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HomeMy WebLinkAboutAgenda Report - October 27, 1982 (57)t 4 t > - �: GITY� COUNCIL MEETING Y `'* Y FOctgber� 27, 1.982 y ESCROW AGREE- Following introduction of the matter, Council, on motion of MENT WITH Mayor Reid, Olson second, agreed in concept the establishing PG&E APPROVED of an escrow fund for the monies in dispute between the City and PG&E resulting from the City's purchase of NW energy from NCPA and side ayrecinent with WAPA. The motion IVd by unanimous vote. DAVID It $T*AUS SOMME S. GLAIR THOMAS C. TRAUGM A OP cou"61% SHrsAH T. SHCPHC O October 22, 1982 Mr. Henry A. slaves, Jr. City Hall 221 West Pine Street Lodi, California 95240 Dear Nr4 GlavesL Enclosed, for the consideration of the Lodi City Council, -area 1. An Agreement in a form satisfactory to PG&E and to me which establishes an escrow fund for the monies in dispute between the City and PG&E resulting from the City's purchase of NN energy from NCPA. 2. A form of agreement to be entered into by the City with W"A and NCPA in order to protect their interests in the monies to be deposited in the escrow fund. WAPA has approved this agreement and is prepared to execute it. 3. A copy of a letter agreement I reached with PG&E, subject, of course, to the approval of the various NCPA Cities. The monies Lodi is to place in escrow if it approves the agreement will be returned to Lodi by NCPA. I am convinced that establishment of the escrow fund is in the best interest of the City and stroggly recommend its approval. Under approval, there is a fair chance that the matter may be settled without litigation and on favorable terms. The agreement also protects the City against a lawsuit by PG&E to establish an escrow fund and against the possibility (if a law- suit on the underlying arrangement is lost)of having to pay interest in excess of that earned on the withheld funds. If 14 g f LAw ornccs BPIT•oEL MCDIARMtD RECIE �D PONLANDSMAN RaEOKItT MCOIAIRMIO JOHN MICHAEL SAHORA J. STRCM 2000 VIRGINIA AVENUE. N.W. CYNTHIA S. SOCWRAO ", wAs cw. a.c. 2oo4?l? OCT 25 M 11: 00 Ji." JAMIKII OL MMARc o ALAN J. ROT" TELEPHONE Q= 333-4000 JOSEPH L. VAN EATON i11ANCIts t. rRAasC10 TEueoPeR MW sea-ss�s AUCE 14. REINNE PATRiCIA c STTACKL8 oA�MEt L DAVIDSON THOM" . W CITY CLERK �oDAW N� ss our PSTER HL MATT CITY CI' LOBI NANCY E. *11EMIERS DAVID It $T*AUS SOMME S. GLAIR THOMAS C. TRAUGM A OP cou"61% SHrsAH T. SHCPHC O October 22, 1982 Mr. Henry A. slaves, Jr. City Hall 221 West Pine Street Lodi, California 95240 Dear Nr4 GlavesL Enclosed, for the consideration of the Lodi City Council, -area 1. An Agreement in a form satisfactory to PG&E and to me which establishes an escrow fund for the monies in dispute between the City and PG&E resulting from the City's purchase of NN energy from NCPA. 2. A form of agreement to be entered into by the City with W"A and NCPA in order to protect their interests in the monies to be deposited in the escrow fund. WAPA has approved this agreement and is prepared to execute it. 3. A copy of a letter agreement I reached with PG&E, subject, of course, to the approval of the various NCPA Cities. The monies Lodi is to place in escrow if it approves the agreement will be returned to Lodi by NCPA. I am convinced that establishment of the escrow fund is in the best interest of the City and stroggly recommend its approval. Under approval, there is a fair chance that the matter may be settled without litigation and on favorable terms. The agreement also protects the City against a lawsuit by PG&E to establish an escrow fund and against the possibility (if a law- suit on the underlying arrangement is lost)of having to pay interest in excess of that earned on the withheld funds. If 14 0 Mr. Henry A. slaves, Jr. -2- October 22, 1982 the Council approves, the only potential additional liability which the -City might incur would be its share of NCPA's expenses in Iconnection with these transactions and its share of the amount paid to the bank to administer the escrow fund. If you have any questions, please contact me either at my office or' at'my home (202-363-2937). Very truly yours, Daniel I. Davidson Enclosures Ci PGandE ESCROW AGREEMENT Pacific Gas and Electric Company (PGandE) and the City of (City) are parties to a contract as amended. or the supe y and purchase of electric power to dated (Contract). During the period ay September 30, 1982, e parties disagree as to the quantity of energy provided by PGandE