HomeMy WebLinkAboutAgenda Report - April 2, 2014 C-11AGENDA ITEM CW11
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AGENDATITLE: Adopt Resolution Authorizing the City Manager to Execute Long -Term Layoff
Agreement for the California Oregon Transmission Project Between City of Lodi
and Certain Members of the Transmission Agency, of Northern California
MEETING DATE: April 2, 2014
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to execute a long-
term layoff agreement for the California Oregon Transmission
Project between the City of Lodi and certain members of the
Transmission Agency of Northern California.
BACKGROUND INFORMATION: The City of Lodi is a member of the Transmission Agency of
Northern California (TANC), a California Joint PowersAgency
formed in the early 1980's to build the California Oregon
Transmission Project (COTP) — a transmission line connecting the Pacific Northwest with Central
California.
The investment and decision to develop the COTP was driven in part by the economics between
electricity markets in the Pacific Northwest and California, with the former being consistently more
economic than the latter. Lodi's current share of COTP is approximately 26 megawatts (MW) at an
annual cost of $1.2 million, including debt service and operating and maintenance costs. With the
deregulation of the wholesale electricity markets in the 1990's, access to transmission services has
changed. As result, the economic benefit of COTP over time has eroded for those entities in the
California Independent System Operator's (CAISO) Balancing Authority (BA) and even more so after the
COTP was moved into the Balancing Authority of Northern California (BANC) in 2006. The COTP
transmission allows those entities outside the CAISO BA to make energy purchases while avoiding the
costs of doing business with the CAISO.
Therefore, staff is recommending approval of a 25 -year layoff of Lodi's 26 MW of COTP transmission
service, effective July 1, 2014, whereby the City of Lodi and all of the TANC Members who are in the
CAISO BA (Santa Clara and Northern California Power Agency Pool Members) would lay off their
interests to other COTP participants who reside in the BANC BA, specifically the Sacramento Municipal
Utility District, Modesto Irrigation District and Turlock Irrigation District. These entities would pay the
City's current allocated share of COTP costs and following the retirement of the COTP debt service in
approximately 10 years, they would, in addition, begin making annual payments to the City in the amount
of approximately $230,000 per year.
The 25 -year duration of the layoff was required to balance the high initial cost to the receivers of the
layoff with the relative low price after the COTP debt service is paid off. This layoff will result in power for
Lodi that was previously purchased in the Pacific Northwest to be purchased in the CAISO BA, the cost
increase for which is expected to be negligible.
APPROVED: '\,,- 1,
SteffiaefiSchw�ibaue
_r,J.�terim City Manager
Adopt Resolution Authorizing the City Manager to Execute Long -Term Layoff Agreement for the California Oregon Transmission
Project Between City of Lodi and Certain Members of the Transmission Agency of Northern California
April 2, 2014
Page 2 of 2
Approval of this Agreement does not change Lodi's membership status in TANC. The Risk Oversight
Committee received a report on this agenda item and recommended City Council approval.
FISCAL IMPACT: Implementation of this agreement will result in an annual savings of
approximately $1.2 million per year. Under current rates, these savings will
flow through the Energy Cost Adju0ment (ECA).
FUNDING AVAILABLE: Not applicable.
Utility Director
PREPARED BY: Melissa Price, Rates & Resources Manager
MCP/EAK/Ist
LONG-TERM LAYOFF AGREEMENT
BY AND AMONG
THE
TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
AND CERTAIN OF ITS MEMBERS
NAMELY
THE CITIES OF ALAMEDA, HEALDSBURG, LODI, LOMPOC, SANTA CLARA, AND UKIAH
THE PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE
AND
THE MODESTO IRRIGATION DISTRICT, THE TURLOCK IRRIGATION DISTRICT, AND
THE SACRAMENTO MUNICIPAL UTILITY DISTRICT
EXECUTION ORIGINAL
TABLE OF CONTENTS
RECITALS............................................................................................................................... 1
AGREEMENT......................................................................................................................... 2
Section1. Definitions ........................................................................................................... 2
Section2. Effective Date and Term ................................................................................... 2
a. Effective Date ............................................................................................................. 2
b. Term ............................................................................................................................. 2
Section3. COTP Layoffs ...................................................................................................... 2
a. Layoff of the LAYOFF ENTITIES' COTP Interests, Rights, and Obligations ... 2
b. Return of the LAYOFF ENTITIES' Interests, Rights, and Obligations .............. 3
c. Layoff Quantity .......................................................................................................... 3
d. Project Agreement No. 3 Appendix C .................................................................... 3
e. Billings and Payments .............................................................................................. 4
f. Additions, Betterments, and Replacements ........................................................... 5
g. Default ......................................................................................................................... 7
h. Voting Rights .............................................................................................................. 8
Section4. Recall and Return Options ............................................................................... 9
a. Conditions for Exercising Recall Option ................................................................ 9
b. Repayment Obligations if the LAYOFF ENTITIES Exercise Recall Option .... 10
c. Repayment Obligations if the DISTRICTS Exercise Return Option ................ 10
Section5. Market Payments .............................................................................................. 10
Section6. Debt Service Payments .................................................................................... 11
Section7. No Assignment Without Consent ................................................................. 11
Section 8. Long -Term Layoff to Third Parties Not an Assignment ........................... 11
Section9. Dispute Resolution .......................................................................................... 12
a. Negotiation ............................................................................................................... 12
b. Mediation .................................................................................................................. 12
c. Additional Rights ........................................................................ I ........................... 13
EXECUTION ORIGINAL
Section10. Attorney Fees ................................................................................................... 13
Section11. California Law ................................................................................................. 13
Section12. Integrated Agreement .................................................................................... 13
Section 13. No Third Party Beneficiaries ........................................................................ 13
Section14. TANC Liability ............................................................................................... 14
Section15. Notices .............................................................................................................. 14
Section16. Severability ...................................................................................................... 14
Section17. Discharge of Obligations .............................................................................. 14
Section18. Modifications .................................................................................................. 15
Section 19. Counterparts/Electronic Delivery ................................................................. 15
ii EXECUTION ORIGINAL
This Long -Term Layoff Agreement ("Agreement") is entered into by and among
the Transmission Agency of Northern California, a California public entity and joint
powers agency ("TANC"), and certain of its members, namely the City of Alameda
(ALAMEDA), City of Healdsburg (HEALDSBURG), City of Lodi (LODI), City of
Lompoc (LOMPOC), City of Santa Clara (SANTA CLARA), and City of Ukiah
(UKIAH), and the Plumas-Sierra Rural Electric Cooperative (PLUMAS), referred to as
"LAYOFF ENTITIES" in this Agreement and the Modesto Irrigation District
(MODESTO), the Turlock Irrigation District (TURLOCK), and the Sacramento
Municipal Utilities District (SMUD), referred to as "DISTRICTS" in this Agreement,
with references to each entity individually and collectively as "Party" or "Parties" in
this Agreement, as of the Effective Date, defined in Section 1 of this Agreement, with
regard to the following:
RECITALS:
A. The LAYOFF ENTITIES and the DISTRICTS are each Participants in and parties
to TANC Project Agreement No. 3, entered into as of March 1, 1990.
