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.
The Tuesday meeting of the Modesto Irrigation District Board was another head shaker. The topic of our interest was the 2016 rate workshop which was conducted by MID’s Planning, Pricing and Risk Manage,r Jimi Nitniss. Now Jimi, whose compensation package comes to around $195,000 a year, has questionable goals and apparently has way too much time on his hands.
How Do You Lower Rates and Remain Revenue Neutral?
If you take a look at your bill you’ll notice a fixed monthly charge of $12.50, an environmental adjustment and a capital adjustment. And of course the really bad news, your electric usage. But MID Staff has a way for you to lower your electric rates but at the same time pay the same amount for the first 500 kWh. Huh? That’s right some might call it smoke and mirrors but MID says it’s all the rage with other utilities. MID_2016_Residential_Rate_Design
That’s a direct quote from MID Director Paul Campbell at Tuesday’s workshop. See it isn’t about making things better, it’s about making them appear better. Staff wants to raise your fixed fee from $12.50 to $20.00 and charge less for the first 500 kWh. So the cost is a wash or revenue neutral. BUT MID gets to say they have the lowest residential rates around. So how does this help us? It doesn’t. It’s all public relations. The electric rate remains the same for everything more than the first 500 kWh used, .18 per kWh. Lots of fanfare with little or no effect.
The Driving Force Behind the Change
Jimi says since Turlock Irrigation District (TID), Sacramento Metropolitan Utility District (SMUD), and Roseville all do it it must be a good idea. The idea is to have fixed cost on your bill to more accurately cover MID’s fixed cost. But it still doesn’t cover it all of the fixed costs, all it really does is pretend to lower your bill, which of course it doesn’t do. To our mind it’s like a placebo for electric ratepayers. And at the end of the day you still have the headache.
Most people don’t realize just how much the residential ratepayer subsidizes industry in Modesto. Right now you’re (residential) paying .16 per kWh in the summer and .13 per kWh in the winter. Large industrial businesses around Modesto are paying as little as .05 per kWh summer and .03 Per kWh winter rates. Do you know that .03 is cheaper than the cheapest power MID buys (Don Pedro hydro is almost .04) but hey as long as homes are paying .16 and .13 who cares? If MID wants to emulate Roseville and SMUD and virtually ALL of the utilities in the Bay area they will bring industrial and residential closer in line. For these bay area companies don’t use they residential rates to subsidize their industrial base like we do. And if you’re curious farmers and ranchers are paying .10 per Kwh summer and winter. Forget the water subsidy, open your eyes to the electric subsidy.
If you would like to watch the workshop you can see the magical effect of the rate adjustment on the MID Board. There will be a public hearing in November, so stay tuned.
Ahhh secrets, several years ago they were the meat and potatoes of MID’s existence. Why respond to public record requests if you don’t have to? Most recently we’ve been trying to get to the bottom of MID’s farmer to farmer water transfer program and the Return Allocation Program by requesting the names of those selling water and the amounts. Unfortunately time and time again we’ve been refused access to these records of a public resource. When MID’s staff announced they were going to hold private meetings with those same farmers who participated in last years programs we adamantly argued against such secrecy. Unfortunately the Board remained silent. When we threatened to go public staff relented by saying they were going to contact all irrigators. But you and I know who they are going to listen to, all you have top do is follow the money. When Directors John Mensinger and Paul Campbell originally started pushing hard for these programs you had to wonder why. After all these two Directors, who publicly call themselves the “City Boys,” were promoting a ‘farmer to farmer’ program which, of the actual farmers on the Board, two weren’t supporting and one was just willing to listen and eventually supported. The self-proclaimed “city boys” seemed out of their bailiwick. After all Campbell and Mensinger spend much of their time attacking the water irrigation price structure. But maybe there was a reason.
Two $5,000 Campaign Donations
The two largest campaign donations by far came from Bill Lyons to these two men (Mensinger and Campbell). But why would Bill Lyons decide it was to his benefit to have his political puppets push so hard to pass the Farmer to Farmer Transfer Program? In a Garth Stapley article of 4/22/14, Mr. Lyons claimed he was responsible for 54% of the 1,060 acre feet of water in the Return Allocation Program, which in the end delivered a check to Mr. Lyons of at least $ 302,400 and likely more. Unfortunately MID has decided to keep the actual amount and recipients a secret from the very public that own the company. But his big killing, monetarily, was in the Farmer to Farmer Transfers. Irrigation_Operations_Report
Lyons Sweetheart Deal
Unbeknownst to most of the public Bill Lyons and Mapes Ranch negotiated the rights to pump for FREE any water that comes down MID’s canal that cuts through his property going to the river. His is the only entity with the ability to steal this public resource. Maybe this was one of the reasons he and his then puppets, Tom VanGroningen and Glen Wild, were pushing the water sale to San Francisco. Maybe Bill Lyons envisioned acting as a toll booth collector for any water MID might attempt to sell down the river. At the January 22 meeting MID General Manager Roger Van Hoy characterized the MID meeting where the Lyons sweetheart deal was passed, as open and public. This meeting was before Roger’s employment with MID and according to Former MID Director and Board President when the deal was passed, John Kidd is asked about MID meetings back then he likes to say, if there were three members of the public at a meeting then word must have gotten out that someone was bringing donuts.
