Shining Up Sacramento’s Lackluster Public Utility — Episode 172 of Local Energy Rules

Date: 7 Dec 2022 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

20 years ago, customers of the Sacramento Municipal Utility District (SMUD) were solar “PV Pioneers.” Now, the utility is stifling customer-owned solar, increasing fixed charges, and one third of SMUD customers can’t afford their monthly bill.

For this episode of the Local Energy Rules Podcast, host John Farrell is joined by Derek Cressman and Fatima Malik, who have both run for seats on the Sacramento Municipal Utility District (SMUD) board. They describe the evolution of SMUD, how the public utility is failing its customers, and share their proposed solutions. This is the full interview that was partially released in part five of The Promise and Peril of Publicly-Owned Power series.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Derek Cressman: I would encourage people to think about establishing public power as the beginning of a process and not an end. It’s not going to fix all of your problems, but it’s going to give you an opportunity to stay civically engaged so that you can fix them.
Fatima Malik: You want good leadership, but right now our leadership lacks luster. And so when you have lack luster leadership, it’s not good, right? And so I think we are starting to really realize like, wait a minute, these folks have been here way too long. They’re way too comfortable.
John Farrell: Public power has long been viewed as a crucial tool for communities to hold their electric or gas utilities accountable. President Franklin Roosevelt famously described public power as a birch rod in the cupboard to discipline a poorly performing private utility. But how can a community discipline a publicly owned utility that is underperforming? Joining me, I have two candidates, current and former, for the board of the Sacramento Municipal Utility District in California, one of the nation’s largest municipal utilities. Fatima Malik is a public health professional, a lifelong Sacramento resident, and she was narrowly defeated in her 2020 campaign for a board seat, but is planning to run again in 2024? Derek Cressman is an author and former nonprofit executive and a longtime clean elections advocate who ran for the SMUD board in 2022. They joined me in September of that year. Listeners note: some of this podcast audio was shared in Local Energy Rules episode 169 as part of our series on public power. This is the full interview. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a biweekly podcast during powerful stories about local renewable energy.

Derek and Fatima, welcome to the podcast.

Derek Cressman: Great to be here. Thank you.
Fatima Malik: Thank you for having us.
John Farrell: Perhaps you have a similar platform since you were willing to come onto the podcast together. But to draw out what your campaigns are about, I wanted to give the listeners some context for one of our first Local Energy Rules episodes. I interviewed Brent Sloan from the Sacramento Municipal Utility District about the utility’s solar pioneers program. He described how SMUD, as the utility is known, was actually one of the leaders in getting solar on individual rooftops, their program standardized solar arrays on residential homes to get experience with the technology. It’s really interesting and really innovative in its time in the 1990s. But as I understand it, SMUD is not as big a fan of rooftop solar these days as it was 30 years ago when it was doing that program. I imagine that might be one of the issues of of your interest. But I’d like for you to share more about your campaign’s focus. So Fatima, let’s start with you since we corresponded when you were running as a candidate in 2020 and you’re gonna be running again in 2024, can you tell me a little bit about what was important to you in running for the SMUD board and what were some of the things that you were concerned about?
Fatima Malik: Yeah, thank you John. And you know, again, thanks for having me. Happy to be here. And I think a lot of the challenges and concerns that we had as a society, as a nation in 2020 are still resonating now in 2022. I think first and foremost climate change, right? And we’re seeing an increase in kind of the impacts of that from these extraordinary heat waves taking place right now in California to very catastrophic flooding in Pakistan, which is where I was born. And so I think for me, having a global impact and witnessing that and even experiencing the local effects of climate change is very near and dear to my heart. So I think first and foremost, thinking about energy and how it impacts climate change has been a concern and it continues to be an alarming challenge that I don’t think we’ve actually quite resolved yet.

So that’s an ongoing issue. And then the other piece is that energy creates a housing burden. And quite frankly since the pandemic we’ve all been home more, we need electricity especially to manage the hotter and colder temperatures. And as I think about what was important to me then, and it’s still important to me today, is the cause of energy, right? And who can afford it and pretty soon it’s gonna become a luxury. I’ll start with the equity piece right here in SMUD territory, as you know, it’s a public utility. During the pandemic, and even now, brown and Black families are affected at a disproportionate rate with the increased burden of energy costs, housing burden. And I think that we have not resolved that when one in three SMUD customers are behind on their utility bills and they’re at jeopardy of having their power shutoff and or now power shutoffs have begun that we’re a little delayed during the pandemic.

