HomeMy WebLinkAboutAgenda Report - November 17, 2004 E-18AQaKD A ITEM EACA
CTTY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt resolution authorizing the City Manager to execute the Electric Service Base
Resource Percentage Agreement 00 -SNR -00327 for Western Area Power
Administration between Northern California Power Agency and the City of Lodi
(EUD)
MEETING DATE: November 17, 2004
PREPARED BY: Electric Utility Diredor
RECOMMENDED ACTION: That the City Council adopt a resolution authorizing the City
Manager to execute the Electric Service Base Resource Percentage
Agreement 00 -SNR -00327 for Western Area Power
Administration between Northern California Power Agency and the
City of Lodi.
BACKGROUND INFORMATION: Due to the granges with Western and the California Independent
System Operator (CALISO), the City of Lodi's Western Base
Resource Contract 00SNR-00327, will need to be formally
assigned to NCPA for power pool assignments to obtain maximum resource benefit effective January 01,
2005. The current power pool assignments are performed by NCPA and have been for a number of
years. By participating in a power pool with Western resource, NCPA brings $300,000 to $2,000,000 of
an annual benefit to all NCPA members including the City of Lodi by implementing these assignments.
Attached are two agreements. Agreement 1 (Assignment) is a two-page agreement whereby we can
assign our Westem "Base Resource Percentage' (BRP) and thereby save money on our purchased
power bill. Agreement 2 is a multipage Assignment Administration Agreement (AAA) to define how we
would share these savings with the other assignors; who, %(Mout which there would be no savings to
share.
Assignment of BRP - Western has provided Lodi with an opportunity to assign our BRP to NCPA so that
assignors may all jointly save perhaps up to a few million dollars per year - primarily through reduced
transmission costs, but also through a more efficient scheduling of Western energy.
Assignment Administration Agreement - Although the required formalities for sharing the savings may
have resulted in a rather detailed agreement, this AAA relies on only a handful of principles that are
presumed to reflect traditional, jointly held, Member values:
1) No Member will become worse off from joint action - this Assignment saves cash.
2) Any Member can change its mind — you can revoke your Assignment on short notice.
3) Every Member controls its own destiny — your AAA can't be changed without your consent.
4) All Members share and share alike; proportionately - half to sources and half to sinks.
5) Only Members that are Assignors can vote on the AAA terms to assign and save after 1213112004.
APPROVED:
Jar) S. Keeler, Interim City
Adopt resolution authorizing the City Manager to execute the Electric Service Base Resource Percentage
Agreement 00 -SNR -W327 for Western Area Power Administration between Northern Cafifomia Power
Agency and the City of Lodi (EUD)
November 17, 2004
Page 2 of 2
FUNDING: None. Within current power
Alan N. Vallow
Electric Utility Director
PREPARED BY: Mel Grandi, Manager, Eledric Services
ANVIMGftt
Attachments
cc: CityAttomey
Contract 00 -SNR -00327
REQUEST FOR ASSIGNMENT OF
CITY OF LODPS
BASE RESOURCE PERCENTAGE
TO NORTHERN CALIFORNIA POWER AGENCY
BACKGROUND:
1.1 The City of Lodi ("Lodi") is a municipal corporation, organized and existing
under the laws of the State of California.
1.2 Lodi has entered into Contract 00 -SNR -00327, dated August 16, 2000,
with Western Area Power Administration (Western), which provides 0.49049 with
a percentage of Western's Base Resource power beginning January 2005.
1.3 The Northern California Power Agency (NCPA) is a joint powers agency,
organized and existing under the laws of the State of California.
1.4 Lodi is a member of NCPA.
1.5 As a member of NCPA, Lodi desires to have Western assign Lodi's Base
Resource Percentage under Contract 00 -SNR -00327 to NCPA so that NCPA
may create a power resource portfolio for the mutual benefit of qualified NCPA
members.
2. ASSIGNMENT OF BASE RESOURCE PERCENTAGE:
2.1 Lodi hereby requests assignment of its 0.49049 percentage of the Base
Resource under Exhibit A to Contract 00 -SNR -00327 to NCPA.
2.2 NCPA is agreeable to taking responsibility for Lodi's 0.49049 percentage
of the Base Resource.
2.3 Lodi shall retain its Base Resource Contract 00 -SNR -00327 with a
0.49049 percent of the Base Resource during the term of assignment to NCPA.
2.4 Any allocation changes made pursuant to the 2004 Power Marketing Plan
shall apply to the Base Resource Percentage referred to in Section 2.1 of this
Assignment, regardless of the contract under which the allocation is being
administered.
2.5 No action will be required of Lodi under Contract 00 -SNR -00327 during
the time that NCPA is holding Lodi's Base Resource Percentage under Contract
00 -SNR -00327.
2.6 The Assignment shall remain in full force and effect until the earlier of:
Page 1 of 3
Contract 00 -SNR -00327
2.6.1 December 31, 2024; or
2.6.2 Sixty (60) days after Western has approved Lodi's written request
for reassignment of its Base Resource Percentage, which approval shall
not be unreasonably withheld or delayed.
2.7 NCPA and Lodi shall jointly and severally indemnify and hold Western
harmless from and against all claims, damages, losses, and expenses, including
attorney's fees, arising out of or resulting from the Assignment.
3. AGREEMENT:
All parties to the Assignment hereby agree that the Assignment will become
effective on the first day of the first month following the date of approval by the
Administrator of the Western Area Power Administration or a later date if agreed
to by Western and Lodi.
CITY OF LODI NORTHERN CALIFORNIA POWER AGENCY
By:
Janet S. Keeter
Title: Interim City Manager
am
Title:
Address: P.O. Box 3006 Address:
Lodi, CA 95241-1910
Attest:
Susan J. Blackston, City Clerk
Date:
Approved as to Form:
D. Stephen Schwabauer, City Attorney
Page 2 of 3
Contract 00 -SNR -00327
The above Request for Assignment of City of Lodi's Base Resource Percentage under
Contract 00 -SNR -00327 to the Northern California Power Agency is hereby approved.
