Agenda Number 4.b.i.

CONTACT: Tom McCann Ron Lunt (623) 869-2343 (623) 869-2362 tmccann@cap-az.com rlunt@cap-az.com MEETING DATE: February 4, 2016 AGENDA ITEM: Discussion and Consideration of Action to Approve Transmission

Contract for Hoover Energy RECOMMENDATION: The Finance, Audit & Power Committee recommends that the Board of Directors approve the Firm Transmission Service Arrangements contract between CAP and the Western Area Power Administration, Contract No. 15-DSR-12585, and authorize the General Manager to make changes to Exhibit A thereto as necessary to reflect changes in CAP’s transmission needs.

FINANCIAL IMPLICATIONS: Impact on Budget: None. No appreciable change in the transmission costs that are already included in 2017 budget.

Impact on Reserves: None. Impact on Rates: None.

LINKAGE TO STRATEGIC PLAN, POLICY, STATUTE OR GUIDING PRINCIPLE: 2010 CAP Strategic Plan

• Power: Transmission Resources

PREVIOUS BOARD ACTION/ACTIVITY: August 2015, November 2015, December 2015 – Board updates on Arizona Power Authority’s (APA) process for reallocating Hoover power for the period after September 30, 2017. January 14, 2016 Finance, Audit and Power Committee consideration and action

ISSUE SUMMARY/DESCRIPTION: In July 2015, APA issued its decision on reallocation of Hoover power for the period of October 1, 2017, through September 30, 2067. CAP was allocated 162 MW of Hoover B capacity and associated energy. Before CAP can enter into a contract for post-2017 Hoover power, it must demonstrate that it has the physical means to take delivery of that energy. Specifically, CAP must show that it has reserved sufficient transmission rights for the Hoover energy. Under the current Hoover power contracts—which went into effect in 1987 and expire September 30, 2017—APA acquired the transmission rights necessary to deliver all of Arizona’s Hoover power and spread the aggregate costs of those transmission arrangement across all APA customers. At the request of its customers, APA has agreed to “unbundle” transmission rights from Hoover power for the next contracting period. Staff recommends that CAP secure its own transmission rights to deliver Hoover energy post-2017 to save cost and improve efficiency. Although the rates that CAP will pay to move Hoover energy over the Parker-Davis or Intertie systems are the same rates that APA would pay if it were to acquire transmission rights for CAP, the overall cost will be less if CAP acquires the rights because we will be able to avoid redundant costs. For example, CAP needs 103 MW of capacity from Mead to Liberty to get Hoover energy to CAP loads. CAP also needs to move NGS energy from McCullough to Mead, and will lose 122 MW of capacity on that path when an existing contract with LADWP expires in 2017. If APA were to obtain Hoover transmission for CAP, these two CAP needs would be satisfied by two separate transmission reservations: (1) APA would purchase 103 MW from Mead to Liberty on the Intertie Project; and (2) CAP would purchase 127 MW from McCullough to Mead on the Intertie Project. Effectively, CAP would have to pay for 230 MW of Intertie capacity. But if CAP secures its own rights, it can meet all of its needs by purchasing 103 MW from McCullough (through Mead) to Liberty and an additional 24 MW from McCullough to Mead, paying for a total of only 127 MW of Intertie capacity. That Intertie capacity can then be used to deliver energy from either NGS or Hoover to CAP loads. Efficiency is also improved if CAP acquires its own transmission rights because it will then be able to coordinate directly with Western in the event of a transmission outage. Currently, CAP must work through APA because the Hoover transmission rights are held in APA’s name. The proposed contract reflects the transmission reservations that are needed to deliver CAP’s Hoover energy post-2017 and meet CAP pump loads. SUGGESTED MOTION: I move that the Board approve the Firm Transmission Service Arrangements contract between CAP and Western Area Power Administration, Contract No. 15-DSR-12585, and authorize the General Manager to make changes to Exhibit A thereto as necessary to reflect changes in CAP’s transmission needs.

