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Escalon council backs SSJID memorandum of understanding on future electric service
Summary
The Escalon City Council voted to adopt a memorandum of understanding with the South San Joaquin Irrigation District (SSJID) signaling support for the district's long-running effort to become a retail electric provider; the MOU commits SSJID to payments in lieu of franchise fees and a 2.5% revenue-sharing framework described as a LAFCO condition.
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The Escalon City Council on Monday adopted a memorandum of understanding with the South San Joaquin Irrigation District that signals the city's support for SSJID's multi-decade effort to become a local retail electric provider.
The MOU does not transfer service or terminate PG&E's role; it is an agreement that SSJID would make the city whole on payments now received as franchise fees and would allocate 2.5% of SSJID retail revenue to cities and the county as part of a Local Agency Formation Commission (LAFCO) condition, Katie Patterson, SSJID's public and government relations manager, told the council.
Why it matters: SSJID has pursued retail electric service since the early 2000s and told Escalon officials it has invested roughly $35 million in feasibility, legal and engineering work to date. SSJID representatives said the district expects to offer rates roughly 15% below PG&E initially and cited potential local ratepayer savings of about $15 million per year across the launch territory.
What council heard: Peter Rekirk, SSJID general manager, and Bill Schwandt, SSJID's electric utility manager, described the technical and legal path ahead, including pending trials related to the district's right-to-take claim and parallel proceedings at the California Public Utilities Commission. Schwandt said the district's regulatory timeline has slipped and that an operational launch previously envisioned in the late 2020s could be delayed depending on court and CPUC schedules.
Residents who spoke at the meeting urged caution. Sheila Lawton, addressing the MOU, said the project's long timeline and SSJID's past expenditures made some residents wary of formal commitments before regulatory hurdles are cleared.
The vote and next steps: A council member moved to adopt the MOU; the motion was seconded and approved by voice vote. The MOU is structured as an initial, nonbinding framework to guide future, more detailed agreements should SSJID prevail in the legal and regulatory processes needed to acquire and operate local distribution assets. City staff said detailed contractual terms and formal agreements would follow if and when the district secures authority to operate retail service.
What remains unresolved: The MOU does not specify implementation timelines, exact payment mechanics, or interagency operating agreements. Council members and SSJID staff said those specifics would be negotiated later and would be subject to additional review and approvals.
The council recorded the action as a show of municipal support for SSJID's path to retail electric service while retaining the option to scrutinize any future, binding agreements in subsequent proceedings.
