Title
A RESOLUTION TO APPROVE THE FORM AND AUTHORIZE THE EXECUTION OF TALLGRASS SCHEDULE WITH AMERICAN MUNICIPAL POWER, INC. AND TAKING OF OTHER ACTIONS IN CONNECTION THEREWITH; AND DECLARING AN EMERGENCY.
Brief Description: American Municipal Power (AMP) has negotiated a power purchase agreement (PPA) for competitively priced green energy and capacity from the Tallgrass Project located in Central Ohio. The City’s power supply consultant is recommending Hudson purchase 1.5 MW from the PPA to replace a portion of its remaining requirements need.
Body
Legislative History
None
Purpose & Explanation
Over the past few years, AMP power supply staff have been actively looking at potential opportunities for Hudson to bring on additional renewable energy sources at competitive pricing.
AMP has secured a 16-year Power Purchase Agreement (PPA) with Tallgrass Energy Partners for a 23 MW renewable baseload electricity supply. This innovative project harnesses exhaust heat from Tallgrass’s existing compressor stations in Asheville and Philo, Ohio-facilities that maintain pressure on the Rockies Express natural gas pipeline. The recovered heat will be converted into a steam-like vapor to drive a turbine generator and produce electricity. Power will be transmitted to AMP through the AEP transmission system within the PJM regional market, operating nearly 24/7. The fixed-rate agreement offers a strategic hedge against fluctuating energy prices and PJM capacity charges.
AMP is recommending the City purchase 1.5 MW for a term of 16 years. Upon review of AMP’s recommendation, the City’s Power Supply Consultant Mr. John Courtney concurs participation in the Tallgrass PPA for 1.5MW would be beneficial to Hudson. As such, staff is in agreement with signing on the Tallgrass PPA for 1.5 MW at a price of $59.50/MWh for the first year of the term with a 2% annual escalation for term. Energy costs after leveraging the project attributes is approximately $44.50/MWh. Attributes of this project consists of Energy, PJM Installed Capacity and Green-e RECs.
Legal Authority for Proposed Legislation
Pursuant to Charter Section 6.04, Contracts & Purchasing:
Competitively bid and advertised for two consecutive weeks; bid tab attached: [Yes/No/NA])
Joint or Cooperative Purchase Program
Professional Services
X Other: purchase per master agreement with AMP.
Fiscal Impact
Currently Budgeted (Account #, $)
Supplemental Appropriation Required (Account #, $)
X Appropriation Not Required
Does this legislation require use of an emergency clause?
X Yes. To expedite contract process and pricing.
No
Recommendation
Suggested Action
Staff recommends the City Council pass this resolution and authorize the City to approve the form and authorize the execution of Tallgrass schedule with American Municipal Power Inc. and taking other actions in connection therewith, and declaring an emergency.
Submitted by,
Thomas J. Sheridan, City Manager
Kevin Powell, Director of Public Works