HomeMy WebLinkAboutResolutions - No. 92-133RESOLUTION NO. 92-133
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A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING EXECUTION OF THE
COMBUSTION TURBINE PROJECT NUMBER TWO
THIRD -PHASE AGREEMENT
WHEREAS, the Northern California Power Agency (NCPA) has
evaluated the possible construction of a 49 -megawatt rated, highly
efficient, combustion turbine generation facility to be located in
Lodi, California; and
WHEREAS, the results have been positive and the project has
reached the state of development where each participating NCPA member,
including the City of Lodi, must make its determination whether or not
to participate further in the project; and
WHEREAS, the NCPA Third -Phase Agreement providing for NCPA member
participation in the construction, operation and financing of the
project and associated rights and obligations has been drafted; and
WHEREAS, NCPA Counsel and the NCPA Commission have reviewed the
Third -Phase Agreement and recommend its approval by the participants;
and
WHEREAS, the Electric Department's review of this matter
indicates that the participation level should be 39.5 percent, which
translates into approximately 20 megawatts.
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby
authorizes a 39.5 percent participation in the Combustion Turbine
Project Number Two and approves the NCPA Third -Phase Agreement.
BE IT FURTHER RESOLVED that the City Manager is authorized to
execute the Combustion Turbine Project Number Two Agreement.
Dated: August 5, 1992
I hereby certify that Resolution No. 92-133 was passed and
adopted by the Lodi City Council in a regular meeting held August 5,
1992 by the following vote:
Ayes: Council Members - Hinchman, Sieglock, Snider and
Pinkerton (Mayor)
Noes: Council Members - None
Absent: Council Members - None
Abstain: Council Members - Pennino
W
Alice M.
City Clerk
RES92133/TXTA.02J
AGREEMENT FOR CONSTRUCTION, OPERATION AND FINANCING
OF COMBUSTION TURBINE PROJECT NUMBER TWO
Dated as of August 5 , 1992
By and Among
NORTHERN CALIFORNIA POWER AGENCY
and
CITY OF ALAMEDA
CITY OF LODI
CITY OF LOMPOC
CITY OF ROSEVILLE
IA 1-9239.6 4 t 009-2-FJC-0&05l92
TABLE OF CONTENTS
Section
Title
Paae
1.
Definitions . . . . . . . . . . . . . . . . .
. . . 1
2.
Purpose . . . . . . . . . . . . . . . . . . .
. . . 4
3.
Construction and Financing of the Project . .
. . . 4
4.
Obligation to Make Project Capacity and
Energy Available . . . . . . . . . . . . . .
. . . 5
5.
Rates and Charges . . . . . . . . . . . . . .
. . . 5
6.
Budgets and Billing Statements . . . . . . .
. . . 7
7.
Obligations in the Event of Default . . . . .
. . . 7
8.
Transfers, Sales and Assignments . . . . . .
. . . 9
9.
Surplus Capacity and Energy . . . . . . . . .
. . . 9
10.
Insurance and Indemnification . . . . . . . .
. . . 10
il.
Project Participant Direction and Review . .
. . . 10
12.
Term . . . . . . . . . . . . . . . . . . ....
. . 11
13.
Termination and Amendments . . . . . . . . .
. . . 12
14.
Member Service Agreement . . . . . . . . . .
. . . 12
15.
Second Phase Agreement . . . . . . . . . . .
. . . 12
16.
Conditional Repayment to Project
Participants . . . . . . . . . . . . . . . .
. . . 12
17.
Tax Covenant . . . . . . . . . . . . . . . .
. . . 13
18.
Notices . . . . . . . . . . . . . . . . . . .
. . . 13
19.
Records and Accounts . . . . . . . . . . . .
. . . 13
20.
Reports to Other Agencies . . . . . . . . . .
. . . 14
21.
Reports to Project Participants . . . . . . .
. . . 14
22.
Headings . . . . . . . . . . . . . . . . . .
. . . 14
23.
Opinions of Counsel . . . . . . . . . . . . .
. . . 14
24.
Construction . . . . . . . . . . . . . . . .
. . . 14
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25. Severability . . . . . . . . . . . . . . . . . . . 14
26. Counterparts . . . . . . . . . . . . . . . . . . . 14
APPENDIX A - Schedule of Project Participation
Percentages . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B - Form of Opinion of Counsel . . . . . . . . . . . B-1
L A 1-9239.6 ii . 41009-2•FSG05/05/92
LAI -9' 9.6 41009 -2 -PIC -03105193
AGREEMENT FOR CONSTRUCTION, OPERATION AND FINANCING
OF COMBUSTION TURBINE PROJECT NUMBER TWO
This Agreement, dated as of August 5 , 1992, by and
among Northern California Power Agency, a joint powers agency of
the State of California (hereinafter called "NCPA") and the NCPA
members executing this Agreement (collectively, the "Project
Participants" and, individually, a "Project Participant"),
WITNESSETH:
WHEREAS, NCPA proposes to acquire and construct or
cause to be acquired and constructed, and to operate or cause to
be operated, the Project (capitalized terms used herein shall
have the meanings given such terms in Section 1 hereof) as
described herein; and
WHEREAS, NCPA and certain of its members entered into
an
It for Financing of Planning and Development
Activities for Construction of Combustion Turbine Project No.
