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SJ agency protecting PG&E profits

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POSTED April 22, 2014 12:16 a.m.

A lot has happened since June 2009 when South San Joaquin Irrigation District filed its current application before the San Joaquin Local Area Formation Commission to become the retail electricity provider for Manteca, Ripon, and Escalon.

• PG&E has been indicted on 12 federal criminal counts.

• PG&E was authorized a rate hike in 2009 that included $5 million to repair/replace a San Bruno pipeline.

• PG&E in 2009 paid its executives $5 million in bonuses

• In 2010, PG&E’s pipeline in San Bruno exploded, killing eight, injuring dozens, destroying 38 homes, and damaging scores of other homes.

• PG&E has received numerous electric rate hikes.

• PG&E was shown to have exceeded its authorized return (profit) as a regulated public utility by an audit conducted of its corporate balance sheets from 1990 to 2010. PG&E’s profits were supposed to be capped at 11.3 percent but instead were at 12.7 percent. The only way they could accomplish that was by cutting back on premises made for rate hike increases including staffing levels, power pole replacements, and natural gas pipeline safety work.

u PG&E has gotten rate increases from the California Public Utilities Commission more than once to replace the same power poles.

So what has James Glaser been doing since San Bruno burned?

Kowtowing to PG&E requests.

Glaser is executive director of LAFCO, the last roadblock SSJID has to clear in its epic struggle to reduce retail power rates to a level that will be at least 15 percent below PG&E.

SSJID has the wherewithal to do that based on the Tri-Dam Project wholesale power receipts. Three studies have confirmed that including a study done by a firm handpicked by PG&E. SSJID can also afford to do that because they manage money in the public’s interest. They don’t buy new corporate jets, they don’t give executives bonuses which PG&E one year alone did to the tune of $12 million while they were teetering on the edge of bankruptcy while jacking up rates, they don’t cut back the working men and women in boom times so service to private sector construction projects are backed up, and they take fiscal responsibility seriously.

It has been 58 months since SSJID filed its application with LAFCO. Repeatedly under Glaser’s leadership, LAFCO has proven they place corporate interests above the interests of the people they are supposed to be serving here in San Joaquin County.

Every time PG&E asks for more studies on the SSJID application, LAFCO obliges like a puppy dog trying to please its master.

PG&E wants the reports studied to death, and LAFCO allows it. Then once it has been studied to death and proves that SSJID’s projections are correct, PG&E then whines the data is outdated because it took so long to study it to death. Then PG&E demands and gets another study.

This past Monday marked the end of the municipal services review, a component of the retail electric plan. Anyone want to bet PG&E will once again flood LAFCO with even more questions and demand yet another study? Unless you can afford to lose money, don’t make the bet. It’s a sucker’s bet.

Inaction speaks louder than words. Glaser and LAFCO have made it clear they could care less about the elderly, farmers, businesses, and struggling families in Manteca, Ripon and Escalon. SSJID has committed to putting in place everything that the state would require a regulated quasi-public utility to do from energy conservation to low-income service subsidies and even pay franchise fees to cities even though they wouldn’t be required to do so as a true public utility. Studies have shown again and again SSJID can do that and still lower rates by at least 15 percent while improving the quality of service. LAFCO will tell you they’ve never had an application such as SSJID’s so they want to err on the side of caution.

Not true by a long shot.

A decade ago LAFCO took less than six months – not 58 months and counting – to carve out a chunk of PG&E territory to create a retail electric provider known as Lathrop Irrigation District. It ultimately will serve 11,000 homes plus businesses at River islands at Lathrop.

Retail power started flowing at cost 5 percent below PG&E levels last year to River Islands’ first customer. As more customers are added, the rates will be lowered until they are 20 percent below PG&E levels. Guess who is running the LID system as a contracted entity? It’s the SSJID.

A cynical person would accuse LAFCO of stretching out the process so it can have staff time billed to SSJID. So far the LAFCO application has cost SSJID in excess of $2.4 million. That reflects only the LAFCO ordered costs. It is 100 times more than what Lathrop Irrigation District had to spend on the same exact application.

PG&E and its several busloads of corporate attorneys have spent nearly five years trying to pick apart the SSJID plan but to no avail.

Meanwhile, 40,000 households, businesses, schools, cities, and farmers are paying at least $12 million more a year for electricity than they need. 

And it’s all because LAFCO is more intent on protecting annual multi-million dollar bonuses for PG&E’s upper echelon executives than they are about putting an average of $300 a year back into the pockets of typical PG&E customers in Manteca, Ripon, and Escalon.

 

This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209.249.3519.

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