HomeMy WebLinkAbout12 Power Supply Contracts Policy Agenda Item #
TRUCKEE DONNER
Public Utility District
Staff Report
To: Board of Directors
From: Stephen Hollabaugh
Date: April 30, 2004
Subject: Update Power Supply Contracts Policy
Why this matter is before the Board—This matter includes a Resolution and only the
Board can authorize a Resolution.
History-The District has an existing resolution 9720 that "authorizes staff to enter into
contracts establishing the price of power purchased from Idaho Power Company." This
resolution lays out guidelines and risk management rules to deal with the price of power
and energy. The District no longer has a power supply contract with Idaho Power
Company, The District has entered into power supply contracts with Constellation
Power Source (CPS) and Western Area Power Administration (WAPA) for current and
future power and energy supply. The District also has a scheduling contract with NCPA.
The existing resolution only refers to Idaho Power Company and needs to be updated.
New Information —Our current power supply contract with Constellation Power Source
includes a "Point of Receipt" (POR) at the Gondar interface to Sierra Pacific Power's
transmission control area near Utah. I have been working with Constellation on a
possible change of Point of Receipt for the summer months of 2004 that may save the
District some power supply costs.
I looked into the current 9720 resolution and noticed that it refers to Idaho Power
Company only.
Though changing the Point of Receipt would not include buying any additional power or
energy, I felt the policy concerning the Power Supply Engineer should be updated so
that if this type of change surfaces and can save the District money, I can act on it within
the proposed policy requirements.
Recommendation — I recommend the Board approve attached resolution 2004-
XXX "Adopting a Policy Authorizing the District staff to enter into contracts
establishing the price of power.
(J
R solution No. 2004- XXX
ADOPTING POLICY AUTHORIZING DISTRICT STAFF
TO ENTER INTO CONTRACTS ESTABLISHING THE
PRICE OF POWER
WHEREAS, the District has entered into a contract with Constellation Power Source(CPS)
for the purchase of wholesale power and energy; and
WHEREAS, the District has entered into a contract with Western Area Power
Administration (WAPA) for the purchase of wholesale power and energy; and
WHEREAS, the District has entered into a contract with Northern California Power Agency
(NCPA) for scheduling services; and
WHEREAS, the District can manage its price risk by purchasing financial instruments and
or physical instruments;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS THAT:
1. The Power Supply Engineer of the District, in consultation with staff of Northern
California Power Agency and with the approval of the District General Manager, is
authorized to execute financial and or physical contracts, which manage the price
risk of the power and energy purchased subject to the following terms and
conditions.
2. In entering into a said contract the following procedures shall be observed-
a) There shall be established a list of pre-approved firms offering financial risk
management services within the electric industry, which list shall be
submitted to the Board of Directors for approval, and may be amended from
time to time.
b) A minimum of two telephone quotes shall be secured from firms on the pre-
approved list, which quotes shall be recorded on the transaction
memorandum which shall be prepared to document the actions leading up to
purchase of the contract.
c) The Power Supply Engineer shall consult with the appropriate staff of the
Northern California Power Agency regarding the desirability to seek quotes,
and shall again so consult after receipt of the two quotes. These
consultations shall be documented in the transaction memorandum.
d) In no event shall any single contract entered into under authority of this
policy extend for a period of greater than four months.
e) Prior to executing the contract, the Power Supply Engineer shall submit his
recommendation to the General Manager of the District. After securing
approval from the General Manager, the Power Supply Engineer is
authorized to execute the contract.
f) The Power Supply Engineer shall inform the Board of Directors of any
executed transaction by providing a copy of the transaction memorandum as
part of the next monthly staff report.
PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held
within the District on the fifth day of May, 2004 by the following roll call vote:
AYES:
NOES:
ABSTAIN:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Peter L. Holzmeister, Clerk of the Board
ATTEST:
Barbara Cahill, Deputy District Clerk
ATTEST:
Peter L. Holzmeister, District Clerk