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HomeMy WebLinkAboutAgenda Report - July 17, 2013 C-11C10ITEM AG NDA I' I E (1)CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute an Electric Standby Service Agreement with General Mills, Inc. MEETING DATE: July 17, 2013 PREPARED BY: Electric Utility Director RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to execute an electric standby service agreement with General Mills, Inc. BACKGROUND INFORMATION: Electric standby service agreements are common between electric utilities and large commercial and industrial customers. Standby service agreements provide commercial and industrial customers with a reliable, back-up energy insurance policy, in the event that their privately -owned generator fails or is down for any given reason (maintenance, etc.). Conversely, the standby service agreement provides the electric utility with financial guarantees from the customer in the event the privately -owned generator is not running and the customer needs to purchase electricity from the utility. In reviewing the published electric utility rate schedules, staff ascertained that the existing cogeneration facility owned and operated by General Mills does not comply with the current Electric Standby Service (SS) rate tariff. Following extensive research, staff located two contracts with General Mills that involved the customer's cogeneration facility. Both contracts have expired. The SS rate schedule is available only on a contractual basis for each specific service connection point to commercial/industrial customers who own electric generating facilities. Each contract term shall be for the service life of the customer -owned generator and shall obligate the customer to pay for Standby Power Service and Standby Peak Period Demand Charges for the contract term. The contract shall provide that, if service is cancelled prior to expiration of the contract period, the customer shall pay the total Standby Power Service Charges for the unexpired term of the contract and any outstanding Standby Peak Period Demand Charges. Staff, in concert with General Mills staff, has developed a standby service agreement which ensures compliance with the current SS rate tariff. The contract in Attachment A requires General Mills to provide the City of Lodi with regular cogeneration plant forecasts. These monthly forecasts will insulate the City from any significant power acquisition expenses due to operational changes from the General Mills cogeneration facility. General Mills will benefit during peak period hours when minor operational variances occur affecting their peak period demand charges. FISCAL IMPACT: The fiscal impact cannot be determined at this time; it will be directly related to variances in the customer's operations compared to their forecasts and the electric energy market price fluctuations at the time. FUNDING: Not applicable. �i APPROVED:- ( IUy Konradt Bartlam, City Adopt Resolution Authorizing the City Manager to Execute an Electric Standby Service Agreement With General Mills, Inc. July 17, 2013 Page 2 of 2 Effz'a-befh A. ey Electric Utility Director PREPARED BY: Rob Lechner, Business Development Manager EAK/RSUIst 07/03/2013 Standby Power Service and Peak Period Demand Charge Agreement This Standby Power Service and Peak Period Demand Charge Agreement ("Agreement") is entered into by and between the City of Lodi (through its Electric Utility Department) and General Mills Operations, LLC this _ day of . 2013. A. Whereas General Mills Operations, LLC owns and operates a processing plant in Lodi California (the "Plant"); and B. Whereas General Mills Operations, LLC operates a 3 megawatt electric generator (the "Private Generator") that, together with the City of Lodi Electric Utility ("LEU") provides power for the operation of the Plant; and C. Whereas General Mills Operations, LLC is obligated to pay for Electrical Service from the City of Lodi pursuant to LEU Rate Schedule I1 and Schedule I1 includes charges for the two separate consumption measures of 1) Energy Use and 2) Demand (Demand includes Peak Period Demand and Billing Period Demand); and D. Whereas General Mills Operations, LLC desires to have the LEU provide a third electric service by standing by to meet its need for electricity in the event that General Mills Operations, LLC elects to run or not run the Private Generator in contravention of the forecast called for in paragraph A.2, of this Agreement (such electricity shall be referred to herein as "Standby Power"); and E. Whereas