County to Explore Possibility of Creating Own Power Utility

Faced with increasing uncertainty about the state’s energy supply, county supervisors Tuesday instructed public-works staff to explore whether the county should join Los Angeles and Anaheim in having its own power utility.

The energy crisis and corresponding rate hikes have forced the county to increase its energy budget to more than $18 million a year, an increase of 40%.

“I think we need to look at the possibility of what it takes to create a utility,” said Supervisor Chuck Smith, who promoted the idea among supervisors at Tuesday’s board meeting.

According to Smith, the state and Edison have put the county and its businesses and residents into an impossible position, and it may take an extraordinary idea to protect taxpayers.

“I don’t feel comfortable relying on Edison and the state,” Smith said. “If [a publicly owned plant is] not explored, we’re doing a disservice to the businesses and the economy in the county.”

But although county officials pointed to Anaheim as an example of a successful municipal utility, even Anaheim’s independence is limited. It’s still connected to the state power grid, making it vulnerable to rolling blackouts in Southern California.

“Where we shine is in our rates, especially our residential rates,” said Melanie Nieman, Anaheim Public Utilities spokeswoman. “Prior to the latest rate hikes by the [Public Utilities Commission], our rates were 20% to 25% lower than surrounding communities. Now the spread is even larger.”

No rate increases are planned for Anaheim’s customers because of the utility’s long-term power contracts, its partial ownership in power plants elsewhere and the fact that it generates electricity at its own plants.

Anaheim generates about 28% of the power supplied to its 123,000 customers at plants it owns entirely or in part. But the city buys the rest of its power, and that binds it to the state’s energy fortunes.

Los Angeles’ Department of Water & Power is slightly different because it is the main supplier and controls its area, which means it is not subject to rolling blackouts, spokesman Eric Tharp said. The DWP also supplies power to Burbank and Glendale.

The DWP’s residential rates are similar to Anaheim’s, but its customers enjoy a 20% to 30% reduced rate compared with other communities.

Bob Wilson, Orange County’s Public Facilities and Resources Department management services director, said the plan is to study the steps necessary to establish a utility, then report back to the board.

“Our intent is to go and put the information together as soon as we can,” Wilson said.

The Board of Supervisors also approved several other measures to lower the county’s power bill. Among them: promoting conservation, upgrading old lighting systems, conducting building-by-building power audits and buying microturbines to generate electricity.

In other business, supervisors approved $11 million in revenue bonds issued against the county’s general fund, representing the first sale of bonds by the county since the 1994 bankruptcy.

“It’s a milestone,” said Gary Burton, the county’s chief financial officer. “And with the county’s good credit rating, we don’t expect any trouble selling the bonds.”

The bonds are to generate revenue to buy telecommunications equipment for all agencies and will be paid back over 7 1/2 years.