The City of Cortez currently operates a water treatment plan that receives its raw water from McPhee Reservoir through a piping system. The raw water can be delivered either to the water treatment plant or to a large reservoir. The raw water coming through the pipe generates up to 400 feet of static head pressure at a pressure reducing valve. The City felt that this constantly generated pressure was going to waste and contracted with URS Corporation to complete a feasibility study (see attached) on developing this pressure into energy.
With the feasibility study provided by URS it was determined that the City could develop a micro-hydroelectric generating unit to power a 240kW generating unit and sell this electricity to Empire Electric/Tri-State Generation. A FERC (Federal Energy Regulation Commission) permit was required for the project to proceed. URS Corporation submitted the required paperwork (see attached) and successfully negotiated the final permit (FERC Permit) after 4 months. The estimated cost of development was approximately $2,000,000 with a projected payback (spread sheet) within 20 years and a 100 year lifetime for the project. This was an amount that the City was unable to fund directly.
Funding for the project was found by working with the Governors Energy Office and the Department of Local Affairs of the State of Colorado for a $500,000 grant (see attached) and with the Colorado Water Resources and Power Authority for a $1,456,891 loan (see attached) at 2% interest. The electricity generated by the project will completely pay for the project with no funding coming from the City of Cortez’ General Fund.
The City of Cortez also had to develop agreements with Empire Electric and Tri-State Generation for the purchase of Renewable Energy Credits (see attached) and for the purchase of the power generated (see attached).
It is expected that the micro-hydroelectric unit will begin generating electricity in April, 2010. For more information on the engineering side of the project contact Jack Nickerson, Director Public Works (jnickerson@cityofcortez.com), for information on power agreements contact Jay Harrington, City Manager (jharrington@cityofcortez.com), and on the grants aspect Chris Burkett, Grants & Special Projects (cburkett@cityofcortez.com).
A Powerpoint presentation can be seen by following the attached link. (see attached)