A request by a county agency for what could amount to a second feasibility study on retail electricity may end up costing consumers in Manteca, Ripon, and Escalon $12 million over the next year.
That’s how the South San Joaquin Irrigation District board views a San Joaquin Local Agency Formation Commission request for a redo of an independent consultant’s report completed three years ago that concluded SSJID has the wherewithal to deliver reliable retail electricity at rates at least 15 percent below what PG&E charges.
The SSJID board has pointed out another year’s delay in moving forward equates to $12 million more that consumers, businesses, and farmers in the three communities have to spend on electricity than they would if the district was the provider.
SSJID leadership agrees with LAFCo Executive Director Jim Glasser that market conditions have changed. They are confident a redo on the study will make SSJID’s come out even stronger in the district’s favor since a reduction in power costs increases the relative value of renewable power that they generate on the Stanislaus River.
What they don’t agree with is the need for another full-scale study.
SSJID General Manger Jeff Shields said the board will discuss the matter during today’s 9 a.m. meeting at the district office, 11011 East Highway 120. The preference is that the new study zero in on the economic feasibility connected with power sales and power purchases. Such a study would take less time and directly answer the concerns of market condition changes.
A hundred percent of the 120 plus megawatts that is produced jointly by the Oakdale Irrigation District and SSJID through Tri-Dam is green energy. As such a state mandate that requires portfolios of energy providers to have a set percentage of the electricity from renewable sources that are 30 megawatts or less means the SSJID will benefit through government established renewable charges that come to $35 a megawatt hour.
If SSJID were in the retail power business today, it would secure most of their power at $50 per megawatt on the open market and then be able to sell at least 48 megawatts to other power providers who must have renewable energy in their portfolios at $85 per megawatt hour. That extra $35 per megawatt will supplement Tri-Dam revenue.
The SSJID believes LAFCo has gone beyond being overcautious when addressing concerns brought up by PG&E that doesn’t want to lose retail power customers in Manteca, Ripon, and Escalon.
The SSJID had already done redundant studies to make sure they were on firm footing. Those studies cost in excess of $6 million over the past 10 years. Both came to the same conclusion. The 15 percent reduction in power rates was more than do-able thanks to the Tri-Dam System power receipts.
The $6 million plus is in addition to the $1.4 million the SSJID has spent on LAFCo related studies since applying for permission to enter the retail power business almost 46 months ago. That includes, as of October 2012, $723,185 paid to LAFCo to cover their direct attorney fees plus some staff time. It also includes the cost of the independent PA Consulting study. The firm, which was recommended by PG&E with the study paid for by SSJID, concluded that the SSJID has the expertise and the financial means to operate and deliver retail power at the reduced rate that the public agency contends they can.
The SSJID is currently being billed $15,000 a month for LAFCO’s attorney fees.
Now the original consulting study that has been studied by LAFCO lawyers and that PG&E has unsuccessfully tried to pick apart for the past three years is being deemed too out of date by LAFCo staff for their governing board to make a decision.
The consultant agreed SSJID has the ability to put more than $12 million a year back into the pockets of residents, farmers, businessmen, and government agencies in Manteca, Ripon, and Escalon by purchasing the PG&E retail electrical system that now provides power within the boundaries of the district’s 72,000 acres.
“That is why waiting another year costs the people in Manteca, Ripon, and Escalon another $12 million,” Shields said.