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Wholesale power adds $8.3 million to SSJID reserves

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POSTED December 31, 2009 2:44 a.m.
South San Joaquin Irrigation District netted $8.3 million from wholesale power sales in 2009 to continue building a financial base in its goal to lower retail power rates for 38,000 customers in Manteca, Ripon, and Escalon by as early as the first quarter of 2011.

Shell Energy Corp. – the energy broker that contracts to buy power generated by the Tri-Dam Project operated jointly by SSJID and Oakdale Irrigation District - was able to get $30 per megawatt hour with a $32 per megawatt hour bonus for renewable energy. Tri-Dam’s previous contract with PG&E generated $30 an hour per megawatt for the partnership while PG&E kept the $32 per megawatt for renewable energy.

Shell in past years has gotten more for Tri-Dam for energy sold from the system on the Stanislaus River.

“The more money we make per megawatt hour, the more money Shell Energy makes,” said SSJID General Manager Jeff Shields.

The PG&E contract with Tri-Dam was flat-lined at $30.

SSJID’s undistributed reserves are pushing $70 million. The SSJID intends to tap into that reserve to provide the seed money to acquire, separate, and upgrade the PG&E system if they are given the green light from the San Joaquin County Local Agency Formation Commission next spring to enter the retail power business.

Shields characterized the return from Tri-Dam after expenses, capital improvements, reserve funding and the split with OID was taken into account as “a bad year” due to a depressed market for spot electricity.

That bad year, though, added $8.3 million, to SSJID’s undistributed reserves. In years when the spot market for peak energy has been stronger, SSJID has netted $18 million in a year.

Actually, SSJID is better off financially with a “bad year” as it allowed two things to happen. It gave the district the opportunity to sell water – a commodity in high demand – to bring in $11 million in additional revenue. At the same time, they have used the slowdown in hydroelectric generation to upgrade facilities at Donnells and to add a third generator at Tulloch. In doing so, Tri-Dam’s electrical generation capacity will increase by 10 percent going from 120 megawatts to around 132 megawatts.

That in turn will mean even more money for SSJID from wholesale power generation. It also means SSJID’s power generating portfolio is 100 percent green and qualifies for the renewable energy credit.
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