Eye On Modesto

Thoughts and observations about Modesto and Stanislaus County

MID.. Re-writing History While Neglecting the Future -The Tom Van Groningen Story

By Emerson Drake

Let us travel back in time for a moment and visit Feb. 23rd, 2010.  MID had just voted to purchase half of its originally

Cover of "Millions"

Cover of Millions

intended share (from 66 to 33 MW) of the Lodi Energy Center.  MID had been spending money like a drunken sailor on shore leave for years on projects costing ratepayers millions of dollars.  From the geo-thermal project, to Mountain House, to TANC, to the four cities project,  all were massive losers, millions upon millions of dollars going out with almost nothing coming back in.  In less than twelve years (1998 to 2010) we went from being $200 million in debt to $1.2 BILLION.  In January of 2010, they had voted in a 7% rate increase which doomed a larger piece of the action for MID.  I was at both of those votes and was happy with neither.

Many of us had been trying to stop the fiscal bleeding for years by going to meetings and speaking out, but Tom Van Groningen,  Paul Warda,  Cecil Hensley, and John Kidd were determined to follow Allen Short down the fiscal prim rose path.  During four of those years Mike Serpa was the only voice of reason on the Board. By 2010 being able to take full advantage the Lodi opportunity was little more than a pipe dream.

Jerry Gold, MID’s financial advisor, had previously reported MID’s credit had been down graded and no one was willing to allow us to borrow more money in our present (2009)  financial condition. By 2010 we were being required to raise rates by 7% just to stay afloat.

Even our newest green energy contracts are too expensive.  We overpaid by more than 30 percent of the going rate.  This isn’t hindsight speaking. PG&E announced their newest solar contract price PRIOR to MID signing the contract.  When I pointed this out to Tom Van Groningen during the meeting BEFORE the solar vote was taken and the contract was signed with Sun Power, he said he didn’t care what PG&E signed for.  What?  Don’t care?  I made public information requests during the negotiations but MID refused to acknowledge prices being discussed.  When you see how much was left on the table (30%) there should have been an investigation.

Just so everyone understands the Lodi Energy Center (LEC) is the most efficient gas turbine power plant in the state. Its average heat rate surpasses even Turlock’s new much smaller plant. We actually could and will make money by owning it but now only half as much.

To watch Director Van Groningen be self congratulatory and preen himself for signing the contract two years earlier for  the Lodi plant was astonishing.

It wasn’t surprising to see the Bee supporting the revised version of MID’s history.  Admittedly it was closer to reality than it would have been with John Holland.  Something else of note came out of the MID meeting.  I received a response to a Public Records Request prior to the meeting.

It was about the astonishing amounts of money Allen Short, Tom Van Groningen, and Glen Wild had been funneling through Martino Graphics to lobbyist Modesto Mike Lynch.  Mike, who provides Judy Sly many of  her “editorial positions” and who was even quoted in a recent column by Ms. Sly, was a participant in the $89,500 in 2010, $227,628.69 in 2011, and $108,000 in 2012 paid  to Martino Graphic design and distributed to three different lobbyists.  Just as in 2012 Mike Lynch profited the most from the parasitic relationship with MID and Martino  than Mike Looker, and Janice Keating.  Just a few short months ago Ms. Sly was telling us  we had plenty of “extra” water to sell to San Francisco?  Now, the tune being sung by the Bee is different.

It never fails to amaze me the amounts of ratepayer money being thrown around to convince us bad is good and good is bad.

It’s going to be interesting to see if any of the MID Board members have another prior  “relationship” with political campaign consultant Mike Lynch.

I wrote the following back in Feb. of 2010

MID Goes on a Spending Spree and Maxes Out its Credit

The MID Board today authorized Allen Short to buy into the soon to be built Lodi plant for a 30 MW (Mega Watt) share.

Interestingly enough this wasn’t one of the options presented to the board or to the public.  Tom Van Groningen made the motion and despite calls from several public speakers for more information the board voted 3-2 with Hensley and Kidd being the two dissenters.

It was noted that MID has refused to make cost cutting measures such as stopping the flood of Mountain House red ink.  A concern was noted that possibly the board is going to try to slash the IBEW (International Brotherhood of Electrical Workers contract offer while maintaining the extremely lucrative pay for executives.

The Lodi plant will utilize the most efficient turbines in Northern California and would seem to be a great opportunity if only we could afford it. The MID Board has spent us into $1.2 Billion dollars in debt.  I don’t think Tom Van Groningen will be forced to sell his private plane to pay for the increase in electric rates this purchase will mandate.

MID financial advisor Jerry Gold pointed out MID will exhaust it credit capability with this expenditure.  So like families who max out their credit cards and continue to only make minimum payments our road to solvency will be long, rocky and definitely on the back of the average electric user.

Of course we remember that the board is looking at surcharges in lieu of more rate increases this year with a caveat since staff members today said they will be looking at rate increase by next year at the latest..  I’m not sure that semantics (word games) make much difference to our check books or to our bottom line it sure seems to be the direction MID is determined to go in. Surcharges and rate increases will hurt families, farmers and businesses in District.

One concern that was made public during discussions while on a break at the meeting was a question regarding MID’s potential violations of the Brown Act.  Has Allen Short been meeting in series with the board members, and just what emails have been exchanged since that particular form of communications was mentioned by several of the board members?



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One thought on “MID.. Re-writing History While Neglecting the Future -The Tom Van Groningen Story

  1. A few notes on this post but let me preface this by saying I am not a fan of MID and the numerous dumb decisions they have made over the past decade. Possible defences of MID’s investment in Lodi plant may be mandated by the state which has quite complex rules born out of Energy Crisis of 2001 on the amount of energy that must be made and or purchased locally (called resource adequacy) along with the amount of reserves that must be available at all times. In addition the 33% renewable mandate with most of it being wind and solar (yes a galacticly stupid contract with sunpower) requires spinning reserves due to the intimacy of wind and solar. These reserves are almost always local gas turbines ie Lodi.

    I cannot say for certain this is the case but with most utilities these issues usually necessitate increased natural gas turbine plants. Also with the cancelling of NM coal plant contracts, virtually mandated by state and federal law, that owned generation has to be replaced by another baseline power source with nat gas the only feasible option.

    This could be another stupid decesion by MID or it may have been the only option they had.

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