District Awaits PUC Decision

By Teresa Rochester

School District officials throughout the state are anxiously awaiting a thumbs up from the California Public Utilities Commission that would release them from a program that mandates they shut off electricity when notified or face steep penalties.

If the PUC approves the plan fines that have been levied against schools participating in "interruptible rate" programs since October 1 would be rescinded and reimbursed.

Santa Monica High School, participants in Southern California Edison's program, has been fined $23,000 since the electricity crunch began last fall.

"The consequences are severe," Supt. Neil Schmidt told the Board of Education at its meeting Thursday night. "If the PUC doesn't allow us to get out of the program, our costs will grow."

A number of school districts and businesses participate in the "interruptible rate" program because in times of plentiful electricity participants receive greatly discounted rates on kilowatt hours. At SAMOHI the district pays on average eight cents a kilowatt hour. During emergencies, when SCE imposes penalties for energy used, the rate can climb to $9 a kilowatt hour.

Schmidt told the board that the administrators at the high school and college, which also takes part in the plan, will continue to share information and strategies for reducing energy use by 10 percent. Schmidt added that the school district will continue to post updates on its website.

If the district is not released from the program, Art Cohen, who handles the district's finances and business services, said the loss would be built into the district's budget, which will not be finalized for several months.

Members of the Education Coalition have been working throughout Sacramento, lobbying for release from the program, Board member Pam Brady said. The California Teachers Association and the Service Employees International Union also launched lobbying efforts.

The board Thursday night also unanimously approved the immediate sale of $4 million in General Obligation bonds. The money would be applied to the Proposition X/State Facility Program Budget to counteract an expected delay in state funds to the District for new construction.

Assistant Superintendent of Fiscal and Business Services, Art Cohen, told the board that the money would be aimed at high priority projects at Santa Monica and Malibu High schools that lack funding.

"We have to sell now because now we get more bang for our buck," Cohen said.

Through the sale the district stands to generate between $300,000 and $350,000 over an 18-month investment period in arbitrage, which is the simultaneous purchase and sale of the same securities in different markets to profit from unequal prices.

The district has already sold $38 million of $42 million in bonds to fund construction projects at schools district-wide.