Krovoza and Wolk Team to Save Public Power Proposal (POU)

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public-powerJust when it seemed likely that the council would fold its efforts to put forward a Publicly Owned Utility (POU), Mayor Joe Krovoza and Mayor Pro Tem Dan Wolk stepped up with a strongly-worded defense of the public power initiative and a new way forward that clarified that, while the city has not made a decision to go forward, it needs to engage the public in renewed public outreach over the next year.

The council heard impassioned pleas from the public power and energy conservation community to stay the course and not lose this opportunity.  In fact, of the public commenters, only one member of the public urged the council to pull back on the initiative.

Still, it seemed that the council had the votes to delay, shelve or otherwise kill the POU for the time being, with concerns about issues such as public outreach, bandwidth, and the loss of City Manager Steve Pinkerton.

The city explained that the $600,000 loan from wastewater “would be immediately repaid at that time financing for the proposed acquisition of electrical utility assets is secured.”  The city stated, “If the city does not acquire the electrical utility assets, then repayment would be incremental not to exceed 10 years from the date the decision is made not to acquire the assets.”

The city added, “This is an investment opportunity for the Wastewater Fund.  The loan would bear interest at a rate that is higher than the rate current received under the Local Agency Investment Fund (LAIF).”

It was Councilmember Brett Lee who led the way arguing against this initiative.  “When we approved this not too long ago, we had a city manager, we had some other items that were not on our plate,” he said.  “Our city manager has quit.  He’s serving out the rest of his time here.  We’re now in the process of trying to find an interim.”

This comment drew some chuckles and pushback from the council.  He responded, “He quit.  He’s serving out his contractual obligation.  He left Davis to go somewhere else.  He wasn’t asked to leave, he was gainfully employed here and decided to go somewhere else.  He quit.”

“Several of you are running for office this June, your bandwidth is fairly full,” he continued.  “We’ve also since the time we voted on this, decided to put a revenue measure for June.  So I’m curious which of my colleagues have the time, energy and bandwidth to lead the effort on the ballot measures and which ones have the time, energy and bandwidth to lead the effort to lead on this public power pursuit?”

Councilmember Lucas Frerichs said that Councilmember Lee made a reasonable point about the hiring process and “the additional point about ongoing budget issues which we’ve made good efforts in addressing those budget issues thus far.”

“There is no question that there’s a promising future for a POU in this community,” he continued.  “I strongly believe in the notion of public power.  I think that we will get there, but I personally, I personally am in the position where we need to get to adjust the timing and sort of hit the pause button, not only hit the pause button but slow it down a bit.”

“The other part is the issue of the public outreach component,” he said, “these items get out in sort of dribs and drabs in terms of what we’re doing.”  He would add, “There is a real need for community outreach on this item regardless of whether we pull all funding tonight or whether we move full steam.”

Rochelle Swanson would state, “I think there is a way to address both the concerns because sometimes a decision is made and we have a change of circumstances, that’s why we have representative democracy to be able to have some flexibility and take some responsibility.”

“We’re in a period in my mind of due diligence,” said Mayor Joe Krovoza, noting that the city has two outside reports who have noted that there is promise here from a sustainability perspective and from a monetary savings perspective.  He said, “As council, I think we have a fiduciary duty to investigate that promise.  I see us as embarked upon a one year or so, very methodical consideration of this question in as careful and deliberate a way as possible.”

“The decision on going forward as a POU has, in my mind, not been made,” he said.  “I think that is where this council, and I will take responsibility, certainly didn’t do a good job of its messaging.  I think it became communicated to the public that a decision had been made.”

Mayor Krovoza then responded to Brett Lee’s point, “We have so many huge issues going on in the city and I don’t think this is one where the councilmembers need to be the leaders or even should be the leaders.”  He added that as he sees this as a gradual, year-long process, “I don’t think it’s one where we have to have one or two council leaders dedicating a large amount of time.”

He continued, “So to me unless the staff is pushing back on us saying we just don’t have the capacity, I’m not inclined to self-limit.”  He added, “The best time to plant a tree was fifty years ago and the second best time to plant a tree is today.”

