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File #: 3027-2018    Version: 1
Type: Ordinance Status: Passed
File created: 10/29/2018 In control: Public Utilities Committee
On agenda: 12/3/2018 Final action: 12/6/2018
Title: To authorize the Director of the Department of Public Utilities to approve an amendment to an existing power supply agreement with AEP Energy Partners, Inc.; and to declare an emergency. ($0.00)
Attachments: 1. ORD 3027-2018 - Purchase Power - Third Amend to Master Purch Pwr & Sale Agreement w-Attach C, 2. ORD 3027-2018 - Purchase Power - Third Amend - Addt'l Info form
Explanation

This legislation authorizes the Director of the Department of Public Utilities to approve an amendment to an existing power supply agreement with AEP Energy Partners, Inc. This power supply agreement currently provides power for the City’s electric customers through the Division of Power. The agreement was initially authorized by Ordinance 2289-2012 in October, 2012, and was awarded after a period of bidding and contract negotiation. Actual supply began on January 1, 2017 and is expected to continue through December 31, 2020. Part of this agreement calls for passing-through certain costs from the regional electric grid operator, PJM Interconnection, LLC. These costs are related to transmission, reliable capacity, and other ancillary grid functions. PJM acts as a Regional Transmission Operator (RTO) under the authority of the Federal Energy Regulatory Commission (FERC). In the course of operating under the agreement, a disagreement has arisen over the intent of the contract document to address the energy associated with transmission losses, and the party responsible for its cost. Additionally, PJM has changed its cost allocation formulas for certain items covered by the power supply agreement, and new charges, not presently covered by the agreement, are expected to be assessed by PJM in the upcoming months. The Department’s outside legal counsel has worked with AEP Energy Partners to mutually develop the proposed amendment. The amendment addresses these concerns by putting sharing formulas in place, and directs that partial refunds be made to the City for past amounts paid by the Division to AEP Energy Partners. Also, from time to time, certain capacity credits may accrue to the City because its power supply is obtained through the PJM RTO process. This amendment authorizes AEP Energy Partners, during the agreement’s term and with the Division’s consent, to sell these credits if beneficial to the City.

SUPPLIER: AEP Energy Partners, Inc...

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