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Twenty years after Davis voters overwhelmingly supported a proposal to replace PG&E with public power, the city has taken the first steps toward creating its own electric utility to serve new developments.
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The Davis City Council voted last week to amend the municipal code to authorize the creation of a city-owned electric utility. The council also established Davis Power, an inactive municipal utility that could eventually serve new developments. The change does not require the city to provide electricity but gives it the authority to do so.
“This item is adding a section to the municipal code that authorizes us to have a future electric utility of our own and for any greenfield development that happens, to automatically transfer their infrastructure to that new electric utility,” Councilmember Bapu Vaitla said at the council’s Oct. 6 meeting. “Effectively it creates a structure that facilitates the future creation of a utility that enables us to control our own power.”
The council requested information about establishing a municipal electric utility in 2024. Last year, Valley Clean Energy, Yolo County’s community choice electricity provider, outlined a process known as greenfield municipalization.
The process allows a city to establish a publicly owned electric utility without taking over existing power infrastructure, Don Dame, a consultant with Valley Clean Energy, said at a council meeting in May 2025.
“Greenfield municipalization involves building a utility from scratch in a part of your city or county where there’s no power service currently being performed,” Dame said. The city would build its own energy infrastructure for new developments rather than connect new construction to the current system, he said. The utility would grow alongside the city, which would reap the benefits of having a publicly owned utility, which by some measures costs residents half as much as an investor-owned utility.
Under that approach, Davis would build electric infrastructure for new developments rather than connect them to PG&E’s existing system. The city-owned utility would expand as new neighborhoods are built. Publicly owned utilities can charge residents substantially less than investor-owned utilities, in some cases about half as much, Dame said.
“Basically you’d be a new municipal very similar to a Palo Alto or the city of Roseville or Lodi or Healdsburg,” Dame told the council. “All publicly owned utilities proximate to the city of Davis.”
But establishing a municipal utility carries financial risks. Some efforts have failed when cities could not attract enough customers to cover operating costs, Dame said. In 2014, a municipal utility created in the Contra Costa city of Hercules was sold to PG&E after about a decade in operation and losses topping $9 million.
Building the infrastructure and beginning electric service in Davis would take years and could cost more than $25 million, Dame said. The city could finance the initial costs through loans, bonds and contributions from developers whose projects would receive electricity from the new utility.
Dame estimated the cost of establishing an inactive utility at less than $200,000.
“Because you form a utility doesn’t mean you’re committed to serve customers,” Dame said. “It can be sitting there ready to use if and when you have an appropriate opportunity and you take the appropriate actions to initialize and activate that utility.”
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Davis is not the first California city to establish an inactive municipal electric utility, according to a city staff report.
San Jose established one in 2023 following a similar move in 2020 by Gonzales in Monterey County. Both utilities remain inactive, but San Jose’s effort prompted concessions from PG&E, including commitments to improve infrastructure and accelerate projects, establish enforceable performance benchmarks and create a team dedicated to large electricity customers.
The approach offers cities an alternative to taking over existing utility systems, a process that has faced opposition from customers of publicly owned utilities and resistance from investor-owned utilities unwilling to sell their infrastructure.
In 2019, Valley Clean Energy’s $300 million offer to acquire PG&E’s electric infrastructure in Yolo County failed. That year, widespread PG&E power shutoffs prompted cities including Rocklin and Lincoln to explore publicly owned electric service.
PG&E’s refusal to sell its infrastructure has complicated similar efforts across Northern California.
Davis voters previously supported an unsuccessful effort to replace PG&E with the Sacramento Municipal Utility District, or SMUD. In 2006, a proposal sought to bring Woodland, Davis, West Sacramento and unincorporated areas of eastern Yolo County into SMUD’s service territory. The publicly owned utility serves most of Sacramento County and a small part of Placer County.
The proposal required approval from voters in Sacramento, Placer and Yolo counties. Sacramento and Placer voters rejected it. Yolo County voters approved annexation into SMUD’s service territory but rejected a separate measure to switch electricity providers by just 10 votes. Davis was the only Yolo County community to support the switch, with all but two precincts voting in favor.
PG&E spent more than $11 million opposing the effort, which The Bee described at the time as “the most expensive race in local election history.”
The defeat did not discourage the South San Joaquin Irrigation District from pursuing plans to supply hydroelectric power to Manteca, Ripon and Escalon, according to Bee reporting at the time. That effort resulted in nearly two decades of litigation with PG&E and almost $30 million in legal fees and other expenses, according to The Modesto Bee.
The Oakdale City Council also voted last year to study replacing PG&E with hydroelectric power from the Modesto Irrigation District, The Modesto Bee reported.
This story was originally published October 14, 2026 at 3:21 PM with the headline “Could Davis form its own electric utility? Council takes a step toward public power.”
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