Title
Approval of Contract No. 17-SLC-0896 Between Los Alamos County and United States Department of Energy Western Area Power Administration Salt Lake City Area for Integrated Projects for Firm Electric Services
Recommended Action
I move that the Board of Public Utilities Contract No. 17-SLC-0896 Between Los Alamos County and United States Department of Energy Western Area Power Administration Salt Lake City Area for Integrated Projects for Firm Electric Services and forward to Council for approval.
Staff Recommendation
Staff recommends approval of the contract as presented.
Body
Los Alamos County has been receiving an entitlement share of federal hydropower since 1989 through the Western Area Power Administration (WAPA). WAPA is an agency of the United States Department of Energy formed for the purpose of marketing electric energy generated at hydroelectric generating facilities operated by the United States Department Bureau of Reclamation. The County’s entitlement share of this renewable energy resource is approximately 1.5 MW’s of capacity with an annual energy entitlement of 5,097 MWh.
WAPA in accordance with their resource planning obligations developed a 2025 Salt Lake City Area (SLCA) Integrated Projects Marketing Plan. The County is a contractor of the SLCA Integrated Projects and specifically contracts with WAPA through the Colorado River Storage Project, which is one of SLCA Integrated Projects.
The 2025 Marketing Plan proposes that contracts be entered into with existing contractors for the Post-2025 marketing period at the same entitlement levels established under existing contracts. WAPA has made a few changes in the proposed contract from the form of the existing contract. Thus the effect of entry into the proposed contract would be essentially to continue the basic operational terms of the existing contract until 2057.
The County by written notice to WAPA within 90 days after the effective date of a rate change, may elect to terminate the service billed by WAPA under the new rate. Termination will be effective on the last day of the billing period requested by the County.
The County’s entitlement share of WAPA hydropower supports the adopted Future Energy Resource recommendations and Los Alamos County Strategic Leadership Plan, specifically Environmental Stewardship by improving environmental quality and sustainability, balancing costs and benefits including County services and utilities.
Alternatives
The County could choose not to approve the contract with WAPA and the replacement power would be purchased on the open market or through another generating asset.
Fiscal and Staff Impact
The current WAPA power costs are included in DPU’s budget projections. If the contract is terminated, the fiscal impacts would be the difference between the WAPA cost of energy and that of the replacement resource. For reference in fiscal year 2018 the WAPA cost of power was $28.53/MWh whereas the spot market purchases averaged $35.67/MWh. The staff impacts are minimal but the WAPA contract does provide our Power System Operators some flexibility in the hour by hour operation.
Attachments
A - WAPA Contract for Firm Electric Service 2024