B. Pursuant to Section 7.1 of TANC Project Agreement No. 3, the LAYOFF
ENTITIES each desire to make their entitlement, or portion of their entitlement to
TANC's Transfer Capability on the California -Oregon Transmission Project
("COTP"), in their respective Participation Percentages, available to a Participant
(hereinafter "layoff") in accordance with the terms and conditions relating to
layoffs by Participants under the Intertie Agreements, under TANC's Long -Term
Layoff Procedures, and this Agreement.
C. The DISTRICTS are willing to accept the LAYOFF ENTITIES' Participation
Percentages, subject to this Agreement, of TANC's entitlement to Transfer
Capability on the COTP.
D. This Agreement does not include the layoff of allocations held by the LAYOFF
ENTITIES pursuant to the South of Tesla Agreement ("SOT Agreement") and
therefore no costs associated with the SOT Agreement will be incurred by the
DISTRICTS and the DISTRICTS shall not incur any costs associated with the SOT
Agreement under this Agreement.
NOW THEREFORE, in consideration of the premises described in the recitals, and in
consideration of the terms, covenants, and conditions that are set out below, the Parties
have entered into this Agreement.
EXECUTION ORIGINAL
AGREEMENT:
Section 1. Definitions,
All capitalized terms used herein are set forth and defined in ATTACHMENT A
to this Agreement.
Section 2. Effective Date and Term.
a. Effective Date.
This Agreement shall become effective and enforceable on July 1, 2014
(hereinafter "Effective Date").
b. Term.
The term of this Agreement shall be twenty-five (25) years commencing
on the Effective Date and terminating at 0000 hours Pacific Prevailing
Time on the day before the 251h anniversary of the Effective Date, unless
the Parties mutually agree in writing to extend the term of the Agreement
for another five (5) years (hereinafter "Term").
Section 3. COTP La3:offs.
The LAYOFF ENTITIES and their respective Participation Percentages ("Layoff
Percentages") laid off pursuant to this Agreement are as follows: ALAMEDA -
1.2272 percent; HEALDSBURG - 0.2456 percent; LODI - 1.9201 percent;
LOMPOC - 0.1865 percent; PLUMAS - 0.1479 percent; SANTA CLARA (exclusive of its
Vernon acquisition) - 10.4706 percent; and UKIAH - 0.1945 percent.
a. Layoff of the LAYOFF ENTITIES' COTP Interests, Rights, and
Obligations.
Except as otherwise set forth in this Agreement, on the Effective Date, and
for the Term of this Agreement, the LAYOFF ENTITIES hereby lay off and
relinquish to TANC 100 percent of the LAYOFF ENTITIES' layoff
percentage use of their interests, rights, and obligations under TANC
Project Agreement No. 3, except their interests, rights, and obligations in
the event of a default pursuant to Section 6 of Project Agreement No. 3
and this Agreement, associated with the LAYOFF ENTITIES' Layoff
EXECUTION ORIGINAL
Percentages in TANC's entitlement to Transfer Capability on the COTP.
TANC hereby transfers at that instant: i) 1.7990 Participation Percentage in
'Z'
TANC's entitlement to Transfer Capability on the COTP to MODESTO;
ii) 3.2383 Participation Percentage in TANC's entitlement to Transfer
Capability on the COTP to TURLOCK; and iii) 9.3550 Participation
Percentage in TANC's entitlement to Transfer Capability on the COTP to
SMUD. MODESTO, TURLOCK, and SMUD hereby accept and assume at
that instant for the Term of this Agreement the use of the LAYOFF
ENTITIES' interests, rights, and obligations under the provisions of TANC
Project Agreement No. 3 associated with the Layoff Percentages under
this Agreement.
b. Return of the LAYOFF ENTITIES' Interests, Rights, and Obligations.
Unless earlier relinquished because of a default under this Agreement by
MODESTO, TURLOCK and/or SMUD, upon the end of the last hour of the
last day of the Term of this Agreement, all of the LAYOFF ENTITIES
interests, rights, and obligations in the LAYOFF ENTITIES' Layoff
Percentages laid off under this Agreement, adjusted for any changes in
such Participation Percentages during the Term of this Agreement
(presently 14.3923 percent of TANCs COTP Entitlement as of the Effective
Date of this Agreement) under TANC Project Agreement No. 3, shall
automatically and without any action of the Parties be relinquished by
MODESTO, TURLOCK, and SMUD through TANC to the LAYOFF
ENTITIES, and the LAYOFF ENTITIES hereby accept their interests,
rights, and obligations at that instant in the future.
C. Layoff Quqntilty.
The sum of the layoffs shall be known as the "Layoff Quantity."
d. Project Agreement No. 3 A1212endix C.
The TANC Commission by resolution approving this Agreement, has
approved a revised version of APPENDIX C of TANC Project Agreement
No. 3, showing the effect of the layoffs on the Participation Percentages of
the LAYOFF ENTITIES and the DISTRICTS during the Term of this
Agreement, for the purposes of delineating voting rights, billings, and
obligations during the Term of this Agreement. The version of
APPENDIX C approved by the TANC Commission and attached to and
3 EXECUTION ORIGINAL
incorporated into this Agreement as ATTACHMENT B has been created
solely for the convenience of the Parties, and does not affect the interests,
rights, or obligations of the LAYOFF ENTITIES if the DISTRICTS were to
default in their obligations under this Agreement. Notwithstanding
anything to the contrary in this Agreement, title to the interests, rights and
obligations of the LAYOFF ENTITIES in their respective Participation
Percentages shall remain vested in the LAYOFF ENTITIES during the
Term of this Agreement, while the right of use of those interests, rights,
and obligations shall be vested in the DISTRICTS in their respective
Layoff Percentages acquired hereunder. Nothing in this Agreement is
intended to alter or amend any interest, right or obligation of any
Participant under TANC Project Agreement No. 3. The failure to give due
and timely notice of a default or potential default pursuant to Section 3(i)
of this Agreement shall not absolve the obligation of any Party to this
Agreement to comply with its responsibilities under TANC Project
Agreement No. 3. Regardless of any default on the part of the
DISTRICTS, the LAYOFF ENTITIES shall not be excused from their
respective obligations under TANC Project Agreement No. 3.
e. Billings and Payments.
During the Term of this Agreement, and in the absence of a default under
this Agreement by the DISTRICTS, all billings and payments shall be
made in accordance with the provisions of TANC Project Agreement
No. 3, with ATTACHMENT B of this Agreement employed by TANC to
assure that, in the absence of a default by the DISTRICTS, the LAYOFF
ENTITIES will not be billed for any TANC Project Agreement No. 3 costs
associated with the Layoff Percentages laid off under this Agreement,
including but not limited to TANC Project Agreement Operations and
Maintenance ("O&M") Costs, TANC Project Indebtedness, Debt Service,
or TANC Capital Improvement Costs -associated with the Layoff
Percentages laid off under this Agreement; provided, however, that the
LAYOFF ENTITIES shall remain responsible under the TANC joint '
Powers Agreement for any costs unrelated to TANC Project Agreement
No. 3. During the Term of this Agreement, TANC shall bill the
DISTRICTS, and the DISTRICTS shall pay, for TANC Project Agreement
No. 5 costs, expenses, fees, and charges otherwise allocable to the
LAYOFF ENTITIES pursuant to Section 3 of TANC Project Agreement No.
5 for the Layoff Percentage of TANC's entitlement to Transfer Capability
4 EXECUTION ORIGINAL
on the COTP laid off to the DISTRICTS in this Agreement pursuant to the
percentages contained in ATTACHMENT C.
f. Additions, Betterments, and Rel2lacements.