The crux of the issue: Stealing Water From the River
Bill Lyons has the ability to sell water allocated to his land and then replace it FREE from the canal or to use his many large industrial sized pumps located along the river to supplant his ‘sold’ water. At least in OID’s proposed ‘fallowing’ program they don’t allow the farmer to replace the water by pumping ground water. Most hydrologists agree that using large industrial pumps located close to a river reduces a river’s flow by increasing river bottom seepage. And obviously taking water from MID’s canal before it gets to the river reduces flow to the fish and the delta thereby increasing salinity in farmland down stream.
In City of Modesto politics taking this kind of campaign donation would require the precipitant to recuse themselves or step back from the discussion and decision. MID has no campaign limits effecting this discussion. We’ve requested for MID to have this discussion several times but have been ignored, which of course sets up this dilemma. As we’ve pointed out this has been an issue for years. VanGroningen, Wild and Warda received money ($5,000 – Lyons seems to find this to be the required amount to purchase MID Directors) from Lyons and were behind the attempted water sale. Fortunately for all of Stanislaus County, Paul Warda changed his mind. Don’t let anyone fool you. Director Warda’s change of heart was the one and only reason the water sale didn’t go through. So Bill Lyons can be defeated, but not easily. Remember he managed to get MID to spend $248,000 on convincing the public the water sale was a good thing and currently is one of the main movers and shakers behind Modesto’s attempt to annex Wood Colony and Salida.
Secrecy and Openness
In the ‘Farmer to Farmer’ program, 3,300 acre feet were passed, transferred at unknown prices by unknown people, but handled by MID staff at a significant cost of staff (both office and field) time. In the Return Allocation Program we cut checks of approx. $540,000 to people whose names we aren’t allowed to know. As a side note we/MID were stuck with $328,000 worth of unsold water costs. They want us to take it on trust that all was investigated and is on the up and up. We, with what we believe is good reason, don’t trust staff.
To be fair Director Byrd did request staff to reconsider but the Board’s attorney response was “That is how we handled it in the past.” There is no legal requirement and Public Record Requests show the Board didn’t vote for secrecy on this issue. We’ve seen how MID staff’s past practices actually work against the ratepayers best interest. Why would we expect things to be different/better if we keep following past procedures and dong them the same way?
Here is MID’s Public Record Response when asked for the people who participated in the buying and selling of our most public of resources, our water. farmertofarmerPPRandredactedresponse
Trust MID’s Staff? Not me, how about you?
All farmers who irrigated their crops last year using MID are allotted a minimum 18 inches this year, not enough to bring a crop to the market place. MID has set a bounty on the water of Four Hundred Dollars per acre for not using the water and returning the water to MID for distribution to all farmers that apply using a random drawing. The reality is they set a base price for the upcoming private water auction for this year.
If the rate increase of 10% goes through the cost will be $32.50 for the base allocation of 18″ plus a ‘Drought Surcharge” of $11.91 which equals $44.14 per acre. MID is offering to give irrigators $400.00 per acre for their base of 18″ or $267 per acre foot if they don’t use the water and leave it with MID. A nice incentive to return something they haven’t received or paid for.
It Gets Better: Our self described city boys, yes John Mensinger used/coined the term referring to himself and Paul Campbell threw in a wild card. He made his point by saying, “they mostly represented people living in Modesto.” Their argument was that a farmer should be allowed to sell their water to anyone they wanted and not just to family as has been MID’s past practice for transferring water delivery rights. And by pushing the $400 incentive they created a ‘base’ price for MID water.
But The Water Isn’t Theirs: See the rub is the water is MID’s water and MID is owned by its ratepayers meaning you and me. So the two city boys along with Nick Blom, who reversed his earlier position, voted to place MID’s water up for auction to the highest bidder. Remember, this is water they haven’t paid for, don’t own, yet windfall profits are going to be allowed? What did these three eat for breakfast?
Mensinger and Campbell have been complaining about subsidies by the electric side: With all of the preaching that has been going on about subsidies you would have thought they would have suggested that MID hold an auction for any surplus water and then use the profit to support its budget instead of allowing a few special interest farmers to line their pockets using our water, which they won’t have to pay for until they receive their bill November.
