Hydroelectric project nets profit for PCWA and Placer County

It's finally payday for the agencies benefiting from the Middle Fork American River Hydroelectric Project. Nearly 60 years after its construction - after paying down debt on the project, funding its operation and setting aside a healthy reserve - the project boasts its first distribution of revenue benefiting Placer County and the Placer County Water Agency. "This is a historic milestone," stated Joe Parker, Treasurer of the Authority and Director of Finance for Placer County Water Agency. "When the (project) was conceived over half a century ago, the benefits were intended for the people of Placer County. Thus, this distribution of net revenue is the realization of the vision Placer County leaders had long ago." Based on year-end 2019 results, a net revenue distribution totaling more than $12 million was split evenly between the County of Placer and water agency. Expenditure of the funds is at the discretion of each entity's governing body. The first 50 years of the hydroelectric project's operations was managed through an agreement with Pacific Gas & Electric, in which PG&E controlled power generation but paid all of the operating costs and paid off the construction debt. When that agreement ended in 2013, Placer County Water Agency took over the economic decisions about when to generate, with money from energy sales going toward operational costs and funding reserves. "Maintaining reserves are critical to ensuring the reliability of the (hydroelectric project)," said Authority Vice-Chair and PCWA District 2 Supervisor Primo Santini. "I want to congratulate and thank the employees who play a pivotal role in operating the MFP to its maximum benefit." The Middle Fork Finance Authority Board, which oversees the funds from the hydroelectric system, has a reserve just shy of $50 million, officials at Placer County Water Agency reported. To make sure the project was producing as much profit as possible, officials also refinanced their debt obligations in March, when interest rates were at historical lows, said Andrew Fecko, general manager of Placer County Water Agency. For their half of the revenue, Fecko said the board will ultimately decide how the funds will be spent but the water agency has a policy that the money goes into a county-wide master plan and is divided up between projects benefiting residents throughout the county. Located in the Tahoe and Eldorado National Forests, on the Middle Fork American and Rubicon rivers, the Middle Fork River Hydroelectric Project consists of five powerhouses, five diversion impoundments, five tunnels and two reservoirs and is the eighth-largest public power project in California. The project provides water supplies, hydroelectric power, public recreational opportunities and environmental stewardship for the people of Placer County.