Date:
Michael S. Hacskaylo, Administrator
Western Area Power Administration
Page 3 of 3
ASSIGNMENT ADMINISTRATION AGREEMENT
FOR
WESTERN AREA POWER ADMINISTRATION BASE RESOURCE PERCENTAGE
Between
NORTHERN CALIFORNIA POWER AGENCY
and
CITY OF LODI
ASSIGNMENT ADMINISTRATION AGREEMENT
TABLE OF CONTENTS
Recitals
Section 1:
Definitions.
Section 2:
NCPA Duties
Section 3:
Assignor Duties
Section 4:
Allocations
Section 5:
Resource Planning
Section 6:
Resource Sale and Purchase
Section 7:
O&M Funding and Restoration
Section 8:
Central Dispatch and Scheduling Services
Section 9:
Accounting
Section 10:
Metering
Section 11:
Billing
Section 12:
Administrative Cost Allocation
Section 13:
Other Agreements
Section 14:
Western Systems Coordinating Council
Section 15:
Term of Agreement
Section 16:
Notices
Section 17:
Waiver of Defaults
Section 18: Uncontrollable Forces
Section 19: Liability
Section 20: Reports and Records
Section 21: Assignment of Agreement
Section 22: Settlement of Disputes and Arbitration
Section 23: Amendments
Section 24: Severability
Section 25: Governing Law.
ASSIGNMENT ADMINISTRATION AGREEMENT
This Assignment Administration Agreement, hereinafter referred to as the
"Agreement", is made and entered into by and between the City of Lodi and the Northern
California Power Agency.
WITNESSETH:
WHEREAS, the Northern California Power Agency, hereinafter referred to as
"NCPA", has heretofore been duly established as a public agency pursuant to the Joint
Exercise of Powers Act of the Government Code of the State of California and, among
other things, is authorized to acquire, construct, finance, and operate buildings, works,
facilities and improvements for the generation and transmission of electric capacity and
energy for resale; and
WHEREAS, City of Lodi, hereinafter referred to as "Assignor" is a member in good
standing of the Northern California Power Agency; and
WHEREAS, as a member of NCPA, Assignor entered into Contract 00 -SNR -00327
(Assignment Contract), dated August 16, 2000, whereby Assignor assigned its Base
Resource Percentage under this contract to NCPA in order for NCPA to create a power
resource portfolio for the mutual benefit of participating NCPA members beginning January
1, 2005.
WHEREAS, NCPA has agreed to accept assignment of Assignor's Base Resource
Percentage, and will administer the Assignment Contract for the benefit of Assignor
according to the terms of this Assignment Administration Agreement; and
WHEREAS, it is intended that the Assignor will receive an economic benefit from
assigning its Western Area Power Administration Base Resource Percentage to NCPA
with such benefit being greater than or equal to the benefit that Assignor would have
derived had Assignor's Base Resource Energy been scheduled solely for use on its own
load; and
WHEREAS, NCPA anticipates taking assignment of additional Western Area
Power Administration Base Resource Percentages from other Assignors to likewise
provide economic benefits from joint assignment administration greater than or equal to
those benefits that individual Assignors would have derived had their Base Resource
Energy been scheduled solely for their own uses; and
WHEREAS, NCPA members and other qualified entities assigning their respective
Base Resource Percentages to NCPA expect to avoid certain costs associated with Base
Resource Energy delivery that would otherwise accrue if each Assignor's Base Resource
Energy been scheduled separately and solely for each Assignor's own load; and
WHEREAS, NCPA seeks to equitably allocate a portion of the common savings to
Assignor by the terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants, it is agreed hereby as
follows:
SECTION 1
Definitions
Whenever used in this Agreement, in either the singular or plural, the following terms shall
have the following respective meanings:
1.1 Administrative Costs are any general or administrative costs NCPA incurs
while performing its duties under this agreement, including but not limited to
consulting fees, legal fees, general overhead, and expenses related thereto.
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1.2 Agreement is this contract and attached Schedule(s).
1.3 Assignment Contract is the contract between NCPA and the Assignor and
approved by the Western Area Power Administration, providing for the
assignment of Assignor's Base Resource Percentage to NCPA.
1.4 Assignor is a party to an Assignment Contract assigning its Base Resource
Percentage to NCPA. Assignor is also a signatory to this Assignment
Administration Agreement with NCPA.
1.5 Base Resource Percentage is Assignor's percentage share of Western
Area Power Administration Base Resource under its Base Resource
Contract 00 -SNR -00327, prior to assigning the Base Resource Percentage
to NCPA. Base Resource Percentage may be modified by Western from
time to time as contemplated in Base Resource Contract 00 -SNR -00327.
1.6 Base Resource Energy is the energy and associated ancillary services
made available from the Western Area Power Administration on a daily
basis as a result of Assignor's Base Resource Percentage. Base
Resource Energy also refers to associated electrical capacity made
available from the Western Area Power Administration on a daily, monthly or
annual basis as a result of Assignor's Base Resource Percentage.
SECTION 2
NCPA Duties and Authorities
2.1 The NCPA Commission, acting after obtaining the unanimous affirmative vote of
those Commissioners representing each and every Assignor may:
(a) Act on behalf of NCPA in carrying out any action properly taken pursuant to
the provisions of this Agreement. The Commission, or its designee, shall
have the authority on behalf of all NCPA to execute any contract, lease or
other instrument which has been properly authorized pursuant to this
Agreement including: documents supplementing this Agreement, contracts
with Non -Parties, contracts relating the Base Resource such as physical
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hydro production hedging contracts for interested Assignors and related
items;
(b) Establish standards, in addition to the authority provided in other sections of
this Agreement, with respect to any aspect of arrangements between NCPA
and the Assignors, which it determines may adversely affect the
administration of the Base Resource Percentage Assignment, and to review
such arrangements to determine compliance with such standards;
(c) In addition, the Commission shall have such further powers and duties as are
conferred or imposed upon it by other sections of this Agreement.
