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SSJID puts its money on the table for 15% lower rates
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The South San Joaquin Irrigation District board has spent the past seven years talking about how they can sell retail power for 15 percent less than PG&E in Manteca, Ripon, and Escalon and do so while updating the distribution system.

On Tuesday, the SSJID made it clear they were putting their money where their collective mouth is.

The board unanimously adopted a resolution confirming their stated intent to divert $15 million a year into retail electric after spending $39 million upfront to leverage bonds to purchase the retail system from PG&E to allow the 15 percent across the board rate reduction that will save consumers within the district $12 million annually. The diversion of Tri-Dam net receipts - that an independent conducting firm recommended by PG&E to provide a neutral analysis of the SSJID plan projected will be $18.3 million a year - will take place until ratepayers retire the bonds while paying 15 percent less for power.

It was a key milestone as the San Joaquin Local Agency Formation Commission staff required the written commitment before they’d consider recommending the district be granted the right to provide the retail service. A LAFCO decision on SSJID’s request to save Manteca, Ripon, and Escalon retail power customers 15 percent a year is expected to be before LAFCO this summer.

SSJID has advanced more than $300,000 for the independent studies that PG&E  essentially demanded to validate several millions of dollars of exhaustive studies the SSJID has had conducted by two separate consulting firms about the feasibility and financial viability of its electrical retail service plan.

Both the SSJID and PG&E were asked by LAFCO to recommend consultants. LAFCO went with a firm favored by PG&E.

That firm - PA Consulting - essentially determined the SSJID plan is feasible if they put $39 million upfront and diverted $15 million a year into the retail power system until the bonds were paid off.

While SSJID disagreed with some of the assumptions such as overstating the amount needed upfront the board nevertheless said if PA Consulting is right they have absolutely no problem committing the resources to make it happen.

Currently, SSJID has in excess of $70 million they could invest upfront into retail power.

The board’s resolution adopted Tuesday also took great care to point out something that the directors have said is fairly obvious for years - even with the diversion of $15 million in Tri-Dam receipts to retail power it will not impair SSJID’s “ability to continue to operate and maintain its existing operations including expenditures for appropriate capital improvements.”

PG&E and San Joaquin Common Sense - an organization they help fund to try to whip up public opposition to SSJID’s plan to buy the local retail system and reduce rates by 15 percent across the board - contend the district is being reckless.

That, however, is clearly not the case based on the report by the independent firm that PG&E recommended. That report is located on the LAFCO website at

The key passages in the consulting report is found on Page 7 and states, “based on its Updated Market View assumptions, PA determined that SSJID would need to reinvest excess operating revenue, adjust PG&E rates, and contribute $39 million of equity upfront and $15.0 million on average per year over the term of the business plan in order to achieve a flat 15% rate discount to PG&E rates. It should be noted that PA has only evaluated the impact that additional equity contributions would have on potential rate discounts, and not on the source of, or SSJID’s ability to provide, such equity contributions.”

The LAFCO request for the resolution that the SSJID board adopted Tuesday tied up that lose end and made it clear on the official record that the SSJID board is committing Tri-Dam receipts to the retail power project.