Hitchcock and Associates/Colton Jets Power Generation Project

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CITY OF COLTON AGENDA REPORT For the City Council Meeting of May 15, 200-1- TO: 001 TO: Honorable Mayor and City Council APPROVAL: Henry Garcia, City Manager,��-a FROM: Thomas K. Clarke, Utilities Director SUBJECT: Approval of Professional Services Agreement with Hitchcock an Associates DATE: Monday, April 09, 2001 BACKGROUND Hitchcock and Associates has been retained by the Colton Electric Utility since 1997. Their primary task has been to assist the Utility with the replacement of power resource contracts with the City of Pasadena and the Bonneville Power Administration that expire in 2002 and 2003 respectively. Together these contracts provide 30 MW of the City's 82 MW and growing capacity requirement. This effort has led to the Colton Flexible Generation Project or Colton Jets. The SCPPA Power Resource Committee lists this project as an active option, and the Cities of Anaheim, Burbank, Pasadena and Vernon have expressed preliminary interest. Further, Robert Ferguson of Hitchcock and Associates, has also obtained the interest of the California Department of Water Resources (CDWR) in the project. CDWR is the State's lead agency for procuring power to alleviate the State's shortage. State funding of the project is a real possibility. ANALYSIS The Electric Utility proposes this new agreement to maintain continuity and preserve the progress that Hitchcock and Associates has provided to the City to date. Through the firm's efforts, Colton was given an audience by CDWR, and our Colton Jets project is being given serious consideration. State backing for the project represents an exceptional economic opportunity for the City. We are at the point where extensive due diligence is required to advance the project. Air resources, generation equipment, fuels and their transportation, plant design, potential operating personnel, SCE interconnection, and environmental issues must now be addressed in considerable detail. The City must demonstrate the viability of the project to CDWR and potential joint participants in order to obtain their financial backing. Hitchcock and Associates has brought Colton to a crossroads. Cities such as Anaheim, Burbank, Glendale, Los Angeles, Pasadena, and Vernon operate electric generation within their jurisdictions, and they have prospered for doing so. Colton has an opportunity to become such u:\tim\council\agendareps\hitchcock2001. doc Item #21