Talon News - Good Local News

By Debbie Israel
TALON 

CITY HOLDS SPECIAL MEETING TO DISCUSS $2 MILLION PREPAYMENT

Also more talk about utility rates

 

Debbie Israel

Ken George, Electric Director for the City of Aztec, talk to commissioners about electricity costs

by Debbie Israel

On May 15, Aztec City Commissioners held two meetings, the first, a workshop to further discuss utility rates; and the second, a special meeting to discuss a proposed amendment to the Purchase Power Contract with Guzman Energy.

The utility workshop was full of information, and Finance Director Kathy Lamb provided a spreadsheet in which she could change some of the proposed numbers around and see what different increase rates would do to the funds. According to City Manager Josh Ray, the meeting was to talk about alternatives again, and to get direction from commissioners on the next step for staff. Commissioners are using the input they have had from citizens and working to keep the rates manageable. They talked about possibly moving some of the bigger projects out in order to be able to make rate increases in smaller increments, possibly over a longer period of time. Mayor Sally Burbridge said "We're not at the point yet of a livable rate that our customers can afford."

Commissioner McClure questioned Ray about the most important of the major water projects at this time, to which he replied that the dredging of the #1 reservoir was probably most important. The reservoir is already being drained in preparation for getting bids on the dredging project.

Staff will continue working toward a plan that is agreeable to all commissioners.

The special meeting, scheduled to begin at 6:30, was called to discuss a proposal from Guzman Energy, amending the city's purchase power agreement with the company. Under the current agreement, they city pays Guzman Energy .0495 cents per Kilowatt hour (KWH) for power delivered to the Shiprock substation. This price include the payment for the construction of the solar farm, which has been in operation for almost one year.

According to the staff summary, prepared by Ken George, Electric Director for the City, Guzman has offered to reduce the price of the power to .04442 per KWH if the city pays two million dollars up front, instead of over the next six years. By amending the agreement, the city would also be able to purchase more power from Western Area Power (WAPA) at a lower cost to supplement the solar. Currently, the city's purchase of power from the Western Replacement Power is limited in the agreement with Guzman.

George explained that if we prepay the $2 million, it would potentially save the city as much as $600,000 over the next six years. He would be able to purchase power at a much lower price from WAPA if commissioners approve the amendment to the contract with Guzman. He also explained that there is always a risk, that the power market could go crazy, but over the past two years, it has been very stable. He expects the cost of power to remain stable because the "coal-carbon tax is off the table. Power marketers aren't thinking they will have to get rid of their plants."

The item was postponed so that all commissioners have time to study the numbers and the proposals. The next regular commission meeting is scheduled for May 23, beginning at 5:15. This item is included on the agenda. The first 45 minutes of the meeting will be open for questions from commissioners, staff and the general public.

Also included in the next agenda will be more discussion on the rate study and budget; along with a zone change request from Sam Blue for Mosaic Academy.

 

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