South San Joaquin Valley Irrigation District makes $80 million bid for PG&E’s area electric system

Manteca, CA, Aug. 25, 2006 — The South San Joaquin Irrigation District (SSJID) formally offered an estimated $80 million to Pacific Gas & Electric Co. for its electric facilities in the area. SSJID posits the move will cut electric rates to 35,000 area residents by at least 15 percent.

The offer was made in a letter to the company’s major shareholders and Thomas B. King, PG&E Co.’s president and COO. District officials termed the bid as a win/win proposition for all stakeholders — one that seeks to avoid costly litigation and the acquisition of PG&E’s local infrastructure through the eminent domain process.

Specifically, the irrigation district is offering to pay PG&E:

* $48.92 million for the appraised value of the electric system;
* $1.44 million to compensate PG&E for its costs associated with separating from the system;
* $1.59 million to pay PG&E for a substation impairment fee;
* $2.66 million for PG&E property, rights-of-way and easements;
* $25 million to be divided equally between PG&E ratepayers and shareholders.

District officials said the offer was intended to address concerns among local government officials about what PG&E alleged was SSJID’s initial plan to engage in a legal process to acquire PG&E’s systems through eminent domain.

The offer comes just two days after SSJID filed a lawsuit against the San Joaquin County Local Agency Formation Commission (LAFCO) over action it took to reject SSJID’s application to provide retail electric service to residents of Escalon, Ripon, Manteca and parts of unincorporated San Joaquin County.

The complaint, filed in San Joaquin Superior Court, challenges both LAFCO’s authority and the evidence upon which it based its decision. District officials expressed hope that a protracted legal challenge to LAFCO could be avoided.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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