Item 2E-Res.for Trojan Project - Laserfiche WebLink

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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Resolution 4808 Authorizing the Issuance and Sale of Trojan Project Revenue Bonds in the Aggregate Principal Amount Not to Exceed $55,000,000 for the Purpose of Refunding Trojan Nuclear Project Revenue Bonds, Series of 1977, and Providing for Related Matters Meeting Date: September 13, 2004 Agenda Item Number: 2E Department: Finance and Court Services Staff Contact: Sue Cutsogeorge www. cl. eugene, or. us Contact Telephone Number: 682-5589 ISSUE STATEMENT The Eugene Water and Electric Board (EWEB) is requesting authority to proceed with a refunding of the 1977 Trojan Project Revenue bonds. Bonneville Power Administration (BPA) pays all principal and interest on the bonds. EWEB is contractually required to consider the feasibility and advisability of refunding the Trojan bonds when requested to do so by BPA. The refunding transaction would not benefit EWEB customers directly but would do so indirectly by lowering BPA costs. BACKGROUND The authorization for the original Trojan Project bonds was a charter amendment approved by voters on November 5, 1968. The refunding of these bonds would have an indirect impact on electric rates because the related interest cost savings would be reflected in BPA wholesale rates. The Trojan Nuclear Plant (Trojan Project) is jointly owned by Portland General Electric Company (67.5%), EWEB (30%), and Pacific Power and Light Company (2.5%). In 1993, PGE ceased com- mercial operation of Trojan. Prior to ceasing operations, EWEB assigned to BPA and other public agency participants its 30% share of output. As part of this assignment, BPA is obligated to pay EWEB's 30% share of all Trojan Project costs, including decommissioning and debt service. There are $45 million of Trojan Project bonds outstanding, carrying a tax-exempt interest rate of 5.9% and maturing in 2009. The refunding bonds would also mature by 2009 and carry an interest rate of approximately 3%, resulting in gross interest cost savings of approximately $3.6 million or almost 8% of the refunding bond amount in net present value savings. RELATED CITY POLICIES There are no City policies related to this item. L:\CMO\2004 Council Agendas\M040913\S0409132E.doc