2002 AGN DEC 03 I07 - Laserfiche WebLink

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The staff has negotiated the attached Purchase Power Agreement with Genco to purchase the entire output, less the station load, for five years with an option to extend for another two five- year terms. The City also has an option to purchase the output of any addition to the generation at this site. The City of Colton is responsible for the interconnection of the project to its distribution circuit. Genco will be responsible for the construction, operation, and maintenance of the plant. They will also be responsible for any cost beyond the impact on our system. ALTERNATIVES: The City has an option to reject the contract and explore other options. FISCAL IMPACT: The fixed component will be the one time cost to interconnect with our existing system of about $50,000. We need to extend our distribution line to connect to Genco system. The City is obligated to take the entire output of the generation at 5.85 cents per KWH with 2% escalation. At present, our average purchase power cost at the City is 6.02 cents per KWH. The total cost of generation output in the first year of operation will be approximately $490,000.00. Part of this cost may qualify for use of our Public Benefit revenue. The variable component of the purchase will be budgeted in the fiscal year 2003-04 budget. The capital cost will be covered from our distribution line extension and professional services accounts. ENVIRONMENTAL IMPACT: Genco has acquired a South Coast Air Quality permit to construct and operate the plant. The project has CEQA approval and Genco has acquired a conditional use permit from the City of Colton. The project will not add any additional emissions due to this contract. It is Genco's responsibility to meet all environmental requirements and standards. RECOMMENDATION: It is recommended that the City Council authorize the staff to execute the Purchase Power Agreement for five years. Report Prepared by: Nitin Modi, Electrical Engineering Manager REVIEW TEAM ONLY City Attorney: I Finance Director: !L City Manager: t OTHER: