Jeff Jardine

Will lawsuit become a jolt to MID’s farm-water subsidies?

The Standiford Station is part of the Modesto Irrigation District’s electrical grid. A class-action lawsuit claims that MID overcharges its electricity customers to subsidize farmers’ water prices.
The Standiford Station is part of the Modesto Irrigation District’s electrical grid. A class-action lawsuit claims that MID overcharges its electricity customers to subsidize farmers’ water prices. Modesto Bee file

The lawsuit filed recently against Modesto Irrigation District begs one question in particular:

What took someone so long to sue?

It’s no secret that MID uses revenue from residential electrical customers to subsidize water rates for farmers. Farmers pay only 17 percent of their actual water delivery costs, meaning the electric ratepayers pony up the remaining 83 percent.

Board members certainly knew of the disparity – they’ve even discussed it during meetings over the years – and yet didn’t fix it. In essence, they said, “So sue us.” And someone finally did, meaning high-powered attorneys on behalf of local government watchdog Dave Thomas.

Consider it akin, in a way, to what Patterson, other cities and some school boards are doing as they plan to move to district elections instead of open seats. The reason is this: They know they’ll get sued if they don’t. Do the right thing now and avoid paying someone’s legal fees later. But folks serving on those boards and councils are subject to a different set of rules. They are expected to recuse themselves from voting on any issue in which they have a direct personal stake.

That’s not the case with irrigation districts, which in no small part is what led to the lawsuit. Laws regulating special purpose districts, including irrigation districts, permit what in most other forms of government would be considered a conflict of interest. In Oakdale, board member Gary Osmundson applied to fallow 105 of his own acres and then voted for a proposal to pay farmers to fallow farmland so OID could then could sell the water to an outside agency. He stands to make $119,700 from the sale, and a group in opposition filed – you guessed it – a lawsuit aimed at stopping the sale.

Yet, if a ratepayer falls behind on his or her bill, the agencies can shut off the power or stop water deliveries. They will publish names in local papers, including The Bee, of those who are delinquent in their payments.

From its inception in 1887, MID’s board has been dominated by farmers, many of whom have brought expertise to the district. The flip side is that they can benefit directly not only from the irrigation water they control but also set the price they pay as customers. The term “sweetheart deal” doesn’t begin to describe the low water rates they’ve paid over the years, using the money made off the residential ratepayers to keep it so.

Three of five board members of the Turlock Irrigation District, which partners with MID on the Tuolumne River watershed, are farmers.

All five Merced Irrigation District board members make their living in agriculture. All five Oakdale Irrigation District board members are involved in agriculture while four of the five members of the South San Joaquin Irrigation District, OID’s partner in the Tri-Dam Authority on the Stanislaus River, are farmers. All are within their rights to serve on these boards and make decisions that, in essence, benefit themselves directly. Neither Oakdale nor South San Joaquin, however, offer electricity to their districts. They sell to PG&E, a stockholder-owned utility that has a stranglehold on the electrical service areas not covered by the irrigation districts and has gone to war with MID over electrical distribution north of Modesto.

While these agencies no doubt are vital to our collective existences, the boards and their members but can also use that power to board members’ direct benefit.

Remember the heat wave of a decade ago? Roughly two dozen people died, including some elderly on fixed incomes, during nearly two weeks of 100-degree heat. Some – including those who lived in mobile homes that can get very hot inside – had to choose between paying for rent, food and medications. They didn’t turn on the air conditioning for fear they would be unable to pay the higher electric bills – in the MID area already inflated by the subsidy to farmers’ water deliveries – and then have their power shut off altogether.

The apprehension wasn’t limited to MID, which, in 2006, had residential rates that were noticeably lower than those charged by PG&E, a gap that since has narrowed.

“They don’t want to pay PG&E,” Carolyn Hebenstreich of the county’s veterans services department told me that summer. “Even if they have $100,000 in the bank.”

MID and PG&E also flexed their collective muscle to trip up the rooftop solar industry because it cuts into their profits. I try not to choke when I turn on my (solar-powered) TV and see PG&E ads promoting their wonderful solar program when in reality PG&E worked the California Public Utilities Commission hard to get net metering laws that add fees to new solar customers. But then, PG&E has done an excellent job of regulating the PUC for decades, so why would anybody be shocked that they imposed their will on solar, too?

Ultimately, where there are water and power brokers, there will be water grabs and power grabs. In MID’s case, they grabbed revenue from electrical power and used it to keep farmers’ water rates artificially low, and it will take a lawsuit to end the practice.

The only surprise is that it took so long in coming.

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