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HomeMy WebLinkAboutRes2010-092 Sponsored by: Oates CITY OF SEWARD, ALASKA W RESOLUTION 2010 -092 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, IN SUPPORT OF THE ALASKA RAILBELT COOPERATIVE TRANSMISSION AND ENERGY COMPANY WHEREAS, the City of Seward along with other Alaskan utilities support the establishment of the Alaska Railbelt Cooperative Transmission and Energy Company (ARCTEC) and will collectively work with the Alaska Energy Authority (AEA) to incorporate proven business concepts to create a cooperative to assist the railbelt region with critical transmission and generation needs; and WHEREAS, the stated purpose of ARCTEC is to provide all Railbelt electric utilities with access to sustainable and affordable energy in the future; and WHEREAS, to accomplish this purpose ARCTEC must fulfill short term and long term energy needs by acquiring adequate fuel supplies for existing generation, forging a path for future generation and concurrently developing and promoting renewable and alternative enegery generation as well as regional transmission projects; and WHEREAS, ARCTEC will best succeed based upon a partnership with all the utilities and state agencies under 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 ARCTEC 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, ARCTEC 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 ARCTEC planning process, all Railbelt utilities will benefit from increased reliability and over time ARCTEC will endeavor to transition away from the Railbelt's over - reliance on fossil fuels to a future that includes sustainable, diverse and affordable energy production; 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 2010 -092 WHEREAS, AEA has completed the Alaska Railbelt Electrical Grid Authority (REGA) study (September 2008) that the identified economic benefits of joint utility operations; and WHEREAS, the implementation of guidelines in order to allow for successful transition have been established by the AEA; and WHEREAS, the Railbelt utilities have energy service needs that have not historically been undertaken by all utilities and ARCTEC can provide these services on a bundled or unbundled basis for the benefit of all; and WHEREAS, ARCTEC 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, ARCTEC will be regulated through the ARCTEC board of directors and under a state regulatory regime that will allow the best value for Railbelt customers. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City of Seward supports the creation of a generation and transmission cooperative (G &T); and Section 2. The City of Seward encourages the state's legislative bodies to support ij the utilities and AEA in their endeavor to create a railbelt, non - profit G &T to assist all the Railbelt utilities customers in procuring reliable, sustainable and diverse energy sources. Section 3. The City of Seward encourage the ratepayers, residents and general public in the Railbelt region to support this endeavor. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 27 day of September 2010. THE CITY 1 SEWARD, ALASKA // , / illard E. D 1 nham, Mayor egi CITY OF SEWARD, ALASKA RESOLUTION 2010 -092 AYES: Valdatta, Bardarson, Smith, Keil, Shafer, Amberg, Dunham NOES: None ABSENT: None ABSTAIN: None ATTEST: Jean Lewis � City Clerk (City Seal) • * ,•.••• A � �i : •° SEt. • 9 rrrr u- o 1 q � •• ••• Q' ,• ®* *`fi OF�AVP •` Council Agenda Statement Meeting Date: September 27 2010 o f sett, To: Phillip Oates, City Manager From: John Foutz, Electric Utility Manager 1 4.4510' Agenda Item: Supporting the Alaska Railbelt Transmission and Energy Company BACKGROUND & JUSTIFICATION: The Railbelt Utilities recently undertook an effort to formalize their historic practice of working together for the common benefit of all Railbelt consumers. The effort culminated in legislative language that would have established a special purpose Railbelt Energy Organization dedicated to the improvement of power supply throughout the region, collaboratively work with the state administration to develop energy resources, consolidate needs to better allow the development of large scale projects by independent power producers, and provide improvement to the daily lives of Railbelt residents through responsible management and development of this vital service. This effort met with failure in the legislative process leaving the Railbelt leadership questioning the need for legislative involvement in the formation of a transformational Railbelt energy organization. While many in the Legislature supported the Railbelt utility leadership decision to form the new organization, special interest lobbying and targeted private industry monopoly interests influenced enough legislators to stall the effort. Faced with the failure of the Legislature to embrace change and work collaboratively with utilities, the Railbelt Utility Task Force has met and decided to form a Railbelt orgainzation under existing law. This direction will obviate the need to seek legislative approval and leave the utilities with a formal orgainzation that will undertake all the original initiatives agreed upon by the utilities and set in motion by the original REGA study that identified the need and benefits of a regional energy organization. Leaders of Railbelt utilities held a joint meeting and outlined their vision that includes 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 ARCTEC 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. 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 has completed an integrated resource plan to determine how to best meet the generation needs of the Railbelt for the next 50 years. ARTEC's mission is for Railbelt electric utilities to collaboratively plan for current and future energy needs. ARTEC will immediately engage in collaborative efforts to resolve fuel supply issues and critical transmission infrastructure needs. ARTEC will plan for a transition away from the Railbelt's over - reliance on fossil fuel fired generation to a future that includes sustainable, diverse and affordable energy production. It is anticipated energy sources may be developed by Railbelt utilities, the State of Alaska, independent power producers or effective combinations of these three entities. A task force of the boards of all Railbelt electric utilities will continue their work on ARCTEC and related issues. INTENT: Council confirm their support for the ARCTEC 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: There is no fiscal im act for the City of Seward. Approved by Finance Department: 1#/VAP ATTORNEY REVIEW: Yes No X RECOMMENDATION: The City Council pass resolution 2010 - O i1. , showing support for ARCTEC and encouraging additional Railbelt residents, consumers and state officials to support the ARCTEC.