Revenue and expenditures are the major issues facing the board of directors for the Nevada Irrigation District in years ahead.
The incumbents for two of the board seats face challengers in the upcoming race; both say they hope to be able to finish shepherding the district through the tail end of some complex regulatory agreements that will affect it for decades to come.
NID was formed in 1921 as an independent special district operated by and for the people who own land within its 287,000-acre boundaries. The district supplies water for irrigation, municipal, domestic and industrial purposes and is one of the largest in the state.
NID collects water on 70,000 acres of high mountain watershed, and owns and operates an extensive reservoir and canal system and network of water treatment plants.
The district also produces hydroelectric energy and provides outdoor public recreation.
The district is finishing up a five-year process with the Federal Electrical Regulatory Commission to re-license the network of reservoirs, canals, flumes and hydroelectric plants it built in partnership with Pacific Gas and Electric Co.
That system provides most of the water NID distributes to 25,000 customers in Nevada and Placer counties.
Any agreements would be in place for the next 30 years, the life of the new federal license, which would begin in 2013.
According to Nick Wilcox, who is running for re-election in District 5, the re-licensing process has cost the district approximately $13 million and is nearly complete. The district has reached agreement with many of the interested parties, including the Bureau of Land Management, the U.S. Forest Service and others on in-stream flow requirements — i.e., how much water you have to leave in the stream in order to protect fish and wildlife. The district is about to move into the environmental review process over the next eight to nine months, Wilcox said.
The district also is in the midst of negotiating several “pieces of the puzzle” with PG&E, including the purchase of power, a conveyance agreement and the possible purchase by NID of the South Yuba canal and the Deer Creek Powerhouse.
The district has finalized the new agreement with PG&E regarding the purchase of power, Wilcox said. The district now will receive about $20 million in revenue, but must pay for maintenance, which is anticipated to be cost about $7.5 million a year.
The district also is negotiating a conveyance agreement with PG&E, which stores water in NID reservoirs such as Rollins; conversely, NID moves water through systems owned by PG&E. The district is close to coming to an agreement on that issue, Wilcox said, adding that it expects the agreement to remain substantially the same as it has always been.
Division 5 candidates
Wilcox’s opponent for the Division 5 seat is Jack Meeks, who says protection of water rights is a top priority in his campaign.
“As an agricultural customer since 1989, I will be involved 24-7 in NID’s strong finances, economical water, and recreation services, and will support their expansion,” Meeks said.
Meeks, who has run unsuccessfully for an NID board seat in past elections, cited a number of years of public service experience, including serving on the Nevada County Board of Education, in his candidacy statement.
“Pro-active, energetic, full-time service is my promise,” he said.
“Water-rich and vote-poor, Nevada County must remain vigilant and protect our water rights from the demands of vote-rich big cities and non-food crops like cotton,” he said. “Rural counties actually produce water as a crop, the precious resource controlled by down-state legislators.
“NID can take the lead in organizing rural counties’ clout in Sacramento,” Meeks said, envisioning a voting bloc of water-producing counties. “My whole agenda is that we do not get a penny for the water that passes outside our boundaries. Other agencies collect the money for it; we don’t get anything for it.
“I think we should get a piece of every water bill, that is issued by all these downstate agencies all over the state, as producers — but we don’t,” he continued. “Water is not considered a product.”
Meeks said he supported the current board’s efforts in negotiating new agreements with PG&E.
Any new revenue generated by the new power purchase agreement should be stored in reserves, he said.
The board’s reserves “have been depleted in order to pay for projects, like the Banner Cascade project, that have been going on for years,” Meeks said.
Wilcox was first elected to the Division 5 seat in 2008; he currently is president of the board.
He cited more than 25 years of experience in water-related occupations, including 11 years as an environmental scientist with the State Water Resources Control Board in Sacramento and as Chief of the Bay/Delta program, helping to bring the highly contentious Bay/Delta water right proceeding to a conclusion.
Wilcox said he decided to run for re-election because he finds the issues both challenging and interesting.
“The district has been involved for some time in the federal hydro re-licensing and the water right licensing processes and there is much more to do,” he said.
