Title
Approval of Modification 21 to the Electric Energy and Power Coordination Agreement (ECA) Between the Incorporated County of Los Alamos and the United States Department of Energy (DOE).
Recommended Action
I move that Council approve this Modification 21 to the Electric Coordination Agreement as presented.
Utilities Manager's Recommendation
The Utilities Manager recommends that Council approve the modification as presented.
Board, Commission or Committee Recommendation
The Board of Public Utilities recommends that Council approve the modification as presented.
Body
The Power Pool was established through the Electric Energy and Power Coordination Agreement (ECA) between Los Alamos County and The Department of Energy in 1985. (Note: In 2002 the National Nuclear Security Administration was established as a branch of the Department of Energy and took over responsibility for the ECA. The acronyms NNSA, DOE, and LANL may be used interchangeably throughout this discussion). Through the contract, both parties contribute the power from and costs of each of the respective “Pool Approved Resources” into the Pool, and those costs are then allocated back to the parties pro rata according to each party’s usage. The contract has been renewed continuously since 1985. Historically the County has contributed approximately 75% of the resources, while the Lab has accounted for approximately 80% of the load.
Los Alamos is considering entering into a purchased power agreement with Uniper Global Commodities for 15 MW Firm Power. The offering is for a primarily renewable resource, yet is offered as a firm, around the clock product, at a very competitive fixed price point of $36.67/MWh with no escalator for the fifteen year life of the PPA. This project was initially discussed with the Operating Committee at the October 30, 2019 Operating Committee meeting and the attached MOD21 to the Electric Coordination Agreement recognizing the project as a Pool Approved Resource was approved by the Operating Committee on January 7, 2020.
Alternatives
If the proposed MOD 21 is not approved but Los Alamos elects to proceed with the Uniper agreement, MOD 18 to the ECA specifies that "Should the County take on new assets, the cost of such assets will be the sole responsibility of the County unless negotiated and agreed to by the NNSA Contracting Officer". Pool load would be served by Pool Approved Resources and Market Purchases with cost share as determined by the existing cost sharing formula for demand and energy, and the power acquired through the Uniper agreement would have to be marketed externally. The proceeds of such marketing would be attributed to and benefit the County exclusively. The County would enjoy all of the benefit if market prices are higher than the PPA cost of the resource,but also would bear all of the risk of potentially lower prices. Recent market prices have ranged from $25 off peak to $115 on peak.
Fiscal and Staff Impact/Planned Item
Fiscal impacts are discussed under "Alternatives" above. Marketing of the power instead of scheduling to load would take some staff effort, but would fall under existing Power Scheduler responsibilities. It is not expected that additional staff resources would be required.
Attachments
A - Proposed ECA Mod 21 Approved by the Operating Committee