HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/03/2009 - ITEMS RELATING TO CONTRACTS WITH PLATTE RIVER POWE ITEM NUMBER: 20
AGENDA ITEM SUMMARY DATE: February 3, 2009
FORT COLLINS CITY COUNCIL STAFF: Steve Catanach
Brian Janonis
SUBJECT
Items Relating to Contracts with Platte River Power Authority.
RECOMMENDATION
Staff recommends adoption of the Ordinances on First Reading.
During a January 20, 2009 meeting of the Electric Board the Board voted 4-0 (1 member absent, 2
members recused) to recommend the approval of the Contracts.
EXECUTIVE SUMMARY
A. First Reading of Ordinance No. 016,2009, Authorizing an Amended and Restated Organic
Contract for Platte River Power Authority.
B. First Reading of Ordinance No. 017,2009,Authorizing an Amended and Restated Contract
With Platte River Power Authority for the Supply of Electric Power and Energy.
The Organic Contract between the four member cities of Estes Park, Fort Collins, Longmont and
Loveland was originally signed in 1975 and last amended in 1998. The Organic Contract forms
Platte River Power Authority. A change to the Organic Contract requires the approval of all four
member municipalities. Most of the changes to the Organic Contract are in the nature of updates
intended to reflect current organizational practices, as detailed more fully below.
In addition, staff and Platte River have negotiated changes to update the Contract for the Supply of
Electric Power and Energy and termination of the Transmission Facilities Agreement. Changes to
the Contract for the Supply of Electric Power and Energy incorporate relevant terms from the
Transmission Facilities Agreement. The most significant change to the Contract is a provision
which allows the City to develop generation resources up to 3,000 kilowatts to supply City facilities;
this is approximately 60%of City facilities demand. The agreement does not limit the size or ability
of customers to install generation resources for their own use,nor for third party developers to install
generation at a customer's site.
February 3, 2009 -2- Item No. 20
BACKGROUND
October 28,2008 work session
During the October 28,2008 work session,Council discussed both the Amended Energy and Power
Supply Contract between the City of Fort Collins and Platte River Power Authority, and the
Amended and Restated Organic Contract between the Cities of Fort Collins, Longmont, Loveland
and Estes Park.
Discussion in reference to the Energy Supply Contract centered on new language that allows the
City to develop and own generation to serve the electric energy demands of its own facilities. The
previous Energy Supply Contract limited the City's ability to self generate to zero. The revised
contract proposes a limit of one percent of the peak load within Fort Collins, which amounts to
approximately 3,000 kW of generation (about 60% of the load for all city facilities). Council
expressed concern over the 1% cap and asked why it couldn't be 2%, 3% or even greater. Joe
Wilson, Platte River's General Counsel, provided a detailed explanation. Previous bonds sold by
Platte River were sold with a commitment to the buyers that Platte River would be the sole provider
to the four cities. Platte River has been aware of the cities desire to support, provide, and develop
renewable resources. Discussions with Platte River's Bond Counsel resulted in an agreement that
the 1%cap could be considered de minimis. At the request of the Utilities Executive Director,Platte
River requested information from their Bond Counsel on the potential to increase the limit on
generation for City facilities up to 10%. A copy of the response is attached. (Attachment 9)
Council also commented on a document Brian Moeck provided before the meeting detailing Platte
River's commitment to environmental concerns and stewardship. Council complimented Platte
River on its efforts and asked if language could be added to the"whereas"clauses and the"purpose"
section of the Organic Contract reflective of Platte River's commitment to environmental
stewardship. The suggested changes have been incorporated into both Contracts. The following
statements have been included:
WHEREAS, the Municipalities are committed to the delivery of electricity
that is both affordable to their customers and generated in a manner that reflects
good stewardship of the environment; and
WHEREAS, during its existence the Authority has developed a portfolio of
generation resources and demand side management programs that deliver affordable
power and energy in conformance with relevant environmental regulations; and
WHEREAS,the Municipalities acting in concert through the Authority wish
to continue their commitment to provide electric power and energy with cost
effective and environmentally responsible resource options that enhance the
sustainability of the Northern Colorado region;
(Note: The additional language added to the PURPOSES section at 2.1(i) is underlined below to
indicate the change)
February 3, 2009 -3- Item No. 20
1.1 PURPOSES
The purposes of the Authority are to conduct its business and affairs for the
benefit of the Municipalities and their inhabitants
(i) to provide the electric power and energy requirements of the Municipalities
and the retail customers within the Municipalities in a cost effective manner that
reflects high standards of environmental stewardship and sustainability;
Revisions to the Organic Contract
In June 1975, the municipalities of Fort Collins, Longmont, Loveland and Estes Park established
Platte River Power Authority to develop both energy resources for the production of electric energy
and transmission infrastructure to deliver electric energy to the four member municipalities.
The Organic Contract Establishing Platte River Power Authority as a Separate Governmental Entity
dated June 17, 1975 defined the roles of each of the municipalities within the organizational
structure of Platte River,defined membership on the Board of Directors,and established the by-laws
within which the Board operates.
In July 1998, the Organic Contract was amended to allow Platte River to provide additional
functions, services or facilities to any combination of two or more of the member municipalities.
An example of an expanded service is Platte River's provision and management of the Banner
Customer Information System used by both Longmont and the City of Fort Collins. The
modification also allowed Platte River to enter into telecommunication activities, which they
continue to manage for the City.
The amendments that staff and Platte River are presenting to Council in the Amended and Restated
Organic Contract Establishing Platte River Power Authority as a Separate Governmental Entity(the
"Updated Organic Contract") add to the services that Platte River may provide to Fort Collins by
noting that Platte River will assist Fort Collins in reaching its renewable energy requirements.
Additionally, language has been added which specifically details that Platte River will provide
services and products that improve the efficiency of generation, transmission and use of electrical
energy. The proposed changes also bring current the expiration dates of the terms of the Platte River
appointed directors. Those dates are as follows; December 31, 2011 for Estes Park, December 31,
2008 for Fort Collins, December 31, 2010 for Longmont and December 31, 2009 for Loveland.
Additional changes allow board members to participate in Board meetings via teleconferencing.
Changes also provide authority to the Board to appoint an interim Platte River General Manager if
and when a vacancy exists in that office. The previous provision automatically designated the Board
Chairman. The Updated Organic Contract also extends the term of the Contract from an end date
of 2040 to 2050.
Revisions to the Amended Contract for the Supply of Electric Power and Energy
Fort Collins and Platte River are proposing an Amended Contract for the Supply of Electric Power
and Energy (the "Updated Energy Supply Contract"). The Transmission Facilities Agreement
between Platte River and Fort Collins, dated February 22, 1980, will be terminated with the
February 3, 2009 -4- Item No. 20
execution and some of its terms are incorporated into the Updated Energy Supply Contract, while
others are addressed in Appendix B to the Updated Energy Supply Contract.
The Updated Energy Supply Contract obligates Platte River to sell and deliver and Fort Collins to
purchase and receive all electrical energy which Fort Collins requires; in effect, it is an all-
requirements contract with an exception as described below. The Contract defines the roles and
responsibilities of each of the entities with respect to providing electric energy, the disposition of
excess energy,the responsibility to maintain adequate rates, and required compliance with Western
Area Power Administration requirements for the purchase of federally generated power.
The above rioted exception to the all-requirements obligation addresses the amount of generation
the City can develop to provide service to City-owned facilities. The contract as it currently stands
limits the amount of generation the cities could develop for their own use. The member cities were
able to keep any generation resources they owned prior to the establishment of Platte River, which
allowed Longmont and Loveland to continue to own and operate their small hydro-electric plants.
Fort Collins had no such resources. The amended Contract designates municipal generation up to
1% of peak as de-minimus. The amendment will have a very positive effect on the City. Fort
Collins will be able to develop approximately 3000 kilowatts of renewable generation. The total
load associated with city facilities is about 5000 kilowatts, so more than half of this could be met
with municipal generation (renewable or other resources). 3000 kilowatts is enough generation to
power approximately 1,000 to 1,200 homes. Depending on the resource developed,3000 kilowatts
of generation could reduce carbon dioxide emissions by between 7,000 to 19,000 tons per year. The
amended Contract does not limit the amount or size of generation customers can install at their
homes or businesses. The option for customers to develop their own generation has always existed
and is not impacted by this amended contract.
Fort Collins and Platte Riverjointly occupy all of the substations serving the City. The proposed
changes clarify that each party has license to occupy any substation where the parties jointly use
facilities. The language of the Updated Energy Supply Contract clarifies the planning requirements
and the timelines needed to insure that adequate time is given for the siting,design and construction
of new transmission and substation facilities. For example, it reduces from four years to two years
the prior notification the City must give Platte River of the need for a new substation if no new
transmission is required. If new transmission is required,the City must give Platte River four years
notification.
The Energy Supply Contract term is also extended from 2040 to 2050. This is of critical importance
because the power supply agreements between Platte River and the cities are security for Platte
River bonds and these agreements must have terms beyond the terms of the bonded indebtedness.
Appendix B to the Updated Energy Supply Contract specifies the responsibilities of each entity as
either the owner or joint user of a facility. The responsibilities for site work, foundation
construction, and operation and maintenance tasks are defined in Appendix B.
Platte River purchases energy from the Western Area Power Administration (WAPA) on behalf of
the Cities. The WAPA General Power Contract Provisions have been added as an exhibit to the
Energy Supply Contract.
February 3, 2009 -5- Item No. 20
The amendments to both agreements give additional flexibility to both Platte River and the City in
addressing Governor Ritter's goal to reduce the City's carbon emissions by 20%below 2005 levels
by 2020 and 80% below 2005 levels by 2050. Both the City and Platte River have committed
themselves through formal resolutions to reaching these goals. The development or acquisition of
additional renewable resources along with the implementation of energy efficiency programs and
services by Platte River, and the City's ability to develop renewable resources for its own use,
provide both Platte River and the City new avenues towards this goal. Additionally, the
amendments provide clarity to the roles and responsibilities of each entity.
ATTACHMENTS
1. Redline version of the Amended and Restated Organic Contract.
2. Redline version of Amended Contract for the Supply of Electrical Power and Energy.
3. Existing Facilities Agreement.
4. October 28, 2008 work session summary and follow-up information provided to Council
after October 28, 2008 work session
5. Memo detailing cost to develop distribution level renewables
6. Letter from Sherman&Howard LLC,regarding Fort Collins inquiry concerning Municipal
Generation.
7. Electric Board minutes.
8. Letter of recommendation from the Electric Board.
9. Letter from Brain Moeck, General Manager of Platte River.
ATTACHMENT 1
PLATTE RIVER POWER
AUTHORITY
ORGANIC CONTRACT
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TABLE OF CONTENTS
1 . 0 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2. 0 ESTABLISHMENT OF PLATTE RIVER POWER AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2 .1 PURPOSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2 .2 FUNCTIONS, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2 .3 BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2 .4 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 INDEMNIFICATION OF OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 TERM OF CONTRACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. 7 ASSETS AND PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 DISTRIBUTION OF ASSETS UPON TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2 .9 SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2 . 10 CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.11 CHECKS, DRAFTS, AND OTHER FINANCIAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.12 DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.13 FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.14 PRINCIPAL PLACE OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3 . 0 GENERAL POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. 0 POLITICAL SUBDIVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
5 . 0 REVENUE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
6. 0 DEBT NOT THAT OF MUNICIPALITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 021
TO FILING OF CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
8 . 0 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
9 . 0 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
10 . 0 DUPLICATE ORIGINALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
i
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AMENDED AND RESTATED ORGANIC CONTRACT ESTABLISHING PLATTE RIVER
POWER AUTHORITY AS A SEPARATE GOVERNMENTAL ENTITY
THIS CONTRACT, originally made and entered into as of June 17, 1975, and amended
February 14, 1977, and July 27, 1978, and amended and restated the 31st day of March 1980, and
the 1st day of July, 1998, and as further amended and restated on this Ist-day of ,
2009, july, 4998, by the parties to this Contract which are : TOWN OF ESTES PARK,
COLORADO, a municipal corporation of the State of Colorado (" Estes Park'), CITY OF FORT
COLLINS, COLORADO, a municipal corporation of the State of Colorado ("Fort Collins' ),
CITY OF LONGMONT, COLORADO, a municipal corporation of the State of Colorado
("Longmont"), and CITY OF LOVELAND, COLORADO, a municipal corporation of the State of
Colorado (" Loveland" ) . When specificity is not required, the municipal corporations which are
parties hereto will hereinafter be individually referred to as " Municipality" and collectively as
"Municipalitiesg" r
WITNESSETH:
WHEREAS, Estes Park owns and operates a municipal electric system which supplies
electric power and energy at retail to users located within the town limits of Estes Park and the
adjacent service area of the Estes Park electric system; and
WHEREAS, Fort Collins owns and operates a municipal electric system which supplies
electric power and energy at retail to users located within the city limits of Fort Collins; and
WHEREAS, Longmont owns and operates a municipal electric system which supplies
electric power and energy at retail to users located within the city limits of Longmont and the
adjacent service area of the Longmont electric system; and
WHEREAS, Loveland owns and operates a municipal electric system which supplies
electric power and energy at retail to users located within the city limits of Loveland and the
adjacent service area of the Loveland electric system; and
WHEREAS, the Municipalities on June 17, 1975, established, pursuant to the provisions
of C . R.S . (4 973) § 29-1-204, as then enacted, t4e-Platte River Power Authority (the "Authority" ),
as a separate governmental entity and successor to a nonprofit corporation, to be the
Organic Contract Amended and Restated 1 / 28 /2009
Pale 1 of 23
instrumentality of the Municipalities and as such successor, to continue to supply their
wholesale electric power and energy requirements; and
WHEREAS, during 1998 the Municipalities contracted new kyish t ce.nit.. .. . With one
another to establish, pursuant to the provisions of C.R.S. c^�L29-1-203, the Authority as a
separate legal entity and multi-purpose intergovernmental authority to provide designated
functions, services, or facilities 0) lawfully authorized to any combination of two or more of the
Municipalities provided that such and (4) Nvl4 function, service, or facility constitutes an
"enterprise" as defined in Section 2(d) of Article X, Section 20 of the Colorado
Constitution; and
WHEREAS, increased complexity and risk the
in the electric utility industry have created the
need to (i)-enhance utility image brand identification i and customer loyalty, by broadening the
types of services offered to electric custemeFs of the Municipalities and (ii) peFmit the Authority
to se tail electric: aa +id aflw-F seFv ees, and Municipalities wish to clarify that the Organic
Contract authorizes the Authority to engage in a broad range of suchFelated services which are
incidental to or supportive of the Municipalities' continued ability to provide electric power and
energy services service to their customers on a competitive basis and to enga.ge in retail sales 0
electric
power-
and
n enef ff; and
WHEREAS, the Municipalities are committed to the delivery of electricity that is both
affordable to their customers and generated in a manner that reflects good stewardship of the
environment; and
WHEREAS, during its existence the Authority has developed a portfolio of generation
resources and demand side management programs that deliver affordable power and energy in
conformance with relevant environmental regulations; and
WHEREAS, the Municipalities acting in concert through the Authority wish to continue
their commitment to provide electric power and energy with cost effective and environmentally
responsible resource options that enhance the sustainability of the Northern Colorado region;
and
WHEREAS, the Municipalities now wish to further amend the Organic Contract, to
extend its term and to restate the amended provisions thereof in a single updated document.
NOW, THEREFORE, the Municipalities do hereby amend and restate the Organic
Organic Contract Amended and Restated 1 / 28 /2009
Pale 2 of 23
Contract, originally executed June 17, 1975, and subsequently amended, so that as hereby
amended and restated it provides, and the Municipalities do agree, as follows:
1 .0 EFFECTIVE DATE:
This Contract, as hereby amended and restated, shall become effective when it
has been duly executed �"„a deliveredon behalf of all of the Municipalities .
2.0 ESTABLISHMENT OF PLATTE RIVER POWER AUTHORITY:
As of June 17, 1975, the Municipalities established a separate governmental
entity, to be known as Platte River Power Authority " , to be used
by the Municipalities to effect the development of electric energy resources and
the production and transmission of electric energy in whole or in part for the
benefit of the inhabitants of the Municipalities. As of July 1, 1998, the
Municipalities also established the Authority as a separate governmental entity
and multi-purpose intergovernmental authority to provide additional designated
functions, services, or facilities (i)-lawfully authorized to any combination of two
or more of the Municipalities, provided that such an (ii) which function,
service, or facilities constitutes an "enterprise" as defined in c^�subsection
2(d) of Article X, Section 20 of the Colorado Constitution.
2. 1 PURPOSES-.-
The purposes of the Authority are to conduct its business and affairs for
the benefit of the Municipalities and their inhabitants :
(i.) (A )-to provide the electric power and energy requirements of the
Municipalities and the retail customers within the Municipalities;
in a cost effective manner that reflects high standards of
environmental stewardship and sustainability,
ii. ( �)—to engage in business activities related to the provision of
electric power and energy services and demand side resources
Organic Contract Amended and Restated 1 / 28 /2009
Page 3 of 23
which the Board determines are likely to enhance the competitive
position of the Authority or the Municipalities., and
iii. {�to provide any additional designated function, service, or
facility {4} lawfully authorized to any combination of two or more
of the Municipalities, provided that these an (ii ` each of whic1
constitutes an " enterprise' as defined in Section 2(d) of
Article X, Section 20 of the Colorado Constitution.
A particular function, service, or facility shall be treated as designated as
a separate purpose under clause {Q) iii of the previous sentence only
upon receipt by each Municipality which is designating the function,
service, or facility to also be performed by the Authority of (a) a
resolution adopted by unanimous vote of the Board of Directors of the
Authority designating the function, service, or facility as a purpose to also
be jointly exercised by the designating Municipalities through the
Authority and (b) opinions of counsel to each Municipality which is
designating the function, service, or facility to also be performed by the
Authority setting forth the extent to which the designated function,
service, or facility is lawfully authorized by such designating
Municipality; and (c) an opinion of the Authority' s bond counsel to the
effect that the designated function, service, or facility constitutes an
" enterprise" as defined in Section subsection 2(d) of Article X, Section 20
of the Colorado Constitution.
