HomeMy WebLinkAbout7 Power Supply Contracts Agenda Item #
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Memorandum
To: Board of Directors
From: Stephen Hollabaugh
Date: May 26, 2005
Subject: Future Power Supply Contracts
History- The District entered into power supply contracts with Constellation Power
Source (CPS) that ends December 31, 2007. Also the District has a Western Area
Power Administration (WAPA) contract for a small amount of energy supply. The NCPA
continues to do the scheduling.
The District will need to secure power for our customers for the period of 2008 through
2011. The IPP3 unit is scheduled to come on line during 2011 and will be a great asset
to the District after it is on line.
New Information — Our current power supply contract with Constellation Power Source
has been a great asset to the District. I will give a presentation (slides attached) that
gives an overview of our current contract ,how it works and what the District options are
for the future.
I have been working with Sandra McDonald of McDonald Partners to help me
understand the future market prices and come up with a plan to secure future power
supplies at reasonable prices.
There are several options the District may have to secure its future power supply needs.
These options come and go quickly in a very volatile market. I will describe these
opportunities and what the District must do to benefit from a stable power supply in the
future.
I have attached several informational items to this staff report. I will discuss each during
the presentation Wednesday night. The items are:
• Power Point Presentation
• Projected Future Block Purchases
• Power Expense Projections — Replacement Contract Priced at $55 and $62.50
per MWh
• Draft Pro-formas for Contract Renewed at $55 and$ 62.50 per MWh and what
the Customer rate implications may be.
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This information along with the ever changing market prices need to be addressed to
ensure that the District can obtain a future power contract at a price that is in the best
interest of our customers and meets the Board's needs.
I am putting together a resolution that will have much of the above information and
outlines a contract extension or RFP process. In this process, the Board adopts a
Resolution authorizing the District staff to execute documents pursuant to the terms of
the definitive documents with the lowest bidder. This Resolution will include a "Not to
Exceed Amount" that will be defined in $lMWh.
Recommendation — I recommend the Board approve attached resolution 2005-
XXX "Authorizing the District staff to enter into a power supply contract and
related services."
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