HomeMy WebLinkAboutRes1998-010
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 98-010
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, APPROVING A POWER SALES CONTRACT WITH CHUGACH
ELECTRIC ASSOCIATION
WHEREAS, the City of Seward (City) and Chugach Electric Association (CEA) have been
discussing a new power sales contract for several years; and
WHEREAS, the negotiated contract gives the City new Demand and Energy charges which
will result in an approximately 15% reduction in our power bill from CEA as compared to our
existing contract; and
WHEREAS, in return for this more favorable rate, the City agrees to bring our generation
on line, and disconnect from CEA power, up to 12 times a year, or 72 hours; and
WHEREAS, bringing the City's generation on line will not have an effect on our customers
since we will be on line and operational prior to opening the 115 KV breaker at Dave's Creek which
separates the City system from the CEA system; and
WHEREAS, in 1997, CEA wrote off $1 million of uncollected Fuel Surcharges against
future Capital Credits for their wholesale customers; and
WHEREAS, there is still approximately $135,000 in "under-recovery" from Seward in 1997
which the Electric Utility is obligated to repay to CEA over the next 12 months; and
WHEREAS, the Fuel Surcharge from CEA will increase by approximately $600,000 in
1998, double that of 1997; and
WHEREAS, as part of the approval for the new contract, the Administration proposes that
the Electric Utility absorb the $135,000 in back fuel charges and pay for it from reserves and the
recently received CEA Capital Credits of $49,788; and
WHEREAS, the Administration additionally proposes an across-the-board decrease in the
total electric bill of 4% for all customer classes except Street Lights, Yard Lights, and Industrial
Customers to offset the higher Fuel Surcharge from Chugach which by Tariff is passed directly on
to our customers; and
CITY OF SEWARD, ALASKA
RESOLUTION NO. 98-010
WHEREAS, by reducing utility customer bills by four percent (4%) before taxes, revenue
to the Electric Utility will decline by approximately $350,000 in 1998, but that decline will be
generally offset by the expected $340,000 net savings to the Utility of the new contract; and
WHEREAS, the Administration proposes that this four percent (4%) before taxes decrease
be effective through February 28, 1999;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City Council approve Resolution No. 98-010, authorizing the City Manager
to enter into a 10 year agreement for the sale and purchase of electric power and energy between the
City of Seward and Chugach Electric Association.
Section 2. The City Council authorizes the City Manager to write-off approximately
$135,000 of under-recovered surcharges from CEA from the Electric Utility Reserve Fund and
authorizes the Electric Utility to initiate a twelve (12) month 4% reduction of Electric Bills (before
taxes) for all customer classes except Industrial Service, Street Lights, and Yard Lights.
Section 3. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 9th day
of February, 1998.
THE CITY OF SEWARD, ALASKA
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Lowell R. Satin, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
Blatchford, Callahan, Clark, Gage, King, Orr, Satin
None
None
None
ATTEST:
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Patrick Re~tIUUtl'"
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