And so it’s this like wave of emergency and almost I’ll say disaster, a situation that low income families, specifically brown and Black families are experiencing. Are we gonna get to climate resiliency when we haven’t resolved? Those who are not able to access right now a very fundamental resource, which is energy at an affordable rate. Equity for sure has been a concern. And we haven’t resolved that. There’s this bandaid of energy assistance programs. But I mean when your SMUD bill is four, $600 a month and you get assistance for how many months, it’s not solving the larger issue here. So I’ll just say we’re not gonna survive without a new way of doing business. So for me it’s really about what are we doing to transition into this new era of climate change, right? Of extreme weather patterns. And now that everyone is home or requiring more energy and the cost of energy is going up, whether you’re a private or public utility. So it’s not reliable, affordable. So yeah, so those are some of the concerns we have that I have when it comes to low-income families here in Sacramento and across the nation actually there is a disproportionate burden for communities of color when it comes to energy and meeting those energy needs.

John Farrell: It’s really helpful to have you lay out the connection there between climate change and affordability. But with California experiencing temperatures over a hundred degrees this summer, obviously these temperatures are a big variation from what’s typical but also a serious threat to human health. So access to affordable air conditioning is becoming more of an issue, I’m sure. Derek, I wanted to turn to you. In the past year, the Center for Biological Diversity published a study that was tracking the number of times that utilities had cut customers off from electricity service during the pandemic for profit. Utilities were kind of targeted in that study cuz because they were cutting off power to customers by the tens of thousands that were not able to pay their bills. But given what Fatima has said, it seems like SMUD isn’t much better than for-profit utilities in that regard. Is affordability a big issue in your campaign for the SMUD board and are there other issues that are top of mind?
Derek Cressman: My interest is related to affordability and reliability and particularly in pursuing a path of distributed energy as a way of getting there. Particularly in SMUD territory involves a lot of rooftop solar, but also other distributed resources such as home batteries and soon vehicle batteries. And I think small businesses using things like fuel cells through a distributed grid, I think that will be much more resilient during a heatwave episode like we had last time and put less stress on the grid than a centralized monopoly model would. And in the long run will be cheaper and more resilient and more reliable for all of our customers.

And I was quite frankly shocked two, three years ago when I explored putting rooftop solar onto my house and called an installer that had done one for one of my neighbors. And they came and informed me that they had a financing model called a power purchase agreement where they would install a rooftop solar system on my house at zero cost to me. I’d enter into a contract with them to purchase power from them at a cheaper rate than SMUD for the next 20 years. And that program made electricity very affordable for people who can’t afford a 20 or $25,000 upfront cash payment to install their own system. And sadly, what the contractor informed me at the time is they were gonna have to discontinue that program if SMUD changed their net metering rates. And in fact, that’s exactly what happened. SMUD did make that change and they have discontinued that program. So I think we’re gonna see a real contraction in rooftop solar and distributed energy in SMUD territory, with the exception of new homes that now have a statewide mandate to have solar installed with them. But I think that’s a big mistake for any utility, particularly in this age of electrification, where due to climate concerns, we need to electrify our homes with heat pump water heaters, heat pump air conditioning and heating units, and moving on to electric vehicles. We’re going to need to double or triple our electric production. And that either means we’re gonna use a lot of open space for utility scale solar and wind projects or we’re going to need to push towards a distributed energy model. And I’ve been disappointed that SMUD has been basically taking the same hostile posture towards that as the investor-owned utilities all across the country because they are all viewing it as competition to their monopoly on providing electricity.

