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Manager's Report

8 March. 2011

The snowpack is back! Things look completely different and more positive than a month ago. Moisture content and percent of snowpack measures are back or near average and the reservoirs are filling up.  The Siphon Power Plant has been able to generate most days over the last month with the exception during the stock water run just completed.  In addition, Juniper Ridge is able to produce during the stock runs – while not much it does add up over the winter to about half a month’s production. So at this point we can’t complain much about the weather or the water/snow conditions.

The last stock run of the winter is scheduled (pending weather) for March 14-17 on the Central Oregon Canal and March 21-24 on the Pilot Butte.

Chuck Schonneker, past and long time serving, Manager of the North Unit Irrigation District passed away. A memorial service was held in Culver over the weekend.

Activity in Salem is still at a full sprint. Hearings have started on bills and even more legislation is being introduced.  A number of bills are of interest to COID and a summary with some notes is provided later in this report.  COID is actively participating with the Oregon Water Resource Congress (OWRC) and our local delegation along with Deschutes Water Alliance partners in tracking any bills that may have positive or negative impact to the District’s interest. 

COID, the Oregon Department of Energy (ODOE) and the office of Senator Chris Telfer have been actively discussing possible legislative fixes to the issues with the BETC for COID, Swalley and Three Sisters Irrigation District. It is anticipated that a bill will be introduced shortly that, if passed, should remedy the ramifications and impact of the originally planned for BETC amounts.

Congressman Greg Walden has announced his intentions to introduce a bill in the US House of Representatives that would involve several items relating to the Crooked River, including a water supply of 5,100 acre feet for the City of Prineville out of the currently uncontracted for water behind Bowman Dam, assurances of security for existing contract holders for water including Ochoco ID, and a one-quarter mile downstream movement of the wild and scenic river boundary.  The DBBC along with Prineville, Ochoco and Crook County are actively participating in discussions for the bill with Congressman Walden in addition to discussions with the staffs of Senators Wyden and Merkley.

The COID Manager along with the Mayors of Prineville, Bend and Redmond, and legal counsel and city staff members met with NOAA Regional Director, Will Steele and his staff to discuss the progress of the Habitat Conservation Plan in the Deschutes Basin. In addition, some time was spent understanding the remaining process for the draft 10(j) rule.  Mr. Steele was extremely supportive of the 10(j) rule and assured the party that NOAA is committed to publish in the Federal Register later this year.

The Deschutes Basin Habitat Conservation Plan is in the scientific study phase with consultants Biota Pacific and R2. There will be a Working Group meeting on March 15^th, and a full Stakeholder Group meeting on March 16^th.

COID Town Hall meetings are scheduled for Tuesday March 29^th in Alfalfa and  Wednesday March 30th at the Terrebonne Grange from 6:30-8:00pm.

Opportunities

• COID received an Oregon Department of Energy Community Renewable Energy Feasibility Fund (CREFF) program grant of $36,000 to facilitate the feasibility of several hydro sites within the District. COID will contribute $12,000 in match for this evaluation.
• COID, NUID and Swalley conducted physical inspections of the North Canal Dam in Bend.  This is a follow up inspection to accurately assess any erosion of key components of the downstream face and toe along with more detailed evaluation of the site for design of a fish ladder for upstream passage.

o   COID, NUID, Swalley and ODFW have applied with the assistance of the Upper Deschutes Watershed Council to the Oregon Watershed Enhancement Board (OWEB) for funding of the fish ladder design. The OWEB Review Team has this project ranked first in the basin. Funding amounts are pending for this effort to proceed.