Two" dated as of July 23, 1990, providing for the financing of
certain planning and development activities in connection with
the Project (said Agreement, as it may be amended and
supplemented from time to time, being hereinafter called the
"Second Phase Agreement"); and
WHEREAS, this Agreement is the "Third Phase Agreement"
contemplated in the Second Phase Agreement; and
WHEREAS, NCPA and its members have entered into one of
three Member Service Agreements, effective February 12, 1981
(said Agreements, as they may be amended and supplemented from
time to time, and any successor agreements such as the Facilities
Agreement, being hereinafter called the "Member Service
Agreement"), which provide for services which NCPA shall perform
for its members, and for the provisions to be contained in second
and third phase agreements, such as the Second Phase Agreement
and this Agreement; and
WHEREAS, NCPA and the Project Participants now wish to
enter into this Agreement to provide further for the
construction, operation and financing of the Project, the sale by
NCPA of capacity and energy of the Project to the Project
Participants, and the security for the Bonds to be issued to
finance the Project;
NOW THEREFORE, the parties hereto do agree as follows:
1. Definitions. The following terms shall, for all
purposes of this Agreement, have the following meanings:
1aI_9n9.6 41009-2-FJc-05105r9,-7
(a) "Bond Resolution" means an instrument providing
for the issuance of Bonds and the terms thereof and may be a
resolution, indenture of trust, order, agreement, or other
instrument.
(b) "Bonds" means bonds, notes or other evidences of
indebtedness of NCPA (including, without limitation, contracts
relating to letters of credit or other credit enhancement
devises, interest rate swap and other agreements relating to
interest rate or other cash-flow exchanges such as those
authorized by the Public Finance Contracts Law, and other
contracts which are characterized as debt by NCPA at or prior to
the execution thereof) issued to finance or refinance the Project
and to finance or refinance any contributions -in -aid -of -
construction for construction necessary for the adjacent electric
system to interconnect with the Project and includes additional
bonds to complete the Project. For purposes of this Agreement,
Bonds shall be considered outstanding as of any date if such
Bonds have not been paid or if provision for the payment of the
principal, premium, if any, and interest on such Bonds has not
been made in accordance with the Bond Resolution pursuant to
which such Bonds have been authorized.
(c) "Code" means the Internal Revenue Code of 1986, as
amended, and the applicable regulations thereunder and shall
include any successors to such statute and regulations.
(d) "Commission" means the Commission which.is the
governing body of NCPA established pursuant to the Joint Powers
Agreement.
(e) "Commissioner" means the representative of a
member of NCPA on the Commission and shall include any alternate
designated by such member while acting as the member's
representative on the Commission.
(f) "Debt Service" means, with respect to any period,
the aggregate of the amounts required by each Bond Resolution to
be paid during said period into any fund or account created by
the Bond Resolution 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
Bonds from time to time outstanding.
(g) "Electric System" means, with respect to each
Project Participant, all properties and assets, real and
personal, tangible and intangible, of the Project Participant now
or hereafter existing, used or pertaining to the generation,
transmission, transformation, distribution and sale of electric
capacity and energy, ..including all additions, extensions,
expansions, improvements and betterments thereto and equipment
thereof; provided, however, that to the extent the Project
Participant is not the sole owner or an asset or property or to
LAl-9239.6 2 41009-2-FIC-05IM92
the extent that an asset or property is used in part for the
above described electric purposes, only the Project Participant's
ownership interest in such asset or property or only the part of
the asset or property so used for electric purposes shall be
considered to be part of its Electric System.
(h) "Facilities Agreement" means the Interim
Facilities Agreement, dated as of June 27, 1991, among the cities
of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto,
Roseville, Santa Clara and Ukiah, the Plumas-Sierra Rural
Electric Cooperative and the Turlock Irrigation District, as
amended and supplemented from time to time, and includes any
successor agreement.
(i) "Fiscal Year" means the then current fiscal year
of NCPA, which on the date of this Agreement is the period from
July 1 to the next succeeding June 30.
(j) "Full Operation Date" means the first date when
the Project is capable of producing and delivering capacity and
energy in commercial operation, as shall be determined by the
Commission of NCPA in accordance with prudent utility practices.
(k) "Interconnection Agreement" means the
Interconnection Agreement among Pacific Gas and Electric Company,
NCPA, and certain members of NCPA, as the same may be amended and
supplemented from time to time, and including any successor
agreement.
(1) "Joint Powers Agreement" means the Joint Exercise
of Powers Agreement - Northern California Power Agency, dated as
of July 19, 1968, as amended, among the cities of Alameda, Biggs,
Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville,
Santa Clara and Ukiah, the Plumas-Sierra Rural Electric
Cooperative, the Turlock Irrigation District and the Truckee
Donner Public Utility District, establishing NCPA.
(m) "Project" means a combustion turbine, electric
generating resource with a nameplate capacity of approximately 49
megawatts located in the City of Lodi, California and related
facilities and interests, including electric facilities necessary
for the Project to interconnect with the adjacent electric system
and all rights, properties and improvements necessary therefor,
including fuel and water facilities and resources and rights
thereto or therein, and capital improvements thereto (including
replacement of the generating unit presently included in the
Project but excluding any additional generating units unless
specifically approved by each of the Project Participants) that
may be constructed from time to time.