2.2 The General Manager and the NCPA staff shall have the duties and authorities as
necessary to provide for the day-to-day administration of this Agreement, which
include but are not limited to actions to:
(a) Carry out directions of the Commission with respect to matters
related to this Agreement;
(b) Coordinate interchange accounting and maintain records pertaining
to the administration of the Base Resource Percentage assignments,
including determination of the volume of power delivered to each
Assignor for each calendar month;
(c) Prepare and submit a proposed budget for assignment -related
expenditures for the ensuing fiscal year to appropriate committees
and the Commission, on such schedule as established by the
Commission or consistent with the NCPA annual budget process;
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(d) Furnish such information and reports as are required to keep the
Assignor informed of the outlook for, the functioning of, and results
achieved with regard to the assignments of Base Resource
Percentages;
(e) Implement operating principles, practices and procedures as they
relate to the economy of operation of the Base Resource Percentage
assignments;
(f) Calculate costs for the Base Resource Percentage Assignment
transactions among the Assignors;
(g) Develop a billing system for the Base Resource Percentage
Assignment for transactions pursuant to this Agreement, including
criteria, rules, and standards thereto;
(h) Issue an invoice to Assignor for Base Resource Percentage
Assignment related costs;
(i) Assist Assignor in making sales and purchases of generation and
transmission capacity related to their assignment of the Base
Resource Percentage;
Q) Initiate and make long and short-range planning studies with respect to
the Western Area Power Administration Base Resource Percentage.
These studies shall be updated annually or at such other times as the
Commission may direct;
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(k) Develop any needed generation and transmission resource plans related
to the Base Resource Percentage assignments in consultation with
Assignor's staff;
2.3 The General Manager and the NCPA staff shall act on behalf of Assignor, as
directed in writing by Assignor, and in accordance with the Assignor's power
purchasing statutes, regulations, rules, ordinances, and charter, as they apply, to
subscribe to additional Western products other than Base Resource, that Western
chooses to market in proportion to each of its customers' Base Resource
Percentage.
SECTION 3
Assignor Duties
3.1 Assignor shall cooperate with NCPA in providing its relevant load and resource
data to NCPA in a timely fashion to insure that NCPA can maximize the value of the
assigned Base Resource Percentage.
3.2 Assignor shall also indemnify NCPA in regard to assignment administration
services provided by NCPA under this Agreement.
3.3 Assignor shall pay NCPA for all costs and charges incurred under this Agreement in
accordance with Section 11.
SECTION 4
A I Inrn+inno
4.1. Western Allocations Excluded from this Agreement
4.1.1. All benefits, costs, and energy schedules associated with the CVP
Corporation's Energy Exchange Arrangements for Project Use and First
C
Preference Support program shall not be subject to this Agreement. This
exclusion applies to all Bank Energy and Bank Return Energy schedules
allocated by the CVP Corporation.
4.1.2. Western allocations that are not assigned to NCPA will not be subject to this
Agreement and will be scheduled only for the benefit of the NCPA member
receiving the allocation.
4.1.3 An NCPA member who does not assign its Base Resource Percentage to
NCPA shall not be subject to this Agreement.
4.2. Determination of Benefits
In order to determine the benefits of assigning each member's Base Resource
Percentage to NCPA for joint administration, NCPA staff will first estimate the value
of the Base Resource Percentage as if no assignments had been executed, then
compare this value with the value obtained through NCPA's joint administration of
all assigned Base Resource Percentages. The computational algorithm for this
comparison is contained in Schedule A to this Agreement; however, such algorithm,
as it may be refined from time to time by the NCPA Commission, shall be
consistent with the following policy goals agreed to by each Assignor, namely: (i)
Western Base Resource Energy shall be fully utilized to the maximum extent
possible; (ii) subject to (i) above, Western Base Resource Energy shall be
scheduled during those time periods that maximize its value; and (iii) consistent with
scheduling Western Base Resource Energy to maximize its overall net value, NCPA
will also seek to reasonably minimize associated transmission -related and other
applicable costs. NCPA staff shall monitor the results of the algorithm contained in
Schedule A and recommend corrective action to be taken if and when the
application of this procedure results in allocations of benefits and costs to Assignor
inconsistent with the policy goals and allocation parameters described in this
section 4.
4.3 Allocation of Benefits
4.3.1 For each monthly accounting period, all benefits attained through NCPA's
administration of assigned Base Resource Percentages shall be allocated
to Assignor proportionately to (i) the number of days that its Assignment
Administration Agreement is in force that month, i.e., the fraction of the month
Agreement is in force, and (ii) the amount of Base Resource Energy
attributed to Assignor hereunder.
4.3.1.1 One-half of any benefits shall be allocated to that group of Assignors
providing Base Resource Energy in excess of their own load (Group
E), and the remaining one-half of benefits shall be allocated to that
group of Assignors whose load exceeds the Base Resource Energy
they have assigned (Group S).
4.3.2 Each individual Assignor within either Group E or Group S shall receive a
share of the group's benefit proportional to its contribution to the group's
excess energy or excess load respectively.
SECTION 5
Resource Planning
5.1 NCPA staff, in consultation with Assignor's staff, shall perform necessary forecasts,
studies and resource planning related to maximizing the overall value of the
integrated Base Resource Percentage assignments. NCPA Staff shall perform
member -specific forecasts, studies and resource plans for the benefit of the
individual Assignor so requesting only upon receiving a detailed written request
from Assignor particularly describing the task requested to be performed as part of
a duly authorized Member Services Agreement between the individual Assignor
and NCPA.
s
SECTION 6
Resource Sale and Purchase
6.1 Sales and Transfers to Non -Parties. Sales or transfers of Base Resource Energy to
entities not assigning a Base Resource Percentage to NCPA under the
authorization of the Western Area Power Administration are strictly prohibited
without the express written consent of the Western Area Power Administration.
6.2 Penalties. Any Penalties incurred for violation of section 6.1 shall be solely
responsibility of the Assignor found to be in noncompliance with the above section.
SECTION 7
O&M Funding and Restoration
7.1 NCPA shall pass through to Assignor on an as -billed basis any bills and credits
related to Western Area Power Administration O&M Funding and Central Valley
Project Improvement Act Restoration Funding as part of its normal billing procedure
described in Section 11 below.
