Thirteen local governments in the San Joaquin Valley seeking to control their electricity supply suffered a blow July 31 when the city of Fresno pulled out of the deal. Fresno would have been the biggest “community choice” aggregator among them, accounting for about half the load of a new joint powers authority. However, the rest of the municipalities vowed to proceed with their plans. On a tight 4-3 vote, the Fresno City Council decided against participating in the public power authority. The munis hoped to replace Pacific Gas & Electric and Southern California Edison as the electricity providers for 800,000 people. Council members who opposed the arrangement--which promises cheaper power--objected largely to increased air pollution from a planned natural gas-fired project. That facility was set to supply a large chunk of the power to the group. The region suffers from serious air quality degradation and is considered a non-attainment area under the federal Clean Air Act. “There were too many questions that needed addressing,” said Gregory Barfield, chief of staff to council member Cynthia Sterling, who voted against the community choice plan. “We are still viable,” said Cristel Tufenkjian, Kings River Conservation District spokesperson, of the community choice aggregation (CCA) program. The district is the mover and shaker behind the plan to switch from private utility service to regional public power. The plan arose from the ashes of the 2000-01 state energy crisis. Edison and PG&E until recently have been publicly neutral on the issue of community choice aggregation. They supported legislation passed in 2002 that allows cities and counties to consolidate their electricity demand. However, neither utility wants to lose customers. They warned their affected ratepayers about possible adverse impacts of moving to community choice, including price volatility. “The council majority vote was in the best interest of the people of Fresno,” said PG&E spokesperson Jeff Smith. The two utilities will continue to provide distribution, metering and billing services to the region. Charley Wilson, Edison spokesperson, said, “We will continue to work with the authority on implementation issues.” The Fresno City council staff recommended joining the power authority on grounds the new arrangement would provide local choice, “price stability,” and promote local renewable energy supplies. Implementing the San Joaquin community choice plan was dependent on nine of the 14 eligible local governments signing an agreement by August 3. It will move ahead because Fresno was the only city to bow out. However, the large city’s withdrawal reduces the coalition’s expected annual load from 5,218 GWh to about 3,300 GWh-- likely raising the cost for the participating ratepayers. The next step for the power authority is to assess whether it is economically beneficial to move ahead with the proposed 500 MW power project near Fresno, according to Tufenkjian. Under an agreement between the conservation district and the financial institution Citigroup, the latter will initially provide power to the authority from the market. The authority also plans to tap into local renewable resources, including solar power (Circuit, Feb. 9, 2007). In June, the Kings River district put out a request for proposals for up to 400 MW of renewable energy. The California Public Utilities Commission approved the San Joaquin communities’ CCA implementation plan April 30. The power authority vowed to cut power rates by 5 percent in its first year of business, an estimated savings of about $786,000 in 2008, according to the Fresno City Council staff report.
