Manteca, Ripon, and Escalon should find out this spring if PG&E or the South San Joaquin Irrigation District will be their retail electrical provider in 2012.
The San Joaquin County Local Agency Formation Commission is expected sometime in March to schedule a hearing on the SSJID request to provide retail power service to the 72,000 acres that are within district boundaries.
Originally, a hearing had been targeted for this month but the LAFCO staff wanted to conduct additional studies beyond the ones they ordered last year after some of the assumptions made by the consultant about power costs and SSJID’s ability to finance the project were questioned.
The consultant had assumed the cost SSJID would pay for wholesale power would increase but did not apply the same assumption to PG&E rates.
Also, the consultant’s original study indicated they believed SSJID had undervalued the PG&E system therefore the $10 million start up that SSJID used in their financials wouldn’t be enough to leverage the purchase of the PG&E retail system serving the three counties.
SSJID noted, however, that they have $70 million in undistributed reserve and that the board was committed to using annual Tri-Dam receipts - their share is at least $12 million annually - to meet their promise of buying the system and lowering all rates to customers at least 15 percent below what PG&E charges.
LAFCO permission is required before special districts can provide additional services. The SSJID has provided irrigation water for 103 years and wholesale power for 55 years including 51 years to PG&E without failure.
If LAFCO gives SSJID the green light, the next step is for the Manteca-based irrigation district to enter into negotiations with PG&E. If the two entities can’t settle on sale price the courts then decide.