HomeMy WebLinkAbout11 UAMPS Horse Butte Power Sales Agenda Item # I I
Public Utility District
ACTION
To: Board of Directors
From: Stephen Hollabaugh
Date: September 01, 2010
Subject: Consideration of a Revision to the Power Sales Contract for the
UAMPS Wind Project at Horse Butte
1. WHY THIS MATTER IS BEFORE THE BOARD
This item is before the Board for the consideration of a Power Sales Contract with
UAMPS for the Horse Butte Wind Project in Idaho.
2. HISTORY
Renewable Portfolio Standard (Excerpt) - TDPUD
• At such time that projected resources do not exceed projected demand,
TDPUD will strive to include qualifying resources to meet projected demand.
• Truckee Donner PUD resource mix will have a minimum of 21% of renewable
resources by 2010. Renewable resources are defined as non-fossil fueled
electric generating resources, including hydroelectric.
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.
Truckee Donner PUD is in the resource project at UAMPS. The resource project is
used to investigate possible generation resources prior to starting a study project. The
UAMPS Horse Butte Wind project moved into a study project in which Truckee is a
participant. A workshop was given to the Board on November 4, 2009 and April 7,
2010. At the April 7, 2010 workshop, the draft Power Sales Contract was reviewed
along with a project overview.
On August 4, 2010 the Board approved the Power Sales Contract with a subscription
of up to 9000 kW. At that time the forecast pricing was $76/MWh at Mona.
3. NEW INFORMATION
Project Status:
The Horse Butte Wind project will be about 50 to 100 MW depending on member
subscription. It is a private/public project using federal tax credits & tax exempt
financing. The project is in the final development and permitting stage that includes:
construction contract, turbine vendor, permits, etc.
The cost estimate has reduced since the last update due to reduced transmission and
substation requirements and lower financing costs. The cost estimate was reviewed
the UAMPS customer meeting in Susanville on August 18, 2010 and is now $64.10
MWh at the busbar or $69.10/MWh (Mona equivalent). The Mona equivalent
includes the busbar cost plus an estimate of the Bonneville Power Administration
(BPA) transmission costs. Staff believes this is probably the lowest busbar cost for a
wind project that the District will see compared to any other wind projects.
The project has an ability to generate 100MW. UAMPS staff asked its members to
increase their subscription if possible in order to have a member owned project at its
full capacity of 100 MW. At the current proforma prices, the members could sell some
of this additional output until their loads require them to bring this resource to their
customers. At these prices, there is a strong market to sell this at cost or with a
margin to the member. This resource cost compares favorably to natural gas, coal,
and the market after the buyout approximately six years after commissioning. UAMPS
staff put together a presentation at the member meeting ("Quick and Dirty Resource
Analysis") that is attached. This presentation compared this project favorably to other
resources.
Power Sales Contract:
TDPUD's Power Sales Contract was approved by the Board at the August 4, 2010
meeting for up to 9,000 kW. To increase the subscription to this project, a resolution
changing the subscription amount is required. The 6000 kW additional capacity will
yield about 2000 kW of energy at 30% load factor. This amount is similar to another
contract (Salt Lake Landfill gas) that will expire in six years. At that the District can
bring the additional Horse Butte energy into our portfolio at a lower cost. Another
strategy would be to bring all of this energy to the District and displace market
purchases.
4. FISCAL IMPACT
The Horse Butte Wind project will represent a portion of the Electric Supply
Procurement budget that might otherwise be purchased at from the market. This
project has a projected load factor of just over 30%. Therefore up to 15,000 kW
subscription will yield and average of 5,000 kWh of energy per hour. The estimated
cost including BPA transmission is approximately $69/MWh. This cost includes the
associated renewable energy credits (REC's) with the energy. A strategy would be to
sell 6,000 kW of the 15,000 KW to the market during the first number of years of the
project and then bring the resource to our load. A second strategy will be to use this
addition toward our load and displace market purchases.
5. RECOMMENDATION
Approve the Board President to sign a resolution authorizing and approving and
increased subscription to Horse Butte Wind Project Power Sales Contract to 15,000
kW with Utah Associated Power Systems; and related matters in substantially the
form attached.
pl
Stephen Hollabaugh Michael D. Holley
Assistant General Manager General Manager
rr
ublic Utility District 1
RESOLUTION NO. 2010 - XX
A RESOLUTION AMENDING RESOLUTION NO. 2010-23 AUTHORIZING
AND APPROVING THE HORSE BUTTE WIND PROJECT POWER SALES
CONTRACT WITH UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS;
AND RELATED MATTERS.
WHEREAS, on August 4, 2010 Truckee Donner Public Utility District ("District")
approved Resolution No. 2010-23 Authorizing and Approving the Horse Butte Wind Project
Power Sales Contract with Utah Associated Municipal Power Systems ("UAMPS");
WHEREAS, pursuant to Section 1(b) of Resolution No. 2010-23, the District authorized
and approved an Entitlement Share representing up to 9,000 kW of capacity, as such capacity
amount may be rounded by the Project Management Committee pursuant to the Power Sales
Contract to provide a whole number of turbine generator sets;
WHEREAS, the District believes that it is in the best interests of its ratepayers to increase
its Entitlement Share in the Horse Butte Wind Project from 9,000 kW of capacity to 15,000 kW
of capacity, as such capacity amount may be rounded by the Project Management Committee
pursuant to the Power Sales Contract to provide a whole number of turbine generator sets;
WHEREAS, the District now desires to amend Resolution No. 2010-23 and increase its
Entitlement Share in the in the Horse Butte Wind Project;
NOW, THEREFORE, BE IT RESOLVED by the Governing Body of Truckee Donner Public
Utility District, as follows:
(a) Resolution No. 2010-23, Section 1(b), adopted by this Governing Body on August
45 2010, is hereby amended to read in its entirety as follows:
"An Entitlement Share representing up to 15,000 kW of capacity, as such capacity
amount may be rounded by the Project Management Committee pursuant to the
Power Sales Contract to provide a whole number of turbine generator sets, is
hereby authorized and approved."
(b) All other sections and provisions of Resolution 2010-23 shall remain unchanged
and in full force and effect.
(c) All previous acts and resolutions in conflict with this resolution or any part hereof
are hereby repealed to the extent of such conflict.
100181959.DOC 1}
(d) In case any provision in this resolution shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(e) This resolution shall take effect immediately upon its adoption and approval.
ADOPTED AND APPROVED this_day of 12010.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By
Jeff Bender, President of the Board
ATTEST:
Michael D. Holley, Clerk
[SEAL]
100181959.DOC 11