2.2 FUNCTIONS, SERVICES, OR FACILITIES:
The functions, services, or facilities to be provided by the Authority are:
The ( " supplying of the electric power and energy requirements of
the Municipalities and retail customers within the Municipalities and,
{B}
the provision of any additional function, service, or (i) lawful
autl4efize to any ` embinatio of twe of mefe of the MU inipa ifies an
Organic Contract Amended and Restated 1 / 28 /2009
Page 4 of 23
,., , Fsua t t the lost s,,,-, +,,nce f Section 2.1 1, .,, eo.f. by: means of
(i) Aacquiring, constructing, owning, reconstructing, improving,
rehabilitating, repairing, operating and maintaining electric
generating plants, transmission systems and related facilities, or
interests therein, for the purpose of producing, transmitting and
delivering to the Municipalities, electric power and energy to the
extent of their requirements, including renewable energy
requirements and demand side resources;
(ii) ppurchasing electric power and energy from electric utilities and
other producers of energy, as required to supply the
Municipalities and perform its other obligations;
(iii) Sselling at wholesale to the Municipalities all of the electric power
and energy produced or purchased by the Authority which the
Municipalities require;
(iv) Sselling, exchanging and otherwise disposing of, under the most
economically advantageous terms and conditions obtainable, any
d a4-surplus power and energy or transmission capacity which
the Authority owns, produces or purchases;
(v.) Bdeveloping electric energy resources (including renewable
sources) and producing and transmitting electric energy in whole
or in part for the benefit of the inhabitants of the Municipalities;
kv&i.) developing products and services to improve the efficiency of
generation, transmission and use of electrical energy
Organic Contract Amended and Restated 1 / 28 /2009
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{ i}(vii) ,acquiring, constructing, owning, purchasing, selling,
exchanging; or otherwise disposing of, reconstructing, improving,
rehabilitating, repairing, operating, and maintaining assets,
infrastructure, plants, systems, and related facilities or interests
therein;
(viO viii) Bdeveloping products, services, infrastructure, and
resources related to such function, service, or facility for delivery
to appropriate markets in whole or in part for the benefit of the
inhabitants of the Municipalities; and
(vi0 ix Son rescission o.F termination of this Contract to vest in the
Municipalities all right, title and interest of the Authority in or to
all of its property and assets .
2. 3 BOARD OF DIRECTORS
The governing body of the Authority shall be a Board of Directors in
which all legislative power of the Authority is vested.
2.3 .1 NUMBER--
The number of Directors shall be eight (8) .
2.3.2 SELECTION:
Each Municipality shall be represented by two (2) members on the
Board of Directors of the Authority, who shall be designated or
appointed as follows :
(i) Mayors:MAYORS
The Mayor of each of the Municipalities is hereby
designated and shall serve as a member of the Board of
Organic Contract Amended and Restated 1 / 28 /2009
Page 6 of 23
Directors of the Authority contemporaneously with service
as Mayor; provided, however, that any Mayor may
designate some other member of the governing board of
such Municipality to serve as a Director of the Authority in
place of the Mayor.
(ii) ^ ,-.,,rote P. i-Fe^+^rs :APPOINTED DIRECTORS
The governing body of each of the Municipalities shall
appoint ones additional member to the Board of
Directors. Appointed Directors shall be selected for
judgment, experience, and expertise which makes them
make that person particularly qualified to serve as the-a
Director of an electric utility.
2.3 .3 TERM.
The term of office of the Directors of the Authority shall be as
follows:
(i) MayeraMAYORS
The Mayor of each Municipality, or the member of the
Municipality' s governing board designated by the Mayor,
shall serve as a Director of the Authority for the same
period of time that the Mayor serves as Mayor of that
Municipality.
(ii) :APPOINTED DIRECTORS
The term of the Appointed Director for Estes Park shall
expire on December 31, 49832011, the term of the
Appointed Director for Fort Collins shall expire on
December 31, 49� 92008, the term of the Appointed
Director for Longmont shall expire on December 31,
Organic Contract Amended and Restated 1 / 28 /2009
Page 7 of 23
19922010, and the term of the Appointed Director for
Loveland shall expire on December 31, 4-942009. Each
successor shall be appointed for a term of four years from
the date of the expiration of the term for which the
predecessor was appointed and until 04e suEeesso.. s
appointed and has qualified .
2.3 .4 REMOVAL:
Any Director appointed by the governing board of a Municipality
may be removed at any time by such governing board, with or
without cause. A Mayor will be automatically removed as a
Director if remove ft-& upon vacating_the office of Mayor, and a
member of the Municipality' s governing board designated to
serve in place of a Mayor may be removed at any time by the
Mayor, with or without cause .
2.3 .5 VACANCIES:
A vacancy occurring in the directorship of an Appointed Director,
whether such vacancy be the result of resignation, death, removal
or disability, shall be filled by the appointment of a successor
Appointed Director by the governing body of the Municipality
which appointed the Director whose office has become vacant. In
the case of a vacancy in the directorship of a Mayor or his
designee from any Municipality, the vacancy shall be filled by the
new Mayor or the Mayor' s designation of some other member of
the governing board of that Municipality.
2.3.6 COMPENSATION--
Directors shall not receive compensation for their services, but the
Board of Directors may be reimbursed,
from ,,,,; ,rbur-se rt t r,;,.,,,,tors of their actual expenses for
Organic Contract Amended and Restated 1 / 28 /2009
Pale 8 of 23
attendance at meetings of the Board of Directors and for expenses
otherwise incurred on behalf of the Authority.
2.3. 7 ANNUAL MEETINGS:
An annual meeting of the Board of Directors shall be held within
the first 120 days in each year at such place in Fort Collins,
Colorado, as shall be designated in the notice of the meeting, to
elect officers, to pass upon reports for the preceding fiscal year,
and to transact such other business as may come before the
meeting. if the day fixed for the annual meeting shall fall on a.
legal holiday, t4e annual meeting sl4all be held en the nex
succeeding business day-; Failure to hold the annual meeting at a
designated time, or failure to hold the annual meeting in any year,
shall not cause a forfeiture or dissolution or otherwise affect the
Authority.
2.3.8 REGULAR MEETINGS--
The Board of Directors may fro time totee—provide—, -by
11V1 (] Ylirnous Aesolll ufioYl or by unanimous consent of all DiFectors,
for the time and place for the holding of a4ay-regular meetings by
resolution without notice to Directors other than the
suc-14resolution adopting, exeept 41 the ease of consent, Y.
notice shal given by meeting scheduleSecretar-y as.
2.3 .9 SPECIAL MEETINGS--
Special meetings of the Board of Directors may be called by the
Chairman or any Director and it shall thereupon be the duty of the
Secretary to cause notice of such meeting to be given as
hereinafter provided. Special meetings of the Board of Directors
Organic Contract Amended and Restated 1 / 28 /2009
Page 9 of 23
shall be held at such time and place within the State of Colorado
as shall be fixed by the Chairman or the Director calling the
meeting.
2.3.10 NOTICE OF MEETINGS:
Written notice of the annual or of any special meeting of the Board
of Directors shall be delivered to each Director not less than seven
(7), nor more than thirty-five (35), days before the date fixed for
such meeting, either personally or by mail, by or at the direction
of the Secretary, or, upon hiss default, by the person calling
the meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to
the Director at hiss address as it appears on the records of the
Authority, with postage thereen prepaid,
2.3 . 11 WAIVER OF NOTICE:
Whenever any notice is required to be given to any Director of the
Authority under the provisions of the law or this Contract, a
waiver thereof in writing signed by such Director, whether before
or after the time stated therein, shall be equivalent to the giving of
such notice. Attendance of a Director at any meeting of the Board
of Directors shall constitute a waiver by such Director of notice of
such meeting except when such Director attends such meeting for
the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
2 . 3 . 12 QUORUM:
A majority of the number of Directors then in office shall
constitute a quorum for the transaction of business; provided that,
if less than a majority of the Directors then in office is present at a
meeting, a majority of the Directors present may adjourn the
Organic Contract Amended and Restated 1 / 28 /2009
Page 10 of 23
meetin from mtime to time; and, provided further, that the
Secretary shall notify any absent Directors of the time and place of
such adjourned meeting. The act of a majority of the Directors
present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
2.3.13 ATTENDANCE BY TELECONFERENCE
Directors may attend and fully participate in any meetingt hrough
electronic teleconferencing.
''�2.3 .14 VOTE IN CASE OF DEADLOCK--
In the event the Board of Directors, at a meeting at which a
quorum is present, is deadlocked and unable to obtain a majority
vote of the Directors present concerning a matter being considered
for action, any Director may require a "Weighted Vote." A
" Weighted Vote" shall then be taken with each Director' s vote
being given one half the proportion which:
(i) the dollar amount of electric power and energy purchased
from the Authority during the twelve-month period
ending with the close of the billing period for the month
two months prior to the month of the deadlocked meeting
and paid for by the Municipality appointing such Director
bears to;beafs4e
(ii) the dollar amount of all electric power and energy
purchased from the Authority and paid for by the
Municipalities during said twelve-month period.
The act of a majority of the " Weighted Vote" shall be the act of the
Board of Directors .
Organic Contract Amended and Restated 1 / 28 /2009
Page 11 of 23
''�42.3 .15 DUTIES:
The duties of the Board of Directors shall be :
(i) To govern the business and affairs of the Authority.
(ii) To exercise all powers of the Authority.
(iii) To comply with the provisions of parts 1, 5, and 6 of
Article 1 of Title 29, of C.R.S.
(iv) To adopt a fiscal resolution, which complies with statutory
and other restrictions imposed by law on the affairs of the
Authority, to govern the financial transactions of the
Authority, including the receipt, custody, and
disbursement of its funds, securities, and other assets, and
to provide for the services of a firm of independent
certified public accountants to examine, at least annually,
the financial records and accounts of the Authority and to
report thereupon to the Board of Directors.
(v) To keep minutes of its proceedings.
2.4 OFFICERS:
The officers of the Authority shall be a Chairman, Vice Chairman,
Secretary, Treasurer, General Manager and such other officers and
assistant officers as may be authorized by the Board of Directors from
time to fim to perform such duties as may be appreve�assigned by the
Board of Directors. The Chairman and Vice Chairman shall be members
of the Board of Directors, but other officers of the Authority need not be
members of the Board of Directors.
Organic Contract Amended and Restated 1 / 28 /2009
Page 12 of 23
2.4.1 ELECTION OF OFFICERS AND TERMS OF OFFICE:
At each annual meeting of the Board of Directors, the members of
the Board of Directors shall elect officers who shall serve as such
officers of the Authority until the next succeeding annual meeting
of the Board of Directors and until their successors are elected and
qualified. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as may be
convenient. Vacancies or new offices may be filled at any meeting
of the Board of Directors.
2.4.2 REMOVAL:
Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors, with or
without cause, whenever in its judgment the best interests of the
Authority will be served thereby .
2.4.3 DUTIES OF OFFICERS--
In addition to duties designated assigned by the Board of
Directors, the duties of the officers shall include the following:
2. 4.3 .1 04 a i r+na.n
(i.) CHAIRMAN
The Chairman shall preside at all meetings of the Board of
Directors and, except as otherwise delegated by the Board
of Directors, shall execute all legal instruments of the
Authority. When and while a vaeaney exists in the office
of General Manager-, the Chairman shall act as the.
pr-` ne_r -- - - _ _ _ -- _ e€€���the Atitlqofity, and shall
perform such other duties as the Board of Directors may
Organic Contract Amended and Restated 1 / 28 /2009
Page 13 of 23
prescribe from
f: m to t; ,.V, ,
'7 A 2 Nine Ch irma.n
zT.Q r.
(ii.) VICE CHAIRMAN
The Vice Chairman shall, in the absence of the Chairman,
or in the event of his-the Chairman' s inability or refusal to
act, perform the duties of the Chairman and when so
acting shall have all the powers of and be subject to all the
restrictions upon the Chairman. The Vice Chairman shall
also perform such other duties as may be prescribed by the
Board of Directors rN^m +; m t fifne .
2. 4.3 .3 Secretary
(iii.) SECRETARY
The Secretary shall maintain the official records of the
Authority, including all resolutions and regulations
approved by the Board of Directors, the minutes of
meetings of the Board of Directors, and a register of the
names and addresses of Directors and officers, and shall
issue notice of meetings, attest and affix the corporate seal
to all documents of the Authority, and shall perform such
other duties as the Board of Directors may prescribe
time to times
_. 4.3 . 4 T
(iv.) TREASURER
The Treasurer shall serve as financial officer of the
Authority and shall, pursuant to the fiscal resolution
adopted by the Board of Directors governing the financial
transactions of the Authority and the restrictions imposed
by law, be responsible for the receipt, custody, investment,
Organic Contract Amended and Restated 1 / 28 /2009
Page 14 of 23
and disbursement of the Authority' s funds and securities
and for duties incident to the office of Treasurer, and shall
perform other duties as the Board of Directors may
prescribe f+om time to time .
2. 4 .3 .5 General Manager
(v.) GENERAL MANAGER
The General Manager shall be the principal executive
officer of the Authority with full responsibility for the
planning, operations, and administrative affairs of the
Authority, and the coordination thereof, pursuant to
policies and programs approved by the Board of Directors
from time to time., and shall be the agent for service of
process on the Authority. When and while a vacancy
exists in the office of General Manager, the Board of
Directors shall appoint a qualified interim General
Manager to act as the principal executive officer of the
Authority .
2.4 .4 BONDS OF OFFICERS:
The Treasurer and any other officer or agent of the Authority
charged with responsibility for the custody of any of its funds or
property shall give bond in such sum and with such surety as the
Board of Directors shall determine. The Board of Directors in its
discretion may also require any other officer, agent, or employee
of the Authority to give bond in such amount and with such
surety as it shall determine. The cost of such bond shall be an
expense payable by the Authority .
2.5 INDEMNIFICATION OF OFFICERS AND DIRECTORS--
Each Director and officer of the Authority, whether or not then in office,
Organic Contract Amended and Restated 1 / 28 /2009
Page 15 of 23
and his her personal representatives, shall be indemnified by the
Authority against all costs and expenses actually and necessarily incurred
by him her in connection with the defense of any action, suit, or
proceeding in which he / she may be involved or to which he / she may be
made a party by reason of his/ her being or having been such Director or
officer, except in relation to matters as to which he she shall be finally
adjudged in such action, suit, or proceeding to be liable for willful
t.� to r�negligence or willful and wanton misconduct in the
performance of duty . Such costs and expenses shall include amounts
reasonably paid in settlement for the purpose of curtailing the costs of
litigation, but only if the Authority is advised in writing by its counsel
that in his her opinion the person indemnified did not commit-&aeh
Nvillful or Nvante gross negligence or willful and wanton misconduct.
The foregoing right of indemnification shall not be exclusive of other
rights to which he/ she may be entitled as a matter of law or by
agreement.
2.6 TERM OF CONTRACT:
This Contract shall continue in force and effect until December 31,
20402050, and until thereafter terminated by any Municipality following
not less than twelve (12) si)E (6) months written notice to the other
Municipalities of its intention to terminate; provided, however, that this
Contract may be amended, modified, '-^s^�dor terminated at any
time by a written document approved and executed by each and every
Municipality which is a party to this Contract; and, provided further,
however, that this Contract may not in any event be rescinded or
terminated so long as the Authority has bonds, notes, or other obligations
outstanding, unless provision for full payment of such obligations, by
escrow or otherwise, has been made pursuant to the terms of such
obligations .
Organic Contract Amended and Restated 1 / 28 /2009
Pale 16 of 23
2.7 ASSETS AND PROPERTIES:
All assets and properties of the Authority shall be held in trust for the
purposes herein mentioned, including the payment of the liabilities of the
Authority .
2.8 DISTRIBUTION OF ASSETS UPON TERMINATION:
In the event of the Fescission of termination of this Contract and the
dissolution of the Authority, all of its assets shall immediately vest in the
Municipalities . The assets of the Authority conveyed to each
Municipality shall be that proportion which (i) the total dollar amount of
electric power and energy purchased and paid for by such Municipality,
from the Authority and its predecessor during their corporate existence,
bears to (ii) the total dollar amount of all electric power and energy
purchased and paid for by all of the Municipalities, from the Authority
and its predecessor during their corporate existence.
2.9 SEAL:
The corporate seal of the Authority shall be in the form of a circle and
have inscribed thereon the name of the Authority and the words
" Corporate Seal," together with such insignia, if any, as the Board of
Directors may authorize .
2.10 CONTRACTS--
Except as otherwise provided by law, the Board of Directors may
authorize any officer or officers, agent or agents, to enter into any
contract, or execute and deliver any instrument in the name and on behalf
of the Authority.
2.11 CHECKS, DRAFTS, AND OTHER FINANCIAL DOCUMENTS--
All checks, drafts, or other orders for payment of money and all notes,
bonds, or other evidences of indebtedness issued in the name of the
Organic Contract Amended and Restated 1 / 28 /2009
Page 17 of 23
Authority shall be signed by such officer or officers, agent or agents,
employee or employees of the Authority and in such manner as shall
fr^m time to time be determined by the fiscal resolution of the Boa ^E
2.12 DEPOSITS-.-
All funds of the Authority shall be deposited frame—te +i ,Y to its.
credit, and pursuant to , in in a manner set
forth by the fiscal resolution.the Boa-F of Pi-FeEtor-s may select
2.13 FISCAL YEAR:
The fiscal year of the Authority shall be the calendar year.
2.14 PRINCIPAL PLACE OF BUSINESS--
The principal place of business of the Authority shall be in Fort Collins,
Colorado. ,
and within thirty (30) days following any change, the Authority shall file
Nvit toe niyisio of T oEa Goyerviment 04e mane of t4e anent f^r ser-
ofin�
business.
3.0 GENERAL POWERS:
The general powers of the Authority shall include the following powers:
34L� ELECTRIC ENERGY--
To develop electric energy resources and related services, and produce,
purchase, and transmit electric energy, in whole or in part, for the benefit
of the inhabitants of the Municipalities.
3-.2 h. CONTACTS:
To make and enter contracts of every kind with the Municipalities, the
Organic Contract Amended and Restated 1 / 28 /2009
Pale 18 of 23
United States, any state or political subdivision thereof, and any
individual, firm, association, partnership, corporation or any other
organization of any kind.
34 iii. AGENTS AND EMPLOYEES:
To employ agents and employees.
3 4 iv. FACILITIES:
To acquire, construct, manage, maintain, and operate electric energy
facilities, works, and improvements and any interests therein, including,
without limitation, to acquire, construct, reconstruct, improve, and
rehabilitate, repair, operate, and maintain (separately or jointly)
generating plants, transmission systems and related facilities for the
purpose of delivering electrical power and energy generated thereby to
the Municipalities, and any mine, well, pipeline, plant, structure, or other
facility for the development, production, manufacture, storage,
fabrication, or processing of fossil or nuclear fuel of any kind for use, in
whole or in major part, in any of such generating plants, and any railroad
cars, trackage, pipes, equipment, and any structures or facilities of any
kind used or useful in the transporting of fuel to any of such generating
plants, and to sell, deliver, exchange, or otherwise dispose of the power
and energy generated by said plants, and any of the waste or by-products
therefrom, and to purchase, lease, or otherwise acquire and equip,
maintain, operate, sell, assign, convey, lease, mortgage, pledge, and
otherwise dispose of electrical generating plants, transmission systems
and related facilities, together with all lands, buildings, equipment, and
all other real or personal property, tangible or intangible, necessary or
incidental thereto.
3-.5Lv.LPROPERTYL
To acquire, hold, lease (as lessor or lessee), sell, or otherwise dispose of
Organic Contract Amended and Restated 1 / 28 /2009
Pale 19 of 23
any real or personal property, commodity, and service including, without
limitation, to buy, lease, construct, appropriate, contract for, invest in,
and otherwise acquire, and to own, hold, maintain, equip, operate,
manage, improve, develop, mortgage, and deal in and with, and to sell,
lease, exchange, transfer, convey and otherwise dispose of and to
mortgage, pledge, hypothecate and otherwise encumber real and
personal property of every kind, tangible and intangible.
3-. 6 vi. CONDEMNATION:
To condemn property for public use, if such property is not owned by
any public utility and devoted to such public use pursuant to state
authority.
