The Davis City Council adopted the ordinance on Oct. 20 as part of its consent calendar, which passed with no votes against. It had been introduced, also on the consent calendar, on Oct. 6. The ordinance adds Article 2.30 to the municipal code, authorizing a future municipal electric utility called Davis Power, to be administered by the Public Works Department if it is ever activated. It takes effect 30 days after adoption.
The ordinance itself states that neither its adoption nor the designation of a service area forms Davis Power, obligates the city to build or acquire any facility, or obligates the city to provide electric service. City staff's report calls the result an "inactive" utility whose activation depends on later evaluations and council decisions. The report lists no capital commitments; the cost so far is staff time.
The approach is what staff call greenfield municipalization: a local government using its legal authority to create a new publicly owned utility to serve a previously undeveloped area, without taking over any existing utility equipment. Valley Clean Energy presented the idea to the council in May 2025, and the council directed staff to explore ordinance changes to allow it. Staff listed possible benefits, including lower service costs, long-term local control, tax-exempt financing of facilities, improved reliability and newer technology to cut greenhouse gas emissions. When the item passed Oct. 6, a council member thanked staff, saying it creates a structure for a future utility and lets the city “control our own power.”
Staff cautioned that making a utility operational would take significant effort and resources and that the process would likely take several years. Issues still to be analyzed include the scale at which a utility would be economically viable, large capital costs for new infrastructure, a detailed regulatory process, recruiting specialized staff, potential liability, comparative retail rates and community support. Future council steps would likely include hiring consultants, an initial feasibility study, a review of the existing franchise arrangement with the investor-owned utility, a comprehensive legal, economic, engineering and financial study, transmission interconnection agreements, rates based on a cost-of-service study, and a final business plan.
The Oct. 6 staff report pointed to San Jose, which it said passed an ordinance in 2023 establishing a municipal utility called San Jose Power; the report described it as inactive, with no formal plans to fully activate in the near term. The report also said Gonzales and Hercules had attempted similar efforts but had not ultimately succeeded in fully implementing and maintaining their own electric utility.
If Davis Power ever operates, the ordinance sets some ground rules. Its service areas would be within city limits and set by council resolution. Rates would be set by council resolution and could vary by area. Proposed rate changes would require notice in a newspaper at least 15 days before the council considers them, and notice with customers' bills if a bill goes out in the meantime. Rate increases for the express purpose of increasing transfers to the city's general fund would be prohibited. Revenue would go into a separate Davis Power Operating Fund, and the public works director would report to the council at least once a year.