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Manteca saves $140K a year by shedding PG&E

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POSTED June 26, 2013 1:24 a.m.

Is the epic struggle the South San Joaquin Irrigation District has undertaken to replace PG&E as the retail power supplier for Manteca, Ripon, and Escalon worth it?

The answer is on your street.

A move more than a decade ago by the Manteca City Council has avoided municipal costs of at least $140,000 a year.

PG&E owned 1,674 of Manteca’s 2,685 street lights in 1999. The California Public Utilities Commission allowed PG&E to charge $65 a year for electricity and the maintenance for those 1,674 street lights. Research showed that if Manteca bought the street lights under PG&E control and then contracted the maintenance out it would cost $42 annually per light including electricity.

Manteca was required to pay the $65 even if the street lights PG&E was paid to maintain were out for weeks or months at a time.

PG&E initially put the cost of buying the street lights at $1.3 million. The CPUC ultimately said the fair market value was $483,180.

But here’s where it gets interesting. Manteca homeowners had already paid for the 1,674 street lights and infrastructure needed to power them. The cost was collapsed into the price of new homes.

In the 1990s, the city started requiring developers to dedicate street lights to the city and not PG&E. In doing so the city started cutting their ongoing costs as well as reducing the cost to developers who in turn pass the cost onto home buyers.

That’s because the CPUC requires developers to cover potential PG&E taxes on improvements they make such as street lights and underground wiring, transformer boxes and such needed to serve the subdivisions they build. The charge is just under 35 percent of the cost of the improvements. The goal was to keep PG&E whole against corporate taxes. However, it has become a big profit center for PG&E.

Developers typically pay more than PG&E is required to pay in taxes. That excess money is never returned to developers as the CPUC allows the utility to pocket it. Such a requirement would not exist if a public agency was the retail power provider.

Not only did Manteca residents end up spending less money on street lights in terms of electricity and maintenance but they also got better service.

It wasn’t uncommon for PG&E to take a month to replace a burned out street light. The current contractor typically responds within several days or less once they are contacted by the city.

So the city reduced ongoing costs 35.3 percent, obtained the infrastructure at a fair market price that was 62.8 percent lower than what PG&E wanted, and was able to modernize and drastically improve service at the same time.

It mirrors everything that SSJID contends it can do with the added caveat the $12 million in annual savings will cost to households, businesses, government agencies, and farmers in Manteca, Ripon, and Escalon.

 SSJID’s exhaustive studies — verified already by an independent consultant that has done work for PG&E — show that retail power costs will fall by at least 15 percent across the board. That, by the way, is for starters. They are likely to eventually drop farther.

The only problem is getting the SSJID application to enter the retail power business past the San Joaquin Local Agency Formation Commission where it has languished for 46 months.

You’ve got to wonder whether the LAFCo board that consists of elected representatives throughout the county is literally trying to study the SSJID proposal to death.

Are the LAFCo board members more concerned about PG&E’s profitability or the economic vitality of their own community?

It is a legitimate question given what looks like the LAFCo staff’s primary objective is to either milk as much money as they can out of SSJID to cover staff expenses or make sure that grandmothers’ on restricted incomes in Manteca, Ripon, and Escalon keep paying higher prices for electricity than they need to so PG&E can keep raking in money by the trainload.

Had Manteca’s elected leaders taken the same approach as LAFCo, PG&E would have been able to pocket $1.7 million from Manteca taxpayers over the past 12 years.

So is the 16-year odyssey the SSJID undertaken to reduce this community’s power costs by at least 15 percent worth the effort even though it is now stalled at what is essentially the last regulatory hurdle?

How you answer that depends upon whether you want your neighbors as well as yourself to have a combined $12 million more in  our collective pockets each year or whether you prefer that PG&E have that money.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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