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MID delays decision on rates

Customers of the Modesto Irrigation District almost certainly will pay more for electricity next year.

Just how much more, however, remained a mystery Tuesday.

After an hourlong staff presentation and public hearing, during which a few Mountain House residents asked for a delay in any rate increase, MID directors decided they needed more information.

"I don't think anybody on this board enjoys raising rates," said director Paul Warda, who said state and federal mandates were driving the proposed rate rise. "If not for the government mandates, our rate increase would be (reduced) about half."

Overall, MID needs an 8.5 percent rate increase to help pay for those programs, escalating fuel costs and other expenses.

Even at that, MID officials say, the utility still would have to take nearly $11 million from reserves next year to cover all projected expenditures.

Under the plan presented Tuesday, MID power rates would rise anywhere from 5 percent to 15 percent.

Residential power users would see their bills increase by as much as 9.5 percent.

Warda asked MID staff to return to the board in two weeks with more information on several key rate-increase components:

Splitting the amount of any rate increase, imposing a portion of it in January and the remainder in June or July.

Expanding the utility's two-tier rate system to four or more tiers, with the consumers using the most power paying the highest rates.

Levying a surcharge on all MID electric customers that would adjust automatically to reflect the escalating cost of fuels, such as natural gas, used by the utility to generate power.

The rate hike discussion will continue Nov. 27, the next time MID board members are scheduled to meet.

During the Tuesday morning public hearing, two Mountain House residents presented the board with petitions signed by 86 of their neighbors, asking MID either to delay or reduce the proposed 9.5 percent residential rate increase.

The MID provides power to more than 2,000 Mountain House customers.

"I'm very upset," Celia Mayes said. "We are getting squeezed out. I would hate to see another family have to leave Mountain House."

MID officials say escalating costs, caused by a number of state and federal mandates, are behind the need for a substantial rate increase.

But Mayes and Mountain House neighbor Starlette Sanchez told MID directors the timing of the proposed rate hike couldn't be worse for their San Joaquin County community.

The women told board members that many of their neighbors are struggling to make property tax and mortgage payments on time.

"We understand this is a business," Sanchez said. "We're simply asking for more time. We need more time to recover."

What about renewable power?

Director Tom Van Groningen said board members were sensitive to the plight of Mountain House residents, as well as other MID customers.

But Van Groningen said the district has few options.

"I'm a ratepayer, and I'd like to pay less," he said. "(But) you can't sell a product for what it costs to produce."

Director Cecil Hensley, who won re-election last week to a fifth term, said MID customers enjoy some of the lowest power rates in the state.

Hensley complained that even as MID and other utility companies in the state must spend hundreds of millions of dollars in the next decade to reduce carbon dioxide emissions, a key global warming pollutant, China and other emerging nations spew millions of tons of pollutants into the air without penalty.

Attorney Richard Harriman, representing the Modesto Irrigation District Ratepayers Association, urged directors to move more aggressively into renewable energy sources such as solar power.

"I don't see a really strong commitment to renewables," he said.

Harriman also suggested it might be a better strategy for the district to use reserves to pay cash for improvements rather than finance them.

But district officials said the interest payments MID receives on its cash reserves provide a reliable revenue stream.

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

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