Scottsdale City Council has adopted Resolution No. 10525 authorizing Mayor Jim Lane to execute an agreement between the municipality and the Arizona Power Authority for the purchase of Boulder Canyon Project (Hoover) power.
The measure was approved on consent at the Aug. 30 regular city council meeting.
In addition, the agreement authorized the city manager or designee to execute any necessary, non-substantive contract amendments relating to a proportional increase in the city’s Hoover power allocation resulting from relinquishment of Hoover power by another entity.
Also, the city manager or designee can executive electric service agreements and bill crediting agreements with APS/SRP to effectuate Scottsdale Water’s operational use of Hoover power.
Scottsdale Water annually requires an average of 38,000 kilowatts and over 140,000,000 kilowatt hours of electrical power to continuously provide high quality, reliable utility services, according to the Aug. 30 city council report.
Power is provided through a combination of both Arizona Public Service and Salt River Project.
“Retail purchase of electrical power has an annual fiscal impact to Scottsdale Water’s utility operations of more than $14,000,000,” the report states.
In an effort to diversify its energy supply portfolio and achieve power cost savings, Scottsdale Water submitted an application in 2014 seeking an allocation of low-cost renewable hydro-power generated from Hoover Dam to meet a portion of its required annual energy needs.
Among all new applicants, Scottsdale Water was successful in receiving the second largest allocation of Hoover Power to an Arizona municipality.
On Sept. 30, 2017, all existing federal and state contracts for Hoover Power expire. New contracts will begin on Oct. 1, 2017.
Contracting and purchase of this renewable energy resource will be available through the Arizona Power Authority. Then, the APA enters into contracts with Arizona entities for the sale and use of that power. Hoover power contracts are for a duration of 50 years. Transmission of the Hoover energy would be effected through a service arrangement with APS or SRP.
“This agreement would replace approximately 3.7 percent of that total electric grid supply power with renewable energy,” said Scottsdale Water Systems Advisor, Stephen Rot, during the Aug. 30 meeting. “To narrow that focus a little bit, we would initially anticipate utilizing full use of that Hoover power at the Scottsdale Water Campus.”
The Scottsdale Water Campus is by far the single largest consumer of electrical energy the city has, said Mr. Rot.
“The delivery and use of Hoover power at the Scottsdale Water Campus is by far the single largest consumer of electrical energy that we have,” he said. “It would equal approximately 12.7 percent of the annual energy use at that facility.”
The contract with Hoover would save approximately 2 cents per kilowatt hour. This results in an estimated net savings of $3.9 million over the entirety of the agreement, or $80,000 per year, said Mr. Rot.
Scottsdale Councilman David Smith said his reasoning for pulling the consent item to be presented during the meeting was to give recognition of the work Scottsdale Water has done.
“I wanted citizens to know you’re working on their behalf to save money,” said Mr. Smith.
“A lot of citizens probably don’t even realize the quantity of electricity it takes to produce good lean water here in the city. And your efforts to find not only a renewable source, a clean source but in fact a source that saves money for the citizens is to be recognized and applauded.”