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Home My WebLink Aboutbocc.res.066.1985 ' �,: �� : r. ;_, : ��, � � . � , h-- , Y�. ;�r E i r�`".' �` "�•, � �.. -� ��;.Y f . .. . _ ... 1� _ . . .�. . .. �. � . . .Y�`"�.�.... _ . �� a� ,4 � �+ . F A JOTNT RESOLUTION OP 'tHE CITY O!' AS�LN AND PITRIN CbUN2"Y �'� B5TABLISHING POLICItS ANb PROC�DUIi�S L�OR D6TBRlIINING �! THS PRODUCTION ObST ANU PUItCHASB PRICL> OP P(fWER PRODUC�b 8Y TH� RUEbI HYDitOELECTRIC PROJ�CP AND FOR THE DI5TRI$U'fTaN bF REVENUES PROM 'i'HB SALE OF RUEDI YOHL'R County 1185-6fi � (.�L�cLI`ilt•e" 1`� seRtes op i9as itHEREAS, the City of Aspen thereinaEter tihe 'City") and Pitkin County, �olorado, lhereinaEter th@ "County") are construc- ting a hydroelsc�rta Eacflity at the base of Ruedi Dam which is echeduied to baqin powec production on oc baEore .1uly 2, 19851 end WHERBAS, thar facility wili producc en average oE 21,000.000 kilcwat!-houca per yeac oE elc►ctrical nn�rgy� and wHEREAS, the produceion coste of Ehet enorgy will allow it to be sold [oc a price competitive with thc wholasale price of ,_ powar suPplicd trom othrs sourcest a�d wHER6AS. agreements alloving [or thc tcans+a38afon ot �;. power produced at the Ruedi Nydropover Project (heraina!!ec the ;t "Projcct•) to khe City o! Aspen are currently being negotiatedi ,�. and - wHEREAS, the City has adopted Asdinance t42, ba�iea oF � �: _•� I9B4. which establishes policies and procedures to guide the �� detecmination ot �etail electric rates based on the costs oE � parver both purchased and p�oduced by the City, inciuding that �� ;� produced by the Projects t: NOW, THEREFORE. BE IT HERSBY R6SOLV&D, that the City of Aspen affirms its intention and coffunitment ta purchase the entire electric output of the Project fos a peciod no less than the longest term of the bonds issued to fund Project development. � BE IT FORTHER RESOLVED, that the following policies, procedures and focmulas will be applied to future determinations of the cost and purchase p=ice of Project power at►d to determine �=° how revenue derived from the sale of that power is to be distri- ,.i� buted. �R;- 1 . �;.. � .��.'� ^� ?.� ,� A .IC s<��,�`=�Y�y�iwav� I , 3��' -. � � �' 4 •q '��^� �� YL �.�� 4 . - :.t�� yti�'� y�� ,•.i� r��Y��.t�.i4«�-�t'� _. , .. °+-+YVre'..cd, .�J.�....J.::.aar'ia�fr.r.-.�; .r� . I. DET�ItMINATION OP PROJSCT CDS'fS A. t�fxed Costs pix�d project Costs are those annual costs t.y �rhich can be detecmined in advance and are � unlikely tu vary signi£icantly over the life - of the Pro�ect. These inciudec 1) Debt repayment costs� 2) insu�ance coat�s 3) Contribueions to new Eecillty coats includ- ing the Project's share o! the caet of a nev tranafor�er et tihs Aspen SubsEation ; and the cost oE maintaining the Noly Ccoss °; ciccuit from tho Aspen subatation to the Aapen Switching Station. B. Vaciable Costa Yarieble Projact Coata s�• lhose annual costia which may vary sign!licantly trom one yenr to the ne�t dependi�g on vacioua Eactocs. Theae costs irtclude: 1) Opert�tions and maintanance coala. ThLs coet consiats ot a fixed base fea plus a variablo bonus Lee detotmined by a fotmula applied to pover productioa above a pre- determined tbceshold level irtitially sek - at 28.Q00,000 ki2owatt-haurs per year. � , 2) ?ranewlssion costs. Transmiss3on. or �� wheeling, ratee are detarained hy khe j utilities over vhase facilities Project � z poWer is transmitted, according to their arrn forwulas. '"hese rates are charged on � a per-kilowatt-hou= basis and are tbus � directly proportional to power output. 