MID Board approves seven percent electric rate increase for 2010

Surcharge to be reviewed at Feb. 9 Board workshop

The Modesto Irrigation District (MID) Board of Directors yesterday approved a measure that will raise all electric rate classes seven percent effective Feb. 1, 2010. The measure also included a power supply surcharge to appear on customer electric bills following review at a Board workshop scheduled for Feb. 9, 2010. The rate increase measure passed by majority vote.

“Rate increases are never pleasant, least of all when so many of our customers are struggling in this deep recession,” said MID General Manager Allen Short. “It’s a really delicate balance because what we have facing us are a number of issues we can’t control.”

Factors contributing to the rate increase

In addition to a decline in retail electric revenues due to the economy, these factors drove the rate increase:

  • Costly state mandates for green energy and reductions in greenhouse gas emissions.
  • Planned new power plants must be financed by issuing long-term bonds per MID Board policy.
  • MID must demonstrate to creditors that it will have enough net income to make debt payments on existing and any future new bonds.
  • MID’s bond rating was recently downgraded from A+ to A.

Cost-cutting and reserve drawdowns

Prior to today’s Board decision, MID implemented cost-cutting measures that included deferring $6.8 million in projects from the 2010 budget, instituting a hiring freeze and leaving over 40 positions vacant – about 10 percent of the MID workforce. MID also drew $65 million from its reserve fund to stabilize rates over the past 10 years.

Customer impacts of rate increase

Residential customers who use an average amount of electricity will see their bills rise from $130.40 to $139.55 a month, a $9.15 increase. The fixed monthly charge remains $12.50. Individual electric bills may change by a different percentage depending on how much electricity the customer uses.
Qualifying low-income customers who are enrolled in the MID CARES discount program and who use an average amount of electricity will see their electric bills rise from $95.66 a month to $102.70, an increase of $7.04 a month. The CARES discount will save low-income customers about $442 a year.

Average electric use is about 850 kilowatthours a month on an annualized basis. In the Modesto area, electric consumption is substantially higher in summer than in winter. Air conditioning use accounts for this difference.

For more information

2010 electric rates or estimates of 2010 electric bills

  • Residential rates, call 209 526-7337 or toll-free 1-888-335-1643
  • Commercial/industrial/other rates, call 209 526-7339 or toll-free 1-800-304-5373
  • Email questions to

MID CARES low-income program, program qualifications, how to enroll

Rebates on energy-saving products, energy conservation information

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