CPUC Issues Resolution Regarding South San Joaquin Irrigation District’s LAFCo Application to Provide Electric Service
Finding states no significant negative impact on remaining PG&E ratepayers
Manteca, CA, December 21, 2009 – At the request of San Joaquin Local Agency Formation Commission (LAFCo), yesterday the California Public Utilities Commission (CPUC) unanimously approved a resolution finding that the proposed South San Joaquin Irrigation District (SSJID) plan to purchase PG&E’s electric facilities in Manteca, Ripon, Escalon and surrounding farm land will not significantly impact the remaining PG&E electric ratepayers. The resolution is part of the SJ LAFCo review process required to be complete before LAFCo can move on with its analysis of SSJID’s retail electric plan.
“This resolution determines that SSJID’s proposed service could raise rates for PG&E’s remaining ratepayers but the magnitude of the estimated increase is small relative to PG&E’s current system average rates, and thus does not substantially impair PG&E’s ability to provide adequate service at reasonable rates,” reads the CPUC resolution summary. The resolution states that possible higher rates of $0.00032 per kilowatt-hour could result, and that the estimated costs and/or offsetting benefits that would affect remaining PG&E customers varies greatly depending on the assumptions used in the analysis.
The CPUC used the worst possible case for the purchase price in their analysis, assuming that SSJID would only pay $41 million and even with that low price, the Commission found the effect on rates was insignificant.
According to the CPUC resolution (E-4301) “It is reasonable to use the highest quantifiable estimate, based on the facts before the CPUC, when determining whether there is the possibility that the proposed service will substantially impair PG&E’s ability to provide adequate service at reasonable rates within the remainder of its service territory.” However, in testimony presented at the CPUC hearing, SSJID General Manager Jeff Shields pointed out that the District’s contract appraiser, R.W. Beck, has set the Fair Market Value at $61 million and the District has made a good faith offer to pay PG&E $79.5 million. “If the CPUC utilized either of these higher purchase values, PG&E’s remaining customers could actually see a slight reduction in their rates,” Shields noted.
In an unrelated action, the CPUC authorized PG&E to raise the rates for its Tier 1 and 2 residential class customers by three percent or $.004545 starting January 1, 2010. PG&E had requested a five percent increase for its customers who have the lowest monthly usage.
“One of the significant aspects of this rate increase related to the CPUC’s ruling on SSJID’s electric plan is that the ‘worst case scenario’ considered by the CPUC is still minuscule compared to the impact of a normal annual PG&E rate increase,” said Shields.
SSJID Board Unanimously Approves Filing Application With San Joaquin Local Agency Formation Commission
Board Support is First Step toward 15% Savings on Retail Electric Rates in SSJID’s Service Territory
Manteca , CA , September 3, 2009 – The South San Joaquin Irrigation District ( SSJID ) Board voted unanimously today to approve filing an application with the San Joaquin Local Agency Formation Commission (LAFCo) to provide retail electricity in SSJID’s service territory. SSJID will submit the application immediately.
“The board heard from many supporters today, which was encouraging. We also heard from a few PG&E representatives who oppose our plan,” said Dave Kamper, SSJID board president, after the hearing. “We understand the importance of making sure that the people we will serve with electricity have all the facts, without the fear tactics and misinformation that PG&E representatives will put out there.
“After careful consideration of the public’s comments and a thorough review of SSJID’s application, the Board believes now more than ever that the District owes it to our communities and our constituents to reinforce our commitment to bringing them all the benefits of public power. The $11.6 million that we can put back into the economy and the ratepayers pockets in the first year of operations alone hit home for all of us. The people have spoken and they need economic relief.”
Retired Ripon Unified School District Superintendent Leo Zuber, a resident of Ripon, specifically addressed the SSJID board about some of PG&E’s negative comments. “For 100 years, five people have made the decisions that have gotten us here today. (As far as PG&E saying we need a public vote—) we don’t need to have a vote on whether or not this should happen. We have a vote every three years on some of you. If we don’t like what you do, the direction you’re headed, then that’s when we take care of it. At that time, even PG&E can get involved…and the times that they have, they’ve lost,” Zuber said.
“There’s nothing wrong with the money you’ve spent so far. There’s nothing wrong with the money you’re going to spend. Because if this works out, we’re all going to get that money back,” Zuber concluded.
The application to LAFCo outlines how SSJID will provide locally-owned and controlled retail electricity service to both residents and businesses at a 15% discount from current PG&E rates, which includes agricultural and industrial customers, in the South San Joaquin County communities of Manteca , Escalon, Ripon and surrounding unincorporated areas. SSJID’s plan also provides for increased system reliability and local control, all hallmarks of successful public power agencies.
“With the board’s approval of the application, we’re one step closer to bringing much-needed electricity rate relief to the nearly 40,000 customers in South San Joaquin County ,” said Jeff Shields, SSJID ’s General Manager.
Sometime after SSJID submits its retail electric application to LAFCo, a date will be set for a future hearing at which the commissioners will decide whether SSJID can move forward in exercising its legal authority to provide electricity to homes and businesses. Several procedural steps will be followed in the meantime and further studies and reports may be initiated by LAFCo to assist with making their decision.