Friday, September 05, 2008

Utility to charge customers served by irrigation districts

By JOHN HOLLAND
jholland@modbee.com
and LESLIE ALBRECHT
MERCED SUN-STAR

last updated: April 18, 2008 03:04:43 AM

More than 8,000 homes and businesses will start getting bills soon from Pacific Gas & Electric Co., even though they get power from other suppliers in the Northern San Joaquin Valley.

The monthly charges -- up to $9 per home and $21 per business -- will be levied in recently developed areas that PG&E had planned to serve before the Modesto and Merced irrigation districts expanded into them. The customers are in parts of Ripon, Escalon, Riverbank, Oakdale, Livingston, Atwater and Merced.

Starting in June, PG&E will collect the money to help recover costs related to the state's power crisis early in this decade, and to restore the sites of closed nuclear plants.

The California Public Utilities Commission in February affirmed PG&E's right to levy the charges. The action came over protests from the irrigation districts.

"PG&E needs to explain why it is charging fees for electrical service when it doesn't provide electrical service to these people and never has provided electrical service to these people," said Kate Hora, a spokeswoman for the Modesto district.

PG&E spokeswoman Nicole Tam said the utility must be compensated for what it spent on infrastructure and power purchases in anticipation of serving these customers. "Those costs were incurred on behalf of those customers, and those obligations have to be met," she said.

The charges will be on bills separate from those for gas from PG&E. Notices are being mailed this week.

The $9 and $21 monthly amounts will be in place for three years, Tam said. The charges then will be reduced by a yet-to-be- determined amount as the obligations from the energy crisis are met, she said.

Some parts of the charges, such as the one related to nuclear plants, have no expiration date, so bills of some sort will continue indefinitely, she said.

The Modesto and Merced districts are sending their own mailers to affected customers, along with information on how to protest to the PUC.

Jem Brown, assistant general manager at the Merced district, said it fought the charges for six years.

"It's like owning a Honda forever and ever, then going out and buying a Toyota, and then getting a bill from the Honda factory," he said. "It's taxation without any services."

The areas in question were undeveloped when the irrigation districts expanded their electrical service territories, moving into places that PG&E had planned to serve.

The new charges come about a year after PG&E started similar levies on a smaller group of customers -- those who were getting power from the utility but switched to an irrigation district.

Among them was Courtesy Chevrolet Cadillac in Merced.

"We don't feel we owe it," controller Jim Lindsey said. "We weren't using their services at that time. We wouldn't charge you for a car you didn't purchase."

Tam said that if the irrigation district customers did not pay the charges, the costs would have to be spread among PG&E customers elsewhere.

About 55 percent of the money collected will go to the California Department of Water Resources, which stepped in to buy wholesale electricity during the power crisis.

About 40 percent will go to an entity that assumed PG&E's debts after the utility filed for bankruptcy amid the crisis.

The other 5 percent will remain with PG&E.

Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.

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