3) Federal costs. The Pedecal Energy [tegula- tosy Commission imposes a use charge on � hydroelectric projects based on total � 2 � � � _ , . �;,. �� .. ��t .. , ;,�,�-�:,; .ti= � x,�� `� ��w �-�;��; � ��R �*.c =-•Hk[?�'� . � `.:::.......... .....� � � __._ ��.*- s . �a., +�.�..:«...� power productian. This cBarge is algo directly proportional to poaer output. 4) Miscellaneoua admfnistratfve costs. �hese costs include a to-be-$etetmined annua� asnount charged by the Buceau of Reclamation tor aperational roordination and othpr yeariy bookkeeping, administrative and legal roats which may be incurred by the - City of Aapen purmuant to permanent Project �. operatione. These costs rannot be guanti- fi�d at this �img and mey be includsd un8ec Fixed Project Coscs in ths future. All variable coaea formulas and seaple ealculations except those asaociatad xith !4. abovo, can be lound in Appendix A, attached hereto and lncorparaled herein. ' C. Cost Calculalions ' Total production coats [or 1985 will ba aeti- mated immediataly pcioc to the date of ioittal poKer production. ^roduction coats toc subse- quent yea�s will be estlmated on a date to be � establisfied by tbe Clty oi Aspen Finance , Depactment. sstimates vill be based on foGmu- I las applicable at the kime and best available i � �nfocmation regarding estimated or b3storic � ceservoir release schedu2es. oover produetion. � tra�swission losses. ittflation cates and � adjustments. cpntract terms, aad other relevant data. A. Determination of C.osts Per Kilowatt-8our Wholesale costs paid by the City for purchased -a power and retail rates charged by the City fo� - delivered power ace determined and documented - on a pe=-kilowatt-hour basis. in order to '� 3 ;� ;�.'.: �5 " � � �.-,� ;>. � �� '�� rt �5��. ,, ,, . .a-�.., _ . �� `� `�_�rr��. '��.�..��L'`�' . _�. .�.r� -_ . ..� �'�' "" �.., determine vroject wholesale costs on the same b�sis, total annual costs as described above Mfll be divtded by estimated total annual poMer delivered to thp City's 5witching 5tation + (total pcoduction less trangmission los�es)- Bstimates will be based on ESt11118L1� and hiatoric resecvoir manayement. hydrology. generatoc pecfocmance and transmiasion losaea. II. DETERMINATION OP A8PEN POW6R PURCHASE RATB - The City's purehas� price wili exeeeA production � costs as determined above, in ordsr to accompliah the followings A. Pay all avecage annual pcoduction coata. B. Create and maintaln a resQCVe aacoun! euEEi- ` cient to meet any ravenue shortEalls occurring aa a resul! ot •xtcvmely dry conditions and below-average Aydropower productlon. Potential revenue ehorttalls will ba dotermined at eho start oE power production and all revenues in i excesa of caste vill be dediceted to a resecve ' account uotil �he amount res�cved equals the ; estimoted shoctiall. Tha resecve account i i target balance will be eet initla2ly at ; 5200,000 based oa arojected winimum revenues 1 � and �aximum expen�es during the poorest hydro ( ' yeas o€ record, that figure to be revised at i � five-yeac intervals as necessary to accaunt , � for inElation and othec variables. � C. Provide excess revenues for distribution to � othec Project participants as per the provi- sions of Intergovernmental Agreement #CA 68 (83) (October 11, 1983) and as further ad- dressed in Section III, below. ;� 4 - ��'��i r ja�i��F'n-'. . ��,. ts-"'F';``�., x r, � w s ` t'� �;,;� `�r-i�`.is..