HomeMy WebLinkAboutAgenda Report - August 20, 1997 (71)COUNCIL• •
CITY OF LODIc+ 5-.• S
AGENDA TITLE: Power Supply Contract (Secondary Service) between the City of Lodi and Arkay
Industries, Inc.
MEETING DATE: August 20, 1997
SUBMITTED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council authorize the City Manager to approve the attached
Economic Development Power Supply Contract (Contract) between the City
of Lodi (City) and Arkay Industries, Inc. (Customer).
BACKGROUND: In return for the Customer's: 1) providing new employment and 2) improving
the City's industrial area by constructing new manufacturing facilities, the City
and the Customer are willing to sign a contract for delivery of secondary
service (less than 12,000 volts). The Electric Utility Department will own, install, maintain and repair the
secondary transformers and associated equipment and will absorb the cost of transformer losses in return for
payment at the Contract -established electric rate.
A copy of the proposed contract is enclosed for reference.
FUNDING: Not Applicable
Alan N. Vallow
Electric Utility Director
Prepared by John Stone, Manager, Business Planning and Marketing
ANV/JS/Ist
C: City Attorney
Approved
H:\USER\ADMIN\CTYCNCL\1997\082097cc2.wpd August 27, 1997
RATE AGREEMENT
BETWEEN
ARKAY INDUSTRIES, INC.
AND
THE CITY OF LODI
This Agreement is made by and between ARKAY INDUSTRIES, INC. ("Customer") and the CITY OF
LODI ("City"), collectively called "the Parties" and individually as "Party". This Agreement supersedes
the City's mandatory rate schedule assignment for this Customer.
WITNESSETH:
WHEREAS, City operates an electric utility system supplying electric power to City customers; and
WHEREAS, Customcr is a i—nanufacturcr of plastic products v,, :ich xiil b -c operating i:: the City; and
WHEREAS, Customer is constructuring new manufacturing facilities; and
WHEREAS, Customer is bringing new employment to the City; and
WHEREAS, City desires to supply the Customer's total load at secondary voltage (less than 12,000
volts) and provide Customer with a contract rate; and
WHEREAS, City desires to provide the Customer an economic incentive in the form of a discounted
electric rate in return for creating a new business with new electric load in the City.
NOW, THEREFORE, the Parties hereto agree as follows:
Section 1. Definitions. Whenever used in this Agreement, in either the singular or plural number,
the following terms shall have the following respective meanings:
1.1 "Agreement" is this contract.
1.2 "City" is the City of Lodi, a California Municipal Corporation.
1.3 "Customer" is Arkay Industries, Inc.
1
1.4 "Facility" is the Customer's facility located at 1250 East Thurman Street, Lodi, California.
1.5 "Account" is the Customer's Account Number initially assigned to Customer's Facility
or its successor Customer Account Number(s).
1.6 "Parties" are collectively Customer and City.
1.7 "kw" is a kilowatt, a demand charge billing unit.
1.8 "kWh" is a kilowatt-hour, an energy charge billing unit.
1.9 "Billing Cycle" is the monthly bill.
1.10 "Force Majeure", as used herein, means unforeseeable causes beyond the reasonable
control of and without the fault or negligence of the Parry claiming force majeure. Such
an occurrence may include, but is not limited to, acts of God, labor disputes, sudden
actions of the elements, actions or inactions by federal, state and .«unicipal agcncics, and
actions or inactions of legislative, judicial, or regulatory agencies.
1.11 "Energy Multiplier" is the sum of 1.000 plus the change in the Consumer Price Index
(CPI) as published by the Bureau of Labor Statistics for the previous calendar year. This
Energy Multiplier will be in effect for the following calendar year for bills rendered on and
after February of the applicable year. Succeeding yearly Energy Multipliers will be the
product of the previous Energy Multiplier and the sum of 1.000 plus the change in the
Consumer Price Index for the previous calendar year. In no case will the Energy Multiplier
be less than 1.000.
Section 2. Rate Application
2.1 The Account shall be billed a minimum cumulative total of $20,000 for the term of the
Agreement.
2.2 The billing cycle charge for the Customer shall be as follows:
Section 3.
3.1
July 8, 1996 through December 31, 1999:
Customer Charge: $ 125.00
Demand Charge: $ 0.00 per kw
Energy Charge: $ 0.05200 per kWh less the Economic
Development Credit
Economic Development Credit: $ 0.0002 per kWh per Full Time Equivalent (FTE)
employee up to a maximum of $ 0.01000 per kWh.
Initial and subsequent FTE totals may be updated at
six-month intervals. The Electric Utility Department
may update the FTE total at more frequent intervals
when in its sole judgment an update is appropriate.
January 1, 2000 through December 31, 2001:
Customer Charge: $ 125.00
Demand Charge: $ 0.00 per kw
Energy Charge: ($ 0.05200 per kWh less the Economic
Development Credit) times the Energy Multiplier
Economic Development Credit: $ 0.0002 per kWh per Full Time Equivalent (FTE)
employee up to a maximum of $ 0.01000 per
kWh. Initial and subsequent FTE totals may be
updated at six-month intervals. The Electric Utility
Department may update the FTE total at more
frequent intervals when in its sole judgment an
update is appropriate.
