No water means no power for Modesto area hydroelectric producers

jnsbranti@modbee.comFebruary 8, 2014 

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Don Pedro Reservoir after two years of dry weather. MID says its “diverse” power mix will help in current conditions. Other districts may have more trouble.

ANDY ALFARO — aalfaro@modbee.com Buy Photo

This year’s devastating drought may cost Northern San Joaquin Valley irrigation districts more than $20 million in lost hydroelectric power.

Severely reduced water flows from Sierra reservoirs means turbines won’t be generating nearly as much electricity as usual.

That’s going to cause multimillion-dollar losses for the Modesto, Turlock, Merced, Oakdale and South San Joaquin irrigation districts, all of which use water flowing down from the mountains to produce energy.

Modesto and Turlock, which sell electricity directly to customers, will have to spend millions more than usual to buy power from other sources this year, rather than using the relatively bargain-priced hydroelectricity they typi- cally generate themselves.

Other irrigation districts count on selling the energy their water supplies generate, but now they’re bracing for budget cuts because they’ll have less power to sell.

Despite this weekend’s welcome wet weather, water in the region’s reservoirs – Don Pedro, New Melones and Lake McClure – remains very low.

During an average year, the Turlock Irrigation District generates about 400,000 megawatt hours of hydroelectricity from Don Pedro. About 150,000 megawatt hours are expected to be generated this year. That’s 37.5 percent of normal.

“The drop in hydroelectric generating capacity will ultimately cost more money,” TID spokesman Calvin Curtin confirmed. The current estimate is “approximately $6 million in additional costs for 2014.”

The Modesto Irrigation District’s financial hit is expected to be $3.5 million to $4 million, depending on how much it spends to find alternate sources of power, according to MID spokeswoman Melissa Williams.

MID typically generates about 200,000 megawatt hours of hydropower at Don Pedro, but it expects 125,000 megawatt hours this year. That’s 62.5 percent of normal.

Williams said the shortfall will force MID to buy more electric power on the short-term market, where prices vary.

Hydropower is one of the least expensive and environmentally clean sources of electricity available, so replacing it can be financially painful.

Electricity from gas-fired power plants, for example, is at least three times more expensive than hydropower in normal years, according to the U.S. Energy Information Administration.

MID and TID generate and purchase electricity from a variety of sources, and neither expects problems meeting customer demand for energy this year.

“In a normal year, Don Pedro hydropower accounts for approximately 8 percent of MID’s resource mix. In a dry year, Don Pedro is about 4 percent of our resource mix,” Williams said. “MID maintains a diverse, balanced power resource mix. … (That diversity) is the best insurance for MID customers. It limits exposure to all kinds of risks – marketplace, legislative, regulatory, technological, and weather- and climate-related.”

TID also assures its diverse energy-generating portfolio will enable it to meet the electricity needs of its customers. Nevertheless, Curtin encouraged everyone “to conserve both water and electricity and to make every effort to use both as efficiently as possible.”

Merced’s circumstances

The financial hit for the Merced, Oakdale and South San Joaquin districts will be different, and in some cases more acute.

The drought’s timing couldn’t have been much worse for the Merced Irrigation District, where the hydroelectric power loss could approach $10 million this year.

The Merced district has owned New Exchequer Hydroelectric Project on Lake McClure since 1967. But Pacific Gas and Electric Co. historically has received the benefit of all electricity produced there, explained Merced Irrigation District spokesman Mike Jensen.

That deal with PG&E ends June 30. Merced will inherit the hydroelectric plant’s two generators on July 1, but Jensen said it will be “under the worst possible circumstances.”

“With a near-empty reservoir and projected historic low inflows, the (Merced Irrigation District) will have minimal ability to produce hydroelectricity,” Jensen said. The New Exchequer generators are expected to “cease to operate sometime in May 2014, based on a low reservoir level.”

That will leave only a small generator at Lake McSwain producing electricity.

Jensen said his Merced district expects to produce fewer than 10,000 megawatt hours this year, compared with the average annual production of 330,000 megawatt hours. That’s 3 percent of normal.

The loss will cost Merced “more than $5 million and less than $10 million,” Jensen said. So his district “has begun the process to temporarily increase water rates to get through this worst-case year. It expects to rely on reserves and is deferring capital improvement projects.”

That district also provides electric power to customers in Merced County, but Jensen assured “electric rates will not be affected by any water rate increases.” He said that’s because hydroelectric generation is a component of the district’s water department budget, not its electric department budget.

OID and SSJID

Revenues from hydroelectric generation also have benefited irrigation water users in the Oakdale and South San Joaquin districts since 1958. Those districts jointly own the Tri-Dam Project, which generates hydropower at the Donnells, Beardsley and Tulloch dams.

The Tri-Dam facilities will produce less power this year than at any time in their history, according to Steve Knell, OID’s general manager. That’s because water levels are so low. Example: Precipitation at Beardsley Lake this year has been about 16 percent of normal.

“Income from hydro generation depends on both output and pricing,” Knell said. Tri-Dam’s current estimate is that it will generate $3.8 million to $5.2 million in revenue each for OID and SSJID.

But back in October when OID developed its annual budget, Knell said his district did not anticipate such a significantly dry winter and low hydroelectric output. So it budgeted for $9 million in revenue, which is about double what Oakdale may end up getting.

SSJID, which serves Escalon, Ripon and Manteca, also will have to make due with millions less than usual.

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or (209) 578-2196.

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