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HomeMy WebLinkAboutAgenda Report - April 18, 2012 C-11AGENDA ITEM C 0 1' A� CITY OF LODI • ,. ` COUNCIL COMMUNICATION Im AGENDA TITLE: Adopt Resolution Approving the Northern California PowerHgency Legislative an( RegulatoryAffairs Program Agreement, and Authorizing the City Managerto Execute Said Agreement MEETING DATE: April 18, 2012 PREPARED BY: Electric Utility Director RECOMMENDED ACTION: Adopt a resolution approving the Northern California Power Agency Legislative and RegulatoryAffairs Program Agreement, and authorizing the City Manager to execute said agreement. BACKGROUND INFORMATION: Since the inception of the Northern California PowerAgency (NCPA), the legislative and regulatory activities of the agency have been fundamental for the purpose of managing substantial public investment, and protecting the public power business model through preservation of local control. The attached Legislative and RegulatoryAffairs Program Agreement (L&RPA) represents an important step toward ensuring clear and consistent agreements for programs throughout NCPA. While many important agency—wide governance issues have been addressed during previous membership deliberations, the structure of the L&R program area has not yet been formalized in the same way. This agreement provides this needed programmatic structure by: Ensuring that all NCPA members, because of their shared interest in protecting NCPA assets and the public power business model, participate in the L&R Program as outlined underthe terms of the agreementwith termination of the L&RPA being concurrentwith membership in NCPA. Establishing three program areas: 1) General Legislative and RegulatoryAffairs Program; 2) Specific Legislative and RegulatoryAffairs Programs, and; 3) Member Services Program. o All NCPA members support the General Program which includes Legislative, Regulatory and Judicial Action. o The Specific Programs allows for the costs of project -specific Public Benefits and Judicial Action activities to be paid for by project participants only. o The Member Services program ensures all members support the costs of one staff person for this program, and provides flexibility to initiate public benefits projects paid for by the beneficiaries of the project. Clarifying that NCPA Pool -specific regulatory efforts currently governed by separate cost allocation methodologies are unaffected by the agreement. Requiring NCPA Commission approval of new L&R Judicial Action initiatives, and ensuring that NCPA members can opt out of these initiatives as they are formed, or withdraw during the APPROVED: Konradt Bartlam, City Manager Adopt ResolutionApproving the Northern California Power Agency Legislative and RegulatoryAffairs Program Agreement, and Authorizing the City Managerto Execute Said Agreement with Administration by the Electric Utility Director April 18, 2012 Page 2 of 2 proceeding with appropriate notice and fulfillment of contractual financial obligations related to the initiative that were entered into prior to withdrawal. • Providing the NCPA Commission with discretion to allow for exemptions or special terms under the agreement for new NCPA members due to unique, special, or legal circumstances. Utility staff respectfully recommends approval of the NCPA Legislative& Regulatory Program Agreement. FISCAL IMPACT: Not applicable. FUNDING: Not applicable. Elizabeth A. Kirklev Electric Utility Director PREPARED BY: Rob Lechner, Manager, Customer Service & Programs EK/RSUIst A PUBLIC AGENCY NC PA NORTHERN CALIFORNIA POWER AGENCY Commission Staff Report Date: March 15, 2012 To: NCPA Commission 651 Commerce Diie Roseville, CA 95678 phone (916)781-3636 fax (916)783-7693 web . www.ncpa.com. AGENDA ITEM NO.: p Subject: Commission Approval of NCPA Legislative and Regulatory Affairs Program Agreement Back rg ound Since the inception of NCPA, the legislative and regulatory activities of this agency have been fundamentalto our purpose of managing substantial public investment, and protecting th e public power business model through preservation of local control. The attached Legislative and Regulatory Affairs Program Agreement recognizes the integral role that this program plays -today in protecting more than $1 billion in power resource and infrastructure investments against potentially onerous legislative and regulatory measures that could undermine the value ofthese.prdjects and lead to increased ratepayer costs. The N CPA Legislative and Regulatory Affairs Program Agreement represents an important step toward ensuring clear and consistent agreements for programs throughout the agency. While many important agency -wide governance issues have been addressed during previous membership deliberations, the structure of the NCPA Legislative and Regulatory Affairs program• area has not yet been formalized in the same way. This agreement provides this needed programmatic structure by. • Ensuring that all NCPA members, because oftheir shared interest in protecting agency assets and the public power business model, participate in the Legislative and . . Regulatory Affairs Program as outlined under the terms of this agreement. Termination cf this agreement is concurrent with. membership in the agency. Establishing three program areas: 1) the Genera I-Leg!slative and Regulatory Affairs Program; 2) the Specific Legislative and Regulatory Affairs Program, and; 3) the Member Services Program. All members support the General Program which includes Legislative, Regulatory and Judicial Action. The Specific Program allows for the costs of project -specific Public Benefits and Judicial'Action. activities to be paid for by project participants only. The Member Services Program ensures all members support the costs of one staff person for this program, and provides flexibilityto initiate public benefits projects paid for by:the beneficiaries of the project. Clarifying that NCPA Pool -specific regulatory efforts currently governed by. separate cost allocation.methodologies are unaffected by this agreement. SR: 133:12 Commission Approval ofNCPA Legislative and Regulatory Affairs Program Agreem en t March 15, 2012 Page 2 • Requiring Commission approval of new Legislative & Regulatory Affairs Judicial Action initiatives, and ensuring that NCPA members can opt out cfthese initiatives as they are formed, or withdraw during the proceeding with appropriate notice and fulfillment of contractual financial obligations related to the initiative that were entered into prior to withdrawal. Providing the Commission with discretion to allow for exemptions or special terms under this agreement for new NCPA members due to unique, special, or legal circumstances. The provisions of this agreement are