News Article

April 15, 2008
PG&E dispute settled
Valley public electricity cooperative reaches deal.
By Associated Press / The Fresno Bee

The state's first public electricity cooperative and Pacific Gas & Electric Co. said Monday they have settled a dispute over PG&E's marketing campaign against the co-op.

The San Joaquin Valley Power Authority aims to provide power to more than 115,000 customers across the Valley.

Cities and counties that join the cooperative can buy or generate electric power as a group, a move they say will allow them to offer lower electricity rates to consumers.

That model, however, cuts PG&E out of the loop.

Last year, PG&E persuaded Tulare County and the city of Fresno to withdraw from the co-op.

The power authority filed a complaint with the California Public Utilities Commission, saying PG&E's tactics broke state rules, a claim the utility denied.

Last week, the two sides filed a preliminary settlement agreement with the commission under which PG&E will separate its marketing work from its activities as a utility. It will become final only if approved by commissioners.

PG&E was accused in the complaint of going directly to local government agencies to criticize the power authority's plan. PG&E has now pledged to apprise the power authority of its concerns, to allow the power authority to respond.

According to the agreement, PG&E will pay the power authority up to $450,000 for litigation costs connected with its complaint.

Power authority officials said they thought the settlement could prevent similar disputes in Marin County and San Francisco, which are also considering implementing the same co-op model.

"The settlement agreement is in the best interest for the customers that we seek to serve," said Tom Haglund, the authority's chairman of the board. "It will likely have a carryover effect to other cities and counties."

During the energy crisis of 2000 and 2001, the state suffered soaring electricity prices and rolling blackouts. In 2002, then-Gov. Gray Davis signed a bill into law authorizing local municipalities to become electricity providers through the new public power model, called community choice aggregation.

PG&E spokesman Jeff Smith said Monday the company was pleased to have ended the dispute.

Bee staff writer Marc Benjamin contributed to this report.