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September 12, 2013

Governor considering bill aimed at Merced Irrigation District customers

A bill recently passed by both houses of the Legislature could prevent a significant rate increase next year for Merced Irrigation District customers.

A bill recently passed by both houses of the Legislature could prevent a significant rate increase next year for Merced Irrigation District customers.

Written by Sen. Anthony Cannella, R-Ceres, Senate Bill 591 could curtail electric bill increases next year for the more than 8,000 MID customers under the state’s mandate for buying clean energy, the district said in a news release.

“We will continue to do everything possible to minimize the fees passed on to MID ratepayers,” John Sweigard, the irrigation district’s general manager, said in the statement.

Under state law, utility districts are required to secure 33 percent of their energy from renewable sources, such as solar and wind power, by 2020.

However, the law generally disqualifies power generated by water on a large scale from being considered a renewable energy source, according to the district.

The Merced district generates a significant amount of power from the New Exchequer Dam at Lake McClure and that energy is not considered renewable under state law, according to the state Legislative Analyst’s Office.

District officials said the greenhouse-gas-free power generated at the dam will, in many years, be enough to supply all of the district’s energy needs. “However, under existing law, it appears MID will be required to purchase additional and unneeded power that is no friendlier to the environment than what we will already be producing,” the district said in a statement to the Legislature.

If Cannella’s bill becomes law, the district said it could count a portion of its hydroelectric production toward the renewable energy requirements and pass savings on to its customers.

Potential savings for customers would depend on the amount of water stored each year at Lake McClure, district spokesman Mike Jensen said Thursday. “We certainly hope ratepayers would see a difference in their bills,” he said.

Similar accommodations have been made for the San Francisco Municipal Utilities District and the Trinity Public Utilities District, the Legislative Analyst’s Office said.

If the bill fails, the irrigation district would be forced to purchase unneeded solar and wind energy and customers would likely see their bills increase, perhaps as much as 20 percent, according to Assemblyman Adam Gray. Gray, D-Merced, co-wrote the bill and said he opposed such a rate hike on an “economically challenged” community.

The bill is opposed by the California Wind Energy Association, Large-Scale Solar Association, the Utility Reform Network and the Sierra Club of California, according to the analyst’s office.

The Utility Reform Network said it opposes the apparent “special treatment” the Merced district would receive and said all utilities should be required to “contribute equally to meeting California’s renewable energy goals.”

Jensen said the irrigation district’s ability to, at times, generate enough power through hydroelectricity to meet its needs puts the district in a unique position. “Our response is that if we’re receiving special treatment, it’s only because we have some very special circumstances,” Jensen said.

A similar bill introduced in the Assembly in February by Jim Patterson, R-Fresno, failed to advance out of committee.

Jensen said he remains hopeful that Cannella’s bill will become law. The bill received unanimous support on the floor of the Assembly and Senate, and was sent to Gov. Jerry Brown’s office Aug. 30.

Jeff Macedo, a spokesman for Cannella, said he believes the current bill received greater support because it focuses on helping one small utility district rather than changing the legal definition of renewable energy.

Macedo said Brown’s office has not indicated whether the governor intends to sign the bill. “We are actively working with his office for support,” Macedo said Thursday.

Macedo said the governor has until Oct. 13 to sign or veto the bill. If he does not take action by that time, the bill would become law.

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