While most Orange County electricity users are seeing bills surge, Anaheim businesses and residents recently got a nearly 3% rate cut worth $7 million annually. The city’s residential power customers now pay about 25% less than Southern California Edison consumers.
“Anaheim is in really good shape, given the current structure of the industry,” said Marcie Edwards, general manager of the city’s Public Utilities Department.
Anaheim is the only city in Orange County to have its own electric utility. Anaheim meets most of its needs through its own power generation and uses long-term contracts to buy the rest. As a result, the city has insulated itself from the spiking electricity spot prices that have very nearly tanked both Edison and San Francisco-based Pacific Gas & Electric.
“Unlike the investor-owned utilities, we were never prevented from signing long-term contracts,” Edwards said. “This price certainty, as well as improvements in productivity, has helped us achieve a rate reduction.”
Since cities are nonprofit agencies without stockholders, any revenue above costs and capital expenditures are returned to customers in the form of reduced rates.
The city generates a surplus of power about 10 months out of the year, purchasing outside power during the summer using long-term contracts. Overall, Anaheim generates around 80% of its total annual demand for electricity, which is sizable. The city counts more than 300,000 residents and is home to the expanded Disneyland Resort, the Arrowhead Pond and some big industrial users.
And don’t let the name fool you: the city keeps the lights on at Edison International Field. Rosemead-based Edison International, parent of Southern California Edison, acquired the naming rights to the stadium in the pre-deregulation days of 1995.
“This was back during a time when utilities thought electricity would soon be traded like pork bellies,” Edwards said. “Everyone engaged in branding activities to get their names out.”
Anaheim is using its energy edge to market to businesses, Edwards said. Her department also has been providing input to Gov. Gray Davis’ office through the California Municipal Producers’ Association, offering some advice on the state’s electricity crisis.
During times of low demand, Anaheim sells surplus power to Pasadena-based California Power Exchange Corp., with the caveat that the electricity must stay in California.
Anaheim hasn’t been selling power lately, Edwards said. In fact, she said, the utility has been in a modest buying mode over the past few weeks. In recent months, Anaheim has made some spot sales, presumably at premium prices. But Edwards insists the city isn’t reaping windfall profits:
“Whatever price the power exchange is paying is the price that we get,” she said. “If anything, we have been potentially losing some revenue because we are selling only inside California at a time when the offers to pay for energy by marketers outside the state are actually higher. We have been forgoing revenue.”
And there’s a hitch for Anaheim. Unlike the Department of Water and Power in Los Angeles,another city utility that’s doing fine during the power crisis,Anaheim is linked to the California Independent System Operator. So the city still can be subject to systemwide rolling blackouts, even though it generates or procures enough power to meet its needs (see story, this page).
Anaheim’s electric utility dates back as far as 1895 but got a big boost in the energy-strapped 1970s. Back then, Anaheim and its voters elected to take direct control of the municipality’s electricity generation needs, effectively seceding from Edison.
The city started out by buying equity shares of power plants,the San Onofre Nuclear Generating Station, the Hoover Dam in Nevada, the San Juan, N.M-based Waterflow plant and the Intermountain Power Plant in central Utah.
Anaheim later built its own 45-megawatt natural gas-fueled turbine plant, which is switched on mainly during peak demand periods.
What’s more, city workers have been busily placing solar-powered photovoltaic cells wherever they can,atop the newly remodeled Anaheim Convention Center, police stations and even traffic lights. The goal is to eventually supply roughly 10% of Anaheim’s electricity demand via solar power, according to Edwards.
The city now has some 500 megawatts of total generating capacity,enough to supply its businesses and 300,000 residents for most of a typical year. And Anaheim plans to buy a 20% stake of Burbank’s 40-megawatt Magnolia power plant, scheduled to come online in 2003.
The city’s electricity consumption is split roughly 75% residential and 25% industrial and commercial.
And, because Anaheim relies on gas for less than a tenth of its total electricity needs, the city also has protected itself from skyrocketing natural gas prices. Most of the city’s power comes from out-of-state coal-fired plants like Delta, Utah-based Intermountain, a plant that satisfies almost half of Anaheim’s electricity demand. n
