More Information

Our Region
Comments (0) | | Print

SMUD pullout dims hopes for big power project

Published: Friday, Jul. 3, 2009 - 12:00 am | Page 1A

One of the largest public works projects in the West – 600 miles of high-voltage power lines through Northern California – is on life support after its biggest player abruptly pulled the plug.

A magnet for opposition from both owners of properties the transmission lines would cross and environmental activists, the project was promoted as vital to the region's clean-energy future.

A consortium of municipal power providers said the lines were needed to bring renewable solar, wind and geothermal energy from the northeast corner of California to power-thirsty urban areas.

On Wednesday, the Sacramento Municipal Utility District told The Bee it was pulling out of the $1.5 billion project due to regulatory and financial uncertainties – leaving a gaping hole in the project budget. SMUD had been expected to shoulder 35 percent of the project's costs.

The Transmission Agency of Northern California – the project's sponsor – has 15 members. But only five had agreed to fund the power line project's environmental impact studies and, if it ultimately was approved, finance the project.

The remaining participants are the city of Santa Clara, Redding Electric Utility, and the Modesto and Turlock irrigation districts.

The Western Area Power Authority is a federal partner.

On Thursday, those partners grappled with questions about the project's viability.

"We need another entity or entities to step forward in order to move this thing forward," said Paul Hauser, director of Redding Electric.

Keeping the project alive means one or more of the existing players would have to absorb SMUD's $525 million share, or a new partner would have to be found to salvage the project – or even pieces of it, officials said.

Most of the staff and board members of the participating utilities contacted by The Bee said they doubted the project would survive, despite the need for additional transmission capacity.

Tom Van Groningen, the Modesto Irrigation District board chairman, said he would "give serious consideration" to pulling out was well.

The likelihood of carrying on without SMUD is "very, very slight," he said.

Modesto had expected to pay $300 million of the total project cost, he said.

Santa Clara remains interested in the added transmission capacity, but a city spokesman said going it alone doesn't pencil out.

With SMUD out of the picture, "financing will be up in the air," said Dan Beerman, a city spokesman.

The Turlock Irrigation District was a participant, but its interest was limited to east/west lines between Tracy and Turlock, officials said. The district was not expected to pay for or use the more controversial north/south portion of the project.

The federal Western Area Power Authority, which delivers power to governmental and nonprofit entities from federal dams, also has some limited involvement.

If the project is to live on, it will be the feds that save it, some opponents of the project speculated.

But that's not a logical leap, said Randy Wilkerson, an authority spokesman.

"Western isn't in the business of bankrolling transmission projects," Wilkerson said. "We do participate in transmission projects that have a need and can – in the foreseeable future – pay for themselves."

Wilkerson said that like other players, Western is required to break even.

Randy Fiorini, vice president of the Turlock Irrigation District, said he wasn't surprised SMUD had pulled out.

Some of the project's opposition – which has been fierce – probably can be attributed to the lack of initial outreach, Fiorini said. Three tentative routes for the transmission lines were plotted on a map before stakeholders could weigh in.

"There has been so much controversy with the way the scoping was handled," he said.

SMUD acknowledged difficulty with the process but said the public uproar wasn't key to to its decision to pull out.

Rather, SMUD officials said a changing regulatory environment – and how that might affect the financial picture – was the main factor.

There is talk at the state and federal level of changing the way transmission projects are placed and funded. Given the uncertainty, it made sense to hold off, said SMUD spokeswoman Elisabeth Brinton.

Rule changes could force SMUD to share in the cost of energy grid projects in which it is not directly involved. And it could force SMUD to share the assets it paid for, officials said.

"The game rules are changing," Brinton said. "We are going to the game, but we don't know if we are playing football, baseball or softball."


Call The Bee's Ed Fletcher, (916) 321-1269.


hide comments

About Comments

Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.

What You Should Know About Comments on Sacbee.com

Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)

Here are some rules of the road:

• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "report abuse" button to notify the moderators. Responding to the comment will only encourage bad behavior.

• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.

• Do not attack other users; focus your comments on issues, not individuals.

• Stay on topic. Only post comments relevant to the article at hand. If you want to discuss an issue with a specific user, click on his profile name and send him a direct message.

• Do not copy and paste outside material into the comment box.

• Don't repeat the same comment over and over. We heard you the first time.

• Do not use the commenting system for advertising. That's spam and it isn't allowed.

• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.

You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "report abuse" button to submit those comments for moderator review. You also may notify us via email at feedback@sacbee.com. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.

If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them, but you may ask our staff to retract one of your comments by sending an email to feedback@sacbee.com. Again, make sure you note the headline on which the comment is made and tell us your profile name.


Sacramento Bee Job listing powered by Careerbuilder.com

Quick Job Search

View All Top Jobs
Buy
Used Cars
Dealer and private-party ads
Make:

Model:

Price Range:
to
Search within:
miles of ZIP

Advanced Search | 1982 & Older

SacBee Marketplace

Featured Categories

Legal Worship Education Health View all
Powered by Planet Discover