MERCED — The Merced Irrigation District on Thursday will discuss a major legal battle concerning a dispute with Mariposa County over revenue from the New Exchequer Dam hydroelectric project.

Attorneys for the MID will meet in closed session with the board of directors to discuss the case, which is currently in Merced County Superior Court.

The MID will take over the hydroelectric project and all associated revenue from the Pacific Gas and Electric Co. in July. At that point, under the 1960 contract that established the project, Mariposa County claims it is due 25 percent of profits from power generation.

The irrigation district disagreed, sending the case to a local judge for arbitration. MID officials argue that Mariposa County is exploiting ambiguities in the language of the contract for financial gain.

With millions of dollars at stake, both sides have stressed the importance of the issues.

During the meeting, the board, legal staff and the general manager will also meet in closed session to discuss labor issues with the International Brotherhood of Electrical Workers.

In public session, the board will give staff direction on the district's water resources and parks and recreation finances.

There will be a general update on water and energy resources.

The meeting will be on Jan. 3 because of the holiday schedule. The board will meet at 11 a.m. in the City Council chamber, 678 W. 18th St., Merced.

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.