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HomeMy WebLinkAboutAgenda Report - September 15, 1982 (41)ORDNANCES Ordinance No. 1269 - An Ordinance of the City Council of the City of Lodi approving the terms and conditions of a Member Agreement AGREEMENT RE (Calaveras Third Phase) between Northern California Power Agency CALAVERAS THIRD and certain Participating Members, and authorizing the execution PHASE of and delivery of said Agreement by Officers of the City; namely the Mayor and City Clerk having been introduced at a regular meeting ORO. N0. 1269 of the Council held September 1, 1982 was brought up for passage ADOPTED on motion of Councilman Pinkerton, Murphy second. Second reading was omitted after reading by title, and the Ordinance was then passed, adopted, and ordered to print by the following vote: Ayes: Council Member - Murphy, Olson, Pinkerton, Snider, and Reid (Mayor) Noes: Council Member - None Absent: Council Member - None r - � t F 3 i y - p 4� f tnt J k r Z i r - � t F 3 i f CITY CCx1NC11: FRED M. REID. Mayw ROBERT G. MIAPHY, Mayor Pro Tempore EVELYN M. OLSON JAMES W. PINKERTOK It. JOHN R. (Randy) SNIDER ;ITY OF LOD I CITY HALL, 221 WEST PINE STREET POST OFFICE BOX 320 LOOI. CALIFORNIA 95241 (209) 334-5634 September 20, 1982 Ms. Gail Sipple -Executive Assistant Northern California Power Agency 8421 Auburn Blvd. Suite 160 Citrus Heights, CA 95610 Subject: Calaveras Third Phase Agreement Dear Gail: HENRY A. CLAVES. )r. City Manager ALICE M. REIMCHE Cky Clerk RONALD M. STEIN City Attorney Pursuant to your August 30, 1982 fetter, enclosed herewith find. the following documents pertaining to the Calaveras Third Phase Agreement. 1. An executed copy of the Third Phase Agreement 2. Certified copy of Ordinance No. 1:269 - An Ordinance of the City of Lodi, California, approving the terms and conditions of a member agreement between Northern California Power Agency and certain participating members, and authorizing the execution of and delivery of said agreement by officers of the City of Lodi. Very truly yours, AlOce' City Clerk AMR:jj Enc ls. r ,:.?'x•r«C•.. _.. -, ,- . _ :rt:.w,..'�__•._•_•___.._�..a. ..;�b3x*,w,,:.a„�s�,a.r�......_.._.,.._._.. .. ...,,.,....�..,._..._, ,.,..w.m,..,.__ ' 7/21/82 RESOLUTION NO. 82-30 NORTHERN CALIFORNIA POWER AGENCY BE IT RESOLVED BY THE COMMISSION OF THE NORTHERN CALIFORNIA POWER AGENCY, as follows: Section 1. The changes in the form of "Agreement for Construction, Opera- tion and Financing of the North Fork Stanislaus River Hydroelectric Development Project" approved by Resolution No. 82-17, adopted June 24, 1982, is hereby approved, subject to such changes in form as may be approved by bond counsel, and all references to said agreement in said Resolution No. 82.17 shall be construed as a reference to the agreement so changed. Section 2. Section 3 of Resolution No. 82-17 is hereby amended by sub- stituting for the date of August 23, 1982, the date of September 23, 1982, Section 3. Section 4 of Resolution No. 82-17 is amended by adding the following: "Nothing in Section 13 of the Third Phase Agreement shall delay the procedures set forth in this resolution, it being the intention of the Commission to have all of the Percentage Participation subscribed, and the agreement irrevocable, on on before November 8, 1982." Vote Abstained Absent City of - Alameda Biggs Gridley -_ X .... Healdsburg- LG�d — Lodi Lompoc Palo Alto Redding Roseville _ Santa Clara Ukiah Ory Plumas-Sierra_ J ADOPTED AND APPROVED this -.1.'LI day of l� _, 1982. r/ RESOLUTION NO. 82-17 NORTHERN CALIFORNIA POWER AGENCY WHEREAS, NCPA and its members entered into a "Member Agreement for Financing of Planning and Development Activities of the Calaveras Hydroelectric Project" as of June 26, 1980, herein called the Second Phase Agreement, which agreement is Service Schedule No. 2 to the Member Service Agreement effective January 12, 1981; and WHEREAS, on July 6, 1981, NCPA entered into a "Power Purchase Contract" with Calaveras Count., Water District under which NCPA agrees to finance the construction of the North Fork Stanislaus River Hydroelectric Development Project, conditioned upon receipt by Calaveras of the necessary permits therefor in form satisfactory to NCPA; and. WHEREAS, the Second Phase Agreement contemplates the execution by NCPA and its members of a Third Phase Agreement, therein called a Final Power Contract, as a basis for financing the cost of such construction as set out in Appendix "A"; and WHEREAS, it appears that Calaveras may soon receive all necessary permits in form satisfactory to NCPA for the construction of the Project; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE NORTHERN CALIFORNIA POWER AGENCY, as follows: Section 1. The terms and provisions of the form of "Agreement for Con- struction, Operation and Financing of the North Fork Stansl-aus River Hydro- electric Development Project" presented to this meeting are hereby established and approved, pursuant to section 2(c) of the Second Phase Agreement, and such Agreement is herein referred to as the Third Phase Agreement, subject to any nonsubstantive changes as agreed to by the General Manager and Legal Counsel. Section 2. The Secretary of the Commission shall transmit counterpart copies of the Third Phase Agreement to each Member of this Agency and request that such Member execute such Third Phase Agreement for a Project Entitlement Percentage selected by it but not in excess of that specified in section 4 of Resolution No. 82-09. ;eC) Resolution No. 82-11 Page Two Section 3. The date by which the Third Phase Agreement must be executed by Project Members and delivered to NCPA is hereby established as Monday, August 23, 1982. Failure of any member to execute the Third Phase Agreement for any of its total participation share and to deliver it to NCPA by that date or 30 days after member receipt, whichever is later, will be an irrevocable de— cision on the part of that member not to -purchase any such power. Execution and delivery of the Final Power Contract for less than its total participation percentage and delivery of that executed agreement by the date established or 30 days after receipt, whichever is later, will likewise be an irrevocable decision on the part of that member not to purchase any such power in excess of the share set forth in its delivered agreement. The member making any herein -defined irrevocable decision not to purchase all of its share of power shall be foreclosed from receiving, and shall be relieved of further burdens related to, power which it has declined to purchase. Nothing in this resolu- tion shall be construed as varying any of the provisions of the Second Phase Agreement. Section 4. If any members shall select a lesser Project Entitlement Percentage than that specified by section 4 of Resolution No. 82-09 the Percentages not so selected shall be offered by the Secretary to those members who selected the full percentage to which they are so entitled, for acceptance within 30 days after receipt of such offer by the member. If such members desire more Percentage than is made available, the available percentage shall be divided among such desiring members in accordance with their percentages under section 4 of Resolution No. 82-09. Section 5. Neither this resolution nor the Third Phase Agreement is intended to change in any way the rights and duties of NCPA toward Calaveras under the Power Purchase Agreement or otherwise, and NCPA shall determine whether or to what extent to proceed with the financing of the Project. • Resolution N"2-17 Page Three Vote Abstained Absent City of m Alameda Biggs --_ Gridley _ Healdsburg Lodi Lonpoa _� J Palo Alto Redding Roseville Santa Clara a Ukiah Pl umas-Sierra ADOPTED AND APPROVED this oq' -- day of i �, 1982• Resolution No. 82-17 APPENDIX "A" (c) Exercise and Effect of Taking Less Than Full Entitlement. The Project Members shall establish the terms and provisions of an agreement to purchase power of the Project prior to the expiration of this Agreement, to be known as the Final Power Contract. They shall also