The main event — a court trial to determine whether it is in the public’s best interest for the South San Joaquin Irrigation District to acquire PG&E’s distribution system in Manteca, Ripon and Escalon — is set for May 2024.
And if SSJID prevails, the last hurdle — determining fair market price — could also end up in court.
It is the May 2024 trial on whether SSJID can exercise its “right to take” that will determine if the proverbial legal Rubicon has been forged, essentially taking away PG&E’s ability to derail the SSJID effort per se.
But as the Sacramento Municipally District (SMUD) learned firsthand in the first half of the 20th century, it can still take a while to hammer out a price to the point that is likely to end up being decided in court as well.
Meanwhile a wave of PG&E rate hikes — including an average rate jump off 17 percent being considered this year by California Public Utilities Commission — makes 15 percent lower retail rates in the SSJID jurisdiction even more solid.
That’s because almost all of the rate increases coming up now have to do with “hardening” the PG&E system and addressing wildfire-related issues that are not connected to any of its distribution and delivery system in South San Joaquin County.
Other jurisdictions have penciled out whether they can break away from PG&E. Many of them have come to the conclusion they could offer lower rates if they could but the fact PG&E has a history of fighting tooth and nail with every legal maneuver possible before they finally concede defeat makes it a costly and drawn out legal ordeal.
It is why the City of Rocklin last year opted not to move forward even though an exhaustive study showed they could deliver lower rates to their residents just like the City of Roseville does.
SSJID is using proceeds from Tri-Dam power generation to fund its legal efforts to lower local power rates for resents, business, farmers, and public institutions.
The 19 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 California Public Utilities Commission (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
If PG&E prevails in the May 2024 trial 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, a proposed $20 billion plan 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.
In March, the California Supreme Court refused a request by PG&E to 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 can proceed with its legal efforts to force a sale of the PG&E system serving Manteca, Lathrop, and Ripon.
The SSJID also prevailed in a filing ordering PG&E to pay legal costs SSJID incurred fighting in court over the past 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.
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, 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.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
