South San Joaquin Irrigation District has taken the next step needed to become the retail electricity provider for Manteca, Ripon, Escalon and the surrounding countryside.
The SSJID board has sent PG&E a formal request seeking good faith negotiations for acquiring PG&E’s facilities serving the 72,000 acres that encompass the irrigation district.
The decision to take the next step followed three other major hurdles that the SSJID has crossed. First, gaining the San Joaquin Local Agency Formation Commission’s approval to add retail electricity to the repertoire of services the SSJID already provides including wholesale electricity generation, irrigation water for farmers, domestic water for the cities of Manteca and Lathrop as well as Tracy, and storm run-off services for the cities of Manteca and Escalon.
The SSJID also prevailed in a court challenge PG&E filed in a bid to overturn the LAFCO ruling.
The board also commissioned another independent firm specializing in placing market on retail power systems to assess the PG&E system within SSJID’s territory and determine a fair market price.
SSJID General Manager Peter Reitkerks declined to release the value the consultant placed on the system given the district expects to negotiate the price with PG&E.
In the past, the SSJID board has made it clear they will do updated financial analysis of the viability of the district taking over the system and selling electricity to Manteca, Ripon, and Escalon customers at a rate at least 15 percent lower than PG&E charges. If the valuation the board was provided with behind closed doors as allowed by law didn’t fit into plans to reduce power costs 15 percent they would not have sent the formal request to PG&E for good faith negotiations.
The SSJID board is expected to reassess the financial analysis one last time after a purchase price is agreed upon before executing a purchase contract. Again, the board has repeatedly emphasized in the past they will only pull the final trigger if it remains financially doable and the electricity rates are significantly reduced.
PG&E has until Friday, June 3 to formally indicate whether they want to enter good faith negotiations. If they opt not to reply in the affirmative, Reitkerks said the SSJID board has indicated they want to consider a determination of necessity hearing at the June 28 SSJID board meeting.
If adopted as allowed by state law, it would start the eminent domain process that could lead to a court ruling to set the final price.