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Light Plant Superintendent Briefs Utility Board on Tri-State Power Purchase Agreement

 

 

The Lamar Utilities Board met without sufficient members to form a quorum this past Tuesday, June 12, so no official votes could be taken regarding purchase order approval or payment of bills. Instead, Light Plant Superintendent, Houssin Hourieh provided details for the on-going Power Purchase Agreement between ARPA, Arkansas River Power Authority and Tri-State G & T.

Each of the six ARPA member municipalities must approve the agreement before it can move forward. The timeline suggests the final PPA should be reviewed by mid June and individual ordinances would be approved on second reading by mid to late June.  The ordinances would be in effect thirty days allowing the transaction to be closed by the end of July and power deliveries from Tri-State G & T and SECPA would commence on August 1st.

Hourieh told the LUB that differences between the parties remain over how the required minimum sales are determined and some questions regarding a member’s potential decision to base some power supplies from renewable sources.

The measurement period in negotiations is now based on the average annual sales per individual city member from 2015 to 2017 and would be a certain level of kWh’s per city. Falling below that level would have any delinquent city billed for the balance.  The proposed minimum for Lamar, La Junta and Trinidad is 91% and for 85% for Holly, Las Animas and Springfield.  Should sales rebound the following year (or anytime thereafter) the minimum annual sales would no longer be in effect. At that level, the loss of load for Lamar would be 7,750,000 kWh, with La Junta just behind at 7,500,000 kWh.  By comparison, Holly’s loss of load estimate is 1,300,000 kWh.

When asked what circumstance could create such a downturn in power purchases, Hourieh suggested that could have occurred with the loss of Neoplan USA in Lamar as it was a major power customer. Lamar Mayor Roger Stagner pointed out that since that time, Lamar Light and Power has a more diverse customer base.

Additional discussions are taking place on how real assets, such as the Lamar Repowering Project would be accorded to member cities with Lamar being impacted in that regard, as well as the ownership and value of its wind turbine. Springfield owns the other turbine in the group, while Holly has a diesel generator and Trinidad has three.  Hourieh said those discussions are just getting underway for all ARPA board members.  The next Lamar Utility Board meeting will be held on June 26th at which time the board will act on payment of bills.

By Russ Baldwin

Filed Under: City of HollyCity of LamarConsumer IssuesEconomyFeaturedUtilities

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