Council Pulls Plug on Public Power Funding

CCA-Community-Choiceby Michelle Millet

In a surprise move Tuesday night council passed, by a 4-1 vote,  a motion put on the floor by Councilmember Brett Lee  to rescind the authorization of a $600,000 expenditure that was to be used to study the option of the City of Davis forming a Publicly Owned Utility.  Lee’s motion received support from Councilmembers Lucas Frerichs, Dan Wolk and Rochelle Swanson.  Mayor Joe Krovoza dissented.

The staff recommendation made to council that night included approval of a work program that “specifically describes activities and tasks to be undertaken over the next six months that would enable staff to continue the due diligence process, educate the community about public owned utilities and develop partnerships with community groups that would collaborate with the City in its efforts to achieve its energy goals and objectives.”

The staff report highlighted hiring a consultant to manage the implementation of this work program at the cost of $30,000 plus a communications consultant to assist with public education, outreach to stakeholders and preparation/implementation of a communications plan at the cost of $25,000.

Frerichs’ and Wolk’s vote to pull support for the funding was a departure from their previous stance on this issue.

At the March 25 council meeting it was Councilmember Frerichs who put forward the motion to authorize the city manager and the city attorney to move forward on a set of actions that would allow for a decision to be made regarding the possible formation of a municipally owned utility.  After moving the motion, that was seconded by Wolk, Frerichs suggested that staff recommendations include the hiring of a project specific manager to guide the city’s efforts.

A vote was delayed on the motion that night after Councilmember Brett Lee expressed concern that some key questions regarding the process of moving from a investor owned utility (IOU)  to a private owned utility (POU) had yet to be addressed.

At the March meeting Lee stated, “I think before we agree to spend, or authorize to spend this fairly large amount of money we should at least be able to talk confidently about some actual real numbers. I’d like to talk to somebody about when they made the effort to go to a POU. We will likely end up in court and there will be legal cost involved.  I don’t know whether this will be millions of dollars in legal fees or whether it will be 10s of millions in legal fees. I don’t know whether the journey is a 1 year journey or a 10 year journey.”

Councilmember Lee, with support from Swanson, requested that staff return with some examples of jurisdictions that have made the transition from an investors owned utility to a publicly owned one.

This information was not contained in Tuesday’s staff report and was cited by Lee as one of the reasons for his motion to rescind the $600,000 expenditure. Lee reiterated his support for examining the possibility of transitioning to a POU. He stated that the magnitude of the potential savings to the City of Davis and its residences warranted us looking into it, but he felt that the city should not be spending money to do some of the basic fact gathering and community outreach laid out in the staff report.

Instead, Lee called for the various community groups who support this effort to step forward and do some of the early, ground laying work. He stated, “I’m not supportive of spending this money, I’m supportive of asking people to help volunteer to provide this information.”

Mayor Pro-Tem Wolk also noted that the examples provided in the staff report, of entities that have made the transition from a IOU to a POU, were not analogous to Davis.  “Davis would be unique in what we are trying to do in terms of moving from an IOU to a POU,”  said Wolk, after which he expressed concerns over litigation and the fact that, “while we were already being asked to spend quite a bit of money, it could end up be being more.”

Lucas Frerichs expressed interest in reexamining the Community Choice Aggregation (CCA) option. A CCA is a state policy that enables local governments to aggregate electricity demand within their jurisdictions in order to procure alternative energy supplies while maintaining the existing electricity provider for transmission and distribution services.

He made the assertion that it was unlikely that a POU would be able to be formed in the next few years and that the CCA route – especially if the city worked in conjunction with partners in county – could be a much more achievable reality. He noted that the likelihood of success versus the amount of money we would have to spend on creating a Davis-specific POU is something he was having concerns about, and thus he was not in favor of pursing the $85,000 for the scope of the work that was listed in resolution.

Councilmember Swanson stated that she shard Lee’s concerns about the lack of concrete examples of the what the process would be like. She mentioned the numerous concerns the public has expressed to her over the proposed expenditure and stated that she would “hate to see the unintentional consequence of this is that we loss support for public power, or we lose support for a POU because we are not going through the steps.”

After noting her support for Councilmembers Lee’s motion, Swanson clarified, “This is not saying no to the idea of a POU, its about being responsive in this snapshot of time to be able to focus on bigger priorities.”

Mayor Krovoza was in clear opposition to Lee’s motion stating, “I’m not going to support this motion. I like the idea of doing the next $85,000. I am comfortable with these recommendations, I think they move us forward judicially with lots of community volunteerism.” He stated that he believes staff addressed community concerns about spending $600,000 by coming forward with a scaled back and reasonable amount.

In his final comment he said, “I want it to be clear that this in an attempt by our council to save hundreds of millions of dollars for our citizens. I think if we are interested in being responsive to our citizens concerns about us spending too much money that this is one of the most dramatic things that we can do.  I do think spending $85,000 to see if it is feasible to save 130 million over 30 years is wise.”

After the motion to rescind the $600,000 passed, Mayor Krovoza made a motion to approve staff recommendation and authorize $85,000 to be spent on considering whether or not a POU would be in the best interest of the community.  The motion did not receive a second and failed.

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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22 Comments

  1. Tia Will

    ““This is not saying no to the idea of a POU, its about being responsive in this snapshot of time to be able to focus on bigger priorities”.” Swanson

    ““I want it to be clear that this in an attempt by our council to save hundreds of millions of dollars for our citizens. I think if we are interested in being responsive to our citizens concerns about us spending too much money that this is one of the most dramatic things that we can do. I do think spending $85,000 to see if it feasible to save 130 million over 30 years is wise.” – Krovoza

    While this may not have been “saying no to the idea of a POU” it most certainly was saying saying no to the reality of one. I would have been much more convinced by the disclaimers of the four who voted to rescind had they been willing to adopt any of a number of other options:
    1. Setting a precise timeline for reviewing the answers to Brett Lee’s questions regardless of who was assigned
    the task of information gathering.
    2. Opting for the more moderate expenditure of 85,000 as Joe Krovoza suggested.
    3. Making a formal proposal for the establishment of a citizens committee such as the WAC rather than Brett Lee’s
    vague statement about himself finding a volunteer to answer his questions.
    As it was, they made the decision to rescind without any definite proposal of when or even whether to revisit this issue although much was said about that possibility. It certainly sounded like “NO” to me.

    1. Michelle Millet

      It certainly sounded like “NO” to me.

      Tia you are doing what I often hear you give other people a hard time for, i.e. not taking people at their word and interpreting their actions to mean something different from what they said. Brett made it clear that he was in favor of continuing to pursue a POU, but that he just did not think the city was at a point YET where it should be spending more money on doing so. Rochelle also stated that she wanted continue to pursue the idea, but wanted to make sure the public was better informed before moving forward. How do you get a “NO” out of this?

      1. SODA

        Michelle, I agree with Tia on this. By doing what they did on Tuesday night, they DID shut down and tabled the issue with a strong rebuke to staff. I am in favor of NOT spending the 600K but NOT in favor or voting to completely rescind the whole idea especially after we have spent ~400K already. They completely disregarded the history to date. I doubt the new council will bring it forward anytime soon.

        1. Michelle Millet

          The idea was specifically not rescinded, this point was clarified by the city attorney.

          As far as the council bringing it forward, while I share your concerns about this, I do believe their is enough support in the community and with some of our current and potentially future council members to bring this issue back to the table when more of the groundwork has been laid.

        2. Frankly

          The $400k is already sunk. That is not good justification for spending another $600k. $600k is $600k.

          Get the city finances in order and then come back to try again.

          1. Michelle Millet

            Same question to you DP, are you accusing the council of lying when they stated that they would bring this back?

          2. Davis Progressive

            no. they probably intent to do that, but these things have a way of falling off the shelf.

          1. Tia Will

            Michelle

            Did I say that ? I am aware that you do not agree with me on this.
            I do not believe that I have ever met anyone who is entirely consistent with their words and their actions. You asked me how I got to “no” from what happened. I answered honestly that I feel that their choice not to specify a time at which to consider effectively shut down any forward action on this at this time. A complete shut down of forward movement is, in opinion equivalent to a “no” at this time which is all I was saying.

