DOWNTOWN -- The executive director of Glendale Water & Power promised
business leaders Thursday the electric utility will dramatically cut
rates and work to lower its cost of operating.
Bernie Palk faced more than 20 members of the business community
during a luncheon sponsored by the Glendale Chamber of Commerce. He
outlined his recommendation that the city shouldn't open its borders --
for now -- to outside competition when deregulation takes effect March
31. That would mean businesses would have to keep buying their power from
Glendale.
None of the business leaders spoke out against the recommendation, but
sought assurances that the city is doing what it can to be competitive.
"Whether we open or not, we will have lower rates," Palk said. "If we
can't keep our costs down, then we will have to open. But we can keep our
costs down. The pressure of competition has forced us to do that."
When the city pays down its debt on out-of-state power plants by 2001,
officials have projected small commercial customers will see a 20% drop
in rates and the biggest commercial users will pay 32% less. Residents
will also see a 22% drop.
A portion of the rate reduction will start in July and the remainder
expected by the end of 2001.
By shutting out competition, Glendale will be able to retain its
business customers. If some of the larger accounts left, that could
threaten the $10.8 million a year Glendale Water & Power contributes to
the city's budget to pay for services such as police and fire, Palk said.
Chamber President David Small, store manager at J.C. Penney, said he
couldn't speak for his retail chain but liked what he heard.
The chamber has yet to take a stance on deregulation.
"It appears Glendale Water & Power is striving to be very
competitive," Small said. "To me that is the biggest thing... They need
to be competitive. It's good for the city for businesses to continue
buying power."
Several business customers have told city officials in the past they
want the city to open its borders, Palk said. But even among that group,
having competitive prices is more important, he said.
Burbank is considering taking a similar stance to Glendale. Pasadena
is planning to open to competition.
