Title
Electric Transmission Service Contract with City of Alachua (B)
**This item was presented to the UAB on March 10, 2022.**
Explanation
GRU’s long-standing Wholesale Power Agreement (WPA) with the City of Alachua will expire on March 30, 2022, and will not be renewed. However, staff has negotiated a Transmission Services only Agreement, which will go into effect on April 1, 2022, to deliver energy and capacity to Alachua substation. Under this agreement, the City of Alachua will pay GRU for use of its transmission network for the delivery of energy from another provider. Unlike the existing WPA, wheeling power to Alachua through GRU’s transmission system involves little financial or regulatory risk for GRU, and the proceeds from GRU’s wheeling service may help to reduce rate pressure for all electric customers.
The switch from a WPA to a Transmission Services agreement was precipitated by Alachua splitting its electric system into two areas served by separate transmission systems. For the remaining term of GRU’s existing WPA, GRU has served the original substation and another provider has served the new substation. In conjunction with this split, Alachua issued an Invitation to Negotiate (ITN) for power to be served at either or both of these substations. GRU submitted a response to the ITN but was not chosen. GRU staff then successfully negotiated the transmission services agreement.
Fiscal Note
The Transmission Services Agreement is expected to net approximately $265,000 in annual revenues, subject to increase in tandem with Alachua Substation load and inflation.
Recommendation
Authorize the General Manager or his designee to execute the Agreement between the City of Gainesville, d/b/a GRU, and the City of Alachua for the delivery of energy and capacity by the City of Alachua from FPL to GRU through the transmission system of GRU, subject to approval by the City Attorney as to form and legality.
At their March 10th, 2022, meeting, the UAB vote...
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