James Glaser — the executive director of the San Joaquin Local Agency Formation Commission — is siding with PG&E against South San Joaquin Irrigation District’s bid to reduce retail electric rates 15 percent across the board in Manteca, Ripon, and Escalon.
Less than two weeks after Glaser tried to work behind the scenes to block the Ripon City Council from filling the unexpired LAFCo term of the late Red Nutt in an apparent bid to have one less commissioner that would have enhanced PG&E’s efforts to block SSJID’s bid to takeover retail power service in the three communities, he is posed on Wednesday to push for the five-member LAFCo panel to reject the SSJID plan.
Glaser tried to fill the LAFCo seat in advance of Wednesday’s meeting following Nutt’s sudden passing with the alternate from Lodi. Under LAFCo bylaws the alternate member can serve until such time as a permanent replacement is made by the City Selection Committee consisting of the six mayors of the six cities in San Joaquin County.
However, the alternate from Lodi — Phil Katzakian — could not have served in any case since Dec. 3 was his last day in office. Had Glaser succeeded, there would have been just four voting members at Wednesday’s meeting.
Ripon Mayor Chuck Winn, however, was able to contact Lathrop Mayor Sonny Dhaliwal— chairman of the mayors’ committee — who was able to pull off an 11th hour gathering of all the mayors to beat a legal deadline for having a replacement in place by the Dec. 10 meeting.
The mayors agreed the seat on the LAFCo board still belonged to Ripon as the appointment of Nutt was through May of 2015.
Last week, the Ripon council appointed Jake Parks to serve on the LAFCo board. The other four LAFCo board members who will decide the fate of the SSJID application are public member and Chairman Steven Nilssen, Tracy Councilman Michael Maciel, and San Joaquin County Supervisors Ken Vogel and Larry Ruhstaller.
The LAFCo commission meets at 9 a.m. Wednesday in the sixth floor Board of Supervisors chambers, 44 North San Joaquin Street, Stockton.
Glaser wants LAFCo
panel to say no to SSJID
Glaser rejected a series of consultant studies that back SSJID’s contention it can lower rates by 15 percent and zeroes in on one model that contends the best the irrigation district can do is lower rates initially by2.5 percent. Based on that study, Glaser is arguing the commission should reject the SSJID application.
The current application process started 63 months ago. Glaser throughout the time has repeatedly questioned SSJID’s capabilities after PG&E lawyers objected to studies that showed the SSJID was capable of lowering rates by at least 15 percent.
“This is about local control and lower power rates,” SSJID General Manager Jeff Shields said.
Fracking — and the subsequent surge in natural gas supplies it has helped trigger — is expected to further enhance SSJID’s ability to lower electrical costs across the board 15 percent in Manteca, Ripon, and Escalon.
An independent analysis of the SSJID proposal commissioned by LAFCo concludes that the district is both capable of running retail power operation and has the financial wherewithal to deliver rates at 15 percent below what PG&E charges. The crux of the SSJID plan requires them to acquire the PG&E distribution system in Manteca, Ripon, and Escalon.
Shields noted earlier this year since the independent studies were completed the district is on even sounder footing for its plan to lower power rates.
Shields credited it to a surplus of natural gas made possible by fracking techniques. That surplus is driving down prices for natural gas that fuel a number of power generation plants.
Sixty percent of PG&E charges are for the actual purchase or generation of electricity.
Documents pertaining to the SSJID’s application that were prepared by independent consultants can be downloaded from the LAFCo website at www.co.san-joaquin.ca.is/lafco/
Dropping power costs at first glance would seem to be problematic for the SSJID plan since cheaper electricity produced by natural gas would impact hydroelectric power. The district’s ability to lower power costs is predicated on net receipts from the Tri-Dam Project. Tri-Dam generates between $12 million and $15 million a year historically in net revenue for the SSJID. The district plans to use a large chunk of more than $70 million from Tri-Dam that they’ve squirreled away to finance the purchase of the PG&E system. The independent studies have shown that the SSJID can make 15 percent power happen by diverting part of the Tri-Dam receipts each year to the retail power operations. The SSJID board has already voted to do exactly that.
The study that Glaser is basing his recommendation on ignored the Tri-Dam Project revenue that became available less than 10 years ago when 50-year bonds were paid off. The Tri-Dan project is owned free and clear now by SSJID along with Oakdale irrigation District.
The SSJID has used its share of Tri-Dam receipts to significantly accelerate capital improvements to the irrigation system, put in place aggressive conservation efforts working with famers as well as rolling out the nation’s most advanced high tech drip irrigation system that ahs significantly reduced water use.
The Tri-Dam money will also be used to secure a long-term power contract. The Tri-Dam power per se would continue to be sold primarily on the much more profitable peak market
SSJID has a built in hedge since half of the more than 120 kilowatts the system generates qualifies for California’s Renewable Energy Credit (REC) program. A certain amount of REC credits must be generated or secured annually by manufacturers to stay in compliance with state air quality laws and not be subjected to stiff fines. As such, qualified green renewable energy commands a higher price.