3-.7(vii)__DEBT:
To incur debts, liabilities, or obligations and to borrow money and, from
time to time, to make, accept, endorse, execute, issue, and deliver bonds,
debentures, promissory notes, bills of exchange, and other obligations of
the Authority for monies borrowed or in payment for property acquired
or for any of the other purposes of the Authority, and to secure the
payment of any such obligations by mortgage, pledge, deed, indenture,
agreement, or other collateral instrument, or by other lien upon,
assignment of, or agreement in regard to, all or any part of the properties,
rights, assets, contracts, easements, revenues, and privileges of the
Authority wherever situated.
3-. 9(viii.) LITIGATION:
To sue and be sued in its own name.
3-, 9 ix. SEAL:
To have and to use a corporate seal.
Organic Contract Amended and Restated 1 / 28 /2009
Pale 20 of 23
349Lx.JRATES:
To fix, maintain, and revise fees, rates, and charges for functions, services,
or facilities provided by the Authority.
344(xi.) REGULATIONS:
To adopt, by resolution, regulations respecting the exercise of its power
and the carrying out of its purposes.
342(xii.) AGENTS:
To do and perform any acts and things authorized by this section under,
through, or by means of an agent or by contracts with any person, firm,
corporation or governmental entity, fiduciary,
of 0qe United States or- a+�y state o-r polifica! subdivision tker-
�3(xiii.) JOINT OWNERSHIP--
To own, operate, and maintain real and personal property, and facilities
in common with others, as permitted by law, and to conduct joint,
partnership, cooperative, or other operations with others and to exercise
all of the powers granted in this Contract in joint partnership or
cooperative efforts and operations with others.
3 . 14(xiv.) OTHER POWERS--
To exercise any other powers which are essential, necessary, incidental,
convenient, or conducive to providing the wholesale electric power and
energy requirements of the Municipalities, as well as to accomplishing
the purposes, functions, services, and facilities set forth in Sections 2.0,
2.1, and 2.2 of this Organic Contract.
4.0 POLITICAL SUBDIVISION:
The Authority shall be a political subdivision and a public corporation of the
Organic Contract Amended and Restated 1 / 28 /2009
Pale 21 of 23
State of Colorado separate from the Municipalities. It shall have the duties,
privileges, immunities, rights, liabilities, and disabilities of a public body politic
and corporate .
5.0 REVENUE BONDS--
The Authority is authorized to issue bonds, notes, or other obligations secured
by its electric revenues pursuant to the terms, conditions, and authorization
contained in 1973 C.R.S. § 29-1-204(7) .
6.0 DEBT NOT THAT OF MUNICIPALITIES--
The bonds, notes, and other obligations of the Authority shall not be the debts,
liabilities, or obligations of the Municipalities.
rights,7.0 AUTHORIP� 1S SUCCESSOR: The Authority is the successoF to the Platte River-
Power- Author-", a non profit eofpo-Fafion of the State of Colo-Fado, whose eor-po
existence has been terminated, and as such successor- the Authority shall hold all
int s, p-Fivileges, e-r fies of and s4a1All assume all ,.bligatio s _f s,+r
profit cor-po.Fcrcion.
8-.07. 0 FILING OF CONTRACT:
A copy of this Contract shall be filed with the Division of Local Government of
the State of Colorado within ten (10) days after its execution by the
Municipalities.
9-08 . 0 NOTICES:
Any formal notice, demand, or request provided for in this Contract shall be in
writing and shall be deemed properly served, given, or made if delivered in
person or sent by registered or certified mail, postage prepaid, to the persons
specified below:
Organic Contract Amended and Restated 1 / 28 /2009
Page 22 of 23
Town of Estes Park, Colorado
c/ o ^ ��anrTown Administrator
P.O. Box 1200
Estes Park, Colorado 80517
City of Fort Collins, Colorado
c/ o Utilities Executive Director Gene -a'_ Manager-
P . O . Box 580
Fort Collins, Colorado 80522
City of Longmont, Colorado
c/ o Director of Longmont Power & Communications Electric and
Telecornv»u ications Utilities
Fier
1100 South Sherman
Longmont, Colorado 80501
City of Loveland, Colorado
c/ o Water and Power Director
200 North Wilson
Loveland, Colorado 80537
40:09 .0 SEVERABILITY:
In the event that any of the terms, covenants, or conditions of this Contract or
their application shall be held invalid as to any person, corporation, or
circumstance by any court having jurisdiction, the remainder of this Contract
and the application and effect of its terms, covenants, or conditions to such
persons, corporation, or circumstances shall not be affected thereby.
14-.010 .0 DUPLICATE ORIGINALS--
This eContract may be executed in several counterparts, each of which will be an
original but all of which together shall constitute one and the same instrument.
Organic Contract Amended and Restated 1 / 28 /2009
Page 23 of 23
IN WITNESS WHEREOF, the Municipalities have caused this Contract, as amended, to
be executed as of the 4-sT day of , 2009 julyf 1998 .
TOWN OF ESTES PARK, COLORADO ATTEST-:
.
By: Town Clerk
Maw
ATTEST--
.
CITY OF FORT COLLINS, COLORADO
City Qe
By:
Mayor ATTEST-
CITY
OF LONGMONT, COLORADO City ClerIF
ATTEST-
By:
Mayor
City QeF
ATTEST:
CITY OF LOVELAND, COLORADO
By : Town Clerk
Maw
ATTEST:
City Clerk
ATTEST:
Organic Contract Amended and Restated 1 / 28 /2009
Page 24 of 23
City Clerk
ATTEST:
Cites
MayorTOWN OF IESTIES PARK, COLORADO
Crrry OP FORT CO"INS,rNc Cnr nn n ran 4*&
Mayor-
cipi-I OF r (4.r Q-NT- r,nr nn n ran
MayorTZXT-
04A4 OF r nA T n NP Cnr nn n ran
Mayor
Organic Contract Amended and Restated 1 / 28 /2009
Page 25 of 23
ATTACHMENT 2
AMENDED CONTRACT FOR THE SUPPLY OF ELECTRIC POWER AND ENERGY
This contract, made this -Is, day of , 2009 *, 998, between PLATTE RIVER
POWER AUTHORITY, a political subdivision organized and existing under and by virtue of the
laws of the State of Colorado (hereinafter called "Platte River") and the CITY OF FORT
COLLINS, COLORADO, a municipal corporation of the State of Colorado (hereinafter called
"Fort Collins�Ly,D
WITNESSETH:
WHEREAS, Platte River was formed by Estes Park, Fort Collins, Longmont proposes
,and Loveland (hereinafter collectively called " Municipalities" ) in order to
provide the wholesale power and energy requirements of the Municipalities in a cost effective,
sustainable, and environmentally responsible manner; and
WHEREAS, Platte River, owns, operates, and maintains electric generating facilities
plants, transmission lines, substations, and related facilities
electric poNver and for the purpose, among others-, of supplying electric power and
energy to thermal electric systems owned and operated by the Municipalities for resale;
and
WHEREAS, Platte River has heretofore entered into or will enter into agreements for the
sale of electric power and energy similar in form to this Agreement with the cities of Estes Park,
Longmont, and Loveland; .. 1 .11-Fdeipalifies operating electric systems (whic-h
,, , unieipal fies are her-, ina ft F eell ,,,well called "N4un ,,ipal fies ); and
WHEREAS, this Agreement replaces the Transmission Facilities Agreement between
Platte River and Fort Collins, dated February 22, 1980; and
WHEREAS, Fort Collins desires to purchase electric power and energy from Platte River
on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual undertakings herein contained, the
Parties hereto agree as follows:
Article 1 : Sale and Purchase of Electric Power and Energy
Fort Collins Power Supply Agreement Amended and Restated 1 / 28/ 2009
Page 1 of 11
(a) Platte River shall sell and deliver to Fort Collins and Fort Collins shall purchase
and receive from Platte River all electric power and energy which Fort Collins shall require for
the operation of its municipal electric system to the extent that Platte River shall have such
power and energy available; provided, however, that_LIJ Fort Collins shall have the right to
continue to generate its own power and energy to the extent of the capacity of its generating
facilities in service on September 5, 1974 and may also generate power and energy for its own
use from any new generation resource(s) owned and operated by Fort Collins provided that the
total rated capacity of all such new generation is no greater than 1,000 kW or one percent of the
peak load of Fort Collins, whichever is greater, provided further that if Fort Collins develops
new generation resources of a total rated capacity as set forth above Platte River commits that it
will meet with Fort Collins to discuss in good faith an increase in the total rated capaci!Y limit,
and (2) Fort Collins shall not be in violation of the all requirements purchase obligation herein
when it purchases power from net metered customers.
(b) Subject to the provisions of Article 2(a), Fort Collins hereby binds itself to take and
pay for all power and energy that is generated, purchased, or otherwise obtained by Platte
River, and is furnished to Fort Collins for resale pursuant to Article 1 (a) hereof, said payment to
be made at the rates schedule set forth-eut in the Tariff Schedules of Platte River in effect at the
ftDn+-time the power and enemy is furnished to Fort Collins time made, a��afte
provided.
Article 2: Rate for Power and Enemy
(a) Fort Collins shall pay Platte River for all electric power and energy furnished
hereunder at the rates and on the terms and conditions as provided set fort in the Platte River
Tariff Schedules Attachment-A; provided, however, that notwithstanding any other provision
of this Agreement, the obligation of Fort Collins to pay Platte River for all electric power and
energy furnished hereunder shall be, and is, a special obligation of Fort Collins payable solely
from revenues to be received by Fort Collins from the sale of electric power and energy to its
electric utility customers during the term hereof and is not a lien, charge, or liability against Fort
Collins or against any property or funds of Fort Collins other than revenues to be received by
Fort Collins from the sale of electric power and energy to its electric utility customers during the
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 2 of 11
term hereof, and the obligation to pay Platte River for all electric power and energy furnished
hereunder does not constitute a debt, liability, or obligation of Fort Collins other than from its
revenues to be received from the sale of electric power and energy to its electric utility
customers during the term hereof, and Fort Collins is not otherwise obligated to pay such
obligation.
(b) The Board of Directors of Platte River at such intervals as it shall deem
appropriate, but in any event not less frequently than once in each calendar year, shall review
the rates for electric power and energy furnished hereunder and under similar agreements with
the other Municipalities and, if necessary, shall revise such rates to so 44at it s produce
revenues which shall be sufficient, but only sufficient, with the revenues of Platte River from all
other sources,
(i) to meet the cost of operation and maintenance (including, without
limitation, fuel, replacements, insurance, taxes, fee, and administrative and
general overhead expense) of the electric generating plants, transmission
system, and related facilities of Platte River;
(ii) to meet the cost of any power and energy purchased for resale hereunder
by Platte River and the cost of transmission service;
(iii) to make payments of principal and interest on all indebtedness and
revenue bonds of Platte River and provide an earnings margin adequate to
enable Platte River to obtain revenue bond financing on favorable terms;
and
(iv) to provide for the establishment and maintenance of reasonable reserves.
(c) Platte River shall cause a notice in writing to be given to each Municipality to
which it furnishes electric power and energy, which notice shall set out each proposed-revision
of the rates with the effective date thereof, which shall be not less than thirty (30) days after the
date of the notice, and shall set forth the basis upon which the Fate is proposed to be adjusted
and stablis a . All rate adjustments shall apply equally to all Municipalities to which Platte
River furnishes electric power and energy, unless otherwise agreed upon, and shall not be
discriminatory. Fort Collins agrees that the rates from time to time established by the Board of
Directors of Platte River shall be deemed to be substituted for the rates presently contained in
the Tariff Schedules herein provided in Attachment A and agrees to pay for electric power and
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 3 of 11
energy furnished to it hereunder after the effective date of any revisions to the Tariff Schedules
at such revised rates.
Article 3: Covenants of Platte River
(a) After- fifst satisfying energ�re e is of all.
Municipalities to which it furnishes electric power and energy, Platte River may, as suc
V��Ili� ents are established f+ofn t4ne to fifne, Platte River- shall mmket and Elispose of-, OfIder-
the most economically advantageous teFms and conditions obtainable, any and all surplus
electric poweF and ener-gy wl4i& it owns or- pr-oduces or- ivl4i& Platte River- is obligated jb�4
contr-act to Platte River shall use reasonable diligence to furnish a constant and
uninterrupted supply of electric power and energy hereunder. If the supply of electric power
and energy shall fail, or be interrupted, or become defective through uncontrollable forces, as
defined
yherein, Platte River shall not be liable for any claim or damages caused thereby.
( atte tise a constant and uninteFFupted
supply of electric power and eneFgy hereunde.r. if the supply of electric power and eneFgy shall.
fail, be int2Fr-upted r become Elefeefiye 04-Fo a4 uncont-Follable forner as define in Owe
Provisions,General Power- Contract Attachment / attached hereto and made a paFt ,
Platte nit ,,,,, sl4all not be liable +,,reef- , or fo-F damages ,, ., , , se + 4er-ebyAfter first satisfying the
electric power and energy requirements of all Municipalities to which it furnishes electric
power and energy, Platte River may, in its sole discretion, market and dispose of any surplus
electric power and energy which it owns or produces or which Platte River is obligated by
contract to purchase, under the most advantageous terms and conditions obtainable.
Article 4: Covenants of Fort Collins
(a) Fort Collins agrees to maintain rates for electric power and energy furnished to its
electric utility customers which will, after payment of all of Fort Collins 's costs of operation and
maintenance (including, without limitation, replacements, insurance, administrative and
general overhead expense), return to Fort Collins sufficient revenue to meet its obligations to
Platte River hereunder.
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 4 of 11
(b) Fort Collins shall not sell at wholesale any of the electric energy delivered to it
hereunder to any of its customers for resale by that customer, unless such resale is specifically
approved in writing by Platte River.
(c) Fort Collins acknowledges that it is familiar with the provision of Platte River' s
contract with the Western Area Power Administration znitedStates, which requires, as a
condition of the purchase of federally generated power pursuant to such contract,. that Platte
R4ver- make available the benefits Ow eef to the Municipalities comply
+^,,ms and at the lowest possible rates consistent-with certain provisions of the "General Power
Contract Provisions," which is attached hereto as Attachment A. , aR
Fort Collins further acknowledges its compliance obligations under the General Power Contract
Provisions, as that document presently exists and asPlatte River- has eneoti-Faged it may be
modified in4o4mplenient the future distribution principles of said provision and agrees to do
se.
Article 5: Conditions of Delivery of Power and Energy
(a) The electric power and energy to be furnished by Platte River shall be alternating
current, sixty (60) hertz, three-phase, subject to conditions of delivery and measurement as
hereinafter provided and in the Tariff Schedules .
(b) Responsibilities for the facilities through which ,
voltage, and the other conditions of service governing Platte
l � ll River's y 1
of electric power and energy is delivered are a-
ll a 11 o- �, _ _ _ _ NV"
Specifications set forth in Attachment BC of this Agreement, attached hereto and made a part
hereof; as aRw+ided by toe n , ,,+; from time to t4ne.
(c) Fort Collins shall make and pay for all final connections between its system and
the system owned by, or available to, Platte River at the points of delivery agreed upon.
(d) Unless otherwise agreed, Fort Collins shall install, own, and maintain the
necessary substation equipment at the points of delivery from the system of, or available to,
Platte River and shall install, own, and maintain switching and protective equipment of
adequate design and sufficient capacity beyond such points of delivery to enable Fort Collins to
take and use the electric power and energy supplied hereunder without hazard to such system.
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 5 of 11
(e) To provide adequate service to Fort Collins, Platte River agrees to increase the
capacity of an existing transmission point of delivery, or to establish a new transmission point
of delivery at a mutually agreeable location, of a design capacity of not less than 10,000 kV a
maximum nameplate rating at 55' C. rise, and in accordance with this Agreement.
(f) Fort Collins shall give Platte River at least two years written notice of the need to
increase the capacity of an existing transmission point of delivery or the need for a new
transmission point of delivery. If new transmission is required, Fort Collins shall give Platte
River at least four years written notice. The notice shall specify the amount of additional or new
capacity, the new transmission required, and the desired initial date of its operation. Platte
River shall, within sixty (60) days after receipt of such notice, and on the basis of the best
information available to Platte River from system plans and load projections for Fort Collins,
inform Fort Collins in writing of Platte River' s plans and schedules with respect to the supply of
the additional capacity requested by Fort Collins, and shall thereafter keep Fort Collins
informed of Platte River's progress in supplying such additional capacity. Any written notice
requesting additional capacity at an existing point of delivery or the establishment of a new
point of delivery shall provide to Platte River any and all authority necessary for its facilities to
occupy the property of Fort Collins during the period in which that point of delivery is used by
Platte River for the delivery of power and energy.
(g) If Fort Collins requires the construction of a 115 kV or 230 kV transmission line for
additional service where such line is a tap or radial line over which energy can flow in only one
direction, as distinguished from a system line over which energy can flow in either direction,
then ownership, operation, and maintenance of such 115 kV or 230 kV transmission line will be
undertaken by Platte River pursuant to a separate agreement with Fort Collins which provides
for an appropriate sharing of the annual costs of ownership and operations of such line for as
long as such energy flow and delivery conditions prevail.
Article 6: Consultation on System Planning
(a) At least once each year, on or before Tuly 1, Platte River shall consult Fort Collins
concerning its requirements for transmission facilities to effect delivery of power and energy by
Platte River. The date for such annual consultation shall be set by greement of the Parties.
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 6 of 11
(b) At least thirty (30) days prior to the date of such annual consultation, Fort Collins
shall provide Platte River with two (2) copies of its latest estimate of requirements for delivery
of power and energy covering a future period of ten (10) years. Platte River shall review Fort
Collins' s annual estimates and shall consider them in preparing Platte River's annual system
plan. Following Platte River's annual consultations on delivery requirements with all
Municipalities, Platte River shall prepare an annual system plan for the delivery of power and
energy to all Municipalities covering a future period of ten (10) years. Decisions regarding the
construction of any transmission and delivery facilities by Platte River primarily to supply Fort
Collins, will take into account Fort Collins' long-range distribution requirements and costs and
the long-range costs and benefits of alternative service plans . Platte River's annual system plan
shall include appropriate load flow and stability studies and a copy thereof shall be furnished to
Fort Collins if requested.
Article 7: Measurement of Power and Energy
(a) Metering equipment shall be furnished, installed, and maintained by Platte River
at each point of delivery to Fort Collins at the low voltage side of the transforming
equipmentlocated ther or at such other points as agreed upon by the Parties .
(b) Loss adjustments for low voltage side or remote metering shall be as specified in
the Tariff Schedulerste schedule i Attachment n or as otherwise agreed by the Parties.
Article 87: Meter Readings and Payment of Bills
(a) Platte River shall read meters and invoice Fort Collins for power and energy
furnished hereunder at approximately monthly intervals. Such invoices shall be due and
payable to Platte River within fifteen (15) days from date of issuance and shall become
delinquent thereafter.
(b) If Fort Collins's monthly bill becomes delinquent, late charges at the rate of a one
and one-half percent (1ih % ) per month of the unpaid balance shall be added, and if such bill is
delinquent for a period of fifteen (15) days or longer, Platte River may discontinue delivery of
electric power and energy not less than fifteen (15) days following written notice to Fort Collins.