and received by the City under said Contract (hereinafter "disputed energy"). The City contends that during such period energy ordinarily provided by PGandE was -provided by the Northern California Power Agency (VCPA), pursuant to its letter agreement with the Western Area Power Administration for the purchase of surplus Northwest energy, dated May 28, 1982. PGandE contends that the City has not received such energy and that during such period the City has and will continue to receive energy provided by PGandE under the Contract. Pending a final, nonappealable resolution of this dispute by mutual agreement of the parties or by final decision of a court or agency having jurisdiction to determine the rights of the parties under the Contract, the parties agree as follows: 1. The City and PGandE shall establish a new escrow with the bank ("Escrow Holder") and execute escrow n tructions in the form attached hereto as "Attachment As [such instructions to bank to be agreed upon]. 2. The City shall make payments to Escrow Holder in the amount of PGandE's Nay -September bills for the disputed energy. 3. If, as.a result of a final nonappealable judgment, or determination of a court or agency, all of the disputed energy billed to the City was provided by PGandE, all monies (including interest) in the escrow fund shall be paid to PGandE in full payment for the disputed energy provided under the tariff. 4. If, as a result of a final nonappealable judgment or determination of a court or agency, none of the disputed energy was provided by PGandE, then all funds in the escrow fund minus the figure PGandE asserts it is entitled to for services it provided to City shall be paid to the City. The remaining funds shall be retained in escrow pending mutual agreement or a final nonappealalple judgment of a court or agency. 5. If, as a result of a final nonappealable judgment or determination of a court or agency, some of the disputed energy was provided by PGandE and some provided by NCPA, there shall be retained in escrow the amount PGandE asserts it is entitled to for services it has provided to the City in connection with the energy furnished by NCPA. The amount PGandE billed for the energy it furnished shall be paid to PGandE (with pro rata interest) as full payment for the disputed energy provided by PGandE under the tariff. The remaining monies above those to be retained in escrow shall be paid to the City. The funds retained in escrow shall remain in escrow pending mutual agreement or a final nonappealable Judgment of an agency or a court. 6. If the City and PGandE reach a settlement with respect to the amount of energy provided by NCPA to the City without obtaining a final determination in the court or agency action, then the City or PGandE shall have the right to obtain a final judgment or a final determination of their respective rights to the monies held in escrow, unless PGandE and the City are able to agree as to the manner of distri- bution of said monies. 7. The cosecs of the escrow shall be paid to the bank as follows: if PGandE is determined to have pro- vided all of the disputed energy to the City, the City shall pay the costs of the escrow. If NCPA is determined to have provided all of the disputed energy to the City, PGandE shall pay the costs of the escrow. If PGandE and NCPA each provided a portion of the disputed energy to the City, PGandE and the City shall pay a pro rata portion of the cost of the escrow, based on the proportion PGandE and MCPA provided. As used herein and in the escrow, the phrase "final non - appealable judgment or determination" shall mean any. judgment or determination by a court or agency of competent jurisdic- tion which determines the rights of the parties and frog► which no further appeal of the matter can be prosecuted. Jamb" 8tr-Lay. an. . ftC4 fj a gaa i• st.etri¢ CMVpUtT ' n B.alA StMvIeft - soft sera 4100. i di 941(W - 21k:: - INAMW %d t:x Uk J au IN &1 lobus' e' • Stadl; Dever Mr. ear-fAry t 'fids tri31 or, *or tslapfsan&. - ooavez 3atloa t3s3t �cQaraisyg sat estabiishmmi- of Separate- ssarcw sesaaats . bst . Pai�Z aad each o� t3ss sbcw-:�ssad Citimm.- x bmm* agrs� ur ' • strZY racaerses3 the following tar each City The prvsgt sctiam by its akility ant%ovitjr a wa, It a.ca►ssary, by its. city ccwmci" s Z:. Erie3tr City aaslI atawnft- s sepsssLt* 04= vitt: PGOL. - - T.- The amt of tho PUZ bLUS % ticfc- luis Citi► dsduatsd a+s a. raault of tb* p •alss of . floX041*8t: due8Y by =JL fltall b& Vlacad In thw - tsmcat.. 