HomeMy WebLinkAboutAgenda Report - July 24, 1985 (107)Council was reminded that the Util_ .ty Department made a
presentation to the Lodi City Council, July 12, 1983,
regarding the Haas -Kings Project. This project is one
of three hydroelectric projects currently licensed to
PG&E on the North Fork Kings River. The Federal license
to operate the project expires soon as the project would
then be open to coveting proposals for relicensing.
The City of Lodi has contributed to a study of one such
relicensing proposal. This proposed license application
is sponsored by SKJD, certain Southern California
municipals, and NCPA as our representative; it proposes
adding generation capacity to the existing Haas power
development through additional utilization of water
resources of the North Fork Kings River.
At the time this project was discussed with the Lodi
City Council the ut'.lity power resource picture was much
different from what we perceive today. The Calaveras
hydroelectric project was in the planning stage with
many uncertainties involving enviroYental problems and
economic choices. Discussion was centered at that tidme
upon the need for peaking capacity --that is, power
needed only during peak load conditions. Ccubustion
turbines are normally utilized for such peak load duty
cycle, but the NCPA combustion turbine project did not
becu e active until late in 1983.
Therefore, utilization of the potential generation
resource of Haas -King appeared of benefit to the City of
Lodi in covering future peak load periods. The proposed
City share of the project was 7.5 megawatts..
Re-examination of the peak load benefit of the
Haas -Kings River Project discloses a redundancy between
the peak load period production of this project and the
combustion turbine project. This situation is expected
to exist for as much as ten years after projected
commercial operation. Following that period, a
gradually increasing City need for power and energy from
a project like the Haas -Kings is projected to emerge.
Construction is underway here in Lodi of the Richard L.
Hughes combustion turbine which, together with four
other identical turbines (in other cities), provide
peaking capability to substantially neet our peak load
and that of other NCPA participants.
Therefore, the Haas -Kings project is no longer as
strategic a resource as originally conceived. ContLnued
support of the project should be minimal. The City of
Lodi should reduce its participation from 12.7% (current
participation) to a level of 1%. The project nit
r COUNCIL COMMUNICATION
TO THE CITY COUNCIL DATE i NO.
PROW THE CITY MANAGER'S OFFICE July 24, 1985 !
SU4JEtT. RaaS-Kings Project Financial Canni.tm-nt
RECQMMaIDED ACTION: That the City Council approve the City's continued
participation in the Haas -Kings project relicensing effort in the amount
of one percent (1% — $2,500) of the estimated cost of ccrpleting this
project now determined to be $250,000.
BFI7QRC ID INMRMATION: Attached (Exhibit A) is a memo prepared and
distributed by the staff of the NortheYi California Power Agency (NCPA)
addressing the Haas -Kings Project. In -:luded in the memo is a listing of
the participation shares, showing the City of Lodi at 12.70%. The degree
of participation the City staff is recnding not at that level, but
rather one percent. This sets the City's financial commitment for the
remainder of the calendar year at $2,500 rather than $.31,750 which the
12.70% represents. At a meeting held last r,,onth, the project members
"agreed to recommend that the meribers continue NCPA and City participation
in this relicensing effort at some level. There was support for
continuing the project so that the legislative effort to preserve the
preference for public poor agencies in relicensing of hydroelectric
facilities will not be adversely affected between now and the end of the
year-
Also
ear-
Also attached (Exhibit B) is a memo prepared by the Utility Dir•actor
reviewing the scope of this project.
Thomas A. Peterson
City Manager
EXHIBIT "P"
OEI,VED
Northern California Power Agency ►5e5 AUL 10 AN 9. Z4
180 Cirby, Way, Roseville California 95678 �14�CE ,-M REr
PAUL E.
CA
CHS
Ci:r Y CLERK'
�Gener aaggeer C1r.Y OF LO^I
(916) 781-4203
July 8, 1985
TO: Haas -Kings Second Phase Agreement Participants
FROM: Roger A. Fontes
SUBJECT: Increase in Financial Commitment
NOTICE iS HEREBY GIVEN that the Project Members propose an increase in their
financial commitment to the Haas -Kings Project, in an amount to he determined -
by NCPA, pursuant to Section 6 of the Agreement for Financing of Planning and
Development Activities for Relicensing of the Haas -Kings River Project
("Agreement"), dated September 24, 1982. The NCPA staff has determined that
an additional $250,000.00 will be necessary to sdpport completion of the
Project between now and the end of this calendar year.
