Submitted By: Randy Hahn
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Presentation By: Doug Peebles
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Department: Electric Utility
FORMAL TITLE:
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Sale of the Ocala Electric Utility 230kV Seminole Silver Springs North-to-Shaw 230kV transmission line to Duke Energy Florida, LLC for $9,893,712
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable, Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
On October 18, 2022, the City Council approved a Memorandum of Understanding (MOU) covering the sale of the existing 230kV transmission line to Duke Energy Florida, LLC (DEF). This line runs from the Seminole Silver Springs North (SSSN) Switching Station to the Ocala Electric Utility (OEU) Shaw Substation. The sale also includes the 230kV facilities at the Shaw Substation.
The Asset Purchase Agreement (APA) covers the combined scope of the 230kV infrastructure assets, the transfer of associated easement rights, and the operating agreements. DEF is required to construct a new 230kV transmission line and connect it to the OEU Shaw Substation, at no cost to OEU, by 2029. This new line will establish a second (alternate) 230kV connection for OEU at the Shaw Substation, which is necessary to meet near-term transmission planning needs for OEU’s service territory. DEF will be responsible for all current and future regulatory compliance requirements for the 230kV facilities at the Shaw Substation and the 230kV line between the Shaw Substation and the SSSN Switching Station.
FINDINGS AND CONCLUSIONS:
Ocala Electric Utility requests approval of the sale of the 230kV SSSN-to-Shaw 230kV transmission line to DEF, including approval of the agreement and all supporting legal instruments and easement exhibits.
FISCAL IMPACT:
The sale of the assets is based on the net book value of the current 30-year depreciation schedule for the itemized assets. The sale of the easement rights is based on current market valuation, with a reduction due to Ocala retaining the rights for other existing utility infrastructure to remain within the transferred 230kV transmission easements. The net value determined for this sale is calculated at $9,893,712. Funds will be posted to account #457-364-000-000-16-36423 - Proceeds - Sale of Assets.
PROCUREMENT REVIEW:
N/A
LEGAL REVIEW:
This Agreement has been reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny