State legislation that would allow Calaveras and Tuolumne counties to sell cheap electricity from New Melones Reservoir to businesses to grow the local economy has stalled at least until January in the legislature.
Assembly Bill 923, sponsored by the Assemblyman Frank Bigelow, R-O’Neals, who represents both Tuolumne and Calaveras counties, would amend the California Public Utilities Code to allow for expanded use of the energy in the two counties.
The bill missed a deadline to advance from the Assembly Committee on Utilities and Commerce and thus becomes a “two-year bill,” meaning it cannot be acted upon until the second year of the current legislative session, which begins in January 2014.
Calaveras Public Power Agency General Manager Dennis Dickman said efforts continue through Bigelow’s office to build support for the legislation.
“I don’t think we had enough lead time to get sufficient support” this year, Dickman said.
Dickman said Pacific Gas and Electric and other investor-owned utilities are the most important supporters to be sought.
Bigelow’s chief of staff, Kirk Kimmelshue, said more time is needed to educate committee members on the bill.
“It’s a complicated issue,” Kimmelshue said. “It’s not something that every community faces.”
AB 923 does not face any specific opposition at this point, he added.
A similar bill, AB 1350, sponsored by Assemblyman Roger Hernandez, D-West Covina, has also been held up in the Assembly Committee on Utilities and Commerce.
Calaveras and Tuolumne counties are allocated low-cost electricity, pegged at 6.2 cents per kilowatt-hour, in return for land given up during the 1970s to complete the New Melones Dam project. Market rates price electricity at about 12.5 cents per kilowatt-hour.
Local government gets access to the cheaper energy through the Tuolumne Public Power Agency and Calaveras Public Power Agency but almost half of the energy goes unused each year.
The agencies jointly hired a consultant for a $20,600 study on how to use more of the electricity last year. Paradigm Energy Consulting of Sacramento came back with a couple of options each county appeared to favor.
A direct access program allowing the counties to offer reduced-cost power to select businesses either relocating or expanding was held to have the greatest potential benefit. Yet it also requires legislative approval.
If approved, direct access could provide a real boost to a struggling region, said Kathleen Haff, deputy director of the Tuolumne Public Power Agency.
“Our rural counties are more impoverished than many other counties that are considered economically disadvantaged,” she said, pointing to higher rates of unemployment and subsidized lunch eligibility in schools.
Another possibility identified by the consultants is expanding eligibility for the reduced-rate power on a tiered plan to state and federal agencies operating locally. The rate for those agencies would be higher than that granted to local government but less than the market rate.
Dickman’s approach has been to pursue that angle in conjunction with the direct access push. CPPA members agreed to amend their joint powers agreement to allow for a tiered system in December 2012. Dickman said he is in continued discussions with state and federal agencies about coming on board.
Haff said her board has directed her to focus on direct access before turning to a tiered program but that may be reconsidered.
“We didn’t figure it would be as long of a process,” she said. “January will be the do-or-die date. (AB 923) will either be introduced then or die.”
A final option identified by Paradigm appears to be less attractive. Known as “community choice aggregation,” it allows cities and counties to administer power distribution to all residential customers within their jurisdiction.
According to Angels Camp City Councilman Bert Sobon’s written report submitted at Tuesday’s council meeting after attending a CPPA meeting on July 17, the consultants identified a projected benefit of a 2.5 percent cut to city residents’ electric rates.
“The question for the city is, ‘In view of the time to recover up-front cost to set up and the continuing cost of administering a city electric utility department, is there a desire … to obtain more information about this option?’” Sobon wrote.
Angels Camp City Administrator Michael McHatten said the matter will come before the full council for discussion as an agenda item before the CPPA board meets again on Oct. 16.
Haff said CCA is a no-go for Tuolumne County.
With “a lot of built-in extra costs,” a CCA program tends to provide an end cost to users higher than their current bills, she said.
She added that a CCA program in Marin County, the only existing one in the state, has attracted customers with greener energy, but not lower bills. Sonoma and San Francisco counties are also in the process of forming CCAs.
Furthermore, a CCA cannot reverse its offering to residential customers.
“It’s forever, not short-term contracts like you can offer with a second tier of users,” Haff said. “You can’t take it back when you need for your original (TPPA or CPPA) members.”
Dickman said a CCA doesn’t pencil out for Calaveras on a countywide basis but the city of Angels Camp may be small enough that it could bring a benefit without overwhelming demand for the low-cost power.