BOULDER — The city of Boulder signed a contract with the Tri-State Generation and Transmission Association for the sale of hydroelectric power generated at five of the city’s eight hydroelectric plants.

The deal is a 10-year agreement with an option to renew for another five years. It’s expected to generate about $500,000 per year in revenue, which will offset water utility capital improvements and operating costs that would otherwise be paid through higher water rates for customers.

The city had previously sold hydroelectric power to Tri-State from the Boulder Canyon Hydroelectric plant. This agreement renews the contract for Boulder Canyon and adds four facilities: the Kohler, Maxwell, Orodell and Sunshine plants.

“The city evaluated power sale options over the past several years and found that the Tri-State agreement would provide for higher projected revenues compared to other potential purchasers,” said Jeff Arthur, director of Public Works for Utilities, in a prepared statement. “Tri-State has been a great partner on the Boulder Canyon Hydro contract for the past five years, and we are excited to renew and add additional facilities to the contract.”

Tri-State is a not-for-profit power supplier to 43 electric distribution cooperatives and public power districts. It operates in Colorado, Nebraska, New Mexico and Wyoming. Thirty percent of the energy consumed within the association came from renewable resources last year.

Hydroelectric generation harnesses the energy generated during the downhill trip from water sources to the water distribution system. Boulder’s hydro program consists of eight plants that generate about 37 million kilowatt-hours of electricity annually, enough to power 4,600 households and displace 20,400 tons of coal.