the LEU is subject to significant cost exposure when it must provide this third Standby Power service on the spot market because it cannot forecast and plan for General Mills Operations, LLC's need for Standby Power. F. Whereas, General Mills Operations, LLC is exposed to Peak Period Demand Charges under LEU Rate Schedule I1 in the event that it is required by market, labor, mechanical or other forces to power down the Private Generator Monday through Friday 3 p.m. to 7 p.m. every week excluding Holidays as defined in Schedule I1 ("Peak Hours"). NOW THEREFORE, The Parties Agree as follows: A. STANDBY POWER SERVICE 1. This Standby Power Service Agreement is provided pursuant to LEU Rate Schedule SS. The Service provided under this Agreement shall be in addition to any other schedule applicable to General Mills Operations, LLC. However, the rate adjustments called for in this Agreement shall only be applied when all of the following conditions apply: a. The closing price of power for the month of consumption, on the last traded day of the month prior to the month of consumption, is either twenty-five percent (25%) higher or lower than the closing price for power for that same month of consumption on the date of the forecast called for in paragraph A.2 of this Agreement ("Forecast"). Power Page 1 of 11 prices will be measured for purposes of this calculation as indicated by Intercontinental Exchange (ICE) NP 15 Forward Wholesale Electric Power Baseload Offer Price as shown in this Agreement as Appendix A; and b. As a result of General Mills Operations, LLC deviation from its Standby Forecast LEU is required to purchase power that was not in its portfolio or sell power that was in its portfolio as further set forth in paragraphs A.4 and A.5 of this Agreement. 2. General Mills Operations, LLC shall provide the Electric Utility Department with a written rolling three month forecast indicating whether it will run or will not run the Private Generator. The notice shall be provided by email to the Electric Utility Director, Rates and Resources Manager, and Business Development Manager. The notice shall be provided on the first working day of each month. LEU shall send a confirmation email to sender at General Mills Operations, LLC by the end of normal business hours on the fourth business day of each month indicating that the forecast has been received, accepted, and includes the applicable number for Step 1 for the forecasted months. In the event General Mills Operations, LLC fails to provide this forecast, the forecast will be deemed to project that General Mills Operations, LLC will not run the Private Generator. 3. The forecast provided to LEU shall be in the format set forth in Appendix B which is attached hereto and incorporated herein by reference. 4. In the event that LEU is required to purchase power that was not in its portfolio on the applicable forecast date to meet energy needs for General Mills Operations, LLC because General Mills Operations, LLC chooses not to run the Private Generator in contravention of its forecast, General Mills Operations, LLC will pay LEU, as part of its Upcoming Bill Cycle, the full cost to LEU to supply the additional power, minus any payments made for Energy Charges and ECA charges called for in Schedule I1 applicable to this portion only of General Mills Operations, LLC's load. In this case the contract price will be the most recent ICE Quote Sheet at the beginning of the active month plus all applicable transmission access charges, plus 2% for losses. The relevant Standby Forecast for determining costs under this Agreement shall be the forecast supplied by General Mills Operations, LLC that was three months prior to the need for the Standby Power; in other words, General Mills Operations, LLC shall be responsible for any Standby Power costs that result from General Mills Operations, LLC running or not running the Private Generator in contravention of its forecast. As used in this Agreement, Upcoming Bill Cycle shall mean the bill cycle that falls within 90 days after the applicable service period. Examples of how the LEU will calculate the full cost to LEU to supply the additional power are attached as Appendix C. 5. In the event LEU is required to purchase power that was not in its portfolio on the applicable forecast date to meet General Mills Operations, LLC projected energy needs, and General Mills Operations, LLC elects to run the Private Generator in contravention of the applicable forecast, General Mills Operations, LLC will pay LEU, as