California ballot initiative would eliminate IOUs, establish statewide public utility

Dive Brief:

The California Secretary of State last week approved a ballot proposal for signature gathering that would replace the state's three investor-owned utilities with a single, statewide public power district, City News Service reports.
The proposed measure to establish the California Electrical Utility District (CEUD) was approved by the Secretary of State on Friday, allowing backers to begin gathering the 365,880 signatures needed by April 26, 2016 to qualify the measure for the November ballot.
The CEUD would replace Southern California Edison, Pacific Gas & Electric, San Diego Gas & Electric, and the state’s other investor owned electric utilities (IOUs). It would replace the IOUs’ corporate structures with an elected Board of Directors from 11 wards made up of the current IOU service territories.

Dive Insight:

Californians fed up with scandals involving the utility sector and its regulators have another option, as of Friday — eliminate the IOUs altogether.

On Friday, the California Secretary of State approved a ballot petition to establish a statewide public utility to begin gathering signatures. Organizers will have until April 26 to collect 365,880 signatures — 5% of the number who voted in the last gubernatorial election — to get the initiative on the ballot.

Directors of the new statewide public utility would be elected from their wards for four year terms. The public power district would be authorized to “acquire property, construct facilities necessary to supply electricity, set electricity rates, impose taxes and issue bonds," according to petition language.

Municipal utilities like the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District (SMUD) could join the CEUD or work collaboratively with it.

A public power district would substantially change state and local finances, according to the Legislative Analyst’s Office, but officials did not offer a more detailed assessment, as the initiative has not qualified for the ballot yet.

The initiative is led by Ben Davis, an anti-nuclear activist and former SMUD Rate Advisory Board member. He got an identical ballot proposal cleared for signature gathering in March, but did not get enough people to sign on before that proposal's deadline was reached on Sep. 23.

This spring, Davis told Utility Dive the new entity would lower costs to electricity consumers and create other economic benefits by removing regulatory complexities and eliminating shareholder profit considerations.

Davis said public utilities have 15% lower rates on average nationally than privately owned utilities. SMUD’s rates, he added, average 25% lower than California’s IOU rates.

By law, Davis explained, the new public utility would have the right to acquire, through eminent domain, whatever electric infrastructure it would need to serve the public.

The effort to create a statewide public utility came from Davis's push for a ballot initiative to close California’s nuclear facilities after the 2011 Fukushima nuclear disaster, he said in March. Efforts to obtain information from the California Public Utilities Commission left him suspicious of the state's energy establishment, including the California Energy Commission and the California Independent System Operator.

Along with the public utility proposal, Davis also got his initiative to close California's existing nuclear plants approved for signature gathering on Friday. The proposal, which would extend regulations that apply to new nuclear plants in the state to exsiting ones like Diablo Canyon, needs 365,880 signatures by April 26.