1992 AGN OCT 20 I23 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For Council Meeting of October 20, 1992 TO: Honorable Mayor and City Council / FROM: Gale A. Drews, Electric Utility Director SUBJECT: CONSIDER FIRST READING OF ORDINANCE AUTHORIZING Date: 10/13/92 THE ISSUANCE OF BONDS BY THE SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY TO FINANCE COSTS OF THE SAN JUAN 3 PROJECT CONSIDER FIRST READING OF ORDINANCE APPROVING ENTERING INTO OF POWER SALES CONPRACT FOR THE SAN JUAN 3 PROJECT BACKGROUND The Southern California Public Power Authority (SCPPA) is an Authority comprised of 11 members, 10 municipal utilities and 1 irrigation district, that was organized in 1981 to finance acquisitions and construction of generating and transmission projects. Four cities, including Colton, and Imperial Irrigation District along with representatives of SCPPA, have been negotiating with Century Power for the acquisition of their remaining interest in San Juan Unit #3 which is 204 megawatts. San Juan Unit #3 is a coal fired generating plant located near Farmington, New Mexico, operated by Public Service of New Mexico. (Please see the attached San Juan Unit #3 Summary Description.) R. W. Beck and Associates were retained by the parties to evaluate the resource and submit its findings with an analysis of Alternative Allocations. Colton is anticipating acquiring through a Power Sales contract, the output of 30 megawatts of the project, to be integrated under the terms of the Integrated Operations Agreement (IOA) with Southern California Edison Company (SCE). This power would be used to displace some of the short term power contracts now in place and to provide power for load growth, such as the San Bernardino County Medical Center's. The resource would be available to the City in the 1995-96 time frame. Although the project cost of capacity and energy is estimated to be slightly higher than the Utility's present average cost, 4.5 cents to 5.23 cents, it is felt that the Utility's average cost will escalate considerably in the future years as the surplus of capacity and energy diminishes in the market. Attachments: San Juan Unit No. 3 Summary Description R. W. Beck & Associates Summary of Draft Results Page 1 of 2 Item No -02.3