part of its Upcoming Bill Cycle, the full cost Page 2 of 11 to LEU to acquire the unused power, less any credit for LEU's resale of the unused power. Examples of how the LEU will calculate the full cost to LEU to acquire the unused power are attached as Appendix C. B. PEAK PERIOD DEMAND CHARGE POWER SERVICE 1. This Peak Period Demand Charge Power Agreement is provided pursuant to and amends LEU Rate Schedule I1. The Service provided under this Agreement shall be in addition to any other schedule applicable to General Mills Operations, LLC. The Peak Period Demand Charge element of Schedule I1 (not the Billing Period Demand element) will not be charged for energy consumed by General Mills Operations, LLC as a result of the Private Generator not running unless General Mills Operations, LLC does not run the Private Generator within at least 80% of its Peak Demand Forecast called for in Paragraph B2 of this Agreement for the periods that the Private Generator was actually forecast to run. (This calculation is intended to give General Mills Operations, LLC relief from aberrational Peak Period Demand that is the result of occasional variances from their Peak Demand Forecast.) Billing Period Demand charges will remain unaltered from the method described in Schedule I1. Peak Period Demand charges called for in Schedule I1 will be applied to load that General Mills Operations, LLC cannot serve with its forecasted generation. (In other words, if General Mills Operations, LLC forecast calls for the Private Generator to run, and General Mills Operations, LLC draws an additional peak load of 1 megawatt from LEU, General Mills Operations, LLC will have a Peak Period Demand charge for that one megawatt). Examples of how the Peak Period Demand charge will be calculated are attached as Appendix D. 2. General Mills Operations, LLC shall provide the Electric Utility Department with a written rolling three month forecast indicating whether it will run the Private Generator at 100% of max output during the Peak Period ("Demand Forecast"). The Demand Forecast shall be provided by email to the Electric Utility Director, Rates and Resources Manager, and Business Development Manager. The notice shall be provided on the first business day of each month. LEU shall send a confirmation email to sender at General Mills Operations, LLC by the end of normal business hours on the fourth business day of each month indicating that the forecast has been received and accepted. In the event General Mills Operations, LLC fails to provide this forecast, the forecast will be deemed to project that General Mills Operations, LLC will not run the Private Generator. The relevant Demand Forecast for determining whether the credit will be applied under this Agreement shall be the Demand Forecast supplied by General Mills Operations, LLC that was three months prior to the need for the Demand Service; in other words, General Mills Operations, LLC shall be responsible for all Demand Charges called for in Schedule I1 if it does not forecast its need to use the Demand Service at least three months in advance. Page 3of11 3. The forecast provided to LEU shall be in the format set forth in Appendix B which is attached hereto and incorporated herein by reference. C. GENERAL TERMS In the event that LEU is to pass any costs associated with General Mills Operations, LLC running or not running the Private Generator in contravention of the applicable forecast, LEU will provide to General Mills Operations, LLC a detailed explanation of how the associated costs were derived. 2. Force Majeure Failure to Perform. A "Force Majeure Event" shall be an Act of God, war, a terrorist attack, or riots or other reasons of a like nature not the fault of, or under the reasonable control of, the party delayed in performing work or doing acts required hereunder. In the event that either party hereto shall be delayed, hindered in or prevented from the performance of any act required hereunder by reason of a Force Majeure Event, then performance of such act(s) shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equal to the period of such delay, provided such delayed party gives prompt written notice to the other party of the occurrence giving rise to the delay. Each party shall commence performance promptly upon the cessation of the Force Majeure Event. Notwithstanding the foregoing or any other provision of this Agreement, if either party is unable to resume performance within thirty (30) days after a Force Majeure Event, then the other party shall have the right to immediately terminate this Agreement without penalty. 