2005 AGN MAY 03 I08 - Laserfiche WebLink

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Item #8 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MAY 03, 2005 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Request for Approval of Scheduling Service Agreement with City of Burbank for Magnolia Power Project DATE: April 25, 2005 BACKGROUND: The Magnolia Power Project is a 310 MW natural gas-fired electric generating unit located in Burbank, California. Council approved the City's participation in the Magnolia Power Project on March 26, 2002. Construction of the project is near completion; commercial operation date is scheduled for June 30, 2005. When complete, it will serve the cities of Burbank, Pasadena, Glendale, Anaheim, Colton, and Cerritos. It is projected to operate in a base -load mode (8,000 hours per year or more) and will be staffed by Burbank Water and Power personnel. DISC USSION/ANALYSIS: The Scheduling Service Agreement ("Agreement") between the City of Burbank and the City of Colton is the mechanism which allows for the transmission of the energy associated with Colton's Generation Entitlement Share to the California Independent System Operator (ISO). Colton's share is 10 MW. Per section 4.10 of the Agreement, the energy will be delivered to a point that each of the cities' schedulers have mutually agreed upon. The initial term of the Agreement is 12 months from the date of firm operation, and will automatically renew for an additional 12 -month term unless terminated in writing by either party at least 90 days prior to the expiration of the 12 -month term in effect at the time. The cost of scheduling services for base capacity energy is $3.144 per kilowatt -month. This amounts to $377,280 per year. The cost of scheduling services for peak capacity energy, if necessary, will be $7.00 per mega -watt hour for each mega -watt hour scheduled. FINANCIAL IMPACT: This is included in the budget for Fiscal Year 2005-2006, and is funded in account number 520- 8000-8006-2330-0555-700 (Transmission). ENVIRONMENTAL IMPACT: None. CONFLICT OF INTEREST— Gift Disclosure Requirements Not applicable.