MID raises rates

     Modesto Irrigation District, (MID), Board members voted to increase electricity rates by 7 percent on January 26. Much lower than the proposed 11 percent increase that would be needed to raise revenue to a level the public utility’s lenders would like to see in order to continue receiving low interest rates on bonds issued for expansion projects. Beginning in February, residential bills should expect to increase an average of $9 per month while businesses would increase an average of $15. The Board is also expecting to vote on whether surcharges should be used to make up the difference if these revenue goals are not met.
     Not all Board members agreed on the rate increase. Directors Tom Van Groningen, Paul Warda, and Glen Wild voted for the increase. Director John Kidd favored delaying the vote to further review the MID’s finances while Director Cecil Hensley said the increase is too high considering unemployment rates. District officials have reduced spending by cutting small capital projects and leaving 49 employment positions vacant but the rate increase is needed to continue major projects including a 255 megawatt power generating plant in Lodi the District has already $10 million on planning and design. MID General Manager Alan Short said the District’s financial advisors are recommending canceling the project and funds could be recovered if another agency takes their place. Surcharges are being proposed as a way to cover the cost of purchasing power from outside sources during summer months when electricity demand is at its highest
     Electric rate increases could have an effect on Modesto Junior College’s annual budget, considering last year’s state budget cuts resulted in a tuition increase and the loss of several classes. Students and faculty at MJC will have to wait until the state passes the next fiscal budget which will reflect on the fall 2010 and spring 2011 school year. For students on a fixed income or receiving financial aid who are MID customers, the rate increases will mean making a few sacrifices to come up with the extra $27 average for the remainder of the school year.
 

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