A short time ago we received MID’s response to a Public Record Request. It contained the Kilowatt sales and total revenue received by rate class from 2010 through 2014. The word total is important here because some rate classes have demand charges which are difficult to explain and for most of us, including me, to fully evaluate and understand. So total means all revenue received with no exclusions. For this conversation we’ll focus on 2014.
Detail kWh Revenues in $Millions Cost per kWh
Residential 868,341 156,132 .179 Commercial 725,487 105,539 .145 Industrial 768,952 79,797 .103 Other 138,545 18,403 .132
As you can see residential is paying 20% more than commercial and over 40% more than industrial for each kWh they use. MID suggests the rate disparity is because of the cost of service. When detailing the ‘cost of service’ it all depends on what costs numbers you count and what ones you ignore. But interestingly enough most other utilities in Central California don’t have the extreme disparity. Lets look at the numbers as a whole. MID likes to say using rounded numbers that each of the three big rate classes uses about one third of the electricity MID sells. But as a total of revenue, Commercial generates about one third of the revenue that Residential uses and Industrial is little more than half.
When MID was pressed about costs back in June, by the Bee’s Garth Stapley, the response was, “The Bee asked for a demonstration showing how Netniss computed his profit estimate, using updated numbers, Van Vuren said it might not be possible, but we can get close.” A few days later, Netniss declined. He said that in November, he was trying to be helpful without considering journalistic intent.” I would suggest it’s obvious not only do they NOT want scrutiny they refuse to provide information if it will be used against their goals.
So Why are 95,819 Residents Paying So 12,693 Business Accounts can Live High on the Hog?
Traditionally MID has been run by businessmen and farmers, yes I know farmers are businessmen, but their costs have been offset by the residential customers who have been paying a premium. Recently a dairy farmer who pays the lower commercial rate commented that if people didn’t like what they were being charged “they could just shut off the switch.” Frito Lay who pays the lowest Industrial rate generates $2.2 Billion a year in profits. And yes some of these profits are because they pay a lower rate than sick senior citizens on fixed incomes (the MID CARES program).
So Lets get Back to the Cost of Doing Business Argument
Just like in Mountain House it’s all about what costs you count. In Mountain House they count basic infrastructure only. They don’t count the cost of running the transmission lines or the transformer costs among others. They only count the costs of running the lines from transformers to the street and then to the building site. For example in Beard Industrial Park they recently had to add a powerhouse and multiple transformers for the new area the City of Modesto approved and just as importantly, because of equipment failure they had to replace several very expensive transformers an older area of Beard. These don’t count against “the cost of doing business.”
What is the most expensive time to purchase electricity? In the summer, and when do you think most of the industrial power is used? You guessed it, in the summer. Does this factor into the cost of doing business? Not according to MID. So according to MID, 164 industrial users use almost 1/3 of the electricity MID sells, yet only paid $79.7 Million of the $359.8 Million of the revenue MID generated.
The public is constantly being sidetracked by a conversation regarding water subsidizes but these costs are but a drop in the bucket compared to the amount of the electric subsidies residential ratepayers are forced to endure.