(n) "Project Participation Percentage" means, with
respect to each Project Participant, the percentage of the total
capacity of the Project, and the energy associated with such
LAI -9M9.6 3 41009 -2 -EJC -0105192
capacity, to which such Project Participant is entitled pursuant
to the terms of this Agreement. The Project Participation
Percentage for each Project participant shall be the percentage
set forth opposite the name of such Project Participant in
Appendix A hereto, as such Appendix A shall be amended from time
to time in.accordance with this Agreement.
(o) "Project Participant" means each of the NCPA
members executing this Agreement, together in each case with
their respective successors or assigns.
(p) "Public Finance Contracts Law" means Chapter 12 of
Division 6 of Title 1 of the Government Code of the State of
California, as the same may be amended and supplemented from time
to time, and shall include any successors to such statute.
(q) "Revenues" means, with respect to each Project
Participant, all income, rents, rates, fees, charges, and other
moneys derived by the Project Participant from the ownership or
operation of its Electric System, including, without limiting the
generality of the foregoing, (i) all income, rents, rates, fees,
charges or other moneys derived from the sale, furnishing, and
supplying of electric capacity and energy and other services,
facilities, and commodities sold, furnished, or supplied through
the facilities of its Electric System, (ii) the earnings on and
income derived from the investment of such income, rents, rates,
fees, charges or other moneys to the extent that the use of such
earnings and income is limited by or pursuant to law to its
Electric System and (iii) the proceeds derived by the Project
Participant directly or indirectly from the sale, lease or other
disposition of all or apart of the Electric System as permitted
hereby, but the term "Revenues" shall not include (y) customers'
deposits or any other deposits subject to refund until such
deposits have become the property of the Project Participant or
(z) contributions from customers for the payment of costs of
construction of facilities to serve them.
(r) "Trustee" means the entity or entities designated
by NCPA as the Trustee under any Bond Resolution.
2. Purpose. The purpose of this Agreement is to
provide the terms and conditions of the financing, construction_
and operation of the Project by NCPA and the sale by NCPA, and
the purchase by the Project Participants, of the capacity and
associated energy of the Project.
3. Construction and Financing of the Project. NCPA
will use its best efforts to cause or accomplish the construction
and financing of the Project, including obtaining all necessary
authority and rights therefor and performing all things necessary
or convenient in connection therewith. Each Project Participant
will cooperate with NCPA to that end and will give any and all
clarifying assurances by executing supplemental agreements that
LAI -97.39.6 4 41009-2-FJc-09109,92
may be requested by NCPA's legal counsel to make the obligations
herein more specific, to satisfy legal requirements and provide
security for the Bonds.
4. Obligation to Make Project Capacity and Energy
Available. (a) Pursuant to the terms of this Agreement, NCPA
shall make available or cause to be made available, and each
Project Participant shall be entitled to receive, such Project
Participant's Project Participation Percentage of the capacity of
the Project and the energy associated with such capacity.
Subject to the terms of this Agreement, and any directions of the
Project Participants pursuant to Section 11 hereof, NCPA shall
operate the Project, or cause the Project to be operated, in
accordance with the principles contained in the Facilities
Agreement, as the same may be amended and supplemented from time
to time.
(b) NCPA will remain available to do all things
necessary and practical to deliver or cause to be delivered to or
for each Project Participant, such Project Participant's Project
Participation Percentage, of the capacity of the Project and the
energy related thereo. Such delivery shall be at points mutually
agreed upon by NCPA and each Project Participant. Such agreement
shall not be unreasonably withheld by either NCPA or a Project
Participant. NCPA will remain available to make or cause to be
made all necessary and practical arrangements for transmission of
such capacity and energy to such points over the lines of NCPA or
others. Wheeling or delivery services by NCPA with respect to
the delivery of Project energy to the Project Participants shall
be as provided in service schedules as set forth in Article III
of the Member Service Agreement applicable to the respective
Project Participants.
5. Rates and Charges. (a) Commencing on the Full
Operation Date, NCPA shall fix charges to the Project
Participants under this Agreement in accordance with this Section
to produce revenues to NCPA for capacity and energy of the
Project equal to the amounts needed by NCPA to meet the total
costs of NCPA to provide capacity and energy from the Project,
including but not limited to: (i) Debt Service on the Bonds and
other payments required under the Bond Resolutions other than the
payments described in (ii) and (iii) below; (ii) any other
operation, maintenance and replacement costs of the Project,
including the cost of fuel, a reasonable reserve for
contingencies, and all other Project costs not described in (i)
above or (iii) below; and (iii) the costs and expenses of NCPA
for delivering Project capacity and energy pursuant to Section
4(b) hereof. NCPA shall fix charges to the Project Participants -
to produce revenues to NCPA from the Project to meet the costs
described in (i) above based on Project Participation
Percentages. The costs described in (ii) above will be divided
between capacity charges and energy charges as provided in the
Facilities Agreement. Capacity charges for the costs described
LAI -9239.6 5 11009-2-PJc-05/05/92
in (ii) above shall be based on Project Participation Percentages
applied to such costs. Energy charges for the costs described in
(ii) above shall be based on actual energy deliveries to each
Project Participant from the Project. If NCPA delivers Project
capacity and energy to or for any Project Participant pursuant to
Section 4(b) hereof, NCPA shall fix charges to each such Project
Participant so that such Project Participant shall pay only the
costs described in (iii) above which are attributable to such
Project Participant.
