HomeMy WebLinkAbout12 UAMPS contract pooling appendix agreement Agenda Item # 12
DistrictI r Public Utility
ACTION
To: Board of Directors
From: Stephen Hollabaugh
Date: March 19, 2014
Subject: Consideration of a UAMPS Lock-In Planned Pool Appendix for the
Purchase of a Market Purchase Starting April 1, 2017 to March 31,
2022
1. WHY THIS MATTER IS BEFORE THE BOARD
Board approval is required to enter into this contract or pooling appendix agreement.
2. HISTORY
Conservation is considered first resource for all new energy purchases. District
forecast assumes that load increases by 1% annually over the next three years.
Conservation is expected to account for 1-3% of total load, therefore conservation will
offset growth that would otherwise require additional resources. The District
forecasted load will be flat and conservation will account for any growth the District
may have.
The District's future power supply portfolio is intended to balance:
• Conservation;
• Renewable Resources;
• Resource Diversity;
• Contract Duration;
• Cost; and
• Price Volatility.
The District has an existing Pooling Appendix for a Five-Year Market purchase
contract that ends March 31, 2017. UAMPS has sent our an interest email to
members who may be interested in extending a purchase for an additional five years.
This new product would start after the existing five year product terminates on March
31, 2017. UAMPS has requested member agencies to indicate the amount of power
they desire for UAMPS to secure for them by March 21, 2014.
3. NEW INFORMATION
Pursuant to the discussion with UAMPS, UAMPS has provided a Lock-In Pooling
Appendix for a five year firm product beginning April 1, 2017. UAMPS has requested
member agencies to indicate the amount of power they desire by March 21, 2014.
Today's forward market prices (quoted March 11th) are $44 per MWh flat for five
years. There is some ability to shape a product that will meet the District's future
needs very well. If UAMPS is able to procure a market resource for $49 per MWh or
less then the member would be obligated to sign the corresponding confirmation to the
Lock-In Planned Pool Appendix. A market resource product consists of unspecified
sources of power from the supplying company that is part of their portfolio delivered to
a location. This product resource mix may change during the life of the contract but will
still meet the firm energy requirements of the contract.
District staff has analyzed our purchased power portfolio and recommends that the
District request the following in the Lock-In Planned Pool Appendix:
• Seller: UAMPS;
• Buyer:Truckee Donner PUD;
• Resource: Unspecified Market Purchase;
• Term: April 1, 2017 to March 31, 2022;
• Flat Amount by month; April 3.8 MW, May 3.2 MW, June 2.7 MW, July 4.5 MW,
August 3.4 MW,Sept 3.0 MW, Oct 2.8 MW, Nov 4.3 MW, Dec 7.3 MW Jan. 8.2
MW, feb. 8.1 MW, March 4.6 MW (these may change slightly due to UAMPS
combining members requests into whole MW s);
• Price $49 per MWh, or lower, at Mona and/or Gonder;
• Other Provisions: Buyer agrees that if UAMPS locks in a power supply product
meeting the above outlined criteria, they will execute a revised Appendix to
purchase firm capacity and energy; and
• Buyer further acknowledges and agrees if UAMPS is unable to lock in a power
supply product meeting the above outlined criteria by March 30, 2014 at 12:00
pm this Lock-In Appendix terminates.
4. FISCAL IMPACT
The UAMPS 2017-2022 Lock-In Pooling Appendixes for a market purchase represents
a 35% portion of the Electric Supply Procurement portfolio. The existing market
purchase (2012-2017) is priced at $49.25 per MWh and represents 42% of the existing
portfolio. The new market purchase (2017-2022) will be priced at $49 per MWh or
less. This should stabilize any rate impacts our customers might see if this portion of
our power portfolio were replaced with a higher priced generation. The estimated
2018 power purchase portfolio will be less than 2% higher than the existing 2014
budget. The reason 2018 is a little higher than 2014 is due to some renewable
resources (Landfill Gas) within our portfolio that the price increases incrementally each
year.
The term of this Appendix starts April 1, 2017 through March 31, 2022. The price will
be $49 per MWh or lower at Mona and/or Gonder delivery points. District staff believes
that this energy product will stabilize the price of energy to our customers over this
time period.
5. RECOMMENDATION
Approve the UAMPS Lock-In Planned Pool Appendix and corresponding confirmation
for the purchase of firm capacity and energy not to exceed the price of $49 per MWh
from April 1, 2017 through March 31, 2022 in approximately the amounts outlined in
this memo. (DAMPS may need to combine members requests so the amounts below
may change slightly.)
Stephen Hollabaugh Michael D. Holley
Assistant General Manager General Manager