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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
City of Anaheim
PUBLIC UTILITIES DEPARTMENT
DATE: NOVEMBER 7, 2023
FROM: PUBLIC UTILITIES DEPARTMENT
SUBJECT: APPROVAL OF RENEWABLE HYDROELECTRIC POWER
PURCHASE AGREEMENT
ATTACHMENT (Y/N): YES ITEM # 10
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1) Approve the Renewable Power Purchase Agreement (Agreement) with EIF Haypress, LLC (Haypress) to purchase power and associated resources from the Haypress Hydroelectric Project (Project) for approximately $905,000 per year, subject to a 2.5% annual escalator, for a fifteen-year term commencing on January 1, 2024; and
2) Authorize the Public Utilities General Manager or designees, on behalf of Anaheim, to (a) execute and deliver the Agreement and supporting agreements, such as cost- neutral amendments of the Agreement, administrative amendments of the Agreement’s Exhibits, collateral assignment agreements, power scheduling agreements, and scheduling coordinator agreements; (b) prepare, certify, attest, execute, and deliver any other documents related to the Agreement; and (c) take all actions as are necessary or advisable to implement and administer the Agreement.
DISCUSSION:
At their meeting on October 25, 2023, the Public Utilities Board (PUB) recommended that the City Council approve the Renewable Power Purchase Agreement for Hydroelectric Resource.
California’s Renewable Portfolio Standards (RPS) require utilities to achieve targets for clean, sustainable, and renewable energy resources. In 2022, Senate Bill (SB) 1020 affirmed that 100% of electricity from agencies like Anaheim Public Utilities (APU) will have to come from renewable and carbon-free resources by 2045. APU seeks to procure renewable hydroelectric power to help meet its State-mandated RPS targets and continue its path towards a more sustainable power supply mix on behalf of its customers.
Approval of Renewable Hydroelectric Power Purchase Agreement November 7, 2023
As a result of the State’s mandates and energy needs throughout the Western United States, there has been increased competition for renewable energy projects. In this situation, rather than a traditional utility-requested solicitation, Haypress, the owner of the Project, issued a public Request for Offers (RFO), seeking proposals from market participants to purchase energy from the Project. Haypress received six competitive proposals for the Project, including one from APU. After reviewing the proposals, Haypress selected APU as the successful respondent.
The Project is a hydroelectric facility located in Sierra City, Sierra County, California, which is approximately 40 miles northwest of Lake Tahoe. The Project consists of two hydroelectric turbines and generator powerhouses that operate on run-of-river water flows from a tributary to the North Yuba River. As with other renewable projects, the Agreement provides that APU will only pay for renewable energy that Haypress delivers during the term of the Agreement, which provides risk mitigation against future droughts.
APU submitted its offer for the Project after evaluating the Project’s cost, ability to meet resource adequacy requirements, location with access to transmission lines, and eligibility under California’s RPS regulations. The proposed Agreement would provide APU with
12.5 Megawatts (MW) of renewable power and is expected to generate approximately 15,000 Megawatt-hours (MWh) of renewable energy annually. The energy produced will be enough to serve approximately 2,500 homes in Anaheim and reduce approximately 6,200 metric tons of carbon dioxide emissions annually.
The Agreement includes unit pricing of $60 per MWh, subject to a 2.5% annual escalator.
The approximate first-year cost is $905,000. The Agreement term is for 15 years and is scheduled to commence on January 1, 2024.
IMPACT ON BUDGET:
Sufficient funds are included in APU’s Fiscal Year 2023/24 restricted Electric fund budget, with future years subject to City Council approval of budget appropriations.
Respectfully submitted,
Dukku Lee
Public Utilities General Manager
Attachment:
1. Haypress Hydroelectric Project Renewable Power Purchase Agreement