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HomeMy WebLinkAboutRES NO 112-98RESOLUTION NO. lJ 1~' 9 8 RESOLUTION OPPOSING PROPOSITION 9, ELECTRIC UTILITIES, ASSESSMENTS, BONDS, ON THE NOVEMBER 1998 BALLOT WHEREAS, in 1996 AB1890 was signed into law restructuring California's electric services industry and in 1997 SB477 added several areas for consumer protection to the legislation, allowing users to choose to continue to purchase their electricity from existing investor-owned utilities (IOUs) who continue to provide and maintain distribution and transmission systems or purchase from energy services providers, and WHEREAS, Proposition 9, called The Utility Rate Reduction and Reform Act, would make several changes to existing legislation and would eliminate recovery of "stranded" capital costs, including those of municipal utilities, which are currently allowed to be charged to all electricity customers as Competition Transition Charges (CTC), and WHEREAS, AB 1890 froze all electricity rates to protect consumers during electrical restructuring at June 1996 levels until January 1, 1998, with a 10 pement rate reduction for residential and small commercial customers at that time and another 10 percent reduction expected in 2002; and WHEREAS, the first rate reduction has been achieved by financing a portion of the residential and small commercial customer's share of the CTC paid to the IOUs through $6 billion in rate reduction bonds issued by the State Infrastructure and Economic Development Bank to be repaid over ten years, thus spreading residential and small commercial customers share of the CTC over a longer period of time; and WHEREAS, the precedent set in Proposition 9 by disallowing payment on CTC rate reduction bonds could impair the ability of state and local governments to secure low-cost financing for local infrastructure bonds and other types of bonds; and WHEREAS, the State Legislative Analyst and the Department of Finance have determined the net impact of this proposition on state government revenue reductions to be potentially in the high tens of millions of dollars annual through 2001- 02 and local government net revenue reductions potentially in the tens of millions of dollars annually through 2001-2002; and WHEREAS, this proposition could exacerbate the financial problems experienced through unfunded state mandates and serves to eliminate customer choice and competitive electricity rates in the newly restructured electricity services market. C ORI NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Bakersfield as follows: The Council of the City of Bakersfield is opposed to Proposition 9, Electric Utilities, Assessments, Bonds, on the November 3, 1998 ballot due to the unsettling effects it would have on the newly restructured electricity services market including limiting customer choice and competitive electricity rates, the negative fiscal impact it would have on cities, and the uncertainty that would result in the municipal bond market as a result of questions about repayment of the $6 billion in rate reduction bonds. .......... o0o .......... I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof held on AU6 ~' ~, 1~8 , by the following vote: CITY CLERK and EX OFFICIO(CLERK of the Council of the City of Bakersfield APPROVED BOB PRICE MAYOR of the City of Bakersfield APPROVED as to form: of the City of Bakersfield ©RIGrNAL