MID Board Report Archive

MID Board Meeting of Tuesday, January 22, 2008
Contact: MID Public Affairs Department, Kate Hora, 209 526-7454
The next MID Board meetings will be February 12 and 26, and March 11 and 25.

The MID Board Report is a summary of highlights of meetings of the MID Board of Directors and not a complete or official record of proceedings. Official records of proceedings of the MID Board of Directors are contained in the Minutes of meetings of the Board of Directors. For information about the Minutes, please contact the Office of the Board Secretary, 1231 Eleventh Street, Modesto, telephone 209 526-7360, 8:00 a.m. – 5:00 p.m., Monday – Friday, excluding holidays, or email Board@mid.org.

Board begins process for setting 2008 water allocation and water rates
By majority vote, the MID Board directed staff to issue a Notice of Proposed Irrigation Water Rates for 2008 and set March 11, 2008, as the date of a public hearing on a 10 percent water rate increase proposed by staff. A water rate increase is neededto help cover increases in the cost of protecting water rights, operating/ maintaining the canal system, delivering water to growers, engineering design support, regulatory compliance and administrative/general expenses. If the proposal is approved, the active irrigation account charge will be $23.50 per acre including a 36-inch base tier water allocation. The facility maintenance charge will be $11.75 per acre.(Landowners pay either the active irrigation charge or the facility maintenance charge, not both.) The MID Board will determine the final 2008 water allocation later this spring.

Staff reports

Don Pedro Board of Control Report

• Water Use Manager Joe Lima reported that winds in excess of 60 miles per hour were clocked at Don Pedro during the January 4 storm, but no facilities were damaged. Construction of a redesigned marina will soon begin with completion expected in summer 2008.

Water report

• Walt Ward, Assistant General Manager for Water Operations, stated that the three-plus inches of rain received so far this month is excellent in comparison to last year’s dry January. The California Dept. of Water Resources reports the following snowpack levels, compared to the historical average season-to-date: Northern Sierra – 109 percent, Central Sierra – 92 percent, Southern Sierra – 112 percent.

Update on natural gas pre-pay transactions

• Pricing and Risk Administrator Scott Van Vuren explained that the prepay market has stagnated as a result of the subprime mortgage crisis. This reflects credit problems currently afflicting large commercial banks – the major players in pre-pay transactions. A transaction will be ready to execute when market conditions improve.

Approved by unanimous vote

• A joint funding agreement with the U.S. Geological Survey to continue developing a groundwater flow model for the Modesto Groundwater Subbasin; approximate cost to MID in 2008 is $21,000.
• A three-year contract with Weather Modification, Inc. for cloud-seeding services.
• Agreements with Employee Benefit Specialists, Inc., to administer IRS Section 125 flexible spending accounts.
• The 2008 Investment Policy Guidelines.
• Development and permitting activities for a 49.2 megawatt reciprocating engine generation power plant. This proposed plant is needed to meet peaking power needs of MID customers and to complement intermittent resources such as wind energy. The initial project phase will not exceed $6 million and includes buying Emission Reduction Credits and preparing a project Environmental Impact Report with a complete, detailed siting study. Total constructed project cost is currently estimated at approximately $70 million.
• MID participation in a Transmission Agency of Northern California (TANC) Project Agreement for program development of proposed new power transmission lines, at an estimated cost to MID of $6.9 million during 2008-2009. These transmission lines will improve reliability and help meet increasing customer demand for electricity. TANC is a Joint Powers Authority of which MID and other public power agencies are members.

Approved by majority vote

• A 15 percent increase in MID’s current Value-at-Risk (VaR) limit of $1.6 million, and linking the VaR to budgeted retail electric revenue beginning in 2009. This change allows staff to carry out the Board’s previously adopted natural gas hedging policy.