the outgrowth of extensive member discussions and review. The agreement provides much-needed certainty for NCPA members by providing stability for the program and protecting against unanticipated cost -shifts. Importantly, the agreement also helps ensure NCPA member flexibility by establishing a "beneficiaries pay" structure for public benefits projects, and providing for increased local discretion related to participation in judicial action initiatives. It will also prevent undue staff time (and opportunity costs) and legal fees expended as a result of disputes that can arise in the absence of agreements that provide a shared understanding of the roles and obligations of both the agency and its members. Fiscal Impact This agreement wffi not affect the current cost allocation for the Legislative and Regulatory Affairs program as approved by the NCPA Commission in December, 2010 (please see attached Schedule 1 >The agreement ensures that only those members participating in public benefits projects and judicial action initiatives coverthe associated costs. Environmental Analysis This activity would not result in a direct or reasonably foreseeable indirect change in the physical environment and is therefore not a "project"for purposes cf Section 21065 the California Environmental Quality Act. No environmental review is necessary. Recommendation It is the recommendation of the NCPA staffthat the Commission approve the attached NCPA Legislative and Regulatory Affairs Program Agreement. Respectfully s miffed, Prepared by: LINA 0_ n JA /. ' . P PE' JANE CIRRINCIONE G , eral Manager Assistant General Manager, Legislative & Regulatory Affairs Attachments (3) — Resolution 12-24 — Legislative and Regulatory Affairs Program Agreement — NCPA Commission Approved Allocation Methodology for the Legislative & Regulatory Program SR: 133:12 RESOLUTION 12-24 RESOLUTION OF THE NORTHERN CALIFORNIA POWER AGENCY APPROVAL OF LEGISLATIVE AND REGULATORY AFFAIRS PROGRAM AGREEMENT (Staff Report#133:12) WHEREAS, since the inception of NCPA, the legislative and regulatory activities cf the agency have been fundamental to our purpose of managing substantial public investment and resources, and protecting the public power business model through the preservation of local control; and WHEREAS, following extensive NCPA member review and consultation, a Legislative and Regulatory Affairs Program agreement has been developed that recognizes the importance cf protecting the agency's assets, resources, and our member systems, and ensures all NCPA members participate in supporting the vital Legislative and Regulatory Affairs functions of this agency; and WHEREAS, this agreement will provide stability and prevent against unanticipated cost -shifts within the Legislative and Regulatory Affairs Program; and WHEREAS, this agreement will provide NCPA member flexibility by establishing a "beneficiaries. pay" structure for public benefits projects and providing for local discretion over participation in judicial action initiatives; and NOW, THEREFORE BE IT RESOLVED, that the Commission of the Northern California Power Agency adopts the Legislative and Regulatory Affairs Program Agreement. PASSED, ADOPTED and APPROVED this — day of 2012, by the following vote on roll call: Y- to Abstained Absent Alameda BART Biggs Gridley Healdsburg Lodi Lompoc Palo Alto Port of Oakland Redding Roseville Santa Clara Truckee Donner Ukiah Plumas-Sierra GARY W. PLASS ATTEST: DENISE DOW . CHAIRMAN ASSISTANT SECRETARY NORTHERN CALIFORNIAPOWERAGENCY LEGISLATIVE AND REGULATORY AFFAIRS PROGRAM AGREEMENT This LEGISLATIVE AND REGULATORY AFFAIRS PROGRAM AGREEMENT ("this Agreement")is made as cf July 1,2012, by and among the Northern California Power Agency, a j oint powers agency of the State of California ("NCPA) and its Members. NCPA and the Members are referred to herein individually as a "Party" and collectively as the "Parties". RECITALS A. NCPA maintains a Legislative and Regulatory Affairs Program by which NCPA provides its Members with: (1)representation and advocacy in areas cf common interest to all, or nearly all Members at the regional, state and federal level, including, but not limited to, representation and advocacy before the California Legislature, U.S. Congress/ the CAISO, state and federal environmental and energy agencies, state and federal commissions and other regulatory bodies; (2) support and expertise for Members involved in particular NCPA Projects and Programs; and (3) programmatic support for implementation, reporting, and compliance with various state and federal programs and requirements. B. The Legislative and Regulatory Affairs Program consists cf three Program Areas: (l)the GeneralL&R Program; (2) the SpecificL&R Program; and (3) the Member Services Program. The General L&R Program, Specific L&R Program and Member Services Program are together referred to as the "L&R Program." C. An agreement is necessary to formalize the contractual relationships between NCPA and Members with regard to the role, scope, governance, and the equitable allocation of costs associated with the L&R Program. Each Member agrees to pay its equitable share cf costs associated with the L&R Program in accordance with its L&R Program Cost Allocation. D. - The L&R Program benefits all Members. It is an integral portion cf NCPks core function and is necessary in order to protect the investments NCPA and its Members have made in their public power assets. It is therefore mandatory for aU Members cf NCPA to become a signatory to this Agreement, except in such limited circumstances where the Commission exempts a Member from this requirement in accordance with Section 6.2.1 of this Agreement. E. This Agreement includes provisions for the L&R Judicial Action Program, but does not affect or modify the Judicial Action program administered by NCPA's Power Management Division, nor affect the cost allocations for the Power Management f udicial Action Program. F. Each Member agrees to pay its equitable share cf costs associated with the L&R Program, as deternvned by the L&R Program Cost Allocation, which accounts for the cost allocation principles set forth in this Agreement. G. The L&R Program shall operate in accordance with the guidance set forth in the Annual L&R Program Strategic Plan and the Annual Budget. All L&R Program functions are overseen by the NCPA Legislative and Regulatory Affairs Committee ("L&R Committee") and the NCPA Commission. NOW THEREFORE, the Parties agree as follows: Section 1. Definitions. 1.1 Definitions. Whenever used in this Agreement (including the Recitals hereto), the following terms shall have the following respective meanings: 1.1.1 "Agreement" means this Legislative and Regulatory Affairs Program Agreement, as the same maybe amended from 1 time to time in accordancewith the terms and conditions hereof. 