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Here are some frequently asked questions about SSJID’s public power plan:
What is SSJID trying to do?
What’s wrong with getting electricity from PG&E?
How can SSJID deliver lower rates?
Does SSJID have other advantages over PG&E in addition to price?
SSJID is an irrigation district. Does it have any experience with electricity?
What’s keeping SSJID from delivering my power now?
When will LAFCo vote to allow SSJID to become the electric service provider for Manteca, Escalon and Ripon?
Why has it taken so long?
What happens after LAFCo gives SSJID approval? When will I start saving 15% on my electric bill?
I heard that other irrigation districts, like the Modesto and Turlock Irrigation Districts, raised their electric rates not long ago. How do I know SSJID’s rates really will be cheaper?
What is SSJID trying to do?
The South San Joaquin Irrigation District wants to become the retail electric provider for Manteca, Escalon and Ripon, replacing PG&E and lowering rates across the board. SSJID would deliver electricity to all the homes, businesses and schools in the District, except for some neighborhoods in Ripon and Escalon that are already served by the Modesto Irrigation District.
The best part: SSJID will reduce rates 15% below PG&E’s, saving people in our area millions of dollars a year.
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What’s wrong with getting electricity from PG&E?
The big problem with PG&E is that its rates are too high and reliability is low. PG&E has repeatedly asked the California Public Utility Commission for permission to raise its electric rates, all while spending millions on a failed ballot initiative designed to protect it from competition, and millions more in fines for repeated safety violations. With more fines possible and lawsuits pending after the natural gas pipeline explosion in San Bruno, PG&E’s rates will only go up.
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How can SSJID deliver lower rates?
SSJID can deliver electricity at rates 15% below PG&E’s because SSJID is a public, non-profit agency that doesn’t have to produce a profit for shareholders. PG&E collects an extra 11.35% from ratepayers each year to pay its shareholders an annual dividend. SSJID’s public power customers will not get charged extra to pay shareholder returns.
PG&E also pays multi-million dollar salaries and bonuses to top executives, maintains an expensive office building in downtown San Francisco and keeps a corporate jet. SSJID doesn’t have any of those kinds of expenses and also has a better credit rating, meaning we can borrow money more cheaply than PG&E.
SSJID wants to combine all of those competitive advantages to benefit approximately 40,000 homes and businesses in our area.
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Does SSJID have other advantages over PG&E in addition to price?
Yes. In addition to lower rates, SSJID will provide better reliability and local control to people in Manteca, Escalon and Ripon. PG&E’s system is old and in many places is in poor condition. SSJID will update and modernize the electric distribution system in our area as we separate it from PG&E’s network. This will improve reliability and reduce power outages.
In addition, SSJID is run by local directors, who are elected by the people of this area and responsive to local needs. PG&E isn’t.
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SSJID is an irrigation district. Does it have any experience with electricity?
Absolutely. For the past 50 years, SSJID has been in the electric business – generating clean hydroelectric power and selling it on the wholesale market. Now we simply want to close the loop and also serve retail customers.
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What’s keeping SSJID from delivering my power now?
To become the area’s electric provider, SSJID needs the approval of the San Joaquin Local Agency Formation Commission, a body mostly made up of elected officials from throughout the county. We’ve submitted our application to LAFCo and are awaiting a public hearing and a vote.
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When will LAFCo vote to allow SSJID to become the electric service provider for Manteca, Escalon and Ripon?
The LAFCo hearing and vote on SSJID’s application to provide lower-cost electric service for area homes and businesses could come in late 2012. However, we’ve encountered many delays so it’s difficult to know.
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Why has it taken so long?
A couple of reasons. First, LAFCo has been deliberate and cautious throughout the process, which we understand and support, and the studies they’ve requested take time to complete. But the big reason it’s taken this long is because PG&E has used every opportunity to delay and drag out the process.
One recent example is PG&E’s argument that SSJID should have included a Community Choice Aggregation (CCA) option in our required Environmental Impact Report – even though PG&E has vigorously opposed CCA efforts in San Francisco and Marin County. Adding this section to our environmental report takes time to prepare, then the whole document has to be recirculated for a 45-day public comment period. The net effect is it delays our hearing date by about six months. While PG&E’s tactics are entirely legal, they are unfortunate for District residents ready to stop overpaying for electricity.
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What happens after LAFCo gives SSJID approval? When will I start saving 15% on my electric bill?
It’ll depend on what happens after the LAFCo vote, but the short answer is at least a year, possibly longer. Before SSJID can become the area’s electric utility it has to buy PG&E’s current infrastructure – poles, lines, substations and the like – and separate the system from PG&E’s. How quickly all that happens will depend a lot on PG&E.
If PG&E chooses to cooperate, SSJID and PG&E will sit down and negotiate a price and move forward fairly quickly. (It’s possible that even with a negotiated price PG&E would insist on going through an eminent domain process in court because of tax advantages their company would receive.) Even with that, you could have SSJID service in 12 to 18 months.
If PG&E chooses not to negotiate, SSJID will initiate legal proceedings to acquire the PG&E system. If it’s adversarial in court, the process can take much longer – especially if one party’s strategy is to drag out the process as long as possible.
The worst outcome for District residents would be if PG&E chooses to contest LAFCo’s decision in court. There could be a long legal battle before SSJID can even begin the process of acquiring PG&E’s system. We hope this won’t be PG&E’s strategy, but can’t control what its management decides to do.
In any case, SSJID will keep District residents informed. Continue to check the News & Information page on this website for the latest, and sign up to receive periodic e-mail updates.
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I heard that other irrigation districts, like the Modesto and Turlock Irrigation Districts, raised their electric rates not long ago. How do I know SSJID’s rates really will be cheaper?
Both MID and TID did announce rate increases last year – as did PG&E. As the cost of power increases, rates do go up. State mandates to provide an increasing amount of renewable power are also driving up prices because renewable sources are more expensive. (Unfortunately, under the definitions in the law, large hydroelectric facilities like SSJID’s Tri-Dam properties do not count as renewables.)
The benefit of public power, including electric service from SSJID, isn’t that rates will be frozen in time; it’s that they will always be cheaper than PG&E. The SSJID Board of Directors has pledged to set and hold SSJID’s electric rates 15% below PG&E’s. While PG&E and SSJID customers will both see future rate increases if power prices rise, SSJID customers will always pay lower monthly bills.
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