The City of Palm Springs, CA, has asked the Federal Energy Regulatory Commission (FERC) to approve a plan allowing it to enter the electric business by installing a second electric meter at customer locations. [The City of Falls Church, VA, was the first to propose such a strategy (em known as "municipalization lite."] The city would not own or control transmission or distribution facilities, nor would it build new facilities to serve customers.
Southern California Edison (SCE), which currently provides retail electric service directly to
residences and businesses in Palm Springs, has vigorously opposed the proposal. And the incumbent utility's protests have not gone unheard. So far, more than 25 utilities, as well as the Edison Electric Institute and the California Public Utilities Commission (CPUC), have asked the FERC to deny the Palm Springs application.
"The Palm Springs request is a blatant attempt to circumvent federal law, which prohibits FERC from ordering retail wheeling or sham wholesale wheeling," says Robert G. Foster, SCE vice president of public affairs. Foster contends that the request is a blatant attempt to circumvent the CPUC's restructuring plan.
Meanwhile, more than 1,000 residents of Palm Springs have formed an organization, Citizens Against the Government Takeover (CAGT), opposed to the City Council's attempt to take over the SCE system. According to former City Council member Joy Schlendorf, now CAGT executive director, "Cities pursuing these muni-lite takeovers or private utility businesses are more intent on supplementing general fund revenues than on lowering consumer electric rates." She points out that if the FERC approves the proposal, electricity would operate under federal control, depriving state citizens of consumer advocacy representation at the CPUC.
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