SECTION 8
Central Dispatch and Scheduling Services
8.1 Central Dispatch. Each Assignor shall, to the fullest extent practicable, subject its
Base Resource Percentage to the central dispatch of the Northern California Power
Agency. The objectives of the Pool central dispatch with respect to the Base
Resource Percentage shall be as follows:
(a) to supply the capacity and energy requirements of the combined Assignors
at the lowest practicable cost;
(b) to accomplish the requirements of (a), above, in a reliable and safe manner.
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8.2 Base Resource Scheduling. NCPA and Assignor shall cooperate to meet each
applicable control area's scheduling timelines and protocols to maximize the value
of the assigned Base Resource Percentages, and correspondingly minimize
related transmission costs.
SECTION 9
Accounting
9.1 Records and Accounts. NCPA shall keep accurate records and accounts related to
the Base Resource Percentage assignment, and for each identifiable service that it
supplies to Assignor through this Agreement or through any related agreement
which may be entered into between NCPA and Assignor. Records and accounts
shall be kept in general accordance with the Uniform System of Accounts
Prescribed for Public Utilities and Licensees Subject to the Provisions of the
Federal Power Act (see 18 CFR 101), as prescribed by the Federal Energy
Regulatory Commission and amended from time to time. Such records and
accounts shall be made available to Assignor for inspection at any reasonable time.
All records are subject to audit at the written request of Assignor provided that such
audits shall be conducted at the expense of the Assignor(s) requesting them.
SECTION 10
Metering
10.1 Each Assignor's duties with respect to metering under this Agreement shall be
performed in accordance with protocols and standards of its respective control
area. Differences in control area standards with respect to metering, if any, shall be
resolved initially though internal discussions between the Assignors; and if the
Assignors are unable to reach an agreement in this regard, then the matter shall be
resolved through the dispute resolution procedures contained in Section 22 below.
to
SECTION 11
Billing
11.1 Applicability. Each month NCPA shall invoice Assignor in accordance with this
terms of this Agreement. Invoices amounts for Base Resource related costs will
initially be determined according to Assignor's actual Base Resource Percentage,
subject to the true -up procedure described below. Bills from NCPA to Assignor
shall be rendered and collected by NCPA pursuant to requirements and procedures
provided in this Agreement as follows. Amounts shown on invoice are due and
payable thirty (30) days after the date of the billing statement, except that any
invoice coming due on a Friday, holiday, or weekend shall be adjusted by NCPA to
come due on the closest following workday, as applicable. Assignor shall timely
pay to NCPA all amounts of money shown on an NPCA invoice or billing statement
completely, without setoff, for any service, product, electrical capacity or energy, any
Base Resource Energy, contracts related to the Base Resource, Administrative
Costs, Western Area Power Administration O&M Funding and Central Valley
Project Improvement Act Restoration Funding, any consulting or legal fee or
expense associated with this Agreement, and any other cost, liability, or expense
incurred by NCPA pursuant to this Agreement.
Any amount due and payable but not paid by the Assignor within thirty (30) days
following the date of the invoice shall bear interest at the per annum prime rate (or
reference rate) of the Bank of America NT & SA then in effect, plus two (2) percent
per annum computed on a daily basis until paid.
NCPA shall mail all invoices within 24 hours of the invoice date thereon. NCPA will
alert Assignor's designated representative via telephone of any payment not
received within 36 hours after the due date. The postmark date on the envelope
containing payment by check shall be used to determine timeliness of payment,
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except that payments received later than seven (7) days after the due date shall be
declared late without regard to postmark date.
Preferred Payment Method
Payment via wire transfer is the preferred method of making payments to NCPA.
For wire transfers, the transaction date shall be used to determine the timeliness of
payments.
NCPA Credit Memoranda issued to any Assignor do not bear interest during the
period such credits remain outstanding but unapplied. It is each Assignor's
responsibility to apply the credits to subsequent NCPA billings on a timely basis.
A. Disputes.
If An Assignor does not dispute the correctness of any billing statement in writing,
within the time provided, the billing statement shall be deemed to be correct. If
Assignor disputes the correctness of any billing statement by NCPA, it shall pay the
amount claimed when due. If the bill is determined to be incorrect, NCPA will issue
a corrected bill and refund any amount which may be due Assignor (including any
interest paid by Assignor).
If NCPA and Assignor fail to agree on the correctness of a bill within thirty
(30) days after the Assignor has submitted a written request for explanation,
the General Manager shall promptly submit the dispute to the NCPA
Commission for resolution. If the Commission and Assignor fail to agree on
the correctness of a bill within thirty (30) days, the dispute shall then be
resolved under the procedures set forth in Section 22 of this Agreement.
B. Invoices and Invoice True -Up
NCPA invoices for all costs will be adjusted or trued -up as provided below.
True -up of invoices will be performed throughout the year, as practicable; but,
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not less than quarterly. At the end of each fiscal year, as soon as the annual
audit is complete and actual data is available, NCPA shall true -up all
invoices based on actual cost data and actual billing determinants. True -up
amounts will be invoiced or credited to the Assignor, as applicable. True -up
amounts for Base Resource related costs will be based upon an adjusted
Base Resource Percentage attributable to Assignor in accordance with
Schedule A. Credit amounts will be deposited in the appropriate member's
individual account in the General Operating Reserve.
11.2 Appeals. In the event of extenuating circumstances, should Assignor make a late
payment including interest, it may then make a written appeal to the Commission for
relief from such interest for reasonable cause.
11.3 Audit Rights. Assignor shall have the right to audit any data created or maintained
by NCPA pursuant to this Agreement rn thirty (30) days written notice unless
otherwise agreed by such Assignor and NCPA.
11.4 Assignor Covenants. Each Assignor covenants and agrees (a) to establish and
collect rates and charges for the services and commodities provided by its Electric
System sufficient to provide Revenues adequate to meet its obligations under this
Agreement and to pay all other amounts payable from, and all lawful charges
against or liens upon, the Revenues; (b) to make payments under this Agreement
from the Revenues of, and as an operating expense of, its electric system; (c) to
make payments under this Agreement whether or not there is an interruption in,
interference with, or reduction or suspension of services provided under this
Agreement (such payments are not subject to any reduction, whether by offset or
otherwise, and regardless of whether any dispute exists); and (d) to operate its
electric system and the business in connection therewith in an efficient manner and
at reasonable cost and to maintain its electric system in good repair, working order,
and condition.