Energy Multiplier: as defined in Section 1.11 above
Term of Agreement
This Agreement shall be binding for bills rendered on or after July 8, 1996, and shall
remain in effect subject to Paragraphs 3.2 and 3.3 below, for bills rendered through
December 31, 2001.
3.2 If either party fails to perform any of the provisions of this Agreement, the other party
may, by written notice given within thirty days of such failure to perform, terminate this
agreement. Customer may appeal such termination in writing to the Electric Utility
Director. This is in addition to any other legal recourse Customer may have.
3.3 This Agreement cannot be terminated without mutual consent of the Parties.
3.4 Parties may mutually extend this Agreement from year to year beyond the original term
of this Agreement.
Section 4. Force Majeure
4.1 If either Party because of Force Majeure is rendered wholly or partly unable to perform
its obligations under this Agreement, that Party shall be excused from whatever
fcr unria:�ce is affcctcd ty the Force Majeure W the extent so affected, provided that:
The non-performing Party, within two weeks after the occurrence of the Force Majeure,
shall give the other party a written report describing the particulars of the occurrence.
The suspension of performance is of no greater scope and of no longer duration than is
required by the Force Majeure.
4.2 No obligations of either Parry which arose before the occurrence causing the suspension
of performance are excused as o result of the occurrence.
4.3 The non-performing Party uses its best efforts to remedy its inability to perform. This sub-
paragraph shall not require the settlement of any strike, walkout, lockout or other labor
dispute on terms which, in the sole judgement of the Party involved in the dispute, are
contrary to its interest. It is understood and agreed that the settlement of strikes, walkouts,
lockouts or other labor disputes shall be entirely within the discretion of the Party having
the difficulty.
M
Section 5. Assignments
5.1 Neither Parry shall voluntarily assign its rights nor delegate its duties under this Agreement
without the written consent of the other Party.
Section 6. Amendments
6.1 This Agreement may be amended only by written instrument executed by the Parties or
their successors.
Section 7. Severability
7.1 In the event that any of the terms, covenants, or conditions of this Agreement shall be held
invalid, the Parties intend that all other terms, covenants, and conditions and their
application shall not be affected thereby, but shall remain in force and effect unless a court
,
holds that such provisions are not 5E'vCrable from all other provisiui,s ui.uli� Aarceiiient.
Section 8. Governing Law
8.1 This Agreement shall be interpreted, governed by, and construed under the laws of the
State of California.
Section 9. Counterparts
9.1 This Agreement may be executed in counterparts, all or any of which shall be regarded for
all purposes as one original and shall constitute and be but one and the same instrument.
Section 10. Headings
10.1 The headings to the articles in this Agreement are intended for convenience only and not
for the purpose of interpreting the provisions of this Agreement.
Section 11. Notices
11.1 Any notice, demand or request required or permitted to be given by either Party to the
other and any instrument required or permitted to be tendered or delivered by either Party
5
to the other may be so given, tendered or delivered, as the case may be, by depositing the
same in any United States Post Office with postage prepaid, for transmission by certified
zn
or registered mail, addressed to the Party, or personally delivered to the Party, at the
address designated below. Changes in such designation may be made by notice similarly
given.
11.2 All written notices or questions shall be directed as follows:
To City: ELECTRIC UTILITY DIRECTOR
CITY OF LODI
1331 SOUTH HAM LANE
LODI CA 95242-3995
To Customer: ARKAY INDUSTRIES, INC.
1250 EAST THURMAN STREET
LODI CA 95240
Section 12. Non -waiver
12.1 None of the provisions of the Agreement shall be considered waived by either Parry except
when such waiver is given in writing. The failure of any Party at any time or times to
enforce any right or obligation with respect to any matter arising in connection with this
Agreement shall not constitute a waiver as to future enforcement of that right or obligation
or any right or obligation of the Agreement.
Section 13. Warrantv of Authoritv
13.1 Each of the Parties which has executed and delivered this Agreement represents and
warrants that it has agreed to be bound by all the terms, covenants, and conditions of this
Agreement and has acted with all the requisite capacity and authority and approval of its
governing body.
Section 14. Metering
14.1 Metering for billing purposes will be at the low voltage side of the transformer supplying
power to Customer's Facility.
Section 15. Entire Agreement
15.1 This document contains the entire agreement between the Parties and as to the matters
addressed by this document. It shall supercede any previous written agreements between
these parties. Any inconsitent prior or contemporaneous oral agreement or understandings
are void and shall not be used to modify this written Agreement.
IN WITNESS THEREOF, the Parties have caused this Agreement to be executed by their duly
authorized officers and their seal to be affixed, as of the day and year herein written.
CITY OF LODI, a Municipal Corporation
H. Dixon Flynn, City Manager
ATTEST:
":cc M. Reimche, City Clef`
APPROVED AS TO FORM:
Q
Randall A. Hays, Ci4 Attorney
Name
Date
Date
p -a7-97
Date
ARKAY LNTDUSTRIES, INC.
8
Date