MID Board Report Archive

Modesto Irrigation District (MID) Board Meeting of Tuesday, Nov. 7, 2006
Contact: MID Public Affairs Department, Maree Hawkins 209-526-7390
The next MID Board meeting is scheduled for Nov. 28.

• Nov. 28 Consider proposed electric rate increase for adoption
• December Board meetings are tentatively scheduled for Dec. 12 and 19.

2007 electric rate package proposed

The Modesto Irrigation District (MID) Board of Directors has received a staff proposal for a 2007 electric rate increase package.

A public hearing on the proposal will be held at 7 p.m. Tuesday, November 14, 2006, in the MID Board Room, 1231 11th Street, Modesto. The public may comment on the proposal by email (board@mid.org); sending a letter to MID Board of Directors, PO Box 4060, Modesto, CA 95352-4060, or speaking at the 7 p.m. November 14 public hearing, MID Board Room, 1231 11th Street, Modesto. The Board is scheduled to consider adopting a 2007 rate package at its 9 a.m. November 28 meeting. The rate package would be effective January 1, 2007.

Staff has recommended the following increases:

• Residential: 4 percent
• Commercial: 2-5 percent 
• Industrial: 10-15 percent
• Private lighting: 15 percent
• Agricultural pumping: 5 percent

No increase is proposed for the public lighting rate.

The goal is to move each customer class to cost-of-service, a Board-adopted policy since 1995.  This means each customer pays all costs associated with producing/purchasing the power and delivering it to each home or business. Some customer rate classes are closer to cost of service than others, which accounts for the different percentages.

The proposal would increase residential rates as follows:

KWh=kilowatthours
The fixed monthly charge of $12.50 would not increase under this proposal.

Staff recommends a rate proposal based upon the proposed 2007 budget.  The budget process begins mid-year with a thorough review of all components. Each item within the budget is carefully scrutinized.

Nearly 78 percent of the total proposed budget (purchased power/generation, debt service and labor) is essentially non-discretionary.  Many of the other expenditures, such as mandatory environmental and regulatory compliance, are also non-discretionary.  Staff has carefully reviewed the proposed budget and believes that only essential elements are included.

MID must have enough revenue to stay on a secure financial footing and meet the financial goals adopted by the Board. These include: reserves to $200 million by 2011, a 1.5x debt coverage ratio, an A+ stable rating from bond rating agencies, and rates at cost of service. After the 2001 energy crisis, energy prices never came back down to pre-2001 levels. MID then used its reserve fund to hold down rate increases for customers, but reserves need to be returned to specified levels.

The staff presentation also noted that the board will be asked to consider organization changes including a table of the organization, business plan, succession plan, employee development plan and management and supervisory orientation program.  Proposed staffing additions include three Customer Service representatives, a field service representative, an Energy Management representative, four positions at the water treatment plant, four positions at Ripon Generation Station, a line worker, five substation electricians, an engineering technician, and a senior electrical engineer.  Deleted positions include the treasurer (combined with the Assistant General Manager Finance) and the General Services Manager.

Some minor changes to the Electric Service Rules have been proposed to clarify language and update fees.

Three people did address concerns about the rate proposal to the Board.  A representative of Signature Fruits said they were very concerned about the proposed industrial rate increase since the burden can’t be passed on to their customers.  A member of the MID’s Community Advisory Committee said he would like to see a zero rate increase for any customer on the MID’s low-income discount program.  He also suggested a tiered rate structure with a pilot program for the low-income discount rate customers. A local business owner told the board that in this very competitive market the increase in commercial rates would be significant.

Water report

Assistant General Manager Walter Ward, Water Operations, noted that it’s been drier than average since
July 1 with about half an inch of rain in Modesto.  Average rainfall to date is 2.22 inches. 

Board action

The Board unanimously approved

• Minor technical changes to MID’s Claribel/Minniear Project.
• A banking services agreement with Wells Fargo.  Wells Fargo was selected because its products will help make the MID more efficient.
• A declaration that a list of obsolete and/or non-functional electrical office/computer equipment is surplus to allow it to be donated or recycled in compliance with applicable laws and regulations.