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 Council approve a Power Purchase Agreement with Mercuria Energy America, LLC, in an amount not to exceed $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, 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 approved this request at their regular meeting on March 18, 2025 and recommends that Council 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.
Following a competitive selection process, DPUhas selected the lowest-priced offer from Mercuria Energy, LLC, for a new PPA to meet this need. At the time of publication of this staff report the offered price was at an average of $27.33 per megawatt-hour (MWh). This pricing is presented as an estimate because it may change along with market power prices, up until the day that the agreement is fully executed. The refreshed price could go up or down from the estimate. BPU approved a contract value for the three-month period of $3,046,680, with an approxi...
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