3. This Agreement will be in force for the operational life of the Private Generator. However, the parties agree to reopen the Agreement for further good faith negotiations in the event market conditions render the current structure of the Agreement incapable of achieving its stated purpose of insulating the City of Lodi from losses incurred as a result of the operation of the Private Generator in contravention of the Forecast. Further, General Mills Operations, LLC may terminate this Agreement at the end of the initial or any subsequent one-year term, by removing the Private Generator from service. However, any re -commissioning of or construction of a new Private Generator shall be subject to an agreement as required by the Lodi Municipal Code. Page 4 of 11 IN WITNESS WHEREOF, the City of Lodi, California and General Mills Operations, LLC, have executed this Agreement as of the date July 17, 2013. ATTEST: RANDI JOHL-OLSON, City Clerk APPROVED AS TO FORM: D. STEPHEN SCHWABAUER, City Attorney JANICE D. MAGDICH, Deputy City Attorney By: CITY OF LODI, a municipal corporation KONRADT BARTLAM, City Manager General Mills Operations, LLC: By: Name: Title: Page 5 of 11 Appendix A Intercontinental Exchange (ICE) NP 15 Forward Wholesale Electric Power Baseload Offer Price NP15 Forward Wholesale Electric Prices 6/24/2013 NrT15 m LLH Baseload SuperFk** Jul -13 Bid $49.50 $36.00 $43.70 Offer $50.75 $37.75 $45.16 $58.36 Aug -13 Bid $55.00 $41.00 $48.98 Offer $56.75 $4325 $50.95 $61.29 Sep -13 Bid Offer $40.75 $31.75 $42.75 $3425 Q3-13 Bid $48.50 $31"15 Offer $50.00 $'�o,i",�, Q4-13 Bid $44.25 3, -'5 YR14 Offer $44.00 Q1-13 Bid $4'#'L` $3825 Offer $41.50 $36.88 $39.10 $44.89 $43.23 $45.06 $55.00 $41.24 $43.56 $48.56 $41.10 $43.78 $50.51 Q2-14 Bid ."`; ",$5,4.00 $26.00 $32.84 Offer f, $40.54 $2950 $35.77 $42.12 YR14 Bid $44.00 $33.00 $39.27 Offer $46.75 $36.75 $42.45 $48.62 YR15 Bid $46.25 $3425 $=11.09 Offer $49.50 $38.75 $44.88 $54.45 YR16 Bid $50.00 $36.75 $44.30 Offer $53.50 $4125 $48.23 $58.85 **Defined as HE13-HE20, annual values represent Q3 Page 6of11 Appendix B Three -Month Rolling Forecast City of Lodi Private Generator Three -Month Rolling Forecast Customer: General Mills Operations, LLC Account Number: 00076646 Nameofperson completing this form: 7hasnenwhancompktadbyteacuttomn,l:tortrtrsaseIndet.manlnrtithe dtamnw11mn orwlpnotrunmepdartecan«u tt,anotice "Inaprwaaaonmenmoudnn,dayofQarh month. The notin shah be "Wed by e -mall to the Electric tltlny Dlrmor, Mtn and Resources W.M., and Do*—Dn2lapnwnt h1anat er. On -peed, hours es dellned In UU Schedule 1.1. Phone Number: ( ) Date: Private Generator,`gr'cas` CalendarMonth Jan Feb Mar Apr Ma lun - w.WJ; F AugSep Oct Nov Dec Comments 7p F On -Peak Hours NA NA NA NA NA NA Total Hours `• `y1 F r S -L 1 71 CD CD 1 1� O fD O � X. tz ITIO 11 ri SD CA rt Appendix C (I of 3) STANDBY CONTRACT BILLING EXAMPLE STEP 1 - Determine the most recent ICE Quote Sheet at the time of the relevant General Mills Operations, LLC cogen forecast. ICE Quote Sheets are currently updated each Wednesday. STEP 2 - Determine the most recent ICE Quote Sheet at the beginning of the active month. Compare this ICE Quote Sheet with the ICE Quote Sheet determined in STEP 1. If rates (Baseload Offer rates) in this ICE Quote Sheet are within 25% of the ICE Quote Sheet determined in STEP 1, no bill is rendered. STEP 3A - (If needed) If the rate in STEP 2 was 25% more than the rate in STEP 1, compare the ICE Quote Sheet rate determined in STEP 2 with average electric cost for General Mills Operations, LLC under the I1 electric rate (Total electric costs minus State Energy Tax, California Solar Surcharge and Customer Charge, divided by kWh for the month). If General Mills Operations, LLC average electric cost is more than the ICE Quote Sheet rate determined in STEP 2, plus the CAISO transmission cost, plus 2% for losses, no bill is rendered. STEP 311 - (If needed) If the average electric cost for General Mills Operations, LLC is less than the ICE Quote Sheet rate as determined in STEP 3A, the General Mills Operations, LLC cogen forecast is then compared with the General Mills Operations, LLC actual cogen run for the month. If the cogen actually ran more than or equal to the General Mills Operations, LLC cogen forecast, no bill is rendered. If the General Mills Operations, LLC cogen ran less than forecast, a bill will be rendered for the lesser of 1) the difference between the actual cogen run and the General Mills Operations, LLC