• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The Valley Citizen

Pursuing truth toward justice

The Valley Citizen

Pursuing truth toward justice
  • Arts
  • Education
  • Environment
  • History
  • Nature
  • Politics
  • Wit
  • About

MID Faces Conundrum about Need for Rate Increases, by Bruce Frohman

December 29, 2013 By Bruce Frohman Leave a Comment

DSCN0256The Modesto Irrigation District (MID) is the primary electricity supplier to northern Stanislaus County and the town of Mountain House in San Joaquin County.   

The Board of Directors of MID has been discussing an electric service rate increase in 2014. The numbers suggested have ranged from zero percent to a double digit increase. Current MID electric rates rank among the highest in California. 

The debate about the rate increase centers on the overall financial condition of the utility. MID has borrowed heavily in the past to finance the expansion into Mountain House and has had trouble containing ongoing operating expenses.   

The utility operates “the Cadillac” of electrical equipment, with an excellent record of outage-free service. Unlike Pacific Gas and Electric Company, MID rarely experiences an outage due to equipment failure. Automobile collisions with power poles are probably the biggest cause of outages.  

High salaries are also a major expense. The quality of the employees has helped make the utility one of the most reliable in California. Cutting salaries could result in personnel losses that would compromise the reliability of the utility in the long run. Reliability is the key to customer retention in a competitive market. 

Impediments to a Rate Increase 

The biggest impediment to a large rate increase is the present high electric rates. With MID having one of the highest rate structures in California, the public has grown increasingly critical about further increases. MID Board member turnover in recent elections has installed new faces who are politically sensitive and who don’t want to cause a storm of public protest. The previous Board had been insular and mostly free of public scrutiny until the large rate increases of recent years. 

Another major and recent impediment to a rate increase is competition. Solar energy companies are moving into the Modesto electric market. They are attempting to take MID’s electrical customer business incrementally by selling products and services to businesses and residences. They do so by promising lower monthly costs than customers presently pay the MID. The higher MID raises rates, the more vulnerable the utility is to the competition.   

One company offers residential customers an electric solar lease for $99 per month. As the average monthly electric bill rises farther and farther above the $99 level, the MID residential customer base is going to erode. At some point, another rate increase could result in a total offset of increased revenue through customer losses. In theory, every current MID customer could opt for solar if MID’s prices go high enough. With energy deregulation in California, the competition will only get more intense, making MID’s electric product more price sensitive. 

No Easy Solution 

In order to overcome the present financial bind of the Modesto Irrigation District, the Board of Directors will need to find a way to enhance revenue without losing customers.  Given the limitations resulting from the impediments to rate increases, the task seems daunting. For the sake of the utility and its customers, the Board will need to be creative. The utility can no longer afford to act like a monopoly.    

 

Filed Under: Featured, History Tagged With: MID electric rates, Modesto Irrigation District rate increases

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Note: Some comments may be held for moderation.

Primary Sidebar

Off The Wire

?Monster Fracks? Are Getting Far Bigger. And Far Thirstier.
“Monster Fracks” Are Getting Far Bigger. And Far Thirstier.
A Times analysis shows that increasingly complex oil and gas wells now require astonishing volumes of water to fracture the bedrock and release fossil fuels, threatening America’s fragile aquifers.
www.nytimes.com
Newsom urges SCOTUS to consider encampment ruling that has 'paralyzed' California cities
Newsom urges SCOTUS to consider encampment ruling that has ‘paralyzed’ California cities
The Democratic governor’s intervention lays down a mark in a legal dispute with potentially profound implications for one of California’s most pressing issues.
www.politico.com
Clarence Thomas Secretly Participated in Koch Network Donor Events
Clarence Thomas Secretly Participated in Koch Network Donor Events
Thomas has attended at least two Koch donor summits, putting him in the extraordinary position of having helped a political network that has brought multiple cases before the Supreme Court.
www.propublica.org
How hungry is California? Millions struggle to eat well in an abundant state
How hungry is California? Millions struggle to eat well in an abundant state
How bad is hunger in California? A lot depends on your access to food aid, which expanded during the COVID-19 pandemic but now is being reduced.
calmatters.org
Sacramento DA sues city over homeless encampments
Sacramento DA sues city over homeless encampments
Sacramento County had nearly 9,300 homeless people in 2022, based on data from the annual Point in Time count. That was up 67% from 2019. Roughly three-quarters of the county’s homeless population….
www.mercurynews.com
At Last, a Real Possibility to Avoid Catastrophic Climate Change
At Last, a Real Possibility to Avoid Catastrophic Climate Change
After decades of minimal action, Congress passed the largest and most comprehensive piece of climate legislation in U.S. history. Will we make the most of this opportunity?
www.audubon.org
How the fentanyl crisis' fourth wave has hit every corner of the US
How the fentanyl crisis’ fourth wave has hit every corner of the US
The epidemic’s staggering scale and infiltration of communities is laid bare in a new study.
www.bbc.com
Can licensed tent villages ease California's homelessness epidemic? This nonprofit thinks so
Can licensed tent villages ease California’s homelessness epidemic? This nonprofit thinks so
Taking people off the street and into tents is a new twist on homeless shelter being explored by the San Francisco-based Urban Alchemy in two tent villages operating in Los Angeles and Culver City.
www.latimes.com
Mississippi has problems, but it's handling homelessness better than L.A.
Mississippi has problems, but it’s handling homelessness better than L.A.
The public tends to blame homelessness on poverty, drug use, crime or even warm weather. But other cities don’t have L.A. levels of street homelessness because they have more available housing.
www.latimes.com
Neo-Nazis March Through Florida Park
Neo-Nazis March Through Florida Park
The demonstrators raised “Heil Hitler” salutes and waved flags with swastikas.
www.thedailybeast.com
Families have high hopes for Gavin Newsom's CARE Courts. Providers want to lower expectations
Families have high hopes for Gavin Newsom’s CARE Courts. Providers want to lower expectations
Gov. Gavin Newsom?s experiment to push Californians with mental illness off the streets and into treatment, CARE Court, starts soon.
calmatters.org
Pope says 'backward' U.S. conservatives have replaced faith with ideology
Pope says ‘backward’ U.S. conservatives have replaced faith with ideology
Pope Francis has blasted the “backwardness” of some conservatives in the U.S. Catholic Church. He says they have replaced faith with ideology and that a correct understanding of Catholic doctrine allows for change over time.
apnews.com

Find us on Facebook

pp
The Valley Citizen
PO Box 156
Downtown Bear Postal
1509 K Street
Modesto, CA 95354

Email us at:
thevalleycitizen@sbcglobal.net

Footer

The Valley Citizen
PO Box 156
Downtown Bear Postal
1509 K Street
Modesto, CA 95354

Email us at:
thevalleycitizen@sbcglobal.net

Subscribe for Free

* indicates required

Search

• Privacy Policy

Copyright © 2023 The Valley Citizen

Dedicated to the memory of John Michael Flint. Contact us at thevalleycitizen@sbcglobal.net

Editor and publisher: Eric Caine

Website customization and maintenance by Susan Henley Design