Form revised: July 12, 2011

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 the execution of a confirmation agreement with J.P. Morgan Ventures Energy Corporation for the purchase of environmental attributes from a 10 MW share of the Stateline Wind Project in the form of renewable energy certificates that are necessary or convenient for meeting the requirements of the Washington State Energy Independence Act; and further authorizing the execution of other necessary and convenient agreements for the receipt, tracking, transferring, management, and sale of the environmental attributes.

Summary of the Legislation:

This legislation approves the confirmation agreement for the 5-year purchase of renewable energy certificates (REC’s) to allow the City Light Department to comply with the Washington State Energy Independence Act also known as Initiative 937 or I-937.  The City Light Department would pay $14 per REC from 2022 through 2026 for approximately 23,000 RECs per year.

Background: 

This legislation approves the confirmation agreement for the purchase of renewable energy certificates from J.P. Morgan Ventures Energy Corporation’s 10 MW share of the 300 MW Stateline Wind Project located in Walla Walla County, Washington and Umatilla County, Oregon.  This resource is expected to produce about 23,000 RECs annually.  City Light will receive 100 percent of the RECs associated with the 10 MW share of the renewable resource starting in 2022 for a 5-year term.  The RECs will be delivered to City Light through the Western Renewable Energy Generation Information System.  The RECs from this wind resource are eligible under Washington State’s Energy Independence Act (Chapter 19.285 of the Revised Code of Washington).  City Light intends to use the RECs to partially meet its regulatory requirement under the Energy Independence Act.

_X__   This legislation has financial implications.

Appropriations:

Fund Name and Number	Department	Budget Control Level*	2011 Appropriation	2012 Anticipated Appropriation
TOTAL			$0	$0

Appropriations Notes:  None for 2011 and 2012.

Anticipated Revenue/Reimbursement Resulting from this Legislation:

Fund Name and Number	Department	Revenue Source	2011 Revenue	2012 Revenue
TOTAL			$0	$0

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	2011 Positions	2011 FTE	2012 Positions*	2012 FTE*
TOTAL				0	0	0	0

Position Notes:  None.

Spending/Cash Flow:

Fund Name & #	Department	Budget Control Level*	2011 Expenditures	2012 Anticipated Expenditures
TOTAL			$0	$0

Spending/Cash Flow Notes:  None.

Other Implications:

a) Does the legislation have indirect financial implications, or long-term implications?  Yes.  Starting in 2022, the expected annual cost for the 5-year term is $320,000 per year.

b) What is the financial cost of not implementing the legislation?  The financial cost of not implementing this legislation would be to purchase other RECs, or resources that are more expensive, or pay the costs related to the penalty in I-937 for not having sufficient RECs.  The penalty cost is approximately four times greater than the acquisition cost of the RECs proposed in this legislation.

c) Does this legislation affect any departments besides the originating department?  No.

d) What are the possible alternatives to the legislation that could achieve the same or similar objectives?  Alternatives include purchasing 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.  Renewable resources that include energy, RECs, and delivery cost approximately six times more than this REC purchase.

e) Is a public hearing required for this legislation?  No.  There have not been previous hearings.  There will be an opportunity for public comment at the council meeting prior to council’s vote to approve or reject the legislation.

f) Is publication of notice with The Daily Journal of Commerce and/or The Seattle Times required for this legislation?  Not applicable.

g) Does this legislation affect a piece of property?  No.

h) Other Issues:  None.

List attachments to the fiscal note below:  None.