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Home arrow News arrow Local News arrow Race on to seal Norcal deal by October

Race on to seal Norcal deal by October

By Jennifer Grimes

Triplicate staff writer

Changing Del Norte Countys power provider from a profit making company to a public entity could and should be done by October, according to the countys attorney Bob Black.

The deal to form Norcal, a government-owned-and-operated utility for Del Norte and Siskiyou counties, has been in the works for several years. It involves purchasing the local electricity distribution system from PacifiCorp, the countys current provider.

Now, because of some pending legislation considered by Congress which may sour the deal, the race is on to sign the papers before the law comes into effect.

As the law is now, a publicly owned utility can use tax-exempt bonds to finance improvements to the system, Black said.

That means getting money to make yearly repairs and upgrades at extremely low interest rates, according to Black.

The new law, if passed, would prohibit the use of such bonds for the first 10 years, meaning ratepayers would have to pay more to keep the system running well.

For example, every year, Norcal will have to spend about $5 million on capital improvements like for new lines, and poles or a new truck which could be financed by tax-exempt bonds. The new law would say you cant do that, said Black.

Congress could pass the legislation as soon as early October, but Black said the chances are good the Norcal deal could be signed before the law goes into effect. Beating that deadline may make Norcal exempt, allowing it to use the bonds.

I think its something the investor-owned utilities are lobbying for to discourage public ownership, Black said.

Even if the deal does go through soon, the county will not be allowed to operate it.

Under a different law passed last year, counties can purchase and own a public utility, but cannot run one. But city governments can.

Del Norte County officials have tried to encourage the Crescent City City Council to step in, when the county is required to step out.

City Council has not made that commitment yet, however.

City Manager Dave Wells said the city probably wont join until everything in the deal is resolved and the structure of the operating board is finalized.

Its hard to make a decision to be involved in something until you know what that something is, Wells said.

Specifically in question is how many cities will be involved in the joint powers authority that will run Norcal and how many representatives from each city will sit on the board.

Black said each week the county participates in a conference call with engineers, financial advisors, and legal consultants about ironing those details out.

Once the deal is on paper, the concept will once again be presented to the City Council, Black said.

 


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