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Council considers running its own electric company
As Californians wait for the energy crisis to send utility rates through the roof, the City Council is looking into the possibility of running its own electric company.
On the recommendation of the Commission on Aging, the City Council adopted a resolution to have the Energy Commission thoroughly examine the possibility of the city becoming an electricity provider. The motion was approved by an 8-1 vote with Councilmember Polly Armstrong the only vote in opposition.
Chairman Charlie Betcher said the Commission on Aging approved the recommendation largely because of concern for the city’s 20,000 seniors and disabled who live on fixed incomes.
“These are people who will have to decide after paying rent each month whether to buy food or pay utilities,” Betcher said.
The state declared a Stage two alert both Tuesday and Wednesday when power reserves dipped below 5 percent.
PG &E reportedly will have to lay off employees and will absorb billions of dollars in losses.
In the present environment, the Energy Commission will have to carefully consider the pros and cons of starting up an electric company.
“It’s not clear if municipalization is the answer,” said Neal DeSnoo, secretary of the Energy Commission.
“Whatever company is formed would have to purchase energy from the same wholesalers that existing utility companies do.”
DeSnoo said Berkeley has an aging infrastructure of poles and wires and the cost of maintenance may eat up any potential cost savings. He said PG&E can spread out high maintenance costs in areas like Berkeley with lower costs from newly developed areas like Hercules.
In their recommendation, the Commission on Aging referred to the City of Alameda and other municipalities, which run their own electric companies. But DeSnoo said they were formed a long time ago in an environment more favorable to municipal ownership.
He said an example was the Federal Public Preference Program in which municipalities were given discounts on hydroelectricity produced in the northwest.
“That program hasn’t existed in over 10 years,” he said.
