Kern County, CA to Study Municipalization/Bypass

Date: February 15, 1996

The Kern County Board of Supervisors has decided to initiate begin a study of its options in a deregulated electricity market, including the strategy of creating its own utility district.

Citizen petitions for a Kern County municipal utility were seconded by a representative of the Kern County Farm Bureau and Agricultural Energy Consumers Association. The Kern Economic Development Corp., and Independent Oil Producer's Agency joined the call for the County Supervisors to investigate its options.

Last week, supervisors unanimously voted to begin looking into all available options that might open up under a deregulated electricity industry. County Administrative Officer Joel Heinrichs said he expects his staff will report back to the board in about 60 days.

Board members also filed a letter with to the California Public Utilities Commission, asking that the Commission refrain from implementing "advice filings" from PG&E and Edison International that would severely limit options for any entity seeking to municipalize or bypass their current utility to shop for power elsewhere. The "advice filings" are responses to a 12/20 draft proposal issued by CPUC that outlined how restructuring should occur.

Objections to the advice filings center on the utilities' demand that anyone leaving their system pay a competition transition charge. Transition charges are meant to repay utilities for costs they have incurred because of regulations obligating them to provide power to consumers.

"If (the advice filings) are implemented, options previously available to Kern County customers...(such as municipalization, self generation and bypass) will be foreclosed as prohibitively expensive,"the Board warned.

Supervisors also took objection to a proposal in utility that would prohibit any objections to fees by entities looking to get off their systems.

"Customers electing direct access pursuant to the restructuring proceeding must, as a condition of taking service under the utility's retail distribution tariff or of receiving any other service subject to commission's jurisdiction, sign an agreement to pay their share of transition costs and waive any jurisdictional objection they might otherwise raise in any forum," stated both filings.