Explanation
BACKGROUND: This legislation authorizes the Public Utilities Director to modify Contract Numbers CT-07199 and CT-009743 with American Municipal Power-Ohio, Inc. (AMP-Ohio) for the purchase of wholesale electricity. This legislation also authorizes the Public Utilities Director to sign an agreement to amicably resolve a disputed amount owed to AMP-Ohio for electricity and associated energy purchased from the City of Shelby from June 1, 2001 through June 30, 2002. AMP-Ohio asserts that the City of Columbus owes $218,200.24 for the delivery of electricity and associated energy from the City of Shelby. The City of Columbus, Department of Public Utilities, Division of Electricity, asserts that it is not liable to AMP-Ohio for said energy. In an effort to resolve the dispute, each of the three parties will agree to assume responsibility for one third of the amount being disputed. The City of Columbus, Division of Electricity, will agree to pay to Amp-Ohio $72,733.34, in six equal monthly installments of $12,122.22 each. This amount will be included in the power supply invoices issued by Amp-Ohio to Columbus for the months of May 2004 through October 2004.
After review of anticipated purchase power needs for 2004, it has been determined that an increase of $400,000 is necessary for power purchased from the AMP-Ohio Gorsuch contract and an increase of $800,000 for the AMP-Ohio generic contract is needed to cover purchase power costs as well as the aforementioned settlement of the disputed charges.
Emergency action is requested in order that the resolution agreement may be signed and the payments may begin as scheduled.
FISCAL IMPACT: The budget authority for purchase power in 2004 is $37,327,414 and is sufficient to cover the aforementioned costs. Ordinance 0165-2004, passed February 23, 2004, authorized the expenditure of $28,427,414 for power purchased from Constellation Power Source, Inc. A contract increase of $27,000,000 has been processed and the balance of $1,427,414 on the auditor's certificate has been cancelled, thus providing sufficient funds to cover the AMP-Ohio contract increases. There is no increase in the total cost of purchase power for 2004.
Title
To authorize the Director of Public Utilities to sign an agreement between the City of Columbus, the City of Shelby and American Municipal Power-Ohio, Inc. to resolve a disputed amount owed to American Municipal Power-Ohio, Inc. for electricity and associated energy and to modify contracts for the purchase of wholesale electric power from American Municipal Power-Ohio, Inc. for the Division of Electricity; to authorize the expenditure of $1,200,000.00; and to declare an emergency. ($1,200,000.00)
Body
WHEREAS, the City of Columbus is a member of American Municipal Power-Ohio, Inc. (AMP-Ohio), a non-profit organization whose membership includes Ohio municipalities that own and operate municipal electric systems, including the City of Columbus; and
WHEREAS, the City and AMP-Ohio have entered into a generic contract agreement dated March 11, 1986, Contract Number CT-07199, under which certain services may be provided by AMP-Ohio to the City via schedules pursuant thereto; and
WHEREAS, the City and AMP-Ohio have entered into a contract agreement dated July 11, 1988, Contract Number CT-09743, for energy supplied from the Gorsuch Station; and
WHEREAS, AMP-Ohio purchased electricity and associated power from the City of Shelby; and
WHEREAS, AMP-Ohio asserts that it is due payment from the City of Columbus for the delivery of electricity and associated energy from the City of Shelby to the City of Columbus; and
WHEREAS, the City of Columbus, Department of Public Utilities, Division of Electricity, asserts that it is not liable to AMP-Ohio for said electricity and associated energy; and
WHEREAS, the three parties have agreed upon a resolution of the dispute by equally sharing in the cost of the electricity and associated energy; and
WHEREAS, it is necessary to modify the existing contracts to provide for wholesale electric power and associated services required in 2004 under the provisions of Section 329.16, Columbus City Codes, 1959; and
WHEREAS, emergency action is necessary in order that the resolution agreement be signed and payments may be made in accordance with the terms of the agreement; and
WHEREAS, an emergency exists in the usual daily operation of the Division of Electricity, Department of Public Utilities, in that it is immediately necessary to enter in to a resolution agreement with American Municipal Power-Ohio, Inc. and the City of Shelby for the immediate preservation of the public health, peace, property, safety and welfare; no, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of Public Utilities be and is hereby authorized to enter into an agreement with American Municipal Power-Ohio, Inc. and the City of Shelby to resolve a disputed debt for electricity and associated energy.
SECTION 2. That the Director of Public Utilities be and is hereby authorized to modify contracts with AMP-Ohio by increasing the contract amounts by $1,200,000.00, or so much thereof as may be needed, as follows:
CONTRACT NUMBER AMOUNT
CT-07199 $800,000
CT-09743 (Gorsuch) $400,000
SECTION 3. That these contract modifications are in compliance with Section 329.16 of Columbus City Codes, 1959.
SECTION 4. That to pay the cost of the aforesaid contract modifications the expenditure of $1,200,000.00, or so much thereof as may be needed, is hereby authorized from Division of Electricity Operating Fund 500, Division No. 60-07, OCA Code 606715, and Object Level Three Code 2233.
SECTION 5. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if Mayor neither approves nor vetoes the same.