South San Joaquin Irrigation District and PG&E are heading toward a pre-trial conference for a court showdown that ultimately will decide if SSJID can exercise eminent domain powers conferred by the state onto irrigation districts to acquire the local PG&E system.

The “right to take” trial in San Joaquin County Superior Court is one of two remaining hurdles SSJID has to clear after 22 years of regulatory and judicial challenges in their effort to deliver on its promise of providing retail electricity to Manteca, Ripon, and Escalon at 15 percent below PG&E rates.

Such a trial had been scheduled for June 23, 2025.

But a non-affiliated case that involved a public’s rights to acquire utility systems under the California constitution for the benefit of people they serve had been appealed to the State Supreme Court could have changed the legal yardsticks lower courts could use to weigh the emeient domain move.

The appeal in the other case — the Town of Apple Valley and the privately-owned Apple Valley Ranchos Water Company — regarding the standard of review lower courts could use was rejected last month by the state’s high court.

SSJID and PG&E agreed to wait until the Apple Valley case appeal decision was made to move forward to trial.

The ruling fine tunes how SSJID can go about pursuing and PG&E to challenge the eminent domain issue at a “right to take trial.”

The pre-trial case management conference will determine when the right-to-take trial will be scheduled.

State’s high court sided

With SSJID four years ago

If the judge in the upcoming trial agrees SSJID meets the state’s constitutional parameters for irrigation districts to use eminent domain for the public good, the last hurdle will then by a court proceeding to establish the price for acquiring the local retail system

Once the district clears the right to take hurdle, the SSJID can start hiring to ramp up its retail power service.

The state’s high court almost four years ago 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 the 22 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.

SMUD rates are 60%

below PG&E rates

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 roughly 60 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
The 955 miles of power lines, 40,000 meters and three substations serving 130,000 people within SSJID’s 133 square mile service territory represents less than 1 percent of PG&E’s overall customer base.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com