Water Authority board approves 10-year power purchase agreement with SDG&E

Short Title
Water Authority board approves 10-year power purchase agreement with SDG&E
Hydroelectric generator to produce clean, renewable energy for 5,000 households annually
November 20, 2003

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For information on the Water Authority’s power strategy: Power

Making a significant new venture into hydroelectric power generation, the San Diego County Water Authority received approval from its board of directors today to enter into a 10-year power purchase agreement with San Diego Gas & Electric. The agreement will provide 25,000- to 30,000-megawatt hours (MWH) of electricity annually and enable the Water Authority to provide a safe and reliable source of clean, renewable energy to San Diego County.

The 4.5-megawatt electrical generator will be installed at the Water Authority’s Rancho Peñasquitos Pressure Control/Hydroelectric facility to be constructed at Interstate 15 and Mercy Road. It will produce enough electricity annually for approximately 5,000 San Diego County households. SDG&E will pay the Water Authority approximately $1.3 million per year or nearly $13 million over the life of the agreement for the new source of electricity.

“The Water Authority is pleased to have completed this agreement with SDG&E to provide a new source of clean, renewable electricity for San Diego County,” said James Bond, vice chairman of the Water Authority’s board of directors. “In addition to power generation, this new facility will provide a critical link to our Emergency Storage Project and new flexibility in moving water throughout our water delivery system.”

James P. Avery, senior vice president of electric transmission for San Diego Gas & Electric, said the utility is pleased to be working with the Water Authority to create additional green energy resources in the San Diego region. “SDG&E is making good on its commitment to acquire 20 percent of its customers’ energy supply from environmentally friendly renewable resources,” Avery said. Within the last year, SDG&E energy resource mix has climbed to approximately 9 percent from renewable resources, such as wind, biomass and hydroelectric facilities.

In May 2001, the Water Authority board adopted an energy strategy that seeks to work in coordination with other local agencies’ energy planning and development efforts, develop economical energy supplies and monitor ongoing developments in the energy market.

The Water Authority and SDG&E agreed to a fixed energy price of $53.70 per MWH, which is the benchmark price set by the California Public Utilities Commission for renewable energy resource projects. All terms and conditions of the agreement will take effect following CPUC approval.
With the resulting $1.3 million in annual income, the Water Authority can pay back the cost of the hydroelectric portion of the project in approximately seven years. The facility is scheduled for completion by mid-2005 with the power generator fully operational by the end of 2005.

The pressure control portion of the facility will pressurize and provide flow control for untreated water flowing in the Water Authority’s second aqueduct between Twin Oaks Valley Diversion Structure just north of San Marcos and Rancho Peñasquitos. It will also provide a critical interconnection between the second aqueduct and the planned San Vicente Pipeline.

When completed in 2008, the new pipeline will deliver water to and from the San Vicente Reservoir. This will allow the Water Authority to move water either north or south and deliver water at high pressure to its other pipelines to the north without the need for pumping. These capabilities provide important new options for moving water within the Water Authority’s aqueduct system in the event of an interruption in imported water deliveries to San Diego County. It will also help enhance pipeline operations for normal water deliveries.

The San Diego County Water Authority is a public agency serving the San Diego region as a wholesale supplier of water from the Colorado River and Northern California. The Water Authority works through its 23 member agencies to provide a safe, reliable water supply to support the region’s $126 billion economy and the quality of life of 3 million residents.

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