South San Joaquin Irrigation District Rekindles Competition Effort

By Published On: September 4, 2009

The South San Joaquin Irrigation District Board unanimously agreed September 3 to again attempt to provide retail electricity service in direct competition with Pacific Gas & Electric. The irrigation district plans to seek requisite approval from the San Joaquin Local Area Formation Commission, which previously rejected its proposal. “With the district board’s approval of the application, we’re one step closer to bringing much-needed electricity rates to the nearly 40,000 customers in South San Joaquin County,” said Jeff Shields, the district’s general manager. The district promised customers in Escalon, Manteca and Ripon rates 15 percent lower than PG&E’s. “It’s disappointing that SSJID is planning to spend even more taxpayer money on a risky plan to take over PG&E’s electric system through eminent domain, particularly during these difficult economic times,” stated Nancy McFadden, senior vice president of Public Affairs for PG&E. In April 2008, a state appellate court ruled that the South San Joaquin Irrigation District could not provide retail electricity service in direct competition without county approval. Two years earlier, the San Joaquin LAFCO rejected the district’s application to sell power to homes and businesses in the area served by PG&E, and the irrigation district sued. Overruling a lower court, the appellate body held that the information the commissioners relied on when casting their no votes in 2006 was protected by the “deliberative process privilege.” Shields said circumstances have changed significantly since the district submitted its application seeking LAFCO approval to offer retail power in its area in 2005. For instance, the district has a much larger cash base generated by hydropower and water supply sales, PG&E rates are higher, the economy is weak, and LAFCO has new board members. Another difference is that the current application requests that an independent economic analysis be carried out on the cost of providing retail power service, with the district picking up the tab. “The bottom line is that rates have gone up significantly, the economy collapsed and people are losing their homes for the cost of a power bill,” Shields said. LAFCO is expected to decide on the district’s application in the first quarter of 2010. At that time, only one original LAFCO member will still be on the board. If the district is successful this time, it would likely face off in court with PG&E over the cost of taking over the investor-owned utility’s distribution infrastructure.

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