MODESTO -- California's most efficient power plant fueled by natural gas is up and running and making electricity for the Modesto Irrigation District and 13 partners.
Whether MID leaders made the right decision three years ago to reduce its share in the Lodi Energy Center, however, seems too soon to call.
"This is not a bad outcome," said Roger Van Hoy, the MID's interim general manager, when asked for a "hindsight assessment" by board member Tom Van Groningen at Tuesday's board meeting. Van Hoy also mentioned some level of "buyer's regret."
The MID initially wanted to draw 66 megawatts, but halved its participation on a 3-2 vote in 2010. The board at that time had been criticized for raising electricity rates and would have had to bump them higher to get favorable bond ratings needed for the higher share.
The plant soon will produce 304 megawatts for the 14 partners, all public agencies. Since firing up at the start of the year, open market prices have been good enough to warrant selling about half the time, said Martin Caballero, assistant electrical engineer. It's expected to get busier as demand for electricity increases with spring and summer weather, Van Hoy said.
The plant was expected to cost $375 million, but expenses rose to $388 million, forcing the MID to pay $42 million, or $2 million more than initially budgeted. The partners continue to negotiate disputed costs with a few contractors, and lawsuits are a possibility, Caballero said.
"We were betting this is the right thing to do," recalled Van Groningen.
Van Hoy said, "It's a pretty good hedge."
MID leaders typically weigh higher electricity rates this time of year, but decided in the fall to skip 2013, partly because natural gas prices were stable and the district expects no more new green energy projects for which to pay.
The board did agree Tuesday to tweak some customer rules, however, including new fees for restoring power service after the district catches someone diverting power around a meter.
The board also approved a $150 fee for missing or damaged units that turn off air conditioners for short periods during peak demand. The district installs the units for customers who volunteer in return for a yearly $20 incentive.
MID board action
In other action, the MID board:
Agreed to split an expected $134,500 cost to move farther from the road two power poles that have been struck by vehicles northeast of Maze Boulevard and Hart Road, west of Modesto. The California Department of Transportation demanded 2½ years ago that the poles be relocated 20 feet, but the MID refused unless the state would help pay.
Approved accepting $3 million from solar developers to beef up a nearly ¾-mile power line near Westley, to be split with co-owner Turlock Irrigation District. A proposed solar plant near Santa Nella, capable of powering 35,000 homes, could overload a 30-mile line from Westley to Los Banos.
Agreed to apply for a $2.6 million state grant to improve paved parking at Don Pedro Reservoir's Blue Oaks boat launch
Set energy-efficiency goals. A chart shows the district saving 3.6 megawatts by 2014, increasing to 6 megawatts by 2021, through customer incentives. The goals are average compared with other utilities, said Bob Hondeville, energy services supervisor.
Bee staff writer Garth Stapley can be reached at email@example.com or (209) 578-2390.