TID Board Approves Raising Rates for the Next Three Years

At its regular 9am meeting on Tuesday, the Turlock Irrigation District Board of Directors voted unanimously to increase electric rates by 4 percent systemwide in 2012, 2013 and 2014. This means that for the average residential customer using 1,000 kilowatts-hours, their monthly bill will increase by an additional $3 per month in 2012, then another $5 per month in 2013 and 2014, for a total increase of $14 per month.

The last TID general rate increase was in 2009, which was 15 percent average systemwide increase.
 
While base rates will remain the same in 2012, the increase will be reflected in an “Environmental Charge” that will appear as a line item on customer bills, further informing customers that the increase is part of a multi-year rate increase strategy that is needed help cover the costs associated with meeting state renewable energy mandates.  Those new state environmental laws costing TID include: 1) AB 32 which requires a limit in greenhouse gases through a cap-and-trade program, and 2) SB1x2 which requires that 33% of power must come from renewable energy source.
 
To help comply, TID constructed the Tuolumne Wind Project at a cost of $427 million to generate 136.6 megawatts of wind energy. TID will begin making principal payments on the project next year and needed to create a funding mechanism.
 
The Tuolumne Wind Project (TWP) is located in Klickitat County, Washington along the Columbia River.  The project consists of 62 turbines which generates a total of 136.6 megawatts, enough green energy to power approximately 44,000 households each year.
 
The project has helped TID reach 28% of the required 33% renewable energy mandates. This is ahead of the state mandated schedule of 20% by 2017 and provides TID an opportunity to bank energy credits that can be carried over into years that TID does not reach the mandated percentage.
 
In order to bank those Renewable Energy Credits, the TID Board approved an Enforcement Program of TID’s renewable portfolio standard policy.
 
Additionally, the Power Supply Adjustment (PSA) will change from the current $0.01/kilowatt-hour charge to a $0.005/kilowatt-hour credit. The PSA has been used since 2005 as a tool that takes into account variances in TID’s power supply cost.
 
The Board’s adoption of the rate increase comes on the heels of numerous public forums and mailings discussing the topic of rates and their connection to renewable energy with customers throughout TID’s electrical service area, most recently at the District’s Nov. 22 Public Rate Hearing.
 
As part of the same agenda item on Tuesday, the Board also voted 5-0 to adopt staff’s proposed 2012 Budget with a hold on $800,000 budgeted for compliance with SBx7-7. SBx7-7 is a water conservation regulation passed in 2009 that requires agricultural customers to reduce their water use and water districts to measure water use, establish pricing structure and management practices that encourage water conservation.
 
TID Director Joe Alamo believed that TID could take that out of the budget as he said, “I believe the farmers can do it better than we can.”
 
The TID 2012 budget plan will see increasing pension costs and labor negotiation costs; however the budget calls for reducing the staff level to 462 positions budgeted in 2012 from the 2011 budgeted 479.
 
Newly elected TID Board President Michael Frantz commended staff on their hard work saying, "Casey (Hashimoto, TID General Manager) and Joe (Malaski, CFO/AGM Financial Services) worked hard to take into consideration both the requests from the Board of Directors and from the community to reduce the budget. Thank you."
 
There was no public comment at the Tuesday, 9am Board meeting regarding the rate increase or the 2012 budget.
 

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