Candidate for
Director; Sacramento Municipal Utility District; Ward 1

SMUD provides $1 billion of electricity to commercial and residential customers. It is a retail electricity business whose customers are its owners. Under law all municipal utilities have certain advantages over private investor owned utilities. SMUD's tax and regulatory burdens are less and SMUD goes first in line to purchase cheap federal hyroelectric power. With these advantages, the first obligation of SMUD Directors is to provide cheap electicity to the homes and businesses of the people it serves. It is further obligated to build sufficient power plants for a growing population and a growing economy.

A recent Sacramento Bee article, August 30, strongly suggested that SMUD plans to increase electricity rates AFTER the November elections. SMUD will decide, "both how much...and which categories of customers should bear the heaviest burden."

Why the rate increases? Since it closed Rancho Seco losing 1,000 megawatts, SMUD has not replaced the loss and is forced to purchasing two thirds of its power at the mercy of a volatile energy market. Refusing to build the needed new power plants, SMUD has instead engaged in wasteful and expensive programs outside of its mission. SMUD has tried to manufacture electric cars and failed. It has struggled mightily over 20 years to produce 8.3 megawatts of solar power.It has done everything environmental and socially correct -- refrigerators, trees, minority preferences -- except to generate more electricity for its customers and the future of the region's economy and its quality of life.

It has forgotten the mission of its founders. It has moved far away from the retail electricity business into social, economic, and environmental experimentation at the expense of ratepayers. SMUD is neither a social welfare agency, nor a research and development firm, nor a venture capital enterprise. SMUD's owners, its citizen rate payers, deserve plentiful and cheap electricity for their homes, businesses, and families. Sun, solar, and biomass energy are only good when the sun shines, the wind blows, and the crops are harvested. SMUD customers need reliable and sufficient sources of electricity 24/7, 12 months a year.

The consequence is higher rates. SMUD trumpets its superior rates as compared to tax-paying private utilities. All municipal utilities do better than private electric companies. Yet SMUD ranks-- not #1 as frequently advertised. SMUD rates are # 17 out of 36 municipal utilities (and cooperatives) in California. To name a few Roseville, Palo Alto, Needles, Turlock, Modesto, Anaheim and LOS ANGELES have cheaper electricity than SMUD according to the U.S. Department of Energy, Table 14, 2002.

In 1998 a consultant found that SMUD was unproductive + producing less electricity per employee than 10 of 11 other utilities compared. In the current run up to rate increases SMUD is again distributing phony comparisons with investor owned utilities rather than honest comparisons of its rates with other municipal utilities.

After a history of mismanagement and employee misconduct, SMUD shut down its nuclear facility in 1989 losing 1,000 megawatts. Fifteen years and hundreds of thousands of new people moving into Sacramento, SMUD has replaced about half, 500 megawatts. SMUD has gone from selling surplus electricity in 1988-1989 to purchasing two-thirds of it in the volatile spot market, drought ravaged northwest, and in high cost contracts. Sacramento's population and economy are growing requiring new generation capacity to avoid blackouts in the near future. 500 megawatts from a new gas turbine plant will be available only after the summers of 2004 and 2005 pass.

SMUD should get back to basics.