The Sacramento Municipal Utility District approved a $35 million contract to take a closer look at the feasibility of developing a long-planned 400 MW pumped storage project in the Upper American River. “It is a very complimentary, closed loop, carbon-free system that uses renewables,” General Manager John Di Stasio told the muni board Oct. 3. The unanimous approval gives the general manager the authority to execute a due diligence agreement with engineering firm Jacobs Associates to investigate the Iowa Hill pumped storage project. The 400 MW storage project is slated for the Northern Sierra foothills. It would be made up of three 133 MW variable turbines that adjust output to match system needs, said Scott Flake, SMUD manager of power generation. The Department of Energy is providing a $5 million grant to help fund the contract. The work, to begin later this year and continue through 2018, is to include drilling exploratory tunnels. At its completion, the muni board is to vote on whether to develop the project, expected to balance out variable wind and solar energy resources. Energy from renewable resources would be used to pump water to an uphill reservoir storing 6,400 acre feet from a lower reservoir. (An acre foot is more than 326,000 gallons). When demand is high and renewables slack, the water would be released from the upper reservoir to turn turbines. That water would be captured in the lower reservoir for later use to be pumped uphill when renewable energy was available. In other news, the board was informed of a robust operating budget. The muni has $600 million cash on hand, well above its $200 million floor to cover 100 days, said Sandra Moorman, SMUD controller. Customer sales have been higher than planned. But, lower-than-expected hydropower output also exists, requiring increased power purchases. The operating budget is still above expectations, Moorman told the board.