Form revised: August 9, 2010

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	CBO Analyst/Phone:
City Light	Robert W. Cromwell, Jr./206-684-3856	Calvin Chow/206-684-4652

Legislation Title:

AN ORDINANCE relating to the City Light Department; authorizing execution of a transaction-specific confirmation of a 7-year agreement with Holy Cross Energy for the purchase of environmental attributes in the form of renewable energy certificates that are necessary or convenient for meeting the requirements of the Washington State Energy Independence Act.

Summary of the Legislation:

This legislation approves a seven year purchase of renewable energy certificates to allow the City Light Department to comply with state law.

Background:

This legislation approves a transaction-specific confirmation of a 7-year renewable energy certificates (“RECs”) purchase for the City Light Department to receive environmental attributes in the form of RECs from Holy Cross Energy who has the REC marketing rights to the Raft River Energy I geothermal facility located in Cassia County, Idaho.  The facility is expected to produce about 65,000 RECs annually.  City Light will receive 100 percent of the RECs associated with the 18 MW facility starting in 2011.  The RECs will be delivered to City Light through the Western Renewable Energy Generation Information System.  Raft River I is an eligible renewable resource under Washington State’s Energy Independence Act (Chapter 19.285 of the Revised Code of Washington) and City Light intends to use them to partially meet this requirement and to meet the requirements of City Light’s voluntary retail green power programs through 2014.

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.)

____    This legislation has financial implications. (Please complete all relevant sections that follow.)

__X__ This legislation has financial implications.

Appropriations:

Fund Name and Number	Department	Budget Control Level*	2010 Appropriation	2011 Anticipated Appropriation
TOTAL			0	See note

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

Appropriations Notes:  The cost will be approximately $520,000 and Seattle’s voluntary Green Up program customer revenues will be used to fund the acquisition of the RECs from this facility in 2011 through 2014.  The RECs from this facility will be used to meet City Light’s regulatory obligations under the Washington State Energy Independence Act between 2015 – 2017.  The cost in each of 2015 through 2017 is expected to be $1 million.  City Light’s 2011-12 budget proposal now before the City Council includes sufficient budget authority for this transaction.

Anticipated Revenue/Reimbursement: Resulting from this Legislation:

Fund Name and Number	Department	Revenue Source	2010 Revenue	2011 Revenue
TOTAL

Revenue/Reimbursement Notes:

None.

Total Regular Positions Created, Modified, or Abrogated through this Legislation, Including FTE Impact:

Position Title and Department	Position # for Existing Positions	Fund Name & #	PT/FT	2010 Positions	2010 FTE	2011 Positions*	2011 FTE*
TOTAL

* 2010 positions and FTE are total 2010 position changes resulting from this legislation, not incremental changes.  Therefore, under 2010, please be sure to include any continuing positions from 2009.

Position Notes:  

None.

Do positions sunset in the future? 

Not Applicable.

Spending/Cash Flow:

Fund Name & #	Department	Budget Control Level*	2010 Expenditures	2011 Anticipated Expenditures
TOTAL

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

Spending/Cash Flow Notes:

What is the financial cost of not implementing the legislation?

The cost of not implementing this legislation would increase City Light’s risk of not meeting its regulatory obligations.  During the period 2015 – 2017 the penalty cost is three times greater than the acquisition cost of the RECs.  This facility will meet approximately 7 percent of City Light’s regulatory requirement under the Washington State Energy Independence Act.

Does this legislation affect any departments besides the originating department?

No.

What are the possible alternatives to the legislation that could achieve the same or similar objectives?

Alternatives would include RECs from other renewable resources and/or energy plus RECs from new renewable resources.  City Light is acquiring and will continue to acquire both to meet its regulatory obligation and its retail customer load requirements, although City Light will not be acquiring energy for its voluntary green power programs.  Renewable resources that include energy and RECs currently cost approximately six times more than RECs alone.

Is the legislation subject to public hearing requirements?

There have not been previous hearings, but in addition to the public notice and comment period, there will be an opportunity for public comment at the council meeting prior to council’s vote to approve or reject the legislation.

Other Issues:

None.

List attachments to the fiscal note below:

None.