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SSJID sitting on $44.1M worth of unrestricted investments, cash

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POSTED May 14, 2013 1:59 a.m.

South San Joaquin Irrigation District had $44.1 million in unrestricted cash and investments at the end of 2012.

 The money -which is almost twice the annual operating expenses for the irrigation district - represents an accumulation of primarily Tri-Dam Project receipts and water sales to other districts. The amount is down from $51.83 million a year previously after spending more than $15 million on capital improvements and state-of-the-art water conservation improvements. The $44.1 million is in addition to $59 million in restricted cash and investments that are committed for a specific use.

The district’s share of Tri-Dam revenues dropped to $6.6 million in 2012 due to lower power prices. That was down from $15.9 million in 2011.

Water sales to other agencies in 2012 dropped 95 percent to $500,000. So far in the current year, water sales have brought in $4 million.

The data is part of the annual financial report being reviewed today when the SSJID board meets at 9 a.m.at the district office,11011 E. Highway 120.

Overall assets including capital assets were at $312 million in 2012. The annual operating budget reflected $25 million in expenditures.

The Tri-Dam receipts and the current mandates of the power market figure heavily in SSJID’s pending plan to acquire the retail system in Manteca, Ripon, and Escalon to lower electric bills by 15 percent across the board.

During dry years when other districts are clamoring for water, the price goes up significantly on the California water transfer market. That more than offsets any decline in wholesale power generation revenue from water flowing through Tri-Dam Project power plants. In short, a dry year may reduce wholesale power receipts deigned to underwrite retail power but at the same time the SSJID is able to secure significantly more for water they sell to other agencies. The district also benefits from the fact power providers have to use renewable energy sources. As such, much of the power sold on the wholesale market by Tri-Dam gets a 35 percent premium over the power market price.

The SSJD retail power strategy involved entering into contracts with another wholesale generator and selling the Tri-Dam Power with the 35 percent premium other utilities need to meet state renewable power resources. The dollar difference that generates as well as excess revenue from the Tri-Dam Project itself is what makes the reduction of at least 15 percent in power rates do-able.

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