MID Board Report Archive

Modesto Irrigation District (MID) Board Meeting of Tuesday, Nov. 27, 2007
Contact: MID Public Affairs Department, Kate Hora, 209 526-7454
The remaining MID Board meetings for 2007 will be Dec. 4, 11 and 18.

 The MID Board Report is a summary of highlights of meetings of the MID Board of Directors and not a complete or official record of proceedings. Official records of proceedings of the MID Board of Directors are contained in the Minutes of meetings of the Board of Directors. For information about the Minutes, please contact the Office of the Board Secretary, 1231 Eleventh Street, Modesto, CA 95350, telephone 209 526-7360, 8:00 a.m. – 5:00 p.m. Monday – Friday, excluding holidays.  

Public Hearing - Resolution of Necessity for Acquisition of Property by Eminent Domain for the Westley-Rosemore Transmission Line Project
The Board conducted a public hearing concerning a Resolution of Necessity to acquire real property interests owned by San Joaquin Wetlands Associates for the Westley-Rosemore Transmission Line Project. A Resolution of Necessity is the first step towards acquiring property by power of eminent domain.

This transmission project will increase MID’s power import capacity by 55 percent, ensuring that our 112,000 electric customers continue to have dependable electric service over the next 20 years. The 16-mile, 230 kV power line and related infrastructure will also help meet new mandatory federal standards for reliability and grid protection.

Once the Westley-Rosemore Project is operational, MID will no longer be vulnerable to the type of power outage that occurred on August 29, 2007. On that date, computer-controlled protective equipment—required because MID lacks adequate transmission capacity—automatically cut power to about one-fourth of all MID customers when a neighboring utility’s transmission line sagged into contact with a tree.

Approved by majority vote
By majority vote, the Board next approved the Resolution of Necessity to acquire property interests by eminent domain from San Joaquin Wetlands Associates for the Westley-Rosemore Transmission Line Project. In addition to pursuing this action, MID will continue to negotiate with the property owner and hopes to arrange a mutually agreeable settlement.

Proposed 2008 electric rates
Following a Nov. 13, 2007, public hearing, the Board directed staff to return today with additional information about residential rate increase options.

Effect of good vs. bad hydro years

Resource Planning and Development Manager Greg Salyer stated that a good hydro year in 2008 could reduce MID’s power supply costs by up to $5 million, while a bad hydro year could increase power supply costs by $3.2 million.

Need for rate increase

Budget and Rates Administrator Jimi Netniss noted that the 2008 budget the Board has approved will require $33.6 million in additional revenue. Staff proposes to close that gap with rate increases that will bring in $23.1 million plus a reserve drawdown of almost $11 million gap. Ultimately, MID’s financial goals are to meet legal rate covenants and maintain strong and stable financial ratings.

• Forty percent of the proposed 2008 rate increase will pay for the first-year cost of state-mandated environmental programs, including new greenhouse gas and energy-efficiency requirements.
• An additional $2 million of the rate increase will pay for the first year of new federal requirements for reliability and grid protection.
• The remaining one-half of the rate increase ($11.8 million) will pay for higher power supply costs, primarily due to poor water conditions in 2007.

Residential rate increase alternatives:

• A 9.5 percent residential rate increase with four alternative rate tier structures.

1. Current two-tier structure
2. Modified two-tier structure
3. Three-tier structure
4. Four-tier structure

• A two-step residential rate increase, consisting of seven percent on January 1 and
  3.25 percent on May 1, 2008.

Although the two-step rate option will bring in the same revenue in 2008 as the multi-tier rate options, the rate increase needed in 2009 will be smaller if the Board chooses the two-step option.

Approved by unanimous vote

• Changes to MID’s 2008 Electric Service Rules, including cost-based adjustments to fees for services. Some MID fees have not changed for several years even as costs have risen.
  
  
• Changes to MID’s bill collection timelines, making electric bill payments due in 20 days and eligibility to disconnect for non-payment 41 days. These changes will
  • Eliminate the overlap of new and past due bills, a source of confusion for customers
  • Align MID’s practices with other utilities, and
  • Improve operational efficiency and cash flows
    

Staff will work on communications to ensure customers are fully informed of the changes.

• Approval of the Second Phase Agreement for planning and development of the Lodi Project, a combined cycle natural gas power plant under development by the Northern California Power Association, at a cost of $5.6 – $7.1 million. The proposed project will generate up to 255 MW, of which MID would own a minimum of 60 MW (with a possibility of increasing to 75). MID’s total estimated cost would be $56.9 million at the 60 MW level ($71.1 million at 75) out of an estimated $241 million total. The Lodi Project’s environmentally friendly, greenhouse gas-compliant design is attractive, especially if clean air rules force MID to stop importing our share of power from coal-fired San Juan Generation Station in New Mexico.

Postponed to a future meeting

• A workshop on MID’s Comprehensive Water Resources Management Plan.