John Farrell: What I’m curious about Derek is that with an investor-owned utility, with a for profit private utility, there’s a pretty clear connection between, oh, well if the customer installs solar, it is competing with my ability to build a transmission line or a power plant that I can profit off of. I’m kind of curious, do you have any sense of why it would be that Sacramento’s municipal utility has adopted the same hostile stance toward rooftop solar given that there’s not a profit motive? Like how do they explain it and does it make sense?
Derek Cressman: Yeah, I asked that same question and where I finally found the answer was digging into SMUDs bond offerings. And it turns out that SMUD, and I suspect other municipal power companies across the country, are highly reliant on the bond market to finance their transmission lines and power plants and projects like that. And so getting a good bond rating is crucial for them. And it’s very clear that the bond market is not that different from the stock market in how it views distributed energy as competition, right? Because the bond market doesn’t make any money when somebody installs rooftop solar, but they do make money if there’s a utility scale installation that’s put through financed by bonds. And so oddly enough, there are similar financial pressures on municipal utilities coming from Wall Street. It’s just the bond market as opposed to the stock market. So that was an eye-opening revelation to me, but it does help to explain a lot of SMUDs hostility to rooftop solar and other distributed energy.
John Farrell: I’m just delighted by this conversation right now because a lot of times I’m asking questions I already know the answer to and this time I didn’t. And that was fascinating. I have never heard this connection between bond holders and municipal utilities. I get asked this a lot by other folks and I’ve been able to talk a little bit about municipal utilities do make transfers often in lieu of taxes into like the general fund of the city in which they serve. And so there is a revenue competing interest here to some degree, but that’s fascinating to know and it has some interesting connections as well to the pressures we see, for example, for rural electric cooperatives, also not for profit utilities and they are held hostage by long term contracts for paying off coal and other kinds of power plants. I can imagine that the pressures there are very similar when it comes to financing.
Derek Cressman: The other equity issue, jumping back to Fatima’s comments that that the bond market comes into play with, and this again was a surprise, but SMUD has adopted a rate structure of very low rates, but very high fixed monthly fees, has the highest fixed fee of any utility in California, public or private, $23 a month. PG&E right next to us is $10 a month. So that’s a regressive fee. You know, regardless of your income, regardless of your household size, you’re paying that same fee. SMUD I think is confusing equity with equality. Their argument is, look, everybody uses the grid, everybody’s gonna pay the same equal fee for the grid, but we don’t all use the grid equally, right? You can have a mansion out in Carmichael or some of the wealthier parts of Sacramento County, five or 6,000 feet swimming pool whatnot, putting way more strain on the grid than a small studio apartment and affordable housing in downtown or midtown or whatnot.

Everyone’s paying that same fixed fee. It’s a little bit like charging a bicycle or a Toyota Prius carpool or a semi truck the same toll to cross a bridge cuz you’re saying, well you’re all using the public infrastructure. But yeah, we’re using it in radically different ways and SMUD brags about this rate structure into their bond documents. They say we’ve devised this fee to ensure that we get sufficient revenue even from people that are doing a lot of conservation or a lot of self-generation. And so it’s put in place as a disincentive to rooftop solar and other distributed energy and, and also quite frankly is a disincentive to spending a lot of money on conservation cuz you’re not gonna save as much on your bill as a PG&E rate structure with higher rates, lower fees.