cogen forecast, or 2) the energy Lodi purchased during the active month. That difference will be multiplied by the ICE Quote Sheet rate determined in STEP 2, plus the CAISO transmission rate, plus 2% for losses, minus the General Mills Operations, LLC average electric cost calculated above. STEP 4 - (If needed) If the rate in STEP 2 was 25% less than the rate in STEP 1, , the General Mills Operations, LLC cogen forecast is compared with the General Mills Operations, LLC actual cogen run for the month. If the cogen ran less than or equal to the General Mills Operations, LLC cogen forecast, no bill is rendered. If the General Mills Operations, LLC cogen ran more than forecast, a bill will be rendered for the lesser of 1) the difference between the actual cogen run and the General Mills Operations, LLC cogen forecast, or 2) the energy Lodi sold during the active month. That difference will be multiplied by the difference between the ICE Quote Sheet rate at beginning of the active month and the ICE Quote Sheet rate determined in STEP 1. Rates will not include CAISO transmission costs or transmission losses, nor provide any credit for the average electric cost for General Mills Operations, LLC under the Il electric rate. Page 8 of 11 Appendix C (continued 2 of 3) STANDBY CONTRACT BILLING EXAMPLE Standby Contract Billing Example Flow Chart Is the most recent ICE Quote at the beginning of the active month within 2591 of the ICE Quote at the time the forecast month was submitted? z O Is the most recent ICE Quote at the beginning of the active month 251% LESS than the ICE Quote at the time the forecast month was submitted? e N STOP NO BILL RENDERED NO BILL WILL BE RENDERED Page 9 of 11 Z O E most recent ICE Quote at the beginning of the month 25%MORE than the ICE Quote at the time recast month was submitted? 9 Compare the most recent ICE Quote at the beginning of the active month with the average electric cost for General Mills Operations, LLC under the 11 electric rate (Total electric costs minus State Energy Tax, California Solar Surcharge and Customer Charge, divided by kWh for the month). Is the General Mills Operations, LLC average electric cost more than the ICE Quote at the beginning of the active month plus the CAISO transmission cost, plus 291 for losses? H1 yEs STOP NO RENDERED y� STOP NO BILL RENDERED Did the cogen actually ran more than or equal to the YES STOP NO BILL General Mills cogen forecast. RENDERED z 0 BILL WILL BE RENDERED Appendix C (continued 3 of 3) Examples of how the LEU will calculate the full cost to LEU to supply the additional power and/or how the LEU will calculate the full cost to LEU to acquire the unused power Geinmal hg0s0- Con L)L nfaraau 20L4 OnPedtllottr: NA rotat H6,1131;3fffi It�tCEtladtxtliainaraftlirta,uwnt.8etta.l Sim tCEdeae Se 2t� 45.60 SW1-Determine the. most recent tU Quote Sineet at the time of Ow relevant General Wit Openations, UC c3gen forecast XXQuawShoals oraearraMEqupdated each Wednesday. I S 57.501 STEP 2 - Datam ine the most moont ICE Quote Sheet at the beglnningaf the active month. Compare this to Quote Sheet with the ICE Quote Sheet determined In STEP L if rates (Beselosd.Offorfates)In.this iff quote Sheet are within 2$94 of Ow ICE Quote Skeet determined In STEP 1, no bill is rendered. S 45.60 S$a•3B Are the rates temiced onrer rates). in this ICE Quote Short vdthin.U%of the ICE Clem Sheet determined in SW V +/• 2wraw is the rate In (STEP 2) 2M Mme than the rate in STEP 1 no Is the fare in (STEP Z) ZM less than the rate in STEP i X11 No STEPBA-(dneeded)d.theratein STEP2�25Lmo thmtMraWIRSTEPLoemperedw XXOjr Shectraoedetamhwdin STEP2wMmW'- A6UsOperattoru, lAtuadertlte tleksOlarate(Ton)eMc>sk0altl mimesSrap EnerryTas,CAlifomiaSdfarSmdusBeatd tusemerClasu ,div{dab'a favi, fq�b / General MAItOperations. nQuate Sheat rate detemdnedin SWzphatM CAI50trrumisYmtcart,piss'.. Ittc4 rendered. The cieneswNot Op ?""ani, \t-i-,kcost f`r po°fr°S ;�3ii ,.pt941Oa2 S 267,�a-70 `� ea� perer+eR(mlrms) S 17&13 •Ciii isu(mhms) 5 ;25359 53Z1i EDR{(Mpia) $ TbW S 22$913.67 taWW41 1.1Fien / s !r�1�M�� ''kppeiaUont. LlCmrage eWctdccortSJmWh ICEQuote54aet rated �Inadit+7€if flus 1h ,�msmlWon cost, plus 2% for losses, no bill is rendered. �-�-�% KXQuoUStreetrace determinedlnSW2 9 45.60 f --. CAWtranunlslan cost \ 1 S 925 �-' 2%for laue; S 1.10 ` is General Mll:Operatiots LLC mono etaeuieoost is mom then Me ICE0,04 V.A*detemdeedinSTFP2,plustMCAi$Ovansniittfantas4*mZ66orfolsw? Yrs NO muf1fl4CEf= B she average elemiecost farSerteral Operatlorrs, LI•Ciakstfar the