Article 98: Meter Testing and Billing Adjustment
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 7 of 11
(a) Platte River shall test and calibrate meters by comparison with accurate standards
at intervals of twelve (12) months, and shall also make special meter tests at any time at Fort
Collins's request. The cost of all tests shall be borne by Platte River; provided, however, that if
any special meter test made at Fort Collins's request shall disclose that the meters are recording
accurately, Fort Collins shall reimburse Platte River for the cost of such test. Meters registering
within two percent (2 % ) above or below normal shall be deemed to be accurate.
(b) The readings of any meter which are disclosed by test to be inaccurate shall be
corrected from the beginning of the monthly billing period immediately preceding the billing
period during which the test was made; provided, that no correction shall be made for a longer
period than such inaccuracy is determined by Platte River to have existed . If a meter fails to
register, the electric power and energy delivered during such period of failure shall, for billing
purposes, be estimated by Platte River from the best information available.
(c) Platte River shall notify Fort Collins in advance of any meter reading or test so that
Fort Collins's representative may be present at such meter reading or test.
Article 109: Right of Occupancy and Access
Both Parties shall have a revocable license to occupy the property of the other Party
necessary to deliver and receive power and energy under this Agreement as described in
Attachment B . Duly authorized representatives of either Party hereto shall be permitted to
enter the premises of the other Party hereto at all reasonable times in order to carry out the
provisions of this Agreement and those described in Attachment Bhereof.
Article 11 : Uncontrollable Forcesln: n ttaEk,, eats
Neither Party to this Agreement shall be considered to be in default in performance of
any of its obligations, except the agreement to make payment, when a failure of performance
shall be due to an uncontrollable force. The term " uncontrollable force' means any cause
beyond the control of the Party affected, including but not restricted to, failure of or threat of
failure of facilities, flood, earthquake, storm, fire, lightning, epidemic, war, riot, civil
disturbance or disobedience, labor dispute, labor or material shortage, sabotage, restraint by
court order or public authority and action or inaction by, or failure to obtain the necessary
authorization or approvals from, any governmental agency or authority, which by the exercise
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 8 of 11
of due diligence such Party could not reasonably have been expected to avoid and which by
exercise of due diligence it shall be unable to overcome. Nothing contained herein shall require
a Party to settle any strike or labor dispute in which it may be involved . Either Party rendered
unable to fulfill any of its obligations under this Agreement by reason of an uncontrollable force
shall give prompt written notice of such fact, if reasonable to do so, to the other Party and shall
exercise due diligence to remove such inability with all reasonable dispatch.
incorporatedProvisions (Attachment B), and the sex v specifications applicable to FeFt Collins (Attachment.
herein. As used in such
attachments, the term "Seller" shall rnean Platte River an
t"n�"" ^� e.F++n "Part ici i nt" shall mean
Fort Collins.
Article 12: Enforceability44 ! Term of Agreement
The Parties hereto recognize that there are legal constraints imposed upon them by the
constitution, statutes, and rules and regulations of the State of Colorado and of the United
States, and imposed upon them by their respective governing statutes, charters, ordinances,
rules and regulations, and that, subject to such constraints, the Parties intend to carry out the
terms and conditions of this Agreement. Notwithstanding any other provision of this
Agreement to the contrary, in no event shall either of the Parties exercise any power or take any
action which shall be prohibited by applicable law. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner so as to be effective and valid under
applicable law.
Tl T Parties,cuted by both
and
shall
amend
n supersede
� NA existing
x st Vlg Cofitr- et for- the St4pply of M Ieet-Fie Vlore-! and
n T+IeFgy
Collins,between Platte River and Fort
dated March 34, 1980. This A.9reement shall remain in
-- -- i-
ated by either- PaFty following not less
than six (6) months written notice to the other- Party of its intention to terminate .
Article 13: Term of Agreement42 No ' &s
(a) This Agreement shall become effective when executed by both Parties, and shall
amend and supersede the existing Contract for the Supply of Electric Power and Energy
between Platte River and Fort Collins, dated July 1, 1998r '��31,1. This Agreement shall
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 9 of 11
remain in effect until December 31, 20502940, and thereafter until terminated by either Party
following not less than twelvesi-x (126) months written notice to the other Party of its intention
to terminate.
(b) The Transmission Facilities Agreement between Platte River and Fort Collins dated
February 22, 1980, shall be deemed terminated as of the date of this Agreement.
Article 1412: Notices
Any formal notice provided for in this Agreement, and the payment of monies due, shall
be deemed properly served, given or made, if delivered in person or sent by regular mail to the
persons specified below:
For Platte River: For Fort Collins :
General Manager Utilities General Manager
Platte River Power Authority City of Fort Collins
2000 East Horsetooth Road P. O. Box 580
Fort Collins, Colorado 80525 Fort Collins, Colorado 80522
Article 1513: Severability
In the event that any of the terms, covenants, or conditions of this Agreement or their
application shall be held invalid as to any person or circumstance by any Court having
jurisdiction, the remainder of this Agreement and the application of its terms, covenants, or
conditions to such persons or circumstances shall not be affected thereby.
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 10 of 11
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
the day and year first above written.
PLATTE RIVER POWER AUTHORITY: ATTEST:
ATTEST: TAT A TTF RTATEP 77(ITATT�'TJ A T TTT Q V RIT •
rrrr�r.
By : By:
General Manager Secretary
Secretary
CITY OF FORT COLLINS: ATTEST:
ATTEST: CITY OF FORT COLLINS :
INS :
�r
By: By:
Mayor City Clerk
City Cler-k el
Fort Collins Power Supply Agreement Amended and Restated 1/ 28/ 2009
Page 11 of 11
ATTACHMENT 3
TRANSMISSION FACILITIES AGREEMENT
1 This Agreement, made this 22nd day of February 1980, by and
2 between PLATTE RIVER POWER AUTHORITY, a political subdivision of the
3 State of Colorado (hereinafter called "Platte River") and THE CITY OF
4 FORT COLLINS, a municipal corporation of the State of Colorado (herein-
5 after called "Fort Collins") .
6 WITNESSETH:
7 WHEREAS, Platte River and Fort Collins are parties to a contract
8 dated September 5, 1974, pursuant to which Platte River is obligated to
9 sell and deliver to Fort Collins, and Fort Collins is obligated to pur-
10 chase and receive from Platte River, all electric power and energy which
11 Fort Collins shall require for the operation of its municipal electric
12 system (hereinafter called "Power Contract") on the terms and conditions
13 set forth in said Power Contract; and
14I WHEREAS, Fort Collins owns certain 115 kV transmission facilities and
15I for consideration, it proposes to grant a revocable license to Platte
16 River for the purpose of operating, maintaining, repairing, and replacing
17 said facilities for the benefit of Fort Collins and other constituent
18 municipalities ("Municipalities") supplied by Platte River in the interests
19 of economy, reliability and coordinated operation thereof; and
20 WHEREAS, Platte River and Fort Collins desire to continue to coop-
21 erate in long-term arrangements for the planning of future 115 kV
22� electric transmission facilities necessary for coordinated system
23 operations as well as the delivery of power and energy to Fort Collins
241 and other Municipalities supplied by Platte River;
25 NOW, THEREFORE, in consideration of the mutual undertakings herein
26 contained, and contained in the Power Contract, the parties hereto agree
-2-
1 as follows:
2 (1) Revocable License to Operate/Maintain 115 kV Facilities
3 (a) Fort Collins does hereby grant unto Platte River a revocable
4 license to operate and maintain the electric transmission facilities
5 more particularly described in Exhibit "A", attached hereto and
6 incorporated herein ("Licensed Facilities") for the sum of One
7 Dollar ($1.00) , payable in advance, and receipt of which is hereby
8 acknowledged by Fort Collins. Said license shall run from the 1st
9 day of March, 1980 through the 30th day of June, 2014, and there-
10 after unless and until sooner revoked or terminated pursuant to
11 Article 9.
12 (b) During the term of this Agreement, Platte River shall have the
13 right to use the Licensed Facilities in whatever manner it shall
14 determine to be the most effective to meet its obligations under
15 the Power Contract and the local needs of Fort Collins and
16 to make whatever modifications, improvements, repairs and replace-
17 ments of the Licensed Facilities it shall determine to be necessary;
18 PROVIDED, HOWEVER, that it shall preserve the asset value of the
19 Licensed Facilities less ordinary depreciation. Platte River shall
20 not permit any lien or encumbrance to attach to the Licensed Facil-
21 ities and shall deliver them up to Fort Collins at the termination
22 of this Agreement.
23 (c) Platte River shall be responsible for the completion, operation,
24 maintenance, repair, replacement and any modification of the
25 Licensed Facilities. All costs incurred by Platte River relating
26 to the Licensed Facilities shall be borne by Platte. River and con-
27 stitute a component of Platte River' s wholesale rate under the
28 Power Contract. General expenses relating to the Licensed
-3-
1 Facilities shall be included therein.
2
3 (2) Point of Transfer Between Fort Collins and Platte River
4 For the Licensed Facilities and for the 115 kV and 230 kV delivery
5 facilities pursuant hereto, the point of transfer of control and
6 responsibility between Platte River and Fort Collins at each sub-
7 station shall be the load side of the high voltage disconnect switch
8 between the 115 kV or 230 kV bus and Fort Collins ' distribution
9 transformer at such substation. Platte River shall control said
10 disconnect switch by license or ownership, as the case may be.
11 Nothing in this Agreement shall preclude Fort Collins from discon-
12 necting its facilities from, and reconnecting them to, Platte
13 River's system at any such substation provided it has first
14 received proper operating and safety clearances in accordance
15 with the June 1979 Operating Agreement attached as Exhibit "B" ,
16 plus any approved amendments thereto.
17
18 (3) Responsibility for Present and Future 115 kV Transmission Facilities
19 (a) From and after March 1, 1980, Platte River will operate, maintain,
20 renew and replace all existing 115 kV transmission and delivery facil-
21 ities described in Exhibit "A".
22 (b) From and after March 1, 1980, Platte River will assume respons-
23 ibility for any and all 115 kV and 230 kV transmission and delivery
24 facilities which are under construction by Fort Collins and shall
25 reimburse Fort Collins for its moneys expended thereon, and will
26 construct, own, operate, maintain, renew and replace all such facil-
27 ities and all additional 115 kV and 230 kV transmission and delivery
28 facilities which become necessary to supply Fort Collins, in accordance
-4_
1 with the conditions hereinafter set forth; provided, however, that if
2 for any reason Platte River is precluded from providing, at 115 kV or
3 230 kV, additional transmission and delivery facilities pursuant to
4 paragraph (b) or (d) of this article, Platte River shall provide
5 equivalent transmission and delivery facilities at a lower voltage,
6 which are of sufficient capacity, reliability and economically prac-
7 ticable in the circumstances , to supply Fort Collins' power and energy
8 requirements.
9 (c) To provide adequate service to Fort Collins, Platte River agrees
10 to increase the capacity of an existing point of delivery, or to
11 establish a new point of delivery at a mutually agreeable location, of
12 a design capacity of not less than 10,000 kVa maximum nameplate rating
13 at 550 C. rise, and in accordance with this Agreement.
14 Fort Collins shall give Platte River at least two years written
15 notice thereof and shall specify the amount of additional or new
16 capacity and the desired initial date of its operation. Platte
17 River shall , within sixty (60) days after receipt of such notice,
18 and on the basis of the best information available to Platte River
19 from system plans and load projections for Fort Collins, inform
20 Fort Collins in writing of Platte River' s plans and schedules with
21 respect to the supply of the additional capacity requested by Fort
22 Collins, and shall thereafter keep Fort Collins informed of Platte
23 River's progress in supplying such additional capacity.
24 (d) If Fort Collins requires the construction of a 115 kV or 230 kV
25 transmission line for additional service commencing March 1, 1980,
26 or later where such line is a tap or radial line over which energy
27 can flow in only one direction, as distinguished from a system line
28 over which energy can flow in either direction, then ownership,
. -6-
1 operation and maintenance of such 115 kV or 230 kV transmission line
2 will be undertaken by Platte River pursuant to a separate agreement
3 with Fort Collins which provides for an appropriate sharing of the
4 annual costs of ownership and operation of such line for as long as
5 such energy flow and delivery conditions prevail .
6
7 (4) Consultation on System Planning
8 (a) At least once a year, on or before July 1, Platte River shall
9 consult Fort Collins concerning its requirements for transmission
10 facilities to effect delivery of power and energy by Platte River.
11 The date for such annual consultation shall be set by agreement of
12 the Parties.
13 (b) At least thirty (30) days prior to the date of such annual
14 consultation, Fort Collins shall provide Platte River with two (2)
15 copies of its latest estimate of requirements for delivery to it
16 of power and energy covering a future period over which Fort Collins '
17 maximum system 30-minute kilowatt demand is expected to reach a level
18 of twice its latest system maximum demand, or 10 years, whichever is
19 greater. Platte River shall review Fort Collins' annual estimates
20 and shall consider them in preparing Platte River' s annual system
21 plan. Any differences between Fort Collins' estimates of its require-
22 ments and those used by Platte River in its annual system plan shall
23 be explained in writing and a copy shall be furnished to Fort Collins.
24 (c) Following Platte River's annual consultations on delivery re-
25 quirements with all Municipalities, Platte River shall prepare an
26 annual system plan for the delivery of power and energy to all Muni-
27 cipalities covering a future period over which Platte River's maximum
28 system demand is expected to reach a level of twice its latest system
-6-
1 demand, or 10 years, whichever is greater. Decisions regarding the
2 construction of any transmission and delivery facilities to be under-
3 taken after March 1, 1980, which are to be provided by Platte River
4 primarily to supply Fort Collins, will take into account Fort Collins '
5 long-range distribution requirements and costs, and the long-range
6 costs and benefits of alternative service plans, in determining the
7 plan for 115 kV or 230 kV supply to Fort Collins. Platte River's
8 annual system plan shall include appropriate load flow and stability
9 studies and a copy thereof shall be furnished to each Municipality.
10
11 (5) Construction of Future Transmission and Delivery Facilities
12 From and after March 1, 1980, Platte River shall finance, construct,
13 own, operate and maintain all future transmission and delivery facil-
14 ities required to supply electric power and energy to Fort Collins at
15 existing delivery points or at future delivery points as may be estab-
16 lished from time to time by agreement between Platte River and Fort
17 Collins.
18
19 (6) Transmission and Delivery for Other Utilities
20 The transmission facilities of Fort Collins which are transferred to
21 Platte River pursuant to this Agreement are intended for use primarily
22 to facilitate the transmission and delivery of electric energy to Fort
23 Collins and other Municipalities served by Platte River. Any use that
24 Platte River shall make of such transmission facilities to effect the
25 delivery of energy to, or the receipt of energy from, other electric
26 utilities shall be (i ) under such terms and conditions that do not
27 impair service to Fort Collins and (ii ) compensatory to Platte
28 River.
_7_
1 (7) Sales by Platte River to Other Entities
2 Platte River covenants that it will not make sales of energy directly
3 to non-utility consumers situated within the electric distribution
4 service area of Fort Collins unless requested to do so by Fort
5 Collins, pursuant to a written agreement among Platte River, Fort
6 Collins and any such consumer. This covenant shall not affect Platte
7 River's rights and obligations to sell. or exchange power and energy
8 to other electric utilities pursuant to its contracts with such
9 utilities and under conditions consistent with the provisions of
10 Section 3(a) of the Power Contract.
11
12 (8) Right of Access
13 Duly authorized representatives of either party hereto shall be
14 permitted to enter the premises of the other party hereto at all
15 reasonable times in order to carry out the provisions hereof.
16
17 (9) Termination
18 The license granted herein shall became effective March 1, 1980 and
19 shall remain in effect until June 30, 2014, unless revoked or term-
20 inated by either Party, following not less than three (3) years
21 written notice to the other Party given prior to June 30, 2014, or
22 unless terminated thereafter following not less than six (6) months '
23 written notice by one Party to the other.
24
25 (10) Notices
26 Any formal notice provided for in this Agreement, and the payment of
27 moneys due, shall be deemed properly served, given or made, if deli-
28 vered in person or sent by regular mail to the persons specified below:
-8-
1 For Platte River: For Fort Collins:
2 General Manager Director of Light and Power
Platte River Power Authority City of Fort Collins
3 Timberline & Horsetooth Roads P. 0. Box 580
Fort Collins, Colorado 80525 Fort Collins, Colorado 80522
4
5 (11) Liability
6 (a) Platte River hereby agrees to indemnify and hold harmless Fort
7 Collins, its agents and employees, from any loss or damage and from
8 any liability on account of personal injury, death or property damage,
9 or claims for personal injury, death, or property damage of any nature
10 whatsoever and by whomsoever made arising out of or in any manner
11 connected with the activities of Platte River hereunder.
12 (b) Fort Collins hereby agrees to indemnify and hold harmless Platte
13 River, its agents and employees, from any loss or damage and from any
14 liability on account of personal injury, death or property damage, or
15 claims for personal injury, death or property damage, of or any nature
16 whatsoever and by whomsoever made arising out of or in any manner
17 connected with the activities of Fort Collins hereunder.
18
19 (12) Disputes
20 Any matter of disagreement between the Parties to this Agreement shall
21 be referred promptly to the Platte River Board of Directors for
22 arbitration.
23
24 (13) Severability
25 In the event that any of the terms, covenants, or conditions of this
26 Agreement or their application, shall be held invalid as to any person
27 or circumstance by any court having jurisdiction, the remainder of
28 this Agreement and the application of its terms, covenants or
_9_
1 conditions to such persons or circumstances shall not be affected
2 thereby.
3
4 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
5 be executed the day and year first hereinabove _written.
6
7 Attest: PLATTE IVERjPOWE AUTHORIT
V
$ By:
9 Assistant Secretary General Manager
10 CITY OF FORT COLLINS
(Attest:
11 71� � By: l f
12 � City Clerk Mayor
13
Approv s to form:
1
ity A
16
17
16
19
20
21
22
23
24
25
26
27
28
EXHIBIT "A"
The following properties comprise the Licensed Facilities to be operated and
maintained by Platte River Power Authority from and after March 1, 1980,
pursuant to the provisions of Article (1) (a) of the Transmission Facilities
Agreement to which this exhibit is annexed.
