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HomeMy WebLinkAboutPetersburg Correspondence 1988O1/08/ 1988 LW! od (disk Electric Hssc. Inc Ybo2elic'/ P.u1 Kodiak Electric Association, Inc. PANAFAX COVER SHEET TO: FROM: KODIAK ELECTRIC ASSOCIATION, INC. Box 787 Kodiak, Alaska 99615 Panafax Telephone No. (907) 486-3265 s ‘ 7 DATE: Tiw, ¥ 1986 ty z iY p. SUBJECT: LANE, Sefedilos Wer 2. A TOTAL OF 7 ___ PAGES FOLLOW THE COVER SHEET. po 7 ; SENT BY: Yaxehil Caldurar TIME: 1635 LA. l/s 1d 1M? so “Udiak Electric Hssc. Ine bbs2cie'/ Pu Kodiak Fiectric Association, Inc, MEMO TO: All @MC tolks, Associates, and Consultants. FROM: Bill Eberhardt, Kodiak Electric Association, Inc. DATH: Jannary 8, 1988 Attached is a draft resolution for Interruptible Schedule No, 2. We've talked about this previously and L'm asking for your com- ments. Phone them to me, PAX them to me, or mail them to me by February 8 and T'1] try and have a smooth copy to you by 15. Feb- ruary 1988, Dick---T would like action on this in our March meeting in --- Pelersburg, Aa Bill Eberhardt KODIAK !LECTRIC ASSOCTATLON, ING, P.O. Box 787 Kodiak, Alaska 99615 FAX 486-3265 Distribution: Doug Bursey, CVEA Joyce Rasler, Wrangoll Dick Southworth, Ketchikan Dennis Lewis, Petersburg Don Shira, APA, Anchorage Kon Saxton, Attorney, Portland Jim NWendershot, Consultant, Anchorage Royer Kemppel, Attorney, Anchorage Ble 18s 1: 36 “Udiak Electric Hssc. Inc Mbseelin'/’ F. S mH Kodiak Electric Assoctation, Inc. DRAFT RESOLUTLON NO, 87- A RESOLUTION of the Project Management Committee ("PMC") provid- ing for the adoption of a rate schedule for the sale of certain power from the Initial Project at PMC Interruptible Rates. WHEREAS, the Initial Projects are capable of producing cnergy in excess of the loads that will purchase power at the full Initial Project Wholesale Power Rate; and WHEREAS, there are opportunities to sell additional power if such power can be made available at a rate less than the Initial Project Wholesale Power Rate plus the PMC utilitys usual markup; and WHEREAS, such sales can be accomplished so as to provide benefits to other customers; and WHEREAS, by their unanimous concurrence the partics intend to encourape sales that are supplementary to those anticipated in the long-term Power Sales Agreement; and WHEREAS, the Alaska Power Authority ("Authority") and the utility members of the PMC believe such sales can encourage greater uti- Jization of existing resources to the benefit of all consumers served by the utility members of the PMC; and WHEREAS, the PMC by Resolution No. 87-20 adopted and approved PMC Tnterruptible Rate Schedule No. 1, Wholesale Displacement Rate (Non-Residential); and WHEREAS, additional supplementary sales are advantageous and possible with customer assistance from PMC utility members under conditions and rates other than those provided in PMC Interrup- tible Rate schedule No. 1; and WHEREAS, the partics to the Long-Term Power Sales Agreement una- nimously now desire to make such sales; and WHEREAS, by agreement to this procedure, the Authority does not concede its right to make supplementary sales pursuant to other arrangements consistent with the Long-Term Power Sales Agreement. Page 1 - RNSOLUT1ON NO. 87- Draft date January 5, 1988 O1/08/ 1Ydd luis’ Udiak Electric Hsse. Inc bbsZel'? F.W4 Kodiak Electric Association, Inc. NOW, THEREFORE, BE IT RESOLVED by the Project Management Commit- tee as follows: Section 1. The PMC hereby adopts PMC Interruptible Rate Schedule No. 2, Fuel Displacement Rate (Non-Residential), (Attachment A). Section 2. Such rate schedule shall be effective immediately Upon a unanimous vote of the PMC, and shall continue to be available until modified or rescinded by majority action of the PMC, Section 3. The utility intending to make sales under PMC Inter- ruptible Schedule No 2 may develop a plan for assisting a cus- tomer pursuant to said schedule. The utility's plan for assis-~ tance shall he presented to the PMC for approval and sales under this schedule shall he contingent. on PMC unanimous approval of such plan. Section 4. Each utility shall negotiate a centract for each proposed sale under the PMC Tnterruptible Rate Schedule No. 2 and shall present such contact to the PMC for approval prior to any sale of power under such contract. Each contract shall require unanimous approval by the PMC, and once approved such contract shall! continue in force for such period and on such terms as are in such approved contract. Section 5. Each utility making sales under the PMC Interruptible Rate Schedule No. 2 shall report to the PMC, on at least a quarterly basis, on sales made under such schedule, sales cxpecled to be made under the schedule, and the information col-~ lected by that utility to demonstrate compliance with the verifi- cation provisions of the PMC Interruptible Rate Schedule No. 2. Section 6, All monies received hy utility during the first two years of the contract shall be applied to the recovery of the utility's cost of assisting -the customer; provided however, that all revenues collected in excess of such costs shall be peid to the PMC, All monies received hy the PMC under this schedule shall be applied to the Authority's administrative services cost and to power production costs in the proportions specified in the schedule. The revenues applied to power production cost shall be applied entirely to the cost associated with Facility Operating Cost and Joint Costs of the Initial Project pursuant to Sections 5b(4.) (A) and (B) of the Power Sales Agreement. Page 2 - RESOLUTION NO. 87- Draft date January 5, 1988 Bl Wds/ lads luis’ KUdiak Electric Hsse. ine Yosdcn'¢ P.u> Kodiak Electric