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the October 20 proposal) depending on whether the longer-run cost of <br /> capacity in the market is greater than or less than the costs <br /> available to the City under the October 20 proposal. <br /> Additionally, although not reflected on the term sheet, OUC's <br /> senior management have indicated that they would be happy to receive <br /> and process employment applications from any City employees whose <br /> positions would be terminated upon retirement of the Power Plant, <br /> Additional Analyses Needed for City Decision <br /> At my request, OUC senior management have confirmed to me that <br /> the City can choose either the October 20 terms or the November 25 <br /> terms, subject to the approval of the OUC Board. There are a number <br /> of elements ("moving parts") to be addressed in analyzing the three <br /> alternatives available to the City, i.e., simply performing the 2008 <br /> PPA until its termination in 2029, the October 20 proposal, and the <br /> November 25 proposal. Needed additional analyses will, I believe, <br /> include sensitivity analyses relating to future costs of capacity <br /> and energy in the market since, under the November 25 proposal, the <br /> City will be in the market as of January 1, 2024, and what the City <br /> believes about the relationship between OUC's proposed Capacity <br /> Payment rates and the market rates for Base Capacity and Peaking <br /> Capacity from 2024 through 2029; the value of the St. Lucie Option; <br /> the value to the City of possibly keeping, or being able to recall, <br /> the rights to the FM contracts; how these variables would fit into <br /> the City's electric rates; and other variables and considerations. <br /> I would recommend that the City undertake such analyses as soon <br /> as practicable so that the City Council will be in the best possible <br /> position to make an informed decision as soon as practicable. <br /> Because of the need to make transmission arrangements to accommodate <br /> either set of amendments, at some point, delay will almost certainly <br /> impinge on the City's ability to implement either option in October <br /> 2015. <br /> Thank you again for the opportunity to be of service to the <br /> City of Vero Beach and your citizens. I look forward to seeing you <br /> again soon. If you have any questions, please call me any time. <br /> Attachments <br /> COPIES: CINDY LAWSON, FINANCE DIRECTOR <br /> TOM RIMMRDS, ELECTRIC UTILITIES DIRECTOR <br /> .. 4 <br /> 3q <br />