Southern California Edison officials are criticizing a Sacramento consulting firm's study that says Culver City could boost its revenues if it takes over the utility's local franchise.
"The study is long on unrealistic assumptions and short on identifying the very real risks to Culver City in attempting such a venture," said Edison spokesman Fred Trueblood.
In a $24,000 feasibility study commissioned by the city, R.W. Beck & Associates concludes that a municipal electric service could generate more revenue for the city than the nearly $600,000 in annual franchise fees and property taxes that the city collects from Edison.
Mayor Albert Vera, who last September proposed that the city look into the utility purchase, says such additional revenue could be used to improve policing and other services.
The City Council will discuss the report's findings during a July meeting.
Council members Mike Balkman and Ed Wolkowitz have said they oppose the proposal. Vera and council members Steven Gourley and James D. Boulgarides voted last November to study the matter, but have not decided whether they support the plan.
Under the proposal, the city would purchase the two Edison distribution stations in the city. In its report, Beck & Associates says this could be financed by issuing 25-year bonds. The initial cost of the buyout, including legal costs and engineering, would be $2.5 million, the report says.
Power supply costs, considered the single greatest expense, were not estimated, although the report "assume(s) that initially the city would purchase power from Edison." Initial staffing of the utility company could be provided by outside contractors, and later shifted to city employees, the report says.
Edison officials, who acknowledge that they have not reviewed the report in detail, say Beck & Associates made serious omissions.
"They significantly undervalued the Edison facilities," said Trueblood, adding that the estimates of start-up costs were too vague.
Trueblood said the city will be forced to pass these and other costs on to residents in the form of higher utility rates.
Dean Park, principal engineer with R.W. Beck & Associates, defended the report, saying it comprehensively addressed all aspects of starting up a municipal utility. Park said he invites Edison to submit questions and comments about the study.