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Initial Study—LID Annexation SECTION 1 PROJECT DESCRIPTION Lathrop Irrigation District(LID) is proposing annexation of 4,650 acres of land within its adopted Sphere of Influence(SOI). In addition to irrigation water services, LID would ultimately provide electrical and telecommunication services to residents and businesses within the River Islands planning area of the City of Lathrop. Figure 3 shows the existing and proposed boundaries of LID, including its adopted sphere of influence. LID is not planning to provide electrical service or any other services within its purview to areas outside its adopted SOI. LID also maintains the authority to provide potable water and sewer service in the future if such services are not be provided by the City of Lathrop. 1.1 Background LID was formed in November 2002 by the San Joaquin County Local Agency Formation Commission (LAFCO)with the ability to provide irrigation water,wastewater(sewer), potable water, electrical and under certain conditions,Telecommunication services. LID is governed by the California Irrigation District Law,codified in the Water Code 20500 et al. and may provide electrical distribution under Section 22115 of the Water Code. LID currently contains 234 acres within the Stewart Tract area in the City of Lathrop, but does not currently provide any services to this area. While no services are currently being provided, it is important to note that LID has already funded,through a JPA with the local Reclamation District(Island Reclamation District No. 2062), over$29 million in potable water and sanitary sewer infrastructure. This financing capability was a major reason behind the formation of LID. It allows for the financing of infrastructure for the large River Islands development project,without causing any liability for the existing residents in the City of Lathrop in accordance with a development agreement with the City. However,as contemplated in its adopted entitlements,the River Islands development will create the significant new demand for both electrical and telecommunication services from LID over the next 30 years. River Islands is a master planned community located that will ultimately include 11,000 residential dwelling units and over 4,500,000 square feet of commercial and office space. River Islands was approved for development by the City of Lathrop on January 28,2003 with various entitlements that include a vesting tentative map,specific plan amendment(West Lathrop Specific Plan),development agreement, Urban Design Concept(UDC),and a project level certified EIR. The project entitlements and EIR contemplated electrical and other services be provided by LID. Although LID has the ability to provide potable water and sewer services to the River Islands project and other areas within its service area,these services are currently proposed to he provided by the City of Lathrop. Should the City not provide these services for any reason, LID is authorized to provide these utilities as well. LID will provide electrical and telecommunication services to existing and future customers. LID plans to interconnect to the existing Pacific Gas and Electric(PG&E)transmission system located near the project site from PG&E's lines near Interstate 5 as described in the next section. While electrical rates contemplated by the project will be near or identical to those currently charged by PG&E initially, it is expected that rates in the LID service area will potentially decrease over time as efficiencies in the system grow to provide a significant savings to its is customers than the current PG&E rate structure; please refer to the LID Statement of Operation and Plan for Service(Exhibit"A"). 10