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SSJID retail power will help agriculture survive & thrive

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POSTED September 17, 2009 1:56 a.m.
Manteca’s city leaders may not have realized it but when they took a vote Tuesday night to support South San Joaquin Irrigation District in their bid to replace PG&E as the retail power provider for Manteca, Ripon, and Escalon they endorsed a plan that will help agriculture survive and thrive in the South County.

Electricity costs are back breakers for many people but especially farmers who need it to pump water, run dairies, and process their harvests. Almond haulers such as Travaille & Phippen before the latest PG&E price jumps this summer were paying PG&E one cent on every pound of almonds they processed. High energy costs make for razor thin margins as the hauler gets just three cents a pound to cover everything from labor and equipment to profit that basically is a farming family’s paycheck unlike in many businesses where owners draw a salary plus set aside profits.

Almond growers aren’t the most brutalized segment of the farming community when it comes to electricity – not by a long shot. That dubious honor goes to dairy farmers. Every PG&E rate increase – there are two more in the works for Jan. 1, 2010 in excess of $700 million on top of another $1 billion already approved to go into effect over the next three years –  has the potential of becoming one more nail in the coffin.

It is why the SSJID strategy of benefiting the entire district and not just farmers with the proceeds of the Tri-Dam Project by jump starting a retail power system that can offer rates 15 percent lower than PG&E makes the most sense for farmers.

Even though they have some of the heaviest electric loads, they are simply too far apart to cost effectively serve with a separate rural electric system. Besides, as the farmer dominated SSJID board has repeatedly pointed out, the irrigation district itself owes its start to the support it got from the cities back in 1909. Manteca, Ripon, and Escalon provided votes plus property value assessment to make it work. It was the same value that indirectly backed the Tri-Dam bonds.

Agriculture gave birth to Manteca, Ripon, and Escalon and has helped them grow. Now it is time to use the consumer power of the cities to make sure agriculture continues to prosper in the South County.

There is a solid potential that the rate gap between PG&E and SSJID will be much greater than 15 percent as the years roll on. SSJID Board Vice Chairman John Holbrook is on target when he says it is quite possible SSJID will end up having rates ultimately below everyone else including Sacramento Municipal Utility District.

It is because SSJID owns almost enough land now to cover its needs through its share of the Tri-Dam. PG&E, by comparison, only generates electricity equivalent to 37 percent of its needs. The rest is from signed hydro contracts in California and with out-of-state suppliers.

SSJID has the ability to sell hydro power at the peak of the electricity markets in the summer when demand is highest. Proceeds will allow it to enter into long-term contracts to flatten the cost of power as much as possible.

If SSJID gets the San Joaquin County Local Agency Formation Commission’s blessing to go forward, they have the potential to make the South County the greenest region in California.

The solar plant at the water treatment plant is highly effective. They could have generated more solar power than they need right now but PG&E and other corporations in the quasi-public utility business got the California Public Utilities Commission to cap such renewable projects undertaken by government agencies. The CPUC are the same folks that guarantee PG&E an 11.35 profit regardless of how bad they run the company or how dire the economy gets.

With PG&E out of the way, SSJID could significantly expand the Robert O. Schulz Solar Farm that generates 1.4 megawatts of clean energy to power the Nick DeGroot Surface Water Treatment Plant. It wouldn’t be a stretch to say they could easily increase that 10-fold through various financing options as technology improves. Even with overcast skies in winter, the site near Woodward Reservoir has been highly effective for generating power.

SSJID also wants to pursue a plan where they help people generate their own power whether it is through roof-top solar installations or agricultural and business applications. It could even involve wind power.

The bottom line for SSJID is the same as it has been from day one – enhancing the economic prosperity of the people they serve.

And in doing so, SSJID as a retail power provider may be the best shot at preserving agriculture in the South County.
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