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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/02/2009 - SECOND READING OF ORDINANCE NO. 060, 2009, AUTHORI ITEM NUMBER: 13 AGENDA ITEM SUMMARY DATE: June 2, 2009 FORT COLLINS CITY COUNCIL STAFF: Steve Catanach Brian Pederson Bob Hover SUBJECT Second Reading of Ordinance No. 060,2009,Authorizing the Conveyance of a Utility Easement to Tri-State Generation and Transmission Association, Inc. RECOMMENDATION Staff recommends adoption of this Ordinance on Second Reading. EXECUTIVE SUMMARY Tri-State Generation and Transmission Association, Inc. ("Tri-State") has requested a connection for transmission facilities between Platte River's transmission system and Tri-State. To facilitate this connection,two new breakers and associated equipment must be installed in the City's Richards Lake Substation. In order for this.connection to occur, the City has granted Platte River a License to install facilities that are not specifically designated to provide service to the City. This Ordinance, unanimously adopted on First Reading on May 19, 2009, grants Tri-State an easement to cross the substation property with its connection. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary - May 19, 2009. (w/o original attachments) ATTACHMENT 1 ITEM NUMBER: 15 A-B AGENDA ITEM SUMMARY DATE: May 19, 2009 FORT COLLINS CITY.,COU.N.CIL STAFF: Steve Catanach (� �� ✓� Brian Pederson Bob Hover �. DEE 1L SUBJECT Items Relating to Richards Lake Substation Modifications. RECOMMENDATION Staff recommends adoption of the Resolution and the Ordinance on First Reading. The Electric Board recommended approval of the Platte River license agreement at its meeting on March 4, 2009. FINANCIAL IMPACT P V No adverse financial impact is anticipated. Tri-State will compensate the City a total of$17,171_'for the proposed easement. The compensation includes $12,171 for the fair market value of the easement as determined by an appraisal by Foster Valuation Company, LLC, $4,000 for the value of four Austrian Pines trees and hedges within the easement area which will be removed by Tri- State, and $1,000 to the City's Real Estate Services Department to process the easement request. Tri-State will be responsible for all costs of installation and restoring the construction area. Additionally,under the terms of the license agreement,Platte River will reimburse the City$14,500 for the use of the City property. In turn, Tri-State will reimburse Platte River for the $14,500 expenditure. EXECUTIVE SUMMARY A. Resolution 2009-047 horizing the City Manager to Exec Aut ute a License Agreement with Platte River Power Autho rtyy/ B. First Reading of Ordinance No. 060, 2009, Authorizing the Conveyance of a Utility Easement to Tri-State Generation and Transmission Association, Inc. Tri-State Generation and Transmission Association, Inc. ("Tri-State") has requested a connection for transmission facilities between Platte River's transmission system and Tri-State. To facilitate this connection,two new breakers and associated equipment must be installed in the City's Richards May 19, 2009 -2- Item No. 15 A-B Lake Substation. In order for this connection to occur, the City must grant Platte River a License to install facilities that are not specifically designated to provide service to the City and must grant Tri-State an easement to cross the substation property with its connection. BACKGROUND r,,. nn T P Y11 For many years, transmission utilities along the Front Range have shared transmission lines, substation space, and rights-of-way in an effort to keep electric costs down by eliminating duplication of facilities in the same area. Tri-State Generation and Transmission Association has asked Platte River to add two circuit breakers and other associated minor equipment at the City's Richard Lake Substation to create a connection point for a new transmission line. This new line is being built to improve the reliability of electric service in the Waverly—Wellington area for Poudre Valley REA, which is a member of the Tri-State organization. The City owns the Richard Lake Substation property. Platte River has the right to occupy City property in this substation as part of its responsibilities under the Amended and Restated Contract with Platte River Power Authority for the Supply of Electric Power and Energy approved by City Council on March 24,2009 (the"Power Supply Agreement"). The Power Supply Agreement does not address a situation where Platte River would use space inside a City substation to support transmission service to a third parth kejrS atel.Plotto River is therefore asking approval from the City to locate the high voltage breakers and associated equipment at the Richard Lake Substation 11 to support Tri-State's transmissi��rinectiioonregb. Platte River staff have reviewed the proposed layout of the Richard Lake Substation additions with City staff and they are in agreement that the substation space to be occupied by the additional Platte River equipment for Tri-State will not affect the ability to safely and reliably operate the substation and will not affect the space needed for expansion inside the substation for future City needs. Tri- State staff will need to have access to the substation periodically to verify the meter readings for energy flow through Platte River's transmission system to the Tri-State transmission line. Under the license agreement, additional equipment in the substation will be owned and maintained by Platte River and will not affect the reliability of the delivery of electric energy to the City facilities in the substation. Tri-State will pay for the use of the space in the Richard Lake Substation and to compensate the City for the costs of land, grading, fencing, and rock surfacing that