AR 080106 Magnolia Power Project

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CITY OF COLTON AGENDA REPORT FOR CITY COUNCIL MEETING OF AUGUST 1, 2006 TO: Honorable Mayor and Council Members FROM: Jeannette Olko, Electric Utility General Manager and Michael Williams, City Treasurer SUBJECT: Magnolia Power Project 2006 Bonds DATE: July 27, 2006 BACKGROUND The Magnolia Power Project is a natural gas-fired power generating plant that is nominally rated at 242 MW. The capacity of the plant increases to 3 10 MW with the operation of supplemental duct firing and steam injection. However, the air permit for Magnolia Power Project limits the amount of annual emissions that the supplemental duct firing and steam injection may generate, which limits their use to approximately 1,000 hours for duct firing and 200 hours for steam injection. There are six participants in the project: the cities of Anaheim, Burbank, Cerritos, Colton, Glendale, and Pasadena. All participants with the exception of the City of Cerritos are considered Project A Participants. The City of Colton's share of the Project A Bonds is 4.3133%. The Project B bonds are payable exclusively from payments received from the City of Cerritos. The following table shows the share of debt service and other costs payable by each of the Project A Participants: City of Anaheim 39.6832% City of Burbank 32.3504% City of Colton 4.3133% City of Glendale 17.2536% City of Pasadena 6.3995% Construction of the Magnolia Power Plant began in July 2003, and started commercial operation on September 22, 2005, four months later than originally scheduled. Staff from Burbank Water and Power operate and maintain Magnolia Power Plant.