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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/01/2010 - ITEMS RELATING TO THE PLATTE RIVER POWER AUTHORITY DATE: June 1, 2010 . STAFF: Brian Janonis Steve Catanach Items Relating to the Platte River Power Authority Contracts. A. Second Reading of Ordinance No. 061, 2010, Authorizing an Amended and Restated Organic Contract for Platte River Power Authority. B. Second Reading of Ordinance No. 062, 2010, Authorizing an Amended and Restated Contract with Platte River Power Authority For the Supply of Electric Power and Energy. EXECUTIVE SUMMARY The staff of Platte River and the Municipalities initiated an effort to revise and extend the Organic Contract and the powersupply agreements between Platte Riverand the Municipalities in late 2007. The goals of this process included: (1) extending the term of the Organic Contract and the power supply agreements through 2050; (2) the elimination of the Facilities Agreements between Platte River and each of the Municipalities and the incorporation of the relevant provisions into the new power supply agreements;(3)the creation of a limited exception to the all-requirements nature of the power supply agreements so that the Municipalities could pursue local energy generation options; and (4) general editorial updating. These Ordinances were unanimously adopted on First Reading on May 18, 2010. STAFF RECOMMENDATION Staff recommends adoption of the Ordinances on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- May 18, 2010 (w/o attachments) ATTACHMENT DATE: May 18, 2010 AGENDA ITEM SUMMARY STAFF: Brian Janonis _ T COLLINS CITY COU 11 Steve Catanach Items Relating to the Platte River Power Authority Contracts. A. First Reading of Ordinance No.061,2010,Authorizing an Amended and Restated Organic Contract for Platte River Power Authority. B. First Reading of Ordinance No--062N2010�Auth�orizi i g:an.Amend�nd Restated Contract with Platte River Power Authority For the Supply of Electric Power ands En�gy. EXECUTIVE SUMMARY The staff of Platte River and the Municipalities initiated an.effort to revise and extend the Organic Contract and the power supply agreements between Platte River and the Municipalities in late 2007. The goals of this process included: (1) extending the term of the Organic Contract and the power supply agreements through 2050; (2) the elimination of the Facilities Agreements between Platte River and each of the Municipalities and the incorporation of the relevant provisions into the new power supply agreements;(3)the creation of a limited exception to the all-requirements nature of the power supply agreements so that the Municipalities could pursue local energy generation options; and (4) general editorial updating. rr P y1l, BACKGROUND / DISCUSSION\ /� Estes Park and Longmont approved the updated agreements during July and September of 2,008. Fort Collins held a work session on the updated agreements during October of 2008, which led to the inclusion of additional language addressing Platte River's environmental commitment. The updated agreements with language added by Fort Collins were adopted by the Fort Collins Council in March 2009. The Loveland Utility Commission expressed concerns about ambiguity in the language added by Fort Collins and recommended approval of the updated agreements in the form previously approved by Estes Park and Longmont. Loveland approved the updated agreements without-the Fort Collins revisions during June of 2009. During the December8,2009 Work Session, Fort Collins Cou lcilmembers indicated that the language that had initially been suggested for the organic and 1power supply contracts might be further simplified. Alternative language was suggested and the City Attorney's office.was,asked.to.work with PRPA staff to make the proposed revisions prior to the Platte River Board meeting on December 10, 2009,so the Mayor could get feedback from Longmont, Loveland and Estes Park. After the direction from the December Work Session indicating that simplified language would be acceptable, the Loveland Utilities Commission proposed further revisions. These revisions eliminated some of the environmental language proposed by Fort Collins, but preserved the central concept that the power provided by Platte River must be reliable, cost-effective and environmentally responsible in the Purposes section of the Organic Contract. The Loveland Utilities Commission also accepted the language that requires Platte River to meet to discuss additional generation if the one percent threshold is met as well as the net metering language added by Fort Collins. The proposed revisions were reviewed,and recommended,for approtval by t e;Electric Board on March 10,2010. The Agreements were scheduled for review by the Fort Collins City-Council`on✓April 6, 2010, but were pulled from the agenda due to concerns about the changes suggested by the Loveland Utilities Commission. \1 J U� On April 20,2010, representatives of Fort Collins and Loveland met to discuss compromise language. The language contained in the agreements being presented was the result of this meeting. All of the language added by Fort Collins May 18, 2010 -2- ITEM 25 after the December 2009 study session is contained in the present drafts. The only language change resulting from the April 20 meeting involved removal of the phrase"demand side resources"and the substitution of more descriptive language. FINANCIAL IMPACT No financial impacts are anticipated. SUSTAINABILITY: ECONOMICENV,IRON EMNTAL ANDNS`�OCIAL/IM PACTS + ' ' . v v. . The revision to the Energy Supply 1 Ig`eement�I\wseach'iof�four member municipalities to install and own generation resources up to 1% of peak.loaP This:p[ovideslan opportunityJfor the development of local City owned renewable resources. One percent of the City of Fort Collins peak load is approximately three megawatts of generation the City could develop for its own use. Project examples the City of Fort Collins has been considering that would be simplified with the adoption of the Agreements are the installation of a solar array on the Aztlan Center, a solar array to feed the Mulberry wastewater treatment facility and support of the FortZED— Renewable Distributed System Integration project. STAFF RECOMMENDATION Staff recommends