HomeMy WebLinkAboutRESO 9162Resolution No. 9162
Resolution of the Council of the City of Palo Alto Approving
the Third Phase Agreement for the Western GeoPower, Inc.
Geysers Geothermal Project Renewable Energy Power
Purchase Agreement for the Acquisition of Up To Fifteen
Percent of the Project Output (Up To 5 Average Megawatts)
over Twenty-Five Years At An Estimated Cost Not To Exceed
$95 Million
WHEREAS, the City of Palo Alto (the "City"), a municipal utility and a chartered
city, is a member of the Northern California Power Agency ("NCPA"), and
WHEREAS, on March 7, 2011, the City approved eight electric portfolio
planning and management guidelines to guide the development and management of the City's
long-term electricity acquisition plan; one of the strategies is to pursue target levels of renewable
resource energy purchases equal to thirty-three percent (33%) of the City's expected energy load
by 2015; and
WHEREAS, the City and other NCP A members desire to collectively enter into a
Power Purchase Agreement (the "PPA") with Western GeoPower, Inc. ("WGI") for a term of
twenty-five (25) years; and
WHEREAS, NCP A is authorized to execute a power purchase agreement with WGI
to purchase the entire expected Project output from the new WGI geothermal project (the
"Project") located in the Geysers Geothermal Field, located in the Mayacamas mountains of
Sonoma County and Lake County in the State of California; and
WHEREAS, NCPA will purchase the Project output for $113.00 per megawatt-hour
("$1131MWh") on behalf of its members in accordance with the PP A; and
WHEREAS, NCP A'S Energy Risk and Counterparty Risk Management Regulations
require that, for power purchases and sales effected for delivery more than one week from the
date of execution of the purchase, competitive bids must be obtained; and
WHEREAS, the NCP A Commission granted an exception to standard procurement
policy, because the PP A is an eligible renewable resource at long-term competitive rates, and it
also has advantages due to its physical location adjacent to the NCP A Geothermal project site,
thereby giving it competitive, operational and economic advantages other than price; and
WHEREAS, the NCPA Commission, on March 24,2011, approved the new PPA and
the Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project
Renewable Energy Power Purchase Agreement (the "new TP A"), which the new TPA allocates
all costs and benefits of the PP A to participating NCP A members; and
WHEREAS, the NCP A Commission authorized the General Manager to execute the
new PP A with WGI; and
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WHEREAS, the City desires to enter into the new TP A with NCP A in order to achieve
a portion its renewable energy goals, reduce reliance on fossil fuels and their associated fuel price
volatilities, and assist the State of California in meeting its renewable energy goals; and
WHEREAS, the City, desires to participate with a participation share percentage in the
new TP A of up to and not exceeding 15% with respect to the costs and benefits of the new PP A;
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NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves Third Phase Agreement for the Western
GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement and
delegates to the City Manager the authority to sign the contract on behalf of the City. The
Council further approves the City's participation in the Third Phase Agreement for the purchase
of renewable energy of up to up to fifteen percent (15%) of the project output equaling
approximately five (5) average megawatts of energy, within an average procurement price cap of
$113 per megawatt-hour. The total cost of renewable energy purchases to be made in accordance
with the Third Phase Agreement will not exceed $95 million over the twenty-five year term.
SECTION 2. With respect to the Third Phase Agreement, the Council hereby waives
the application of the creditworthiness terms and conditions requirements of Palo Alto Municipal
Code section 2.30.340(c), which otherwise.applies to the City's purchases of energy, directly or
indirectly, through NCP A.
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