Irvine Decides On Its First Electricity Customer: Itself

In a strategic move to stake its claim as a municipal electrical utility, Irvine voted Monday to sign up its first customer -- a local wilderness center that the city has yet to build.

The unusual arrangement is part of a larger battle between cities that want to provide their own electricity and private utilities that argue such arrangements could hurt their revenues.

Irvine officials said they rushed their fledgling utility into existence to beat a state Public Utilities Commission vote Thursday that is expected to make it more expensive for municipal utilities to operate.

The city council voted 4 to 1 to build a city-operated wilderness center at Quail Hill, a patch of dedicated open space off the San Diego Freeway near University Drive, and to provide it with electricity.

Initially, it won’t be more than a trailer and a generator.

“It demonstrates our resolve,” Irvine Mayor Larry Agran said before Monday’s special session. “It shows we are not just talking about it; we have the intent of pursuing this until we decide otherwise.”

Irvine’s venture into the world of municipal utilities is rooted in California’s 2001 power crisis. Following that year’s brownouts and rolling blackouts, Irvine and dozens of other cities created their own utilities in hopes of shielding themselves against market instability -- and to add another source of cash.

But for the most part, these public power companies have existed only on paper, without customers, staff or electricity, as cities continue to study the feasibility of such ventures.

Irvine plans to decide by late August whether to go forward, but in the short term the city voted to make itself its first customer.

With that simple move, Irvine will have a running utility company before Thursday when the PUC is to consider the issue of “exit fees.”

New utilities that begin operating after Thursday might be required to pay millions in fees for leaving their present electricity provider -- in Irvine’s case, Southern California Edison.

Irvine, which hopes to provide electricity to new developments planned in the northern part of the city, says it is unfair to charge new customers for past mistakes by the state.

Not everyone is convinced the city should delve into electricity.

“Nobody, myself included, knows anything about how to run a utility,” said councilwoman Christina Shea, who cast the dissenting vote Monday. She took issue with the city becoming its own first customer.

“I don’t want to call it a scam,” Shea said, “but I don’t know what else to call it. We are pretending we have a utility ... in order to create one.”