Brett Lee responded, “Steve (Pinkerton) has been a pretty strong advocate for this and has been providing a lot of the work behind of the scenes on this and so him leaving is definitely a loss and we have to be realistic on that.”

He added, “I also think the public outreach piece will perhaps be more challenging than we anticipate.”  He noted that while we use the SMUD vote as a proxy for generalized support for public power in the community, “The SMUD vote was slightly different, it was who would you like to run your utility – PG&E or SMUD essentially.  SMUD was going to do the heavy lifting in terms of coming up with the assets, in terms of acquiring the funds to do that.”

He expressed concern about getting caught up in a legal process prior to the city issuing bonds, “and if that happens, the city of Davis could lose a substantial amount of money.  Or will have spent a substantial amount of money with nothing to show for it.”  He added, “I think it’s important that we’re realistic to ourselves and also to the public.  So this community outreach is not sort of the slam dunk that people think it will be.”

It is not just about like or dislike for PG&E, but also a recognition of the city’s current fiscal challenges.

Mayor Krovoza responded, “We’re borrowing $600,000 from ourselves which, in the worst case, we don’t go, we pay ourselves back $60,000 at a time at a rate of return.  I think that it should be possible to communicate to the public that we’re going through a very gradual process of due diligence.  We’re not making that go-no go decision right now.”

He then put a motion on the table to direct staff on March 25 to bring back a revised resolution “that clarifies that the city of Davis has not made a decision to go forward or not with a publicly owned utility, to emphasize that we are in at least a one-year period of careful evaluation of the public and private benefits to moving forward with a publicly owned utility or other options that help meet our cost-saving goals.”  He added, “To include in that some consideration of the role of the local URAC [Utility Rate Advisory Committee]… and to clarify the important different stages of public outreach.”

Dan Wolk seconded it.  “I think we do need to keep going on this,” the Mayor Pro Tem stated.  “I think that the feasibility report presents a really compelling case for a POU.  It’s hard to ignore that.  I’m comfortable with that.”

He agreed with the need for community outreach prioritized above determining the fair market value of community assets.  He added, “I think we really need to focus the public’s attention on the SB 43 process.  This is a bill that we sponsored.  This is a bill that would provide renewable energy for our community which is one of the main goals of the POU.”

“This is an issue that PG&E is fighting us on,” he said very pointedly and emphatically.  “Very publicly fighting not just Davis but us and I think it’s critical that our community for all of these reasons get very attuned to what’s happening there.”

In the end, the council voted 5-0 to, as Mayor Pro Tem Wolk suggested, stay the course.

View the video below to see public comments:

—David M. Greenwald reporting

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About The Author

Rob White is the Chief Innovation Officer for the City of Davis and was selected as a 2012 White House Champion of Change for Local Innovation. He serves as an ex-officio Board Member for techDAVIS (a local tech entrepreneur industry group), as an executive Board Member for the Innovate North State iHub, and as a Board Member for Hacker Lab and the California Network for Manufacturing Innovation. He is a candidate for the Doctorate in Policy, Planning and Development from the University of Southern California and has a Masters from USC in Planning and Development and a Bachelors of Science in Geology from Chico State.

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65 thoughts on “Krovoza and Wolk Team to Save Public Power Proposal (POU)”

  1. growth issue

    “This is a bill that would provide renewable energy for our community which is one of the main goals of the POU.”

    There you have it, and renewable energy is more expensive energy.

    1. David Greenwald

      Explain how solar is more expensive. Explain how wind is more expensive. In fact, find me a renewable energy source that a DAVIS POU would utilize that you believe would be more expensive.

          1. growth issue

            “The newly-formed German coalition government wants to revise the share of RE in the German energy generation mix to be 40% to 45% by 2025, instead of the current 50% by 2030, and to be 55% to 60% by 2035, instead of current 65% by 2040, to increase flexibility. The new German Economics and Energy minister, Sigmar Gabriel, stated green energy mandates have become such an albatross around the neck of industry that they could lead to a “deindustrialization” of Germany.”

            http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

          2. Matt Williams

            G.I., thank you for posting that quote. It does a good job of illuminating four issues that exist with respect to renewable energy sources and the electrical power grid.

            First, you note that Herr Gabriel focuses on industrial users, whose power consumption needs are exponentially larger by orders of magnitude than the needs of residential and retail/commercial customers. An abundance of huge industrial customers is not a problem that we have in Davis.

            Second, Herr Gabriel does not eliminate the need for renewables, nor does he flatten the growth curve of the proportion of renewable sources. Rather, he argues that attention needs to be paid to “flexibility” [in operating the electrical grid] so that the needs of all the grid’s customers can be met.

            Third, nowhere in his quote does the issue of cost come into the picture. The issue is peaking not cost.

            Fourth, electrical grids all across the world were created as “one-way streets” with the power flowing from generation sources, through high-voltage transmission lines, to distribution substations, through local distribution networks to end users. The electrical industry is trying to manage the transition from that one-way street system to a two-way street that accomodates generation sources at both ends of the transmission corridor, while at the same time producing profits and dividend checks for their stockholders … and in order to accomplish those fiscal goals, slower is better.

          3. SouthofDavis

            David wrote:

            > Explain how solar is more expensive. I don’t want links,
            > I want you to lay out how solar is more expensive.

            I wish this were not true, but unless an individual or company is getting some kind of tax break from the government it costs more to get power from solar than to buy it from most utilities (once this changes you will see solar panels on the roof of almost every business in the US).

            P.S. The gap is even bigger when you factor in the actual cost of hiring someone to get up on the roof with a safety harness to clean the solar panels twice a year (since dirty solar panels are not as efficient)…

          4. David Greenwald

            “I wish this were not true, but unless an individual or company is getting some kind of tax break from the government it costs more to get power from solar than to buy it from most utilities (once this changes you will see solar panels on the roof of almost every business in the US).”

            I don’t think that’s accurate. There is a cost for buying the panels if you are an individual business, but there is a time frame by which it will pay for itself.

          5. growth issue

            If it really penciled out everyone would be doing it, but by the time the panels are finally paid for and the costs of maintaining along with the cost of roof repair and leaks because of the panels (which some of my neighbors have already experienced) and the extra cost of removing and replacing the panels if one needs a new roof all adds to the costs. Then after about 17 years the panels need to be replaced and you get to start over again with new costs.

          6. Matt Williams

            G.I. harkening back to the quote you posted by Herr Gabriel, if “its nott working too great for Germany, then why is Germany (even with Herr Gabriel’s scaled back recommendation) going from German energy generation mix to be 40% to 45% by 2025, and to be 55% to 60% by 2035?

          7. growth issue

            Matt, he also said “The new German Economics and Energy minister, Sigmar Gabriel, stated green energy mandates have become such an albatross around the neck of industry that they could lead to a “deindustrialization” of Germany.”

          8. growth issue

            Matt, I really suggest that you actually read the article, it’s very damaging for renewable energy: “In Germany, the normal procedure is to use materials and labor to make a product and sell it at a profit. It is just the opposite with RE, where the normal procedure is to use materials and labor to make a product that is sold at 1/4 of the cost, i.e., at a loss which is made up by placing a surcharge on household electric bills. This is completely uneconomic and irrational.”

          9. Matt Williams

            If you think the article is something we all should read, then please submit it to David for publication with an introduction explaining how you see its findings apply to Davis.

            I don’t want to tell you how to write the article, but you may want to draw parallels between the German experience to the PVUSA experience in Davis.

          10. SouthofDavis

            David wrote:

            > There is a cost for buying the panels if you are
            > an individual business, but there is a time frame
            > by which it will pay for itself

            I could take the bus to work every day (aka Pay PG&G) or I could buy a new plug in Prius from Hanlees (aka buy solar) but the money I save from not taking the bus will be enough to “pay for” the Prius (just like the money I save from not paying PG&E will not be enough to “pay for” the solar)…

            P.S. I love saving money and if I thought I would really save money I would get solar and/or trade in my old car (worth about $3K) and spend $30K on a Prius. I’m friends with many people that have spent thousands on solar, spent $30K on a Prius and spent $50K on a diesel MBZ that all tell me they are “saving” money. They are all nice people, but they just don’t understand the time value of money (and could not put together a quick DCF model in Excel to save their life).

