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City to decide on public power today

By Kent Gray

Triplicate staff writer

The question of Crescent City joining a joint public power venture will be decided Monday night, according to officials.

I suspect we will come up with an answer on Monday, said Crescent City Councilmember Glenn Gary. I believe we finally have received enough information to make a decision on this.

An offer by the Nor-Cal Electric Authority to purchase the distribution and transmission assets of Pacific Power in the state was agreed upon in principle by the two parties last month. Nor-Cal is a joint-powers public power company representing several communities in Northern California.

PacifiCorp has agreed to a lower seven-year guaranteed power rate it would charge to Nor-Cal should the deal go through. Now, Nor-Cal members are watching Crescent City, the largest city in the Pacific Power area, to decide on whether or not to join in the deal.

Consultant Ray Czahar, a former planner with the California Public Utilities Commission (PUC), gave a presentation and answered questions from an audience of about 40 residents and officials from Del Norte County and Crescent City on Thursday night.

Czahar, who was originally hired by the city of Yreka to do an analysis of the proposed sale, was hired by Del Norte Countys Tri-Agency to give the same presentation here.

Crescent City City Attorney Dohn Henion asked the most pointed questions of Czahar, including when he had first heard about Nor-Cal, who from, and what opinions he may have formed prior to being hired.

Czahar responded to these questions, and to those posed by other audience members, that he was an unbiased consultant without any stake in the sale.

Am I making a recommendation that this deal be consummated? I am not, Czahar said. I am not a stakeholder in this so any consequences will not fall on me ... I have my own problems with PG&E (Pacific Gas and Electric).

Czahars final analysis favored the sale by saying it was a low-risk venture, although he refused to actually endorse it.

One thing missing from Czahars presentation were alternatives Crescent City and Del Norte County might have other than purchasing Pacific Powers assets, which have been appraised at $133,938,368 and would be sold to Nor-Cal for $150,363,338.

Crescent City Mayor Herb Kolodner said although he felt the presentation was balanced, it was lacking in certain information.

I would have liked a little more generic presentation, Kolodner said. Forget its Nor-Cal, forget its Crescent City. Just overall, is this a good deal, what are the pros and cons? How have other joint-power authorities done? We got some of those answers (Thursday) night, but I didnt feel we got it all.

To date, the communities of Yreka, Dunsmuir, and Dorris have approved the Nor-Cal proposal. Cities yet to make a decision are Crescent City, Fort Jones, Mount Shasta, Etna and Montague.

Del Norte County Counsel Bob Black said Crescent Citys decision will be a pivotal component in the Nor-Cal deal, because it is the only incorporated city in Del Norte County and because it has the greatest population of any city involved.

By Crescent City joining, they are really making a statement that they believe this will be good for the ratepayers, Black said. This will make an impression on the PUC and on the bonding community.

According to Black, Crescent Citys options are limited. If it decides to join the Nor-Cal Authority, it will have a guaranteed seat on its board, it will force some meetings to be held in Crescent City, and will give the city veto power over Nor-Cal decisions.

Should Crescent City decide against it, the Nor-Cal sale may go through anyway and Crescent City will have no voice with a power company that would be serving all of Del Norte County.

They would not be in a position to negotiate or veto the JPA (Joint Power Authority) agreement, which can still be changed, Black said. Crescent Citys Nor-Cal seat is very important because it will be one of only two from the county.

When asked if Del Norte County residents have any other options than Nor-Cal, Black said he didnt see any right now.

There are no alternatives in the foreseeable future, said Black. Thats not to say there wouldnt be down the road, but those options would be infeasible to even consider right now.

All the potential cities are expected to vote one way or the other on Nor-Cal this month. Once this process is completed, Black said an application for the sale will be resubmitted to the PUC probably in February. An earlier application for the sale was rejected by the PUC when Nor-Cal was originally to be managed by county governments, which is illegal in California.

After that, the PUC will probably spend 10 to 12 months analyzing the transaction and taking public testimony before making a final decision, said Black.

Pacific Power, owned by PacifiCorp, has recently asked the PUC for a 28.74 percent increase in rates it charges to its California customers.

According to a PacifiCorp breakdown, residential customers would be hit with the largest increase and could see power bills rise as much as 50 percent, if the application is approved by the PUC.

Although the company says it will pursue its rate increase regardless of what happens with Nor-Cal, advocates for Nor-Cal say residential power rate increases are virtually guaranteed to be less than those proposed by PacifiCorp.

Nor-Cal proponents have said they expect rate increases to be in the neighborhood of 30 percent over todays rates, once the public power utility is operational.

Critics of the sale, however, say Nor-Cal and PacifiCorp increases may be quite similar, because the state PUC is usually unwilling to grant big increases and could pare PacifiCorps request to near what Nor-Cal says it will charge.

Ultimately, Nor-Cal advocates say, customers here should be better served by a public power cooperative because it will provide better local service, will improve facilities and reliability in the system and keep rates stable over the next seven years.

 


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