Form revised February 6, 2008

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
City Light	Pamela Johnson (4-3718)	Karl Stickel (4-8085)

Legislation Title:  AN ORDINANCE authorizing the Seattle City Light Superintendent to issue and administer an open access transmission tariff (OATT).

· Summary of the Legislation:

In this legislation, SCL proposes to issue and administer a new service tariff allowing SCL to provide transmission service within or through the SCL service area to eligible, wholesale customers.

§ SCL’s Open Access Transmission Tariff (OATT) responds to Federal statutes, and commitments made to FERC after passage of the Energy Policy Act of 2005.

§ The OATT effort provides a basis for responding to inquiries from parties interested in interconnecting generators to SCL’s transmission system, and obtaining transmission services from SCL.

§ OATT service is only offered to Eligible Customers as defined by the Federal Power Act – it is not a retail wheeling tariff.

§ OATT rates are based on revenue requirements developed for other classes of service provided by SCL to ensure comparability and cost recovery.

§ Until a bona-fide Eligible Customer requests OATT service, staff action under the tariff is minimal.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Following Energy Policy Act of 2005, Seattle City Light (“SCL”) – through its participation in the Large Public Power Council (“LPPC”) – committed to provide open access transmission service using a tariff developed in accordance with the LPPC Comparability Guidelines.  This commitment states that the OATT will be: developed in open process, posted on the SCL website, and approved by local governing/regulatory body. By making this commitment, FERC refrained from imposing mandatory transmission tariff filing requirements on publicly-owned electric utilities. 

SCL’s T&D planning group hired a consultant to develop the OATT, and retained outside counsel to review the draft OATT for consistency with the LPPC commitment.  Staff from T&D planning, system control center, power management, financial planning and the city attorney participated in developing and reviewing the draft tariff, including associated transmission service agreements, methodologies, policies and rate schedules, as well as generator interconnection procedures and agreements. A public notice and hearing invited comments on the draft tariff which resulted in no changes to the draft tariff.  Documents related to this public hearing are posted at http://www.seattle.gov/light/news under Notices, Announcements and Information dated 6/2/2008.

The tariff package for inclusion in the ordinance consists of: general tariff provisions, service agreement templates, procedures and methodologies for tariff administration processes, and service schedules that include rates developed for SCL.  Most of these documents are based on the FERC Order 890 pro forma transmission tariff with changes to reflect City of Seattle jurisdiction over SCL tariffs and interconnection procedures.  SCL expects that from time-to-time, the tariff, rates, contract templates, methodologies and business practices governing tariff administration will need to be revised to reflect new regulations, industry standards, and changing costs.

· 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 had, or will have, appropriations in other legislation please provide details in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2008 Appropriation	2009 Anticipated Appropriation
N/A
TOTAL

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes: 

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.

Fund Name and Number	Department	Revenue Source	2008 Revenue	2009 Revenue
			0	0
TOTAL

Notes:

Customers making requests for interconnection and/or transmission service under the tariff are required to post interest-bearing deposits that are used to reimburse SCL for expenses related to processing such requests.  At this time, there are no pending requests or deposits associated with service under this tariff.

· Total Regular Positions Created, Modified, Or Abrogated Through This Legislation, Including FTE Impact:  “0”

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.

Fund Name & #	Department	Budget Control Level*	2008 Expenditures	2009 Anticipated Expenditures
TOTAL

* See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

· 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.)

This legislation mitigates risk associated with Federal Power Act compliance and provides an orderly process for addressing legitimate requests for transmission service.  Failure to timely respond to transmission service and/or interconnection requests may result in litigation and payment of liquidated damages.

· 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.)

The current approach for complying with FERC OATT requirements is based on rapid development of a bilateral transmission service contract in lieu of a generally applicable tariff.  In light of new Federal Power Act requirements and associated North American and regional standards, the complexity of the current approach is untenable in the long-run.

· 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?)

A public hearing was conducted June 19, 2008, soliciting comments. No comments were received.  SCL representatives conducted outreach to the community of Eligible Customers during the period between July and October 2008.

· Other Issues (including long-term implications of the legislation):

The OATT activity is closely related to other national and regional transmission forums affecting SCL.  Taking this proactive measure to address possible requests for transmission service will position City Light to expeditiously perform its responsibilities under the Federal Power Act.

Please list attachments to the fiscal note below:

1. No attachments to the Fiscal Note.