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There are serious issues at stake in California?s energy debate. The Legislature and governor have been working for months to arrive at a consensus vision for California's future energy marketplace. The multiagency Energy Action Plan has formed a framework that is being further developed almost every day. Multibillion-dollar decisions on whether and where to build power plants, transmission facilities, and other infrastructure in California hang in the balance. With all these important decisions being weighed, the September 17 "Guest Juice" column by Roseville Electric director Tom Habashi was surprising in the level of misinformation it contained and in how irrelevant it was to the work at hand. Perhaps the best approach is to rebut Habashi's myths head-on: Cost of the Energy Crisis. Habashi claims- wrongly-that only investor-owned utilities passed through higher energy costs to customers during the energy crisis. In fact, despite his disingenuous claim that Roseville Electric "avoided any cost impact" from the crisis, the utility did pass along higher costs to customers by raiding a reserve surplus it had generated and by increasing rates. Further, during the crisis, many public power rates increased dramatically, according to published reports: The Lassen Municipal Utility District increased rates twice, for a total of more than 70 percent; the Merced Irrigation District?s average rates went up by approximately 75 percent between 2000 and 2003; the Sacramento Municipal Utility District and the Modesto ID spent from a reserve of overpayments, then raised rates; and the list goes on. Obligation to Serve. As part of our obligation to serve, PG&E is required to ensure not only that power is available to serve customers that exist today, but that there will also be power to serve expected new customers. In order to provide that future power, investor-owned utilities must commit today to owning new generating facilities or enter into contractual relationships with energy producers. While the costs associated with these actions are not paid today, they are encumbered today in order to ensure future reliability. Cost-Shifting Attempt by Munis/Irrigation Districts: During the energy crisis, when investorowned utilities were unable to purchase electricity for their customers, the Department of Water Resources assumed that responsibility. Like the utilities, DWR purchased sufficient energy to meet the demand of existing and expected new customers within the utilities' service territories. DWR entered into longterm power contracts under the expectation that it would be procuring for all new load within the utilities' service areas. Mr. Habashi must have been in the wrong hearing room at the CPUC, as the record shows that none of the forecasts DWR used when it made its contract decisions included bypass associated with new load. Amazingly, this past summer, California's publicly owned utilities attempted to make an end run around fair energy policy by pushing legislation that would have allowed future customers to avoid paying DWR and other costs if they locate within utilities' service territory where a publicly owned utility is seeking to offer new or expanded service. This legislative maneuver was a blatant attempt to allow selected customers to evade their share of DWR's costs, thus shifting costs to utility customers. California companies and residential customers that have weathered the energy crisis should not be unfairly burdened with additional high energy costs because competing companies locating in the same utility service territory, but served by a new or expanded local publicly owned utility, can avoid paying their fair share of these costs. Luckily, this legislative effort failed. Rate Comparisons: The notion must be debunked that all public power entities have rates lower than their investor-owned counterparts. The reality is that many public power entities have higher rates than their investor-owned counterparts. In fact, in 11 states, public power residential rates are the same as or higher than those of investor-owned utilities. Prior to the energy crisis, PG&E's rates were below those of about 40 percent of California municipal utilities. Mr. Habashi tends to gloss over advantages possessed by public power entities that might explain rate advantages, such as tax-exempt status. Environmentally Friendly Energy: PG&E has voluntarily committed to exceeding California's renewables portfolio standard (RPS) for its power procurement, evidence of our long history of developing, generating, and purchasing renewable power. PG&E supported legislation in 2002 requiring that 20 percent of its customers' power needs be met from renewable energy by 2017, and supported accelerating the target to 2010. In sharp contrast, public power entities have been routinely criticized for insufficient efforts to support renewable energy and have fought to be exempt from the same green power standards utilities must follow. I noticed that Roseville obtains a relatively high level of its power from coal-burning plants, about three times the level of PG&E. Roseville might take note of the recent flap over a fellow muni, the Los Angeles Department of Water & Power, and its derailed plan to purchase more power from coal-fired plants. Self-Serving Arguments: Habashi wrote glowingly of his utility building a power plant "in our community," offering that "it makes us a good neighbor by ensuring that other communities don't carry the burden of building power plants to serve Roseville." This lofty rhetoric is at odds with the facts, since the power plant in question will be located outside of the Roseville city limits. Moreover, if publicly owned utilities wanted to be such good neighbors, they would not have adamantly resisted being required to abide by the same requirements to include planning reserves as apply to investor-owned utilities. I hope this sets the record straight. And I hope it allows us to put the frivolous arguments aside and focus on the best means to address our state?s collective energy needs in the future. The last crisis showed clearly that shortages, high prices, and economic damage don't stop at the city limits. We would all do well to remember that lesson. John Newman is director of governmental relations for Pacific Gas & Electric.

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