CONTRACT

CONTRACT

United States

Department of Energy

WESTERN AREA

POWER ADMINISTRATION

Desert Southwest

Regional Office

CONTRACT NO. 15-DSR-12585

BETWEEN

UNITED STATES

DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region

AND

CENTRAL ARIZONA WATER CONSERVATION DISTRICT

FOR

FIRM TRANSMISSION SERVICE ARRANGEMENTS

For Central Arizona Project Pumping Loads

i

CONTRACT NO. 15-DSR-12585

BETWEEN

UNITED STATES

DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region

AND

CENTRAL ARIZONA WATER CONSERVATION DISTRICT

FOR

FIRM TRANSMISSION SERVICE ARRANGEMENTS

For Central Arizona Project Pumping Loads

TABLE OF CONTENTS

Section Title Page No.

1 Preamble .......................................................................................................... 1 2 Explanatory Recitals ........................................................................................ 2 3 Agreement ........................................................................................................ 3 4 Termination of Prior Agreements .................................................................... 3 5 Term of Contract .............................................................................................. 4 6 Definitions ....................................................................................................... 4 7 Firm Transmission Service to be Provided by Western .................................. 5 8 Charges for Firm Transmission Service .......................................................... 6 9 Transmission System Losses ........................................................................... 8 10 Reactive Supply and Voltage Control Service (Reactive Service) .................. 9 11 Scheduling Capacity and Deliveries of Associated Energy ............................. 9 12 Control and Possession of Systems ................................................................. 9 13 Dispute Resolution ........................................................................................... 9 14 Severability ...................................................................................................... 10 15 Amendments and Modifications ...................................................................... 10 16 Exhibits Made Part of Contract ....................................................................... 10 17 General Power Contract Provisions ................................................................. 10 18 Other Agreements ............................................................................................ 11 19 Successors and Assigns ................................................................................... 11 20 Governing Law ................................................................................................ 11 Signature Clause ................................................................................................................ 12 General Power Contract Provisions Exhibits

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CONTRACT NO. 15-DSR-12585

BETWEEN

UNITED STATES

DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region

AND

CENTRAL ARIZONA WATER CONSERVATION DISTRICT

FOR

FIRM TRANSMISSION SERVICE ARRANGEMENTS For Central Arizona Project Pumping Loads

1. PREAMBLE: This Contract is made this day of , 2016,

pursuant to the Acts of Congress approved June 17, 1902 (32 Stat. 388); August 4, 1939

(53 Stat. 1187); May 28, 1954 (68 Stat. 143); September 30, 1968 (82 Stat. 885); June 24,

1974 (88 Stat. 266); August 4, 1977 (91 Stat. 565); August 17, 1984 (98 Stat. 1333);

December 10, 2004 (118 Stat. 3478); and Acts amendatory or supplementary to the

foregoing Acts, between the UNITED STATES OF AMERICA, acting by and through

the Administrator, Western Area Power Administration (Western), Department of

Energy, represented by the officer executing this Contract or a duly appointed successor,

and the Central Arizona Water Conservation District (CAWCD or Contractor), a multi-

county water conservation district duly organized and existing under the laws of the State

of Arizona, its successors and assigns; each sometimes individually called Party, and

sometimes collectively called Parties.

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2. EXPLANATORY RECITALS:

2.1 The Bureau of Reclamation (Reclamation) is an agency of the Department of the

Interior responsible for, among other things, constructing the authorized features

of the Central Arizona Project (CAP), and for acquiring and maintaining the

United States’ entitlement in the Navajo Generating Station for the purpose of

supplying the power requirements of the CAP and augmenting the Lower

Colorado River Basin Development Fund (Development Fund), as authorized and

directed by the Colorado River Basin Project Act of 1968 (Project Act), and as

amended or supplemented (43 U.S.C. 1501 et seq.).

2.2 Western is the power marketing administration of the Department of Energy

responsible for marketing and exchanging Navajo Surplus, as defined, authorized,

and directed by the Hoover Power Plant Act of 1984 (98 Stat. 1333).

