NEW UTILITY DISTRICT FOR PALMDALE? VOTE, EDISON SALE REQUIRED.

Byline: Jim Skeen Staff Writer

PALMDALE - Would Palmdale residents and business people be better off if the Palmdale Water District also became an electrical utility - like Los Angeles' Department of Water and Power?

The Palmdale Water District has been quietly studying the possibility - which would involve a legal battle to take over transmission lines from Southern California Edison - and has obtained a consultant's report that gives it a tentative recommendation.

Edison officials have already promised to fight any takeover and have raised questions about the potential cost, practicality and benefits to Palmdale residents, although water district officials say they have come to no decision.

``All we are doing is looking at the possibilities,'' Palmdale Water District General Manager Dennis LaMoreaux said Thursday.

The district's board will receive a briefing on the report at 1 p.m. today at the district office, 2029 E. Ave. Q.

Even if the board were to move toward forming a utility district, it would be done only with the backing of the district's customers and would take years to complete, LaMoreaux said.

The water district - which includes Palmdale's central and eastern portions, mostly east of the Antelope Valley Freeway and south of Avenue P - has the authority to become an electricity provider with a vote of its board, officials said.

``The district is an irrigation district; that is how it was formed in 1918. One of the powers of an irrigation district is the generation and distribution of electrical power,'' LaMoreaux said.

The report, prepared by Kansas-based Black and Veatch, was commissioned by the district in response to the statewide energy problems that emerged last year.

The inch-thick report looks at a variety of options for the district, including solar, wind and natural gas energy generation to power its well pumps and treatment plant, as well as taking over electrical service in central and eastern Palmdale.

Over 10 years, an electric utility could draw in $42.2 million in revenue while costing the water district $38.4 million to acquire and run the electrical system, the report says. The report assumes that the expanded water district would charge the same rates as Edison.

The option of forming a utility district merits consideration because public power agencies fared better during last summer's energy crunch, LaMoreaux said.

The state had to take over the responsibility for buying power after Edison and Pacific Gas and Electric ran out of money. PGE filed for reorganization under bankruptcy law. Still, an Edison official said, there's no plan to sell off any assets.

``Our distribution system is not for sale, and it would have to be taken through eminent domain, with all the court proceedings that would entail,'' Edison spokeswoman Alis Clausen said.

Edison officials said they think the water district's consultants underestimated the cost of a takeover, which they say would provide no benefits to customers.

The energy market has stabilized, the company is paying off its debts and should be able to resume buying its own power next year, Edison officials said.

Edison officials said Palmdale's situation is different than that of municipal utilities like Los Angeles or Burbank, which were formed decades ago and have their own power plants.

A new municipal utility would still be tied into California's power grid and susceptible to rolling blackouts just like Edison customers, Edison officials said.

``Any utility formed now would be subject to much of the same market dynamics as investor-owned utilities,'' Edison spokesman Paul Klein said. ``We don't understand why they think they can provide less-expensive power than we can.''

The last municipal utility formed in California was Sacramento's, established in 1947 after two decades of effort, Edison officials said, though a municipal utility district is under consideration in the east San Francisco Bay Area, officials said.

San Francisco voters last year narrowly turned down a public power proposal, and a Tulare County irrigation district investigated going into the electrical business, but gave it up.