FOR IMMEDIATE RELEASE
Contact: Common Sense San Joaquin

Common Sense San Joaquin Coalition Urges SSJID to Drop Ill-Conceived Takeover Attempt

Manteca (CA) - The Common Sense San Joaquin Coalition is calling on the South San Joaquin Irrigation District (SSJID) to stop wasting taxpayer money and to immediately drop its ill-conceived government takeover attempt of PG&E’s electric system after an independent consultant to LAFCo reported that SSJID grossly underestimated the cost to purchase power and undervalued PG&E’s facilities by hundreds of millions of dollars.

In November, SSJID offered to pay for an independent analysis of its application to provide electric service and its proposed takeover of PG&E’s distribution system and presented LAFCo with several consultants acceptable to them.  LAFCo selected PA Consulting, a company well known in the electric utility business for its understanding of the complexities of distribution systems. Specifically, SJ LAFCo asked PA to analyze the feasibility of the plan and SSJID’s contention that it can provide the same level of service to PG&E’s existing customers at a rate 15 percent below PG&E rates.

“PA finds that the underlying assumptions regarding purchase price would make SSJID’s business plan…financially infeasible without raising assumed rates or infusing more equity than what is assumed.  Furthermore, PA finds that SSJID’s projected cost of power is understated in the long run and therefore could further impact the business plan by resulting in higher rates or additional equity.” [San Joaquin Local Agency Formation Commission, Market Expert Report, May 21, 2010, 7.1]

“SSJID grossly underestimated both the cost of power and the value of PG&E’s facilities by hundreds of millions of dollars. It predicated being able to deliver lower rates based on ridiculously low assessments.  Now that the facts are clear and the true value of the local distribution system and power costs are known, it is plainly obvious to any observer that SSJID can't meet its stated goal of lower rates,” stated Jon Tremayne, spokesperson for Common Sense.  “If SSJID proceeds with its plans, its customers could likely face an approximate 2 percent rate increase to pay for its miscalculations.”

SSJID has publicly stated that if the analysis of PG&E's system is higher than their $65 million estimate, it will have to take a long hard look at its next step. The Common Sense San Joaquin Coalition agrees it is time take that look and abandon its costly plans. The PA Consulting report concluded that total upfront costs for SSJID would be $249 - $283 million [San Joaquin Local Agency Formation Commission, Market Expert Report, May 21, 2010, 1.4]

“With massive budget deficits at all levels of government, now is not the time for SSJID to enter into such a high-stakes risk with hundreds of millions of our taxpayer dollars," Tremayne added. "Teachers are losing their jobs, families are finding it hard to make ends meet, our local cities are cutting back on vital police and fire services, and SSJID is wasting valuable taxpayer resources."

A copy of the PA Consulting report “San Joaquin Local Agency Formation Commission, Market Expert Report, May 21, 2010” can be found on our website at www.commonsensesj.com.

The Common Sense San Joaquin Coalition is a group of concerned local residents, community leaders, businesses, farmers, ranchers and taxpayers who have organized to oppose this government takeover of our local electric service.  For more information please visit www.commonsensesj.com.