MID electricity prices to remain stable in coming year

Electricity customers won’t confront higher prices in 2017, the Modesto Irrigation District said Tuesday as its board approved a yearly budget that envisions unchanged power rates.

The MID board has not raised electricity prices in five years, since an attorney warned that doing so might require a vote from customers.

People would be “hard pressed,” board member Jake Wenger said, to find another utility that hasn’t raised power rates in that time. The feat reflects “a concerted effort to operate within the current rate structure,” he said.

The board has raised farmers’ water prices several times in recent years, board member Nick Blom noted. However, MID continues to charge a fraction of its true water costs and this year relied on a $17 million subsidy from electricity customers.

The subsidy provoked two class-action lawsuits this year, both seeking refunds for tens of thousands of electricity customers. One was dismissed when a judge found it had been filed 13 days late.

MID’s new budget envisions costs of $457 million and $425 million in income, including $25 million from selling water and $381 million from selling electricity, plus interest and income from other minor sources.

The $32 million deficit will be covered by “anticipated financing proceeds in 2017,” according to a budget document. That means the district will shift bond money to plug the gap, spokeswoman Melissa Williams said.

MID has relied on reserves to make ends meet in recent years.

Staff two years ago proposed a 3.5 percent increase in electricity prices, but the board said “no.” Last year, the board approved a radical change in the way prices are structured, bumping up bills of some customers while lowering most and bringing no additional revenue to the utility.

The new budget reflects MID’s goal to “offer the highest level of service at the lowest possible cost,” said Jimi Netniss, the district’s budget and rates administrator.

Board member John Mensinger praised staff but cast the only “no” vote Tuesday against the budget because it includes $3.9 million to renovate MID headquarters in downtown Modesto. That money will replace ceiling tiles, window coverings and furniture and pay for interior paint and energy-efficient lighting.

Ratepayer money should strengthen MID’s reliability, Mensinger said while questioning how the office renovation might advance that goal. “I understand that my colleagues will probably vote for (the budget), and that will be fine,” he added.

This story was originally published October 18, 2016 at 5:26 PM with the headline "MID electricity prices to remain stable in coming year."