City Council Agenda
|
Memo to: |
Manteca City Council |
|
|
|
|
From: |
L. David Nefouse, City Attorney |
|
|
|
|
Date: |
May 6, 2025 |
|
|
|
|
Subject: |
Approve a Memorandum of Understanding Between the South San Joaquin Irrigation District and the City of Manteca Regarding The Intent to Pay in Lieu of Franchise Fees. |
Recommendation:
title
Approve a Memorandum of Understanding Between the South San Joaquin Irrigation District (SSJID) and the City of Manteca (the “City”) Regarding the Intent to Pay in Lieu of Franchise Fees.
body
Background:
The purpose of this memorandum of understanding (MOU) is to memorialize and confirm the Parties’ mutual understandings regarding SSJID’s obligation to make payments to the City in order to mitigate any financial impacts resulting from SSJID’s Retail Electric Project. This MOU is also intended to set forth a non-binding procedure whereby SSJID and the City will identify the rights, obligations, and responsibilities that will be incorporated into a more formal written agreement governing the Payments at such time SSJID obtains possession and ownership of PG&E’s electric distribution system.
In addition to providing irrigation water to customers within its 72,000-acre service territory, SSJID also generates and sells electricity on the wholesale market through the Tri-Dam Project, a joint venture between SSJID and the Oakdale Irrigation District (OID). Together, SSJID and OID developed a system of reservoirs, dams, and powerhouses with a capacity of nearly 135 megawatts.
California’s Irrigation District Law (Water Code § 20500, et seq.) authorizes irrigation districts like SSJID to acquire, operate, lease, and control plants for the generation, transmission, distribution, and sale of electric power (id. § 22115, et seq.). It is under this legal authority that SSJID seeks to provide retail electric service to residents and businesses (approximately 43,000 customers) within its service territory. The Retail Electric Project involves SSJID’s replacement of Pacific Gas and Electric (PG&E) as the electric service provider in its district boundary and the acquisition of PG&E’s electric distribution system and real property.
Since 2004, SSJID has pursued its plan to provide retail electric service within its service territory. The primary goal and intended benefit of SSJID’s Retail Electric Project is a reduction of customers’ electric rates, which will be at least 15% lower than PG&E. SSJID continues to work through legal and legislative processes and the matter is currently under review at the California Public Utilities Commission as well as awaiting commencement of trial for its eminent domain case.
SSJID’s Retail Electric Project will present various benefits to electric ratepayers, the local communities, and to the local economy, which aligns with the City’s desire to address energy affordability for City residents.
Fiscal Impact:
There is no direct fiscal impact for the City entering into this MOU with SSJID. However, this MOU helps mitigate the potential loss of future Franchise Fee revenues as a result of SSJID obtaining possession and ownership of PG&E’s electric distribution system.
Documents Attached:
1. Attachment 1 - Memorandum of Understanding