-?i:.' _ s 5 � r�'� � s,�i r��, ��t �. ��.i.X S2 f��` 7 4"A�3.$... .�-� �.l``�Sy IE. t"!•-�La�y�Y -} �,..t �y_ . :.°i ��:Y,.Pn+ae..:.� � f�t'.__�i+.�'�:.s.�s_..._r �t�� . . .. . . �J�L�—r_��`..4r An analysis of historic Ruedi outfldws and egtimated pober output based on manufacturer's data indicates that averagp annual output, and annual revenue, will vary by approximately 20! over an average ten-y�a� periad. 't'herefore, the purchase pricp sfiould be determined so as !o meet all coats in a year in which approxi- ma�ely 8D� of average annual enerqy ia pro- . duced. a pucchase price whirh is 20i in . excesa of ea�imated production costs will accompliah this goal as weil aa tbe other ,: objectives noted above. ThereEor@, a aack-up � of 20ti will be applied ro pcoduction costs as determined according to Section I, above, in : the determinstion of the City's powor puscheae y � ratt. � The exception to the lormula and pcoeedu�e t noted abova r+ill be the 1985 pucchase price ot 4 Z` Ruedi powec. Debt service toc 1985 is lncluded � in the total dcvelopment bo�d revenuQS. so pcoduction costs For power produced during ; that year vill be arti[icially depcessed. The 1985 power purcbase rake vill be set at 5.035 - per kilowatt-bour as pec Ordinance 42, Series I ;, of 198q, a level comparable ta xhole�ale gowe� � purchaae rates fcaw othes sources in thak year � and the resultant revenues in excesr of coBts xill be dedfcated ko funding oP the reserve 5 acequnt described in Section II 8, above, thus � } allowing that account to be fully funded t within approximately 18 months of initial � � power production. 3 � 5 � a � � 5 , � � . . '�5. .X f.� . � .a y� �'�" �¢ ` x .;{� c�,.-i�.� ::4q�i{,`_`�'.�-`�,�' �$, . a-z.'_ � i�k >}.�,:�,�fi r }s �1 �'' ys.-��r . - �7s�*xt .t��'�;`�t x x«��e� w t �s-.2;. t.•-, =�"3''.�. A I u - e�{fd �'�'� : ' ' "' _�-.._.._....._. .��:..-� _ ��±ri+_�t.�. i�ith the exception of 1985, the total of power pto8uction coats a�s determined according to Section I, above, plus a 208 mark-up, shall � constitute City'� power purchase price for Ruec�i poaer and shall be applicd to the follow- ing sections of City af Aapen Ordinance t42. 3eries of 1984c 5ection 2. Paragraph C.4.b � 8ection 2, Paragraph D.�. 8ection 2. Paragraph D.6. � ITI. DISTRIBUTtON OP FtEV6NtJg8 ' inlergovecnmentai AgceemenC fCA 68 (83), betveen the City and County and Dated October 11. 1983, pcovld�s Eor ehe diatribution oE Project cevenues !n excess o! costa awong the City, County, the Ru@di watec and Powor Authorlty, and th• City- Coun�y Nalor Trust Fund. This dlstributlon hae been approved 6y the Clty and County in coneideca- _ kion of tihe benelicial rolc played by tbe partias noted in !he devalo�aen! o! th� Projoct, and the . policy of !he City And County to distribute Project revenues so as to encourage coopora�ivo water planoing, to enaourage furthar beneticial watcr a�d hyc7ropover developmeata. and to balance any - Eutuce revenue losses tbat might tesult from changes i� the management of Ruedi Dam at►d Reser- vo:[r by the U.S. auseau of Reclamation. Tberefore, distribution of Project revenues will be made as i � fO110YS: � 1) Payment of all Pcoject costs as determined accoCding to Section I, above. 