Req.#13246
O"INANCE NO. 2 8 0 71
1 AN ORDINANCE relating to Tacoma Power; revising and ratifying rates
charged for wholesale transmission and ancillary services provided
2 pursuant to Tacoma Power's Open Access Transmission Tariff.
3 WHEREAS the City of Tacoma, Department of Public Utilities, Light
4 Division (d.b.a. "Tacoma Power"), approved its original Transfer Agreement and
5
Connection Agreement as an Open Access Transmission Tariff ("OATT") on
6
7 November 15, 2000, pursuant to Public Utility Board Resolution No. U-9568,
8 which set forth the terms, conditions, and charges by which Tacoma Power
9 provides wholesale transmission service, and is based on the Federal Energy
10 Regulatory Commission ("FERC") pro forma OATT, and
1 1
WHEREAS FERC revised the pro forma OATT, and Tacoma Power
12
1 3 voluntarily committed to adhere to certain "Comparability Guidelines" in its
14 provision of transmission service through revisions to its CIATT, and
1 5 WHEREAS Tacoma Power provides wholesale transmission service
16 under the terms, conditions, and rates of its CIATT to two customers: lberdrola
1 7
Renewables, Inc. ("Iberdrola") and the Bonneville Power Administration ("BPA"),
1 8
and
19
20 WHEREAS proposed rates for the two main forms of transmission
21 services, Point To Point and Network Integration, along with proposed rates for
22 the six ancillary services, have been developed based on recent financial and
23
operations data to reflect Tacoma Power's current cost of providing the
24
25 services, and
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WHEREAS Tacoma Power received comments from lberdrola and BPA
on the proposed revisions, made changes in response to the comments, and
2
collaborated with both customers to ensure an accurate understanding of
3
4 Tacoma Power's current costs, and
5 WHEREAS the proposed rate increases represent additional yearly
6 revenue estimated at $2 million from transmission and ancillary services, and
7 will provide a more prudent level of financial stability for Tacoma Power, and
8
WHEREAS the proposed revisions have been reviewed and are
9
10 recommended for approval, all as described in the memorandum from the
1 1Director of Utilities to the Chairman and the Members of the Public Utility Board
12 and the Mayor and Members of the City Council, dated April 13, 2012, copies of
1 3which are on file with the City Clerk, and
14
WHEREAS, on April 25, 2012, the Public Utility Board approved the
1 5
16 proposed revisions to Tacoma Power's OATT and the associated rates and
1 7charges, and now requests the City Council approve the proposed revisions to
18 the current rates and charges and ratify the prior rates and charges approved
1 9under the 2000 OATT, and
20
WHEREAS it is in the best public interest and prudent utility
21
22 management to approve the proposed revisions and ratify the prior rates and
23 charges; Now, Therefore,
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25
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TPU 10537
46
BE IT ORDAINED BY THE CITY OF TACOMA:
Section 1. That the revisions to the wholesale transmission and ancillary
2
services rates and charges, as set forth in the attached Exhibit "A," are approved,
3
4 and the rates and charges approved under the year 2000 version of Tacoma
5 Power's Open Access Transmission Tariff are ratified.
6 Section 2. That Exhibit "A" shall become effective June 1, 2012 at
7 00:00:00 hours.
