LMUD moves Skedaddle project forward

It’s not expected to come online until December 2026, but the lengthy construction process at the Lassen Municipal Utility District’s Skedaddle Substation is moving forward and making visible progress beyond road building and shifting dirt around.

Nick Dominguez, LMUD’s general manager, and Cort Cortez, electric operations manager, provided updates for the board and the community at the district’s Sept. 23 meeting.

First the bad news. The phase-shifting transformer built in Brazil has arrived in the United States, and LMUD may have to pay a 50 percent, $1.6 million tariff imposed by the Trump administration.

Many Americans incorrectly believe tariffs are paid by the country or company bringing the item to the country; but tariffs are, in fact, an additional tax imposed by the U.S. government to be paid to the U.S. Treasury by the entity importing the item  — ultimately in this case, the LMUD ratepayers.

Fortunately, at the time the transformer was ordered, LMUD staff expected a possible 20 percent tariff, but budgeted the purchase for a 30 percent tariff. The additional 20 percent of the tariff will be paid from LMUD reserve accounts, and will not result in an increase in LMUD rates.

Director Jess Urionaguena has frequently pushed for negotiations with the federal government seeking an exemption for the tariff because the transformer — which no American company can build — was ordered years ago and the purchaser is LMUD, a small, publicly owned utility district.

“The phase-shifting transformer arrived in Texas and was offloaded from the vessel and onto a rail car,” Dominguez said. “We continue to engage with Congressman LaMalfa’s Office and staffers to try and see if we can secure an exemption to the Brazil tariff. They continue to report to us that they’re not getting any responses from the White House, but they continue to reach out. We also looped in some of our partner organizations like the American Public Power Association and National Rural Electric Cooperative Association to ask them to reach out to the Department of Energy, and they may have avenues to get an exemption, so we’re pursuing that as well hoping that we can net something there.”

Cortez said there was quite a bit of activity going on at the construction site.

The control house was delivered Sept. 10, the transformer pads are nearly complete (700 cubic yards of concrete!), and after testing far surpass quality requirements, the phase shifting transformer will travel by rail to Sparks, Nevada, then by truck to the site, and it should arrive there Nov. 23.

Transformer one and transformer two, currently in Laredo, Texas, will arrive Nov. 3 and Nov. 10 respectively.

Cortez said much of the smaller equipment has already arrived, and LMUD is storing it.

He said the same contractor building the LMUD side of the substation has also been hired to build the NV Energy side, adding important continuity for the project.

The NV Energy portion of the project is expected to be completed by December 2026.

Cortez said he’s been informed the NV Energy line has a switch allowing it to carry power from both the north and the south, increasing the reliability for LMUD.

He said LMUD customers should always receive power unless NV Energy has a major systemwide outage or an outage on both the north and the south segments of its line at the same time.

Responding to a question from the public, Cortez said the LMUD side is designed to serve LMUD customers, not to carry loads for other electrical companies.