Category Property Description FERC Account
(1) Land and Land Rights 350
All land, land rights and easements on
which the following facilities are
erected:
(a) Poudre Tap to Power Plant Sub-
station 115 kV line
(b) WAPA Line to Drake Substation
115 kV line
(c) Timberline Park Substation
(Station 300)
(2) Station Equipment 1 353
All foundations, control buildings,
structural steel , 115 kV circuit
breakers, busses, switches and insula-
tors, 115 kV control equipment and de-
vices D-C supply, fences, general
station equipment, switchboards,
meters, relays, wiring and other
electrical facilities in service at
Timberline Park Substation (Station
300)
(3) Station Equipment II 362
All 115 kV breakers, busses, switches
insulators, control equipment & devices,
switchboards, meters, relays, structural
steel and foundations in service at
(a) Drake Road Sub (Station 200) and
(b) Northwest Station (Station 400)
(c) Power Plant Sub (Station 100)
(4) Poles and Fixtures -- 115 kV Lines 355
All anchors, head arm and other guys,
including guy guards, guy clamps, pole
plates, etc. ; brackets; cross arms and
braces; gaining, roofing; stenciling
and tagging; insulator pins and suspen-
sion bolts; pole steps; poles wood &
steel , racks complete with insulators,
reinforcing and stubbing; settings;
shaving and painting for the following
facilities:
(a) Poudre tap to Power Plant Sub
(b) WAPA Line to Drake Substation
(c) Drake Sub to Platte River 230 kV
Line
(d) 115 kV on double circuit south of
Station 300
Category Property Description FERC Account
(5) All conductor, ground wires and ground 356
clamps, insulators, switches and
other devices for the following
facilities:
(a) Poudre Tap to Power Plant Sub
(b) WAPA Line to Drake Sub
(c) Drake Sub to Platte River 230
kV Line
(d) Double circuit south of Station
300
The land and land rights licensed at Timberline Park Substation shall be that
enclosed by and shall include the existing substation fence, as shown on the
attached diagram. Said fence shall not be moved or expanded, and no perman-
ent facilities shall be constructed in the cross-hatched area shown on the
diagram as reserved for Fort Collins ' future distribution facilities, with-
out the permission of the City of Fort Collins, which permission shall not
be unreasonably withheld. Maintenance of the grounds outside the substation
fence and maintenance of the access road to the substation shall remain the
responsibility of the City of Fort Collins.
Platte River agrees that (i) it will not construct or permit construction
of any circuits under 115 kV to exit Timberline Park Substation overhead,
(ii ) it will not construct or permit construction of any 13 kV class cir-
cuits to exit said substation except to supply electric loads of Fort
Collins or Platte River, and (ii) it will provide at least two year' notice
of any expansion that would impact nursery stock in locations presently
utilized for this purpose.
ATTACHMENT TO EXHIBIT "A"
Fenced Area of Timberline Park Substation
(Scale 1 " = 100' )
NORTH
660'
Cross-hatched area reserved for City
of Fort Collins distribution equipment
450'
Exhibit "B"
Department of Energy
Western Area Power Administration
Loveland District Office
P.O.Box 2650
Fort Collins,Colcrado 80522
In Reply Refer To:
OPERATING AGREEMENT
AMONG THE
OPERATIONS SUPERVISORS OF THE
WESTERN AREA POWER ADMINISTRATION
AND THE
PLATTE RIVER PCWF.k AUIPOR!TY
INCLUDING ITS
CONSTITULOT MUNICiiALITIES
ESTES PARK, FORT COLLBS, LONGMONT AND LOVELAND
COLOF.AUO
FOR THE OPERATION OF THE INTERCONNECTED
PG'AER SYSTEM F"CILITIES
June 25, 19i� Page 1
INTENT:
The purpose of this agreement is to establish an operating agreement
among the operating officers and representatives of the organizations
listed which shall be recognized by all parties in the execution of
routine and emergency system operations.
This agreement is not to be interpreted to modify or alter present
contracts among the parties , except that it does supersede all
previous letters of agreement and operating procedures between the
WAPA and the listed organizations, for the operation of the inter-
connected power system facilities.
DEFINITIONS:
The Western Area Pawer Administration shall herein be referred to
as the "'WAPA". The operating representative for WAPA will be the
Poorer System Cispatcher located at the Flatiron System Control
Center, Loveland, Colorado.
The Platte River Potter Authority shall herein be referred to as
"Platte River." The authorized operating representative for Platte
River will be the Chief System Operator located at Platte River' s
general offices , Fort Collins , Colorado.
The municipalities of Estes Park, Fort Collins , Longmont , and Loveland ,
Colorado sh;:il herein be referred to as the "Municipalities. "
Under this agreement , the official interconnected power system
operating rEpresentative for the Municipalities will he the Platte
River Chief System Operator.
"Po:,er System Clearance Procedure": General ,rules and procedures
designed to provide safety in the operation and maintenance of a
power system. Platte River and WAPA proc e;ures are essentially
identic.:l aI:d cumpiy .vith industry wide accepted practices.
"Operating Office Headquarters for a -ystem' s operating activities.
"Dispatching Jurisdiction" : Control authority of an Operating Office
over po:rer facilities by virtue of otimership or, delegated authority
from another Operating Office including: (1) establishing and direct-
ing the placement of Clearances, Hoi. Line Orders and for directing
General Swicching programs for operational testing of equipment (2)
coordinating the operations listed above !,•ith an agency or agencies
involved in prearranged switching procedures. All switching activities
effecting the operation of the interconnected
terconnted transmission systern must
have the prior approval of the Operation 's Office having the Inter-
Connected Operations Jurisdication, except in an emergency.
June 25 , 1979 Page 2
DEFINITIONS (continued) .
"Interconnected power facilities": Yatl include 511 transmission
faci I i it es as def' red 0 the suppl eilents to this ay,Eement .
"Interconnected OP:ratiJns QV40 icticn" . :oordina' i"g authority of an
Operating Office Dvar a Ksignaied area rf i:�i:erconnEcted porter facil-
ities , regardless K ownership de' agared control , f7: operations
which may affect the interconnect d system as a whole. The authority
shall include- (i) saint- ining the integrity of the interconnected
transmission system (2) approving cutagen on bulk power system facil-
ities to accomodate mainter.ancE : r ronstraction prograos (3) directing
the switching necessary t0 recover primary system security following a
forced interruption on the bulk transmission system K) maintaining
adequate frequem.y and voltage levels on the interconnected transmission
system (5) respecting industry established guidelines relative to
Control Area resoonssibilities.
"Dual Dispatching 0risdiction' Joint control authority of two or more
Operating Offices over a desigi,ated rower sIntem facility, generally a
cordon point o-` ;ystem ':ltercrir:act n.
"Delegated Autho °it ": An agreci upon transfer of Dispatching JuYisdiC-
tion from one D rating ^,i ice to asothtr
GENERAL:
The Municipalit-an delegate to ilatt•a R ,rr' Chief System Operator
the dispatching turi_dicturl over the-,- owned bulk transmission
facilities formerly Lelagat-d to wAPA Anthir,g in this agree -•ent
shall be ronstrcer to affect :he Mun Q& it S =Mius' Ye }i.ts to
... ma„age their ow" e1gcc '1c transni . sioh inn d stribunion systems.
TLL- !JAPA ,rlall ratr.r.alc, " c„!:er&onrQC o i .pc;, :;cr L , i >Jrc"•'.ir;n '
PldAe River MY ° r•un, sh :Ai' tanc 8z,, r "roved•..
:. .rr'
•' arc
SWUM i We SwVcKvnb diagrams fu • EPcn Kos ,. . :h arp a,-
incegral art Gi nba pi i .._ `r..rnw:. _ . 'raoi A& .
P Y � '^ ;_7�_ A shah, pit : n.e
Platte Pave- aprrVD, rltE e.StaWzr.od^operzvl:" roc .. _. __ a- _i ;wit oing
diourams fcr ea: : cc KS vaC' ' ' , W V. Me i 'ir'diatc Yna ` Moe
River ' s operati' aU a THj 'i({K -7 •'RYFUURF' SHM_ H CON510SRED
A SUPPLE;1EV To -illy :'lK t f;.: T.
Normally, routine -WILC,linq fr C,aerar.ceq lot Line Orders ;rr' fo;-
"rrarringemc„t' of `aCil r.lt' (Uneral 20 c'1 • og) , an facilities owned
by each party to Wis agrEe";er.- ;hull he Mc;m- '. ished oy wirimer. of
'. the respective ciner irds tha owy , ' S Stpar"is .00 inn di '.Ctio
However, if r-,& '_1 . os rnarivc no,, fic� ;61 iizt, Sw.I r.ChmCi' Q aC}
part`/ t0 this . . ii- Mrt 70 "P ed at . , Qt i ity re Jard;ass of
ownership-
b.;':A
June 24, 1979 Page 3
Under the authority of this Agreement , WAPA, Platte River and the
Municipalities shall form an Operations Committee consisting of
individuals from the operating staffs of each agency, to formulate
operating procedures and to resolve operating problems that may
occur.
It will be the responsibility of each party hereto to advise its work-
men , switchmen , job supervisors , and operation supervisors of the
extent of _heir authority under this Agreement.
CLEARANCES AND HOT LINE ORDERS:
All Clearances and Hot Line Orders between agencies shall be of the
Source of Power type. A Source of Power Clearance or Hot Line Order
is a statement , with documentation, from one operating office to
another that switching and tagging has been performed as a partial or
complete requirement for a Clearance or Hot Line Order on another
system. The operating office receiving the interconnected system
action is responsible for all other switching and for issuing the
order to the .job supervisor. Various circumstances may necessitate
the _;e of a Special Work Permit in addition to the required Clearance
or Hot Lire Order.
?MDEMNIE;CATION7
Each party co this Agreement shall he responsible for its oun actions
and shall ;indemnify and hold harmless the other participants from the
consequences thereof.
TERMfNAT19H AND AMENDMENT:
This Ag eement shall remain in full force and effect until terminated
by the parties hereto. Anyone of the parties may upon 61 days written
notice to the other parties cancel its nz> ticioation in this agreement;
provided he over that Y has complied with its Aligations to hold
fiarmles -he Wer parties hereto as of the .:ate of its withdrawal .
\ R
June 25, 197`:
Department of Energy
Western Area Power Administration
Loveland District Office
P.O.Box 2650
Fort Collins.Colorado 80522
In Reply Refer To:
OPERATING AGREEMENT APPROVAL:
lqe the unders'. gned, approved this Operating .Agreement on behalf of our
respective agencies.
SIESTERN AREA PO5lER ADMINISTRATION CITY OF LOVELAND
O
Maine
jP. �.�- '—� Name
+.�-�--�-�Z "
Title Loveland District Manager Title Z,�e.c / —rc 0, ✓ , 'S
Date June 25, 1979 Date_ 7- 2 -7 J
PL.ATTE RIVEIL PO�ER AUT} ITY /� CITY OF LONGf40NT
Name / Name -r—
t
?itlt General tlanager Title
Date_ Ju1910, 1979 _ Date ? G-
CITY OF FORT COLLINS TOWIN OF E:fr� PART:
:a:l�C: � ✓/� _�� Ndl,le Ylu'lt y 7� __ ��C— —�
ems,. Title
Gate Junta 27 , 197 _ Date "1979
ATTACHMENT 4
Utilities
City O f elecine sto nwater wastewater water
700 Wood Street
Fort Collins For Box 680
Fort Collins,CO 80522
970.221.6700
9M221.6619—lax
970.224.6003—Too
uttlities®Icgov.conn
/cgov.corn7utilities
TO: Mayor Hutchinson and City Councilmembers
THROUGH: Darin Atteberry, City Manager t_
FROM: Brian Janonis, Utilities Executive Director
Steve Catanach, Light and Power Manager 4//
CC: Patty Bigner, Utilities Customer and Employee Relations Manager
Jenny Lopez Filkins, Assistant City Attorney
Brian Moeck, General Manager, Platte River Power Authority ("Platte River")
Joe Wilson, General Counsel, Platte River
John Bleem, Division Manager, Customer and Environmental Services, Platte
River
Mike Dahl, Division Manager, Electric Operations, Platte River
DATE: October 29, 2008
SUBJECT: October 28, 2008 Work Session Summary— PRPA Organic Contract and Energy
and Power Supply Agreement.
During the August 19th Council meeting, the Amended and Restated Organic Contract(the
"Organic Contract") and Amended Contract for the Supply of Electric Power and Energy(the
"Energy Supply Contract") were removed from the agenda in order to discuss the items at a
scheduled work session. On October 28, 2008 City Council held a work session to review,
discuss and provide direction to staff.
Kev Discussion Points
Brian Moeck, Platte River's General Manager, presented a brief history of the partnership
between Fort Collins, Longmont, Loveland and Estes Park in the establishment of Platte River.
The basic function and governance model of Platte River were also discussed.
The initial discussion clarified that the proposed change to the Electric Article of the Code
addressing the City's electrical service territory and the ability of another entity to make retail
electric sales within the City's service area was not at issue in the evening's discussion. It was
communicated that Staff has made significant changes to the proposed Code change and would
be presenting those to the Electric Board in November and then bringing the proposed language
to Council. The process for establishing a buy/sell arrangement to facilitate third party.retail
sales of energy generated with renewable resources will be handled through an Inter-
Governmental Agreement (IGA) between the City and Platte River. A draft of the IGA will be
presented to Council along with the proposed code change.
I
FoF`o�r�yt of
The next item of discussion was the amended Energy Supply Contract which contains new
language that allows the City to develop and own generation to serve its own electric energy
demands. The previous Energy Supply Contract limited the City's ability to self generate to
zero. The revised contract proposes a limit of one percent of peak, which amounts to
approximately 3,000 kW of generation (about 60% of the load for all city facilities). Council
expressed concern over the I% cap and asked why it couldn't be 2%, 3% or even greater. Joe
Wilson, Platte Rivers' General Counsel, provided a detailed explanation. Previous bonds sold by
Platte River were sold with a commitment to the buyers that Platte River would be the sole
provider to the four cities. Platter River has been aware of the cities desire to support, provide,
and develop renewable resources. Discussions with Platte River's Bond Counsel resulted in an
agreement that the I% cap could be considered de minimis. To address Council concern about
the I% limit Platte River explained that should any one of the cities reach the 1%cap prior to the
renegotiation of the Contract in ten years, the issue of accommodating additional municipal
generation would be discussed. At that time Platte River would approach their Bond Counsel for
an expansion of the limit.
Council also commented on a document Brian Moeck handed out before the meeting detailing
Platte River's commitment to environmental concerns and stewardship. Council complimented
Platte River on their efforts, and asked if language could be added to the "whereas"clauses and
the "purpose"section of the Organic Contract reflecting that in addition to providing cost-
effective service, they will also reflect Platte Rivers' commitment to environmental Stewardship.
Initially Brian Moeck expressed hesitancy to add new language to the Organic Contract because
it had been approved in its current form by two other member municipalities but after
consultation with Joe Wilson, Mr. Moeck indicated that modifications that are not viewed as
substantial can be made to the Organic Contract without having to seek approval from the two
other members and that even if the modifications are viewed as substantial, Platte River would
seek approval of the revised agreement with the other member municipalities.
Next Steps
1. Provide a list of the specific projects designated for the $120M in bonds Platte River is
pursuing.
2. Provide a brief summary of the Windy Gap project.
3. Revise Organic Contract to include language clarifying Platte River's commitment to
sustainability and environmental stewardship, and addressing re-negotiation of the I%
cap should the limit be reached prior to the next scheduled contract revision.
4. Provide a graph detailing Platte River's debt since 1973 along with the revenues collected
by Platte River from each of the member Cities.
5. Return the revised Organic and Energy Supply Contracts to Council for consideration at
the December 2, 2008 regular meeting, including red line copies.
Bring the proposed Code Change along with a draft inter-governmental agreement for
establishing a buy/ sell arrangement between a third party retail electric seller, the City and
Platte River to Council.
r1
Utilities
City O� electric - stormwater - wastewater water
F6rt I 700 Wood Street
COsFo Box 580
Fort Collins, CO 80522
970,221 ,6700
970.221 .6619 - fax
970.224 .6003 - TDD
utilities@fcgov. com
fcgov. com/utilities
DATE : November 4 , 2008
TO : Mayor and City Council Members
THROUGH : Darin Atteberry, City Manager
FROM : Brian Janonis, Utilities Executive Director
Steve Catanach, Light & Power Manager
RE : Information requested at October 28th work session
At the October 28th work session Council requested several items of information from Platte
River Power Authority. The items requested were :
1 . A list of the specific projects designated for the $ 120M in bonds Platte River is pursuing
in 2009
2 . A brief summary of the Windy Gap project.
3 . A graph detailing Platte River' s debt since 1973 along with the revenues collected by
Platte River from each of the member Cities and Platte River' s operating revenues .
Platte Rivers ' responses follow.
Projects Designated for $120M Bond Issue
The Transmission Projects consists of the following projects for expansion and upgrades to
Platte River' s transmission system.
The largest project involves the installation of a new 230kV transmission line from
Xcel ' s Fort St. Vrain Power Plant switchyard to a new substation in the City of Longmont. The
new line will be both overhead and underground. Another major element of the project is
rebuilding and upgrading the capacity of the existing : Longs Peak-Meadow 115kV line, the
Meadow-NW 115kVline and the NW-Fordham Tap Western Area Power Administration 115kV
line. This project will improve the reliability of the Longmont transmission system and provide
improved capacity for current electric loads and will support future load growth that may occur
in the City of Longmont. The total cost of the project is estimated to be $59, 100,000 .
To support the termination of the Fort St. Vrain-Fordham 230kV transmission line at the
Fort St. Vrain Power Plant Switchyard, Platte River will reimburse Xcel Energy for the
installation of a new circuit breaker and associated equipment. This project is necessary to
complete the electrical connection to the transmission line. The total cost of the project is
estimated to be $ 1 ,000,000 .
,.,Fort Collins
As part of the 230kV transmission project in Longmont the City ' s Fordham Substation
will be expanded to include new 230kV breakers, two new 230kV/ 115kV transformers, and a
new capacitor bank. The total cost of the project is estimated to be $ 8 ,000,000 , Platte River' s
Dixon Creek-Horseshoe 230kV transmission project involves the installation of a new 230kV
transmission circuit from Platte River' s Dixon Creek Substation in Fort Collins to the City of
Loveland ' s Horseshoe Substation. Platte River will rebuild a four mile segment of Western Area
Power Administration ' s 115kV line in southwest Fort Collins for double circuit operation and
will rebuild a three mile segment of an overhead line owned by Tri- State for double circuit use.
The final portion of the project is a 2 '/2 mile section of 230kV underground line that connects to
the Horseshoe Substation. The total cost of the project is estimated to be $ 16, 100,000 .
Platte River' s expansion of the Horseshoe Substation will connect the new 230kV
transmission line into the Loveland 115kV transmission loop to enhance reliability and provide
adequate capacity for future load growth. The Horseshoe Substation will be upgraded with two
230/ 115kV transformers, associated circuit breakers bus and control equipment, and the addition
of a 115kV capacitor bank to support adequate voltage in the City of Loveland during summer
peak periods. The total cost of the project is estimated to be $ 10,300,000 .
Platte River is responsible for the transmission connections to a new city substation when
requested by any of the four Municipalities. The City of Fort Collins has requested that Platte
River build transmission lines to support the operation of the Fort Collins ' Portner Substation.
The total cost of the project is estimated to be $ 12, 500,000 .
Platte River will also install transmission line termination equipment in the new Portner
Substation to support the City of Fort Collins distribution system expansion. The total cost of the
project is estimated to be $3 ,500,000 .
Platte River will provide additional breakers and substation equipment to support the City
of Loveland ' s installation of a third transformer at the city ' s East Substation. The total cost of the
project is estimated to be $3 , 800,000 .
Platte River will install new security walls at three of its 230kV substations in Fort
Collins, Loveland and Longmont. The total cost of the project is estimated to be $2,500,000 .
The City of Fort Collins has requested equipment needed to support the addition of two
50 MVA transformers at the Timberline Substation. The city plans to use this substation capacity
to serve new loads . The total cost of the project is estimated to be $ 1 ,000,000 .
Platte River will update its existing security camera management software. In addition,
new cameras, enhanced lighting and a new perimeter detection system will be installed in several
substations . The total cost of the project is estimated to be $300,000 .
