AR 050206 SCPPA agreement - Laserfiche WebLink

Browse Search

CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MAY 02, 2006 TO: HONORABLE MAYOR AND COUNCIL MEMBERS FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Approval to enter into Development Agreement with Southern California Public Power Authority for the Purpose of Performing Due Diligence on Renewable Resource Options DATE: April 20, 2006 BACKGROUND: The City Council adopted a Renewable Portfolio Standard (RPS) in October 2003 that established an RPS target of 15% by 2017. To date, the Electric Utility has 6% of its resource portfolio invested in renewable resources. These resources include participation in a wind project in northern California, a photovoltaic demonstration project at the Corporate Yard, and participation in a landfill gas project at Colton Landfill. DISC USSION/ANALYSIS: To continue building the renewable energy portfolio, Colton Electric Utility participated with Southern California Public Power Authority (SCPPA) and nine other SCPPA members in the issuance of a Request for Proposals (RFP) for renewable energy projects from qualified renewable energy providers in 2005. There were twelve responses to the RFP, which were then pared down to nine potential projects. Colton Electric Utility, as well as the other nine participants, is working with SCPPA to evaluate these projects to determine the best fit for Colton Electric Utility through a renewable project steering committee. This committee directs project development activities pursuant to the RFP. The respondents to the RFP have asked to keep many aspects of their proposals confidential during the negotiation and due diligence process. Appendix A provides a public summary of the proposals, including information not associated with any developer. Thus far, there have been no monies expended with regard to the RFP process; however, it is now necessary to contract with outside experts to perform studies and reports and assist with the due diligence process before Colton Electric Utility can make any recommendation to participate in any of these potential projects. The development agreement between SCPPA and all participants will provide the mechanism for SCPPA to hire outside experts to review and analyze the necessary aspects of each project, and provide information appropriate to any decision made by Colton Electric Utility. The types of services to be hired include, but are not limited to the following: • Verification of historical wind patterns for a potential wind farm • Confirmation of technical, regulatory, and legal feasibility for proposed new renewable generation technologies • Bond counsel advice for Clean Renewable Energy Bonds (CREB) • Credit evaluation of renewable project provider • Feasibility and costs of power transmission to support import of renewable energy The development agreement will allocate any costs associated with the due diligence process based upon each participant's pro -rata interest in each project. No costs will be allocated to any SCPPA participant unless interest has been expressed in a particular project. If a member should