    2. Day Man

      This totally misses the point, GI. Yes, renewable energy is more expensive than natural gas. That’s not the point. Cutting out PGE saves money. The Q is, is there a NET savings or not.

      Forgive me, but here’s an analogy about my breakfast choice this morning: fruit is more expensive than oatmeal (and better for me). But fruit that I get from the grocery store and eat at home is less expensive than oatmeal that I order at Bistro 33. I’m getting a healthier, generally more expensive product (fruit) for cheaper because I’m getting it from a cheaper seller and cutting out the middle man (Bistro). And you’re just arguing that fruit is more expensive than oatmeal, and that misses the point, because the argument isn’t what we should eat but where we should get the food. The CC’s point is that by eating at home, we can get fruit even cheaper than we can get oatmeal at Bistro. It’s both better for us and saves money.

      Now, you might argue that I could be saving even more money by eating oatmeal that I buy from the grocery store and cook at home [ie POU that doesn’t use renewables]. And yes, that would be even cheaper than eating fruit at home. But eating fruit has a whole host of other benefits that make it worthwhile for me.

      [Not meant to knock Bistro. I quite like Bistro. But I do roll my eyes at oatmeal prices at restaurants – it must be their highest-margin item. And apologies for taking the analogy too far.]

      1. growth issue

        “Now, you might argue that I could be saving even more money by eating oatmeal that I buy from the grocery store and cook at home [ie POU that doesn’t use renewables]. And yes, that would be even cheaper than eating fruit at home. But eating fruit has a whole host of other benefits that make it worthwhile for me.”

        Yes, that’s exactly where I’m coming from. What’s wrong with buying our energy as cheaply as we can knowing that California already has renewable mandates in place? Why must we pay more because some liberals in Davis have a feel good agenda to go even greener than the state has already dictated?

        1. Day Man

          OK, so this is separate from a PGE vs. POU argument. This is a renewable vs. fossil fuel argument. I THINK the absolute cheapest option would be to still create a POU but then just purchase the minimal mix of renewables as required by the state, so presumably you would support that (if I’m correct that it’s the cheapest).

          Nobody is talking about this option because it undermines the city’s own adopted carbon goals, which predate this city council, to aim for carbon neutrality by 2050. I’m sure you don’t support this goal of carbon neutrality, and I know I can’t talk you into it through this comment or probably ever, so I won’t waste my time or yours trying. But the city has set this 2050 goal, whether you like it or not, so it makes darn good sense that the rest of their policies should be consistent with that goal. Shouldn’t we ask for and expect consistency from our city council? A higher mix of renewables is necessary to meet that goal, so of course the city will pursue a higher mix of renewables. You can’t expect the city to act in a way that explicitly contradicts the city’s own established goals.

          Now, if you disagree with the goal and want to change it, you should lobby the CC to dismantle the city’s carbon neutrality goal. I don’t think any of our five current CC members would support you, and if it went to a vote I don’t think the voters would support you. You’re living in a city that has chosen to embrace values different from your own. Sorry.

          1. Michelle Millet

            Thank you Day Man for laying out this rational argument for pursuing a POU. I may be quoting and referencing it when I discuss this issue in the future-).

      2. SouthofDavis

        Day Man wrote:

        > Forgive me, but here’s an analogy about my breakfast choice this morning:
        > fruit is more expensive than oatmeal (and better for me). But fruit that I get
        > from the grocery store and eat at home is less expensive than oatmeal that
        > I order at Bistro 33. I’m getting a healthier, generally more expensive product
        > (fruit) for cheaper because I’m getting it from a cheaper seller and cutting out
        > the middle man (Bistro). And you’re just arguing that fruit is more expensive
        > than oatmeal, and that misses the point, because the argument isn’t what w
        > e should eat but where we should get the food. The CC’s point is that by
        > eating at home, we can get fruit even cheaper than we can get oatmeal at
        > Bistro. It’s both better for us and saves money.

