Guest Editorial: Making the Grades

By Tom Habashi Utility Director, City of Roseville As I watch the California investor-owned utilities? behavior since the energy crisis, I?m reminded of a child who flunked a subject and protests that the ?A? student cheated. ?No fair!? they cry, whining that the municipal power agencies have unfair advantages in low-cost financing and insulated customer bases. Never mind that the state?s three private utilities charge too much, don?t provide a reliable product, can?t plan, and simply abandoned their obligation to serve the minute the Legislature opened that door for them in 1996. They demand to be coddled and cajoled, forgetting that when it came time to deal with the aftermath of the energy crisis, the investor-owned utilities (IOUs) expected their customers?not their shareholders?to bear the cost. Most recently, the private utilities? hue and cry has been over annexation of undeveloped land to a city served by a municipality, such as the 3,100-acre parcel recently annexed by the city of Roseville. The greenfield land already annexed by Roseville is expected to provide homes for 10,000 families when it is developed, with Roseville Electric paying for and building distribution infrastructure. Recently passed SB 772 attempts to recoup PG&E?s losses from the energy crisis and costs incurred from long-term power contracts negotiated on behalf of PG&E by the state. However, the long-term pacts served PG&E ratepayers and no one else. Just this month, an e-mail the Department of Water Resources received from PG&E surfaced in evidentiary hearings at the California Public Utilities Commission, revealing that the forecast on which DWR relied in making its power purchases did not include nonexistent PG&E customers, in particular those in areas annexed by Roseville and other municipalities. Though Roseville falls within the exempt category prescribed in SB 772, in larger greenfield developments, the CPUC might interpret the new law as requiring future customers to pay an exit fee for energy purchases and infrastructure investments PG&E never made and for services it never delivered. This strikes me as being along the line of demanding a monetary thank-you note for a present that was never given. All greenfield load should be exempt from exit fees. Regardless of the current issue, the problem with IOU service remains a question of motivation and underlying value. Roseville Electric and other munis exist to serve customers. Customers in Roseville are our first and only priority. PG&E and other IOUs serve their customers after they have satisfied shareholders, bankers, and state regulators. Munis charge only what they need to cover the cost of buying power and maintaining a dependable delivery system and do not reap a profit to boost earnings per share. Any funds we collect that exceed our operating costs go back to our customers through lower rates, system improvements, rebates on energy-saving measures, and other initiatives that directly benefit our community. Transparency, accountability, and disclosure are now becoming required in the corporate world, driven by the Enron and WorldCom debacles. In our world, an open-book policy is the way we?ve always done business. Our citizens have access to all meetings and records, and they have the ultimate voice through their vote. The munis? open-door, open-book policies stem not from regulations but from an inherent desire to be responsive to customers. At Roseville Electric, we don?t need to restore public confidence?we never lost it. Municipalities offer customers other advantages as well. Local control of electric utilities gives our customers a voice, and it?s one we listen to. If our customers are upset with rates or some aspect of service, they can talk to us directly. If they are unsatisfied after talking with us, they can appear before the Roseville City Council and be heard. I can attest that the city council requires us to provide ample documentation to support our actions or position. Finally, being responsive to customers is not a today-only notion. It includes taking responsibility for resource planning, load forecasting, and risk management so that we continue to serve customers with rates they can afford to pay and reliability they can depend on. We see our plans to build a power plant in our community as part of that responsibility. While our community is growing and may expand with future annexations like the one just completed, we?re building the power plant to serve our existing customers. During the last energy crisis, we were fortunate that the contracts we had in place allowed us to avoid any cost impact. But we?re not willing to take that risk again. Local generation not only ensures reliability to our customers, it makes us a good neighbor by ensuring that other communities don?t carry the burden of building power plants to serve Roseville. We?re also including a 1 MW solar generation facility on the power plant site. Developing photovoltaic generation fulfills the renewables portfolio standard we voluntarily set for ourselves in keeping with the spirit of state legislation governing IOUs. I wonder whether, in the reverse position, the IOUs would do the same. We?re building the photovoltaic facility not because we have to but because we believe it?s the responsible thing to do and it supports the many Roseville Electric customers who choose to purchase their power through our green energy programs. We have earned the equivalent of an ?A? grade in customer satisfaction. It?s a shame the IOUs prefer whining over working hard for their customers. Perhaps instead of sending them to the principal?s office for an attitude adjustment, we could send every IOU executive to Fresno. For a few hot July days, they could live with a grandmother scraping by on Social Security who is unable to pay IOU rates for air conditioning. Not only would that give the executives something worth whining about, I suspect it wouldn?t take more than a day or two to bring about a radical reassessment of their views on power for the people versus power for investor returns.

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Guest Editorial: Making the Grades

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