Lebanon council approves $6M electric notes and five‑year power purchase authorization
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Summary
Council authorized up to $6 million in electric system bond anticipation notes for 2026 and approved a five‑year power purchase agreement framework with AMP for up to 15 megawatts (2028–2032) at a not‑to‑exceed $65 per megawatt‑hour, with staff noting market prices nearer $53–$55/MWh.
Lebanon City Council voted unanimously Oct. 28 to authorize up to $6 million in electric system bond anticipation notes and to approve an agreement framework allowing the city to purchase 15 megawatts of base electric load from American Municipal Power (AMP) for delivery between 2028 and 2032.
City staff told the council the bond anticipation notes (ordinance 2025‑103) will fund ongoing electric system improvement projects and are not new debt; staff said the city originally issued $10 million, has paid down portions of that debt and plans a 2026 issuance of notes for up to $6 million. “This ordinance authorizes the city to issue $6,000,000 of bond anticipation notes in 2026 to fund electric system cap improvement projects that began in 2024,” staff said during the meeting.
On the power contract, ordinance 2025‑104 authorizes an agreement with AMP to secure 15 megawatts of base load power for 2028–2032 at a not‑to‑exceed price of $65 per megawatt‑hour. Staff emphasized that 15 MW is a relatively small fraction of the city’s current peak demand — “If you think about our total peak demand right now, it’s up around 80 megawatts,” a staff presenter said — and described the purchase as part of a hedging strategy to stabilize future rates.
Council and staff discussed timing and market pricing. Staff said the city had recently put out market “feelers” and saw indications it could obtain future delivery at roughly $53–$55 per megawatt‑hour, below the $65 cap in the ordinance. Staff also noted that the city’s new natural‑gas generators are targeting a March online date, which factors into future purchasing decisions. “So we’d expect the actual purchase price to be much lower…around $53 to $55 per megawatt hour,” staff said.
Councilmembers praised staff for forward planning. One member said the city’s approach helps “save the taxpayers some money in the future.” The ordinance record notes the AMP authorization includes emergency language to be added to the title before finalization.
Outcome: both ordinances passed on unanimous roll calls.
Next steps: staff will finalize contract paperwork and, if market conditions warrant, execute purchases within the limits authorized by council. The bond anticipation notes will be issued in 2026 as described in the ordinance.
