Title
A RESOLUTION APPROVING THE CITY’S PARTICIPATION IN THE AMP RENEWABLE ENERGY CREDITS SALE/PURCHASE PROGRAM; AND DECLARING AN EMERGENCY.
Brief Description: A portion of the city’s renewable energy is generated from the AMP Belleville Hydroelectric Plant located on the Ohio River in Belleville West Virginia. Hydroelectric generation is a renewable energy resource and as such generates Renewable Energy Credits (RECS). Staff wishes to take advantage AMP’S REC sale and purchase program and sell its resource RECS to the market and purchase an equal number of RECS back at a lower price thereby generating income for the HPP fund while preserving the city’s current renewable energy position.
Body
Legislative History
None
Purpose & Explanation
Hydroelectric generation is a renewable energy resource which generates Renewable Energy Credits or RECS which can be purchased and sold on the RECS market. A REC is equal to 1 MWh of generated electricity delivered to the electric grid. The REC makes it possible to track renewable energies on the grid. Currently, the City has 18,000 RECS available from generation at the Belleville Hydroelectric plant during 2021 and 2022 to date. One REC is currently selling for approximately $9.50.
The AMP RECS Sale/Purchase Program allows the City to authorize the REC sales transaction and at the same time purchase an equal number of RECS back at a much lower price. Known as an arbitrage transaction, it is the near simultaneous buying and selling of RECS in different markets where the RECS of renewable electric resources are sold and then replaced by purchasing less costly RECS from another renewable energy resource. The purchase market is currently at $3.00/rec.
Potential Transaction
o RECS = 18,000
o Potential earnings @ $9.50/REC = $171,000
o Potential purchase price @ $3.00/REC = $54,000
o Difference = $117,000
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: AMP Master Contract Agreement transaction
Fiscal Impact
Currently Budgeted (Account #, $)
Supplemental Appropriation Required (Account #, $)
X Appropriation Not Required
Does this legislation require use of an emergency clause?
X Yes. Expedite transactions to obtain best market pricing
No
Recommendation
Suggested Action
Staff recommends City Council pass this Resolution
Submitted by,
Thomas J. Sheridan, City Manager
Frank J. Comeriato, Jr., Asst. City Manager-Operations