Water District Wins Savings Agreement

After an attempt to win lower electricity rates in the newly deregulated California energy market seemed to short circuit last week, the Calleguas Municipal Water District is back in the game.

Los Angeles-based New Energy Ventures on Monday agreed to guarantee the agency a savings plan.

New Energy Ventures has agreed to give the district and other area water agencies a 5% discount on electricity for six months, followed by a cost-sharing program for the remainder of the year.

Calleguas general manager Donald Kendall had signed a contract with the company for the same discount last year. Claiming the company had refused to honor the agreement, he threatened to file a complaint with the state Public Utilities Commission last week.

“I don’t think they would have done anything if we hadn’t made this an issue,” he said. “But this looks pretty good, and if it saves money, it’ll be something I can take back to the board for their approval.”

The plan would guarantee a 5% discount on power used by the district during its peak period between May and October, according to Dan Smith, executive director of the Assn. of California Water Agencies. The association is affiliated with New Energy Ventures.

For the rest of the year, the district would agree to a cost-sharing program in which certain fixed costs, such as distribution, would be purchased by the district at wholesale prices.

“This is an indication of why a deregulated energy market is beneficial,” Smith said. “There’s room for suppliers and customers to work together to solve these kinds of issues, which ends up helping everyone.”

There are no estimates on how much Calleguas customers will save with a new power provider, Kendall said.