adoption of the Ordinances on F ailing. I �' BOARD /COMMISSION RECOMMENDATION The Electric Board voted unanimously on March 10, 2010, to recommend approval of both the power supply and organic contracts. During this meeting, the Electric Board reviewed and recommended Council approval of a version of the Platte River organic contract that included revisions suggested by the Loveland Utilities Commission and that was pulled from the April 6,2010, City Council agenda. After the March 10,2010, Electric board meeting, an informal meeting including representatives from Loveland and Fort Collins took place on April 20, 2010. As a result of this meeting, a version of the Platte River organic contract was produced and is presented with this agenda item. This version of the organic contract includes language informally requested by the City Council in a December 2009 work session. In light of this, the Electric Board=las noC5sRed foF it rs ecomm\\end//atibn again. PUBLIC OUTREACH The following summarizes the timeline of various steps with the Electric Board, the Fort Collins City Council and Councils of the other partner cities. Summer 2008: Fort Collins Electric Board recommended approval of the Contract and Agreement. October 2008: The Contract and Agreement were brought to the Fort Collins City Council work session. Prior to this work session, both Estes Park and Longmont had approved the agreements as written. Fort Collins Council asked that additional language be incorporated regarding environmental responsibility. I lea March 2009: New drafts were created to�mcorpo1ate;the requested language and brought back to the Fort Collins City Counci, I. Both,docu_ . ments were approved wil h the preferred environmental language. May 18, 2010 -3- ITEM 25 Following March 2009: Two cities had previously approved a different version of the Contract and Agreement. The City of Loveland expressed concern -about the added language, so the Loveland City Council approved the two agreements in the form previously approved by the cities of Estes Park and Longmont. December 2009: Another Fort Collins City Council work session yielded some modified language to eliminate redundancies and revised language of concern to Loveland. February 2010: The Loveland Utility Commission proposed revisions to the language informally modified by Fort Collins. ��. March 2010: The Fort Collins/Electric Board voted unanimously to recommend that the Fort Collins City Council approve and a�ho size execution of fthe1ContraCt and Agreement in the forms as modified by the Loveland Utility Commission. ILJI ILJI April 6, 2010: The versions recommended by the Electric Board were pulled from consideration by the City Council. April 20, 2010: Representatives of Fort Collins and Loveland met to consider compromise language. The language proposed by Fort Collins after the December study session was accepted with two clarifications. ATTACHMENTS �y �� r— V\ n 1. Electric Board minutes- March 10, 2010, and January 201009Y 2. Organic Contract, redline version R J 3. Amended Contract for the Supply=of Electric•Power and Energy, redline version ORDINANCE NO. 061, 2010 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, 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 May 12, 2010, that includes some revisions informally requested by City Council at a previous meeting of the City Council, as well as some revisions discussed by Fort Collins and Loveland representatives at an informal meeting,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 a purpose statement 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; and WHEREAS, on March 10, 2010,the Electric Board reviewed a version of the Platte River organic contract that contained language less favorable to the interests expressed by the Fort Collins City Council in a December 2009 work session and recommended that the City Council authorize approval of the organic contract; and WHEREAS, it is City staffs understanding that Utilities staff of Loveland, Longmont and Estes Park will be recommending approval of the Updated Organic Contract to their respective governing bodies. 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 i to replace and supercede the Existing Organic Contract with the Updated Organic Contract. Section 2. That the Updated Organic 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 May 12, 2010. Section 3. That the City Council hereby directs the Electric Board to annually review the terms and conditions of the Updated Organic Contract and suggest any revisions to the City Council by formal board action. Introduced, considered favorably on first reading, and ordered published this 18th day of May, A.D. 2010, and to be presented for final passage on the 1 s ay,of June, A.D. 2010. Mayo ATTEST: City Clerk Passed and adopted on final reading on the 1 st day of June, A.D. 2010. Mayor ATTEST: City Clerk ORDINANCE NO. 062, 2010 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")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 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, 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 May 12, 2010, that includes some revisions informally requested by City Council at a previous meeting of the City Council; and WHEREAS, the Updated Supply Contract will 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, except that 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; and WHEREAS,on March 10,2010,the Electric Board reviewed the proposed Updated Supply Contract and recommended approval of the same; and WHEREAS, it is City staffs understanding that Utilities staff of Loveland, Longmont and Estes Park will be recommending approval of the Updated Supply Contract to their respective governing bodies. ' 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 May 12, 2010. Section 3. That the City Council hereby directs the Electric Board to annually review the terms and conditions of the Updated Supply Contract and suggest any revisions to the Council by formal board action. Introduced,considered favorably on first reading,and ordered published this 18th day of May, A.D. 2010, and to be presented for final passage on the 1st day un , A.D. 2010. Mayo ' ATTEST: City Clerk Passed and adopted on final reading on the 1 st day of June, A.D. 2010. Mayor ATTEST: City Clerk