2.3 The Contractor is a multi-county water conservation district organized pursuant to

the Arizona Revised Statutes Sections 48-3701 et seq. responsible for, among

other things, providing assistance in financing and repaying portions of the

construction costs of the CAP, and operating and maintaining the CAP in the

most economic and efficient manner.

2.4 On September 30, 1969, the Secretary of the Interior determined that acquisition

of the Navajo capacity and components of the Navajo Transmission System

would be the most feasible plan for supplying the power requirements of the CAP

and augmenting the Development Fund. Accordingly, the Secretary of the

Interior submitted a plan to Congress pursuant to Section 303(c) of the Project

Act to acquire Navajo Transmission System capacity and components.

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2.5 On February 21, 1995, Western and CAWCD entered into Contract

No. 93-PAO-10537, as amended or supplemented (Contract 10537), for firm and

non-firm transmission service for CAP pumping loads. Upon the effective date of

this Contract, Contract 10537 shall terminate in accordance with Section 4 herein.

2.6 On September 30, 2011, Western, Reclamation, and CAWCD entered into

Contract No. 11-DSR-12296, as may be amended or supplemented (Navajo

Agreement), for the administration of the United States’ entitlement in the Navajo

Project transmission facilities. Under the Navajo Agreement, Western is

responsible for marketing or exchanging the capacity and energy associated with

the Navajo Power that is in excess of the pumping requirements of the CAP and

any needs for desalting and protective pumping facilities under

Section 101(b)(2)(B) of the Colorado Basin Salinity Control Act of 1974,

Pub. L. 93-320, as amended.

2.7 To meet CAP pumping load requirements, the Contractor desires and Western is

willing to provide firm transmission service over the Parker-Davis Project (P-DP)

and the Pacific Northwest-Pacific Southwest Intertie (Pacific Intertie)

Transmission Systems using the transmission path(s) set forth in Exhibit A.

3. AGREEMENT: The Parties agree to the terms and conditions set forth in this Contract.

4. TERMINATION OF PRIOR AGREEMENTS:

4.1 The following contract, as supplemented or amended, shall terminate upon the

effective date of this Contract and its initial exhibits:

CONTRACT NO. DATE

93-PAO-10537 February 21, 1995 4.2 The applicable provisions of the contract that is terminated pursuant to this

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Contract shall continue in effect after termination to the extent necessary to

provide for final billings, billing adjustments, and the determination and

enforcement of liability and indemnification obligations arising from acts or

events that occurred prior to the effective date of termination of the contract.

5. TERM OF CONTRACT: This Contract shall become effective on October 1, 2017,

and subject to prior termination as otherwise provided herein, shall remain in effect

through September 30, 2067, or until the Parties mutually agree in writing to terminate or

supersede this Contract on an earlier date.

6. DEFINITIONS:

6.1 Hoover Power – The capacity and energy from the Boulder Canyon Project

described in Sections 105 (a)(1)(B) and 105 (a)(1)(C) of the Hoover Power Plant

Act of 1984 (98 Stat. 1333) which is available to CAWCD from the Arizona

Power Authority or its lawful successor.

6.2 Navajo Generating Station – The thermal generating powerplant located near

Page, Arizona, as generally described in Exhibit A to the Navajo Project

Co-Tenancy Agreement No. 14-06-300-2271, dated March 23, 1976, as amended

or supplemented.

6.3 Navajo Power – The United States’ entitlement to capacity and energy from the

Navajo Generating Station.

6.4 New Waddell Power – The capacity and energy from the pump-generating station

at the New Waddell Dam on the Agua Fria River.

7. FIRM TRANSMISSION SERVICE TO BE PROVIDED BY WESTERN:

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7.1 Western has determined that capacity on the P-DP and Pacific Intertie

Transmission Systems is available to serve CAP pumping load requirements.

