16.A.
City Council Meeting - FINAL
- Meeting Date:
- 07/05/2016
- From:
- Nicole Woodman, Sustainability Manager/Interim Public Works Section Dir.
Information
TITLE
Discussion: Arizona Power Authority Power Sales Contract
RECOMMENDED ACTION:
No action is required at the July 5, 2016 meeting. Staff will return on August 16, 2016, with the Arizona Power Authority Power Sales Contract for Council approval.
EXECUTIVE SUMMARY:
The Arizona Power Authority (APA) manages Arizona’s allocation of hydroelectric power from the Hoover Dam for the benefit of the state. Within the scope of that management, APA cooperates with federal, state, and non-governmental agencies to address regulatory and environmental matters that impact electric and water uses of the Colorado River.
In an effort to stabilize future energy costs and diversify its energy portfolio, the City applied for hydroelectric energy allocations through state and federal agencies on March 31, 2014. The City was awarded 373 kilowatts (kW) of Schedule D hydroelectric power for distribution. Schedule D allocates power to eligible entities, who do not currently or historically have allocations of Hoover power.
The APA Power Sales Contract, finalized on July 1, 2016, will authorize the sale of up to 814,103 kilowatt hours (kWh) of Hoover Dam hydroelectric power to the City of Flagstaff annually for 50 years. 373 kW/814,103 kWh is equivalent to 2% of electricity used by the City in FY15 (36,636,576 kWh). The electric power will be distributed to Lake Mary Water Treatment Plant, Rio de Flag Wastewater Treatment Plant and Wildcat Wastewater Treatment Plant, the City’s highest energy users.
APS electric rates at the three treatment plants range between $0.077 - $0.131 per kWh. For every penny saved per kWh, the City could save approximately $4,400 annually. At the current energy allocation (373 kW), a conservative estimate for the City is between $15,000 and $20,000 in annual savings, which will only increase over time.
The 50-year contract would become effective on October 1, 2017 and end September 30, 2067. Flagstaff will be one of 71 Arizona districts, municipalities and tribes to receive an energy allocation from the APA. Examples of other Arizona cities slated to receive energy through the APA include: Buckeye, Chandler, Glendale, Globe, Payson, Peoria, Phoenix, Scottsdale, Sedona, Sierra Vista, Tempe, Tucson, Williams, and Yuma.
In an effort to stabilize future energy costs and diversify its energy portfolio, the City applied for hydroelectric energy allocations through state and federal agencies on March 31, 2014. The City was awarded 373 kilowatts (kW) of Schedule D hydroelectric power for distribution. Schedule D allocates power to eligible entities, who do not currently or historically have allocations of Hoover power.
The APA Power Sales Contract, finalized on July 1, 2016, will authorize the sale of up to 814,103 kilowatt hours (kWh) of Hoover Dam hydroelectric power to the City of Flagstaff annually for 50 years. 373 kW/814,103 kWh is equivalent to 2% of electricity used by the City in FY15 (36,636,576 kWh). The electric power will be distributed to Lake Mary Water Treatment Plant, Rio de Flag Wastewater Treatment Plant and Wildcat Wastewater Treatment Plant, the City’s highest energy users.
APS electric rates at the three treatment plants range between $0.077 - $0.131 per kWh. For every penny saved per kWh, the City could save approximately $4,400 annually. At the current energy allocation (373 kW), a conservative estimate for the City is between $15,000 and $20,000 in annual savings, which will only increase over time.
The 50-year contract would become effective on October 1, 2017 and end September 30, 2067. Flagstaff will be one of 71 Arizona districts, municipalities and tribes to receive an energy allocation from the APA. Examples of other Arizona cities slated to receive energy through the APA include: Buckeye, Chandler, Glendale, Globe, Payson, Peoria, Phoenix, Scottsdale, Sedona, Sierra Vista, Tempe, Tucson, Williams, and Yuma.
INFORMATION:
COUNCIL GOALS:
2) Ensure Flagstaff has a long-term water supply for current and future needs
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
7) Address key issues and processes related to the implementation of the Regional Plan
REGIONAL PLAN:
Goal E&C.2. Reduce greenhouse gas emissions.
Goal E.1. Increase energy efficiency.
Goal E.2. Expand production and use of renewable energy
2) Ensure Flagstaff has a long-term water supply for current and future needs
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
7) Address key issues and processes related to the implementation of the Regional Plan
REGIONAL PLAN:
Goal E&C.2. Reduce greenhouse gas emissions.
Goal E.1. Increase energy efficiency.
Goal E.2. Expand production and use of renewable energy