        A more realistic analogy would be the residents of Village Homes (Davis) are upset that Bistro 33 (PG&E) does not have enough organic fruit (renewable power) so they open up their own restaurant (utility) in Village Homes (Davis) with all the same expenses of running a restaurant (utility) that Bistro 33 (PG&E) has but with less of an economy of scale since they are smaller. The play with the numbers to convince the residents of Village Homes (Davis) that despite paying for more expensive organic fruit (renewable energy) they will be able to charge less than Bistro 33 (PG&E) even though they are smaller and will have less customers to cover the cost of management and overhead.

          1. SouthofDavis

            SMUD gets a higher percentage of its power for “free” from about 10 different “paid off” dams in the Upper American River Project.

            PG&E owns some Dams, but the Davis POU will not own any “paid off” dams that were built 50+ years ago and spit out low cost power.

            SMUD also bought land in Sacramento 50+ years ago when it was cheap (and probably paid less for ALL the land and buildings it owns than the current fair market value of the PG&E site east of downtown.

        1. Day Man

          I love it – now you’re speaking my language of analogies. So this is a bit different than GI’s argument — you seem to be arguing that the studies suggesting a POU will save money are just wrong. Based on economies of scale, it seems totally plausible that a POU would indeed be more expensive, as you argue. So I would find your argument compelling in the absence of evidence to the contrary. But there have been studies to look into exactly this, and they have found that in fact a POU will save money. Maybe our fundamental disagreement is that I trust those studies and you don’t. I didn’t write the studies or even read the studies, so I am not at all certain. But when I weigh the evidence, I see “it might seem that X, but studies show Y.” For me, that is good enough evidence to explore further. And that is exactly what the CC is doing: exploring further.

          [side note: as I said, the economies of scale factor surely pushes the equation in favor of PG&E, but the middle man/profit factor surely pushes the equation in favor of POU. And then there are surely other economic forces at play because utilities are highly regulated and don’t operate at all like the perfect competitive industries we learned about in college economics courses. So what’s the net effect? Again, I defer to those who have studied this exact question with regard to a POU on behalf of the city, and they said there are savings to be had.]

          1. SouthofDavis

            Day Man wrote:

            > you seem to be arguing that the studies suggesting a
            > POU will save money are just wrong.

            Why do we need to be “first” (and “hope” the studies are accurate)? Let’s wait and see if another city in CA can buy the assets of PG&E and start a new POU that saves money.

            Over the years I have at least a dozen people tell me that I need to get involved with Multi-Level-Marketing (MLM) selling Herbalife, Amway, MonaVie etc to make hundreds of thousands a year in my spare time.

            I don’t have any problem with MLM, I just don’t think it is possible to make $100K a year in your “spare time” so I tell them to “come to me after you make $100K and show me your tax return and if you really make that much I’ll sign up (I’m still waiting)…

        2. Matt Williams

          A more realistic analogy would be the residents of Village Homes (Davis) are upset that Bistro 33 (PG&E) does not have enough organic fruit (renewable power) so they open up their own restaurant (utility) in Village Homes (Davis) with all the same expenses of running a restaurant (utility) that Bistro 33 (PG&E) has but with less of an economy of scale since they are smaller. The play with the numbers to convince the residents of Village Homes (Davis) that despite paying for more expensive organic fruit (renewable energy) they will be able to charge less than Bistro 33 (PG&E) even though they are smaller and will have less customers to cover the cost of management and overhead.

          I like your analogy SoD because it does a good job of illustrating the strengths and weaknesses of each alternative.

          Your statement “with all the same expenses of running a restaurant” is incorrect in a number of ways, becaus Bistro 33 also plays with the numbers.

          — First, Bistro 33 is a publicly traded company that has shareholder dividend expenses that Village Homes does not have. My understanding is that the California Public Utilities Commission sets the Bistro 33 rates at a level that guarantees those shareholders no less than a 10% return on their investment.