Western shall use those transmission systems to deliver capacity and associated

energy for the Contractor using the transmission paths designated in Exhibit A,

adjusted for losses as provided in Section 9 hereof. Firm transmission service

shall be provided for delivery of Navajo Power, Hoover Power, and New Waddell

Power (when available), and other power resources to serve CAP pumping loads

– including delivery of CAWCD purchases or sales, or for deliveries of surplus

Navajo Power in amounts identified in Exhibit A. The firm transmission service

capacity provided for in this Contract is intended to serve existing CAP pumping

loads, and is not intended to provide increased use or capacity for the benefit of

any third party.

7.2 For the purposes described in subsection 7.1, the Contractor may request redirects

of transmission capacity in accordance with Western’s business practices.

7.3 The Contractor shall inform Western in writing when a change in the P-DP or

Pacific Intertie capacity is needed to serve CAP pumping load requirements. In

accordance with Attachment K of Western’s Open Access Transmission Tariff,

Western shall reserve such capacity as available. Exhibit A will be revised to

incorporate the revised capacity reservations.

7.4 Western shall at all times have the right to use any portion of the transmission

system capacity reserved for the Contractor, but not being used by the Contractor,

to schedule capacity and deliver associated energy. Western reserves the right to

grant the use of any such transmission system capacity to others on an

6

interruptible basis during the periods when the Contractor does not schedule use

of such transmission system capacity.

7.5 Except as otherwise specifically provided in this Contract, the Parties do not

intend to create rights in, or to grant remedies to, any third party as a beneficiary

of this Contract or any duty, covenant, obligation or undertaking established

herein.

7.6 No assignment of the transmission capacity reserved for the Contractor under

subsection 7.1 hereof may be made without the approval of Western.

8. CHARGES FOR FIRM TRANSMISSION SERVICE:

8.1 P-DP: The Contractor shall pay Western monthly for the amount of transmission

system capacity, expressed in megawatts, contracted for hereunder and reserved

for the Contractor on the P-DP transmission path(s) set forth in Section 3 of

Exhibit A, in accordance with rates, charges, and conditions which shall be

calculated in accordance with the applicable P-DP rate schedule(s), as amended or

supplemented, attached hereto and made a part hereof. The rates or rate

methodology used to calculate the charges for service may be modified pursuant

to applicable Federal laws, regulations and policies; Provided, That the charge in

the twelfth month following the effective date of this Contract and in the twelfth

month of each successive year shall be adjusted, if necessary, so that the total

amount paid by the Contractor during the year, exclusive of any additional

charges due to excess use of capacity, will equal the annual charge per megawatt-

year set forth in Western’s current rate schedules and charges for P-DP,

multiplied by the amount of P-DP capacity reserved for the Contractor as set forth

7

in Exhibit A.

8.2 Pacific Intertie: The Contractor shall pay Western monthly for the amount of

transmission system capacity, expressed in megawatts, contracted for hereunder

and reserved for the Contractor on the Pacific Intertie transmission path(s), as set

forth in Section 3 of Exhibit A, in accordance with rates, charges, and conditions

set forth in Western's current rate schedules and charges for the Pacific Intertie, as

amended or supplemented, attached hereto and made a part hereof; Provided, That

the charge in the twelfth month following the effective date of this Contract and

in the twelfth month each successive year shall be adjusted, if necessary, so that

the total amount paid by the Contractor during the year, exclusive of any

additional charges due to excess use of capacity, will equal the annual charge per

megawatt-year set forth in Western's current rate schedules and charges for the

Pacific Intertie, multiplied by the amounts of Pacific Intertie capacity reserved for

the Contractor as set forth in Exhibit A.

8.3 Unauthorized Overruns:

8.3.1 The Contractor is not entitled to transmission system capacity in amounts

greater than the maximum rates of capacity reservations as set forth in

Exhibit A. The Contractor shall be billed a charge for any unauthorized

overrun of transmission system capacity for each billing period in which

Western determines there is an unauthorized overrun of the maximum rate

of delivery set forth in Exhibit A. Such overruns shall be billed in

accordance with the rate schedule in place at the time of the incident.

8.3.2 Billing the Contractor or accepting payment for any unauthorized overrun

8

of transmission system capacity shall not constitute approval, authorization,

or acquiescence by Western to such unauthorized overrun of transmission

system capacity.

