The high stakes legal chess game that could free more than 130,000 South County residents from paying one of the highest electrical power rates in the nation continues.
Last month, South San Joaquin Irrigation District finally secured a court date for a San Joaquin County Superior Court judge to hear its eminent domain case aimed at taking over the PG&E retail power system in Manteca, Ripon, and Escalon.
It is the decisive step in the legal process for SSJID to achieve its goal of lowering retail electricity rates by at least 15 percent for its constituents in Manteca, Ripon, and Escalon.
That’s because if the SSJID clears it the final legal step is the court deciding the price.
The day in court SSJID has been working to attain for 20 years was set for June 23, 2025.
PG&E, though, this week filed a motion to delay the trial as they are seeking to have a judge defer the condemnation move back to the California Public Utilities Commission.
The CPUC had previously passed judgment that SSJID had taken all the right steps and could proceed. When a lower court then ruled in SSJID’s favor, PG&E appealed to the California Supreme Court.
The state’s high court almost two years ago to the day refused PG&E’s request to have it review a lower court decision the for-profit utility wanted overturned to derail SSJID’s eminent domain efforts.
The high court’s decision not to review the case meant SSJID could proceed with its legal efforts to force a sale of the PG&E system serving Manteca, Lathrop and surrounding farms.
The SSJID also prevailed in May of 2022 in a filing ordering PG&E to pay legal costs SSJID incurred fighting in court over the previous four plus years to be able to pursue its legal rights under the state constitution to use eminent domain given PG&E rejected above market offers to purchase the local distribution system.
Since the original CPUC decision regarding eminent domain was made in SJID’s favor, a state law governing for-profit utilities was changed by the legislature.
It added steps that PG&E noted the CPUC did not consider the first time around.
Those “steps” were put in place by lawmakers concerned PG&E — when it was on the ropes due to bankruptcy issues — could have been easy prey for a hostile takeover that may not have benefited ratepayers or PG&E employees.
Eminent domain, despite what PG&E has inferred over the years in what was a $1 million plus community advertising blitz to build ill will against SJJID was somehow inappropriate for a public power agency to use, is something that PG&E welds quite often as a quasi-public institution.
It is primarily used to locate power lines across private property to serve other customers in a manner that saves the company money regardless of the impact it has on the owner of the land.
If SSJID ultimately prevails it will lead to power bills that at the front end will be 15 percent lower than PG&E. That gap, if history is repeated where other agencies forced a sale of PG&E territory such as the Sacramento Municipal Utility District, will widen as the years pass.
It would mean local residents, businesses, and farms won’t help underwrite profits that flow primarily to Wall Street hedge funds. SSJID would be able to take advantage of lower interest rates based on its solid rated financial status to fund system upgrades.
If PG&E prevails more than 130,000 Manteca, Ripon, and Escalon residents will continue to be slammed with rate hikes attributed to the need to address years of the for-profit utility failing to effectively address long-term maintenance issues, including plans to underground power lines that are mostly 100 miles or more from SSJID and to keep the state guarantee of nearly a 11 percent return flowing into PG&E coffers and the pockets of their investors.
If the 20 years SSJID has invested so far to obtain the local PG&E system seems like a futile effort, keep in mind it took 23 years after the people of Sacramento first moved to exercise their right to acquire their local retail system from PG&E to start delivering electricity in 1946 through SMUD.
What PG&E is doing to stop SSJID is almost a replay of their efforts in courts for almost a quarter of a century to stop SMUD.
Today SMUD’s average rates are 35 percent lower than what PG&E charges. Only a handful of utilities have lower rates than SMUD in California — Roseville Electric and Turlock Irrigation District. That difference is slight.
The gap between SMUD and other local, publicly owned utilities compared to PG&E continues to grow as PG&E’s annual rate increases are significantly higher.
Based on a CPUC analysis between 2002 and 2019 PG&E rates rose an average of 37 percent compared to the 19 percent the consumer price index rate rose. The data available for average local utilities for the 10-year period between 2008 and 2017 shows a 3.33 percent increase.
While 20-year data was not available for all local utilities, based on SMUD only the increase in rates was less than 10 percent for the corresponding 20-year period or roughly a quarter of PG&E’s
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