establish the date by which the Final Power Contract must be executed by -Project Members and delivered to NCPA if they are to participate in the purchase of power from the Project. Fail- ure to execute the Final Power Contract for any of its total participation share and to deliver it to NCPA by that date or 30 days after member receipt, which- -ever hich--ever is later, will be an irrevocable decision on the part of that Project Member not to purchase any such power. Execution and delivery of the Final Power Contract for less than its total participa-tion percentage and delivery of that Project Meaber executed agreement to NCPA by the date established or 30 days after Project Member's receipt, whichever is later, will likewise be an ir- revocable decision on the part of that Project Member not to purchase any such power in excess of the share set forth in its delivered agreement. Supplemental agreements shall be consistent with those prescribed immediately above in this subsection'(c) fo making purchases of power. Failure to return an executed agreement for any additional power within the prescribed period is an irrevoca-- ble decision not to purchase such additional power. The Project Member making any herein defined irrevocable decision not to purchase all of its share of power shall be foreclosed from receiving, and shall be relieved of further burdens related to, power which it has declined to purchase.. C Final Draft 8/5/82 AGREEMENT FOR CONSTRUCTION, OPERATION AND FINANCING OF THE NORTH FORK STANISLAUS RIVER HYDROELECTRIC DEVELOPMENT PROJECT Dated as of September 1. 1982 By and Among NORTHERN CALIFORNIA POWER AGENCY [List Project Participants] TABLE OF CORTMITS -i- PAU 1. Definitions . . . . . . s 3 2. Purpose 0 4 3. Construction and Operation 4 4. Sale and Delivery of Capacity and Energy from the Project . . . . . . . . . . . . . . . . 4 S. Rates and Charges . . . . ' . . . . . . . . . . . 5 6. Annual Budget and Billing Statement . . . . . . 7 7. Obligation in the Event of Default . . . . . . . 8 8. Covenant with Respect to Additional Obligations of Project Participant . . . . . . . 9 9. Transfers, Sales and Assignments of Capacity . .10 10. Surplus Capacity and Energy . . . . . . . . .11 11,. Insurance and indemnification . . . . . . . .12 12. Member Direction and Review . . . . . . . . . .12 13. Term . . . . . . . . . . . . . . . . . . . . . .13 14. Termination and Amendments . . . . . . . . . . .14 15. Member Service Agreement . . . . . . . . . . . .14 16. Second Phase Agreement . . . . . . . . . . . . .14 APPENDIX A - Schedule of Proj-ect Participants and Project Entitlement Shares . .16 APPENDIX B - Form of Opinion of Counsel . .17 -i- AGREEMENT FOR CONSTRUCTION, OPERATION AND FINANCING OF THE NORTH FORK STANISLAUS RIVER HYDROELECTRIC DEVELOPMENT PROJECT This Agreement, dated as of September 1, 1982, by and among Northern California Power Agency, a joint powers agency of the State of California (hereinafter called "NCPA") and the other entities exe- cuting this Agreement. WITNESSETH: WHEREAS, NCPA and Calaveras County Water District (hereinafter called "CCWD") entered into a Memorandum of Understanding, dated May 31, 1977 and June 2, 19771, amended on November 21 1978, and further amended on November 19, 1979, under which CCWD agreed to construct and own a hydroelectric project on the North Fork Stanislaus River and to sell capacity and energy of such project to NCPA, which Memorandum of Understanding, as so amended, has terminated or will terminate upon the issuance of the Federal Energy Regulatory Commission license for the Project; WHEREAS, NCPA and its members entered into a "Member Agreement for Financing of Planning and Development Activities of the Calaveras Hydroelectric Project" made as of June 26, 1980, providing for the financing of certain planning activities in connection with the Project .(said Contract, as it may be amended and supplemented from time to time, being hereinafter called the "Second Phase Agreement"); and WHEREAS, this Agreement is the "Final Power Contract" con- templated in the Second Phase Agreement; and WHEREAS, NCPA and CCWD entered into the North Fork Stanislaus River Hydroelectric Development Project Power Purchase Contract, dated as of July 6, 1981, providing for the financing;, con- struction, ownership and operation of the Project, the sale of capac- ity and energy of the Project to NCPA, and the security for Bonds to be issued to finance the Project (said Contract, as it may be amended and supplemented from time to time, being hereinafter called the "Power Purchase Contract") and WHEREAS, NCPA and its members have entered into one of three Member Service Agreements, effective February 12, 1981 (said Agreements, as they may be amended and supplemented from time to time, being hereinafter called the "Member Service Agreement"'), which provide for services which NCPA shall perform for its members, among other things, and for the provisions to be contained in Second and Third Phase agreements. such a4 the Second Phase Agreement, and this Agreements and -2- i WHEREAS, pursuant to the Power Purchase Contract, NCPA and the Project Participants (as hereinafter defined) now wish to enter into this Agreement to provide further for the construction, opera- tion and financing of the Project, the sale by NCPA of capacity and energy of the Project to the Project Participants, and the security for the Bonds to be issued to finance the Project; NOW THEREFORE, the parties hereto do agree as follows: 1. Definitions. The terms "Project", "FERC", "CCWD Bonds", "Bond Resolution", "NCPA Bonds", "Bonds", "Trustee" and "Full Operation Date" shall have the respective meanings in this Agreement as ascribed thereto in the Power Purchase Contract and, in addition: (a) "Electric System" means all properties and assets, real and personal, tangible and intangible, of the Project Participant now or hereafter existing, used or pertaining to the generation, trans- mission, transformation, distribution and sale of electric capacity and energy, including all additions, extensions, expansions, improve- ments and betterments thereto and equippings thereof; provided, how- ever, that.to the extent the Project Participant is not the sole owner of an asset or property or to the extent that an asset or prop- erty is used in part for the above described electric purposes, only the Project Participant's ownership interest in such asset or prop- erty or only the part of the asset or property so used for electric purposes shall be considered to be part of its Electric System. (b) "Project Entitlement Percentage" means, with respect to each Project Participant, the percentage set forth opposite the name of such Project Participant in Appendix A hereto, as such Appendix A shall be amended from time to time in accordance with Section 14 of this Agreement. (c) "Project Participants" means those entities listed in Appendix A hereto and executing this Agreement, together in each case PP 9 g o9 with their respective successors or assigns. ns. g (d) "Revenues" means all income, rents, rates,'fees, charges, and other moneys derived by the Project Participant from the ownership or operation of its Electric System, including, without limiting the generality of the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived from the sale, furnish- ing, and supplying of the electric capacity and energy and other ser- vices, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System, (ii) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System and (iii) the proceeds derived by the Project Participant directly or indirectly from the sale, lease or other disposition of all or a part of the Electric System as permitted hereby, but the term "Revenues" shall not include (y) customers' deposits or any other deposits subject to refund until such deposits have become the -3- property of the Project Participant, or (z) contributions from customers for the payment of costs of construction of facilities to serve them pursuant to agreements executed or made prior to the date of this Agreement. (e) "Significant Transaction" means any transaction pursu- ant to Section 9(c) of this Agreement which, when combined with any prior or contemporaneous transaction pursuant to said Section 9(c), would result in the Project Entitlement Percentage of any Project Participant being either (i) less than its original Project Entitlement Percentage minus a Project Entitlement Percentage of 4.000%, or (ii) greater than its original Project Entitlement Percentage multiplied by 2.0. (f) "Temporary Bonds" means Bonds issued for the purpose of financing studies, the acquisition of options, permits and other pre- liminary costs to be incurred prior to the undertaking of the con- struction or acquisition of the Project and for the purpose of pro- viding temporary financing of costs of acquisition and construction of the Project and which are designated as Temporary Bonds in the Bond Resolution authorizing the issuance of such Temporary Bonds. 