County of Los Alamos - File #: AGR1028-24

• File #: AGR1028-24
• Version: 2
• Type: General Services Agreement
• Status: Approved
• File created: 2/26/2024
• In control: County Council - Work Session
• On agenda: 3/19/2024
• Final action: 3/19/2024
• Title: Possible Approval of a Short-term Power Purchase Agreement with Mercuria Energy America, LLC to Replace the Uniper Agreements
• Presenters: Ben Olbrich; Philo Shelton
• Indexes (Council Goals): Environmental Stewardship - Carbon-Neutral Energy Supply, Quality Excellence - Effective, Efficient, and Reliable Services, Quality Governance - Fiscal Stewardship, DPU FY2020 - 1.0 Provide Safe and Reliable Utility Services, DPU FY2020 - 2.0 Achieve and Maintain Excellence in Financial Performance, DPU FY2020 - 5.0 Achieve Environmental Sustainability
• Related files: AGR1028-24a

Title
Possible Approval of a Short-term Power Purchase Agreement with Mercuria Energy America, LLC to Replace the Uniper Agreements
Recommended Action
I move that Council 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.
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 agreement at their March 6, 2024 Work Session and recommends that Council 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 (REC's). Mercuria's firm resources for this PPA are from Four Corners and northern Nevada that are thermal asset, however, from April until October from 7:00 to14:00, Mercuria plans to turn down their thermal generation to minimum run levels and purchase solar from the market...