The Sacramento Municipal Utility District's board of directors approved a resolution at its Aug. 15 regular meeting "signaling intent" to purchase Pacific Gas & Electric's Chili Bar hydroelectric project [P-2155].
The facility is a 7 MW hydroelectric powerhouse and reservoir on the South Fork of the American River, north of Placerville, Calif.
The resolution authorizes SMUD's CEO and general manager to execute an agreement for the project's purchase at a price of up to $10.4 million.
PG&E and SMUD said they intend to obtain FERC and California PUC approvals needed for the transaction.
"The Chili Bar hydropower operations are already tightly coordinated with SMUD's Upper American River Project [P-2101], which is immediately upstream of Chili Bar Reservoir," SMUD said. "The UARP is SMUD's 'Stairway of Power' that currently features 11 dams and eight powerhouses. PG&E and SMUD have a long history of partnership and collaboration between the two projects."
Over the past several years, PG&E has been divesting itself of the smaller hydroelectric projects in its portfolio. These include facilities such as the Narrows Project [P-1403] and Narrows No. 2 Transmission Line Project [P-2678], which were sold to the Yuba County Water Agency, and the Deer Creek Hydroelectric Project [P-14530], the sale of which is not yet final (WPW No. 15 ).
"The Chili Bar Project provides marginal economic electric generation benefits for PG&E customers and is PG&E's only hydro project in the American River watershed," the investor-owned utility said.
When the purchase is finalized, SMUD's hydroelectric generation portfolio will be 695 MW. Since the generation output of Chili Bar is less than 30 MW, it qualifies under California's renewables portfolio standard as a renewable generation resource.
The transaction is expected to close in 2020, but a precise date by which the sale will be final and the ownership transferred is unknown, according to both PG&E and SMUD.