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SSJID making power play

Fate of bid to take over PG&E expected by mid-summer

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SSJID making power play

South San Joaquin Irrigation is aiming to be the retail electricity provider for Manteca, Ripon, and Escalon.

HIME ROMERO/Bulletin File Photo

POSTED January 17, 2012 12:36 a.m.

Mrs. Cliff Wiggin became a footnote in Manteca history on March 14, 1911 when she did her daily ironing.

She had plugged in an electric iron to become the first Manteca resident to tap into electricity delivered by the Sierra & San Francisco Power Co. The firm was started by private railway operators in San Francisco who were pushing to extend their own electricity source from the Stanislaus River to The City by the Bay.

Almost immediately competition started when - just months later - the Western States Gas & Electric Company of Stockton made a big push into Manteca. They promised that “juice users” rates would be cut in half.

Sierra & San Francisco Power Co. fought back not by working to lower rates but by taking the upstarts to court to protect their monopoly. The court ruled in Sierra’s favor. By Jan. 1, 1920, the Sierra system was acquired by Pacific Gas & Electric.

PG&E’s monopoly went unchallenged for 89 years until September 2009 when the South San Joaquin Irrigation District officially voted to make an offer to buy the retail system that provides retail power to Manteca, Ripon, and Escalon from PG&E.

A final verdict on that move will be made by this summer. Should the San Joaquin County Local Agency Formation Commission conclude that SSJID is capable of providing power financially as well as being able to run a system that could empower the SSJID to exercise rights reserved to irrigation districts in the state constitution to become retail electricity providers.

If that happens, PG&E would have to say either yes or no. If they say no, then SSJID’s option would be to use state law and take PG&E to court to force a sale and have a judge set a fair market price. PG&E could, though, do what it has done in other instances and agree to sell and negotiate a price with SSJID.

PG&E in 2009 went on record saying that it was not in favor of selling the local system to SSJID.

There have been other SSJID attempts to enter retail power delivery service

This isn’t the first time SSJID has made a push to enter the retail power business.

In 2010 after the LAFCo staff recommended allowing SSJID to add retail delivery service to their wholesale generation of electricity, the LAFCo board split and voted against it. They sided with PG&E out of concern that SSJID would exercise its eminent domain power to obtain the system.

In the 10 years prior to that, SSJID tried four times to enter the retail power business while working with PG&E.

•They tried to create an inter-tie with PG&E by considering the purchase of a power sub-station at a shuttered Tracy tomato processing plant. PG&E fought it.

•They examined the possibility of establishing a new power substation on Lovelace Road and then initially serving the areas around Delicato Vineyards. PG&E fought it.

•They considered and then rejected a PG&E offer to sell SSJID the rural system south of Manteca that was heavily damaged in the 1997 floods and had equipment dating back to the 1920s.

•They pondered starting from scratch and extending service lines toward Manteca to initially serve new development south of the 120 Bypass by working with Modesto Irrigation District.

In the end, though, after spending millions from the Tri-Dam Project receipts on economic analysis, consultant studies and analytic data studying and re-studying the feasibility of creating a power system the SSJID board decided they wanted a system that would give all users within the district lower power costs all at the same time.

Ironically, the SSJID’s foray into retail power happened because of an enticement that PG&E along with other major privately held power companies made to the California Legislature in a bid to get the necessary votes for deregulation back when Gray Davis was governor.

They held out the carrot of offering irrigation districts to compete for the exemption of 72 megawatts from competitive transmission charges to give them the financial incentive to put their own systems in place and offer their users lower power rates. Deregulation went through on a crucial vote where Central Valley legislatures signed on due to the CTC exemptions. The SSJID became the only irrigation district that attempted to see if the power giants would honor their word.

LAFCo study done by firm recommended by PG&E and paid for by SSJID

This time around, LAFCo has done a much more exhaustive examination of SSJID’s finances and capabilities.

They hired an outside consultant that was recommended by PG&E to do the study and had SSJID pick up the tab.

That study in a nutshell determined SSJID is capable of running a retail system and that it can deliver electricity at 15 percent less than PG&E by investing annual Tri-Dam Project receipts into the retail operations.

This Friday the LAFCo board will have a workshop on the various SSJID applications made as part of its effort to enter retail power service. The LAFCo board meets at 9 a.m. in the Board of Supervisors Chambers in the sixth floor of the county administrative center at 44 North San Joaquin St. in downtown Stockton.

LAFCo is allowing up to four months reviewing any comments made to the environmental reports prepared in connection with the SSJID application. Based on that, a LAFCo vote on the actual application is expected to happen sometime by this summer.

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