Title
Approval to Execute a Power Purchase Agreement in an Amount not to Exceed $9,195,750.00 Plus Applicable Gross Receipts Tax, to Meet Forecasted Los Alamos Power Pool Load for the Months of August and September 2026
Recommended Action
I move that the Board of Public Utilities recommend approval of a Power Purchase Agreement with a yet-to-be determined power supplier, competitively selected not later than July 31, 2026, in an amount not to exceed $9,195,750.00 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 months of August and September 2026, 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 July 31, 2026. Up to 75 megawatts (MW) of purchased power is needed throughout the months of August and September 2026 to supply the Los Alamos Power Pool’s forecasted load. 75 MW over 61 days equates to 109,800 megawatt hours (MWh) of energy.
DPU is seeking the lowest-priced offer for a PPA to meet this need. At the time of publication of this staff report, indicative pricing is $67/megawatt-hour (MWh). Staff will solicit offers until the end of the day on July 26, 2026. 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 $16.75/MWh is added to the indicative price to account for a potential market price increase. 109,800 MWh of energy at $83.75/MWh equates to $9,195,750,000.00 excluding GRT.
The selected power supplier will be party to the WSPP AGREEMENT, dated October 31, 2025, and the PPA will be executed pursuant to this WSPP AGREEMENT.
Alternatives
If the PPA is not approved, staff will not have time to seek approval of another PPA. 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.