South San Joaquin Irrigation District’s drive to lower retail electricity rates 15% across the board in Manteca, Ripon, and Escalon is on a long and winding road through the court system.
The legal maneuvers center on PG&E not wanting to have the eminent domain law that they apply frequently to force the turning over of property for them to operate their business in the most profitable manner when it comes to right-of-way and such to be applied against the for-profit utility by SSJID as allowed under California law.
uPG&E has an appeal pending in the Third District court contending SSJID’s board lacked the authority to adopt a resolution of necessity required to start eminent domain proceedings.
uOn Thursday, San Joaquin County Judge Carter Holly will hear arguments from PG&E on the utility’s motion to dismiss the SSJID’s eminent domain lawsuit.
uSSJID is appealing a Superior Court decision that ruled it is unconstitutional for the SSJID as a public agency to make payments in lieu of property taxes to the cities of Manteca, Ripon, and Escalon.
They are the latest in nearly three dozen rulings and legal filings following the San Joaquin Local Agency Formation Commission decision on Dec. 11, 2014 to approve SSJID entering into the retail electric business. That came almost five years after the SSJID board on Sept. 3, 2009 voted to formally file an application with the San Joaquin LAFCo to provide retail service as California law allows irrigation districts to do. The 2009 vote triggered a flurry of lawsuits and court filings that finally accumulated with the Dec. 11, 2014 decision.
All of that came after nearly a decade of vetting the economic feasibility and whether SSJID had the ability to run a retail system in addition to the wholesale system via the Tri-Dam Project that supplied PG&E with reliable power for more than half a century.
SSJID General Manager Peter Rietkerk noted the current legal issues could take two years or so to resolve.
“The SSJID is in it for the long haul,” Rietkerk said. “The board is still committed to providing electricity for 15 percent less.”
Rietkerk noted a lot of key SSJID decisions that have served to strengthen the overall economies of Manteca, Ripon and Escalon have taken years to get through the approval process. Although the Tri-Dam Project was built in three years during the 1950s, it took 10 years of planning and effort to secure the necessary permits. The water treatment plant that serves the cities of Manteca, Lathrop, and Tracy also took a decade of making its way through planning to groundbreaking.
Following the LAFCo approval in 2014, PG&E filed a series of motions to have it overturned. The Third District Court of appeals ultimately denied PG&E’s request for a review of SSJID’s financial capability and whether SSJID’s proposal to pay the in lieu fees to the cities was unconstitutional. That decision was on May 12, 2016. The same day after the ruling was made, SSJID submitted an offer to PG&E to purchase PG&E’s infrastructure within the SSJID’s boundaries.
PG&E rejected SSJID’s offer on June 2, 2016.
Then on June 28, 2016 after a public hearing, the SSJID adopted a Resolution of Necessity to move forward with eminent domain. The resolution noted acquiring the PG&E distribution system was necessary for the proposed project, public use of those facilities would include various public benefits including local control over the power supply, public transparency, an electrical rates projected to be lower than PG&E’s by an estimated 15 percent.
SSJID filed an eminent domain lawsuit against PG&E on July 7, 2016.
Rietkerk noted that the SSJID board is committed to keeping the cities whole even though not paying in lieu fees would make their ability to deliver electricity at rates at least 15 percent below PG&E even more solid.
The Superior Court originally agreed that the in lieu fees were not a gift of public funds and where therefore constitutional but then in a subsequent ruling reversed that position.
The issue as far as the City of Manteca’s in lieu fees is concerned come to roughly $550,000 a year. While SSJID is committed to paying the in lieu fees which is why they are spending the money to make a legal case that they are constitutional, the city stands to see significant savings with a 15 percent reduction in their power bills. Between the wastewater treatment plant, water wells, and street lights alone the 15 percent in power savings could reduce municipal expenditures by roughly $375,000 every year.
The overall impact on the economies of Manteca, Ripon, and Escalon would be to put $15 million a year back into the pockets of residents and businesses.
The impact varies based on the customer and situation.
Energystar.gov, as an example, notes a typical supermarket spends $4 per square foot on energy or $200,000 for an average store of 50,000 square feet. A 15 percent savings such as what SSJID is pushing for means such as store would have their power bill cut by $30,000 annually.
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