Form revised: July 12, 2011

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	CBO Analyst/Phone:
City Light	Phil West/206-684-3718	Calvin Chow/206-684-4652

Legislation Title: 

AN ORDINANCE relating to the City Light Department; authorizing the Superintendent of Seattle City Light to execute an agreement with Bonneville Power Administration and Puget Sound Energy Corporation for the Preferred Puget Sound Area Plan of Service Projects and Cost Allocation; and ratifying and confirming certain prior acts.

Summary and background of the Legislation:

This legislation authorizes a Memorandum of Agreement (MOA) between Bonneville Power Administration (BPA), Puget Sound Energy (PSE), and Seattle City Light (SCL) aimed at improving the reliability of the regional electric grid, in the Puget Sound Area Northern Intertie (PSANI) area.  Since 2007, BPA has limited energy transfers between the Puget Sound area and Canada due to congestion in the PSANI grid area.  The MOA proposes several utility projects to reduce congestion and upgrade the reliability of the system, reducing the risk of region-wide customer power outages in the future.

For the past several years, ColumbiaGrid has convened the Puget Sound Area Study Team (PSAST) with area utilities to address reliability and transmission congestion issues.  The PSAST team was charged with developing a “one-utility” solution to identify the best technical solution (regardless of ownership of specific transmission grid assets) and identified six  major projects, totaling an estimated $140 million.  The MOA assigns project delivery and cost sharing responsibilities between BPA, PSA, and SCL for these projects.

Under the proposed MOA, each party is assigned project delivery responsibilities for key improvements to the Puget Sound Area transmission infrastructure.  BPA is responsible for the full cost of BPA sponsored projects.  PSE is responsible for the full cost of PSE sponsored projects, with a cost adjustment (equal to a one-third cost share) for a reconductor project no longer needed because of the other PSE sponsored projects.  SCL sponsored projects will be one-third cost shared.  The MOA identifies approximately $60.2 million of BPA sponsored projects, $67 million of PSE sponsored projects, and $16.1 million of SCL sponsored projects.  SCL’s share of the total costs is approximately $10.7 million.

The SCL projects identified in the MOA are scheduled to be completed through 2017.  If this legislation is approved, SCL will include these projects and cost share responsibilities in future budget and CIP submittals.  No appropriations are proposed with this legislation.

Project Name:	Project I.D.:	Project Location:	Start Date:	End Date:
SCL Preferred Plan Projects (PSAST)	TBD	Bothell to SnoKing Broad Street North Downtown Delridge to Duwamish	2016	2018

Please check any of the following that apply:

_X___ This legislation creates, funds, or anticipates a new CIP Project.

This legislation anticipates a new CIP project in the future.  This legislation does not amend the 2011-2016 Adopted CIP.

__X__            This legislation has financial implications.

This legislation anticipates approximately $10.7 million in future costs for SCL.  If approved, appropriations for these costs will be included in future budget submittals.

Appropriations:

Fund Name and Number	Department	Budget Control Level*	Existing 2011 Appropriation	New 2011 Appropriation (if any)	2012 Anticipated Appropriation
TOTAL

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

Appropriations Notes:

This legislation anticipates approximately $10.7 million in future costs for SCL.  If approved, appropriations for these costs will be included in future budget submittals.

Spending Plan and Future Appropriations for Capital Projects:

Spending Plan and Budget	2011	2012	2013	2014	2015	2016	Total
Spending Plan
Current Year Appropriation
Future Appropriations

Spending Plan and Budget Notes:

This legislation anticipates approximately $10.7 million in future costs for SCL.  If approved, appropriations for these costs will be included in future budget submittals.

Funding Source:

Funding Source (Fund Name and Number, if applicable)	2011	2012	2013	2014	2015	2016	Total
TOTAL

Funding Source Notes:

This legislation anticipates approximately $10.7 million in future costs for SCL.  If approved, appropriations for these costs will be included in future budget submittals.  Funding would come from the operating revenues of the utility.

Bond Financing Required:

Type	Amount	Assumed Interest Rate	Term	Timing	Expected Annual Debt Service/Payment
TOTAL

Bond Notes:

This legislation anticipates approximately $10.7 million in future costs for SCL.  If approved, appropriations for these costs will be included in future budget submittals.  These projects will be included in the utility’s future CIP, a portion of which is financed through utility bonds.

Other Implications:

a) Does the legislation have indirect financial implications, or long-term implications?  This legislation anticipates approximately $10.7 million in future costs for SCL.  If approved, appropriations for these costs will be included in future budget submittals.

b) What is the financial cost of not implementing the legislation?

There are no practical alternatives to this agreement. This agreement is the result of the ColumbiaGrid’s Puget Sound Area Study Team and negotiations between BPA, PSE and SCL.

c) Does this legislation affect any departments besides the originating department? 

            This legislation does not affect any other City of Seattle Departments.

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

There are no alternatives to this MOA that will achieve the same or similar objectives.

e) Is a public hearing required for this legislation? 

            No.

f) Is publication of notice with The Daily Journal of Commerce and/or The Seattle Times required for this legislation? 

            No.

g) Does this legislation affect a piece of property?

            No.  This MOA affects only transmission equipment.

h) Other Issues:

None.

List attachments to the fiscal note below: