Edison, SDG&E Seek to Squelch New Munis

Southern California utilities are moving to waylay fledgling municipal utilities in the cities of Moreno Valley and Chula Vista. The local elected officials are pursuing public power to boost local control and economic development. Earlier this summer, the Moreno Valley City Council turned down a petition to impose its own financial restrictions on its new greenfield utility. That action cleared the way for a group of local residents, with the help of $670,000 from Southern California Edison, to place on the November ballot their already qualified measure that would constrict the city?s financial options. ?The utility would continue but would be limited if Measure N passes,? said Tom Breitkreuz, who oversees the new operation for the city. The proposal would prohibit the city from subsidizing growth of the utility from its general fund, prevent the transfer of utility revenue into that fund, and also prohibit the imposition of any utility tax by the city. A staff study requested by the city council ( Circuit , May 28, 2004) concluded that the measure ?would severely hamper the successful implementation of the two major policy goals...to provide economic development incentives to attract desired businesses and to establish a new funding source to the general fund to enhance city services.? Meanwhile, Chula Vista?s city council has called on its staff to develop a request for proposals to operate a new greenfield utility, according to Liz Purcell, communications manager for the municipality. The city is aiming to reduce electricity costs for residents and local businesses. In response, San Diego Gas & Electric fired an immediate shot over the bow, warning that any city move to take public control over power will spell economic doom, not boom. Claims by consultants to the city that a municipal utility would be able to purchase power for 5 percent less than SDG&E can are unfounded, said Ed Van Herik, spokesperson for the investor-owned utility. He added that the city has no backup plan in the event of a power outage. SDG&E outlined its critique of the plan in a report sent to the council earlier this month, which concluded that the city could lose millions of dollars a year. ?It?s not a consultant who has to answer these questions,? said Van Herik, ?it?s the mayor and the council.? City consultants for the municipal utility plan are preparing a response to SDG&E?s critique, Purcell said.

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Edison, SDG&E Seek to Squelch New Munis

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