Form revised: December 6, 2011

FISCAL NOTE FOR NON-CAPITAL PROJECTS

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

Legislation Title:

AN ORDINANCE relating to the City Light Department; authorizing the execution of a confirmation agreement with Tuana Gulch Wind Park, LLC for the purchase of environmental attributes, which include 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 12-year purchase of environmental attributes, which include renewable energy certificates (“RECs”) to allow the City Light Department (“City Light”) to comply with the Washington State Energy Independence Act also known as Initiative 937 or I-937.  Under these agreements, City Light would pay $13 per REC from 2019 through 2031 for approximately 27,000 RECs per year.

Background: 

This legislation approves the confirmation agreement for the purchase of RECs from Tuana Gulch Wind Park, LLC located in southern Idaho.  This resource is expected to produce about 27,000 RECs annually.  City Light will receive 100 percent of the RECs associated with the renewable resource starting in 2019 for a 12-year term.  The RECs will be delivered to City Light through the Western Renewable Energy Generation Information System.  City Light intends to use the RECs to partially meet its regulatory requirement under the Energy Independence Act.

Please check one of the following:

____ This legislation does not have any financial implications.

(Please skip to “Other Implications” section at the end of the document and answer questions a-h. Earlier sections that are left blank should be deleted. Please delete the instructions provided in parentheses at the end of each question.)

__X__ This legislation has financial implications.

(If the legislation has direct fiscal impacts (e.g., appropriations, revenue, positions), fill out the relevant sections below.  If the financial implications are indirect or longer-term, describe them in narrative in the “Other Implications” Section. Please delete the instructions provided in parentheses at the end of each title and question.)

Appropriations:

Fund Name and Number	Department	Budget Control Level*	2012 Appropriation	2013 Anticipated Appropriation
TOTAL			0	0

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

Appropriations Notes:  Although this legislation does have fiscal implications, these impacts begin in 2019.  There are no appropriation impacts in 2012 and 2013.

Anticipated Revenue/Reimbursement Resulting from this Legislation:

Fund Name and Number	Department	Revenue Source	2012 Revenue	2013 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	2012 Positions	2012 FTE	2013 Positions*	2013 FTE*
TOTAL

* 2013 positions and FTE are total 2013 position changes resulting from this legislation, not incremental changes.  Therefore, under 2013, please be sure to include any continuing positions from 2012.

Position Notes:  None.

Spending/Cash Flow:  None.

Fund Name & #	Department	Budget Control Level*	2012 Expenditures	2013 Anticipated Expenditures
TOTAL			0	0

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

Spending/Cash Flow Notes: Spending begins in 2019.

Other Implications:

a) Does the legislation have indirect financial implications, or long-term implications?

Yes.  Starting in 2019, the expected annual cost is approximately $350,000.

b) What is the financial cost of not implementing the legislation?  The financial cost of not implementing this legislation would be to purchase 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 (for not having obtained sufficient RECs and/or eligible renewable resources to meet the requirements of I-937) is approximately five times greater than the price 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 three to six times more than this REC purchase.

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? Not applicable.

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

h) Other Issues: None

List attachments to the fiscal note below: None.