(i) Use of Additions, Betterments, and Replacements during Term
of Agreement.
Additions, Betterments, and Replacements, as defined in TANC
Project Agreement No. 3, approved by TANC during the Term of this
Agreement with respect to the use of the acquired shares of the COTP
interests, rights, and obligations laid off to the DISTRICTS under this
Agreement, shall be available for the DISTRICTS' sole use and at their sole
expense during the Term hereof.
(ii) Responsibility For and Use of Betterments at End of the Term
of thisAgreement.
At the end of the Term of this Agreement, the DISTRICTS shall be solely
and severally responsible for the Layoff Percentages of Betterments
approved, paid for, or financed by them during the Term of this
Agreement, and the Layoff Percentages of such Betterments shall remain
available for their sole use and benefit for the life of the COTP.
(iii) Responsibility For and Use of Additions that Exceed the
Adjusted Cost Index at End of the Term of this Agreement.
At the end of the Term of this Agreement, the DISTRICTS shall be solely
and severally responsible for the Layoff Percentages of Additions
approved and financed by them that exceed the adjusted cost index
defined in Section 3.1.2.2.2 of TANC Project Agreement No. 3 (hereinafter
"Adjusted Cost Index"). Such Layoff Percentages of such Additions,
adjusted for any changes in such Layoff Percentages during the Term of
this Agreement for the life of the COTP, shall remain available for the
DISTRICTS' sole use and benefit for the life of the COTP.
5 EXECUTION ORIGINAL
(iv) Responsibility For and Use of Additions Up to the Adjusted Cost
Index at End of the Term of this Agreement.
At the end of the Term of this Agreement, the LAYOFF ENTITIES shall be
solely and severally responsible for the Layoff Percentages of Additions
approved by TANC during the Term of this Agreement in an amount up
to the Adjusted Cost Index, and the Layoff Percentages of such Additions
shall be available for their sole use and benefit in their respective Layoff
Percentages, adjusted for any changes in such Layoff Percentages during
the Term of this Agreement for the life of the COTP, For the purposes of
clarification, to the extent that an Addition exceeds the Adjusted Cost
Index, the LAYOFF ENTITIES shall be responsible for any amount up to
the Adjusted Cost Index pursuant to this subsection 3(f)(iv), and the
DISTRICTS, as applicable shall be responsible for the remaining amount
that exceeds the Adjusted Cost Index, in accordance with subsection
(3)(f)(iii).
(v) Responsibility For and Use of Replacements at End of the Term of
this Agreement.
At the end of the Term of this Agreement, the LAYOFF ENTITIES shall be
solely and severally responsible for the Layoff Percentages of
Replacements approved by TANC during the Term of this Agreement.
Such Layoff Percentages of such Replacements shall be available for their
sole use and benefit in their respective Layoff Percentage, adjusted for any
changes in such Layoff Percentages during the Term of this Agreement for
the life of the COTP.
(vi) Allocation of Capital Costs and Associated Financing Costs.
The Parties agree that the capital costs and associated financing costs of
any portions of Additions that do not exceed the Adjusted Cost Index and
all Replacements put into service during the Ter m of this Agreement shall
be allocated on a straight-line financial basis over the expected useful life
of such Additions and Replacements. Capital costs and associated
financing costs, and the expected useful life of such Additions and
Replacements, shall be determined at the time the Additions and
Replacements are put into service.
6 EXECUTION ORIGINAL
(vii) Payment of True -Up Adjustments.
If the expected useful life of any portions of Additions that do not exceed
the Adjusted Cost Index and all Replacements put into service during the
Term of this Agreement extend beyond the Term of this Agreement, the
Parties agree to make "'true -up adjustments" via true -up payments for the
capital costs and associated financing costs paid or incurred for such
Additions or Replacements put into service during the Term of this
Agreement. The "true -up adjustments" will be based on the cost
differences between the costs calculated on a straight-line financial basis
and the actual payment method(s) used. Upon the end of the Term of this
Agreement the Parties shall make such true -up payments to each other, as
calculated in accordance with subsection 3(f)(viii) below, to effect their
mutual intention that costs for such Additions and Replacements with
long lives be allocated among the Parties on a straight-line financial basis.
These true -up payments will effect the required true -up adjustments
referenced above.
(viii) Calculation of True -Up Adjustments.
Prior to the end of the Term of this Agreement, unless the Parties
otherwise agree, TANC shall determine from its books and records, and
recommend to the Parties an allocation of the capital costs and associated
financing costs for any portions of Additions that do not exceed the
Adjusted Cost Index and all Replacements during the Term of the
Agreement that have been (aa) paid or incurred during the Term of the
Agreement plus (bb) those that remain to be paid beyond the Term of the
Agreement. The true -up adjustments shall be calculated by TANC in a
manner consistent with the examples in ATTACHMENT D, which are
incorporated herein by reference. Any disagreement regarding the
calculation of the true -up adjustments shall be resolved by the TANC
Commission,
9. Default.
In the event of a default by any of the DISTRICTS under this Agreement,
TANC shall immediately and simultaneously notify each of the Parties in
accordance with the provisions of Section 15 of this Agreement. If a
default remains uncured for twenty (20) days after the date notice is first
given under Section 15, then the LAYOFF ENTITIES shall cure any
7 EXECUTION ORIGINAL
monetary default not later than three (3) business days following the 201h
day. Upon the LAYOFF ENTITIES' completion of the cure of a monetary
default or, in the instance of a non -monetary default arising out of a
breach of Sections 5 or 6, below, by any of the DISTRICTS that remains
uncured for twenty (20) days after the date notice is first given under
Section 15 use of the interests, rights, and obligations laid off shall be
automatically relinquished to the LAYOFF ENTITIES at that instant, and
without any action of the Parties. TANC shall provide notice of the default
to each of the Parties to this Agreement, but TANC shall have no
responsibility to otherwise respond to the default.
h. Voting Rights.
During the Term of this Agreement:
(i) The LAYOFF ENTITIES shall not have any rights to vote on any
matter related to TANC Project Agreement No. 3 during the layoff
of their Layoff Percentages; provided, however, that the LAYOFF
ENTITIES shall retain voting rights related Additions and
Betterments to be considered for approval under TANC Project
Agreement No. 3, but the percentage of such vote will be zero (0)
percent in order to fulfill the meaning of Opposing Member.
Absent any vote to the contrary, the vote of the LAYOFF ENTITIES
shall be deemed to be a "no" vote. The LAYOFF ENTITIES shall
retain voting rights associated with any Participation Percentages
not transferred by this Agreement, or any other Agreement.
(ii) In the event of a default under this Agreement by any of the
DISTRICTS, the defaulting Party may not vote on any matter
related to TANC Project Agreement No. 3 with respect to the use of
their acquired shares of the COTP interests, rights, and obligations
laid off to them under this Agreement. The Parties adversely
affected by the default may vote on any matter related to TANC
Project Agreement No. 3 with respect to their shares of the COTP
interests, rights, and obligations that were laid off to the defaulting
Party under this Agreement.
(iii) Any new TANC program or project shall be governed by the
agreements that pertain to such programs or projects.
8 EXECUTION ORIGINAL
Section 4. Recall and Return 012tions.
a. Conditions for Exercising Recall Option or Return 0,12tion.
