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SSJID generating money

Now it’s getting $52K for energy credits

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POSTED April 12, 2010 1:35 a.m.
South San Joaquin Irrigation District’s 100 percent green energy portfolio also is generating plenty of green.

Besides the $12 million plus the district receives annually as its share from the sale of clean hydroelectric power from the Tri-Dam System they operate with Oakdale Irrigation District, the district may now receive $52,500 by selling its renewable energy credits generated from the Robert O. Schulz Solar Farm.

The SSJID board on Tuesday is being asked to authorize selling accumulated credits plus those the district earns through the end of 2010 to Shell Energy North America at a rate of $7.50 per credit. That, by the way, is $4.50 more than the district projected the solar project would yield in energy credits for them when they were debating whether to build it to power the South County Surface Water Treatment Plant and wean the facility off more expensive PG&E power.

The price difference underscores the fiscally conservative approach the district has taken towards its proposed venture into retail sales including its drive to reduce retail electricity rates 15 percent across the board in Manteca, Ripon, and Escalon.

As far as that effort is concerned, the board when they meet Tuesday at 9 a.m. at the district office at 11011 East Highway 120 will be asked to set aside more money for a review being conducted by an independent consultant on behalf of the San Joaquin County Local Agency Formation Commission.

LAFCO has the final say as to whether the SSJID will be allowed to add retail power sales to its repertoire of services.

The SSJID, which did not get to pick the consultant that LAFCO hired to verify its exhaustive multi-year studies about its ability and financial strength to enter retail and do it for less than PG&E, was required to fund the studies. They have spent $250,000 so far. Another $35,000 is needed to complete that work. The board will be asked to fund that as well.

Some PG&E spokespeople have slammed SSJID for spending “taxpayer” and “ratepayer” money on the retail service studies. While it is public money, it is neither tax dollars nor is it paid by people who access services from SSJID which is basically farmers for irrigation water and the cities that buy raw water for the surface treatment plant.

Instead the money is all coming from proceeds from the Tri-Dam System investment made more than 55 years ago. Ironically, the district’s proceeds after covering all costs of over a half century of flawless delivery of wholesale power to PG&E is being used to cover the costs of studies required to make sure that it is capable of delivering better service at least 15 percent under what PG&E currently does. It is the strength of the Tri-Dam investment that will provide the seed money if SSJID gets the green light from LAFCO.

Local customers would
save $11.6M annually

The LAFCO application delineates how the district has positioned itself to reduce power rates across the board by 15 percent. That represents an initial $11.6 million savings throughout the district in 2011. It also will outline the district’s healthy financial status which includes $61 million in undistributed reserves as well as touch on the experience it has gained in more than a half century of flawless generation and delivery of wholesale electricity from its Tri-Dam Project on the Stanislaus River.

The LAFCO application outlines how the district plans to provide electrical servcie plus listing how it meets the requirements required by law to take the step of adding retail power service to its repertoire of agricultural water, treated municipal water, and power generation services.

The SSJID move comes at the same time PG&E is moving forward with its biggest rate hike history - $1.101 billion effective Jan. 1, 2011. PG&E is also operating with a protected profit margin of 11.35 percent as the acceptable return on its equity as authorized by the California Public Utilities Commission and Federal Energy Regulatory Commission.

Currently PG&E provides Manteca with a 2 percent franchise fee on its total electrical sales within the city limits that accounted for $495,000 in general fund receipts for the city in the fiscal year that ended June 30. The SSJID is committing to give the city a 2.5 percent franchise fee. If SSJID and not PG&E was the retail provider in Manteca last fiscal year, it would have meant $99,000 or a total of $594,000. That is roughly the salary and benefits of a public safety employee for one year.

The city also would benefit from the 15 percent reduction in electrical bills. With electrical costs to run the city pushing $2 million a year, that would mean a $300,000 annual savings. The bottom line is the City of Manteca would be $399,000 better off financially every year with SSJID as compared to PG&E.

Similar savings would be experienced by Manteca Unified School District, the City of Ripon, and City of Escalon. Ripon Unified School District, and Escalon Unified School District.

Even the SSJID would be money ahead. By supplying its own power to run the various district irrigation pumps, the district would save $40,000 a year.

The 15 percent cutback over PG&E rates translates to freeing up $11.6 million annually among the residents, businesses, and government agencies within SSJID territory that could be put back into the community every year. The average family using 1,000 kilowatt hours monthly in Manteca could see savings of $349 a year.

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