HomeMy WebLinkAboutMinutes - June 24, 1980152
CITY COUNCIL, CITY OF LODI
CI=''_' HALL COUNCIL CHAMBERS
June 24, 1980
An ad=ourned regular meeting of the City Council of the City of Lodi
was --eld beginning at 7:30 p.m., Tuesday, June 24, 1980 in the City
Hall Council Chambers.
POLL CALL The City Clerk recorded the roll as follows:
Present: Councilmen - Hughes,
McCarty, Murphy, Pinkerton-,
and Katnich, (Mayor)
Absent: Councilmen - None
Also Present: City Manager Glaves, Assista
City Manager Glenn, Utility
_Director Curry, City Attorne
Stein, and City Clerk
Reimche.
PLEDGE Mayor Katnich led the Pledge of Allegiance
to the flag.
ITC—PA City Manager Glaves apprised the Council that
the purpose of this meeting was to provide an
informative session regarding the Northern
California Power Agency.
City Manager Glaves then introduced NCPA Com-
mission Chairman, Fred S. Eyerly and Philip G.
Michaels former General Manager of N.C.P.A. and
who now heads his own consulting firm.
Following introduction of the subject by ••^_it --
Manager Glaves, Mr. Eyerly gave a brief history
of the Northern California Power Agency. The
roll, obligation, and projects that NCPA are in-
volved in were outlined by Mr. Eyerely.
Following an inquiry by the Council, Lodi's curre:
budget for NCPA was set forth as follows:
$7,000 Dues
$56,OCO Development
fund
$255,000 Assessments
A lengthy discussion followed regarding the budge'
Mr. ?yerly estimated that Lodi's portion of the
1980-81 budget would be $255,000, with approxi-
mately $125,000 of this amount to be used for
power projects, and $130,000 will go to the GenerE
Operating fund for NCPA.
Mr. Eyerly then addressed the Council regarding
the Feather River Project No. 1962 highlighting
the project as follows:
Description of the Feather River Project No. 1962 (Project)
T: -e members of NCPA have the right to.participate in the projects which
would be most beneficial to their individual needs. The PdCPA
Commission has elected to pursue recapture of the hydroelectric project
presently under license to PC -8E known as the Feather River Project No.
1962.. T.e.followin�,list shows the MCPA members who are participating
153
Continued June 24, 1980
in the project and their percentage allocation:
Alameda 7.81%
Biggs .41
Gridley .85
Nealdsburg 2.07
Lodi 9.13
Lompoc 2.34
Palo Alto 19.20
Redding 12.11
Roseville 6.95
Santa Clara _ 34.69 -
Ukiah 2.67
Plumus Sierra R.E.C. 1.77
The project is located just south of Lake Almanor on the North Fork of
the Feather River and is part of a coordinated system of hydroelectric
power plants.
The project No. 1962 consists of two powerhouses (Rock Creek and Cresta
on the North Fork of the Feather River in the Feather River Basin,
California. Rock Creek's installed capacity is 113.4 MW, and Cresta's
is 67.5 MTW for a total of approximately 181 MW. These powerhouses were
completed in 1949 and 1950, and PG&E'S license for this project expires
on September 30, 1982. The project operates at an annual average
capacity factor of 68 percent. The project utilizes the differences in
elevation, and Rock Creek powerhouse is served by a 6;� mile tunnel
from Rock Creek Dam, which diverts water from the North Fork, and
Cresta has a 4 mile tunnel leading to its powerhouse.
PG&E holds the current license and has applied to renew its license
for fifty years. The current license expires in September, 1982.
Competing license applications must be submitted to the FERC by
September 16, 1980.
The NCPA Commission has determined that the optimum approach would
be to have the municipal systems in the Northern and Southern California
participate in the filing of the application. Subject to final approva-
by the respective systems an application will be prepared as if the
application were jointly filed by NCPA and the Southern cities of
Anaheim, Riverside, Azusa, Banning, and Colton. Under this approach,
NCPA has tentatively agreed to assume 53.4 percent of the project costs
and capacity and energy output of the project, with the Southern
California cities mentioned above picking up the remaining 46.6 percent.
Presently, it is estimated that the cost of energy from the combined
powerhouses of Project No. 1962 will range between 8.4 and 32 miles
per kilowatthour based on 1983 dollars. If NCPA were to purchase this
same block of capacity and energy with similar characteristics from
PG&E on a wholesale basis, it is estimated that it would cost NCPA 33.9
mills per kilowatthour in 1983 dollars. Because fixed costs associated
with a hydroelectric project represent approximately 96 percent of the
total cost of operating the project, it is anticipated that the cost of
power from the proposed Feather River project would remain relatively
level over the life of the project as compared to continually increasinc
cost of wholesale power from PG&E.
Financing Program for the Feather River Project No. 1962
In order to proceed with filing a competing application for recapture
of the reather River Project, the NCPA members who have determined to
become participating members in this project have extablished a fund
for use in meeting the costs of outside legal and engineering firms
who are being used to assist with the preparation of this application.
