Op-Ed | Peter Van Zant: Be Skeptical of NID Scare Tactics

NEVADA CITY, Calif. July 24, 2017 – Nevada Irrigation District (NID) still hasn’t dropped its ill-conceived plan to build Centennial Dam on the Bear River. They have yet to demonstrate the need for the project or explained how they plan to pay for the dam’s construction. And there is no assurance that the ratepayers won’t get stuck with the $1 billion tab either.

In the face of mounting public opposition, NID resorts to using scare tactics. The latest is NID’s claim that someone is going to take our water if we don’t ‘use’ it. However, California water rights laws guarantee that NID will always have priority over any other water agency for the rights to the water needed in the NID service area.

NID ratepayers need to ask the following questions:

Will hydropower sales pay for the dam? NID no longer plans to install hydropower at Centennial. But premium hydro-power revenues will eventually dissipate due to the ongoing construction of alternative electric power storage like PG&E’s recently commissioned Browns Valley battery installation and many others coming on line. Why do you think PG&E wants to sell its local hydro operations to NID?

How much more water do we need? According to NID’s own reports and local general plans there is very little additional water needed locally (including Placer County). And there’s really no new local water need if NID would just lead us to take the modest steps toward wiser water use being implemented elsewhere throughout the State. The number of new rate payers will not be enough to service a new $1 billion debt for the dam.

How will the dam be paid for? Most likely NID will need to finance the $1 billion dam project. So what will NID do? Sell water. That’s right, the huge debt needed to build Centennial will require NID to sell our water out of the area to water the lush lawns of Los Angeles and other Southern California desert towns.

Without the dam debt our water will be safe. The real threat is if NID finances Centennial Dam with out of district water sales. A water sale contract automatically removes county of origin protections for the water sold. When it’s gone, it is gone.

Our complex California water rights laws give NID first rights to this water. No one will ever ‘take’ our water. NID has a variety of water rights, many of which are pre-1927 that cannot be affected by any other filings now or in the future. Also, if a true local need for more water emerges in the future, NID gets first take because of laws passed after 1927 to protect watershed areas like NID’s from out of area water grabs.

Don’t be scared. Be skeptical.

Peter Van Zant- Peter is a former Nevada County Supervisor, a former President of the SYRCL board of directors, and a SYRCL Dam Watchdog. He lives in Nevada City with his wife Mary and three goofy pets.

5 COMMENTS

  1. Thank you Peter for looking over NID’s shoulder and into the issues building up behind this ill-conceived dam. We have ALTERNATIVES, esp conservation.

  2. Pay attention everybody, please. What Peter is saying is the elephant in the living room is the “out of county” clause in California water law. It’s looking like NID can only hope to pay back the bonds for this dam by selling water that ends up in the California aqueduct to Southern California. Once you sell any water out of the “county of origin”, then those golden 1927 water rights are GONE for that much water in the future. This proposed dam may permanently take away more water rights from Nevada County agribusiness than it supposedly protects. Be very skeptical, folks. Learn about this proposed dam. Ask the hard questions. Demand answers.

  3. Don’t sell out NID’s water rights for a mess of pottage. Those 1927 water rights are worth their weight in gold. Reflect on what happened to the Owen’s Valley once LA got their straw into the works. Thanks Peter for this timely warning.

  4. Anyone who has studied the 2008 financial emergency and the bailouts of those responsible will understand what I’m about to say. There are at least two aspects to consider. The first is the egos of the NID Board of Directors, who no doubt want to leave a monument for themselves. The second is the financiers, the banksters and frauds who will fund the project. It is entirely possible, and even probable, that they will want it ‘both ways’. They will want the regular return on their money; everyone understands that. But they will also want to make money from derivatives, especially bets on the loan going bad. These derivative bets are quite unlike ordinary insurance, in that they are unlimited. If you insure your house against fire, only one company can underwrite your policy. The risks are understandable, and their actuarial department will price the risk accordingly, and that plus a reasonable profit will be your premium. Derivates, on the other hand, have no limits. This is the equivalent of having a whole bunch of strangers all taking out insurance on your house, with the benefits going to them! So, Goldman Sachs or whoever arranges the loans to NID can make bets on them going bad. Not only that, they can deliberately obfuscate the risks of a small group of taxpayers taking on a huge loan, as would be the case here. They can paint all sorts of rosy scenarios, project ideal financial returns, and persuade the NID Board and the ratepayers that no further ‘black swan’ events like the 2008 meltdown are possible. Then they bet that the scheme will fail one way or another.
    You think that no-one would do this to little old NID and little old Nevada County tax payers? Do your research. Goldman Sachs and other fraudsters did this to hundreds of municipalities, cities, and even whole countries (think, Greece). And get this, when their schemes don’t go the way they plan, and they lose money, they frighten governments all round the world into covering their losses! That means you pay them whether they win or lose. Great scam!
    Common sense tells you that ratepayers cannot possibly cover the costs of a $1 billion loan ($2 billion including interest if bonds are repaid over 30 years). Common sense tells you that NID is making a huge mistake (that’s assuming they are honest). Common sense tells you to reject their proposals, and those of their backers.

Comments are closed.