DWCD buys into hydropower study

By Jim Mimiaga
Journal Staff Writer

The Dolores Water Conservancy District took a small step this month toward determining whether a large hydroelectric plant could be built at Plateau Creek, a tributary of McPhee Reservoir.

The District is not funding or building the project, explained general manager Mike Preston, but they agreed April 11 to contribute $30,000 toward an $80,000 preliminary feasibility analysis.

"We are not asking for power if this project goes. We are asking for a cut of the revenues with a little cash investment because it's our neighborhood and our water right," Preston said of the cost-share.

The complicated process is in its very initial stages, and has already led to a turf war, with the district coming out ahead.

Last year an engineering firm that is now part of Tetra Tech, based in Pasadena, Calif., submitted an application to the Federal Energy Regulatory Commission (FERC) to study building a pumped-storage hydroelectricity plant at Plateau Creek.

But DWCD, fearing it would be on the outside looking in at a large private project that involved McPhee Reservoir, submitted a competing bid claiming "municipal preference." FERC agreed and awarded the feasibility permit to the local water district last summer.

Permit in hand, DWCD put out a request for proposals for an investor willing to ante up an estimated $3 million to conduct the feasibility study. Preston explained being awarded the permit puts the district "in the driver's seat, and puts us in a position to realize the benefits of a hydro-electric plant while making sure it is not detrimental to the Dolores Project."

Pumped-storage hydro-power is an innovative method of creating and then selling electricity to meet peak demand loads. The system would require two small reservoirs under 10,000 acre feet to be built on Plateau Creek, one above the other. A pumping system would be installed to deliver water from the lower reservoir to the upper, in essence "charging" the system like a battery.

When peak demand on the grid required extra power, the water from the upper level would be sent through a penstock that runs turbines, generating the additional electricity. The energy used for the pumps would create a net power loss, but the system increases revenues by selling electricity to the grid during periods of peak demand when prices are highest.

"We are always looking for revenue sources to help maintain our high value infrastructure," Preston said.

The proposed hydro-electricity plant would be a supplemental power source for gaps in green energy sources that occur when the wind doesn't blow or sun is not shining.

The project is a non-consumptive water system, but there would be some minimal water losses due to evaporation from the two reservoirs.

The district cannot afford, nor does it want, to build such a large project, expected to cost in excess of $300 million, according to industry data. The board cast the RFP to see if there were any takers for the feasibility study, in itself a massive undertaking involving federal and state permits, preliminary site engineering, and many environmental requirements.

They got a hit from Tetra Tech, the same engineering firm who lost the FERC permit to the district, but they requested some help, Preston explained.

Tetra Tech negotiated a deal with DWCD to cost share on a financial first step, called an "investment memorandum."

"Basically, they will use the money to try and court investors for the feasibility study," Preston said. "They have to figure out environmental issues, the scope of the project, if there is a market for peak demand, capacity of transmission lines and so on."

The district will benefit from the study's engineering findings, and will retain a legal foothold in the future of the project, which was first proposed in the 1980s.

"I'm neutral about it, not sure if I should be mad or enthusiastic, but we felt we had to be proactive in order to have some leverage and control," said DWCD board member Don Schwindt. "This possibility has been laying in the weeds for a long time."

The district's investment will help provide more information on a private energy gamble with an uncertain future.

"It could potentially produce some revenue (for the district), and it won't damage any present water users," Schwindt said.

"But as it unfolds, we, as a local community, will need to decide if we should bump off a neutral stance one way or another."jmimiaga@cortezjournal.com

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