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W A I E R I E N E R G Y I I r F RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L i T I E 5 BOARD OF PUBLIC UTILITIES DATE: March 5, 2010 ITEM NO: 12 SUBJECT: NEW HIGH VOLTAGE ELECTRIC SERVICE AGREEMENT BETWEEN WILD ROCKET FOODS AND THE CITY OF RIVERSIDE ISSUE: The issue before the Board of Public Utilities is the consideration of approval to enter into a three-year, High Voltage Electric Service Agreement at a 69 kV level with Wild Rocket Foods. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve a three-year, High Voltage Electric Service Agreement at a 69 kV level between Wild Rocket Foods and the City of Riverside. BACKGROUND: Wild Rocket Foods (Wild Rocket) is a food processing company and one of Riverside Public Utilities' (RPU) largest electric customers. The company specializes in a full-line of fresh fruit and vegetable processing. Their business model focuses on sustainability, which is evident in their state-of-the-art energy and water efficient facility located in the Sycamore Canyon Business Park at 1730 Eastridge Avenue. The 130,000 square foot facility includes a large refrigerated warehouse for the storage and distribution of perishable fruit and vegetable products. Wild Rocket has requested service at the high voltage level through this Electric Service Agreement. A High Voltage Electric Service Agreement is limited to large industrial customers that RPU determines can take delivery of their electricity directly from a substation at the 69 kV level in accordance with RPU Electric Rules and Rates. Furthermore,to qualify for the High Voltage rate, such large industrial customers must be located within suitable physical proximity of an existing substation as determined by RPU. The power is then transmitted from the substation through a line-specific, leased portion of the transmission system owned and operated by the City of Riverside and transmitted to the customer's facilities. This type of service is cost beneficial for only the few largest RPU customers who are billed for power at this wholesale rate. Wild Rocket will receive delivery of their electricity from a 69 kV level substation. Their suitable proximity to the Springs Substation located within the Sycamore Canyon Business Park is the primary factor for a cost effective rate under this agreement for 69 kV service. The contract encourages and the customer projects facility expansion and load growth. This will potentially result in additional benefits should Wild Rocket successfully expand. Energy usage growth is a stipulation to contract renewal. The rate schedule was structured from the result of a recent Cost-of-Service study and includes Time-of-Use rates. Rates are calculated based upon cost components unique to each specific customer. FISCAL IMPACT: RPU recovers all costs required to serve this customer.