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Does SSJID plan make sense? It’ll cost $200K for study to find out

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POSTED November 21, 2009 2:34 a.m.
Who knows what they’re talking about – PG&E or South San Joaquin Irrigation District?

The SSJID may put up nearly $200,000 to cover the cost for an independent review ordered by the San Joaquin Local Agency Formation Commission of the district’s financial analysis of its ability to provide retail electric service.

The SSJID board will decide whether to spend the money during Tuesday’s 9 a.m. gathering at the district office, 11011 East Highway 120.

Getting approval of the LAFCO board is key to SSJID’s quest to takeover the PG&E system in its bid to reduce power rates by at least 15 percent in Manteca, Ripon, and Escalon. The focus of the analysis will center on the value of the PG&E system.

Although that is usually a battle reserved for negotiations or an eminent domain case before the court, LAFCO board members the first time around raised the question about the system’s value when they rejected the initial SSJID request primarily on concerns about eminent domain.

The LAFCO board has been advised by its staff that eminent domain and whether SSJID could use it against PG&E to acquire their system was not an issue that could impact whether to approve the district’s request to enter retail power service.

SSSJID General Manager Jeff Shields said his board wanted no doubts to be raised about the validity of the district’s financial plan so they offered to pay for an independent study by whatever consultant LAFCO picks. Both SSJID and PG&E have provided LAFCO with a list of consultants each believes are capable of conducting such an analysis.

PG&E contends the value of the system SSJID wants to ultimately acquire is between $350 million and $400 million.

SSJID has a study by an electrical system appraiser that puts the value at between $40 million and $60 million. Part of that is based on how PG&E has depreciated the system in reducing their taxes which was gleaned from documents the for-profit San Francisco-based utility filed with the California Public Utilities Commission.

LAFCO is expected to make a decision on SSJID’s request for a green light to enter the retail power service in the spring of 2010.

Shields said the SSJID board “is very confident” the independent appraisal will prove the district is right.

He added, though if the analysis of the PG&E system’s power comes in higher the district will take a long hard look at its next move even if they prevail at LAFCO.
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