Bond proceeds will also be used to fund additional transmission projects .
2
/,.,F�or_ t Collins
Windy Gap Project Brief
The Windy Gap Project was constructed in the early 1980s . It diverts waters from the Colorado
River to Lake Granby for eventual delivery to project participants on the east slope of Northern
Colorado through the Colorado — Big Thompson Project (C-BT) facilities . The point of
diversion is near the junction of the Colorado and the Fraser Rivers . Diversions occur during
periods of high flow, typically April through June. The Windy Gap Project is owned and
operated by the Municipal Subdistrict, Northern Colorado Water Conservancy District (MS-
NCWCD), of which Platte River Power Authority is a project allottee.
Platte River anticipates delivery of 5 , 150 acre feet of Windy Gap annually, of which 4,200 acre
feet are exchanged for 4,200 acre feet of Fort Collins treated effluent. The treated effluent is
pumped to the Rawhide facility for use as cooling water. The remaining 950 acre feet of Windy
Gap water is delivered to Rawhide from the Horsetooth Reservoir Soldier Canyon outlet. This
water is used for boiler feedwater, site service water and for human consumption after treatment.
In most years the Windy Gap Participants receive their Windy Gap allocations, however for
about one third of the years deliveries are limited due either to lack of water in priority (dry
years) or lack of storage for Windy Gap in the C-BT system (wet years) - ironically, the reliance
on C-BT storage facilities restricts the capability of delivering full Windy Gap allocations during
wet years . Consequently, the Windy Gap Participants, including the cities of Loveland, and
Longmont as well as Platte River, are cooperating in the construction of a firming reservoir.
This firming reservoir will be located near Carter Lake in Boulder County and will be named the
Chimney Hollow Reservoir.
Once Chimney Hollow Reservoir is constructed, Windy Gap water will be delivered through the
C-BT system to fill Chimney Hollow. Once filled, the firming waters in Chimney Hollow can be
reintroduced into the C-BT system for delivery to the Windy Gap Participants when Windy Gap
water is unavailable at the diversion point or from Lake Granby storage .
A Draft Environmental Impact Statement was issued by the U. S . Bureau of Reclamation in
August 2008 . The Draft EIS identified a number of environmental issues and mitigation
strategies . In conjunction with western slope water users two additional significant mitigation
measures are being explored. The first of these would provide 2 ,300 acre feet of firm yield from
the Windy Gap Project to the Middle Park Water Conservancy District (MPWCD) . Presently
MPWCD is entitled to the first 3 ,000 acre feet of Windy Gap pumped annually, but this is not a
firmed resource. NCWCD proposes to use its storage in the Granby Reservoir to firm deliveries
in the noted amount. The second mitigation measure addresses flows in the Colorado River.
NCWCD proposes to dedicate 2,700 acre feet from the Red Top Ditch allocation held by
NCWCD to late summer releases . These late season releases will satisfy the requirements of the
Upper Colorado Endangered Fish Recovery Program and will also enhance stream flow
conditions in Grand County.
Neither of these mitigation measures were discussed nor accounted for in the Op Ed article
appearing in the Denver Post on October 26 .
3
Fort Collins
Graph of PRPA, Four Cities Revenues and debt
Platte River Power Authority
10/29/2008
$ 1,000,000,000
$900,000,000
$800,000,000
$700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$ 100,000,000
$-
m
n � r n n n n co w co w ao co ao co w co m m m m m m m m m m o 0 0 0 0 0 0 0 * �
m m m m m m m m m m m m m m m m m m m m m m m m m m m o 0 0 0 0 0 0 o co m o
ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei ei N N N N N N N N O O ei
O O O
- Debt Outstanding - Operating Revenues -Sales to Fort Collins -Sales to Longmont - Sales to Loveland -Sales to EsYes `OarV
Long -term * Total Municipal Revenues
DebtOutstandin Operating Revenues Sales to Fort Collins Sales to Longmont Sales to Loveland Sales to Estes Park
1973 $ 330,000 $ 1,579,048 $ 729,853 $ 434,928 $ 316, 737 $ 97,530
1974 57800,000 4,099,803 11931,304 17117,280 790, 516 260,703
1975 351000,000 5,808, 651 21699,028 1/610/638 1, 103, 139 385,622
1976 100,357,388 81548,404 3,8771503 21420, 188 1,6551799 581,428
1977 17775801752 11,805, 286 51254,479 37303,476 2,452, 143 781,702
1978 1841570,360 16,908,478 71451,455 4/660/254 3,572, 650 11061,293
1979 2331447,845 21,8961531 9,3631550 51544,919 41400,426 1 ,353, 178
1980 3107566,008 2%691, 255 91644,006 57479,001 4,32% 548 11213,313
1981 40619111225 47,703, 704 121592,070 6/751/388 5,408, 500 11593,081
1982 6761788,421 55,4191645 18,5631887 91765,596 71646,915 2 ,4441479
1983 80475251307 58,581, 391 19,284,460 107869,039 %072, 646 21456,981
1984 77912171162 119,390,923 191227,564 11/624/329 9, 154, 166 21554,959
1985 75813531182 146,325, 184 201095,907 11/363/434 9,2291967 21609,606
1986 74775571332 144,746,972 201741,312 117473/756 9,202, 607 21586,739
1987 99112631978 145,2391254 211713,799 11/933/511 9,535, 639 21664,905
1988 9801957,854 146,027, 235 241275,872 12/555/398 10,2401644 21819,448
1989 9697962,268 147,017,476 261208,733 137202/252 10,638, 289 21995,836
1990 89518461838 142,630, 293 271198,310 13/408/815 11,6831775 31011,858
1991 8841945,034 138,2311632 281409,948 14/073/699 12,029, 746 31256,205
1992 88172851640 135, 138, 217 291161,963 157068/981 12,205, 681 31153, 184
1993 61413311358 138,429, 215 311346, 184 16/ 193/312 12,788, 190 31121,931
1994 57119781358 137,4651883 32,668,582 17/079/301 13,4361247 31109,290
1995 49977211994 136,211, 627 341388,303 177778/794 14,403, 759 31212,265
1996 44912481833 135,957, 312 361631,507 18/789/239 15,230, 634 31347,421
1997 38518141977 128,2641005 371409,047 19/ 102/ 184 15,867, 633 31479,031
1998 37070711528 122,778,935 391037, 151 207497/086 16,447,982 31529,310
1999 35217271076 126,772,974 401265,870 21/820/351 16,483,414 31637, 161
2000 3341029,876 138,0771477 431661,842 24/ 198/576 17,7641188 31801,411
2001 32310561176 151,313,867 45,320,065 257587/946 18,324,483 31831,607
2002 38914921220 131,525,473 471393,923 26/891/475 19,617, 327 41032,642
2003 35816541426 141,8651680 481524,782 27/294/478 20,4161241 41081,919
2004 3451987,669 145,2621757 51,0791251 281712,825 21,365, 230 4,2911364
2005 33217021688 151,041, 726 551685,531 31/269/994 24,525, 233 41590,883
2006 31514851792 157, 1421925 551848,007 321012,770 25,4791715 4,619, 186
2007 2931716,768 163,3781599 58,232,914 33 , 161,849 26,6401559 4,657,040
2008 ** 27219591000 165,321, 500 601134,900 34/445/000 28,580,000 41902,600
2009 ** 37315961000 178,5931886 63, 184, 286 351991,945 30, 2241529 5,057, 101
2010 ** 3521261,000 183,695, 764 67,281,288 381363,998 32, 1991813 5,397,308
* Debt Outstanding represents paramounts oflong-term debtplus unamortized debt associated costs as reported on the Balance Sheets .
** Years 2008, 2009 and 2010 are projections .
4
Fort Collins
Platte River has also provided information on the individual Cities demand and energy growth.
As noted by Brian Moeck in the meeting the Cities growth rates have been similar.
Municipal Growth
1973 - 2007
Estes Park 7 18 11 153 % 2 . 69 %
Fort Collins 50 296 246 491 % 5 . 21 %
Longmont 29 169 140 481 % 5 . 16 %
Loveland 20 146 126 630 % 5 . 84 %
Total 106 628 522 493 % 5 . 21 %
Municipal Demand Growth
350
300
250
3 200 ■ 2007
150 ■ 1973
100
50 2 .69 %
Estes Park Fort Collins Longmont Loveland
MWh 1973 ii
Estes Park 32 , 671 130 , 067 971396 298 % 4 . 03 %
Fort Collins 253 , 824 1 / 484 / 986 1 , 2311162 485 % 5 . 18 %
Longmont 142 423 840 145 697 722 490 % 5 . 20 %
Loveland 1101559 691 , 795 5811236 526 % 5 . 38 %
Total 539 , 477 3 / 146 / 993 2 / 607 / 516 483 % 5 . 17 %
Municipal Energy Growth
1 , 600 , 000
11400 , 000
11200 , 000
11000 , 000
800 , 000 ■ 2007
600 , 000 1973
400 , 000
200 , 000 4 . 03 %
Estes Park Fort Collins Longmont Loveland
5
ATTACHMENT 5
Utilities
Cityf electric stounwater wastewater water
Fort Collins 700 Wood Street
PO Box 580
Fort Collins,CO 80522
970.221.6700
970.221.6619619—fax
970.224.6003—Too
utilities@fcgov.com
tcgov.com/utilities
MEMORANDUM
TO: Mayor Hutchinson and City Councilmembers
THRU: Diane Jones, Acting City Manager
Brian Janonis, Utilities Executive Directory
FROM: Steve Catanach, Light &Power Operations Manager
CC: Patty Bigner, Brian Moeck(PRPA), Joe Wilson (PRPA),John Bleem(PRPA)
DATE: October 23, 2008
SUBJECT: Supplemental information for the October 28, 2008 Work Session—Development
of 3000 kW of renewable generation.
During the October 28lh Work session, Council will be discussing the Power Supply Agreement
between Platte River Power Authority and the City. One of the changes proposed in the Power
Supply Agreement is a provision which allows the City to develop its own generation resources
up to 1% of its annual peak demand. This is to be generation owned by the City. There is no
limit on the size or amount of generation that can be developed by our customers. One percent
of our system peak is approximately 3,000 kilowatts (kW) of generation or approximately 60%
of the City facilities demand. While 1% may seem like a relatively small amount of generation it
is a fairly significant amount of generation on a distribution system. To give the Council an idea
of scale I'd like to provide the following details on the size and cost associated with developing a
solar plant, large wind turbine, small wind turbines or a hydro project. Please note that all of the
costs estimates provided below are very rough ballpark estimates. More detailed analysis will be
required prior to committing to any project or projects.
e A 3,000 kW solar project would require approximately 15 acres of land and would cost
between $25,000,000 and $30,000,000. At a cost of 25 million dollars the Return on
Investment would be 32 years. (This assumes; no caring charges; a 4% increase in power
costs per year; generation levels as modeled with NREL's PVwatts software)
e 3,000 kW of large wind power would require siting a single turbine within an existing or
developing wind project. The cost would be in the ballpark of$7,000,000. The Return
on Investment would be approximately 11 years. (This assumes; a 30%capacity factor,
no caring charges; 4% increase in power costs per year)
CKY of
Fort Collins
• Small wind turbines placed on City facilities could also be considered. The cost of a
small 2 kW wind turbine is typically around $5,000/kW. Installing 3,000 kW of small
turbines would cost approximately$15,000,000. Approximate Return on Investment
would be 19 years. (Assuming; a 30% capacity factor; no caring charges;4% increase in
power costs per year.)
• In 2003 the City did a study on siting a small hydro generator at the dissipation vault on
the Horsetooth intake for the City Water Treatment Facility. The study evaluated
construction of either a 133 kW or a 339 kW plant. Both alternatives studied produced
very positive results. The 2003 costs were$330,000 and $1,100,000 respectively
resulting in an approximate Return on Investment in the five year range. L&P recently
applied for a grant from the Colorado Water Resources and Power Development
Authority to assist in a study to update the evaluation and costs produced in the 2003
study. There is not 3,000 kW of hydro generation available to the City. The study
identified the levels above as the maximum.
The change to the Power Supply Agreement provides the City the opportunity to develop small
generation projects. Development of a 3,000 kW project would be a major undertaking.
However, I believe the change provides us with the flexibility to take advantage of opportunities
to develop smaller projects as they come along. An example would be the proposed 100 kW of
solar panels planned for installation at the Pickle Plant as part of the Art in Public Places project,
or if still cost effective, development of a small hydro plant. Projects will have to be evaluated
on an individual basis, and certainly as new technologies develop we will have to evaluate those.
This change gives us the ability to explore new options.
Please let me know if I can answer any questions or provide any additional information.
a
ATTACHMENT
P L A T T E RIVER
POWER AUTHORITY
Estes Park • Fort Collins • Longmont • Lovelord
December 19,2008
Mr. Steve Catanach
Light&Power Manager
City of Fort Collins
P.O. Box 580
Fort Collins,Colorado 80521
Re: Municipal Ownership of Electric Generation
Dear Steve,
Pursuant to your request, attached is an opinion letter from our bond counsel addressing
the possibility of increasing the de minimis municipal generation exception contained in the
draft power supply agreement to ten percent of peak load.
By way of background,for the first time since the creation of Platte River as the generation
and transmission provider for Fort Collins in 1973, the draft power supply agreement under
consideration contains a provision that allows Fort Collins to own and operate new
municipal generation. Referred to as the de minimis exception, this provision allows new
municipal generation in an amount of one percent of the peak load of Fort Collins.
Accompanying the de minimis exception is language to the effect that if Fort Collins installs
generation in an amount that meets this one percent threshold, the parties will revisit this
limitation. Inclusion of the de minimis language allows Fort Collins to install generation in
variance of the all-requirements provisions of the power supply agreement sufficient to
meet well over half of the demand at municipal facilities—an opportunity that does not
exist under the current contract.
We are all painfully aware of the constriction of available capital in the debt markets.
Today, the municipal bond market is very much a buyer's market. Increases to bondholder
risk can make issuances unmarketable or significantly increase the interest costs. Suffice it
to say that if we were vetting the one percent de minimis threshold with rating agencies
today, their reception to this exception to the blanket protections presently available to
bondholders would be uncertain. That having been said, we are moving forward with our
next bond issuance and the Official Statement will include disclosure of the proposed de
2000 East Horsetooth Road • Fort Collins, Colorado 80525-5721
970/220 40W•1.N~PrPc.0rg
ATTACHMENT
Mr. Steve Catanach
City of Fort Collins
December 19,2008
Page 2
minimis exception. We believe this evidences the commitment of Platte River to work with
Fort Collins and the other owner municipalities as they explore distributed generation as a
component of their local resource mix.
With that context,I will let the letter from bond counsel speak for itself.
Sincerely,
Brran H. Moeck
General Manager
Enclosure: Letter from bond counsel
cc: Bob Goehring, Utilities Director,Town of Estes Park
Mayor Doug Hutchinson,City of Fort Collins
Brian Janonis, Utilities Executive Director, City of Fort Collins
Mayor Roger Lange, City of Longmont
Ralph Mullinix, Director,Loveland Water and Power
Mayor Gene Pielin,City of Loveland
Mayor Bill Pinkham, Town of Estes Park
Tom Roiniotis, Director,Longmont Power and Communications
Joe Wilson,Esq., Platte River Power Authority
Dave Smalley, Chief Financial Officer,Platte River Power Authority
ATTACHMENT
ATMUMS h COUNSMOM AT GAD
633 SEVPNIP FFREFUUSSE 3m
DENVE$CDIAEAD080303
ertnan & Howard t..L-C. SEIJIl'GM N3 297.3900
PAX 303 2"a9/0
OFFHAS IN,COSAAAOO 6PRI .3
MAMHOAr SPPZ4GS.VAa•PHOENIX
EENO•USVEGA3.SUOUa
December 19,2008
Joseph Wilson, Esq.
Platte River Power Authority
2000 East Horsetooth Road
Fort Collins,CO 80525-5721
RE: Fort Collins Inquiry concerning Municipal Generation
Dear Mr. Wilson:
We understand that over the last several months, Platte River Power Authority
("Platte River") and the City Councils of your member cities (the "Member Cities") including
the City of Fort Collins ("Fort Collins"), have been considering proposed amendments to the
organic contract establishing Platte River and to its all-requirements supply contracts with each
Member City. The proposed amendments would extend the term of the existence of Platte River
and of the all-requirements contracts through 2050, (extending the current terms running through
2040 by ten years). The proposed power supply agreements contain a new provision that would
allow a Member City to install its own generation capacity up to an amount equal to one percent
of the peak load of that Member City. This provision would modify the "all-requirements"
protections currently contained in the existing power supply agreements. In connection with the
proposed extension, a member of the Fort Collins City Council has asked about the legal and
financial implications of an amendment that would allow Fort Collins to install generation in a
capacity amount up to 10% of its peak requirements.
This letter will examine the legal implications of the proposed amendment in light
of Platte River's existing bond covenants and will offer the writer's perception of how such an
amendment would be viewed by the bond rating agencies. We are rendering this opinion in our
capacity as Platte River's bond counsel. As bond counsel to Platte River, Sherman & Howard
advises Platte River in connection with structuring new bond issues and renders an approving
opinion on the validity and enforceability of Platte River's bonds,as well as advice in connection
with compliance with Platte River's covenants for the benefit of outstanding bonds.
Fort Collins is one of four municipalities ("Member Cities") that established the
Platte River Power Authority, a separate governmental entity and political subdivision pursuant .
to Section 29-1-204, C.R.S. (the"Power Authority Act"). Fort Collins executed and is a party to
an organic contract with the other Member Cities, originally entered into on June 17, 1975 and
amended and restated as of July 1, 1998(the"Organic Contract").
The creation of a mechanism by which Colorado municipalities could jointly
finance costly generation and transmission projects was the primary purpose of the Power
Authority Act. Platte River was created under this statute in order to finance and construct
r
ATTACHMENT
Sherman & Howard L.t..C. Joseph Wilson,Esq.
December 19,2008
Page 2
generation and transmission facilities and act as a wholesaler of electrical power to and for the
benefit of the Member Cities, which in turn retail the power to their respective residents. The
clear purpose of Platte River is to provide a financing mechanism for the wholesale electric
power and energy requirements of its constituent municipalities(Organic Contract Section 2.1).
Platte River has issued and there is now approximately $300 million of long-term
bonds maturing through June 1, 2018'in the hands of investors. (The typical long-term bond
issue in the municipal power sector is structured to amortize over a 30 year term from either its
issue date or the date the project it finances comes on line.) Platte River has issued virtually all
of its long-term bonds under a General Power Bond Resolution adopted in 1987,which contains
the pledge of revenues and covenants required by bond purchasers as security for Platte River's
repayment obligations. Except to the extent of surplus sales receipts, Platte River's bonds are
payable from the revenues derived from its sale of wholesale energy to its Member Cities,
including Fort Collins. We understand that Platte River's long-term bonds have been rated in the
second-highest category ("AA") by each of the three municipal rating agencies for the last 10
years.
In addition to being a party to the Organic Contract, Fort Collins is a party to an
Amended Contract for the Supply of Electric Power and Energy,dated July 1, 1998(the"Supply
Contract") whereby Fort Collins agrees to purchase from Platte River all electric power and
energy that Fort Collins requires for its municipal electric system. The Supply Contract remains
in effect until December 31, 2040, or until thereafter terminated following six-months notice.
