Sacramento Municipal To Cut Renewables, Energy Efficiency for Competition

The Sacramento Municipal Utility District (SMUD) board, faced with the impact of California's deregulation law in 1998, voted in January to embrace competition by planning future cuts in some of its budgets - among them SMUD's world-renowned renewables and energy efficiency programs - and allowing a 100MW portion of its customers to leave their system in June to shop for cheaper power on the private market.

Robert Wichert, Advanced Resources Technologies Supervisor for SMUD, said the cuts are not yet decided, but will likely be necessary to prepare the utility for outside competition. Chief among cuts planned is SMUD's Public Goods Charge, an electric bill surcharge which supports renewables and energy efficiency programs. The charge is expected to be cut from its current rate of 5.2% to 3.7% of annual revenues, or from $33.8 million to $24.2 million per year, according to attorney Michael Remy, chair of Sacramentans for Safe Energy, which led the fight to close the Rancho Seco nuclear power plant. "It is very distressing to see SMUD's Board acting like PG&E, putting profits before the public good," said Remy.

Wichert said the municipally-owned utility will seek an alternate route for renewables development through the direct marketing of green power to residential customers, which constitute roughly 50% of SMUD's overall load.

Wichert said that with competition coming next year, the Board has expectations "that we won't be able to spend as much on renewables...and energy efficiency as we have in the past." and added that the future of renewables in Sacramento will depend on the willingness of individual consumers to pay higher rates for green power. "Otherwise the board now faces a risk of charging too much and driving customers to find other, cheaper suppliers."

Copyright (c) 1997 by the American Local Power Project END