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	Photo: Lisa Sze

What's So Great About AP&T

Public Utility Is a Bright Idea

   
    When Alameda got its first electric street lamps in 1887, the technology was still in its infancy. Thomas Edison had only just developed a viable light bulb in 1879; the first street lights, which used arc lamps and were called “Yablochkov candles” (after their Russian inventor), appeared just three years later. In fact, no electric utility companies even existed until 1882, when Edison set up the first commercial power station in lower Manhattan, specifically to fuel that city’s new electric streetlamps.
    As such, Alameda’s decision to put in streetlights as an “essential public service” put the small city squarely on the map of the country’s burgeoning electricity industry. Alameda’s Board of Trustees (the predecessor to the Alameda City Council) paid Jenney Electric Company $20,000 to construct just 13 streetlights—plus a 90-kW generating station at the corner of Otis Drive and Park Street. That purchase made Alameda one of the first cities in the country to have electric street lamps.
    The city had planned all along to buy the generating plant from Jenney Electric. But the worth of the plant nearly doubled between 1885 and 1887. “Folks thought it was an obscene price,” says Matt McCabe, head of public relations for what is now called Alameda Power & Telecom. “There was great controversy because the city had to borrow $15,000 from its sewer fund to manage the purchase.” One editorialist for the Alameda Daily Argus, in fact, was so dismayed that the city was throwing taxpayer money into a “bottomless pit” that he wrote, “Unless this supreme folly is checked, may the Lord have mercy on their souls and pockets.”
    Sound familiar? As Alameda’s own public utility struggles yet again with big-time debt (and no small amount of hostility from its critics), it might be good to remember just what’s special about a city having its own utility. AP&T is now the oldest utility west of the Mississippi—and the second oldest municipally owned utility in the country. Yet it remains cutting edge on the national scene. Small and independent, AP&T has bucked the growing trend toward utility mergers. And it has depended on a mix of clean, renewable electricity sources (i.e., non-oil) since long before the words “global warming” first hit the media in the late 1980s.
    “Over its long history, the utility has responded to many, many changes,” notes Ann McCormick, who heads the city’s Public Utilities Board. “We think we’ve done a very good job of being innovative and responding to public needs.”

The Best Lit City

    Those first streetlights were a big deal in Alameda. The city had never put in many gas street lamps; many Alamedans probably had never seen an electric light when the streetlights were installed. The existing technology—“arc” lamps, in which a current of electricity danced from one carbon filament to another—shed such a bright light that the lamps had to be mounted on 125-foot high iron masts that were secured with lines attached to the ground. The city placed two in the East End, two in the West End, two on Park Street and seven in between. As was customary in other cities, all the lights were turned off on nights when the moon shone brightly.
    Thirteen lights may not seem like much. But at the time, the whole town was in the midst of what local historian Woody Minor calls “a period of huge development.” The Transcontinental Railroad was expanded to Alameda in 1869, a project that increased the town’s population from 500 to 10,000 in just over 20 years. Trees were coming down, houses were going up, a sewer system had just been built—and now some areas were lit by what must have seemed like impossibly harsh, bright lights. “I’m sure some people looked on the street lights as a technological wonder,” Minor says. “But others must have resented the urbanization of what had been a sleepy farm town.”
    And electricity begat still more advances. By 1899, the city had erected 30 more streetlights (at just 90 feet high). In 1902, the Municipal Electric Light Plant started selling electricity to residents. By 1905, the city had installed 500 electric meters across the Island; by 1915, the number had risen to 5,000. And by 1916, the city had installed 4,200 new streetlights—one every 75 feet on every block of the Island. In 1921, Alameda’s streetlights were so famous that one San Francisco Daily News reporter proclaimed the town the “best lighted city in the Bay Area.”
    The entire nightscape must have been dramatically altered, with pools of light dotting every block and houses filled with light long after the sun went down. Yet the advances did more than light the night: They allowed, in 1914, the company to finally turn a profit and contribute funds to the city’s coffers. “It took 27 years for the utility to make a profit,” stresses McCabe. “But the company kept going, because electricity was deemed an essential public service.”