(b) To the extent that the funds provided under
Section 5(a) of this Agreement at any time and for any reason,
including without limitation that the Full Operation Date has not
occurred, are not sufficient for such purposes, each Project
Participant shall pay to NCPA an amount equal to such Project
Participant's Project Participation Percentage of the Debt
Service on the Bonds and all other payments required to be made
under the Bond Resolutions. The obligations under this Section
5(b) are incurred by each Project Participant for the benefit of
future holders of Bonds, shall commence and continue to exist and
be honored by the Project Participants whether or not capacity
and energy from the Project is made available or furnished to
them at all times or at all and constitutes an obligation to pay
all such costs whether or not capacity and energy from the
Project is made available or delivered or provided.
(c) Notwithstanding that NCPA may utilize services
under the Interconnection Agreement in complying with Section
4(b) hereof, any payments required to be made by, or costs
incurred by, NCPA or a Project Participant pursuant to Section
9.5 of the Interconnection Agreement shall not be made under this
Agreement.
(d) Each Project Participant is obligated to make
payments under this Agreement solely from the Revenues of, and as
an operating expense of, its Electric System. Nothing herein
shall be construed as prohibiting any Project Participant from
using any other funds and revenues for purposes of satisfying any
provisions of this Agreement.
(e) Each Project Participant shall make payments under
this Agreement whether or not the Project or any part thereof is
completed, operable, operating or retired and notwithstanding the
suspension, interruption, interference, reduction or curtailment
of Project output or the Project capacity and energy contracted
for in whole or in part for any reason whatsoever. Such payments
are not subject to any reduction, whether by offset or otherwise,
and are not conditioned upon performance by NCPA or any other
Project Participant under this Agreement or any other agreement.
(f) No Project Participant shall be liable under this
Agreement for the obligations of any other Project Participant.
Each Project Participant shall be solely responsible and liable
LA 1-9239.6 6 41009 -2 -EJC -05/05!92
for performance of its obligations under this Agreement and for
the maintenance and operation of its respective Electric System.
The obligation of each Project Participant to make payments under
this Agreement is a several obligation and not a joint obligation
with those of the other Project Participants.
(g) Each Project Participant covenants and agrees that
it shall, at all times, operate the properties of its Electric
System and the business in connection therewith in an efficient
manner and at reasonable cost and shall maintain its Electric
System in good repair, working order and condition.
(h) Each Project Participant covenants and agrees to
establish and collect fees and charges for electric capacity and
energy furnished through facilities of its Electric System
sufficient to provide Revenues adequate to meet its obligations
under this Agreement and to pay any and all other amounts payable
from or constituting a charge, lien, or encumbrance upon any or
all such Revenues; provided that the obligation of the Project
Participant to make payments under this Section 5 shall not
constitute a legal or equitable pledge, lien or encumbrance upon
any property of the Project Participant or upon any of its
income, receipts or revenues; and further provided that neither
the Project Participants nor the State of California or any
agency or political subdivision thereof shall ever be obligated
or compelled to levy ad valorem taxes to make the payments
provided for in this Section 5.
6. Budgets and Billing Statements. (a) Prior to the
beginning of each Fiscal Year, the Commission of NCPA will adopt
an annual budget for such Fiscal Year for costs and expenses
relating to the Project which may be part of a multi-year budget
containing such information. NCPA shall promptly give notice to
each Project Participant of its projected share of such costs and
expenses.
(b) NCPA shall prepare and send out billing statements
for amounts payable by the Project Participants pursuant to
Section 5(a) of this Agreement as provided in the Facilities
Agreement and such billing statements shall be subject to the
applicable terms and conditions of the Facilities Agreement;
provided, however, that, notwithstanding anything herein or in
the Facilities Agreement to the contrary, NCPA shall bill each
Project Participant for amounts due pursuant to Section 5(a) of
this Agreement at such times and in such amounts that NCPA will
receive moneys in time to make all payments required by the Bond
Resolutions when due.
7. Obligations in the Event of Default. (a) Upon the
failure of any Project Participant to make any payment in full
when due under this Agreement, NCPA shall make written demand
upon such Project Participant, and if said failure is not
LA 1-9239.6 7 11009-2-Ec-05105192
remedied within thirty (30) days from the date of such demand,
such failure shall constitute a default at the
expiration of such thirty (30) day period. Notice of such demand
shall be provided to each other Project Participant by NCPA.
(b) Upon the failure of any Project Participant to
perform any of its obligations -hereunder, except for the
obligation to make any payment in full when due under this
Agreement, NCPA shall give such Project Participant written
notice of such failure and if such failure is not remedied within
sixty (60) days from the date of such notice, such failure shall
constitute a default at the expiration of such sixty (60) day
period. A copy of any such notice shall be provided to each
other Project Participant by NCPA.
