MID ‘disappointed’ with judge’s ruling that it overcharged, readies for next phase
Modesto Irrigation District officials have decided to move on to the next phase in a lawsuit in which a judge has ruled that the publicly owned utility overcharged its electric customers to provide a subsidy to its farm water customers.
The MID Board of Directors voted 5-0 in closed session Jan. 14 to move forward with the remedy phase of the lawsuit. Remedies could include refunds to electric customers over a number of years in which they were overcharged, though the MID would contest the remedies.
MID spokeswoman Melissa Williams said any legal appeal the utility’s board members may pursue would need to come after the conclusion of the remedy phase. It could take as long as a year to conclude that phase. Court dates have not been set yet.
MID officials were adamant in a news release that the utility’s electric rates were correctly set and appropriately cover the cost of providing service to electric customers, despite a judge’s recent ruling that said that was not the case.
“The MID Board has full rate-making authority and in the spirit of transparency and openness, the District engaged with independent, third-party industry experts to review our rate-making practices,” MID General Manager Scott Furgerson said in the release.
“While we’re disappointed with the judge’s ruling,” Furgerson continued, “this is just one step in a lengthy court proceeding to defend our electric rates — which are among the lowest in California.”
Modesto residents Andrew Hobbs and Dave Thomas each sued the MID in 2016 over its electric rates in Stanislaus Superior Court. Their lawsuits were combined. Thomas, the former Stanislaus Taxpayers Association president, now lives out of state.
Attorneys for Hobbs and Thomas allege in court documents that the MID’s electric customers have subsidized irrigation customers by more than $10 million annually.
Superior Court Judge Roger Beauchesne issued his ruling Dec. 30 in the lawsuit’s first phase, which was to determine whether the MID was providing a subsidy to its roughly 3,100 irrigation customers by overcharging its roughly 122,000 electric customers, in essence an illegal tax under California law.
“The primary basis for (my) decision,” the judge wrote, “is the ubiquitous absence of actual costs throughout MID’s arguments.” He then quoted Clara Peller, who famously asked in a 1984 TV commercial for Wendy’s, “Where’s the beef?”
Beauchesne retired Dec. 31, and Superior Court Judge Sonny Sandhu has taken over the lawsuit.
This story was originally published January 24, 2020 at 9:09 AM.
