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PG&E, SSJID battle over consultant

LAFCo stretches cheaper power application out to 58 months & counting

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PG&E, SSJID battle over consultant

A PG&E substation in Manteca.

HIME ROMERO/The Bulletin


POSTED June 11, 2014 1:55 a.m.

PG&E does not believe the fact a former key employee working for a consulting firm they have paid at least $1.6 million would show bias in their favor while analyzing South San Joaquin Irrigation District’s municipal service review plan.

The plan is a critical part of SSJID’s application before the San Joaquin Local Agency Formation Commission to provide retail electrical service at rates targeted to be at least 15 percent less than what PG&E charges in Ripon, Manteca, and Escalon.

The LAFCo board meets Thursday at 9 a.m. in the Board of Supervisors chambers on the sixth floor of the county building at 44 North San Joaquin Street in Stockton. The board is scheduled to consider upholding the decision of Executive Officer James Glaser to obtain PA Consulting Group to evaluate SSJID’s application to provide retail service.

SSJID, based on information they were able to uncover recently, contends PA Consulting has a conflict due to work they have done previously for PG&E and the fact former PG&E executive Julia Murphy until January of this year worked for the firm as managing consultant for energy capital markets.  Murphy, according to bio information, “co-lead the PG&E account across multiple disciplines including generation, utility strategy and performance metrics, customers, human resources, and supply chain.”

“The fact that she was co-lead of the PG&E account clearly indicates an ongoing relationship between PG&E and PA,” noted SSJID board chairman Ralph Roos in a letter to LAFCo.

Roos also pointed to general rate case filings with the California Public Utilities Commission where PG&E stated, “PG&E’s benchmarking efforts are conducted annually by the PA Consulting Group.”

The SSJID believes that PG&E’s own words demonstrate it has an ongoing relationship with PA Consulting. 

That’s not PG&E’s stance.

“PG&E does not agree that PA Consulting is ‘conflicted,’ as SSJID asserts, solely due to the fact PA Consulting has former PG&E employees on its payroll,” noted PG&E attorney Mark H. Penskar.

PG&E also notes PA Consulting performed work for SSJID against PG&E previously.

That is in reference to a previous PA Consulting study that indicated SSJID had the wherewithal to deliver on its promise for lower electrical rates plus the expertise to do so in an efficient and effectible manner. A second study was ordered by LAFCo after the county agency dragged out the review process and then contended the figures in the original study were outdated and therefore a new study was needed.

Glaser, for his part, argues that three other consultants he considered — Miniter Harnish, MRW and MBMC — cannot independently meet the needs of LAFCo. Glaser noted that PA Consulting has worked twice before with LAFCo on the SSJID application.

It’s been 58 months since LAFCo first received SSJID’s request to add retail power to its service repertoire that already includes wholesale powered generation — complete with 53 plus years of reliable deliveries to PG&E — as well as provide water for farm and urban use.

LAFCo had taken so long to review the initial study that the LAFCo staff decided the financial data was too outdated and ordered yet another round of studies.

LAFCo’s blessing is required before SSJID can take steps needed to obtain PG&E facilities.

A similar move to carve out another piece of PG&E territory in San Joaquin County for the purpose of local control and lower rates took substantially less time.

Nearly a decade ago LAFCo took less than six months — not 58 months and counting —  to approve essentially the same requests being made of LAFCo by SSJID to allow the Lathrop Irrigation District to takeover PG&E service territory.

Customers at River Islands at Lathrop already receive electricity 5 percent lower than PG&E’s rates. As more customers are added the savings will hit 25 percent.

Ultimately LID will serve 11,000 residents and a large business park. LAFCo had no qualms with the LID application then that was cobbled together in part with help from SSJID. In fact, SSJID is helping LID operate its power delivery system.

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