(c) In addition to the rights and remedies available
to NCPA pursuant to subsection (d) of this Section, NCPA may
protect and enforce its rights hereunder by suit or suits in
equity or at law, whether for the specific performance of any
covenant herein or for damages or in aid of the execution of any
power granted herein or any other remedy available under any
provision of applicable law. No remedy by the terms of this
Agreement conferred upon or reserved to NCPA is intended to be
exclusive of any other remedy, but each and every such remedy
shall be cumulative and shall be in addition to every other
remedy given under this Agreement or existing at law or in equity
or by statute on or after the effective date of this Agreement.
(d) Upon the failure of any Project Participant to
make any payment which failure constitutes a default under
subsection (a) of this Section, each Project Participant
severally agrees that, (i) the Project Participation Percentage
of each nondefaulting Project Participant shall be automatically
increased by a pro rata share (based on the Project Participation
Percentages of all nondefaulting Project Participants) of the
defaulting Project Participant's Project Entitlement Percentage
for the remaining term of this Agreement and (ii) the defaulting
Project Participant's Project Participation Percentage shall be
reduced correspondingly; provided, however, that the sum of such
increases for any nondefaulting Project Participant shall not
exceed, without written consent of such nondefaulting Project
Participant, an accumulated maximum of twenty-five percent (25%)
of the nondefaulting Project Participant's original Project
Participation Percentage, as set forth in Appendix A hereto as
such Appendix A may be revised pursuant to subsection (c) of
Section 12 of this Agreement.
(e) Each nondefaulting Project Participant which has
its Project Participation Percentage increased pursuant to
subsection (d) of this Section, shall be entitled to the rights
which the defaulting Project Participant loses upon the default
with respect to such Project Participation Percentage and shall
assume, subject to subsection (f) of this Section, all of the
L UI -9.39.6 8 41009 -2 -FIC -W/05/92
obligations of the defaulting Project Participant with respect to
such Project Participation Percentage hereunder. Increases in
the Project Participation Percentages of the nondefaulting
Project Participants shall be applicable to any payments due and
not paid by the defaulting Project Participant at the time of the
increase and all subsequent payments due and not paid by the
defaulting Project Participant.
(f) If any Project Participant's Project Participation
Percentage is,increased pursuant to subsection (d) of this
Section, the defaulting Project Participant shall not be relieved
of any of its obligations or liabilities under this Agreement and
each Project Participant whose Project Participation Percentage
is so increased shall have a right of recovery from the
defaulting Project Participant to the extent of any damages
sustained as a result of such default and the respective increase
in Project Participation Percentage caused by the defaulting
Project Participant.
(g) NCPA may pledge and assign this Agreement and any
or all of its right, title and interest in, to and under this
Agreement, including without limitation NCPA's rights to receive
all or any portion of the payments hereunder from Project
Participants, to secure the payment of Bonds. Notwithstanding
any other provision of this Agreement, upon notice from NCPA each
Project Participant shall make payments due by it hereunder
directly to a Trustee for Bonds specified in such notice. Such
pledge and assignment by NCPA shall be made effective for such
time shall be provided in the applicable Bond Resolution.
(h) In addition to any rights which a Trustee may have
as an assignee pursuant to subsection (g) of this Section, each
Trustee shall be a third party beneficiary hereof and shall have
the right as a third party beneficiary to initiate and maintain
suit to enforce this Agreement to the extent provided in the
applicable Bond Resolution.
8. Transfers, Sales and Assignments. Each Project
Participant has full and unfettered rights to make transfers,
sales, assignments and exchanges (collectively "transfers") of
such Project Participant's Project Participation Percentage of
Project capacity and/or the energy associated therewith and
rights thereto except as expressly provided otherwise in the
Facilities Agreement and this Agreement. Except as provided in
subsection (b) of Section 9 of this Agreement, such transfers
shall not affect any of the obligations of the Project
Participant under this Agreement.
9. Surplus Capacity and Energy. (a) When a Project
Participant has surplus capacity and/or energy from the Project,
NCPA shall, if requested by such Project Participant to do so,
use its best efforts to sell such surplus capacity and/or energy
on behalf of such Project Participant; provided, however, other
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Project Participants shall have a right of first refusal to such
surplus capacity and/or energy in proportion to their respective
Project Participation Percentages, and other NCPA members which
are parties to the Facilities Agreement shall have the second
right of refusal to such surplus capacity and/or energy, and
other NCPA members shall have the third right of refusal to such
surplus capacity and/or energy. The sales price for any such
surplus capacity and/or energy shall be as determined by the
buyer and seller of such surplus capacity and/or energy.
(b) Notwithstanding the sale by NCPA of all or a
portion of a Project Participant's surplus Project capacity
and/or energy, the Project Participant shall remain liable to
NCPA to pay the full amount of its share of Project costs,
determined as provided in this Agreement,' -a&--.:4 such sale had not
been made, except that_such liability shall be --reduced to the
extent that NCPA shall.receive payment from the purchaser of such
surplus Project capacity and/or energy....
