PURPOSE

Staff seeks City Council approval of an Amended and Restated Interconnection/ Interchange Agreement between the City of Burbank and the City of Glendale. A copy is attached.

BACKGROUND

In 1990, the City of Burbank and the City of Glendale entered into an Interconnection/ Interchange Agreement, mainly for the purpose of providing each other with temporary emergency assistance in the operation of their respective electric utility systems.  Under the 1990 Agreement, the 69 kilovolt (kV) electrical lines linking the two cities� electric systems remained �normally open� (i.e., not in operation) until the need arose to link the two systems together. 

With the Magnolia Power Project nearing completion, Burbank and Glendale have found this to be an opportune time to review and update the 1990 Agreement.  Glendale is one of the participating cities in Magnolia with an entitlement to 16.5% of the plant�s output, or approximately 50 megawatts at peak operation.  Under the Magnolia project agreements, Glendale is entitled to receive its share of Magnolia power at Burbank�s Olive Switching Station.

Utilizing the interconnection between the cities is the proposed means of delivering Glendale�s Magnolia power from Olive to Glendale�s electric system.  Because Magnolia will be in operation most of the time, this means that the tie lines between the cities will be �normally closed� (i.e., in operation) rather than open, as under the 1990 Agreement.  The proposed new agreement would facilitate this arrangement. In the past few years both Burbank and Glendale have each made physical improvements to the 69 kV lines within their respective boundaries to accommodate the increased capacity needed for delivery of Magnolia power to Glendale. 

ANALYSIS

The term of the proposed new agreement, of necessity, would be coextensive with Glendale�s participation in Magnolia, which is expected to be at least 30 years.  

The proposed new agreement includes operational parameters to insure that safety and reliability are maintained during times when the interconnection is �closed.�  It also includes provisions that will enable the two cities to take advantage of the upgraded interconnection facilities by allowing them to develop and implement ways of sharing reserve capacity with each other, thereby reducing fuel or power supply costs.

Additionally, both Burbank and Glendale are prepared to enter into agreements with the four other Magnolia participants under which Burbank and Glendale would use their existing transmission rights to deliver the other participants� power from Receiving Station E to the Marketplace Substation in Nevada, from which the participants would bring the power to their respective systems via the power grid operated by the California Independent System Operator (CAISO).  These agreements will provide economic benefits to both Burbank and Glendale.  The proposed new interconnection agreement would facilitate these arrangements by enabling Glendale to take delivery of a share of Anaheim�s power (approximately 40 megawatts) and deliver that to the Marketplace Substation.

FISCAL IMPACT

The fiscal impact is positive. An Amended and Restated Interconnection/ Interchange Agreement between the City of Burbank and the City of Glendale enables substantial benefits to the City of Burbank in addition to enhancing reliability of service.

RECOMMENDATION

Staff recommends that the City Council approve the proposed Amended and Restated Burbank-Glendale Interconnection/Interchange Agreement and authorize the City Manager to execute it on the City�s behalf.

If the Council concurs, the appropriate action would be a motion to adopt the Resolution entitled �A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING AND AUTHORIZING EXECUTION OF AN AMENDED AND RESTATED INTERCONNECTION/INTERCHANGE AGREEMENT BETWEEN THE CITY OF BURBANK AND THE CITY OF GLENDALE.�

RD:RM:gm

Interconnection Agrmt � council 6-7-05.doc

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