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Rocklin's ‘uncompetitive’ electricity rates not on council’s agenda

By: Jon Brines, Placer Herald correspondent
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Electricity bill comparison

Source: PG&E, Roseville Electric, SMUD

Usage PG&E Roseville SMUD
550 kWh $91 $74 $62
850 kWh $188 $122 $109
1,200 kWh $307 $182 $171

 

Complicating the city’s economic recovery, a senior official from longtime Rocklin-area business Cokeva, Inc., admits Rocklin’s utility rates are a factor in the company’s relocation to Roseville this spring.

Ken Ueltzen, vice president of business development for Cokeva, Inc., said it wasn’t the only motivator, but the lure of Roseville Electric’s rates helped.

“It certainly was a factor,” Ueltzen said. “Electricity is a significant expense.”

The technology company employs 270 people off Industrial Avenue, in the unincorporated area of Placer County, but plans to move into a 326,000-square-foot facility in an old Hewlett-Packard building off Foothills Boulevard in Roseville. The city of Roseville generates its own power for residents and businesses, while Rocklin is a part of the statewide Pacific Gas & Electric.

“Heating, ventilation and air-conditioning is a big driver,” Ueltzen said. “The difference in electricity (rates) makes a difference over time. You look at the month, the year and then you look at 10 years and you say, ‘This is a significant amount of money to pay attention to.’”

Former Rocklin resident Tiffany McMindes said high power bills was one reason she moved from a 1,650-square-foot rental house into a 1,120-square-foot apartment.

“Right now with the economy, people can’t afford their power bill,” she said. “In Rocklin, it’s outrageous.”

For me, the power was really high,” she added. “I thought if we moved into a smaller place it would be cheaper, but it was still high.”

McMindes tried many ways to reduce her bill and had PG&E do an audit, but nothing worked. She struggled not having the air conditioner on during the hot summer to keep her power bills low.

“I never turned on the air conditioner, and it was over $150 a month,” she said. “We all worked full-time and we weren’t there until after 5 p.m.”

The Placer Herald reviewed typical winter bills for PG&E, Sacramento Municipal Utility District and Roseville Electric and found differences among them, with PG&E coming out higher. For instance, a 1,200 kilowatt hour bill would cost an electricity customer $307 from PG&E, while Roseville Electric and SMUD would charge $182 and $171, respectively. At 550 kWh, PG&E charges $91, Roseville $74 and SMUD $62. Roseville Electric and PG&E both have proposed rate increases later this year. PG&E indicates it could go up as much as 2 percent in May. PG&E does not make higher profits by selling more energy, according to its website. As a regulated company, PG&E’s profits are determined by the California Public Utilities Commission.

Rocklin belongs to the Sacramento Area Commerce and Trade Organization, which specializes in advising businesses looking to relocate. SACTO President and CEO Barbara Hayes said power rates and reliability are important factors to companies that are big electricity users.

“I can say that Roseville Electric was a big part of NEC Electronics America Inc.’s decision to locate in the city of Roseville,” Hayes said. “It was not only the rates, but also the partnership that was established between the city leaders and the (semiconductor) company.”

Rocklin City Manager Rick Horst acknowledges PG&E’s utility rates are “uncompetitive” but is not prepared to address it.

“The City Council laid out their strategic agenda at the Council Retreat held on Jan. 12,” Horst said. “The PG&E electric rate issue is not on the agenda at present.”

According to the city of Roseville charter, it is possible for Rocklin residents to join Roseville Electric for their power needs.

Vonette McCauley, public relations manager for Roseville Electric, said Rocklin city leaders need to study it first.

“The Rocklin customer, whether they are residential, commercial or the entire city of Rocklin, would need to initiate the annexation process first by engaging Roseville Electric in a preliminary feasibility analysis,” Mc-Cauley said.

The next step would be for the Rocklin customer(s) to pay for an independent technical and financial evaluation of the proposed annexation concept. If the study determined that it was technically feasible and Roseville Electric found that the annexation would be prudent and in the best interests of the utility, then the formal request for annexation would be sent to the Placer County Local Agency Formation Commission.

Rocklin looked at annexation “informally” several years ago and concluded it was unaffordable, according to former Mayor Peter Hill.

“We would have to buy all the lines, poles substations, etc., that PG&E had built,” he said. “We would also have to pay off any part of loans or bonds that PG&E had for the portion that was used in Rocklin. I think the very rough estimate was the cost would be in the hundreds of millions of dollars.”

Vice Mayor Scott Yuill said while annexation is possible, it is improbable.

“While technically there is a process for annexation, for all intents and purposes it’s legally unconquerable and financially impossible,” he said. “That said, the city should continually look at ways to provide the best services at the most reasonable costs. But I would not support an expensive utility annexation study because it would only squander Rocklin’s general fund.”

PG&E spokesperson Jonathan Marshall said the infrastructure in Rocklin is not for sale.

“As a general rule, our assets are not for sale,” Marshall said. “It’s been PG&E’s privilege to provide our customers with clean, reliable and affordable energy for more than 100 years, and we look forward to the opportunity to do so for many years to come.”

Marshall said if Rocklin ever decided to seek annexation, there could be a legal battle.

“Litigation would certainly be likely if some entity tried to take over PG&E’s assets without our consent,” Marshall said.

According to the Division of Ratepayer Advocates, an independent division of the California Public Utilities Commission, PG&E in 2006 spent about $12.6 million on political campaigns op-posing the annexation of portions of PG&E’s service territory in Yolo County by SMUD. The move worked, as ratepayers voted down a ballot measure there. In the 1980s, residents of Folsom voted to join SMUD, with PG&E fighting the annexation in the courts. Folsom ratepayers won and are now part of SMUD.

Getting consent is unlikely, but Mayor Diana Ruslin said she would consider options if given the opportunity.

“If the city manager comes to the City Council with a recommendation, I would evaluate it like any other proposal,” she said.

McMindes said if enough citizens voice their opinion, the City Council will have to pay attention.

“I definitely hope things change,” she said. “More people need to speak out. Is there another way?”