COUNCIL EYES CREATION OF NEW UTILITY CITY MAY BEGIN SELLING POWER TO AREA RESIDENTS.

Byline: Heather MacDonald Staff Writer

SANTA CLARITA - The City Council will consider creating the framework for a municipal utility at its next meeting, officials said.

Council members rolled up their sleeves and sought a way to protect Santa Clarita from outages during a study session Tuesday, as 100-degree temperatures pushed the state to the brink of rolling blackouts.

``We need to clearly define what we are seeking to gain by forming a municipal utility,'' said Councilman Bob Kellar. ``Are the risks worth it? Will it control price and prevent blackouts? We need those answers.''

The resolution that the council will consider Tuesday sets up the core of a publicly-owned electric utility and opens the door for the city to begin producing, selling and delivering power to the city's residents and businesses, said Terri Maus, the director of field services.

Extensive technical and economic analysis would still be required, Maus said, and those studies could cost as much as $500,000.

It would take two years before a municipal utility could be up and running, according to Denise Henderson, a project manager for Southern California Edison.

Representatives from Edison told the council members Tuesday that creating a municipal utility could lock the city into paying much higher rates once generation increases and electricity prices stabilize.

``Nothing can be done to avoid rolling blackouts this summer - only conservation measures can help,'' said James M. Mendoza, a manager for Edison. ``But certainly by next summer things will be very different.''

Edison representatives urged city officials to wait to take any action until after almost a dozen new generation plants come online in coming months.

Edison spokesman Glen Becerra said the city's newly created energy advisory committee should tackle these questions before any City Council action.

The City Council is scheduled to select the members of the committee Tuesday. The committee, along with a newly hired energy consultant, will devise a plan to help the city conserve energy, use it more efficiently and shield the region from rolling blackouts.

Skyrocketing electricity prices caused by the deregulation of the electric industry have forced Pacific Gas and Electric into bankruptcy, and Edison deep into debt, leading to the threat of rolling blackouts throughout the state.