John Farrell: Wow. I’m absolutely fascinated by the financial connections here that you’ve uncovered and really, really thankful that you can help make that connection for myself and for others. I wanna step back as we’ve been talking about equity here, both in that rate structure and in terms of the impact of affordability. You mentioned the power purchase agreement as a model for how people could get solar and avoid some of the upfront costs of having to buy it themselves. That’s definitely something of strong interest to the Institute for Local Self-Reliance where we’ve often looked at the difference between, for example, power purchase agreements or leasing versus ownership. The other thing that I’m aware of, and I’m curious if this was the case with your neighbor’s power purchase agreement, is that you often do have to at least pass a credit score test in order to access that. So even though there are these options that can lower the upfront costs, solar can still be difficult to get for people who are low income or maybe low credit. Are there ways in which you envision that the public utility could help with that to make sure that access to rooftop solar would be more equitable than maybe it has been in the past?
Derek Cressman: Absolutely. I would like to see SMUD start offering financing at low rates to its customers to install rooftop solar or maybe even SMUD would go ahead and install it for them. But SMUD already has a mechanism for billing customers, a customer service staff to do that, a whole collections process. And so why go out to a redundant financing authority or bank or institution to have to set up all of those processes? Again, SMUD knows the credit worthiness of its customers, wouldn’t need to do a credit check, but if you’ve been paying your SMUD bill reliably for 12 months, you might be a good candidate for a rooftop solar and SMUD could finance that and just tack on the payments to your monthly electric bill. At the same time they’re tacking on the savings <laugh> of your rooftop solar system to your monthly electric bill. So I, I think municipal utilities and SMUD in particular could be much more active in the financing and collecting payments for rooftop solar and other energy efficiency measures, converting from gas to electric water heaters and heat pumps and things like that. SMUD’s been reasonably good at offering some incentives on the purchase for things like especially converting from gas to electric cuz they’re stealing business from PG&E and also benefiting air pollution and climate change and whatnot. So it’s a good move. But as they’ve prioritized that, they’ve been putting less money into offering subsidies for just pure electric conservation measures. Whereas in the 1990s, in that period you were talking about SMUD was a national leader on load reduction and energy efficiency measures.
John Farrell: Related to, as I recall, nuclear power plant that didn’t pan out in the way that they had hoped, which is a pointed lesson for our nuclear proponents out there that it still is complicated. It was complicated decades ago. And as people in Georgia Power’s service territory can tell you, it’s still complicated now. Anyway, sorry for that little sideline on nuclear.
Derek Cressman: Well, it’s an important thing to remember even now. Cause to me what it demonstrates is, and for your listeners who may not know, in 1989 Sacramento voters voted to shut down the Rancho Saco nuclear power plant, which had been an expensive debacle down 50, 60% of the time for maintenance. And so they voted to shut it down and to its credit and I think differently than an investor owned utility would’ve, the day after the vote, they shut the plant down. They did not fight this in court for months or years. One of the real benefits of municipal power is they are more responsive to public pressure. And we saw that again just a couple of years ago due in part to Fatima’s campaign and organizing by local environmental groups and energy groups that were rightfully complaining about a horrible integrated resource plan that SMUD put out that called for keeping its gas fired power plants open all the way through 2040. And the community was outraged by it and organized around it and candidates ran based on this and SMUD responded and they said, okay, we’re gonna go zero carbon by 2030. And they’re still not doing it as fast as I think they can and should do. But it is an example of organizing and public pressure working. Whereas so often when we go up against PG&E or the investor owned utilities, they’re just immune to public pressure and you’re solely relying on regulation to move their behavior.
John Farrell: Fatima, I’m kind of curious, you mentioned affordability as one of the center pieces of what your interest was and, and what SMUD could do differently. One of the things I’m really curious about is there are a number of advocates who work on energy issues who are essentially saying we need to move away from the model where we turn off people’s power even if they can’t pay their bills. Right. That energy just needs to be seen as a right. Whether it’s heat waves caused by climate change and the ability to find a cool place to be, whether it’s the fact that more flexible work allows us to work from home or do school from home, we need access to the internet, we need electricity for that. It’s just essential service. I’m curious if you could talk a little bit more about sort of that nexus of like affordability and access to energy and if that has featured large or if there are other things that were part of your campaign or that you’ve seen as really important conversation that you think public power could do better or that you wish that SMUD would do better. I’m really curious about what other elements there were in your campaign and your continued work to improve SMUD.
Fatima Malik: Yeah, I think that for me the focus is on neighborhoods and the reality is this, right? Energy impacts everything that we do. If it’s too hot or it’s too cold, it makes us sick, right? And more importantly, how does energy affect the lifestyle of the poor? It pretty much screws up people’s life, right? And for me, I guess I really hope, and this is my goal and desire, is that we do the right thing for disadvantaged communities, for disadvantaged populations, especially those that are now experiencing environmental injustices or this legacy of injustices, right? That compound this poverty, the intersection between now being affected disproportionately by climate change. And so I guess there’s really a couple of things. So first and foremost, yes, how do we ensure that the lights stay on for our most vulnerable populations who can’t afford it? And I think that that has to become an equity question of how do we have great designed for those with low income, no income, limited income for renters versus homeowners.

And so that is the first kind of question at hand, right? Is having maybe a new rate structure to account for those who can’t afford the current rate and or charging a little more for those who can afford a little more or who are using more, right? So I think there’s certainly a need for just greater rate structures to address equity income based. And so in addition to that though, for me as a public utility, SMUD can buy power from anyone, right? And they could buy it above market to help low-income communities. And so I guess my suggestion would be that, I think about the Navajo Nation that is now selling their power, right? How can we get disadvantaged communities that are suffering economically to be able to participate in this solar energy market when let’s be real, solar technology is the people’s technology, right? This really belongs to the people.

I’ll give you a little example. Like let’s put it in context, right? Good, bad or indifferent right? Now if I need to go get gas, at least I can go to a variety of different gas stations. I got options, I can go to the mom-and-pop independent distributor or I can go to these transnational kind of corporate places. But what happens when SMUD, the local utility company becomes the only gas station, right? Or the only provider of this, as you said, precious necessary resource at this point, which is energy. We all need it. And so it eliminates competition, right? It corners the energy market. Now the solar energy market, right? My hope and goal and dream right now is that communities that are disinvested, that are disadvantaged need to be part of producing energy both for themselves and for their neighborhoods, right?