1.1.2 "All Resources Bill" means the single, combined monthly bill fromNCPA to a Member with respect to all NCPA programs and projects. 1.1.3 "Annual Budget" means the NCPA budget for the ensuing Fiscal Year adopted by the Commission, as it maybe amended from time to time. 1.1.4 "AnnualL&R Program StrategicPlan" means the strategic plan for the L&R Program adopted by the L&R Committee and the Commission, as it may be amended from time to time. 1.1.5 "AssociateMember" means an associate member of NCPA. 1.1.6 "BaseResource Share" means an individual Member's Base Resource Share from Western. 1.1.7 "Bureau" means the U.S. Bureau cf Reclamation. 1.1.8 "BusinessDay" means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m., Pacific Time. 1.1.9 "CAISO means the California Independent System Operator Corporation, or any successor entity. 1.1.10 "CaliforniaRefund Proceeding" means filings and proceedings, whether regulatory or judicial, in connection with the California energy crisis cf 2000-2001. 1.1.11"CARB" means the CalifomiaAir Resources Board. 1.1.12 " C E C means the California Energy Commission. 1.1.13 "Claims" has the meaning set forth in Section 10.2. 2 1.1.14 "Commission"means the NCPA Commission. 1.1.15 "Constitutive Documents" means, with respect to NCPA, the Joint Exercise of Powers Act (Cal. Govt. Code § 6500, e t seq.), the JointPowers Agreement, and the NCPA Rules Cf Procedure, and such resolutions of general applicability and governance as maybe adopted by the Commission; and, with respect to each Member, the California Government Code and other statutory provisions applicable to such Member, any applicable agreements, charters, contracts or other documents concerning the formation, operation or decision making cf such Member, including, if applicable, its City Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Member's governing body. 1=1.16 "CPUC" means the California Public Utilities Commission. 1.1.17 "Effective Date" means the later of (i) the date set forth in the preamble of this Agreement; or (ii) the date this Agreement is executed by all Members. 1.1.18 "FERC" means the Federal Energy Regulatory Commission. 1.1.19 "FiscalYear" means the NCPA fiscal year•, currently the twelve month period beginning July 1 and ending on the next following June 30. 1.1.20 "General Manager" means the General Manager of NCPA. 1.1.21 "GeneralL&R Program" means the (1)Legislative Representation, (2) Regulatory Representation, (3) Western Representation; and (4)Judicial Action Program areas asset forth in Section 3. 3 1.1.22 "JointPowers Agreement" means that certain Amended and Restated Northern California Power Agency Joint Powers Agreement, dated as cf January 1,2008, establishing NCPA, as the same may be amended from time to time. 1. 1.23 "JudicialAction Program" has the meaning set forth in Section3.2.3. 1. 1.24 "L&R" means legislative and regulatory affairs. 1.1.25 "L&R Committee" means the NCPA Legislative and Regulatory Committee, as established by the NCPA Rules cf Procedure. 1. 1.26 "L&R Program" has the meaning set forth in Recital B. 1. 1.27 "L&R Program Cost Allocation" means the cost allocation methodology approved by the NCPA Commission on December 2,20 10, as set forth in Schedule 1.00, as amended from time to time. 1. 1.28 "L&R Program Schedule" means the procedures, protocols and guidelines, appended to and part of this Agreement, which are subject to change or amendment from time to time by the Commission, as set forth in Section 10 of this Agreement. 1,1.29 "LegislativeProgram" has the meaning set forth in Section 3.1.1. 1.1.30 "Member" means any Member of NCPA or Associate Member cf NCPA. 1. 1.31 "Member Services Program" has the meaning set forth in Section 5. 1.1.32 "NCPA" has the meaning set forth in the preamble hereto. 4 1.1.33 "NCPARules cf Procedure" means the Rules of Procedure for the Commission of the Northern CaliforniaPower Agency, sometimes referred to as the NCPA By-laws, as amended from time to time. 1.1.34 "NERC" means the North American Electric Reliability Corporation. 1. 1.35 "Party" or "Parties" has the meaning set forth in the preamble hereto; provided that "third party" or "third parties" are entities that are not a Party to this Agreement. 1. 1.36 "PG&E" means Pacific Gas and Electric Company. 1. 1.37 "Pooling Agreement" means that certain Amended and Restated Pooling Agreement dated as cf October 29,2008, as the same maybe amended from time to time. 1.1.38 "Power Management Cost AllocationMethodology" means the methodology adopted by the Commissionfrom time to time to allocate power management costs. As of the Effective Date, such methodology is based upon a consultant study referred to by the Parties as the "Nexant Study." 1.1.39 "RegulatoryProgram" has the meaning set forth in Section 3.1.2. 1.1.40 "Specific L&R Program" means activities or initiatives undertaken relative to a specific NCPA Project, NCPA Pooling Agreement matter, or other NCPA agreement as set forth in Section4. 1.1.41 "Term" has the meaning set forth in Section 12. 1.1.42 "UtilityDirector" means the most senior Member employee with day-to-day authority to direct, manage and control �I operation of Member's utility, or if the Member does not have a utility, the most senior Member employee with authority to direct, manage and control acquisition and use of electric power on behalf cf that Participant. 1.1.43 "WECC" means the Western Electricity Coordinating Council. 1.1..44 "Western" means the Western Area Power Administration. 1.1.45 "WesternProgram" has the meaning set forth in Section 3.1.3. 1.2 Rules of Interpretation. As used in this Agreement (including the Recitals hereto), unless in any such case the context requires otherwise: the terms "herein," "hereto," "herewith" and "hereof' are references to this Agreement taken as a whole and not to any particular provision; the term "include," "includes" or "including" shall mean "including, for example and without limitation;" and references to a "Section," "subsection," "clause," or "Exhibit" shall mean a Section, subsection, clause or Exhibit cf this Agreement, as the case may be. All references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as cf which such reference is made, and reference to a law, regulation or ordinance includes any amendment or modification thereof. A reference to a "person" includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and includes its successors and permitted assigns. The singular shall D include the plural and the masculine shall include the feminine, and vice versa. Section 2. L&R Program Structure. The L&R Program consists cf three (3) Programs: (1) the General L&R