Item Coversheet
Subject: Resolution Approving Purchase of Renewable Capacity and Energy from the Beebe Windfarm for the Electric Department
Reviewed By: Acting City Manager: Dana L. Muscott
Prepared By: Electric Director: Phil Newton

PERTINENT FACTS:
The Electric Department is requesting approval of a resolution to purchase 4.8 megawatts (MW) of capacity and associated energy through the Michigan Public Power Agency (MPPA) under the provision of the existing Energy Services Project agreement from the Beebe Windfarm, Gratiot County, MI.  Power will be supplied as a 15.38% entitlement to the output from thirteen wind turbines beginning in December 2014. The price is specified in the agreement between MPPA and Beebe 1B Renewable Energy LLC and will range from $44.85 per MWh to $71.70 per MWh over the 20 year period of the contract.
 
The Beebe Windfarm is located east of Ithaca, MI. The Beebe 1b Windfarm is an extension of the Beebe 1a project that was developed under contract to Consumers Energy. The original project was completed in 2012. Turbines installed for the project are Nordex N117 2.4 MW turbines. These turbines are expected to generate energy under typical area wind conditions at an average annual capacity factor of 37.3 percent.
 
 


LEGAL ISSUES:
The transaction will take place under the provisions of the Energy Services Project Agreement between MPPA and Bay City and the Renewable Energy Purchase Agreement between Beebe 1b Renewable Energy LLC and MPPA. The agreements have been reviewed and approved by counsel.


TIME SENSITIVITY:
Routine

BRIEFLY DESCRIBE THE NATURE OF THE TIME SENSITIVITY:


FINANCIAL CONSIDERATIONS:
Under typical wind conditions the turbines are expected to generate approximately 15,684 MWh of energy per year. In the initial year with per unit cost of $44.85 the total cost would be approximately $0.7 million. The wind energy will displace alternative purchases from third parties and the MISO short-term market. Exact alternative cost estimates are difficult to make due to unknown wind conditions and fluctuating market prices but the renewable costs are expected to be competitive. The FY2014 budget includes $8,923,129 for Wholesale Purchased Power (582-5710-76900). 
 
Schedule A of the draft Renewable Energy Purchase Agreement for the Beebe 1b Wind Farm (see attachment) shows the $ per MWh price for the 20 year period. Total costs for the twenty year term of the agreement are estimated to be approximately $18 million. 


CITY GOALS:


RECOMMENDED ACTION:
*Commission as a Whole resolution approving purchase of Renewable Capacity and Energy for twenty years from the Beebe Windfarm, located outside of Ithaca, MI, for the Electric Department in the estimated amount of $18,000,000.
RECOMMENDATION:  Approve.

ATTACHMENTS:
Name: Description:
Power_Supply,_20yr_4.8MW_Beebe_Windfarm_Resolution_8-19-13.docx Beebe Windfarm Resolution 8-19-13
Beebe_Draft_Contract.pdf Beebe Wind Farm Draft Agreement
Beebe_Authorization_Letter_Draft_7-15-13.docx Beebe Authorization Letter