CITY OF SEATTLE
ORDINANCE __________________
COUNCIL BILL __________________
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AN ORDINANCE relating to the City Light Department; authorizing the execution of a 16-year power purchase agreement with the Bonneville Power Administration and related agreements.
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WHEREAS, the City Light Department (City Light) has been delegated continuing authority to enter into power supply contracts of up to 60 months in duration; and
WHEREAS, City Light has been required to seek specific ordinance authority to enter into any longer-term power purchase contracts; and
WHEREAS, for several decades, City Light has purchased power from the Bonneville Power Administration (BPA) as a preference customer to meet a portion of its electric load (approximately 40 percent under the current load forecast), and City Light is currently under a 2012 power sales contract that will expire September 30, 2028; and
WHEREAS, BPA is a key regional partner in the economy and environment of the Pacific Northwest by providing revenues from the sale of electricity to pay the annual and capital expenses of the Federal Columbia River Power System, including substantial fish and wildlife restoration costs and debt service to the United States Treasury to repay the Federal government’s investments in the system; and
WHEREAS, BPA initiated its new contract implementation process in 2022 to develop Provider of Choice power sales contracts and to engage a stakeholder process to determine the terms and conditions under which it will offer power to its preference customers after the current power supply contracts expire; and
WHEREAS, City Light staff recommend that City Light purchase an amount not to exceed its Contract High Water Mark (a value that sets the maximum amount of power available at the lowest cost rates throughout the contract term) from BPA under a Provider of Choice power sales agreement following BPA’s Tier 1 rate design; and
WHEREAS, upon a determination of need based on integrated resource planning, City Light staff recommends that City Light purchase some amount of additional power to serve City Light’s net power requirements above its Contract High Water Mark at BPA’s Tier 2 rates; and
WHEREAS, BPA intends to offer a proposed Provider of Choice Slice/Block Power Sales Agreement in August or September 2025, the timing and status of which is explained in Attachment A to this ordinance; and
WHEREAS, the agreement will be substantially similar to the template attached to this ordinance as Attachment B, with the expectation that City Light will review, analyze, execute, and return the contract by December 5, 2025 so that BPA can finalize and countersign the Provider of Choice Slice/Block Power Sales Agreement by December 31, 2025; and
WHEREAS, out of the three power supply products offered under the Provider of Choice contract term, Slice/Block, Block, and Load Following, City Light has determined that the Slice/Block power supply product will provide the greatest economic benefits to City Light’s power portfolio and support future power marketing initiatives; and
WHEREAS, BPA requires a related creditworthiness agreement with Slice/Block purchasers, which will be substantially similar to the template attached to this ordinance as Attachment C, with the expectation that City Light will review, analyze, execute, and return the contract by December 5, 2025 so that BPA can finalize and countersign the Creditworthiness Agreement by December 31, 2025; and
WHEREAS, City Light recommends continuing to purchase power from BPA, because it is expected to be less costly than other sources of majority non-emitting power; and
WHEREAS, City Light has also determined that because (a) power purchased from BPA will come from firm existing, operating projects, or future projects that will be agreed upon in a planned public process and (b) the power purchase agreement provides protections to the City if no electricity is available for a long period, entering into the agreement is reasonable and necessary; and
WHEREAS, budget authority and necessary staffing for administering these new agreements will be included in the Mayor’s 2027-2028 Proposed Budget, as well as the Mayor’s subsequent budget proposals; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:
Section 1. City Light explains the timing and status for the final Provider of Choice Slice/Block Power Sales Agreement in the memorandum attached to this ordinance as Attachment A.
Section 2. The General Manager and Chief Executive Officer (CEO) of City Light is authorized for and on behalf of The City of Seattle to sign and enter into a 16-year Provider of Choice power sales agreement, a related creditworthiness agreement with the Bonneville Power Administration, and other related contracts that the General Manager and CEO deems reasonably necessary to implement the Provider of Choice power sales agreement. These agreements will include a Provider of Choice Slice/Block Power Sales Agreement, and a Creditworthiness Agreement similar to the forms attached to this ordinance as Attachments B and C, respectively. The General Manager and CEO of City Light is authorized to agree to modifications and amendments of the forms throughout the 16-year term of the power sales agreement to the extent the General Manager and CEO determines such modification or amendment to be reasonably necessary to meet the needs of the City Light Department.
Section 3. This ordinance shall take effect as provided by Seattle Municipal Code Sections 1.04.020 and 1.04.070.
Passed by the City Council the ________ day of _________________________, 2025, and signed by me in open session in authentication of its passage this ________ day of _________________________, 2025.
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President ____________ of the City Council
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Approved / |
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returned unsigned / |
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vetoed this _____ day of _________________, 2025. |
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Bruce A. Harrell, Mayor
Filed by me this ________ day of _________________________, 2025.
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Scheereen Dedman, City Clerk
(Seal)
Attachments:
Attachment A - Memo BPA 2028 Provider of Choice Contract Status for Legislation
Attachment B - BPA Provider of Choice Slice Block Power Sales Agreement Contract Template
Attachment C - BPA Creditworthiness Agreement Template