2. Purpose. The purpose of this Agreement is to sell capacity and energy of the Project to the Project Participants,: to provide the terms and conditions of such sale and to provide for the financing of the Project. 3. Construction and Operation. NCPA will use its best efforts to cause or accomplish the construction, operation and financing of the Project, the obtaining of all necessary authority and rights, and the performance of all things necessary and conven- ient therefor., all in accordance with the Power Purchase Contract. Each Project Participant will cooperate with NCPA to that end, and will give any and all clarifying assurances by supplemental agree- ments that may reasonably necessary in the opinion of CCWD''s and NCPA's respective legal counsel to make the obligations herein more specific and to satisfy legal requirements and provide security for the Bonds. NCPA may pledge and assign to any Trustee for NCPA Bonds, CCWD and any Trustee for CCWD Bonds, or any of them, all or any por- tion of the payments received hereunder from Project Participants, and upon notice from NCPA each Project Participant shall make pay- ments due by it hereunder directly to any Trustee for NCPA Bonds, CCWD or any Trustee for CCWD Bonds, or any of them, as the case may be. Such pledge and assignment by NCPA shall be made effective for such time as NCPA shall determine and provide. 4. Sale and Delivery of Capacity and Energy from the Project. (a) Pursuant to the terms of this Agreement, NCPA shall provide to each Project Participant, and each Project Participant shall take, or cause to be taken, such Project Participant's Project -4- .. .-s.a-waw .y.....«K.. ,. ... Entitlement Percentage of the capacity and energy of the Project to which NCPA is entitled under the Power Purchase Contract. (b) NCPA will remain available to do all things necessary and possible to deliver or cause to be delivered to or for the Project Participants in accordance with their respective Project Entitlement Percentages the capacity and energy of the Project to which NCPA-is entitled under the Power Purchase Contract. Such delivery shall generally be at points on or adjacent to the Electric Systems of the respective Project Participants or of their designees, reasonably well adapted to the ability of each such Participant or designee to utilize such capacity and energy. NCPA will remain available to make or cause to be made all necessary and possible arrangements for transmission of such capacity and energy to such points over the lines of NCPA or others, and for additional capacity and energy required from others as reserves against planned or emer- gency service interruptions with respect to the Project. Wheeling or delivery services by NCPA with related energy sales to the Project Participants shall be as provided in service schedules as provided in Article III of the Member Service Agreement. S. Rates and Cbarges. (a) Commencing on the Pull Operation Date, NCPA shall fix charges to the Project Participants under this Agreement to produce revenues to NCPA from the Project equal to the amounts anticipated to be needed by NCPA to meet the total costs of NCPA to provide capacity and energy from the Project, including but not limited to (i) debt service on the Bonds, reserves f or the payment of debt service on the Bonds and other payments required under the Bond Resolution other than payments described in (iii) below, (ii) all other payments provided to be made by NCPA under the Power Purchase Contract, (iii) any other operation, mainte- nance and replacement costs of the Project, a reasonable reserve for contingencies, and all other Project costs other than costs and expenses pursuant to Section 4(b), and (iv)- costs and expenses of NCPA for delivering Project capacity and energy pursuant to Section 4(b) of this Agreement. NCPA shall fix charges to the Project Participants to produce revenues to NCPA from the Project to meet the costs described in (i) and (-ii) above based on Projc.-t Entitlement Percentages and to meet the costs described in (iii) above based on the anticipated energy output of the Project. If NCPA delivers Project capacity and energy to or for any Project Participant pursu- ant to Section 4(b) of this Agreement, NCPA shall fix charges to each such Project Participant so as to pay the costs of such delivery without liability to any Project Participant for whom Project capac- ity and energy is not so delivered by NCPA. (b) To the extent that the funds provided under Section 5(a) of this Agreement are not sufficient for such purposes, each Project Participant shall pay to NCPA an amount equal to such Project Participant's Project Entitlement Percentage of the total cost to pay all amounts of principal and interest on the Bonds, reserves for the -5- payment 'of debt service and other payments required under the Bond Resolution and all other payments required to be made by NCPA under the Power Purchase Contract. The obligation of this Section 5(b) is incurred by each Project Participant for the benefit of future hold- ers of Bonds and for the benefit of CCWD, and shall commence and con- tinue to exist and be honozed by Project Participants whether or not capacity or energy is furnished to them from the Project at all times or at all (which provision may be characterized as an obligation to pay all costs on a take -or -pay basis whether or not such Project capacity or energy is delivered or provided). (c) Each Project Participant shall make payments under this Agreement solely from the Revenues of, and as an operating expense of, its Electric Systems provided, however, that so long as no Bonds other than Temporary Bonds are outstanding, to the extent stated in the Bond Resolution authorizing Temporary Bonds then outstanding, Project Participants shall make payments under this Agreement from the Revenues of such Project Participants' Electric Systems but only after the payment of operating expenses thereof. Each Project Participant hereby pledges its Revenues to the payments required hereunder. Nothing herein shall be construed as prohibiting any Project Participant from using any other funds and revenues for pur- poses of satisfying any provisions of this Agreement. In the event that payments uneer this Agreement as an operating expense of a Project Participant's Electric System would violate the provisions of an agreement to which such Project participant is a party, such Project Participant shall, if so requested by NCPA, with all dili- gence proceed to comply with the provisions of any such agreement so as to constitute the payments under this Agreement as an operating expense. So long as a Project Participant is in compliance with all its obligations hereunder, such pledge shall not prevent its applica- tion of Revenues to other operating expenses of its Electric System or, subject to the payment of such operating expenses, to other lawful purposes, nor impair the rights of any recipient of Revenues lawfully so applied. (d) Each Project Participant shall make payments under this Agreement whether or not the Project is completed, operable, operat- ing or retired and