“Over the past eight years, NID has invested over $60 million in new infrastructure,” he said. “This program has stretched the district’s financial resources. However, starting in 2013, hydroelectric power sales will bring in over $12 million per year in new income.”
Wilcox said with a laugh that “everybody has an idea what to do with that money.”
He said, however, that his first priority would be to pay for operations and maintenance costs, then establish a reserve to cover any catastrophic events that could occur in the system.
“We have to be conservative — we have to protect ourselves,” he said.
Next, Wilcox said, funds should go toward new infrastructure.
“We’re involved in major capital improvement projects, to try and extend service to those who want service,” he said. “That’s a solemn duty that we have.”
He said offering raises to the employees, who haven’t seen such an increase in three years, would also be a consideration.
“The ratepayers ... would like to share in this good fortune as well,” Wilcox said. “I can guarantee you rates won’t go down, but we do have discretion not to raise rates as rapidly as we have done.”
Division 3 candidates
Division 3 covers the Lake of the Pines-Alta Sierra area, and is bordered by the Bear River. Scott Miller has been Division 3 director for NID since 2000 and sits on the power purchase committee with Wilcox.
“We have been working on a whole series of issues and I am running again to follow through and finish up on these ongoing issues,” he said.
“I have been intimately involved in many negotiations in that process, specifically the power purchase agreement with PG&E.”
Since NID’s general manager recently resigned, one huge issue is the responsibility of picking a replacement, Miller added.
“I helped pick Ron Nelson,” he said. “I have the experience to know what and who we need in a new GM. I am also the head negotiator on the labor committee; we are on the cusp of agreeing on a multi-year contract with the employees and it would be nice to finish through on that.”
Miller cited his experience with, and knowledge of, the district and its institutional history as strengths of his candidacy.
“I am a workaholic and have a proven track record with keeping the district strong,” he said.
Miller said he was “eager” to try a new plan with the new revenues expected from the purchase agreement with PG&E.
Specifically, he said, he wants to take a portion of the revenues and start a main-line extension program; he added he would like to prioritize the Ranchero Treated Water Group Project, which is 119 parcels off East Hacienda Drive and Pioneer Way.
Miller took a shot at his opponent, Guy Tortorici, when he added that he is “unencumbered” in his representation of the ratepayers, because he has no family member working at the district. Tortorici’s wife works at NID.
“I serve one master — the ratepayers,” Miller said. “I don’t quite know how you serve two masters ... we sit in labor negotiations.”
Tortorici fired back on that issue, saying that he checked with the board’s HR director and counsel, who informed him there was no conflict of interest.
“My wife is not even in the union,” he said. “He’s just fabricating something ... It’s no more a conflict of interest than the current board voting themselves a 100 percent increase in their rate of pay.”
According to Tortorici, it was his wife, Joan, who suggested he run for the board.
“The board’s primary responsibility is the formulation and evaluation of policies, goals and objective to be pursued by the district in carrying out its mission,” he said. “These have been my responsibilities as part of senior management of companies that I have worked for in the past, and they are still my responsibilities in my current work as a management consultant.”
Tortorici pointed to his extensive experience in writing business plans for financial institutions, utility companies, and agra-business concerns, as well as in creating budgets of multimillion-dollar corporations. He also has served as a business consultant to both water distribution and power distribution companies.
“Identifying and mitigating risk is what my clients pay me to do for them as I help them create value for all the stakeholders involved, including the community in which that business operates,” he said.
Tortorici said the top issue is that NID’s water sales do not cover the operating expenses to deliver treated and raw water to their client base, and he questioned the board’s assumption that it will have more than $12 million a year in new revenue.
“NID will be taking over several hydro power generation plants from PG&E, as part of the FERC re-licensing,” he said. “At what price should water be sold to cover the operation expenses? How can costs be efficiently controlled? Where can technology be employed to lower operating costs while increasing employee productivity? How can NID acquire more ratepayers, while achieving profitability?
“Currently NID is receiving reimbursements from PG&E’s hydro plant operations. Soon, NID will have to take on the operations of those facilities and their related expenses. These facilities are nearing 50 years of age. There will be many challenges going forward once NID takes over these facilities and all of their related expenses.”
To contact Staff Writer Liz Kellar, email email@example.com or call (530) 477-4229.