MID 2004 Annual Report
and Consolidated Financial Statements

A Blast of Growth Drives MID Activities

As Stanislaus County’s housing boom continued throughout 2004, MID expanded its electric system to serve a customer base that topped 105,000 accounts by year’s end. Although MID has no role in approving development, we closely watch growth trends. MID is committed to having reliable electric service ready when new customers need it.

Customers, Customers Everywhere

For the third straight year, MID completed roughly 3,100 new electric hook-ups. Most of the new accounts were inside our political boundaries, for example the Crossroads development in south Riverbank. Another 600 new customers were in “greenfield” developments in Escalon, Oakdale, and Ripon, while 450 were added in Mountain House, an unincorporated community in San Joaquin County where MID now serves about 1,000 homes.

Construction activities in 2004 included completing a substation on Minnear Avenue and beginning another on Kiernan Avenue to serve north Modesto and south Riverbank. A major revamp of Standiford substation, a critical intertie (connection) where power from the outside world enters the MID system, was also completed. Three more new substations, two in north Modesto and one in Waterford, are planned for 2006 through 2008.

A New Connection to Western Energy Markets

MID also finished the environmental review for a new 230 kilovolt, 16-mile power transmission line that will improve service reliability and boost our capacity to serve existing and future customers. Running from our existing switchyard near Westley (an intertie to the “ backbone” of California’s electric grid) to Rosemore substation on Modesto’s west side, the new high voltage line will be MID’s fourth such conduit for importing power from throughout the western U.S. Construction should begin in September 2005.

More Customers Equal More Resources

Just as important as infrastructure is lining up adequate electric resources. To reduce risks and costs, MID balances our own power generation with short and long-term power purchases.

Between 2002 and 2006, MID will have invested $145 million in close-to-home power plants that can, if needed, operate independently of California’s electric grid. One is a new peaking plant in south Ripon to serve the rapidly growing northwest part of our service territory. Completion is expected in spring 2006.

In December 2004, air quality regulators gave the green light to retrofit our vintage 1980 gas turbines at McClure Generation Station in Modesto with state-of-the-art control technology that will reduce nitrous oxide emissions by 72 percent. When completed, this modernized facility will be as air quality-friendly as a brand new power plant – a big plus in California’s Central Valley.

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