Moreno Valley Officials Say Edison Is Running a Power Play

Southern California Edison has contributed more than $1.3 million to an initiative that would place severe restrictions on Moreno Valley’s new municipal utility, which will provide electricity to all new homes and businesses in the city.

Officials at Edison, which provides power to nearly all current residents in Moreno Valley and had criticized the creation of the municipal utility, said the company merely is supporting its customers who fear the new city agency will drain Moreno Valley’s finances.

However, consumer advocates and city officials said Edison was trying to eliminate the competition, just as it had in cities across the state.

“It dwarfs any campaign ever in the history of Moreno Valley,” said longtime Councilwoman Bonnie Flickinger, chairwoman of the effort to defeat the measure.

After the energy crisis of 2001, when longtime municipal utilities such as those in Riverside and Anaheim avoided the price hikes that hit many Edison customers, Moreno Valley was one of several California cities that started its own utility.

The City Council voted to create the utility to serve future growth in the city, roughly half of which is undeveloped. Establishing its own utility also would allow the city to generate revenue and use discounted power rates to attract businesses, supporters said. Riverside lured away a Target store by offering massive energy discounts.

Moreno Valley’s utility began operating in February and has hundreds of customers. That number is expected to top 1,000 by the end of the year.

Measure N would place restrictions on the utility, forbidding money from the city’s general fund to be spent on it; requiring it to maintain a reserve account equal to 20% of the agency’s operating expenses; forbidding the utility to spend its profits for five years, and then only with voter approval; and requiring it to charge similar customers the same rates.

Opponents of the measure said the restrictions negate the very reasons that the city created the utility: to increase city revenue and offer incentives to businesses.

Proponents said the limits were necessary to protect the city’s finances. “It builds in several safeguards to protect the taxpayers,” said Arthur Murray, co-chairman of Moreno Valley Residents for Responsible Utility Service.

Murray said city officials created the utility secretively -- ignoring public opposition -- and had committed millions of dollars that could be spent now on parks, fire and police. City officials said that they had spent less than $900,000 on the utility and that future spending had not been decided.

“The utility business is volatile,” Murray said, citing blackouts and the Enron meltdown. “The city is not equipped to go into this kind of business .... PG&E;, a multibillion-dollar company, went bankrupt. Edison was teetering on bankruptcy. It’s just too risky.”

Murray’s organization has been bankrolled by Southern California Edison, which has contributed more than $1.3 million to the Measure N campaign.

Edison spokesman Charley Wilson said the company was approached by residents concerned about city finances who felt left out of the city’s decision to create a utility.

He disputed critics’ assertions that Edison was trying to eliminate competition. “If Edison was interested in limiting or getting someone out of the business, we wouldn’t have agreed to this kind of initiative, which is about rules and how to operate,” Wilson said. “We would have drafted an initiative that said, ‘Hey, kill it.’ ”

Critics called the company’s efforts “blatantly anti-competitive” and said investor-owned utilities had spent large sums limiting or eliminating utility efforts in San Marcos, San Francisco, Corona and elsewhere.

“What they’re doing here isn’t about Moreno Valley,” said Michael Shames, executive director of the Utility Consumers Action Network in San Diego. “Edison is effectively shooting a cannon across the bow of any city that would pursue a greater role in energy policy. This is a warning shot for all cities in Edison’s territory.”