HomeMy WebLinkAboutStudy Session - AES Power Plant - Utility User Tax 5/1/00 NO` _V-)I NV*"J(A)cl , llc
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AES EXPANSION PLANS
• Cle an-burn units 3 and 4
• Overhaul Peaker Unit
• Installation of combined Cycle
Turbines
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• No lant expansion
• Re uce or eliminate emissions
• Re ove visual blight
• Infr ' structure improvements
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RECOMMENDATION
• Direct staff to prepare a resolution
for n upcoming Council agenda to
pla e the issue on the November,
2001 , ballot
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CITY ' S UTIITY USER TAX
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• Rat' is 5%, paid by all power
consumers, including businesses
• Ordinance exempts power plant
• Po ' er plant operated by a regulated
pu lic utility (Edison) until recently
• Now' privately run — energy sold on
opn market
• No ass-through to Huntington
Beapcch consumers
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'STATUS OF NEGOTIATIONS I
• AE offered $200 ,000 per year for 4
yeals, full UUT on any expansion
• Refurbishment of units 3 and 4
• AE� requested City support of
expansion plans
• Desalination Plant - $ 150 million
val e
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STATUS OF NEGOTIATIONS
• City offered phased-in
implementation of full UUT with
guarantees re : screening
• Po sible redevelopment project area
• Ne otiations currently at impasse
FINANCIAL BENEFIT OF UUT
• $ In � million in annual revenue based
upo n current natural gas
consumption
• As private, for-profit company, AES
sh uld compete on same terms as
o th r electrical power generators and
businesses
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FINANCIAL BENEFIT OF UUT
• Sit was purchased due to expansion
pot ntial
• UU revenues from increased gas
usage would result from expanded
site
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• $ 10 million in annual revenue could
� be earmarked for infrastructure on a
pay as you go basis
• Ap roximately $ 15 million in bonding
capability
BALLOT OPTIONS
• 2/3 yote for special tax dedicated to
infrastructure improveme nts
• "A/ "vote — majority vote to impose
general tax, majority advisory vote
earmarking funds for infrastructure
• Mai' rity vote — revenue flows to
Ge eral Fund, no use specifically
identified (recommended by IAC
sub-committee)
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AES CONCERNS
• Annual UUT may force them out of
bu$iness
• Constrained by tolling agreement
vvit . Williams Corporation (annual
revnue is inflexible)
• Mays not be able to refurbish units 3
andl 4
• Claim additional consumer cost