It’s been 20 years since PG&E — along with Southern California Edison — dangled competitive transmission charge (CTC) exemptions for irrigation districts to enter the retail power business to secure two California legislators’ votes that delivered electricity deregulation.
Irrigation districts from Fresno north looked at the feasibility of becoming retail power purveyors using the CTC exemptions but passed. Only one agency — the South San Joaquin Irrigation District — was able to make the numbers work thanks in a large part to its investment in the Tri-Dam Project in the 1950s.
The numbers showed their solid financial position plus the fact they didn’t need to make an 11.5 percent plus profit as PG&E does thanks to rates adopted by the California Public Utilities Commission that assure just that. It meant they could deliver retail rates 15 percent lower than PG&E’s across the board.
After two unsuccessful tries to move forward with system interties — one using the old Heinz plant electrical interconnect in Tracy and another at site near Delicato Vineyards — and PG&E trying to sell the district their system that served south Manteca where many of the poles at the time dated back to the 1920s, SSJID embarked on its current path to enter retail power service.
The path that has led it to the San Joaquin County Superior Court where they are now in the discovery phase of the district’s eminent domain lawsuit to force PG&E to sell them the retail system in Manteca, Ripon, and Escalon was started after SSJID studied even more options. Those options included providing only irrigation customers power savings using the district’s share of Tri-Dam receipts that have run as high as $15 million in some years, starting a retail system from scratch to serve new growth south of the 120 Bypass, and using community aggregation — to reduce PG&E bills in the three communities using Tri-Dam receipts to essentially pay them down — that was pushed then opposed by PG&E.
The three options were rejected by the SSJID governing board given not all the district would benefit and the savings would be less and not permanent.
The board has consistently stood by its pledge that since the Tri-Dam Project as well as the SSJID system itself was secured by all property owners within the district that everyone should benefit — rural and urban — and not just farmers.
And by pursuing the path that has taken them to the Stockton courthouse they have opted for the scenario that will secure the deepest and most permanent savings as well as allow the SSJID to modernize the system and give Manteca’s business parks — present and future — the completive advantage of 15 percent lower power rates to lure employers.
Overall, the SSJID plan based on a number of exhaustible and extensive studies including one by a firm that has done significant work for PG&E will put more than $12 million a year back into the pockets of residents, farmers, businesses, schools, and cities based on 15 percent lower retail power costs.
And it would be done while modernizing the system, keeping franchise fee payments to cities for the right to sell retail electricity intact, continuing all current energy programs, and keeping all discounts such as for the poor intact except the discount that PG&E extends its own workers.
“There’s a lot going on,” said SSJID General Manager Peter Rietkerk. “(The public) just doesn’t see it because it is tied into the discovery process.”
Discovery is a pre-trial procedure in a lawsuit where the parties involved can use civil procedures to obtain evidence from the other parties. That includes answers to formal questions, requesting documents, and depositions. When such information isn’t forthcoming, a party may file a motion asking the court to force compliance.
Once discovery is completed the eminent domain case will be presented in court.
At that point, two things can happen. The court can side with SSJID and rule state law allows them to use eminent domain to force the sale of PG&E assets within their jurisdiction. The other outcome is to stop SSJID from forcing PG&E to sell.
Should the court agree with SSJID the next step is to determine the selling price.
PG&E has already rejected an offer by SSJID based on not simply their belief the price was too low but because they did not want to sell.
If the process moves forward and the two sides can’t agree upon a price, it then goes before a judge to make the final determination of what the PG&E assets are worth.
That will not be the final hurdle should SSJID prevail.
The SSJID board has consistently made it clear since the current effort started that they won’t pull the trigger until they have final numbers in hand that they can then have experts look at to make sure the entire endeavor is still feasible.
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