Steve Mohasci: MID irrigation customers aren’t paying fair share

Re “MID weighs 3.5% rate hike” (Page A1, Nov. 9): MID is considering rates increases for both electric and irrigation customers. The article cited a $12 million MID budget deficit as the reason for rate hikes.

In 2013, fees paid by irrigation system users were $2.29 million, or about 15 percent of costs. The subsidy paid by retail electric customers was about $200 an acre, or $11.76 million for the estimated 58,000 irrigated acres served by MID.

Based on the latest farm income estimates by Bureau of Economic Analysis, farm profit in Stanislaus County totaled $953.3 million or an average of about $2,987 an acre. This level of farm profit would not exist without irrigation, but MID irrigation system users are only willing to pay about $40 per acre – or about 1.3 percent of profit.

Since 2001, farm profit increased an average of 15 percent annually. During that same period, personal income increased 2.7 percent but inflation was 2 percent. Small-business incomes decreased 3.1 percent.

The proposed rate increase to cover the $12 million budget deficit should be shared equally between electricity and irrigation customers. The increase for irrigation system users would only be about 3.5 percent of the $2,987 per acre profit.

This story was originally published November 11, 2014 at 1:43 PM with the headline "Steve Mohasci: MID irrigation customers aren’t paying fair share."