Clean, Green Power

    The original power plant used first coal and then oil to fuel its boilers. By World War I, however, oil was getting so expensive (a whopping $1 per barrel) that the city decided to start buying electricity from other sources—primarily hydroelectric power from the Great Western Power Company. That continued for another 60 years—that is, AP&T bought electricity from other power companies and then distributed it to its many customers across the Island.
    In the early 1980s, the public utility board, along with the city council and management from AP&T, decided to start investing in its own power resources. The utility was too small to build power-generating plants, but by joining the Northern California Power Agency—a consortium of 14 other small utilities—AP&T gained a stake in two geothermal plants in The Geysers. About 90 miles north of San Francisco, The Geysers is the largest dry-steam production field in the world, as well as the largest complex of geothermal generating plants; the complex, in fact, is widely considered the most successful alternative energy project on the planet. AP&T now owns 17 percent of these facilities and derives 50 percent of its power from the plant.
    Geothermal plants work by harnessing the energy found in the steam, heat or hot water that lies in geothermal reservoirs deep beneath the earth’s surface. (At The Geysers, for instance, workers drill up to two miles down to access the hot water.) The force of that steam, heat or hot water spins the turbines in the generating plant and produces electricity. Because such facilities don’t burn fossil fuels to generate electricity, they emit only 1 to 4 percent of the amount of carbon dioxide, or C02, that coal-burning power plants do and 1 to 3 percent of the sulfur compounds that coal plants do.
    But AP&T hasn’t stopped at geothermal in its quest for reliable, economical power. Seven percent of its power comes from landfill gas, and about 1 percent comes from wind. These days a full 38 percent of the city’s electricity still comes from hydroelectric power generated along the North Fork of the Stanislaus River. Hydroelectric has caused its share of environmental problems, but utilities are now legally required to ensure minimum flows of water for fish and wildlife, as well as, in some cases, funding the restoration of riparian and meadow areas along the rivers.
    That mix of very clean, sustainable power makes the utility seem cutting edge, especially in the age of global warming. But AP&T actually chose renewable energy long before global warming became a household word. “At the time, we just wanted power that was reliable and economical,” McCabe says, shrugging. “And it just so happens that by choosing renewable energy, we also developed one of the best environmental records around.”
    Indeed, 96 percent of the city’s electricity is generated from sources that emit neither carbon nor greenhouse gases. That’s a stunning record, especially given that the average Californian receives only 25 percent of his or her electricity from such clean generation, and some utilities will struggle to get even to the 20 percent mandated by state law by 2020. Equally novel is the fact that Alamedans get this electricity automatically. “In most communities, customers have to pay extra—as much as 1.5 cents per kW—for electricity that comes from renewable sources,” McCabe says. “In Alameda, everyone gets green power.”
    The utility has experimented with solar power. In 1998, AP&T set up a series of solar panels on the roof of one of its buildings at Grand Street and Lincoln Avenue. After two years, however, researchers realized that with all the cloudy or foggy days on the Island, solar just couldn’t be a reliable source of power here.
“You have to understand, too, that our peak demand is in the early evening here, which creates a storage issue,” McCabe says. “Solar supply can’t meet our demand schedule.” Nevertheless, as part of its energy education goal, the utility set up a 1-kW solar setup at Lincoln Middle School, and the Alameda County Environmental Health building has a 70-kW project on Bay Farm Island.
    The utility hopes to expand its landfill gas program over the next few years, as well as convert the Island’s oil-burning transformers to vegetable-oil-burning ones, so the city will generate less hazardous materials. AP&T officials are also looking for power generation sources that are closer to Alameda.
    “This is an on-going problem in all of California,” explains Meredith Owens, energy management supervisor for AP&T. “The distances that the electricity is sent are huge, and the infrastructure is very old. There have been very few upgrades.” A plan to produce electricity by burning garbage (to create a gas that would power the turbines), perhaps at the Davis Street Transfer Station in San Leandro, was floated several years ago, but environmentalists concerned with airborne toxins shot down the idea.

And Then, There’s the Debt…

    Of course, a municipally owned utility offers a number of other advantages, too. As an “enterprise service” for the city, AP&T can offer lower rates than bigger utilities like Pacific Gas and Electric Co. (with AP&T rates currently about 18 percent lower for residential, 12 percent lower if you include commercial customers). As a city service, it transfers considerable amounts of money to the city’s coffers, too—by the end of 2006, it was about $2.5 million, in fact. And as a locally based, city-owned utility, it provides Alamedans with local control over their electricity service. “It’s not some corporate head in an office in Houston telling us what to do here in Alameda,” McCabe says. “It’s Alamedans.”
    AP&T’s 5-year-old cable TV and Internet business has seen its share of controversy. Facilitated by a City Charter amendment approved by alameda’s electorate in 1998, the division faced constrution delays and high demand for its service that drove costs beyond original projections. AP&T floated a $40 million bond, but then the project went over budget—by about $37 million—and the utility borrowed money from the power side to cover some of the shortfall. That means the utility now owes $33 million to external sources and $44 to internal sources (i.e., the electricity side). Paying back the debts is further hampered by the fact that the new development at Alameda Point has been cancelled since the original developer pulled out. Making matters worse is the fact that Comcast has undercut the local utility’s rate in an effort to garner customers.
    Some Alamedans worry that the whole company will go bust, that taxpayers will end up footing the bill or that the city will lose the general transfer funds on which some services—including park maintenance—depend. Still other Alamedans, including city treasurer Kevin Kennedy, have complained that the utility wasn’t forthcoming about just how bad the finances had become. But PUB president Ann McCormick thinks “the utility is much bigger than this issue. Certainly, we need to solve the problem, and we’re fully committed to doing so. But the charge that we’re going to stop transferring money—or that parks will close—is absolutely ridiculous. The shape of our cable service may change, but this utility is not going to go broke.”
    Just how the utility will handle its telecommunication issue remains to be seen. But it’s clear that the utility has met the challenge of providing electricity—and lots of it—for well over a century and that it is well ahead of the curve in terms of responding to the very urgent issue of global climate change. Notes McCabe, “We think it’s important for people to remember the utility’s history here. It took 27 years for
the utility to give the city even one dime back in the early years. The cable operation has only been up and running for five years. This is not the end of the road.”

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History Lesson

Want to learn more about Alameda’s electricity history? A few remnants of earlier eras are still scattered across the island, including: