MODESTO — Whether area electricity customers could face higher rates in 2014 was called into question at Tuesdays Modesto Irrigation District board meeting, with no clear answer.
Board member Larry Byrd, who represents mostly farmers, said he does not want to consider a rate increase next year and hinted that other board members agree, despite repeated statements by staff in recent months that the board must discuss how to cover costs as loan money dwindles.
New board member John Mensinger, representing mostly city dwellers, quickly made clear that Byrd doesnt speak for him.
Also Tuesday, staff presented potential reactions to drought, and the board continued taking steps to correct mistakes in expanding a water treatment plant that will cost taxpayers an extra $24 million.
Byrd objected to Modesto Bee reports noting MIDs past practice of charging power customers more so growers irrigation rates remain low. He also criticized coverage reflecting MIDs desire to upgrade its aging water distribution system, saying, We have a Cadillac system and farmers should not fear fantastic water bills.
The last thing we want is to pit farmer and city against each other, Byrd said. Board members never discussed electric rate hikes in fall budget talks, he said, adding that there will be no electric hikes going on here.
Mensinger immediately said, Were all concerned about electric rates. He cited Bee articles comparing power prices with other utilities and said he does not disagree with the facts. Utilities have an obligation to understand and benchmark themselves against other utilities, and one of my goals is to go through that process as soon as possible, he said.
A Bee review in November found that MIDs 2012 income per home power customer was the second highest for all public utilities in California, and that MID rates rose 130 percent over 12 years, compared with the statewide average increase of 36 percent.
General Manager Roger VanHoy in July presented a list of important subjects needing board attention and said he intended to produce a detailed cost-of-service study next year. That would feature a discussion on electric customers subsidizing farmers and whether farmers receive due credit for replenishing groundwater.
VanHoys July plan also called for action on overhauling the water distribution system; asking for board input on rate shock limits, or capping potentially steep water rate hikes; and postponing debates until after the November election.
District spokeswoman Melissa Williams and Jimi Netniss, the districts budget and rates administrator, in November told The Bee that the board, in early 2014, should discuss rate hikes as an option to running low on bond proceeds for capital improvements such as new equipment. The district will run out of that money in the fall of 2014, Netniss told the board a few months ago.
Asked for clarification after Tuesdays board meeting, Williams reiterated that the board eventually will have to confront the money shortage. A range of choices includes tapping into reserves, raising rates or getting more loans, she said, and floating another bond could require raising rates to get money needed to pay it back.
So there will be options to explore, and it doesnt necessarily mean raising rates, Williams said. And today, Larry made it clear that he is against raising rates.
In other news, the board heard a sobering report showing that nearby mountains have received only 3 inches of rain and snow since the start of the wet season in October, or one-third the normal amount. A nearly identical pace in times past led to two of the driest years on record: 1924 and 1977, said John Davids, the districts civil engineering manager.
Its especially critical this year because the past two winters have been abnormally dry.
The probability of rebounding (with a wet winter) gets less and less, Davids said.
If the sky doesnt start dumping rain and snow soon, the board will have to weigh drought options such as starting irrigation deliveries later in the spring and ending earlier in the fall, and providing farmers with less than theyre used to getting. Flooding fields for nonbeneficial use, such as pastures as opposed to crops, could bring fines, Davids said, and the board might limit water for 750 homeowners with so-called garden head accounts.
The states Department of Water Resources on Tuesday announced steps for a new drought management effort to prepare for and reduce potential impacts of a third consecutive dry year, the agency said in a release. Director Mark Cowin began mobilizing staff to offset potentially devastating impacts, the agency said.
Among (the agencys) principal concerns is the plight of farmers who must operate with markedly less water than needed for crops, the release said.
The MID board also awarded a $3.7 million contract correcting most of the remaining problems at the water treatment plant, which turns canal water into tap water and sells it to Modesto for the citys water customers.
A botched design mostly related to filtration caused six years of delays and an extra $23.8 million in expenses. The city and district recovered $14.9 million from contractors in a legal settlement; the rest of the shortfall is the focus of a lawsuit between MID and City Hall.
Tuesdays meeting was the first for Mensinger and board members Paul Campbell and Jake Wenger, all elected Nov. 5. They joined in a unanimous decision to keep Byrd as the boards vice chairman and Nick Blom as chairman for 2014.
Bee staff writer Garth Stapley can be reached at email@example.com or (209) 578-2390.