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HomeMy WebLinkAbout~Master - Contract for Gas Transport Services to City's Power Plant RESOLUTION NO. 15-634 RESOLUTION APPROVING CONTRACT FOR GAS TRANSPORT SERVICES TO POWER PLANT FOR GAS CONVERSION PROJECT FOR THE CITY OF AMES WHEREAS, the Ames Municipal Electric System (AMES) is in the process of converting both of its coal-fired generators over to use natural gas,and once the units are converted,AMES will typically burn 12,000 MMBtu of natural gas daily along with refuse-derived fuel to generate the electricity; and, WHEREAS,this contract is for the purchase of 14,000 MMBtu/per day of natural gas Firm Throughput Service for nearly a 10-year contract period(January 1,2016,to October 31,2025);and; and, WHEREAS, it should be noted that this contract is for the purchase of the transportation of the gas to Ames and does not include the natural gas commodity; and, WHEREAS, the City has already contracted for the delivery of natural gas from a major pipeline which passes through Story City, Iowa, to the Power Plant, and that contract is with Interstate Power&Light/Alliant; and, WHEREAS,this second leg of delivery is to arrange transport service from Northern Natural Gas Company(NNG) which owns/operates the major pipeline in the area; and, WHEREAS,NNG is the primary provider-of-service in the area, so the City is pretty much a captive customer for service, having limited negotiation ability; and, WHEREAS, the City's gas consultant and Electric Services staff have negotiated a final contract, and the estimated cost of this service per year is between $952,650 and $1,111,425 depending on the final amount of service needed(12,000— 14,000 Dth per day); and, WHEREAS, staff has received EUORAB's endorsement of the Firm Throughput Service Agreement with NNG and directed staff to forward the agreement to the City Council for approval; and, WHEREAS,the City Council is being asked to approve a multi-year agreement at this time, rather than a one-year contract with renewal options. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the 10-year contract with Northern Natural Gas Company for firm natural gas transport service to the City's Power Plant in the estimated amount of$1,111,425 per year is hereby approved. ADOPTED THIS 13`h day of October, 2015. A. tom• ��� Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Gartin Seconded by: Corrieri Voting aye: Betcher, Corrieri, Gartin, Goodman,Nelson, Orazem Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 13t1i day of October, 2015.