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ITEM #9 <br />CITY OF COLTON <br />AGENDA REPORT <br />FOR COUNCIL MEETING OF JANUARY 15, 2008 <br />TO: HONORABLE MAYOR AND CITY COUNCIL <br />FROM: Jeannette Olko, Electric Utility General Manager <br />SUBJECT: Request for Approval of Power Purchase Contract with NM Colton <br />Genco, LLC <br />DATE: January 08, 2008 <br />BACKGROUND: <br />Council approved a power purchase contract with NM Colton Genco, LLC for 1.26 MW of landfill <br />methane gas generated power on December 3, 2002. NEO Corporation, original owners of the <br />landfill generator, sold the asset to Algonquin Power in June 2004. The terms and conditions of <br />the original agreement remained intact and were not affected by the sale of the company. <br />DISCUSSION/ANALYSIS: <br />On December 21, 2007, the Electric Utility was notified via email of the sale of the NM Colton <br />Genco LLC facility to Fortistar LLC. The generating station located in Colton was one of six landfill <br />gas powered generating stations sold by Algonquin Power to Fortistar LLC. The generator in <br />Colton is currently inoperable, but is expected to be operational by mid-February. <br />The existing Purchase Power Contract between NM Colton Genco LLC and the City expired <br />December 31, 2007. Fortistar LLC has requested a 90 day extension of the contract through <br />March 31, 2008 to allow both parties to evaluate the feasibility and mutual desirability for a long <br />term extension of the contract. <br />FINANCIAL IMPACT: <br />There is no financial impact while the unit is inoperable. When the unit becomes available, any <br />power that is received will be paid for by the Electric Utility; funds are currently budgeted in <br />account number 520-8000-8001-2330-0555-500, Purchased Power — Firm Power. Current <br />balance in the account is $593,825.53. <br />ENVIRONMENTAL IMPACT: <br />None. <br />CONFLICT OF INTEREST — Gift Disclosure Requirements <br />NM Colton Genco, LLC <br />Fortistar LLC <br />Contact: Tony Wetzel <br />