were expended to create the Substation. In addition to the revocable license for Platte River, it is also necessary for Tri-State to obtain a permanent, non-exclusive utility/asement across a,porhon of thJCity's Richards Lake Substation property in order to complete Qs project! The 'proposed easement consists of a 50-foot wide strip of land, covering a 12,171 square foot/area aoofftthe substation property. The Substation property is generally located approximately 1/4 mile west of Interstate 25,and 1/4 mile south of Richards Lake Road, directly west of the Anheuser Busch brewery. The easement shall be contingent upon the City's approval of the proposed License agreement with Platte River. The City shall reserve the right to terminate the easement to Tri-State if the easement is not used, if it is abandoned, or if the City revokes the license to Platte River for any reason in the future. The City shall be named as an additional insured on Tri-State's general liability insurance, May 19, 2009 -3- Item No. 15 A-B environmental/pollution insurance, and automobile liability insurance policies while the easement is in effect. ATTACHMENTS n-n-,, T,,D",v 1. Location Map. 2. Excerpt of Minutes from the Electrical Utility Board meeting on March 9, 2009. ORDINANCE NO. 060, 2009 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CONVEYANCE OF A UTILITY EASEMENT TO TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC. WHEREAS, the City owns a certain parcel of real estate in the NW '/4 of Section 33, Township 8 North, Range 68 West of the 6th Principal Meridian, which is commonly known as the Richards Lake Substation (the "City Property"); and WHEREAS, the City Property is primarily used for electric power distribution activities by the Platte River Power Authority ("Platte River"); and WHEREAS, Tri-State Generation and Transmission Association, Inc. ("Tri-State") is proposing to construct an overhead electric transmission line project known as the Richards Lake Substation to Waverly Electrical Transmission Line Project(the "Project"); and WHEREAS, as part of the Project, Tri-State has requested a permanent, non-exclusive utility easement (the "Easement") over the City Property; and WHEREAS, Tri-State would construct a portion of the proposed overhead electrical transmission line and connect the new line to Platte River's high voltage substation equipment within the Easement; and WHEREAS, the Easement is approximately 50 feet wide and covers approximately 12,171 square feet of the City Property; and WHEREAS, as consideration for the Easement, Tri-State would pay $12,171 to the City's Utilities Department, which represents the fair market value of the Easement as determined by an appraisal by Foster Valuation Services, LLC; and WHEREAS, Tri-State would also pay $4,000 to the City's Utilities Department for the value of four Austrian Pine trees and hedges that would be removed from the Easement area by Tri-State, and pay $1,000 to the City's Real Estate Services Department for processing the Easement; and WHEREAS, Tri-State would be required to maintain liability insurance coverage for the City's protection while the easement is in effect; and WHEREAS, the City would reserve the right to terminate the easement if the proposed overhead line is not built, if it is abandoned, or if the related license agreement from the City to Platte River is terminated; and WHEREAS, City staff has identified no negative impacts to the City resulting from the grant of the requested Easement; and WHEREAS, to create the connection to Tri-State's new transmission line, Platte River will add two new circuit breakers to the Richards Lake Substation; and WHEREAS, adding these new circuit breakers will also increase the reliability of electrical service to the citizens of Fort Collins; and WHEREAS, at its meeting on March 4, 2009, the City's Electrical Utility Board recommended approval of the related license agreement to Platte River and the installation of the facilities necessary to provide interconnection to Tri-State at the Richards Lake Substation and, by the adoption of Resolution 2009-047, the City Council has approved the same; and WHEREAS, Section 23-111 of the City Code states that the City Council is authorized to sell, convey, or otherwise dispose of an interest in real property owned by the City, that is a part of the City's utility system, provided that the City Council first finds, by ordinance, that such sale or disposition will not materially impair the viability of the City utility system as a whole, will be for the benefit of the City's citizens, and is in the best interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the conveyance of the permanent, non-exclusive utility easement on the City Property to Tri-State as provided herein is in the best interests of the City, will not materially impair the viability of the City's electrical utility system as a whole, and will be for the benefit of the citizens of the City. Section 2. That the Mayor is hereby authorized to execute such documents as are necessary to convey the easement to Tri-State, on terms and conditions consistent with this Ordinance, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines are necessary or appropriate to protect the 'interests of the City, including, but not limited to, any necessary changes to the legal description of the easement, as long as such changes do not materially increase the size or change the character of the easement. Introduced, considered favorably on first reading, and ordered published this 19th day of May, A.D. 2009, and to be presented for final passage on the d fiay of June, A.D. 2009. Mayor ATTEST: Chief Deputy City Clerk -2- Passed and adopted on final reading on the 2nd day of June, A.D. 2009. Mayor ATTEST: City Clerk -3-