HomeMy WebLinkAboutResolutions - No. 2008-216RESOLUTION NO. 2008-216
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
THE CITY MANAGER TO EXECUTEAMENDMENT NO. 1 TO THE
SECOND PHASE AGREEMENT FOR FUNDING THE PLANNING AND
DEVELOPMENT ACTIVITIES OF THE LODI ENERGY CENTER
WHEREAS, Lodi is a member of the Northern California Power Agency ("NCPA")
and by way of City Council Resolution 2007-247 is a Project Participant in the Second
Phase Agreement (Agreement) for Funding the Planning and Development Activities of
the Lodi Energy Center (LEC); and
WHEREAS, on or about March 1, 2008, NCPA had attained 100% Project
subscription along with fully executed Agreements from all Project Participants including
Lodi; and
WHEREAS, the Project Participants met on March 6, 2008, and formed the
Project Participant Committee (PPC) as contemplated in the Agreement and such PPC
directed NCPA staff to commence Phase 2A Project activities; and
WHEREAS, on June 30, 2008, the PPC directed the NCPA LEC Project
Manager to commence Phase 2B activities on or about August 1,2008; and
WHEREAS, Project related air resources agency and CEC Application for
Certification (AFC) applications were submitted during August and September 2008,
respectively; and
WHEREAS, the Project Participants are aware that certain critical power
equipment, such as the gas and steam turbine components of the power island
assembly, require significant lead times for fabrication and delivery, and thus such
equipment must be ordered in a timely manner to support LEC's construction and
scheduled Commercial Operation Date of April 2012; and
WHEREAS, the Project Participants are additionally aware of the recent rapid
escalation trends of power generation construction and equipment costs and
consequently desire to control the delivered cost of certain LEC power island equipment
by making a deposit to secure a manufacturing schedule slot or taking other actions to
secure a known delivered cost for such equipment; and
WHEREAS, the Project Participants desire to amend the Phase 26 activities
described in the Agreement to provide for the timely delivery and cost certainty of critical
power island components through advanced equipment ordering, securing equipment,
manufacturing schedule, and/or pricing options, or other method in order to attain
delivery timing and cost certainty of critical LEC equipment; and
WHEREAS, the Parties desire to amend the Phase 2B activities described in the
Agreement to include the leasing of any needed warehouse and administrative facilities
located at or proximate to the proposed Project site in order to provide for timely and
adequate staff work space and secure equipment and materials storage; and
WHEREAS, in order to fund the expected cost to attain power island equipment
delivery timing and pricing certainty, the Project Participants are willing to increase the
Phase 2B portion of the Agreement budget by up to $15 million, for a total Phase 2B
budget amount of $24 million ($9 million currently approved plus the proposed added
$15 million), and thus resulting in a revised combined LEC Phase 2A and 2B budget of
$40 million ($16 million for Phase 2A plus the proposed revised Phase 2B amount of
$24 million) of which Lodi will be responsiblefor its proportionateshare; and
WHEREAS, Lodi acknowledges that expenditures/deposits/option premiums
incurred to attain greater equipment delivery and pricing certainty may not be
refundable, in whole or in part, in the event that the LEC is not ultimately financed or
constructed: and
WHEREAS, Lodi received from NCPA a 30 -day advance written notice to all
Project Participants by memorandum dated August 22, 2008, of its intent to seek NCPA
Commission approval to execute LEC Amendment No. 1 at NCPA's September 26,
2008, Commission meeting; and
WHEREAS, the NCPA Commission did approve execution of the LEC
Amendment No. 1 at NCPA's September 26, 2008, Commission meeting; and
WHEREAS, Amendment No. 1 to the Agreement will provide an opportunity for
the Project Participants including Lodi to explore and implement options to meet key
equipment delivery timing and cost requirements associated with the LEC Project and
therefore to help Lodi meet capacity and energy power goals, reduce reliance on third -
party power purchase agreements, and assist the State of California in meeting its
reserve requirements and energy goals.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize (i) the City Manager to execute Amendment No. 1 to the Second Phase
Agreement for Funding the Planning and Development Activities of the Lodi Energy
Center and (ii) the Electric Utility Director to implement and administer such amended
Agreement in accordance with its terms.
Dated: November5,2008
I hereby certify that Resolution No. 2008-216 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held November 5, 2008, by the
following vote:
AYES: COUNCIL MEMBERS— Hitchcock, Hansen, Johnson, Katzakian,
and Mayor Mounce
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS— None
2008-216
OHL
City Clerk