Minutes 01/13/1987 - Laserfiche WebLink

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144 TUESDAY, JANUARY 13, 1987 Background By memorandum dated July 16, 1986, I submitted to Council a status report of our negotiations with Multi-Trade Group, Inc., with respect to the possible purchase of electric power from a co-generator facility proposed for construction by this firm. In this memorandum I explained the various matters associated with this proposed project including APCo's negative position regarding co-generation facilities. I also noted that we did not have enough information at that time to provide a detailed analysis of the project but pointed out that the project could benefit the City in a number of ways and that a complete economic analysis would be made of the proposal. Review and Conclusion We have completed an extensive review of the proposed project and have con- cluded that the construction of the co-generation facility as proposed is feasible and will provide mutual benefits to both parties. The benefits to accrue to the City from this project are summarized under "Benefits to the City" of this report. Proposed Contract Highlights A contract draft has been prepared between the City and Multi-Trade Group, Inc. (Multitrade) setting forth the terms and conditions under which the City would purchase electric power from this firm. (See Attached Agreemen t) The highlights of the Agreement are as follows: 1. During each 30-minute interval Multitrade shall sell and deliver and the City shall purchase a minimum of 7,000 KW and associated electric energy generated by the facility. Multi- trade shall, however, at any time upon the City's request increase deliveries of capacity and associated energy up to a maximum rate of 15,000 KW. 2. The capacity and energy rates charged the City by Multitrade and paid by the City are set forth in the tariff as shown in Exhibit A. These rates will result in considerable savings in purchased power cost under our projected operating con- ditions which will be noted later in this report, however, under the provisions of this Agreement and tariff the City under the worst situation would never pay more than the City's avoided cost with APCo. That is to say, under no cir- cumstances would the City pay more for both APCo power and the co-generator's power than the City would have paid APCo if the co-generating facility was not constructed. 3. The initial term of the proposed Agreement from the date of execution is ten (10) years and is automatically extended thereafter for successive periods of one (1) year unless terminated by either party at the end of any term with written notice of at least twelve (12) months in advance.