Power generation exceeding YCWA’s expectations
$37.6 million collected so far this fiscal year
It’s been close to a year – May 1, 2016 – since the Yuba County Water Agency took over as independent operator of a series of powerhouses along the Yuba River, and the revenue generated from the facilities has far exceeded the agency’s expectations.
Of course, it’s been quite a year for water and flows.
So far this fiscal year, YCWA has generated $37.6 million from the facilities, which exceeds the agency’s projections of $28.3 million through February.
Fifty years prior to May of last year, Pacific Gas and Electric Co. had the rights to the power generated along the Yuba River.
PG&E paid YCWA approximately $185 million over that time period for bonds the agency issued to construct facilities included in the Yuba River Development Project with the understanding that the agency owned and operated the power generators and PG&E would receive the energy generated.
“It was a good deal for them because it gave them a competitive power supply, and we made out because we got a dam, a reliable water supply, flood protection and would have enough water for our customers, which in turn that water would be used to recharge the groundwater aquifer,” said Curt Aikens, general manager of YCWA.
There are power generation facilities along the river at New Bullards Bar Dam, the Colgate Power Plant and Narrows II Power Plant.
The facility at the dam is relatively small compared to the other facilities, only having the capacity for 150 kilowatts – Narrows II has the capacity for 55 megawatts. Colgate is the largest facility, with two units able to generate 170 megawatts a piece. To put it in perspective, Aikens said a kilowatt is almost equivalent to a horsepower, and a megawatt is 1,000 kilowatts. So the two units at Colgate have the capability of generating a total of approximately 340,000 horsepower.
“When selling energy, you are really selling the capability of the facilities,” Aikens said.
Terri Daly, administrative services manager for YCWA, said it’s been a smooth transition since taking over last May but said there was plenty of work done up front to prepare.
“We spent several years preparing for the transition to independent operations,” Daly said. “In our power systems, for example, we built a control room and hired operators to handle 24/7 operations, built microwave communications links, replaced, repaired and upgraded key components of the generation system, and established an engineering function.”
To help navigate the complex power market, the agency partnered with Shell Energy of North America to act as the scheduling coordinator. Daly said YCWA’s models project annual revenues from the powerhouse facilities from $25.6 million to $54.8 million, depending on hydrology levels and the power market.
The past few months of unusually high levels of rain in the region has also been a factor in the agency’s higher than expected revenues from power sales.
“The good news is, more water means more energy, and more energy means more revenue,” Aikens said. “Wet years are good for power generation revenues. The bad news is, when it’s this wet, you get damages. This is probably the wettest year on record.”
Aikens said there has been more water spilt from New Bullards Bar Dam this year than
ever before. So far, about 900,000 acrefeet has gone over the dam’s spillway, he said, which is substantial compared to the past five years of zero spilling during the drought. Because of the high water levels this year, some of the agency’s powerhouses had to close down for several days in January and February.
Agency officials are happy that revenues generated so far this fiscal year have exceeded expectations, but they say the added responsibilities of maintaining and operating the powerhouses come at a cost.
“This year, we budgeted about $17 million for routine operations and projects, plus about $4.6 million for capital projects,” Daly said. “We also have to be prepared for the unexpected, such as the $15 million in agencywide flood damage that we experienced this year. We are working to build up reserves that would be avail- able for emergencies and operations, if we were unable to generate and sell power.”
Preliminary feasibility studies project the agency will spend in excess of $40 million on maintenance and upgrades at the three facilities over the next five years, Daly said.
Generated revenues will also help the agency finish the relicensing process through the Federal Energy Regulatory Commission. Aikens said they are about halfway through the process and expect it to take about another six years to complete. Once issued, a new license could last from 30 to 50 years.
“YCWA has spent approximately $33 million so far on relicensing and may spend another $5 million by the time we actually get a new license,” Daly said. “YCWA anticipates filing our amended final license application with FERC in early April.”
With that license, Daly said the agency estimates it will have to spend another $140 million on implementing new environmental and recreational requirements.
YCWA is in the process of an asset risk assessment to determine priority of work that needs to be done to maintain consistent operations. Also, as part of its mission to provide the region with a high level of flood protection, revenues generated in the power market will be used to fund improvements to specific facilities.
Aikens said the agency plans on installing a new auxiliary spillway at the New Bullards Bar Dam. The current spillway at the dam only allows for a release of 20,000 cubic feet of water per second. The auxiliary spillway would have the capability to release another 40,000 cfs.
The agency is also in the process of developing a tailwater depression system at the Colgate facility, which would help keep the facility operating during high water events on the river.
Daly said the two flood protection improvement will cost the agency $150 million.