ICEQuote Sheet rate as detmmsaed in STEP 3A7no STEP SB- (R needed) If the awerago electric am far:ewmal ttifnOperedoes, LLCis Ides than the tCEQsmte Sheetrate asdeterWred In STEP 3A, the Ganeral MBs Operations, LI.Ccogen famast is thencgmparad wtlh dee Gweral MlllsOperallons. EEC actio cogen nm forthe moor. lithe eagertamdly ran morrttam orsquat wthe Genesi M165 Operpaoes, 11C O gen faraws, rOWN Is (&Wand. rated General Mlle Operatlor4 t1C--cogen ran less OW (areoa, a bill VIII be rendered forme leserof 1) dra dilfwmnm beoaeeo ted amN cogen ran and the GenerN MRsOpendom, LLCoagenlare(at, ort) the eragyeodi puMwseddudngthe aWve reondl. That dl(ferancr will be aKd**W by the KMOtefG Sheet rata determined in STEP 2. plated CAISO tnnprnisirn rte, phis 2%ferkn5@16 mmustler General Milt Operations, tLC VA4w alearicrosterrww..w above. [d®enfwewt(mwh) 11W cogen actual (mWb) 1164 Cogen actual (mVAj -Cogan forecast(mWh) D has the wpn actually ren more than of equal to the Gwml Milt Operadomi, UC cogen forecast? Yes ICE Quote Sheet rate determined In STEP 2: plus. the CAISO transmission cost, plus216 for loses(mWh) $ $5.95 ICEQuote Sheat.atthe beginningofthe active month (mMd $ 45.60 CAISO transmissionrate lmWh) $ 8.25 216forlosses $ L16 General Mils Operacions, LLC awrage electric cost(ruwh) $ 124.% ICE.Quote-General NMI&Ope.tions, LLCavenV oUctdc cost (rnWh)DF11E0 6&81 BILL RENDERED NO BILL IIEN STEP 4- (If needed) IF the fate In STEP 2 vias 25M less than ted rate in $TEP 1, the General Wks Operations, LLC Cogen forecast IS conlparad wilt the -General Mils OPeratidns, LLC actual cogen nm ferthe MXWL d the cogen on less than oreePml to the General Mlle Operations. IL Crxpn forecast, no bail is tmWerad it the General Mills Operations LLC cogen ran more then forecast, a bill will be rerWenitd for the lesser of 2) the difference betwiten the actual cogen an and ted General MRIs Operations, LLC cogen lneecask or 2) the energy LOS sold during do active mortis. That difference will be multiplied by titre diffmance batreen On ICE Quote Sheet nate at begvufung of t)re stave month and tiro XE Quote Shat raw determined in SEEP 1- Razes wit not inchsde CAISO tronsfr ssion coats or transmission losses, nor provide any credit fortlte auerage electric cost for "neral Mlle Opraticns, LLC wderthe 11 electric rate. OapnfereGst(mLvh) 1764 Caren actual(mWh) 1164 Oogenttcdfal (mwh)-Oogenfereeastimwk) 0 Nos the cogen actually ran more man aequal to the Seneral Mils Operations. LIC cogen forecast? Yea the ICE Use Sheet race at begirWrigot ft active maM and the ICE Cbjow Sheet rate deftanirerd In MIS I (mVA) S 5250 BILL RENDERED NO BIILROa011ism Page 10 o£11 ca CD 0 W x ay CD 0 0 c� CD w X, m o' d SD 0 n w as CD 0 n tar n rT 0 R. a co Q.. x 'u RESOLUTION NO. 2013-133 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE AN ELECTRIC STANDBY SERVICE AGREEMENT WITH GENERAL MILLS, INCORPORATED ------------------------------------------------------------------------ ------------------------------------------------------------------------ WHEREAS, City of Lodi staff has determined that the existing General Mills, Incorporated cogeneration facility does not comply with the current Electric Standby Service (SS) rate tariff; and WHEREAS, to ensure compliance with the SS rate tariff, a customer who owns a generation facility must sign a contract for purposes of operating such a facility; and WHEREAS, City staff, in partnership with General Mills staff, has developed an appropriate standby service agreement, which complies with the current SS rate tariff and requires General Mills to provide a monthly cogeneration plant operating forecast; and WHEREAS, this monthly operating forecast will insulate the City from any significant power acquisition expenses due to operational changes from the General Mills cogeneration facility, and General Mills will benefit during peak period hours when minor operational variances occur affecting its peak period demand charges. NOW, THEREFORE, authorize the City Manager to Mills, Incorporated. Dated: July 17, 2013 ---------------------- BE IT RESOLVED that the Lodi City Council does hereby execute an electric standby service agreement with General I hereby certify that Resolution No. 2013-133 was passed and adopted by the City Council of the City of Lodi in a regular meeting held July 17, 2013, by the following vote: AYES: COUNCIL MEMBERS — Johnson, Katzakian, Mounce, and Mayor Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Hansen ABSTAIN: COUNCIL MEMBERS — None HL-OLSON City Clerk 2013-133