NID takes steps toward purchase of PG&E’s Deer Creek Powerhouse assets, Chalk Bluff Canal and most of the South Yuba Canal

November 14, 2018

Nevada Irrigation District (NID) is moving forward with a sale agreement to purchase a Pacific Gas and Electric Company (PG&E) hydroelectric powerhouse and associated canals.

At its November 14 meeting, the NID Board of Directors approved a resolution authorizing General Manager Rem Scherzinger to execute an agreement for the purchase of PG&E’s Deer Creek facilities, including the powerhouse and related assets, all of the Chalk Bluff Canal, and most of the South Yuba Canal, all of which are used in transporting NID’s water to its customers.

The Deer Creek facilities are near Nevada City and began operating in 1908. The powerhouse has a generating capacity of 5.7 megawatts. The facilities are very closely tied to NID’s operations. The sale will also include the Deer Creek Forebay, a small reservoir that provides water to the powerhouse.

“The Chalk Bluff and South Yuba Canals are significant components for NID water deliveries,” Scherzinger said. “More than 30,000 people are served by this canal system, including the cities of Grass Valley and Nevada City, local fire stations, the Grass Valley Air Attack Base, county and city hydrant systems, schools and the Sierra Nevada Memorial Hospital.”

PG&E reportedly was selling the Deer Creek facilities because they no longer serve as an economical source of electricity generation for its customers – an increasingly competitive energy market, lower generation needs forecasted on PG&E’s system, and the increasing cost of operating the facilities were factors.

Approval by the Federal Energy Regulatory Commission (FERC) and the California Public Utilities Commission (CPUC) will be needed prior to transfer of ownership.

NID and PG&E are also asking FERC to create a separate hydroelectric license for the Deer Creek facilities. They are currently bundled with PG&E’s Drum-Spaulding Project FERC license, which includes several powerhouses, dams, reservoirs and water conveyance systems in Placer and Nevada counties.

It’s not known when the sale will be final and ownership will be transferred, but both entities expect that the sale will close in 2019.

As part of the sale, NID will dedicate a 766-acre conservation easement to the Bear Yuba Land Trust to protect the transferred lands from development in the future.

 

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