notwithstanding the suspension, interruption, interference, reduction or curtailment of Project output or the capacity and energy contracted for in whole or in part for any reason whatsoever. Such payments are not subject to any reduction-, whether by offset or otherwise, and are not conditioned upon performance by CCWD, NCPA or any other Project Participant under this Agreement or any other agreement. (e) No Project Participant shall be liable under this Agreement for the obligations of any other Project Participant. Each Project Participant shall be solely responsible and liable for performance of its obligations under this Agreement and for the maintenance and operation of its respective properties not included CM as part of the Project. The obligation of each Project Participant to make payments under this Agreement is a several obligation and not a joint obligation with those of the other Project Participants. (f) Each Project Participant covenants and agrees to estab- lish and collect fees and charges for electric capacity and energy furnished through facilities of its Electric System sufficient to provide Revenues adequate to meet its obligations under this Agreement and to pay any and all other amounts payable from or con- stituting a charge and lien upon any or all such Revenues. (g) Each Project Participant covenants and agrees that it shall, at all times, operate the properties of its Electric System and the business in connection therewith in an efficient manner and at reasonable cost and shall maintain its Electric System in good repair, working order and condition. 6. Annual Budget and Billing Statement. Prior t o t h e beginning of each NCPA fiscal year, NCPA will adopt an annual budget for such fiscal year for costs and expenses relating to the Project and shall promptly give notice to each Project Participant of its projected share of such costs and expenses. A billing statement pre- pared by NCPA will be sent to each Project Participant not later than the fifteenth (15th) day after the end of each calendar month showing the amount payable by such Project Participant of costs payable under Section 5(a) of this Agreement for the next preceding calendar month, the amount payable by such Project Participant as its Project Entitlement Percentage of costs payable under Section 5(b) of this Agreement for the next succeeding calendar month, and the amount of any credits. Amounts shown on the billing statement are due and pay- able thirty (30) days after the date of the billing statement. Any amount due and not paid by'the Project Participant within thirty (30) days after the date of the billing statement shall bear interest from the due date until paid at an annual rate to be established by NCPA at the time of adoption of the annual budget. On or before the day five (5) calendar months after the end of each NCPA fiscal year, NCPA shall submit to each Project Participant a statement of the aggregate monthly costs for such fiscal year. If the actual aggregate monthly costs and the Project Participant's Project Entitlement Percentage thereof pursuant to this Agreement, and other amounts payable for any fiscal year, exceed the estimate thereof on the basis of which the Project Participant has been billed, the deficiency shall be added to the next succeeding billing statement. If the actual aggregate monthly costs and the Project Participant's Project Entitlement Percentage thereof and any adjustment of or credit to the Project Participant's Project Entitlement Percentage thereof or other amounts payable for any fiscal year are less than the estimate on the basis of which the Project Participant has been billed, NCPA shall credit such excess against the Project Participant's next billing statement. -7- jka3�°M'z ;�c��ar `,. `�.�ri�4'`R.Se>.A,:y_ fix.^.:v: ,a...a .r ,�__' __•__.0-.-... :.—. _..-...,:_ o.:. x!^:s,�`'x-`-'a If a Project Participant questions or disputes the correct- ness of any billing statement by NCPA. it shall pay NCPA the amount claimed when due and shall within thirty (30) days of its receipt request an explanation from NCPA. If the bill is determined to be incorrect, NCPA will issue a corrected bill and refund any amount which may be due the Project Participant which refund *shall bear interest from the date NCPA received payment until the date of the refund at an annual rate to be established by NCPA at the time of adoption of the annual budget. If NCPA and the Project Participant fail to agree on the correctness of a bill within thirty (30) days after the Project Participant has.requested an explanation, the par- ties shall promptly submit the dispute to arbitration under section 1280 rt =. of the Code of Civil Procedure. 7. Obligation in the Event of Default. (a) Upon fail- ure of any Project Participant to make any payment in full when due under this Agreement or to perform any other obligation hereunder, NCPA shall make written demand upon such Project Participant, and if said failure is not remedied within thirty (30) days from the date of such demand, such failure shall constitute a default at the expira- tion of such period. Notice of such demand shall be provided to each other Project*Participant by NCPA. (b) Upon the failure of any Project Participant to make any payment which failure constitutes a default under this Agreement, NCPA shall use its best efforts to sell and transfer for the default- ing Project Participant's account all or a portion of such Project Participant's Project Entitlement Percentage of Project capacity and energy for all or a portion of the remainder of the term of this Agreement. Notwithstanding that all or any portion of the Project Participant's Project Entitlement Percentage of Project capacity and energy is so sold or transferred, the Project Participant shall remain liable to NCPA to pay the full amount of its Project Entitlement Percentage of monthly costs as if such sale or transfer had not been made, except that such liability shall be discharged to the extent that NCPA shall receive payment from the purchaser or transferee thereof. (c) Upon the failure of any Project Participant to make any payment which failure constitutes a default under this Agreement and causes NCPA to be in default under the Power Purchase Contract or any Bond Resolution, NCPA may (in addition to the remedy provided by sub- section (b) of this Section 7) terminate the provisions of this Agreement insofar as the same entitle the defaulting Project Participant to its Project Entitlement Percentage of Project capacity and energy. Irrespective of such termination, the obligations of the Project Participant under this Agreement shall continue in full force and effect. (d) Upon the failure of any Project Participant to make any payment which failure constitutes a default under this Agreement, and except as- sales or transfers are made pursuant to subsection (b) of this Section 7, (i) the Project Entitlement Percentage'of each nonde- faulting onde- faulting Project Participant shall be automatically increased for the remaining term of this Agreement pro rata with those of the other nondefaulting Project Participants and (ii) the defaulting Project Participant's Project Entitlement Percentage shall (but only for pur- poses of computing the respective Project Entitlement Percentages of the nondefaulting Project Participants) be reduced correspondingly; provided, however, that the sum of such increases for any nondefault- ing Project Participant shall not exceed, without written consent of such nondefaulting Project Participant, an accumulated maximum of 25% of the nondefaulting Project Participant's original Project Entitlement Percentage. (e) If a Project Participant shall fail or refuse to pay any amounts due to NCPA, the fact that other Project Participants have increased their obligation to make such payments shall not relieve the defaulting Project Participant of its liability for such payments, and any Project Participant increasing such obligation shall have a right of recovery from the defaulting Project Participant to the extent of such respective increase in obligation caused by the defaulting Project Participant. (f). Any Trustee for NCPA Bonds or for CCWD Bonds shall have the right, as a third party beneficiary, to initiate and maintain suit to enforce this Agreement to the extent provided in any Bond Resolution and, in the case of a Trustee for CCWD Bonds, the Power Purchase Contract. 