HomeMy WebLinkAbout6 Wholesale Power Agenda Item # b
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Public Utility District
Memorandum
To: Board of Directors
From: Stephen Hoilabaugh
Date: February 26, 2003
Date of Board Meeting March 5, 2003
Subject: Consider entering into a wholesale power sales contract. Discussion
of wholesale power supply proposals and selecting a power provider starting
April 1, 2003.
1. WHY THIS MATTER IS BEFORE THE BOARD
The District has a RFP for wholesale power supply out at the current time. Staff
will bring to the Board the final proposals of the short list of power providers and
recommend action. The District has asked the power providers to give the
District a firm price for the Board to consider.
2. HISTORY
The District needs to acquire a new power supplier starting April 1, 2003. The
District settlement with idacorp Energy requires the District to have a new power
supplier on April 1, 2003. We have sent out an RFP to several prospective
power suppliers for indicative pricing and contract terms. We plan to work with a
short list of providers to prepare final contract terms and eventually firm pricing
that will come to the Board on March 5, 2003.
3. NEW INFORMATION
The District has received the final round of RFP's from prospective power
suppliers. I will describe some of these proposals and the difference in products
that were proposed. I will bring the data that I receive on the morning of March 5,
2003 to the board for their consideration.
4. RECOMMENDATION
I recommend the Board enter into a wholesale power sales contract with a power
supplier to be recommended at the Board meeting.
Truckee Donner Public Utility District
2003 Power Supply RFP
March 5, 2003
Schedule
Send out RFP to potential Power January 1.7
Suppliers — To get indication of interest
Receive Power Supply Indications of February 7+
Interest — Including some contract
language and indicative pricing
Select Short List: Work out Enabling February 10-28
Agreements: including Credit and
Collateral Requirements
Send out Final RFP to Short List February 24-28
Approve Power Supply Contract , March 5
elect Power Supplier
tart receiving power lApril 1, 2003
........ 2
TDPUD Replacement Power Supply Strategy
• The District solicited proposals for a replacement power
contract through 2007
• Term: 3 to 5 Year fixed Price
• Full Requirements or Monthly Shaped Blocks with Shaping
• Process: Initial RFP sent out to over 12 Suppliers
— These included Municipal, Investor Owned, Marketers
— Initially we asked for indications of interest including notional prices and
contract terms.
• Short list started with six Suppliers of which three offered final
proposals.
• Final proposals were received today.
• Staff and consultants evaluated these proposals considering
price, credit and contract terms.
3
Recommendation
• Supplier: Constellation Power Source, Inc.
• Product: Monthly Shaped Blocks with Shaping
• Term: April 1 , 2003 through December 31 , 2007
• Credit: Corporate Guarantee up to 50 million
• Price: $49.95 per MWH
— Shaping Product priced at market price
— Shaping service cost estimated to be approx. $90,000 year
Constellation Power Source, Inc
• Wholly owned subsidiary of Constellation Energy Group
(NYSE: CEG).
• Owner of Baltimore Gas and Electric, oldest utility in the
United States, with 180 years of operational experience.
• Over 9000 MW of generation plants
• Baal from Moody's, A- from S&P
a�_...--__...._ .... _ � � _ _�� _. n �_� ��__��. __� 1.1. s
Monthly Purchases and Load - Profile Mitigates Risk
January 2002 July 2002
25,000 �ti 25,000
20,000 20,000
15,000 15,000
10,000 10,000
5,000 5,000
1 3 5 7 9 11 13 15 17 19 21 23 1 3 5 7 9 11 13 15 17 19 21 23
Hour Ending Hour Ending
6e;Hourly lucaa�Contract Purchase J ^Peak Day Hourly Load—Contract Purchase
.... ............................... ..
April 2-0-0-2- October 2002
25,000
25,000
2
20,000V`w 0,000
15000
15,000
10,000
10,000
5,000 NO
5,000
1 3 5 7 9 11 13 15 17 19 21 23
1 3 5 7 9 11 13 15 17 19 21 23 Hour Ending
Hour Ending
—Peak Day Hourly Load —Contract Purchase
—Peak Day Hourly Load—Contract Purchase:
Transaction Results — Rate impact
• Terminating the contract and financing the settlement will avoid
significant near term rate increases.
• Fully loaded cost, including debt service, is substantially below effective
prior contract cost.
TDPUD Wholesale Power Cost
$120.00
$100.00
$80.00
$60.00
i �
$40.00
$20.00
$0.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
I
---Original Contract Replacement Contract:
- - --
_ 7
Schedule
Approve Power Supply Contract , March 5
Select Power Supplier
Receive Rating March 7
Receive Insurer Quotes March 10
Mail POS March 12
Price March 18,19
Start receiving power April 1
Close April 3
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