HomeMy WebLinkAbout11-Consideration of Financing or Payment for Maintenance Work -Nebo Natural Gas Generation=LOW
r TRUC EE DONNE
Public Utility District
CONSENT
To: Board of Directors
From: Stephen Hollabaugh
Date: April 03, 2013
Subject: Consideration of Financing or Payment for Maintenance Work of the
Payson/Nebo Natural Gas Generation
This matter is before the Board for possible approval of financing or payment the
maintenance and repair work of the Payson Project, Natural Gas Power Generation.
2. HISTORY
The Board approved, at the November 4, 2009 Board meeting, the Absolute
Assignment and Lay Off Power Sales Agreement concerning the transfer of 3.6768%
Entitlement share of the Payson Project from the City of Payson to Truckee Donner
PUD. Truckee Donner PUD now has an ownership entitlement to 3.6768% or 4.118
MW of the Payson/Nebo natural gas generation plant.
3. NEW INFORMATION
The Payson/Nebo natural gas generation plant is in need of some major overhaul and
maintenance work. This work is estimated to cost $7,140,000. UAMPS has
investigated financing this expense. UAMPS notice of election to make prepayment to
project participants is included as Attachment 1. The prepayment notice is covered in
section 4 of the existing Payson Project Power Sales Contract. The notice specifies:
• Maximum estimated amount of prepayment (Referenced Project Costs x
Entitlement Share)
Date by which Participant must make election (at least 15 days after date of
notice)
• Governing body must adopt resolution within this timeframe
The project cost estimate is $7,140,000. This results in Truckee Donner PUD's portion
to be $262,524 ($7,140,000 x 3.6768%). A resolution is required to approve a
prepayment in respect to additional bonds for the Payson Power Project (Attachment
2).
Prepayment - Election by Participant
If participant elects to make prepayment, participant notifies UAMPS within such
timeframe. If a participant does not notify UAMPS of election, participant is deemed to
have waived election. After making election, participant will have at least 15 days to
deposit funds with UAMPS.
Prepayment - Final Accounting
Prepayment will be "trued -up" within 90 days after final disbursement of prepayments.
Participant must pay any additional amount within 15 days of final accounting
statement. UAMPS will provide revised Schedule to Power Sales Contract.
Truckee Donner PUD currently has a retention fund balance at UAMPS of
$557,953.47. Truckee Donner PUD could use this fund to pay our prepayment portion
of the Nebo mayor overhaul and maintenance work.
4. FISCAL IMPACT
Payson/Nebo Natural Gas Electric Generation project will represent a portion of the
Electric Supply Procurement budget that might otherwise be purchased at from the
market. Truckee Donner PUD can use our UAMPS retention fund to pay for the major
overhaul and maintenance to the Nebo power plant. The current balance in this fund
is $557,953.47 and would be reduced by $262,524 for this expense leaving a balance
of $295,429.47.
5. RECOMMENDATION
A) Approve a Resolution authorizing and approving a Prepayment by the Truckee
Donner Public Utility District in respect of Additional Bonds to be issued by Utah
Associated Municipal Power Systems pursuant to the Payson Power Project Power
Sales Contract; and related matters.
B) Approve the payment of $262,524 to UAMPS for the Districts portion for major
overhaul and maintenance of the Payson/Nebo Natural Gas Generation facility
from Truckee Donner PUD's retention fund at UAMPS.
Stephen Hollabaugh Michael D. Holley
Assistant General Manager General Manager