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Presented by Michael Turnipseed Kern County Taxpayers Association August 3, 2010

The Unintended Consequences of the State’s Mishandling of Utility Regulation: PG&E Residential Electric Tiered Rates, Prop 16 and A Proposal for Consideration Part III. Presented by Michael Turnipseed Kern County Taxpayers Association August 3, 2010. KERNTAX’s PROPOSAL March 2, 2010.

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Presented by Michael Turnipseed Kern County Taxpayers Association August 3, 2010

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  1. The Unintended Consequences of the State’s Mishandling of Utility Regulation: PG&E Residential Electric Tiered Rates, Prop 16 and A Proposal for Consideration Part III Presented by Michael Turnipseed Kern County Taxpayers Association August 3, 2010 KernTax

  2. KERNTAX’s PROPOSALMarch 2, 2010 With all this said, KERNTAX respectfully requests that your Board put the following referendum on the June ballot to protect the rights of Kern County electric ratepayers that have no option but to purchase their electricity from the State/CPUC/PG&E monopoly: KernTax

  3. KERNTAX’s PROPOSALMarch 2, 2010 We the voters of Kern County do hereby authorize the Kern County Board of Supervisors to take the following actions for the economic benefit of the County: Review all current Franchise Agreements with utility companies. Encourage local municipalities to do the same. Determine the electric load and needs of Kern County residents. KernTax

  4. KERNTAX’s PROPOSALMarch 2, 2010 Review, study and analyze the operating practices and pricing models of Los Angeles Water and Power, Pacific Gas and Electric Company, Sacramento Municipal Utility District, San Diego Gas and Electric Company, and Southern California Edison Company. KernTax

  5. KERNTAX’s PROPOSALMarch 2, 2010 Negotiate with current providers or other electric generating companies to insure Kern County residents have access to fair and equitable electric rates. The top tier rate should not exceed the required revenue rate/cost of power by more than 20 percent. Seek state legislation requiring fair and equitable electric rates statewide, much like a postage stamp rate. KernTax

  6. KERNTAX’s PROPOSALMarch 2, 2010 • File legal action on behalf of Kern County electric ratepayers seeking fair and equitable electric rates. • And finally, if all else fails, study the practicality and feasibility of establishing a county or even Central Valley-wide municipal utility district and if needed, establish a Municipal Utilities District to serve ratepayers in a fair, equitable manner. Municipalities, with their own franchise agreements, can opt out and keep their existing franchises. KernTax

  7. KERNTAX’s PROPOSALMarch 2, 2010 Kern County Taxpayers Association respectfully requests that your Board adopt this referendum by March 12, placing it on this June's ballot. KernTax

  8. The KernTax Timeline • 02/24/2010 KernTax shared information with PG&E • 02/26/2010 PG&E files for Emergency Rate Reductions for June 2010, A.10-02-029 • 03/01/2010 Top E-1 rates increases to $.498/kWh. • 03/02/2010 KernTax makes presentation to KCBOS • 03/09/2010 KCBOS Follow Up Meeting • 03/22/2010 PG&E files GRC for June, 2011, A.10-03-014 KernTax

  9. The KernTax Timeline • 06/01/2010 Top E-1rate lowered to $.400/kWh. • 06/08/201010 Prop 16 is defeated. • 07/20/201010 KernTax and the County of Kern receive Intervener Status from CPUC. • On going CPUC Regulatory Process on A.10-03-014 • 09/2010 KernTax plans to develop 8-county coalition to support E-1 rate reductions. • 11-12/2010 Draft Legislative reforms • 01/2011 Introduce Legislation KernTax

  10. The KernTax Timeline • 03/2011 CPUC decision on A.10-03-014 • 04/2011 PG&E files new GRC for 2012 • 06/01/2011 A.10-03-014 takes affect • 08/2011 Fate of legislation will be known • 09/2011 Evaluate progress on regulatory and legislative fronts. Identify and evaluate legal options. • 01/2012 Make decision on future action KernTax

  11. KernTax Recommendations • Let the regulatory/legislative process take its course. • Taking action, to leave the state-regulated system, will marginalize the County’s status, and that of KernTax, in the regulatory process with the CPUC. • Taking any action will adversely affect any chance for meaningful legislative reform. KernTax

  12. KernTax Recommendations • All of the required knowledge to make an informed decision will not be known until at least 01/2012. • The current timing for utility reform is not positive: • 10 Statewide Propositions • City of Bakersfield Pension Reform Referendum • County of Kern Civil Service Reform • $200,000 est. election cost KernTax

  13. KernTax Recommendations • Government-set utility rates, above actual cost, just like other government above-cost fees, are excessive taxation! • We are trying to meet ratepayers’ needs, as defined by the ratepayers; obtain a reasonable return for the utilities’ shareholders; and provide for a utility-based future for the employees of PG&E & SCE. KernTax

  14. KernTax Recommendations • KernTax respectfully requests that the Kern County Board of Supervisors wait until all regulatory, legislative, and legal options have been exhausted before placing any referendum before Kern County voters. Thank you for your time and consideration. Questions? KernTax

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