Voice your support for utility rate incentive

September 11, 2013 

The release of the most recent preliminary unemployment figures for California proved a point once again — that California, and particularly its inland counties, still face significant challenges five years after the Great Recession.

Our national economy has been building momentum with a falling unemployment rate. But our statewide unemployment rate remains consistently higher at 8.7%. The situation is even worse in many inland counties where unemployment continues to hover at rates well into the double digits; ranging from 10.9% (Shasta) to 14.6% (Merced).

Many of us from inland counties are battling to bring jobs and investments to our hard-hit communities. From Tehama to Kern, we are in competition with other states for investments and jobs. We need every tool possible to stay in the game.

One critical factor that works against us is the high cost of energy, with California having the highest rates in the West. While we "compete" with rates averaging 13.8 cents per kilowatt/hour, this is, in some cases, twice the cost of nearby states. Arizona's rates are 9.3 cents, Nevada's 8.9 cents, Oregon's 8.8 cents, Utah's 7.1 cents, Washington's 6.8 cents and Idaho's only 6.4 cents!

Additionally, with a much hotter climate than the rest of California, bills in our inland counties easily can be higher still.

In response to local government requests for assistance, Pacific Gas & Electric Co. submitted a proposal to the California Public Utilities Commission in March 2012 to create an Enhanced Economic Development energy rate.

The proposal stipulates that businesses locating or expanding in counties with significantly higher than average unemployment, adding a minimum of 200 kilowatts of energy or more, would receive 35% off their electric rates for five years. That rate reduction is substantial enough to catch the attention of employers looking to expand or locate on the West Coast and bring badly needed jobs to our regions. Investments in counties with unemployment rates that are 25% higher than the state average would be eligible for this incentive.

A broad coalition of 30 California cities and 10 counties, legislators and private industry leaders has backed this initiative. The objective is to incentivize job creation in communities with the greatest need and where people are struggling the most financially.

After an 18 month-long regulatory proceeding before the PUC, we are finally close to adoption of this new incentive. On Aug. 9, the PUC released its Proposed Decision on the Enhanced Economic Development rate.

However, the wording of the Proposed Decision is not clear on whether the Enhanced Economic Development rate would result in eligible employers receiving the full 35% discount or whether they could have those savings guaranteed for the five-year period of the program. These details are critical for the discounted rate to be effective and actually stimulate job creation.

While the PUC is receiving public comment on the language of the proposal, it will likely take action on the application at its Sept. 19 voting meeting in San Francisco.

To build a stronger economy in the most economically depressed areas of California, we need every entity in the state pulling in the same direction, including the PUC. So as PUC commissioners prepare to vote on this issue, they need to hear all the voices of support from across the Central Valley and Northern California.

The PUC should approve the proposed Enhanced Economic Development Rate but with the needed changes to give our communities a level playing field as we attempt to revitalize our local economies. Anyone sharing our goal of job creation should let the PUC know that. You may contact PUC Executive Director Paul Clanon via email at paul.clanon@cpuc.ca.gov.

 

Ashley Swearengin is mayor of Fresno, Robert L. Poythress is mayor of Madera and Robert Silva is mayor of Mendota.

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