HomeMy WebLinkAboutRes2006-023
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Sponsored by: Corbridge
CITY OF SEWARD, ALASKA
RESOLUTION 2006-23
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A
NEW AGREEMENT FOR THE SALE AND PURCHASE OF ELECTRIC
POWER AND ENERGY WITH CHUGACH ELECTRIC ASSOCIATION,
INCORPORATED
WHEREAS, Chugach Electric Association, Inc. ("Chugach") has provided electric
power and energy to the City of Seward ("City") under various contractual arrangements since
the 1960s; and
WHEREAS, since September 1998, Seward has purchased electricity from Chugach
under a wholesale power sales agreement, as amended, that was approved by the Alaska Public
Utilities Commission, now the Regulatory Commission of Alaska ("RCA"); and
WHEREAS, the term of the current approved contract expires on May 31, 2006; and
WHEREAS, the City realizes cost savings by purchasing power from Chugach, while
retaining its own diesel electric generation units for use in the event of interruptions in power
purchases from Chugach; and
WHEREAS, the City and Chugach have negotiated a new Agreement for the Sale and
Purchase of Electric Power and Energy ("new contract") to ensure continuation of cost-effective
power purchases from Chugach following the expiration of the current contract; and
WHEREAS, the new contract will become effective on June 1, 2006, or as otherwise
approved by the RCA. The new contract will be in effect for an initial term ending on
December 31,2011 and provides for two optional extended terms of five years each, as follows:
After the initial term, the term of the contract will automatically be extended for two additional
five-year terms (ending on December 31, 2016, and December 31, 2021) unless either party
provides notice of termination of the contract at least one year prior to the end of the then current
term; and
WHEREAS, the City Council has determined that the continuation of power purchases
from Chugach under the rates, terms, and conditions of the new contract is in the public interest
and in the best interest of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
CITY OF SEWARD, ALASKA
RESOLUTION 2006-23
Section 1. The City Manager is hereby authorized to enter into the new contract with
Chugach, in substantial form as the contract presented at this meeting; notwithstanding the
foregoing, the City Manager may make such minor changes or corrections as needed to finalize
the new contract transaction, including those required for approval by the RCA, but shall not
change the essential terms and conditions of the contract presented at this meeting.
Section 2. This resolution shall take effect immediately.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 13th day
of March, 2006.
THE CITY OF SEWARD, ALASKA
-I~ JJ1~
Vanta Shafer, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
Valdatta, Dunham, Lorenz, Schafer, Thomas, Bardarson, Shafer
None
None
None
ATTEST:
~t~
J Lewis, .
C ty Clerk
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Council Agenda Statement
Meeting Date: March 13, 2006
To: Clark Corbridge, City Manager
From: Tim Barnum, Electric Utility Manager
Agenda Item: Authorizing the City Manager to enter into a new agreement for the sale
and purchase of electric power and energy with Chugach Electric Association, Inc.
BACKGROUND & JUSTIFICATION:
Resolution-2006-___ would authorize the City Manager to enter into a new wholesale power
sales agreement with Chugach Electric Association, Inc. (“Chugach”). Since September 1998,
the City has purchased power from Chugach under a wholesale power sales agreement and
extensions thereto that were approved by the Regulatory Commission of Alaska (“RCA”). The
term of the current contract expires on May 31, 2006. The City and Chugach have negotiated a
proposed new contract that will go into effect June 1, 2006, upon approval by the RCA. As
proposed, the contract will have an initial five and one-half year term that expires on December
31, 2011, with two optional five-year extension terms. The proposed new contract is similar to
the current contract, but provides for an increased demand charge and different interruptability
provisions. The new contract will ensure the continuation of a reliable supply of electricity for
the City at competitive rates.
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.
Other:
FISCAL NOTE:
Increased costs associated with purchasing power from Chugach will be reflected in proposed
tariff changes to utility customers, thereby passing the cost of power purchases to the utility
customers.
Approved by Finance Department:
RECOMMENDATION:
Council approve Resolution 2006-___ authorizing the City Manager to enter into the new
contract with Chugach, in substantial form as the contract presented at this meeting;
notwithstanding the foregoing, the City Manager may make such minor changes or corrections as
needed to finalize the new contract transaction, including those required for approval by the
RCA, but shall not change the essential terms and conditions of the contract presented at this
meeting.