Form revised: December 14, 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 the execution of a 15-year agreement with PaTu Wind Farm LLC 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; 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 a fifteen year purchase of renewable energy certificates to allow the City Light Department to comply with state law.  The City Light Department would pay $14.50 per REC from 2016 through 2030 for approximately 27,600 RECs per year, as well as a one-time brokerage fee of $107,000.

Background:

This legislation approves a transaction-specific confirmation of a 15-year renewable energy certificates (“RECs”) purchase for the City Light Department to receive environmental attributes in the form of RECs from PaTu Wind Farm LLC’s new PaTu Wind facility located near Wasco, Sherman County, Oregon.  The facility is expected to produce about 27,600 RECs annually.  City Light will receive 100 percent of the RECs associated with the 9 MW facility starting in 2016.  The RECs will be delivered to City Light through the Western Renewable Energy Generation Information System.  PaTu Wind 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 meet a portion of this requirement.

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

Appropriations:

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

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

Appropriations Notes:  A one-time brokerage fee of $107,000 will be payable upon contract execution.  No other costs or fees until 2016.  Expected annual cost for the 15-year term starting in 2016 is $414,000.  City Light’s 2011-12 budget includes sufficient budget authority for this transaction.

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

* 2012 positions and FTE are total 2012 position changes resulting from this legislation, not incremental changes.  Therefore, under 2012, please be sure to include any continuing positions from 2011.

Position Notes:

None.

Do positions sunset in the future? 

Not applicable.

Spending/Cash Flow:

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

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

Spending/Cash Flow Notes:

None.

What is the financial cost of not implementing the legislation?

The cost of not implementing this legislation would be to increase City Light’s risk of not meeting its regulatory obligations at a penalty cost four times greater than the acquisition cost of these RECs.  This facility will meet approximately 3 percent of City Light’s regulatory requirement.

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 renewable energy and RECs to meet its regulatory obligation and its retail customer load requirements.  Renewable resources that include energy, RECs and delivery 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: (Include long-term implications of the legislation.)

None.

List attachments to the fiscal note below:

None.