Loading...
HomeMy WebLinkAboutRes2009-133 Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2009 -133 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF �. SEWARD, ALASKA, IN SUPPORT OF THE GREATER RAILHELT ENERGY AND TRANSMISSION CORPORATION WHEREAS, Chugach Electric Association (CEA), Matanuska Electric Association (MEA) and the City of Seward (COS) jointly support the establishment of the Greater Railbelt Energy and Transmission Corporation (GRETC) and will collectively work with the Alaska Energy Authority (AEA) to incorporate proven business concepts into the current Legislation (HB182 and SB143) establishing GRETC; and WHEREAS, the stated purpose of GRETC is to provide all Railbelt electric utilities with access to reliable, long -term, wholesale power supplies at stable prices; and WHEREAS, to fulfill this purpose GRETC must acquire adequate fuel supplies for existing and planned generation resources while concurrently developing and promoting renewable and alternative generation and regional transmission projects that can diversify power supply resources; and WHEREAS, GRETC will best succeed based upon a private /public partnership with a unified business structure that incorporates rational economic decision making, lowest financing costs and provides business continuity through technical competence, and corporate leadership; and WHEREAS, the Railbelt electric grid has significant capital investment needs, and GRETC in cooperation with the Alaska Energy Authority (AEA) and state - assisted financing can provide the lowest cost financing and reduce the risk to individual utilities; and WHEREAS, GRETC can provide regional generation and transmission planning for the benefit of all Railbelt utility customers through an Integrated Resource Plan (IRP) process and this process will support rational funding decisions for future generation and transmission projects; and WHEREAS, through the GRETC planning process, all Railbelt utilities will benefit from increased reliability and over time GRETC will endeavor to provide equal reliability for all service territories within its jurisdiction; and WHEREAS, the Bradley Lake hydroelectric project is one example of a project that has been successful based upon state - assisted financing through AEA and the combined strengths of the Railbelt electric utilities to manage and operate highly technical generation and transmission facilities; and CITY OF SEWARD, ALASKA RESOLUTION 2009 -133 WHEREAS, AEA has completed the Alaska Railbelt Electrical Grid Authority (REGA) study (September 2008) the identified economic benefits of joint utility operations, but acknowledged the need for a transition period due to complexities of existing utility ownership and contractual arrangements; and therefore the following guidelines are suggested to allow for a successful transition to GRETC: • Existing utility generation, transmission, and fuel assets may be cooperatively integrated into GRETC operation based upon a range of options (sale, lease, or other beneficial operating agreements) at the option of the utilities owning such assets, • Utilities may participate through sales agreements with GRETC for desired services, • Existing power sales agreements will not change except under terms mutually acceptable to all parties, • During transition to GRETC, operation of the interconnected system may be governed by a single set of interconnection guidelines that will be jointly established by GRETC and the utilities, • Power sales arrangements and ancillary services can be made available to participating utilities that need services which cannot be provided by GRETC initially and these services can be available through bilateral contract arrangements; and WHEREAS, The Railbelt utilities have energy service needs that have not historically been undertaken by all utilities and GRETC can provide these services on a bundled or unbundled basis for the benefit of all. These services can include: • Planning reserves • Operating reserves • Base load power • Power dispatch • Wind integration • Acquisition of Independent Power Producer (IPP) Renewable resource projects (reduces coordination from six utilities to one) • G &T project management • Fuel supply aggregation, acquisition, storage and scheduling • Grant application processing and management • Other services as deemed appropriate by the GRETC board of directors; and WHEREAS, GRETC will offer services based on uniform rates for like services and utilities will pay for services they receive under standard tariffs or contract arrangements; and WHEREAS, GRETC will be regulated through the GRETC board of directors and under a state regulatory regime that will allow the best value for Railbelt customers; and CITY OF SEWARD, ALASKA RESOLUTION 2009 -133 ... NOW, THEREFORE, BE 1T RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City of Seward, along with CEA and MEA, encourage Homer Electric Association (HEA), Municipal Light and Power (ML &P) and Golden Valley Electric Association (GVEA) to support and join GRETC; and Section 2. The City of Seward, CEA and MEA jointly support the creation of GRETC using proven business concepts that will provide reliable, stable and affordable G &T services to our customers. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 24 day of November, 2009. THE CITY II SEWARD, ALASKA Willard E. Dunham, Mayor AYES: Valdatta, Bardarson, Smith, Keil, Shafer, Amberg, Dunham NOES: None ABSENT: None ABSTAIN: None ATTEST: Jean Lewis, CMC City Clerk (City Seal) �° >'! tt 4 ,d.V! S s IY µ IY ,� Y q t O x .4 4 [OS4 A ipz M ` *� Agenda Statement Meeting Date: November 24, 2009 , ovsE. 4 . To: Phillip Oates, City Manager 1, From: John Foutz, Electric Utility Manager 4 P Agenda Item: Support Of The Greater Railbelt Energy And Transmission Corporation BACKGROUND & JUSTIFICATION: Leaders of Chugach Electric Association, Matanuska Electric Association and the City of Seward held a joint meeting on November 20, 2009 and moved forward in support of legislation to create the Greater Railbelt Energy and Transmission Corporation, or GRETC. The organizations outlined their vision in a resolution that noted many of the benefits the new organization would bring. These include joint planning, state- assisted financing, and utility technical expertise to operate and maintain projects. The organizations note that the successful Bradley Lake hydroelectric project provides a model for GRETC activities. Bradley Lake is a state - owned, utility- operated project whose low -cost power is shared through power sales contracts with each of the six Railbelt electric utilities. The state provided the financing for Bradley Lake through a combination of grants and bonds, with the utilities covering the debt service in exchange for power from the project. Legislation to create GRETC was introduced in both the House and Senate earlier this year, but the legislature adjourned with the bills still in the energy committees of the two bodies. Legislators and utilities have devoted a great deal of time to energy issues during the interim, and the GRETC bills will continue to receive attention when the legislature reconvenes in 2010. The GRETC concept of a single Railbelt organization to provide generation and transmission services emerged from a study of how the region's grid works today and how it could best meet the needs of Alaskans in the future. The Railbelt Electrical Grid Authority study, completed in September 2008, was led by the Alaska Energy Authority with funding from the legislature. The REGA study identified an average annual present worth net savings of between $10.5 and $30.9 million which equates to between a 3.6 to 10.1% net savings for Railbelt consumers. In a related effort, the AEA is currently doing an integrated resource plan to determine how to meet the generation needs of the Railbelt for the next 50 years. The Parnell administration, like the Palin administration before it, continues to support the GRE'I'C legislation. The governor's senior energy advisors and AEA leadership have met repeatedly with Railbelt electric utilities to discuss the legislation and seek consensus on the issues. A task force of the hoards of all Railbelt electric utilities will continue their work on GRETC and related issues. INTENT: The City of Seward will confirm their support for the GRETC concept. CONSISTENCY CHECKLIST: Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures or Other Plans or Policies: FISCAL NOTE: Approved by Finance Department: i J. _ I ATTORNEY REVIEW: Yes No X RECOMMENDATION: The City Council pass resolution 2009 -133, showing support for GRETC and encouraging additional Railbelt utilities to support the GRETC legislation.