Voters Side with Moreno Valley Muni Expansion

A measure to restrain Moreno Valley from expanding its fledgling municipal greenfield utility appears to have narrowly failed in the November 2 election. However, an ongoing count of provisional and absentee ballots by the Riverside County registrar of voters could change the outcome. Measure N?which was backed by Southern California Edison?failed on a vote of 51 to 49 percent, or by just 526 votes, as of press time. It would have prevented the city from imposing any tax to finance the utility, using general funds to subsidize its operation, or transferring any utility revenues to the city?s general fund. The city sees the new utility as an economic development tool with the potential to swell strained city coffers. Assuming that the measure ultimately is defeated, the city plans to expand the system into new construction in undeveloped areas, known as greenfields, in the years ahead. ?We expect to have 1,000 meters by the end of the year and 2,500 by this time next year,? said Tom Breitkreuz, enterprise services manager for the city. ?We will continue to expand in the next 10 to 15 years.? ?Regardless of the outcome, the risks of starting a new electric utility today are substantial,? said Charley Wilson, Edison spokesperson. Spikes in wholesale energy prices could create a potential liability the city could cover only by tapping general fund money, Wilson claimed. That could leave basic police, fire, and other city services vulnerable to sudden cuts. The new system serves mostly residences but is beginning to serve both industrial and retail customers, including a new Serta mattress factory and several new big-box retailers. By the end of the year, the city estimates it will supply 2 MW of power to its customers. That power is priced on a par with Edison?s, Breitkreuz said, but the city council has the option of offering electricity rebates as a new business incentive. Moreno Valley formed the greenfield utility early this year. ENCO Utility Services operates the system, which purchases power from Sempra Energy. Edison continues to serve established areas of the city of 155,000. Given the low price of electricity that the Los Angeles Department of Water & Power and other munis maintained during the energy crisis, several California cities have examined establishing their own municipal utilities. However, Moreno Valley was one of the few that managed to move forward. ?That model for Los Angeles is fundamentally different than the greenfield model, where you don?t own equipment or control generation,? Wilson said. For instance, he noted that the City of Industry formed a greenfield utility for a new 450-acre business park but wound up losing $800,000 the first year because of higher-than-expected wholesale energy costs. A spokesperson for Moreno Valley said such a loss is unlikely there because it pays Sempra a fixed price for power and is able to minimize its need to either purchase or sell power on the spot market.

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Voters Side with Moreno Valley Muni Expansion

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