Portola supports PSREC acquisition of electrical service
At the regular meeting of the city council Jan. 13, the city of Portola prepared for a pre-hearing conference the California Public Utilities Commission has scheduled Jan 20 in San Francisco, by adopting a resolution in support of Plumas-Sierra Rural Electric Cooperative’s acquisition of electrical service within the city.
Currently, Sierra Pacific Power Company, the city’s electrical provider, has an application before the CPUC to sell its California customer base of 46,000 households to a Canadian firm, California Pacific Electric Company, or CalPeco as abbreviated.
Prior to the Jan. 13 council meeting, a group formed of PSREC, Truckee-Donner Public Utilities District, Sierra County, Plumas County and the cities of Loyalton and Portola, as well as Sierra Pacific Industries met to discuss the issues and protest the sale.
In October, the city of Portola formed an ad hoc committee of council members John Larrieu and Dan Wilson to work with City Attorney Steve Gross and city staff to come up with a recommendation to the city council and approved a letter to the CPUC protesting the sale of local assets to CalPeco.
Although the topic was not on the agenda at the regular December meeting of the city council, B.J. Pearson spoke during the public forum period and advised the council to study the issue at greater length and to “slow down.”
He expressed fears about the higher rates PSREC customers experience and felt the city was being pressured to act quickly.
“If it’s a good deal today, it’ll be a good deal tomorrow,” Pearson concluded.
Bob Marshall, general manager for PSREC, also spoke during public comment at the December meeting and repeated his assertion that, with access to Nevada energy sources, PSREC could guarantee the same rates SPPC currently charges Portola customers.
He also countered that the situation did, in fact, call for urgency, because the sale was before the CPUC for approval. The opportunity is here now he said.
The resolution approved at the Jan. 13 meeting re-iterated that the city formally protested the sale to CalPeco, expressed concerns about service reliability under CalPeco and formally endorsed the sale of Portola’s electrical service to PSREC.
The resolution also stated that if the sale is approved, the city will “consider other alternatives, including condemnation and/or municipalization of the electric distribution system.”
Mayor John Larrieu, also a committee member, will attend the San Francisco meeting and present both the resolution and a letter drafted by Gross and approved by the council to the CPUC.
The letter addressed the same concerns about reliability as the resolution and added, “It is clear that if the sale goes forward, electric service will continue to deteriorate. CalPeco will be a local distribution company only, without transmission facilities. CalPeco will not have the same set of tools, such as building new transmission lines or making upgrades to existing transmission facilities that are currently available to SPPC to serve its California customers.”
SPPC, in its change to become Nevada Energy, is not including transmission lines in its sale of California assets, only the customer service base.
Gross described CPUC’s Jan. 20 meeting as consisting of administrative matters, setting hearing times and locations, and scoping out the issues to be set forth in the agenda.
Gross explained some of the reasons for protest saying, “CalPeco did not indicate any specific improvements or advantages to the community here by the sale. That’s an issue of contention because that’s one of the requirements.
“The applicants are required to show that there’s a natural improvement as a result of the sale. You recently experienced an outage where PSREC was able to respond much more quickly in an emergency.”
City Manager Jim Murphy discussed the situation during an outage on New Year’s Eve and praised PSREC for carrying Portola while lines were repaired. He asked PSREC’s Bob Marshall, who was in the audience, about whether the co-op had been able to turn on Loyalton as well.
“Bits and pieces,” Marshall replied. “There was a 7-megawatt limit to what we could do because the mill (Sierra Pacific Industries’ co-generation plant) was still off. If the mill had been on, we’d have carried everyone and much faster. Getting the mill back on was a coup for our group.”
Larrieu said the committee’s recommendation was to support the entire protest process.
Committee member Dan Wilson added, “We wanted local control because of possible outages. And at meetings, we heard that CalPeco wasn’t very experienced in operating this kind of system. The Nova Scotia electrical company is not guaranteeing them for the 10 years that they previously said they would—is that right, Mr. Marshall?”
“That’s correct,” Marshall confirmed, clarifying that it was a worry for the ratepayer advocates that the financial soundness of the company was not being guaranteed. He added, “They may be forced to by the CPUC as part of the sale.”
In Marshall’s presentation, he stressed that no matter who ended up serving Portola’s customers, PSREC would continue to work with the utility during outages. “On the transmission level, we always work together as best as we can.”
He addressed the council and audience members, “We had three big goals for the group. One of them was: Get the Loyalton mill back on. One of them was: Get Portola and Loyalton served by the co-op. And the last one was: Get SPPC to support development of the Fort Sage substation.”
He said SPI was back on, although not yet at full power, but had dropped out of the group once it had resolved issues with SPPC.
Council member Curt McBride asked if it would be useful to have representatives from local businesses at the San Francisco meeting.
Marshall answered that letters from business owners would be more useful, since there would be little presentation of information,
“If we get them to hold a hearing in our area, or at least in Truckee or Tahoe, at that point, I definitely want everyone we can get to attend.”
Citizen Bob Morton asked Marshall if it was too early to assess the impact to ratepayers.
Marshall reiterated the co-op had pledged to match whatever rates CalPeco would charge according to the current rate structure, giving the 2,200 new members different rates than current members.
“If we can get access to Nevada for our entire system, that will allow us to have the same rates for everybody,” Marshall added, saying that it would benefit current members in the long run.
Murphy pointed out that, although other cities have a revenue stream from running electric utilities, Portola did not have the necessary expertise.
“The learning curve is too high to make it feasible,” he said.
“But it’s not off the table, as indicated in the resolution” Gross interjected.
Marshall added, “You always have that option—whether it’s us or CalPeco, or SPPC. These efforts don’t negate those rights.”
He concluded, “It’s not just about repair, but will the company invest money in making it reliable, not just repairing it when it’s out?”