8
9 Passed MAY 1 5 2012
10
11 Mayor
12 Attest:
13
14 City Clerk
15
Approved as to form:
16
17
Chief Deputy City Attorney
18
19 Requested by Public Utility Board
20 Resolution No. U-10537
21
22
23
24
25
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TPU 10537
EXHIBIT "A"
1 City of Tacoma
2 Wholesale Transmission and Ancillary Services Rates and Charges
|1013|
|1013|
Transmission and Ancillary Services 2000 Tariff Tariff (eff. June 1,
|1013|
2012 00:00:00 hours)
|1013|
7 Annual Transmission Revenue Requirement $14,041,698 $22,962,043
|1013|
PTP Transmission Service $897/MW-mo $1,243/MW-mo
9 % of NT Load relative to Total Tacoma
1 0 NT Transmission Service Transmission Load multiplied by 1/12
Transmission Revenue Requirement
12
Scheduling, System Control, and Dispatch ($/MWh) $0.58 $0.82
13
14 Reactive Supply and Voltage Control ($/MWh) $0.25 $0.08
15 Regulation and Frequency Response ($/MWh) $0.30 $0.34
16
17 Energy Imbalance ($/MWh) Market Based Rate at the time of deviation
18 Operating Reserves: Spinning ($/MWh) $105.48 $14.45
19
20 Operating Reserves: Supplemental ($/MWh) $105.48 1$14.45
21
22
23
24
25
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TPU 10537
48
CITY CLERK USE ONLY
Tacoma REQUEST FOR Request ?)2-4to
M ORDINANCE r] RESOLUTION Ord./Res. 2 8 071
1. DATE: April 27, 2012
2. SPONSORED BY: COUNCIL MEMBER(s) N/A (if no sponsor, enter "N/A")
3a. REQUESTING 4a. CONTACT (for questions): PHONE:
DEPARTMENT/DIVISION/PROGRAM Travis Metcalfe 253.502.8149
Utilities/Light Division/Power
Management
3b. "Do PASS" FROM [Committee Name] 4b. Person Presenting: PHONE:
F-1 Yes James Russell 253.502.8395
n No
nTo Committee as information only
n Did not go before a Committee 4c. ATTORNEY: PHONE:
3c. DID THIS ITEM GO BEFORE THE William C. Fosbre 253.502.8218
PUBLIC UTILITY BOARD?
Yes, on April 25, 2012
Not required - 11-111
4 'Ve p A t in, eW 1wrte c%t 46@ft- (Utilit4yiIP-1 rector
5. REQUESTED COUNCIL DATE: May 8, 2012
Authorize Tacoma Power to revise the wholesale transmission and ancillary serv
Power's Open Access Transmission Tariff (OATT).
6. SUMMARY AGENDA TITLE: (A concise sentence, as it will appear on the Council agenda.)
Revised Tacoma Power Open Access Transmission Tariff Rates
7. BACKGROUND INFORMATioN/GENERAL DiscussioN: (Why is this request necessary? Are there legal
requirements? What are the viable alternatives? Who has been involved in the process?)
Authorize Tacoma Power to revise the wholesale transmission and ancillary services rates in Tacoma
Power's Open Access Transmission Tariff (OATT).
Tacoma Power provides wholesale transmission service under the terms, conditions, and rates of our
OATT to two wholesale transmission customers; lberdrola Renewables, Inc. (lberdrola) and the
Bonneville Power Administration (BPA). lberdrola has a 45 MW Point-to-Point (PTP) Transmission
Service Agreement that is used to transfer the output of the Simpson Tacoma Kraft Company, LLC
cogeneration facility across the Tacoma Power transmission system to the BPA transmission system.
The second customer is BPA which transmits power across Tacoma Power's transmission system to ten
Load Serving Entities that are embedded within Tacoma Power's service territory. These 10 Load
Serving Entities are often referred to as the Pierce County Mutuals and include; Alder Mutual Light
Company, Eatonville Power and Light Company, Elmhurst Mutual Power and Light Company, Lakeview
Light and Power Company, the Town of Milton, Ohop Mutual Light Company, Parkland Light and Water
Company, Peninsula Light Company, the Town of Steilacoom, and a portion of Lewis County PUD. BPA
has a PTP Transmission Service Agreement covering delivery to most of the Pierce County Mutuals and
a Network Integration (NT) Transmission Service Agreement for delivery to the remaining Pierce County
Mutual loads.
4 9
CITY CLERK USE ONLY
REQUEST (CONT) Request 13-2-Li(oo
Ord/Res 2 807 1
Tacoma Power proposes to revise the OATT rates for our two main transmission services (NT and PTP
transmission service) as well as the rates for the six ancillary services. The proposed OATT rates are
based on recent financial and operations data and are more closely aligned with our current costs for
providing the services. Tacoma Power collaborated with both lberdrola and BPA during the development
of these rates to ensure they had an accurate understanding of our current costs. Where appropriate,
Tacoma Power made revisions to the proposed OATT rates in response to comments of these
customers.