Program; (2) the Specific L&R Program; and (3) the Member Services Program. Each Program Area shall operate in accordance with the guidance set forth in the Annual Budget and the Annual L&R Program Strategic Plan. To the extent practicable, and except as otherwise provided for in this Agreement, NCPA shall endeavor to allocate L&R Program costs in an equitable manner, taking into account factors such as cost causation, Member size (including load, population, and number of customers), annual percentage increase in Member allocation, level cf Member participation in NCPA Programs and Projects, and other relevant factors. Each Member shall be responsible for paying its fair share cf the costs cf the L&R Program, as determined by the L&R Program Cost Allocation set forth in Schedule 1.00. Section 3. General L&R Program. The General L&R Program includes the following four (4) areas: (1) Legislative Program focused on broad policy issues cf general significance to aIl, or nearly all Members; (2) a Regulatory Program focused on broad policy issues of general significance to all., or nearly all Members; (3) Western Program; and (4)L&R Judicial Action. 3.1 General L&R Pro zram Areas. 3.1.1 Lezislative Proffam. The Legislative Program addresses broad policy issues cf general significance. The Legislative Program provides legislative advocacy and lobbying cf both the state and federal government. The Legislative Program is divided into three separatebudget centers: 3.1.1.1. State legislative. This budget center includes advocacy efforts focused on representing the ri needs of public power systems and electricity ratepayers before members of the state Senate and Assembly, the Office of the Governor, and state energy and environmental agencies; 3.1.1.2. U. S. Congress. This budget center includes advocacy efforts focused on the potential impacts of national energy and environmental - related legislation on public power systems and representing the needs of public power systems and electricity ratepayers before Members of Congress, the Executive Branch, and federal energy and environmental agencies; and 3.1.1.3. Advocacy groups. This budget center includes NCPA's participation in, and associated financial support for, advocacy groups and national associations, which lobby on behalf of and share NCPNs state, federal and regional policy goals. 3.1.2 Regulatory Program. The Regulatory RepresentationProgram addresses broad policy issues cf general significance. NCPA's regulatory program is responsible for advocacy and I it3gad l or participation in proceedings before state, federal, and regional regulatory agencies, including, but not limited to the CARB, CEC, CPUC, FERC, NERC, WECC and the CAISO. �3 3.1.3 WestemProgram. The Western Program is an advocacy program which provides legislative and regulatory advocacy before representatives of Western and the Bureau and works with these agencies and the United States Congress to maximize the value cf the Western power resource for Members having Western power allocations. The Western Program does not include activities or initiatives engaged in solely for the benefit cf signatories to a Western Assignment Contract with Western, and a concomitantAssignment Administration Program Agreementwith NCPAby which certain Members (as assignor) have assigned their Base Resource Share to NPCA (as assignee) to permit NCPA to create a power resource portfolio administered through the Pooling Agreement. 3.1.4 L&R Tudicial Action. The L&R JudicialAction Program involves participation in particular litigation and in discrete regulatory or legislative dockets, proceedings or cases pending at CARB, CEC, CPUC, FERC or other regulatory agencies, where such proceedings affect public power. In the Commission's discretion, and only under special and limited circumstances, major policy matters that are sufficiently unique, discrete and identifiable may be identified as part cf and fall within the L&R Judicial Action Program, rather than other areas of the L&R Program (and rather than within the Power Management L&R Judicial Action Program). E 3.1.4.1. 3.1.4.2. JudicialAction Programs —Notice and Commission Approval Requirements. NCPA has an obligation to provide notice to Members and secure Commission approval when NCPA proposes to undertake a L&R Judicial Action Program initiative. NCPA shall provide notice concerning any L&R Judicial Action Program initiative it plans to undertake on the Commission agenda and secure Commission approvalbefore NCPA undertakes that Judicial Action Program initiative; provided, however, that once NCPA has secured NCPA Commission approval of its participation ii a Judicial Action Program initiative, it is not necessary for NCPA to provide notice in advance of each individual filing, action, or activity associated with that L&R Judicial Action Program initiative. Member Participation in L&R JudicialAction Program Initiatives. Once NCPA has provided Members with notice cf its intent to paxticipate in a L&R JudicialAction Program initiative on a NCPA CommissionAgenda and secured NCPA Commission approval to participate in the Judicial Action Program initiative, Members must affirmatively opt -out cf such initiative by providing written notice to the 10 General Manager of that Member's intent to opt -out of the Judicial Action Program initiative within thirty (30) days of the NCPA Commission's approval of the Judicial Action Program initiative, otherwise such Member will be considered apart of the L&R Judicial Action Program initiative. The General Manager may extend the thirty (30) day time period for a Member to opt -out of a Judicial Action Program initiative for an additional thirty (30) days, as necessary, upon written request submittedby the Member to the General Manager. 3.1.4.3. WithdrawalfmmL&R Judicial&tirn Program Initiatives. Once a Member has failed to opt - out of an L&R JudicialAction Program Initiative that involves formal filing of pleadings before any court or regulatory agency, that Member may only withdraw from such Judicial Action Program initiative after providing sixty (60) days written notice to the General Manager. Any such withdrawal from all or part of any L&R JudicialAction Program initiative shall in no way relieve that Member from obligations and costs incurred on behalf of that Member prior to that Member providing notice of its intent to withdraw, 11 including any and all attorneys fees, consultant or witness fees, or any other costs incurred or contracts entered into prior to that Member's withdrawal. 