Editorial

June 17, 2007
More choice is a powerful option
Element of competition could lower electricity rates for Valley
individuals, businesses and governments.
The Fresno Bee

A regional power authority that hopes to provide lower-cost electricity is gathering steam, as more communities sign on to the concept. That could be very good news for power users as well as local government treasuries.

This week Clovis became the largest city to join the San Joaquin Valley Power Authority, which plans to offer electricity at lower rates than traditional private suppliers such as Pacific Gas & Electric Co. Tulare and Kings counties and the cities of Hanford, Corcoran, Kingsburg, Dinuba and Kerman previously agreed to join the program.

Selma, Parlier, Sanger and Lemoore will take up the issue this week.

Up soon is Fresno, which is a linch-pin of the plan, since it would consume almost half the electricity provided by the new authority. The City Council will hold a workshop Tuesday, with a vote on the matter the following week. Reedley will consider the plan the same day.

PG&E, not surprisingly, has fought the proposal, saying that the new authority's figures are inaccurate and arguing that it is the best and most reliable provider of power for Valley customers.

The new power authority is the brainchild of the Kings River Conservation District, which will be the lead agency operating the authority. The idea is to purchase long-term supplies of electricity, which would be delivered by PG&E through its existing grid. The stability of the long-term power contracts would keep rates lower than PG&E can offer.

In addition, the authority, as a public agency, would not be required to generate profits to satisfy shareholders, thus holding rates down.

The idea has met resistance from those who are leery of anything the public sector does, and those who believe such matters should be entirely left to the private sector.

It's hard to make that argument on behalf of PG&E and Southern California Edison, giant monopolies that currently supply the Valley's power. This isn't a case of a free market being subverted by public sector "socialism." There is no "free market" without competition. Thus there is no free market in electricity -- not yet, anyway.

As Clovis Mayor Bob Whalen said Monday, after his city council signed on with the authority, a little competition for PG&E would be a good thing.

"My hope is that PG&E will feel some heat," he said.

Signing onto the proposal at this point doesn't make it a done deal. Once nine of the 14 communities eligible to join the new agency have approved the concept, the authority -- the Kings River Conservation District, for all practical purposes -- will have 90 days to finalize rates and other details. Then communities and individuals will have several opportunities to opt in or out of the plan. If they opt out, they would remain customers of PG&E or Edison.

That's plenty of choice, and it means that no one, private individual or city is required to go along with the plan if they get cold feet about it.

The numbers are attractive. Individual homeowners would save an average of about $3.50 per month over the next eight years. The savings to cities and counties would be large. Fresno would save as much as $600,000 to $700,000 annually on its power bills, money that would be freed up for other pressing needs.

There are indirect benefits. Part of the utility bill Fresno residents pay, for instance, is determined by the cost of power to supply water and operate other city facilities. Those rates wouldn't rise as sharply if power costs could be curbed.

This is a very compelling notion for individuals and communities alike. We believe this process should advance. It looks like it might pay off for all of us.