TID Hears Rate Increase Concerns and Will Set Rates on December 6th

Turlock Irrigation District (TID) held one last public hearing during the November 22nd Board Meeting regarding proposed electrical rate changes. Chris Poley, Utility Analyst, reviewed the process staff followed to calculate the rates and how to implement those changes.

Public workshops were held in the evening in Turlock, Ceres and Patterson to gather input from customers. Staff took into account customer comments including spreading the increase over three years versus the two years originally proposed and separating out the charge to point out that it is the cost of complying with state mandates. Staff also had to keep in mind other factors such as the rate stabilization fund balance, maintaining appropriate coverage ratios to maintain TID’s credit rating, and if there were any limits on an environmental charge.  

 
Turlock Irrigation District (TID) held one last public hearing during the November 22nd Board Meeting regarding proposed electrical rate changes. Chris Poley, Utility Analyst, reviewed the process staff followed to calculate the rates and how to implement those changes. Public workshops were held in the evening in Turlock, Ceres and Patterson to gather input from customers. Staff took into account customer comments including spreading the increase over three years versus the two years originally proposed and separating out the charge to point out that it is the cost of complying with state mandates. Staff also had to keep in mind other factors such as the rate stabilization fund balance, maintaining appropriate coverage ratios to maintain TID’s credit rating, and if there were any limits on an environmental charge.  
 
The rate increase is necessary to cover the cost of compliance new state environmental laws: 1) AB 32 requires a limit in greenhouse gases through a cap-and-trade program, and 2) SB1X2 requires that 33% of power must come from renewable energy source. To comply, TID constructed the Tuolumne Wind Project at a cost of $427 million to generate 136.6 megawatts of wind energy.
 
The proposed rate increase is based on the projected annual cost of the Tuolumne Wind Project and the AB 32 cap-and-trade program which is $45 million and $10 million respectively. Estimated cost per kilowatt-hour is 2.8 cents by 2014 which would create a budget shortfall of $38 million in 2012 and $50 million by 2014. What this means for the average residential customer would be an additional $4 per month in 2012, then another $5 per month in 2013 and 2014 for a total increase of $14.
 
Poley pointed out that there is possibility of deviation over the next three years. For example, the greenhouse gas law AB 32 could be postponed again and thus the corresponding rate increase that will cover that cost will be postponed as well. 
 
"We believe there will be many changes between now and 2015,” stated Poley. “I expect staff will be bringing back updates to the board by 2014 if not sooner."
 
There were few public comments and those that were present gave suggestions and asked for clarification.
 
Mary Jackson, a Turlock City Council Woman, expressed concern that the meetings were only held at 9am and are difficult for most people to attend. She requested that the board consider evening meetings when major items such as rates are on the agenda. Jackson also suggested that the Board Meetings be televised to help keep the public informed.
 
David Hollinger, a senior living on Social Security, asked that TID reevaluate the income levels used to qualify individuals and couples for low income rates. Although he felt that TID has always had excellent rates compared to when he lived in southern California, Hollinger was concerned about the increase for those on fixed incomes.
 
"We don’t have a 4% increase in our income," said Hollinger.
 
Tracy Sunday, a resident with solar energy panels installed on his home, wanted clarification about the environmental charge and how that would apply to residents doing their own environmental friendly power generation. The Environmental Charge is based on net consumption and will only be changed per kilowatt hour used by the customer from TID.
 
The proposed rate changes will go before the board for a final vote along with the 2012 budget on December 6, 2011, in the TID Board Room at 9am.
 

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