The total estimated budget for obtaining a license to operate the
project is on the order of $750,000, of which NCPA'S members will be
responsible for 53.4 percent, or approximately $400,000. A long-term
financial program will be establishedto allow the NCPA members to
recover this front-end money as well as to minimize the overall cost
of project power over the life of the license to be granted by the FERC.
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154
Jure 24, 198[7 Continued
It should be pointed out that this long-term indebtedness will not
be an obligation on the tax base of the constituency of each part-
icipating member, i.e., the debt will not be repaid through taxes
in the individual member cities.
Discussion followed with euestions being directed to Staff
and Mr. Eyerly and Mr. Michaels.
Mr. Eyerly then addressed the Council regarding the CC's^1D
Hydroelectric Project, highlighting the project as follows:
To meet the future power needs for NCPA members. NCPA entered into
a Memorandum of Understanding (MOU) with the Calaveras County .dater
District to purchase all of the net electric output of the proposed
hydroelectric project to be located on the North Fork of the Stanislaus
River. This project and the benefits to be expected from it are
described in this paper.
The members of NCPA have the right to participate in the projects
which would be most beneficial to their individual needs. This
hydroelectric project, which is expected to be completed in the Fall
of 1984, is known as the CCWD Hydroelectric Project having a capacity
of 200 MW. The following list shows the NCPA members who are
currently participating and their percentage allocation in this
project:
Alameda
10.88%
Biggs
.42
Gridley
1.00
Healdsburg
1.43
Lodi
9.85
Lompoc
2.18
Roseville
6.24
Santa Clara
31.08
Ukiah
3.04
Plumas-Sierra
1.55
R.E.C.
100.00%
CCWD Hydroelectric Proiect - Maior Features and Proiect Discussions
The CCWD Eydroelectric Project also referred to as the North :ork
Stanislaus River Hydroelectric Project would have an installed capacity
of 200 MW. It will be located on the Stanislaus and North Fork
Stanislaus Rivers, and Highland, Silver, Beaver, and Duck Creeks. It
would be it Calaveras, Alpine, and Tuolumne Counties, California,
near the towns of Sonora, City of Angels, and San Andreas, and would
affect lands of the United States within the Stanislaus National Forest.
Power from the project would be integrated into PGBE'S power systems
in Northern California for delivery to NCPA participating members. The
project would consist of the following major features:
1. The 37 -foot high concrete gravity North Fork Diversion Dam, im-
pounding a 350 acre-foot reservoir immediately downstream of the con-
fluence of Silver and Duck Creeks; and a 11,300 -foot long unlined
tunnel.
2. A 200 -foot high rockfill dam, 200 feet downstream of the existing
dam for Spicer Meadow Reservoir, and the resulting New Spicer Meadow
Reservoir, enlarged to 189,000 acre-feet of storage capacity. The
crest elevation of the new dam would be at 6,610 feet. A 120 -foot _
high rockfill dike would also be constructed. New Spicer Meadow
Power Plant, at the toe of the main dam, would contain four 1,300
Krl generating units to be connected with the Pacific Gas and Electric
Company's (PGSE) transmission facilitie„ near Cabbage Patch.
The 173 -`cot hig'-. concrete arch McKay's Point Diversion Dam, with a
crest elevation of 3,395 feet, creating a 2,200 acre-foot reservoir
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June 24, 1980 Continued
with a surface area of 40 acres at the normal maximum water surface
elevation of 3,370 feet.
4. A 15 -foot high concrete weir, the Beaver Creek Diversion Dam, to
be located downstream of the Calaveras Big Trees State Park. This
dam would create a 25 acre-foot reservoir with a surface area of five
- acres at the normal maximum water surface elevation of 4,195 feet.
It would divert Beaver Creek flows through a 7 -foot diameter, 900 -
foot long tunnel into McKay's Point Diversion.
5. Collierville Tunnel, 17 feet in diameter and 40,100 feet long,
from a gated intake structure 135 feet high in the right abutment of
the McKay's Point Diversion Dam to a 6,620 -foot long penstock.
6. Collierville Powerhouse, to be located at Clark Flat on the
Stanislaus River about a mile below the confluence of the North and
Middle Fork Stanislaus Rivers. The Powerhouse will house two
100,000 KW generating units connected through transformers to an
adjacent switchyard and thence to the existing area transmission system.
7. The 56 -foot high concrete gravity Collierville Afterbay Dam, with
a crest elevation of 1,076 feet and impounding a 920 acre-foot
reservoir with a surface area of about 40 acres. The dam will reregu-
late releases from the Collierville and Stanislaus power plants.
8. Eleven Miles of buried 21 KV She ated transmission cable from the New
Spicer Meadow Power Plant to PG&E'S existing Cabbage Patch switchyard
and 35 miles of 230 KV, double circuit, 3-phase transmission line from
the Collierville Power Plant to PG&E'S existing Bellota switchyard.
9. Recreation facilities In the New Spicer Meadow Reservoir and
the North Fork Diversion Dam areas.
