The Santa Clara City Council has approved a 10-year contract to buy hydropower from the Oakdale and South San Joaquin irrigation districts.
The Tuesday night vote means up to $17 million in estimated income to each district per year, money that could help them keep water rates low for farmers.
The power will start to flow Jan. 1 from three Stanislaus River powerhouses —Tulloch, Beardsley and Donnells — that have operated as the Tri-Dam Project in Tuolumne County since the 1950s. In June 2016, electricity from a plant built in the 1980s will be added.
The price will 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.
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The district boards, acting as the Tri-Dam governing body, approved the contract last month. It is expected to provide each district with $10 million to $17 million annually, depending on conditions in the watershed.
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.
In 2011, the districts each got $13.96 million from Tri-Dam. In 2012, the income dropped to $7.33 million.
Santa Clara operates a municipal utility called Silicon Valley Power, serving about 52,000 residential and business customers in the city limits. Tri-Dam will provide up to 125 megawatts for the city, which had peak demand of 471 megawatts last year.