Water Authority Board Adopts Position of Oppose on Proposition 16

Short Title
Water Authority Board Adopts Position of Oppose on Proposition 16
If passed, new conditions affect public agencies' ability to provide electric delivery service
May 27, 2010

The San Diego County Water Authority Board of Directors today voted to adopt a position of oppose on Proposition 16, a statewide initiative that would amend the state constitution to require a two-thirds super-majority vote before a public agency could provide electric delivery service to new customers. The measure is on the June 8, 2010 statewide primary election ballot.

“"Proposition 16 would create unnecessary and expensive conditions on the Water Authority's ability to sell hydroelectric power," said Water Authority Board Chair Claude A. "Bud" Lewis. "The Water Authority has projects that develop significant amounts of clean hydroelectric power that generate revenues to reduce costs to water ratepayers.”

"Proposition 16 would make future power projects by water agencies infeasible, and would have a negative impact on the development of similar environmentally friendly power supply projects," Lewis said.

“Currently, the Water Authority sells hydroelectric power generated by the Rancho Peñasquitos Pressure Control and Hydroelectric Facility. Since the facility came on line in January 2007, it has produced 65,054 kWh, generating revenues of more than $3.4 million. Beginning in 2011, the Water Authority anticipates generating up to 40 megawatts of electricity from the pump station at its Lake Hodges project. The energy created will provide approximately $5.4 million in annual revenue. Revenues from the power projects offset water rates charged to the Water Authority's 24 member retail agencies and cities and, ultimately, water ratepayers.”

If Proposition 16 were to pass, the Water Authority would not be able to sell hydroelectric power without the approval of two-thirds of the voters within its service area, and two-thirds of the voters within any area that would receive the power. The same requirements would apply if the Water Authority tried to aggregate power for its member agencies. Under the measure, investor-owned utilities, including Proposition 16's sponsor - Pacific Gas and Electric Company - would not be hindered by voter approval for their own power supply projects.

The Water Authority's Legislative Policy Guidelines direct the Board to oppose any legislation that adversely affects its ability to supply itself or member agencies or sell gas and electricity to any public or private entity.

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