3.1.4.4. JointDefense and Litigation Privileges. Notwithstanding any agreement or provision to the contrary, each Member in the L&R Judicial Action Program agrees that it intends a Joint Defense and Joint Litigation privilege to apply to all litigation and regulatory proceedings to which NCPA becomes a party as a consequence, and that such j oint defense and j oint litigation privilege is in addition to such attorney client or other privileges as may apply as a consequence of the Joint Powers Agreement, or otherwise. 3.1.4.5. Agreement as Not Affecting PowerManagement JudiciaNction. This Agreementprovides for judicial action only within the context of the L&R Program. It does not affect suchjudicial action as may be undertakenby NCPA's Power Management Division, the costs of which shall continue to be allocatedby NCPA in accordance with the power management cost allocation methodology, as maybe amendedby the 12 Commission or such other methodology as the Commissionmay establish. 3.2 Cost Allocation Principles for the General L&R Program. Costs associated with the General L&R Program shall be allocated in accordance with the followingprinciples: 3.2.1 Legislative Program and Reylatoru Program. Costs associated with the Legislative Program and Regulatory Program under the General L&R Program shall be allocated to all Members in accordance with the L&R Program Cost Allocation set forth in Schedule 1.00. The Commissionmay, in its sole discretion, utilize funds collected from Members pursuant to Article N, Section3(a) cf the JointPowers Agreement to offset Member costs associated with the General L&R Program. 3.2.2 WesternProQram. Costs associatedwith the Western Program shallbe allocated based on each Member's Western Base Resource Share relative to other Members with Western allocations. 3.2.3 L&R JudicialAction. Costs associated with the L&R Judicial Action Program shall be borne onlyby Members that elect to participate (or fail to opt -out of a particular L&RJudicial Action initiative, as applicable) and shall be allocated amongst such Members on a case-by-case basis by the Commission as appropriate; provided however: 3.2.3.1. Rates & Tariffs. The costs associatedwith activities and initiatives related to CAISO Rates and Tara_ffs and PG&E Rates and Tariffs are not 13 governedby this Agreement. Such costs are a partV the Power ManagementL&R Program and shall be allocated pursuant to the Power Management Cost Allocation Methodology, as adopted or amended by the Commission from time to time; and 3.2.3.2. Western—Pool Members. The costs associated with activities and initiatives related,to Western undertaken solely for the benefit of signatories to a Western Assignment Contract with Western, and a concomitant Assignment AdministrationProgram Agreement with NCPA by which certain Members (as assignor) have assigned their Base Resource Share to NPCA (as assignee) to permit NCPA to create a power resource portfolio administered through the Pooling Agreement shall be borne exclusivelyby those signatories to the Pooling Agreement, based on each signatory's relative Western Base Resource Share; and 3.2.3.3. California Refund Proceeding. Thecosts associated with activities and initiatives related to the California Refund Proceeding shall be allocated in accordance with the refund methodology approvedby the Commission from time -to -time for that matter. 14 Section4. SuecificL&R Proaaxn. In addition to the GeneralL&R Program, NCPA also undertakes activities and initiatives from time -to -time on behalf of particular subsets cf NCPA Members that may or may not be of benefit to all Members. 4.1 Specific L&R Program Areas. The Specific L&R Program includes legislative, regulatory and judicial activities and initiatives undertaken solely for the benefit of a specific NCPA Project, signatories to the Pooling Agreement, or a signatory to a separate agreement with NCPA. 4.2 Cost Allocation Principles for the Suecific L&R Program. Costs associated with the SpecificL&R Program shall not be borne by Members in general. Such costs shallbe allocated among specific Members in the relevant NCPA Project, Pooling Agreement or other agreement in accordance with the terms of the applicable agreements. Section 5. Member Services Program. The Member Services Program generally undertakes activities or initiatives on behalf of particular subsets of NCPA Members that may or may not be cf benefit to all Members. 5.1 Member Services Program Areas. The Members Services Program: 5.1.1 Provides data and information to Members needed to comply with statutory energy and environmentalreporting obligations; 5.1.2 Undertakesjoint projects to promote the adoption of best utility practices among Members; and 5.1.3 Collaborates with, and provides leadership for, statewide compliance efforts by public power agencies to ensure that credible and consistent data is provided to State agencies in 15 a manner that will help prevent future legislative intrusions on local control cf publicly -owned generation, transmission and distribution of electric energy. 5.2 Cost Allocation Principles for the Member Services Program. Cost associated with the Member Services Program shall be allocated in accordance with the following principles: 5.2.1 Member Services Staff The costs associated with the provision of services noted in section 5.1 ,and the cost (including all allocated overheads) of at least one (1) dedicated NCPA Member Services Program staff person, shall be allocated amongst all Members in accordance with the L&R Program Cost Allocation set forth in Schedule 1.00, as amended from time to time. 5.2.2 ntherMember ServicesProQram Costs. Costs associated with other Member Services projects, activities and initiatives shall be allocated based on each Member's involvement in a particular Member Services project, activity or initiative, and where applicable, the terms and conditions cf any applicable agreementsby and among Members and NCPA for discrete Member ServicesProgram projects, activities or initiatives. Section 6. Member Commitments. 6.1 Existing Members. The L&R Program benefits all Members. It is an integral portion cf NCPA`s core function and is necessary in order to protect the investments NCPA and its Members have made in their public power assets., It is therefore mandatory for all Members of NCPA to become a signatory to this Agreement. 16 6.2 New Members. Following the Effective Date cf this Agreement, any new Member of NCPA who becomes a signatory to the Joint Powers Agreement must also concurrently become a signatory to this Agreement, except as provided in Section 6.2.1. 6.2.1 Exceptions. The Commission may, by a unanimous vote and due to a special, unique or legal circumstance, exempt a Member from the requirement that it become a signatory to this Agreement when it becomes a signatory to the Joint Powers Agreement, and approve a Resolution setting forth the specific terms of that individualMember's participation in and cost allocationunder the L&R Program; provided however, that the Commission may concurrently limit the authority to participate in the L&R Program for any Member granted such an exemption, including that Member's voting authority on the L&R Committee as set forth in Section 8.2. 