• COID and BLM are proceeding with land appraisals and environmental inspections on the parcels included in the land swap authorized by Congress in the public lands bill passed this year in Badlands area east of Bend. 
• FERC has not issued any findings on COID’s preliminary permit application for Cline Falls.  A competing permit application was filed by KC Hydro Company  in August so FERC will decide which application  takes first position in a few months.  As COID is a municipal entity it should take first position under federal rules for permit applications.  If COID is successful in receiving first position it will have three years to develop an official project application for license.
• COID filed for certification of  the Siphon Power Project (SPP) to the Low Impact Hydro Institute (LIHI) last fall and anticipate to have full certification by the end of March. This enables COID to have fully certified Renewable Energy Credits (RECs) within Oregon’s Renewable Portfolio Standard (RPS) for both SPP and Juniper Ridge hydroelectric production. The RECs have a market value that can be sold to utilities and other generators of carbon based energy in order for these entities to come into compliance with the RPS. 

o   There is also a strong possibility that COID may be able to sell RECs into the State of California as the market value of RECS is considerably higher in that market.  At this point COID has both hydro facilities registered with WREGIS, the electronic clearing house utilized for REC markets. COID has also filed for certification of its hydro facilities with the California Energy Commission to facilitate the possibility to sell its RECs into California. COID will continue to maximize the value of its hydroelectric assets beyond just selling the electricity going forward as these markets develop.

• The DBBC has been a member of a group of stakeholders formed to evaluate options for dealing with the building sedimentation in Mirror Pond located in Bend. A smaller group of these stakeholders including Bend Parks, City of Bend and PacifiCorp has hired a project manager to assist in the effort of developing a community based plan to develop options and gather funding for this Mirror Pond issue. This effort will take place during 2011 and likely beyond. The DBBC is active and regularly participates in these discussions.

Challenges

• The Deschutes Basin Board of Control (DBBC) and the US Forest Service (USFS) have been in continued discussion regarding the Ryan Ranch project.  The Oregon Water Resource Department has issued an official opinion that a water right is needing to be secured by the USFS before it may proceed with inundating the land with water. Ryan Ranch is an area above Bend below Benham Falls that the USFS wishes to establish as a wetland area. It is uncertain how or when the USFS would be able to secure a permanent surface water right although a temporary permit for water withdrawal prior to irrigation season is a possibility for going forward.
• Pacific Rim Energy’s FERC application to develop kinetic hydroelectric projects in the irrigation canals in almost every irrigation district in the western United States, including all the districts in Central Oregon was deemed deficient. Pacific Rim Energy now has 60 days to file any remedies to address the deficiency. COID as well as other irrigation districts in Oregon and Washington are evaluating alternative course of action. This filing is intrusive to COID’s interests and considered unwelcomed.
• Issues continue to arise with patrons and the delivery of water to parcels past the District’s Point of Delivery.  The District is evaluating its existing statutory authorities and reviewing policies to assist in resolving these issues.
• Persistence of patrons failing to beneficially use their water either due to economics, absentee ownership, or mismanagement resulting in potential confiscation by the District as the only viable option to prevent forfeiture.

STATUS REPORT

Juniper Ridge Piping & Hydroelectric Project

• Final contractor payment was disbursed
• Required reserve of $650K with ODOE was established.
• Received final approval of $1.5MM of additional funds from the Oregon Department of Environmental Quality. $450K will be in the form of an outright grant and the remainder on a 20 year 2.25% loan.

Real Estate

• One 20 acre parcel near Deschutes Market Road and Hwy 97 was listed for sale through Steve Scott Realtors.  Listing, as per District policies, was at the recently updated appraised value.  No offers have been received to date.  The remaining 20 acre parcel was not listed.

Status – No Change

• COID and the Redmond School District filed and received approval of a partition plat to the City of Redmond.  Traffic issues in Redmond are affecting the timing of the zoning change possibility and therefore any potential sale to an interested buyer. 

Status – Paused.  ODOT and the City of Bend have executed an agreement this past month that may facilitate movement of a similar agreement for Redmond.

Development 

• The COID Board along with the boards of Swalley and Tumalo have approved executing the Memorandum of Agreement for Coordination with the City of Bend.  There were some non-substantive language changes made by the Arnold board after the COID Board approved.  The COID Board will be asked to affirm those changes and execute the MOU.

Status – Ongoing. 

ON THE RADAR SCREEN

• Federal legislation and regulation of renewable energy projects
• Federal regulation of wetlands and jurisdiction of irrigation canals