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SECTION 12
Administrative Cost Allocation
12.1 A proportionate share of administrative costs incurred by NCPA under this
Agreement shall be allocated and invoiced to Assignor. The allocation of these
costs will be based on two determinants: Assignor's Base Resource Percentage
and the benefits received by Assignor hereunder. An annual true -up shall be
performed to finally settle on administrative cost allocations to each Assignor for the
prior year.
SECTION 13
Other Agreements
13.1 Joint Powers Agreement. This Agreement complements the Joint Powers
Agreement. It extends the responsibilities and authorities assigned to the
Commission and to the General Manager under terms of the Joint Powers
Agreement.
13.2 Pooling Agreement. This Agreement supersedes the Pooling Agreement, and
takes precedence with respect with respect to issues addressed in this Agreement
relating to the receipt, delivery, scheduling, accounting and billing for all Western
Area Power Administration Base Resource Energy to which Assignor is entitled for
as long as this Agreement is in effect.
13.3 Other Agreements. With the exception of Third Phase Agreements and Project
Indentures of Trust, this Agreement shall upon its effective date, take precedence
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with respect to issues addressed in this Agreement and also addressed in any
other agreement between Assignor and NCPA. With respect to issues common to
Third Phase Agreements and this Agreement, Third Phase Agreements shall take
precedence over this Agreement.
SECTION 14
Western Electricity Coordinating Council
14.1 Consistency with Western Electricity Coordinating Council Standards, Criteria and
Rules. The standards, criteria and rules adopted by NCPA committees and by
NCPA under this Agreement shall be consistent with those adopted by the Western
Electricity Coordinating Council (WECC).
SECTION 15
Term of Agreement
15.1 Effective Date. This Agreement shall become effective on the date on which it has
been duly executed and delivered to NCPA by Assignor.
15.2 Termination. Of necessity, the term of this Agreement must coincide with term of
the underlying Assignment Contract. More specifically, this Agreement shall
terminate automatically upon the termination of the Assignment Contract.
Notwithstanding termination of this Agreement, any financial obligations incurred by
Assignor hereunder shall survive until satisfied.
Assignor shall not be obligated to compensate NCPA, or any other Assignors, for
loss of any benefits that would have accrued to NCPA, or other Assignors, if
Assignor had not terminated this Agreement. Nor shall NCPA, or any other Base
Resource Percentage Assignor, be obligated to compensate Assignor for any
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benefits that accrue to the remaining Assignors because of the termination.
Reallocation of the costs and benefits of the Base Resource Percentage
assignment after Assignor has withdrawn shall not give rise to any claim against
Assignor by NCPA or other Assignors. Nor shall NCPA or any of the remaining
Assignors be obligated to compensate Assignor for any benefits that accrue to the
remaining Assignors because of such a reallocation of costs and benefits.
SECTION 16
Notices
16.1 Notice. Any notice, demand or request required or authorized by this Agreement
shall be in writing and shall either be personally delivered or transmitted to the
Assignor at the address shown on the signature pages hereof.
SECTION 17
Waiver of Defaults
17.1 Waiver. No waiver of the performance by Assignor of any obligation under this
Agreement with respect to any default or any other matter arising in connection with
this Agreement shall be effective unless agreed to by both Assignor and NCPA in
writing. Any such waiver in any particular instance shall not be deemed a waiver
with respect to any subsequent performance, default or matter.
SECTION 18
Uncontrollable Forces
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18.1 Uncontrollable Forces. An Assignor shall not be considered to be in default in
respect of any obligation hereunder if prevented from fulfilling such obligation by
reason of uncontrollable forces. The term "uncontrollable forces" shall be deemed
for the purposes hereof to mean storm, flood, lightning, earthquake, tsunami, fire,
explosion, failure of facilities not due to lack of proper care or maintenance, civil
disturbance, labor dispute, sabotage, war, national emergency, restraint by court or
public authority, or other causes beyond the control of the affected Assignor which
such Assignor could not reasonably have been expected to avoid by exercise of
due diligence and foresight. Any Assignor affected by an uncontrollable force shall
use due diligence to place itself in a position to fulfill its obligations hereunder and if
unable to fulfill any obligation by reason of an uncontrollable force, such Assignor
shall exercise due diligence to remove such disability with reasonable dispatch.
Nothing in this Agreement shall require an Assignor to settle or compromise a labor
dispute.
SECTION 19
Liability
19.1 Liability. All of the privileges and immunities from liabilities, exemptions from laws,
ordinances and rules, all pension, relief, disability, workers' compensation, and
other benefits which apply to the activity of officers, agents or employees of any
public agency which is an Assignor to this Agreement, while engaged in the
performance of any of their functions or duties, shall apply to them in the same
degree and extent when performing their respective public duties in connection with
this Agreement.
19.2 Division of Responsibility. Neither the General Manager, NCPA, an Assignor, nor
an entity acting on behalf of Assignor, shall be responsible for the transmission,
control, use, or application of electric capacity and energy provided under the this
Agreement on the receiving Assignor's side of such Assignor's point of
17
interconnection and shall not, in any event, be liable for damage or injury to any
person or property whatsoever, arising, accruing, or resulting from, in any manner,
the receiving, transmission, control, use, application, or distribution by NCPA, or
Assignor, or a corporation acting on behalf of NCPA or Assignor, of said capacity
and energy on the receiving Assignor's side of such Assignor's point of
interconnection.
19.3 Indemnity, Each Assignor shall indemnify, defend, hold and save NCPA and the
other Assignors harmless from any and all loss or damage sustained to any person
or property and from any and all liability incurred by reason of any act or
performance, or failure to act or perform, on the part of NCPA or the other
Assignors. Such indemnification shall hold harmless the one indemnified, the
members of its governing body, its officers, agents and employees, from and
against any and all liability of whatever nature, including strict liability and any and all
losses and damages, including consequential damages and injuries, costs, and
expenses, including expenses incurred in connection with investigating any claim or
defending any action, and reasonable attorney's fees.