8.3.3 Overruns shall not establish any continuing right thereto. The Contractor

shall cease any overruns when requested by Western.

8.4 Superseding Rate or Charge: The rate set forth in the applicable rate schedule or

any superseding rate or charge may be modified in accordance with Article 11 of

the General Power Contract Provisions.

9. TRANSMISSION SYSTEM LOSSES:

9.1 P-DP: As of the initial date of this Contract, the transmission loss factor on the

P-DP is deemed to be three percent (3%) of the deliveries of energy by Western at

the P-DP transmission path(s) point(s) of delivery, as specified in Exhibit A.

9.2 Pacific Intertie: As of the initial date of this Contract, the transmission loss factor

on the Pacific Intertie is deemed to be three percent (3%) of the deliveries of

energy by Western at the Pacific Intertie transmission path(s) point(s) of delivery,

as specified in Exhibit A.

9.3 Revised Transmission Loss Factor: Losses set forth in subsection 9.1 and 9.2

shall be reviewed periodically by Western. If the review of losses indicates the

need for a revision in the transmission loss factors, Western shall determine the

appropriate transmission loss factor and shall provide notice thereof to the

Contractor at least thirty (30) days in advance of the effective date of said

revision. Supporting data will be provided upon written request of the Contractor.

9

9.4 P-DP and Pacific Intertie Losses: Transmission system loss roles and return

responsibilities are performed in accordance with the Navajo Agreement,

Operating Procedure No. 5, Revision No. 1, as amended or supplemented (OP5).

In the event that OP5 terminates, Western reserves the right to establish

procedures that will provide for the return of losses by the Contractor provided

for in this section.

10. REACTIVE SUPPLY AND VOLTAGE CONTROL SERVICE (REACTIVE

SERVICE): Reactive Service maintains the voltage level on the transmission system

and must be purchased from the Transmission Provider if the Contractor cannot self-

provide. Equipment used to provide voltage support could be static var support and

generating units. Western’s rate schedule for Reactive Service is applicable to the

transmission reserved in this Contract.

11. SCHEDULING CAPACITY AND DELIVERIES OF ASSOCIATED ENERGY:

Capacity and deliveries of associated energy hereunder shall be scheduled in advance,

emergencies excepted, and accounted for on the basis of such advance schedules in

accordance with Western’s business practices for scheduling and applicable industry

scheduling practices.

12. CONTROL AND POSSESSION OF SYSTEMS: Except as noted in the exhibits

herein, each Party shall remain in exclusive control and possession of its system, and this

Contract shall not be construed to grant either Party any rights of ownership, control, or

possession of the other Party's system.

13. DISPUTE RESOLUTION: If a dispute arises between or among the Parties under this

Contract, the authorized representatives shall meet in an attempt to resolve the dispute. If

10

the Parties are unable to resolve the dispute through discussion or mediation, any Party

may bring the dispute to a Federal court of competent jurisdiction.

14. SEVERABILITY: In the event that any term, covenant, or condition of this Contract, or

the application of such term, covenant, or condition, shall be held invalid as to any person

or circumstance by any court having jurisdiction, all other terms, covenants, or conditions

of this Contract and their application shall not be affected thereby, but shall remain in

force and effect unless a court holds that the provisions are not severable from all other

provisions of this Contract.

15. AMENDMENTS AND MODIFICATIONS: This Contract and the exhibits attached

hereto may not be amended or modified except by subsequent mutual written contract

amendment or modification duly executed by the authorized representatives of the

Parties.

16. EXHIBITS MADE PART OF CONTRACT: Inasmuch as the schedule of

transmission service commitments may change during the term of this Contract, they will

be specified in Exhibit A as agreed upon by the Parties in writing. The initial Exhibit A

is attached hereto and made a part hereof and shall be in full force and effect until

superseded by subsequent exhibits. All exhibits shall terminate upon expiration of this

Contract.

