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TID proposing power rate hike
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Turlock Irrigation District electricity consumers in Ceres, Hughson, Keyes and may soon get zapped with higher power costs, as the Board of Directors heard a proposal Nov. 25 to increase electricity rates by an average of 15 percent. Should the increase be approved at the Dec. 16 TID Board meeting, the rate hike would take effect on Feb. 1, 2009.

"(The public hearing) was good," said TID Director Rob Santos, "but I thought there would be more public input."

Representatives from SupHerb Farms in Turlock and Patterson Frozen Foods were present at the hearing to protest the rate increase, which they described as hard to pass along to their customers. Community activist Linda Taylor also submitted a letter to the TID Board expressing concern about the ability of the elderly and the poor to pay higher rates.

Should the Board approve the rate hike on Dec. 16, it would become the first across the board rate increase since 2006.

The increase is needed to help offset what TID is currently projecting as a $52.7 million budget shortfall for the 2009 budget year. This projected deficit comes due to a combination of increased costs for natural gas prices and a reduced demand for electricity, given the foreclosure crisis.

In order to have the least possible impact on consumers, despite the need for increased revenues, TID's plan calls for dipping into its $55 million Rate Stabilization Funds to spend $8 million in reserves next year to help reduce the increase.

"We like to keep money in the Rate Stabilization Funds for things like this," Santos sad. "We don't have to raise rates so high; we can take money from the funds instead."

The hope is that a future increased demand in electricity, along with the declining price of gas, will allow the TID to break even without increasing rates to match the full cost of doing business. An especially rainy year could also help consumers, as it would allow TID to create more cheap electricity through their Don Pedro Dam hydroelectric plant.

However, it remains possible that rates could increase even more in the future. If the cost of gas continues to increase, or an unforeseen major maintenance project requires TID attention, the cost of electricity is likely to increase.

The plan to be discussed by the TID directors on Dec. 16 calls for a 13 percent rate increase for residential TID electricity customers and a jump of 13 to 20 percent for commercial and industrial power costs. The average TID residential customer, who uses 850-kilowatt hours of electricity per month, would see a monthly bill approximately $12 higher.

This hike comes on top of a tenth of one percent increase in the Power Supply Adjustment charge, due in December, from $0.009 to one cent per kilowatt-hour. That should raise monthly rates by about a dollar for most consumers.

TID is not the only utility company in the area raising rates, however, as the Modesto Irrigation District approved an 18.9 percent increase two weeks ago. That rate hike will be phased in gradually over the course of the next 10 months.

It remains possible that TID will opt for a similar phased increase in rates at their Dec. 16 meeting, but the need for increased funding is almost undeniable. Without an increase, the TID will dig a deep hole of debt over the coming year.

"We purchase electricity every single day," Santos said. "We can't store all our power and then use it as we need it. We're buying and selling all the time."