Platte River is obligated, pursuant to Section 6.06(b) of its General Power Bond
Resolution, to enforce the provisions of the Supply Contract. Platte River has further covenanted
not to "consent or agree to or permit any rescission of or amendment to any [Supply Contract]
which will in any manner impair or adversely affect the rights of the Authority thereunder or the
rights or security of the bondholders under the Resolution."
Article I of the current Supply Contract provides that:
Platte River shall sell and deliver to Fort Collins and Fort Collins shall purchase and
receive from Platte River all electric power and energy which Fort Collins shall require
for the operation of its municipal electric system to the extent that Platte River shall have
such power and energy available; provided, however, that Fort Collins shall have the
right to continue to generate its own power and energy to the extent of the capacity of its
generating facilities in service on September 5, 1974.
Fort Collins' contract with Platte River is made payable solely from revenues to
be received from the sale of electric power and energy to its electric utility customers during the
term of the contract. As acknowledged in the recitals, each of the other Member Cities entered
into substantially similar supply agreements with Platte River, in connection with execution and
delivery of the Organic Contract,and upon extension of the term of such supply agreements.
r
ATTACHMENT
Sherman & Howard L.L.C., Joseph Wilson,Esq.
December 19,2008
Page 3
The Supply Contract is a "requirements" contract. 'These supply contracts with
the Member Cities constitute the primary source of revenues over the 30 to 35-year life of the
Platte River bonds issued to construct electric generation and transmission facilities. Since Platte
River has no retail customers; it is dependent upon the revenues it receives from the Member
Cities to service debt. It is for this reason that Platte River's bond resolution contains the
covenant by Platte River to enforce each Supply Contract and not to amend the Supply Contracts
in a manner that adversely affects the holders of its bonds.
Over the last 30 years, we have had to consider a number of proposed
arrangements involving acquisition by a Member City of additional power from small generation
facilities. For example, under the Public Utility Regulatory Policies Act ("PURPA"), which
requires electric utilities to buy power from non-utility cogeneration and small electric
generation facilities at the "avoided cost" rate, Platte River and the Member Cities entered into
parallel generation purchase and sale agreements. (However, we understand no projects under
PURPA have been implemented through these agreements.) More recently, Platte River has
been approached about Member Cities potentially purchasing (e.g., pursuant to a net metering
arrangement) energy from small solar or cogeneration facilities. Given the de minimus size of
the projects and the likely amount of energy from such sources, and the unlikelihood of any
economic harm to Platte River from such sales, we have advised Platte River that we could see
no legal need for Platte River to insert itself as purchaser of such energy. (We understand that
none of the renewable projects in fact were implemented.)
When Platte River initiated the renewal and extension process for the Organic
Contract and the Member Cities supply contracts approximately one year ago, we were
approached by you. You expressed a desire to eliminate the de minimis project-by-project
analysis with an amendment quantifying a comprehensive exception to the all-requirements
obligation within the supply contracts. After conferring, we agrccd that defining an objective
level for the Member Cities to pursue renewable generation on the face of the agreements made
sense, for three reasons. First, including the exception to the all-requirements obligation as a
provision of the agreements would permit objective disclosure in future Official Statements (Le.,
the offering documents for Platte River bonds) as opposed to the individual de minimis analysis,
the existence of which had not been disclosed to prospective bond buyers. Second, a specific
level for allowable municipal generation, provided that did not jeopardize the security upon
which bondholders relied, would allow the Member Cities to craft individual renewable
portfolios. Finally, Platte River could achieve administrative savings by avoiding involvement in
small project review, documentation and implementation.
The concept of including a small quantified exception to the prohibition on
municipal generation within the supply contracts was subsequently discussed with staff members
representing the Member Cities. Through these discussions it was determined that a municipal
generation level set at one percent of the peak was satisfactory to the municipal representatives.
This would allow a total of over six megawatts of municipal generation spread among the
Member Cities, which would represent a significant increase over the past developments under
the de minimis case-by case approach. When we were approached as bond counsel with this one
ATTACHMENT
Sherman & Howard L.L.C. Joseph Wilson,Esq.
December 19,2008
Page 4
percent threshold we reviewed legal authorities to determine whether Platte River would be
permitted to enter into an amendment to the Supply Contracts including the objective one percent
exception.
The legal issue presented is one of compliance with Platte River's covenant under
its bond resolutions: does the amendment,taken as a whole, `9n any manner impair or adversely
affect the rights"of Platte River or the bondholders? We have examined contract law generally
and Colorado case law in particular, and while we found no authority directly in point, have
determined that under principles of the Restatement (Second) of Contracts (as adopted by the
Colorado Supreme Court), the key factor is whether under all the facts and circumstances, Platte
River is deprived of any substantial benefits expected under the contract. National Propane
Corp. v Miller, 18 P3d 782, 789(Colo. App.2000); . On its face, allowing the Member Cities to
generate up to six megawatts of power and reduce and purchases from Platte River by such
amount would appear to adversely affect Platte River and its bondholders, since it marginally
decreases the ability of Platte River to cover its fixed costs through billing the Member Cities,
and to that same extent exposes Platte River to the risks of having to sell up to six megawatts of
surplus power and energy on the open market. However, it is also clear that Platte River
management may take into account the net benefits which it (and its bondholders) will receive
from (i) the extension of the term of the Supply Contract itself and (ii) from its non-involvement
in a host of small renewable energy projects with unproven reliability and cost-benefit ratios.
Subject to verifying that the amendment will not adversely affect Platte River's ratings on its
outstanding bonds (discussed below), we have concluded That, while it is close question, Platte
River may enter into the proposed amendment to the Supply Contracts including the provision of
additional municipal generation of up to one percent of municipal peak. (We would recommend
including a provision dealing with the admittedly unlikely event that a Member City peak
declines in a future year.)
In early 2008, we determined that it was advisable to consult with the rating
agencies concerning the proposed negotiation of an objective exception to the prohibition on
municipal generation. As mentioned above, part of the legal analysis depends on whether
existing bondholders would be materially damaged by the amendment. Apart from the general
economic cost-benefit for Platte River, if the change were to result in a downgrade of the ratings
on Platte River's outstanding bonds, Platte River would not be permitted under its covenants to
enter into the amendment. This writer had conversations with representatives of Moody's
Investors Service and Standard & Poor's rating agencies in early 2008. In my discussions with
the rating agency representatives, I presented the case for such an objective quantification (as
opposed to the case by case de minimus standard) as beneficial to Platte River, particularly in
avoiding the administrative burden of inserting Platte River in many small and non-economic co-
generation projects. Based on those conversations, the concept of amending the Supply
Contracts to provide an express standard of one percent of municipal peak for such co-generation
did not raise the prospect of any rating downgrade for Platte River bonds. I would caution,
however, that the formal rating process on Platte River's new proposed bond issue will provide
the only definitive judgment on that point.
' ATTACHMENT
Shertnan & HoWard L.L.C. Joseph Wilson, Esq.
December 19,2008
Page 5
As bond counsel we have concluded that Platte River may enter into an
amendment to the Supply Contracts extending the term and including a one percent of peak
exception to the prohibition of municipal generation. However, based on my understanding of
the financial importance of the exclusivity of the requirements contract to maintenance of Platte
River's ratings this would be the maximum threshold consistent with its obligations under its
bond covenants. In our opinion,an amendment to the Supply Contract permitting Fort Collins to
own and operate generation up to 10% of its peak load requirement would not be consistent with
Platte River's covenant to enforce the Supply Contract and not to consent to amendments
adverse to the security of existing bondholders. The surplus capacity associated with such a 10%
of peak exception could expose Platte River and its existing bondholders to substantial financial
risk. Such risk, in our opinion, would completely outweigh any benefit from the contract
extension or cost savings to Platte River.
Please contact me if you have any questions concerning this letter or if you wish
us to do anything further.
Respectfully submitted,
ems, .
PUBFIN%9299121
ATTACHMENT 7
Fort Collins Utilities Electric Board Minutes
Special Meetin¢
Tuesday,January 20, 2009
Electric Board Chairperson City Council Liaison
John Morris, 377-8221 Wade Troxell, 219-8940
Electric Board Vice Chairperson Staff Liaison
Dan Bihn, 218-1962 Robin Pierce, 221-6702
Roll Call
Board Present
Board Chairperson John Morris, Vice Chairperson Dan Bihn, Board Members *Tom
Bamish, Steven Wolley, *John Harris and Steve Yurash (*See notation below in PRPA
Agreements section where Board members recused themselves).
Board Absent
Board Member John Graham
Staff Present
Meagan Peil, Steve Catanach, Robin Pierce and Jenny Lopez-Filkins
Guests
Joe Wilson and John Bleem, PRPA; Eric Sutherland
Meeting Convened
Chairperson John Morris called the meeting to order at 5:32 p.m.
Public Comment
Citizen Eric Sutherland expressed a desire to respond to a question asked of him at the
last City Council meeting as to whether he had read the Energy Policy, and he has read
the Policy. Also, Mr. Sutherland presented his view that the City of Fort Collins Electric
Board is not immediately concerned about the citizens of Fort Collins. He feels it is
irresponsible of City Council to have to sit through more of these issues without the
consideration of the Electric Board, and the PRPA contracts are not an exception. He
feels the Board is not aware of issues with possible violation to service area protection.
Net Metering and Service Code Change - Formal Recommendations
Light and Power Operations Manager Steve Catanach asked the Board for a formal
recommendation on the net metering and code change agenda items. These items have
been before the Board for discussion for the last few months. Council recently asked staff
to present Board recommendations earlier in the process of consideration (for discussion
at work sessions).
Key discussion points for net metering are the purchase of annual excess energy from our
customers for the retail rate and establishing the net metering maximum as 1 MW; how
1
DRAFT
the tariff rate will be used after the I MW level of generation. The service code language
states clearly Platte River Power Authority (PRPA) and the City would recover all costs
directly or indirectly. As discussion continued, there was interest in breaking out the
identifiable costs, i.e. PILOTS (Payments in Lieu of Taxes), insurance and infrastructure.
City Manager Darin Atteberry has recommended adopting a waiver of the PILOTS for
three years due to the possible impact on the General Fund and also re-examining the
codes and PILOTS in three to five years.
Board members discussed their concerns about mandating insurance; if a customer's
facility could impact other customers negatively, the customer would be required to carry
insurance.
The Board recommended the Sunset provision, insurance, and the impact on our
infrastructure and the costs to us for that. Should the payment be from the customer or
utilities if there is an impact on our infrastructure? For example, if there are twelve homes
on a transformer with 5 kw solar units on each home, and the combined impact reaches
maximum generation, it would overload our transformer. In that scenario, who is
responsible for the transformer upgrade? The recommendation from Council is to accept
a certain limit. We would pay for costs and then when the customer upgrade hits a limit,
they would absorb the costs. Also, on the commercial side, we would ask the commercial
customer to absorb the cost of the equipment.
What is the standard for the State coverage or with Xcel Energy regarding insurance
coverage?
Xcel Energy did not have any mention of insurance on their website, but Austin Energy
(think this reference needs further defined) did have a requirement for insurance.
Do companies like State Farm even have insurance coverage for this?
City staff will look into this and are not sure what kind of insurance coverage would be
involved. If an incident were to occur, the liability portion of homeowner's insurance
might come into play.
Example: There is a transformer at the end of a cul de sac. Three homeowners put solar
panels on their homes to cover their demand. Would that cause problems to the
transformer?
On a solar installation, there would be very little effect on the transformer, because they
would not have the momentum feeding into the system to affect voltage. However, a
small wind turbine could have an effect, because it has the momentum to feed into the
system.
What about the use of an electric generator?
The generators are not a problem in most cases, because the owner has to transfer the
power with a transfer switch, and generators do not operate in parallel with us.
Example: What about a large industrial arch welder situated next to a computer
company? The welder has caused issues with the computer company and their service.
How would we handle that?
There are rules and regulations which would require the customer to correct any damage
to our system.
2
DRAFT
What ifsomeone doesn't have a reduced voltage starter?
There is a provision requiring them to correct it and send the power back to us, typically
after the fact.
is there any way to protect against this type of situation?
There are expensive treatments that we would ask owners to maintain. We are going
with motor generators that run in parallel with our system (what would be a better way to
say this?). We are also developing a piece of switch gear that will fundamentally
disconnect before something goes wrong.
The service code change is geared to third parties with generation over a certain limit.
Our goal is to address these issues in the Code.
Could we mention in the Code that we have insurance, but lack of insurance will not
relieve customers of liability?
This would be part of the interconnections standards agreement.
Recommendation would be to address the insurance in interconnection agreements.
Where is the actual language of the Code?
The intent is to go to Council with the recommendation of the Board and then proceed
with the written language. We are not asking for an approval of the language at this
meeting, but are asking the Board to give recommendations on how we would put the
issues (PILOTS, insurance and third party generators) into the language.
Assistant City Attorney Jenny Lopez-Filkins has suggested the topic of PILOTS needs to
be addressed in the service code change, because it is a financial issue. Also, PILOTS is
mentioned in the interconnection agreement and infrastructure, insurance, and indemnity
agreements and will be in the interconnection agreement, but not necessarily in the
service code change. This would cover all bases in this type of situation.
The Board would like to see more from the insurance side and what is being done
throughout the State, not just in Austin, because if a homeowner sees the need for certain
insurance, it may impact decisions to pursue a solar unit on their residence.
Are (who?) referring to certain Code sections?
These recommendations from the Board will go to Council.In turn, Council will make
their recommendations, the Code language will then be written, and Council will vote on
the Code language.
PRPA (Platte River Power Authority) Agreements
Organic Contract and the Energy Supply Contract
* Board members Tom Barnish and John Harris recused themselves due to their
association with PRPA (Platte River Power Authority) as employees, and they will
not hear this discussion or vote on the amended contract agreements; both members
left the meeting at 7:02 p.m. Remaining Board members for the discussion were
Chairperson John Morris, Vice Chairperson Dan Bihn, and Board members Steve
Yurash and Steven Wolley.
3
DRAFT
Mr. Catanach brought the contracts in July 2008 to the Electric Board as an information
item, and now the Board needs to recommend to Council adoption of the amended
contracts with PRPA.
The Organic Contract is fundamentally the bylaws structure of Platte River and details
how it operates and its organizational structure. This is a contract between all four cities
(Longmont, Loveland, Estes Park and Fort Collins) and PRPA. The original contract was
established in 1975 and then amended in 1998 and 1999. This contract must be approved
by all four cities and establishes the governing structure. The Board of Directors of PRPA
is comprised of two members from each of the cities, and the mayor is automatically
placed in one of the positions. Historically, the other position is filled by the Executive
Director of Utilities.
The amendments in 1998 added some additional functions to PRPA, and Fort Collins
contracted PRPA to house and maintain our Banner billing system and to provide use of
the phone fiber system. PRPA has the right to contract this out.
The amendments proposed now are actually minor in nature and would add renewable
resources to the type of resources for electric energy that PRPA will provide to the City.
This will add the development of products and services in support of efficiency
improvements for generation, transmission and use of electrical energy to the list of
services, functions and facilities that PRPA can provide to the cities.
Also, the contract amendments would clarify the expiration dates of the terms of the
appointed directors. There is no multiple term limit at this time. It is simply a date that
those terms will be taken back to the governing bodies to reseal someone to the Board of
Directors.
Another amendment in the contract adds the ability of the appointed directors to attend
board meetings in a teleconference style.
The current contract states the General Manager would be replaced by the Chairperson of
the Board of Directors in the case of retirement or leaving, and the contract would amend
to give the Board of Directors the authority to appoint a new General Manager.
Another amendment would extend the contract for another ten years and would expire
December 31, 2050. The contract is generally brought every ten years, and the goal is to
extend the contract far enough out that the contract does not expire before the bonds
become due.
The other contract in question is the contract for the supply of power and energy with
PRPA. This contract is confusing, but it is the melding of two different contracts in this
agreement.
The facilities agreement with PRPA designates responsibility for the substations, grounds
keeping and maintenance, and is a separate agreement that will now be a part of the
contract for supply of power and energy.
In addition to this, the contract will state that PRPA will be the sole provider of electrical
energy to the City of Fort Collins, and we will only purchase from PRPA. The existing
4
DRAFY
contract states it will not allow any internal generation, but the proposed amendment will
allow the City to develop one percent of the peak load. The new contract would give the
City the ability to generate electricity to sustain their buildings. The one percent is only
for the City facilities' use and is not referring to the generation for residential or citizen
use.
What if we put a wind generator on this building?
We could but we have other opportunities like hydro.
What is the City's intent of developing its own renewable energy?
It will open the door for us; for example, the pickle plant and solar array project is
considered an Art in Public Places project, but it will be generating electricity.
/s there a way to make it clearer?
Council now understands what it means in the contract and that it is a contract between
the cities and PRPA, not with citizens.
As far as the facilities agreement portion, it will reduce the time period of four years to
two years of notification for the replacement of a substation unless transmission is
required. Then we would be required to continue with the four year notification. Also,
this would allow each party access to the substations and license to occupy the
substations. This will also cover that neither party will be in default of their obligations if
they cannot fulfill their obligations due to uncontrollable forces, i.e. forces of nature.
The term of the contract will also be extended, and the goal of the extension is to have a
contract in place to cover a loan. PRPA is showing the bonds company a source of
income.
Can the bonds go past the termination date?
Without the contract, it will increase the risk to the bond analyst, and there should be a
customer for the term for the loan. It would be very unlikely for the bond to go past the
2040 date; however, there could be a bond issue in the upcoming years and the contract
would cover that bond issue to 2050.
This is the criteria for the bond ratings from the CFO (chief financial officer) of PRPA
and what Moody's looks at for the issuance of a bond. There needs to be almost a
complete monopoly for providing electricity energy, issue tax exempt, strong link with
local government and there needs to be a market position for the bond.
What about the parallel generation? What if Poudre School District decides to go with
Sun Edison and puts in a 3MW system?
The contract would not be affected, because the contract we are looking at is not about
citizen generation, rather the generation between PRPA and the City. A 3MW system
would be in the service code language above the I MW system thresholds, because it
constitutes third party generation. However, it would affect the infrastructure and would
really need to be looked at before putting that kind of system in to play. There would also
be a different buy/sell agreement, and the costs would affect all the parties. This would
also under the PRPA Tariff 3 and other costs would fall under ancillary costs. We would
work with someone with a generator for this type of system.
5
How would you collect on a tariff?
That would be in the buy/sell agreement and the retail rate agreement. We would
purchase generation at the retail rate. The buy/sell agreement would be covering all the
costs. We have no experience with an actual situation, but we do have this in place to
cover if we do have renewable resources like another generation system.
Motion of the Electric Board is to recommend to City Council the adoption of contracts.
Motion passed unanimously.
Adjournment
The meeting was adjourned at 8:15 pm following a motion to adjourn by Board Member
Yurash.
