HomeMy WebLinkAbout0513.094City of Palo Alto
.. _. _____ City j\'lanager~~_l!epo~!
1'0: HONORABLE em' COUNCIL
FJWM: CITY MANAGER DEPARTMENT: 'lffJLlTIES
AGENDA DATE: Docembor S, 1994 CMR:513 :\14
SUBJECT: _ i'w'chaoe Agreoement with Bonne.ille PoWt'l" AdmInlsIration ... d
British Columbia Power ElIcbange Corporation
&:OVFST
This report t"e(j1J.e.sts. tl'-,,;:,t Cou.::cil approve and ,11.l'thorize the Mayor to exeCliIe an agrctment with
&nDe'o'ule Power Administration (BPA) and British Columbia Power F .. xchatlge Corporation
(POWER.E.X) for finn ~nergy. firm capacity and replacement energy sales. Thb\ acquisition will
displace more expensh"e power !.hat Palo Alto is currently acquiring from other svppliers.
Bl<CQMMENIMnQ1'i~
Staff m;:ommends that CO!.lIlCil at;tboriz.c the: Mayor to execute the attached agreement with
Bo!lOCville PuW'Cr Administration and Bntisb Columbia Power F .• :~ch&nge Corporation. The Utilities
Advisory Commi.sslJrl (UAC) reviewed the agree<nelll and financial ana,ysis and unanimously
"",,"ii," "10<1 City COWICil approval.
PQUCV IMl"LICA~
Though this Apttment does 001 represent any o~.ange 10 existing policies, it rep=" a .run in
busiDcs! practi<:e frolIl the past several year., for one, Ibis is the tim ccntract in several decades
_ the City is directly erJeting il'110 wllh • power supplier, i1ldepen<lent of the Northern California
"""'" Agency. Second, the contract constitutes a power ptm:base from • fed<flII power marketing
ageDCy 0Ih:r Iilan Western Area Power Administration (WAPA).
EXf .. crrrrn: SUMMARY
In .May 1994 W AP A instituted a new rate ~trm.:ture thai prices energy a~ a low rate for an initial
block of power and a bigl>:t rue for a secondary blocl< of power, By implementing this tate,
W AP A sent a signal to its c:ustomers te reduce their (.;on.qunpriOl"L of secondary block W AP A
energy. Tbe City's response was [0 purcbase replacement t:~rgy from lite shOI1-teml ma1ket.
Paje J of 2
.----------~.-.~ .. --------'-""" ...
•
This .., ......... prov;&es I'lIo AJw Ibr: oppo;tmit)' to purcIwe souooaJ power from BPA and
POWFltEX Tho ..". ........... ~ in Mloy 1995, bas. maximum lerm of ten years and.
DWrimum ..... offuur yoan. Purcbasi"l! energy U!lo:lcr thls "1<1_ "ill displace more ."""",ive
"""IY .... ..-s from ~ ~, namely, expensive =<,'llllary block power from W AP A,
la _, tbil 4'tcnXUt offers pric< ceminIy for, portion of Ibr: City" energy pwcl>as<
n.quitu ....... This ..,=-cIo:$ 00l tmpocr die current WAPA C<lntracl or Ibr: marketing plan
fo< W AP A _ be)'<lIld 2004.
ft5cA.1 IMPACT
swr. am/yJis of Ibr: .,~ iDdicla:s il WIll bave ." .~ value between $3.1 million to $3.3
miIiioI! .,.... I _jUr period and beIwtes! $0.86 milJioc to $0,95 million over ctJc tint fCUT yea!'s.
El'i"JRONMm\l'AL~"'-;
ueo.l.tion of cr..is Ap~ "iI\--!d:: BPA aro ?O'WF .. Rf.x does oot con.."1it<..Jte 3: projcci uOOc,r the
ClilforniJ £rl'..-i.ror.rn.:m:a.r Qu.lEry Ac!; ther~fure. an enyil'of'rmenlaJ a3~ssrnent is i'KH retllJ.lred.
'" 1TAClL"~'''J'S
.. Memvl'lnd.L.'T! Rep-crt (1:1 ll,A.C' d.:.tcd r-;,)',cm'c\::r 2 1994
... !\,!-~~ ~r,.,'.:-c~ &,~ Cit) "f ?'li.1 A!t,~, BrA al'lJ POWEREX
PREPARED BY: Gu"ish &!r.c:'\i.odnn.'Tcm HalJa..:b.i
DEPARTML~T HElill APPROVAL'
CITY W.NAGER APPROVAl.: ~~ City ger
Pa&' 2 of 2
i1;1 . I
/" ,