19.4 Counsel Representation. Pursuant to the provisions of California Civil Code
Section 1717 (a), Assignor and NCPA were represented by counsel in the
negotiation and execution of this Agreement as indicated below. In light of this
representation, those terms of this Agreement which dictate the responsibility for
bearing any attorney's fees incurred in the litigation or settlement in a manner
inconsistent with the provisions of Section 19.3 were intentionally so drafted by the
Assignor and NCPA.
SECTION 20
Reports and Records
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20.1 Reports. Assignor and NCPA shall each prepare and make available to the other all
data necessary for each to (i) perform all duties required under this Agreement, and
(ii) verify the accuracy of all amounts due and payable under this agreement.
Examples of data to be made available by NCPA at Assignor's request include, but
are not limited to:
a. All load data relevant to Assignor's assignment of its Base Resource
Percentage to NCPA.
b. All ISO cost information relevant to determining the cost savings obtained by
Assignor due to its assignment of its Base Resource Percentage to NCPA.
C. Such additional reports and records as are reasonably requested in writing;
provided however, that the Assignor so requesting shall reimburse the other
for reports and records not essentially completed or kept in the ordinary
course of business.
20.2 Reports to Other Agencies. NCPA will submit such reports and records which are
required or may be required by the California Energy Commission, the Western
Area Power Administration, the California Independent System Operator, the
Federal Energy Regulatory Commission or other such local, state or federal
agencies, as such reports and records are required for NCPA to fulfill its obligations
under this Agreement.
SECTION 21
Assignment of Agreement
21.1 Limitations. This Agreement shall inure to the benefit of and shall be binding upon
the respective successors and assignees of the Parties to this Agreement;
19
provided, however, that, except as provided in the event of a default, and, except for
the assignment by NCPA authorized hereby, neither this Agreement nor any interest
herein shall be transferred or assigned by Assignor hereto except with the consent
in writing of the NCPA provided, however, that such consent shall not be withheld
unreasonably. No assignment or transfer of this Agreement shall relieve Assignor of
any obligation hereunder, except as otherwise so provided herein.
SECTION 22
Settlement of Disputes and Arbitration
22.1 Settlement of Disputes. NCPA and Assignor agree to make best efforts to settle all
disputes among themselves connected with this Agreement as a matter of normal
business under this Agreement. The procedures set forth in the remainder of this
Section shall apply to all disputes that cannot be settled by NCPA and Assignor;
provided, that the provisions of Section 11.4 shall first apply to all disputes involving
invoice prepared by NCPA. Regarding agenda items arising from this bilateral
Agreement, for which there is a potential legal conflict of interests between the
Assignor and NCPA, the Assignor's designated Commission member shall abstain
from voting on such items at NCPA Commission meetings.
22.2 Role of the Commission. All disputes connected with this Agreement that cannot be
resolved informally among the respective staffs shall be submitted to the
Commission upon the written request of one or more Assignors. If the Commission
cannot resolve a dispute within thirty (30) days after the dispute is submitted to it,
Assignor may commence binding arbitration pursuant to Section 22.3. The
Commission may suggest that a mediator with experience in the utility industry be
asked to assist in such negotiations. The arbitration procedure provided for in 22.3
shall be used only as a last resort in the event that the dispute cannot be resolved
through discussion, negotiations and mediation.
20
22.3 Arbitration. A dispute that cannot be settled pursuant to Section 22.2 shall be
settled by binding arbitration. Immediately after the conclusion of arbitration,
Assignor and NCPA shall take whatever action is required to comply with the
arbitrator's decision. Judgment upon the award may be entered in any court having
jurisdiction.
22.4 Expedited Dispute Resolution Procedure. If at any time Assignor or NCPA believes
that the other has breached or may breach this Agreement by some disputed
action, which dispute can not be timely resolved under procedures set forth in
Section 22.2, written notice shall be promptly provided to the General Manager.
Such notice shall provide a detailed explanation of the dispute and the position(s) of
the Parties to the dispute. The notice shall also provide an explanation of why the
dispute cannot be timely resolved under the procedures set forth in Section 22.2.
Upon receipt of such notice, the General Manager and the Utility Director of
Assignor shall consult to determine what actions are appropriate to effect a
resolution of the dispute. In the event that the General Manager and the Utility
Director cannot effect a resolution of the dispute satisfactory to all Parties within five
(5) working days of receipt of such notice, the General Manager shall immediately
notify the Chairman of the Commission and provide copies of the notice, together
with any comments of the General Manager and the Utility Director, concerning the
dispute.
Upon receipt of such notice, the Chairman of the Commission shall either place the
dispute on the agenda of the next regular meeting of the Commission for the
purpose of having the Commission mediate the dispute or if deemed necessary by
the Chairman, due to the need for timely resolution, call a special meeting of the
Commission for the purpose of having the Commission mediate the dispute. If the
21
Commission cannot effect a resolution of the dispute at such meetings, the Parties
shall immediately invoke the provisions of Section 22.3.
SECTION 23
Amendments
23.1 Amendments. Unless otherwise set forth in this Section, this Agreement may be
amended only by written instrument executed by Assignor and NCPA with the same
formality as this Agreement; provided however that the Schedule(s) to this
Agreement may be modified through a unanimous vote of the Assignors' NCPA
Commission members provided that each Assignor's commission representative is
present and votes for the passage of the amendment.
SECTION 24
Severability
24.1 Severability. In the event that any of the terms, covenants or conditions of this
Agreement or the application of any such term, covenant or condition, shall be held
invalid as to any person or circumstance by any court having jurisdiction, all other terms,
covenants or conditions of this Agreement and their application shall not be effected
thereby, but shall remain in force and affect unless the court holds that such provisions
are not severable from all other provisions of this Agreement.
22
SECTION 25
Governinq Law
25.1 Governing Law. This Agreement shall be interpreted, governed by, and construed
under the laws of the State of California.
