Council 'reluctantly' agrees to DOE utilities agreement

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By Arin McKenna



When Deputy Clerk Adrianna Ortiz announced that a motion to approve a new Electric Energy and Power Coordination Agreement (ECA) between Los Alamos County and the Department of Energy had passed 7−0, Council Chair Geoff Rodgers added “passed reluctantly.” 

The five-year agreement was reached after five years of contentious negotiations. The Department of Public Utilities (DPU) tried to negotiate the inclusion of a modest profit or management fee. The National Nuclear Safety Administration (NNSA) procurement office ruled that could not be allowed in a reimbursement-type contract. 

The compromise agreement allows the county to remove a county-owned asset from the pool with 18 months notice. If that should happen, the county must provide replacement power for Los Alamos National Lab, with the cost shared pro-rata (80 percent DOE/20 percent county).

“In my mind, it’s kind of the best of both worlds, because it still gives us the security of having a partner to share in some of the potential liability, our risk, our actual costs, but it does give us the opportunity to utilize our now-owned assets to explore the market and look at other opportunities for utilization of these resources,” said Robert Westervelt, deputy utilities manager for Finance and Administration.

Westervelt noted that one of the advantages of this agreement is that if DPU succeeds in moving into other markets, its bond rating is likely to rise. 

“One of the things with our bond ratings is, because we have such a large single customer for such a large portion of our resources, they rate us at one level and then lower it by one,” Westervelt said. “This allows us to expand out and look at other resources and other potential partnerships.”

Westervelt and Manager John Arrowsmith confirmed that DPU is actively pursuing other markets.

Councilors were not happy with the agreement.

“The contractor, being us, is being told what to do by the contracting officer (NNSA). Why are we subsidiary? Why is it not a mutual agreement? We’re sort of told what to do,” Councilor Frances Berting asked. 

“The issue is the contracting mechanism, and every time it comes up for renewal, it has to be in accordance with DOE policies and DOE procurement regulations,” Westervelt responded. 

During public comment, Chris Ortega, vice chair for the Board of Public Utilities, addressed the history of the agreement and its relevance today.

“The first six years of this agreement, Los Alamos County and its residents were subsidizing the Department of Energy. The contract was tilted in their favor,” Ortega said. 

Ortega described concerted efforts by the board, DPU management, the council chair and the congressional delegation to negotiate an equitable agreement. He recommended that the county try to involve the congressional delegation early in negotiations for the next contract to bring pressure higher up the DOE ladder. 

Although Ortega voted against recommending the agreement in the board meeting, he acknowledged that with the current contract expiring June 2015, council probably needed to approve it.

“I think the staff has done as good a job as could have been done in negotiating with DOE,” Ortega said. “I started negotiating with them in 1983, I think. Thirty years, more than half my life, I’ve been fighting with those people, and I know how difficult it is. And I think the staff has done the best it can under those conditions.”

Councilors echoed Ortega’s reluctance to approve the agreement. 

“As long as we stay in this contractual relationship, we are going to be in this subservient relationship,” Councilor Steve Girrens said. 

“So I just wanted to go on record saying that I’m exactly lining up philosophically with Chris Ortega, and say, we’ve got to take advantage this next five years to figure out how we put our power on the market and let the DOE compete or go buy their power on the market.”

“I’ve been witness to a lot of these discussions, and I appreciate the blood, sweat and tears that it took to come to this point,” Councilor David Izraelevitz said. “So this may not be perfect, but maybe it’s good enough that we can continue our conversations in the future.”

“I know this has not been easy, and I don’t like what we’re voting on,” said Rodgers, who attended the meeting where an impasse was declared. “I certainly hope that we use this time to better our position next time this expires. So let’s remain aggressive in dealing with this issue.”

Other business

Berting pulled a motion to “withdraw the Historic Sculptures Master Plan as an official document that guides the work of county boards, commissions and staff” from the consent agenda. 

Deputy County Administrator Brian Bosshardt clarified that the document would still be available for reference but that boards and staff would not be working to implement the plan to install 17 historic statues around the historic district. 

The Fuller Lodge Historic District Advisory Board was granted five minutes to make its case for keeping the plan as an active document. Chair Mark Rayburn and former chair Ron Wilkins presented arguments for at least retaining the criteria established in the plan. 

“The plan talks about statues as recommendations or suggestions. It was always understood that each statue would come before council for approval of design, sitting and funding. And it was understood that success raising non-county funds might determine which statues were actually installed,” said Wilkins. 

“Accepting the plan does not mean that every statue must be installed or that other subject ideas are excluded.”

Wilkins recommended developing a mechanism to pursue private funding. He also suggested that economic development funds should be used to implement the plan, since those who developed it believed it would draw visitors to Los Alamos. 

Berting made two motions, one to remand the document back to the original committee to develop a plan without the 17 statues and another that the plan be brought back as a general guideline for art. 

Both motions failed for lack of a second. 

The item was tabled to a future agenda. 

Council also voted to reappoint Cathy Mockler to the Planning and Zoning Commission. Philip Kunsberg had also applied for the vacancy.