During the Term of this Agreement, based upon the events set forth in this
Section 4, any of the LAYOFF ENTITIES shall have the option to recall and
any of the DISTRICTS shall have the right to return up to fifty (50) percent
of their share of the Layoff Quantity (respectively "Recall Option" or
"Return Option"). Parties acknowledge the potential impact that
exercising the Recall Option or Return Option might have on the non -
exercising Parties, and therefore, to the extent commercially and legally
practicable, Parties agree to use reasonable efforts to provide advance
notice that they are intending to exercise such an option.
The Recall Option or Return Option shall be effective upon the later of one
year's written notice or the actual effective date/occurrence (respectively
"Recall Effective Date" or "Return Effective Date") of one of the following
events:
(i) Dissolution of the California Independent System Operator
Corporation ("CAISO"), or any successor Independent System
Operator ("ISO") or Regional Transmission Operator ("RTO");
(ii) Relocation of the LAYOFF ENTITIES to a different Balancing
Authority, excluding the CAISO Balancing Authority, or any
successor ISO or RTO;
(iii) Elimination or change to Integrated Balancing Authority Area
("IBAA") pricing in a manner that would allow the LAYOFF
ENTITIES to realize a value for transactions utilizing the COTP.
For purposes of this provision, entering a Market Efficiency
Enhancement Agreement with the CAISO shall not constitute a
"change to IBAA pricing."
(iv) Termination of BANC or its successor or the execution of an
agreement by the DISTRICTS to participate in the CAISO in a
manner that provides for a return on all or a portion of the Layoff
Quantity. For purposes of this provision, "to participate in the
CAISO in a manner that provides for a return on all or a portion of
the Layoff Quantity" means that the DISTRICTS enter into a
EXECUTION ORIGINAL
Transmission Control Agreement with the CAISO and recover an
authorized rate of return on all or a portion of the Layoff Quantity
through CAISO transmission or wheeling access charges, or their
equivalents. This shall only apply to the Layoff Percentage of the
entity electing to participate in the CAISO, as described in this
Section.
b. Repayment Obligations if aLiy of the LAYOFF ENTITIES Exercise the
Recall 012tion.
In the event of any of the LAYOFF ENTITIES exercise of the Recall Option
for a portion of the Layoff Quantity, the LAYOFF ENTITIES shall be liable
to repay all Debt Service Payments and TANC Project O&M Costs and
TANC Administrative and General Expenses ("TANC A&G Expenses")
incurred by the DISTRICTS, associated with the Layoff Percentages under
this Agreement, up to the Recall Effective Date with respect to all or a
portion of the Layoff Quantity on or before the date the recall occurs, or at
a time and duration as mutually agreed to by the PARTIES, and assume
all Debt Service Payments and TANC Project O&M Costs and TANC
A&G Expenses for the recalled portion of the Layoff Quantity from the
Recall Effective Date forward.
C. Rel2ayment Obligations if any of the DISTRICTS Exercise the Return
012tion.
In the event any of the DISTRICTS elect to exercise the Return Option for a
portion of the Layoff Quantity, the DISTRICTS shall continue to pay Debt
Service Payments, as defined in Section 6 of this Agreement, on the entire
portion of the Layoff Quantity until no additional Debt Service Payments
are required to pay back the Debt Service in place as of the date this
Agreement is executed by the Parties. The DISTRICTS shall be relieved of
TANC Project O&M Costs and TANC A&G Expenses for the returned
portion of the Layoff Quantity from the Return Effective Date forward.
Section. 5. Market Payments.
Starting May 1, 2024, and on each May I thereafter, the DISTRICTS shall pay the
LAYOFF ENTITIES, in aggregate, an annual fixed premium of $1,752,000 for the
remainder of the term of the Layoff. This payment will be administered by TANC.
10 EXECUTION ORIGINAL
Section 6. Debt Service Paments.
The DISTRICTS shall be solely and severally liable, shall assume, and hereby
agree to pay and retire the debt service issued pursuant to TANC Project Agreement
No. 3 in connection with the Layoff Percentages of the LAYOFF ENTITIES ("Debt
Service Payments"), and in accordance with the DISTRICTS' Layoff Percentage of
TANC's Entitlements to Transfer Capabflity on the COTP, as defined in Section 3(a) and
3(c) of this Agreement. Timing of the payoff of such Debt shall be at the option of the
DISTRICTS, provided that at the end of the term of the Layoff the Layoff Entities will
have returned, to them, their Layoff Percentages without any TANC Project Agreement
No. 3 Debt associated with the Layoff Percentages that existed as of the execution date
of this Agreement,
Section 7. No Assignment Without Consent.
During the Term of this Agreement, the DISTRICTS shall not assign the rights to
the use of the interests, rights, or obligations of the LAYOFF ENTITIES acquired
pursuant to this Agreement, or delegate any obligations that have been undertaken by
the DISTRICTS pursuant to this Agreement, including but not limited to the obligation
to pay as set forth in this Agreement and the obligations set forth in Sections 7 or 8, to
any entity, including but not limited to a TANC Member (hereinafter "Assign" or
"Assignment"), without the advance written consent of the respective boards,
commissions and/or councils with requisite authority (hereinafter "Council") of TANC,
the LAYOFF ENTITIES, or their authorized representatives. The Parties agree that such
consent shall not be unreasonably withheld and further agree that best efforts shall be
utilized by the Parties to bring the issue of a proposed Assignment to Council within
ninety (90) days following the Parties' receipt of written notice requesting permission to
Assign. It is the intent of the Parties that any proposed Assignment by the DISTRICTS
must result in a complete assumption of that which was acquired by the assigning Party
under this Agreement. Partial Assignments by the DISTRICTS are expressly prohibited.
Section 8. Long -Term Lgyoff to Third Parties Not an Assignment.
To the extent that any of the DISTRICTS, as applicable (hereinafter "Layoff
Party") intend to layoff or transfer the use of the interests, rights, and obligations
received from the LAYOFF ENTITIES under this Agreement to a third party
("Acquiring Party") for a period of more than one (1) year, and such layoff or transfer is
not otherwise an Assignment as defined and discussed in Section 7 of this Agreement,
and provided the conditions of Sections 7.1, 7.2, and 7.4 of TANC Project Agreement
No. 3 have been satisfied and pursuant to the requirements of TANCs Long Term
11 EXECUTION ORIGINAL
Layoff Procedures, the Layoff Party shall do all of the following: 1) provide written
notice to the LAYOFF ENTITIES and TANC prior to the effective date of such layoff; 2)
include in its layoff agreement with the Acquiring Party provisions specifying: i) that
such layoff agreement shall be terminated immediately upon a default under this
Agreement by the DISTRICTS, as applicable, that remains uncured for twenty (20) days
after the date notice is first given under Section 13; ii) that the Acquiring Party is not a
third -party beneficiary of this Agreement between the LAYOFF ENTITIES on the one
hand and the DISTRICTS, as applicable, on the other; and iii) that the Acquiring Party
shall have no recourse against the LAYOFF ENTITIES and TANC in the event of a
default by the DISTRICTS under this Agreement and the layoff agreement; and 3)
provide the LAYOFF ENTITIES and TANC with a copy of the executed layoff
agreement.
Section 9. Dispute Resolution.
