Title
Approval to Execute One or More Power Purchase Agreements in an Aggregate Amount not to Exceed $18,509,400.00 Plus Applicable Gross Receipts Tax, to Meet Forecasted Los Alamos Power Pool Load for the period starting October 1, 2026, and Running Through March 31, 2027
Recommended Action
I move that the Board of Public Utilities recommend approval of one or more Power Purchase Agreements with a yet-to-be determined power supplier or power suppliers, competitively selected, in an amount not to exceed $18,509,400.00 plus applicable gross receipts tax, for the purpose of supplying power and energy to serve the Los Alamos Power Pool's electric load for the period starting October 1, 2026, and running through March 31, 2027, and forward to Council for approval.
Utilities Manager's Recommendation
The Utilities Manager recommends that the Board approve the motion as presented.
Body
DPU’s current Power Purchase Agreement (PPA) ends on September 30, 2026. Up to 75 megawatts (MW) of purchased power and 246,792 megawatt-hours (MWh) is needed for the period to supply the Los Alamos Power Pool’s forecasted load remaining after accounting for behind-the-meter generation. These PPA’s will cover the next 6-months while Foxtail Flats is under construction. Next spring, staff will have more certainty on how much solar energy will be supplied to the Los Alamos Power Pool from April 1, 2027 and afterwards. DPU anticipates another solicitation next spring for nighttime power needs after March 31, 2027.
DPU is seeking the lowest-priced offers for a PPAs to meet this need. At the time of publication of this staff report, indicative pricing averages $60/MWh. This pricing is presented as an estimate because the price will change along with market power prices, up until the day that the agreement is fully executed. A 25% contingency of $15.00/MWh is added to the indicative price to account for potential market price increases. 246,792 MWh of energy at $75.00/MWh equates to $ 18,509,400.00 excluding GRT.
The selected power suppliers will be parties to the WSPP AGREEMENT, and the PPA will be executed pursuant to this WSPP AGREEMENT.
Alternatives
If the PPA is not approved, staff will use market purchases to buy power, which comes with a price risk.
Fiscal and Staff Impact
No immediate fiscal impact because the approved budget for power purchases is sufficient for this proposed PPA. There is no anticipated staff impact since all associated work is a part of normal electric production work functions.