8. LIST ALL MATERIAL AVAILABLE AS BACKUP INFORMATION FOR THE REQUEST AND INDICATE WHERE FILED:
Source Documents/Backup Material Location of Document
a. Memo to Mayor and Members of City
Council dated April 13, 2012
b. Tacoma Power Open Access
Transmission Tariff
C.
9. WHICHOFTHECITY'SSTRATEGicGOALsDOEsTHISITEMSUPPORT?(CHECKTHEGOALTHATBEsTAPPLIES)
A. F1 A SAFE, CLEAN AND ATTRACTIVE COMMUNITY
B. F] A DIVERSE, PRODUCTIVE AND SUSTAINABLE ECONOMY
C. 0 A HIGH-PERFORMING, OPEN AND ENGAGED GOVERNMENT
10. IFTHISCONTRACTISFORANAMOUNTOF$200,OOOORLESS,EXPLAINWHYITNEEDSLEGISLATIVEAPPROVAL:
11. FINANCIAL IMPACT: EXPENDITURE 0 REVENUE
A. No IMPACT (NO FISCAL NOTE)
B. YES, OVER$ 1 00,000, Fiscal Note Attached
C. YES, UNDER $1 00,000, (NO FISCAL NOTE)
Provide funding source information below:
FUNDING SOURCE: (Enter amount of funding from each source)
Fund Number & Name: State city Other Total Amount
If an expenditure, is it budgeted? F@ Yes F] No Where? Cost Center:
Aect
50
cotclerk\ forms \ ReauestResolutionOrdinance.doc nf4- -truly. 1-;4 '1-1_1' IMInImn" I
CITY CLERK USE 0 NLY
Request q
I
Ord/Res 280 71
FISCAL NOTE
Each piece of legislation that has a financial impact or creates positions authority requires a fiscal note. After preparation
by departmental staff, the Budget and Research Division will review the fiscal note and make any necessary revisions
before transmittal to the Legal Department for legislation preparation.
DEPARTMENT: CONTACT PERSON/PHONE: OMEBA CONSULTANT/PHONE:
Tacoma Power Travis Metcalfe - 502-8149
Is it currently budgeted? E-1 Yes E No
Is this a grant? El Yes E No If Yes, n Operating F] Capital
EXPENDITURES:
FUND NAME & NUMBER COST CENTER WBS ACCOUNT 2011-2012 EXPENDITURES
TOTAL
General Fund: Include Department
Purpose: Tacoma Power Wholesale Transmission and Ancillary Service Revenues
REvENUES:
FUND NAME & NUMBER COST CENTER WBS ACCOUNT 2011-2012 REVENUES
Tacoma Power - Fund 565400 5424000 $1,000,000
4700- Revenues
TOTAL,
Notes: Revenues shown at minimum contract amount of $1.0 million per year.
POSITION IMPACT:
POSITION TITLE PERMANENT/PROJECT/ POSITION END DATE 2011 FTE FUTURE FTE
TEMPORARY POSITION
No impact
Totalpositions created or abrogated through this legislation, including FTE impact. FTE impactfor temporary employees is
estimated
5
cotclerk@forins \RequestResoltftionOrdinance.doc Office of the City Clerk (011071201 1)
CITY CLERK USE ONLY
FISCAL NOTE (CONT) Request 02-
Ord/Res 28 0 71
LONG-TERM FINANCIAL IMPACT OF LEGISLATION:
SPENDING PLAN & BUDGET 2011 2012 2013 2014 2015-16 TOTAL
Estimated Revenues $1,000,000 $2,000,000 $2,000,000 $4,000,000 -$9,000,000
TOTAL
FUNDfNG SOURCE 2011 2012 2013 2014 2015 TOTAL
TOTAL
The financial cost of not implementing the legislation:
Not implementing this legislation would represent an opportunity cost equal to the minimum amount of revenue
shown above.
