AGENDA MEMORANDUM

 

 

Meeting Date:           March 24, 2008

 

From:                          Paul Kalv, Electric Director

 

Subject:                      Resolution authorizing a settlement agreement with Progress Energy Florida, Inc. regarding Crystal River Unit 3

 

 

Staff Recommendation:

City staff recommends approval of the agreement.  City staff has been a party to the meetings held by CR3 participants and a party to meetings and discussions with Progress Energy Florida management.

 

Analysis:

On behalf of the non-operating owners (CR3 participants) of the Crystal River Unit 3 nuclear electric generating unit located in Citrus County, Florida (CR3) operated by Progress Energy Florida, Inc. (PEF), Florida Municipal Power Agency (FMPA) staff has audited the expenses related to CR3.  The audit periods covered are from January 1, 2002 through December 31, 2005.

 

During the audit, FMPA staff identified certain findings related to administrative and general (A&G) expenses.  The parties have not been able to agree on a resolution regarding the appropriate billings to the CR3 participants.

 

The parties have agreed on a compromise settlement to resolve the issues related to the Audit and have agreed on a billing method for A&G expenses assignable to CR3 in the future. 

 

As a result of the audit, the parties have agreed that PEF shall refund a total of $188,460 to the CR3 participants (Settlement Amount) for the Audit periods.  The City of Leesburg will receive $18,902 as their share of the refund.

 

The parties also agreed to an alternate recovery methodology for A&G expenses for the calendar years 2007, 2008, and 2009.  PEF shall bill the CR3 participants for A&G expenses applicable to CR3 based on 16% of non-outage Operating & Maintenance (O&M) expenses outlined in the Settlement Agreement for the three calendar years.

Options:

1.  Approve the Settlement Agreement with Progress Energy Florida, Inc.

2.  Such alternative action as the Commission may deem appropriate

 

Fiscal Impact

The City will receive a one-time settlement payment of $18,902.00

 

Submission Date and Time:    3/19/2008 6:08 PM____

 

Department: ___Electric  ___________

Prepared by:  _____Connie Lambert____                     

Attachments:         Yes____   No __X____

Advertised:   ____Not Required ___X___                     

Dates:   __________________________                     

Attorney Review :       Yes _X__  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head __Paul Kalv_

 

Finance  Dept. _______JB_________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SETTLEMENT AGREEMENT WITH PROGRESS ENERGY FLORIDA, INC. FOR REFUND FROM AN AUDIT OF CR3 ADMINISTRATIVE AND GENERAL EXPENSES FROM JANUARY 1, 2002 THROUGH DECEMBER 31, 2005; AND PROVIDING AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute the settlement agreement with Progress Energy Florida, Inc.

 

             THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the __24th_ day of _March   2008.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk