05-03-2013 BPU RPT 09 - Laserfiche WebLink

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W A T E R I E N E R G Y I LIE E RIVERSIDE PUBLIC UTILITIES P U B L I C U T I L IT I E S Board Memorandum BOARD OF PUBLIC UTILITIES DATE: May 3, 2013 ITEM NO: 9 SUBJECT: POWER PURCHASE AGREEMENTS FOR RENEWABLE GEOTHERMAL ENERGY BETWEEN CALENERGY LLC AND THE CITY OF RIVERSIDE ISSUES: The items for Board of Public Utilities consideration are: 1) approval of Amendment No. 2 to Power Sales Agreement between Salton Sea Power LLC, a CalEnergy subsidiary; and 2) approval of the new Power Purchase Agreement between CalEnergy LLC and the City of Riverside for renewable resources from CalEnergy's geothermal power projects located in Imperial Valley, California. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: Approve the Amendment No. 2 to Power Sales Agreement between Salton Sea Power LLC and the City of Riverside to modify the pricing terms commencing July 1, 2013 through the remaining term of the existing agreement; 2. Approve the new Power Purchase Agreement between CalEnergy LLC and the City of Riverside to provide energy from CalEnergy's geothermal power projects commencing Calendar Year 2016; 3. Authorize the City Manager, or his designee, to execute said Agreements under the terms and conditions as set forth within the Agreements; 4. Authorize the Public Utilities General Manager, or his designee, to execute any documents necessary to administer the Agreements that are consistent with the established policies by the City Council; and 5. Authorize the City Manager, or his designee, to terminate the Agreements for circumstances provided in the Agreements (e.g., failure to meet operational performance standard). BACKGROUND: Riverside Public Utilities (RPU) has been very aggressive in pursuing the best priced renewable energy to serve the retail energy requirements and has historically adopted more stringent requirements than those imposed on Investor Owned Utilities (IOU). RPU's current Renewable Portfolio Standard ( "RPS ") requires that it supply 20 %, 25% and 33% of retail energy needs using renewable resources by 2010, 2015 and 2020, respectively. In 2012, California's Senate Bill (SB) X1 -2, mandated that all electric utilities, including RPU, procure increasing amounts of renewable power (primarily from in -state resources) to serve its retail needs during specific compliance periods. Such targets must reach 33% renewable resources no later than Calendar Year (CY) 2020.