8. Covenant with Respect to Additional Obligations of Project Participant. Nor Project Participant shall issue bonds, notes or other evidences of indebtedness, or cause indebtedness to be issued on its behalf, or enter into an agreement which secures indebtedness of such Project Participant or another entity and which agreement requires such Project Participant to take or to take -or -pay for capacity and energy from a project, payable from the Revenues of its Electric System on a parity with or superior to the payment of operating expenses of its Electric System, unless payment of such indebtedness or agreement is on a parity with the payment of operat- ing expenses of its Electric System and either: (i) an independent consulting engineer or engineering firm or corporation having a national and favorable reputation for special skill, knowledge and experience in analyzing the operations of electric utility systems shall render and file with NCPA a written opinion that the incurring of any such indebtedness or the entering into any such agreement will not materially adversely affect the capacity if such Project Participant to meet its obligations and covenants under this -9- t Agreement; or (ii) the annual payments under such indebtedness or agreement are fixed and the Revenues for the fiscal year next preced- ing the approval of such indebtedness or agreement are at least (a) 1.25 times the maximum annual amount of such payments pursuant to Section 5(c) of this Agreement and under the proposed indebtedness or agreement and all other similar indebtedness and agreements, plus (b) the sum of all other amounts payable from or constituting a charge or lien upon any of the Revenues in such preceding fiscal year. Notwithstanding the foregoing, none of the provisions con- tained in this Section 8 shall be construed as affecting the right of Plumas-Sierra Rural Electric Cooperative to issue additional notes under and pursuant to its existing security instruments, as the same may be from time to time amended or supplemented, securing loans made by the United States of America acting through the Administrator of the Rural Electrification Administration and by the National Rural Utilities Cooperative Finance Corporation. 9. Transfers, Sales and Assignments of Capacity. Each Project Participant has full and unfettered rights to make transfers, sales and/or assignments of capacity, energy, and rights thereto except as expressly provided otherwise in this Agreement. (a) No Project Participant shall transfer ownership of all or substantially all of its Electric System to another entity until it has first com- plied with the provisions of this subsection (a). A consolidation with another governmental entity or change in governmental form is not deemed a transfer of ownership. (1) Such disposition or transfer shall be under terms and conditions that provide assurance that the obli- gations of the transferring Project Participant under- this Agreement, and that NCPA's obligations under this Agreement, the Power Purchase Contract, and any Bond Resolution, and under other agreements made or to be made by NCPA to carry out the Project, will be promptly and ade- quately met. NCPA may require that sufficient moneys of the transferring Project Participant to discharge such obligations be irrevocably set 'aside and maintained in a trust account, as a condition to the transfer of the _ Electric System, if no other adequate assurance is available. (2) The transferring Project Participant shall give written notice to NCPA of any proposed transfer pursuant to this subsection (a). Appendix A to this Agreement shall be amended as appropriate to reflect any transaction pursuant to this subsection (a). (b) Notwithstanding any other provision of this Agreement, no Project Participant shall transfer, assign, sell or exchange any Project capacity and energy, directly or indirectly, in any manner, -10- and, shall not take or permit to be taken any other action or actions, which would result in any of the NCPA Bonds or CCWD Bonds being treated as an obligation not described in Section 103(a) of the Internal Revenue Code of 1954, as amended, by reason of classif ka- tion of such Bond as an "industrial development bond" within the meaning of Section 103(b) of said Code. (c) Prior to the date of issuance of Bonds other than Temporary Bonds, any Project Participant may, subject to subsection (b) of this Section 9, transfer, assign, sell or exchange all or a portion of the Project capacity and energy to which such Project Participant is entitled in accordance with this subsection (c). Such capacity and energy may be offered to other Project Participants. Each such Project Participant shall be limited in its right to such capacity and energy as against any other such Project Participant in proportion to their Project Entitlement Percentages thereof. Any such transferee, assignee, exchangee or vendee shall be entitled to Project capacity and energy to the extent the same are so trans- ferred, assigned, exchanged or sold. The Project Entitlement Percentage of the Project Participant so transferring, assigning, exchanging or selling shall be decreased and the obligations of such Project Participant under this Agreement shall be discharged to the extent Project capacity and energy is transferred, assigned, exchanged or sold; provided, however, that such Project Participant shall remain liable for all obligations of NCPA incurred prior to the date of such transfer, assignment, exchange or sale to the extent of its Project Entitlement Percentage unless such obligations are spe- cifically assumed by the transferree, assignee, exchangee or vendee of such Project Participant. Any such transaction which would dis- charge or -educe any Project Participant's obligation pursuant to this subsection (c) shall be subject to the prior approval of NCPA and in addition, each Significant Transaction shall be subject to the approval of each Project Participant unless NCPA determines, after consultation with its consulting engineer, that such approval should not be required. Appendix A to this Agreement shall be amended as appropriate to reflect any such transaction pursuant to this subsec- tion (c) changing any Project Entitlement Percentage. Where a trans- fer, assignment, sale, or exchange is made of Project energy or capacity without decreasing a Project Participant's obligations under this Agreement, no approval is required under this subsection (c). 10. Surplus Capacity and Energy. W h e n a P r o j e c t Participant has surplus capacity and/or energy from the Project, NCPA shall, if requested by such Project Participant to do so, sell such surplus capacity and/or energy in the following manner: (a) NCPA shall use its best efforts to sell such surplus capacity and/or energy at a price at least equal to the Project Participant's cost therefor. -11- xs x. _ _.. ----e-xues...�. .,_....._ ..n ..,rmr.:r�.o.m+.�..�t.?A:r�.t;�+►.�.-a: _ .. _. Y (b) Other Project Participants shall have a right of first refusal, and other NCPA members shall have the second right at the sales prices set forth in subsections (c) and (d) of this Section r 10. (c) If NCPA can purchase equivalent capacity and/or energy from other sources for less than the Project Participant's cost for surplus capacity and/or energy, as the case may be, the sales price of such capacity and/or energy to another Project Participant or NCPA member shall be equal to the cost of purchasing the capacity and/or energy from such other source. (d) If the alternative cost of purchasing capacity and/or energy for other Project Participants or members of NCPA is more than the Project Participant's cost of surplus capacity and/or energy from the Project, then the sales price shall be the Project Participant's cost plus one-half the difference between the Project Participant's cost and the cost of capacity and/or energy from an alternative source. 