Plan to shift to municipal utility goes before voters

The state’s energy crisis of 2000-01 may be over, but lingering consumer frustration has contributed to a push by several cities in one Northern California county to abandon investor-owned Pacific Gas & Electric Co.

California’s failed experiment with energy deregulation, marked by blackouts and soaring utility rates, led PG&E; and other utility giants to rack up billions of dollars in debt. Municipally owned utilities emerged relatively unscathed.

“When the energy crisis hit, public power started looking like a really good thing,” said Dan Berman, a Davis resident and co-founder of the Coalition for Local Power, an organization that favors dumping PG&E;, a unit of San Francisco-based PG&E; Corp.

Berman and others started a campaign to get Davis to break away from PG&E;, the state’s largest utility. The effort evolved over several years and grew into a ballot initiative that will go before voters in Sacramento and Yolo counties today.

At issue is whether the Sacramento Municipal Utility District should be allowed to annex Davis and other parts of Yolo County, including the cities of West Sacramento and Woodland. PG&E; would lose 70,000 customers.

The takeover effort could spread through PG&E;’s territory in Northern California if it’s successful, Yolo County Supervisor Mariko Yamata said.

“Once people realize the savings they can achieve with a public utility -- as opposed to an investor-owned utility that only cares about maximizing their profits -- everyone will want to municipalize,” Yamata said. “This could spread to the Bay Area and elsewhere, and that scares PG&E.;”

PG&E; has spent more than $10 million campaigning against the annexation, which will appear on the Yolo County ballot as Measures H and I and on the Sacramento County ballot as Measure L. All three measures must be approved for the switch to happen.

As a publicly owned utility, the Sacramento Municipal Utility District is not allowed to spend money on political campaigning.

Officials with the Sacramento utility say the acquisition would cost $110 million and would take five to 10 years to pay off. During that time, Yolo County customers would have to settle for rates only 2% less than they pay now.

The pro-annexation campaign promises that Yolo residents would begin seeing big savings after the acquisition costs are paid off.

The Sacramento utility’s rates, which historically have been lower than PG&E;’s, currently are about 30% less -- the widest gap in 20 years.

PG&E; contends that a takeover would cost more than $500 million and thus would be too expensive and risky.

“SMUD wants Yolo customers to invest millions of dollars to buy PG&E;’s property and equipment,” said a recent mailer by the Coalition for Reliable and Affordable Electricity, an anti-annexation committee funded by PG&E.; “But Yolo ratepayers won’t see any benefits from the financial risk we’re taking.”

Some residents view PG&E;’s campaign as an attempt to make voters forget the company’s turbulent history.

“Public power has been much more dependable,” said David Thompson, a Davis resident. “We’re being asked not to trust SMUD by a company that had the largest bankruptcy in California history and that initiated and asked for the most costly utility plan that’s ever been promoted.”

The takeover would help the Sacramento utility spread its costs and become more efficient, said Bill Slaton, a member of the utility’s board and chairman of the campaign promoting Measure L in Sacramento County.