Monday Aug 01 2011
Placer County mulls unpredictable Middle Fork money options
By: Gus Thomson, Journal Staff Writer
Placer County’s Middle Fork money is still question mark. But the question of where the profits should flow continues to be studied. Overall revenue predictions are a moving target with the profit picture murky. “It (overall annual revenue) could be $40 million or $10 million or $85 million,” the Placer County Water Agency’s Einar Maisch told the Board of Supervisors at a recent meeting. The county and the water agency share equally in profits off the Middle Fork project’s hydroelectric generation but Maisch – the water provider’s director of strategic affairs – said that the amount is dependent on several factors, most importantly the amount of Sierra snow that falls during a season. That variable – along with rising and lowering prices and demand for electricity – left supervisors leery this past month to committing any funding for subsidizing a regional wastewater treatment plant connection for the county’s Sewer Maintenance District No. 1 in North Auburn and the city of Auburn’s own needs. Maisch said huge swings in revenues from electricity are expected after the county and water agency take over the system’s electricity sales from Pacific Gas & Electric. That will come after the project is relicensed by the Federal Electricity Regulatory Commission in 2013. As a taxpayer, Foresthill’s Duane Frink said he’d be unhappy if Placer County committed funding when the money isn’t in hand. “When you have the money in the bank, then you have choices,” Frink said. While wide swings in Middle Fork income could come with a precipitation picture similar to this year’s long, wet winter or a drought similar to the one that hit in the mid-1970s, the $44 million annual figure is being used as the potential norm for income. The expected annual income windfall for the county would be $3.2 million in 2015 – the initial year payments would start flowing into the general fund – and rise to an anticipated $8 million a year starting in 2022. Before 2015, any funds in excess of operating or capital expenditures would go into a reserve fund. Holly Heintzen recently presented the figures to supervisors at a board meeting, stating that a priority would be to pay down debt on about $50 million loaned to the Middle Fork Financing Authority to pay for the costly federal relicensing project now nearing completion. Heintzen said that the proceeds from the project – which lies west of Lake Tahoe and averages 1 million megawatts of power annually – would be unpredictable. “It’s a system you can’t count on, on a year-to-year basis,” Heintzen said. The relicensing of the project is moving forward “on a very good track,” Heintzen said. In February, the water agency submitted an application for the new 50-year license. Spending priorities for funds received from the sale of electricity after 2013 provide for remaining power revenues to be turned over to the county and PCWA after operational and maintenance funds are committed. Supervisors have asked county staff to work with potential partners Auburn and Lincoln on possible payments from Middle Fork revenues for a regional sewer system. The amount staff will study will be up to $40 million. But Supervisor Jennifer Montgomery said that committing funding upfront could create problems with an unpredictable money source. “There’s a lot of angst regarding what we do or don’t spend the money on,” Montgomery said.