MID doesn't punt power prices to new board. Rates will rise 10% over next two years

Nov. 15—The Modesto Irrigation District board voted Tuesday morning to raise electricity rates by nearly 10% over two years.

The 3-2 vote came over pleas from several audience members to let the newly elected board decide the matter in December.

Residential rates will rise 6.9% on Jan. 1, 2023, and an additional 2.7% a year later. Increases also are coming for business customers and for electricity used to pump farm wells.

MID has not raised rates since 2012. A staff report said the key driver was the high cost of natural gas, the largest source of power.

A typical residential customer, using 850 kilowatt-hours in a month, will see the bill rise from about $150 to $160 as of Jan. 1, the staff said.

Directors Nick Blom, Larry Byrd and Paul Campbell voted for the increase. Stu Gilman and John Mensinger favored leaving it to the three winners on the Nov. 8 ballot.

Campbell and Mensinger did not seek reelection and will be succeeded by Robert Frobose and Janice Keating, respectively. Gilman lost his seat to John Boer.

Keating said Tuesday that the increases are ill-timed for customers facing inflation in general. "We're all struggling," she said. "I go grocery shopping. It's horrendous."

Building up reserves

Supporters of the proposal said it will help MID build the reserves needed to get low interest on bond issues for capital projects. Byrd also said the staff has used "a sharp pencil" to contain operating costs.

"Ten dollars a month? he said of the typical increase. "I can't get two gallons of gas for that."

The rate proposal came amid continuing debate over whether MID's power customers are covering part of the irrigation costs. A judge in Stanislaus County Superior Court ruled in 2020 that this was an improper subsidy. The district is appealing.

Tuesday's hearing included a consultant's report that tried to better assign costs to the power and water sides. Blom noted that the board could vote before the 2023 irrigation season on a major water rate increase.

Still cheaper than PG&E

MID and the neighboring Turlock Irrigation District had low electricity rates for decades thanks to cheap hydropower from Don Pedro Reservoir. Growing demand prompted them to add natural gas plants, and they now are deep into solar and wind due to state mandates.

Both districts have rate increases in 2023 but remain well below Pacific Gas & Electric Co. The investor-owned utility surrounds the public power agencies on all sides.

MID's lower rates mean an estimated $335 million a year staying local rather than going to the San Francisco-based PG&E, said Jimi Netniss, the district's assistant general manager for finance.

This story was originally published November 15, 2022 1:11 PM.

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