The Federal Energy Regulatory Commission (FERC) has the responsibility of
approving and granting the license for this project. The Calaveras
County Water District filed an application for the FERC license on
November 30, 1978. This project is referred to by FERC as Project
'Jo. 2409. The draft Environmental Impact Statement (EIS) was issued
by FERC on November 21, 1979. Issuance of the draft EIS is an important
step in the overall licensing process. Comments are received from all
interested and intervening parties'in support or opposed to to
proposed project dsring the comment period following the issuance of the
draft EIS. These comments are resolved to the extent possible and the
final EIS is issued identifying unresolved concerns. Depending upon
the comments received by FERC at this stage, a decision is made to
either order hearings or issue preliminary license without hearings.
The final EIS is expected to be released by FERC in 'June 1930. There
is a liAke.l=hood of the need for hearings on some relauively minor issues
before the preliminary license is iss.ued. It is anticipated at this
stage that the preliminary license will be issued either in the Spring
of 1981, or latest by the Fall of 1981.
`dCPA, having realized this to be an attractive project for meeting
future power demands from economic consideration, entered into a
Memorandum of Understanding (MOL') with the Calaveras County Water
District in May 1979. Under the provision of the MOU, NCPA will
?src:^ase at cost all of the net electric energy generated at the
project facilities. In addition, ^?CPA's purchase price for future
power following the initial license period will be at nifty percent of
the cost of comparable Dower at that time.
The current estimated cost of construction and financing this project
is $424,531,00. The debt service on this amount when combined with
the annual operation and maintenance costs would result in a cost of
aDDroximately 60 mills/KriH for the energy from this project in the
first year of operation.
1J C
June 24, 1980 Continued
This cost of electricity will remain essentially fixed over the life
of the project since the debt service represents 97 percent of the
annual project cost and the debt service is a fixed amount over the
life of the project. Based on the rates contained in the proposed
NCPA/PG&E Interconnection Agreement and information prepared by R.W.
Beck and Associates, NCPA members will realize in 1990 a net annual
savings of 7.7 million from this project compared to the purchase
of replacement energy from PG&E. This saving will increase each
year throughout the life of the project and represents very sub-
stantial savings to all NCPA members.
NCPA has agreed to advance preliminary cost of this project until a
FERC license is approved. This amount may be increased if necessary,
upon agreement by the members of P7 CPP.. After the FERC license is
approved revenue bonds will be issued to fund the total project cost
and the funds which have been advanced by NCPA will be refunded.
Calaveras County voters have passed a resolution authorizing CCWD
to issue up to $350 million in revenue bonds for this project.
Additional financing arrangements will be made to fund the remainder
of the $424.5 million project cost. These alternatives include 1)
Calaveras County voter approval of an additional bond issue; 2) is-
suance of revenue bonds by NCPA; 3) formation of a joint powers
agency which would issue the additional revenue bonds; 4) formation
of a nonprofit corporation which would issue the additional revenue
bonds. The method to be used will be selected after final evalua_ion
of the advantages and disadvantages of each method giving consideration
to actual circumstances at the time.
Discussion followed with questions being directed to Staff
and to Mr. Eyerly and Mr. Michaels.
Following an inquiry by Councilman Hughes, Mr. Michaels made
the following report on the RFL Project. This Project was
undertaken by nine or ten member cities sometime back. Un-
fortunately RFL was not all that stable and the company de-
clared bankruptcy, and approximately $500,000 turned up
missing. A trustee has been appointed and NCPA is now the
owner of leases on approximately 6,000 acres.
The first well was drilled but turned out not to be of com-
mercial value.
The first phase in obtaining licensing has been completed
and approval has been received; and the second phase in ob-
taining licensing is now being undertaken.
Mr. Michaels t -en talked about the exploration phase of this
project, advising that the Department of Energy has been con-
tacted regarding subsidizing this project. Mr. Michaels
estimated that there may be a 50 -SO% chance that such =unding
would be available.
Xr. Michaels stated that NCPA has expended approximately four
million dollars on this project to date.
Additional discussion regarding this project followed with
questions being directed to Staff and to Mr. Eyerly and `''r.
Michaels.
Councilman Hughes stated that he understands there is a
possiblilty of NCPA cities being allocated additional CVP power.
Mr. Michaels addressed the Council on the Subject stating that
DCPA has applied for additional CV? power through the Western
Area Power Association stating that it normally takes aDproxi-
mate'_y 16 months to receive such power. Mr. Michaels indicated
157
June 24, 1980 Continued
that this additional CVP power would amount to approximately
102 megawatts, and that cost for this power would be approx-
imately 25 rills.
Additional discussion followed regarding the matter with
questions being directed to Staff and to Mr. Eyerly and
Mr. Michaels.
Mayor Katnich then thanked Mr. Eyerly and Mr. Michaels for
coming and giving the Council the opportunity to review this
information.
ADJOURNMENT There being no further business to come before the Council
the meeting was adjourned at approximately 9:45 p.m.
Attest: ALICE M. R IMCHE
CITY CLERK
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