good morning everyone we'd like to welcome it to the mesa city council meetings for the morning of thursday may the 19th prior to beginning our regular study session we will convene a special city council meeting i'll note for the record that we are all present except for mr thompson who's traveling in the excuse from this meeting item 1a is a resolution authorizing the acquisition of interstate natural gas pipeline transmission capacity through participation in a bidding process it's actually on topic isn't it mark everybody mark was doing some some research to prepare for the meeting i'll finish teeing this up item 1a is a resolution authorizing the acquisition of interstate natural gas pipeline transmission capacity through participation in a bidding process and approving and authorizing the city manager to enter into associated contracts upon a successful bid frank welcome what do we need to know about this good morning mayor and council frank mcrae with the energy resource department i'm i'm hoping that tony will be able to join me here he's been detained a little bit but uh what what this is an opportunity that we've never really pursued before normally we have sufficient pipeline capacity under the federally regulated tariffs um with el paso natural gas or kinder morgan and so as we're growing our system with new customers coming on the addition of gas fire generation for our electric utility we're finding ways to find new um and increase capacity on our interstate pipeline transportation contracts so our staff was looking for new and different ways to add to that capacity portfolio and there's a way to obtain capacity without asking the pipeline to build new capacity and that's when an existing customer has a contract for that interstate transportation capacity expires and so we find out about that this is the first time we've ever endeavored to do that so our staff did a great job identifying uh that contract expiring that becomes available so because it's a federally regulated pipeline it's not a bid based upon price it's a bid based upon the length of time that you're willing to contract for that capacity and so in order to maximize our opportunity to win the bid and obtain that capacity it's based upon the length of the bid so they um accept bids up to 50 years i believe so what we would likely be doing is is making a bid for that long period of time that's a very unusual type of contract the only other contracts i know that energy resources into with that length of a term is our contracts for hydroelectric power on the colorado river so this is a unique opportunity our staff has done a great job finding this these contracts don't expire every day certainly the people that hold those contracts don't let them expire they often redo them they have the first right of refusal to basically renew those contracts so great opportunity for us to get some additional capacity minimize our cost not have to go through an open season where we're asking those um pipeline companies to build new capacity so this is taking advantage of existing capacity that's being released into the market great sounds like a good opportunity any discussion questions on this item uh and i'm sorry this is a little off topic but we're still pursuing electric generation capacity utilizing natural gas correct that's correct it seems like is there should there be any hesitancy in signing up for a 50-year contract and it seems like no natural gas will be a relevant and important part of our energy portfolio of the city for the foreseeable future particularly when we're building facilities you know electric generation facilities that utilize natural gas it will help us meet those needs as well as the needs of the industrial developments that we're seeing in the area of our gas service territory so this will be to both the benefit of the electric utility as we start adding gas fire generation into our resource mix as well as serving our other gas customers that we serve in both pinal county and the city of mesa mayor council i mean our area that we can service from a gas utility is bigger than the city of mesa and there are certain parts of that outside the city of mesa but in our service area um that are seeing great demand from large potential users and so in order to kind of tony come on up let me get the hide to uh meet their demands and for the long term uh this is another opportunity to assure that supply is that correct yes yes sir okay yes mr ready is there a reason why the pipeline has been why the contractor is not rebidding is there issues or anything as far as infrastructure wrong with it or no i i wouldn't say there's anything that's a deficiency in the way the pipeline is operated or maintained or managed sometimes businesses go out of business sometimes a utility's demand will fall for whatever reason and so they'll be able to release the contracts and not continue to pay capacity charges sometimes utilities forecast their needs very far out in the future so they acquire that pipeline capacity and then the load doesn't materialize and so that's why they'll release the capacity tony anything to add to that no let me introduce tony cador and i know you've met him before but he's our resources program manager and uh deputy director level position for us in energy it resources additional discussion on this item okay is there a motion to prove this resolution thank you mr luna seconded by uh vice mayor duff uh all in favor please say aye aye any opposed thank you that passes unanimously thank you uh is there a motion to adjourn this special counsel meeting thank you mr luna and mrs billsbury for the second all in favor please say aye aye thank you that passes unanimously as well