Since taking over power sales for facilities along the Yuba River in 2016, annual revenues for the Yuba Water Agency have grown tremendously – as well as expenditures. The agency has largely planned projects around the anticipated surplus in funds, but has also gone about giving back to the community it serves.
In 2018, the agency issued $55,000 in grants and awarded more than $1 million to support law enforcement and public safety needs in Yuba County – in addition to the typical expenditures the agency must account for annually to maintain its operations. Agency officials said improving conditions for both residents and the county is a part of its mission.
But there are certain rules in place dictating what the money can be spent on.
“Bottom line is: while we are limited to what we can spend money on, we are passionate about and focused on making Yuba County a better place to live, work and play. In fact, we recently revised our agency vision statement to reflect that: ‘A prosperous and thriving Yuba County and elevated quality of life for residents achieved through strategic water resource management and community investment,’” said DeDe Cordell, communications manager for the agency.
For the 50 years prior to May 1, 2016, the Pacific Gas & Electric Company had the rights to the power generated from hydropower facilities along the Yuba River. When that contract expired, the water agency took over.
In addition to power sales, the agency’s primary revenue source is water sales. How much the agency makes off of these sources depends on the amount of rainfall the watershed receives and the market price of electricity.
“Our long-term average revenue is roughly $40-$70 million per year. But our expenses are budgeted at approximately $55 million. So, you can see we expect some years to have surplus, but in others, we may need to dip into reserves to cover our expenses,” Cordell said. “Part or all of any surplus revenues in any one year will go into the reserves budget to fund large planned expenses such as the secondary spillway estimated to cost $160 million and implementation of the new Federal Energy Regulatory Commission license when it is issued.”
In California’s variable climate, generated revenue can fluctuate by the tens of millions of dollars each year, making it difficult to project out. In the current fiscal year, the agency is estimating its operating revenue to be just over $62 million.
This year’s projections – which reflect an expectation of less water somewhat offset by higher current market prices – are down slightly compared to the past two fiscal years. In 2017-18, the agency generated $69.5 million in revenue, and $66.7 million the year prior.
The agency has been building up its reserves in preparation of a number of future expenditures that will be required under a new FERC license to operate the Yuba River Development Project. Cordell said the preliminary cost estimate for that is in excess of $300 million over the life of the license, with the majority of that amount required in the first 10 years of being awarded the license.
“But while we continue to save a lot of our surplus revenue so that we have the ability to pay for those huge future expenses, we are also giving funds, where we legally can, to help improve the quality of life for the people of Yuba County. Our target right now is approximately $1 million per year for those types of grants,” Cordell said.
One example of how the agency is giving back is its residential water saving program, which focuses on Yuba County’s low-income households. In just the last four months of 2018, the agency covered the cost of water saving measures in 321 residences.
When prioritizing spending and saving, the agency’s first focus is on safety and keeping its facilities in good shape, Cordell said. With the money left over, the agency has the ability to fund outside projects, within certain boundaries.
Any loans or grants awarded by the agency must be within its authorizations – mandated by the state – and for the benefit of Yuba County. The authorizations include flood risk reduction, water supply, mitigation and enhancement related to environmental impacts of the agency’s facilities, and recreation within its FERC boundary.
If it falls somehow within those parameters, the agency can get creative. For example, the agency provides education funding via grants for the Fish in the Classroom program that helps educate students in Yuba County about the fish species on the Yuba River, allowing them to raise fish in the classroom before releasing them during a field trip to the river. The agency is also researching the development of a scholarship program to support students who are interested in degrees related to the agency’s mission areas.
The agency can also use the funds on projects that help it perform its missions, such as the Bill Shaw Rescue Equipment and Training Grant program established in 2018 for first responders who may respond to an emergency within the agency’s area of operations.
“We work to maximize the benefit of our funds by leveraging loans, providing the local share of grants, or providing the funding to write grant applications for outside funds, whenever possible,” Cordell said. “We look for ways to improve the prosperity of our county within the limits of our legal authorizations.”