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LAFCo treating SSJID differently than Lathrop power provider

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POSTED April 24, 2013 2:23 a.m.

The request by South San Joaquin Irrigation District to take over a chunk of the PG&E service territory isn’t the first rodeo for the San Joaquin County Local Agency Formation Commission.

Thirteen years ago, LAFCo spent less than four months taking away nearly 11,000 future customers from PG&E in approving the Lathrop Irrigation District to provide retail power sales to the River Islands at Lathrop development.

They did so without concern of how much of a discount the four existing PG&E customers and 11,000 future households and businesses would receive. Instead they focused almost entirely on whether the LID had the wherewithal to operate a retail power system.

That contrasts sharply with how LAFCo has treated the SSJID application made 44 months ago that now - due to a concern by LAFCo staff the original study they ordered almost four years ago is outdated - could take at least another year before any decision is made.

“It’s incredible to see what LAFCo is doing with SSJID,” said Susan Dell’Osso, project manager for River Islands at Lathrop and a member of the LID board. “SSJID has over 100 years of history with a proven track record of providing services and at a low cost and we had none.”

The LID’s first customer started getting electrical service last month. The River Islands charter school is receiving power at a rate 5 percent below PG&E electrical rates. As River Islands adds homes, the LID customer base will expand to the point rates will be 20 percent lower than PG&E’s. The LID is able to do so because it doesn’t need to operate at a profit as PG&E does.

The SSJID application indicated rates will be targeted at 15 percent below PG&E initially. But as the district moves forward as a retail provider the expectation is rates will be lowered even further.

All of that maters to LAFCo staff this time around as opposed to 2001.

“We did a study on rates and discussed it but all LAFCo was really concerned with was whether we had the capability of providing the service,” Dell’Osso said.

That dovetails into how the SSJID, through General Manager Jeff Shields, views the California statutes governing the duties of LAFCo on such applications.

LAFCo - under the direction of executive officer James Glaser - has made the economic model the main focus of the review process. Glaser has expressed the view it is his responsibility to make sure customers involved aren’t impacted financially. That wasn’t a concern of LAFCo in 2001. Nor did LAFCo 13 years ago order extensive independent studies and require LID to cover staff time as well as the cost of additional consultants and legal teams retained by LAFCo to review their application.

SSJID, in contrast, if they go ahead with yet another study requested by LAFCo will end up having spent almost $1.9 million connected directly with the LAFCo review process.

Glaser also is concerned that the SSJID could end up shifting Tri-Dam money away from its water delivery systems. He believes the LAFCo staff needs to sort through that as well. It is a litmus test that was not applied to LID which also intends to deliver drinking water to customers.

The SSJID board, for its part, has discussed that point in the past several times to make sure the retail power model the district uses still allows Tri-Dam money to flow to irrigation system improvements.

The SSJID, through long-term investments and financial management, not only went 22 years without raising water rates until a state law mandated that they do so but has been able to install state-of-the-art closed water conservation systems including employing drip technology that has made it one of the most efficient water purveyors in the West.

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