Form revised December 4, 2006
FISCAL NOTE FOR NON-CAPITAL PROJECTS
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Department: |
Contact Person/Phone: |
DOF Analyst/Phone: |
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City Light |
Marilynn Semro/386-4539 |
Thomas Dunlap/386-9120 |
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Legislation Title: AN ORDINANCE relating to the City Light Department; authorizing agreements with Idaho Power for the interconnection of the Lucky Peak hydroelectric project with Idaho Power and the acquisition of long-term firm transmission service from Idaho Power, both for the purpose of transmitting power purchased from the Lucky Peak hydroelectric project. |
· Summary of the Legislation:
This ordinance authorizes City Light to replace its expiring transmission agreement with Idaho Power by entering into new agreements with Idaho Power for maintaining the existing interconnection of Lucky Peak with Idaho Power’s transmission system. The ordinance also authorizes City Light to purchase new transmission service for a term that is less than or equal to the remaining term of the City Light’s Lucky Peak power purchase agreement and in an amount less than or equal to the nameplate rating of Lucky Peak. These agreements are necessary to transmit power from Lucky Peak located near Boise, Idaho to the Bonneville Power Administration’s transmission system network to enable its transmission to the City of Seattle.
· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):
In 1984, the City Light entered into a fifty (50) year power purchase agreement for the purchase of power from Lucky Peak [Ordinances 111632 and 111673] and a transmission agreement with Idaho Power [Ordinance 113931] for interconnecting Lucky Peak to Idaho Power’s transmission system and transmitting the Lucky Peak power to the Bonneville Power Administration’s transmission system. The transmission agreement expired on December 31, 2007. City Light has requested and will receive transmission service from Idaho Power for Lucky Peak for a one year term beginning January 1, 2008 and ending December 31, 2008.
Consistent with the Federal Energy Regulatory Commission’s (the “FERC”) Order 890, Idaho Power’s Open Access Transmission Tariff (“OATT”) now requires that for Lucky Peak to remain interconnected to Idaho Power’s transmission system, City Light must sign a ten year Large Generator Interconnection Agreement with Idaho Power (the “LGIA”). In addition, consistent with FERC’s Order 890, Idaho Power’s Open Access Transmission Tariff (“OATT”) now requires that all requests for long-term firm transmission service must be for a term of at least five (5) years and must be requested at least one year in advance of the requested start date. To avoid losing City Light’s priority to Idaho Power’s firm transmission, and to avoid significantly reducing the ability to transmit power from the Lucky Peak resource, City Light requested transmission service before the December 31, 2007 deadline for a term of not less than five (5) years starting January 1, 2009. In addition, consistent with FERC’s Order 890, Idaho Power’s OATT requires City Light to sign the transmission services agreement within fifteen (15) days of when the agreement is offered by Idaho Power or the transmission request will be deemed withdrawn and the request terminated.
This ordinance authorizes City Light to enter into any required interconnection agreements, transmission service agreements and all such subsequent agreements for any time periods that are less than or equal to the remaining term of the Lucky Peak power purchase agreement and in an amount that is less than or equal to the nameplate rating of Lucky Peak. All such agreements must be substantially similar in form to the document that has been approved by FERC and attached to this Fiscal Note as attachments 1 and 2.
· Please check one of the following:
____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)
__X__ This legislation has financial implications. (Please complete all relevant sections that follow.)
Appropriations: This table should reflect appropriations that are a direct result of this legislation. In the event that the project/ programs associated with this ordinance have appropriations that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below.
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Fund Name and Number |
Department |
Budget Control Level* |
2008 Appropriation |
2009 Anticipated Appropriation |
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TOTAL |
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*See budget book to obtain the appropriate Budget Control Level for your department.
Notes: This legislation does not make any appropriations. In 2006 City Light budgeted $1,027,400 for Lucky Peak transmission under the then existing transmission services agreement and $1,230,700 for 2008 based on Idaho Power’s then current point-to-point (“PTP”) transmission services rate. Since that time, Idaho Power’s transmission services rate for PTP has increased such that SCL now expects charges for 2008 to be about $2,100,000. City Light’s Purchased Power BCL (SCL700) includes sufficient budget authority to cover the incremental expenses of this new agreement in 2008. There is no cost directly attributable to the LGIA.
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Fund Name and Number |
Department |
Revenue Source |
2007 Revenue |
2008 Revenue |
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TOTAL |
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Anticipated Revenue/Reimbursement: Resulting From This Legislation: This table should reflect revenues/reimbursements that are a direct result of this legislation. In the event that the issues/projects associated with this ordinance/resolution have revenues or reimbursements that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below the table.
Notes: No revenues are anticipated for 200 for this item. Unlike the transmission services agreement that terminated at the end of 2007, transmission service under Idaho Power’s OATT would allow City Light to sell transmission that is surplus to the needs of Lucky Peak power at market rates. The ability to sell such surplus transmission at market rates is a result of FERC’s recent Order 890. Because there is no experience under this provision of Order 890, there is currently no ability to estimate future revenues, but there is the possibility they will exist. There is no revenue directly attributable to the LGIA.
Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact: This table should only reflect the actual number of positions created by this legislation In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table.
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Position Title and Department* |
Fund Name |
Fund Number |
Part-Time/ Full Time |
2008 Positions |
2008 FTE |
2009 Positions** |
2009 FTE** |
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TOTAL |
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* List each position separately
** 2009 positions and FTE are total 2009 position changes resulting from this legislation, not incremental changes. Therefore, under 2009, please be sure to include any continuing positions from 2008.
Notes: None.
· Do positions sunset in the future? (If yes, identify sunset date):
Spending/Cash Flow: This table should be completed only in those cases where part or all of the funds authorized by this legislation will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects). Details surrounding spending that will occur in future years should be provided in the Notes section below the table.
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Fund Name and Number |
Department |
Budget Control Level* |
2008 Expenditures |
2009 Anticipated Expenditures |
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TOTAL |
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* See budget book to obtain the appropriate Budget Control Level for your department.
Notes: None.
· What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)
The cost of not implementing this legislation is the risk of having Lucky Peak disconnected from the transmission system and losing City Light’s priority right to existing firm transmission and thus not being able to transmit the power from City Light’s 101 MW Lucky peak hydroelectric project in Idaho to the BPA transmission system due to no or intermittent transmission. To replace such a loss is likely to require a substantial capital outlay and potentially years of delay in constructing new transmission lines.
· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)
It is possible, although it is unclear how probable, to structure an exchange where Lucky Peak power stays in Idaho and an alternative power supply is provided to City Light from within BPA’s or City Light’s transmission system. The available parties to such an exchange would be very limited if there is no transmission.
An LGIA must be signed with Idaho Power. In addition, City Light should be the party to sign it. While the LGIA could be signed by the Lucky Peak owners, because City Light is the operator of Lucky Peak, the Lucky Peak owners do not operationally control Lucky Peak and therefore do not have the ability to comply with the technical requirements under the LGIA. The Lucky Peak owners, Idaho Power and City Light agree that City Light is the appropriate party to sign the LGIA.
· Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)
No.
· Other Issues (including long-term implications of the legislation):
None.
Please list attachments to the fiscal note below: