SUBJECT
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Approve the Duke Energy Master Service Agreement for Standby Power Generation for the Southeast Wellfield Water Production Facility (Action)
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DESCRIPTION
As part of the design of the Southeast Wellfield Water Production Facility (WPF), various options for providing backup power were evaluated to reduce capital cost and minimize the number of standby power generators needed to support Phase 1 and future plant expansions. These options included 1) low voltage power distribution with PRWC-owned generators, 2) medium voltage power distribution with PRWC-owned generators, and 3) a backup power system from Duke Energy One, Inc. (Duke). After consideration of capital versus long-term operating and maintenance costs, the Duke option was selected for incorporation into design of the WPF.
The Duke option is a managed service approach to providing backup power generation with no upfront capital expenses, overhead and maintenance. Under this Master Services Agreement (MSA), Duke will design, install, operate, and maintain the backup power system for the life of the contract. The backup power system will be designed to accommodate future WPF expansions.
The MSA is for a 20-year term with a monthly managed service fee of $166,625. To offset the cost of this program, the PRWC will participate in Duke Energy Florida's IST-2 rate program which is available to customers with interruptible service contracts. Duke has estimated that the savings from this program could approach $100,000 per month depending on actual energy consumption.
The MSA has a buyout provision in the event that the PRWC desires to terminate the agreement prior to the completion of the 20-year term. A buyout payment schedule is included in Exhibit 1 to the MSA based on the depreciated value of the equipment. At the end of the 20-year term, the PRWC can elect to purchase the equipment at fair market value or renew the MSA with Duke.
RECOMMENDATION
Request Board approve a Master ...
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