The Oakdale and South San Joaquin irrigation districts plan to start selling their hydropower to the city of Santa Clara under a 10-year contract that could mean a big boost in income.
The money would help the districts keep water rates low for farmers, something they have enjoyed since the powerhouses on the Stanislaus River started running in 1957.
The district boards, acting as the governing body of the Tri-Dam system in Tuolumne County, approved the contract last week. The Santa Clara City Council, which oversees a municipal utility called Silicon Valley Power, is scheduled to vote on it Tuesday.
The contract is expected to provide each district with $10 million to $17 million annually, depending on conditions in the watershed.
Under this contract, we will see the highest revenue we have ever seen at Tri-Dam, said Bere Lindley, finance and administration manager at SSJID.
The price would start at 6.3 cents per kilowatt-hour in 2014 and rise gradually to 8.5 cents in the last three years of the contract. That compares with prices that fluctuated between 4.5 and 6 cents from Shell Energy, which marketed the power for the districts under a five-year contract ending this year.
The income, which the districts split, has risen and fallen because of water conditions, capital projects, general economic conditions and the comparative cost of other power sources. Natural gas has been especially cheap recently, holding down the price of hydro.
In 2011, the districts each got $13.96 million from Tri-Dam. In 2012, the income dropped to $7.33 million.
For OID, the power sales amounted to 83 percent of total income in 2011 but just 68 percent last year.
The bottom line to us is that (the Santa Clara contract) gives stability to our income, said Frank Clark, chairman of the OID board.
This district has about 62,000 irrigated acres in northeast Stanislaus and southeast San Joaquin counties.
SSJID has about 55,000 irrigrated acres in the southern part of San Joaquin. It also sells treated water to Manteca, Tracy and Lathrop.
Along with the power income, both districts have also used substantial income from outside water sales to keep their farmers rates low and pay for canal system upgrades.
Tri-Dam started with the construction nearly 60 years ago of powerhouses fed by Tulloch, Beardsley and Donnells reservoirs. A fourth plant was built downstream from Beardsley in the 1980s. The plants have a combined capacity of 125 megawatts.
Silicon Valley Power reported peak demand of 471 megawatts last year from its 52,000 residential and business customers. It also gets electricity from natural gas, coal, other hydro plants, geothermal wells, wind, solar and biomass.
The Tri-Dam purchase would help the utility meet a state mandate for at least 33 percent renewable power by 2020. Hydro counts if the plants are 30 megawatts or less, which is the case with three of the four on the Stanislaus.
The Modesto and Turlock irrigation districts have long used hydropower sales from Don Pedro Reservoir to cover some of the cost of delivering water to farms. They sell the electricity directly to district residents, along with power from natural gas plants and other sources.
Bee staff writer John Holland can be reached at firstname.lastname@example.org or (209) 578-2385.