We all understand the Modesto Chamber of Commerce donated $2,000 and Bill Lyons even more to each of the ‘city boys’ and that the Chamber is famous for using public money to help their ‘friends’ and they do expect a return on their money, but I would have hoped they would have refrained from passing out the largess for a couple of months more.
The sellers are guaranteed a MINIMUM profit of $355.59 per acre. And who knows where that will end up after the unofficial auction.
The bottom line is: We’re fronting them the water for at least six months at no money down or interest fees to allow them to find the highest bidder on our water for them to make the profit on? And this is the business acumen the two city boys bring to the MID Board? Just how did this help the 113,000 electric account holders? How did this help the small farmer who is barely making it bring his crop to harvest. How did this help us?
For the second meeting in a row the Modesto Irrigation District Board had a spirited debate, completely without rancor, which included several diverse positions. After the Boards of Tom VanGroningen and Allen Short it truly is like a breath of fresh air. Now if only the actions and decisions were different.
Jumping right into it: The conversation started regarding the DRAFT Drought Operation Rules proposed by staff.The proposed Transfer Policy was a complete reversal of what was decided at the last meeting which took place on Feb. 11, 2014. You can watch it here starting at 59 minutes, in the agenda it’s the ‘Drought workshop. You can forward to 1:18 to listen to the public debate. At 1:36 you can hear the unusual banding together of Mensinger and myself. At 2:11 you can listen to Nick Blom argue the exact opposite position he voted for at today’s meeting. http://mid.granicus.com/MediaPlayer.php?view_id=1&clip_id=24&meta_id=1689 you can advance through the short sound issues without missing anything.
The topic centered on deciding on how water transfers would be handled, and who would be allowed to transfer their water. At the time I supported the idea of farmers being allowed to sell their water to anyone. I was behind Director Mensinger in his opinion. But we lost the argument convincingly. Yet today the DRAFT proposal supported this same position. So why did staff bring a proposal that lost, forward as potential policy? A look around the room and then listening to public comment gave us some clues. The Chamber trotted out Chamber Board of Directors member Ruben Villalobos in support of the grower to grower transfers. What does Ruben know about water transfers? Absolutely nothing. But when Chamber of Commerce lobbyist Cecil Russell calls Ruben, Ruben says yes Cecil, and trots on over. Bill Lyons Jr. was sitting in the audience making sure the actors in our little play performed as they were instructed otherwise he would tell daddy on them. To cut to the chase they wanted to allow farmers to sell their MID allocated water of 18″ inches per acre.
Larry Byrd and Jake Wenger wanted to limit the transfers to family and were encouraging an incentive to farmers to decide to return the allocated water to MID. Jake wanted $400 per acre and Larry $100 per acre as an incentive, to be distributed to other interested farmers and encourage the sharing of water if a farmer had other supplies (pumping). Unfortunately the establishment of the incentive plan came after the ‘Transfer’ issue was resolved and may have been a mute point.
Much to the dismay of many in the room, Nick Blom decided to go with the self- described ‘city boys’ and voted for growers to be able to sell to anyone. It’s a extremely intricate issue and not one lending itself to simple explanations. It’s understandable for farmers to want to help each other and no one is really against that. The overreaching concern is a few of the wealthier farmers will be able to out bid smaller farmers and the smaller farmers might go under, not that the Chamber of Commerce would mind.
An attorney from Ripon (Stacey Henderson) claimed to be representing several small farmers decided to insert the term lottery into the mix. It seemed like she took the opportunity to unduly influence the issue since this word was no where to be seen in the staff’s proposal. Later during a break and in private conversation she upbraided me for characterizing her comments as spin. She said if I had any question I should ask her first. So I did and she walked away without saying a word. Someone from Ripon is getting paid to influence our decisions. Just like a lawyer/lobbyist making suggestions they had no intention on following through on. Just more paid for testimony from my point of view. We see lots of that at the MID.
Were strings being pulled and Directors were dancing to the Chamber’s and Bill Lyons tune? This time it’s the farmers not the ratepayers who will pay.
On another note, Modesto City Councilmen Bill Zoslocki and Dave Cogdill just authorized MID to spend up to $504,000 on a study of the rim fire area. Consequently, our rates will be going up at a time when the Council wants to forgive Seneca Foods an $8 Million fine they incurred by generating excessive waste water, causing Modesto to settle a lawsuit costing up to $1 Million.
I wonder when the City Council will get around to telling us?
Topics include Women’s voting issues from around the country, what political
candidates should and shouldn’t put on their facebook pages, Jim Mortensen’s reasons he lost the MID race, Mike Hardin’s Measure X claims and the missing truth about Modesto’s budget, these topics and more so tune in and find out what you need to know to make decisions important to you, your family and your community. Fridays at Noon.
By Emerson Drake
It’s time for recommendations for our local elections. If you’ve read the articles here on the EyeOnModesto
and listened to the radio show ‘What’s on America’s Mind‘, you’re well aware of our stances. The issues facing some offices make our choice extremely clear (MID water sales and Board Governance Policy). In others, the candidates past actions makes our choice easy (Developer/Profiteers).
From participating at MID meetings and city committee and council meetings, candidate forums and following the money, we’ve learned the true beliefs of the candidates not the ones they tell the public in order to get elected. There is even one candidate for Hart-Ransom School District who is in favor of forced public urination for 13 year old girls in mixed company (you can’t make this stuff up. Candidate (Athens Abell) wrote it on her facebook).
MID District 4 is the toughest call. We have three candidates who could perform well but unfortunately one must be chosen. The polls are suggesting the candidate most likely to defeat Jim Mortensen (arguably the worst candidate for the people/ratepayers), is Jake Wenger. For a complete breakdown on the election candidates check out recent “What’s on America’s Mind” broadcasts.
Here’s the list:
For MID Division 2 Carmen Sabatino Division 3 Les Johnson Division 4 Jake Wenger
For Modesto City Council District 2 Juan Telles District 4 Juan Melgoza District 5 Jenny Ketchum Kenoyer
Modesto City Schools District full Term Michael Scheid Sue Zwahlen David Allen Ruben Villalobos
Modesto City Schools District 2 year term Jordan Dickson
Hart-Ransom School District Sandy Rigghs Jim Cover Richie Fultz
Measure V Yes
Measure X No
While we need more police and fire the money won’t be spent there so as much as I would like to support this measure I can’t.
There has been widespread discussion of groundwater problems in the foothills. The question seems to be “what to do about it”? Major damage to some smaller property owners is occurring right now and that can be a complete loss of value of home and property, simply because adjacent large plantings of almonds are taking their groundwater. An estimate of that property loss would be highly appropriate in your investigation. Legal costs to defend these small properties are simply too expensive to individuals and are prolonged.
You have the police power to stop abuses. Please use that power as soon as possible. An immediate moratorium, like that in San Louis Obispo County would be very appropriate…but then what?
A rapid estimate of the problem could be made with existing knowledge by county employees, hydrologists and farmers, using present orchard records and detailed data on approved wells, plus planned almond planting and wells. That would be a guide.
Rainfall in the low foothills is on the order of 12 inches per year. Half may reach the water table. Minimum irrigation needs of almond trees is estimated at 30 inches per year. Thus, at least 2 feet of water is needed, in addition to rain. That must come from groundwater, since there is no other source. Because the pore space in rocks holding available water is roughly 15% (plus or minus 5%), every foot of pumped groundwater should drop the water perhaps 8 feet. That equals 16 feet per year. If the water table drops significantly less than that, it means that groundwater is flowing laterally underground to the well from ones’ neighbors and depleting the overall groundwater supply. That would not be surprising, since lateral movement of groundwater is well known to be much easier than vertical movement.
There is a legal term known as “prescriptive rights”, whereby, if water is taken wrongly, and no objections occur, then at some point in time the right to object is lost. Since there is no groundwater law in California, the time for a prescriptive right is unknown, but could conceivably be quite short. You can control that.
A rough estimate of the magnitude of the water problem in the foothills can be made in a week. Not a year or two, if people use reasonable estimates, as described. There is certainly enough understanding of the problem by employees of the local irrigation districts to make valid estimates of the problem. I cannot overstate the need to act now on requiring environmental impacts on properties adjacent to wells. Also, grand-fathering in of continuing harmful practices absolutely must be avoided.
While I am up here, I would like to put in a plug once again for an influential county/city committee to look at the truly long term needs by our local society for food and water. Some members of this area seem determined to make the central valley another silicon valley. that would truly be a local and national disaster. I believe the average local citizen is concerned but does not know how to register that concern with the decision makers. A prominent committee could help
WATER EXPORT RULES
I would like to put in a plea that you folks approve the proposed rules on export of groundwater today. I understand from highly reliable sources that this sort of problem was recognized at least 10 years ago and ignored. If it had been addressed then we would probably not have the present problems. There is a phrase to “kick the can down the road” that has been applicable in the past. Please do not do it in this case. If there are major unexpected problems with the rules, there is no reason why they cannot be changed in the future.
The county does need a water expert on its staff, who has legal advice available. Neither the city or county has a lawyer knowledgeable in water precedents….I have asked. given the tremendous importance of water at present, and even more so in the future, it is imperative that the county have such advice readily available, the sooner the better.
Rumor has it that 40% of natural river flow will be kept for the fish in the future. Meanwhile, the state requires major increases in housing by the city. It seems obvious that truly great water challenges lie ahead and that does not even consider potential global warming.