17. GENERAL POWER CONTRACT PROVISIONS: The General Power Contract

Provisions (GPCP), effective September 1, 2007, are attached hereto, and are hereby

made a part of this Contract the same as if they had been expressly set forth herein;

Provided, Provisions 7, 8, 9, 12, and 15 through 28 shall not be applicable hereto; and

Provided, That in Provision 3, the term “capacity” shall mean “transmission capacity”;

11

and Provided, That if the provisions in the GPCP are in conflict with this Contract, the

terms of this Contract shall control.

18. OTHER AGREEMENTS: Nothing in this Contract shall be interpreted as an

amendment, supplement, or modification of the Navajo Agreement or to limit, modify, or

restrict the rights or obligations of the Parties thereunder, including without limitation,

the right to enforcement of any and all remedies thereunder in the event of a breach or

default thereunder. In the event of any conflict between the provisions of this Contract

and the Navajo Agreement, the provisions of the Navajo Agreement shall control.

19. SUCCESSORS AND ASSIGNS: This Contract shall inure to the benefit of and shall be

binding upon the respective successors and assigns of the Parties to this Contract;

Provided, however, that this Contract, or any interest therein, may be assigned or

transferred by any Party only with the written consent of the other Parties, which consent

shall not be unreasonably withheld.

20. GOVERNING LAW: This Contract shall be interpreted, governed by, and construed

under applicable Federal law. In the absence of applicable Federal law, the laws of the

State of Arizona shall govern.

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IN WITNESS WHEREOF, the Parties have caused this Contract No. 15-DSR-12585

to be executed on the date first written above.

WESTERN AREA POWER ADMINISTRATION By Ronald E. Moulton Title Senior Vice President and Desert Southwest Regional Manager Address Desert Southwest Region P.O. Box 6457 Phoenix, AZ 85005-6457 (SEAL) CENTRAL ARIZONA WATER

CONSERVATION DISTRICT Attest: By By Title General Manager Title Address P.O. Box 43020 Phoenix, AZ 85080-3020

Exhibit A Contract No. 15-DSR-12585 Central Arizona Water Conservation District

Page 1 of 2

SCHEDULE OF FIRM TRANSMISSION SERVICE COMMITMENTS

1. This Exhibit A, to be effective under and as a part of Contract No. 15-DSR-12585

(Contract), shall become effective upon the effective date of the Contract, and shall

remain in effect until superseded by another Exhibit A; provided, that this Exhibit A, or

any superseding Exhibit A, shall be terminated by the expiration of the Contract.

2. This Contract identifies the firm transmission service over the Parker-Davis Project and

Pacific Intertie Transmission Systems to meet the Contractor’s load requirements, as

stated in Section 3 herein.

3. CONTRACTOR TRANSMISSION SYSTEM CAPACITY RESERVATIONS:

Under the terms of the Contract, but subject to the conditions included herein, the

Contractor shall have the right to schedule energy over the Parker-Davis Project and

Pacific Intertie Transmission Systems as follows:

3.1 Pacific Intertie System Capacity Requirements for 10/01/17-03/31/19:

Capacity Reservation

Transmission Path (MW) Period McCullough 500-kV or Mead 230-kV 103 10/01/17-03/31/19 to Westwing 500-kV/230-kV1 or Liberty 230-kV McCullough 500-kV to Mead 230-kV 24 10/01/17-03/31/19 Mead 230-kV to McCullough 500-kV 35 10/01/17-03/31/19

1 Uses 103 MW of Westwing transformer 500-kV to 230-kV capacity reserved for CAWCD under Navajo Agreement.

Exhibit A Contract No. 15-DSR-12585 Central Arizona Water Conservation District

Page 2 of 2

3.2 Pacific Intertie System Capacity Requirements for 04/01/19-09/30/67:

Capacity Reservation

Transmission Path (MW) Period

McCullough 500-kV or Mead 230-kV 61 04/01/19-09/30/67 to Westwing 500-kV/230-kV2 or Liberty 230-kV Liberty 230-kV or Westwing 230/500-kV3 or Mead 230-kV 39 04/01/19-09/30/67 to Mead 230-kV or McCullough 500-kV Mead 230-kV to McCullough 500-kV 38 04/01/19-09/30/67

3.3 Parker-Davis Project Capacity Requirements for 10/01/17-09/30/67:

Capacity Reservation

Transmission Path (MW) Period

Mead 230-kV to Davis 230-kV to Parker 230-kV 24 10/01/17-09/30/67

4. This Exhibit A to Contract No. 15-DSR-12585 may be modified in accordance with

Section 16 of the Contract.