          — Second, Bistro 33 receives $4.3 million per year in “special program” dollars (under the acronym PPP). Currently, Bistro 33 uses the substantial majority of those $4.3 million to defray expenses in their Sacramento restaurants, which means that their Davis restaurant is unable to run as man y “daily specials” that provide Davis diners superior food at a discount. Village Homes will be able to spend every single one of those $4.3 million in Davis subsidizing a wide array of “daily specials” that benefit Davis diners.

          — Third, Bistro 33 is heavily committed to the alcoholic beverage portion of its business, and as part of its vertical integration has several distilleries in various California cities. Unfortunately its San Bruno distillery had a serious industrial accident that caused an explosion that killed several of the people who lived in houses adjacent to the distillery. Because of the costs of that industrial accident, and the risk that its other distilleries may have similar accidents, Bistro 33 has instituted a distillery surcharge on all the meals it serves in all its restaurants.

          — Fourth, Bistro 33’s capital borrowing rate as a for-profit private entity is higher than Village Homes’ borrowing rate as a not-for-profit public entity. Further, Bistro 33 has no incentive to try and lower its borrowing rate because of the first point above (10% of a larger expense number produces higher absolute profits than 10% of a lower expense number)

          — Fifth, Village Homes is in the position to create a capital structure that allows each Village Homes customer to have approximately 50% of each restaurant bill be income tax deductible under both IRS and CA Board of Equalization rules. Bistro 33 can not provide that major income tax advantage to its diners.

          All the above are strengths of the Village Homes alternative. As you have pointed out there are advantages that Bistro 33 has.

          — First, bulk purchase of the raw materials used to create the meals it serves. Raw material purchases do amount to approximately half of a restaurant’s expenses.

          — Second, Bistro 33 definitely has the potential of low management costs and low overhead. With that said, there is nothing that prevents Village Homes from operating its restaurant with only one employee, the billing clerk. In addition, management time devoted by the Village Homes Council will be paid on an as-used hourly rate based on an annual salary rate of $60,000 per year ($12,000 times five Council members). That means that Village Homes may be able to have even lower management costs and overhead than Bistro 33 does. To achieve the one employee level, all the Village Homes restaurant operations can be outsourced to Osteria Fasulo, which has a thriving nearby restaurant.

  2. growth issue

    You have to love this statement:
    The city added, “This is an investment opportunity for the Wastewater Fund. The loan would bear interest at a rate that is higher than the rate current received under the Local Agency Investment Fund (LAIF).”

    So if I’m making 2% on $600,000 in an acoount but I decide to borrow that money from myself and pay myself back at 3% somehow I’m making money?

    1. hpierce

      Well, you could be making money, if your operational costs decreased more than the 1 % ‘premium’, as opposed to doing nothing.

      That said, I’m looking forward to ‘tabling’ the idea of a city utility, for now.

    2. David Greenwald

      That’s not the proper analogy. The proper analogy would be to take out a mortgage on your home (borrowing money against your asset), you use that mortgage to improve your home, and then you sell your home at improved price.

          1. hpierce

            Only if the savings in operational costs justify it. Example, I re-fied a house, increased the mortgage amount (interest rate was actually lower than what I had), to finance a new roof, which was near the end of its life expectancy. I avoided risk of a leak that could have greatly added to costs, and caught low prices on material & labor. Considered I made a good call, investment. In my case, lucked out, re-fied, did roof, and am paying less than on old mortgage, and for a shorter period of time.

          2. growth issue

            No you’re both wrong, it’s about the loan, not what you do with the loan.

            Read the statement again, it doesn’t say if we borrow the money and do this or that with it we can save money, it’s strictly about the loan and the interest.

          3. hpierce

            Respectfully disagree… if you have an asset that costs you 30% to operate, and you can finance a change that will increase your debt payment by 1%, and you will save 15% of your operational costs, you save 4.5% of your asset cost, and are “ahead”.

            Again, now is not the time to pursue a POU

          4. hpierce

            Did… 3 times. I tell you ‘three times’, you are correct for a “static” asset… but if significant operational costs are reduced, it might be a good choice. Not now, though.

          5. Matt Williams

            G.I., unlike hpierce, I will agree with you. It is about the loan, not what you do with it.

            So let’s look at the three alternative loan scenarios.

