02-05-10 BPU RPT 13 - Laserfiche WebLink

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W A T E R I E N E R 5 Y , L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: February 5, 2010 ITEM NO: 13 SUBJECT: CLEARWATER POWER PLANT ASSET PURCHASE AND SALE AGREEMENT — SUPPLEMENTAL APPROPRIATION ISSUE: Consideration of Riverside Public Utilities' purchase of the City of Corona's Clearwater Power Plant ("Clearwater") and its related assets. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the proposed Clearwater Power Plant Asset Purchase and Sale Agreement ("Purchase Agreement") between Riverside and the City of Corona, for the approximate purchase price of $49,300,000, plus up to an additional five percent for purchase price adjustments as set forth in the Purchase Agreement; 2. Approve the Commercial Lease with Ron and Kathryn Judd for shop and office space in the vicinity of Clearwater, and authorize the City Manager, or his designee, to execute extensions thereof; 3. Approve creation of the Utilities Generation Plant Manager classification and the addition of the staff positions set forth in Attachment 4; 4. Approve a supplemental appropriation in the amount of $51,765,000 for the Clearwater asset purchase and $520,000 for anticipated expenses ancillary thereto, for a total of $52,285,000 funded from a combination of primarily bond proceeds and the Electric Fund fund balance to an account as established by the Finance Division; and 5. Authorize the City Manager, or his designee, to execute the Purchase Agreement and other necessary documents. BACKGROUND: Located in Corona adjacent to the Prado Flood Control Basin, Clearwater is a combined-cycle, natural gas generating facility constructed at Corona's Wastewater Treatment Plant #1 ("WWTP #1") in 2004 and capable of producing approximately 30 megawatts of power (sufficient for approximately 22,500 residential customers). Corona's City Council has determined that Clearwater is excess to their needs. Purchase Agreement Riverside and Corona have been discussing Riverside's potential purchase of Clearwater for approximately two years. Among other Clearwater-related assets, the purchase would also include the 69,000 volt facilities necessary to move power from Clearwater to the Southern California Edison Company's electrical distribution system. The useful life of Clearwater and the related transmission facilities is anticipated to be at least thirty years.