In the event of any controversy or claim between the Parties, whether based in
contract, tort or otherwise, arising out of, based upon, or relating to this Agreement,
except for any controversy or claim based upon a default of the obligations to make
payments as set forth in Sections 3 of this Agreement or a breach of the obligations set
forth in Sections 7 or 8 of this Agreement (hereinafter "Dispute"), the Parties shall
attempt to resolve such Dispute in the following manner:
a. Negotiati .
The Parties shall attempt in good faith to resolve the Dispute promptly by
negotiations between duly authorized representatives of the Parties who
have authority to resolve the Dispute. When a Party believes there is a
Dispute, that Party shall give the other Party written notice describing the
Dispute with reasonable particularity. Within fifteen (15) calendar days
following the receipt of such notice, the receiving Party shall submit a
written response to the noticing Party. The authorized representatives
shall meet in person and attempt to resolve the Dispute.
b. Mediation.
If the Dispute is not resolved within fifteen (15) calendar days following
receipt of the receiving Party's response given pursuant to subsection (a),
above or such additional time, if any, that the Parties mutually agree in
writing, the Parties shall try in good faith to resolve the Dispute by
mediation. The form of mediation and the mediator selected to mediate
12 EXECUTION ORIGINAL
the Dispute shall be acceptable to both Parties, which acceptance shall be
confirmed by the Parties in writing.
C. Additional Rights
If the Dispute is not resolved through mediation within ninety (90)
calendar days of the noticing Party's written notice of the Dispute
pursuant to subsection (a) above, or such additional time, if any, that the
Parties mutually agree to in writing, the Party or Parties involved in the
dispute shall be free to pursue any and all legal and equitable actions or
remedies.
Section 10. Attorney Fees.
In any mediation, arbitration, or litigation to enforce or defend any interest, right,
or obligation of this Agreement, the prevailing Party shall be entitled to an award of
reasonable attorneys' fees and other litigation expenses.
Section 11. California Law.
This Agreement was made in and will be performed in California, and the law of
California shall apply in the interpretation and enforcement of this Agreement.
Section 12. Integrated Agreement.
This Agreement is the whole, integrated. agreement of the Parties, superseding
prior negotiations. This Agreement does not amend TANC Project Agreement No. 3 in
any respect. In the event of any conflict between this Agreement and TANC Project
Agreement No. 3, the provisions of TANC Project Agreement No. 3 shall control. If
there is a conflict between this Agreement and the Long -Term Layoff Procedures, this
Agreement shall prevail,
Section 13. No Third -Party Beneficiaries.
There are no third -party beneficiaries to this Agreement, and this Agreement
shall not impart any rights enforceable by any person or entity that is not a Party to this
Agreement.
13 , EXECUTION ORIGINAL
Section 14. TANC Liability.
TANC and its officers, agents, and employees, as well as the other members and
commissioners of TANC (hereinafter "Indemnitees"), undertake no legal liability to the
Parties to this Agreement and each Party releases, holds harmless, and covenants not to
sue the Indemnitees for any cause, claim, injury, damage, or death arising from a
negligent act or omission of an Indemnitee in connection with this Agreement.
Section 15. Notices.
Notices required under this Agreement shall be given by TANC to each Party to
this Agreement using all of the four following methods on the same day, if possible:
facsimile, email, overnight delivery, and a personal phone call from the TANC General
Manager to each Chief Executive Officer of each Party.
Contact information for the purposes of notice for each Party shall be maintained
by TANC as ATTACHMENT E of this Agreement, attached to and incorporated herein.
Each Party shall be responsible for maintaining current contact information with
TANC.
Section 16. Severability.
Any provision of this Agreement determined by a court of competent
jurisdiction to be invalid shall not be severed from this Agreement if severance would
materially adversely affect any Party, and if any Party in good faith concludes that
severance would result in materially adverse consequences, such Party may give notice
under the notice provisions hereof, that this Agreement shall terminate on a date all of
the Parties consider appropriate, and if no agreement is reached on an appropriate early
termination date, then at the last hour of the day that is one hundred and twenty (120)
days after the date notice was first given.
Section 17. Discharge of Obligations.
All obligations unsatisfied at the end of the Term of this Agreement shall be
promptly discharged by the responsible Party.
14 EXECUTION ORIGINAL
Section 18. Modifications.
This Agreement may only be modified or amended in writing by the Parties
following receipt of all necessary approvals. Approvals and consents shall not be
withheld unreasonably.
Section 19. Counteri2arts/Electronic Deljygry.
This Agreement may be signed in counterparts, each of which shall be deemed
an original but all or which together shall constitute one and the same instrument. This
Agreement may be executed and delivered by facsimile or electronic transmission afid
the Parties agree that such facsimile or electronic (PDF) execution and delivery shall
have the same force and effect as delivery of an original document with original
signatures, and that each Party may use such facsimile or electronic signatures as
evidence of the execution and delivery of this Agreement by the Parties to the same
extent that an original signature could be. used.
15 EXECUTION ORIGINAL
TRANSMISSION AGENCY OF
NORTHERN CALIFORNIA
By:
Its:
Dated:
CITY OF HEALDSBURG
By:—
Its:
Dated:
CITY OF LOMPOC
By:—
Its:
Dated:
CITY OF UKIAH
By:
Its:
Dated:
ALAMEDA MUNICIPAL POWER
By:
Its:
Dated:
CITY OF LODI
By:
Its: Interim City Manager
Dated:
APPROVED AS TO FORM: ATTEST:
Janice D. M di h . I . nt.City Att. Randi Johl-Olson
PLUMAS-SIE A fJRAL City Clerk
ELECTRIC COOPERATIVE I �,-)
By:
Its:
Dated:
CITY OF SANTA CLARA
By:
Its:
Dated:
16
EXECUTION ORIGINAL
MODESTO IRRIGATION DISTRICT
By:
Its:
Dated:
SACRAMENTO MUNICIPAL
UTILITY DISTRICT
By:
Its:
Dated:
TURLOCK IRRIGATION DISTRICT
By:
Its:
Dated:
17
EXECUTION ORIGINAL
ATTACHMENT A
DEFINITIONS
Acquiring Party
Has the meaning set forth in Section 8 of this Agreement.
Additions
A new facility, other than a Betterment or Replacement that is added to the Project, together
with associated land rights, if any.
Adjusted Cost Index
Has the meaning set forth in Section 3.1.2.2,2 of TANC Project Agreement No. 3.
Agreement
This Long -Term Layoff Agreement, as it may be amended time to time.
Annual Fixed Payment
Has the meaning set forth in Section 5 of this Agreement.
Annual TANC Budget
The annual budget approved by the TANC Commission which provides for all. TANC activities
as a joint powers agency, including TANCs share of any joint obligations arising from the
Agency's participation in projects such as the COTP, expenses associated with related debt
service obligations, transmission service costs incurred on behalf of TANC Members, and
operation costs for the Agency,
Balancing Authority
The responsible entity that integrates resource plans ahead of time, maintains load -interchange -
generation balance within a Balancing Authority Area, and supports Interconnection frequency
in real time.
Betterment
A new facility, other than a Replacement, together with associated land rights, if any, which will
increase the Rated Project Transfer Capability" (as that term is defined in the Intertie
Agreements) above the then -current Rated Project Transfer Capability or sixteen hundred (1600)
megawatts, whichever is less.
CAISO
The California Independent System Operator Corporation, or its successor.
