Last month, the Davis City Council directed staff to return with a revised resolution, adding steps to the work plan calling for hiring of a project manager to oversee the effort, and adding review of the due diligence work by the Technical Advisory Group and the newly-formed Utility Rate Advisory Committee. Also, staff was directed to conduct research into recent municipalization, how long they took, and how much they cost.
City staff once again clarifies that the approval of this resolution “does not in and of itself, authorize municipalization of electrical assets within the City limits. There is a process prior to taking the necessary steps towards acquisition of the PG&E assets.”
Among the other steps would be that this resolution would “Retain the services of an individual or firm to act as the Project Manager for the work contemplated by this resolution.” Thus the project manager does not mean someone to manage the POU, but rather to complete the steps.
Among these steps would be “due diligence tasks” which include “case study analysis, asset inventory, utility appraisal, fair market value determination, business plan development, business model development, power portfolio and renewable energy determination, possible decentralized energy service evaluate enterprise investment return potential, risks and opportunities, assess appropriate institutional and legal structures, and cost of service evaluation.”
They would also look into an EIR process pursuant to CEQA (California Environmental Quality Act), an investigation on the steps “necessary for acquisition of electrical infrastructure used within the City Limits.”
All of this would lead up to a work plan, and would provide council “with sufficient information to allow the City Council to make a decision regarding a City-owned electric system within 12 months of the date of the resolution.”
Despite efforts by Joe Krovoza and Dan Wolk to save the POU back in February, the initiative remains controversial. Part of the concern is whether the city staff, with Steve Pinkerton leaving at the end of the week, has the bandwidth to take the necessary steps.
It was Councilmember Brett Lee who led the way arguing against this initiative in late February. “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.”
“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?”
The project manager is an acknowledgement from council and staff that there is a lack of ability for city employees to pursue this.
“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.”
There has been pushback from PG&E, polling that shows public opposition and concern, and pushback from both the Chamber of Commerce and the Davis Enterprise.
“Now is not the time to take on another huge project. We have too much on our plate as it is,” the Enterprise wrote in February. “Perhaps if the long-hoped ‘innovation park’ ever gets going and we start attracting high-tech businesses to town, the tax base will improve to the point where this is feasible. Or perhaps our economy will rebound enough to allow us the fiscal luxury of moving forward.”
The Enterprise noted that PG&E is the main obstacle to such a vision. Our current provider, they write, “is in no mood to give up customers, and not inclined to sell the infrastructure a public provider would have to buy. In 2006, the utility spent heavily to prevent an exodus and, while the measures passed in Davis, it was able to convince Sacramento voters to reject the union. Davis was back at Square One.”
“At this point, the council has spent $400,000 analyzing the possibilities, with $600,000 more earmarked from a wastewater fund,” the paper notes.
Chamber Executive Director Kemble Pope noted a chamber survey that asked, “The City of Davis is moving forward with plans to separate from Pacific Gas & Electric Company (PG&E) and has spent $400,000 over the past two years on this project. Tonight, they will vote to spend an additional $600,000 on consultants to create a workplan to create a municipally owned electricity enterprise. Total cost of purchasing PG&E’s assets is unknown. SHOULD THE CITY CONTINUE WITH THESE PLANS?”
Kemble Pope reported that 41% said they were unsure, “that they did not have enough information.” Another 28% said no and there were only 32% that said yes. “The community is not educated, they may support this project, but we don’t know,” he added.
Sheila Allen, one of the candidates for council also summed up her opposition, noting at the Chamber debate, “This weekend people only wanted to talk about public utility. I could not find anybody who was interested in us spending money right now to do this. I absolutely agree that we need to move towards more renewables. I really appreciated any time the city wants to do something that will save me 20 percent on my electrical bill or any other bill, but I think hiring a manager a moving forward with this right now is not the right time.”
John Munn would add, “I’m not going to sugar-coat this. I don’t support pursuing a city-run utility at this time or spending money studying it. We need to fix our problems first and then my requirements for seriously considering a publicly owned utility at any time are that it be clear from the outset that a city owned utility must be as reliable as what it replaces and must provide electricity at rates that are competitive with PG&E.”
The question is whether in the face of this opposition, the council will continue their plans to pursue this project. No decision will be made on going forward with the project – the only question is whether planning will continue.
—David M. Greenwald reporting