MANAGER’S REPORT

10 May. 2011

Irrigation season is well underway and full season flows are approaching on May 15th. As usual, there are a lot of patrons that expect full season rates early in the season, but is not available per Oregon Statutes until mid-May. It is always challenging to communicate that message but staff does a good job and work with the patrons as much as possible.

The Juniper Ridge Hydro Project has been successfully generating to expectations since April 12th as well as the Siphon Plant since January. Water flows this spring in the Deschutes River were higher than average and production was excellent in April.

The issue with the Business Energy Tax Credit (BETC) finalization for Juniper Ridge was satisfactorily resolved this past month with COID receiving a certified amount letter from Oregon Department of Energy (ODOE) per the original amounts anticipated. The next step is for COID to market and sell the BETC, in cooperation with ODOE, before the end of 2011. The amount of funds that will be realized to COID from the BETC is $4,198,000. These amounts will be used to buy-down the existing obligation to ODOE under the terms of our Small Energy Loan agreement. Very good news indeed. COID wishes to thank Sen. Chris Telfer and her staff for their support in Salem in getting this matter resolved and finalized.

The National Oceanographic and Atmospheric Administration (NOAA) is making progress on drafting the 10(j) rule for the Federal Register. It is anticipated that the draft rule will be published in the Federal Register by early summer. The 10(j) rule will provide experimental/non-essential status to the reintroduced steelhead for some period of time, and enable the Basin to continue its restoration efforts without the threat of federal prosecution or third-party litigation which should enable continued funding from restoration partners at the state and federal levels.

A field team from the US Department of Energy, Bureau of Reclamation and the Army Corps of Engineers for the basin scale hydroelectric assessment will be coming to Central Oregon in early June to begin the study. The Deschutes Basin was the only basin in the western U.S. selected for this study and represents a considerable opportunity for additional funding and recognition for potential additional development of hydroelectric generation. The purpose of the study is to evaluate maximizing hydro development on the existing federal dams of Wickiup, Crane and Bowman along with the irrigation district canals while at the same time evaluating mitigating any potential environmental impacts.

The Oregon Department of Energy Community Renewable Energy Feasibility Fund (CREFF) program grant for evaluating the feasibility of additional hydroelectric generation sites within the District infrastructure was completed this past month.  A total of six sites were evaluated with three deemed feasible at the present time. The top three were NC-2 Falls, Young Avenue and Ten Barr Chute. The District will focus on NC-2 Falls for the present time and will likely be pursuing an application to the US Department of Energy for grant financing of the project. The Board will be discussing the opportunity of working with Natel Energy for this project at this month’s meeting.

Opportunities

  • COID, NUID, Swalley and ODFW received notice that the application to the Oregon Watershed Enhancement Board (OWEB) for funding of the fish ladder design was approved and funded for $39,000 plus match from the applying partners. Funding should become available to begin the design work by mid-summer 2011.
  • Alaska Senator Murkowski and Senator Wyden co-sponored a bill in the US Senate that will streamline FERC licensing of hydroelectric facilities along with potential funding for projects. 
  • 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. 
  • COID is engaging in discussion with PacifiCorp with the Cline Falls facility on next steps to clarify the conditions for the lease termination on that site for March 2013. COID is evaluating the costs for retrofitting and upgrading the facility to potentially pursue FERC licensing for a hydro project at this location.
  • 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 April. 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. 
    • California legislation continues to offer promise of COID to possibly sell RECs into the California market in 2011. 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

  • Pacific Rim Energy’s preliminary application to FERC for hydroelectric projects filed on COID’s canals was deemed deficient and was denied by FERC.
  • 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

State of Oregon Legislation

There are a number of bills involving COID’s interests or irrigation districts in general during the current legislative session. A few of the bills are described in detail below with their status.

  • HB 3571 -- Relating to ownership of renewable energy certificates; declaring an emergency. Supported by COID successfully passed the House and is now with the Senate. A hearing is expected within the next two weeks.

Ayes, 44; Excused, 2; Excused for Business of the House, 14

5-4 Referred to Senate Committee on Environment and Natural Resources.

  • HB 2873 - Relating to fish supportive measures for hydroelectric projects located within artificial delivery systems; declaring an emergency. Proposed by OWRC and passed the House and is now with the Senate.

Ayes, 40; Nays, 19-Excused, 1.

5-5 Referred to Environment and Natural Resources

  • HB 3623 - Relating to the Deschutes Basin ground water study area; declaring an emergency.

4-6(H) First reading. Referred to the desks of the Co-Speakers.

4-7 Referred to Energy, Environment and Water.

4-14 Public Hearing held.

4-21 Work Session held.

4-27 Recommendation: Do pass with amendments, be printed A-Engrossed, and be referred to Ways and Means.

Referred to Ways and Means by order of Speaker.

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. Legislation has been filed in Salem that may further produce positive effects for potential development.

Development 

  • COID, Arnold, Swalley and Tumalo will begin discussions with the City of Bend to implement the recently executed MOU and pursue an Inter-Governmental Agreement by the end of 2011.

Status – Ongoing. 

ON THE RADAR SCREEN

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