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Feather River Bulletin
Quincy, California
May 2, 2001     Feather River Bulletin
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May 2, 2001

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8A Wednesday, May 2, 2001 Utility News Sam Williams Staff Writer '['he Lassen Municipal Utility Dis- trict has lost more than $7 million during the past nine months, accord- ing to a financial report by LMUD's Controller Bob Gaumond. The controller presented the fi- nancial report, reflecting figures through March 31, to the LMUD di- rectors at the board's April 25 meet- ing. "The current rate does not cover the price of purchased power," Gau- mond told the directors. The controller told the Times he had not been making financial re- ports for the past several months be- cause of the slow reporting of power purchases by the st~e. But he saidAccording to his figures, last year on LMUD's current suppl]~r.~the city of March 31, the publicly-owned utility Redding, supplies more timely data showed a profit of $1,749,549.22. on the district's power purchases. Gaumond reported LMUD lost According to Gaumond's report, $301,288.94 in March. The controller LMUD shows a net loss of said consumption in March and Oc- $7,179,150.20 since July t. But Gnu- tober, months on the cusp of the sea- mond said the figures do not reflect sons, is often lower than summer or LMUD's billing in April of $225,000 to winter months. the California Power Exchange o1 Gaumond said LMUD's recent 41- another $700,000 billing to the North- percent rate hike, effective with the ern California Power Association for January 2001 billing cycle, was predi- excess power LMUD sold into the rated on the utility district being open market earlier this year. able to obtain power from the state at Gaumond said since the Power 7.5 cents per kilowatt hour. But to Exchange was no longer in business, date, the state has not sold any power it was "highly unlikely" LMUD to municipal utility districts or to would be paid for that power. LMUD, focusing instead on the large The controller noted how much privately-owned utility districts such things have changed in the past year. as Pacific Gas and Electric. Gaumond said if the district could ed power rate from the purchase power for 7.5 cents per ding has been avera kwh, the district could stabilize the cents per kwh, about rates. And the controller said the dis- above what the district trict needs to collect about 5.5 cents residential customers. per kwh above the purchase power According to price to break even. the utility district He said the district continues to this fiscal year for negotiate with power suppliers but to $4 million through "nothing's been finalized. We're still year. limping along. The state didn't do The district's what they said they were going to do. this year were $17.7 We're either going to raise rates or pared to $7.7 million last we're behind the eight ball again." A(tcording to "We've subsidized the rate payers LMUD has $15.2 million in since July," Gaumond said. "And investments. $14.9 million since February we've continued to in restricted funds and subsidize the rate payers We haven't unrestricted funds. set the rates high enough." The controller said LMUD's blend- m: By Sam Williams said he'd signed a confiden- Staff Walter tiality agreement with the At its April 25 meeting, the coalition's attorney. Accord- Lassen Municipal Utility Dis- ing to that agreement, the spe- trict revealed its plan to pur- cific details of the negotia- sue a long-term power pur- tions, including the purchase chase contract with a coali- price of power, could not be tion of irrigation companies disclosed to the public until in the Pacific Northwest. after a contract is signed. The proposed contract But Cady said the "ball- would run for 38 years, the park numbers were consistent term of the coalition's license with hydro project prices in with the Federal Energy Regu- the Pacific Northwest" and latory Commission with a pos- that the proposed power costs sibility for renewal. LMUD were "consistent with existing and the coalition could ink a and projected hydro power contract as soon as June. costs." The directors unanimously According to a press re- approved a motion allowing lease from LMUD, Cady was the general manager to enter "hesitant to quote specifics at into a Memorandum of Under- this time until all of the stud- standing to address a number ies on generation, transmis- of issues regarding the negoti- sion, and construction financ- ations, ing issues were complete and James Stephens, indicated that 'the numbers spokesman for the Citizens are commensurate with Advisory Committee, gave the northwest hydro power directors a standing ovation prices.' Hydroelectric power after the vote. is usually inexpensive corn- "This is something our cur- pared to other types of genera- rent board has been working tion. on for months now," Stephens Don Battles, LMUD's gener- told the Times. It is very re- al manager, said the coalition grettable they were not able to originally approached Louie enlighten us to this sooner Templeton, LMUD's board due to the confidentiality chairman, in late December clauses included in the agree- or early January to discuss a ment. This does, however, partnership on the construc- show that our current board tion of the 30 megawatt hydro is working haRd toward, and generation facility which very interested in, ecuring would supply power exclu- low rates for our future."sive.!y LMUD. The Lassen "I'm really excited baat, : Co imtY,.h{ility would also this," Louie Templeton, agree to purchase all power LMUD's board chairman said, generated by the coalition. and I have been since the first Battles said the California phone call. We're going to find Municipal Utility Association the money to do it. This could arranged the initial contact make a decent future for between LMUD and the