Pasadena Water and Power recommends an amendment to the city’s Transmission Service Agreement (TSA) with the Los Angeles Department of Water and Power (LADWP) to extend it for a period of 47 years after it expires on September 30.
The city services committee will discuss the recommendation on Tuesday, before forwarding it to city council next week.
This proposed change will be the last of four one-year extensions to the contract that was signed in October 1991 and first expired in 2017.
Pasadena has received electricity from the Boulder Canyon Project, also known as the Hoover Project, since the Hoover Electrical Service Contract was signed in 1941. In 1987, the contract was amended to run until 2017. In 2017 , the Hoover Power contract was amended to extend until 2067.
The TSA that PWP signed with LADWP in 1991 provides 26 megawatts of transmission service through which Pasadena imports 20 MW of power and capacity from PWP’s Hoover Dam hydroelectric right, as well as power from short-term purchases of various Southwestern utilities in the California Independent System Operator Network (CAISO) to meet customer load.
The 26 MW transmission service gives PWP additional flexibility to receive excess Hoover power, if available.
The PWP recommends that the extension be until September 30, 2067. This would correspond to the duration of the Hoover electrical service contract. PWP said the Burbank and Glendale water and power utilities are also executing similar transmission service agreements with the LADWP.
Regarding tariffs, PWP stated that LADWP had not increased its tariffs for the past 30 years, even when it was allowed under the terms of the contract to apply annual increases. Until Amendment 4 which ends in September, the combined rate was $ 1.20 per kilowatt-month (kw-mo).
The proposed new long-term TSA amendment proposed a rate of $ 2.30 per kw-mo with a biennial escalator, which is the consumer price index from the Los Angeles Bureau of Labor Statistics, PWP said. The LA CPI is linked to the long-term inflation rate, currently forecast at around 2.65%.
PWP said the proposed rate is lower than the current Open Access Transmission (OATT) rate, which is $ 2.936 per kw-mo in July.
“This long-term TSA rate will ensure price stability in the future, and approximately four percent of the city’s load will be passed through this TSA,” PWP said in the report. “As there are currently transient inflationary pressures, it is recommended that the rate be secured before TSA Amendment 4 expires on September 30, 2021.”
The report also indicates that, compared to the current LADWP OATT, the City could save an average of 28% per year, or approximately $ 250,000, over the 47-year life of the proposed amendment.
Assessing the tax impact, PWP said the total cost of the action will range from $ 652,740 per year during the initial term of the amendment, to around $ 1,066,740 per year by the end of the amended term. in 2067.