PURPOSE FOR ESTABLISHING PUBLIC POWER

To generate savings for ratepayers.

To provide reliable service to consumers.

Local control and access to wholesale power market

Environmental protecting, including purchase of green power.

To generate savings for ratepayers.

To provide reliable service to consumers.

Local control and access to wholesale power market.

Environmental protecting, including purchase of green power.

SERVICES PROVIDED

Public power generators are generally vertically integrated utilities owning generation, transmission, and distribution systems.

May provide water, gas, sewer and electric services.

Local staffing or contracts with outside entities.

Provisions in the City Charter and other applicable law authorize the manner in which the Power Authority may provide such services.

May supply MUD special district with light, water, heat, transportation, telephone or other communication service, or garbage, sewage or refuse matter services. These services may also be purchased from or distributed to other outside entities.

Local staffing or contracts with outside entities.

AUTHORITY TO ESTABLISH THE MUNICIPAL UTILITY IN CALIFORNIA

In California, applicable state and local laws are:

California Constitution (Article XI, Sections 5 and 9)

Public Utilities Code (Section 10002) regarding the acquisition of IOU service territory.

Government Code (Sections 6500-6599.2)

City Charter in San Francisco, .

In California, applicable state and local laws are:

_Public Utilities Code (Sections 11501-14403.5)

Public Utilities Code (Section 10002)

Local Government Reorganization Act of 2000 (applies to electric MUDs).

Public Utilities Code (Sections 15501-18055)

Government Code (Sections 6500-6599.2)

USE OF EMINENT DOMAIN POWERS TO ACQUIRE UTILITY PROPERTY

Authorized by California Government Code Section 54340.

Public Utilities Code (§ 10002) authorizes use of eminent domain powers.

Authorized by Government Code Section 54340.

Determination of necessity - SB 23 and SB 1076.

GOVERNANCE

If the utility is a city department, it can be governed by members of the city"s legislative body or appointees of the legislative body (& Mayor, in some cases), or an elected board, or Commissioners appointed jointly by the legislative body and Mayor; or joint governance by the legislative body and an appointed utility advisory commission.

Municipal utility boards either operate independently or with oversight by the legislative body.

For Charter cities, governance is authorized by City Charter.

Appointments or confirmations of utility boards are usually made by the legislative body. In a majority of cases, mayoral appointments must also be approved by the legislative body.

Governed by an elected independent utility board serving in staggered terms and elected by district residents.

MUD directors have decision making authority over all major functions of the utility.

MUDs are governed by a 5-member elected board of directors, with the exception of the Sacramento MUD whose district board was increased to 7 directors. The district board also appoints a general manager who handles daily operations.

TERM LENGTH OF GOVERNING BODY

National average term for most utilities is about 3.7 years.

Under the San Francisco proposal, the directors serve in staggered terms. Directors have a four-year term of office, limited to three terms per director.

Elected independent utility boards, in other jurisdictions, usually serve for more than 4 years.

MUD directors serve for 4 years, in staggered terms.

MUD directors are not subject to term limits.

MUNICIPAL POWER AUTHORITIES/DEPARTMENTS

MUNICIPAL (or PUBLIC ) UTILITY DISTRICTS

COMPENSATION OF GOVERNING BODY

Compensation, if available, is kept deliberately low, and may be provided to elected or appointed members of the governing board. If the utility board is elected, average compensation (nationally) ranges from $1,000 to $14,400. Annual compensation for appointed members of the Utility Board averages $3,600 (1995 AAPA survey data).

Members of the elected independent utility board are usually paid. Annual compensation rates for members of the Independent Utility Board averages between $900 and $7,200 (national averages).

MUD directors are paid $100 for each meeting attended or for each day"s service - up to $600 per month, plus expenses.

SMUD Directors may also receive an annual salary adjustments of up to 5%.

AUTHORITY OF CONTROLLING BOARD to:

1) Set retail electric rates

2) Approve the utility budget.

3) Set salaries of utility officials

4) Issue long-term bonds.

5) Make financial investments for the utility.

6) Approve participation in joint ownership of generation and transmission facilities.

7) Exercise the right of eminent domain

Authority for major functions and decision making usually resides with the legislative body, as follows:

1) Authority resides with the legislative body for utilities under city control.

2) Authority with legislative body.

3) May be jointly administered by the utility board and legislative body. In other jurisdictions, city official e.g. city manager or employee of the MPA, may also be authorized to set salaries of utility staff.

4) Authority resides with the legislative body for utilities under city control.

5) Usually, authority to make investments resides with city employees, e.g. city manager, financial director, or city treasurer.

6) Usually subject to joint approval by utility board and legislative body, such as city council or BOS.

7) Usually subject to joint approval by the utility board and legislative body. Although, when a municipal utility is a city department, the legislative body would exercise eminent domain powers, including the condemning IOU facilities.

Independent utility board has authority over all these major functions, as well as deciding all matters of policy. Utility directors also determine the location of the utility"s facilities. The general manager, as utility employer, implements the board"s policies, as well as administers decisions made by the utility board.

PUBLIC ACCOUNTABILITY

A Citizens Advisory Committee may serve in an advisory capacity to the legislative body with no decision making powers.

A Citizens Advisory Committee may serve in an advisory capacity to the independent utility board or MUD board.

RELATIONSHIP BETWEEN CITY GOVERNMENT AND UTILITY

City employees, such as a city manager, city auditor, and city attorney, manage utility operations for utilities under legislative body oversight. If the utility does not have its own administrator, a city employee is also more likely to bring issues to the board. The mayor may also sit on a city council, which governs a public utility.

Utilities with independent utility boards are less likely to be managed by city employees. A utility employee, rather than a city employee, brings issues to the utility governing board. In California, the general manager brings issues to the MUD board.

FORMATION & OPERATIONS

Extensive reviews and approvals required under state law are required before a utility can deliver power.

Review and approvals by the state PUC and county LAFCo are required before a MUD can deliver services. Voter approval for MUD formation must be followed by a second citizen vote approving service delivery.