Title
Approval of a Short-term Power Purchase Agreement to Replace the Uniper Agreements
Recommended Action
I move that the Board of Public Utilities approve a short-term Power Purchase Agreement with Mercuria Energy America, LLC, in the amount of $51,334,560.00 and a contingency additional amount of $3,690,720.00, for a total of $55,025,280.00, plus applicable gross receipts tax, for the purpose of buying power and energy to serve the Los Alamos Power Pool's electric load, and forward to Council for approval.
Utilities Manager's Recommendation
The Utilities Manager recommends that the Board approve the motion as presented.
Body
If the BPU and County Council approve the Termination and Settlement Agreement and Release of Claims between the Incorporated County of Los Alamos, New Mexico, and Uniper Global Commodities North America LLC, then the DPU will need to secure a new source for the 40 MW of firm, around-the-clock power that is being lost from Uniper. Given the short time available to secure the new source of power and the current favorable pricing, DPU is seeking to enter into a short-term Power Purchase Agreement (PPA) to begin replacement power delivery on April 1, 2024, and end no later than February 28, 2026, for 40 MW of firm power, delivered to Four Corners 345kV or San Juan 345kV. The end date is selected to align with the planned Phase 1 power delivery from the Foxtail Flats Solar and Storage agreements. This replacement power will not be renewable or come with any Renewable Energy Certificates.
?
The expected price under the PPA is estimated at $76.50 / MWh, but the executed price will only be certain on the day that the PPA is executed. Accordingly, a contingency of $5.50/MWh is included to be prepared for this price uncertainty. The PPA will start on April 1, 2024, and end on February 28, 2026, a total of 699 days, with 671,040 MWh of energy delivered over the term. At the expected price the total PPA value is $51,334,560.00, the contingency ...
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