2 Uses 61 MW of Westwing transformer 500-kV to 230-kV capacity reserved for CAWCD under Navajo Agreement. 3 Uses 39 MW of Westwing transformer 230-kV to 500-kV capacity reserved for CAWCD under Navajo Agreement.

1

Transmission Contract for Hoover Energy

Finance, Audit & Power CommitteeJanuary 21, 2016Thomas W. McCann and Ronald Lunt

Hoover Transmission Today

• Arizona Power Authority (APA) provides all transmission 

rights needed to get Hoover power to customer loads

• The aggregate cost of all Hoover transmission rights is 

included in the rates APA charges CAP and other 

customers for Hoover power

• CAP has limited ability to use the transmission rights 

associated with its Hoover allocation to transmit other 

energy

• The current Hoover transmission arrangements are in 

effect until September 30, 2017

2

2

Hoover Transmission Post‐2017

• APA recently completed its process to reallocate Hoover 

power for the period 2017 through 2067

• APA has agreed to unbundle transmission from Hoover 

capacity and energy charges

• Hoover customers have the option of securing their 

own transmission contracts 

• APA will secure transmission rights for those 

customers who want that service

• Transmission costs will not be part of the basic Hoover 

capacity and energy rates charged by APA

3

CAP Hoover Transmission

• CAP has been allocated 162 MW of Hoover capacity for 

the period 2017 through 2067

• CAP must secure firm transmission rights sufficient to 

get Hoover power to CAP loads

• The Energy Risk Oversight Committee recommends that 

CAP secure its own Hoover transmission rights to 

maximize flexibility and minimize cost

• Rights can be used to move energy from any source

• Rights can be modified over time as conditions 

change (e.g., completion of PV‐Morgan project)

4

3

Proposed Transmission Contract

• Term is 50 years to match the term of CAP’s Hoover 

power contract

• Provides firm transmission service from Western 

Area Power Administration over Parker‐Davis and 

Intertie systems

• CAP can change capacity reservations if 

circumstances change (e.g., CAP loads or energy 

resources), although requests for increased capacity 

would be subject to availability

• Replaces CAP’s current transmission contract with 

Western

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Proposed Transmission Contract

• Costs for transmission service will be 

consistent with Western’s published 

rates for the applicable system

• CAP is responsible for transmission 

system losses, consistent with current 

practice 

• Specific paths, capacity reservations and 

effective dates are set forth in Exhibit A 

• CAP General Manager would have authority 

to modify Exhibit A as necessary

6

4

Special Considerations

• On Oct. 1, 2017, an existing contract 

between Reclamation, Western, and 

LADWP will expire and CAP will lose 122 

MW of capacity between McCullough 

and Mead substations

• Will be replaced by proposed 

Western contract

• Minimize the use of the Parker‐Davis 

Project

• Once PV‐Morgan project is complete, 

Western contract reservations will be 

reduced

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Exhibit A Reservations

Oct. 1, 2017 to Mar. 31, 2019

• McCullough to Liberty – 103 MW 

• Mead to McCullough – 35 MW 

• Mead to Parker – 24 MW

• McCullough to Mead – 24 MW 

Apr. 1, 2019 to Sept. 30, 2067

• McCullough to Liberty – 61 MW 

• Liberty to McCullough – 39 MW 

• Mead to McCullough – 38 MW 

• Mead to Parker – 24 MW 

8

162 MW

162 MW

5

Current Reservations

9

10

2017‐2019 Reservation

6

11

2019‐2067 Reservation

Questions?