Association, Inc. PROJECT MANAGEMENT COMMITTEE By ’ Chairman ATTEST: By Secretary Page 3 - RESOLUTION NO, 87- Draft date January 5, 1988 bl/uo 1333 1M: sc* KUdiak Electric Hsse. ine bode’ F.Wb Kodiak Electric Association, Inc. Schedule No, 2 Page 1 of 3 DRAFT - 1/5/88 INTERRUPTIBLE SCHEDULE NO. 2 FUEL DISPLACEMENT RATE (GOVERNMENT) 1. Statement of Intent. This schedule is intended to permit the sale of power from the Tnitial Project which is in excess of sales that can be accomplished at the Initial Project Wholesale Power Rate. Sales under this schedule are intended to be entirely supplemental to sales that would occur without this sehedule. Sales under this schedule arc intended to reduce the power cost component of the duitial Project Wholesale Power Rate and help defray the Author- ity's administrative service costs and/or debt service payments and in no event shal! sales under this schedule result in an increase in the Initial Project Wholesale Power Rate. To the maximum extent possible, consistent with the terms of this sched- ule, cach retail utility is intended to have the flexibility nec- essary to negotiate terms that meet the needs of its individual circumstances. 2. Conditions of Service. a. Only power produced by a facility of the Initial Project and in excess of sales that could be made by Project Management Committee Utilities at the full Initial Pro- ject Wholesale Power Rate is eligible for sale under this schedule, b. All power sold under this schedule is interruptible, subject to both Initial Project hydro and transmission availability, c. The customer may receive assistance from the utility in the form of acquisition and/or installation of electrical appliances, equipment, Lixtures, or other apparatus noc- essary for supplementing the customer's existing on-site fuel fired energy source. 3. Eligib!le Loads. a. loads to be served under this schedule must be state, federal, or local government loads. O1/638/1¥9de 103 st “Udiak Electric Hssc. Inc Hiboddids'/ Feu? Kodiak Electric Association, Inc. b. a. Ce Schedule No, 2 Page 2 of 3 Such loads must not be presently served, on a regular basis, with power purchased from a retasi] clectric util- ity at any rate, Fligible loads must be capable of being served by the customer's existing fucl fired energy source and be capa- ble of interruption of electric service at any time. Eligibility is contingent on unanimous approval by the PMC of tho utilitys plan to provide such assistance. Rate. The rate shall be established by contract between the utility and the customer. The utility shall consider its acquisition and/or installation costs in assisting the customer, Tf the rate established in the contract is iudexed to the cost of an alternate energy source, the ulility shall consider specific ecconomic indicators of the alternate energy source. Rates established under this schedule shall recover, in two years or less, the utilitys costs in assisting the customer. The rate shal] consist of three components: (1)Authority adminislrative service costs, (2) power production costs, and (3) retail utility service costs. The proportion of revenue to each component shall be: authority adminis- trative service costs = 1/3; power production costs - 1/3: retail utility service costs - 1/3; provided, that avocany Lime after October 28, 2000, if such payments would act to reduce the Initial Project Wholesale Powor Rale, the Authority shall apply its share of revenue under this schedule to reduce the purchasing utilities debt) service obligations under the long-lerm Power Sales Agreement. Retail rate adjustment. Lf the rate established in 4.a. is an indexed rate, the utility shall not adjust the customers rate morc often than annually. In determining whether an adjustment is necessary and in calculating the adjustment, the utility shall use a specific economic indicator defined in the sales contract. B1/O8/ 1988 1: sy Udiak Electric H Inc Yodeels'/ Kodiak Electric Association, Inc, Schedule No. 2 Page 3 of 3 5. Contract Tmplementation. a. All sales under this schedule shall be pursuant to indi- vidual contracts between the serving utility and the utilitys customer. Such contracts shall be of at Jeast five-years duration. In addition, such contracts shall establish take-or-pay requirements sufficient to recover the utilitys cost of assistance to the customer and return an cqual amount of revenues for distribution as provided in Section 4,b. b. Al1 such contracts shall be conditioned on prior unani- mous approval by the PMC, After such approval, each contract shall continue in effeet for such period, and on such terms, as approved. Cc. A utility shall apply revenues from sales to a customer under this schedule to the recovery of the utilitys cost of assisting that customer; provided however, that all revenues collected in excess of such costs shall be paid to the PMC, Thereafter, on a monthly basis, the utility shall pay to the PMC all revenues which are atblributable to sales under this schedule. On a monthly basis, the PMG shall pay to the Authority the 1/3 component of the revenues for the Authoritys administrative services costs. d. line extensions, additional transformation capacity, additional secondary services and/or control cquipment are not recoverable costs permitted by this rate schedule. 6. Verification. a. The utility shall interrupt the energy provided under this rate schedule at least once each month for a minimum period of one hour. ‘he interruption shall be conducted by utility personnel without notice to the customer. b. The utility shall have right to inspect customer facil- ities to insure the proper operation of the installed equipment. RB:117/2