Nor-Cal Electric Authority burns out

August 08, 2003 12:00 am

By Kent Gray

Triplicate staff writer

Pacific Power announced yesterday that it was breaking off talks with the Nor-Cal Electric Authority and has halted the sale of Pacific Power's California service area to Nor-Cal.

The decision by Pacific Power, a division of Scotland-based PacifiCorp, may cost Del Norte County and Nor-Cal hundreds of thousands of dollars in investments, according to officials. It also spells the end of the Nor-Cal Electric Authority.

"After five years of significant effort and negotiation with Nor-Cal and stakeholders, there is still uncertainty that a transaction could ever be successfully completed," said Andy MacRitchie, executive vice president of PacifiCorp. "In our opinion, although there have been points of encouragement along the way, we now believe it is unlikely we could successfully complete an appropriate transaction."

Nor-Cal, a theoretical nonprofit public utility that was intended to provide electricity to residents throughout Del Norte and Siskiyou counties and portions of Modoc and Shasta counties, was mired in difficulties since its inception in Del Norte County.

The idea of the public utility was conceived in the late 1990s, strongly supported by Del Norte County Supervisor Jack Reese and former-Supervisor Clyde Eller.

Reese, who sat on the Nor-Cal Commission until last year, said he believed much of the reason for Pacific Power's decision this week rested with one particular party.

"I'm going to place the blame where it belongs, and that's with Siskiyou County," Reese said. "They are responsible for Mr. DeMarco, and everything Mr. DeMarco did from the beginning was to meddle in Nor-Cal business."

Frank DeMarco is the county counsel for Siskiyou County. Reese accused DeMarco of trying to thwart the sale at every opportunity.

"The Siskiyou County Board of Commissioners allowed Mr. DeMarco to stay right in there and negotiate with Pacific Power. And, for whatever reason, he never wanted this sale to happen," said Reese.

Aside from speaking against the formation of Nor-Cal before the California Public Utilities Commission in 1999, DeMarco sued Nor-Cal on behalf of Siskiyou County last year, contesting the validity of the new utility.

Reese said he didn't have a solid figure yesterday on how much county money and time was invested in Nor-Cal.

According to Nor-Cal counsel Bob Black, the county has spent $519,000 on behalf of NorCal. It borrowed $400,000 from the Del Norte Economic Development Corporation, half of which has been repaid. It also borrowed $100,000 from Six Rivers National Bank. This loan was repaid in full, Black said.

"It's not fair to say the county lost that money. The county and Nor-Cal are still exploring the options for getting it back," said Black.

MacRitchie said the action started by DeMarco slowed down an already sluggish pace.

"Certainly the validation action, which I believe Modoc County entered into as well, delayed the process and presented more difficulties," said MacRitchie. "There were a lot of factors that led to this decision ... We've been working on this now for some five years. And as we sit here today, we're still a long, long way away from seeing anything happening."

MacRitchie did not dismiss the possibility of a sale in the future, but added his company has no intention of seeking other buyers.

"We need to refocus our efforts right now on the communities which we serve," MacRitchie said. "We understand the difficult times that many of the communities out there are experiencing, and a strong utility will assist in those areas."