6.3 L&R Program Costs. Each Member agrees to and acknowledges its mandatory obligation to pay its L&R Program Cost Allocation invoiced in its All Resources Bill. 6.3.1 Participation and Costs. Any Member may elect to represent itself, or not participate in whole or in part in any portion cf the General L&R Program, SpecificL&R Program or Member Services Program; provided however, that any such decision shall not relieve any Member cf its mandatory obligation to pay its L&R Program Cost Allocation. 6.3.2 Excevtions to Cost Obli-gation. The Commissionmay, by a unanimous vote and due to a special, unique or legal circumstance, adopt a resolution which exempts a Member 17 from paying all or a portion cf the costs associated with the General L&R Program, SpecificL&R Program and Member Services Program, and setting forth the terms cf that individual Member's cost allocationunder the L&R Program; provided however, that such an adjustment to a Member's cost allocationmay, in the Commission's discretion, concurrently limit that Member's authority to participate in the L&R Program, including that Member's voting authority on the L&R Committee as set forth in Section 8.2. Exceptions granted pursuant to this Section shallbe reflected in that Member's L&R Program Cost Allocation. Section 7. Strategic Plan and Annual Budget. 71 Each year, NCPA shall present to the L&R Committee a proposed Annual L&R Program Strategic Plan. The proposed Annual L&R Program Strategic Plan shall outline proposed: (l)initiatives, goals, priorities and objectives for the L&R Program, including identification of those that fall within the General L&R Program, SpecificL&R Program and the Member ServicesProgram; and (2) budgets for the L&R Program, including individual budgets for the General L&R Program, Specific L&R Program and the Member Services Program. 7.2 Following approval by the L&R Committee, the proposed Annual L&R Program StrategicPlan shall be presented to the Commission for its consideration and adoption as part of NCPA's Annual Budget review process. 18 7.3 The Annual L&R Program StrategicPlan adopted by the Commission shall serve as the basis for the Commission's development of the L&R Program's budget which shallbe a part cf the Annual Budget. 7.4 The Commission shall apply the L&R Program Cost Allocation set forth in Schedule 1.00 to the L&R Program's budget to determine each Member's equitable share of L&R Program costs, except as otherwise provided for in this Agreement. 7.5 NCPA shall operate the L&R Program in accordancewith the adopted L&R Program Strategic Plan and within the monetary parameters cf the Annual Budget adopted by the Commission. Section 8. L&R Committee. The L&R Committee shall consider and report upon all matters relating to state and federal law referred to it by the NCPA Commission or by the General Manager and shall serve as an advisory committee on L&R matters in accordance with the NCPA Rules of Procedure. 8.1 Establishment of the L&R Committee. The L&R Committee exists in accordance with the provisions of the NCPA Rules cf Procedure. The L&R Committee shall consist of one or more representatives appointed by each Member, which representatives shallbe the Member's designated voting representative on the NCPA Commission, that Member's Ui ily Director, or a designated Alternate NCPA Commissioner of that Member. 8.1.1 Designation of Alternate Representative. Each Member may also designate a temporary alternate representative for an L&R Committee meeting, in accordancewith the following procedure: 19 8.1.1.1. A Member must notify the General Manager in writing of the identity cf its alternate representative in advance cf the L&R Committee meeting at which that alternate representative intends to participate and vote. Such notification must be signed by either the Member's designated voting representative on the NCPA Commission or thatMember's Utility Director; 8.1.1.2. In advance of the L&R Committee meeting at which that alternate representative intends to partiapate and vote, the Member must sign and submit a form to NCPA, using a form to be prepared by NCPA specifically for that purpose, to the General Manager, stating that the alternate representative's vote on L&R Committee matters is binding on that Member, and such form must be signed by the alternate representative and the Member's designated voting representative on the NCPA Commission or that Member's Utility Director. 8.2 Voting: Except as provided in section 8.2.1, each Member shall be entitled to cast one vote. Y a Member has designated more than one L&R Committee Representative, then the voting representative shallbe first the Member'sCommissioner, or in the absence cf the Commissioner, the Utility Director, or in the absence of both the KIK Commissioner and the Utility Director the temporary alternate designated pursuant to Section 8.1.1. 8.2.1 Limitations. 8.2.1.1. Specific L&R Program. Only Members participating in the relevant project, Pooling Agreement, or other agreement shall be entitled to vote, in accordance with the applicable Project Agreement, Pooling Agreement or other agreement. 8.2.1.2. Member Services Projects, Activities, & Initiatives. Only Members participating in a particular Member Services Program project, activity or initiative (pursuant to section 5.2.2) shall be entitled to vote on matters related to that project, activity or initiative. 8.2.1.3. Limited Members. Notwithstanding the foregoing, and except as otherwise provided by the Commission resolution granting an exception, any Member that has been granted an exceptionpursuant to Section 6.3.2 of this Agreement shall not be entitled to voting representation on the L&R Committee, but may designate one non-voting representative and one or more non-voting alternates. Such Members shall be entitled to receive notices oF and to attend all regular and special meetings of the L&R Committee. 