Submitted by Meagan Peil, Electric Board Secretary
Fort Collins Utilities
Approved by the Board on 12009
Signed
Meagan Peil , Date
6
ATTACHMENT 8
utilities—Electric Board
Cit Of 700 Wood Street
Fort Collins 97 Box.60
Fort Collins, CO 80522
kgov. 1.6702
970.416.2208—fax
/cgov.coMutilities
Date: January 21, 2009
To: Wade Troxell, City Council Member and Electric Board Liaison
From: Fort Collins Electric Board
Re: Amended and Restated Organic Contract and Amended Contract for the Supply
of Electric Power and Energy
At the January 20, 2009 Electric Board meeting the Electric Board endorsed the Amended and
Restated Organic Contract between the Cities of Fort Collins, Longmont, Loveland and Estes
Park and the Contract for the Supply of Electric Power and Energy between the City of Fort
Collins and Platte River.
The Electric Board felt that the existing agreement with PRPA has assured our community
highly reliable and extremely affordable electric power since its inception. A reference to
environmentally responsible resource options updates the contract to indicate current City goals.
The proposed modifications that allow the City of Fort Collins to generate power and energy for
its own use from any new generation resource(s) owned and operated by Fort Collins provided
that the total rated capacity of all such new generation is no greater than 1,000 kW or one percent
of the peak load of Fort Collins, whichever is greater, provides outstanding flexibility for the
City to promote renewable energy in its city owned facilities. Additionally, language has been
added which specifically details that PRPA will provide services and products that improve the
efficiency of generation, transmission and use of electrical energy.
To insure the strength of Platte Rivers' bond rating (AA), the Cities designated PRPA as the sole
provider to all four entities. This limited the amount of generation the cities could develop on
their own. Although the Electric Board supports local renewable energy options, the Board feels
that maintaining PRPA's AA bond rating is in the City's best interest and decisions that impact
this rating could cost the City several hundred thousand dollars annually.
The Electric Board respectfully recommends that the City Council approve the Contracts. The
Board voted 4—0 (excluding two members that recused themselves) in favor of recommending
to Council adoption of the Contracts.
Cc: Mayor and City Council Members
Darin Atteberry, City Manager
Brian Janonis, Utilities Executive Director
Steve Catanach, Light & Power Operations Manager
ATTACHMENT 9
PLATTE RIVER
POWER AUTHORITY
Estes Park • fort Collins• Longmont • Loveland
January 22, 2009
Mayor Doug Hutchinson
1315 Whedbee Street
Fort Collins, Colorado 80524
Original letters also sent to:
Fort Collins City Council Members
City Manager, Darin Atteberry
Re: 'Renewal)of:the OTLdliic`Coiti•acr'and`Fort`Collins Power Supply Agreement
Dear Mayor Hutchinson,City Council members and City Manager Atteberry:
We look forward to meeting with you on February 3 to seek approval of the Organic Contract
and Fort Collins Power Supply Agreement. The purpose of this letter is to provide background
information on this item,and to emphasize several options whereby Platte River can help
support City Council's initiatives related to energy supply policy and climate action.
Contract Changes -To begin, we would like to summarize changes that have been made to the
Organic Contract and Power Supply Agreement. Key updates include the following:
• A new provision is being added to the Power Supply Agreement to encourage
distributed generation developed by the owner municipalities;
• Emphasized importance of efficiency, demand side management and renewable energy
resources in future planning; i
• Integration of the existing Transmission Facilities Agreement into the new Power
Supply Agreement;
• Extended the term of the contracts from 2040 to 2050;
• Added focus regarding environmental stewardship and sustainability. 4
Local Distributed Generation-We understand that development of local distributed
generation is important to City Council, particularly from renewable sources. Platte River
supports such generation,which can be implemented via several scenarios, including those
summarized below.
• Municipal facilities - As indicated above, the updated Power Supply Agreement now
provides that generation can be developed by Fort Collins to serve municipally owned
buildings and facilities (offices,pools,community centers, etc.). The amount of such
generation is one percent of the municipal peak load. This means that the City can
2000 East!lorsciooth Road • for' Collins. Colorado 80525.5721
Mayor,Council Members, and City Manager
January 22,2009
Page 2
develop roughly 3,000 kW of these type facilities,which is enough to meet about 60
percent of their peak load. If Fort Collins installs generation sufficient to reach this
threshold, the Power Supply Agreement commits Platte River to discuss in good faith an
increase in the amount of such generation.
Customer-owned generation- For many years customers in Fort Collins have been
installing distributed generation to help serve their electric needs. Platte River's tariffs
have provisions for net metering of customer-owned generation and about forty such
systems are operating in the four owner municipalities (mostly PV solar). Platte River
becomes involved in Customer generation when these systems are of a size that requires
scheduling,which is at or above 1,000 kW. Combined heat and power in commercial or
industrial facilities may be an option for this size range. No system this large has yet
been installed, but a few local sites may have potential.
Generation developed by"third parties" and sold via long term contracts-In this case,
"third party" refers to distributed generation entrepreneurs (not a customer and not the
municipality) that have developed a business model under which they propose to
purchase,install and maintain a generation system on a customer's property. The
generation output would be sold to the host property owner under a long-term contract.
After consultation with bond counsel, Platte River has determined it would treat these
developments as if they were net metering situations and not require any contractual
arrangement with the third party unless the rated capacity of the generation system is
1,000 kW or greater. At this size,Platte River needs to be involved for operational
reasons. To address both the operational issues associated with larger generators and
for purposes of the Platte River bond covenants,we are suggesting that a "buy/sell"
arrangement be formulated in these circumstances. As noted in the outline for buy/sell
agreements that was distributed to City Council for the January 13 meeting,this form of
contract would keep Platte River in the chain of title,but would not alter the financial
arrangement between the distributed generation entrepreneur and the host property
owner.
Generation developed by Platte River-Though third party entities may bring
advantages to renewable projects (tax credits,etc.), Platte River would also like to have
an opportunity to develop local renewable projects for the owner municipalities. There
may be benefits to both the City and Platte River from such generation sources,and
Platte River has significant experience in working with local entities to develop electric
generation.
Off grid generation- Generation that is not connected to the grid can be installed locally,
with no concerns or involvement by Platte River. A few small systems like this exist in
the City.
i
Mayor,Council Members, and City Manager
January 22, 2009
Page 3
As indicated by these scenarios, many opportunities are available for customers,municipal
facility operators, third party developers and the City (working with Platte River)to implement
significant levels of distributed generation in Fort Collins. Platte River supports this type
generation,as evidenced by the significant efforts Platte River has undertaken to ensure that
legal roadblocks are minimized.
Carbon Policy- It is clear that reducing greenhouse gas emissions is important to City Council,
as provided in Fort Collins' Climate Action Plan. Carbon policy is also a significant issue for
Platte River. We were the first utility outside California to join the California Climate Action
Registry and were named a Climate Action Leader in 2007. We are also a founding member of
the evolving national registry (TCR) and a partner in the local Climate Wise program. In
December,Platte River became the first electric generator in the State of Colorado to submit a
resolution to the Governor's Energy Office(GEO) committing to submit a plan for reducing
greenhouse gas emissions to 20 percent below 2005 levels by 2020. This resolution,passed
unanimously by Platte River's Board, provides that the plan be delivered to the GEO by June 1
of 2009. We have issued an Invitation to Bid to hire a consultant that can assist in developing a
roadmap for carbon policy planning and will gather input from each owner municipality as the
plan is developed. We anticipate the plan being approved by Platte River's Board at their
meeting in May.
Platte River can assist Fort Collins in meeting its carbon goals, since a significant portion of city
emissions are related to electricity generation. Options such as increased energy efficiency,
additional renewable energy,natural gas fuel substitution and combined heat/ power systems
(cogeneration) could be considered if Fort Collins has an interest in these options. Some options
may be developed to serve all the owner municipalities,but there may also be opportunities to
provide unique resource options to Fort Collins (at unique rates).
Wholesale Renewable Energy Supply- While we understand that local distributed generation is
of primary interest to City Council, Platte River can provide additional wholesale renewable
energy from new sources in the region. We currently plan to add 12,000 kW of new wind
generation resources by the end of 2009, anticipating an investment of over$60 million during
the 20-year term of operation for this new plant. We have also identified opportunities for
acquisition of wind generation above this level for 2009 (and beyond). Additional wild
generation was offered at the April 2008 City Council meeting,but the City was not prepared to
make such a purchase at that time. In December,we identified another project that could f
provide additional wind energy to the City. If Fort Collars has an interest in expanding this
type of renewable supply, Platte River can proceed quickly to increase new wind plant
commitments specifically to serve Fort Collins. Note that options we have evaluated for 1
delivery by 2009 would require immediate action.
Though wind generation has been the most cost effective renewable energy supply to date,
Platte River is also evaluating solar generation,particularly systems with storage capability
(concentrated solar power) to make this generation source more predictable. A large,locally
placed solar system could be considered for supplying Fort Collins, if the City is interested and
I
Mayor, Council Members, and City Manager
January 22,2009
Page 4
finds the associated costs acceptable. Platte River installed one of the first photovoltaic (PV)
solar systems in Fort Collins, and this system has operated since 1986. We have used it to
displace electrical loads at our headquarters office complex and to operate two zero emission
electric vehicles. This system was very expensive,but has operated well for over 20 years.
Looking forward,the City and Platte River can jointly consider unique approaches to
addressing the net cost of solar supply to Fort Collins, including building larger systems,
adding storage capability,integrating unique incentives/pricing, selling offsets (perhaps to the
Colorado Carbon Fund or other parties) and other options as they are identified.
In late 2006,Platte River hosted a regional meeting on wood biomass generation,involving
large customers, Colorado State University, the Forest Service, the Governor's Energy Office,
local biomass consultants and others. Though the group agreed that many challenges exist,
particularly long-term, reliable fuel supply, there may be an opportunity for a modest-sized
wood biomass generation facility in the region.
Platte River has also closely monitored and provided support for the Maxwell Ranch project.
We were involved when this project was first considered in the early 1990's, as part of a
statewide assessment of wind generation potential. In 2007,in conjunction with our most recent
request for renewable generation proposals, we sought a response from the entity that is
currently developing the project. We continue to support discussions related to development of
the project, and if there is commitment on the part of Colorado State University, FORTZED, the
City of Fort Collins and/or other entities,Platte River could purchase energy from the project,
deliver it to the City through our transmission system and acquire the necessary balancing and
regulation services for wind generation resources at the site.
New renewable generation resources could also be added to replace existing REC-based supply.
New plant resources are much more expensive than REC-based sources, but may provide other
values that are important to Fort Collins. Fort Collins Utilities and Platte River staffs are
working together on an analysis of options for changing the wholesale renewable mix provided
to Fort Collins. We have also met with the other owner municipalities to discuss potential
alternatives to the current renewable supply tariff. Platte River could reduce the REC-only
supply to Fort Collins,by re-selling or otherwise disposing of a portion of RECs currently under
contract. The other owner municipalities may have an interest in the surplus RECs and there
are likely options to sell these RECs in the broader renewables market. Also, Platte River has
offered to develop a new approach to renewable supply going forward,whereby the owner
municipalities could choose the level of each type of supply that they require (REC-only or
energy with RECs). If Fort Collins is interested in changes to current supply, we are ready to
respond during 2009. Any change to Platte River's current Renewable Supply Policy and
associated tariff would require approval by Platte River's Board of Directors and any net costs
associated with REC sale or disposal would be borne by Fort Collins.
f
Demand Side Management(DSM) -Since 2002,Platte River has invested over$5 million in
energy efficiency and demand side management programs within the owner municipalities,
and we anticipate spending about$10 million over the next five years. Over two-thirds of the {+
Platte River funds associated with these programs have been provided to customer projects in
Mayor,Council Members,and City Manager
January 22,2009
Page 5
Fort Collins,even though Fort Collins represents less than 50 percent of Platte River's municipal
load. Additional funds have been provided by the City for DSM programs. DSM reduces
customers' utility costs,supports local and regional efficiency industry, enhances the
environment within homes and businesses, and reduces greenhouse gas emissions. From our
analysis to date, DSM is clearly the most cost effective means of reducing carbon emissions and
will be a major focus in coming years. The partnership with Fort Collins Utilities for
implementation of DSM programs has worked well in the past and we anticipate continued
cooperative success as programs are expanded in the future.
Sinart Grid-Platte River supports Fort Collins Utilities as it considers new "smart grid"
technologies for enhancing system efficiency,reducing consumption and enhancing customer
communications. We are working with Fort Collins Utilities to support the FORTZED project,
are developing information regarding generation cost variations over time to support time-of-
use pricing strategies and are available to support Utilities staff as they consider other
opportunities afforded by new smart grid technologies. Though most of the smart grid
implementation occurs at the retail level,Platte River stands ready to assist with issues relating
to local transmission and generation resources.
Again,we look forward to seeing you at the February 3 meeting,where we will seek approval
of the updated Organic,Contract and Power Supply Agreement. Platte River is well positioned
to support the City of ForCCoilins in meeting its goals for the future. Please contact me at any
time,if you have any questidns or cornmerits.
Sincerely,
Brian H. Moeck
General Manager
cc: Steve Catanach i
Brian Janonis
John Bleem
Joe Wilson
I
i
I
ORDINANCE NO. 016, 2009
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING AN AMENDED AND RESTATED ORGANIC
CONTRACT FOR PLATTE RIVER POWER AUTHORITY
WHEREAS,the City is one of four member municipalities that have entered into an organic
contract establishing Platte River Power Authority("Platte River"); and
WHEREAS, the first such contract was entered into in 1975, and the contract was last
amended by the execution of an"Amended and Restated Organic Contract Establishing Platte River
Power Authority as a Separate Governmental Entity" dated July 1, 1998 (the "Existing Organic
Contract"), with a termination date of December 31, 2040; and
WHEREAS, agenda items calling for approval of an "Amended and Restated Organic
Contract Establishing Platte River Power Authority as a Separate Governmental Entity" ("Interim
Organic Contract")dated August 13, 2008,were prepared for Council consideration on August 19,
2008 and such items were withdrawn from consideration on that date; and
WHEREAS, a City Council work session took place on October 28, 2008 to discuss the
Interim Organic Contract dated August 13, 2008; and
WHEREAS, City Council requested revisions to the Interim Organic Contract that reflect
Platte River's commitment to environmental stewardship and sustainability; and
WHEREAS, the parties have recently negotiated a proposed, updated agreement entitled
"Amended and Restated Organic Contract Establishing Platte River Power Authority as a Separate
Governmental Entity" (the "Updated Organic Contract"), a copy of which is on file with the City
Clerk, dated January 28, 2009, that includes the revisions requested by Council and the purpose of
which is to replace and supersede the Existing Organic Contract; and
WHEREAS, the Updated Organic Contract, if approved by the parties, would amend the
provisions of the Existing Organic Contract so as to: contain preamble statements and purpose
statements reflecting Platte River's commitment to environmental stewardship and sustainability;
reflect the current manner in which the parties conduct business; expand the kinds of services that
Platte River will provide to Fort Collins; and obligate Platte River to assist Fort Collins in reaching
its renewable energy requirements to develop products and services to improve the efficiency of
generation, transmission and use of electrical energy; bring current the dates of the terms of the
appointed utilities directors of the member municipalities and allow such directors to attend and fully
participate in Platte River meetings by electronic teleconference;and extend the termination date of
the Existing Organic Contract by ten years to December 31, 2050.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby finds that it is in the best interests of the City
to enter into the Updated Organic Contract, which agreement will supersede the Existing Organic
Contract.
Section 2. That the Updated Organic Contract in substantially the form on file in the
office of the City Clerk and dated January 28, 2009, is hereby approved, and the Mayor is hereby
authorized and directed to execute the same on behalf of the City.
Introduced, considered favorably on first reading, and ordered published this 3rd day of
February, A.D. 2009, and to be presented for final passage on the 17th day of February, A.D. 2009.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading on the 17th day of February, A.D. 2009.
Mayor
ATTEST:
City Clerk
ORDINANCE NO. 017, 2009
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING AN AMENDED AND RESTATED CONTRACT
WITH PLATTE RIVER POWER AUTHORITY
FOR THE SUPPLY OF ELECTRIC POWER AND ENERGY
WHEREAS, on February 22, 1980, the City and Platte River Power Authority ("Platte
River") also entered into a "Transmission Facilities Agreement" (the "Facilities Agreement") to
establish the parties' rights and obligations related to their respective electric system facilities and
to provide for shared use or lease of certain specified facilities; and
WHEREAS, on March 31, 1980, the City also entered into a "Contract for the Supply of
Electric Power and Energy" (the "Existing Supply Contract") with Platte River Power Authority
which establishes the terms and conditions of the City's purchase of electric power and energy from
Platte River; and
WHEREAS, on July 21, 1998, the City Council approved an amendment to the Existing
Supply Contract extending its termination date from December 31,2020 to December 31,2040;and
WHEREAS, agenda items calling for approval of an"Amended and Restated Contract for
the Supply of Electric Power and Energy"("Interim Supply Contract")dated August 13,2008,were
prepared for Council consideration on August 19, 2008 and such items were withdrawn from
consideration on that date; and
WHEREAS, a City Council work session took place on October 28, 2008 to discuss the
Interim Supply Contract dated August 13, 2008; and
WHEREAS, City Council requested revisions to the Interim Supply Contract that reflect
Platte River's commitment to environmental stewardship and sustainability,and that call for the City
and Platte River to conduct future good faith negotiations regarding the City's interest in developing
generation resources to serve its own City facilities if necessary; and
WHEREAS, the City and Platte River have recently negotiated an updated "Amended and
Restated Contract for the Supply of Electric Power and Energy" (the "Updated Supply Contract"),
a copy of which is on file with the City Clerk, dated January 28, 2009, that includes the revisions
requested by Council,the purpose of which is to replace and supersede the Facilities Agreement and
the Existing Supply Contract; and
WHEREAS,under the proposed Updated Supply Contract,Platte River will continue to sell
and deliver to the City, and the City will continue to purchase and receive from Platte River, all
electric power and energy that the City requires for the operation of its municipal electric system;
however,the City may also generate power and energy for its own use in City facilities from any new
generation resource(s) owned and operated by the City provided that the City's total rated capacity
does not exceed 1,000 kilowatts or one percent of the peak load of the City,whichever is greater;and
WHEREAS, the proposed Updated Supply Contract also: states that each party will be
granted a revocable license to occupy the property of the other party as necessary to deliver and
receive power and energy under the Updated Supply Contract in accordance with specified terms
regarding the use of certain facilities; allocates costs and maintenance responsibility for certain
facilities; outlines the process for the parties to engage in system planning; acknowledges Platte
River's contract with the Western Area Power Administration ("WAPA"); requires, as a condition
of the purchase of federally generated power, that the City comply with WAPA's "General Power
Contract Provisions;" and amends the term of the Existing Supply Contract so as to extend its
termination date by ten years to December 31, 2050.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby finds that it is in the best interests of the City
to replace and supercede the Facilities Agreement and Existing Supply Contract with the Updated
Supply Contract.
Section 2. That the Updated Supply Contract is hereby approved, and the Mayor is
hereby authorized.and directed to execute the same on behalf of the City in substantially the form
on file in the office of the City Clerk and dated January 28, 2009.
Introduced, considered favorably on first reading, and ordered published this 3rd day of
February,A.D. 2009, and to be presented for final passage on the 17th day of February, A.D. 2009.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading on the 17th day of February, A.D. 2009.
Mayor
ATTEST:
City Clerk