Modesto utility raised power bills nearly 10% over 2 years. Now it says that wasn’t enough
Modesto Irrigation District electricity rates could rise once again via a board vote Tuesday, Nov. 14.
The increases would total about 15% for residential customers over 2024 and 2025. A typical home’s average monthly bill, now about $160, could reach $184 by the second year.
The board had voted last November for increases totaling nearly 10% in 2023 and 2024. A staff report said another round of hikes is needed due to the rising cost of wholesale power. The proposal calls for adding to the increase already approved for 2024 and a new bump for 2025.
MID generates much of its supply from its own hydroelectric and natural gas plants. It also purchases from various sources, including wind, solar, gas and hydro. These prices have risen about 20% since the rate vote a year ago.
MID supplies about 130,000 customers in and near Modesto. Rates also would rise for businesses.
The district also sells water to about 58,000 acres of farmland. It long has faced criticism that electricity bills subsidize the irrigation operations.
The staff said the new power rate structure is based on a consultant’s report on how costs should be assigned to each part of MID’s operations.
The power rate increases approved last year were the first since 2012. Earlier this year, MID also raised irrigation rates by $9 an acre.
The staff had projected $546.9 million in electricity expenses this year, but that is expected to be $40.4 million higher. Officials are reluctant to tap into reserves because they help the district get low interest rates when issuing bonds for capital projects.
The staff offered three options for spreading the proposed increases over two years:
- 9.7% in 2024 and 3% in 2025
- 8.2% in 2024 and 4% in 2025
- 7.5% in 2024 and 5% in 2025
These options would leave MID between $1.5 million and $6.3 million short of the needed revenue. The staff proposes to close the gap starting in 2025 with monthly bill adjustments based on wholesale power prices over the previous six months. Customers would save a little if the trend is downward.
The board will meet at 9 a.m. Tuesday at the MID office, 1231 11th St., Modesto. Remote comments can be made by email at board@mid.org or by phone at 209-526-7360.
This story was originally published November 11, 2023 at 7:00 AM.