21 8.3 L&R Committee Rules of Procedure. The Commission in its discretionmay establishrules of procedure for the L&R Committee. Section 9. Administration of Agreement. The Commission has sole overall responsibility and authority for the administration cf this Agreement. NCPA shall undertake L&R Program activities in accordance with the Annual Budget and ArrLd L&R Program StrategicPlan adoptedby the Commission. Any acts, decisions or approvals taken, made or soughtby NCPA under this Agreement shallbe taken, made or sought, as applicable, in accordance with NCPA's ConstitutiveDocuments. Section 1 o. L&R Program Schedules. L&R Program Schedulesmay be established for the implementation of this Agreement. L&R Program Schedules can provide detailed descriptions, procedures, protocols and guidelines (including operating and cost recovery procedures) for the operation of the L&R Program. The L&R Program Schedulesmay be adopted, amended or deletedby the NCPA Commission after receiving the recommendation of the L&R Committee. Upon Commission approval, adoptions, amendments, or deletions cf L&R Program Schedules shall be effective immediately without the necessity cf approvalby the governing board or commission of any Member. NCPA shall upon adoption, amendment or deletion of an L&R Program Schedule ensure that each Member is promptly provided notice cf such adoption, amendment or deletion. In the event of a conflictbetween this Agreement and any L&R Program Schedule, this Agreement shall govern. Section 11. Effectiveness of Agreement. This Agreementbecame effective on the Effective Date. Section 12. Term and Termination. The Term cf this Agreement for each Member is concurrentwith each Member's membership in NCPA. If a Member withdraws from NCPA, then this Agreement shall terminate as to that Member, 22 but shall remain in effect for all other Members. Any cost or liability arising prior to withdrawal from membership and remaining undischarged as of the effectivedate cf withdrawal from NCPA shall continue and the withdrawing Member shallbe required to satisfy such costs or liabilities as a condition cf withdrawal from NCPA. Section 13. Miscellaneous 13.1 Confidentiality. All Parties acknowledge that, from time to time, the information provided to them as a part cf the L&R Program will be politically and commercially sensitive and may be confidential or trade secret information. The Parties will keep confidential all confidential or trade secret information made available to them in connection with this Agreement or the L&R Program to the extent possible, consistent with applicable laws, including the California Public Records Act. It shall be the responsibility cf the holder cf the claim cf confidentiality or trade secret to defend at its expense against any request that such informationbe disclosed. Confidentialor trade secret information shall be marked or expressly identified as such. 13.2 Indemnificationand Hold Harmless. To the maximum extent permitted by law and subject to the provisions of Section 13.4, each Member agrees to indemnify, defend and hold harmless NCPA and its Members, including their respective governing officials, officers, agents, and employees, from and against any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature, including reasonable attorneys' fees and the costs of litigation, including experts ("Claims"), to the extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross 23 negligence, recklessness, or willful misconduct of a Member, its governing officials, officers, employees, subcontractors or agents. 13.3 Separate Liabilities. No Member shall be liable under this Agreement for the obligations cf any other Member, and each Member shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein. The obligation of each Member under this Agreement is a separate obligation and not a joint obligationwith those cf the other Members. 13.4 No Consequential Damages FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENTFOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY MEMBER OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS BEEN ADVISED OF 24 THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH NEDMBER EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY. The Parties acknowledge that California Civil Code section 1542provides that: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time cf executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." The Parties waive the provisions of section 1542, or other similar provisions cf law, and intend that the waiver and release provided by this section cf this Agreement shall be fully enforceable despite its reference to future or unknown claims. 13.5 Amendments. Except as provided in Section 8 cf th is Agreement, this Agreement may be amended only by written imtrurrent executed by all of the Parties with the same formality as this Agreement. 13.6 Severability. In the event that any cf the terms, covenants or conditions cf 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 affected thereby, but shall remain in force and effect unless the court holds that such provisions are not severable from all other provisions of this Agreement. 13.7 Governing Law. This Agreement shall be interpreted, governed by, and construed under the laws of the State cf California. 25 13.8 Headings. All indices, titles, subjectheadings, sectiontitles and similar items are provided for the purpose cf convenience and are not intended to be inclusive, definitive, or affect the meaning of the contents of this Agreement or the scope thereof. 13.9 Notices. Any notice, demand or request required or authorizedby this Agreement to be given to any party shall be in writing, and shall either be personally delivered to a Member's Utility Director, or in the case cf NCPA to its General Manager, or transmitted to the Member and NCPA at the address shown on the signature pages hereof. The designation of such address maybe changed at any time by written notice given to the Secretary of the Commission who shall thereupon give written notice cf such change to each Member. 13.10 Warranty cf Authority. Each Party represents and warrants that it has been duly authorized by all requisite approval and action to execute and deliver this Agreement and that this Agreement is a binding, legal, and valid agreement enforceable in accordance with its terms as to the Member, and as to NCPA. Upon execution cf this Agreement, each Member shall deliver to NCPA a resolution of the governingbody of such Member evidencing approval of and authority to enter into this Agreement and an opinion cf legal counsel that such authority was duly exercised in accordance with suchMember's Constitutive Documents. 13.11 Counterparts. This Agreement may be executed in any number of Counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all the signatories to all of the counterparts had signed the same n. instrument. Any signature page of this Agreement maybe detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical. in form hereto but having attached to it one or more signature pages. 