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GARLAND
POLICY REPORT
Work Session Item 3.c.
City Council Work Session Agenda
Meeting Date:
10/17/2022
Item Title:
2022 Capital Improvement Program Budget Amendment No. 2
Submitted By:
Allyson Bell Steadman
Strategic Focus Areas
:
Sound Governance and Finances
ISSUE
Amend the 2022 Capital Improvement Program (CIP) to appropriate $60,002,860 for the installation of new generation resources at the Olinger Power Station.
OPTIONS
Approve CIP Budget Amendment No. 2 as proposed.
Do not approve CIP Budget Amendment No. 2.
RECOMMENDATION
Option (A) - Approve CIP Budget Amendment No. 2 as proposed. This item will be scheduled for formal consideration at the October 18, 2022 Regular Meeting.
BACKGROUND
At the October 10, 2022, Executive Session, Garland Power & Light (GP&L) briefed Council on a plan to install additional generating units at the Olinger Power Station. Due to the age and increasing reliability issues of the existing GP&L natural gas-fired generation fleet, GP&L is requesting approval for the purchase and associated engineering, permitting, and construction of two (2) Dynamis DT35 Package Turbine Generators at the Olinger Power Station. These resources will provide a total of 69MW of quick-start generation capacity to the GP&L generation fleet to be used to serve the energy and ancillary services needs of GP&L customers. Approval of this CIP amendment would allow for an operational target date prior to the summer of 2024. The cost is anticipated to be $52,176,400 plus a 15% contingency of $7,826,460, for a total request of $60,002,860.
CONSIDERATION
Staff seeks the Council’s approval to increase Electric's 2022 CIP appropriation by $60,002,860. The City will issue Commercial Paper as expenditures are incurred in the Electric Production Program, and at a future date, Revenue Bonds will be issued to refinance the outstanding Commercial Paper.
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