MID eyeing rate increases

It's "High Noon" at the Modesto Irrigation District.

The utility's five directors are staring down the barrel of an unforgiving electric rate increase and there's no place to hide.

What's at stake?

The MID's residential customers could see their electric bills jump as much as 9.5 percent in 2008.

Many small businesses could be saddled with a bump as high as 8 percent.

Other rate increases for bigger businesses and industry, as well as private lighting districts, would range from 5 percent to 15 percent.

MID serves more 110,000 residential and commercial electricity accounts in Stanislaus County.

The utility's last electric rate hike went into effect Jan. 1.

Those increases, however, were only half as much as first contemplated. As a result, most MID residential customers received a 2 percent rate hike.

For months, the utility's board members have kicked around the notion of upping the rate hike ante. So far, they haven't pulled the trigger.

But that could change today.

Finally, the time may have come to settle things once and for all, à la Gary Cooper in the Hollywood classic "High Noon."

In that 1952 flick, Cooper portrays a town marshal forced to confront a gang of killers by himself.

OK, maybe that's a tad dramatic.

Still, this is no time for MID board members to flinch.

$11M short even with rate hike

Even with a rate increase, MID staff members predict, the utility will wind up about $11 million short. That projected deficit would be covered by the utility's cash reserves.

The MID staffers say the proposed rate increases are being driven by three factors:

Compliance with various programs mandated by the state and federal governments

An increase in the cost of fuels that the MID uses to generate power

The reduced availability of hydroelectric power because of a significant lack of snowfall in the mountains and rainfall in the valley over the past year

In a report to the MID board, staff members lay out several scenarios designed to make a rate increase more palatable.

They include adding more rate tiers. The tiers would reward those who use less electricity with lower rates.

Another proposal would impose part of the increase in January and the remainder in July.

There's also talk about a fuel surcharge that would be passed along to MID customers. The surcharge would be levied on top of a rate hike.

The MID staffers say they've laid all the cards on the table. There are no aces, they say, stashed up anyone's sleeve.

Not everyone is convinced.

Director Mike Serpa stead- fastly refused to vote on the utility's $453 million budget, saying it lacked basic financial data to understand the neces- sary ins and outs of district finances. Nearly 85 percent, or $384.1 million, of the district's budget is related to electric serv- ices.

Attorney Richard Harriman, meanwhile, representing a group called the Modesto Irrigation District Ratepayers Association, also has some budget and electric rate questions.

Bee staff writer Michael G. Mooney can be reached at mmooney@modbee.com or 578-2384.