MID approves electricity price changes

Modesto Irrigation District leaders on Tuesday changed how electricity bills are computed for 95,197 residential customers despite pleas from the audience to leave rates alone and a protest petition signed by 296 people.

Critics said the new rate structure will penalize those who conserve the most, and solar customers, while officials say the change will cause most bills to drop a bit, including those of MID’s poorest customers. The district will continue to collect $153 million a year from home customers – same as before the switch, officials said.

“The bulk of our customer base will realize savings because of this change,” said board member Paul Campbell.

Tuesday’s unanimous vote increases the fixed portion of home bills from $12.50 to $20 a month, while lowering the variable component based on how much power a family uses.

About three quarters of all customers will see a dip of about $2 a month in energy bills, MID says, and the rest can expect bills to climb by up to $6 a month.

Those with the most to lose are solar customers and people already using extremely small amounts.

“I’m trying to save, doing what I can,” said Paul Kuchar of Modesto, whose electricity bill is about $100 a month. “Others use far more, and they’re going to be charged less?”

“You’re rewarding excessive consumption,” agreed Modesto resident Emerson Drake. Because the change brings no more revenue to MID, he concluded that the district wants to brag about rates appearing reasonable thanks to “smoke and mirrors.”

MID says the average low-income customer will pay $88 a month under the change, instead of $92. The average nondiscount customer, using 850 kilowatt hours a month, will pay $163.55, down from $166.05, the district says.

Others are offended that MID continues undercharging farmers on irrigation prices, covering the deficit by transferring millions of dollars each year from electricity revenue. MID enjoyed a $106 million profit from selling electricity in 2014, representing net power revenue minus expenses.

“Everyone is paying the subsidy,” said Lee Delano, a former MID assistant general manager. He estimated that each family overpays about $18 a month to keep water prices low for growers.

“You might be moving (power) rates around to give a break to some people, but you’re stealing hundreds of thousands of dollars from electric customers and I object to it,” agreed Ron Cherrier of Modesto. “What really needs to be done here is you need to straighten that out.”

Board member Jake Wenger noted that MID has raised water prices about 70 percent in the past three years, while electricity rates have not changed in three years.

“Fine. It’s great you’re making an effort, but it’s not enough,” Cherrier replied. “You need to eliminate the subsidy.”

“I didn’t say we were done,” Wenger said. “We have to take steps and that’s what we’re doing.”

The board typically sets water prices after the first of the year.

MID’s 2,100 customers with rooftop solar panels are subsidized up to $5 million a year by regular ratepayers, officials say.

Board member John Mensinger, himself a solar customer, said he will pay about $90 more a year after the change. It will enable MID to collect some money from solar customers who now may pay little or nothing if they generate enough power, he said.

The average MID solar customer will pay $1.60 more a month, or $19.20 more a year, the district says.

Solar contractor Brady Anderson said changing rates will upset investment expectations of most solar customers. When he asked to see MID’s cost-of-service study, a report justifying rate adjustments, General Manager Greg Salyer advised him to file a California Public Records Act request, typically a several-day process.

Gina Goodhill Rosen, SolarCity’s deputy director of policy and electricity markets, said MID’s $20 fixed charge will be “among the highest in the country. … Going solar to reduce energy consumption should not be singled out or demonized,” she added.

Mensinger said the board is “aware of the impressive display of comments” from people protesting in the petition and in calls and emails. If some people end up paying more, “hopefully it won’t be too much more,” he said.

“It’s a very complex world we live in and it’s hard to meet everyone’s needs at all times,” Mensinger continued. “It’s a balance. I think solar is a good thing to do. Staff is just proposing to change the balance a little bit.”

This story was originally published November 17, 2015 at 3:52 PM with the headline "MID approves electricity price changes."