Consideration and Approval of Contract: Exclusivity Agreement between the City of Flagstaff and NextEra Energy Resources Development, LLC.

The City's Purchasing Section conducted a Request for Proposals (RFP) solicitation for a Power Purchase Agreement for up to 19 megawatts/50,000 megawatt hours of renewable energy closed on November 20, 2018.  This RFP was advertised for seven (7) weeks and the City received a total of seven (7) proposal responses.  A review panel consisting of key City staff, technical experts, and community partners were assembled to review the seven (7) proposals that were submitted.  The top three (3) scoring proposers were then interviewed and evaluated with NextEra Energy Resources Development, LLC ("NextEra") earning the highest score. 

In order to move forward with the next step in advancing this renewable energy initiative, NextEra will need to begin negotiations with the Arizona Corporation Commission ("ACC") and Arizona Public Service ("APS) on behalf of the City for this initiative.  It also supports NextEra's negotiations and business agreement with the Hopi Tribe to construct the project on Hopi-owned land.  The Exclusivity Agreement before City Council authorizes NextEra to move forward with these essential negotiations and business agreements.

If this project is approved by the ACC and APS, the City may realize cost savings in annual electric expenditures. Preliminary pricing estimates per kilowatt hour trend with recent national averages of less than $0.04 per kilowatt hour. There are numerous variables that are incorporated into final pricing including interconnection costs and transmission tariffs, which are unknown at this time.

In addition, the Hopi Tribe would earn income on the land leased to NextEra for the renewable energy project, which supports the Hopi people goals of greater self-reliance.

This agreement does not commit the City to obligations beyond working with NextEra to advance this initiative.  If and when negotiations with the ACC and APS are finalized, staff will return to City Council with a Power Purchase Agreement for consideration.  The agreement would specify exact costs for the renewable energy the City is looking to secure.

This effort supports the City Council goals to take meaningful climate action and to become a 100% renewable energy organization. In addition, it supports the goal set forth in the Energy Focus area of the Climate Action and Adaptation Plan to increase renewable energy generation within the community and City municipal organization (E-2-A).

Yes, the City Council ratified an MOU between the Hopi Tribe Economic Development Corporation and the City in February 2018. The MOU describes how the Parties will effectively plan for and take the actions necessary to advance renewable energy and economic development in Arizona, further develop the City of Flagstaff's commitment to become a 100% renewable energy municipal organization and take meaningful climate action, and to enable the Hopi Tribe to develop its resources for the benefit of Hopi Tribal members.