Utility district to get discount energy
Thursday, directors of the South Tahoe Public Utility District will decide between a sure thing that would save them $50,000 a year on electricity costs, or gamble on either greater or less savings.
The district earlier had agreed to sign a contract with New Energy Ventures, one of the many new electricity providers competing in California’s new energy market that became operational April 1.
Then the district learned that New Energy Ventures was unable to import electricity from California’s wholesale supply to Lake Tahoe, because of a federal ruling that granted Sierra Pacific Power Co. exclusive rights to the company’s only import line.
Sierra Pacific is one of only two investor-owned utilities supplying power in California that has not been affected by the state’s new energy competition. In Sierra Pacific’s case, the Federal Energy Regulatory Commission ruled that the capacity on the company’s transmission line was not sufficient to allow other energy providers to import electricity.
Kirkwood, which is not connected to the outside power grid, is the other eligible energy supplier not yet participating.
However, Sierra Pacific still faces competition from other power producers within its own 50,000-square-mile service district. Idaho Power Co., a partner with Sierra Pacific in the 500-megawatt Valney Power Plant near Winnemucca, has now agreed to supply New Energy Ventures with discounted power for the South Tahoe utility.
But the alternative energy provider is offering the South Tahoe district a choice in its pricing contract that directors will consider at a board meeting that begins at 2 p.m. Thursday.
New Energy is offering the district a flat 5-percent discount off what Sierra Pacific charges, worth $50,000, or four-fifths of any savings New Energy can achieve in its contract with Idaho Power.
“I’m leaning toward the 5-percent blanket reduction from the present tariff,” said the district’s Ross Johnson during an operations meeting Monday. “We could get between 5 and 11 percent with shared savings, if we could predict the savings. But there is not enough data yet to be sure.”
Johnson said he believes New Energy can strike a deal with Idaho Power for at least a 5-percent savings, but is unsure how much more.
Johnson said the Truckee-Donner Public Utility District is claiming an 11-percent discount in its direct contract with Idaho Power. If New Energy obtained a similar discount, the district would save 9 percent off its current bill, for a savings of about $90,000.
“New Energy Ventures is shopping hard for energy, but we’re in a unique situation, their only customer in Sierra Pacific’s area,” Johnson said. “So they may not be as motivated to find us a great deal.”
Whichever offer the district board chooses, the initial contract would be for one year, and then could be renegotiated.
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