Power contract should keep rates steady | SierraSun.com

Power contract should keep rates steady

Renee Shadforth

After weeks of posturing via fax and e-mail until 2 a.m., Power Supply Engineer Steve Hollabaugh can sleep a little better: the Truckee Donner Public Utility District has a new power contract.

“Cold weather on the East Coast caused prices to get very volatile. It’s made me very nervous. I’ve lost some hair over the last few days worrying about it,” Hollabaugh said at the March 5 board meeting.

The directors voted unanimously to choose Constellation Power Source Inc. as the district’s power supplier for the next four and a half years, from April 1 through Dec. 31, 2007.

After sending out requests for power in January, district staff received an indication of interest from six suppliers. At the end of February, staff was in negotiations with three bidding companies. At the meeting, Hollabaugh presented the board with Constellation; the company he and staff thought presented the best bid.

The other two companies’ bids remained undisclosed, so the board had to trust district staff had made a good decision, Hollabaugh said.

“Can we know who the other bidders are?” asked director Pat Sutton. “Can’t we at least know the range (of the bids)?”

The district’s attorney, Steve Gross, said there isn’t a law requiring staff to disclose the other companies’ bids.

Hollabaugh estimated the contract with Constellation, with rates at $49.95 per megawatt-hour, will prevent the district from having to raise its customers’ energy bills.

“I was worried that if [the bid] came in much higher, we’d have to have a rate increase around 2004,” he said. “This rate just barely makes it below the margin.”

In December, the district decided to raise its customers’ electricity rates in anticipation of a settlement with IdaCorp Energy. In January, the TDPUD agreed to pay $26 million to the energy supplier by April 4.

“If we didn’t get the settlement with Idaho (Energy), we would’ve had to raise rates 30 percent more than they are now,” Hollabaugh said.

The district will pay off the settlement with IdaCorp by issuing certificates of participation and, in effect, the increase in rates.