At thFir ireeting on June 27, 1985, the Project Members agreed to recommend
that the Members continue NCPA and City participation in the Project on some
basis. There was support for continuing the Project so that the legislative
effort to preserve the preference for public power agencies in relicensing of
hydroelectric facilities will not be adversely affected between now and the
end of the year.
Under the terms of the Agreement, your City is entitled to
1. Withdraw entirely from the Project or;
2. Maintain your Participation Percentage in the Project, by paying an
appropriate share of the increased financial commitment; or
3. Continue your participation in the Project, but reduce that participation
in it, by paying less than your full share of the increase, or none of it.
Since it is anticipated that one or more of NCPA's participating .members may
withdraw from the Project, you are specifically requested to notify NCPA of
your city's maximum contribution to the increase (in dollars), if any. Below
is a table of current NCPA city participation in Haas -Kings to determine your
potential share- of the budget increase. Sources of funds for further
participation are the FY 1985-86 NCPA Budget, or remaining Phase 2A Funds, or
by special assessment.
€` _•.r=. 00
Page 2
The Project Members have indicated their desire to take further action on this
matter at the Commission meeting now scheduled for July 27, 1985, in San
Francisco. Please advise the Agency of your desires in this matter at the
earliest possible time, but no later than the July, NCPA Commissi(>n
meeting. If you or your City Attorney have any questions regarding the
Haas -Kings 'Participation Agreement, please call Bruce McDonough at (916)
444-3900.
NCPA Project
Participation Shares
Haas -Kings
Alameda
12.43%
Biggs
1.05
Gridley
2.38
Healdsburg
3.97
Lodi
12.70
Lompoc
5.56
Palo Alto
15.61
Plumas-Sierra
5.56
Roseville
40.74
TOTAL 100.00
Sincerely,
RO ER A. FONTES
Manager, System Planning
& Engineering
cc: Paul Cavote
Bruce McDonough
RAF/fr
EXHIBIT ##B"
The Utility Department made a presentation to the Lodi City
Council July 12, 1983 regarding the, Haas -Kings Project. This project
is one of three hydroelectric projects currently licensed to PG&E on
the North Fork Kings River. The Federal license to operate the project
expires soon and the project would then be open to carpeting proposals
for relicensing. The City of Lodi has contributed to a study of one
such relicensing proposal. This proposed license application is
sponsored by SMUD, certain Southern California municipals and NCPA,
as our representative; it proposes adding generation capacity to the
existing Maas power development through additional utilization of
water resources of the North Fork Kings River.
At the time this project was discussed with the Lodi City Council,
the utility power resource picture was much different from what we
perceive today. The Calaveras hydroelectric project was in the
planning stage with many uncertainties involving environmental problems
and economic choices. Discussion was centered at that time upon the
need for peaking capacity -- that is, power needed only during peak
load conditions. Combustion turbines are normally utilized for such
peak load duty cycle, but the NCPA canbution turbine project did not
became active until late in 1983.
Therefore, utilization of the potential generation resource of
Haas -King appeared of benefit to the City of Lodi in covering future
peak load periods. The proposed City share of the project was 7.5
megawatts.
Re-examination of' the peak load benefit of the Haas -Kings River
Project discloses a red,mdancy between the peak load period production
of this project and the ocabustion turbine project. This situation is
expected to exist for as much as ten years after projected cammerci,al
operation. Following that period, a gradually increasing City need for
power and energy from a project like the Haas -Kings is projected to
emerge.
Construction is underway here in Lodi of the Richard L. Hughes
combustion turbine which, together with four other identical turbines
(in other cities) provide peaking capability to substantially meet our
_peak load andthat of other NCPA participants.
'-dierefore, the Haas -Kings project is no longer as strategic a
resource as originally conceived. Continued support of the project
should be mm�ni.mal. The City of Lodi should reduce its participation
from 12.7% (current participations to a level of 1%. The project need
should be reviewed in no more than six months to re -confirm the above
analysis and a decision made regarding continued support.
To date, approximately $58,420 has been contributed to the
Haas -Kings project development by the City of Lodi. Reduced support
through the end of year at a 1% level would require approximately
�2,500. These contributed funds would be returned when the project was
successfully relicensed and financed by the public power entities.
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