PG&E underpaid Manteca $80,835 in franchise fees collected from city electric and natural gas customers over a five-year period ending in December 2010.
Manteca’s municipal engineering and technology staff used the municipal geographic information system to double check PG&E data. They discovered PG&E had failed to provide the city with franchise fees for 192 customers within the city limits. Municipal staff also determined PG&E had placed some 831 premises as being within the city when in fact they are in the county’s jurisdiction.
The bottom line was that PG&E agreed they had underpaid Manteca $80,835 in municipal franchise fees between January 2006 and December 2010. PG&E sent Manteca the money they owed this past week.
Manteca collects a 2 percent franchise tax fee on electrical sales within its city limits. It also collected a 1 percent franchise tax on natural gas sales and a 5 percent franchise tax fee on cable TV service.
In the 2009-10 fiscal years that translated into $1.2 million including $569,000 from Comcast, $498,000 from PG&E for electricity and $134,700 from PG&E for natural gas sales.
The franchise tax fees were initially a concern of Manteca, Ripon, and Escalon councils two years ago when SSJID asked for their backing in its effort to rollback retail power sales by 15 percent by acquiring the PG&E system with the irrigation district’s boundaries. Publicly operated utilities aren’t required to pay franchise tax fees.
SSJID has committed to not only paying the franchise tax fees but increasing it to 2.5 percent. That means if SSJID becomes Manteca’s retail power provider the city would receive $622,500 in franchise tax fees based on 2010 electricity sales or $124,500 more than PG&E paid.
The city also would benefit from the 15 percent reduction in electrical bills that an independent consultant hired by the San Joaquin Local Agency Commission determined SSJID can indeed do if they are given the go ahead to become a retail power provider, The consultant was hired as an independent judge of SSJID’s capabilities based on a recommendation from PG&E.
With electrical costs to run the city pushing $2 million a year, that would mean a $300,000 annual savings. The bottom line is the City of Manteca would be $424,500 better off financially every year with SSJID as compared to PG&E.
Similar savings would be experienced by Manteca Unified School District, the City of Ripon, and City of Escalon. Ripon Unified School District, and Escalon Unified School District.
Even the SSJID would be money ahead. By supplying its own power to run the various district irrigation pumps, the district would save $40,000 a year.
A final LAFCO decision on SSJID’S request to exercise its authority under the state constitution to become a retail provider of electricity is expected by June.