COUNCIL TO MULL FORMING UTILITY CITY COULD SKIRT ENERGY PROBLEMS.

Byline: Heather MacDonald Staff Writer

SANTA CLARITA - The Energy Advisory Committee will recommend that the City Council lay the groundwork for a municipal utility that could shield local businesses and residents from future price increases and power shortages.

The council members will vote Aug. 28 on the resolution, which reserves the city's legal right to form a publicly owned utility separate from the state's power grid and Southern California Edison.

``We need to explore this option and reserve our rights,'' said committee member Charles O'Connor.

The Tuesday night vote was unanimous, after committee members decided there was no drawback to the action.

Although temperatures soared Wednesday, healthy reserves prevented rolling blackouts like the ones that hit earlier this spring. Predictions of at least 30 hours of blackouts in June and July failed to materialize, as supply met demand consistently through the cooler-than-average summer.

Committee chairman Wayne Crawford suggested that a municipal utility would be very attractive to business such as Six Flags California and homeowners in Stevenson Ranch, which are outside Santa Clarita's borders. City officials want to see Santa Clarita's boundaries move west of the Golden State Freeway and east of the Antelope Valley Freeway.

``A municipal utility could allow the city to build trust and establish a track record of success,'' Crawford said.

Committee members were concerned that a bill prohibiting cities from forming municipal utilities will be reintroduced next week when the state Legislature reconvenes.

If such a bill appears to be headed for passage before Aug. 28, the City Council could decide to hold a special meeting to ensure that the city's rights are protected, said Councilman Cameron Smyth. Smyth and Councilman Bob Kellar are nonvoting members of the advisory committee.

The legislative session will end Sept. 14.

A handful of other cities is also considering forming municipal utilities. They include Berkeley, San Marcos, Chula Vista, Davis and the City of Industry, according to Steve McClary of Oakland-based MRW & Associates, the committee's adviser.

The City Council balked in July at creating a ``paper municipal utility,'' deferring the issue to the committee, which had just been formed.

Several prominent civic leaders have urged the City Council to form a municipal utility, proposing that the city be powered by two cogeneration plants in Placerita Canyon.

Extensive technical and economic analysis would be required before a municipal utility could be put in place, a staff report found. Those studies could cost up to $500,000, according to Terri Maus, the city's director of field services.

Edison officials have warned city officials that creating a municipal utility could lock the city into paying much higher rates after the crisis is over and prices drop.