NORTHERN CALIFORNIA POWER AGENCY
Approved as to form:
By:_
Title:
Address for Notices:
CITY OF LODI
Attest:
0
Susan J. Blackston, City Clerk
Date:
Approved as to Form:
By:_
Title:
By:
Janet S. Keeter
Title: Interim City Manager
Address: P.O. Box 3006
By:
D. Stephen Schwabauer, City Attorney
23
Lodi, CA 95241-1910
Schedule A
The Allocation Algorithm
A-1 Allocation of Benefits other than Transmission Cost Savings
Steps 1-9 determine each Assignor's monthly percentage allocator that will be used to
distribute benefits of pooling. Step 10 uses that percentage allocator to distribute the
benefits.
All computational steps in this allocation algorithm will be implemented in a manner that is
consistent with NCPA staffs goal of scheduling the assigned BR to maximize the
economic market value of the BR.
Step 1: Constrained own -load optimal dispatch: NCPA staff shall perform after -the -
fact monthly "own -load" optimal dispatch of each Assignor's BR to establish the value of
the individual BR allocation to each Assignor pre -assignments. The own -load dispatch
shall be constrained by hourly loads equal to each Assignor's gross hourly loads multiplied
by a forecast factor of 1.00 such that BR energy schedules cannot exceed 100% of load in
any hour. In addition, revenues that the Assignor would have received from Western
through the re -marketing of its "stranded" energy allocations (the portion of monthly energy
allocations that cannot be utilized by the Assignor) will be added to this value.
Value_O/L(i) = O/L dispatch(i) * MCP + Stranded—Revenue(i)
where:Value O/L is the BR energy value in the own -load dispatch,
represents each Assignor,
O/L dispatch is the hourly own -load schedule of BR,
MCP is the hourly NCPA Pool Market Clearing Price,
and, Stranded Revenue is the estimated Western energy re -marketing
revenue.
Step 2: Net value of own -load constrained dispatch: All volumetric Western costs will
be deducted from the values computed in Step 1. Fixed monthly BR costs and other fixed
costs are not included in this step.
NetValue_O/L(i) = Value—O/L(i) — VarCost_O/L(i)
where: NetValue O/L is the own -load BR value adjusted for variable costs,
and,
VarCost O/L is all variable cost associated with Western BR,
including exchange purchase costs, that each Assignor would have
paid to Western to schedule its individual BR allocation.
Step 3: Unconstrained own -load optimal dispatch: Perform individual optimal
dispatches without load constraints. The difference in net value between this un-
constrained net value and the NetValue_O/L of Step 2 shall be the allocation determinant
for 50% of the assignment benefit computed in Step 7.
NetBen_O/L(!) = Unconstrained_Disp(i) * MCP — VarCostPool_O/L(!) —
NetValue_O/L(i)
Allocator E(i) = NetBen_O/L(i) / (Sum of NetBen_O/L(i))
where:NetBen O/L is the net value increase when the load constraint is removed,
Unconstrained Disp is the optimized BR schedule without load constraint,
VarCostPool_O/L is the variable cost incurred without load limits,
and, Allocator E is the energy provider BR value allocator used in step 7.
Step 4: Head -room value: Compute the value of load "head -room" provided by each
Assignor during the month. Head -room value is a function of each Assignor's net load (net
of constrained own -load BR schedules and other energy schedules subject to federal
power marketing restrictions) in each time -step when NCPA's actual BR schedule
exceeds the sum of the Assignors' own -load BR energy schedules.
In each hourly time step that NCPA's actual BR schedule exceeds the sum of
01—dispatch in step 1, the HR Value for each Assignor (i) is computed as:
HR_MW(i) = Max[0, Load(!) — O/L—dispatch(i) — Other Western(!)]
HR—Value(i) = HR—MW(i) / (sum of HR_MW(!)) *
(NCPA—BR — sum of O/L—dispatch(i)) * MCP
where:HR MW is the net -Western load "head room"
Other Western is the schedule of non -BR Western energy,
HR Value is the proportional allocation of usable head room valuation,
and, NCPA BR is NCPA's actual schedule of Western BR.
Step 5: Allocators for head -room providers: Compute the allocation determinant for
50% of the pooling benefit computed in step 7 on the basis of HR Value for the month.
ll
Allocator L(i) = HR Value(i) / (sum of HR Value(i))
Where Allocator L is the head -room provider value allocator used in step 7.
Step 6: Net benefit of BR assignments: Compute the net benefit of BR assignments to
NCPA as the difference between MCP energy value of NCPA's actual BR schedule -minus
variable BR costs — minus the sum of NetValue—O/L for the month. If the result is positive,
then proceed to step 7. If negative, proceed to step 8.
Net—Ben = NCPA_BR * MCP + Stranded—NCPA — VC—NCPA — (sum of
NetValue—O/L(i))
where: Net Ben is the increase (or decrease) in BR value due to assignments,
Stranded—NCPA is actual re -marketed energy revenues,
VC NCPA is NCPA's variable BR costs including exchange energy
purchase costs,
and, Stranded—NCPA is revenues received for energy re -marketed by Western
for NCPA.
Step 7 (Only if Net Ben is positive) Allocate positive Net—Ben: Allocate one-half of the
Net Ben using Allocator E and one-half using Allocator L. Proceed to Step 9.
Assignor Ben(i) = Net—Ben * (Allocator E(i) + Allocator L(i)) / 2
Where Assignor Ben is each Assignor's share of NCPA's assignment benefit.
Step 8 (Only if Net Benefit is less than or equals zero) Zero pooling benefit: Set
Assignor—Benefit value to zero for each Assignor. Proceed to Step 9.
Assignor Ben(i) = 0.
Step 9: Assign constant adiusted BR percentage shares for month: Determine
each Assignor's percentage share of NCPA's BR by normalizing the sum of each
Assignor's Assignor—Ben and NetValue—O/L. Each Assignor's share of NCPA's BR
schedules in each time -step during the month shall be equal to the percentage computed in
this step. (For example, if a member's share in a given month is calculated as 15% in this
step, that member is assigned 15% of actual Western schedules in each time -step during
that month.)
iii
BR—Pct(l) _ [Assignor Ben(i) + NetValue_O/L(i)] /
sum of [Assignor Ben(!) + NetValue—O/L(!)]
where BR Pct(i is each Assignor's share of NCPA BR schedules and associated
benefits (e.g., re -marketed energy revenues).