Cause neighborhood economies are really necessary right now and I think it would help SMUD to achieve all of their goals. But unfortunately SMUD is really focused on solar farms and they’re getting ready to eat up like thousands of acres of just pristine natural land to build these solar farms and batteries which serves them but not the public or the people that need it the most. And so I think that would be, for me, kind of the biggest necessary change is how we do business and actually working with the communities that need it the most to help them produce power so it’s cheaper and or even purchase it from them so that they can rebuild their economies.

Derek Cressman: You know, one thought that came to mind raised by your question, I think we should be thinking about at least a modest amount of electricity as a human right in the same way that, you know, clean water to drink and clean air to breathe should be viewed as a human right. And one of the things that I believe and hope will happen as we move to a distributed energy grid is utilities will have more detailed data about the electricity you’re using in your home through a smart grid. And so for example, through a load management program that you might sign up for, they could offer you a discount and say, Hey, let us pre-cool your house from three to five and then raise your thermostat between five and eight when the grid’s under a lot of pressure.

That same technology could perhaps be used in sort of the way we do lifeline telephone service, right? Where you’re always gonna be able to dial 911 even if you can’t make a long distance call to Europe. We could have circuits in a home that are connected to basic heating and cooling to keep a house healthy for somebody, especially if they’re immune compromised or elderly, or going through a health crisis or have healthcare equipment. But maybe if they have a pool, their pool pump wouldn’t be viewed as a human right? And so instead of shutting them off, they could be put on minimal life preserving power and then, okay, let’s deal with these other issues and payment issues for not, not even necessarily excessive, but other uses of energy would provide options besides just shutting somebody off or letting them run up an electric bill for things that are beyond necessary for just human survival.

John Farrell: It’s really intriguing to hear you talk about lifeline too, cuz I remember at a convening, I was at one of the last events I went to before the pandemic, someone from Iowa talked about that they used to have lifeline rates where it was something like $10 for a block of 300 or 500 kilowatt hours, something like that. So it wasn’t as technologically savvy. This was back in the 1980s I think. But the principle was the same that that modest block of electricity would be very low cost $10 a month or something like that. Maybe there’s your proposal as you take that inordinately high fixed charge and you say, well that fixed charge gives you that basic block and the rates other than that need to cover the more optional uses discretionary uses of energy.
Derek Cressman: Yeah, that’s a very interesting idea. Yeah, thank you for that. One other thing that I’d throw out for you and your team at the Institute to look at would be differences in public utilities that have an elected board versus an appointed board. I suspect that there are pros and cons to both. But for example, SMUD has an elected board. I believe we’re the only electric public utility in California that has that. You compare it to the Los Angeles Department of Power and Water, which has an appointed board. And there’s some interesting differences. SMUD pays its general manager upwards of $750,000 a year. LA Department of Power and Water, which serves triple the number of customers and provides two utility services, pays about $200,000 less. I’m wondering why that is. And if in fact appointed boards might govern their utility more comparable to the other county or city utilities or departments like your trash services and your water services and your electric services and think about a compensation scale similar to those, whereas those with elected boards tend to compare themselves more to the private sector.

And we see it also in SMUDs public relations and marketing budget, which is about 28 million per year. It’s like $43 per customer, right? So talk about an equity issue and this is to pay for billboards in our airport, just that’s saying SMUD is wonderful and smart. Not educating people about a rebate program or a rate program or anything like that. And LA Department of Power and Water dramatically less spending on sort of self, self-aggrandizement. That may be because the board members don’t have to run for reelection and aren’t trying to sort of bolster their own reputation. I’m not sure, but I think your organization and the folks that are looking at starting new municipal power plants should think about this and go, well, is it best to have them directly elected? Cause that does mean that they’re more prone to public pressure and we’ve seen some benefits from that in SMUD. Or does that turn your board into sort of mini politicians who are using it as a stepping stone for other office and are therefore reticent to be critical of the utility or hold it to account because they’re looking for kind of the good PR boost themselves. So I don’t know the answer to that, but I think it would be worth further study by all of us and in particular your group.