            Scenario 1 is the “do nothing scenario” in which the Wastewater Fund has $600,000 that is earning 0.244% per annum interest from the Local Agency Investment Fund (LAIF) (see http://www.treasurer.ca.gov/pmia-laif/historical/avg_mn_ylds.asp). Since there is no borrowing there are no outflows, so the net inflow/outflow total is an annual inflow of $1,464.

            Scenario 2 is the “borrow from the City’s line of credit scenario,” which is what the City did to fund the Water Project JPA during 2011 and 2012. The line of credit interest rate was approximately 5.0%. In scenario 2 our inflows are the same $1,464 per year, and our outflows are $30,000 ($600,000 at 5%), so our net annual inflow/outflow is a net outflow of ($28,536).

            Scenario 3 is the borrow from the Wastewater Fund. For the sake of argument, lets set the interest rate at 3%. That means the inflows to the Wastewater Fund rise from $1,464 to $18,000. The outflows at 3% are also $18,000, so our net annual inflow/outflow is a net outflow of $0.

            So Scenario 1 is $1,464 per year better than Scenario 3, which is $28,536 better than Scenario 2.

  3. Michelle Millet

    “The best time to plant a tree was fifty years ago and the second best time to plant a tree is today.”

    My favorite line of night. I’m going to miss Krovoza’s leadership on this issue.

    1. SouthofDavis

      Joe said:

      > The best time to plant a tree was fifty years ago and
      > the second best time to plant a tree is today.

      I like Joe, but I think this has more to do with a quote that almost all politicians like:

      “The best time to expand government was fifty years ago and the second best time to expand government is today”

      After the takeover of PG&E the city can take over all the grocery stores in town and the politicians will have even more ways to reward their donors.

      1. hpierce

        A bit “over the top”, but I can think of a number of folks in town who would embrace your ‘thought’, just to keep “greedy corporations” in check.

  4. SouthofDavis

    David wrote:

    > That’s not the proper analogy. The proper analogy would be to take out
    > a mortgage on your home (borrowing money against your asset), you use
    > that mortgage to improve your home, and then you sell your home
    > at improved price.

    When you spend money to improve a home you will get an “improved price” but you (almost) never get back all the money you spend. I’ve read dozens of articles like the one below, and most agree that you will get ~66% back of what you spend to remodel a kitchen and ~62% back of what you spend to remodel a bathroom.

    http://money.usnews.com/money/personal-finance/articles/2012/10/25/renovations-that-yield-the-best-return-on-investment

    P.S. If it was really an “investment opportunity” why not loan every penny of cash reserves the city has to the city to “study” other things?

  5. Day Man

    I’ve expressed here on Vanguard my own concerns, similar to Brett’s, about the city not being able to take on so much at once. But watching last night’s meeting, including all the public comments and Krovoza’s comments, honestly swayed me, and now I’m convinced that it’s worth moving forward. So kudos to them for effectively making their case. And based on the 5-0 vote, it seems like the others were at least somewhat swayed as well. So my headline here wouldn’t be “Krovoza and Wolk Team to Save POU.” I didn’t get any sense of teaming, and a minority vote can’t really team up against a majority vote. My headline would be “Krovoza, Wolk, and Public Convince Council to Continue POU Study.” Actually, I’d have to go back and watch the tape before being convinced that it’s worth including Wolk in that headline. If I’m remembering it correctly, he only spoke up after things were clearly starting to turn in favor of staying the course. But the tape might prove otherwise.

    1. SODA

      Agree Day Man. Thought the title too generous to Dan. Maybe ” ” around Wolk….along with the Coop story.
      Sorry to be snarky, but I watched and it was clearly Joe who rationally held the baton.

  6. Frankly

    Hm… the two guys moving on and needing to cement their strong-California-liberal-Democrat credentials to help them better fit in where they are going.

    I am completely in favor of saving money.

    But I am also know a hidden agenda when I see it.

