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VCE takes steps toward creation of a locally owned and operated public utility

VCE(From press release) The board of Yolo County’s clean power agency has submitted a $300 million bid to purchase Pacific Gas & Electric’s lines, poles and other electricity distribution assets within Yolo County.

The purchase would enable the creation of a locally owned and operated public utility that the board has concluded would result in a more successful, efficient and safe electricity system.

Following the announcement this summer of its intent to examine the purchase of local PG&E assets, and after months of study and review with expert consultants, the Valley Clean Energy board of directors submitted a non-binding offer Friday, Oct. 18, to purchase PG&E’s assets.

Valley Clean Energy’s offer would ultimately be subject to approval by the federal court handling the PG&E bankruptcy case.

Valley Clean Energy is a public agency that currently purchases electricity under a joint powers agreement for the cities of Woodland and Davis and unincorporated Yolo County, but relies on PG&E’s distribution system to bring that power to its customers.

Purchase of the local PG&E power poles and lines would allow for the creation of a Yolo County-based public utility similar in nature to those found in Lodi, Roseville, Sacramento (SMUD) and other communities across the state.

Circumstances surrounding PG&E’s January bankruptcy filing have created this unique opportunity to reimagine a more successful, efficient and safe electricity system in Yolo County and other areas of PG&E’s service territory.

“We have taken an important step toward local energy independence by submitting an official non-binding offer letter to PG&E of $300 million for the acquisition of PG&E's power delivery infrastructure in Yolo County,” said Valley Clean Energy Board Chair Tom Stallard, a member of the Woodland City Council. “Our analysis was conducted by seasoned professionals and we believe the offer is competitive, fair and equitable.”

Valley Clean Energy’s efforts are supported by recent statements by Gov. Gavin Newsom, who is encouraging local jurisdictions to pursue acquisition of PG&E’s local electrical lines. In reference to San Francisco’s recent offer to buy PG&E assets, the governor was quoted as saying, “I back more competition. I am very specifically encouraging others to come into this space and to make some bids. We want to create a competitive space — and all of it with an eye on different approaches.”

PG&E’s bankruptcy protection filing in January 2019 created an opportunity for community choice energy agencies such as Valley Clean Energy, along with other public agencies, to determine whether a “public power” electric service approach might provide greater control, benefits and safeguards to California communities.

“The transfer of PG&E’s electricity assets will aid PG&E’s financial stability and contribute to fire victim recovery settlements while helping Valley Clean Energy expand upon its efforts to provide reliable, safe, clean and affordable electricity to the residents and businesses of Yolo County,” added VCE Board Vice Chair Gary Sandy, a member of the Yolo County Board of Supervisors. “Bottom line, our offer makes financial and environmental sense.”

Added VCE Board Member Lucas Frerichs, a member of the Davis City Council, “Control of the power poles and lines in Yolo County would allow us to make local investment decisions that could mean a safer electricity system and provide benefits for both customers and the environment.

“We want this process to be as smooth as possible and will work with all concerned parties to ensure that transitioning from an investor-owned model to a municipally owned utility is beneficial to consumers, businesses and employees who would be served by our new utility.”

The decision to pursue acquisition of PG&E’s electric distribution assets is not unique to Valley Clean Energy; the city and county of San Francisco announced a $2.5 billion offer on Sept. 9 for PG&E’s infrastructure within its geographic boundaries.

Additionally, on Sept. 3, the South San Joaquin Irrigation District — a water agency in the heart of the state’s agricultural region that tried to buy PG&E distribution facilities in 2006 and 2016 — formally renewed its offer to purchase PG&E distribution system assets as part of the current bankruptcy proceeding.

And on Thursday, Oct. 17, San Jose Mayor Sam Liccardo announced his proposal to investigate the formation of a public utility for his city in the wake of the recent PG&E power shutoffs.

While the cost and responsibility of operating and upgrading an electrical distribution system is significant, many proven examples indicate that public ownership of power facilities is practical. A total of 54 public power utilities currently serve almost one-third of Californians.

Valley Clean Energy procures power for more than 150,000 residential and commercial electricity customers in Woodland, Davis and unincorporated Yolo County. However, customers currently pay PG&E for the distribution of that power to their homes and businesses using the infrastructure Valley Clean Energy has now offered to acquire.

Having full control over both electricity distribution and generation can help achieve Valley Clean Energy’s stated goals of providing cost-competitive clean energy, product choice, increased energy efficiency and price stability.

The PG&E bankruptcy process does not have a specific timeline but is expected to conclude in 2020. In the meantime, using other existing publicly owned utilities as models, the Valley Clean Energy board will consider possible agency structure, operational and financing options.

Valley Clean Energy is a not-for-profit public agency formed to provide electrical generation service to customers in Woodland, Davis and the unincorporated areas of Yolo County. Our mission is to source cost-competitive clean electricity while providing product choice, price stability, energy efficiency, greenhouse gas emission reductions and reinvestment in the communities we serve. For more information about Valley Clean Energy, visit www.valleycleanenergy.org or call Jim Parks, VCE’s customer outreach and programs director, at 530-446-2750.

Comments

Todd Edelman

This is a nice surprise!

* Curious about other incorporated areas like West Sac and those in the northwest county.
* Gas will still be PG&E?
* What does SMUD do for its customers who want to go solar, including renters?
* What about the huge PG&E yard next to Old East Davis that should be re-developed for mixed use? Does the VCE purchase include all the vehicles and equipment, buildings? If PG&E still does gas will they need to share the facility?
* A great branding idea would be: VCe-bike share! Taking this out of the hands of Uber is just like taking the power supply out of the hands of PG&E!!!

Nancy Price

To date, there's been no apparent discussion by the County's city councils nor the County Supervisors on the opportunity, now that AB 857, the California Public Banking bill, was signed by Gov. Newsom. Both Assemblymember Cecila Aguiar-Currey and Sen. Dodd voted for AB 857.

This bill states that 10 banks can be formed over 12 years. Oakland, SF, LA and San Diego each are already working on creating a municipal bank. Santa Rosa is looking to form a regional bank with the northern counties. So, now's it's time to discuss the merits of forming a regional bank along with Sacramento and, perhaps, Stockton or even wider areas.

In any case, it's time to have this discussion and describe the merits of a public bank that could help in funding the VCE purchase, though, perhaps we don't want to wait that long. But also a regional public bank could fund affordable housing, transportation infrastructure and other local and county needs.

Time to advance this discussion and not miss out. I have expert friends working on public banks now that would be glad to come to speak in Davis.

Go to CPBA California Public Banking Alliance https://californiapublicbankingalliance.org

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