July 7, 2020
(Grass Valley, CA July 7, 2020) – The Nevada Irrigation District today announced that at its meeting on Wednesday, July 8, the Board of Directors will receive an update on the Yuba-Bear Project FERC relicensing effort and provide guidance for use in the development of a possible new rate structure.
For the past ten years, NID has been working with regulatory agencies, the environmental community and other stakeholders to develop a plan for relicensing its Bear-Yuba project. The report to the Board of Directors will provide an update on the relicensing effort including the costs of $216,625,000 to implement over the next 40 years. Included in these costs are $119 million for maintaining and upgrading existing recreational facilities (a FERC requirement), more than $72 million in environmental conditions, and nearly $25 million for a second powerhouse at Rollins Reservoir.
While the total costs will be spread over 40 years, the costs will be higher earlier in the life of the license with spikes in certain years. The report suggests that the District should recognize these costs in District spending and reserve policies. For perspective, the District typically has a capital projects budget of between $20-30 million per year, and at the end of 2019 NID had approximately $97 million in total reserves, with $64 million in total unrestricted reserves.
In a separate discussion, the NID Board of Directors are being asked to provide staff and the Water Rates Committee with direction on type of allocation, how much of its costs to recover in its base water rate, use of hydroelectric revenues, and if property taxes should be used to cover debt service.
Over the past year, the Board has commissioned two Cost of Service studies. The 2019 study looked at how the cost is allocated between the base rate, used to recover fixed costs, and the volume cost, used to recover operations and maintenance costs. It also looked at the cost to provide raw water vs. drinking water. The 2020 study was a more detailed cost of service study looking at the cost to deliver water to raw and treated water customers by water delivery system. More information can be found here