11. Insurance and Indemnification.. NCPA shall obtain or cause to be obtained insurance for the Project covering such risks, in such amounts and with such deductibles as shall be determined by NCPA. NCPA shall indemnify and hold harmless each Project Participant from any liability for bodily injury or property damage resulting from any accident or occurrence arising out of or in any way related to the construction or operation of the Project. 12. Member Direction and Review. NCPA shall comply with all lawful directions of the Project Participants with respect to this Agreement, while not stayed or nullified, to the fullest extent authorized by law. Actions of Project Participants, including giving above directions to NCPA, will be taken only at meetings of autho- rized representatives of Project Participants duly called and held pursuant to the Ralph M. Brown Act. (a) A quorum of the NCPA Commission for purposes of acting upon matters related to the Project shall consist of those Commissioners, or their designated alternates, representing a numeri- cal majority of the Project Participants, or, in the absence of such, those Commissioners representing: Project Participants having a com- bined Project Entitlement Percentage of at least 508. (b) Special meetings of the Commission to act only on mat- ters relating to the Project may be called by a majority of the Commissioners of Project Participants upon notice as required by the Ralph M. Brown Act. (c) At regular or special meetings of the Commission, voting on matters relating to the Project shall be by Project Entitlement Percentage, and a 50% or greater affirmative vote shall -12- r-. r be 'required to take action, unless the Project Participants agree at such meetings that voting will be on a one member one vote basis, vith a majority vote of those present required for action. (d) Upon demand of any Commissioners (including alternates) of Project Participants, at any meeting -of the Commission other than a special meeting referred to in subsection (b) of this Section 12, the vote on any issue relating to the Project shall be by Project Entitlement Percentage and 65% or greater affirmative vote shall be required to take action. (e) Any Project Participant may veto a discretionary action of the Project Participants relating to the Project that was not taken by a 658 or greater Project Entitlement Percentage vote within 10 days following mailing of notice of such Commissioners' action, by giving written notice of veto to NCPA, unless at a meeting of Commissioners or alternates of Project Participants called for the purpose of considering the veto and held within 30 days after such veto notice, the holders of 65% or greater of the Project Entitlement Percentage shall vote to override the veto. (f) The sixty-five percent of the Project Entitlement Percentage specified in this Section 12 shall be reduced by the amount that the Project Entitlement Percentage of any Project Participant shall exceed 35%, but such 65% shall not be reduced below 50%. 13. Term. This Agreement shall not take effect until it and/or any supplement to it provided for in Section 2(c) of .the Second Phase Agreement has been duly executed and delivered to NCPA by Project Participants the Project Entitlement Percentages of whi-ch, in the aggregate, equal 100%, all ' in accordance with Section 2(c) of the Second Phase Agreement and accompanied by an opinion for each Project Participant of an attorney or firm of attorneys in substan- tially the form attached hereto as Appendix B, and by evidence sats - factory to NCPA of (a) authority to enter into this Agreement, in compliance with Section SC of 'Amended and Restated Member Agreement for Construction, Operation and Financing of NCPA Geothermal Generating Unit #2 Project,' made as of January 1, 1980 by NCPA and Purchasing Participating Members or (b) that such authority is not necessary. Notwithstanding the delay in effective date of this Agreement until the Project Entitlement Percentages in the aggregate equal 100%, it is agreed by all signatories hereto that in considera- tion for NCPA's signature hereto, and for its commitment to use its best efforts to obtain the 100% commitment within 90 days following August 1, 1982, each Project Participant upon its execution and delivery of each agreement to NCPA along with required opinion and any required evidence of authority as called for shall be immediately bound not to withdraw its respective offer herein made to enter into -13- this Agrhement as executed and/or supplemented or to decrease its respective participation percentage during the 90 day period commenc- ing August 1, 1982. The term of this Agreement shall continue until the later of (i) all Bonds issued have been retired, or full provi- sions made for their retirement, including interest until their retirement date or (ii) expiration or termination of the Poorer Purchase Contract. This Agreement shall automatically expire and terminate if the first series of Bonds shall not be issued on or before September 30, 1983. 14. Termination and Amendments. This Agreement shall not be subject to termination by any party under any circumstances, whether based upon the default of any other party under this Agreement, or any other instrument, or otherwise, except as specifi- cally provided herein. Except as otherwise provided in this Agreement, so long as any Bonds are outstanding and unpaid and funds are not set aside for the payment or retirement thereof in accordance with the applicable Bond Resolution, this Agreement shall not be amended, modified or otherwise changed or rescinded. by agreement of the parties without the consent of each Trustee for NCPA Bonds or CCWD Bonds whose con- sent is required under the applicable Bond Resolution. 15. Member Service Agreement. This Agreement is a ser- vice schedule and a Third Phase agreement attached to and incorpo- rated into the Member Service Agreement. This Agreement shall be construed as the more specific terms governing the general relation- ship between the parties set out in the Member Service Agreement in connection with the Project. • 16. Second Phase Agreement. The Second Phase Agreement is superseded by this Agreement, except that section 4 thereof shall remain in effect as provided by section 5 of the Second Phase Agreement unless changed by formal action of all of the Project Participants. Said section 4 is as follows: "Section 4. Conditional Repayment to Members. All payments and advances made pursuant to Section 1 excluding interest paid on delinquent payments shall be repaid to each of the entities making such payments and advances pur- suant to this Agreement out of the proceeds of the first issuance of the Project bonds or as and when there are suf- ficient funds available from the partial sale of bonds. Such reimbursements shall be made within 60 days following the sale of any Project bonds and shall include interest computed monthly at a rate equivalent to the end of the month prime rate of the Bank of America NT&SA. Any inter- est due under the third paragraph of section 1 of this Agreement and unpaid shall be deducted from the repayments. If Calaveras is not successful in obtaining a -14- e Project license from FERC, there shall be no reimburesment except out of unused Project funds including those then in Calaveras Working- Capitan and Contingency Fund account and all money Calaveras is obligated to pay or return to NCPA in connection with the Memorandum along with all other receipts to which NCPA is entitled in connection with the Project." IN WITNESS WHEREOF each Project Participant has executed this Agreement with the approval of its governing body, and caused its official seal to be affixed and'NCPA has executed this Agreement in accordance with the authorization of its Commission. NORTHERN CALIFORNIA POWER CITY OF PALO ALTO AGENCY BY