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November 10, 2005

CORCORAN'S COUNCIL OK'S MOVING AHEAD WITH KRCD ON COMMUNITY CHOICE POWER PROJECT

The Corcoran City Council has agreed to move forward with the Kings River Conservation District toward final planning aimed at making a regional Community Choice Power Program a reality.

Council members Wednesday evening (November 9) voted to move ahead with preparation of an implementation plan that would lead toward an application with the California Public Utilities Commission (CPUC). It is possible the energy program could be operating by early 2007.

Community Choice is a program created by the California Legislature. It permits a city or county to elect to "aggregate" electrical energy from a source other than the tradition investor owned utility company. The utility would continue to own, operate and maintain the local distribution system and handle all customer service, including billing.

Under the program being proposed in Corcoran, 10 other cities and one county, the electricity delivered to homes and businesses would be generated by and acquired from the Kings River Conservation District. KRCD plans to develop a new natural gas-fired, base-load power plant within the District's service area.

Wednesday's action was the Corcoran council's third endorsement of the program. The council two years ago approved a statement expressing interest in the project and earlier this year entered into a memorandum of understanding with KRCD under which the City of Corcoran and the other partnering agencies pursued a recently completed feasibility report.

That report, financed by KRCD and its dozen municipal partners, concluded potential benefits of a regional Community Choice program appear to be significant from the perspectives of cost savings, improved reliability and local control. It recommended that the various agencies move ahead with development of an implementation plan.

The other agencies involved in the program under the memorandum of understanding include the cities of Clovis, Dinuba, Fresno, Hanford, Kerman, Kingsburg, Lemoore, Parlier, Reedley, Selma and Kings County.

KRCD's staff has to date presented the report's findings to governing boards in the cities of Corcoran, Reedley, Selma, Lemoore, Parlier, and Kings County. All six have decided to move forward with the preparation of a Community Choice Implementation Plan. The remaining six MOU partners have scheduled presentations for their governing boards in November through mid-December.

The feasibility analysis was conducted by Navigant Consulting Inc. with a peer review by MRW & Associates. It states that the KRCD Regional Community Choice Program would:

  • Produce a conservative potential savings of 4-6 percent in electrical energy generation costs, totaling $779 million for the region during the 25-year study period.
  • Increase generation reliability.
  • Make it possible for cities and counties to offer stable rates to customers (due to KRCD's public agency status, related financing benefits and the lack of a profit motive).
  • Offer benefits of scale not available to cities and counties acting individually.
  • Provide local communities with control over their energy choices.

The report acknowledges that the ability to provide these benefits and the financial viability of the Community Choice program would be contingent upon availability of cost-based electricity from the planned KRCD base-load generating facility. The report also identifies a number of other factors that must be addressed during preparation of the implementation plan.

Meanwhile, a CPUC administrative law judge has issued draft ruled for administering Community Choice that KRCD feels are extremely encouraging.

If final CPUC rules are in place by year's end and all KRCD Community Choice Program studies are completed as planned, Corcoran and its partners could be positioned to formally apply with the CPUC in May 2006 to implement the program. The project's current proposed time line envisions CPUC action on the applications by October 2006 with the possibility the first Community Choice power deliveries might be made by January 2007.

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