2) Funding of a reserve account as determined ` according to Section II B, above. 3) Distribution of ;08 of revenues in excess of #1) and #2), above. to the City. r� 6 � � . x,.. �.E: �y� X � , � �".�` p-'. � . ��_ i , �: . _ .-rs� a s. 1 ' �,�y s'�r+ ._ . : . `!_'�.� �... ��: Yq es Y'._:e ;± .iiy��Tr�^�r�," +i . ..: h� � ! r'�:' � , ., .. ., ' { ��,r .--�: . ��' �` � ,th..'��F:.' � 1. -J..e.�!� r,_ � . �K'� _ Gt� . �'�11Y'_�f v_ - , '-.vr .�.> .4." . a � - . - . 4) nistributfon of 30$ of revenues in excess of fl) and !2), above. to the County. S) bistribution of 20a of revenues in excess of 11f and 12), above, to the Ruedi Nater �nd Pow�r Authority. 6) Distribution of 208 oF revenuea in exresa of 11) and f2), above. to the City-County Hater Ttuat. Datetmination of revenuea in excees of production coats, and diatribution of Eunds accor8ing to the above wi11 be made on or about Novdnber 1 oE each yeac or on sucb o�hac dake as rray be delerminad by the Clry Finance oepartment. Dietribution o! cavenues according �o Nwnbcra ]), �), 5), and 6}, above, are eatimaeod to beqin in Novamber ot 1986 tn ronsideratlon of the dedication o! 1985 ravenuea to Project costs and the lunding ot a r�aQrve acconnt as dascr;tbed in 8ection II. above. eook- keeping and acaounting aseociated tiith the collac- ` tio� and distributio� oE ProjecE ravenuea will be car�ied out by the City of Aspen Flnance Oepartmen! according ro mekhods aad procedures to be dcter- mined by tbat Oepartaner�t. That aeportment will also eompile and distr�bute accaunting reco�ds 1 vhich will ir�clude. hut pot he limlted to, annual Ruedi gcoss revenues, prpduction costs, and n�t sevenues, said recorc3s ta 6e provided to Project participants at the time of revenue dist=ibution. '� AAOPT�D THIS lOTH DAY OF 3UNE , 1985. � s � CITY OF ASPSN, COLORADO � � ' O �� 3 � ^f �� ` � 8y• {� Willfam Stirlir�'g, Mayor � foY the City Council F � D � � 7 � , - ��. ��`ry ,r,, _ z�' y ' . ' 7��a�"+ �3� .� �� ty,�;;�� " .��-: �.r s:�.' '�3�+� _ '�'s „�'+� ...,'7 J:.r. F . �' c �t��`�t �- t+�y.��`-4s�z�:" �r � y.+� �.. t �C�''t ,4} . � i ,;�"��'��d�' �[„S f�4+..r::� �� ^Ft:. . -� .� ' . . _ a �..�,..>v:� .. . _ .. . . , - ATTBS'�s /\��./Vfr�4t,� ,��`-o'Gl�. � Cleck ana ecorder, City of Aspen APPIiOVED AS TO PORMs - -�� .i�—.` _,_ {,� c=,I:� . :,}_ y-- � � Pau1 J. Tadd ne City Altocnsy .� PITKIN COUNTY. COpORADO ;� i��`� �� /4�� , Bys � ° Tom Blake, Chairman eoacd o� County Cowaission�ce ATT6 Cle�k and Rscordec, Pitkin County 11PPRON 6D 11$ TO FORM t U v ,F . / : Thomas Fenton Slolth County Attocney � � 8 ��.F' . � _ ; ,x: � r_ .�. ��ri �� -�.� tr� . -;� '_ � . . . . e f�. � . '7 s� R �, ,a.r t q8�'. .,'�' �' �� . i.a�.i-i - ..,L r . td'":w +� 't ,Z�.t''L' . ,r . _ . `' ,. _,_ i ,;", .'`.- - �'.