A-1 EXECUTION ORIGINAL
CAISO Tariff
The California Independent System Operator Corporation Operating Agreement and Tariff,
dated March 31, 1997, as modified or amended from time to time.
Debt
Indebtedness,
Debt Service
With respect to any period, the aggregate of the amounts required by each Indenture to be paid
during said period into any fund or account created by the Indenture for the sole purpose of
paying or providing reserves for paying the principal (including sinking fund installments) of
and premium, if any, and interest on all the Indebtedness from time to time outstanding;
provided, however, that Debt Service shall not include any amounts on account of acceleration
of the maturity of any Indebtedness.
Debt Service Payments
Has the meaning set forth in Section 6 of this Agreement,
Indebtedness
Bonds, notes or other evidences of indebtedness (including, without limitation, contracts
relating to letters of credit or other credit enhancement devices and long-term contracts which
are characterized as debt by TANC at or prior to execution thereof) issued or otherwise incurred
or entered into by or on behalf of TANC in connection with the Project. For purposes of this
Agreement, Indebtedness shall be considered outstanding as of any date if such Indebtedness
has not been paid or in provision for the payment of the principal of and interest on such
Indebtedness has not been made in accordance with the Indenture pursuant to which such
Indebtedness has been issued or incurred.
Integrated Balancing Authority Area
Has the meaning set forth in the CAISO Tariff, as modified or amended from time to time.
Intertie Agreements
Agreements related to the Project which have been or which may be entered into by TANC and
some or all of the other Participants, which include, but are not limited to, the MOU, the Project
Development Agreement, the Project Participation Agreement, any amendments to the
foregoing agreements, and other agreements related to the Project entered into by TANC as
Project Manager or by TANC on behalf of the Members.
Layoff
As used in this Agreement, the voluntary temporary transfer of all or a portion of TANC
Member entitlements to Transfer Capability for a period of more than one (1) year.
A-2 EXECUTION ORIGINAL
Layoff Quantity
The sum of the Layoffs as set forth in Section 3(c) of this Agreement.
Layoff Party
Has the meaning set forth in Section 8 of this Agreement.
Layoff Percentages
Has the meaning set forth in Section 3 of this Agreement.
Market Efficiency Enhancement Agreement
Has the meaning set forth in the CAISO Tariff, as modified or amended from time to time.
MOU
The Memorandum of Understanding, California -Oregon Transn-dssion Project, dated
December 19,1984, among the Participants, the Department of Water and Power of the City of
Los Angeles, and the California Department of Water Resources, as modified by the
Memorandum of Decision of the United States Secretary of Energy, dated February 7, 1985, as
interpreted by the letter of the United States Department of Energy Acting General Counsel,
dated May 4,1985, as amended by the California -Oregon Transmission Project Memorandum of
Understanding Annex, dated March 19,1986 (MOU Annex), and as it may be further amended.
The MOU and MOU Annex are incorporated into Project Agreement No. 3 as Appendix A and
Appendix B, respectively.
Participants
Those entities, including TANC, which have interests in the Project through execution of the
Intertie Agreements.
Participation Percentage
That percentage of TANC's entitlement to Transfer Capability which an individual TANC
Member has the right to use as set forth in Appendix C of TANC Project Agreement No. 3.
Such percentages may be modified pursuant to Sections 2.3, 3.1.2.2, 6, and 15 of TANC Project
Agreement No. 3. Modified percentages are included in Appendix B of this Agreement.
Project
The talifornia-Oregon Transmission Project (COTP), which consists of electric transmission
facilities between California and the Pacific Northwest. As such, Project is generally described
in, and as changed pursuant to, the Intertie Agreements.
Project Development Agreement
That agreement among the Participants dated September 30, 1985, which provides, inter alia, for
the Participants to share the costs of Project Development Work.
A-3 EXECUTION ORIGINAL
Project Participation Agreement
That agreement which was executed by those Participants electing to proceed with Phase II and
Phase III of the Project, as it may be modified and supplemented in accordance with the terms
thereof.
Recall Effective Date
Has the meaning set forth in Section 4(a) of this Agreement.
Recall Option
Has the meaning set forth in Section 4 of this Agreement.
Replacements
A new facility that is intended to be a direct replacement for an existing facility, which is
designed primarily to maintain the existing operational reliability or capability of the Project,
irrespective of whether the replacement results in an incidental increase in the Rated Project
Transfer Capability (as that term is defined in the Intertie Agreements), and which results in a
retirement unit being substituted for another such retirement unit. As used herein, retirement
unit shall mean property as defined in Section 15060 of the Federal Energy Regulatory
Commission Uniform System of Accounts Prescribed for Public Utilities and Licensees Subject
to the Provisions of. the Federal Power Act, or its successor document.
Return Effective Date
Has the meaning set forth in Section 4(a) of this Agreement.
Return Option
Has the meaning set forth in Section 4 of this Agreement.
SOT Agreement
The agreement between TANC and TANC Members with respect to allocations of TANC
entitlements to Tesla -Midway Transmission Service, dated as of February 14,1993.
TANC
The Transn-dssion Agency of Northern California or its successor.
TANC Capital Improvement Costs
Those costs incurred in connection with Phase III of the Project allocable to TANC for the
purpose of making Additions, Betterments, or Replacements to the Project and such other costs
relating to capital improvements to the Project properly chargeable to TANC pursuant to the
Intertie Agreements.
A-4 EXECUTION ORIGINAL
TANC Commission
The governing body of TANC as described in the TANC joint Powers Agreement.
TANC joint Powers Agreement
The joint Powers Agreement, Transmission Agency of Northern California, dated. December 10,
1984, which established TANC as a joint powers agency pursuant to Section 6500 et seq. of the
California Government Code, as amended and supplemented from time to time.
TANC Long -Term Layoff Procedures
The procedures adopted by the TANC Commission via Resolution 2004-21, to facilitate Layoffs
consistent with TANC Project Agreement No. 3.
TANC Member
A signatory to the TANC joint Powers Agreement.
TANC Project Administrative and General Expenses or TANC A&G Expenses
Those administrative and general expenses incurred by TANC in its management of the Project
that are recoverable from TANC Members and set forth each fiscal year in the TANC annual
TANC Budget, being categorized as "TANC Agency" and "TANC Operations."
TANC Project Agreement No. 3
The agreement entered into as of March 1, 1990, by and among TANC and the Cities of
Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara and Ukiah; the
Sacramento Municipal Utility District; the Modesto Irrigation District; the Turlock Irrigation
District; and the Plumas-Sierra Rural Electric Cooperative.
TANC Project Agreement No. 5
An agreement entered into as of August 23,2004, and amended and restated effective as of May
1, 2006, by and among the Transmission Agency of Northern California, and the Cities of
Alameda, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah;
the Modesto Irrigation District; the Turlock Irrigation District; and the Plumas-Sierra Rural
Electric Cooperative.
TANC Project Costs
Those costs incurred in connection with Phase II of the Project allocable to TANC and such
other costs relating to the acquisition and construction of the Project properly chargeable to
TANC pursuant to the Intertie Agreements.
TANC Project Indebtedness
That Indebtedness to be issued by TANC to finance TANC Project Costs, TANC Project O&M
Costs, TANC Capital Improvement Costs, and such other costs as are described in Section
4.1.3.1. of TANC Project Agreement No. 3.
