Minutes 08/12/1980 - Laserfiche WebLink

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c. A powerplant with capacity of 17,250 kw, consisting of two 8,500 kw units and one 250 kw unit, and with the ability, on an average annual basis, of delivering 30,508,000 kwh at the load centers. The report then estimated the cost of the project at $39,762,000 and stated flatly that it would be economically feasible over a 50-year period, based on certain assumed economic factors. These assnmptions have been debated ever since and are at the heart of the project's current situation. The Appraisal Report concluded, however, with a recommendation that the City proceed with "Phase II fl studies on the project. (In December, 1977, Beck completed and submitted the City's application for a preliminary permit for the project from FERC. This submission was prior to the completion of the Appraisal Report and the application details differed in some minor ways from the later report. The preliminary permit was granted by FERC on December 27, 1979.) Citizen's Committee--Original Effort Shortly after delivery of Beck's Appraisal Report, the City Council decided to form an advisory group of citizens to provide oversight to the project and to make appropriate recommendations to Council. This eleven-man committee was formally appointed and organized in October, 1978, and originally designated the "Special Citizens Committee for the Hydroelectric Project" . However, it soon came to be referred to as the "Select Citizens Committee" and, finally, just the !'Select Committee". The primary charge for the Select Committee was to review and independently evaluate Beck's Appraisal Report, which it began to do in early December, 1978. The Select Committee immediately zeroed in on the four major factors that in combination would make the Ridgeway Project financially feasible for the City or not, as follows: a. Construction costs of the overall project b. Anticipated future inflation rates c. Terms and interest rates on borrowed funds d. Cost of future purchase of power from APCo. In general, the Select Committee reported to City Council on January 9, 1979, its opinion that Beck's Appraisal Report was perhaps overly optimistic as to certain of the four essential factors of feasibility and concluded that: liThe Committee is in agreement that the long-term profitibility of the project is good. However, the committee also believes there is a high probability that short-term cash shortfall to the City during the early years of the project could be a very significant $3- 5,000,000. The committee would rE:commend pro- ceeding vvith the Phase II study only after Council throughly analyzed the financial impact upon the City, and options available to cope with a short-term cash deficit." -3-