    1. Day Man

      Seriously? They just woke the PG&E beast and put a target on their foreheads. PG&E has an extremely active lobbying/PAC apparatus that often gets involved legislative races and has a lot of money to burn. They stuck their necks out, and I wouldn’t be surprised if they get punished hard for this. If anything, I think this was NOT the smart tactical move. I’m sure they know this, especially since Dan’s mom has faced PG&E before.

    2. Michelle Millet

      Frankly, Krovoza’s support of policies that promote conservation are consistent and from I can tell are genuine. I believe he would support them regardless of wether or not they would “cement” his liberal credentials., but if by doing so he gets more votes, so much the better for those of us whose views align with his on these issues.

    3. growth issue

      Frankly:
      “But I am also know a hidden agenda when I see it.”

      Yes, the true agenda is being unmasked. The question is are Davis residents willing to pay more for their renewable energy than conventional which can be purchased at a cheaper rate?

      1. Davis Progressive

        you haven’t figured this out yet. there is $4.3 million that you’re already paying going to other communities, davis wants to bring it here and use it to do things like built solar panels. you’re argument that this is going to cost more to produce is completely wrong headed given the $4.3 million that are current going to build facilities in other communities.

        1. Michelle Millet

          Some of this 4.3 is probably being spent in this community, for things like low income assistance programs.

          I have a standing question that I’ve asked but haven’t met anyone who know the answer which is how much of the 4.3 million that Davis customers pay in PPP fees is behind spent in ways that directly impact our community.

        2. growth issue

          DP, who are we kidding? IMO if Davis liberals get a hold on that $4.3 million most of it will go to social programs providing free or reduced energy to the poor.

          1. Tia Will

            GI

            Respectfully, I believe that this is because your blogging default on virtually every issue is what those awful liberals are going to do with your money once they have managed to extract it from you in some nefarious way.

            For some, money is simply not the top priority. That is not the view of someone who has always been affluent. That is the view of someone who has found herself at some point in her life at virtually every point on the economic spectrum. Money provides opportunity for material, economic and social gains, it does not in and of itself , beyond the point where one’s physical needs are met, provide contentment, happiness or self worth.

  7. Michelle Millet

    I was heartened by the high quality and content of public comment on this issue. It is clear that we have knowledgable people in this community willing to invest their time and expertise in studying the pro’ sand cons’s of a move to public owned utility. I’m glad that the process is moving forward. From what I have learned so far a POU could result in many significant benefits to our community and it’s effort to reach it energy sustainable goals, and I’m really glad we our going to continue exploring these options. I hope this effort keeps it momentum through the changes in leadership that will be occurring over the coming months.

    1. growth issue

      The speakers were imo pretty much the usual crowd and said what one would expect. A member of the NRC, a member of the Valley Climate Action Center, a couple members or former members of some energy panel, a CoolDavis member, etc….and a few citizens one of which was against it. Hardly a good cross section of the community and I didn’t feel really a good representation of how the residents of Davis really feel about the POU.

      1. David Greenwald

        “The speakers were imo pretty much the usual crowd and said what one would expect.”

        Three or four leading industry experts on public power. A member of the NRC who sells photovoltaic systems. You’re correct it’s not a cross section of the community, it’s an example of the amazing level of talent this community has within it.

      2. Michelle Millet

        Hardly a good cross section of the community and I didn’t feel really a good representation of how the residents of Davis really feel about the POU.

        What impressed me about these speakers was there knowledge on the subject, and the fact that at least 3 openly questioned some of the facts regarding rates estimates and reliability statistics that were presented in the report to the city. I think closer examination of the report, by outside experts, is important, and I was happy to hear there are people who possess the knowledge, time, expertise, and willingness to do so.

      3. Matt Williams

        G.I., I agree with you 100%. I went into Council Chambers last night with no intention of speaking. There were people there who have forgotten more about electrical energy than I will ever know. However, Herb Niederberger’s final slide was so clearly missing one step that I felt I had no alternative other than to get up and speak. His last slide covered “Implementation of Resolution 13-169” and started with “1. Good faith meetings with PG&E”

        The point I made was that the first step (before Herb’s Step 1) should be “1. Good faith meetings with the voters.” Absent that important foundation step, any POU effort will be a house built on a foundation of sand.

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