3.• fta tax of the aoarar agrfs ma tt• will be- th om, . - coataine& I= tha atsacbMMMt to- your October 13 ° - Iatt* C to 041e3s City as atowiad and, opeed to batweem aa in am disco *ions. will finall" thegm terme, bt the Closes of ..Ca iz'idarv- � 14.. L98Z- •- - 4, Pagir vilf. c=ftact "ch City visaing and sgsneL o4 - upon. th* amount to be pla+cal to each. escrow-, �.. PG&a ana tach city will 49r * UVCIO aitd eX•c'.AM the btssit' s escrow- irmtructiaam and at final ssd auczow 6. lack City will art on mg rwcarm4adatics as rapidly- 4.0 apidlv- as taaai bl * Wi d err• its tl r sd. du ay. Hata+ i C•�A� 71�� Ys� ate. xs�► . 1�AIt�t tri AWW A. JLCrs 1 !� .halt /► Y m" , Irls•s1. Mp�00r tY�111MOlCM. O►C �OOl7 trrc Q ►Cii�R 7�i71101i �rei0r /�'!M L YAM MAf� . _ - c— �A rM/i Q � OWSSW "WOW lit tome, "Mama N�t UTA M TUIatomb I". WA@wvmft Jt I- Womme" 011yom" �4 i A/�Tfiitl► SOON 1t �- •�.a aitT .�' �! i. w011cas*. P� 91111441 IL &IMAM � jot Noe" t. ..over _ Jamb" 8tr-Lay. an. . ftC4 fj a gaa i• st.etri¢ CMVpUtT ' n B.alA StMvIeft - soft sera 4100. i di 941(W - 21k:: - INAMW %d t:x Uk J au IN &1 lobus' e' • Stadl; Dever Mr. ear-fAry t 'fids tri31 or, *or tslapfsan&. - ooavez 3atloa t3s3t �cQaraisyg sat estabiishmmi- of Separate- ssarcw sesaaats . bst . Pai�Z aad each o� t3ss sbcw-:�ssad Citimm.- x bmm* agrs� ur ' • strZY racaerses3 the following tar each City The prvsgt sctiam by its akility ant%ovitjr a wa, It a.ca►ssary, by its. city ccwmci" s Z:. Erie3tr City aaslI atawnft- s sepsssLt* 04= vitt: PGOL. - - T.- The amt of tho PUZ bLUS % ticfc- luis Citi► dsduatsd a+s a. raault of tb* p •alss of . floX041*8t: due8Y by =JL fltall b& Vlacad In thw - tsmcat.. 3.• fta tax of the aoarar agrfs ma tt• will be- th om, . - coataine& I= tha atsacbMMMt to- your October 13 ° - Iatt* C to 041e3s City as atowiad and, opeed to batweem aa in am disco *ions. will finall" thegm terme, bt the Closes of ..Ca iz'idarv- � 14.. L98Z- •- - 4, Pagir vilf. c=ftact "ch City visaing and sgsneL o4 - upon. th* amount to be pla+cal to each. escrow-, �.. PG&a ana tach city will 49r * UVCIO aitd eX•c'.AM the btssit' s escrow- irmtructiaam and at final ssd auczow 6. lack City will art on mg rwcarm4adatics as rapidly- 4.0 apidlv- as taaai bl * Wi d err• its tl r sd. du ay. Hata+ UPOA or tel4ghwe aoeesssat3rwis today pith than iX - otliolals each City tb WA be &bX*. to act *=m tbw lyo2100149 Sabaaule. l msods — Mdaday. Ceti 23- or sacro it ii abeeZa�a2x asoasrss�►. - - lsidsw, arta adc 22. ° Lodi — �db+rdaY. Gcloh~rr2?'. ' rzu wi 29. " Ca20,, lbs !'dads grillbr dirposUA& With at duaigaatj@4 bank vithtjt th=w ww%iz g darts attar aepsweIL't bFY sadkL VOW.- WM and C►tt VIU ashes w- &Omm - tiUma ass-. aect3ar: a4 eacw oth4w groVldrd east its .spolm3.tled abom is int-ssiftw& ares�oac.�ito t2* a beft'ts stated abwm.. 'tom deferral. shall hs• to- &31w- th! pesos&. :to MMloa;'t s•ltlasoatt at tae disputa. a & abai2. .apira• �o+rasbvr I9 1942.. •It= ycw agrsm wit r tbAmr- fregoiaq, plsaaa- +secat,a t3i3aa . 2sttarr I= the spsoa- Vecmided b►lawr an& t*Umm X 3.t to roe, AUX*+ is css -bab%Ldf Of Puaii.�.c tea a: 31.acrsQ N Dear Mr. Cale"at October 1982 As you know escrow accounts are being established by the° City of ( Alameda, Lodi, Lompoc, Heald sburg , and Ukiah) (hereinafter "City") and PO&C. These accounts. wiLl contain the monses in dispute resulting from. the anergy soli by WAPA to NCPA under their agrewment of May 28, 1982. The City agrees with wAP°A and NCPA that it~ will. clot take any action that would cause releas* of the Funds in escrow ( except as a result of a Final non -appealable, judgment or final determination by a court or agency) without the, consent of WAPA and NCPA. Such consent . cony be withheld. by WAPA or NCPX sole,Ly to protect their legitimate financial interests in receipt: of the, payments to which they, are eatitLe& putsuaat to. their contracts. with each- other or the City arising out of the transactions ralatsd to the energy sold. under rets; NCPA. nAPA. Letter agreement of inlay 28, L982. The existing contracts between or among the, signatories to this. agreement _shall be, modified to reflect then terms of this agreement. IL you. agree to the, foregoing would- you. please executer chis Letter in. the spaces provided; below and transmit a copy to mw. Agreed to on behal.2 of the Western Area. Power Adacinistratiom by ° Very truly- yours, agreed to- on behalf of the: Northers California. Power Aqency by