John Farrell: Thank you for that suggestion. That’s really interesting to think about how those differences play out and some fascinating anecdotes there about how that could be playing out with SMUD versus LADPW in terms of that marketing budget in particular. Yeah, there’s a lot bigger incentive if you’re running for reelection to make sure that the institution you’re running is popular by the public.
John Farrell: We’re going to take a short break. When we come back, we talk about the arc of Sacramento’s public utility from being an upstart public agency to today. And I ask what advice that Fatima and Derek have for advocates seeking publicly owned power in their community. You’re listening to a Local Energy Rules podcast with two candidates for the board of the Sacramento Municipal Utility District in California, Fatima Malik and Derek Cressman.

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Fatima Malik: Can I add something to that?
John Farrell: Please, please do.
Fatima Malik: I think Derek is spot on in terms of, we should certainly kind of dig a little deeper into the governance structure and then obviously how that plays into the rules, policies and rates that are set. For me, what’s really fascinating about SMUD, right, again, if we think about like it’s origin story, right? It’s a beautiful origin story about a hundred years ago when the voters wanted to not be a part of this private utility company, PG&E. And so SMUD was born and created again as this public utility. And again, under the leadership of David Freeman, as you know, who came from the Tennessee Valley Authority, right? And his legacy of just like solar and conservation, which lasted about 30 years. But now if you think about it, SMUD is not that leader that they once were and or even that public utility that they once were.

I certainly see it operating more as a private company and not really responding to the community, the public or customer’s needs. And what’s even more fascinating to me, so just to give an example, I did a little research of my own, five out of seven of the SMUD board members run uncontested, right? So these seats, the folks in these seats have been there a long time. They’re comfortable. They pretty much are just like by default. And so the person that I ran against, he’s been on the board 12 now to be 16 years, right? And when you think about that, and I think about this too, it’s like there are no board limits or in terms of term limits, there are no campaign contribution limits. I mean, the state is kind of doing a little bit of that at the state level, but like when these local races, and especially local utility rates, customers don’t even know that they get to vote.

So there’s a lot lack of connection and knowledge there. And then as I think about even now, like running in, let’s say if I was elected, would I want term limits? If it’s the, let’s say right person in that seat, you want good leadership, but right now our leadership lacks luster. And so when you have lack lister leadership, it’s not good, right? And so I think we are starting to really realize like, wait a minute, these folks have been here way too long. They’re way too comfortable. And I think now with this whole conundrum around climate change and what to do about solar energy, the conversation is not changing to benefit those that should, right? Which is the customers, the public, it’s like this devaluation of, I’m gonna say customer produced solar energy, right? First and foremost. But also it’s like we have so many other challenges from, yes, Rancho sake of the nuclear power plant was shut down, but it hasn’t been decommissioned, right?

Again, for political or other reasons. We’re still spending money on, for whatever reason, kind of like it’s still there, but it’s still costing us money. So that’s a problem. It has not been decommissioned and closed. And then we have these gas powered plants, which again, three of five are in disadvantaged communities affecting asthma and respiratory problems and air quality, which then affects COVID and all those respiratory issues. So again, you have these compound issues of the policies that we have in place, but then the leaders who set those policies, and I think Derek’s hit a spot on too, of like the growth compensation of the CEO. Like that’s the highest salary in the state of California. And yeah, we believe in living wages, but at what point is it just atrocious and a bit maybe excessive?

