Council Communication

Title:	Voluntary withdrawal from the Oregon Utility Resource Coordination Association (OURCA).
Dept:	Electric & Telecommunication
Date:	March 19, 2002
Submitted By:	Dick Wanderscheid
Reviewed By:	Paul Nolte
Approved By:	Greg Scoles, City Administrator

Synopsis:	The City of Ashland along with Forest Grove, McMinnville, Columbia River PUD, Clatskanie PUD, Emerald PUD, Northern Wasco PUD, Tillamook PUD and the Eugene Water and Electric Board created the Oregon Utility Resource Coordination Association Intergovernmental Agency (OURCA IGA) in October, 1999. The agency was created under ORS 190 and it's purpose was "to use any authority vested in OURCA IGA to further the economy and efficiency of each party by the purchase, sale, generation, transmission, distribution, interchange or pooling of electrical energy and capacity among the parties or with others." Circumstances have changed dramatically since this agency was created and the City should voluntarily withdraw from the organization as it has outlived its usefulness.
Recommendation:	It is recommended the City Council move to withdraw from OURCA .
Fiscal Impact:	Savings of membership dues, consulting and legal fees incurred by OURCA on behalf of its members will be realized by this withdrawal.
Background:	OURCA was formed prior to Ashland signing a power sale contract with BPA. At that time there was thinking by many utilities that other market opportunities could actually be less costly then purchasing BPA power. The driving force behind this organization was the Eugene Water and Electric Board (EWEB) which has it's own generation, trading agents and control area. This allows them to buy and sell electricity on a daily basis. EWEB felt that they could be more effective by doing this on behalf of the other OURCA members. Since then Ashland has signed a long-term power sale agreement with BPA and market conditions have changed dramatically. BPA prices, even with their recent increases are still the least expensive alternative on a long-term basis. There were nine original members of OURCA. They were Ashland, McMinnville, Forest Grove, EWEB, Emerald PUD, Tillamook PUD, Clatskanie PUD, Columbia River PUD and Northern Wasco PUD. Tillamook, Forest Grove and Columbia River have already voluntarily withdrawn from the IGA. The organization did purchase power for some of its members in 2000 and that purchase ended up costing those members that participated in that sale, a considerable amount of money . Fortunately Ashland wasn't a part of that power sale. Because the wholesale electricity markets have changed significantly since 1999 and because we have a new full requirement power sale contract with BPA, OURCA has outlived its usefulness. Therefore, staff recommends that the City voluntarily withdraw from the organization as permitted by the Intergovernmental Agreement. This withdrawal can be accomplished by a council motion to withdraw from OURCA.

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