Manteca, Ripon, and Escalon could have a new retail electrical provider in 2012.
It all hinges on what the San Joaquin County Local Agency Formation Commission rules.
That decision could come as early as January.
The South San Joaquin Irrigation District has invested well over $1 million in additional studies and reports requested by the county agency to augment extensive studies that the district had already done. Those studies - including an economic model based on harnessing $15 million a year in SSJID’s share of Tri-Dam Project proceeds generated from the sale of wholesale electricity - concluded the SSJID can deliver retail power at rates at least 15 percent lower than PG&E currently does.
PG&E has argued the opposite would happen, that power costs would actually go up. That is why LAFCo directed SSJID to do the supplemental studies. The LAFCo staff selected an expert in the electrical business that PG&E recommended - PA Consulting. They did the report working with the LAFCo staff while SSJID covered the costs.
PA Consulting concluded that it was indeed feasible based on the value they believed the PG&E system is worth which was considerably more than SSJID’s estimate. By committing $39 million of the $70 million the district has stashed away from Tri-Dam proceeds upfront, plus borrowing, and infusing $15 million a year until those bonds are paid off, the independent consultant recommended by PG&E determined SSJID could indeed deliver power at 15 percent under PG&E’s cost.
PA Consulting also determined that SSJID would actually receive $18.3 million a year in the future from Tri-Dam which is more than enough to cover the $15 million. It is higher than the “more than conservative” estimate that SSJID made.
The SSJID board also voted unanimously at LAFCo’s request to commit that $15 million a year before the commission makes its decision.
The environmental review period is expected to start in the next few weeks after LAFCo staff has completed their internal review.
This is the second application at LAFCo. The first attempt by SSJID to enter the retail power business was rejected on a split vote by the commission despite LAFCo’s staff’s favorable recommendation. The debate the first time centered on the possible use of eminent domain to acquire PG&E if negotiations between the two entities weren’t successful. LAFCo staff noted that eminent domain wasn’t a criterion that state law required the commission to measure the worthiness of the SSJID proposal.
Each time, independent consultants concluded SSJID had the resources and the knowledge to run a retail power system. They have overseen the Tri-Dam wholesale power system for 56 years.
The California Public Utilities Commission has gone on record noting that the loss of Manteca, Ripon, and Escalon would not have a noticeable impact on the rest of the PG&E system.
The SSJID move to acquire part of the PG&E system to put in place lower power rates is not a first. It has been done elsewhere in the system. One of those efforts - the Trinity Public Utilities District - was accomplished through the efforts of Jeff Shields when he was the general manager for that Weaverville-based agency. Shields is now general manager of SSJID.
Trinity County made the move as high power costs were severely impacting residents and was costing them jobs as sawmills and other manufactures were fleeing the county.
Trinity continues to have power rates significantly lower than PG&E.