�`,, �.v?C=.r .F ., APPBNbIX A �O CITY OP A5P�N ANO p2mK2N C�OtlNTSt ` �OINT It�SOLU7'ION 1! (p51 FORMUtA3 FOR D�TERMININC VAEtIAHL� (�OSTS OP ttUED2 PditER AkD SAMPtE CAtCUtATIONS 1. Operaelong and Maintenanee • a) An annual Base Payment of S78,000 wili be due and payable within ten werkiny days of the rereipt oE an invoice from the Contractor. which invoice shall be submitted at the � Contrertnr's convenience on or aftec ths Stact Date oE the Contract. Rurther 8ese �aymenta wi11 be due and • payable withln een workinq days of the rereipt of annual � invoires Erom ehs Contractor, which invoices a6a11 be submitt@d at the Contractor's convenience on oc aElQr the annual Stert Date anntversary, anding on the nineteenth such annlversary. b1 An annual 6nergy payment wlll ba dua and pavablo withln tan working days oE tbQ recelpt of an I�voice from tha Contractor, whtch invoice ahall be �ubmitted at the Contractor•o convenlo�cQ on or atlec the onnual anntvar- sary oE the starr DatQ, baglnning with the first auch annlvecsary, in an amount !o be calculata8 As folla++s: 5.006 (6 �ille) r*or kilorralt-tauc (RV�!) for every Rw1i over a minimnm threehold, se� inittally at 18.00U,000 (eigheeen million) Kvf1 p�oduced durtng the previous co�lract yaar and measured at the llrst meter bayond �he gene�atoc. a) Tho abovQ payments vill be adjusted accordin9 to the adjustment provisians of bhe 1lgreement batween Genacal - Blactric, tbe City oi Aspcn and Pitkin County dAted Decamber 15. 1984. 2. Tcansmiseion Coste Tcans�i��ton casts will 6e charged an a monthly basis accocd- ing to a rate af 8 mills (S.QOS) per kilaWakt-hour delivered !o the C1ty of Aspea oc such other rake as may be deteca►ined by khe City of Aspen, Pitkin County. Colocado-Uke �lectric Association- and Holy Cross �lectric Association. 3. Federal Use Chacges From the Federal Energy Regulato[y Commission Order i379. issued May 24, 1984: 'Annual charges �oc the uee of Government Y Dams or other structures os+ned by the onited , � Stakes are 1 mill per kilowatt-hour for the ; first 40 gigawatt-hours of energy a project produces, 1-1/2 mills per kilowatt-hour for over 40 up to and including BQ gigawatt- _ � hours. and 2 mills per ki2owatt-hour for any � energy the project produces over 80 gigawatt- hours.• ;=_-, � ``si.. - 1 ��M1: � ;�.`.: . , �t +�:z�� ,r + �. z.- �:..R,a ;-� !�...:�a'"�.��`,' }}� .� � . � � yy�� 1%, � ' —,��jy!+'�'Ls[L.�.y��` �L ''t !� I � 3.'� [ r ` ''�ii"i r� :-i � ��.�a. � ��'01.,�.:_��a�F'... C' bi"�'��Y - g .h�si ^.�b��9��+F+a��. ..�,.�.�tr�.+.,'�iJ i�T, _ "�+.�.. . ....rl°.s..n�wJ .. . . .:�ti _ _. .. 4. 5ample Calculation j, n��Mt ATibli OF PAit P1ttlb�Ct'IU_1i__GbST (Ali figutes in thougands af 8ollars) b�DI- D�BT NBfi CAT�D L�gRC TOTAL YB88 $flY.� � �'�riL•iT?�a 4Ilt� 2t�lII 'RSl1$!!$Z1 I1S . C . . yyg�. ^� 1986 405 $8 v6 �2 5101 162 S20 N/A 5706.303 'jQTAt PAODtlCTtON CO3T ! '�'�'L',1�,L 1(vH DRt.iVSRRq : �pg� �s@L %Nq (�stima�ee) (estiroatedl :� 5706,303 / 18,726.353 � 037� k d. jI. DSTERMiNRT ON OP kP6N PUR 11SE PRI B � R6VBNU6 COST PBR IMII + 20t MARRU2 E PtlRCltA86 PRIC6/Kw8 x Kwb DallveCed s T09'AL RSVBNUB 8.0377 + .0075 � $.0�53 x 18,726,353 � SB��,562 'POTAL ASvBNtIE - TOTAL COSTS � Tolal Net Revenues � ,; 5818.303 - S'706.303 ■ 81�2,000 jj�. 11TSTRi8L�7'ION OP S[tRPLUS REV�IOB (Aaou�ae all o! 5200.000 Aeeerve Account lueded Erom 1985 Rurplus Ravenues) TOTAL N�T RBV6NUFS b1�2,000 TO CITY t5103,350 x 30t? S j2 600 T'0 COUNTY (5103,350 x 30t} S 4Z-600 1'0 R�TP1� t6103,350 x 20i) S 28.d00 TO CITY-COONTY WJ►TER TROST FOND (S103.350 x 20t) �z8.4o0 BALANCB � � � �L'� .�.. �.==_ r�:t �;�` 2 '��: _��:i