By And and CITY OF ALAMEDA CITY OF REDDING By By And and CITY OF BIGGS CITY OF ROSEVILLE By By And and CITY OF GRIDLEY CITY OF SANTA CLARA By By And and CITY OF HEALDSBURG CITY OF QRIAH By BY And and CITY OF LODI PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE By By And and CITY OF LOMPOC By and SCHEDULE OF PROJECT PARTICIPANTS AND PROJECT ENTITLEMENT PERCENTAGES Project Participant City of Alameda City of Biggs City of Gridley City of Healdsburg City of Lodi City of Lompoc City of Palo Alto City of Redding City of Roseville City of Santa Clara City of Ukiah Plumas-Sierra Rural Electric Cooperative APPENDIX A Project Entitlement Percentage 10.37 Total 100.000% -16- clnr COUNCIL FRED M. RfiD, Mayor CITY OF h O D I ROBERT G_ MURPHY. Matte Pro TenVore CITY HALL. 221 WEST PINE STREET EVELYN M. OLSON POST OFFICE Box 320 JAMES W. PINKERTON. Jr. LODI. CALIFORNIA 95241 JOHN R. q[andy) SNIDER (209) 334-5631 September 23, 1982 Northern California Power Agency 8421 Auburn Boulevard Suite 160 Citrus Heights, California 95610 Dear Sirs: HENRY A. CLAVES. )r. City Manager ALICE M. REIMCHE City Clerk RONALD M. STEIN City Attorney APPENDIX B I am acting as counsel to the City of Lodi (the "Project Participant") under the Agreement for Construction, Operation and Financing of .the North Fork Stanislaus River Hydroelectric Development Project dated as of September 15, 1982 (the "Agreement") among the Project Participant, the Northern California Power Agency (the "Agency") and certain other entities, and I have acted- as counsel t., the Project Participant in connection with the matters referred to herein. As such counsel, I have examined and am familiar with M those documents relating to the existence, organization and operation of the Project Participant, (ii) all necessary docv:rentation of the Project Participant relating to the authorization, execution and delivery of the Agreement and (iii) an executed counterpart of the Agreement. ! Based upon the foregoing and an examination of such other information, papers and documents as I deem necessary or advisable to enable me to render this opinion, including the Constitution and laws of the State of California together with the charter,, other governinginstruments, ordinances and public proceedings of the Project Participant, I am of the opinion that: 1. The Project Participant is a municipal corporation Of the State of California, duly created, organized and existing under the laws of the State of California and duly qualified to furnish electric service within said State. 2. The Project Participant has full legal -- right, power and authority to enter into the Agreement and to carry out and consummate all transactions contemplated thereby, and the Project Participant has complied with the provisions of applicable law in all matters relating to such transactions. 3. The Agreement has been duly authorized, executed and delivered by the Project Participant, is in full force and effect and, assuming that the Agency has all the requisite power and authority, and has taken all necessary action, to execute and deliver such Agreement, constitutes the legal, valid and binding obligation of the Project Participant enforceable in accordance with its terms, except that the rights and remedies set forth therein may be limited by or resulting from bankruptcy, insolvency, reorganization or other laws affecting creditors' rights generally. 4. Payments by the Project Participant under the Agreement will constitute an operating expense of the Project Participant and are to be made solely from, and are secured by a valid pledge of, the Revenues of its Electric System as provided in Section 5(b) of the Agreement. However, as long as no Bonds other than Temporary Bonds are outstanding, to the extent stated in the Bond Resolution authorizing Temporary Bonds then outstanding, payments by the Project Participant under the Agreement shall be made from Revenues of its Electric System but only after the payment of operatingexpenses thereof. "Bond", "Temporary Bonds" and "Bond Resolution" herein have the respective meanings given thereto in the Agreement. 5. No approval, consent or authorization of any governmental or public agency, authority or person is required for the execution and delivery by the Aect Project P g Participant of the reement or the performance by the Project Participant of its obligations thereunder. 6. The authorization, execution and delivery of the Agreement and compliance with the provisions thereof will not conflict with or constitute a breach of, or default under, any instrument relating to the organization, existence or operation of the Project Participant, any commitment, agreement or other instrument to which the Project Participant is a party or by which it or its property is bound or affected, or any ruling, regulation, ordinance, judgment, order or decree to which the Project Participant (or any of its officers in their respective capacities as such) is subject or any provision of the laws of the State of California relating to the Project Participant and its affairs. 7. There is no action, suit, proceeding, inquiry or investigation at law or in equity, or RMS:vc M before any court, public board or body, pending or, to my knowledge,; threatened against or affecting the Project Participant or any entity affiliated with the Project Participant or any of its officers in their respective capacities as such (nor to the best of my knowledge is there any basis therefor), which questions the powers of the Project Participant referred to in paragraph 2 above or the validity of the. proceedings taken by the Project Participant in connection with the authorization, execution or delivery of the . Agreement, or wherein any unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by the Agreement# or which, in any way, would adversely affect the validity or envorceability of the Agreement. Very truly yours, RONALD M. STEIN City Attorney o . a ORDINANCE 110. 1269 h AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI, CALIFORNIA, APPROVING THE TERMS AND CONDITIONS OF A MEMBER AGREEMENT BETWEEN NORTHERN CALIFORNIA POWER AGENCY AND CERTAIN PARTICIPATING MEMBERS, AND AUTHORIZING THE EXECUTION OF AND DELIVERY OF SAID AGREEMENT BY OFFICERS OF THE CITY OF LODI, CALIFORNIA. WHEREAS. pursuant to the provisions of Chapter 5, Division 7, Title l of the Government Code of the State of California, as amended (the "Joint Powers Act"), the City of Lodi and certain other public agencies create pursuant to the laws of the State of California (collectively, the "Kembers"), have entered Into a Joint Powers Agreement (the "Agreement"), as amended, creating the Northern California Public Agency (the "Agency"), a public entity separate and apart from the 1 -1 -embers; and WHEREAS, in accordance with the Agreement and the Joint Powers Act, the Agency has entered or will enter into agreements to acquire a project (the "Project") to consist of rights to capacity and energy from the North Fork Stan islaus River Hydroelectric Development %wer Project, a hydroelectric project proposed to be constructed in the State of California, and capital improvements thereto that may be constructed from time to time, and interests in certain other properties and rights relating thereto; and WHEREAS, the City of Lodi Inas need for an economical, reliable source of electric power and energy to meet the demands of the customers of its electric system, and, as such, has determined that it is desirable to enter into the Agreement for Construction, Operation and Financing of the North Fork Stanislaus River Hydroelectric Development Project (the "Member Agreement") in the form submitted to this City of Lodi and dated for convenience as of September 1, 1982, to purchase electric capacity and energy of the Project from the Agency; and WHEREAS, this City Council finds and determines that it is in the s s yry�(fy j`vi best interests of the customers of the electric system of the City of Lodi for the City of Lodi to purchse electric capicty and energy of the Project from the Agency; NOW, THEREFORE, the City Council of the City of Lodi does ordain as follows: 1. The City Council hereby finds and determines that the terms and conditions of the Member Agreement, including the Project Entitlement Percentage of the City of Lodi of 10.37 percent (10.37%) be, and the same are hereby, approved. 