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League: Say no to Prop. 16

Voters’ forum addresses impacts on SSJID

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POSTED April 27, 2010 3:03 a.m.
PG&E’s bid to amend the California Constitution in the June 8 election could create another hurdle for South San Joaquin Irrigation District’s drive to lower electric rates at least 15 percent across the board in Manteca, Ripon, and Escalon.

The League of Women Voters of California has taken a position against Proposition 16 that is the brainchild of PG&E which is the only contributor to the $35 million campaign to get it passed. The measure essentially requires a two thirds approval of voters before a local jurisdiction can enter the retail power business.

The League is sponsoring a public forum on Monday, May 3, from 7 to 8:30 p.m. in the McFall Room of the Manteca Library at 320 W. Center St. to discuss the proposition. The forum will delineate what passage of Proposition 16 would mean to SSJID plans to lower electric rates.

Speaking will be SSJID General Manager Jeff Shields who will explain the Manteca-based public agency’s plans to provide electric service. PG&E is currently trying to block SSJID from entering the retail power business by fighting the agency’s efforts to add to their service repertoire with an application at the San Joaquin County Local Agency Formation Commission,

Cate White will explain the League’s position.

The League did not invite PG&E to attend.

Passage of Proposition 16 would require a two-thirds vote to not only establish a new public electrical service agency anywhere within PG&E territory but it would also require a two-thirds vote if a public power agency wanted to add additional territory or possibly even increase its electric load depending upon how language is interpreted.

“PG&E’s campaign tries to make voters believe that if local governments choose to buy electric power from any source other than PG&E, the likely result is either higher rates for that service or the local government raising local taxes or floating bond measures to meet escalating costs,” the league noted in its position paper. “But under current law, local governments cannot either raise any taxes or pass bond measures without going to the voters for approval.

“Neither local government power providers nor CCAs are profit-making enterprises that need to satisfy shareholders. If communities choose to obtain their energy from publicly owned utilities or CCAs, it is because they want to obtain it at lower cost, or from ‘greener’ sources, such as renewable or less polluting energy sources, than PG&E offers.”

Most jurisdictions that are trying to enter the power business are doing so using Community Choice Aggregation, an element that PG&E lobbied the California Legislature to put in place in 2002 in response to criticism of the power company not being responsive to local needs.

The SSJID, though, is attempting to expand its 54 years of wholesale power generation and delivery history - including 52 providing service to PG&E - into the retail side of the electric business.

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 service 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 more 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 be 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.
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