Estimate the cost to the City if the legislation is not implemented, including the potential conflicts with
regulatory requirements, cost avoidance, or other potential costs.
OTHER ISSUES:
52
cotclerk\fonns\RequestResolutionOrdinance.doc Office of tire City Clerk (011071201 1)
TACOMA PUBLIC UTILITIES
3628 South 35th Street 8 0 71
Tacoma, Washington 98409-3192
April 13, 2012
To the Chairman and Members of the Public Utility Board and
to the Mayor and Members of the City Council
RECOMMENDATION
Tacoma Power requests approval by the Public Utility Board and the City Council to
authorize Tacoma Power to revise the wholesale transmission and ancillary services
rates in Tacoma Power's Open Access Transmission Tariff (OATT).
BACKGROUND
Tacoma Power provides wholesale transmission service under the terms, conditions,
and rates of our OATT (attached) to two wholesale transmission customers; lberdrola
Renewables, Inc. (lberdrola) and the Bonneville Power Administration (BPA). lberdrola
has a 45 MW Point-to-Point (PTP) Transmission Service Agreement that is used to
transfer the output of the Simpson Tacoma Kraft Company, LLC cogeneration facility
across the Tacoma Power transmission system to the BPA transmission system.
The Bonneville Power Administration (BPA) uses Tacoma Power's transmission system
to deliver power to ten Load Serving Entities embedded within Tacoma Power's service
territory. BPA has a PTP Transmission Service Agreement with Tacoma Power that it
uses to deliver power to Eatonville Power and Light Company, Elmhurst Mutual Power
and Light Company, Lakeview Light and Power Company, the Town of Milton, Ohop
Mutual Light Company, Parkland Light and Water Company, Peninsula Light Company,
and the Town of Steilacoom. BPA also has a Network Integration (NT) Transmission
Service Agreement with Tacoma Power that it uses to deliver power to Alder Mutual
Light Company and a portion of Lewis County PUD.
Tacoma Power proposes to revise the OATT rates for our two main transmission
services (NT and PTP transmission service) as well as the rates for the six ancillary TACOMA
services. The proposed OATT rates are based on recent financial and operations data IOWIR
and are more closely aligned with our current costs for providing the services. Tacoma------
Power collaborated with both lberdrola and BPA during the development of these rates
to ensure they had an accurate understanding of our current costs. Where appropriate,
Tacoma Power made revisions to the proposed OATT rates in response to comments of
TACOMA
these customers. WATIRJ
TACOMA
5 3 I L
Chairman and Members of the Public Utility Board and
The Mayor and Members of the City Council
April 13, 2012
Page 2
The attached OATT includes the proposed revised wholesale transmission and ancillary
services rates. On an annual basis, Tacoma Power estimates the increased annual
revenues associated with the revised OATT transmission service rates and the revised
ancillary service rates at approximately $2 million and $1 million, respectively.
Tacoma Power requests your approval to revise the wholesale transmission and
ancillary services rates in Tacoma Power's OATT.
Sincerely,
am . Gaines
Director of Utilities/CEO
Attachment
54
28 071
Ordinance No.
First Reading of Ordinance: _MAY - 8 2012
MAY 1 5 2012
Final Reading of Ordinance:
Passed: MAY 1 5 2012
Roll Call Vote:
MEMBERS AYES NAYS ABSTAIN ABSENT
Mr. Boe
Mr. Campbell
Mr. Fey
Mr. Ibsen
Mr. Lonergan
Mr. Mello
Ms. Walker
Ms. Woodards
Mayor Strickland
MEMBERS AYES NAYS ABSTAIN ABSENT
Mr. Boe
Mr. Campbell
Mr. Fey
Mr. Ibsen
Mr. Lonergan
Mr. Mello
Ms. Walker
Ms. Woodards
mayor Strickland
Occagenda@agenda procedures and forms0rdinancevotingrecord.doc