2. The Project Entitlement Percentage of the City of Lodi as set forth in Appendix A to said Member Agreement may be increased (to such percentage, noto to exceed 10.3:7% percent (10.37%), as shall be determined by the City Council of the City of Lodi). 3. The Mayor and City Clerk are authorized to execute and deliver said Member Agreement by and on behalf of the City of Lodi• 4. Pursuant to Section 54241 of the Government Code of the State of California, this Ordinance is subject to the provisions for referendum aPPlicable to the City of Lodi. 5. The City Clerk shall certify to the enactment of this Ordinance and shall cause this Ordinance to be published in accordance with Section 54242 of the Government Code of the State of California. 6. Thirty (3) days from and after its enactment, this Ordinance shall take effect and be in full force, in the manner provided by law. ADOPTED by the City Council and signed by the Mayor and attested :7 • by the City Clerk this 15th day of September, 1982 by the following vote - Ayes: Council Member - Olson, Snider, Pinkerton, Murphy, and Reid (Mayor) Noes: Council member - None Absent: Council Member - None Attest: 9 .. t City Ll'erk.o f the. City MMI _,Approv as to form: Pon Stein City Attorney 14,77 Mayor of the City of Lodi 1269 xW MOW. rN, , n h i City Manager Glaves apprised the Council that at the August NCPA Commission meeting, the Commission approved release to the participants of the following four Ordinances relating .D. to the Shell No. 3 East Block Project: DESCRIPTION 1) $300 Million Note Ordinance 2) $300 Million Bond Ordinance 3) $130 Million Refunding Bond Ordinance 4) $30 Million Amendment to Second Phase Agreement Under California Law, NCPA cannot issue debt for a project unless the participants in the project have each approved an Ordinance authorizing the issuance of such debt. NCPA would like the flexibility to finance the East Block Project and those facilities related to it with either, bonds, bond anticipation notes, bank loans, tax-exempt commercial paper or demand notes The $300 million Bond Ordinance and $300 million Note ordinance provide NCPA with the flexibility to use any of these financing options. NCPA would like the flexibility to -temporarily finance the entire Project with tax exempt commercial paper or bond anticipation notes backed by a bank's irrevocable letter of credit. The final terms and conditions of any NCPA debt are subject to Commission approval. The estimated $300 million is broken out as follows: $150 Million Construction Costs Including Interest During Construction of the 110 MW East Block Project $ 50 Million Construction Costs Including Interest During Construction i of New Transmission which NCPA }.light Build Jointly with PG&E $ 10 Million NCPA's Share of Costs of a Possible Joint Chemical Disposal Facility in the Geysers $ 10 Million NCPA's Share of Costs of a Possible Joint Maintenance Facility in the Geysers $ 5 Million Cost of a Possible NCPA Buy -In of PG&E Transmission Facilities $ 25 Million Contingencies $ 50 Million Bond Reserves and Financing Expenses $300 Million TOTAL The above costs have all been estimated conservatively. The East Block Project will require geothermal steam from both the East Block and the Primary Area. NCPA Shell Project #2 currently has a first call on steam in both areas. To allow the financing of the East Block Project at reasonable terms, it might be advisable or necessary to :advance raf,;nd 'ho �UF loan and/or the S55 mi I I ion outstanding t _ . i 1 L s- A b • Continued October 6, 1982 create Shell Project #2'-s prior lien on steam. It also might be economical from an interest saving standpoint to advance refund the DOE loan and/or the $55 million outstanding Shell Project #2 Bonds_ An indepth presentation on the project was presented by Utility Director Dave Curry which included the following information: PROJECT SUINMY NCPA No. 3 GEOTHERMAL POWER PLANT Project Description The Northern California Power Agency (NCPA) No. 3 project will consist of two 55 MW geothermal turbine -generator units complete with associated electrical equipment, cooling system, hydrogen sulfide abatement system, 230 kv trans- mission line, and steam collection system. The plant site is located within The Geysers Known Geothermal Resource Area (KGRA) approximately, 75 miles north of San Francisco. The site of the power plant is under lease from the U.S. Bureau of Land Management and is located in Sonoma County, California. The plant will be located 1 mile east of the NCPA Geothermal Power Plant No. 2 (Ref: Figure 1-1) Steam to the plant will be provided via a steam gathering system designed and constructed by Shell California Production Inc. (SCPI) The gathering system will connect together several steam wells to provide an integrated steam supply system to NCPA No 2 and NCPA No. 3 plants. Capacity Factor 10 The power plant units are designed to run as base loaded (continual operation) units at their maximum efficiency point. The design point has been selected such that the units provide the maximum power at the most economical rate. Based on operating experience of geothermal plants in The Geysers area, an average annual capacity factor of 83.37. is expected. Plant Desisn Gibbs & Hill, Inc. (G&H) is doing the engineering and construction management for Project No.. 3. The plant design Will be based on the experience of the G&H organization, the operating experience at NCPA Geothermal Project No. 2, and the extensive geothermal operating experience of the NCPA power plant operations staff. It will incorporate the very latest technology associated with geothermal plants in terns of efficient running and maximum availability, and is expected to operate at top performance throughout its design life time of 25 years. Cost & Timetable NCPA 3 Project cost is estimated at $175,000,000, assuming commercial operation of the plant by 1986. Site preparation is scheduled for 1983. Financial Considerations Under California Law, NCPA cannot issue debt for -a project unless the participants in the project have each approved an ordinance authorizing the issuance of such debt. NCPA would like the flexibility to finance the NCPA 3 Project and those facilities related to it with either bonds, bond anticipation notes, bank loans, tax-exempt commercial paper or demand -notes.. The $300 million Bond Ordinance and $300.million Note Ordinance provide NCPA with the flexibility to use any of these financing options. The NCPA 3 Project will require geothermal steam from both the East Block and the Primary Area. NCPA (Shell) Project #2 currently has a first call on steam in both areas. To allow the financing of the NCPA 3 Project at reasonable terms, it might be advisable or necessary to advance refund the DQE loan and/or the $55 million outstanding Project #2 Bonds to negate the legal covenants which create Shell Project #2'.s prior lien on steam. it might also be economical, from. an interest saving standpoint, to advance refund the DOE loan andjor the $55 million outstanding Shell Project #2 Bonds. The $130 million Refunding Bond Ordinance would allow -NCPA to advance refund the $55 million outstanding Shell Project #:2 Bonds and/or the DOE loan. 4CPA cannot practically issue debt unless it has a take -or -pay commitment (Member Agreement) from the participants in the project being financed to secure the debt. The only outstanding Member Agreement for the NCPA 3 Project is the East Block Second Phase Agreement which is currently limited to $5.5 million. The proposed $30 million Amendment to this Agreement would provide the security to allow NCPA to borrow $30 mullion to repay the $5.5 million bank loan, and fund construction `costs and interest during construction of the Project through December, 1983.