A-5 EXECUTION ORIGINAL
TANC Project O&M Costs
Those costs incurred in connection with Phase III of the Project allocable to TANC and
recoverable from TANC Members, which are necessary to operate and maintain the Project,
such other costs relating to the operation and maintenance of the Project properly chargeable to
TANC pursuant to the Intertie Agreements, and costs of the TANC Coordinator. TANC Project
O&M costs shall not include TANC Project Costs or TANC Capital Improvement Costs, TANC
Project O&M Costs are set forth each fiscal year in the Annual TANC Budget and categorized as
the "California -Oregon Project."
Transfer Capability
The ability of the Project or a segment thereof to transmit power, expressed in megawatts, as
determined in accordance with the Intertie Agreements, As used in TANC Project Agreement
No. 3, the term Transfer Capability can refer to a rated amount or an amount available at any
given time, as appropriate in the context in which such term is used. TANC and its Members
acknowledge that there may be times when available Transfer Capability is less than the rated
amount for the Project or a segment thereof.
Transmission Control Agreement
Has the meaning set forth in the CAISO Tariff, as modified or amended from time to time.
True -Up Adjustments
Has the meaning set forth in Section 3(f)(vii) of this Agreement.
A-6 EXECUTION ORIGINAL
ATTACHMENT B
MODIFIED PROTECT AGREEMENT NO. 3 (PA -3) PERCENTAGES
Interim - COTP Operations and Maintenance
(Accommodates the Cities of Santa Clara, Alameda, Healdsburg, Lodi, Lompoc, and Ukiah, and the
Plumas-Sierra Rural Electric Cooperative 25 -year layof])
B-1 EXECUTION ORIGINAL
ATTACHMENT C
MODIFIED PROTECT AGREEMENT NO. 5 (PA -5) PERCENTAGES
Interim - PA- 5 Cost Sharing Percentages
(Accommodates the Cities of Santa Clara, Alameda, Healdsburg, Lodi, Lompoc, and Ukiah, and the
Plumas-Sierra Rural Electric Cooperative 25 -year layoff)
C-1 EXECUTION ORIGINAL
P u
MID
30.2978% 2.4836%
32.7814%
Redding
11.6130% 0.0000%
11.6130% -
3.5496% 12.9147%
16.4643% -
-SMUD
Santa Clara
28.2650% -14.4548%
13.8102%
TID
20.8606% 4.4705%
25.3311%
Alameda
1.6940% -1.6940%
0.0000%
Healdsburg
0.3390% -0.3390%
0.0000%
Lodi
2.6510% -2.6510%
0.0000%
Lompoc
0.2570% -0.2570%
0,0000%
Palo Alto
0.0000% 0.0000%
0.0000%
Plumas
0.2040% -0.2040%
0.0000%
Roseville
0.0000% 0.0000%
0.0000%
Ukiah
Total
0.2690% -0.2690%
100.0000% %
0.0000%
100.0000%
C-1 EXECUTION ORIGINAL
ATTACHMENT D
TRUE -UP METHODOLOGY FOR REPLACEMENTS AND ADDITIONS
The Parties identified a desire to provide for equitable allocation of costs between the Districts
and Layoff Entities for the laid -off shares of Replacements and those Additions (all Additions
approved by TANC up to the threshold limit and the portion of those greater than the limit up
to the threshold limit) that, at the end of the term of the layoff, will revert from a right and
responsibility of the Districts to that of the Layoff Entities.
TANC developed the following methodology, which was incorporated into the 2009 Long -Term
LayoffAgreement between TANC, the Districts and the Cities of Palo Alto and Roseville, and has
been reviewed and approved by the Parties. TANC will treat all Replacements and Additions
(at least up to the Project Agreement No. 3 Threshold Amount) as if they were financed using
"typical municipal financing" (i.e., levelized payments composed of principal and interest, at
the prevailing municipal cost of money at the time of the Replacement or Addition, over the
useftl life of the Replacement/Addition). The TANC Commission will make a determination of
the useful life and the cost of financing at the time of approving a Replacement and/or
Addition.
If a payment structure or financing were used that were different from the form of a "typical
municipal financing," then a transfer payment may be necessary to account for an accelerated or
decelerated (relative to typical municipal financing) payoff of principal as of the end of the term
of the layoff. The following are for illustration purposes only and are the same examples that
were provided in the 2009 Long -Term Layoff Agreement.
EXAMPLES:
The following assumptions apply to the examples provided below:
1 . End of term of layoff: 2/1/2024
2. Timing of Replacement (or Addition): 2/1/2014
3. Applicable cost threshold for Section 3.1.2.2.2: $52.71A
4. Cost of Replacement or Addition: $25M
5. Estimated useful life of Replacement or Addition at 1/l/2014: 20 years
6. Remaining term of layoff at 2/l/2014: 10 years
7. Btimate useful life of Replacement or Addition remaining after layoff: 10 years
8. Prevailing municipal cost of money, 2/1/2014: 6 percent (20 -year term)
Using the assumptions listed above, TANC examined five different payment structures and the
potential need for a transfer payment under each. These are described below and a summary
table is included at the end of this section:
D-1 EXECUTION ORIGINAL
Example V: TANC Pails Cash at time of ftlacement (Addition)
As of February 1, 2024, all principal would have been paid off and there would be no
outstanding obligations for the Addition. With typical municipal financing, there would have
been ten years of levelized payments remaining for principal and interest at $2.18OM/yr with
respect to the full $25M cost for the Addition. The NPV of this payment stream as of 2/1/2024
comes to $16.04M. Cities should pay the respective Districts their laid off participation
percentages times $16.04M.
Example #2: TANC Borrows $25 million and makes interest only 72ayments:
As of February 1, 2024, no principal would have been paid off. With typical municipal
financing, there would have been approximately $9M of principal paid off at the end of the
layoff; and the Districts should pay the respective Cities their laid off participation percentages
times $8.96 million.
Example #3: Levelized 12ayments over life of Addition:
As of February 1, 2024, there would have been $8.96 million principal refired. Since financing
used typical municipal financing, this is the expected amount of principal to be paid off at the
end of the layoff, and no transfer payment is needed.
Exami2le #4: Levelized payments over lon= than life ofAddition:
As of February 1, 2024, assuming a 25 -year financing term, there would have been about $6M of
principal paid off. With typical municipal financing, there would have been about $9M of
principal paid off at the end of the layoff. Districts should pay the respective Cities their laid off
participation percentages times $3M.
Exam�21e #5: Levelized -�ayments over shorter than life of Addition:
As of February 1, 2024, assuming a 15 -year financing term, there would have been about $14-2M
of principal paid off. With typical municipal financing, there would have been about $9M of
principal paid off at the end of the layoff. Cities should pay the respective Districts their laid off
participation percentages time� $5.2M.
As mentioned above, this approach will require certain determinations be made by the
Commission at the approval of any future Replacements or Additions; these include: 1) the
useful life of the Replacement/Addition, and 2) prevailing TANC borrowing rate for the
determined useful life.