10. Insurance and Indemnification. NCPA shall obtain
and continue in force, or cause to be obtained and continued in
force, property -insurance for the Project and liability insurance
with respect to the Project, covering such risks (including
earthquakes), in such amounts and with such deductibles as shall
be determined by NCPA. NCPA shall indemnify and hold harmless
each Project Participant from any liability for personal injury
or property damage resulting from any accident or occurrence
arising out of or in any way related to the construction or
operation of the Project; provided, however, that such
indemnification by NCPA shall be limited to the extent the
proceeds of insurance and other moneys are available to NCPA for
such purposes.
11. Project Participant Direction and Review.
(a) NCPA shall comply with all lawful directions of the Project
Participants with respect to the Project, while not stayed or
nullified, to the fullest extent authorized by law and to the
extent such directions are not inconsistent with, and do not
impair NCPA's ability to perform its obligations under, any Bond
Resolution.
(b) While NCPA shall own, operate and maintain the
Project in accordance with this Agreement, in recognition of the
Project Participants' interest in the Project, NCPA agrees that
it shall take no action with respect to the Project pursuant to
the authorization or approval of its Commission if a Commissioner
representing a Project Participant requests that such
authorization or approval be based upon Project Participation
Percentages and such authorization or approval does not receive
the affirmative vote of Commissioners representing Project
Participants then having a combined Project Participation
Percentage of at least 650.
LAI -M9.6 10 41009-2-F1G05/05192
(c) Any Project Participant may veto any authorization
or approval of the Commission relating to the Project that was
not taken by a 65% or greater Project Participation Percentage
vote within 10 days following the mailing of notice of such
Commission action, by delivering written notice of veto to NCPA,
unless at a meeting of the Commission called for the purpose of
considering the veto and held within 30 days after delivery of
such written notice of veto, the Commissioners representing
Project Participants having a combined Project Participation
Percentage of at least 650 at such time shall vote to override
the veto.
(d) The 65% of Project Participation Percentage
specified in subsections (b) and (c) of this Section shall be
reduced by the amount that the Project Participation Percentage
of any Project Participant.shall exceed 35%r but such 65% shall
not be reduced below --F�I 4 rnAjaR i t'}/ ',N bvT.0 cE.f(-.
12. Term. (a) Subject to subsection (b) of this
Section, this Agreement shall take effect when it has been duly
executed and delivered to NCPA by Project Participants the
initial Project Participation Percentages of which, in the
aggregate, equal one hundred percent (1000).
(b) Notwithstanding the provisions of subsection (a)
of this Section, it is agreed by all signatories hereto that in
consideration for NCPA's signature hereto, and for its commitment
to use its best efforts to obtain the signatures of other NCPA
members hereto, each Project Participant which executes and
delivers this Agreement to NCPA prior to the effectiveness of
this Agreement agress not to take any action to withdraw from
this Agreement or otherwise affect its status as a Project
Participant hereunder before July 23, 1992. Upon the
effectiveness of this Agreement pursuant to subsection (a) of
this Section, no Project Participant shall have any right to
withdraw from this Agreement or otherwise affect its status as a
Project Participant hereunder.
(c) The term of this Agreement shall continue until
the later of (i) the expiration of the useful life of the Project
or (ii) the date on which no Bonds remain outstanding; provided,
however, that in no event shall the term of this Agreement with
NCPA as a party extend beyond the date of termination of NCPA.
in the event of the termination of the existence of NCPA it is
the intent of the Project Participants that this Agreement be
construed as an agreement among the Project Participants.
(d) Upon the termination of this Agreement and at the -
request of any Project Participant, all Project Participants
desiring to partake shall be entitled to an equitable
distribution of, or an equitable ownership interest in, the
Project, based upon their respective Project Participation
Percentages, upon the payment to NCPA of the sum of one dollar.
LA 1-9739.6 11 41009.2-FJc-05105;92
13. Termination and Amendments. (a) This Agreement
shall not be subject to termination by any party under any
circumstances prior to the term specified in subsection (c) of
Section 12 hereof, whether based upon the default of any other
party under this Agreement, the release of any party of any of
its obligations hereunder or for any other cause whatsoever.
(b) So long as any Bonds are outstanding, this
Agreement shall not be amended, modified or otherwise changed or
rescinded by agreement of the parties without the consent of each
Trustee for Bonds whose consent is required under the applicable
Bond Resolution; provided that no amendment to Appendix A hereto
pursuant to subsection (d) of Section 7 hereof shall require the
consent of any Trustee to become effective.
14. Member Service Agreement. This Agreement is a
service schedule and a third phase agreement attached to and
incorporated into the Member Service Agreement. This Agreement
shall be construed in accordance with the more specific terms
governing the general relationship between the NCPA and its
members set out in the Member Service Agreement in connection
with the Project.
15. Second Phase Agreement. The Second Phase
Agreement, as it relates to the Project Participants, is
superseded by this Agreement.
16. Conditional Repayment to Project Participants.
All payments and advances heretofore made by Project Participants
with respect to the Project, excluding interest paid on
delinquent payments, shall be repaid to each of the Project
Participants making such payments and advances out of the
proceeds of the first issuance of Bonds which can economically
provide therefor, or as and when there are sufficient funds
available from partial sale of Bonds, if Bonds are issued to
finance the Project. Such reimbursements shall be made within 60
days following the sale of any Bonds and shall include interest
computed monthly at a rate equivalent to the end of the month
reference rate of the Bank of America NT&SA. Any interest due
under the third paragraph of section 1 of the Second Phase
Agreement and unpaid shall be deemed due pursuant to this Section
16 and deducted from the repayment. If NCPA determines to
complete the Project, but is not successful in obtaining all
necessary approvals and financing therefor, there shall be no
reimbursement except out of unused Project funds including those
then in the working capital fund, along with all other receipts
to which NCPA is entitled in connection with the Project.
