May 18, 2014

Critics of a Modesto Irrigation District subsidy getting more vocal

Critics of the Modesto Irrigation District’s policy of power customers subsidizing farmers’ water are becoming more vocal. One man researched the issue, created a slideshow and has begun presenting it to interested groups. Another has launched a Facebook page.

Some critics of a controversial Modesto Irrigation District subsidy are getting more vocal.

A former district administrator has fashioned a slide show attacking MID’s policy of charging electricity customers more to keep farmers’ irrigation rates low, and another power customer has created a Facebook page assailing the same practice.

Lee Delano, a former MID assistant general manager over water operations, presented his 48-frame slide show to the Modesto Engineers Club earlier this month and wants to take it on the road to show other groups.

“All the people in the district own all the water and all the power. It should be distributed fairly and I don’t think it is,” said Delano, who left the district in 1989 and has done private consulting since. “I think the electric ratepayer is paying too much.”

His presentation says:

• Power customers in reality pay for 90 percent of irrigation costs.
• The subsidy has cost power customers more than $133 million since 1971.
• Average families pay $16 a month more than they should to keep farm water rates artificially low, or nearly $200 a year.
• The benefit to one large agricultural operation west of Modesto comes to more than $1 million a year.

Delano researched many sources cited in Modesto Bee coverage over the past 18 months, crunched numbers and produced several additional conclusions. For example, he believes that the district spends $121 to deliver each acre-foot of water but charged farmers only $10.83 last year, meaning MID’s 113,000 electricity customers made up the difference of more than $110 per acre-foot.

Travis Malek, 29, has posted Bee stories on the issue at www.facebook.com/OccupyMID.

“When I first read about this, I was really angered,” he said in an email. “I felt like I needed to start a social resource where concerned MID customers could gather and join together to become informed and organized in fighting against unfair MID practices.”

The district has followed a subsidy policy for decades – since 1938, says Delano, citing a 1987 book on MID’s history – and in 1995 began quietly folding a surcharge into its rate formula without it showing up on customers’ power bills. Leaders for years have acknowledged the inequity and made motions toward correcting it as far back as 20 years ago, but political will among board members faltered and power rates continued surging skyward.

An extensive Bee review in November showed that families paid less for MID power in 2003 than charged by other area utilities, but as of last year, average families in Modesto were paying $261 more per year than those in Turlock, and $300 more than Merced. MID’s income per customer shot up 130 percent in 12 years compared with the statewide average of 36 percent for public utilities, and MID’s average income from homes in 2012 was more than all others in California except for Hercules Municipal Utility.

In late 2012, The Bee revealed that an attorney hired by the board had privately warned MID that raising electric rates without a vote of the people could violate state law linking rates to actual costs of providing services.

Debates have swirled since, with some board members irritated at the division and others pushing to address the inequity. A blue-ribbon water advisory committee of volunteers spent months scrutinizing water operations and a year ago suggested a comprehensive study of rates against those charged by other utilities. General Manager Roger VanHoy in July promised a board presentation with “usable information for debate” by the second quarter of this year.

District spokewoman Melissa Williams on Friday said cost-of-service discussions will be folded into the board’s budget workshops starting in June.

Subsidy supporters say a study of costs must provide some credit to the district’s water side for various services that bring benefit to everyone but no money to MID. They include groundwater aquifers replenished by farm water seeping down; electricity generated in Don Pedro Reservoir’s turbines; canal banks that accommodate power poles; and canals accepting rainwater from Modesto streets. All represent real value, the water advisory committee said, but that value has not been quantified.

Delano, a Modesto Engineers Club board member, has been one of the subsidy’s most consistently outspoken critics, appealing publicly to the board since at least 2011 and writing numerous pieces for Bee editorial pages since. His slide show urges people to vote for board members dedicated to correcting the inequity.

Said he, “I just provide the facts that I think everyone should know.”

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