Title
Approval of a Short-term Power Purchase Agreement with Tenaska Power Services Co. in the Amount of $566,481.39 to Meet Forecasted Los Alamos Power Pool Load for the Month of March 2026
Recommended Action
I move that Council approve a short-term Power Purchase Agreement with Tenaska Power Services Co. in the amount of $423,112.00, and a contingency additional amount of $106,000.00 for a total of $529,112.00, plus applicable gross receipts tax, for the purpose of buying power and energy to serve the Los Alamos Power Pool's electric load, and I further move that Council delegate the authority to implement the Power Purchase Agreement to the Utilities Manager.
...Utilities Manager's Recommendation
The Utilities Manager recommends that Council approve the motion as presented.
Board, Commission or Committee Recommendation
The Board of Public Utilities reviewed this request at their work session on February 4, 2026 and recommends that Council approve the motion as presented.
Body
DPU’s current Power Purchase Agreement (PPA) with Mercuria ends on February 28, 2026. 22 megawatts (MW) of power are needed for all of March to meet the Los Alamos Power Pool’s forecasted load. DPU received two offers for a new PPA to meet this need and has selected the lower-priced offer, with an estimated cost of $423,112.00 excluding Gross Receipts Tax (GRT). This pricing is presented as an estimate because it will change along with market power prices, up until the very day that the agreement is fully executed. The price could go up or down. A 25% contingency in the amount of $106,000.00 is added to account for this potential price movement, for a total amount of $529,112.00 excluding GRT. GRT at 7.0625% is $37,369.00, for a total amount of $566,481.00.
...Alternatives
If this PPA is not approved, staff will not have time to seek approval of another short-term PPA. Staff will use day-ahead market purchases to procure power, which comes with a price risk.
Fiscal and Staff Impact...
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