Water Authority board approves second power purchase deal with SDG&E

Short Title
Water Authority board approves second power purchase deal with SDG&E
Pumped storage project to provide electricity during peak usage
January 29, 2004

Entering in to its second hydroelectric power purchase deal in the last two months, the San Diego County Water Authority board of directors today approved a 25-year agreement to sell electricity from a 40-megawatt power-generating project to San Diego Gas & Electric. Estimated to produce approximately 53,000 MW-hours of energy annually, the Olivenhain-Hodges Pumped Storage project will generate electricity needed during times of peak usage in the San Diego area.

“This is the second time the Water Authority has partnered with SDG&E to provide a new source of clean electrical power to San Diego County,” said James Bond, Water Authority board vice chairman. “This is a prime example of how the Water Authority maximizes the use of its facilities to benefit our region.”

"This contract demonstrates SDG&E's continuing commitment to make use of locally generated energy," said James P. Avery, senior vice president of electric transmission for SDG&E. "We are continually seeking out new resources of energy to satisfy the growing demand in this region. This agreement demonstrates our commitment to San Diego and our faith in the San Diego County Water Authority."

Hydroelectric revenues from the project are estimated at $2.9 million annually for the 25-year term of this agreement in addition to reducing Water Authority’s operational power costs by an estimated $2.4 million annually. Construction of the pumped storage project will begin in December 2005 with the generators fully operational by January 2008.

All terms and conditions of the agreement will take effect following California Public Utilities Commission approval.

The Lake Hodges Pipeline will connect the new Olivenhain Reservoir with Lake Hodges, linking it with the Water Authority’s imported water delivery system and allowing water to move between the two reservoirs. The pipeline provides various benefits to Lake Hodges. These include the ability to store 20,000 acre-feet of water at Lake Hodges for use during an emergency, keep the reservoir at a more consistent level and capture runoff water before it spills over Lake Hodges Dam and into the ocean during rainy seasons.

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 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 $130 billion economy and the quality of life of 3 million residents.

# # #