23.12 Assignment. No Member may assign or otherwise transfer their rights and obligations under this Agreement without the express written consent cf NCPA. 27 IN WITNESS WHEREOF, each Member has executed this Agreement with the approval of its governing body, and NCPA has authorized this Agreement in accordance with the authorization of its Commission. NORTHERN CALIFORNIA POWER AGENCY [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Date: Approved as to form: a Its: General Counsel Date: CITY OF ALAMEDA [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Approved as to form: By: Its: City Attorney Date: �: SAN FRANCISCO BAY AREA RAPID CITY OF BIGGS TRANSIT [Address] [Address] [City, State, Zip] [C: y,State, Zip] [Telephone] [Telephone] [Facsimile] [Facsimile] Date: CITY OF GRIDLEY [Address] [City, State, Zip] [Telephone] [Facsimile] By Title: Date: Approved as to form: By: Its: City Attorney Date: CITY OF HEALDSBURG [Address] [City, State, Zip] [Telephone] [Facsimile] Title: Date: Approved as to form: By: Its: Citi Attorney Date: 29 By: By: Title: Title: Date: Date: Approved as to form: Approved as to form: By: Its: City Attorney Its: General Counsel Date: Date: CITY OF GRIDLEY [Address] [City, State, Zip] [Telephone] [Facsimile] By Title: Date: Approved as to form: By: Its: City Attorney Date: CITY OF HEALDSBURG [Address] [City, State, Zip] [Telephone] [Facsimile] Title: Date: Approved as to form: By: Its: Citi Attorney Date: 29 CITY OF LODI CITY OF LOMPOC [Address] [Address] [City, State, Zip] [City,State, Zip] [Telephone] [Telephone] [Facsimile] [Facsimile] By._ Title: Date: Approved as to form: 'By: D. Stephen Schwabauer Its: Chi Attorney Date: - CITY OF PALO ALTO [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Date: Approved as to form: By: Its: City Attorney Date: Title: Date: Approved as to form: Its: City Attorney Date: PLUMAS-SIERRARURAL ELECTRIC COOPERATIVE [Address] [City, State, Zip] [Telephone] Facsimile] Title: Date: Approved as to form: Its: General Counsel Date: 30 CITY OF OAKLAND, acting by and =OF REDDING through its BOARD OF PORT [Address] COMMISSIONERS [City, State, Zipj [Address] [Telephone] [City, State, Zip] [Facsimile] [Telephone] [Facsimile] By: Title: Date: Approved as to form: By: Its: General Counsel Date: CITY OF ROSEVILLE [Address] [City, State, Zip] [Telephone] [Facsimile By:_ Title: Date: Approved as to form: By: Its: City Attorney Date: By.— Title: Date: Approved as to form: By: Its: City Attorney Date: CITY OF SANTA CLARA [Address] [City, State, Zip] [Telephone] [Facsimile] By._ Title: Date: Approved as to form: Its: City Attorney Date: 31 TRUCKEE DONNER PUBLIC UTILITY DISTRICT [Address] [City,State, Zip] [Telephone] [Facsimile] Title: Date: Approved as to form: By: Its: General Counsel Date: CITY OF UKIAH [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Date: Approved as to form: Its: City Attorney Date: 32 INDEX OF L&R PROGRAM SCHEDULES �IlQ Introductionto L&R Program Schedules 1 -nn L&R Program Cost Allocation 33 L&R PROGRAM AGREEMENT L&R Program Schedule 0-00 INTRODUCTION TO L&R PROGRAM SCHEDULES Separate L&R Program Schedules will be established for this Agreement and related purposes, as appropriate, pursuant to Section 7 cf this Agreement. L&R Program Schedules will provide detailed descriptions, protocols, principles, guidelines and procedures (including operating and cost recovery procedures) for the L&R Program pursuant to this Agreement. For NCPA Projects and Activities for which another Agreement is executed between NCPA and its Members, the L&R Program Schedule w i I I supplement, and not supersede, such Agreements with respect to the L&R Program. NCPA L&R Program Schedules shall provide for: o L&R Program Cost Allocation; and o Other topics as needed in the future. Additional L&R Program Schedules may be established to provide guidance regarding the L&R Program, or for other aspect cf the implementation of this Agreement. Definitions as set forth in Section I of this Agreement shall have the same meaning in the L&R Program Schedules. 01 NCPA L&R PROGRAM AGREEMENT L&R Program Schedule 1-00 L&R PROGRAM ALLOCATION Approved Allocation Methodology for the Legislation and Regulatory Program Per Commission Action on November 18,2010 Resolution 10-106 Legislative Program (State and Federal) 50% of costs (non pass through) allocated by Equal Shares among all participating members 50% of costs (non pass through) allocated by Energy Shares from previous calendaryear .Regulatory Program (State and Federal) 50% cf costs (non pass through) allocated by Equal Shares among all participating members 50% of costs (non'pass through) allocated by Energy Shares from previous calendaryear Member Services 50% of costs (non pass through) allocated by Equal Shares among all participating members 50% of costs (non pass through) allocated by Energy Shares from previous calendar year Judicial Action - Green House Gas Reduction Initiative (same as Regulatory Program) 50% cf costs (non pass through) allocated by Equal Shares among all participating members 50% of costs (non pass through) allocated by Energy Shares from previous calendaryear Western Costs of program allocated based on adjusted share of Western Base Resource Percentages Source: NCPA CommissionResolutionl0-106. Five Year Phase in Plan FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 10.000/0 20.00% 30.000/6 40.00% 50.00% 90.00% 80.00% 70.00% 60.00% 50.00% 10.00% 20.00% 30.00% 40.00% 50.00% 90.00% 80.00% 70.00% 60.00% 50.00% 41.86% 56.39% 70.93% 85.46% 100.00% 58.14% 43.61% 29.07% 14.54% 0.000/0 10.00% 20.00% 30.00% 40.00% 50.00% 90.00% 80.00% 70.00% 60.00% 50.00% 35 RESOLUTION NO. 2012-40 A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE NORTHERN CALIFORNIA POWER AGENCY LEGISLATIVE AND REGULATORY AFFAIRS PROGRAM AGREEMENT WHEREAS, since the inception of the Northern California Power Agency (NCPA), the legislative and regulatory activities of the agency have been fundamental for the purpose of managing substantial public investment and protecting the public power business model through preservation of local control; and WHEREAS, an official agreement is needed to formalize the contractual relationships between NCPA and its members with regard to allocation of costs and the role of the NCPA Legislative& Regulatory Program. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve the NCPA Legislative & Regulatory Affairs Program Agreement and authorizes the City Manager to execute this agreement on behalf of the City of Lodi, California, with administration by the Electric Utility Director. Dated: April 18, 2012 ------------------ hereby certify that Resolution No. 2012-40 was passed and adopted by the City Council of the City of Lodi in a regular meeting held April 18, 2012, by the following vote: AYES: COUNCIL MEMBERS— Hansen, Johnson, Nakanishi, and Mayor Mounce NOES: COUNCIL MEMBERS— None ABSENT: COUNCIL MEMBERS— Katzakian ABSTAIN: COUNCIL MEMBERS— Non6J1 OHL City Clerk 2012-40