            Can we not disagree on this without becoming accusational ?

          2. Michelle Millet

            My tone was not meant to be accusatory. I’m asking you sincere question. They said they planned on bringing this issue back, do you not believe them?

          3. Tia Will

            Michelle

            I have already answered your question.
            Maybe if I give you an example of what I have seen at multiple administrative meetings in my department my meaning will be clearer.

            The chief of my department tends to handle unresolved issues that are before us in two distinctly different ways.

            1. If here is an issue before us that cannot be resolved because of a lack of information, but in which she is strongly invested, she will proceed as follows.
            She will say, this is the information that we need before we can make a decision. Who is going to take this on ? This means that she anticipates that one of us will volunteer. Once she has her volunteer, she asks how long we will need. Then she sets a date on the agenda when she expects a report back on that item.

            2. Scenario two. There is an item in which more information is needed. The chief is not so deeply invested in it. She is likely to say something like,we need more information on this. We’ll come back to it at a later meeting. For me this is a clear signal that although she has stated we will come back to it, it has effectively been tabled unless one of us who feels more strongly about it takes the lead.

            The first to me is a demonstration of strong leadership and commitment to a goal. The second, not so much so. It isn’t that I don’t believe her, it is that I understand that she is not prioritizing this highly.

            I did not see any of those in the majority taking a firm, committed approach to moving this forward. The closest anyone came was Brett’s somewhat nebulous comment about him finding a volunteer to make the calls.
            I do not see this as a demonstration of strong, committed leadership in terms of moving this issue forward.

          4. Michelle Millet

            It isn’t that I don’t believe her, it is that I understand that she is not prioritizing this highly.

            Got it, thanks for clarifying. I see where you are coming from.

            My hope is that they people in this community who support public power will take a more aggressive and active role in promoting public outreach on this issue.

            If they are looking for volunteers I’m happy to stand at the Farmer’s Market and talk to people about the advantages of forming a POU.

            If the support for public power is strong enough in this community then I do not think think this issue is dead.

            And if that base of support isn’t there, then I agree this idea has lost it’s traction, and if this is the case then I don’t think any amount of money council spent would have changed that.

          5. Tia Will

            I agree with what you have written the way you phrased it. I have a different perspective. Sometimes I believe, especially in dealing with complex issues, that it is the responsibility of the council to build consensus and support. I do not see that the council chose to do that in this instance.

  2. Frankly

    Thank you Brett Lee for your good leadership on this.

    Perceptions are reality, and the perception going forward with a $600,000 study of a POU is that the council is tone deaf to the fiscal realities of the city. Your council peers should thank you for helping to polish their image.

    1. Tia Will

      “Perceptions are reality,”
      Perceptions are not reality any more than corporations are people.
      What makes reality are our actions. When our actions are not in alignment with our words, which do you think we should give more credence to. I am not guessing at motives. I am pointing out that there was an incongruence between the words that were spoken and the action that was taken. Since no definite time was scheduled to revisit this issue I will stand by my statements.

  3. DavisBurns

    No doubt PGE is very happy about this decision. I think they have already begun their campaign to convince people that we can “trust PGE” and it was an easy sell.

    1. Michelle Millet

      One of my concerns with moving forward with additional expenditures at this point is the content of the pushback we are seeing from some community members.

      Clearly segments of the community do not seem to understand or are not aware of the potential benefits that come with forming a POU.

      IMO we would have been doing PG&E a favor, and making their campaign to convince people that we can trust them easier, by moving forward on this before we have more information regarding what the process of forming a POU looks like and before better public outreach has been conducted.

  4. Davis Progressive

    john munn is already suggesting nefarious intent to bring this back? i’m just disappointed, as i expressed yesterday at the lack of leadership here and i don’t think this bodes well for other tough choices? are they going to back off on economic redevelopment when a group of open spacers push back? oh that’s right, they did.

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