HomeMy WebLinkAboutAgenda Report - January 7, 1998 E-17CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Agreement for Facilities Sale and Transition Charge Recovery
MEETING DATE: January 7, 1998
SUBMITTED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council authorize the City Manager to sign the attached
Agreement for Facilities Sale and Transition Charge Recovery (Agreement).
BACKGROUND: As a result of development of a new residential subdivision along Turner
Road, the developer needs to have the PG&E overhead distribution line
bordering the subdivision undergrounded or removed. When the parcel of
land was originally annexed, the residence on the Wine and Roses property which abuts the development was
not changed to City electric service thereby leaving the line in use. Subsequently, the existing residential
customer has expressed a desire to change to City electric service.
With the assistance of the City Attorney and PG&E's attorneys, all parties have been able to negotiate the
proposed Agreement after several months of unified effort. The Agreement meets all the parties' needs and
the requirements of AB1890 (Electric Industry Restructuring). It should be emphasized that the Agreement is
a unique negotiated settlement and is not to be considered precedent -setting.
The Agreement addresses the sale of the PG&E line to the City so the City may remove the line and the
payment of transition charges and nonbypassable cost obligations. Sale of the above PG&E facilities is
subject to California Public Utilities Commission approval.
The Electric Utility Department recommends that the City Advance funds to pay PG&E $11,269.00 for the
associated PG&E facilities and the existing residential customer's $3,700.00 statutory PG&E transition
charges and nonbypassable cost obligations. By separate agreement, the developer will reimburse the City
for approximately one-half the cost of the PG&E facilities.
The Agreement will clear the entire parcel for electric service by the City, thereby avoiding all future right to
serve questions, and will allow the City to remove the unused facilities and provide underground service as in
other new residential developments.
FUNDING: 16.0 Electric Utility Fund Reserve
sment for Facilities Sale and Transition Charge Recovery
ric Utility Department
of Meeting: January 7, 1998
Council Communicatic
P92/
Alan N. Vallow
Electric Utility Director
Funding Approval:
Vicky McAt ie, Finance Director
Prepared by: John Stone, Manager, Business Planning and Marketing
ANV/JS/kaf
c: City Attorney
9971Ci1y CounciA010798cc8
AGREEMENT FOR FACILITIES SALE
AND TRANSITION CHARGE RECOVERY
1.) An existing PG&E electric service customer located at 2505 West Turner Road, (Account
No. PXT42 10002) in the City of Lodi (City) has expressed a desire to change to the City's electric
service. The City desires to provide: electric service to this customer. This customer is currently
served by the following PG&E facilities which City wishes to acquire:
A section of overhead 12 kV electric distribution line located on West Turner Road
between Lower Sacramento Road and the Woodbridge Irrigation District Canal,
consisting of 12 poles and associated equipment, approximately 7,500 ft. of #6 copper
conductor, one 15 kVA 12kV-120/240U transformer, and various cut-outs and
insulators.
2.) PG&E has supplied the City with the estimated net present value (NPV) of transition
charges and nonbypassable costs payable by the customer under Section 367 et. seq. of the California
Public Utilities Code (enacted as part of AB 1890 on September 24, 1996). That NPV is $3,700.
3.) PG&E has also supplied the City with a purchase price for the described distribution
facilities made up of the facilities' replacement cost new depreciated (5% present worth depreciation)
($10,245) and a ten (10) percent going concern factor ($1,024). The total purchase price is $11,269.
The City possesses the power of eminent domain and would seek to exercise that power with respect
to these facilities absent this agreement.
4.) City hereby agrees to pay and PG&E hereby agrees to accept said NPV sum of $3,700.00 as
payment in full of all the customer's statutory transition charge and nonbypassable cost obligations.
City also agrees to pay and PG&E hereby agrees to accept the sum of $11,269.00 as the purchase
price for all right, title and interest in the described facilities.
5.) Time is of the essence. City may take possession of these facilities immediately upon
payment of the above NPV and purchase price sums.
6.) PG&E's sale of these facilities is subject to California Public Utilities Commission approval
under Cal. Pub. Util. Code Section 851; City and PG&E will cooperate in securing that approval.
Should the CPUC not approve the sale of facilities, PG&E will be compensated for the City's
acquisition of these facilities through the eminent domain process.
7.) City and PG&E are agreed that this agreement is a settlement of differences and is of no
evidentiary or precedential value.
Accepted and agreed to this day of
CITY OF LODI, a municipal corporation
1997:
PACIFIC GAS AND ELECTRIC COMPANY
Name: H. DIXON FLYNN Name:
Title: City Manager Title:
Attest:
ALICE M. REIMCHE
City Clerk
Approved as to Form:
RANDALL A. HAY
City Attorney
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