Authorize Intergovernmental Agreement with Eugene Water and Electric Board for scheduling services for the Portland Hydroelectric Project not to exceed $1,040,000
The City of Portland ordains:
Section 1. The Council finds:
- The City’s Hydroelectric Project (Project) is located on the Bull Run River. The Project is regulated by the Federal Energy Regulatory Commission and the City holds the Project’s energy generation rights.
- In September 2017, the Bureau of Hydroelectric Power (Hydro) entered into an Intergovernmental Agreement with Eugene Water and Electric Board whereby EWEB provides power scheduling services to operate the Project.
- The 2017 Intergovernmental Agreement set a flat monthly fee for Eugene Water & Electric Board’s services in the amount of $7,000, with an annual increase of 3% on January 1 following the first anniversary of the effective date.
- In September 2020, Hydro was notified by Eugene Water & Electric Board that the cost to continue performance of the scheduling services had increased. Consequently, Eugene Water & Electric Board requires a new flat monthly fee of $16,000 to continue scheduling services on behalf of the Project.
- Staff from Hydro sought informal pricing quotes from the few companies with the external capacity to provide similar scheduling services; each initial quote was equivalent to or higher than Eugene Water & Electric Board’s new monthly flat fee rate. Eugene Water & Electric Board costs have been determined to be reasonable for these services.
- The Intergovernmental Agreement’s initial term is for a duration of five (5) years and will be effective July 1, 2022, through June 30, 2027. The Intergovernmental Agreement will be automatically renewed thereafter for successive one (1) year terms as agreed upon by Hydro and Eugene Water & Electric Board.
- The new Intergovernmental Agreement provides Eugene Water & Electric Board a flat monthly fee in the amount of $16,000. The monthly fee will increase annually by 3% beginning on January 1, 2024, following the first anniversary of the effective date of the Intergovernmental Agreement.
- The not-to-exceed amount of the Intergovernmental Agreement is $1,040,000. Funding in the amount of $192,000 is available in the FY 2022-23 Budget. Additional funding will be requested in Fiscal Year 2023-24 through 2026-27 Budgets and any subsequent fiscal years upon annual renewals.
NOW, THEREFORE, the Council directs:
- The Portland Water Bureau Director is authorized to execute on behalf of the City an Intergovernmental Agreement with Eugene Water & Electric Board to provide scheduling services for the Project, in a form substantially in accordance with the attached Exhibit A and as approved by the City Attorney’s Office.
- Amendments increasing the compensation to the Eugene Water & Electric Board under the Intergovernmental Agreement may be agreed to and executed by the Portland Water Bureau Administrator up to twenty-five percent (25%) of the current flat monthly fee, provided that such increase is available within the approved budget. Any increase exceeding twenty-five percent (25%) of the current flat monthly fee requires City Council approval.
- The Mayor and Auditor are authorized to draw and deliver checks chargeable to the Water Fund when demand is presented and approved by the proper authorities.
Official Record (Efiles)
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed by Council
Auditor of the City of Portland
Mary Hull Caballero
Impact Statement
Purpose of Proposed Legislation and Background Information
The City of Portland’s Hydroelectric Project (Project) is located on the Bull Run River, approximately ten miles northeast of Sandy, Oregon. The Project falls under the jurisdiction of the Federal Energy Regulatory Commission (FERC). The Bureau of Hydroelectric Power (Hydro), assigned with the Portland Water Bureau, desires to purchase certain power scheduling and dispatch services from Eugene Water & Electric Board as may be required in the operation of the Project. Hydro has exclusive generation rights to the energy.
Scheduling and dispatch are a critical daily operational and contractual element required to schedule and send the hydroelectric power generated at the Project to Portland General Electric (PGE). The City’s Power Sales Agreement with PGE requires these services to be provided by the City. The City does not have the capability to perform these services.
Hydro has had an Intergovernmental Agreement with Eugene Water & Electric Board to provide hydroelectric power scheduling and dispatch services for the Project for the last five (5) years. The existing Intergovernmental Agreement is expiring, and the terms and conditions need to be updated. Hydro and Eugene Water & Electric Board have a mutual desire to continue these services by entering into a new Intergovernmental Agreement.
Hydro desires to enter a new Intergovernmental Agreement with Eugene Water & Electric Board for the required scheduling and dispatch services. City Code allows Hydro to enter this Intergovernmental Agreement with Eugene Water & Electric Board under the conditions described in Code Section 3.110.010, Ordinance No. 147822.
Financial and Budgetary Impacts
Hydro will provide Eugene Water & Electric Board a flat monthly fee in the amount of $16,000. The monthly fee will increase annually by 3% beginning on January 1 following the first anniversary of the effective date of the Intergovernmental Agreement.
The not-to-exceed amount of the Intergovernmental Agreement is $1,040,000. Funding in the amount of $192,000 is available in the FY 2022-23 Budget. Additional funding will be requested in Fiscal Year 2023-24 through 2026-27 Budgets and any subsequent fiscal years upon annual renewals.
The Intergovernmental Agreement’s initial term will be for a period of five (5) years and will be effective July 1, 2022, through June 30, 2027. This Intergovernmental Agreement will be automatically renewed thereafter for successive one (1) year terms as agreed upon by Hydro and Eugene Water & Electric Board.
The proposed Intergovernmental Agreement will not result in a change in the staffing levels to Hydro.
Community Impacts and Community Involvement
A public involvement assessment was conducted on this Project, and it was decided that public outreach was not needed because this work occurs inside the watershed and does not affect the community surrounding the watershed.
100% Renewable Goal
This Intergovernmental Agreement facilitates the ability of the Project to continue to produce and sell renewable energy in the form of hydroelectric power to PGE for regional use. On average the Project produces enough hydroelectric energy to power roughly 10,000 households in the greater Portland area each year. Hydroelectric plants are a carbon-free generation resource. As it is fueled by water, the Project as a part of the Northwest's hydroelectric power base does not produce air pollution or greenhouse gas emissions.