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Liberty Utilities’ Ratepayer Rip-off Scheme

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By ROGER PATCHING

You are about to be ripped-off big time by your local electric company, Liberty Utilities. But if you act now, we might be able to stop it. The rip-off amounts to more than $50 million distributed among only 49,000 ratepayers.

Newly created Liberty is not your standard utility like PG&E or Sacramento Municipal Utility District. It is wholly owned by a Canadian holding company (Algonquin Power and Utility Company) that raises investor funds to buy energy projects. Their primary concern is not to serve as a utility but to produce big profits for investors through the manipulation, most recently of vulnerable little utility monopolies it acquires. Liberty’s tiny group of ratepayers was once part of Sierra Pacific Power’s 1.1 million.  

The way it works isn’t complicated. The subsidiary company (Liberty), at the behest of its parent (Algonquin), tries to sell the regulatory California Public Utility Commission on the notion that it needs an “upgrade” when it doesn’t. If approved, Algonquin issues stock on the promise of high growth and/or Liberty borrows the project money from Algonquin. The project costs and financing are passed to the ratepayers. It has little to do with building to meet energy demands but rather for enhancing the parent company’s balance sheet.

And since the engineering doesn’t exist to justify expansion, the sales pitch is by corporate attorneys using fabricated figures instead of science. We and other nonprofits led by the North Tahoe Citizen Action Alliance have challenged the false claims. Our worry is that the scheme might succeed with the commission unless more of the community gets involved.  

The unnecessary upgrade has to do with North Tahoe/Truckee. The issue and their sales pitch is that power runs both ways in a loop between Truckee and North Tahoe. Therefore, even with a break in the line, power would still be delivered from either direction. Most of the loop operates at 60kV. And with residential growth the capacity could be increased with new lines. Sound simple? It’s meant to. This idea was introduced by Sierra Pacific Power in 1996 when it projected 54 percent growth in 15 years. It didn’t happen. While Truckee grew, there was essentially no growth on the loop. Ignoring this fact, the same plan to spend $50 million to rebuild the entire loop at 120kv is now being pitched as needed to serve Northstar/Squaw Valley resorts as well as Martis Valley developments. The wise approach would be to take less expensive steps that upgrade the weakest part of the system first.  

But no, Liberty and its parent don’t want a simple and incremental project. That’s not how they make money. Especially egregious and unnecessary to rebuild now is the 625 line between Kings Beach and Tahoe City. It alone would cost half of the $50 million and cause the removal of more than 25,000 trees — the largest forest removal and road building project in the Basin in modern history. Contrary to the well honed narrative by Liberty, this line is already heavy duty and won’t need to be updated for decades, if ever. Moreover, increased building is not anticipated along this line because it falls in the Basin under TRPA’s jurisdiction, unlike Martis and the ski resorts.   

For more information proving why we don’t need it and who to contact to halt it, see friendsoflaketahoe.org.

~ Roger Patching is president and CEO of Friends of Lake Tahoe.

 
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November 9, 2017