HomeMy WebLinkAboutReso 2000-200 - Combustion Turbine Generator e .
RESOLUTION NO. 2000- Za o
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING AUTHORIZING CONSTRUCTION OF A COMBUSTION
TURBINE GENERATOR AND HEAT RECOVERY STEAM
GENERATOR SYSTEM AND ANCILLARY FACILITIES AT THE
REDDING POWER PLANT, AND ENTERING INTO CONTRACTS
WITH ALSTOM.
WHEREAS:
A. The mission of the Redding Electric Utility (REU) is to provide its citizens with a long-term,
reliable and safe electric supply at competitive rates, with local control of its electric supply.
B. Due to contract expirations with Western Area Power Administration and PacifiCorp, the REU
must obtain new electric resources. In April 2000, REU issued a Request for Proposals (RFP) for
additional electric resources (RFP No. 3368). The RFP provided wholesale electric market bidders with
all the details of Redding's future electric needs, as well as REU's existing resources, including local
generation and transmission assets. The RFP sought innovative approaches to supplying Redding's future
energy needs in a cost-effective,energy-efficient manner.
C. To increase REU's local generation capabilities by constructing an additional generation unit at
the Redding Power Plant, REU began negotiations with the low RFP proposer, ALSTOM POWER, INC.
(ALSTOM), for construction of a 43-megawatt (MW), combustion-turbine-generator and heat-recovery-
steam-generator(HRSG) system and ancillary facilities.
D. The addition of the Project will make approximately 140 MW of generating capacity available
at the Redding Power Plant — nearly 45 percent of REU's total power supply needs. This local resource
will improve REU's existing high level of system reliability. The increased local generation serves as
`insurance' against the loss or failure of the high-voltage transmission lines that are relied on to deliver
power throughout the state and into Redding. This local generation provides increased local control of
REU's supply and an increased ability to serve customers.
THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF
REDDING HEREBY AUTHORIZES:
1. The construction of a new combustion turbine generator and heat recovery steam generator
system and ancillary facilities at the existing Redding Power Plant.
2. Entering into a Public Works Contract with ALSTOM for the purchase and construction of a
43-MW, combustion turbine generator and HRSG system and ancillary facilities, for a fixed
price of$32.2 million, as recommended by the City Manager and Electric Utility Director, and
approved as to form by the City Attorney. Construction is to be completed by the summer of
2002.
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3. The City Manager is authorized to approve Project construction change orders for Item 1 work,
if needed, up to four percent (4%) of the ALSTOM Contract.
4 Entering into a 15-year lease agreement with ALSTOM for the catalyst, and maintenance
oversight, that has also been recommended by the City Manager and Electric Utility Director,
and approved as to form by the City Attorney. Under the lease agreement, for $650,000 per
year, ALSTOM will guarantee the steady state performance of the SCONOx system to meet the
air quality permit requirements and replace the catalyst as needed for the term of the agreement.
5. The Mayor to sign (a) the Public Works Contract with ALSTOM; (2) the Catalyst Lease
Agreement with ALSTOM; and (3) facilitating documents for a backup line of credit in the
event the Project cannot be fully funded with REU's retained earnings. The Council further
directs the City Clerk to attest the Mayor's signature and affix the seal of the City of Redding to
the appropriate documentation.
6. A full-time Project Manager position at a salary level not to exceed $10,000 per month for the
duration of the Project. This position would sunset no later than 180 days after the Project goes
into commercial service.
I HEREBY CERTIFY that the foregoing resolution was introduced, read and adopted at a special
meeting of the City Council on the 12`h day of December 2000 by the following vote:
AYES: COUNCIL MEMBERS: Cibula, Kight, Pohlmeyer, Stegall and McDonald
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
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DAVID L c�EORGEr ayo /
Attest: Form Approved:
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Connie Strohnayer, City Clerk W. Leonard Wingate, C Attorney
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