Iowa Hill Pumped-Storage Project
After many years of study and careful evaluation, SMUD has decided not to proceed with the proposed Iowa Hill project near Camino due to cost, financial risk and changes in the electric utility business.
The latest engineering estimate put the total cost of the project at $1.45 billion. An updated cost-benefit analysis has led us to conclude that other energy-storage technologies may provide more economical options for reducing peak demand, meeting our renewable-energy goals and reducing carbon emissions.
SMUD will continue to be an active community member in El Dorado County, partnering on fire-prevention efforts, community development, road maintenance and environmental monitoring while we maintain our hydroelectric system and improve recreation facilities in the Crystal Basin.
For more information about our decision not to build the Iowa Hill project, see our answers to the frequently asked questions below.
We decided not to build the project because of its cost and financial risks.
In 2010, a detailed study pegged the cost of construction at approximately $800 million. Last year, our engineering contractor updated the construction cost estimate to $900 million. Including the cost of financing and higher-than-expected costs to upgrade our transmission system, plus allowances for a contingency fund, the estimate for the total cost of the project rose to $1.45 billion.
In 2015 we also re-evaluated our need for the energy storage that would have been provided by the 400-megawatt pumped-storage project. Staff determined we would need only about half of the project’s capacity until 2030 or later. After further analysis, we concluded that the project would be too risky from the financial standpoint. And with recent advances in other energy-storage technologies, we recognized a growing likelihood that there will be more economical alternatives for satisfying Sacramento’s energy storage needs in the long term.
We are constantly evaluating new technologies and the relative merits of potential solutions to Sacramento’s long-term energy needs. Options we’ve investigated in recent years include compressed-air energy storage, micro-grids and small, flexible generating units fueled by natural gas. The technology for storing electricity in lithium-ion batteries has advanced at a surprising rate recently and could become economical on a larger scale in the next decade. Electric vehicles also could play a significant role in meeting energy storage needs in the future.
The electric utility business is gravitating away from large, central power plants in favor of wider distribution of energy resources, including battery storage to go with scattered solar installations.
In addition, we’re working with the Western Area Power Administration to study the feasibility of adding a new transmission line in the Sacramento Valley that would give us access to more clean renewable energy resources from the Pacific Northwest. The Colusa-Sutter Transmission Line project would help us achieve our goal of integrating larger supplies of intermittent renewable energy.
No. We’ll definitely install the boating-release valve to increase the volume of water we can release to provide whitewater boating flows and higher releases for environmental needs required by our current license for operating the Upper American River Project. Well determine in mid-summer whether we’ll build a new, small powerhouse below Slab Creek Dam, which is independent of Iowa Hill.
We own 86 acres at the top of the mountain and about 120 acres adjacent to the mountain along Slab Creek Road. We have no immediate plans for this property but will likely put it up for sale eventually.
The ongoing work on a land exchange with the Forest Service will come to an end with our decision not to build the pumped-storage project. We had been interested in a land exchange to create a buffer zone around the top of Iowa Hill, where we would have built a new reservoir. Because we won’t build the project, we have no need to expand our property at Iowa Hill.
Yes, definitely. SMUD has about 80 employees based at our hydroelectric maintenance station at Fresh Pond, and their jobs will be unaffected by the decision not to build the Iowa Hill project. Many of our Fresh Pond employees and some who work in Sacramento live in El Dorado County. We anticipate these employees will continue to be active in civic and charitable activities in El Dorado County, and SMUD will continue to encourage that.
SMUD will stay engaged in local community and business organizations that promote economic development, fire safety and community wellbeing.
No. We remain fully committed to recreation improvements and will stick to the planned schedule outlined in our hydroelectric operating license. Over the next 3 years, this work will include improvements to existing campgrounds, hiking trails and roads, expansion of RV camping and the extension of bike trails.
We don’t envision ever reversing this decision.