17. Tax Covenant. Notwithstanding any other provision
of this Agreement, neither NCPA nor any Project Participant shall
transfer, assign, sell or exchange any portion of the capacity
and/or energy of the Project, or any other interest in the
Project or the capacity and/or energy thereof, directly or
L11-9239.6 12 31009-.-FJC-05!05/91
indirectly, in any manner, or shall take, or to the extent it can
control the same permit to be taken, any other action or actions,
which would adversely affect the exclusion of the interest on any
of the Bonds from gross income for federal income tax purposes
under Section 103 of the Code, including without limitation, by
reason of classification of any of such Bonds as a "private
activity bond" within the meaning of said Code.
18. Notices. Any notice, demand or request required
or authorized by this Agreement to be given shall be in writing,
and shall either be personally delivered to the representative of
the Project Participant on the Commission, if to a Project
Participant, or to the General Manager of NCPA, if to NCPA, or
transmitted by telecopy, facsimile or other electronic means to
NCPA or the Project Participant at the address shown on the
signature pages hereof addressed to such parties. The designated
party and any such address may be changed at any time by written
notice given to the Secretary of the Commission who shall
thereupon give written notice of such change to each Project
Participant. Any such notice, demand or request shall be deemed
to be given when so delivered.
19. Records and Accounts. (a) NCPA shall keep
accurate records and accounts for the Project, for each
identifiable service which it supplies to any Project Participant
through this Agreement and for other transactions of NCPA related
to the Project. Such records and accounts shall be kept in
general accordance with the Uniform System of Accounts.Prescribed
for Public Utilities and Licensees Subject to the Provisions of
the Federal Power Act (18 CFR 101), as prescribed by the Federal
Energy Regulatory Commission, as amended from time to time. NCPA
shall cause those records and accounts to be audited annually by
a firm of independent certified public accountants experienced in
electric utility accounting and of national reputation. All
public records and accounts shall be made available to the
Project Participants for inspection at any reasonable time. A
copy of the annual auditor's report shall be submitted to the
Project Participants not later than four months after the end of
each Fiscal Year. All records are subject to audit at the
request of any Project Participant provided that such audits
shall be conducted at the expense of the Project Participant(s)
requesting them.
20. Reports to Other Agencies. NCPA shall submit such
reports and records which are required by the California Energy
Commission, the Federal Energy Regulatory Commission or any other
local, state or federal agencies having jurisdiction in
connection with the Project.
21. Reports to Project Participants. Following the
Full Operation Date NCPA shall prepare and issue to the Project
Participants the following reports monthly:
LA 1-9239.6 13 31009 -2 -VC -05105192
(a) Project Operating Reports.
(b) Project Financial Operating Statement.
(c) Status of the Project budget.
(d) Such additional reports as are requested by the
Project Participants.
22. Headings. The headings of the sections hereof are
inserted for convenience only and shall not be deemed a part of
this Agreement.
23. opinions of Counsel. Each Project Participant
shall, if requested by NCPA in connection with the issuance of
any Bonds, cause an opinion or opinions in substantially the form
attached hereto as Appendix B to be delivered by an attorney or
firm of attorneys acting as counsel for such Project Participant.
24..• Construction. This Agreement shall be construed
in accordance with the laws of the State of California.
25. Severability. If any one or more of the covenants
or agreements provided in this Agreement to be performed should
be determined to be invalid or contrary to law, such covenant or
agreement shall be deemed and construed to be severable from the
remaining covenants and agreements herein contained and shall in
no way affect the validity of the remaining provisions.of this
Agreement.
26. Counterparts. This Agreement may be executed in
any number of counterparts, and each executed counterpart shall
have the same force and effect as an original instrument and as
if NCPA and all the Project Participants to all of the
counterparts had signed the same instrument. Any signature page
of this Agreement may be detached from any counterpart of this
Agreement without impairing the legal effect of any signatures
thereon, and may be attached to another counterpart of this
Agreement identical in form thereto but having attached to it one
or more signature pages.
IN WITNESS WHEREOF, each Project Participant has
executed a counterpart of this Agreement with the approval of its
governing body, and represents and warrants that the Project
Participant has all requisite authority, and has duly agreed to
be bound by all of the terms and conditions of this Agreement,
and NCPA has executed each counterpart of this Agreement in
accordance with the authorization of its Commission.