John Farrell: Derek, any last thoughts for you? Or maybe advice for people who are residents in a community that has public power and what they can do to make sure that they’re holding it accountable?
Derek Cressman: I guess I would encourage people to think about establishing public power as the beginning of a process and not an end. It’s not going to fix all of your problems, but it’s going to give you an opportunity to stay civically engaged so that you can fix them. But if that civic engagement falls away, and if people don’t run and contest elected board seats and don’t keep an eye, you know, watch dogging the rates and the budget and providing an oversight role, and the same way that we have to do with every government entity, well, things can go off the rails and institutions develop a life of their own and become insular. And it’s just the nature of human organizations, whether they’re for-profit or government. And so citizens need to stay engaged and vigilant because it really matters how we generate our power and how we distribute that power and, and how we pay for that. And so if you have a public power company or organization, you’ve got better opportunities to be engaged and, and stay on top of that
John Farrell: Fatima, advice you would have for folks who are trying to improve their public utility or hold it accountable?
Fatima Malik: Yeah, I think people need to get involved in the conversation, pay attention and run, run for these seats. It’s really important that people get involved. They have a voice and a seat at the table. And so I would say it’s necessary to have more representation on these boards. I encourage you to run, to speak up and to learn as much as you can because it literally affect all of our lives. And we’re just at a point now where we can’t ignore the cost of our energy bills when we get that letter or email or you know, you get that notice like you’re about to have your power shut off or if your power is shut off. So yeah. So I guess my only suggestion is it’s time. It is really time that we have the conversation, we change the conversation and that we find more robust leadership to help us get through this new era of affordable energy, clean, renewable, regenerative energy that meets all of our needs.
John Farrell: Well thank you to both of you both for putting yourselves out there as candidates to try to make a public institution better. Also for taking the time to talk with me. I’ve learned a lot about what you’ve been working on and the struggles that you had and a lot of really good tidbits in here for folks who are focused on public power about how, how it can and cannot address the needs that they’re trying to get addressed for their community. So thank you again, really appreciate your time.
Thank you.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules, where I was joined by Sacramento Municipal Utility Board candidates, Fatima Malik and Derek Cressman. You can learn more about the candidates’ critique of the Sacramento Municipal Utility on their candidate websites linked on our show page. You can also hear our interview about the utilities early innovation with rooftop solar in Local Energy Rules episode 27 with Brent Sloan from the Sacramento Municipal Utility District. If you liked this episode about public power, you’d probably also enjoy our six part series, the Promise and Peril of Publicly Owned Power published in the fall of 2022. As always, you can find a map of all 2,000 US municipal electric utilities, and many other measures of energy democracy on ILSR’s interactive Community Power Map. On our website, you can also find many other stories and interviews about publicly owned utilities or communities pursuing public power. Local Energy Rules is produced by myself and Maria McCoy, with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.


Candidates Raise Concerns over Conditions at SMUD

Derek Cressman and Fatima Malik have each run for seats on the Sacramento Municipal Utility District board. In their respective campaigns, they both raised concerns about how SMUD is failing to protect Sacramento’s most vulnerable electric customers. Malik states that one in three SMUD customers are behind on their utility bill, putting them at risk of service disconnection. Meanwhile, California’s heat waves are getting more deadly for those without adequate cooling power.

SMUD has also increased its minimum fee, placing more burden on those who use the grid the least.

There’s this band aid of energy assistance programs. But when your SMUD bill is $400, $600 a month and you get assistance for how many months, it’s not solving the larger issue here… we’re not gonna survive without a new way of doing business.

— Fatima Malik

Cressman and Malik agree that distributed energy generation is more reliable, resilient, and can be more affordable for customers. SMUD, however, has phased out its once solar-friendly policies.

Public Utilities Also Bend to Private Pressure

Cressman goes into some detail about the bond market, bond ratings, and how public utilities finance projects. Essentially, even though they don’t answer to shareholders, public utilities also prioritize utility-owned projects to boost their bond rating. They even go so far as to disincentivize customer-owned solar and energy conservation projects.

I’ve been disappointed that SMUD has been basically taking the same hostile posture towards that as the investor-owned utilities all across the country because they are all viewing it as competition to their monopoly on providing electricity.

— Derek Cressman

To its credit, SMUD has demonstrated some accountability to the public — often cited as one of the benefits of public power. The utility shut down the Rancho Seco nuclear power plant (though, as Malik notes, it has not yet been decommissioned).

What Do SMUD Board Candidates Want to See in Their Utility?

Cressman and Malik have many ideas for improving both governance and service at SMUD. They want to see more innovative, customer-centric programs, including on-bill financing for solar, free or affordable “lifeline” electricity service, and utilizing community-owned solar as an economic development opportunity.

Solar technology is the people’s technology.

— Fatima Malik

Malik wants to steer her utility back to its “origin story;” SMUD started as a public alternative to the for-profit Pacific Gas & Electric and was a leader in solar. To get there, customers must vote in local elections, or even run for the board themselves.

Think about establishing public power as the beginning of a process and not an end. It’s not going to fix all of your problems, but it’s going to give you an opportunity to stay civically engaged so that you can fix them.

— Derek Cressman

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.

This is the 172nd episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.

This article originally posted at For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update

Featured Photo Credit: Photon Energy via Flickr (CC BY-NC-ND 2.0)

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Maria McCoy

Maria McCoy is a Researcher with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.