!!”

            Having decided to enter our horse in the next race, there was lots of pre-race preparation that needed to be done before we even entered the paddock at the race track. If that pre-race preparation didn’t tell us that our horse was ready to run the race, we had the option of “scratching our entry.” Torturing this metaphor, the consultant’s report presented to Council in December was the culmination of pre-race preparation. Based on the findings in the consultant report, the Council decided to take the next step, go to the paddock on race day and do the necessary further preparation needed to get the horse to the starting gate, or make a race day decision to scratch. We still have to saddle up the horse, get the jockey into his silks, have the jockey mount the horse and make the long walk from the paddock to the starting gate.

          9. growth issue

            Matt, no disrespect intended, but sometimes when I read your posts, I can’t help but believe that all you are interested in is blowing chunks of horse manure.

  6. Matt Williams

    GI, lets look at some of those chunks of horse manure. The following information is from the public documents that were part of the analysis of Measure H in 2006

    SMUD vs. PG&E: SAMPLE ELECTRIC BILLS: September 2006

    Utility Co. ____ Residential (700 kWh) _____ Business (2000 kWh) ______ Supermarket (250,000 kWh)
    PG&E ________________ $90 _______________________ $375 _________________________ $31,824 _____________
    SMUD ________________ $65 ______________________ $217 _________________________ $27,055 _____________
    Savings with SMUD __ $25/month ______________ $158/month__________________ $ 4,768/month _____
    Savings with SMUD __ 27.8% ____________________ 42.1% ________________________ 15.0% ______________

    For a major league tightwad like you, I would think that you would be interested in seeing whether you can put an end to the reality that PG&E is picking your pocket each and every month. That is manure that makes your plants grow big and strong and bear lots of fruit.

        1. Matt Williams

          I’m not saying you shouldn’t be skeptical. Skepticism is healthy. I suspect that if the City drills down into the numbers the 20% to 25% savings may come down to something a bit above 15%, but given the amount of money that the citizens and businesses in Davis spend each year on electricity, 15% is a very big number.

          Speaking of big numbers, PG&E was willing to invest $10 million to make sure that they could continue to pick your pocket.

  7. Frankly

    So, let’s bring back Elaine Musser and Matt Williams, form a POUAC, develop expertise, debate it ad nauseam and then put it to a vote. And then after the vote where the thing barely passes, let us find out that there have been backroom agreements for Davis to exceed the state mandates for percentage of green energy… something that will require a larger upfront investment and will provide less of a discount for ratepayers.

    But then we will say it is for the children.

    1. Matt Williams

      That acronym has a real ring to it. Reminds me of a walk through the park I took with my son about 35 years ago when he stepped in a place he regretted, and turned to me and said, “Poo, Ick”

      Bottom-line, if we handle the investigation process transparently and wisely we won’t step in anything as we take our walk through the issues.

    2. Michelle Millet

      Who do you trust less PG&E or our local governance. Who do you think, of the two, as customers, we will be better able to hold accountable for the decisions they make regarding our energy supply and it’s cost.

      1. Frankly

        Who do you think is better qualified to plan, build and operate a power utility?

        As I said, I don’t dismiss the idea of a POU, but I think we are on complex issue overload at this point.

        1. Michelle Millet

          Who do you think is better qualified to plan, build and operate a power utility?

          I’ll say this, experience doing something does not in and of it self make someone or something the best choice.

          Take our city council election does the fact that one candidate has experience on a elected board mean that they are the better choice because they have experience?

          Or we you rather go with a candidate that lacks this type of experience but is smart, dedicated and willing to learn?

          While the city may be lacking in experience running an electric utility, compared to PG&E, I have faith that we are more then capable of learning how to do so.

          1. J.R.

            I have much more faith in PG&E than in the city. When I smelled a gas leak PG&E was there within an hour and highly efficient. When I deal with the city I get poor service and bad attitudes.

          2. Matt Williams

            Same question to you G.I. as I posed to J.R., “Fair enough G.I., but how do you feel about SMUD’s efficiency?” If the POU outsources the utility’s operations to SMUD, then why is the City’s efficiency in sending out bills an issue?

  8. Davis Progressive

    the money issue here is baffling. based on this expenditure instead of a $5.1 million deficit, we’d have a $5.166 million deficit. you’re going to respond, a penny here, sixty thousand there, but it isn’t a penny here… it’s this money, carefully financed to leverage greater savings down the line.

    nevertheless this pr, shows that the city is going into a fight with pg&e, the biggest and meanest bully on the block, with their pants down.

  9. Tia Will

    Regardless of anyone’s views of “efficiency” the comparative costs that Matt posted would certainly argue that PG&E is not providing us with the best value available. I think that this alone would make a comprehensive look at the alternatives worth while.

    1. iPad Guy

      I’m for a “comprehensive look at the alternatives.” But, not interested in spending a million dollars (plus interest on $600,000) from the General Fund at this time of fiscal crisis. How much would you choose to spend on evaluating alternatives now?

  10. Pingback: The Electric Grid and the Requirements to Manage It Are Changing | .:Davis Vanguard:.

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