Item 2C: EWEB Short-Term Borrowing

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4973 Authorizing an Electric Utility System Line of Credit Agreement in the Aggregate Principal Amount of not to Exceed Forty-Six Million Three Hundred and Fifty-Five Thousand Dollars ($46,355,000) for the Purpose of Financing and Refinancing the Harvest Wind Project and Providing for Related Matters Meeting Date: May 11, 2009 Agenda Item Number: 2C Department: Central Services Staff Contact: Sue Cutsogeorge www.eugene-or.gov Contact Telephone Number: 682-5589 ISSUE STATEMENT Eugene Water & Electric Board (EWEB) is requesting authority to proceed with the financing of the Harvest Wind Project. The authorization consists of two separate financing resolutions. The first resolution (this item, 2C) is for the issuance of an Electric Utility System line of credit agreement in an amount not to exceed $46,355,000, and the second resolution (item 2D) is for the issuance of Electric Utility System, Refunding Revenue Bonds in the amount of $46,355,000 to provide long-term financing for the project. BACKGROUND In the fall of 2007, EWEB was approached about its interest in the Harvest Wind Project (Project). The Project is a new phase of the White Creek wind generation development in Klickitat County, Washington. After a due diligence review with staff, EWEB decided to join Cowlitz PUD, Lakeview Light and Power, and Peninsula Light in developing the Project. EWEB’s share of the project is about 20 megawatts of a 100 megawatt capacity. EWEB criteria for participating in such projects are found in its Integrated Electric Resource Plan (Plan). The Plan establishes goals for the acquisition of the community’s energy requirements over a 20- year timeframe and was adopted by the EWEB Board in 2004, after extensive community and citizen participation. The Plan’s top three resource development priorities in order of preference include: 1.Conservation 2.Local and renewable distributed co-generation/combined heat and power systems 3.Renewable resources including wind, geothermal, biomass and solar EWEB continually evaluates resource development opportunities for environmental, social, and economic impacts. During the 2007 legislative session, a renewable energy bill was passed creating a renewable portfolio standard under which utilities like EWEB would be required to derive twenty-five percent of its annual retail electricity sales from renewable energy resources by 2025. The impact of this and similar standards in California and Washington has been to drive up the monetary value of the Z:\CMO\2009 Council Agendas\M090511\S0905112C.doc