Publicly owned electric utilities – as SSJID will be – have consistently delivered lower rates across the country when compared with investor owned utilities, like PG&E. SSJID can offer electricity at rates at least 15% below PG&E’s because SSJID is a publicly owned, nonprofit agency that doesn’t have to produce a profit for shareholders. PG&E collects extra money from ratepayers each year to pay its shareholders an annual dividend, and to pay income tax on the profit. We won’t. PG&E also has higher overhead costs including a sprawling multilevel management structure, multimillion-dollar salaries and bonuses to top executives, an expensive office building in San Francisco, and a corporate jet.
SSJID doesn’t have any of those kinds of expenses. As a publicly owned utility, SSJID qualifies to pay interest on its debt that is tax free to lenders. This, together with a better credit rating than PG&E means SSJID can borrow money for infrastructure more cheaply than PG&E. SSJID can combine all of these competitive advantages to benefit the approximately 40,000 homes and businesses in our area.
First of all, because we’re able. Several independent analyses over the last 10 years, and as recently as 2019, have concluded that SSJID can deliver rates at least 15% below PG&E’s and do it without subsidizing rates from our wholesale power or water sales. A second reason is that the SSJID Board of Directors has pledged to set and hold SSJID’s electricity rates at least 15% below PG&E’s.
Reduced rates will save customers millions of dollars each year. SSJID also is committed to investing in public benefit programs and providing California Alternate Rates for Energy (CARE) rates in the same manner as PG&E, with the added discount commitment. That’s a significant economic benefit for local residents and the whole region that will continue year after year.
SSJID is owned by its customers and is governed by a locally elected board of directors who are also customers. This means the board of directors truly wants lower rates, higher reliability, and more safety for our customer-owners, not higher profits for shareholders. PG&E is not an ordinary corporation; it is a monopoly whose customers have no choice, while its board of directors is obligated to put shareholders first. Unlike PG&E’s secret board meetings in a San Francisco skyscraper, SSJID has open board meetings twice a month where our customers can participate in discussions about key issues and have access to important information. Our five directors are elected by and accountable to those who live in their divisions of SSJID. Our customers and the communities we serve have an opportunity to help set and hold us to priorities for rates, service, safety and reliability. SSJID’s culture reflects the fact our employees live here. We share the same community pride and values of our neighbors – who are our customers and owners.
When it comes to operating reliably and efficiently, SSJID has the big advantage of being much smaller than PG&E. As the nation’s largest utility, PG&E is hamstrung by diseconomies of scale; they are too big. Historically they have been unable to stay on top of the maintenance and replacement needs of such a vast system, with terrible consequences. While SSJID will be in the top 10% of publicly owned utilities by size, it will still be less than 1% of the size of PG&E. This makes the task of monitoring, repairing, and replacing critical infrastructure much simpler.
As a smaller local utility, the work of keeping the local power grid in good repair will be done by people who mostly live here and are also customers of SSJID who have to live with the results of their work, along with their neighbors. SSJID employees will be working in the same local area all the time, seeing the same facilities day after day, and developing intimate familiarity with the “ins and outs” and changing conditions of the local system.
SSJID is respected locally for how it has provided water distribution services to our communities for more than 110 years safely, reliably, and very affordably. We believe our history and commitment to exceptional service to our customers makes us uniquely qualified to also provide local electrical power in a reliable manner.
SSJID will be subject to the same state law as PG&E requiring the use of renewable energy sources to supply electricity to our customers. SSJID is committed to complying with the law and building a portfolio of power supplies that meets or exceeds the requirements in state law. As a local, customer owned and controlled utility, we can fulfill this responsibility in ways that respect and reflect local resources and preferences. For example, SSJID would help implement community interest in vehicle electrification initiatives to support our commuting customers. We have a long record of doing this even without being a retail electric utility. At the Tri-Dam Project SSJID has been producing enough carbon-free, renewable energy to power all the residences and businesses of the SSJID territory for over 60 years.
In the late 2000s, SSJID built the Robert O. Schultz solar farm which greatly reduced the carbon footprint of our Water Treatment Plant. In 2012, the Local Energy Aggregation Network awarded SSJID with their 2012 National Community Choice Aggregation Leadership Award for our efforts to assist Marin Energy Authority (Marin Clean Energy) in procuring renewable energy certificates from the Robert O. Schultz Solar Farm.
PG&E cut off power to millions of Californians multiple times in 2019 because of high wind conditions and potential wildfire emergencies elsewhere in the state. SSJID will reduce the risk of PSPS outages in our area by reconfiguring the power transmission system in our region to bypass transmission lines operated by PG&E, similar to what the Modesto Irrigation District does. This fix will take several years to design and build after SSJID begins electric service. It will dramatically reduce the risk of our customers losing power should extreme fire danger arise in a different area.
SSJID has long experience with the process of successfully establishing and operating major new utility enterprises including:
- The founding of the District in 1909
- Building Old Melones Dam in 1926
- The Tri-Dam Project in the 1950s
- The Sandbar hydroelectric plant in the 1980s
- The $120 million water treatment plant in the 2000s
- The solar farm in the late 2000s
- A pressurized, recirculating irrigation distribution system in 2011 – 2012
One key to all these major successes is the ability to employ highly qualified firms and individuals to plan, develop, and operate the new ventures. Several of these enterprises are electric utility services. SSJID has been in the electric business for the past 62 years, generating clean hydroelectric power through its Tri-Dam Project and selling it on the wholesale market. The amount of electricity we generate is approximately equal to the amount used by all retail customers within SSJID boundaries. Now, we want to take the next logical step and serve the retail customers within our district.
The short answer is, “It won’t.” The irrigation and electric utilities will be financially and operationally independent. Rates of neither enterprise will be subsidized by rates of the other. The electric utility will have its own assistant general manager. There will be separate engineering and operations departments for the irrigation and electric utilities departments. Efficiencies will be realized in support services such as fleet management and administrative functions.
If PG&E were to lay off employees as a consequence of SSJID purchasing PG&E’s local electric utility assets, AB 1054, enacted in 2019, would require SSJID to retain the affected employees and keep their pay and benefits the same. SSJID would have need of those employees and would welcome them to employment with SSJID. SSJID attracts top quality employees by deliberately offering competitive pay and benefits. One fact that would make the transition simpler and easier is that employees of PG&E and of SSJID both belong to the same union, the International Brotherhood of Electrical Workers (IBEW) Local 1245. However, it is not even clear that PG&E would lay off any employees due to an SSJID succession to service. SSJID territory is less than 1% of PG&E’s business and PG&E loses more than 1% of its employees each year through ordinary attrition.