D-2 EXECUTION ORIGINAL
Examplefl
Cash Payment
Example #2
Interest Only "T
Example #3 -
pcial" Maturity
Exampl #4 Example #5
Longer M rity Shorter Maturity
Loan Amount
—
$ 25,000,000 $
25,000,000 $
25,000,000
$ 25,000,000 S
25,000,000
I nterst Rate
6.00%
6.00%
6.00%
6.00%
6.00%
"Typical Term" - years
20
20
20
20
20
Annual Payment
$2,179,614
$2,179,614
$2,179,614
$2,179,614
$2,179,614
Target Balance 1/ 1 /2024
$16,042,148
$16,042,148
$16,042,148
$16,042,148
$16,042,148
Example Term - years
na
20
25
15
Actual Remaining Balance as of
January 1, 2024
0 $
25,000,000
$16,042,148
$ 18,993,934
10842915.45
Deviation from "typical" 1
$ (16,042,148)1 $
8,957,852 $
$ 2,951,786 1 $
(5,199,233)
,Payment to Districts I
$ 16,042,148 1 $
(8,957,852), $
$ (2,951,786), $
5,199,233
As mentioned above, this approach will require certain determinations be made by the
Commission at the approval of any future Replacements or Additions; these include: 1) the
useful life of the Replacement/Addition, and 2) prevailing TANC borrowing rate for the
determined useful life.
D-2 EXECUTION ORIGINAL
ATTACHMENT E
CONTACT INFORMATION FOR PURPOSES OF NOTICES
Ronald V. Stassi, General Manager
Alameda Municipal Power
USPS: P.O. Box H
Alameda, CA 94501-0263
Courier: 2000 Grand Street
Alameda, CA 94501
Phone: (510) 748-3905
Fax: N/A
Email: stassi@alamedamp.com
Healdsburg:
Terry Crowley, Utility Director
City of Healdsburg
USPS:
401 Grove Street
Healdsburg, CA 95448
Courier:
401 Grove Street
Healdsburg, CA 95448
Phone:
(707) 431-3340
Fax:
(707) 431-2710
Email:
tcrowley@ci.healdsburg.ca.us
Lodi:
Elizabeth Kirkley, Electric Utility Director
City of Lodi
USPS: 1331 South Ham Lane
Lodi, CA 95242-3995
Courier: 1331 South Ham Lane
Lodi, CA 95242-3995
Phone: (209) 333-6828
Fax: (209) 333-6839
Email: ekirkley@lodi.gov
E-1 EXECUTION ORIGINAL
Lompoc:
Leslie Bean, Utility Director
City of Lompoc
USPS:
P.O. Box 8001 -
Lompoc, CA 93438-8001
Courier:
100 Civic Center Plaza
Lompoc, CA 93436-6916
Phone:
(805) 875-8299
Fax:
(805) 875-8396
Email:
L—bean@ci.lompoc.ca.us
Santa Clara:
John Roukema, Director of Electric Utility
City of Santa Clara
USPS:
1500 Warburton Avenue
Santa Clara, CA 95050
Courier:
1500 Warburton Avenue
Santa Clara, CA 95050
Phone:
(408) 261-5490
Fax:
(408) 249-0217
Email:
jroukema@svpower.com
PSREC:
Robert Marshall, General Manager
Plumas-Sierra Rural Electric Cooperative
USPS: 73233 Hwy 70
Portola, CA 96122-7069
Courier: * 73233 Hwy 70
Portola, CA 96122-7069
Phone: (530) 832-4261
Fax: (530) 832-6070
Email: shenson@psrec.coop
Greg Salyer, Assistant General Manager, Electric Resources
Modesto Irrigation District
USPS: P.O. Box 4060
Modesto, CA 95352
Courier: 1231 Eleventh Street
Modesto, CA 95354
Phone: (209) 526-7550
Fax: (209) 526-7315
Email: greg.salyer@mid.org
E-2 EXECUTION ORIGINAL
TID:
Larry Gilbertson
Assistant General Manager
Turlock Irrigation District
USPS: P.O. Box 949
Turlock, CA 95381-0949
Courier: 333 East Canal Drive
Turlock, CA 95380
Phone: (209) 883-8334
Fax: (209) 656-2148
Email: lbgilbertson@tid.org
SN=:
Paul Lau
Assistant General Manager,
Power Supply and Grid Operations
Sacramento Municipal Utility District
USPS: P.O. Box 15852
Mail Stop: B408
Sacramento, CA 95852-1830
Courier: 6201 S Street,
Sacramento, CA 95817-1899
Phone: (916) 732-6757
Fax: (916) 73- 6562
Email: paul.lau@smud.org
TANC:
Transn-dssion Agency of Northern California
Bryan W. Griess, General Manager
USPS: P.O. Box 15129
Sacramento, CA 95851-0129
Courier: 35 Iron Point Circle, Suite 255
Phone: (916) 852-1673
Fax: (916) 852-1073
Email: bgriess@tanc.us
E-3 EXECUTION ORIGINAL
RESOLUTION NO. 2014-50
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
THE CITY MANAGER TO EXECUTE A LONG-TERM LAYOFF
AGREEMENT FOR THE CALIFORNIA OREGON
TRANSMISSION PROJECT BETWEEN THE CITY OF LODI
AND CERTAIN MEMBERS OF THE TRANSMISSION AGENCY
OF NORTHERN CALIFORNIA
WHEREAS, the Transmission Agency of Northern California (TANC) is a
California Joint Powers Agency that has facilitated the construction and joint ownership
of transmission projects on behalf of its members; and
WHEREAS, TANC members include the Sacramento Municipal Utility District
(SMUD), Modesto Irrigation District (MID), Turlock Irrigation District (TID), Plumas Sierra
Rural Electric Cooperative, and the California cities of Alameda, Biggs, Gridley,
Healdsburg, Lodi, Lompoc, Redding, Roseville, Santa Clara, and Ukiah; and
WHEREAS, TANC is a joint owner of the California Oregon Transmission Project
(COTP), a transmission line connecting the Pacific Northwest with Central California;
and
WHEREAS, the City is a signatory to TANC Project Agreement Number 3
(1990), by which the City has a 1.9201 % project participation entitlement on the COTP
(approximately 26 megawatts); and
WHEREAS, recent historic and projected value of COTP to the City's electricity
portfolio is lower than participation costs; and
WHEREAS, City's current costs associated with COTP are approximately $1.2
million per year; and
WHEREAS, under TANC Project Agreement Number 3 and TANC's Procedures
for Long -Term Layoffs of Transmission Capacity, the City is able to assign its COTP
entitlements to other COTP participants; and
WHEREAS, SMUD, TID, and MID have agreed to accept the City's share of
COTP entitlements, via a layoff arrangement, for a period of 25 years, with an option to
extend 5 years upon mutual agreement; and
WHEREAS, this activity would not result in a direct or reasonable foreseeable
indirect change in the physical environment and is therefore not a "project" for purposes
of Section 21065 of the California Environmental Quality Act and no environmental
review is necessary; and
WHEREAS, the Risk Oversight Committee received a report on this agenda item
and recommends City Council approval.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute a Long -Term Layoff Agreement (Agreement) for
the California Oregon Transmission Project (COTP) between the City of Lodi and certain
members of the Transmission Agency of Northern California (TANC); and
BE IT FURTHER RESOLVED that authorization for any extension of term,
including the five-year extension option, shall be subject to future review and
authorization of the Lodi City Council.
Dated: April 2, 2014
I hereby certify that Resolution No. 2014-50 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held April 2, 2014, by the following vote:
AYES: COUNCIL MEMBERS — Hansen, Johnson, Mounce, Nakanishi,
and Mayor Katzakian
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
LHL-OLSON
City Clerk
2014-50