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Water Sales Net $4M
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South San Joaquin Irrigation District has what much of California wants ? water.

Many urban water agencies and rural irrigation districts in the Golden State are clamoring for more water on the heels of this week’s announcement that the Sierra snowpack is only at 17 percent of normal levels. The Sierra snowpack is essentially the state’s largest water reservoir covering almost 40 percent of California’s needs.

“The phone has been ringing off the hook,” noted SSJID General Manager Jeff Shields.

Interest in SSJID water has been coming from cities, regional water districts in urban areas, irrigation districts, underground water banks, and large scale farming operations The SSJID board has already approved the transfer of 40,000 acre feet of water to the Bureau of Reclamation and the San Luis & Delta-Mendota Water Authority. The authority serves numerous urban and irrigation districts. That has brought $4 million into the SSJID coffers so far this year.

It also happens to be the amount of funding the district spent over the last three years to install state-of-the art water conservation practices that have helped make reductions in water use on area farms.

“The entire intent (of the board) was to have the water conservation improvements that we put in place eventually be financed by the water we save,” Shields said.

The district will keep on pocketing money from surplus water sales when they can make them in future years.

That also happens to be part of the long-term strategy for lowering power rates by at least 15 percent if the district gets set opportunity over the PG&E retail system in Manteca, Ripon and Escalon.

During dry years when other districts are clamoring for water, the price goes up significantly on the California water transfer market. That more than offsets any decline in wholesale power generation revenue from water flowing through Tri-Dam Project power plants. In short, a dry year may reduce wholesale power receipts deigned to underwrite retail power but at the same time the SSJID is able to secure significantly more for water they sell to other agencies. The district also benefits from the fact power providers have to use renewable energy sources. As such, much of the power sold on the wholesale market by Tri-Dam gets a 35 percent premium over the power market price.

“We will be able to cover all of the water needs this year of our farmers and the cities we serve,” Shields said.

That’s because of the superior water rights the district shares with the Oakdale Irrigation District to 300,000 acre feet of water from the Stanislaus River watershed. They built the original New Melones Reservoir in 1925 without federal or state help. That dam was inundated in the 1970s by the federal project by the same name. Part of the deal to allow the federal government to do that further solidified the first 300,000 acre feet of run-off from the Stanislaus water shed each year goes to the SSJID and OID.

The state isn’t in desperate shape despite this being the second consecutive dry year. That’s because current storage in many reservoirs is near normal levels thanks to carryover and an early wet winter. The problem is there won’t be the runoff from the snow this year that helps replenish the reservoirs as they are drawn down during the spring, summer and fall.

Shields noted that the board will decide whether there will be additional water transfer sales this season.