Title
Approval to Execute a Power Purchase Agreement in an Amount not to Exceed $3,833,000 Plus Applicable Gross Receipts Tax, to Meet Forecasted Los Alamos Power Pool Load for the Months of April 2026 through June 2026
Recommended Action
I move that the Board of Public Utilities recommend approval of a Power Purchase Agreement with a yet-to-be determined provider, competitively selected on March 31 2026, in an amount not to exceed THREE MILLION EIGHT HUNDRED THIRTY-THREE THOUSAND DOLLARS ($3,833,000.00) plus applicable gross receipts tax, to meet forecasted Los Alamos Power Pool load for the months of April 2026 through June 2026, 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
DPU’s current Power Purchase Agreement (PPA) with Tenaska Power Systems, Inc. ends on March 31, 2026. At most 45 megawatts (MW) of power are needed for all of April through June to meet 80% of the Los Alamos Power Pool’s forecasted load. 80% is selected as a planning target because it avoids procuring excessive power and the associated cost risk of selling that excessive power at a loss.
DPU is seeking the lowest-priced offer for a new PPA to meet this need. At the time of publication of this staff report a single offer has been received at an estimated price of $31 per megawatt-hour (MWh) and the DPU will continue to solicit additional offers until the end of the day on March 31, 2026. 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. This refreshed price could go up or down from the estimate. 45 MW for the three-month period is 98,280 MWh, with a value of $3,046,680. An approximately 25% contingency adds $8 per MWh with an amount of $786,2...
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