Approve Agreement between Transportation Cabinet and FPB for the Relocation of Electric Facilities along U.S. 421 South ($656,154.04):

Staff recommends that the Board approve an Agreement between the Transportation Cabinet and FPB for the relocation of electric facilities along U.S. 421 South. The total cost of this relocation is $656,154.04 of which the State will reimburse FPB for $593,304.59. FPB will absorb a betterment cost of approximately $46,380.70. This is due to the use of steel poles instead of wood poles, an increase in conductor size, and non-billable material cost associated with transformers. Also, material returned to stock from the removal of existing facilities has an estimated value of $16,648.75.

A couple of notes for clarification:

• The Electric Department will install all poles with its own crews.
• The pole rigging, installation of new conductors, and removal of existing facilities will be done by contract labor.
• FPB will select a qualified electrical contractor by the competitive bid process and forward the selection to the Transportation Cabinet for approval.

The Staff Attorney, along with the Electric Engineering Staff, has reviewed the Agreement and it meets with their approval.

Approve Addendum to SEPA Power Contract between Kentucky Utilities and FPB SEPA Contract:

Staff recommends that the Board approve the addendum to the SEPA Power Contract between Kentucky Utilities (KU) and FPB contingent upon the language being acceptable to the General Manager and Staff Attorney.

As a result of negotiations, KU and the Kentucky SEPA Municipals reached an agreement on the market value of the SEPA capacity and energy. KU through this contract will purchase the SEPA capacity and energy for 2007 at a market value of $60.00 per MWH. The credit to the Municipals for 2007 will be $57.40 per MWH