City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Kevin Werner, City Administrator
Date: 11/10/2025
Subject: SSJID Franchise Fee
RECOMMENDATION:
Approve and authorize the City Administrator to sign the Memorandum of Understanding between the South San Joaquin Irrigation District (SSJID) and the City of Ripon (City) regarding payments in lieu of franchise fees to the City in order to mitigate the financial impacts resulting from SSJID’s Retail Electric Project.
BACKGROUND:
SSJID is governed by an elected five-member Board of Directors. For over 115 years, SSJID has reliably and economically provided irrigation water to customers within its 72,000-acre service territory, which includes the cities of Escalon, Ripon, and Manteca, and unincorporated portions of southern San Joaquin County. In addition to providing irrigation water, SSJID also facilitates agricultural drainage.
Since 2005, SSJID has operated the Nick C. DeGroot Water Treatment Plant, converting raw water to treated drinking water, which it sells and conveys through its transmission system to the cities of Manteca, Tracy, and Lathrop. In 2009, SSJID also constructed the Robert O. Schulz Solar Farm to provide solar-generated electric power to the water treatment plant.
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. Together, SSJID and OID developed a system of reservoirs, dams, and powerhouses with a capacity of nearly 135 megawatts. Tri-Dam Power Authority is a similarly governed and managed entity with responsibility for the Sandbar Hydroelectric Plant, located on the Middle Fork of the Stanislaus River. Hydroelectric power sold from these facilities brings SSJID $4 million to $17 million in annual income.
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 (Water Code § 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.
Beginning in earnest in 2004, SSJID has continuously 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 presents 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 Ripon residents.
DISCUSSION:
SSJID is requesting the City of Ripon approve the attached Memorandum of Understanding that confirms SSJID’s obligation to pay in-lieu franchise fees to the City in order to mitigate the financial impacts resulting from SSJID’s Retail Electric Project. Once SSJID secures possession and ownership of PG&E’s system, the City will work to enter into a more formal agreement regarding permissions, rights, obligations, and responsibilities that will govern the payments of the in-lieu of franchise fees.
FISCAL IMPACT:
There is no fiscal impact associated with the recommended action.
Attachments:
1. FINAL SSJID_City of Ripon MOU re Payments in Lieu