Step 10: Assign BR costs: Assign any difference between the actual NCPA_VCost
(NCPA's actual BR variable costs) and the sum of the VarCost O/L in the month, positive
or negative, will be distributed to each Assignor using BR_Pct(i). Each Assignor's
Western BR costs for the month (to be billed by NCPA) will equal the respective
VarCost_O/L adjusted by this step added to the Assignor's share of fixed BR costs.
BR—Cost(i) = VarCost_O/L(!) + FixedCost_O/L(!) —
BR—Pct(i) * [NCPA—Vcost — (sum of VarCost_O/L(i))]
where:BR Cost(i) is each Assignor's total monthly Base Resource cost,
and, FixedCost Q&W is each Assignor's fixed Western BR cost.
NCPA staff shall regularly monitor the results of this procedure and recommend corrective
action to be taken if and when the application of this procedure results in counter -intuitive
and/or unfair allocations of benefits and costs to the Assignors.
A-2 Transmission Cost Savings Allocations
After each month, NCPA staff will compute the difference between NCPA BR energy
physically scheduled through an Assignor that is directly connected to Western's
transmission system and that Assignor's O/L_dispatch value computed as specified in
Step 1. If this difference is positive, the direct -connect Assignor saved transmission
charges and CAISO costs (e.g., GMC, low and high voltage access, etc.), to the extent that
the over -scheduled BR displaced CAISO energy, by physically scheduling another
Assignor's BR energy. The value of the transmission charge and CAISO cost savings will
be determined and split on a 50/50 basis with the non -direct -connect Assignors whose BR
energy was scheduled to the direct -connect Assignor(s).
The direct -connect Assignor directly receives the benefit of avoiding transmission charges
and CAISO costs to the extent that the direct -connect Assignor actually displaced CAISO
energy imports. The direct -connect Assignor will pay half of the transmission and CAISO
savings that is achieved by scheduling other Assignor's shares of BR to its load (as
determined by NCPA staff) to the non -direct -connect Assignors. These payments will be
allocated to the non -direct -connect Assignors in proportion to their adjusted BR_Pct (from
Step 9).
iv
RESOLUTION NO. 2004-252
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE CITY MANAGER TO EXECUTE
ELECTRIC SERVICE BASE RESOURCE PERCENTAGE
AGREEMENT NO. 00 -SNR -00327 FOR WESTERN AREA
POWER ADMINISTRATION BETWEEN NORTHERN
CALIFORNIA POWER AGENCY AND THE CITY OF LODI
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute Electric Service Base Resource Percentage
Agreement No. 00 -SNR -00327 for Western Area Power Administration between
Northern California Power Agency and the City of Lodi.
Dated: November 17, 2004
I hereby certify that Resolution No. 2004-252 was passed and adopted by the
Loci City Council in a regular meeting held November 17, 2004, by the following vote:
AYES: COUNCIL MEMBERS — Beckman, Hitchcock, Howard, Land, and
Mayor Hansen
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
SUSAN J. BLACKSTON
City Clerk
2004-252
2.
&RI S
Assignment 04 -SNR -00771
REQUEST FOR ASSIGNMENT OF
CITY OF LODI'S
BASE RESOURCE PERCENTAGE
TO NORTHERN CALIFORNIA POWER AGENCY
BACKGROUND:
1.1 The City of Lodi (Lodi) is a municipal corporation, organized and existing
under the laws of the State of California.
1.2 Lodi has entered into Contract 00 -SNR -00327, dated August 16, 2000,
with the Westem Area mower Administration (Western), which provides Lodi with
a percentage of Western's Base Resource power beginning January 2005-
1.3 The Northern Califomia Power Agency (NCPA) is a joint powers agency,
organized and existing under the laws of the State of California.
1.4 Lodi is a member of NCPA.
1.5 As a member of NCPA, Lodi desires to have Western assign Lodi's Base
Resource Percentage under Contract 00 -SNR -00327 to NCPA so that NCPA
may create a power resource portfolio for the mutual benefit of qualified NCPA
members.
2.1 Lodi hereby requests assignment of its 0.49049 percentage of the Base
Resource under Exhibit A to Contract 00 -SNR -00327 to NCPA.
2.2 NCPA is agreeable to taking responsibility for Lodi's 0.49049 percentage
of the Base Resource.
2.3 Lodi shall retain its Base Resource Contract 00 -SNR -000327 with a 0.000
percent of the Base Resource during the term of assignment to NCPA.
2.4 Any allocation changes made pursuant to the 2004 Power Marketing Plan
shall apply to the Base Resource Percentage referred to in Section 2.1 of this
Assignment, regardless of the contract under which the allocation is being
administered.
2.5 No action will be required of Lodi under Contract 00 -SNR -00327 during
the time that NCPA is holding Lodi's Base Resource Percentage under Contract
04 -SNR -00782.
Page 1 of 3
Assignment 04 -SNR -00771
2.6 The Assignment shall remain in full force and effect until the earlier of:
2.6.1 December 31, 2024; or
2.6.2 Sixty (60) days after Western has approved Lodi's written request
for reassignment of its Base Resource Percentage, which approval shall
not be unreasonably withheld or delayed.
2.7 NCPA and Lodi shall jointly and severally indemnify and hold Western
harmless from and against all claims, damages, losses, and expenses, including
attorney's fees, arising out of or resulting from the Assignment.
3. AGt3EEMENT:
All parties to the Assignment hereby agree that the Assignment will become
effective on the first day of the first month following the date of approval by the
Administrator of the Western Area Power Administration or a later date if agreed
to by Western and Lodi.
Attest:
By:
Title:
Attest:
By:
Title
CITY OF LODI
By.
Title:
Address: 1331 South Ham Lane
Lodi CA 95242
Date:
NORTHERN CALIFORNIA POWER AGENCY
By:
Title:
Address: 180 Cirby Way,
Date:
Roseville. CA 95678
Page 2 of 3
Assignment 04 -SNR -00771
The above Request for Assignment of City of Lodi's Base Resource Percentage under
Contract 00 -SNR -00327 to the Northern California Power Agency is hereby approved.
Date:
Michael S. Hacskaylo
Administrator
Western Area Power Administration
Page 3 of 3