Farmers urge commission to cut PG&E rate request

Calling the request unjustified and even “a bit punitive,” farmers and ranchers testified last week against a double-digit rate increase in electricity and natural gas usage for agricultural customers proposed by Pacific Gas and Electric Co. The increases would affect thousands of farmers and ranchers in Northern and Central California.

California Farm Bureau Federation Associate Counsel Ron Liebert said the rates that the utility is proposing would cause significant problems for farmers and ranchers.

California Farm Bureau Federation Associate Counsel Ron Liebert, left, discusses PG&E's proposal to increase gas and electric rates with Kari Dodd, manager of the Tehama County Farm Bureau, TCFB Vice President Sam Mudd, and Colleen Cecil, executive director of the Butte County Farm Bureau. They were joined by other area farmers at a recent hearing held by the California Public Utilities Commission.

“If the PG&E phase 1 and 2 proposals are approved, average agricultural rates could increase between 13.5 percent and 19.4 percent,” Liebert said. He filed formal testimony in the case on behalf of CFBF and attended many of the public participation hearings organized by the California Public Utilities Commission, which regulates utility companies.

While addressing CPUC Administrative Law Judge John S. Wong at a hearing in Red Bluff last Thursday, Liebert recommended that the rate increase requested by PG&E be reduced considerably.

“From our analysis, we are recommending a $600 million deduction from PG&E’s request in year one and substantial decreases in subsequent years,” Liebert said.

In its general rate case application for 2011-2013, PG&E requests an increase of about $1.1 billion in 2011, and over a three-year period a cumulative increase of about $4.2 billion, Wong stated. PG&E is also pursuing a second application for natural gas transmission that would raise rates an additional $67.3 million in 2011 and $450 million during a four-year period.

The CPUC hearings, held from late May to mid-June, were well attended by farmers, ranchers and agricultural representatives, Liebert said. The Red Bluff hearing attracted farmers and ranchers from Tehama, Butte, Shasta and Colusa counties. Tehama County Farm Bureau Manager Kari Dodd and Butte County Farm Bureau Executive Director Colleen Cecil addressed the CPUC on behalf of their members.

Walnut, prune and pistachio grower Bruce Lindauer of Los Molinos testified that the PG&E rate increase would cost his business and his family thousands of dollars.

“The structure of the rates as proposed is going to increase my cost of electricity anywhere from 13 to 20 percent. It may not sound like much to you, but let me put those numbers into perspective,” Lindauer said. “Our utility costs each year are about $55,000 to $80,000, so if you do the quick math at 10 to 20 percent, you are looking at increased cost of $8,000 to $16,000.

“I have one child in college and one that is about ready to start. I propose that this is one year’s college education that is going to be eaten away every year.”

Peach and prune farmer Ryan Sale of Red Bluff, like many of the farmers and ranchers who provided comments, works a second job to make ends meet. He addressed the need for PG&E to cut costs like most other businesses have had to do during this dismal economy.

“The rest of us are shedding employees, we’re shedding businesses, we’re shedding things that we used to do and in my case I’m finding other jobs so that I can maintain what I do,” Sale said.

Speaking on behalf of his family’s ranching operation in Shasta County, Ned Coe addressed PG&E’s earnings per share.

“PG&E’s first quarter earnings were 79 cents per share, 21.5 percent greater than the first quarter last year. Going back to 2007, they’ve had positive earnings every quarter,” he said.

“Every business in Tehama, Shasta and Glenn counties represented here would love to have had a positive earning in every quarter, but due to economic conditions we haven’t been there,” said Coe, who is also a CFBF field representative. “I would request that the PUC address PG&E’s rate increase of 13 to 19 percent for agricultural customers and tell them like every other business, they need to look at their input costs instead of just continuing to increase revenue.

They need to start looking very hard at their expenses.”
Walnut grower Sam Mudd of Red Bluff, vice president of the Tehama County Farm Bureau, suggested that the CPUC take agriculture’s contributions to the environment and the food supply into account when making its decision.

“We converted from a diesel engine to wells and electric motors. We believed electricity was a little cleaner energy,” said Mudd, who said electricity represents his third-highest input on the farm. “It feels a little bit punitive to someone like me who made the investment to build wells and stop using diesel engines. I’d like you to keep that in mind when you are looking at how these rate increases affect local farmers who are trying to grow a quality product for a hungry world.”

Now that the CPUC public participation hearings have concluded, formal hearings will take place at the agency’s office in San Francisco starting on June 21, with the process expected to conclude later this year.
“At the conclusion of the formal hearings, all parties, including CFBF, file opening and reply briefs in which they discuss the testimony and raise legal issues,” Liebert said. “Afterward, the administrative law judge will write a proposed decision. The commissioners can adopt that decision or vote to adopt an alternate decision.”

Farmers and ranchers unable to present testimony during the public participation hearings but who would like to send a letter to the commission, should note that their comments pertain to application No. A.09-12-020 and mail to: The Public Advisor, California Public Utilities Commission, 505 Van Ness Ave., Room 2103, San Francisco, CA 94102. Communication via e-mail can be submitted to: public.advisor@cpuc.ca.gov.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)