coali- everyone. I'm really excited." tion after the coalition con- The item was .added to the tacted the state group and said agenda after Frank Cady, it was seeking a municipal LMUD's general counsel, ad- utility district to partner the vised the directors that an generation project. emergency situation existed After adding the item to the and that immediate action on agenda, the directors unani- the contract was necessary, mously approved a resolution According to the Ralph M. allowing Battles to enter into Brown Act, California's Open a Memorandum of Under- Meeting Law, public boards standing with the coalition. may take action on unagen- Battles said the project dized items when an emer- would take two-and-one-half gency exists or when "there is or three years to complete, but a need to take immediate ac- once the deal was signed, "It's tion and that need for action something that's going to be came to the attention of the lo- there for the long term." cal agency subsequent to the Battles, also reluctant'to agenda being posted..." discuss the possible terms of Few details of the negotia- the contract, said, "We've tions were revealed as Cady been asked to be somewhat SHADETREE AUTO SALES - 283-9740 Ull I ii ASPHALT PAVING & SEALCOATING HOT CRACKFILLER • GRADING • CHIPSEAL FREE EST. • STATE WIDE SERVICE • RES & COM. 1248 BIGGSAVE C12 LIC. #762465 Oroville CA. 95965 (530) 532-4572 or (530) 534-5506 II discrete about cost figures."tween $250,000 to $300,000. Battles praised Cady and The coalition of irrigation the coalition's attorney who districts, in return for giving have been negotiating the LMUD the exclusive first terms and conditions of the right to the output and partici- project up to this point and pation in this project, wished added, "We've come a long LMUD to participate with ways with it (the proposed them in the balance of these project) in a fairly short costs for the feasibility stud- time." ies, etc. which, at this junc- According to a memoran- ture of project design, will dum on the project distributed hone in on LMUD's needs vis- to the LMUD directors, the a-vis the District and vice-a- coalition owns the hydroelec- versa." tric generation rights on a Pa- According to the memoran- cific Northwest dam. The dam dum, the general manager and is owned and operated by the the coalition will be dis- US. Bureau of Reclamation. cussing a dozen points includ- The federal agency plans to ing: drain the reservoir this year • Equally splitting the costs and make "'significant repairs of completing the feasibility and upgrades" to dam, which study with a maximum cost to "presented a window of oppor- each party of $150,000; tunity for the irrigation dis- • The parties will begin ne- trict to install hydro facili- gotiation of a Power Purchase ties." Agreement; The dam, built in 1910, was • The term of the agreement plumbed for electric genera- shall be for the term of the tion, but it has never been FERC license with a first used for that purpose, right of refusal upon renewal According to the memoran- of the license; dum, "Before it can be finally • LMUD shall purchase all determined whether or not of the project's output; the project is financially vi- • LMUD shall pay annual able to the irrigation districts debt service on the project and to Lassen, with whom the and other amounts as re- irrigation districts are quired by any bond financing, presently solely negotiating as well as the operating and the feasibility study needs to maintenance costs and a roy- be completed specifically ad- alty to the irrigation districts dressing the needs of Lassen based on KW hours taken in and the irrigators, intercon- an amount to be negotiated, nection studies need to be such amount being a standard completed, and additional de- industry amount based upon sign approvals need to be ob- costs, risk allocation formu- rained from the Bureau of las, financial feasibility and Reclamation and possibly all other Criteria used to de- some changes to the FERC lb termine such royalty pay- cense. It is estimated that the merits according to standard additional work will cost be- utility practices; ' Serving Plumas, Sierra & Lassen Counties A COMPLETE INSURANCE SERVICE Business • ome * Auto • i 283 1112--7 Since 1883 400 Main • Quincy Lic. #0140935 Good for us and Discounts up to 60% on remaining Western Auto merchandise! Limited to stock on hand. MA] IIU ,,'I'/U)PIJAI C ; 405 W. Main St. Quincy • 283-1212 • Upon retirement of the de- proceeds for the but, LMUD will be relieved of project should the principal and interest and oth- forward; er payments as required by • Both bond indenture, and the royal- deal exclusively ty amount paid to the coali- faith with each tion will be adjusted accord- ing this project, ing to the above mentioned each party shall standard practices; right to terminate • Power will be delivered to ment upon a point of innerconnection such party's with the local grid operator, ject cannot the cost of the infrastructure the terms of the for which shall be part of the or is not project; for the party; and, • From the point of inner- • The parties connection LMUD shall be and a solely responsible for the tual development transmission of the energy or tions committee. other use as solely determined According to by LMUD and at LMUD's ex- from LMUD, "An pense; hydro expert • The operation of the pro-to evaluate the ject shall in all respects be the project subject to the release of water makes a final for irrigation purposes under Cady said the the terms of the FERC license; merits could be • Both parties shall be reim- end of June, and bursed for their development would be made costs, including costs herein, time." from the bonded financing Eastern Piumas Health • "People Ilelping a The ~gei~t ~,'v, lchers new'~ginnin~ Point, ph......... il,hl, rilR'~t in your town, let ...... t the ~o,,ds you ] ....... 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