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SSJID may soon replace PG&E for Ripon power

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POSTED February 23, 2013 1:39 a.m.

Ripon residents who pay higher electrical rates than their neighbors who switched to Modesto Irrigation District may soon have their bills slashed by 15 percent.

That’s because a decision on South San Joaquin Irrigation District’s request to replace PG&E as the retail power provider for much of Ripon, Manteca, Escalon and surrounding rural areas is expected to finally be made by the San Joaquin Local Agency Formation Commission.

When that happens, it is possible SSJID customers in Ripon could pay less than MID.

 In the case of PG&E, the exit fees at in time included massive loans the utility took out to lower power costs after deregulation. They got the CPUC to allow them to charge customers back for lowering their rates.

The Ripon City Council - as well as elected leaders in Manteca and Escalon - has gone on record backing SSJID’s attempt to take over the local PG&E system.

An independent analysis of the SSJID proposal commissioned by LAFCo concludes that the district is both capable of running a retail power operation and has the financial wherewithal to deliver rates at 15 percent below what PG&E charges. The crux of the SSJID plan requires them to acquire the PG&E distribution system in Manteca, Ripon, and Escalon.

Documents pertaining to the SSJID’s application that were prepared by independent consultants can be downloaded from the LAFCo website at www.co.san-joaquin.ca.is/lafco/

The district’s ability to lower power costs is predicated on net receipts from the Tri-Dam Project.  Tri-Dam generates between $12 million and $15 million a year historically in net revenue for the SSJID. The district plans to use a large chunk of more than $70 million from Tri-Dam that they’ve squirreled away to buy and finance the purchase of the PG&E system. The independent studies have shown that the SSJID can make 15 percent power happen by diverting part of the Tri-Dam receipts each year to the retail power operations. The SSJID board has already voted to do exactly that.

That money will also be used to secure a long-term power contract. The Tri-Dam power per se would continue to be sold primarily on the much more profitable peak market

SSJID has a built in hedge since half of the more than 120 kilowatts the system generates qualifies for California’s Renewable Energy Credit (REC) program. A certain amount of REC credits must be generated or secured annually by manufacturers to stay in compliance with state air quality laws and not be subjected to stiff fines. As such, qualified green renewable energy commands a higher price.

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