Two decisions aimed at securing the Tehachapi Cummings County Water District's financial and energy futures were made by the board of directors last Tuesday night.
The first was to authorize General Manager John Martin to continue talks to supply 10,244 acre feet of surplus water over a 23-year term to Granite Construction for its Solari Sand and Gravel Project, which is set to begin operations in 2015.
The deal could net the district a potential $2.3 million in revenue over the next two to three fiscal years, roughly offset by half that much in additional costs to bank the required amount of water if the two parties can reach an agreement.
The project includes not only sand and gravel extraction, but an asphalt concrete production plant, a Portland cement concrete production plant, a lime marinating plant, and periodic asphalt and concrete recycling operations. It will be located within the boundaries of Wheeler Ridge-Maricopa Water Storage District.
However, Wheeler Ridge-Maricopa district can only supply two years of Granite's 10-year water supply demand which is what prompted the heavy civil general contractor and construction material giant to approach the Tehachapi Cummings district.
One key provision of the draft agreement Martin has composed, is that Granite will need to bank a five-year supply in the Tehachapi Basin, so the district will be able to deliver water to the site even in the dry years.
Negotiations will continue, with the possibility of a contract being in place as early as November.
The price of natural gas
Among other items addressed at last week's meeting was Martin's request for approval of the board in reaching a deal to lock in the district's natural gas prices at somewhere around $3.50 per million British Thermal Units (MMBtu) over the next three years. The rate is less than that currently paid by the district.
At last month's meeting, Board President Harry Cowan appointed an ad-hoc energy committee to study the issue of purchasing long-term gas, which is currently at a low. The committee met and determined that pre-purchasing gas for the years 2013 through 2015 would allow the district to avoid the need to raise water prices.
However, the Martin cautioned that the district will still need to purchase some of its own natural gas supply during those years after confirming its water supply. So, increases or decreases to water rates are not completely eliminated.
Currently the district spends between $200,000 to $250,000 per month, burning 45 MMBTU's to transport 1-acre foot of water into the Cummings Valley, and an additional five MMBTU's to move that water into the reservoir.
Martin will continue to engage in discussions with Shell Energy to secure a long-term deal for natural gas, and the results will be presented during November's board meeting for further consideration.
State of local water supply
The district will be pumping during the entire month of October, which Martin said might become a regular part of the district's operation if the agricultural demand remains as high as it is. Some growers will be farming right up to Nov. 1, but have been doing a good job of splitting their water demand by taking just 63 percent from imported water supply and 37 from groundwater, he said.
Martin said this is better than in 2011, when the district used more groundwater sources during a year that was already at an unusual low.
The district imported 1,118 acre feet in September, bringing the year-to-date total to 6,047 acre feet.
Jacobsen Reservoir is at its normal level with 1,039 acre feet of water.
Finally a building
Some things are just worth waiting for. And an item that has been on and off the board's agenda over the past 20 years has finally been approved.
The construction of a 5,000-square-foot metal storage building that will house parts and supplies for both the district's pump and pipeline operations is set to break ground no later than the first of the year.
"We've thought about this several times over the years but never had the money," Cowan said. "But now we do and it's time move on this."
The directors unanimously agreed to award the contract low-bidder Valley Steel Construction in Bakersfield, at a cost of $125,110.
The equipment that will be kept in the new building currently is being stored outside in the yard located behind the district's main office adjacent to Brite Lake which is where the new structure will be constructed.