NORTHERN CALIFORNIA POWER
AGENCY
ADDRESSES FOR NOTICES
Northern California Power Agency
180 Cirby Way
LA 1-9739.6 14 4t0o9-2-FJc-W105/9'-)
By
And
Roseville, CA 95678
Attention: General Manager
Telecopy: (916) 783-7693
CITY OF
ALAMEDA
City of Alameda
Bureau of Electricity
By
2000 Grand Avenue
Alameda, CA 94501
And
Attention:
Telecopy:
CITY O LODI
City of Lodi
221 West Pine Street
BLodi,
CA 95241
1 yger,
TnCMaS A. PeUErson
Attention:
And
Telecopy:
i y
L.CITY
e ice .fiche
OF
LOMPOC
City of Lompoc
100 Civic Center Plaza
By
Lompoc, CA 93438
Attention:
And
Telecopy:
CITY OF
ROSEVILLE
City of Roseville
2090 Hilltop Circle
By
Roseville, CA 95678
Attention:
And
Telecopy:
LAI -9239.6 15 41009-2.FJc-05105190-)
SCHEDULE OF PROJECT PARTICIPATION PERCENTAGE
Project
Participant -
City of Alameda
City of Lodi
City of Lompoc
City of Roseville
TOTAL
APPENDIX A
Proj ect
Entitlement
Percentage
LAI -9239.6 A-1 41W9-2-FJc-osfos/9M.
CITY COUNCIL
JAMES W. PINKERTON, Mayor
PHILLIP A, PENNING
Mayor Pro Tempore
DAVID M. HINCHMAN
JACK A. SIEGLOCK
JOHN R. (Randy) SNIDER
July 31, 1992
CITY OF LODI
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 334-5634
FAX (209) 333-6795
Northern California Power Agency
180 Cirby Way
Roseville, California 95678
Ladies and Gentlemen:
THOMAS A. PETERSON
City Manager
ALICE M. REIMCHE
City Clerk
BOB McNATT
City Attorney
I am acting as counsel to the City of Lodi, a municipal corporation
(the "Project Participant"), under the Agreement for Construction,
Operation and Financing of Combustion Turbine Project Number Two, dated as
of July 23, 1990 (the "Agreement") among the Project Participant, Northern
California Power Agency (the "Agency") and certain other entities (the
"Project Participants"), and I have acted as counsel to the Project
Participant in connection with the matters referred to herein. As such
counsel, I have examined and am familiar with (i) those documents relating
to the existence, organization and operation of the Project Participant,
(ii) all necessary documentation of the Project Participant relating to the
authorization, execution and delivery of the Agreement, and (iii) an
executed counterpart of the Agreement.
Based upon the foregoing and an examination of law and such other
information, papers and documents as I deem necessary or advisable to
enable me to render this opinion, including the Constitution and laws of
the State of California, together with other governing instruments,
ordinances and public proceedings of the Project Participant, I am of the
opinion that:
1. The Project Participant is a municipal corporation, duly
created, organized and existing under the laws of the State of
California and duly qualified to furnish electric service within the
State of California.
2. The Project Participant has full legal right, power and
authority to enter into the Agreement and to carry out and
consummate all transactions contemplated thereby, and the Project
Participant has complied with the provisions of applicable law in all
matters relating to such transactions.
3. The Agreement has been duly authorized, executed and
delivered by the Project Participant, is in full force and effect as
to the Project Participant in accordance with its terms and, assuming
that the Agency has all the requisite power and authority, and has
taken all necessary action, to execute and deliver such Agreement,
constitutes the legal, valid and binding obligation of the Project
Participant enforceable in accordance with its terms.
4. Payments by the Project Participant under the Agreement
will constitute an operating expense of the Project Participant and
are to be made solely from the Revenues of its Electric System as
provided in Section 5(d) of the Agreement.
5. No approval, consent or authorization of any other
governmental or public agency, authority or person is required for
the execution and delivery by the Project Participant of the
Agreement, or the performance by the Project Participant of its
obligations thereunder.
6. The authorization, execution and delivery of the Agreement
and compliance with the provisions thereof will not conflict with or
constitute a breach of, or default under, any instrument relating to
the organization, existence or operation of the Project Participant,
or any commitment, agreement or other instrument to which the Project
Participant is a party or by which it or its property is bound or
affected, or any ruling, regulation, ordinance, judgment, order or
decree to which the Project Participant (or any of its officers in
their respective capacities as such) is subject or any provision of
the laws of the State of California relating to the Project
Participant or its affairs.
7. There is no action, suit, proceeding, inquiry or
investigation at law or in equity, or before any court, public board
or body, pending or, to my knowledge, threatened against or affecting
the Project Participant or any entity affiliated with the Project
Participant or any of its officers in their respective capacities as
such (nor to the best of my knowledge is there any basis therefor),
which questions the powers of the Project Participant referred to in
paragraph 2 above or the validity of the proceedings taken by the
Project Participant in connection with the authorization, execution
or delivery of the Agreement, or wherein any unfavorable decision,
ruling or finding would materially adversely affect the transactions
contemplated by the Agreement, or which, in any way, would adversely
affect the validity or enforceability of the Agreement.
The opinion expressed in paragraph 3 above is qualified to the extent
that the enforceability of the Agreement may be limited by any applicable
bankruptcy, insolvency, debt adjustment, moratorium, reorganization, other
similar laws affecting creditors, rights generally and to the availability
of any particular remedy.
This opinion is rendered only with respect to the laws of the State
of California and the United States of America, and is addressed only to
the Agency. No other person is entitled to rely on this opinion, nor may
you rely on it in connection with any transactions other than those
described herein.
Sincerely,
1 /T
BOB W. MCNATT
City Attorney
BM:vc